Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — Q1 2019 Earnings Presentation
34 slides from Komercni Banka, A.s's earnings presentation, May 3, 2019
Slide 1: Komerční banka Group Results First Quarter 2019
PRAGUE, 3 MAY 2019 KOMERČNÍ BANKA GROUP RESULTS First quarter 2019 According to IFRS, Consolidated, Unaudited
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: Contents
CONTENTS Highlights of KB’s performance Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Appendix KB GROUP AS OF 31 MARCH 2019│ 3 MAY 2019 │ 3
Slide 4: Highlights from the First Quarter 2019
HIGHLIGHTS HIGHLIGHTS FROM THE FIRST QUARTER 2019 KB registered a 38% year-on-year increase in the number of its clients with KB Mobile Banking to No. 1 position 655,000. The volume of transactions submitted in three months through mobile devices rose by 82% on the Czech market YoY to CZK 15.6 billi
Slide 5: Giving Back to the Society
CORPORATE SOCIAL RESPONSIBILITY GIVING BACK TO THE SOCIETY VOLUNTEERING SUPPORTING EDUCATION KB again was the main partner AT ALL LEVELS of Ukliďme Česko (Let’s tidy up KB supported SingularityU Czech Summit discussing new Czechia) campaign. trends in mobility, artificial intelligence, computing, ro
Slide 6: Reinforcing Market Leadership
DIGITAL BANKING REINFORCING MARKET LEADERSHIP KB KEY HIGH CLIENT SATISFACTION WITH KB’s MOBILE BANKING January survey of 2,390 clients showed further Strong take up of KB Key improvement in client satisfaction with the mobile authentication app by clients, banking application, at 8.8 score (out of 1
Slide 7: Contents
CONTENTS Highlights of KB’s performance Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Appendix KB GROUP AS OF 31 MARCH 2019│ 3 MAY 2019 │ 7
Slide 8: Government Investments Picking Up
ECONOMY OF THE CZECH REPUBLIC GOVERNMENT INVESTMENTS PICKING UP GDP in 4Q18 up +2.6% YoY, +0.8% QoQ. In 2018 the economy grew by Czech GDP growth (%, yoy) 2.9%. In both cases the growth was driven by fixed investments and household consumption Investment activity of corporations strong in the wh
Slide 9: Contents
CONTENTS Highlights of KB’s performance Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Appendix KB GROUP AS OF 31 MARCH 2019│ 3 MAY 2019 │ 9
Slide 10: Selected Deals of the First Quarter of 2019
SELECTED DEALS SELECTED DEALS OF THE FIRST QUARTER OF 2019 KB GROUP AS OF 31 MARCH 2019│ 3 MAY 2019 │ 10
Slide 11: Gross Lending Excluding Repo Up 4.0% YoY
LOANS TO CLIENTS GROSS LENDING EXCLUDING REPO UP 4.0% YOY Group lending (w/o repo and client bonds) CZK billion Group business and other loans CZK billion +4.0% +0.4% (incl. client bonds) +4.2% +0.5% 624.7 628.6 634.5 637.3 YoY 606.1 612.7 43.6 45.2 47.1 49.0 50.7 52.1 15.2% YoY 306.5 309.8 317.5 31
Slide 12: Client Deposits Rose by 4.5% YoY
DEPOSITS AND OTHER AUM CLIENT DEPOSITS ROSE BY 4.5% YOY Group deposits (w/o repo operations) CZK billion Deposit product structure CZK billion +4.5% +3.8% (w/o repo operations) YoY YoY 790.6 806.6 809.5 795.5 826.1 790.7 806.6 809.6 795.5 826.1 756.0 756.1 61.6 61.3 61.1 61.8 61.5 -0.1% 62.7 258.0 2
Slide 13: Contents
CONTENTS Highlights of KB’s performance Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Appendix KB GROUP AS OF 31 MARCH 2019│ 3 MAY 2019 │ 13
Slide 14: Improvement in Profit Driven by NII and Risk Costs
R E C O N C I L I A T IPORNO O F IFT I & N CL O OMSS E IMPROVEMENT IN PROFIT DRIVEN BY NII AND RISK COSTS Drivers for year on year change in attributable net income (as of 31 March 2019) One-off items: +5.9% 1Q 2018: +8.9% • Finalisation of sale price for -31 KB’s former stake in Cataps; -82 -128 93
Slide 15: YoY Growth Driven by Client Deposits
BALANCE SHEET YOY GROWTH DRIVEN BY CLIENT DEPOSITS Assets 4.4% Liabilities 4.4% CZK billion 6.9% and Equity 6.9% 1,133 YoY CZK billion 1,133 YoY 1,086 1,060 1,086 1,060 110 +3.4% 106 92 311 337 +8.4% 281 815 812 857 +5.2% 616 625 629 +2.0% 3 55 6 3 47 3 54 3 4 122 118 131 +7.2% 37 36 37 101 103 107
Slide 16: Rise in Capital Ratios Driven by Profits and Upgrade of Czech Sovereign Exposures
RISE IN CAPITAL RATIOS DRIVEN BY PROFITS AND CAPITAL, RWA UPGRADE OF CZECH SOVEREIGN EXPOSURES Contributions to capital adequacy ratio in 1Q 2019 (%) Contributions to equity in 1Q 2019 (CZK million) +46 bps 106,663 84 74 0.71 3,176 18.94 103,329 18.48 -0.46 -0.03 -0.02 0.26 31 Dec RWA RWA Other Inte
Slide 17: Higher Volumes and Reinvestment Yields
N ET INTEREST AND SIMILAR INCOME HIGHER VOLUMES AND REINVESTMENT YIELDS Quarterly NIM (%) NII +9.2% -2.3% 2.20 2.19 2.22 2.35 2.28 5,788 6,030 5,892 5,413 5,394 5,492 385 351 431 351 390 426 2,618 2,891 2,902 2,245 2,338 2,428 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 Higher CZK interest rates suppo
Slide 18: Fee Income Seasonally Weaker
NET FEES AND COMMISSIONS FEE INCOME SEASONALLY WEAKER NFC -2.1% -9.6% Deposit product fees – increasing clients’ preference for account packages including a wider range of services 1,591 1,523 1,580 1,459 1,463 1,428 Transaction fees – rapid increase in electronic and card 697 677 611 659 628 58
Slide 19: Effect of Revaluations and Shift to Interest Income
NET PROFIT FROM FINANCIAL OPERATIONS EFFECT OF REVALUATIONS AND SHIFT TO INTEREST INCOME Lack of clear trend for future CZK IR and FX rates limiting clients’ NPFO -13.5% -27.7% demand for positions hedging 1,013 862 790 A larger part of gains from market operations booked in interest 660 747 595
Slide 20: Costs Under Control
OPERATING EXPENDITURES COSTS UNDER CONTROL Average number of employees (quarterly) OPEX +3.2% +15.8% YoY 19 8,558 8,498 8,463 8,343 8,340 8,167 -1,803 -1,847 -2,151 -1,932 -1,896 -1,905 -3.9% 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 -1,278 -928 -1,008 -841 -952 -1,224 -4 -3 -4 -852 -478 -846
Slide 21: Contents
CONTENTS Highlights of KB’s performance Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Appendix KB GROUP AS OF 31 MARCH 2019│ 3 MAY 2019 │ 21
Slide 22: Sound Asset Quality
LOAN PORTFOLIO QUALITY SOUND ASSET QUALITY Gross lending CZK billion Loan exposure up 1.9 % YoY and 0.6% QoQ 628.3 635.2 640.7 636.6 640.5 607.4 NPL exposure ratio down to 2.5% YoY (vs. 2.8% in 1Q 565.8 587.8 595.3 601.2 585.8 590.6 2018) driven by low default rates, good recovery performance, p
Slide 23: Low Cost of Risk
COST OF RISK LOW COST OF RISK (Year-to-date, in basis points) Net release of CoR in 1Q 2019 at CZK 176 million (vs. Total Cost of Risk 4 CoR net release at CZK 83 million in 1Q 2018) 0 -2 -6 -5 -5 -5 CoR on corporate loan portfolio at -19 bps in 1Q 2019 -11 -10 -11 -12 -13 -14 (vs. -12 bps for i
Slide 24: Contents
CONTENTS Highlights of KB’s performance Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Appendix KB GROUP AS OF 31 MARCH 2019│ 3 MAY 2019 │ 24
Slide 25: Number of Clients and Distribution Network
KB GROUP CLIENTS AND DISTRIBUTION NETWORK NUMBER OF CLIENTS AND DISTRIBUTION NETWORK 1Q 2018 1Q 2019 YoY Number of clients Number of bank clients (thousands, CZ) 1,664 1,668 1,658 * KB Group's clients 2,397,000 2,379,000 -18,000 1,647 1,654 Komerční banka 1,666,000 1,658,000 -8,000* 1,626 – individu
Slide 26: Year-to-Date Income Statement
CONSOLIDATED INCOME STATEMENT YEAR-TO-DATE INCOME STATEMENT Profit and Loss Statement Reported* Recurring Note for recurring Change Change (CZK million, unaudited) 1Q 2018 1Q 2019 YoY 1Q 2018 1Q 2019 YoY figures: Net interest income and similar income 5,394 5,892 9.2% 5,394 5,892 9.2% Net fee & comm
Slide 27: Quarterly Income Statement (Including One-off Items)
QUARTERLY INCOME STATEMENT CONSOLIDATED INCOME STATEMENT – QUARTERLY VIEW (INCLUDING ONE-OFF ITEMS) Profit and Loss Statement Reported* Note for recurring Change Change (CZK million, unaudited) 1Q 2018 4Q 2018 1Q 2019 YoY QoQ figures: Net interest income and similar income 5,394 6,030 5,892 9.2% -2.
Slide 28: Balance Sheet
CONSOLIDATED STATEMENT OF FINANCIAL POSITION BALANCE SHEET Balance Sheet 31 Mar 31 Dec 31 Mar YoY YoY Ytd Ytd (CZK million, unaudited) 2018 2018 2019 rel. abs. rel. abs. Assets 1,085,628 1,059,932 1,133,345 4.4% 47,717 6.9% 73,413 Cash and current balances with central bank 16,147 24,851 18,164 12.5
Slide 29: Capital & Profitability Indicators
FINANCIAL RATIOS CAPITAL & PROFITABILITY INDICATORS Reported Recurring* (year-to-date, IFRS 9) 31/03/2018 31/03/2019 31/03/2018 31/03/2019 Capital adequacy 18.3% 18.9% Tier 1 ratio = Core Tier 1 ratio 17.7% 18.4% Risk weighted assets for credit risk (CZK billion) 363.7 369.2 Net interest margin, ann
Slide 30: Business Performance of Subsidiaries 1/2
OVERVIEW OF KB SUBSIDIARIES BUSINESS PERFORMANCE OF SUBSIDIARIES 1/2 1Q 2018 1Q 2019 YoY Modrá pyramida (100%), #2 building savings & loans company Volume of new loans (CZK million) 3,589 2,008 -44% Volume of total loans (gross, CZK million) 45,230 52,087 15% Volume of deposits (CZK million) 61,555
Slide 31: Business Performance of Subsidiaries 2/2
OVERVIEW OF KB SUBSIDIARIES BUSINESS PERFORMANCE OF SUBSIDIARIES 2/2 1Q 2018 1Q 2019 YoY Factoring KB (100%), #1 on the Czech factoring market Factoring turnover (CZK million) 11,681 11,652 0% Volume of total financing (gross, CZK million) 7,865 8,075 3% Average number of FTEs 44 43 -2% Komerční poj
Slide 32: Macroeconomic Environment – Czechia
MACROECONOMIC ENVIRONMENT – CZECHIA Macroeconomic Indicators 2015 2016 2017 2018 2019* 2020* Real GDP (%, average) 5.4 2.4 4.5 2.9 2.4 2.4 Inflation (%, average) 0.3 0.7 2.5 2.1 2.5 1.9 Household consumption (%, average) 3.8 3.5 4.4 3.1 2.4 3.0 Unemployment (%, av., MLSA meth.) 5.0 3.9 2.9 2.2 2.1 2
Slide 33: Interest Rates Evolution
INTEREST RATES EVOLUTION For the period 1 Jan 2006 – 29 March 2019 KB GROUP AS OF 31 MARCH 2019│ 3 MAY 2019 │ 33
Slide 34: KB #1 Listed Czech Bank
KB #1 LISTED CZECH BANK Development of KB share price and PX index (1 January 2001 – 29 March 2019) Shareholder structure Free-float 39.6% Société Générale 60.4% • The number of shareholders comprised 47,718 corporate entities and private individuals. • Of the Bank’s total share capital of CZK 19,00