Alior Bank Sa Unsp/Adr

Good morning.

This is Dominik Prokop. On behalf of Aliorbank, may I welcome everyone to the results conference. We will talk about the first quarter 2026. In the first part, the bank's results as well as the trends. They will be discussed by members of the board, President Piotr Żabski, who will sum up the most important trends and will tell us about business results, Deputy President Marcin Ciszewski, who will tell us about risk, and Deputy President Zdzisław Wojtera, who will tell us about finance. After the end of the presentation, we will have a Q&A session. Before I hand over to Piotr, may I encourage everyone to ask questions already during the first part of the conference, which will help us smoothly move into the Q&A session. Peter, you have the floor. Good morning, everyone. The presentation will begin. be composed of four parts. Firstly, operational activities with two business lines, the corporate and the individual customers, then the risk result and then financial results and other issues. So, let me move on to the operational activities and about the first quarter. What you can see here is a slightly changed makeup of the presentation. We wanted to refer to our strategies. There are three pillars on the left, scaling up, high resilience, operational excellence. And it's within these categories that I'd like to tell you about what went on in the first quarter. But before... Moving on, let me just sum up. This was a good quarter for Alierbank. Our results were 1.5 billion zlotys with a 2% growth year on year. And taking into account that we have lower interest rates in the country, this kind of growth in revenue is really making us very happy. This is a real scaling up result. As far as net profit is concerned, we have 403 million zlotys. This is a drop of 15%. The corporate income tax is the main cause of this result. We will hear from our colleague later about more details. As far as the gross profits are concerned, we are on more or less the same level. As far as other parameters are concerned, very good return on equity, 13.8% increase. The corporate income tax is important in this regard.

Very well managed costs.

37.8% cost-to-income ratio, and we believe that this good level will be maintained. NPLs at a low level, even lower than last year, So this downward direction in the NPLs is maintained.

What is crucial is what you can see on the left-hand side and the first pillar, the scaling up.

We grew in the deposit portfolio by 9% year on year, which is making us very happy. We want to grow in this particular area. As far as loan sales are concerned, there are two elements that I want to mention. Mortgage loans in the first quarter 2026 in relation to the previous year, namely the first quarter 2025, is an increase of 84%, 1.8 billion zlotys was the value of the loan sales. There's been a very good quarter as far as the development of relational customers is concerned. We grew by over 100,000 in the number of relational customers. They have to meet a certain level of requirements. It is not obvious that you already become a relation customer while being a bank customer. It's been a very good quarter for Allier Leasing, which is our sister company. And

That's part of our scaling-up process.

As far as high resilience is concerned, I want to draw your attention to our rating. We received an investment rating from S&P, which is important for us because we will be issuing bonds in the euro market, so we hope to receive a good rating level there. Our costs are stable.

The credit risk is going down. And we are recommending for the third year running the payment of dividend to the tune of 50%, 8.93 zlotys per share.

In the third pillar, the operational excellence, I want to draw your attention to Our mobile app development, there's been a new launch of it in the current year, and compared to the previous versions, it's on a much higher level. And so we're growing in terms of the users' numbers. It's the highest dynamic in the market, 90% growth at the end of March 2025. Very good capital position, which gives us the opportunity for further growth. Liquidity is on a good level. New elements in the area of technologies. We have adopted an ambitious AI strategy.

We want to be even more

dedicated to this high-end use of AI in the bank and we have very ambitious plans for the next years. That is all as far as the general summary is concerned. Now a bit more about the numbers. If you look at our balance sheet, the assets is almost 105 billion zlotys, 85 billion of that is deposits, which is a 9% growth. Assets grew by 8% and the gross performing loans grew by 7%. That's the performing loans, basket one and two. So these increments which we announced in the strategy are taking place and allow us to realize higher levels of growth in spite of the dropping interest rates. In this particular slide, some more information about our customers. The relational customers grew by 6% over the year, and there's a 19% growth in mobile app users. What you can see on the right-hand side among the relational customers which is 50% of the users of our application and the customers are banking with us quite efficiently.

In the mobile app we have 44% sales.

in the general framework of our sales channels as for the balance sheet on the left hand side you have the loan portfolio and the deposits on the right hand side let me say a few words about the loans the Customer loans are stable in the growth. The general effort goes to maintain the portfolio and recreate the sales levels. There is a considerable growth in the burgundy part, namely the real estate loans. These are important. And the whole portfolio has grown by 8% over the 12 months. As far as the deposit are concerned, all the constituent parts in these bars are growing. That's a good result. The whole of the growth is 12% year on year and we are very happy to see the growth in each of these constituent parts. We are improving the results and that coincides with our strategy plans. As far as retail customers are concerned and the mortgage loans, there's been an 80% growth there. There's a lot of activity in the market as a whole, but on our side, the market shares in mortgages, for instance, is definitely higher than the Alior Bank share in the banking sector. so this is something that makes us very happy and we are catching up there as for the other loans non-mortgage loans in the burgundy part you have the installment loans they have performed slightly worse in the first quarter but the result was the fact that there's been some carry over of the business partner negotiations and we haven't managed to do something in the first quarter But I can be confident that it will be made up in the subsequent quarters. As for the cash loans, quarter on quarter, there has been growth in spite of prepayments, in spite of the churn and short tenors. The effort that we put into the recreation of the balance is quite efficient and the balance will grow in the subsequent months. As far as the retail customers are concerned, I want to draw your attention to two types of activities, our brokerage house on the left and our TFI sector on the right. What we announced in this strategy was for the second pillar of our strategy to make our results stable by the use of the Commission. One of the strong players in that department is the activity of our brokerage house. As you can see, there's been a 52% rise in the commission year-on-year, which is considerable, with 38% growth of assets and FIO and a considerable rise in the structured products sales. On the side of Alior TFI, we are approaching the 5 billion level of assets. We've even crossed over it, but March has not been a good result for that type of activity, as there's been a lot of redemptions. So we hope to come back to the level of 5 billion, but the 34% year-on-year rise is not to be sneezed at, and we are definitely on the right track. And it is with these activities that we will be helping to stabilize the Commission result. Now, the business customer, the left-hand side is the business loan portfolio, which is quite stable if you compare year-on-year results. But within the portfolio, there's been some changes. The first one that needs commenting is that the non-performing loans dropped down to 2.4 billion year on year and this drop is mainly in the micro businesses sector. We had quite a big historical baggage of non-performing loans in the micro companies sector and this part is diminishing. What is important is the growing part in the middle are the segments that we want to develop, namely the small and medium-sized companies. And here we've seen an 11% growth. However, in the portfolio we also have bigger consortium, the biggest players in the market where you can have slight movement, so the mix of the portfolio in the middle is changing, but in the general terms of its value. We have stability and I can safely say that the mix of the portfolio is changing for the better. There is more of the healthy parts of the portfolio. which makes our business aims more viable. As far as business customers are concerned, there's been a 5% growth year on year in the deposit volume. The last quarter has been very important. We've had a 22% growth in the current accounts sales. So this is a good offer. It's been readily picked up by the customer and over 70% of the sales is online sales. The new type of banking that we have launched for business customers and this is bringing profits in terms of current accounts sold.

One more slide devoted to the corporate sector.

Let me draw your attention to our leasing company activity. Alio Leasing has seen record growth in sales, both in terms of leasing and loan sales. 27% is the rise year-on-year and the whole portfolio grew by 12%. This is the kind of growth which is considerably above the level of the whole of the market. Our activity focuses on financing cars up to three tons. We are very strong in that particular area and the share of the market has grown by six percent from 2.9 so you can see that the leasing as an alternative form for small and medium-sized companies and these can readily obtain financing from our bank when they've been at least two years in operation. And so we catch up the gap, we can sell it in the banking channels and we're very happy with the growth that has been observed there. Some other types of information we are being appreciated in the market. We've been on the podium in the Golden Banker plebiscite and in the mobile banking our application reached the first prize. We have been a leader in the institution of the year ranking, so we've been appreciated there and also we've received six statuettes Also, we've been appreciated in the top employer title, we've received the certificate for 2026 and what is crucial, but let me stress that again, the investment rating of the bank represents the appreciation of our efforts which we put into building a quality portfolio and this translates into the payment of the dividend, generating new sales. And this all creates a situation where Alia Bank is a bank with an investment rating, which makes us very happy. That is all from me about the first quarter. And I will hand over to Marcin for his comments about the risk management.

Thank you, Piotr. Good morning to all of you. The first quarter of 2026. ended with a very safe capital position. Tier 1 and TCR ratios are at the level of 1785 with a huge accident. 3.9 billion, which makes it possible to implement all the strategic endeavors. Concerning the TRIA ratio, it's been at 21.60%, which is also a very safe position as far as liquidity is concerned. LCR is also at a very high level, as well as NSFR, which is definitely higher than required by regulations, 236 and 152 percent, respectively. We are working on the transformation of our portfolio. And we are successively reducing the non-working portfolio. NPR is at 539 at the end of the first quarter. We are maintaining our strategic goal, which is to get below 5% with this ratio at the end of this year. The cost of risk measured with the core 0.67 slightly higher than during the previous period but here we can see the impact of our approach towards the sales of non-working portfolios which can be seen in the upper right graph where we can see that at the end of the second and fourth quarters of every year we are checking the level of the non-working portfolio and we are getting additional revenues improving our co ratio the non-working portfolio went down from 429 to 364 billion as far as far as the npl indicator is concerned in segments for the retail customers is at 241 at the end of the first quarter market level concerning the business sector we are reducing it consistently but it's still higher than expected at the end of the quarter we are at the level of 11.35 We confirm that as far as the cost of risk of our bank, it should not exceed 0.8, which is also reflected by our strategy, which is implemented consistently. Thank you very much. And now Zdzislaw has the floor. Thank you, Marcin. Good morning. I am going to discuss about the financial results right now. If we look at our income base, as Piotr has mentioned, in the business part, we are glad to see that the number of the clients and the level of loans and deposits are all increasing. With the interest rates getting down, this makes it possible for our income to grow by 2% year to year. Of course, the division of the results differs, because on the interest rates we are 0.3 points down, but on the commissions we are 6% up. If we look at the net result, we can see that it's definitely lower. But as all the banking sector did, we applied a new approach for banking. But what is important is that the gross result is almost the same as the one we have obtained last year in the first quarter of 25. When we look now at the income statement, the P&L, So we can see the total net interest income and also the commissions. We have got dedicated slides I am going to discuss in a moment.

And we've got also results on other activities.

Let me mention that we have got also the hedging transactions plus 18 million zlotys and also on the transactions with financial instruments 6 million zlotys. And in particular the hedging transactions assessment is positive in this quarter and it contributed in a good way to the result. It can change in the future as you know very well. That's a positive one-off. If we look now at the total costs, They are also under good control. The costs of our activities increased by 2% only. And I'm going to discuss it more precisely on the dedicated slide. What is also important is that the legal risks costs, well, we have identified 37 million slots of risks due to foreign currency loans. And this is mainly due to the model modification. So when we extended the horizon from two to five years, the provision for that topic has increased. We do not see a major influx of mortgage in foreign currencies claims. So this is a trend that is not deteriorating. as far as the gross result the gross profit is almost at the same level as last year which with lower interest rates and higher costs is quite a good result for this quarter concerning the net profit we've got the impact of the corporate income tax we have 37 percent of rate that has been applied to the whole year here so getting down to more specific elements of the interest rates results. We can see a decrease by 1 percent quarter to quarter, but taking into account the fact that in February we have two days less, so we can say that this is quite comparable. as far as the interest rates results are concerned when we look at the interest rate margin which is probably more interesting for you we can present with a big level of satisfaction this decrease because when we look at what happened As far as the reference interest rates of the National Bank of Poland is concerned, they went down by 200 base points last year. And as we have already been saying for some time, we are changing the structure for our sales. and we have a huge growth of the mortgage laws, which is stabilizing the income of the bank in the long term, but it has got a negative impact on the margin. Taking into account those two basic elements, the fact that we went down from 5.88 to 5.19 only, this can be considered a huge success when we look at the general trend of this decrease. Concerning the deposits and loan ratio, it's 78.5, which is quite a good result. Concerning the fees and commissions, it has increased by 6% year to year. When you look at its development in the past quarters of 2025, we can see that every quarter it has improved and I believe that this year the trend should be continued, which would mean that the number of the clients will increase, the sales of our products will also result in an improved commission income. When I look at the first quarter year to year there are two things that needs to be commented. First of all the increase of the brokers commissions by 10 million zlotys and this is connected with a higher volume of the investment funds and to a higher activity of our clients at the stock exchange. We've got also a second item, the sales of insurance connected with the mortgage loan sales. We have also seen here a huge growth by 7 million zlotys. And my last slide on the operating expenses. As mentioned in the strategy, we want to maintain them at a comparable level and we want to maintain them in a regime that we have adopted. in order to present it better we have split costs operating expenses into bank operating cost and bfg costs which are above it so as you can see every quarter is getting slightly higher but it's still comparable when you look year to year quarter to quarter we can see that there is a slight increase in costs when we look at the Last quarter, we can see that we have mainly HR costs that have increased, but this is due to the structure and to the charges we need to pay as employer for the social security. That's for the first quarter, and then it's getting down in the next quarters. When we look at the general governance costs, Usually, in the last quarter, there are additional activities such as marketing activities, IT projects, consultancy services, and this all resulted in higher costs in the fourth quarter, so now we have a decrease in the first quarter of 26. What is important is that When we look at the cost income ratio, BFG in time, 37.8 for the bank, for a bank with our structure, which is a growing bank, it's a very good value. And the most important information for you, I think, we would like... for the general cost of governance once bfg included to be maintained at the level of the inflation so that it would not exceed the inflation ratio this year thank you very much the floor is back to piotr thank you gentlemen on the last slide i would like to comment as follows we had a quite a good quarter I mean the first quarter of 2026. We are changing the structure of our balance sheet, of course. It's moving progressively, but in the good direction. The P&L is increasing and even faster than expected in some segments. Mortgage, consumer loans, are increasing concerning the business clients the portfolio is stable but the structure and the mix is improving we are reducing the non-working part we are improving the segments in which would like to be active concerning the pnl well all this results in higher income 1.5 billion that has been mentioned here is due to the increase of our volumes, and we are very glad because of that.

Of course, our P&L is highly impacted by all kind of costs.

that seem to be very well managed. They are not increasing, they are not growing. We may say that in some areas we are even able to reduce them. That's why we have a very good position on the risks and with a good road followed by the NPLs, follow the risks. The P&L is at a very good level. It's very stable. very solid. 403 millions of our results impacted by the corporate income tax mainly is very good. It's one of the best return of investments on the market currently. Cost income, I have already mentioned that and NPLs. So we consider that this quarter has been a good one. It's a good opening of the year. The dividend is paid.

And our rating, investment rating, have been a strong element of this first quarter.

And I think that I will end here and we will be glad to answer to your questions.

Well, first of all, what we are observing is a much better situation in terms of winning

the law suits. That is why the reserve level is as it is. We are being much more efficient in the litigation process, and that's been the main reason for the drop. Thank you very much.

The next question.

In the first quarter, was there a reserve for the legal risk related to SKD? And if yes, what was the amount of the reserve? Well, in the first quarter, we did not set up a reserve fund for that. We simply decreased because of the incidence of higher

success rate that Piotr mentioned.

What about the MRL at the end of first quarter 2026? At the capital group level we received 11.5%.

Next question.

Does the Board see an impact of relational customers to the provision result? And what is the outlook as regards the Commission result for 2026? Well, I think this question is not so much about relational loans, but relational customers. yes we see an impact the relation customers give us a better level of banking the relation with customers bank more readily and use more of our products our aim is to increase the commission result by four percent and we are on a good track as far as this is concerned. There's a growth trend which Zdzislaw showed us. What was the WFD result at the end of the first quarter? 44.7%. What is your assessment of the ECJ ruling about the para loan results. Well, what is this ECJ ruling about? ECJ said that banks can provide credit for commission but cannot receive interest from it. However, the fact that they cannot receive interest, so the loss from that, can be set off by higher interest. So these are three important constituent parts of this ruling. We are analyzing what's going on. This is a very fresh ruling. We are very active in the Polish Bankers Union and the whole of the sector will be very active in limiting the results of that ruling because in our view, This is about the mechanics of the calculation of the bank's remuneration. This mechanics should be modified. And ECJ said simply the potential losses that occur because you do not take interest on commission can be set off by higher interest. So ECJ agrees that remuneration is due to the bank because of that type of activity. And the next question, what part of contracts contains the cost of commission of insurance? As far as new sales are concerned, we're talking about marginal level of value. We have one, as far as I remember, open line, but it is practically being wound up. As far as the other part of the portfolio is concerned, we are analyzing this. This is a fresh issue, so we cannot respond giving you any figures, but historically we realize that this has taken place and we are assessing the situation because there's been many changes in the contracts and it's too early to provide a definitive answer on that. Thank you very much.

The question from Jaromir. Piotr mentioned about the rise of MSP volumes by 11% year-on-year.

In slide 30, you show the drop by 16% year-on-year. Well, the drop is in the micro companies, but in other segments we are growing, so I don't know what this is about. In one slide we're talking about a working portfolio, the one that generates stable growth, and there we have increase results, but in the subsequent slide we have the total portfolio in the gross value, which includes the non-performing loans. Another question about the ECJ ruling about SKG. Can this impact the bank's reserve levels? Well, I want to be quite definite. This particular ruling did not refer to SKD. Let us not introduce any confusion here. This ruling was about the right of the bank to obtain interest on the cost of credit, like commission, or whether this can be compensated. And ECJ said that it can be compensated by a higher level of interest.

So this is not an SKD case.

There is no sanction related to a free loan. This is about the mechanics of the calculation of revenues due to the bank stemming from commission on loans. Thank you. That was the last question. Thank you all very much for the questions and thank you to the board.