Komercni Banka, a.s. · PSECZ:KOMB
Komercni Banka, a.s — Q1 2006 Earnings Presentation
34 slides from Komercni Banka, a.s's earnings presentation, Apr 28, 2006
Slide 1: Financial Results as at 31 March 2006
JJ Mois Année Financial Results as at 31 March 2006 (International Financial Reporting Standards) Prague - 28 April 2006
Slide 2: Contents
Contents n Business Highlights n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 1
Slide 3: Highlights of 1Q 2006
Highlights of 1Q 2006 Strong growth of sustainable earnings As of 31 March 2006, year-on-year comparison • Total revenues increased by 8% driven mainly by NII, including impact of one- off gains. • Total costs, including one-off effects, declined by 4%. • Operating profit up 20% thanks to rising cor
Slide 4: New and innovated products of Komerční banka
Expanding offer New and innovated products of Komerční banka Komerční banka has introduced advantageous Authorized Overdraft for doctors and pharmacists helping them to overcome periods of e.g. late payments from insurance companies with credit limit up to CZK 3,000,000 and favourable interest rate
Slide 5: KB's strategic focus - strong growth in loan portfolio
Business highlights of 1Q 2006 KB’s strategic focus - strong growth in loan portfolio As of 31 March 2006, year-on-year comparison • Outstanding mortgages to individuals: + 38% to CZK 45.6 billion • Outstanding consumer loans: + 21% to CZK 13 billion • Outstanding loans on credit cards: +128% to CZK
Slide 6: Successful sales of products from affiliates and third parties
Business highlights of 1Q 2006 Successful sales of products from affiliates and third parties n Dynamic growth in sales of life insurance products: premium written up 32% year-on-year n Strong sale of mutual funds: new sales volumes of CZK 5.1 billion (+ 11% YoY) with strong rise in fee income paid
Slide 7: Ongoing growth of penetration ratios
Penetration of products Ongoing growth of penetration ratios 31. 3. 2005 31. 3. 2006 YoY Change Cross-selling ratio* Individuals 4.60 5.02 +9% Penetration ratio – Individuals** Mortgages 2.7 3.2 +18% Consumer loans 10.0 11.5 +15% Credit cards 6.0 8.3 +38% Life insurance 7.6 9.5 +25% Penetration rati
Slide 8: Contents
Contents n Strategy and Business Highlights n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 7
Slide 9: Unconsolidated Financial Results
Unconsolidated Financial Results Unconsolidated Profit and Loss Statement 1Q 2005 1Q 2006 Change CZK million, unaudited 06/05 Net banking income 5,568 6,017 +8.1% Operating costs -2,782 -2,667 -4.1% Net operating income 2,786 3,350 +20.3% Cost of risk -181 -320 +76.6% Profit on subsidiaries and asso
Slide 10: NII dynamics mainly driven by retail loans growth
Net Interest Income NII dynamics mainly driven by retail loans growth CZK million, unconsolidated Net Interest Income Net Banking Income Other NII from loans + 8.1% 6.017 3,657 NII from deposits 5,568 3,277 NII from Investment Banking +60.7% 440 274 • NII from mortgages, consumer loans and credit ca
Slide 11: Total fees up by 1.4%
Net Fees and Commissions Total fees up by 1.4% CZK million, unconsolidated Net Banking Income Net Fees and Commissions Non-FX + 8.1% 6.017 2,080 2,110 FX clean payments 5,568 FX cash conversions • The growth in non-FX fees is mainly driven by fees on loans and fees from cross-selling (driven up by I
Slide 12: KB trading profit mainly comprises clients' operations
Trading Profits and Other Income KB trading profit mainly comprises clients’ operations CZK million, unconsolidated Net Profit from Financial Operations Net Banking Income FX operations +19.1% 228 Securities and security + 8.1% 6.017 192 derivatives 5,568 Interest and Commodity Derivatives 168 -11.0
Slide 13: Total expenses down by 4.1%, favourably impacted by exceptional effects
Operating Costs Total expenses down by 4.1%, favourably impacted by exceptional effects CZK million, unconsolidated Operating Costs Personnel Costs 2,782 - 4.1% + 3.3% 1,195 2,667 • Positive impact mainly from release of employees loyalty reserves as no 1,157 - 9.4% 1,048 more needed under IAS 19. •
Slide 14: Operating costs Q-on-Q development
Operating Costs Operating costs Q-on-Q development CZK million, unconsolidated Depreciation, impairment and disposal of fixed assets General administrative expenses Personnel expenses 3,146 3,027 2,995 2,920 2,880 2,807 2,843 2,667 496 2,782 436 478 373 404 415 416 425 394 1,281 1,310 1,190 1,503 1,
Slide 15: Cost of risk
Cost of risk CZK million, unconsolidated Cost of risk CZK million, unconsolidated Provisions for loan losses Impairment of securities Provisions for other risk expenses -181 -320 Comments -90 -263 ▪ Net provision for loan losses posted at CZK -263 million to be compared to CZK -90 million for Q1 200
Slide 16: Balance Sheet
Balance Sheet Assets Liabilities CZK million, unconsolidated 493,738 484,971 Change 493,738 484,971 Change Cash and balances 9,231 7,312 - 20.8% Amounts due 31,526 15,866 - 49.7% with central bank to banks Amounts due from 245,953 231,803 - 5.8% banks Amounts due 370,058 374,043 + 1.1% to customers
Slide 17: Shareholders Equity: Development since the end of 2005
Shareholders Equity Development since the end of 2005 CZK million, unconsolidated Total shareholder’s equity Total shareholder’s equity as at 31 December 2005: + 1,220 as at 31 March 2006: 50,513 51,534 Shareholders’ equity 31. 12. 2005 1. 1. 2006 Increase Decrease 31. 3. 2006 Share capital 19,005 1
Slide 18: Distribution of 2005 Profit
Shareholders Equity Distribution of 2005 Profit 2001 2002 2003 2004 2005 Dividend per share (CZK) 11.5 40 200 100 250 EPS (CZK) 66.6 230.6 243.7 244.7 240.7 Payout ratio (%) 17.3 17.3 82.1 40.9 103.9 Dividend yield* (%) 1.1 1.9 8.3 3.1 7.3 Adjusted EPS** (CZK) 66.6 166.3 178.1 184.4 195.1 Adjusted P
Slide 19: Contents
Contents n Business Highlights n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 18
Slide 20: Loan portfolio quality remains under control
Client loan portfolio Loan portfolio quality remains under control CZK million, unconsolidated Client loans, On-balance sheet Specific provisions Gross amount 191,307 + 4.8% 200,444 Standard loans 165,578 + 5.5% 174,688 + 3.6% 6,200 6,426 Total watch loans 486 + 11.1% 540 Watch loans 16,811 - 0.1% 1
Slide 21: Contents
Contents n Strategy and Business Highlights n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 20
Slide 22: Financial Results of KB Group
Financial Results of KB Group Consolidated Financial Results and Ratios Profit and Loss Statement 1Q 2005 1Q 2006 Change CZK million, unaudited 06/05 Net interest income 3,525 3,881 +10.1% Net fees & commissions 2,129 2,110 -0.9% Income from financial operations 245 319 +30.2% Other income -19 22 +/
Slide 23: Subsidiary and associated undertakings results
Financial Results of KB Group Subsidiary and associated undertakings results As at 31 March 2006, CZK mil., CAS/IFRS Share of KB Profit after tax Equity Assets ESSOX, s.r.o. (IFRS) 51% -7 43 2,766 Factoring KB, a.s. (CAS) 100% 15 176 2,259 Komerční banka Bratislava, a.s. (IFRS) 100% 14 582 5,258 Pen
Slide 24: Usage of direct banking channels growing fast
KB Clients and Network Usage of direct banking channels growing fast As of 31 March 2006, year-on-year comparison § 1,477,000 clients - increase by 56,000 (+4%) - of which 1,195,000 are individual clients (+5%) § Network - 359 points of sale for retail clients - including 36 business centres for med
Slide 25: Loan portfolio growing in all client segments
Loan portfolio Loan portfolio growing in all client segments Individuals SME Volume of loans Corporates CZK billion, Gross amount Other +21.5% 200.4 191.3 185.1 173.6 164.9 55.7 58.6 29% 51.6 ■ Year-on-year growth of the loan portfolio 48.1 by 21.5% 43.9 ■ Total mortgage loans amounted to CZK 49.3 b
Slide 26: Term deposit show again a growing trend
Clients’ deposits Term deposit show again a growing trend Current Accounts incl. O/N Volume of primary client deposits Term and Savings Accounts CZK billion Loans from Customers (excl. repo transactions) + 6.2% 363.1 367.3 353.0 356.7 ■ Increase of depositary base by 6.2% 345.9 year-on-year ■ Rising
Slide 27: Sales of key products
Products for Individuals and Small Businesses Sales of key products Financial Packages 31. 3. 2005 31. 3. 2006 YoY Change PACKAGES FOR 642,848 718,900 + 12% INDIVIDUALS packages packages GAUDEAMUS 104,488 108,711 + 4% package for young clients packages packages 104,819 133,420 + 27% CHILD ACCOUNT ac
Slide 28: Growing card business
Payment cards Growing card business 31. 3. 2005 31. 3. 2006 YoY Change Debit cards - active 1,178,008 1,247,758 +6% Credit cards – active 70,652 132,514 +88% o/w to entrepreneurs - 29,834 - Number of POS (points of sales using 13,329 15,182 14% electronic device) 1Q 2005 1Q 2006 Number of transactio
Slide 29: Co-operation within KB/SG Group and Strategic Partnerships
Cross-selling activities Co-operation within KB/SG Group and Strategic Partnerships Provided in 1Q 2005 1Q 2006 Change 06/05 co-operation with: Life insurance Vital (number of sold policies through KB) Komerční pojišťovna 11,146 11,255 +1% Non-life insurance Allianz (number of sold policies through
Slide 30: Macroeconomic Environment: Czech Republic
Macroeconomic Environment Czech Republic Macroeconomic indicators 2003 2004 2005 2006* 2007* GDP (%) + 3.2 + 4.7 + 6.0 + 5.0 + 4.5 Inflation (%) + 0.1 + 2.8 + 1.9 + 2.5 + 2.5 Households income (%) + 4.8 + 4.9 + 4.8 + 5.0 + 5.0 M2 (%) + 6.9 + 4.4 + 8.2 + 8.0 + 7.5 3M PRIBOR (%) 2.3 2.4 2.0 2.3 2.6 Po
Slide 31: Interest Rates Evolution
Market Interest Rates Interest Rates Evolution 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1 2 2 2 2 3 3 3 3 4 4 4 4 5 5 5 5 6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 2 2 2 2 2 .3 .6 .9 .3 .6 .9 .3 .6 .9 .3 .6 .9 .3 .1 .1 .1 .1 .1 31 30 30 31 30 30 31 30 30 31 30 30 31 31 31 31 31
Slide 32: Development of KB's share price and PX Index
KB Share price Development of KB’s share price and PX Index CZK 3 950 1 650 3 750 1 550 3 550 1 450 1 350 3 350 1 250 3 150 1 150 2 950 1 050 2 750 950 2 550 850 2 350 750 2 150 650 1 950 550 1 750 450 31.12.02 31.3.03 30.6.03 30.9.03 31.12.03 31.3.04 30.6.04 30.9.04 31.12.04 31.3.05 30.6.05 30.9.05
Slide 33: Structure of Shareholders
KB Shareholders Structure of Shareholders Major shareholders of Komerční banka, a. s. as at 31 March 2006 Number of shares outstanding – 38,009,852 Free Float: 39.65% Société Générale S.A. 60.35% Others 34.29% Investors Bank & Trust Co.* 5.36% * Shares held on behalf of third parties Komerční banka
Slide 34: Investor Relations - Contacts
Contacts Investor Relations - Contacts ILONA KATZOVÁ Head of Investor Relations Phone: +420-222 432 156 Email: ilona_katzova@kb.cz MARTIN SKOUMAL EMILIA ZAMPIERI Investor Relations Investor Relations Phone: +420-222 432 155 Phone: +420-222 432 734 Email: martin_skoumal@kb.cz Email: emilia_zampieri@k