Nova Ljubljanska Banka (NLBR) Q3 2024 earnings summary

Executive summary

• Net profit after tax rose 10% year-over-year to EUR 427.5 million, driven by strong loan growth, higher interest income, and the Summit Leasing acquisition, which strengthened market leadership and expanded into Croatia.

• Achieved strong growth across all client segments and geographies, both organically and via acquisitions, with leasing now a key business pillar.

• Asset growth was stable in both retail and corporate portfolios, with high single-digit to double-digit loan growth in key markets.

• Market share gains in housing loans and deposits, with a focus on fixed-rate lending and digitalization.

• The Group expanded in leasing and asset management, acquiring SLS Group and entering the Croatian market, and completed strategic asset management acquisitions in North Macedonia and Serbia.

Financial highlights

• Net operating income rose 15% year-over-year to EUR 924 million, with net interest income up 15% and net non-interest income up 15%.

• Cost-to-income ratio improved to 43.2% from 45.2% a year ago, with a target of 48% for 2025 due to integration and digital investments.

• Return on equity after tax (ROE a.t.) was 18.6%, with a 15% target for 2025.

• Net interest margin at 3.65%, though trending downward due to ECB rate cuts.

• Loan-to-deposit ratio improved to 73.6%, reflecting more efficient funding.

Outlook and guidance

• Revenue guidance for 2024 and 2025 reaffirmed, with strong loan growth expected to reach low double digits organically in 2024.

• Cost of risk remains below 20 basis points for 2024, with a cautious outlook for 2025 (30-50 basis points) due to macro uncertainties.

• Dividend payout for 2024 proposed at EUR 220 million, with more than 40% of 2024 profit targeted for 2025.

• ROE a.t. guidance is above 15% for 2024 and above 20% for 2025.

• Cost-to-income ratio for 2025 is expected to be around 48% due to SLS Group integration and digital investments.