Fibank Q4 2024 Individual Results

• Fibank’s Q24 2024 unconsolidated net profit dropped over 7.9% YoY to EUR 6m, which is significantly less than the Net Profit drop of 45% by Q2 2024. Net Interest Income increased 15.5% to EUR 218.4mln and Net fee and commissions income gained 8.5% to EUR 84mln. However, the decreases in Other Net Operating Income (100% from EUR 13.9mln to EUR 27.8mln loss) and the massive Allowance for impairment (41.5% increase to EUR 99.2mln) lead to the decreased Net Profit.
• The problem which started with SG Group in Q4 2023, which we mentioned in previous reports, seems to be finally out of the books and the portfolio must be improving from now on. The expense under Allowance for impairment (dropping EUR 29mln) comprises almost entirely of the changes from reevaluating Receivables from clients. This is clearly the path to clean up and optimize the loan portfolio and the price of that is the decreased Net Income.
• Total operating income increased by 8.9% YoY to EUR 288m. The business generally grew noticeably (both interest and fees). It is likely that in the environment of growing interest this will be a continued trend.
• The gross sum of overdue loans with delay of over 90 days was EUR 246m, which was a 23% decline from its Q4 2023 level of 321mln. Because of this and the increased Loans and advances, which went from EUR 5.6bln to EUR 5mln, the NPL ratio dropped from 6.4% to 4.4%.
• Net Interest Margin is at 4.91% as per data from the Bulgarian National Bank. From the top 10 banks in terms of assets, only one bank has marginally higher NIM – DSK Bank at 4.96%. The average NIM of the top 10 banks is 3.95% and the median NIM is 3.86%. Fibank seems to be able to reap greater benefits between the loans-deposit spread without losing clients. For comparison, large banks like Unicredit and United Bulgarian Bank have NIMs of 3.41% and 3.02%.
• Gross loans portfolio added 10.6% to EUR 4bn as corporate loans grew at 7.5% YoY (representing 63.4% of the portfolio). From retail loans, which represent 35.1% of the portfolio, the mortgages and the consumer loans contributed to the push, where the former had a slightly bigger effect.
• The loan portfolio as per the business line:

VALUATION

• Multiples approach:

Deals, which took place in recent years in Bulgaria were considered for the data:

The ratios were calculated using data from the previous year of the deals as indicative of the available information at the time of the negotiations.

The value based on the “lowest of” rule is 29% above current NAV.

Market based approach:

Share price (04/02/2025):               EUR 2.12

Shares outstanding:                           149,084,800

Market cap (Valuation, ‘000):        EUR 316,059

The analysis suggests a substantial hidden fair value reserve over the current market cap valuation.

The complete analysis can be seen here: