Budget and Business Plan 2025
March 2025
Patria Bank SA - Soseaua Pipera nr. 42, cladirea Globalworth Plaza, et. 8 ssi 10, Bucuresti, Romania, cod postal 020309 | Banca participanta la
Fondul de Garantare a Depozitelor Bancare (FGDB) | ORC: J40/9252/2016 | CIF RO 11447021 | Nr. RB-PJR-32-045/15.07.1999 | Capital social (subscris si varsat) 327.881.437,60 lei | Cod operator date personale Registrul ANSPDCP: nr. 753 | Nr. Registru ASF: PJR01INCR/400026 din 28.03.2019 | Tel: 0800 410 310 | Fax: +40 372 007 732 |info@patriabank.ro| www.patriabank.ro.
1
Summary
I. | MACROECONOMIC PERSPECTIVES | 3 |
II. | THE BANK'S OBJECTIVES AND BUSINESS PLAN FOR 2025 | 3 |
III. | FINANCIAL PROJECTIONS FOR 2025 | 6 |
I. Macroeconomic Perspectives
MACRO
2025 PROJECTS
Forecasts are for maintaining the monetary policy interest rate and resuming the
cycle of interest rate cuts towards the end of 2025, given the prospects of
Monetary policy interest rate
maintaining the annual inflation rate at high levels, the large macroeconomic
imbalances, the high uncertainty in the economy.
Economic growth
Deficit
7.04%
Inflation
4.40%
ROBOR 3M
5.50%
IRCC
5.70%
EURIBOR 3M
2.15%
1.5% --> 2.5%
II. The Bank's objectives and business plan for 2025
• Increase in total assets by 15%, up to RON 5.2 billion
• Reaching a double-digit Return on Equity (RoE) in 2025 of 11.66%, and obtaining a Net Result of RON 52.9 million
• Increasing the balance of loans granted to customers by 16%, RON +376 million, expected to take place in 2025 compared to 2024
• Increase in commercial financing of 7% (RON +241 million), evolution focused mainly on expansion of current accounts, of overnight deposits and of collateral deposits
• Diversification of financing sources by using an amount of EUR 37.5 million from the EUR 50 million financing granted in 2024 by the European Investment Bank
• Attracting new customers and increasing the number of products per customer is a priority goal for business lines in 2025
• Development of operating income by 25%, RON +53 million, through the contribution, mainly, of net interest income and net commission income representing the core activity of the bank
• Managing costs in a responsible manner by assuming the development plans and investment projects planned by the Bank for the year 2025, as well as the forecast inflationary constraints
• Optimizing the business model so that increasing efficiency leads to achieving a sustainable cost / income ratio; for the year 2025, the aim is to improve the ratio from 71% in 2024 to 64% (without taking into account the 2% turnover tax)
• Decreasing the Nonperforming Exposures Ratio to 3.51% (from 4.1% in 2024) by continuing the recovery and write-off actions and maintaining the NPL coverage ratio above the 55% level.
The strategic ratios targeted by the Bank in 2025 are presented below. These are presented from the perspective of Management Accounting (according to internal monitoring):
Actual | Actual | Budget | ||
INDICATORS | 2023 | 2024 | 2025 | 2025 vs 2024 |
Loans to Depo | 70% | 67% | 73% | 8% |
Loans / Total Assets | 54% | 55% | 55% | 0% |
Liquid Assets / Total Assets | 41% | 39% | 36% | -7% |
Cost / Income | 72% | 71% | 64% | -10% |
Cost / Income (%) Tax 2% included | 72% | 75% | 67% | -10% |
RoA | 0.6% | 0.8% | 1.1% | 33% |
RoE | 6.2% | 8.5% | 11.7% | 37% |
NPE | 5.4% | 4.1% | 3.5% | -14% |
Coverage of NPL | 60% | 58% | 57% | -2% |
During this period, the Bank will pursue an optimal capital adequacy, following the simultaneous realization of the following desideratum:
• Compliance with prudential parameters (TSCR + capital buffers) in order to ensure the capital base necessary for the bank's development and to accommodate the new BASEL IV requirements
• Optimal allocation of capital in productive assets with superior yield
• In the area of commercial lending, the Bank will ensure that the investments to optimize the return on capital, establishing the pricing policy according to all relevant parameters.
The Bank propose an increase of the loan portfolio in the conditions of achieving a significantly higher level of efficiency. In this sense, the Bank will seek to reach a minimum level of credit volumes / employees and credit volumes / bank unit, regardless of the business sub-segment that generates the respective assets. The realization of this desideratum will be fulfilled both by increasing the productivity of the sales force, and by optimizing the entire approval process.
Increased attention will be paid to increasing non-risk revenues, both in the retail area and in the area of legal entities and also to the revenues coming from financial activity.
Further details on the bank's objectives and prospects for the future are presented in the Income and Expense Budget for 2025, subject to the approval of the General Shareholders Meeting.
Loan sales plan by segments for 2025
For the budgeting of new loan production, the Bank will seek to reach a minimum level of loan volumes / employees and loan volumes / branch, seeking the alignment to the market, on each business subsegment that generates these assets.
The realization of this desideratum will be fulfilled both by increasing the productivity of the sales force, and by optimizing the entire approval process, the on-going optimization of sale processes, the simplification and automatization of target flows, the applications writing and decision-making processes.
Yearly Sales Evolution (M RON)
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Actual 2023
Actual 2024
Buget 2025
Retail IMM Corporate
Agro Micro APIA
TOTAL
NPL Strategy
For the budgeting of financial projections, the Bank considers the continuing of NPL recovery rates from the old portfolio, as well as the increase in quality management activities regarding new loan production.
In cadrul proiectiilor financiare s-a avut in vedere continuarea procesului de recuperare
The Bank has as strategic objectives:
- Maintaining the Coverage Ratio of NPL above 55%
- Reduction of NPE rate to 3.5%
During 2025, the Bank also considered the write-off of NPLs from the balance sheet in amount of RON 26 million.
III.
Financial projections for 2025
Profit and Loss account
The Budget and the Business Plan reveals the strategic objective of Patria Bank - the profitability consolidation - accomplished through:
✓
The increase of net banking income by the contribution of all its components
✓ The evolution of operational costs taking into account estimated inflation, sustaining commercial activity and investments in digitalization resulting in the improvement of Cost / Income Ratio from 71% in 2024 to 64% in 2025 (without the 2% tax on turnover).
Net banking income presents an increase of 25% in 2025 compared to 2024, due to the development of the loan portfolio (+16% in 2025 vs 2024), the increase of clients' transaction volumes and the number of active clients. An important component is represented by the fees and commissions income which is expected to register an increase of 16% in 2025 vs previous year.
The budgeted profit for the year 2025 was affected by the additional turnover tax calculated by applying a rate of 2% on the annual turnover. The amount budgeted by the Bank for the payment of turnover tax is RON 8.4 million (vs RON 7.5 million in 2024).
Management Accounting Presentation
values in k RON
2024
2025
kRON
%
Net Interest Income
Net fee and commission income Gains from financial income Other income
NET BANKING INCOME
53,330 25%
143,474 36,087 25,536 8,677 213,774
191,008
47,535 33%
42,034
5,948 16%
27,412 6,649 267,104
1,876 7%
(2,028) -23%
(152,060)
(170,212) -18,152 12%
Staff costs Administrative expenses Depreciation and amortisation OPERATING EXPENSES
(76,302) (63,353) (12,405)
(86,709) (68,902) (14,600)
(10,408) 14%
(5,549) 9%
(2,195) 18%
OPERATING RESULT
61,714
96,892
35,178
57%
COST OF RISK
(10,212)
(24,180)
(13,968) 137%
Other provisions
(1,700)
(450)
1,250 -74%
RESULT BEFORE INCOME TAX Current & Deferred Tax
Tax on turnover
NET FINANCIAL RESULT
49,802 (7,090) (7,544) 35,168
72,262 (10,992)
22,460 45%
(3,902) 55%
(8,387) 52,883
(843) 11%
17,715
50%
Operating expenses → cost optimization will continue to be pursued at the Bank level, in order to develop the commercial activity.
Administrative expenses will increase in 2025 by RON 5,549 thousand, of which the most important refer to expenses directly related to the increase in the Bank's volume of activity
o Real estate costs: rent, energy, security services and maintenance of buildings
o Marketing costs
o Costs with card processing services and in ATM network
o IT costs, due to software maintenances related to new IT projects, as well as cost increases in telecommunication
o Audit and business consultancy costs
Balance Sheet
Patria Bank proposes to increase its assets by 15%, the generating elements being the increase in the loan portfolio, as well as that of the government securities portfolio.
The share of (gross) loans in total assets will remain constant at 55%, contributing to the consolidation of profitability.
As in the past, financing remains predominantly from the commercial area diversified with interbank resources, loans from financial institutions and REPO operations.
Loan to deposit ratio
Loan to deposit ratio is to increase from 67% in 2024 to 73% in 2025, the loan portfolio is to expand more rapidly than the deposit and the current accounts portfolio → evolution 2025 versus 2024:
Loans (gross) + 376 M RON, +16%
Deposits + 241 M RON, +7%
Management Accounting Presentation
Actual
Budget
values in k RON
Liquid Assets Equity Investments
Net Customers Loans
2024 1,807,649 40,296 2,361,692
2025 2,093,824
286,176 16% 42,296 2,000 5% 2,737,590 375,898 16%
Subordinated loans 5,668 7,168 1,500 26%
Tangible assets Intangible assets Goodwill
57,358 59,184
31,440 31,780
20,103 20,103
Right of use assets IFRS 16 Investment Property
25,546 21,079
90,210 90,210
Other debtors and other assets Deferred Tax Asset
42,130 45,669
3,856 6,677
TOTAL ASSETS
4,485,947
5,155,579
Due to Banks
Due to Customers
4,905 3,702,193
171,494 3,943,244
241,051 7%
Borrowings from IFIs 136,548 287,500 150,952 111%
Liability IFRS 16 Other liabilities Subordonated debt Subordonated securities TOTAL LIABILITIES
26,640 22,404
61,708 77,295
59,391 110,000
65,557 65,935
4,056,942
4,677,872
EQUITY
TOTAL LIABILITIES & EQUITY
429,005 4,485,947
477,707 48,702 11%
5,155,579 669,632 15%