Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nova Ljubljanska banka dd Ljubljana (FRA:N1V2, Financial) reported strong growth across all client segments and geographies, including successful integration of Summit Leasing.
- The bank maintained a solid trend in net operating income with stable margins and a strong cost-to-income ratio.
- The macroeconomic environment in the region remains promising, with low unemployment and higher growth rates compared to the Eurozone.
- The bank has been proactive in managing interest rate risks by shifting to fixed rates and focusing on fee income origination.
- Nova Ljubljanska banka dd Ljubljana (FRA:N1V2) is investing significantly in digitalization, which is expected to enhance operational efficiency and customer service.
Negative Points
- The bank faces uncertainties due to economic turbulences in Germany and the broader European manufacturing sector.
- There are tensions related to wage inflation and the need to invest in digitalization, which could impact short-term profitability.
- The cost-to-income ratio target has been revised from 45% to 48% for 2025, indicating potential cost pressures.
- The automotive industry, particularly in Germany, poses risks due to its current challenges, which could affect related sectors.
- The bank anticipates a transitional period in 2025 with potential higher cost of risk due to swift rate reductions and ongoing investments.
Q & A Highlights
Q: When is the next issuance of Emerald Bonds planned?
A: Early next year is very likely, although it's not yet a firm decision. Originally, it was planned for mid-next year, but it might be accelerated to the beginning of the year. β Unidentified_3
Q: Can you tell us about buying the online vehicle sales platform, Dovato, and how much loan generation do you expect from that platform?
A: Dovato is a small entrepreneurial step to add to our Comprehensive Mobility Solutions. It is currently immaterial for the banking group, and it's too early to determine its impact on loan generation. β Unidentified_3
Q: You have kept the 2025 ROE unchanged despite revising the CIR target. Does this 15% ROE for 2025 now look too ambitious?
A: We believe it looks more realistic. We aim to deliver more than 15% ROE, and while 2025 can be seen as a stretch, we believe 15% is achievable. β Unidentified_3
Q: What was the contribution by the new acquisition to the net interest income and fee line in Q3?
A: It was immaterial because it was just 19 days. More specifics will be disclosed in the annual report, with a midterm goal of a 30 million contribution to the group's results. β Unidentified_3
Q: At what level do you expect the net interest margin to stabilize after 2025?
A: It's too early to tell due to many moving parts. We are trying to defend the margin with various measures, but we expect some loss of margin. We anticipate the rate environment to be at 200 basis points by the end of next year. β Unidentified_3
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
