The management board of Alior Bank SA adopted an implementation plan for its 2020 strategy under which some targets could be reached earlier than initially planned.
The implementation plan stipulates that the targeted return on equity of 14%, cost-to-income ratio of 39% and net interest margin of 5.1% are expected to be met in 2019, one year earlier than assumed in the strategy, the details of which were first unveiled in March, the bank said Oct. 4. ROE is expected to reach 14.1% in 2020, or higher contingent on "additional upside not included in the base plan," the lender said in a presentation.
After the first half, Alior's ROE, cost-to-income and NIM stood at 5.8%, 55% and 4.8%, respectively. The bank will also look to achieve a cost of risk of 1.6% in 2020, compared with 1.8% after the first half of 2017.
The bank maintained its earlier target for annual loan volume growth of between 5 billion Polish zlotys and 6 billion zlotys and reiterated that it expects to be in position to pay a dividend in 2020, subject to regulatory guidelines. The bank plans to invest 100 million zlotys per year into IT and innovations and to reduce its branch network to 800 outlets, including 200 owned offices and 600 franchise branches, by 2020 from 1,110 in 2016.
Alior noted that it will analyze growth opportunities through further M&A transactions and develop its cooperation with PZU SA and Bank Pekao SA to achieve revenue and cost synergies.
Meanwhile, the lender shut its structured finance department and reduced the workforce in its corporate banking department to 12 from around 30 people, news agency PAP reported Oct. 3, citing sources familiar with the matter.
As of Oct. 3, US$1 was equivalent to 3.67 Polish zlotys.