Nova KBM

Annual Report for 2021: Nova KBM Group continues with a successful and sustainable business performance | NKBM

Annual Report for 2021: Nova KBM Group continues with a successful and sustainable business performance

Annual Report for 2021: Nova KBM Group continues with a successful and sustainable business performance

6 April 2022
(Maribor, April 6 2022) Nova KBM published the Annual Report of the Bank and the Nova KBM Group for the 2021 financial year. Nova KBM delivered a very strong financial performance in 2021 and solidified its position as the most accessible bank in the country. The Bank provides its customers with comprehensive financial services through the largest physical network of branches, including our strategic relationship with Post of Slovenia, and via state-of-the-art, award-winning online and digital banking platforms. Nova KBM and the Nova KBM Group ended 2021 with a profit in the amount of €108.9 million and €112.6 million, respectively.

In many respects, 2021 was an exceptional year due to the demanding business environment and the ongoing pandemic. The Bank successfully continued implementing activities and projects in five key strategic areas: growth and profitability, client excellence, strong risk management and compliance, operational efficiency, and organisational culture and talent development. The first step in the sale of Nova KBM Group was also successfully completed last year. In May 2021, the shareholders signed a contract for the sale of the Group to OTP Bank. Closing of the transaction remains subject to the regulatory approvals which are expected during the second or third quarter of 2022. In 2021, as a part of the Group’s transformation plan, Nova KBM sold Anepremičnine d.o.o. and completed the purchase of a 100% participating interest in the factoring company ALEJA finance, which became the newest member of the Group. Summit Leasing Slovenija, one of the leading domestic leasing companies and a member of the Group since 2017, signed an agreement on the purchase of Mercedes-Benz Leasing Hrvatska facilitating its access to the Croatian market.This transaction closed on April 1 this year.


We also recognise the growing importance and relevance of the broad ESG (environmental, social, governance) agenda, particularly the challenge of climate change, and their likely future impact to our business and operating environment and business model. As a result, in 2021 we embarked on a comprehensive ESG transformation and began incorporating even more directly environmental, social and governance factors into its business strategy, commercial activities, and its risk management framework. We also established a Climate Change and Sustainability Committee (CC&S), which mission is to ensure comprehensive implementation of the ESG Strategy across the entire organization and to identify, assess manage and mitigate climate-related risks as well as make the most of the potential business opportunities arising from ESG transformation. We recognize our important role as a leading systemic bank in Slovenia, a country which is a signatory to the Paris Agreement and is a participant in the European Green Deal and has committed to making Europe a climate neutral continent by 2050. In this respect we made commitments to take actions in the short and medium to adapt its current investment and loan portfolio to one which is aligned with the EU's NDCs to decarbonize the economy and such that its exposure to climate and transition risk is reduced over time, increase our engagements to financing the economic transition towards a low carbon or carbon neutral economy and further reduce the footprint of our operations. During 2021 Nova KBM reduced its own carbon footprint by 20% (Scope 1 and Scope 2), compared to 2020. The Bank also made further investments in raising ESG awareness among its stakeholders, the digitalisation of delivery of its products and services to customers, increased paperless operations and process automation, complemented where appropriate, by the use of robotic processing. The Bank’s ESG Report (which is a supplement to the Annual Report) gives a comprehensive overview of the Bank’s vision, activities, and achievements in this area.


The Group’s focus on growth and sustainable profitability facilitates investments in its further development and provides sufficient capacity for adapting to future changes in the financial and economic environment. After-tax return on equity was 11.04% at the Group and 10.72% at the Bank level for the year ended 31 December 2021. At the end of the financial year 2021 the balance sheet of Nova KBM stood at 9,945 million (8,4% increase compared to 2020) and of Nova KBM Group at 9,958 million (8,4% increase compared to 2020) The Group has also delivered on its strategy to further reduce its non-performing loans bringing the NPE ratio of the Nova KBM Group’s portfolio down to 2.03% and 1.28% at the Bank level. The Group ended the 2021 financial year with ratings that reflect its successful performance over recent years. Moody’s rating at the end of 2021 was Baa1/P-2 (Ratings Under Review From Stable), while that from Fitch Ratings was BBB-/F3 (with a Stable Outlook). The Group successfully managed its balance sheet in terms of credit, liquidity, interest rate and currency risks in 2021, in accordance with internal and regulatory requirements. We have maintained an important role in the domestic government bond market, as we continue to increase the turnover and number of financial institutions with whom we trade each year. Nova KBM was the only Slovenian bank to participate in the issue of Slovenian government bonds in 2021, including the issue of Slovenia’s first sustainability bond in June.


The success of Nova KBM’s operations and its contribution to the wider business and social environment have been reflected in various surveys and awards received in 2021. For the second year in a row we received the Superbrands title, which ranks Nova KBM amongst the top 1% of the most successful brands in Slovenia. In early 2021, we introduced changed branding and initiated a successful partnership with Primož Roglič, one of the world’s best cyclists, and his role as the Bank’s ambassador continues in 2022. In an independent survey of mobile banking, mBank@Net and Bank@Net repeated their success from the previous year and were named the best online and mobile bank platforms in Slovenia in 2021. We received our second HORUS national award for the strategic management of social responsibility. The EBRD awarded the Bank for its achievements in facing the challenges of climate change, promoting the use of more sustainable forms of energy, and improving environmental and social effectiveness.


The year 2022 will be characterised by another important milestone for Nova KBM. It is now 160 years since the Mestna hranilnica, or Municipal Savings Bank, the predecessor bank of Nova KBM, opened in Maribor. Since that time, the Bank has taken many steps that are part of the broader development and consolidation of the Slovenian banking sector.


John Denhof, President of the Nova KBM Management Board:We are very proud of our rich 160-year history. Leveraging the amazing talent and relevant experiences that we acquired via the recent mergers we continue to relentlessly pursue our vision to be the best bank in Slovenia. This means for us seeking continuous improvements and acting on the feedback of our clients. We thank all of our employees for their outstanding work and focused implementation, as well as our diverse customers and business partners for their cooperation and trust. With very strong year now behind us, we remain even more optimistic about the journey ahead.”Andrej Fatur, Chair of the Nova KBM Supervisory Board: Nova KBM Group has a sustainably profitable business model, remains soundly capitalised and has a very strong liquidity position. The Bank is well prepared to face future risks and take advantage of coming opportunities, including the plans of becoming part of the OTP Group later in 2022, subject to regulatory approvals. We are confident that the journey of Nova KBM Group will successfully continue.



Link to the 2021 Annual Report of the Nova KBM Group and Nova KBM and to the ESG Report: Financial Reports and Documents


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