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ALIOR BANK. OR NOTHING 2025-2027 STRATEGY MARCH 2025
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OVER 17 YEARS, ALIOR BANK HAS BEEN BUILT FROM SCRATCH Superior Banking Culture 2008 Digital Disruptor 2017-2020 More than a bank (Value-added services) 2020-2022 Your Bank of everyday life, Your Bank for the future 2023-2024 ? 2025 – 2027
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STRONG IN RISK MANAGEMENT Advanced tools and automation NIMBLE DISTIRBUTION MODEL Diverse channels MODERN TECHNOLOGIES Cloud-based data and AI/ML solutions DISTINCTIVE BRAND 3. most recognizable brand communication* #1 IN CONSUMER FINANCE We granted every fifth loan in Poland ROE ∼24% above market return PART OF A STABLE GROUP PZU Group – the market leader in insurance * Kantar, Alior Bank Brand Condition, Q4 2024 survey commissioned by Alior Bank DIVIDEND: 50% of net profit in 2024 ...now entering onto a path of growth in relationship banking, leveraging our competitive strengths FROM THE GROUND UP TO A TOP 10 BANK IN POLAND…
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AN EVOLVING ENVIRONMENT CUSTOMER Demographic challenges, an aging population Evolving customer preferences BANKING SECTOR RISKS Regulatory-driven changes TECHNOLOGY Revolution in work models and productivity driven by GenAI Cybersecurity risks Geopolitical tensions negatively affecting business stability and performance GEOPOLITICS Expected interest rate decline Challenges on the path to carbon neutrality in Poland by 2050 ECONOMY NUMEROUS CHANGES AHEAD: OPPORTUNITIES AND CHALLENGES
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ALIOR BANK OUR VALUE PROPOSITION We will leverage our growth capabilities and leadership in Consumer Finance to scale up relationship banking We will remain close to our customers and partners, accompanying them where and how they need us in the most convenient way – Alior Bank will be the best option available We will offer simple banking – a complete banking experience in a modern, digital format For our shareholders, we will be a source of stable income OR NOTHING
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WE SET AMBITIOUS GOALS FOR THE STRATEGIC HORIZON 2025–2027 Operational Excellence ~35% C/I ratio, maintained despite cost inflation and the reinstatement of BFG contributions <4.9% NPL ratio, ensuring safe business growth ∼2.6 Billion PLN net profit >50% Dividend as a share of net profit A dividend-paying bank 2027 Targets Scaling Up #1 Maintain leadership in Consumer Finance ~30% Growth in the active customer base and volumes +38% Growth in fee and commission income (including insurance) as a stabilizing factor High Resilience +15% Revenue growth despite the expected interest rate decline SCALING UP HIGH RESILIENCE OPERATIONAL EXCELLENCE
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Entry into new sectors with installment offers and strengthening position in e-commerce Increased conversion of customers to current accounts Competitive offering of core products at attractive prices Refreshed brand to support relationship building Modern, intuitive mobile app at the heart of customer relationships – a key element of our value proposition Relationship customers New mobile app Consumer Finance RETAIL CUSTOMER: WE HAVE A PROVEN GROWTH FORMULA – NOW IN A NEW EDITION SCALING UP HIGH RESILIENCEOPERATIONAL EXCELLENCE #1 Position in the installment loan market ∼30% growth in the number of relationship customers 2027 Targets 2.1 mln # of retail relationship customers
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60% Complete Banking Experience The app will enable users to handle every banking-related need – so they can focus on what truly matters +75% of mobile app users among relationship and installment customers of E2E (end-to-end) sales initiated through the mobile channel (double the 2024 level) Accessible Solutions There is no need to be an expert to carry out everyday operations. Our solutions are designed to ensure user confidence in navigating the app Modern technologies We see an opportunity for a fresh start. The race to harness AI in the management of finances has only just begun (Cyber)Security In our app, your finances are protected against cyberattacks RETAIL CUSTOMER: THE NEW, INTUITIVE MOBILE APP WILL BE THE AT THE HEART OF CUSTOMER RELATIONSHIPS 2027 Targets SCALING UPHIGH RESILIENCEOPERATIONAL EXCELLENCE
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A new generation of digital banking for business customers: integration of digital and mobile channels with customers’ key systems Online offering focused on acquiring new and activating existing Micro and SME customers (including sector specialisation and competitive pricing policies) Activation and acquisition Digital Banking BUSINESS CUSTOMER: WE WILL OFFER ATTRACTIVE DIGITAL SOLUTIONS AND PRODUCTS FOR MICRO AND SME SEGMENTS SCALING UPHIGH RESILIENCEOPERATIONAL EXCELLENCE ∼25% growth in the number of relationship customers 2027 Target 173k # of relationship business customers
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Modern digital banking embedded in the customers’ systems and moving away from value-added services (VAS) towards system integration – offering leading-edge solutions, including for Micro and SME segments. A system composed of: Alior Business Online, Alior Business Mobile, and the Business Customer Product Centre, integrated with leading ERP systems through Bank Connect KSeF Integration (National e-Invoicing System) Business Intelligence Reporting ERP System Integration Professional Support Logistics Systems – Warehouse e-Commerce Integration (eShop, eSale) >90% of relationship customers using digital banking solutions BUSINESS CUSTOMER: WE WILL DEFINE A NEW PARADIGM OF DIGITAL BANKING FOR ENTREPRENEURS 2027 Target SCALING UP HIGH RESILIENCEOPERATIONAL EXCELLENCE
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CRM systems focused on cross-selling cash loans, including integration with the mobile app for installment customers Physical branch network review and refresh of format, alongside process improvements within branches Integrated Channels Modern CRM Tools +14% Revenue growth in the Retail Banking segment Expansion of offerings in cooperation with PZU Group, particularly in stand-alone and retirement products Mortgage offerings enhanced by digital processes and strengthened sales capabilities, supporting lending across a broad range of customers and property types Digital Mortgage Bancassurance and Investments RETAIL CUSTOMER: WE AIM FOR STABLE REVENUE GROWTH DESPITE THE ANTICIPATED DECLINE IN INTEREST RATES 2027 Target HIGH RESILIENCEOPERATIONAL EXCELLENCE SCALING UP
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3x growth in conversion from installment customers to relationship customers From meeting needs... …to becoming a partner in life decisions ...through a tailored offering... We will utilise modern CRM tools and advanced data analytics to transform our customer base into multi-product relationships Deposit / Current Account Cash Loans Mortgages Investments Installment Loans RETAIL CUSTOMER: OUR MODERN CRM WILL ENABLE US TO FULLY CAPITALISE ON OUR STRENGTH IN INSTALLMENT PRODUCTS TO BUILD LONG-TERM RELATIONSHIPS 2027 Target HIGH RESILIENCEOPERATIONAL EXCELLENCE SCALING UP
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CRM tools for Business Customers+ focused on tailoring offerings to the needs of demanding Business Customers, enabling effective cross-selling and holistic relationship management Development of a specialised product portfolio, including: ESG-linked loans, leasing (for used cars and machinery, a leasing limit included in every credit decision), and factoring Specialised Offering Modern CRM Tools +21% Revenue growth in the SME segment (including leasing and factoring) BUSINESS CUSTOMER: A COMPETITIVE OFFERING OF LEADING DIGITAL BANKING SOLUTIONS AND PRODUCTS FOR MICRO AND SME SEGMENTS 2027 Target HIGH RESILIENCEOPERATIONAL EXCELLENCE SCALING UP
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Every 4th cash loan from Alior Bank with insurance provided by PZU x7 gross written premium from stand-alone policies in 2027 compared to 2024 WE WILL LEVERAGE THE POTENTIAL OF PZU GROUP TO STRENGTHEN CUSTOMER RELATIONSHIPS …while expanding the offering of stand-alone insurance in cooperation with PZU Expansion of individual product offerings – with a focus on motor and property insurance Increased sales of insurance products via the mobile channel Maintaining a leading position in bundled products... 2027 Target 2027 Target HIGH RESILIENCEOPERATIONAL EXCELLENCE SCALING UP
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Measures 2027 Targets Automation of orders >60% Employee engagement index Organisational transformation based on Agile, development of career paths and work-life balance Automation of risk areas, including credit processes built on AI/ML models Updated liquidity and capital policy Enhanced self-service through continued automation and application of (Gen)AI Advancing to the next level of technology – Digital Transformation 2.0, including: Data Lakehouse as the foundation for AI/ML use cases (cross-sell, retention, risk) maximum scalability through cloud infrastructure, development of low-code/no-code platforms Cybersecurity embedded in the Bank’s DNA a foundation for stable, digitally resilient growth People: the best place to work Risk and treasury: Enablers of growth Technology and operations: Innovation, automation, and (cyber)security >60% Digital Transformation 2.0 100% NPL ratio <4.9% ESG as a lever for enhancing Alior Bank’s positive impact on the environment OPERATIONAL EXCELLENCE: WE WILL REDESIGN OUR OPERATING MODEL TO SUPPORT THE DELIVERY OF BUSINESS GOALS OPERATIONAL EXCELLENCE SCALING UPHIGH RESILIENCE
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Establishing an agile operating model built on modern tools and strong collaboration Creating a growth-friendly environment based on clear competency-building paths Building a work environment that fosters diversity and supports well-being Development – New Horizons Balance – Empathetic Workplace Maturity – Achieving More Together >60% maintaining a high score in the employee engagement index PEOPLE: WE WILL CREATE THE BEST PLACE TO WORK BY ENGAGING TEAMS IN AGILE TRANSFORMATION, AS WELL AS DEVELOPMENT AND WORK-LIFE BALANCE INITIATIVES 2027 Target SCALING UP HIGH RESILIENCEOPERATIONAL EXCELLENCE
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Self-service in digital channels (primarily Alior Mobile), e.g., early loan repayment Automation and simplification of post-sales processes to improve back- office operations Modern Data Lakehouse architecture, ML and (Gen)AI tools, within a harmonised development ecosystem Migration to the cloud and maximum scalability through the development of hybrid cloud infrastructure Modernisation of ways of working, including: use of AI tools in software development, deployment of AI in system monitoring and IT maintenance Modern Technology Solutions Automated and Efficient Operations 60% of transactions are automated 100% completion of Digital Transformation 2.0 OPERATIONS AND TECHNOLOGY: WE WILL IMPLEMENT MODERN SOLUTIONS AND SIMPLIFIED PROCESSES WITH A HIGH DEGREE OF STABILITY, AUTOMATION, AND (CYBER)SECURITY 2027 Targets SCALING UP HIGH RESILIENCEOPERATIONAL EXCELLENCE
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Use of advanced risk models and AI to: improve the quality of risk models, streamline credit processes, and enhance collections processes Capital: Optimal capital structure Liquidity: Executing a sustainable liquidity policy Enhancement of liquidity and capital structure Process Automation RISK AND FINANCE: WE WILL LEVERAGE RISK PROCESS AUTOMATION AND OPTIMISED LIQUIDITY AND CAPITAL POLICY TO SUPPORT GROWTH <4.9% NPL (Non-Performing Loan ratio) 2027 Target SCALING UP HIGH RESILIENCEOPERATIONAL EXCELLENCE
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Financing our customers’ sustainable transformation Reduction of Bank’s CO2 emissions: 100% of electricity purchased with guarantees of origin and declaration to achieve Net- zero by 2050, preparation of a transition plan through 2027 Diversity within the organisation, especially the advancement of women: • gender pay gap <2.5%; • 50% share of women in management positions*; • Launch of a support programme for employees returning from parental leave (reboarding) Sensitivity towards people: • Engagement in local community initiatives, • Increase in the share of skill- based volunteering in the corporate volunteering programme Financial education and increased awareness of cybersecurity among employees and customers Youth program: Financial Start Inclusion of ESG goals in the management incentive system Responsible governance and procurement processes; ESG matters introduced into agreements with franchise partners and ESG criteria included in evaluation processes for specific procurement categories Maintaining, over a 10-year horizon, a maximum exposure limit of 1% for credit exposures classified as high ESG risk E G >10% share of sustainable transformation products in new sales to Business Customers <2.5% adjusted gender pay gap ESG: WE WILL ENHANCE ALIOR BANK’S POSITIVE IMPACT ON THE ENVIRONMENT THROUGH NEW INITIATIVES *Employees managing Bank units 2027 Targets SCALING UP HIGH RESILIENCEOPERATIONAL EXCELLENCE
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We know our strengths: growth capabilities and a leading position in the Consumer Finance market, a solid capital base, efficient risk management, a strong distribution network, and a committed team We will significantly scale up our operations, ensuring that our revenues become more stable and resilient to market effects We will ensure excellence of our operating model ALIOR BANK 2025-2027 STRATEGY SUMMARY We will deliver stable financial results and dividends for our shareholders ∼7.0 Key targets for 2027 ∼2.6 Revenue PLN billion >18% Profit PLN billion ∼35% ROE >50% C/I Dividend % of net profit OR NOTHING
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APPENDICES
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2,3 3,4 5,1 14,4 11,4 3,7 4,5 3,2 2,5 2019 2020 2021 2022 2023 2024 2025 2026 2027 GDP (real, %, y/y) 4,6 - 2,0 6,9 5,3 0,1 2,9 3,7 3,6 3,2 2019 2020 2021 2022 2023 2024 2025 2026 2027 CPI inflation – average (%, y/y) 1,50 0,10 1,75 6,75 5,75 5,75 5,00 3,50 3,50 2019 2020 2021 2022 2023 2024 2025 2026 2027 Average annual unemployment rate (%) 5,4 5,9 6,2 5,4 5,2 5,1 4,9 4,9 4,8 2019 2020 2021 2022 2023 2024 2025 2026 2027 NBP reference rate (%, end of period) • Economic growth in 2025–2027 will be supported by consumption, EU- funded investments, a strong labour market, and moderate recovery in external demand Comments by Alior Bank Economists, 12/2024 • In 2025, a gradual decline in inflation is forecasted, with a drop to around 4% y/y in the second half of the year • In 2026 and 2027, inflation is expected to stabilise around the NBP’s inflation target • In 2025, potential for gradual interest rate cuts in the second half of the year, followed by faster reductions in 2026, and stabilisation thereafter • In the long term, interest rates will remain higher than pre-pandemic levels, due in part to a tight labour market • A slight decrease in the unemployment rate is expected over the 2025– 2027 horizon APPENDIX: MACROECONOMIC FORECAST
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APPENDIX: GLOSSARY OF TERMS AND ABBREVIATIONS ROE – return on equity C/I – cost-to-income ratio NPL (Non-Performing Loans) – loans at risk CRM – Customer Relationship Management AI - Artificial Intelligence VAS - Value-Added Services Relationship customer in the retail segment – a customer who has a current account and meets one of the conditions: performing outgoing transactions, or having specific products, or logging in to electronic channels Relational customer in the business segment – a customer who meets one of the conditions: performing outgoing transactions, or having specific products, or logging in to electronic channels Brand communication awareness – a measure of awareness of bank advertisements, monitored at Alior Bank in the Brand Condition Study conducted by Kantar, based on the answer to the question "Have you seen the last advertisement of any of the banks?"
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LEGAL DISCLAIMER This presentation (“Presentation”) has been prepared by Alior Bank (“Bank”) and does not constitute an offer for sale or an invitation to submit an offer to purchase or subscribe for any securities or financial instruments issued by the Bank, nor does it constitute advice or a recommendation in relation to any securities or other financial instruments issued by the Bank. No part of this Presentation, nor the fact of its distribution, shall constitute the basis for, nor may it be relied upon in connection with, any contract, commitment, or investment decision. This Presentation may contain forward-looking statements. These statements are based on current expectations of the Management Board and are subject to numerous factors beyond the Bank’s control, as well as to a range of known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, or achievements of the Bank to differ materially from those expressed or implied in the forward-looking statements. The Bank is not obliged to update or publicly disclose any changes or modifications to the forward- looking statements contained in this Presentation and does not intend to do so. This Presentation does not constitute a forecast or estimate of results; therefore, any changes to the Bank’s strategy or intentions, arising from unforeseen circumstances affecting the Bank’s strategy or intentions, shall not be disclosed in the manner provided for the publication of changes to forecasts or estimates. Neither the Bank, nor any of its representatives, parent companies or subsidiaries shall be liable for any damage resulting from any use of the Presentation or any information contained therein, or for any basis connected with the Presentation. Certain information contained in this Presentation may have been derived from publicly available sources that the Bank considers reliable; however, the Bank does not make any representations as to the accuracy or completeness of such information. The information contained in this Presentation should be read with reservations and in conjunction with other publicly available information, including, where applicable, any broader informational materials published by the Bank. The information in this Presentation has not been independently verified and may be subject to change or modification at any time. The Presentation may contain financial information or indicators that have not been subject to audit, review, or other evaluation by an external auditor. This Presentation is not intended for publication or distribution in countries where such publication or distribution may be prohibited under applicable laws. LEGAL DISCLAIMER