Nova Ljubljanska Banka dd: NLB Call Takeaways: Regional expansion in focus amid solid fundamentals

Research evidence excerpt

Nova Ljubljanska Banka dd: NLB Call Takeaways: Regional expansion in focus amid solid fundamentals

rd high single digits Rate

(c.8% CAGR), slowing towards the rate of deposit growth in key markets since cross-

border funding should be limited. Slovenia remains a relative outperformer, with CET1 = Common Equity Tier 1

management indicating potential for stronger, double-digit growth given strong demand.

GDP = Gross Domestic Product

Stable overall asset quality, with some sector stress M&A = Mergers & Acquisitions

Management acknowledged pockets of asset quality weakness, particularly in Slovenian

manufacturing (e.g. steel), consistent with recent NPL trends (see: 4Q earnings note), but MREL = Minimum Requirements for

emphasised that overall credit metrics remain strong. Cost of risk is expected within a own funds and Eligible Liabilities

30–50bps range, with no evidence of systemic stress across the portfolio. Exposure to NPL = Non-Performing Loans

energy and geopolitically sensitive regions is being closely monitored, though the group

benefits from relatively low leverage across its borrower base and solid coverage levels. OW = Overweight

Capital still strong, potential RWA optimisation initiatives RoE = Return on Equity

Capital remains strong, with a 3.7ppts buffer to requirements. Management reiterated RWA = Risk-Weighted Assets

its medium-term target of >13% CET1 (end-1Q26: 14.8%) and a dividend payout of

c.60%, with buffers maintained to preserve M&A optionality. Potential RWA optimisation SNP = Senior Non-Preferred

initiatives including SRT transactions could further support capital efficiency.

Issuance flexibility, 1-2 benchmark p.a. remains the aim

Management acknowledged the relatively low frequency of fixed income issuance, with