Nova Ljubljanska Banka d.d. · LJSE:NLBR

Nova Ljubljanska Banka d.d — H1 2017 Earnings Presentation

31 slides from Nova Ljubljanska Banka d.d's earnings presentation, 2017

  1. Slide 1: NLB Group Presentation − H1 2017

    NLB Group Presentation − H1 2017

  2. Slide 2: Disclaimer

    Disclaimer THIS PRESENTATION AND ITS CONTENTS ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA OR JAPAN, OR TO ANY RESIDENT THEREOF, OR ANY JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFU

  3. Slide 3: Team

    Team Nova Ljubljanska Banka (NLB) Blaž Brodnjak Archibald Kremser Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Marketing Officer (CMO) 18+ 18+ • Responsible for Corporate and Retail Banking since December • Chief Financial Officer of NLB since July 2013 2012; CEO since February

  4. Slide 4: Overview of NLB Group today

    Overview of NLB Group today Investment highlights Key figures  The largest banking and financial institution Balance sheet (EURm) Dec-15 Dec-16 Jun-16 Jun-17 Delta in Slovenia by total assets Total assets 11,822 12,039 11,761 12,070 3%  100% owned by the Republic of Slovenia Loans to customers (gr

  5. Slide 5: Slovenia: Fully integrated into European institutions

    Slovenia: Fully integrated into European institutions  Member of the EU and the Eurozone EUR 39.8bn 4.4% nominal GDP(1) real GDP growth(3)  Export-driven economy with value- EUR 19k 6.4% added export goods GDP/capita vs EUR survey unemployment 11k CEE average(2) rate(3)  Well educated labour forc

  6. Slide 6: Slovenian economy growing at 4.4% compared to 2.1% Eurozone growth in Q2 2017

    Slovenian economy growing at 4.4% compared to 2.1% Eurozone growth in Q2 2017 Real GDP growth Macro update • Slovenian economy grew by 4.4% in Q2 2017 – 3,1% stronger than Eurozone average of 2.1% 2,3% 2,5% 2,5% 2,0% 1.7% • Drivers included 7.4% gross capital formation growth Eurozone 1,2% and conti

  7. Slide 7: The banking system has seen a pick-up in corporate loans lending while interest rates remained stable

    The banking system has seen a pick-up in corporate loans lending while interest rates remained stable Households and non-financial corporate loans in billion EUR Resurgence of corporate loans and steady growth in retail loans 9,2 9,1 8,9 8,9 +8.7% • Non-financial corporate loans stock increased by 7

  8. Slide 8: NLB Group - Journey so far

    NLB Group - Journey so far Transformation into a sustainably profitable client-oriented group, focused on core markets Key initiatives implemented 68% reduction of NPLs (NPL stock, EURm) Smaller and stronger balance sheet (EURm) NPL% 28.2% 25.6% 25.1% 19.3% 13.8% 12.6% •1 Focus on core businesses 14

  9. Slide 9: Dominant player in the Slovenian banking sector

    1 Dominant player in the Slovenian banking sector Market leader across products in Slovenia 22.8% Net loans to 4.712 customers(1) 2.041 1.949 1.844 1.738 EURm (3) 25.2% Customer 6.660 deposits(1) 3.651 2.799 2.202 1.795 EURm (3) 113 Branch 70 58 56 network(2) 26 # (3) % Market share as of Jun-17 Sou

  10. Slide 10: Dominant player in the Slovenian banking sector: Retail banking

    1 Dominant player in the Slovenian banking sector Retail banking Retail net loans Retail deposits  Retail lending has been steadily growing since 2014, primarily driven by mortgages; (EURm) (EURm) Market household indebtedness remains low vs. Eurozone (22% of GDP as of 2015) 24.2% 23.9% 23.5% 23.4%

  11. Slide 11: Dominant player in the Slovenian banking sector: Corporate banking

    1 Dominant player in the Slovenian banking sector Corporate banking  Corporate deleveraging post-crisis, volumes decreasing 8% on average Corporate net loans NLB key business(2) during 2014-16 (Market, EURm) gross loans (EURm) Market  Corporate credit demand demonstrated pick-up in 2016 as economi

  12. Slide 12: NLB's countries of presence outside Slovenia represent attractive markets

    2 NLB’s countries of presence outside Slovenia represent attractive markets, with significant growth potential  NLB's SEE footprint outside of Slovenia covers 5 countries with EUR68.8bn GDP and 15.4m population  Attractive growth markets, with 2.2% real GDP growth, EUR5k GDP/capita and 23% househo

  13. Slide 13: Top position across target SEE countries

    2 Top position across target SEE countries Unified brand across 6 markets since 2015  Leading franchise in the region based on total assets, compared to other banks present in the same countries, with network of 245 branches and 1.1m active clients(1) in SEE  The only international banking group w

  14. Slide 14: Strong revenue performance driven by stable NIM and resilient fee income

    3 Strong revenue performance driven by stable NIM and resilient fee income Net interest income relatively stable in very challenging Marginal reduction in NIM in H1'17 (Group, %) environment (Group, EURm) 498 4,3 4,1 443 4,0 3,9 389 195 2,7 2,6 (1) 330 340 317 179 2,5 2,5 157 149 1,3 0,8 -38 -30 0,5

  15. Slide 15: Successful business transformation results in sustainable profitability

    3 Successful business transformation results in sustainable profitability Evolution of group profitability since 2014 (EURm) 2015 impact 2016 impact ROE 4.8% 6.6% 7.4% 9.4% 15.5% +10 +58 118 +23 70 +15 +8 110 +6 92 -5 -7 H1'16 H1'17 -38 -23 62 Key y-o-y drivers  Fees income +5  OpEx -4      

  16. Slide 16: Profitability improvement in all key business segments during H1'17

    3 Profitability improvement in all key business segments during H1'17 Profitable, client-oriented group, focused on core markets Core segments consistently profitable, retail and international increasingly profitable (PBT, EURm) Gross % of Key metrics (FYD June-17, EURm) PBT Assets loans assets Core

  17. Slide 17: Core foreign banks represent a self-funded source of profits, with solid capital adequacy

    3 Core foreign banks represent a self-funded source of profits, with solid capital adequacy International contributes 45% of Group profit (H1’17) Core foreign banks self-funded by design (L/D ratio(1), Jun-17) Foreign Foreign strategic strategic markets markets 45% 33% 92,2% EUR2.6bn 81,4% 81,9% 78,

  18. Slide 18: Funding structure driven by deposits and complemented by established wholesale markets access

    4 Funding structure driven by deposits and complemented by established wholesale markets access Deposits accounting for 90% of funding (EURm) Strong retail franchise provides stable and price L/D 76% 75% 74% 74% 73% insensitive deposits base (EURm) ratio 9.439 9.491 Jun-17 8.949 9.026 Term 41% 10.54

  19. Slide 19: Well capitalised franchise with solid capital position

    4 Well capitalised franchise with solid capital position…  Highest quality capital (CET1) at Group and NLB d.d.(1), reaching 16.5% in Jun-17  Increase in credit RWAs in H1’17 is a result of increased retail exposures due to housing and consumer loans growth. RWA on operating risks increased due to

  20. Slide 20: Diversified loan portfolio

    5 Diversified loan portfolio Although Slovenian assets prevail, NLB Group focuses on its core markets and cautious risk taking Credit portfolio by segment and geography • No large concentration in any specific industry or client (Group, Jun-17) segment Serbia Kosovo Institutions 5% 4% • NLB’s lendin

  21. Slide 21: NLB has driven a turnaround in asset quality

    5 NLB has driven a turnaround in asset quality Further improvements driven by active NPL management and economic recovery Gross NPL formation has been low Active workout drove gross NPL ratio Reduction of NPLs remains a key since 2014 (Group, EURm) down despite falling loan volumes focus Formation /

  22. Slide 22: NPLs adequately covered by provisions and collateral

    5 NPLs adequately covered by provisions and collateral, with limited off balance sheet non-performing exposures  Total coverage exceeds 100% across segments  Limited non-performing exposures from off-balance sheet items (~EUR96m) Group NPL structure (Jun-17, EURm) Corporate (Jun-17) Retail State B

  23. Slide 23: Medium-term objectives

    6 Medium-term objectives Delivering growth, sustainable returns and attractive payout to shareholders Drivers Targets(1) H1’17 Medium term  Ongoing economic recovery in Slovenia and international markets NIM 2.5% >2.7% Improving macro  Improved consumer confidence environment  Rebound from low in

  24. Slide 24: Appendix

    Appendix Financial statements

  25. Slide 25: Key financial data and performance: NLB Group (1/2)

    Key financial data and performance NLB Group (1/2) FY’14 FY’15 FY’16 H1‘16 H1‘17 Net interest income 330 340 317 157 149 Net fee and commission income 148 147 146 71 76 Income from financial operations 38 4 20 16 17 Other Income (5) (8) (7) (1) (0) Operating Income 511 483 476 243 241 Staff costs (1

  26. Slide 26: Key financial data and performance: NLB Group (2/2)

    Key financial data and performance NLB Group (2/2) Dec-14 Dec-15 Dec-16 Jun-17 ASSETS Cash and balances with Central Banks 1,128 1,162 1,299 1,289 Financial instruments(1) 2,529 2,578 2,778 2,828 Loans and advances to banks (net) 271 432 436 451 Loans and advances to customers 7,415 7,088 6,997 6,97

  27. Slide 27: Key financial data and performance: NLB d.d. (1/2)

    Key financial data and performance NLB d.d. (1/2) FY’14 FY’15 FY’16 H1‘16 H1‘17 Net interest income 227 208 175 87 76 Net fee and commission income 101 98 95 47 49 Income from financial operations 34 9 13 13 13 Other Income 3 (2) 0 0 (1) Operating Income 364 313 284 148 136 Staff costs (102) (102) (

  28. Slide 28: Key financial data and performance: NLB d.d. (2/2)

    Key financial data and performance NLB d.d (2/2) Dec-14 Dec-15 Dec-16 Jun-17 ASSETS Cash and balances with Central Banks 434 497 617 693 Financial instruments(1) 2,038 2,087 2,295 2,318 Loans and advances to banks (net) 159 345 408 423 Loans and advances to customers 5,700 5,221 4,929 4,793 Investme

  29. Slide 29: Structure of NLB Group

    Structure of NLB Group NLB Group Core Slovenia sub-segments Foreign Strategic NLB d.d. Non-bank Retail(2) Markets CFO line CRO line CMO line Core foreign banks NLB Banka, Belgrade Financial markets Retail sales NLB Banka, Podgorica Investment Banking Distribution network(1) NLB Skladi and Custody NL

  30. Slide 30: Key segment financials – H1’17

    Key segment financials – H1’17 NLB Core markets and activities (3) Corporate Financial Foreign Non-Core Other Retail banking banking in markets in Strategic Total Group EURm in Slovenia Slovenia Slovenia markets P&L (H1 2017) Net interest income 35.1 20.3 16.0 70.3 141.8 7.0 (0.2) 148.6 Net non-inte

  31. Slide 31: Key segment financials – H1’16

    Key segment financials – H1’16 NLB Core markets and activities (3) Corporate Financial Foreign Non-Core Other Retail banking banking in markets in Strategic Total Group EURm in Slovenia Slovenia Slovenia markets P&L (H1 2016) Net interest income 37.2 24.1 22.3 65.9 149.5 7.4 (0.3) 156.7 Net non-inte

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