Nova Ljubljanska Banka (NLBR) Q1 2025 earnings summary

Executive summary

• Q1 2025 profit after tax was EUR 125.8 million, down 10% year-over-year, mainly due to higher costs and impairments, but up 45% from Q4 2024.

• Achieved strong business growth, both organically and through M&A, notably with Summit Leasing acquisition, making the group the #1 leasing provider in Slovenia and expanding in Croatia.

• Total assets reached EUR 28.7 billion, up 10% year-over-year; gross loans to customers increased 22% year-over-year, with deposits up 8% year-over-year.

• The 2030 strategy targets doubling the balance sheet, revenues, and profit, focusing on digitalization, sustainability, and regional expansion.

• Accelerated digitization strategy, aiming for over 80% of new production to be end-to-end digital by 2030.

Financial highlights

• Net operating income rose 5% year-over-year to EUR 312.2 million; net interest income was EUR 233.9 million (+1% year-over-year); net non-interest income grew 19% to EUR 78.3 million.

• Q1 2025 revenue reached approximately EUR 126 million; cost-to-income ratio increased to 46.7% (up 5 p.p. year-over-year), below full-year guidance.

• Total costs increased 17% year-over-year (9% normalized), mainly due to salary adjustments, SLS Group acquisition, and strategy implementation.

• Net interest margin declined by 0.27 p.p. to 3.46%, but impact was mitigated by strong loan growth and balance sheet management.

• Dividend proposal to distribute 50% of 2024 profit, targeting over 9% gross yield, with EUR 6.43 gross per share proposed for June 2025.

Outlook and guidance

• 2025 guidance reaffirmed: recurring revenues expected at ~EUR 1.2 billion, cost-to-income ratio around 48%, ROE after tax ~15%, normalized ROE >20%.

• Loan growth expected at high single-digit level; cost of risk guidance remains 30–50 bps, with cost of risk at 37 bps in Q1.

• Dividend payout of 50% of 2024 profit in two tranches; 2026 outlook includes regular income >EUR 1.3 billion and dividend payout 50–60% of 2025 profit.

• 2030 strategy aims for >EUR 2 billion recurring revenues, >EUR 1 billion recurring profit, CIR <45%, and normalized ROE >20%.

• Continued focus on digital transformation and cost discipline, with headcount reduction of 20-25% by 2030.