Basic financial data

In 2019, the net profit of Alior Bank S.A. Capital Group amounted to PLN 253 million and was lower than the net profit obtained in the previous year by PLN 461 million, i.e. by 65%.

As the main reasons for this decrease we can name:

• decrease in income in connection with the CJEU judgement regarding refund of part of commission in the case of early repayment of retail loans – the Group estimated the judgement’s impact to be gross PLN 378 million, which amount includes:

• provision for historical refund of part of the commission in the case of loans repaid before 11 September 2019, in the amount of PLN 243 million (impact on other operating expenses) – one-off impact.
• provision for refund of part of the commission in the case of loans repaid after 11 September 2019, in the amount of PLN 85 million (impact on interest income),
• adjustment due to the difference between the settlement of the commission in the Bank’s books using the effective interest rate method and the linear method of estimating refund of part of the commission, in the amount of PLN 50 million (impact on interest income) – one-off impact.

Impact of these amounts on the Bank’s net income in 2019 was PLN 306 million.

• a significant increase in the Cost of Risk related to business customers operating in the AGRO segment (in 2019, provision for this segment amounted to PLN 389 million) – oneoff impact.
• significant changes in the risk management area at Alior Bank, necessary to build solid foundations for continued growth in the years to come.

As a consequence, the Bank’s profitability ratio ROE was 3.8% (vs. 11.7% in 2018.). Excluding the impact of the CJEU judgment regarding refund of part of commission in the case of early repayment of retail loans, the Bank’s ratio ROE in 2019 would be 8.4%

However, it is worth emphasising that even in such a difficult year the Bank’s capital position remained unthreatened, and TIER 1 and TCR indicators remained at a stable high level (13.48% and 16.20%, respectively), leaving a safe buffer above the regulatory requirements (198 bps and 270 bps, respectively).

Similarly, the Bank’s liquidity situation in 2019 remained on a secure level. It was closely monitored and maintained at an adequate level by adapting the deposit base level and launching the funding acquisition depending on the development of lending action and other liquidity needs.

Summary of the Bank’s key data

Change 2019 vs 2018