Alior Bank Sa · GPW:ALR
Alior Bank Sa — Q4 2014 Earnings Presentation
37 slides from Alior Bank Sa's earnings presentation, Feb 27, 2015
Slide 1: Alior Bank S.A. Q4 2014 results presentation
ALIOR BANK S.A. Q4 2014 results presentation February 27, 2015 1
Slide 2: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Outlook • Appendix 2
Slide 3: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Outlook • Appendix 3
Slide 4: Highlights: Continuous & profitable growth
HIGHLIGHTS Continuous & profitable growth Robust profitability: PLN 100 M net result in Q4’14 >40% growth in annual profit vs 2013, Best-in-class NIM maintained: 4,7%, Strict cost discipline: <50% C/I for 2014, Stable asset quality: 2,2% CoR (excluding Polbita), T-Mobile Banking Serv
Slide 5: Meritum Acquisition Update
MERITUM ACQUISITION UPDATE Acquisition of Meritum Bank Expedient approval process: KNF approval Feb 10th 2015, Transaction closed on Feb 19th 2015, Merger motion filed on Feb 25th 2015. Starting Feb 19th two banks operating separately within Alior Capital Group – financial consolidation
Slide 6: Key Financials
KEY FINANCIALS (A/B)-1 Q4'14 Q3'14 Q4'13 (D/E)-1 (D/F)-1 M PLN 2014 2013 (%) QTD QTD QTD (%) (%) A B C D E F G H Net interest income 1 216 999 21,8 319 321 298 -0,6 7,3 Net fee and commissions 348 275 26,5 96 85 88 12,0 8,1 Trading result & other 309 266 16,1 85 83 62 2,2 36,4 Operating income 1 873
Slide 7: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Outlook • Appendix 7
Slide 8: Loan Book Development and Financing
LOAN BOOK DEVELOPMENT AND FINANCING Loan book split L/D = 96,8% in PLN m RETAIL L/D=90% 23 648 Deposits Loans +20% 61% 56% Other business 168 1% Factoring 14 849 517 2% 14 224 13 878 Investment 19 654 loans 4 134 13 301 7 234 8 113 289 1% 17% 8 360 Term, own 562 3% banking sec., 44% other 3 367 Curr
Slide 9: Credit Risk Overview
CREDIT RISK OVERVIEW NPL total (%) Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 11,8 12,0 10,2 10,7 8,8 9,0 9,5 9,5 8,4 Market avg.* 6,5 11,2 11,8 3,1 2,0 2,3 2,5 2,5 2,2 Corporate Retail Mortgage Decrease of market average NPLs due to extensive sale of NPLs in Q4’14. Alior sold NPL portfolio amounting to PLN 89 m
Slide 10: CHF Exposure
CHF EXPOSURE in PLN ths CHF loans constitute less than 1% of the total net loans 2014 loan portfolio by currency PLN 3 128 Other currencies 20 335 185 CHF Zero potential impact from CHF exposure under any scenario. 10
Slide 11: Net Interest Margin
NET INTEREST MARGIN Alior NIM development (YTD) 4,7% 4,7% 4,7% 4,7% 4,5% Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 NIM formula: NII YTD for Q1’14, Q2’14, Q3’14 annualized divided by average IEA from Q4’13 and Q1’14, Q2’14 and Q3’14 respectively. NIM in selected Polish banks (Alior, Millennium, mBank, BZWBK, Pek
Slide 12: Fees and Commissions
FEES AND COMMISSIONS 96 Net F&C 88 84 84 85 141 139 135 135 F&C income 125 56 51 48 57 59 other 39 34 42 bancassurance 43 39 29 29 32 23 payment and credit cards 22 servicing* 16 14 13 12 14 brokerage fees Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 F&C expenses -52 -42 -50 -39 -55 12 * thereof interchange: Q1’14
Slide 13: Strong capital position allows for continuous profitable growth
STRONG CAPITAL POSITION ALLOWS FOR CONTINUOUS PROFITABLE GROWTH 13,4%* 14,0% 8,0% 7,0% 12,0% 12,1% 11,6% 12,4% 6,0% 11,0% 11,2% 10,0% 5,0% 8,0% 1,3%* 4,0% 6,0% 3,0% 4,0% 1,0% 1,1% 1,2% 1,1% 1,2% 2,0% 2,0% 1,0% 0,0% 0,0% Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 ROE ROA * excluding Polbita impact 20,0% 14,0% 18,
Slide 14: Strict Cost Discipline Maintained
STRICT COST DISCIPLINE MAINTAINED in PLN m Costs Revenues 2014 YTD C/I = 49,4% 1 873 +21,6% 40 269 1 540 39 227 348 275 +9,2% 925 847 80 84 325 303 1 216 999 460 520 2013 2014 2013 2014 HR costs NHR costs Other costs NII NFC Trading Other Revenue growth considerably outperforms cost. 14
Slide 15: Growing Customer Base
GROWING CUSTOMER BASE Customer acquisition on track Current accounts growth Q3’14 vs. Q3’13 (ths) +143 +103 +96 +116 2 576 Alior Bank 319 2 473 2 330 122 2 234 121 2 119 120 119 mBank 186 118 ING BSK 155 2 352 2 454 2 115 2 209 2 000 BZ WBK 152 Getin Noble 141 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Retail Co
Slide 16: Diversified Distribution Network
DIVERSIFIED DISTRIBUTION NETWORK 4th largest distribution network in Poland Branches Agencies Alior Express 859 836 786 720 221 211 100 438 411 428 414 292 230 199 97 50 195 208 209 210 211 149 2009 2010 2011 2012 2013 2014 T-Mobile outlets Post merger with Meritum Alior distribution network (incl.
Slide 17: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Outlook • Appendix 17
Slide 18: T-Mobile: Growth Initiative on Track
T-MOBILE: GROWTH INITIATIVE ON TRACK Client acquisition exceeds expectations • 141 ths. clients acquired since launch in May’14 Substantial increase in loan distribution capacity • 72 store-in-store outlets till the end of December’14 • Additional 178 store-in-store outlets till the end of H1’15 Cas
Slide 19: Consumer Finance Performance
CONSUMER FINANCE PERFORMANCE Increasing cross-sell volumes form CF customers Instalment loans average monthly volumes (PLN m) 2014-04 2014-05 2014-06 2014-07 2014-08 2014-09 2014-10 2014-11 2014-12 684,9 673,7 675,1 689,6 696,6 709,8 721,7 717,8 736,7 +3,8% cross-sell average monthly volumes (PLN m)
Slide 20: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Outlook • Appendix 20
Slide 21: Going Forward: 2015 Outlook
GOING FORWARD 2015 Outlook 2015 consensus of 360 m Key initiatives: Distribution network remodelling T-Mobile Banking Services SME focus CRM enhancement Internet & mobile banking upgrade NIM ~4,5% C/I below 48% CoR 2,2-2,3% Loan growth 2015 - PLN 4,5 billion net Oulook excluding Meritum impact Conse
Slide 22: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Outlook • Appendix 22
Slide 23: Recommendation U
RECOMENDATION U Alior Bank will ensure full compliance with Recommendation U from April 2015 Insurance products will be offered in two models group individual (without commission) Alior Bank intends to expand insurance product range 23
Slide 24: Banking Guarantee Fund Fees Impact
BANKING GUARANTEE FUND FEES IMPACT Total estimated impact of BFG fund fees in 2015 amounts to PLN 55 m, up by PLN 27 m 2014 2015 +/- Total BFG fee 28 55 27 Annual premium 19 44 24 Prudential levy 9 12 3 Annual premium & prudential levy will be booked in 2015 on a monthly basis 24
Slide 25: Income Statement Snapshot
INCOME STATEMENT SNAPSHOT in PLN m Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Interest income 370 357 415 392 429 456 436 Interest expense -130 -118 -117 -121 -125 -135 -116 Net interest income 240 239 298 271 304 321 319 Dividend 0 0 0 0 0 0 0 Fee and commission income 115 116 141 125 139 135 135 Fe
Slide 26: Balance Sheet Snapshot
BALANCE SHEET SNAPSHOT Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Cash and balances with Central Bank 729 722 755 1 067 1 078 1 057 1 019 1 158 Financial assets held for trading 215 265 234 243 208 285 421 477 Financial assets available for sale 3 259 3 447 2 929 3 389 3 172 2 784 3 796 3 569 O
Slide 27: Shareholding
SHAREHOLDING Largest free float among Polish financials institutions 18.3m shares - 25,3% Entities controlled by Carlo Tassara Group 5.1m shares – 7,1% Genesis Asset Managers LLP 45,1m shares – 62.3% Market free float 3.8m shares – 5,3% Aviva OFE Carlo Tassara has committed to sell at least 25% to a
Slide 28: Continued strong loan growth in Retail & SME
CONTINUED STRONG LOAN GROWTH IN RETAIL & SME Retail loans (new production per quarter) 1 809 1 621 1 681 66 Other retail 1 489 73 1 314 125 1 374 Mortgages for 1 189 1 271 74 629 1 129 54 370 61 546 real estate 72 423 74 74 322 342 247 260 229 1 126 971 992 1 062 1 114 Cash loans 826 868 939 938 Q4'
Slide 29: Employees
EMPLOYEES Persons 6 512 6 500 6 707 6 834 6 154 6 413 5 720 2 325 2 426 2 485 2 386 2 253 2 405 2 187 4 027 4 114 4 160 4 382 4 408 3 533 3 749 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Outlets Headquaters FTEs 6 559 6 637 6 157 6 237 6 240 5 712 5 185 2 343 2 254 2 444 2 349 2 202 2 303 2 094 3 888
Slide 30: Continued Growth of Market Share
CONTINUED GROWTH OF MARKET SHARE Deposits MARKET SHARE Loans 2,7% 2,8% 2,6% 2,6% 2,7% 2,5% Q4'13 Q3'14 Q4'14 Q4'13 Q3'14 Q4'14 Deposits MONTHLY GROWTH (%) Loans Total Retail Corporate Total Retail Corporate ALIOR Market ALIOR Market ALIOR Market ALIOR Market ALIOR Market ALIOR Market JUL 3,5 0,5 -0,
Slide 31: 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 2014F 2015F 2009 2010 2011 2012 2013 2014F 2015F Inflation (CPI % yoy)
Slide 32: 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 2,10 2,20 2,00 2,00 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 33: Polish Banking Sector – Growth of the Main Balance Sheet Figures
POLISH BANKING SECTOR – GROWTH OF THE MAIN BALANCE SHEET FIGURES Assets Loans +9,0% +4,1% 1 538 1 532 +3,9% 1 493 +6,9% 1 429 1 406 1 444 1 401 1 350 1 374 1 041 1 055 1 039 936 945 966 993 972 1 002 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'1
Slide 34: Polish Banking Sector – Main P&L Lines Performance
POLISH BANKING SECTOR – MAIN P&L LINES PERFORMANCE NII NFC Result on banking activity 7,1 0,7 4,0 37,2 13,5 28,4 57,7 10,3 44,1 18,7 7,0 29,4 9,2 3,4 14,1 Q1'14 Q2'14 Q3'14 Q4'14 Q1'14 Q2'14 Q3'14 Q4'14 Q1'14 Q2'14 Q3'14 Q4'14 X - CHANGE VS. Q4’13 (%) Expenses* Net impairment** Net profit -0,2 -0,1
Slide 35: Estimated Merger Synergies
ESTIMATED MERGER SYNERGIES M PLN 2015 2016 2017 Total income 5 15 15 Risk cost reduction 6 13 21 Costs 25 49 49 Total synergies 36 77 85 Source: Alior estimates Synergies: Business processes and HQ costs Distribution network optimization Marketing Product offering Integration costs estimated
Slide 36: 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 36
Slide 37: 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 2014. Bank