NLB Group posts EUR 162.2 million net profit in 9 months

29 November 2019

Today, on 29 November, the Supervisory Board of NLB d.d. met for its 58th regular meeting and discussed the NLB Group operations in the first nine months of this year. NLB Group generated EUR 162.2 million net profit, which is a 2% increase YoY. All subsidiary banks in SE Europe generated profit and contributed 39% to the Group’s profit before taxes. Members of the Supervisory Board also appointed a new Chief Operations Officer (COO). After receiving a license from the Bank of Slovenia, this function will be performed by Petr Brunclík.  

Profit before impairments and provisions stood at EUR 170.3 million, which is a 7% increase YoY.

The total net operating income amounted to EUR 384.7 million, representing a 4% increase YoY. The increase is based on higher net interest income (3% increase YoY) and higher income from net fees and commissions (6% increase YoY). Net loans to NLB Group customers were 5% higher than at the end of 2018, and customers’ deposits also went up by 5%.    

The share of costs in the net income (CIR) amounted to 55.7%, which is a 1.3 pp drop YoY. The net interest margin of the Group dropped by 0.03 pp YoY, and amounted to 2.51%. The cost of risk was negative at -31 bp.

The quality of the credit portfolio continued to improve. Consequently, the share of non-performing loans dropped to 5.2% by the end of September, while the share of internationally comparable non-performing exposure (according to the EBA guidelines) dropped to 3.5%. The total capital ratio for the NLB Group reached 16.1% by the end of September, which is above the regulatory requirements (14.75%). Despite the challenging economic environment of historically low interest rates, the NLB Group successfully continues with its activities to achieve the set mid-term financial targets.  

For more details on NLB Group operations in the first nine months of 2019, please refer to the NLB Group Interim Report, which was published today. On Monday, 2 December, at 11:00 am CET all interested stakeholders are invited to follow a webcast presentation of financial results live on this link

Petr Brunclík, the new COO

The Supervisory Board of NLB appointed Petr Brunclík as member of the Management Board, with a five-year term of office from the day he receives consent from the Bank of Slovenia. He will assume the function of Chief Operating Officer (COO) and will be responsible for the IT, operations, procurement, and corporate real estate management departments.

The new COO is joining NLB d.d. during its intense digital and IT transformation, as well as numerous challenges being set forth to the banking sector by various fintech companies, and continuing calls to improve customer experience. Therefore, the first task he will need to tackle will be answering these challenges:

- Secure business and IT alignment, as well as improve the speed of IT deliveries by adopting agile principles;

- Focus on a mobile first approach and implement the best online experience for customers in the SEE;

- Revise and simplify the IT architecture according to latest best practices to support the digital transformation;

- Simplify, automate, and digitize processes to minimize costs;    

- Enhance capabilities for processing data, modelling, and relevance of services to clients.

Petr Brunclík (1979) has almost 20 years of diverse banking, business, customer service, process improvement, online, and technology experience. He majored in information technologies and applied informatics at the University of Economics in Prague. He began his career in 2001 as a Head of Promotion at the Mironet Group, a Czech hardware and computer systems distributor. From there he moved on to GE Money Bank (6/2003), which was later (in May 2016) rebranded to MONETA Money Bank. For the next 15 years he held various positions including IT Manager for eBusiness Applications (2/2007), and later Senior IT Manager for Distribution Channels (3/2009), then Shared Service Center Director (1/2012), and lastly Chief Shared Services Officer (COO) (6/2013), responsible amongst other fields for a call center, customer service, and business process support. Before joining NLB he gained extensive experience as a Chief IT and Operations Officer (CIO & COO) at the Home Credit Philippines (from June 2017), which is a part of Home Credit Group, an international consumer finance provider, with a leading presence across 11 countries in Central and Eastern Europe, Asia, and North America. 

Supervisory Board also on updated strategy and MSCI inclusion

At the meeting, the Supervisory Board approved the updated business strategy of the NLB Group, which defines the Group’s focus as further extensive digitalization, a significant increase of client centricity, and cost efficiency. It also reaffirmed the Group’s mission and vision, which clearly defines its identity and South-eastern Europe as its focus – its home region.

The Supervisory Board also expressed its content and welcomed the decision of MSCI, to include NLB’s shares in MSCI Slovenia and MSCI Frontier Markets as at 27 November, 2019. It noted, that this is an important milestone that will ensure higher stock liquidity and gained recognition of NLB’s shares in the international market.

Members of the Supervisory Board also took note of the reports for Q3 submitted by the Bank’s experts and granted consent to transactions requiring Supervisory Board approval.

Supervisory Board of NLB d.d. 

NLB Group in the First Nine Months of 2019

The right solution, at the right time, in the right place

We are focusing on providing the best user experience and setting new trends with our innovative solutions. We want to offer our clients the right solutions, at the right time, and in the right place.

  • NLB Pay mobile wallet, which contains digitalised Maestro, Mastercard and Visa cards, enables payments, cash withdrawals and card management – not only in Slovenia but also in three members of the NLB Group: NLB Banka Skopje, NLB Banka Sarajevo and NLB Banka Prishtina.
  • Mobile application NLB Skladi for a simple overview of money saved. 
  • New online application NLB Purchase of Receivables for easy access to short-term funding. 
  • Tight collaboration between NLB d.d. and the banks of NLB Group in the segment of large companies and a proactive approach of the local teams have already yielded results and shown the Group’s regional strength in several completed transactions in Kosovo, Serbia, Bosnia and Herzegovina, Montenegro and North Macedonia.  
  • Banking members have received several awards in the first nine months: 
    • NLB Banka Prishtina was awarded the most active issuing bank in Kosovo in 2018 within the Trade Facilitation Programme of EBRD.
    • NLB Banka Skopje was named the Best Bank in North Macedonia for 2018 (Europe Banking Awards 2018).  
    • Financial magazine Euromoney granted the award for the best bank in Montenegro to NLB Banka Podgorica, and for the best bank in North Macedonia to NLB Banka Skopje.

We are closely connected with the environment we live and operate in

NLB Group is no mere financial Group. In addition to good business performance and financial results that contribute to economic development of the region, we also wish to shape and improve the social threads of the environment we live in and to contribute to a higher quality of life of all its people.

We promote sports among young people

In life, it is important that hearty supporters stand by our side in good times and bad times – in whatever may come. These supporters stood by the players of the Slovenian national football team at the qualifying matches for the European Championship 2020 in Stožice. Among them, there were as many as 800 NLBs employees with their children and almost 2000 children who were invited there as part of the NLB Youth Sports project.

Business and educational meetings with representatives of the local economy

For the sixth consecutive year, NLB has organised a series of business and educational meetings with representatives of the local economy throughout Slovenia called “Faces of Business, Reflections of Time”.

We want to enable our companies to get in touch with the lead experts in Slovenia so that we can together find solutions to business challenges identified in our day-to-day interactions and which we are faced with to a large extent ourselves, too. Most of all, we want to bring the discussion to the local level – where the companies operate. 

Supporting culture

We supported SNG Maribor at its 100th anniversary, as the two institutions have a lot in common. Our understanding of SNG Maribor’s contribution to keeping the Slovenian language refined is broader in context, of pan-Slovenian meaning, and we understand the needs of the local environment at the same time.

Nurturing talents

At the end of August NLB Banka Sarajevo and NLB Banka Banja Luka hosted the 2nd regional business forum focusing on talents and how they influence business performance. More than 250 participants listened to the round-table discussion of the NLB Group banks’ CEOs on the market specificities in the region where NLB Group operates, challenges we are faced with and our reactions to the ever more evident trend of labour shortages and efforts to retain quality employees.