Alior Bank S.A. (ALR) Earnings Call Transcript & Summary

Ladies and gentlemen, the event is going to be hosted by the journalist that you may know from TV screens and who is no stranger to finances and economics. Please welcome [ Agatha Komatha ].

Good morning, ladies and gentlemen. Thank you for having me to this important conference. On behalf of the host of the event, the Supervisory Board with its Chairman, Filip Majdowski. And with the President of the Management Board of Alior Bank, Grzegorz Olszewski, it is my great pleasure to welcome all of you warmly to this extraordinary meeting focused on the new strategy of Alior Bank. I am very pleased that we can meet in this amazing venue with such a wonderful company. A very warm welcome goes to our noble and honorable guests. And we have with us Professor Andrzej Zybertowicz, adviser to the President of Poland; [ Ivana Duda ], a member of the Council of Monetary Policy; Malgorzata Sadurska, a member of the Board of PZU S.A. A warm welcome to the Board member of PZU S.A., [indiscernible], Maciej Rapkiewicz; the President of the Board of [indiscernible], President of the Management Board [indiscernible]; [indiscernible] President of the Board of TFI PZU S.A.; [indiscernible] Vice President of the TFI PZU S.A.; and Tomasz Marczak, Vice President of Sales and Strategy, Mastercard Europe. A warm welcome to all of you. We also welcome those who are here in person in this outstanding venue on this special height, but also those who participate remotely because the whole conference is streamed on the Internet. Thank you very much for joining us. I would also say a warm welcome to the representatives of the Polish Financial Supervisory Authority and to the Polish Guarantee Bank, business consultancy and other institutions and companies that Alior Bank cooperates with, our clients, shareholders and the numerous experts, analytics and the representatives of media. Thank you very much for coming, one more time. [Presentation]

Please welcome well-known faces of Alior Bank. [ Alexandra ] [indiscernible]. Welcome, dear. It's nice to see you. Tell us, what message do you have?

Well, first of all, a warm welcome to all of you. And well, the message is constant. We are about to give you good news and new opportunities. Soon, we will start and go out to the millions of houses. However, today, we are meeting on top. It is in a way as if we were on the highest position of the rankings.

Well, yes, definitely. From this height, ladies and gentlemen, we can take a look into far. We can have a better perspective and we can be more courageous while planning. And thus, this is time to welcome the President of the Management Board of Alior Bank, Mr. Grzegorz Olszewski. The floor is yours.

Good morning, ladies and gentlemen. This is no accident that we are meeting in one of the highest buildings in Warsaw. Alior Bank has always been ambitious and has always put the bar high for our competitors. In our new strategy, we are about to come back to our roots to offer solutions that are available for a few today, offered by fintech and other institutions. It's going to be a very ambitious strategy. We have the basis to have such ambitious goals. After 15 years in the market, we've managed to create an effective business model. And we've started in very difficult times. In 2008, we were facing the financial crisis all over the world, and Alior Bank made it to create a strong bank with repeatable results that are going to be invested into our capital base -- into growing our capital base. The good news is also when I'm thinking about the risks in the banking sector. We have a marginal percentage of the CHR -- CHF mortgages and credits. The previous years, we focused on the reduction of the area of the risk. And right now, we've changed from the one that with an increased cost of risk. We have the rentable very good cost of risk, and we have a low margin of nonworking credits in our portfolio. This was achieved thanks to the team. We have a good team, and we've always had the technology. that's why we have one of the biggest own teams, technological teams. We have an engaged team. What is important, we are diversified in generations. And we are also backed by a strong shareholders group, the biggest group in Europe, in Central Eastern Europe, [indiscernible]. After 15 years, we created a brand that is standing out in the market in the Polish banking sector. We are on the fourth floor -- fourth position as far as the brand is concerned. We are good in quality. We are the fourth bank of choice around our clients. And gentleman in the bowler hat is the most recognizable banking symbol in Poland. We realize that we've achieved it, among others, through implementation of 2 previous strategies: the strategy of the Digital Rebel and the strategy, More Than A Bank. The Digital Rebel strategy was betting on technology. And in the strategy More Than A Bank, we've added services that were not typical for banking. Toll payments, parking payments, we very often were the first one to implement those. And now this is the time to implement the strategy, bank on a daily basis, a bank for the future. Right now, we are prepared to provide services on a high level. However, we know that our clients change, that companies grow, and we want to follow them. We understand the social changes that are happening. That's why we want to be an employer for our employees that offers ambitious possibilities to grow. We want to be a bank for today but also a bank of the future. From the shareholders' perspective, for the next 2 years, we want to focus on the transformation of our business so that even in the low interest rate environment, Alior is still very attractive to our shareholders. It's going to be a strategic decision. We're going to focus on 3 pillars: higher mobility culture, support for entrepreneurship and the modern shift bank. A higher culture of mobility. First of all, this is the inclusive mobile application that is addressed to kids, to parents and to their grandparents. This is the application that is going to offer an innovative payment system that is going to -- that we already have implemented in the first group. And the -- and post payment is going to be a part of this strategy. We have never before put such a strong emphasis on support for entrepreneurship. We are going to focus on micro and small and medium enterprises. We are going to participate in the energy transformation of the country. From the perspective of the client, we're going to build a new mobile banking. And from the perspective of the bank, we are going to implement an automated credit process. And thanks to that which we will be able to grow sustainably and to build assets of high value. And the third pillar, the modern bank. How do we understand the modern bank? Well, modern bank is supposed to help us to get -- to implement the first and the second pillar. A modern bank is an agile bank. It's a bank that focuses on providing products of high quality within a short period of time. Sometimes it's not ready-developed product. We're going to work on it just as we are working on Alior Pay. We're going to keep developing it in this agile culture. It's a bank that is responsible and manages its risk and capital responsibly. This is important. And the modern bank is a bank that realizes ESG strategy as far as environment, social aspect is concerned and the highest management standards are concerned. Ladies and gentlemen, these are our 3 main pillars of our new strategy. Let's move on to details. Let's start with the higher culture of mobility. And please welcome Rafal Litwinczuk, Vice President of the Board, who is going to tell you all about the higher level of mobility culture at Alior Bank.

Thank you. Ladies and gentlemen, today, Alior Bank is 4 million of individual clients who are serviced by 170 departments and partner institutions. We have over 1 million of mobile application, and we would like to -- this form of communication with the bank to grow on popularity with our current and future clients. By putting an emphasis on this, I would like to have -- we would like to have 1.5 million clients in 2024 that would use the application daily basis. We have a position of the leader as far as consumer finance is concerned. We have a good, strong position here for many years, thanks to the cooperation with the biggest retailers in Poland. We still have access to new clients and we are able to deliver cross-sell. And thanks to that, we are delivering sales in an effective way as cash loans are concerned. Thinking about dynamics of -- and the growth of e-commerce market in Poland, we've decided to use our competencies on financing, shopping and purchases, financing purchases. And this is why we have come up with this Alior Pay, which is omnichannel platform. We want to build a lot of functionalities around it. Today, I'd like to focus and draw your attention especially to deferred payments that we just mentioned. And this is a unique solution because we allow our clients to have all the types of payments. Whether these are Internet online or traditional payments or traditional transfers or withdrawing money from ATM, our client is presented with a choice. We tell them pay as you want whenever you want and whatever -- however you want. But Alior Pay is not only that. It's also a number of tools as the assistant of recurring payment. This is a solution that we have implemented thanks to our accelerator, and it has been implemented with bill tech company. And this service is all about the fact that the client can define the number of recurring payments for energy, for electricity. And in the future, they are going to be realized by the bank because we can import the data from suppliers. Thanks to that, the client has this unique convenience because they don't have to remember about it on an everyday basis. In general, we would like Alior Pay application to bring convenience to clients' mind on finances. We want Alior Bank to be perceived as a friend in finances, so that the number of the tools that we've already provided and that we will still provide will make that we -- on the basis of Alior Pay will build the basic relation with the client. That's our main goal. Other than those already implemented solutions, we want to build the portfolio for our consumer finance partners, our micro lending that we are planning to launch soon, and we have high hopes about all those new products. We also value cooperation with our main shareholder, PZU Group. We would like to create a marketplace, a platform for all the insurance products where we could all easily find it and offer it to our clients. In order for the clients to have access to all those solutions, we are planning to new this mobile application from scratch. This application is going to be multi generation. It's going to be a generation bridge. We wanted to build so that everyone feels good with it. For the youngest ones, we want to have content that is about education, so kids could learn with their children curiosity and get some financial education and have certain control over the savings or allowance so that they learn from the very beginning. For the older generations, we want it to be as easy and as simple as possible. We don't want to miss out on those clients who want more custom, tailor-made solutions, and we will, for sure, include that as well. What is more, we want this application to initiate a certain credit process which will be in our distribution process. And as a result, we'll have increased sales and increased client satisfaction and increased loyalty. In order to meet the needs of the clients better and to get to the clients, we have to have more tailor-made solutions. We want to reach the client in the real time so that this message is personalized, individualized and therefore, we will have an increase in transactions and in the profits of the bank. On the side of the client, we are expecting higher satisfaction and higher loyalty which will translate into higher NPS, which I'm sure Radek is going to tell you all about in a minute. We want this customized solution, and so that the client perceives a certain safety and comfort. And since we're talking about safety, I would like to go to PZU projects that are directly linked to the client safety. And we, as a bank, together with PZU Group, offer a number of products in insurance, starting with life insurance, health insurance and of course, property insurance. We have offered both for individual and corporate offer. We have -- we are cooperating as far as CRM is concerned, so that we learn about the needs of our clients, and we are able to offer them with the right product at the right time and right place. We are offering possibilities provided by cash platform. It is -- for example, allows the clients to get their remuneration quicker. So this is a number of solutions that we are offering to our clients already. And we hope that they are going to be developed more accessible in the future through those new tools and applications. Thank you very much for your attention, and please welcome Szymon on stage.

Ladies and gentlemen, the business client of Alior Bank, we have a base to grow. We have 250,000 clients, out of which 70,000 is leasing and about 160,000 are micro enterprises, which is a lot in Poland. In Polish market, this is a good base. Automated decisions, these is, for sure, our strength. 95% of the decisions is absolutely automated, and it's growing in the medium segments. In the bigger, higher segments, we are growing really fast as far as remote service is concerned. Right now, it's 45%, and we started recently with much lower levels. 45% of operations are realized, implemented remotely. And the last point, very important, which is a certain momentum for us as a result of a big effort of all the organizations within the past month. The cost of risk has been reduced. And I'm sure we'll get more into detail from Tomasz Miklas. This is what we're going to focus on. As you can see in the left top corner, an increase of assets. The concentration will focus mainly on SMEs, especially in profits between PLN 5 million and PLN 6 million. We'll have 16% of growth of the annual index, 10% in higher segments, over PLN 60 million. In the micro segment, we are not planning the increase in -- of assets. But yes, we do plan for a big growth in the number of clients by 20%. The next months, the coming time is going to be difficult for the small enterprises. But what we see is the need of simplification, of putting it all into one product of the existing clients, the cross between different business lines. When we talk about putting it into a form of a product, please take a look at the horizontal x. We are below the benchmark of the market right now as far as factoring and leasing are concerned. This is 1% of our base in cross in factoring and 5% in leasing. This is below the market benchmarks, but we do know how to quickly and substantially increase those. When we talk about transactivity and loans, well, here without processes and technologies, we cannot do more -- much. But what is key here, on the horizontal x, in the -- as you can see, this is the credit process. What we want to do, we want to radically reduce this time. What we also want to do is to reflect our strategy, not only the strategy of the segment and sector, but also operations of ESG in the limits to contrast -- in contrast to what we've had so far. And of course, this horizontal x in the left bottom corner -- sorry, horizontal x, which is the Internet banking and remote operations, well, the Internet banking is, in fact, our main link with the clients, and our investments are going to focus on that. But more about that in a minute. As a result, for sure, the quality of our portfolio -- of our credit portfolio will be the priority #1. And rentability and effectiveness are going to be 2 additional vectors that we are going to implement through investments. What investments do I mean? As you can see here, these are the key elements, but I understand that the logic behind those is the most important. 80% of investments are the ones on the foundations of growth. Why here? Because they are going to bring profits long after we close the perspective of the strategy. These are the investments on the new credit process, on the Internet banking, on the mobile application, because we definitely want to get more. 20% is the growth drive. And all those elements are about how we manage the bank operations, how we manage and how we invest in the relations with the customer. And of course, the central element, this is data management, . Without it in a modern world, you cannot imagine any growth whatsoever. And this is the element that needs the biggest investment. And this is our priority, the first one in our order. So to sum it up, in lower segments, this is, first of all, online availability, acquisition online, in fact, because this is going to be the main driver for those sectors, in micro especially, and multi channels. This is something which we are lacking a lot in micro. And for investors, I believe what's interesting is sales effectiveness and our market share and the quality of the loan portfolio. In the higher sectors, we have 4 elements. First of all, automatic process, which will translate into faster pace of decisions, a radical increase of remote service and the quality of this service and as a consequence of such section of our clients and, of course, the new online banking. And since we're talking a lot of technology and investments, then please allow me to give the floor to Pawel Tymczyszyn.

Ladies and gentlemen, everything that Grzegorz, Rafal and Szymon mentioned cannot happen here in our bank. The flagship projects and products that we are already implementing and the products that will be here for sure in the future, so all of that cannot happen without technology. Bank -- Alior Bank has been known for 15 years for its technological innovations. It's been a digital rebel. But right now, we have to invest in technology so that we prepare the bank for the new challenges of a modern bank which wants to gain even more in the Polish market. That's why we're betting on 3 pillars of the business transformation in technologies, first of all, effectiveness, innovation and security. Within those 3 pillars, we are focusing on the development of the base of IT professionals, those that are on, the one hand, our biggest strength because these are IT professionals in-house, our own human resources. But we also want to reorganize the agile organization so that they provide content better and quicker. This is our strategic goal, so that our -- the delivery of content, just as it goes for BNPL or Alior Pay or for business, so that the content is provided in an agile and a fast way and is dedicated for a given line, retail back office or any other. That's why we want to be agile and fast with delivering those that can be an MVP content. It doesn't have to be verified as far as graphics are concerned. However, they are supposed to be quick, reliable and work quickly. We want to innovate our IT systems so that it's easier to manage them. When I talk about the innovation pillar, we want to have multi-cloud, both for calculations, for teamwork of our employees, which is already happening, but also to apply multi-cloud solutions in all possible elements so that this multi-cloud is private, public and hybrid. We want to get greater robotization and automation of the services processes, but also using AI for better match of products and for customer care, as well for better sales. And last but not least, we have security. New products, new communication channels are also the new source of channel -- of challenges and threats. We have to be very effective in ensuring that they are safe from criminals and intruders. As I mentioned, our ambition is the multi-cloud and the access to our services through the cloud. This is a new challenge that we still have to make more safe. The links to mobile applications are also in the scope of our interest. We want to formulate tools and the support, the training so that security and safety is the guideline for IT and for business, and at the same time, that it's more resilient to this -- to threats. Going into detail. The new IT model serves to get the content quicker -- in a quicker way for both internal and external customers. Its main element is the cloud, as I mentioned, the rapid integration of IT systems, automation testing and monitoring. After last year, in IT, we've decided that we have a lot of analysts in Alior. We've always been very creative as far as ideas are concerned, but we not always delivered. So what we want? We want to have more professionals and we want to send -- to transfer IT professionals into business, so that would be also an effective management. The agile structure worked very well for Alior Pay. We had BNPL and Alior Pay, and now we want to expand the management structure into agile to the whole Alior organization. We want to have dedicated IT specialists, depending on the order of business of retail and other departments of the bank. And we want to optimize these IT services for each and every department, so that it is quick and agile and quickly delivered to the end customer. We already are joining flexible hybrid group working with Microsoft solutions. We want to be -- manage our centers in Krakow, Gdansk, and Warsaw better so that we are even more effective in managing those 700-plus IT specialists. We've noticed that this capital of 700-plus IT specialists is our advantage because it's estimated that about [indiscernible] or up to 30,000 IT specialists are still needed by the market. That's why also we are betting on the jobs of the future. We are betting on the local programming that is already implemented within the programming. This is opening IT to new receivers. This is an attempt to conduct coding by people who are not specialists, but with formulas such as Excel, they will be programming and data management programs and automate the processes. We are betting on a flexible and partner cooperation with business, and code that is compliant with ESG. It turned out that IT is the biggest consumer of power in the bank. So we are right now working, and I see Radomir is smiling. We are going to be saving. We are going to be reducing our carbon footprint. We are already building our photovoltaic farms so that we reduce the usage of traditional energy sources in IT. About innovation, well, in automation, we have implemented InfoNina 2 years ago. It's an info line. After 2 years, 40% of received calls are automated. So this is a huge success. This info line process 5 million conversations that were reduced by 15%, and this solution has been awarded with numerous awards, both national and international. We wanted to bet in this solution, and we wanted to have next challengers. So in InfoNina 2.0, as a goal, we have over 50% of calls to be automated. Also, modeling of IT so that we have the match between the offer and service for the client done automatically. And also building a chat box when where our clients will be available, we'll have access 24/7 to use the information channel, and that will allow our employees to move to other tasks. And to sum up, I would like to talk about one of the most important elements because the stability of the bank's operations is our overall goal for our organization, for our shareholders, for our stakeholders and for the whole capital group, the effectiveness of the service and support for business by IT, for the security of the client also through the tools and for the new communication channels that we want to make even more secure. Thank you very much for your attention. We are trying to make the bank that is an everyday bank to become the bank of the future. And now I'll give the floor to Grzegorz. Thank you.

Ladies and gentlemen, ambitious goals when we talk about projects, but they won't be implemented without a strong team. How does Alior Bank look like today? It's a diverse bank. Generations are diverse, which is crucial because when we want to offer products for each group of a group of clients, we have to understand them. And how would we do it if we didn't have the representatives at our organization? For 15 years of Alior Bank, the average length of service is 7 years. We're also in a nice balance as much as women and men in managers -- managerial positions are concerned. I am the most proud of those awards that we were given. Financial Times asked anonymous questions to many employees all over Europe, and we were there for the first time ever as the highest ranked financial institution in Poland. I'm very proud of that, but it is a commitment that we should work for our employees. We are going out of the crisis of post COVID. And the year-on-year commitment is 23% of the bank. How do we do this? Our strategy on the human reservices is based on 3 pillars. You are important. Alior is you. Alior is us. You are diversified. You have to offer individual benefits. You have to offer individual development paths. Each employee needs to find something for themselves. An engaging working environment. We're really focusing on environment and taking a look at the social challenges that we have right now and the projects that my 4 speakers mentioned. We know that many employees will be in need for new skills. That's why we are going to focus on our reskilling program that is going to grow their skills, especially those around technologies. And the distinctive culture. No strategy can be implemented effectively if an organization does not have a consistent, valuable culture. We're going to focus on the agile approach, on strong leadership so we have -- we are effective in gaining our goals. Remembering about the implementation of the strategy, we also play -- we put a lot of emphasis on the sustainable growth in development. So in the social aspects, we're going to focus on 2 things. The first one is the health aspect. Last year, we had the day at the U, and 40% already used this day. It's a [ free ] day off -- it's a day off on the condition that an employee is going to get examined. We are encouraging our employees and their families to get examined. And we want to continue this best -- the good experience to our clients, thanks to cooperation of [indiscernible]. The second social challenge is the automation and the skills that Polish people have right now. By 2023, 7 million Polish people are going to have to change their profession to get new skills. Today, only 7% of companies have reskilling programs implemented. We've implemented ours a year ago. We have several dozen people participating in those programs and will be offered the job in technology area, even though they had never done before. We want to use their business knowledge. We want, of course, to help and solve social problems. Last year, we were learning on how to build long-term health with the Embassy of Ukraine with the NGOs, UNICEF, Caritas. And we've built the biggest help center in Poland that helps people coming from Ukraine to adjust to work, to the job market in Poland. And we're going to continue those 2 important projects. In the environmental area, we are going to focus on financing SMEs. Those SMEs who constitute 50% of Polish GDP need this investment in order to increase the energy effectiveness and the effectiveness of their business models. This is where we are going at. This is the direction of our activities. Others are going through transformations, but we also have those, too. So that's why we're going to build the photovoltaic farm that is going to provide energy for our center in Krakow. As far as sustainable development is concerned, we have to remember about the highest standards of management, about the management that will allow us to meet one of the highest KPI of those that we've ever had in our history. We are already implementing trainings. We are changing our work environment. We are working within the social aspects, but this is also some challenges in regulations. We want to have the full alignment in the coming years. Ladies and gentlemen, I've just presented the main things about HR management and about the sustainable development. And now the report about the cost of risk is going to be delivered by Tomasz Miklas, who's been here his whole career.

Thank you very much. Thanks for today. Thanks for every day for the future. It's a bank that is predictable and a good partner for their clients and shareholders. Therefore, we are focusing on 2 areas. The first one is the capital area. And the other one is this ever increase of the Tier 1, and we plan to increase it to 13.5% by the end of 2024. And TCR will increase over 15%. Even though we have a difficult macroeconomic environment, we still are expecting the growth in credit risk portfolio and NPL is going to be below 10%. And the cost of risk is going to be lower than 1.6%. Implementation of those goals requires very specified activities. In the capital area, this is accumulation of the profits. But also, we want to be one of the first banks that launches the method of advanced estimation of the capital, which is IRB project. We've already started some of it, and we are going to continue with that. When we talk about our competitors, we want to find and win the best clients. First of all, this is the process of decision-making in the credit process, and the second of all, the pace of this process, of decision-making process. We are already using those tools in order to evaluate our clients who want the cash loan or the installments credit. In 2 years, we want to implement this tool all over our services in credits. This is individual SMEs and corporate clients. Advanced analytics requires also technology that will allow us to get into this multi-cloud and to provide services that are done in real time. However, accuracy is not all. We want to be the leader as far as the pace of decisions is done. We already have very good. At least 15% of decisions for business customers will be made in an automated process minimum in 2 years for corporate clients, and minimum of 30% of mortgages will be done fully automatically. So to sum up. For the next 2 years, we are building our capital stability and building our credit portfolio, loan portfolio. In capital, this is, first of all, accumulation of IRB. For the quality of assets, this is focusing on competing on the best clients and getting those decisions into the speed. Thank you very much. And now I give the floor to my colleague.

Thank you very much. Radomir Gibala. Strategies are mines, initiatives, concepts, but also very specific and measurable goals. In order to achieve those, we need an effort from the organization, but also macroeconomic environment, which is crucial for gaining those goals. So let's take a look at our assumptions, which we have taken into account in this strategic perspective. GDP. It seems that our economy will avoid getting into recession, which is the blackest scenario, the worst scenario. However, we are experiencing a slowdown of the gross product. So we have adopted 0.6% for 2023 and the slow and the small increase, 2.4% in the next year, 2024. What does it mean for the industry? It means that the activities will be slower. And it means that the credit actions will be slower. That means we've also included that in our business model. Another rate. This is unemployment rate. For years now, this index would tell us about the structural power of Polish economy. In the past years, that will mainly be driven by the supply. So that would be demographics. But we are not expecting significant differences here, which is crucial for -- especially if we think about the cost of risk that Tomasz mentioned. And it's extremely crucial to our bank because 2/3 of the portfolio are the retail client. Inflation. Ladies and gentlemen, the last readings say -- tell us about dropping year-on-year inflation. It's hard to say whether we are before or after the peak of inflation. That's why we've accepted the average of 13% and the drop in 2024 of this index, which for bank is important because of the inflation pressure in the cost -- operational costs, but also while implementing the strategy that requires investments. That also is included in our business model. And the last figures here, which is the reference rate of the National Polish bank. And again, here, we have it calculated to the banking market. Here, we have adopted 6.75% till the end of this year. We are expecting to see a decrease, a drop in the next year. And ladies and gentlemen, this is our base scenario. We are not -- we did not expect one-off events such as the war in Ukraine or pandemic. The previous years shows that the world economy and the national economy have expected things like that. However, these are the numbers, the figures that we can plan for using our financial tools. And now the measures of our success, we've divided them depending on the stakeholders, to the financial and nonfinancial ones. First of all, ROE, the open part would be over 13 parts. We believe that this is a reasonable level that we are -- want to offer to our investors. It's worth keeping in mind that it was calculated with own capital higher than 50% in relation to the current value. Effectiveness, expressed by cost-to-income index. In reality, when we take the inflation pressure and the capabilities and willingness to implement the strategy, we agreed on a value that is lower than 45%. The widely understood security explained in detail by Tomasz, let me remind that the cost of risk below 160 basis points, 1 digit NPL. So that's -- and the build of Tier 1 and TCR. In order to -- for those financial indexes to be met, as it was said by Grzegorz, we have to have measurable goals for our stakeholders, and that's clients and employees. When we talk about clients, Net Promoter Score is above 45. We want to build a number of ambassadors, promoters that we just -- through the activities that my colleagues just told you about. The engagement of employees after a year -- employee involvement after a year, we are already pleased to say that our index is on a high level. And yet, we are increasing the bar to have over 65% of that index. And the last of this group of indexes, this is the ability to pay dividends. It's not quantified yet. However, as a management board, we can see the room to have it in the future with the shareholders to share our profit. Of course, this is done. We are aware that we need the corporate agreements, we need the regulators agreement and among others. And we want to be very precise about that. For 2023, we want to have this profit ROE to include -- to be included into capital. However, we would like to declare such a management of the bank that in the future would allow to share this profit with shareholders. So ladies and gentlemen, one more time. The motto for the strategy, bank of every day, the bank of the future. We want it to be a profitable, safe future.

Thank you very much. Thank you. And this is how we've reached to the details. We've learned about the details of strategy of Alior Bank 2023-2024. Thank you for this presentation. And since we are in this company, I would like to say -- to tell you one piece of information. Because of injury, Vice President of Alior Bank, Jacek Polanczyk, was not able to join us today, but we deeply believe that he is watching us today and we're sending our kind regards. Ladies and gentlemen, since we already know the assumptions of the strategy, it is time to invite to stage the representatives of the main shareholder of the Alior Bank that is responsible for the cooperation and partnership programs. Please welcome the President, Malgorzata Smurzynska.

Ladies and gentlemen, thank you so much for the invitation to today's conference for the presentation of the -- well, the presentation of strategy is an extraordinary moment for each company. That's why I'm even more happy that we can be here with my colleagues today. Since 2015, the fate of PZU and Alior Bank has been intertwined within the biggest financial group in Poland in this part of the region. Of course, we are strongly supporting all the plans and goals because that transfers on the potential of the whole PZU Group and the implementation of our strategy. Digital Rebels with higher culture created more than the bank. This is how we can describe the 15 years of Alior Bank in Polish market. What is important also, the modern technologies, innovative products, additional services has always been the part of the intended strategy. I believe that this strategy, the bank for every day, the bank for the future will be the new impulse to further development and growth of the market position. Lately and recently, we've all worked in the unprecedented circumstances, managing with the pandemics, the war in Ukraine and lack of stability in many markets. We are delivering globally and locally. And we are dealing with challenges that have not been known by dozens of years. And that's why it is the more important to be able to look into the future deeper, further taking a look at new financial trends and social trends, at future expectations of the clients. The area that is very important for PZU, even we might say strategic, that's the business cooperation. And within the past years, it was set by Rafal Litwinczuk. Together with Alior Bank, we've introduced a lot of products, insurance, property, health assistance services that are offered within the banking channel of Alior Bank. And on the other hand, the clients -- the products of the bank get to the insurance client of PZU. In the strategy of PZU Group, for 2021-2024, we have a strong emphasis on the cooperation with the banks. And we have assumed, very ambitiously so, that within the current strategy of PZU, threefold, 3x more, we will increase our inspirations threefold times as far as the insurance rate is the right to the accumulated level of PLN 3 billion. And I believe that even though we have a multitude of challenges and difficulties, with the good cooperation, and I'm sending smiles to my colleagues from the Management Board, I'm sure we will meet that goal. Ladies and gentlemen, as I was presented on behalf of the biggest shareholder, I would like to say a warm thank you to the Board members, to the members of the Supervisory Board, to all the managers and employees of Alior Bank for their work on the new strategy. I wish to the whole team of Alior Bank, fruitful and successful delivery of the strategy and goals. Thank you.

Thank you very much, Madam President. So ladies and gentlemen, now we know about the new strategy of Alior Bank. We know what does the main shareholder thinks about it. And right now, the representatives of the bank are at your disposal today. They're about to meet the shareholders and stakeholders. However, right now, we have the time for questions and answers from you. Of course, we will answer them all. Each person willing to ask a question is kindly requested to raise their hand and then we'll provide the microphone. We have the first one.

[ Adam Soffo ], USB News. Two questions. First of all, what is the interest rate margin in the perspective of this strategy? And the other one is about the cost of risk. This 160 basis points are from the end of this perspective. But from the GDP indexes on 2023, it might be a challenge here. So what kind of cost of risk are you expecting this year?