Addiko Bank Ag · VIE:ADKO
Addiko Bank — Q3 2024 Earnings Presentation
48 slides from Addiko Bank's earnings presentation, Nov 7, 2024
Slide 1: 3Q24 Results Presentation
3Q24 Results Presentation Herbert Juranek (CEO) Edgar Flaggl (CFO) Tadej Krašovec (CRO) Ganesh Krishnamoorthi (CMO & CIO) Constantin Gussich (Investor Relations) 7 November 2024
Slide 2: Executive Summary & Business Update
Executive Summary & Business Update Financials & Risk Update Outlook & Wrap-Up Additional Materials
Slide 3: Key Highlights 3Q24
Key Highlights 3Q24 • YTD 3Q24 net profit up 25% YoY to €37.7m (3Q23: €30.1m), EPS at €1.95 − Third quarter result 2024 after tax at €12.2m (1Q24: €15.6m, 2Q24: €9.9m) − Cost of Risk on net loans at -0.71% (€-25.0m) Earnings • Return on average Tangible Equity at 6.4% (3Q23: 5.5%) & • Operating resu
Slide 4: Takeover Offers By Agri Europe and NLB
Takeover Offers By Agri Europe and NLB • Partial takeover offer by Agri Europe Cyprus (Agri Europe) − Agri Europe held at the time of the offer 9.99% in Addiko − Partial takeover offer for an additional 17% at an offer price of €16.24 per share (cum dividend) Takeover • Takeover offer by Nova Ljublj
Slide 5: Acceleration Program Continued to Drive Value Generation
Acceleration Program Continued to Drive Value Generation Key developments Developments in the first nine months 2024 • Consumer outperforming SME with strong +22% YoY growth in new business • Disbursements via partnership universe growing by 21% YoY (launched in Business BiH & Montenegro) 1 Growth i
Slide 6: Continued Growth in Focus
Continued Growth in Focus Focus portfolio development Gross performing loans (€m) • Total book (gross performing loans) rose at a muted pace, up 1% since YE23 despite Total Book 3,304 3,493 3,486 3,534 overperformance in Consumer YoY • +5% YoY growth in focus book (+8% YoY +4% +5% excluding medi
Slide 7: Visible Progress in Business with Consumer & SME Customers in CSEE
Visible Progress in Business with Consumer & SME Customers in CSEE Business Update Improving dynamics YoY €m, YTD YoY • Strong customer growth in cash loans (+11% YoY) 1,152 1,159 +1% • Solid new business delivered (+22% YoY) with 93 78 premium pricing (+33bp YoY) -16% • NCI growth (+9% YoY driv
Slide 8: Financials & Risk Update
Executive Summary & Business Update Financials & Risk Update Outlook & Wrap-Up Additional Materials
Slide 9: Financial Performance 3Q24 at a Glance
Financial Performance 3Q24 at a Glance Financial Performance 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 5.80% YTD, €m 79.3 79.4 5.30% 77.0 77.4 76.6 3Q23 YoY 18.4 18.3 4.80% 17.7 16.9 16.9 Net Netinterest interest income income 181.7 167.5 +8.5% NCI 4.30% 3.90% 3.89% 3.89% 3.97% 3.93% Net fee Net & commission fe
Slide 10: Capital Position Remains Strong
Capital Position Remains Strong Capital development fully-loaded % CET1/TCR, YTD, RWA in €m Addiko Group 3,653 3,694 3,692 3,616 RWA 0.44% 0.10% 0.05% 0.23% 0.04% 0.00% 0.02% 0.01% 0.30% CET1/ 21.1% TCR 20.4% 20.3% 20.4% fully-loaded 1 1 1 2023 2023 OCI Reg. Reg.&&Equity Equity RWA 1Q24 1Q24 OCI Reg
Slide 11: Balanced NPE Development Continues in 3Q24
Balanced NPE Development Continues in 3Q24 NPE volume1 & ratio development Quarterly NPE formation & exit €m, YTD €m, QTD 4Q23 1Q24 2Q24 3Q24 NPE ratio (on-balance loans)2 2.8% 2.9% 2.8% 2.9% Formation 24.9 24.5 21.4 21.6 NPE ratio (GE based)3 2.0% 2.1% 2.0% 2.0% 0.7 4.3 0.8 0.8 10.3 9.4 7.8 7.4 11.
Slide 12: Cost of Risk at a Glance
Cost of Risk at a Glance Expected credit loss expenses on financial assets 3Q24 YTD, €m, positive number for release • YTD 3Q24 expected 4.6 0.3 credit loss expenses of Impairments (negative) (13.3) Releases (positive) €-25.0m resulting in -0.71% cost of risk (on net (25.4) (25.0) loans): (16.6) − C
Slide 13: Outlook & Wrap-Up
Executive Summary & Business Update Financials & Risk Update Outlook & Wrap-Up Additional Materials
Slide 14: Outlook 2024 and Wrap-Up
Outlook 2024 and Wrap-Up Income & Business Risk & Liquidity Profitability Loan Growth1 >6% CoR3 c.1% RoATE5 c. 6.0% Outlook CAGR 2023-2026 2024 <3% NIM2 >3.8% NPE Ratio4 DPS6 >€1.2 Unchanged as guiding principle (adjusted in 1H24) NBI2 >4.5% YoY TCR >18.35% OPEX <€195m LDR <80% Ramp-up until 2026 •
Slide 15: Additional Materials
Executive Summary & Business Update Financials & Risk Update Outlook & Wrap-Up Additional Materials
Slide 16: Management Team Since June 2021
Management Team Since June 2021 Herbert Juranek Edgar Flaggl Tadej Krašovec Ganesh Krishnamoorthi Chief Executive Officer Chief Financial Officer Chief Risk Officer Chief Market, IT & Digitalisation Officer Chair of the Management Board Member of the Management Board Member of the Management Board M
Slide 17: Addiko at a Glance
Addiko at a Glance Overview of Addiko Operating as one region - one bank 3Q24, % of Group Assets (rounded) ✓ Fully licensed bank with HQ in Austria, focused 100% on Central ✓ and South-Eastern Europe ✓ Addiko Bank AG is regulated by the Austrian Financial Market Austria ✓ (5%2) Authority (“FMA”)1 an
Slide 18: Current Shareholder Structure
Current Shareholder Structure Diplomat Pay D.O.O. (Serbia) ** 9.99% Agri Europe Cyprus (Cyprus) Alta Pay Group DOO (Serbia) ** 35.88% 9.93% European Bank for Reconstruction and Development (EBRD) Dr. Jelitzka + Partner (Austria) 9.63% WINEGG Realitäten GmbH (Austria) Wellington Management Group LLP
Slide 19: Key Macroeconomic Assumptions
Key Macroeconomic Assumptions GDP forecasts (%, real growth) Previous Forecast 2024E 2025E 2026E Δ 2023A Base Base Base 2024 Slovenia 2.1% 1.7% 2.2% 2.5% -0.8% Croatia 3.1% 3.3% 2.7% 3.0% +0.4% Serbia 2.5% 3.8% 3.6% 3.6% +0.8% Bosnia & 1.7% 2.6% 2.9% 3.1% +0.2% Herzegovina Montenegro 6.3% 3.5% 3.7%
Slide 20: ESG in Addiko
Addiko’s Commitment to the Sustainable Development Goals ESG in Addiko - It is the little things that count Environment Social Governance Making ESG work through Vision Carbon footprint reduction Committed to the good good governance Addiko helps its employees Sound principles of Addiko supports soc
Slide 21: Balance Sheet Composition
Balance Sheet Composition Assets Liabilities and Equity YTD 3Q24, €b YTD 3Q24, €b 6.3 6.3 Other 0.2 0.2 Liabilities ✓• Liquid balance sheet Other Assets 0.1 Due to Credit ✓• Strong deposit base - LCR ratio: 386% (YE23: 313%) Institutions 0.6 Direct - Loan-deposit ratio Deposits (customer): 68.6% (YE
Slide 22: Addiko Story Well Positioned for Strong Growth in Mid-Term
Addiko Story Well Positioned for Strong Growth in Mid-Term • We will turn Addiko into leading CSEE specialist bank for Consumer & SME customers Vision • We are focused and offer the best digital products to challenge universal banks • We will accelerate the bank’s transformation and generate value f
Slide 23: Acceleration of Growth in Focus Areas Consumer & SME
Acceleration of Growth in Focus Areas Consumer & SME Gross performing loans in focus segments Gross yield by segment1 Gross loans of focus segments as % of total gross performing loans 3Q24 YTD QTD QTD QTD Full year 3Q24 2Q24 1Q24 2023 yield yield yield yield Consumer 7.4% 7.4% 7.4% 7.3% 7.1% % in f
Slide 24: Consumer and SME Lending Development
Consumer and SME Lending Development Consumer (Micro shifted to SME as of 1Q21) SME €m, YTD €m, YTD 1,803 1,846 1,752 1,668 1,706 1,606 1,535 1,562 1,389 1,2981,3261,3101,3221,3321,301 1,342 1,312 1,243 1,188 1,188 1,0591,0401,057 1,028 928 791 774 Gross 646 Performing Loans 2016 2017 2018 2019 2020
Slide 25: New Business on a Monthly Basis
New Business on a Monthly Basis New business during 2024 €m 3Q24YTD: 637 85 77 74 76 69 62 59 61 60 67 68 63 63 64 69 69 63 57 53 Consumer 48 38 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 90 3Q24YTD: 522 78 81 72 72 68 72 72 67 63 64 64 66 54 53 55 58 SME 48 52 45 40 Jan. Feb. Mar. A
Slide 26: Digital Transformation
Digital Transformation Digital capabilities YTD +9% YoY Registered Mobile Banking 118 150 188 230 258 284 291 309 +1% Mobile banking users (vs. PQ) Users (ths.)2 +8% YoY +1% Digital users (vs. PQ) 318 295 301 273 246 210 26% Bank@Work (1H24: 26%, 1Q24: 26%, YE23: 25%, 3Q23: 25%) 177 149 35% Digital
Slide 27: Financials: Financial Performance 3Q24 in Detail
Financials: Financial Performance 3Q24 in Detail Key financials P&L in €m YTD QTD •1 Operating result up 6.9% YoY to €83.5m (up 3Q24 (YTD) 3Q23 (YTD) +/- PY 3Q24 2Q24 +/- PQ 10.8% excl. one-off costs): Net interest income 181.7 167.5 8.5% 61.1 60.8 0.4% Net fee and commission income 53.6 50.3 6.6% 1
Slide 28: Financials: Key Performance Drivers 3Q24
Financials: Key Performance Drivers 3Q24 Net interest income Net fee and commission income €m €m NIM 367bp 391bp 389bp 397bp 393bp % of 30% 29% 28% 30% 30% +8.5% NII +2.2% 181.7 167.5 +8.7% +1.8% +0.4% +6.6% +9.3% -0.5% 59.8 60.8 61.1 50.3 53.6 16.9 18.4 18.3 3Q23 (YTD) 3Q24 (YTD) 1Q24 (QTD) 2Q24 (Q
Slide 29: Financials: Interest Income Dynamics
Financials: Interest Income Dynamics Interest income by quarter1 Gross yield by quarter2 €m 78.1 78.2 76.0 76.2 72.7 3Q23 4Q23 1Q24 2Q24 3Q24 7.2% 7.2% 7.3% 7.4% 7.4% 21.2 20.5 20.9 20.7 Consumer 19.1 7.8% 7.8% 8.0% 8.0% 8.0% new new new new new Other 1.4 1.1 business business business business busi
Slide 30: Financials: Breakdown of Other Interest Income
Financials: Breakdown of Other Interest Income Treasury interest income by quarter €m Other interest 19.1 20.9 20.7 21.2 20.5 income (total) • HTC bond portfolio strategy: interest income from the instruments 17.8 held under the Hold-to-Collect (HTC) bond portfolio strategy in EU 17.6 17.4 17.3 enti
Slide 31: Financials: Interest Expense Dynamics
Financials: Interest Expense Dynamics Interest expense by quarter Cost of funding by quarter1 €m 17.3 17.1 16.4 15.5 3Q23 4Q23 1Q24 2Q24 3Q24 2.8 2.1 2.2 Deposits - 1.5 0.9 0.70% 0.82% 0.84% 0.83% 0.86% 13.4 1.1 Network 1.4 1.2 1.3 4.3 Direct 1.4 3.5 4.1 2.12% 2.37% 2.74% 2.99% 2.98% 3.3 Deposits Tr
Slide 32: Financials: Commission Income Dynamics
Financials: Commission Income Dynamics Net fee and commission income by quarter Key highlights €m • Net fee and commission income 3Q24 increasing 18.4 18.3 17.7 due to higher income from accounts & packages and Non-Focus 16.9 16.9 0.6 0.5 0.7 bancassurance and Other 0.5 0.5 • Other products: increas
Slide 33: Financials: Other Income & Other Result
Financials: Other Income & Other Result Other income breakdown (YTD) €m 3Q24 3Q23 Deposit guarantee -4.8 -4.5 Higher bank levies and other taxes mainly driven by the 1 1 Bank levies and other taxes -6.0 -3.3 introduction of the Slovenian banking tax Restructuring -0.6 -0.2 New position as of 3Q24 (s
Slide 34: Financials: Development of General Administrative Expenses (OPEX)
Financials: Development of General Administrative Expenses (OPEX) OPEX development by quarter Other Administrative expenses €m 3Q24 YTD, €m Other1 6.6 5.9 12% Advertising 11% Total: 24.8 50.4 47% IT 6.3 €53.1m 46.7 46.5 4.2 46.1 Legal & Advisory 12% 45.0 9.6 Depreciation 4.4 4.2 4.2 18% And 4.3 Amor
Slide 35: Financials: Balance Sheet
Financials: Balance Sheet Detailed balance sheet overview (YTD) €m 2020 2021 2022 2023 3Q24 Cash reserves 1,156.3 1,361.7 1,382.9 1,254.5 1,202.2 Investment Portfolio 965.5 1,044.8 1,084.4 1,208.1 1,370.6 Financial assets held for trading 36.4 32.6 22.8 29.5 29.1 Investment securities 929.0 1,012.2
Slide 36: Financials: Income Statement
Financials: Income Statement Detailed income statement overview (YTD) €m 2020 2021 2022 2023 3Q23 3Q24 Interest income calculated using the effective interest method 194.3 185.5 192.9 247.3 188.8 207.4 Other interest income 2.6 2.2 2.3 29.7 12.2 25.1 Interest expense (22.3) (18.2) (18.7) (49.0) (33.
Slide 37: Financials: Breakdown by Entity
Financials: Breakdown by Entity 3Q24 YTD Addiko Bank d.d., Addiko Bank d.d., Addiko Bank d.d., Addiko Bank a.d., Addiko Bank a.d., Addiko Bank A.D., (€m, IFRS) Zagreb Ljubljana Banja Luka Sarajevo Beograd Podgorica Net interest income 57.4 46.2 16.9 18.3 34.6 9.6 Net commission income 17.7 11.3 7.2
Slide 38: Risk: Strong Risk Management Framework
Risk: Strong Risk Management Framework Non-performing loan portfolio (YTD) NPE Volumes, 244 194 163 138 146 137 141 €m NPE Coverage 73.6% 71.9% 75.4% 80.9% 81.4% 80.7% 80.8% Ratio1 (Ex-Collateral) NPE Ratio (on-balance loans)2 4.7% 4.0% 3.3% 2.8% 2.9% 2.8% 2.9% NPE Ratio (GE based)3 3.5% 2.9% 2.4% 2
Slide 39: Risk: Robust Asset Quality in Portfolios
Risk: Robust Asset Quality in Portfolios Focus Non-Focus Consumer SME €m, rounded €m, rounded €m, rounded 2,082 2,038 > 90 1,978 48 43 days 1,958 1,944 1,931 > 90 1,925 83 1,913 44 78 61-90 31 days 39 38 41 33 81 39 45 41 61-90 67 days 44 days 31-60 31-60 days days < 30 < 30 days days > 90 days 1,93
Slide 40: Risk: Provision Coverage Evolution
Risk: Provision Coverage Evolution Stage 1, 2 and 3 assets1 Business segments: Stage 1 & 2 (Performing) coverage1 €m 3Q24 (YTD) ECL coverage (YTD) By Segment 1H24 1Q24 2023 3Q23 4,509 4,518 4,513 4,521 4,509 153 138 146 137 141 Focus Focus 1.5% 1.4% 1.4% 1.4% 1.4% 413 580 557 523 531 Consumer 1.6% 1
Slide 41: Risk: NPE Formation and Exit Dynamics
Risk: NPE Formation and Exit Dynamics Quarterly NPE formation & exit - group level Consumer SME Mortgages Large Corporates Public Finance €m €m €m €m €m Net -2.8 +4.4 -0.6 +3.3 -12.9 +5.3 -6.5 +2.6 -2.9 -0.9 -1.0 -0.8 +3.5 -0.53 -1.5 -0.6 -0.4 -0.1 -0.1 -0.3 11.2 13.4 12.7 13.3 0.8 0.0 0.0 0.0 0.0 0
Slide 42: Risk: NPE and Cost of Risk Development
Risk: NPE and Cost of Risk Development Focus Non-Focus3 €m Consumer SME €m €m NPE Coverage Ratio (Excl. 78.7% 80.2% 80.8% 80.8% 68.6% 76.3% 81.8% 80.0% 79.9% 82.5% 79.9% 82.0% Collateral)1 5.3% 5.2% 5.4% 5.6% 3.7% NPE Ratio2 3.2% 3.0% 3.1% 3.1% 3.0% 2.3% 2.5% 2022 3Q23 2023 3Q24 2022 3Q23 2023 3Q24
Slide 43: Risk: NPE and Cost of Risk Development by Business Segment
Risk: NPE and Cost of Risk Development by Business Segment Consumer SME Mortgages Large Corporates Public Finance €m €m €m €m €m NPE Coverage Ratio1 78.7% 80.8% 80.8% 68.6% 81.8% 80.0% 77.4% 82.0% 83.1% 91.0% 78.1% 83.9% 61.8% 73.2% 56.6% 8.0% 7.1% 5.8% 4.8% 5.1% 4.6% 4.5% 4.5% 3.7% 4.0% NPE Ratio2
Slide 44: Risk: CHF Loans Significantly Managed Down
Risk: CHF Loans Significantly Managed Down CHF portfolio overview CHF status across countries €m • Several CHF initiatives rejected because parliamentary constitutional service % of Total classified such drafts as unconstitutional and unlawful under European law 5.5% 4.4% 3.4% 2.0% 1.7% 1.3% 1.1% 0.
Slide 45: Capital: Capital Requirements & Guidance Going Forward
Capital: Capital Requirements & Guidance Going Forward Capital requirements as of 2024 (excluding P2G) • Unchanged at 3.25% P2R • At least 56.25% must be held in CET1 (Draft for 2025) capital and at least 75% in Tier 1 capital 21.1% 20.4% 21.1% 20.4% 21.1% 20.4% • Yearly review as part of SREP • Sys
Slide 46: Capital: Further Details
Capital: Further Details Breakdown of capital position1 Fully-loaded Addiko is using the standardised approach for 21.1% 20.0% 19.5% 20.4% its RWA calculation with most of its RWAs stemming from credit risk Expiration of IFRS 9 transitional capital rules as of 1 January 2023 leading to no difference
Slide 47: Capital: Credit Risk RWA in Focus vs. Non-Focus
Capital: Credit Risk RWA in Focus vs. Non-Focus Risk weighting for focus portfolio is in line with overall contribution to loan book Credit risk RWA Credit risk RWA: breakdown by segment1 3Q24, €m 3Q24, €m Large Public Corporate Finance Mortgages 6214 3,044 184 Corporate Center 493 Consumer Total: €
Slide 48: Disclaimer
Disclaimer THESE RESULTS AND STATEMENTS (HEREINAFTER REFERRED TO AS “MATERIALS”) WERE CAREFULLY PREPARED BY ADDIKO BANK AG. HOWEVER, THE MATERIALS HAVE NOT BEEN INDEPENDENTLY VERIFIED. THEREFORE, ADDIKO BANK AG MAKES NO REPRESENTATION AND GIVES NO WARRANTY, NEITHER IMPLIED NOR EXPRESSED, AND ASSUMES