Nova Ljubljanska Banka (NLBR) Q4 2025 earnings summary

Executive summary

• Achieved net profit of EUR 503.1 million for 2025, driven by robust 14% loan growth and strong fee income, despite margin pressure and higher provisioning costs.

• Total assets increased 12% year-over-year to EUR 31.5 billion, with customer deposits up 10% and continued strong growth in Southeast Europe.

• Maintained a leading market position in Southeast Europe, with double-digit loan growth in both retail and corporate segments.

• Digital transformation advanced, with digital active user base up 5.7% YoY and digital sales of core products rising to 36%.

• Dividend payout ratio increased to 55% of profits, with absolute dividend growth despite a slight net income decline.

Financial highlights

• Net operating income grew 5% YoY to EUR 1,302.5 million, with net interest income up 1% YoY and net non-interest income up 16% YoY.

• Cost-to-income ratio (CIR) at 47.4%, reflecting higher operating costs but remaining below guidance.

• Return on equity after tax (ROE a.t.) was 14.5%, with normalized ROE at 20.5%.

• Cost of risk for the year was 29 basis points, mainly due to sector-specific provisions in Slovenia.

• NPL ratio stable at 2.0%, with coverage ratios above EU averages.

Outlook and guidance

• 2026 guidance targets net operating income above EUR 1.3 billion, CIR below 48%, cost of risk at 30–50 bps, and high single-digit loan growth.

• Dividend payout ratio outlook is 50-60% by 2027, with current capital levels supporting growth and distributions.

• Effective tax rate expected to converge to 15% by 2029 as DTA utilization and balance sheet tax sunset.

• M&A capacity up to EUR 4 billion RWA, supported by strong capital and recent AT1 issuance.