Addiko Bank AG

Ladies and gentlemen, welcome to the ADECO Results Q1 2026 conference call. I'm Moritz, the chorus call operator. I would like to remind you that all participants will be in a listen-only mode and the conference has been recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's our pleasure to hand over to Herbert. Please go ahead, sir. Good afternoon. It is . So maybe you can adjust it. There is no other line currently open. So when I'm talking, when you're talking, I have an investment. I'm sorry, ladies and gentlemen, we seem to have some technical difficulties. Please hold the line while we solve the issue. Thank you.

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Ladies and gentlemen, we will now resume the conference. Please go ahead. Good afternoon, ladies and gentlemen. Very welcome to the presentation of the first quarter results 2026 of AdicoBank on behalf of my colleagues Ganesh, Sade, Edgar and Stefan. We have prepared the following agenda for you. I will start with the highlights of the first quarter and then hand over to Ganesh, who will update you on the development on the business side. Afterwards, Edgar will provide you with more insight on our financial performance and today will inform you about the situation in the risk area. At the end, I will do a short wrap-up and comment on our outlook for 2026 before we move on to Q&A. Let me start with the earnings and asset quality. In the first quarter of 2026, we achieved a net profit of 10.1 million euros. This is around 30% below the strong Q1 result due to several one-time effects and environment-related factors that we will address during our presentation. Nevertheless, the result is also around 16% above the result of the fourth quarter of last year. The return on average tangible equity amounted to 4.7%, with earnings per share at 52 cents. The operating result came in at 20.1 million euros, compared to 25.3 million euros in Q1 2025. On the risk side, the picture remains very stable. The MPE volume stood at 132 million euros, with the MPE ratio stable at 2.6%. At the same time, the coverage ratio improved further to 81.9%. Cost of risk remained very low at 0.2%. Turning to business development. In consumer lending, we once again delivered strong growth with new business up by more than 12%. In SME lending, new business development continues to differ by country. and we are working on targeted measures to further reinforce growth in this segment. Ganesh will give you more insights in his part. Net interest income remains stable. The growth in consumer lending and contributions from the sovereign bond portfolio largely offset the impact of the lower interest rate environment. Net commission income amounted to 18 million euros, broadly in line with the prior year. Overall, we managed to keep our net banking income stable despite severe negative effects coming from the regulatory front and a significant lower interest rate environment compared to last year. Let me briefly touch on funding, liquidity, and capital. Our funding position remains very solid with customer deposits of 5.3 billion euros, a loan-to-deposit ratio of around 70%, and a liquidity coverage ratio well above 290%. Our capital position is also very strong with a total capital ratio of 21.7% entirely in CT1. Finally, on ESG and regulation, I would like to state that we have implemented CSRD compliant ESG reporting for 2025 and that the impact of the new NADEG for 2026 is currently under evaluation with expected reliefs on our disclosure requirements. Overall, we started 2026 with a resilient business model, strong capital, ample liquidity buffers and a clear growth momentum in our core consumer business. Let me briefly comment on our annual general meeting. The AGM was held on 20 April 2026 and all agenda items were approved as proposed. Around 69% of shareholders registered to attend the meeting with approximately 51% ultimately participating. At the AGM, all agenda items were approved with vote levels of 99% or higher. Shareholders also approved the extension of the term of office of good pre-bill for one year and Frank Schwab for three years. turning to the shareholder structure and dividend topic. In line with supervisory expectations and regulatory requirements, the dividend remains suspended, taking into account ongoing regulatory considerations related to the current shareholder structure. While working rights restrictions for a shareholder group were lifted in early February 2025, the banking supervisory authorities continue to identify uncertainties regarding the overall shareholder structure. These concerns may extend to potential limitations on certain recovery options in the conceivable event of a stress or crisis situation. Against this background and in the interest of the bank, the management board maintained its position of not resuming dividend payments as long as the ownership structure has not conclusively clarified and the related supervisory concerns have not been fully resolved. Finally, as announced in our last earnings call, Adico shares were reclassified effective 1st of April, 2026, from prime market to standard market of the Vienna Stock Exchange. I will now turn to the intended voluntary takeover offers. On the 8th of April, 2026, Raiffeisen Bank International AG announced its intention to launch a voluntary public takeover offer to acquire control of all ADECO shares at a price of €23.05 per share. The offer is intended to be subject to a minimum acceptance threshold of more than 75% of the outstanding ADECO shares and does not constitute a delisting offer within the meaning of the Austrian Stock Exchange Act. In addition, RBI announced its intention to enter into an agreement with Altagroup DOO from Serbia, which, subject to a successful completion of the takeover offer, would provide for the sale of Artico's subsidiaries outside the European Union. The envisaged purchase prices are intended to correspond at least to the respective fair market value of the company's concerns. The completion of these so-called carve-outs is subject to the usual antitrust, supervisory and regulatory approvals. Let me now turn to the voluntary takeover offer announced by Nova Lubianska Banka, BD or NLD. On the 9th of April 2026, NLD announced its intention to also launch a voluntary public takeover offer to acquire control of all article shares. The announced offer price amounts to €29 per share. NLB's objective is to acquire a significant majority shareholding in Articool through this offer. NLB intends to integrate Articool's banking subsidiaries in the five overlapping markets into its existing operations. For subsidiaries outside the European Union, NLB announced that it will initially conduct a cost-benefit analysis. Should a divestment of individual subsidiaries be deemed appropriate, the envisaged sale price is intended to correspond at least to the fair value of the respective subsidiary. The publication of MLB's takeover offer was published out today in the morning. The minimum acceptance threshold was set at 75%, replacing the prior reference to a significant majority. Today, at 10.45, RBI announced that they increased the offer price from 23.05 Euro per share to 26.5 Euro per share, cum dividend 2025. The publication of RBI's takeover offer is expected to take place between the 14th and 19th of May, 2023. These takeover offers will create additional costs that are not included in our original planning assumption. As customary, the management board and the supervisory board will carefully review them and, within the legally prescribed timeframes, position themselves accordingly vis-à-vis the shareholders in line with their statutory duties. The statements, as well as the takeoffers themselves, will be published on our website at www.adico.com. Let me now come back to our internal key initiatives. We already introduced the specialization program and its overarching goals in our last investor call. Today, I would therefore like to focus on what is new and, more importantly, on the concrete topics we are working on in 2026. Let me begin with business expansion. This year, our focus is on selectively broadening the product stack where we see clear incremental risk-adjusted revenue potential. Concretely, this includes expanding products such as investments, digital insurance and factoring with a strong focus on attracting new customers while deepening engagement with our existing client base. In parallel, we are working on increasing digital channel usage and strengthening primary banking relationships, ensuring better product penetration and higher lifetime value across our customer base. In addition, we are evaluating new market opportunities. We will enter selected priority segments with tailored offerings, evaluate partnerships, further scale point of sales and partnership-driven acquisition models. The second area is engine and platform, with a strong emphasis on decision models, analytics and AI. This year is about translating these capabilities into tangible business impact. We are rolling out AI-enhanced decision models to improve decision quality and speed, while significantly shortening development and delivery cycles across the organization. At the same time, we are accelerating end-to-end automation across risk and service processes. The objective is clear. Reduce manual workload, lower FDE intensity, shorten turnaround times, and improve both customer experience and compliance outcomes. Finally, competences, and people. In 2026, the focus here is on measurable productivity gains and skills readiness. We want to increase efficiency through digital tools and automation, optimizing FD allocation, and ensuring 24-7 operational continuity and resilience. In parallel, we are investigating improving capital, data, and AI skills across the workforce. retaining key talent and strengthening a culture of innovation and continuous learning to support the execution of the specialization agenda. We will keep you updated on the progress of the program. With that, I would like to hand over to Ganesh, who will present to you the progress on the business development.