• Revenue: Exceeded PLN 6 billion, an 8% growth year on year.
• Net Profit: PLN 2.445 billion, a 20% increase from the previous year.
• Net Interest Income: Grew by 9% year on year.
• Cost of Risk (CoR): Reduced to 0.62%, down by 0.37% from the previous year.
• Non-Performing Loan (NPL) Ratio: Decreased to 6.81%.
• Net Interest Margin (NIM): Approximately 6%.
• Return on Equity (ROE): Nearly 24%.
• Cost-to-Income Ratio: Below 35%.
• Asset Growth: Increased by 4% year on year.
• Deposit Volume: Increased by 5% year on year.
• Gross Performing Loans: Increased by 3% year on year.
• Customer Growth: 65,000 new customers, a 7% increase.
• Mobile App Users: Increased by 17%, adding 189,000 users.
• Alior Leasing Portfolio: PLN 6.6 billion, a 6% growth year on year.
• Dividend Intent: Plan to pay out 50% of the profit as a dividend, pending regulatory approval.

• Warning! GuruFocus has detected 6 Warning Signs with FRA:2I5.

Release Date: March 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Alior Bank SA (WAR:ALR) reported a record financial performance in 2024, with revenues exceeding PLN 6 billion, marking an 8% year-on-year growth.
• The bank's net interest income grew by 9%, and net profit increased by 20% compared to the previous year, reaching PLN 2.445 million.
• The cost of risk significantly decreased to 0.62%, down by 0.37% from the previous year, indicating improved risk management.
• Alior Bank SA (WAR:ALR) experienced a 4% growth in assets and a 5% increase in deposit volumes year-on-year.
• The bank's capital position is strong, with a TCR of 18.27%, providing a significant surplus over the regulatory minimum, allowing for potential future growth and dividend payouts.

Negative Points

• The profitability of assets in the loan and securities segments decreased in Q4 2024, partly due to one-off events.
• The pace of growth for the lending portfolio slowed down in Q4 2024, with a reduction in net interest rate impacting net interest income.
• Operating costs are expected to rise in 2025 due to inflation and increased contributions to the BFG fund.
• There is ongoing litigation risk related to the free loan, although the bank has modified its lending offer to mitigate this risk.
• The bank's commission income only grew by 1%, indicating a need for improvement in this area to achieve stronger growth.

Q & A Highlights

Q: What level of lending does the bank expect in the mortgage segment, given that the governmental subsidy program will not be ready before Q4 2025? A: Piotr abski, President: We have seen significant growth in sales last quarter and even better growth in mortgage applications. We aim to grow in mortgages faster than the market, although this year might not be as spectacular. Mortgages are one of the three foundations for building customer relationships, and we expect growth faster than the market average.

Q: Has the bank completed the process of cleaning its business customer portfolio, and will the NPL level remain similar to last year? A: Piotr abski, President: We are still working on portfolio quality and considering selling it to an external buyer, depending on conditions. While a large reduction is difficult, we will continue to improve gradually.

Q: How will you improve your commission performance, and what growth can we expect? A: Piotr abski, President: We are focusing on retail, micro, and SME segments to ensure stable commission levels. We aim for significant growth, hoping for a double-digit share of commissions in the total net profit.

Q: Is the larger number of restructuring requests in the micro segment a symptom of a wider economic situation or a one-off? A: Piotr abski, President: This is reflected in our parameters. BD and GD were significantly impacted in the business customer segment, but we do not expect negative changes in the complete portfolio's future behavior.

Q: What was the level of WFD at the end of 2024? A: Piotr abski, President: 48.5%.

Q: In Q4 last year, the profitability of assets in loans and securities went down. Does this include one-offs, or is this a new starting point for 2025? A: Piotr abski, President: The reduction was due to one-offs like the credit holiday impacting Q3 and Q4. Without these, the margin would be 6.2% in Q3 and 6.1% in Q4. We anticipate dynamic growth in 2025 to cover reduced values and maintain interest income levels.

Q: What is the reason for the lower tax rates last year, and will the effective tax rate be lower in the coming years? A: Piotr abski, President: In Q4, we received a positive tax interpretation for some costs, allowing us to enter them as cost items. In 2025, the tax rate will be closer to 2023 values.

Q: Is it possible for the NPL to go below 5%, and when will it happen? A: Piotr abski, President: Yes, this is our goal, and we aim to achieve it by the end of 2026.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.