Alior Bank Sa · GPW:ALR
Alior Bank Sa — H1 2013 Earnings Presentation
32 slides from Alior Bank Sa's earnings presentation, Aug 8, 2013
Slide 1: Results presentation 1H 2013
ALIOR BANK S.A. Results presentation 1H 2013 Sustainable development in challenging environment August 8th, 2013
Slide 2: Q2 2013 Highlights
Q2 2013 HIGHLIGHTS • Without one-off insurance periodization Q2 net result 105 M PLN (+14 m PLN vs. Q1) • On track to deliver >390 m PLN net in 2013 • Strong fundamental performance Loans +1,8 bn PLN (+12% qoq) Deposits +1,9 bn PLN (+11% Q0Q) # Of customers +151 k (vs +102k in Q1) NII +9% (vs +4% Q1
Slide 3: Key Financials
KEY FINANCIALS M PLN 1H 2013 1H 2012 % (A-B)/B Q2 2013 Q2 2012 % (A-B)/B A B C D E F Net interest income 418 326 28 218 174 25 Net fee and commission income 227 217 5 89 106 -16 Trading result & other 146 98 49 90 64 41 Operating income 791 641 23 396 343 16 General Administrative Expenses -409 -371
Slide 4: Long Term C/I Target on Track
LONG TERM C/I TARGET ON TRACK 426 1) 409 394 396 386 340 314 298 200 202 207 190 191 174 182 61% 56% 55% 52% 51% 52% 1) 47% 49% 4Q'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 C/I Revenues Costs C/I target of <42% in 2016 is clearly within Alior’s reach 1) Excluding one-off insurance fee periodization 4
Slide 5: NIM – Q2 at the Level of Q1 with Positive Outlook
NIM – Q2 AT THE LEVEL OF Q1 WITH POSITIVE OUTLOOK Alior NIM in selected Polish Banks Alior NIM in selected periods GetinNoble 2.0% 4,11% 4,08% 4.4% 4.5% 4.4% BRE 2.1% 4.1% 4.1% Millennium 2.2% ING BSK 2.9% PEKAO 3.5% BZWBK 3.5% Alior 4.1% Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Handlowy 4.1% PKO BP 4.3% 2Q’13
Slide 6: Favorable Development of Loan Book and Deposit Gathering
FAVORABLE DEVELOPMENT OF LOAN BOOK AND DEPOSIT GATHERING Loan book split (m PLN; %) Revenue split (%) Treasury; Factoring; 642; 4 Other business; 8 358; 2 Investment loans; 2 660; 15 Cash Loans; Retail: 53% 5 309; 30 Business; Business: 47% 29 Retail; 63 Working Capital; 4 657; 26 m PLN L/D = 92,7%
Slide 7: Fee Income Performance Correlated with Loan Production
FEE INCOME PERFORMANCE CORRELATED WITH LOAN PRODUCTION Fee income split in Insurance income split 1H 2013 (PLN m; %) (%) Brokerage ; Other ; 8; 2 20; 6 Insurance investment products 9 Insurance stand alone 2 Banking ; 134; 39 Life & job-loss insurance 89 Insurance ; 180; 53 Bank remains comitted to
Slide 8: Alior Remains Focused on Effective Cost Management
ALIOR REMAINS FOCUSED ON EFFECTIVE COST MGMT Split of 1H’13 General and Administrative Expenses C/I in selected Polish banks growth y/y (in PLN m) PKO BP 41.1% Tax and fees Depreciation GetinNoble 42.5% +4 Handlowy 43.0% BFG other Advisory BRE 46.7% Trainings Marketing -19 PEKAO 47.5% +17 HR BZWBK 5
Slide 9: Credit Risk, Excellent Portfolio Collection
CREDIT RISK, EXCELLENT PORTFOLIO COLLECTION Q2 2013 NPL (%) 8,2 7,4 6,6 6,6 6,7 6,4 6,3 6,4 5,9 5,6 4,4 4,0 1,3 1,2 1,0 0,9 TOTAL MTG Retail Corporate Q2'13 Q1'13 2012 EOY Q2'12 Q2 2013 coverage ratio (%) 75 68 68 70 60 61 62 57 59 56 54 51 28 18 20 20 TOTAL MTG Retail Corporate 9
Slide 10: Market Risk – Low Risk Appetite
MARKET RISK – LOW RISK APPETITE Market risk mgmt key assumptions • No proprietary trading • No dependency on whole-sale funding • All clients trades in FX and commodities are closed instantly • Zero position in commodities • Stress test on FX rates: Max loss = 250 t PLN • Stress test on interest rat
Slide 11: Effective Asset and Equity Utilization Maintained
EFFECTIVE ASSET AND EQUITY UTILIZATION MAINTAINED 23.2% 21.5% 1) 19,8%* 17,0% 18.7% 15.8% 14.8% 1) 1.7% 1.8% 1,8%* 1.7% 1.5% 1,8% 1.4% Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 ROE ROA *NOT INCLUDING ONE-OFF IPO MGMT INCENTIVE EXPENSES 1) Excluding 25 m PLN net impact of insurance periodization 11
Slide 12: Alior's Growth Strategy Works: Increasing Market Share
ALIOR’S GROWTH STRATEGY WORKS: INCREASING MARKET SHARE Deposits MARKET SHARE Loans 2.4% 2.3% 2.2% 2.0% 1.9% 1.6% 2Q'12 1Q'13 2Q'13 2Q'12 1Q'13 2Q'13 Deposits GROWTH Loans Total Retail Corporate Total Retail Corporate ALIOR Market ALIOR Market ALIOR Market ALIOR Market ALIOR Market ALIOR Market JAN -
Slide 13: Alior Retains Its Top Position in Client Acquisition
ALIOR RETAINS ITS’ TOP POSITION IN CLIENT ACQUISTION 1 740 1 589 1 487 113 1 359 108 1 627 1 199 104 1 481 1 079 99 1 383 94 1 260 89 1 105 990 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 Retail Corporate 13
Slide 14: Distribution Network Growth
DISTRIBUTION NETWORK GROWTH No of Alior outlets 795 759 720 684 142 109 603 65 100 528 45 16 438 410 411 441 444 350 304 230 208 208 208 209 209 209 209 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Branches Agencies Alior Express 14
Slide 15: Strategic Initiatives
STRATEGIC INITIATIVES Consumer Finance – started in March 2012 Gaining a strong footprint in 613 locations of major retailers (e.g. Euro RTV AGD, Mediaexpert, Avans, Agata Meble) Ever increasing presence online (Allegro, PayU, Neo24.pl) Consumer Finance portfolio: PLN 263,6 M (Q2 2013) Ali
Slide 16: 2013 Outlook
2013 OUTLOOK • Positive development of risk-adjusted return of non- collateralized portion of loan portfolio • Symptoms of macro improvement should result in Sustainable acceleration of SME and micro demand for banking products growth • Exponential growth of Consumer Finance (white label installment
Slide 17: Back Up
ALIOR BACK UP Ath
Slide 18: Polish Macro Outlook
POLISH MACRO OUTLOOK GDP growth (% yoy) Investments and private consumption (% yoy) 11 4.30 9.0 3.90 9 7 Private Investments 2.90 5 consumption 4.1 3.2 2.00 2.1 2.5 3 2.5 1.60 1.60 1.0 0.5 1 -1 -0.4 0.6 -1.0 -1.2 -3 2009 2010 2011 2012 2013F 2014F 2009 2010 2011 2012 2013F 2014F Annual average Annua
Slide 19: Polish Macro Outlook
POLISH MACRO OUTLOOK NBP referance rate (%) WIBOR 3M (%) 4.50 4.99 4.25 4.00 4.27 4.20 4.11 3.50 3.50 3.95 3.25 3.50 2009 2010 2011 2012 2013F 2014F 2009 2010 2011 2012 2013F 2014F End of period End of period FX rate (EUR/PLN) Fiscal policy (% of GDP) 20 60 4.46 Public debt 56.4 18 55.6 55.5 55.2 54
Slide 20: Polish Market – Loans and Deposits
POLISH MARKET – LOANS AND DEPOSITS Loans to households (bln PLN) Loans to corporations (bln PLN) 553 263 262 542 259 540 258 537 538 257 536 528 253 253 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 End of period End of period Deposits from househo
Slide 21: Income Statement Snapshot
INCOME STATEMENT SNAPSHOT Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 Interest income 221 347 494 161 352 576 851 270 310 340 364 355 347 Interest expense -87 -132 -189 -60 -132 -219 -356 -118 -139 -146 -171 -155 -130 Net interest income 13
Slide 22: Balance Sheet Snapshot
BALANCE SHEET SNAPSHOT Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 2010Q3 2010Q4 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 Cash and balances with 239 327 476 397 372 347 449 582 592 702 1 030 729 722 Central Bank Financial assets held for 78 109 118 142 157 382 312 187 205 174 174 215 265 trading
Slide 23: Effective Utilization of Current Infrastructure Reflected in Flat Cost Development
EFFECTIVE UTILIZATION OF CURRENT INFRASTRUCTURE REFLECTED IN FLAT COST DEVELOPMENT in PLN m Q4'11 Q1'12 Q2'12 Q3'12 Q4'12* Q1'13 Q2'13 HR costs -83 -101 -91 -96 -97 -107 -117 NHR costs, icluding inter alia: -76 -64 -78 -83 -75 -74 -70 IT costs -5 -6 -7 -7 -8 -8 -8 rent / building maintenance -33 -32
Slide 24: Trading Result
TRADING RESULT 1H 2013 1H 2012 1H’13 / 1H’12 FX transactions result 70 56 25% Interest rate transaction result 54 24 127% Other financial instruments result 3 1 118% Trading result 127 81 57% FX transactions: forex, FX swap and CIRS with capital exchange, FX forward, currency options, revaluation of
Slide 25: Shareholding Structure
SHAREHOLDING STRUCTURE Alior Lux S.a r. l. & Co. S.C.A. and Alior Sp. z o.o. 36% Other shareholders Genesis Asset 49% Managers, LLP 6% European Bank for Reconstruction and Development 9% 105 managers of Alior Bank hold via LuxCo82 indirectly 2 008 435 shares and will receive 1 299 909 shares latest
Slide 26: Net Other Operating Income
NET OTHER OPERATING INCOME 1H 2013 1H 2012 1H’13 / 1H’12 Other operating income 22 25 11% Other operating expenses -9 -13 49% Net other operating income 13 12 -14% Income (%) 1H 2013 Structure Expenses (%) operating management risk of third party 16 other assets 32 21 other 41 reimburseme litigation
Slide 27: Employees
EMPLOYEES 5 720 4 873 4 570 2 187 1 745 1 668 3 533 2 902 3 128 1H'12 2012 1H'13 Branches HQ 27
Slide 28: OFE - The Three Concepts of Changes
OFE - THE THREE CONCEPTS OF CHANGES 1. OFEs’ „bonds part” liquidation The amount of financial means which OFE can’t invest in shares will be transferred from OFE to sub accounts in ZUS. 2. „Voluntary” Each participant of the system can decide (regarding the capital part of the system) whether to kee
Slide 29: Advantages and Disadvantages of Each Concept
ADVANTAGES AND DISADVANTAGES OF EACH CONCEPT „Bonds Part” Voluntary Voluntary + liquidation 1) OFEs become real investment 1) It is expected that OFE will be chosen 1) The same as in case of funds competing on the market with by the participants who are familiar with Voluntary, (government’s view) A
Slide 30: ZUS as a Significant Player on WSE
ZUS AS A SIGNIFICANT PLAYER ON WSE CONCERNS PLANS / ASSUMPTIONS Investors are uncertain about the fate of The transfer of assets to ZUS will not listed companies which are held in the mean so called automatic sell-off of OFE portfolios. shares, the shares can be sell gradually, not cheaper than the
Slide 31: 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 31
Slide 32: 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 Q1 2013. B