Alior Bank Sa · GPW:ALR
Alior Bank Sa — Q3 2020 Earnings Presentation
52 slides from Alior Bank Sa's earnings presentation, Nov 4, 2020
Slide 1: Presentation of Q3 2020 Financial Performance
Alior Bank SA Presentation of Q3 2020 Financial Performance Warsaw, 4 November 2020
Slide 2: Agenda
Agenda 1 Key issues 2 Operations 3 Credit risk 4 Financial performance 5 Appendices 2
Slide 3: Key Issues
Key Issues 3
Slide 4: Key issues: solid performance in all business areas
Key issues In Q3 the Bank generated solid performance in all of its business areas Net profit at the level of PLN 81.8 M. Record sales of mortgage loans. In Q3 2020 Each month in Q3 was closed with positive it totalled PLN 960 M, up by 43% q/q. and 100% financial income. y/y. In Q3 2020 the Bank sha
Slide 5: Q3 2020 – business development and improvement of financial performance
Q3 2020 – business development and improvement of financial performance Despite a significant deterioration of the external Business volumes growth allows us to look optimistically environment, the Bank is able to generate stable at the Bank development in consecutive periods. financial performance.
Slide 6: Stable and secure position: capital and liquidity surpluses over regulatory minima
Bank's stable and secure position: significant capital and liquidity surpluses over regulatory minima At the end of Q3 2020 the levels of TIER1 and TCR capital ratios exceed significantly the regulatory minima, respectively by: 448 b.p. (PLN 2 196 M) and by 491 b.p. (PLN 2,405 M) TIER 1 Liquidity -
Slide 7: Quick and efficient actions to minimize the impact of COVID-19
Bank’s quick and efficient actions taken to minimize the impact of COVID-19 Income-side initiatives Cost-side initiatives • increase of cross selling of transactional products, • enhancement of process efficiency using robotization, including insurance of credit products artificial intelligence (AI)
Slide 8: Alior wins the highest awards (1/2)
Retail and business customers appreciate the Bank's activities - Alior wins the highest awards (1/2) 1st place 1st place 1st place Business friendly Bank according Traditional banking Remote banking to Forbes Polska Magazine Alior Bank became "Newsweek's Friendly Alior Bank in the "Newsweek's Friend
Slide 9: Alior wins the highest awards (2/2)
Retail and business customers appreciate the Bank's activities - Alior wins the highest Awards (2/2) Alior Bank's currency Alior Bank brokerage house New branch of Alior Bank exchange office Invest Cuffs award Bankier.pl portal award European Property Award Our New Branch Format won the European Cur
Slide 10: Operations
Operations 10
Slide 11: Development of digital solutions and new facilities in the offer
Development of digital solutions and new facilities in the offer for the customers Consistent development Innovations in the mobile application Good start of open banking Alior Stock Exchange • PLN 300 for school starter • Making available consecutive facilities • Alior Bank systematically and funct
Slide 12: Improvements in customer service and development of digital channels
Improvements in customer service and development of digital channels VideoSelfie Cash Platform Use of biometrics to identify the client in the Making the Cash platform available to account opening process. Link4 personnel and PZU agents. Credit card at Alior Online Improvements of lending process Pr
Slide 13: Changes in the offer and transactional products
Changes in the offer and transactional products Application for an investment account and a Competition for customers to take supporting account available in Alior Online advantage of Auto-Dealing service for microbusinesses: • Encouraging business customers to use • New self-service facility for Ba
Slide 14: Sales of key products during COVID-19 period
Sales of key products at the Bank during COVID-19 period Mortgage loans (in PLN bn) Loan (in PLN bn) +100% 2,06 -44% 0,96 y/y y/y 1,73 0,67 1,46 1,16 0,48 0,49 0,47 0,98 III3Q’19 kw. 19 4Q’19 IV kw. 19 I1Q’20 kw. 20 II 2Q’20 kw. 20 III3Q’20 kw. 20 3Q’19 III kw. 19 IV4Q’19 kw. 19 I1Q’20 kw. 20 II2Q’2
Slide 15: Increase in sales of mortgage loans
Increase in sales of mortgage loans (average monthly volume per quarter) Mortgage loans - average monthly sales in PLN M Share of market 321 Alior Bank's share in 2020 Mortgage loan market 45% January 2.7% 222 February 3.1% 162 163 156 March 2.8% 42% 1% APRIL 3.5% 4% May 4.9% June 7.1% July 7.0% 3Q’
Slide 16: Effective Building of a Lasting Relationship with Customers
RETAIL Effective Building of a Lasting Relationship with Customers CUSTOMERS Sales of savings and current accounts ('000) Number of retail customers (M) (No. of savings and current accounts opened for New to Bank and New to Product customers) +0.2 M -8% 4,30 43,3 41,4 4,19 4,23 39,7 4,10 4,15 36,3 3
Slide 17: Growing significance of digital channels
RETAIL Growing significance of digital channels CUSTOMERS Sales of saving and current account, Users of Alior Bank's mobile applications ('000) and personal account online ('000) +47% +7% 585 544 504 38,2 456 398 29,1 31,0 23,4 25,1 III 3Q’19 kw. 2019 IV 4Q’19 kw. 2019 1Q’20 I kw. 2020 2Q’20 II kw.
Slide 18: Significant increase of customer satisfaction index
RETAIL Significant increase of customer satisfaction index CUSTOMERS Distribution network NPS Relationship NPS 80% 81% 75% 75% 76% 35% 36% 28% 29% 28% 3Q’19 III kw. '19 IV4Q’19 kw. '19 I 1Q’20 kw. '20 2Q’20 II kw. '20 3Q’20 III kw. '20 III3Q’19 kw. '19 IV 4Q’19 kw. '19 I 1Q’20 kw. '20 II 2Q’20 kw. '
Slide 19: Business customers: transformation into more active relationships
BUSINESS Business customers: transformation of business customer base into more active and CUSTOMERS sustainable relationships New business customers in Small /Medium /Large Enterprises segments BankConnect Customers* (number of customers) (number of customers) +11%** -25%** 1 200,0 940 1 000 1 014
Slide 20: Robust sales of new B2B loans in Q3 2020
BUSINESS Robust sales of new B2B loans in Q3 2020 in the COVID-19 pandemic period CUSTOMERS Limit of new sales* Sales limit using automatic decision-making process (PLN M, small, medium and large segments) (PLN M, small segment) 250 2 500 123 200 2 000 50 58 47 150 1 500 105 64 118 2 248 100 1 000 2
Slide 21: Micro customers: number of customers up and improved relationship
SEGMENT MICRO Micro customers: Number of customers up and improved relationship MICRO No. of business customers in Micro segment ('000) New business customers in Micro segment ('000) -19% +13% 10,9 9,4 7,9 6,5 6,4 3Q’19 III kw. '19 4Q’19 IV kw. '19 1Q’20 I kw. '20 II 2Q’20 kw. '20 III3Q’20 kw. '20 1
Slide 22: Alior Bank and BGK guarantees
The proposal of Alior Bank offered jointly with the Bank of National Economy (BGK) Alior Bank is one of the main distributors of portfolio guarantees jointly with BGK Alior Bank was one of the first to modify the guarantee schemes in the times of COVID-19 took advantage of special terms and conditio
Slide 23: High coverage with guarantees of new sales transactions
MICRO High coverage with guarantees of new sales transactions MICRO Micro new sales coverage with BGK guarantees Micro portfolio coverage with BGK guarantees 97% 97% 95% 55% 55% 92% 93% 54% 54% 52% III3Q’19 kw. '19 IV4Q’19 kw. '19 I 1Q’20 kw. '20 II2Q’20 kw. '20 III3Q’20 kw. '20 III kw. '19 IV kw. '
Slide 24: Operations of key member companies of the Alior Bank Group
Operations of key member companies of the Alior Bank Group ALIOR LEASING ALIOR TFI • In the period of 9 months of 2020 Alior Leasing generated sales in the range of PLN 1.6 billion, of which PLN 634 M • In Q32020 Alior TFI generated record net sales of PLN was generated in Q3 (up by 12% compared to
Slide 25: Credit risk
Credit risk 25
Slide 26: Structure and quality of the loan portfolio
Structure and quality of the loan portfolio Total loan portfolio, gross (PLN M) Retail customer portfolio (PLN M) Business customer portfolio* (PLN M) 36,236 26,801 34 492 26 110 3 382 61,294 62,346 2 820 8% 35 5 194 19% 5 483 21% % 12 750 790 3% 712 42% 11 375 33% 8% 3% 26 801 44% 26 110 6 662 25%
Slide 27: Continuous improvement of the quality of new loan sales
Continuous improvement of the quality of new loan sales Sales volume and quality of new cash loans (PLN M) 2 500 5,0% 1 942 2 025 2 009 2 060 1 722 1 755 1 745 1 707 1 807 1 766 1 728 1 654 2 000 4,0% 1 623 1 461 Loan amount granted 1 500 1 262 1 242 1 269 3,0% Default rate MOB6 (6 1 000 1,91% 2,0%
Slide 28: Portfolio by pandemic risk level
Portfolio by pandemic risk level Change of turnover – Sept. 2020 vs. Feb. 2020 Low risk industries Medium risk industries High risk industries Low risk industries, resilient or gaining in Industries threatened by interrupted supply Industries severally hit by economic importance, such as: production
Slide 29: Portfolio by pandemic risk level
Portfolio by pandemic risk level Sensitivity of KB portfolio Sensitivity of KB TOP100 portfolio Sensitivity of the regular KB TOP100 portfolio 13% 17% 17% 4% 3% Low risk Branże industries niskiego ryzyka 24% Branże Mediumśredniego ryzyka risk industries 63% Branże wysokiego High risk ryzyka industri
Slide 30: Sensitivity of cash loan portfolio to risk of employment termination
Sensitivity of cash loan portfolio to the risk of employment termination Share in total cash loan portfolio 18.8% Scale of sensitivity to the risk of (w tym18.7% 18.7%accounting z tytułu employment termination based on: (including wakacji kredytowych) for repayment holidays 19.6% source of income em
Slide 31: Customer support - repayment holidays
Customer support - repayment holidays (non-statutory/sectoral payment moratoria) No. of launched repayment holidays (accounts)* 66,396 5,436 16,533 14.6% Share of launched Share (%) of applications processed positively 95.5% 89.0% 99.7% repayment holidays in TOTAL portfolio Repayment holidays grante
Slide 32: Customer support - statutory repayment holidays
Customer support - statutory repayment holidays (applies only to Retail Customers) Total Retail Loan Mortgage CF Other Customers A. Total number of applications 1586 202 67 297 2152 B. Total volume of applications (in PLN M) 100.9 45.5 0.2 1.3 147.9 C. Total share of applications in the Retail 0.28%
Slide 33: Change of lending policy since 2Q 2020
Change of lending policy since 2Q 2020 Area Scope of changes Industry policy • Implementation of additional analysis and requirements for risk acceptance for customers in directly and indirectly exposed industries • Imposing financing constraints on the customers generating income under civil law co
Slide 34: Financial performance
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Slide 35: Profit and Loss Account
Profit and Loss Account PLN M Q3 2019 Q2 2020 Q3 2020 change % y/y change y/y Q1-3 2019 Q1-3 2020 change % y/y m. y/y Total income 955,1 791,2 892,7 -7% -62,4 2 985,0 2 634,0 -12% -351,0 Interest income 803,0 722,0 683,1 -15% -119,9 2 436,7 2 182,0 -10% -254,7 Fee & charges income 170,2 154,6 169,1
Slide 36: Impact of interest rate cuts on the financial performance
Impact of interest rate cuts on the financial performance Impact of interest rate cuts on the financial performance According to the Current Report No. 29/2020, published on 29 May 2020 the Bank estimates the impact of the interest rate cut* on the quarterly net profit/loss in the range of PLN 116 -
Slide 37: Interest net income
Interest net income (M PLN) Interest income YTD, y/y Net interest income on a quarterly basis Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 3,096 354 2,599 NIM* 4.43% 4.11% 4.34% 4.00% 3.71% 321 2 437 -255 M (10)% COF** 1.14% 1.12% 1.02% 0.72% 0.44% 2 182 2 743 2 278 Interest income (PLN M) 1,029 -660 -41
Slide 38: Net fee and commission income
Net fee and commission income (PLN M) Fee and charges income YTD, y/y Net fee and charges income on quarterly basis Pozostałe Other feeskoszty cost prowizyjne 329 852 893 302 305 294 Koszty prowizyjne Fees cost związane related to cards z 31 78 kartami 24 25 269 24 42 66 127 40 52 22 43 113 Sprzedaż
Slide 39: Operating expenses of Alior Bank Group
Operating expenses of Alior Bank Group (PLN M) Operating expenses YTD, y/y Operating expenses on a quarterly basis C/I* 38.9% 43.8% 50.7% 49.9% 45.7% +6 M 1,278 +0.5% 1,284 145 136 482 182 89 395 408 229 372 352 24 24 12 61 Koszty BFG BGF costs 12 59 319 281 61 109 Amortyzacja Amortisation 66 98 Kos
Slide 40: Cost of Risk (CoR)
Cost of Risk (CoR) Alior Bank Group 5,94% • A significant increase in the Cost of Risk (CoR) in Q2 2020, it was followed by a decline to the levels 3,30% corresponding to the long-term average. 1,79% 1,88% 2,00% 1,86% 2,08% 2,17% 1,93% 1,86% • If the macro environment has stabilized and there are no
Slide 41: Thank you for attention
Thank you for attention 41 Alior Bank S.A. | 28 lutego 2020 r. | Wyniki skonsolidowane Grupy
Slide 42: Appendices
Appendices 42
Slide 43: Macroeconomic environment (1/3)
Macroeconomic environment (1/3) Economy rebounces Labour market is supported by the Anti-Crisis Shield GDP y/y growth rate with major components y/y by quarter Employment and wages in the enterprise sector and unemployment rate 15 10% 10 8% 4,8 4,6 4,0 3,2 6% 5 2,0 -2,5 4% 0 -3,1 2% -5 -8,2 0% -10 -
Slide 44: Macroeconomic environment (2/3)
Macroeconomic environment (2/3) Q2 – one of the best at the background of Europe Retail sales with relatively quick rebouncing Real GDP growth rate in Q2 Retail sales growth rate (%, y/y) (%, y/y, wda) 0 10 -5 5 0 -10 -5 -15 -10 -20 -15 Republic -25 Netherlands Kingdom Hungary Germany Belgium EU Pol
Slide 45: Macroeconomic environment (3/3)
Macroeconomic environment (3/3) Economic growth Inflation and National Bank of Poland rate GDP y/y growth rate with major components y/y by year CPI y/y and MPC's interest rate by year 3,5 3,3 15 3 10 5,3 2,3 4,1 4,0 2,5 5 2,0 2 0 -2,6 1,7 1,5 -5 1 -10 0,5 0,10 -15 0 2018 2019 2020P 2021P 2018 2019
Slide 46: Market position of Alior Bank Capital Group
Market position of Alior Bank Capital Group Balance sheet PLN 77.7 bn 8 031 pers. (FTE) Headcount total 8th position in the market 5th position in the market 31.91% Equity PLN 6.5 bn Branch offices 717 outlets 9th position in the market 4th position in the market 7.25% Deposit PLN 65.9 bn 7.12% WSE
Slide 47: Additional information
Additional information Headcount* (FTEs) Alior Bank branch offices -115 -323 -14% -3.9% 832 820 791 8,354 8,369 8 310 750 8,183 717 505 519 529 8031 213 212 498 490 207 195 227 224 205 199 220 224 7 654 7 624 7 557 7 465 619 608 584 7 317 545 518 III3Q’19 kw.19 IV4Q’19 kw.19 I1Q’20 kw.20 II2Q’20 kw.
Slide 48: Consolidated Statement of Financial Position (PLN M)
Consolidated Statement of Financial Position (PLN M) Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 change % q/q change q/q change % y/y change y/y Total assets 76 963,2 76 714,1 76 512 77 671,9 77 717,3 0,1% 45,4 1,0% 754,1 Cash assets and equivalents 946,8 1 379,1 1 960,9 1 128,5 1 636,9 45,1% 508,4 72,9
Slide 49: Re-engineering of the sales network and expansion in preferred industries
Re-engineering of the sales network and expansion of business in preferred industries Alior Bank optimized the Business Customer sales network through the transformation of 8 Corporate Centers and 13 SME Gdańsk CBC Centers into 14 Corporate Banking Centres (CBC). Białystok CBC Poznań II CBC Poznań I
Slide 50: Centralisation and digitisation of after-sales processes
BUSINESS Centralisation and digitisation of after-sales processes CUSTOMERS In Q3 2020 Alior Bank followed-up the project of centralization and optimization of after-sales processes 6644 cases 43% cases the process of central centralised credit in the after-sales service in the after-sales service o
Slide 51: Contact
Contact Should you have any questions or querries do not hesitate to send them at: relacje.inwestorskie@alior.pl Director of Investor Relations Department: Dominik Prokop ph. +48 508 700 362 51
Slide 52: Disclaimer
Disclaimer This document has been prepared by Alior Bank S A . ("Bank", "Company”) solely for the Presentation purposes. Any forward looking statements concerning future economic and financial performance of the Bank contained in this Presentation are based on the Financial Report of the Alior Bank