Ab Artea Bankas · OMXVSE:ROE1L
Ab Artea Bankas — Šiaulių Bankas — Q3 2024 Earnings Presentation
40 slides from Ab Artea Bankas's earnings presentation, Oct 31, 2024
Slide 1: Šiaulių Bankas Q3`24 Financial Results
Šiaulių Bankas Q3`24 Financial Results October 31, 2024
Slide 2: Key Financial and Strategic Highlights
Key Financial and Strategic Highlights ▪ Strong Profitability: Delivered a healthy ROE of 15.4%, indicating solid profitability and YTD 2024 Highlights effective capital utilization NET PROFIT ▪ Stable Efficiency: Achieved a stable C/I ratio of 45.6%, demonstrating resilience and efficiency despite
Slide 3: Q3`24 Business Segment Highlights
Q3`24 Business Segment Highlights Corporate Private Investment Record High Corporate Loans Lending Activity Substantially Increased DCM Services Surging Originations in Retail Segment Corporate loan book expanded by 22% YoY, New mortgage contracts signed in Q3`24 Origination amounted €185m for the f
Slide 4: Macroeconomic Overview
Macroeconomic Overview Section I
Slide 5: Lithuania`s Economic Growth Accelerates as Inflation Declines
Lithuania`s Economic Growth Accelerates as Inflation Declines Robust Growth Inflation Has Largely Retreated Strongest Consumer Confidence in the EU Real GDP, annual change, % Average annual (HICP) inflation, % Economic Sentiment Indicator(1) (average = 100) Lithuania 120 Lithuania Euro area Euro are
Slide 6: Q3`24 and 9M`24 Financial Results
Q3`24 and 9M`24 Financial Results Section II
Slide 7: Financial Performance Highlights
Financial Performance Highlights Income Statement ▪ Despite declining EURIBOR we have managed to achieve comparable In €`m Q3`24 Q2`24 %∆ QoQ Q3`24 Q3`23 %∆ YoY revenue level QoQ Net Interest Income 40.4 41.1 (2%) 40.4 40.7 (1%) ▪ Other operating expenses decreased by 14% QoQ. Q2 expenses Net Fee &
Slide 8: Net Interest Income
Net Interest Income Key Highlights Net Interest Margin (NIM) Dynamics Net Interest Income YoY (€`m) 6.5% 6.5% 6.4% ▪ Net interest income decreased by -2% in 6.1% 5.6% Q3`24, compared to Q2`24 40.4 10.3 ▪ Net interest income was positively supported 4.2% 3.9% 3.6% 40.7 by new loan origination across
Slide 9: Loan Portfolio
Loan Portfolio Key Highlights Loan Yields 10.0% 10.1% 10.1% ▪ The loan portfolio expanded by 8% since the last quarter and by 18% in the 9.5% 7.5% 7.4% 7.2% past year. This growth was largely driven by strong originations in our corporate banking segment supported by mortgages 5.2% 7.2% 7.0% 6.8% 4.
Slide 10: Net Fee & Commission Income
Net Fee & Commission Income Key Highlights Net Fee & Commission Income YoY (€`m) ▪ Net fee & commission income (NFCI) surged by 43% YoY, driven primarily by the acquisition of INVL Retail business (asset management and life +43% insurance) ▪ Excluding the acquisition impact, NFCI increased by health
Slide 11: Operating Expenses
Operating Expenses (1) Key Highlights Operating Expenses Structure(1) (Q3`24) Other 10% • Cost discipline maintained despite overall inflationary cost environment. Buildings & Premises 7% C/I running at 45.6% for the first nine month significantly below original projections Marketing 4% • Operating
Slide 12: Asset Quality
Asset Quality Key Highlights Stage 2 and Stage 3 Dynamics • Mainly due to the rapid growth of the loan portfolio and impairment losses 57% 61% 61% 59% 60% model adjustment, €7.3m in provisions were formed over the first nine months • The positive and improving development of the Lithuanian economy h
Slide 13: Funding
Funding Key Highlights Funding Portfolio Breakdown (Q3`24) Cost of Funding Other 5% 2.90% Due to Other 2.55% 2.61% • The deposit portfolio continued its banks 2% 2.24% steady growth, increasing by 2% in Q3 Debt Securities 12% 1.82% (€78m) and by 8% over the first nine Term Deposits months (€240m) 36
Slide 14: Capital Ratios and Requirements
Capital Ratios and Requirements Siauliu Bankas Continues The Journey to Optimize Capital Position Sufficient Capital to Support Growth Going Forward and Future Capital Distribution Total Capital Ratio MREL Subordinated MREL • Robust capital position to support growth and future capital distribution
Slide 15: Shareholder Returns Policy
Shareholder Returns Policy Revised Capital Return Policy to Optimize Capital Structure and Enhance Shareholder Value New Dividend Policy Share Buyback Program Our dividend policy commits to a minimum payout of 50% On October 18th executed on a €4.92m tender offer via of the previous year's net earni
Slide 16: Corporate Clients Segment Development
Corporate Clients Segment Development Key Highlights Corporate Loans (Q3`24) (€`m) Corporate Loans by Sectors (Q3`24) +22% ▪ The corporate loan book Renovation 10% 2 092 Other 5% expanded by 22% year-over- 1 856 1 928 1 712 1 764 Real Estate 26% year, driven by record-high Healthcare 3% new loan ori
Slide 17: Private Clients Segment Development
Private Clients Segment Development Key Highlights Private Loans (Q3`24) (€`m) New Mortgage Agreements (Q3`24) (€`m) 72.0 75.6 +21% ▪ Strong demand for mortgages led to record-high 1,186 1,262 1,042 1,074 1,112 origination volumes, 38.0 41.0 39.0 increasing by 99% y-o-y 849 907 754 780 803 ▪ Consume
Slide 18: Investment Clients Segment Development
Investment Clients Segment Development Asset Management (€`m) Life Insurance (€`m) 1,378 12000 Life Insurance Risk Under Management (RuM) (€`m) 1,272 1,329 1,182 81 88 1,108 79 10000 15.0 79 145 154 72 136 1,511 1,529 1,566 1,614 13.0 123 1103 1136 8000 1,479 111 1057 11.0 925 980 6000 9.0 7.0 4000
Slide 19: Investment Clients Segment Development
Investment Clients Segment Development Leading Capital Markets Business Bonds Originated by the Bank in Primary Market (Q3`24) (€`m)1 92 • New bond originations surged to €31m in Q3`24, bringing the year-to-date total to €185m, a substantial increase compared to the €85m issued in the same period la
Slide 20: Continuing Value Creation for Our Shareholders
Continuing Value Creation for Our Shareholders Siauliu Bankas Share Price Performance – L1Y1 800 000 +31% 0.80 700 000 600 000 0.75 Paid Dividend of EUR 500 000 0.0485 per Share 400 000 0.70 300 000 200 000 0.65 100 000 0.60 0 2023-10 2023-11 2023-12 2024-01 2024-02 2024-03 2024-04 2024-05 2024-06 2
Slide 21: Click or Scan to Subscribe to Our Newsletter
Meet Us At: Click or Scan to Subscribe to Our January 17, 2025, Tallinn Newsletter November 7, 2024, Riga November 16, 2024, Vilnius Please subscribe to our Investor Relations newsletter for the latest news and insights December 3, 2024, Prague January 14, 2025, Vienna Subscribe November 7, 2024 Nov
Slide 22: Appendix
Appendix
Slide 23: Income Statement
Income Statement Q3`24 Q3`23 %∆ YoY Q1-3'24 Q1-3'23 %∆ YoY In EUR'000 Interest income 63,239 52,028 22% 183,886 138,981 32% Other similar income 6,921 5,736 21% 19,948 15,262 31% Interest expense (29,735) (17,046) 74% (82,779) (38,158) 117% Net interest income 40,425 40,718 (1%) 121,055 116,085 4% F
Slide 24: Statement of Financial Position
Statement of Financial Position Sept` 24 Dec` 23 %∆ YTD Sept` 23 %∆ YoY In EUR'000 ASSETS Cash and cash equivalents 398,795 751,499 (47%) 572,499 (30%) Securities in the trading book 221,645 207,677 7% 64,477 244% Due from other banks 3,062 3,013 2% 2,841 8% Derivative financial instruments 223 251
Slide 25: Life Insurance Income Reconciliation
Life Insurance Income Reconciliation Net Interest Income In €'m Q3`24 Q3`23 %∆ Revenue related to insurance activities €2.7m Net gain from trading activities (unit-linked contacts) €1.6m Interest income 62.8 52.0 21% Interest income (unit-linked contracts) 0.4 0.0 NA Interest income (unit-linked con
Slide 26: Key Financial Targets
Key Financial Targets Focus Areas 2024 2025 2026 2027–2029 Growth Loan Book €3.3bn €3.7bn €4.1bn CAGR: ~ 8 % Deposits €3.3bn €3.6bn €4.0bn CAGR: ~10% Total Operating Income €202m €211m €243m CAGR: ~10% Net Fee and Commission Income €27m €29m €33m CAGR: ~20% Efficiency Cost-to-Income Ratio 49.7% 53.2
Slide 27: 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 ▪ Asset management business – among the strong
Slide 28: Sticky Deposit Portfolio
Sticky Deposit Portfolio Share of Insured Deposits Top 10 Depositors1 67% 12% 66% 10% 65% 8% 64% 6% 63% 4% 62% 2% 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 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 % of Total Deposits % of Total Depo
Slide 29: CRE Portfolio Analysis
CRE Portfolio Analysis 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 (Q3`24) Other CRE 8% Siauliai 15% Shopping Centers Public Gyms 8% 27% Research Center
Slide 30: Solid Liquidity Position
Solid Liquidity Position Securities Portfolio (Q3`24) Securities Portfolio (Q3`24) By Security Type, Bank-only By Accounting Method, Bank-only Corporate Bonds Fair Value Trading Book 8% 7% 2% €0.9bn €0.9bn Government Bonds 92% Amortised Cost 91% Liquid Assets (€`m) Strong Liquidity Position (Q3`24)
Slide 31: Loan Portfolio Segments Performance
Loan Portfolio Segments Performance Corporate Lending – Portfolio(1) Mortgage – Portfolio Consumer Financing – Portfolio mEUR mEUR mEUR 2 000 7.1% 7.2% 7.1% 7.5% 7.0% 6.0% 5.9% 1 900 6.8% 1 000 5.8% 5.8% 6% 6.6% 7.0% 5.6% 380 10% 1 800 10.1% 10.1% 6.5% 900 5.3% 6% 10.0% 1 700 340 9.9% 10% 5.7% 6.0%
Slide 32: Šiaulių Bankas Market Share in Lithuania
Šiaulių Bankas Market Share in Lithuania Loan Portfolio Market(1) Corporate Lending(1) 21.7% 22.9% SEB 22.2% SEB 26.6% Swedbank Swedbank Luminor Luminor 10.1% 13.8% Šiaulių Bankas Šiaulių Bankas 28.7% Others Others 27.1% 16.0% 10.9% Mortgage(1) Consumer Financing(1) 28.9% 27.1% SEB Šiaulių Bankas 36
Slide 33: Group Shareholder Structure
Group Shareholder Structure Shareholder Structure (Sept`24) Number of Shareholders Other Domestic 19.9% Investors 19,087 19,154 18,891 32.4% 18,524 9.0% 16,573 7.3% 5.3% 5.1% 21.1% Other Foreign Investors Algirdas Butkus (One of the Founders) 9,053 Listed Baltic asset management group established in
Slide 34: Total Shareholder Returns & Broker Outlook
Total Shareholder Returns & Broker Outlook Šiaulių Bankas (SAB1L) TSR Performance vs. Market Index – Last 5 Years Analyst Assessments Imply Average Upside of 25% 200% +21% +22% +29% +30% +90% 180% € 1.05 € 1.06 € 0.99 € 1.00 160% 140% +21% 120% 100% 80% 60% 40% Enlight Research Erste Swedbank Norne
Slide 35: 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 36: 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 37: Board of Directors
Board of Directors 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 Supervisory Council of
Slide 38: High Focus on ESG As a Competitive Advantage
High Focus on ESG As a Competitive Advantage Šiaulių Bankas ESG Strategic Priorities Selected Case From ESG Strategic Priorities: Renovation Strong Institutional Environmental Partners: Sustainability Leading 65% building of the renovated multi-apartment Service Access buildings in Lithuania are fin
Slide 39: Šiaulių Bankas – An Award Winning Organisation
Šiaulių Bankas – An Award Winning Organisation Bank of the year, Lithuania 2013; 2015; 2016; 2019; 2021; 2022; 2023 Banking Awards, “Global Finance”: Asset Management Awards (INVL): 2023 Best bank in Lithuania 2024 Citywire Awards – Three SB Asset Management's portfolio managers (Regimantas Valenton
Slide 40: 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