Nova Ljubljanska Banka (NLBR) H2 2023 earnings summary

Executive summary

• 2023 result after tax reached €550.7m, up 23% YoY, supported by strong net interest income and profitable banking subsidiaries.

• Regional subsidiaries contributed 44% of the result, with profit growth in every subsidiary.

• Net operating income rose 37% YoY to €1,093.3m.

• N Banka’s legal and operational integration was completed in September 2023 within the planned timeframe and budget.

Financial highlights

• Net interest income rose 65% YoY to €833.3m; net non-interest income fell 11% to €260.0m.

• Result before impairments and provisions increased 75% to €591.4m; total costs rose 9% to €501.9m.

• Net fee and commission income grew 2% to €278.0m, supported by investment funds, bancassurance and guarantees, partly offsetting cancelled high-balance deposit fees and temporary measures.

• Q4 result after tax was €163.8m, up 14% QoQ, including a €61.9m deferred tax asset benefit; Q4 net non-interest income included a €15.3m housing-loan modification loss and €5.0m of flood donations.

• 2023 profit included a €61.9m deferred tax asset benefit; prior-year profit included €172.9m negative goodwill from the N Banka acquisition.

Outlook and guidance

• 2024 outlook: regular income above €1,100m, CIR below 50%, cost of risk 20–40 bps and mid-single-digit loan growth; guidance assumes a 150 bps year-end interest-rate decline.

• 2024 profitability targets include ROE after tax above 15% and normalized ROE above 20%.

• Revised 2025 outlook: regular income above €1,200m, CIR below 50%, cost of risk 30–50 bps, high-single-digit loan growth and ROE after tax above 15%.

• 2025 dividends are expected to exceed 40% of 2024 profit; M&A capacity is up to €4bn RWA.

• New mid-term strategy and 2030 vision were scheduled for Investor Day on May 9, 2024; future capital returns will be revisited in the strategy process.