Slide 1: KB Group Unaudited Financial Results as at 31 March 2011
KB Group Unaudited Financial Results as at 31 March 2011 (International Financial Reporting Standards) Prague 5 May 2011
Slide 2: Disclaimer
Disclaimer This document contains a number of forward-looking statements relating to the targets and strategies of the Komerční banka Group. These statements are based on a series of assumptions, both general and specific. As a result, there is a risk that these projections will not be met. Readers
Slide 3: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Cost of Risk Appendix 3 KB 1Q 2011 results – Prague – 5 May 2011
Slide 4: Resilient activity in private sector
Czech economy Resilient activity in private sector Real GDP growth (%) Expectation for GDP growth in 2011 limited by public savings measures in CZ and abroad. Result 7.0 6.1 ultimately determined by external environment 2.3 2.2 2.0 Strong retail sales in first two months of 2011 -4.0 pulled by big d
Slide 5: Highlights of the first quarter of 2011
Highlights of the first quarter of 2011 Year on year comparisons Growth of net profit driven by reduction in risk costs Gross lending to clients up 4.2% to CZK 398.2 billion Total revenues stable at CZK 8.0 billion, as slight growth of interest and fee income was offset by lower gains from financial
Slide 6: Focus on meeting clients' expectations
Business achievements and initiatives in the first quarter of 2011 – Individuals Year on year comparisons Focus on meeting clients‘ expectations Full launch of MojeOdměny (MyRewards) programme intended to support clients loyalty, transaction activity and cross selling, client domiciliation with KB a
Slide 7: Market activity moderated in line with expectation
Business achievements and initiatives in the first quarter of 2011 – Businesses Year on year comparisons Market activity moderated in line with expectation Volume of loans to small businesses increased by 4.9% to CZK 26.0 billion. Lending to corporations rose by 1.3% to CZK 178.9 billion Factoring K
Slide 8: Deposits from individuals increasing
Group deposits CZK billion By Customers 551.8 541.2 536.5 535.3 538.1 536.1 Deposits from individuals 67.1 68.0 68.5 69.0 69.0 69.2 increasing 153.7 152.8 152.2 151.3 153.7 154.2 YoY group deposits decreased by 0.9%, QoQ 27.2 27.5 27.8 28.2 28.8 29.0 down by 0.4% 295.1 284.6 281.1 280.7 281.1 278.8
Slide 9: Loans trending upwards, corporations more volatile
Group lending activities Loans trending upwards, CZK billion 399.7 398.2 386.1 389.0 corporations more volatile 382.0 385.6 45.6 46.4 47.6 48.7 49.7 50.0 Gross loans rose 4.2% YoY, slightly declined 100.3 101.7 104.2 106.4 109.3 112.0 0.4% QoQ 29.3 28.7 28.4 28.3 28.3 28.1 Business loans increased b
Slide 10: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Cost of Risk Appendix 10 KB 1Q 2011 results – Prague – 5 May 2011
Slide 11: Profit and Loss Statement
Consolidated financial results Profit and Loss Statement Change 1Q 2010 1Q 2011 YoY (CZK million, unaudited) Net interest income 5,294 5,372 1.5% Net fees & commissions 1,855 1,866 0.6% Income from financial operations 782 713 -8.8% Other income 25 15 -40.0% Net banking income 7,957 7,966 0.1% Perso
Slide 12: Consolidated financial results Profit and Loss Statement
Consolidated financial results Profit and Loss Statement Change Change 1Q 2010 4Q 2010 1Q 2011 YoY QoQ (CZK million, unaudited) Net interest income 5,294 5,449 5,372 1.5% -1.4% Net fees & commissions 1,855 2,028 1,866 0.6% -8.0% Income from financial operations 782 804 713 -8.8% -11.3% Other income
Slide 13: Consolidated financial results Balance Sheet
Consolidated financial results Balance Sheet 31 March 31 Dec 31 March Change Change (CZK million, unaudited) 2010 2010 2011 YoY YtD Assets 695,674 698,014 703,984 1.2% 0.9% Cash and balances with central bank 9,829 13,689 14,016 42.6% 2.4% Amounts due from banks 137,162 112,179 112,411 -18.0% 0.2% L
Slide 14: Key ratios and indicators
Consolidated financial ratios Key ratios and indicators 31 March 31 Dec 31 March Change Change (year-to-date) 2010 2010 2011 YoY QoQ Capital adequacy 14.1% 15.3% 15.5% Tier 1 ratio 12.8% 14.0% 14.2% Total capital requirement (CZK billion) 27.2 27.5 27.0 -0.8% -1.7% Capital requirement for credit ris
Slide 15: Slight rise in interest income
Net interest income Slight rise in interest income 5,404 5,294 5,415 5,449 5,372 5,273 398 410 504 450 432 475 NII up by 1.5% YoY, down by 1.4% QoQ 2,032 1,982 2,013 2,021 2,122 2,101 Solid contribution from retail subsidiaries – ESSOX +8%, Modrá pyramida +7%, PF KB +12% YoY 2,930 2,847 2,849 2,786
Slide 16: Stable fee income
Net fees and commissions Stable fee income 2,028 1,956 1,911 1,931 1,866 1,855 154 Fee income rose 0.6% YoY, down 8.0% QoQ due to 169 138 121 122 128 375 seasonally strong 4Q 378 420 409 422 421 363 401 Maintenance fees – flat upon declining average price. 346 386 411 376 145 127 133 196 New package
Slide 17: Mixed result in a challenging environment
Net profit from financial operations Mixed result in a challenging environment 864 782 804 Net profit from financial operations decreased by 8.8% 685 713 294 YoY. QoQ result down 11.3% 614 586 623 398 489 532 Treasury operations – good result of proprietary 124 128 33 trading despite low market liqu
Slide 18: Operational expenses driven by investments in people and IT
Operating costs Operational expenses driven by investments in people and IT 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 OPEX rose by 6.3% YoY. QoQ down 7.3% following seasonal pattern -1,612 -1,457 -1,514 -1,613 -1,491 -1,605 Personnel costs up 10.2% YoY (adjusted for 2010 one-off release of bon
Slide 19: Shareholders' equity
Shareholders‘ equity Total shareholders‘ equity Total shareholders‘ equity +1,597 as at 31 December 2010 as at 31 March 2011 Shareholders' equity 31/12/2010 1/1/2011 Increase Decrease 31/03/2011 Share capital 19,005 19,005 19,005 Capital and reserve funds 36,174 49,504 -10 49,493 - Retained earnings
Slide 20: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Cost of Risk Appendix 20 KB 1Q 2011 results – Prague – 5 May 2011
Slide 21: Stable portfolio quality
Loan quality Stable portfolio quality Gross lending CZK billion 398.2 Loan exposure rose by 4.2% YoY and 386.1 382.0 385.6 389.0 399.7 moderately decreased by 0.4% QoQ (CZK 1.5 billion) 346.2 340.8 345.8 349.2 360.9 359.4 Share of Standard and Watch loan exposure remained stable at 93.8% (93.5% in Q
Slide 22: Cost of risk decline continued
Cost of risk Cost of risk decline continued 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 142 98 92 83 80 100 Cost of risk down on a YoY basis at 55 bps 131 55 98 85 66 72 55 0 in Q1 2011 from 98 bps in 1Q 2010 8 4 35 10 -648 -558 -100 YoY decrease in net provisioning by 42% -931 -803 -733 -1,110
Slide 23: Zoom on corporate client segments
Cost of risk - Corporate Zoom on corporate client segments KB Group – Corporate Segments 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 158 200 94 95 82 80 150 57 100 YoY corporate cost of risk down to 57 bps 50 0 -250 -50 -344 -273 -100 compared to 94 bps in 1Q 2010 -454 -447 -150 -200 -579 -250 -
Slide 24: Zoom on retail client segments
Cost of risk - Retail Zoom on retail client segments KB Group – Retail Segments 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 226 250 YoY cost of risk down on Individuals and 169 178 175 171 168 108 115 150 stable throughout the year on Small 100 97 94 98 91 107 88 85 83 88 50 Business -50 QoQ inc
Slide 25: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Cost of Risk Appendix 25 KB 1Q 2011 results – Prague – 5 May 2011
Slide 26: Evolution of clients' portfolio and networks
Number of clients and distribution network Evolution of clients‘ portfolio and networks Number of KB clients (CZ) Clients KB bank 1,583,000 clients (-2%) MPSS 679,000 clients (-5%) PFKB 500,000 clients (+1%) 1,577 1,629 1,620 1,590 1,583 1,515 ESSOX 301,000 active clients (-5%) Network 395 branches
Slide 27: KB consolidated group
KB consolidated group Pension Penzijní fond KB #4 pension fund in the Czech Republic with more than 500,000 clients insurance (100%) Modrá pyramida Building Second largest building society according to loan volume with 679,000 clients stavební society and 1,234 strong agent distribution network spoř
Slide 28: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 1Q 2010 1Q 2011 Change YoY MPSS Volume of new loans (CZK million) 1,665 1,798 8% Volume of total loans (gross, CZK million) 46,403 50,022 8% Target volume of new contracts (CZK million) 8,847 6,843 -23% Volume of deposits (CZK million) 68,040 69,182 2% Averag
Slide 29: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 1Q 2010 1Q 2011 Change YoY Factoring Factoring turnover (CZK million) 2,351 3,088 31% KB Volume of total financing (gross, CZK million) 1,496 1,913 28% Average number of FTEs 39 38 -3% KP Newly concluded policies (number) 94,404 133,660 42% of which in life i
Slide 30: Standalone results of KB group companies and associated undertakings
Standalone results of KB group companies and associated undertakings Account. Share Net YoY Equity YoY Assets YoY standards of KB Profit CZK million KB IFRS n.a. 2,817 n.a. 70,424 n.a. 612,433 n.a. - o/w KB branch in Slovakia IFRS 100% 15 n.a. n.a. n.a. 8,949 n.a. ESSOX, s.r.o. IFRS 51% 61 38.6% 2,7
Slide 31: New methodology for CoR in bps calculation
Cost of risk in Bp calculation New methodology for CoR in bps calculation KB Group CoR in Bp - Total 180 CoR calculation formula (in Bps) aligned with 142 140 market practice applied from the beginning of 2011 100 98 92 83 80 88 55 60 Two main changes: 66 62 56 55 39 20 Instead of On+Off B/S only On
Slide 32: Revaluation of MPSS balance sheet
Revaluation of MPSS balance sheet Background ► Remaining 60% in Modrá pyramida acquired in October 2006. Full consolidation of MPSS since 4Q 2006 ► Preliminary goodwill on acquisition of Modrá pyramida at CZK 2,741 mil. ► In accordance with IFRS 3 A&L valuation to be completed within 12 months after
Slide 33: Czech Republic macroeconomic environment
Macroeconomic environment Czech Republic Macroeconomic Indicators 2006 2007 2008 2009 2010* 2011* Real GDP (%, average) 7.0 6.1 2.3 -4.0 2.2 2.0 Inflation (%, average) 2.5 2.8 6.3 1.0 1.5 1.8 Household consumption (%, average) 5.2 4.9 3.4 -0.2 0.3 0.3 Unemployment (%, av., MLSA meth.) 8.2 6.7 5.5 8.
Slide 34: Interest rates evolution
Interest rates evolution (for the period 28 December 2001 – 29 April 2011) 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 28/12/2001 28/12/2002 28/12/2003 28/12/2004 28/12/2005 28/12/2006 28/12/2007 28/12/2008 28/12/2009 28/12/2010 Pribor 3M Pribor 6M ČNB REPO Rate 34 KB 1Q 2011 results – Pr
Slide 35: Development of KB's share price and PX Index
Development of KB‘s share price and PX Index (for the period 1 October 2001 – 29 April 2011) 4,800 2,100 4,300 1,900 1,700 3,800 1,500 3,300 1,300 2,800 1,100 2,300 900 1,800 700 1,300 500 800 300 01/10/2001 01/10/2002 01/10/2003 01/10/2004 01/10/2005 01/10/2006 01/10/2007 01/10/2008 01/10/2009 01/1
Slide 36: KB shareholders
KB shareholders As at 31 March 2011 According to excerpt from the Securities centre Others 39.6% Société Générale 60.4% 36 KB 1Q 2011 results – Prague – 5 May 2011
Slide 37: Investor Relations
Investor Relations Jakub Černý, Georgina Olegrová Tel.: +420 955 532 156, 955 532 734 E-mail: investor_relations@kb.cz - Internet: www.kb.cz 37 KB 1Q 2011 results – Prague – 5 May 2011