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Alior Bank SAAlior Bank hopes to rebuild fee and commission income in 2025; costs to rise 6-7 pct y/y
Listed lender Alior Bank expects to rebuild its fee and commission income throughout 2025, with operating costs rising by 6-7 percent this year, the bank's deputy CEO Zdzislaw Wojtera told a conference.
The bank said on Friday that in the first quarter, net fee and commission income was PLN 209.3 million (EUR 48.9 mln), down 3 percent year on year and 5 percent quarter on quarter.
"I am convinced that we will rebuild this revenue line, we will work to improve it," said Alior's deputy CEO Zdzislaw Wojtera.
He further pointed to the strategy and the sales performance, especially in the retail part, which could translate into a good commission result at the end of the year.
Alior reported that the PLN 4 million (EUR 934.8 mln) year-on-year decline in first quarter's commission income from insurance sales was due to lower mortgage sales than a year ago and a change in the cash loan product offering.
On the other hand, the decline in loans, advances and leases by PLN 6 million (EUR 1.4 mln) was mainly due to lower corporate customer activity and lower income from the collection of lease receivables.
The bank's operating expenses amounted to PLN 615.8 million (EUR 143.9 mln), up 13 percent year on year and 5 percent quarter on quarter.
The year-on-year increase in costs was mainly due to a PLN 23 million (EUR 5.4 mln) annual increase in staff costs (mainly caused by an increase in the average salary level) and a PLN 34 million (EUR 7.9 mln) increase in Poland's state bank guarantee fund BFG contribution.
"This year, we will endeavour to keep the distribution of costs between quarters similar, comparable. (...) I expect that we should stick with year-on-year cost growth in the range of 6-7 percent," Wojtera said.
The deputy CEO said that a 100 basis points interest rate cut would mean a decrease in the bank's interest income of around PLN 100 million (EUR 23.4 mln). He estimated that the reduction in rates would revive lending.
Wojtera reported that in new mortgage sales, 93 percent of mortgages are granted at a periodic fixed rate.
In the first quarter of 2025, the bank made a provision for the legal risk of mortgages in foreign currencies, which amounted to PLN 15.9 million (EUR 3.7 mln).
The bank stated that the additional provision is related to changes in model assumptions, in particular a slight change in assumptions regarding the target level of litigation cases.
Alior's deputy CEO Marcin Ciszewski reported that write-offs in subsequent quarters could be at a similar level.
seb/ nl/ ao/
