Alior Bank (ALR) Q3 2024 earnings summary

Executive summary

• Q3 2024 net profit reached PLN 666 million, up 16% year-over-year, with cumulative nine-month profit at PLN 1.83 billion, up 29% year-over-year, reflecting strong financial performance and improved credit quality.

• Revenues in Q3 2024 grew 12% year-over-year to PLN 1.58 billion, with net interest income up 11% and net commission income up 20% year-over-year.

• Mobile app users increased by 19-20% year-on-year to 1.24 million, and customers with regular inflows rose by 71,000.

• Maintained a strong capital position with Tier 1 ratio at 16.78% and TCR at 17.11%, well above regulatory minimums.

• Significant decrease in cost of risk and NPL ratio, reflecting improved credit quality.

Financial highlights

• Total revenues exceeded PLN 4.5 billion for the nine months, up PLN 415 million year-over-year; Q3 revenues at PLN 1.58 billion (+12% y/y).

• Net profit improved by PLN 386 million year-over-year and by PLN 94 million quarter-on-quarter.

• Net interest income for the period was PLN 3,792 million, up 11% year-over-year; net fee and commission income rose to PLN 533 million (+7% y/y).

• Cost-to-income ratio at 30% for Q3 and 33.9% for the nine-month period.

• Net interest margin at 6.32% in Q3, up 16 basis points year-on-year; cumulative NIM at 6.08%.

• ROE reached 25.7% in Q3 and 24.4% for the nine months.

Outlook and guidance

• New strategy to be published by early 2025, focusing on safe capital, high NIM, innovation, digitization, and consumer finance leadership.

• Cost of risk guidance at 60 basis points for the near term, with medium-term outlook at 80 basis points; 2024 cost of risk expected at 0.6%, long-term at 0.8%.

• Lending forecast to accelerate in 2024, with further growth in 2025 driven by investments and lower rates.

• Main financial targets: ROE >13%, C/I <45%, Tier 1 >13.5%, TCR >15%, COR <1.6%, NPL <10%.