Alior Bank’s Solid Results in Q3 2018. Net Profit in Line with Consensus
The Alior Bank Group reported a dynamic growth of revenue, which stood at PLN 2,950 million in 9M 2018 (up by 9 percent YoY), while its net result increased by more than 56 percent. The Group’s net profit amounted to PLN 173 million in Q3 2018 alone, in line with the market consensus. The Group is consistently implementing the Digital Disruptor strategy, optimising its profitability and efficiency ratios, rate and by aligning its offer with the needs of the market and the clients.
“Our Q3 2018 results demonstrate that the strategy pursued by Alior Bank is right. Changes in the portfolio mix, including continued growth of loan volumes in the strategic segments and other initiatives which improve the positioning of the Bank’s offer in the context of market needs, lead to a visible improvement of our financial ratios. Importantly, we acquire more and more clients thanks to our deposit products, including personal and savings accounts. In Q3 alone, we sold 47.8 thousand new personal and savings accounts, 10.6 thousand more than in Q2. As a result, we have grown our clients base to 4.2 million,” said Krzysztof Bachta, Vice-President of the Management Board of Alior Bank and acting CEO.
Net interest income amounted to PLN 781 million in Q3 2018 (PLN 763 million in Q2 2018) and to PLN 2,281 million in January-September 2018, representing an 8 percent increase year on year. Net interest margin (NIM) reached 4.64 percent in Q3 2018, an increase of 6 basis points quarter on quarter and well above the 2020 strategic target of 4.5 percent.
Gross loan book growth amounted to PLN 4 billion in 9M 2018. Alior Bank reported a high sales growth in the strategic segments of cash loans, leasing, and micro-firms. The Bank expects to grow by at least PLN 5.5 billion in 2018, and by PLN 5-6 billion in subsequent years, in line with the 2020 strategy.
“We have been successfully improving the cost-efficiency of our business for several quarters now. The cost/income ratio (C/I) dropped to 44.0 percent in 9M 2018 vs. 51.7 percent in 9M 2017. According to the Bank’s strategy, the C/I ratio will decrease further to 39 percent in 2020. Our return on equity (ROE) reached 11.5 percent in Q3 2018, a significant increase year on year compared to a ROE of 7.2 percent in Q3 2017,” said Filip Gorczyca, CFO and Vice-President of the Management Board of Alior Bank. “Importantly, we have expanded our co-operation with Bank Gospodarstwa Krajowego, resulting in a significant increase of the share of the de minimis and COSME guarantees in the micro-firm segment to approximately 75 percent in new sales. This ensures a significant improvement of the quality of our portfolio and a further optimisation of the capital requirements,” said Filip Gorczyca.
Alior Bank is steadily improving its capital position. TCR and Tier 1 ratios stood at 15.26 percent (vs. the regulatory minimum of 13.13 percent) and 12.14 percent (vs. the regulatory minimum of 11.13 percent), respectively, at the end of Q3 2018.
The liquidity ratio LCR reached 132 percent at the end of Q3 2018 vs. 127 percent in Q2 2018 and 124 percent at 31 December 2017.
Alior Bank continues to implement the Digital Disruptor strategy, which provides for:
The Bank continued to expand its product offer in Q3 2018. The Mocno Oszczędnościowe account for retail clients attracted 13,700 new clients and PLN 2.6 billion of new savings from July to September alone. Alior Bank’s flagship product Konto Jakże Osobiste has been acknowledged by the industry: it won Offering Innovation gold in the EFMA Distribution & Marketing Innovation Awards. Alior Bank launched a multi-currency card for retail and business clients in Q3 2018. In co-operation with LOTOS Paliwa, Alior Bank offers the Business Lotos card for business clients with discounts of up to PLN 0.20 per litre of gasoline.
September saw the launch of the first edition of RBL_START, Alior Bank’s acceleration programme targeting 8 start-ups selected from amongst 100 applicants from around the world. The start-ups include PayPo, a fintech providing online shopping deferred payment services, in which the Bank made an equity investment. In October, Alior Bank launched a development portal and a sandbox. RBL_START participants are the first to access the service testing tools. Alior Bank won first place in two Forbes rankings in September as the most company-friendly bank and the bank most recommended for companies, while Newsweek named Alior Bank a friendly bank ranking leader.
Net interest income amounted to PLN 781 million in Q3 2018 (PLN 763 million in Q2 2018) and to PLN 2,281 million in January-September 2018, representing an 8 percent increase year on year. Net interest margin (NIM) reached 4.64 percent in Q3 2018, an increase of 6 basis points quarter on quarter and well above the 2020 strategic target of 4.5 percent.
Gross loan book growth amounted to PLN 4 billion in 9M 2018. Alior Bank reported a high sales growth in the strategic segments of cash loans, leasing, and micro-firms. The Bank expects to grow by at least PLN 5.5 billion in 2018, and by PLN 5-6 billion in subsequent years, in line with the 2020 strategy.
“We have been successfully improving the cost-efficiency of our business for several quarters now. The cost/income ratio (C/I) dropped to 44.0 percent in 9M 2018 vs. 51.7 percent in 9M 2017. According to the Bank’s strategy, the C/I ratio will decrease further to 39 percent in 2020. Our return on equity (ROE) reached 11.5 percent in Q3 2018, a significant increase year on year compared to a ROE of 7.2 percent in Q3 2017,” said Filip Gorczyca, CFO and Vice-President of the Management Board of Alior Bank. “Importantly, we have expanded our co-operation with Bank Gospodarstwa Krajowego, resulting in a significant increase of the share of the de minimis and COSME guarantees in the micro-firm segment to approximately 75 percent in new sales. This ensures a significant improvement of the quality of our portfolio and a further optimisation of the capital requirements,” said Filip Gorczyca.
Alior Bank is steadily improving its capital position. TCR and Tier 1 ratios stood at 15.26 percent (vs. the regulatory minimum of 13.13 percent) and 12.14 percent (vs. the regulatory minimum of 11.13 percent), respectively, at the end of Q3 2018.
The liquidity ratio LCR reached 132 percent at the end of Q3 2018 vs. 127 percent in Q2 2018 and 124 percent at 31 December 2017.
Alior Bank continues to implement the Digital Disruptor strategy, which provides for:
- a consistent development of retail and SME business;
- becoming a leader in profitability and cost effectiveness;
- the application of the most advanced state-of-the-art technological solutions in banking.
The Bank continued to expand its product offer in Q3 2018. The Mocno Oszczędnościowe account for retail clients attracted 13,700 new clients and PLN 2.6 billion of new savings from July to September alone. Alior Bank’s flagship product Konto Jakże Osobiste has been acknowledged by the industry: it won Offering Innovation gold in the EFMA Distribution & Marketing Innovation Awards. Alior Bank launched a multi-currency card for retail and business clients in Q3 2018. In co-operation with LOTOS Paliwa, Alior Bank offers the Business Lotos card for business clients with discounts of up to PLN 0.20 per litre of gasoline.
September saw the launch of the first edition of RBL_START, Alior Bank’s acceleration programme targeting 8 start-ups selected from amongst 100 applicants from around the world. The start-ups include PayPo, a fintech providing online shopping deferred payment services, in which the Bank made an equity investment. In October, Alior Bank launched a development portal and a sandbox. RBL_START participants are the first to access the service testing tools. Alior Bank won first place in two Forbes rankings in September as the most company-friendly bank and the bank most recommended for companies, while Newsweek named Alior Bank a friendly bank ranking leader.