Alior Bank Sa · GPW:ALR
Alior Bank Sa — H1 2015 Earnings Presentation
38 slides from Alior Bank Sa's earnings presentation, Aug 20, 2015
Slide 1: Alior Bank S.A. 1H 2015 results presentation
ALIOR BANK S.A. 1H 2015 results presentation August 20, 2015 1
Slide 2: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Outlook • Appendix 2
Slide 3: Highlights
HIGHLIGHTS Solid results Asset quality trends improving • Proactive management of retail NPLs, now comfortably below the market average (9,8% in Q2’15 vs. 13,2% in Q1’15 • Mortgage NPLs down 20bps QoQ (at 2,2%) • Corporate NPLs down 10bps QoQ (at 9,7%) Secure liquidy capacity for further growt
Slide 4: Meritum Merger Update
MERITUM MERGER UPDATE Merger with Meritum Bank Legal merger on 30th of June 2015, Synergies of minimum PLN 36m for 2015 on track (5m for 1H’15), 607 FTE reduction in Q2’15 60 outlets closed in Q2’15 Integration costs of maximum PLN 50 m as planned (PLN 9.7 m so far), Negotiations with
Slide 5: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Outlook • Appendix 5
Slide 6: Key Financials
KEY FINANCIALS (A/B)-1 1H'15 Meritum M PLN 1H'15 1H'14 Q2'15 Q1'15 (D/E)-1 (%) (%) impact A B C D E F G Net interest income 717 581 23 374 343 9 108 Net fee and commissions 163 167 -3 70 93 -24 0 Trading result & other 165 135 22 81 84 -3 12 Operating income 1 045 884 18 525 520 1 120 General Admini
Slide 7: Loan Book Development
LOAN BOOK DEVELOPMENT Loan book split in PLN m Alior comparable Alior + Meritum +30% 28 345 +16% 135 Other business 25 391 521 (inc. 1 Meritum) 24 627 134 Factoring 148 4 668 21 877 555 521 (incl. 8 Investment 209 Meritum) loans 4 660 43% 551 4 322 3 659 45% 6 972 Working 44% (incl. 842 Capital 46%
Slide 8: Deposit Base Development
DEPOSIT BASE DEVELOPMENT L/D = 95,2% in PLN m Alior comparable Alior + Meritum L/D=85% Retail +37% Deposits Loans 64% 57% +20% 18 958 15 744 16 558 13 804 10 698 Term, own banking sec., 8 544 9 052 13 946 (incl. 1 645 other 6 848 Meritum) 16 048 Current 8 260 7 505 Loans 6 956 7 200 (incl. 755 Merit
Slide 9: Credit Risk Overview
CREDIT RISK OVERVIEW Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q1'15 Alior+Meritum Q2'15 Alior+Meritum NPL total (%) sale of receivables portfolio 12,8 13,2 amounting to PLN 663 m in Q2’15 11,8 12,0 10,7 9,8 9,7 9,8 8,8 9,0 9,5 9,1 8,9 8,5 Market avg.* 10,9 11,5 3,4 2,5 2,5 2,2 2,4 2,2 2,4 2,2 Corporate Retail
Slide 10: Net Interest Margin
NET INTEREST MARGIN Alior NIM development (YTD) Market Alior comparable Alior + Meritum average 4,8% 4,6% 4,5% 4,3% 4,1% 2,8% 1H'14 Q1'15 1H'15 Q1'15 1H'15 1H'15 Market average calculated as average of NIM for the following banks: (Alior, BZWBK, Pekao, PKOBP, ING, Millennium, mBank, Bank BPH, Bank H
Slide 11: Fees and Commissions
FEES AND COMMISSIONS Alior + Alior comparable Meritum Net F&C 96 93 84 85 71 70 F&C income 139 135 135 134 123 125 51 Fees related to C/A, 57 59 64 loans, transfers 76 76 42 43 39 34 bancassurance 9 10 payment and credit 32 23 20 21 21 22 cards servicing 13 12 14 16 17 17 brokerage fees Q2'14 Q3'14
Slide 12: Capital Position Allows for Continuous Profitable Growth
CAPITAL POSITION ALLOWS FOR CONTINUOUS PROFITABLE GROWTH YTD Alior comparable Alior + Meritum 12,1% 11,6% 12,4% 10,8% 11,5% 10,0% 1,2% 1,1% 1,2% 1,1% 1,0% 1,1% Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q2'15 ROE ROA Alior comparable Alior + Meritum 13,1% 13,8% 13,0% 12,8% 12,8% 11,5% 12,0% 11,2% 10,4% 10,2% Q2'
Slide 13: Strict Cost Discipline Maintained
STRICT COST DISCIPLINE MAINTAINED 1H’15 C/I = 49,8% Alior comparable Alior+ Meritum +16% +4,6% 520 41 469 10 449 1H'14 1H'15 Integration Meritum costs 1H'15 costs Integration costs in 1H’15: PLN 9,7 m 13
Slide 14: Customer Base
CUSTOMER BASE Customer acquisition Customer Acquisition in Q2 +363 -10 driven by T-Mobile +143 +103 2 939 2 929 development 2 473 2 576 295 289 2 330 122 123 121 121 120 2 454 2 520 2 520 2 352 2 209 Decrease in other channels triggered by proactive management of dormant accounts Q2'14 Q3'14 Q4'14 Q
Slide 15: Enhancing Current Accounts Earnings Quality
ENHANCING CURRENT ACCOUNTS EARNINGS QUALITY Acquisition focuses on more profitable clients Consequent increase of salary current accounts in new sales. 56% 55% 54% 53% 51% 51% 51% 50% 50% 50% 50% 49% 49% 49% 49% 49% 49% 49% I 2014 II III IV V VI VII VIII IX X XI XII I 2015 II III IV V VI Dormant acc
Slide 16: Branch Optimization on Track
BRANCH OPTIMIZATION ON TRACK Alior maintains one of the most extensive footprints 859 836 831 771 720 221 211 211 100 153 Alior Express 438 411 428 414 411 408 Agencies 292 230 199 97 50 Branches 195 208 209 210 211 209 210 149 2009 2010 2011 2012 2013 2014 Q1'15 Q2'15 Alior Meritum T-Mobile Total S
Slide 17: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Outlook • Appendix 17
Slide 18: Strong T-Mobile Partnership in Poland Effectively Capturing Profitable Growth
STRONG T-MOBILE PARTNERSHIP IN POLAND EFFECTIVELY CAPTURING PROFITABLE GROWTH Continuous strong customer • 226 K customers acquired since launch in May’14 acquisition • New loan volume growth by PLN 38 m in Q2’15 vs Building PLN 70 m May’14 – Mar’15 as a result of marketing customer campaign, algori
Slide 19: Extension of Alior Bank Strategic Alliance with Deutsche Telekom Group
EXTENSION OF ALIOR BANK STRATEGIC ALLIANCE WITH DEUTSCHE TELEKOM GROUP Agreement with strong partner to enter high potential CEE market • over 6 m clients of Telekom Romania MC • one of largest economies in our region, high growth potential for banking services, dynamic growth of smartphones (28%, w
Slide 20: Consumer Finance Performance
CONSUMER FINANCE PERFORMANCE Cross-sell volumes impacted by competition Instalment loans average monthly volumes (PLN m; YTD) 09’14 10’14 11’14 12’14 01’15 02’15 03’15 04’15 05’15 06’15 887 902 901 920 924 916 910 905 888 883 -3% cross-sell average monthly volumes (PLN m; YTD) 09’14 10’14 11’14 12’1
Slide 21: White Label Business Capabilities Confirmed – Cooperation with Tesco to Be Continued
WHITE LABEL BUSINESS CAPABILITIES CONFIRMED – COOPERATION WITH TESCO TO BE CONTINUED THE SITUATION OF THE PROJECT • Tesco has accepted a proposal for further cooperation • The agreement will be signed in September 2015 PROJECT PERFORMANCE • Current Loan Portfolio exceeds 100 m PLN • Monthly cash loa
Slide 22: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Outlook • Appendix 22
Slide 23: Going Forward: 2015 Outlook including Meritum
GOING FORWARD 2015 Outlook including Meritum 2015 consensus of PLN 373 m* (increase from 353 in Q1’15) NIM ~4,7% C/I below 48% CoR ~2,4% (previously 2,5%) Loan growth 2015 - PLN 4 billion net (previously PLN 5 billion net) *based on the analysts forecasts with Meritum included published post Q1’15 r
Slide 24: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Outlook • Appendix 24
Slide 25: Income Statement Snapshot
INCOME STATEMENT SNAPSHOT in PLN m Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Interest income 437 456 443 481 525 Interest expense -129 -135 -120 -138 -151 Net interest income 307 321 323 343 374 Dividend 0 0 0 0 0 Fee and commission income 139 135 135 136 125 Fee and commission expense -55 -50 -39 -43 -54 Net f
Slide 26: Balance Sheet Snapshot
BALANCE SHEET SNAPSHOT 30 Jun’14 30 Sep’14 31 Dec’14 31 Mar’15 30 Jun’15 Cash and balances with Central Bank 1 057 1 019 1 158 1 378 1 815 Financial assets held for trading 285 421 477 525 427 Financial assets available for sale 1 473 2 063 2 652 2 494 2 714 Hedging derivatives 16 53 80 120 49 Recei
Slide 27: Proposed FX Mortgage Solution
PROPOSED FX MORTGAGE SOLUTION Polish lower chamber of parliament has passed a law restructuring FX denominated mortgages. Polish FX mortgage banking market dominated by CHF loans ( above 80%) For those who took the loan at CHF/PLN >2,6 it may be profitable to convert the loan. Estimated costs for th
Slide 28: Cost of Consumer Credit – New Proposal
COST OF CONSUMER CREDIT – NEW PROPOSAL The Act is waiting for President approval – 6 months vacatio legis Assumptions: • maximum non-interest costs of loan - 25% of its total amount and 30% of that amount per annum, • non-interest costs throughout the crediting period not higher than loan total amou
Slide 29: Shareholding
SHAREHOLDING Largest free float among Polish financials institutions 18.3m shares - 25,2% Entities controlled by Carlo Tassara Group 5.1m shares – 7,0% Genesis Asset Managers LLP 45,5m shares – 62.6% Market free float 3.8m shares – 5,2% Aviva OFE On May 30th 2015 PZU signed an SPA allowing for purch
Slide 30: New Loans Sales in Retail & SME
NEW LOANS SALES IN RETAIL & SME Retail loans (new production per quarter) 1 809 1 621 1 681 66 1 641 1 489 73 1 530 125 90 1 314 1 374 74 55 Other retail 1 271 61 629 54 370 546 562 Mortgages for 72 423 526 322 342 real estate 260 1 126 992 1 062 1 114 939 938 971 990 949 Cash loans Q2'13 Q3'13 Q4'1
Slide 31: Employees
EMPLOYEES Persons 6 834 7 280 7 012 6 413 6 707 714 651 Meritum 4 160 4 382 4 408 4 380 4 138 Outlets Headquaters 2 253 2 325 2 426 2 186 2 223 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 FTEs 7 098 6 738 6 240 6 559 6 637 714 651 Meritum 4 038 4 305 4 294 4 251 3 928 Outlets 2 202 2 254 2 343 2 133 2 159 Headqua
Slide 32: Continued Growth of Market Share
CONTINUED GROWTH OF MARKET SHARE Deposits MARKET SHARE Loans 3,2% 3,2% 3,2% 3,0% 2,9% 2,6% Q2'14 Q1'15 Q2'15 Q2'14 Q1'15 Q2'15 Deposits MONTHLY GROWTH (%) Loans Total Retail Corporate Total Retail Corporate ALIOR Market ALIOR Market ALIOR Market ALIOR Market ALIOR Market ALIOR Market JAN 0,0 -1,1 3,
Slide 33: Polish Macro Outlook
POLISH MACRO OUTLOOK GDP growth (% yoy) Investments and private consumption (% yoy) 10,6 Investments 4,5 Private 3,9 consumption 4,8 3,3 3,5 4,1 3,2 3,0 2,1 2,6 2,5 0,8 1,9 0,2 1,6 1,6 0,9 -2,4 -0,8 -1,8 2009 2010 2011 2012 2013 2014 2015F 2009 2010 2011 2012 2013 2014 2015F Inflation (CPI % yoy) Un
Slide 34: Polish Macro Outlook
POLISH MACRO OUTLOOK NBP reference rate (%) WIBOR 3M (%) 4,50 4,99 4,25 4,27 4,13 3,95 3,50 3,50 2,71 2,50 2,06 2,00 1,70 1,50 2009 2010 2011 2012 2013 2014 2015F 2009 2010 2011 2012 2013 2014 2015F End of period End of period FX rate (EUR/PLN) Fiscal policy (% of GDP) 4,46 30 Public debt 57,2 60 56
Slide 35: Polish Banking Sector – Growth of the Main Balance Sheet Figures
POLISH BANKING SECTOR – GROWTH OF THE MAIN BALANCE SHEET FIGURES Assets Loans +5,6% +4,6% +6,5% +7,8% 1 569 1 577 1 538 1 532 1 493 1 429 1 406 1 444 1 401 1 073 1 090 966 993 972 1 002 1 041 1 055 1 039 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14
Slide 36: Polish Banking Sector – Main P&L Lines Performance
POLISH BANKING SECTOR – MAIN P&L LINES PERFORMANCE NII NFC Result on banking activity -4,2 -12 -11,3 15,3 14,8 3,5 3,5 14,5 9,5 9,7 3,3 3,3 3,4 13,6 13,4 8,8 8,7 8,4 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 X - CHANGE VS. Q2’14 (%) Expenses* Net impai
Slide 37: Contact Details
CONTACT DETAILS Please direct all inquiries to: relacje.inwestorskie@alior.pl +48 22 417 3860 IR unit head: Piotr Bystrzanowski piotr.bystrzanowski@alior.pl 37
Slide 38: Disclaimer
DISCLAIMER This document has been prepared by Alior Bank S.A. (the “Bank”) solely for use at the Presentation. Any forward looking statements concerning future economic and financial performance of the Company contained in this Presentation are based on Financial Statement of the Bank for 1H 2015. B