Ab Artea Bankas · OMXVSE:ROE1L
Ab Artea Bankas — Šiaulių Bankas — FY2024 Earnings Presentation
44 slides from Ab Artea Bankas's earnings presentation, Feb 27, 2025
Slide 1: Q4 and Full Year 2024 Financial Results
Šiaulių Bankas Q4 and Full Year 2024 Financial Results February 27, 2025
Slide 2: Key Financial and Strategic Highlights
Key Financial and Strategic Highlights ▪ Exceeding Expectations: Outperformed FY 2024 guidance across all key metrics and raising our long- term targets FY 2024 ▪ Strategic Progress: Successful execution of the new business strategy, with all key initiatives on track Net Profit Adj. Net Profit €78.8
Slide 3: Strategic Progress
Strategic Progress Successful execution of the new business strategy, with all key initiatives on track Replatforming Rebranding Having completed the discovery phase, the project is Final preparations underway now in the implementation phase ▪ We're in the final phase of getting ready to unveil our
Slide 4: Outperformed Our Guidance Across All Metrics
Outperformed Our Guidance Across All Metrics Metric 2024 Guidance 2024 Actual Results Variance Loan Book €3.3bn €3.4bn +3% Deposits €3.3bn €3.6bn +8% Total Operating Income1 €202m €210m +4% Net Fee and Commission Income €27m €29m +8% Cost-to-Income Ratio1 49.7% 49.0%2 (0.7pp) Return On Equity 13.7%
Slide 5: Macroeconomic Overview
Macroeconomic Overview Section I
Slide 6: Lithuania: A Resilient Economy Thriving Despite External Challenges
Lithuania: A Resilient Economy Thriving Despite External Challenges Strong GDP Growth Lowest Inflation in EU Macroeconomic Outlook Real GDP, annual change, 2024 Q4, % Average annual HICP inflation in 2024, % Lithuania's macroeconomic forecasts, % Romania 5.8 2024E Lithuania 3.6 Belgium 4.3 Croatia 4
Slide 7: Q4 and FY 2024 Financial Results
Q4 and FY 2024 Financial Results Section II
Slide 8: Financial Performance Highlights
Financial Performance Highlights Income Statement In €`m Q4`24 Q4`23 %∆ YoY 2024 2023 %∆ YoY ▪ Record-high total revenues driven by stable net interest income and strong growth in fees and other Net Interest Income 39.2 40.8 (4%) 160.2 156.9 2% Net Fee & Commission Income 8.1 5.7 43% 29.1 20.3 44% r
Slide 9: Net Interest Income
Net Interest Income Key Highlights Net Interest Margin (NIM) Dynamics Net Interest Income YoY (€`m) NIM 4.1% NIM 3.7% 6.5% 6.5% 6.5% 6.4% ▪ Net interest income (NII) increased 6.0% 160.2 by 2% in FY 2024, compared to the 37.3 previous year 4.2% 3.9% 3.9% 3.6% 156.9 ▪ This was primarily driven by a 3
Slide 10: Loan Portfolio
Loan Portfolio Key Highlights Loan Yields ▪ Loan portfolio growth continued its strong trajectory in 2024, reaching 17% and surpassing 10.1% 10.1% 9.8% the guidance, with robust performance across all key business segments 10.0% ▪ Loan origination volumes reached a record €1.5 billion in 2024, thoug
Slide 11: Net Fee & Commission Income
Net Fee & Commission Income Key Highlights Net Fee & Commission Income YoY (€`m) ▪ Net fees & commission income (NFCI) increased by a solid 44% in FY 2024, compared to the previous year +44% ▪ Fee income significantly boosted by the acquisition of asset management business (INVL 29.1 Retail) ▪ Conti
Slide 12: Operating Expenses
Operating Expenses (1) Key Highlights Operating Expenses Development YoY (€`m) 41.2% 49.0% ▪ 2024 exhibited an increase in operating expenses, driven by rising salary expenses (larger headcount following the merger with INVL Retail and expanding organisation) and 37.5% 2 45.6% 2 several one-off expe
Slide 13: Asset Quality
Asset Quality Key Highlights Stage 2 and Stage 3 Dynamics 61% 61% 59% 60% 72% ▪ NPL decreased to 2.2% in 4Q, with improved NPL coverage ▪ €11.3 million in provisions were formed in 2024, driven by rapid loan portfolio growth and 7.4% 7.2% 6.5% 5.8% 6.5% adjustments to the impairment loss model ▪ Cos
Slide 14: Funding
Funding Key Highlights Funding Portfolio Breakdown (Q4`24) Cost of Funding Due to Other 2.90% Banks 1% Other 5% 2.61% 2.70% 2.55% ▪ Total deposits increased +4% QoQ and +12% YoY Debt Securities 9% 2.24% ▪ Funding portfolio remained unchanged QoQ despite the Term Deposits redemption of €210 million b
Slide 15: Capital Ratios and Requirements
Capital Ratios and Requirements Key Highlights Sufficient Capital to Support Growth Going Forward CET 1 Tier 1 Total Capital ▪ Robust capital position to support growth and future capital distribution Surplus 1.60% 3.45% 5.02% ▪ We further strengthened our Total Capital by issuing €50 million in AT1
Slide 16: Capital Allocation and Management
Capital Allocation and Management Key Highlights Total Returns Yield 20241 Capital Management Framework Dividend Yield Buyback Yield 8.1% ▪ On September 30, we announced a new shareholder 0.7% distribution strategy with a minimum 50% payout ratio 6.3% Organic Dividends ▪ Management intends to propos
Slide 17: Guidance Update: Positioning for Growth & Profitability
Guidance Update: Positioning for Growth & Profitability 2025 2026 2027 2028-29 ▪ We convincingly beat our 2024 targets across all key Growth Loan Book €4.1bn €4.6bn €5.3bn CAGR: ~8% financial metrics, leading to a significant upward revision of our future guidance Deposits €3.9bn €4.4bn €4.8bn CAGR:
Slide 18: Concluding Remarks
Concluding Remarks ▪ Exceeded Expectations: COMMITMENT TO Surpassed FY24 guidance across all key metrics and raising our long-term targets SHAREHOLDER VALUE ▪ Strategic Progress: Effectively executing our new business strategy, keeping all key initiatives on track 50% ▪ Strong Financial Results in F
Slide 19: Click or Scan to Subscribe to Our Newsletter
Click or Scan Calendar: to Subscribe to Our Newsletter March 7, 2025 New Brand Proposal March 18, 2025 Please subscribe to our Investor Relations newsletter for New Brand Presentation the latest news and insights March 18-20, 2025 Morgan Stanley European Financial Conference, London Subscribe Apri
Slide 20: Business Segment Results
Business Segment Results Section III
Slide 21: Corporate Clients Segment Development
Corporate Clients Segment Development Key Highlights Corporate Loans1 (Q4`24) (€`m) Corporate Loans by Sectors1 (Q4`24) +19% Renovation 13% ▪ The corporate loan book expanded by 19% Real Estate 23% 2,092 2,099 Other 5% YoY, driven by record-high new loan 1,928 1,764 1,856 Healthcare 3% originations
Slide 22: Private Clients Segment Development
Private Clients Segment Development Key Highlights Private Loans (Q4`24) (€`m) New Mortgage Agreements (Q4`24) (€`m) +18% 72.0 75.6 ▪ Strong demand for mortgages led to record-high private lending volumes, 1,267 1,186 1,262 increasing by 18% YoY 1,074 1,112 41.0 39.0 ▪ Deposit collection remains hig
Slide 23: Investment Clients Segment Development
Investment Clients Segment Development Key Highlights Life Insurance (€`m) Life Insurance Risk Under Management (RuM) (€`m) ▪ Asset Management AuM continued to grow strongly, driven by both client inflows and 15.0 positive financial market performance. AuM reached €1.46bn, with an increase of €277 1
Slide 24: Investment Clients Segment Development
Investment Clients Segment Development Key Highlights Bonds Originated by the Bank in Primary Market (Q4`24) (€`m) 92 ▪ New bond originations surged +62% YoY to €226 million in 2024 62 ▪ Šiaulių Bankas continues to be dominant market leader in corporate bonds origination 55 segment in Lithuania with
Slide 25: Appendix
Appendix
Slide 26: Key Investment Highlights
Key Investment Highlights A Profitably Growing Lithuanian Banking Franchise with New Strategic Expansion Initiatives 1 Operating in a structurally attractive market with strong growth potential 2 Differentiated and diversified business mix 3 A strategic focus on selected lending areas is generating
Slide 27: Creating Shareholder Value: Our Efforts Driving Strong Returns
Creating Shareholder Value: Our Efforts Driving Strong Returns Total Return Since 20241 1.30 +28% 1.25 1.20 1.15 1.10 1.05 +5% MSCI EM Europe ex Russia Index 1.00 +2% 0.95 0.90 2024-01 2024-02 2024-03 2024-04 2024-05 2024-06 2024-07 2024-08 2024-09 2024-10 2024-11 2024-12 Notes: (1) Total shareholde
Slide 28: Organisational Structure and Reporting Segments
Organisational Structure and Reporting Segments Corporate Clients Private Clients Investment Clients ▪ Daily banking – Comprehensive financial solutions ▪ Comprehensive daily banking solutions for corporate including current accounts, payments, and card services ▪ Asset management business – among t
Slide 29: Income Statement
Income Statement Q4`24 Q4`23 %∆ YoY 2024 2023 %∆ YoY In €'000 Interest income 59,592 56,745 5% 243,478 195,726 24% Other similar income 6,787 5,980 13% 26,735 21,242 26% Interest expense (27,225) (21,957) 24% (110,004) (60,115) 83% Net interest income 39,154 40,768 (4%) 160,209 156,853 2% Fee and co
Slide 30: Statement of Financial Position
Statement of Financial Position 2024 2023 %∆ YoY In EUR'000 ASSETS Cash and cash equivalents 395,136 751,499 (47%) Securities in the trading book 235,110 207,677 13% Due from other banks 3,121 3,013 4% Derivative financial instruments 1,093 251 335% Loans to customers 3,117,700 2,645,104 18% Finance
Slide 31: Life Insurance Income Reconciliation
Life Insurance Income Reconciliation Net Interest Income In €'m Q4`24 Q4`23 %∆ Revenue related to insurance activities €3.4m Net gain from trading activities (unit-linked contacts) €3.0m Interest income 59.2 56.6 5% Interest income (unit-linked contacts) €0.4m Interest income (unit-linked contracts)
Slide 32: Robust Loan Portfolio
Robust Loan Portfolio Loan Portfolio Rate Type Top 10 Loans by Sector1 Loan Book Split by Risk Groups Education 9% 55% 10% Fixed Rate 18% 51% 51% 49% 50% 50% 9% 50% 8% 46% 46% Healtcare 13% 7% 45% 47% 47% 46% 6% 40% 5% 4% 5% Manufacturing 4% 4% 4% 42% 35% 3% 3% Real Estate 36% 30% 2% 4Q`23 1Q`24 2Q`
Slide 33: Conservative and Diversified CRE portfolio
Conservative and Diversified CRE portfolio CRE: Underlying Property Types CRE: High Geographic Diversification Top 20 Corporate Real Estate Client Breakdown by Asset Class CRE Split by Region (Q4`24) Other CRE 8% Siauliai 18% Shopping Centers Public Gyms 8% 27% Research Centers 11% Vilnius 47% Klaip
Slide 34: Loan Portfolio Segments Performance
Loan Portfolio Segments Performance Corporate Lending – Portfolio1 Mortgage – Portfolio Consumer Financing – Portfolio m`€ m`€ m`€ 2 000 7.1% 7.2% 7.1% 7.0% 7.5% 6.0% 5.9% 1 900 6.8% 1 000 5.8% 5.8% 5.6% 6% 6.6% 6.6% 7.0% 5.2% 380 10% 1 800 5.3% 10.1% 10.1% 6.5% 900 6% 10.0% 1 700 340 9.9% 10% 5.7%
Slide 35: Sticky Local Deposits
Sticky Local Deposits Share of Insured Deposits Top 10 Depositors1 Term Deposits with Auto-Rollover (Dec-24) 67% 12% 66% 10% 23% 65% 8% 64% 6% Term deposit Auto-Rollover 63% 4% Term deposit w/o Auto- 62% 2% Rollover 61% 0% Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24
Slide 36: Solid Liquidity Position
Solid Liquidity Position Securities Portfolio (Q4`24) Securities Portfolio (Q4`24) By Security Type, Bank-only By Accounting Method, Bank-only Corporate Bonds Fair Value Trading Book 7% 7% 1% Government Bonds Amortised Cost 92% 92% Liquid Assets (€`m) Strong Liquidity Position (Q4`24) Group Figures
Slide 37: Šiaulių Bankas Market Share in Lithuania
Šiaulių Bankas Market Share in Lithuania Loan Portfolio Market(1) Corporate Lending(1) 21.1% 17.9% 23.8% SEB SEB 25.1% Swedbank Swedbank 11.2% Luminor Luminor 15.0% Šiaulių Bankas Šiaulių Bankas 30.6% Others 28.1% Others 16.6% 10.6% Mortgage(1) Consumer Financing(1) 9.4% 26.9% SEB Šiaulių Bankas 42.
Slide 38: Group Shareholder Structure
Group Shareholder Structure Shareholder Structure (Dec`24) Number of Shareholders Other Domestic 19.9% Investors 32.4% 19,087 18,774 18,524 9.0% 16,573 7.3% 5.3% 5.1% 21.1% Other Foreign Algirdas Butkus Investors (One of the Founders) 9,053 Listed Baltic asset management group established in 1991 an
Slide 39: Capital Ratios and Requirements 2024
Capital Ratios and Requirements 2024 CET1 Ratio T1 Ratio Total Capital Ratio MREL Subordinated MREL Surplus 1.60% 3.45% 5.02% 3.77% 6.10% 33.90% MB 0.43% 27.80% Other EL 11.13% 22.77% 22.77% T2 Capital 19.00% 19.15% 5.47% MB 0.80% 17.30% 17.75% AT1 capital AT1 capital 15.70% 15.70% 1.85% MB (includi
Slide 40: Successful AT1 Issuance
Successful AT1 Issuance Diversified Pool of Investors Rest of World 3% Rest of Europe • AT1 transaction for Šiaulių bankas (Ticker: SABLLH) • Inaugural AT1 transaction in Lithuania Nordics Transaction • PerpNC5 €50 million 7% Summary • The annual fixed rate coupon on the notes up to the reset date o
Slide 41: Debt Securities in Issue
Debt Securities in Issue Type ISIN Code Volume of Issue Interest rate Maturity Issue date Currency Senior Preferred XS2887816564 300,000,000 4.85% Dec 5, 2028 Sep 5, 2024 EUR Subordinated LT0000404287 20,000,000 6.15% Dec 23, 2029 Dec 20, 2019 EUR Subordinated LT0000407751 50,000,000 10.75% Jun 22,
Slide 42: Management Board
Management Board Vytautas Sinius Šiaulių Bankas: Šiaulių Bankas: 12 years Daiva Šorienė 25 years ▪ Chief Executive Officer of Šiaulių Bankas ▪ Head of Corporate Clients ▪ Chairman of the Management Board of Šiaulių Bankas Financial Industry: Financial Industry: ▪ Deputy Chief Executive Officer of Ši
Slide 43: Board of Directors (Supervisory Council)
Board of Directors (Supervisory Council) Valdas Vitkauskas Mindaugas Raila ▪ Chairman of the Supervisory Council of Šiaulių Bankas since August 2022 ▪ Chairman at Willgrow, Girteka Logistics and SIRIN Development ▪ Member of the Supervisory Council of Šiaulių Bankas since June 2022 ▪ Member of the S
Slide 44: Disclaimer
Disclaimer General The material in this presentation has been prepared by AB Šiaulių Bankas (Šiaulių Bankas) and solely for use at this presentation. The information provided in this presentation pertaining to Šiaulių Bankas, its business assets, strategy and operations is for general informational