Alior Bank (ALR) Q1 2025 earnings summary

Executive summary

• Net profit for Q1 2025 was PLN 476 million, down 17.6–18% year-over-year due to one-off events, with adjusted net profit at PLN 517 million.

• Mobile app users grew 16% year-over-year to 1.33 million; main relationship customers increased by 56,000.

• Deposit portfolio rose 5% year-over-year to PLN 78.5 billion; assets increased 6% to PLN 96.6 billion.

• Revenues reached PLN 1.47 billion; net interest income was PLN 1.28 billion (+1%), while commission income fell 3%.

• Management intends to recommend a 50% dividend payout from 2024 net profit.

Financial highlights

• Assets grew 6% year-over-year; performing loans up 1%, deposits up 5%.

• Net interest margin (NIM) at 5.88%, down 8 bps year-over-year.

• Return on equity (ROE) at 16.8%, down 7.6pp year-over-year; cost-to-income ratio at 42%.

• Cost of risk at 0.74%, slightly up year-over-year.

• Non-performing loan (NPL) ratio improved to 6.69% from 7.65% year-over-year.

Outlook and guidance

• Expectation to maintain income performance similar to last year, with NIM projected at 5.7–5.8% by year-end despite interest rate pressure.

• Management expects cost of risk to remain below 0.8% barring major macroeconomic changes.

• Anticipates interest rate cuts in 2025, supporting credit expansion and loan demand.

• Anticipate significant commission income growth in 2026 as new projects mature.

• Legal risks related to FX mortgage loans and free credit sanctions remain significant challenges.