In This Article:
Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Nova Ljubljanska banka dd Ljubljana (FRA:N1V2) reported strong growth across all client segments and geographies, including successful integration of Summit Leasing.
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The bank maintained a solid trend in net operating income with stable margins and a strong cost-to-income ratio.
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The macroeconomic environment in the region remains promising, with low unemployment and higher growth rates compared to the Eurozone.
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The bank has been proactive in managing interest rate risks by shifting to fixed rates and focusing on fee income origination.
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Nova Ljubljanska banka dd Ljubljana (FRA:N1V2) is investing significantly in digitalization, which is expected to enhance operational efficiency and customer service.
Negative Points
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The bank faces uncertainties due to economic turbulences in Germany and the broader European manufacturing sector.
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There are tensions related to wage inflation and the need to invest in digitalization, which could impact short-term profitability.
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The cost-to-income ratio target has been revised from 45% to 48% for 2025, indicating potential cost pressures.
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The automotive industry, particularly in Germany, poses risks due to its current challenges, which could affect related sectors.
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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. 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. 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. 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. Unidentified_3