Alior Bank Sa · GPW:ALR
Alior Bank Sa — Q3 2022 Earnings Presentation
47 slides from Alior Bank Sa's earnings presentation, Nov 7, 2022
Slide 1: Presentation of results for 3Q 2022
Alior Bank S.A. Presentation of results for 3Q 2022 Warsaw, 4 November 2022
Slide 2: Agenda
Agenda 1. Operating activities 2. Financial results 3. Credit risk 4. Other issues 2
Slide 3: Operating activities
Operating activities 3
Slide 4: Very good results of Alior Bank disfigured by one-off events
Very good results of Alior Bank disfigured by one-off events Total revenues (PLN M) +373 PLN M +41% 1 292 1 200 In 3Q 22, the revenues generated by the Alior Bank Group 1 093 amounted to PLN 767 million. Compared to 3Q 21, the reported 525 918 935 revenues decreased by PLN 152 million (-17 %) • inte
Slide 5: Stable growth of the Bank, profitability under pressure of one-off events
Stable growth of the Bank, profitability under the pressure of one-off events Assets (PLN bn) Gross Loans (PLN bn) Deposits volume* (PLN bn) +7,5% +0,4% +8,1% 84,1 63,4 72,4 63,7 78,2 67,0 3Q 21 3Q 22 3Q 21 3Q 22 3Q 21 3Q 22 C/I 3Q 22 ROE 3Q 22 NIM 3Q 22 TCR 3Q 22 59.5% -4.6% 3.07% 13.70% +16.9 p.p.
Slide 6: Growth of key products – mortgage loans
RETAIL Growth of the Bank’s key products – mortgage loans* CUSTOMERS Sale of mortgage loans (PLN billion) Number of Customers with a mortgage loan (K) -53% +2% 1,40 1,20 0,94 0,88 76,0 75,8 1,00 75,5 75,3 0,80 0,67 0,66 0,60 0,44 74,1 0,40 0,20 0,00 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 3Q 21 4Q 21 1Q 22 2Q
Slide 7: Growth of key products – cash loans
RETAIL Growth of the Bank’s key products – cash loans* CUSTOMERS Sale of loans (PLN billion) Number of Customers with a loan (K) -6% -19% 421 417 1,61 409 1,41 402 397 1,35 1,20 1,30 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 Gross consumer loan portfolio (PLN billion) -7% Market Po
Slide 8: Development of key products – Consumer Finance loans
RETAIL Development of the Bank’s key products – Consumer Finance (CF) loans CUSTOMERS Sale of CL loans (PLN billion) Number of CF Customers (K) +21% +4% 1,52 1600 1 303 1 367 1 324 1 337 1 349 1,17 1400 0,97 0,91 0,99 1200 1000 800 600 400 200 0 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 3Q 21 4Q 21 1Q 22 2Q 22
Slide 9: Effective building of a lasting relationship with Customers
RETAIL Effective building of a lasting relationship with Customers CUSTOMERS Number of Individual Customers* (million) Number of accounts “Konto Jakże Osobiste” (thousand) +2% +26% 4,13 578 610 4,06 4,09 4,06 4,10 541 484 508 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 Number of moto
Slide 10: Growing importance of digital channels
RETAIL Growing importance of digital channels CUSTOMERS Users of Alior Bank mobile applications (thousand) Number of wire transfers ordered in the Alior Mobile application (million) +25% +22% 839 882 10,2 10,3 791 9,2 9,5 704 740 8,4 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 Struct
Slide 11: Increase in sales and effectiveness of the loan portfolio
BUSINESS Increase in sales and effectiveness of the loan portfolio ... CUSTOMERS Segment: Small / Medium / Large Micro segment Total credit limit granted (PLN bn) Total credit limit granted (PLN bn) +70% -30% 0,38 0,36 0,38 0,32 1,8 2,1 1,8 0,27 1,7 1,1 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 3Q 21 4Q 21 1Q 2
Slide 12: Improvement of portfolio structure and new sales
BUSINESS ... simultaneous improvement of the portfolio structure and new sales... CUSTOMERS Balance of assets Small/Medium/Large in regular service (PLN billion) Share of new sales to preferred industries +18% +2 p.p. 27% 26% 10,8 25% 9,2 9,2 9,7 9,0 20% 15% 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 3Q 21 4Q 21
Slide 13: Further automation of loan and remote service processes
BUSINESS ... further automation of loan and remote service processes CUSTOMERS Remote service (Segments: Micro / Small / Medium / Large) Automated decisions (Segments: Small / Medium / Large) Sale of cards and auxiliary accounts New sales in automated decisions (PLN million) in BusinessPro Banking a
Slide 14: Improved x-sell results and Customer transaction activity
BUSINESS Consequently, improved x-sell results and Customer transaction activity CUSTOMERS Segments: Micro / Small / Medium / Large Number of actively used cards (thousand) Number of cashless transactions with payment cards (million) +5% +11% 103,1 3,3 101,8 3,2 101,1 99,6 98,1 3,0 2,9 2,8 3Q 21 4Q
Slide 15: Latest implementations in the area of Business Customer
BUSINESS The latest implementations in the area of Business Customer CUSTOMERS Fast Track Process Online INIT Pre-approved Process Fast Track – a new simple and fast credit path for Medium and Large Companies The pre-approved application is addressed to the Bank’s Customers with an initial overdraft
Slide 16: Alior Bank – Digital Leader
Alior Bank – Digital Leader My Bills - many things, one click ... and paid! After positive results of the "friends & family" phase conducted in 3Q 22, in October this year, in the Alior Mobile application and in the Alior Online internet banking service, we have implemented the new My Bills service,
Slide 17: Summary of activity in ESG and CSR in 3Q 22
Summary of Alior Bank’s activity in the area of ESG and CSR in 3Q 22 ESG tab on the website of Alior Bank Social Responsibility https://www.aliorbank.pl/dodatkowe-informacje/informacje/zrownowazony- Health-promoting actions for Alior Bank Employees: rozwoj.html • “Day on the U”. Each and every emplo
Slide 18: Social Responsibility of Alior Bank
Social Responsibility of Alior Bank Active with Alior Cycle Meet at Rift • Sports and recreational events. • As part of the #WeSupportGamers series, the Bank became • Promotion of a healthy lifestyle and active leisure. one of the main partners of the Meet at Rift Festival in Łódź. This is Poland’s
Slide 19: Financial results
Financial results 19
Slide 20: Income statement
Income statement PLN M 3Q 21 3Q 22 % y/y y/y 1-3Q 21 1-3Q 22 % y/y y/y Total Income 918,3 766,5 -17% -151,7 2 702,3 3 059,5 13% 357,2 Net interest income 703,5 586,7 -17% -116,8 2 040,4 2 420,8 19% 380,4 Net fee and commission income 189,6 201,6 6% 12,0 550,7 612,9 11% 62,2 Other income 25,1 -21,7 -
Slide 21: Interest income and net interest margin
Despite the increase in financing costs, the rise in market interest rates continues to positively affect the (adjusted) net interest income Interest income and expenses (PLN M) Interest margin and financing cost* +85% +128% 5,81% 4 103 +27% 5,11% 525 1 708 4,58% 4,01% 642 Other Interest Income 1 34
Slide 22: Commission income improving y/y
Thanks to the increase in Customer transactions, Alior successively improves its commission income y/y Fees and Commissions Income (PLN million) +6% +11% -9% 613 Bank accounts, transfers, cash 216 221 operations (net) 202 551 190 191 136 0% y/y 49 -11% y/y Bancassurance (net) 49 43 136 48 45 63 21 -
Slide 23: Stable level of adjusted operating costs
Despite the growing inflationary pressure, the Bank is maintaining a stable level of adjusted operating costs Operating costs (PLN mn) C/I ratio** +17% -23% +30% 591 C/I normalized*** 59,5% 1 541 - Employee - expenses 493 C/I reported 53 - 195 456 - 214 1 188 General and 391 394 97 53 49,3% 97 +5% y
Slide 24: Pursuit of the updated More than a Bank strategy 2021–2022
Pursuit of the updated “More than a Bank” strategy 2021 – 2022 2020 2021 1-3Q 2022 Goal 2022 Assets PLN 78.6 bn PLN 83.0 bn PLN 84.1 bn PLN 89.0 bn Business Number of Individual 4.2 mn 4.1 mn 4.1 mn 4.5 mn volumes Customers Number of Business 251 k 258 k 254 k 278 k Customers ROE -4.7% 7.7% 7.6% >5%
Slide 25: Credit risk
Credit risk 25
Slide 26: Credit policy change and NPL reduction strategy
The change in the credit policy accompanied by the effective implementation of the NPL reduction strategy allowed for a sustained reduction in cost of risk and an improvement in the quality of the loan portfolio Alior Bank Group – cost of risk Alior Bank Group – NPL ratio 2000 3,24% 1800 -59 PLN M y
Slide 27: Improved coverage of NPL with provisions
Despite a relatively small increase in the value of impaired loans, the coverage of NPL with provisions improved significantly Impaired loans (PLN bn) NPL reserve coverage ratio* Cost of Risk - CoR** 14,00% 9 12,75% 13,00% 1,64% 9 1,58% 11,77% 1,54% 12,00% 11,31% 8 10,98% 1,46% 10,70% 11,00% 8 57,27
Slide 28: Capital and liquidity surplus above regulatory minimum
Stable and secure position of the Bank: capital and liquidity surplus significantly above the regulatory minimum The levels of TIER I and TCR capital adequacy ratios as at the end of 3Q 22 significantly exceed the regulatory minimum by: 246 bps (PLN 1.2 bn) and 173 bps (PLN 0.9 bn), respectively TIE
Slide 29: Why Alior Bank?
Why Alior Bank? ▪ Innovation, digitisation, high quality of services for Customers ▪ Improvement of performance by increasing revenue and reducing costs ▪ Improvement in the loan portfolio quality ▪ Growing share of housing loans in the portfolio ▪ Negligible share of CHF housing loans in the portfo
Slide 30: Coming soon… Alior Pay
Coming soon... Alior Pay
Slide 31: Other issues
Other issues 31
Slide 32: Economic growth slowing while inflation rises
The pace of economic growth is slowing down, while inflation is quite the opposite GDP growth in 3Q 22 is declining... … inter alia as a result of rapidly tightening monetary policy… GDP growth (viable, %, y/y) and its structure (p.p.) 14,0 Interest rates in the CEE region (%) 10,0 Poland, Hungary,
Slide 33: The Polish economy remains the leader in Europe
The Polish economy remains the leader in Europe Polish industry despite braking of the vanguard of the EU Amid consumption supported by the influx of immigrants Industrial production (Dec'19=100, swda) Retail sales rate of growth (%, y/y, wda) 140 135 130 120 125 110 115 100 90 105 80 70 95 60 85 gr
Slide 34: Prospects burdened by high inflation and rising interest rates
Prospects burdened by high inflation, rising interest rates and worsening global economic conditions The economic situation is slowing down Inflation will slow down only in 2025 Y/y price index and MPC interest rate in the years GDP dynamics y/y with main components y/y in the years 16 14,2 7,0 14 5
Slide 35: Addressing climate-related challenges
We have been successfully addressing climate-related challenges We cooperate with: 26 PLN 1.2 bn PLN 1.1 bn thousand balance volume of new eco- new Customers as at the end of sales at the end of as at the end of 3Q 22* 3Q 22* 3Q 22* ECO OFFER in 3Q 22 #EKO category Eco-benefits to a credit Eco Loan
Slide 36: Awards and promotion of Alior Bank's offer
Awards and promotion of Alior Bank’s offer Alior Bank regularly implements promotions, amenities and novelties for retails and business Customers Retail Customers: Business Customers • We introduced a new mortgage loan offer called Light • We provided entrepreneurs from Ukraine with the 4x4 start. b
Slide 37: Alior Bank's investment services
Alior Bank’s investment services Alior Bank’s Brokerage House Alior TFI In 3Q 22, we observed significantly lower turnover on After the decrease in assets under management recorded in 4Q the WSE, but due to high volatility on the OTC market, 21 and 1H 22, caused mainly by an increase in interest rat
Slide 38: Activities pursued by Alior Leasing
Activities pursued by Alior Leasing Sale of lease and loans (PLN billion) Number of customers (in thousand) Lease portfolio and loans (PLN billion) +9% -3% -24% +44% -28% +23% 74,3 71,8 2,3 68,3 6,0 5,9 2,1 +58% 5,4 55,4 5,0 1,6 1,6 3,9 35,1 I-III kw.19 1Q-3Q 19 I-III kw.20 1Q-3Q 20 I-III kw.21 1Q-3
Slide 39: Gross structure of the loan portfolio
Gross structure of the loan portfolio – noticable increase in the share of housing loans (PLN M) Loan portfolio in total Retail Customer Segment Business Customer Segment* 0% 0% +1% 1% -1% +3% 37 931 38 245 37 933 25 505 63 436 63 234 63 676 24 988 25 743 3 800 4 195 4 277 6 181 6 217 6 170 25 505 2
Slide 40: Bank adjusts its deposit portfolio
Bank adjusts its deposit portfolio to the current market situation (PLN M) Structure of net liabilities to Customers Net liabilities structure - Retail Segment Net liabilities structure - Business Segment +8% +12% -1% 2% +4% 72 363 -2% 66 954 70 741 1 255 51 733 2 244 46 127 49 591 20 737 21 150 1 6
Slide 41: One-off events affecting reported results
One-off events affecting reported results of Alior Bank Group Impact on Impact on 2021 (PLN M) gross profit net profit 1Q 2Q 3Q 4Q Tax asset write-off related to the operations of the Bank's branch in Romania -25 -25 -25 -25 TOTAL 2021 -25 -25 Impact on Impact on 2022 (PLN M) gross profit net profit
Slide 42: Consolidated statement of the financial standing
Consolidated statement of the financial standing of the Alior Bank Group (PLN mn) 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 % q/q q/q % y/y y/y Total assets 78 201,9 83 048,4 84 649,7 84 223,5 84 070,7 0% -152,8 8% 5 868,7 Cash and cash equivalents 1 645,3 3 763,4 4 989,9 4 940,2 5 428,9 10% 488,7 230% 3 783,6
Slide 43: New sale of loans
New sale of loans (PLN M) Sales in the Business Customer Segment* +45% -13% 2 729 2 432 2 414 865 2 196 2 082 2 103 691 1 818 1 823 628 1 619 1 137 1 455 754 1 363 666 603 1 194 +112% y/y 541 436 562 1 864 1 741 1 568 1 152 1 220 1 328 1 277 927 1 078 893 909 +2% y/y IQ 20 IIQ 20 IIIQ 20 IVQ 20 1Q 2
Slide 44: Additional information
Additional information Employment (FTEs) Alior Bank’s branches -398 -5% -117 -56 -18% -1% -41 665 -7% 7 432 7 442 7 357 633 626 589 476 484 7 090 7 034 194 548 479 193 192 211 210 484 476 190 210 51 190 34 41 180 150 23 2 6 745 6 749 6 668 420 406 6 425 6 408 393 376 356 3Q 21 4Q 21 1Q 22 2Q 22 3Q 2
Slide 45: Quotations, shareholding structure, ratings
Alior Bank S.A. - quotations, shareholding structure, ratings Alior Bank’s share price compared to WSE indices (comparable data for 12 months) Alior Bank share price : 23.12 PLN (data as at September 30, 2022) Capitalisation : 3.0 PLN bn 60 Value of shares in free trade : 1.6 PLN bn P/BV**: 0.6x 50
Slide 46: Contact
Contact Contact data Investor Relations and Subsidiaries Supervison Department Address details e-mail: ir@alior.pl Alior Bank S.A. Investor Relations and Subsidiaries Supervison Department ul. Łopuszańska 38D 02-232 Warsaw Poland More information Website Following events: Facebook fanpage Twitter pr
Slide 47: Disclaimer
Disclaimer This data has been prepared by Alior Bank S.A. (“Bank”, “Company”) solely for the Presentation purposes. Any and all data that may constitute a projection for the Company’s future economic and financial results, contained in this presentation, has been prepared based on the Report of the