Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — Q3 2007 Earnings Presentation
42 slides from Komercni Banka, A.s's earnings presentation, Nov 8, 2007
Slide 1: KB Group Financial Results as at 30 September 2007
JJ Mois Année KB Group Financial Results as at 30 September 2007 (International Financial Reporting Standards) Prague – 8 November 2007
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 Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix Komerční banka 2
Slide 4: Successful growth of the business performance and Group profitability
Successful growth of the business performance and Group profitability Consolidated net banking income of KB Group reached CZK 21,783 million, up 13% year on year Cost income ratio further improved to 45.8% Net operating income increased by 14.6% year on year Consolidated cost of risk at 37bp
Slide 5: Product and services innovations in 3Q 2007
Product and services innovations in 3Q 2007 Flexible Mortgage – further improvements in the offer of mortgage products Mojekarta – allowing the clients to change PIN of their card, following the opportunity to design the front of the card eStatement – a new functionality of internet banking. S
Slide 6: Main business achievements in 3Q 2007: Retail segment
Main business achievements in 3Q 2007 As of 30 September 2007, year-on-year comparison Retail segment Number of individual clients increased by 5% to 1,277,000 Success of the attractive offer for youth segment 161,000 Child accounts (+13%); 151,000 Gaudeamus packages (+19%) Student ID card „UNIk
Slide 7: Main business achievements in 3Q 2007: Corporate segment
Main business achievements in 3Q 2007 As of 30 September 2007, year-on-year comparison Corporate segment Total volume of loans to corporates grew by 17% Revenues from investment banking rose by 23%. KB extended a credit facility of up to CZK 4 billion to Middle Bohemia region, the largest sing
Slide 8: Main business achievements in 3Q 2007: Subsidiaries
Main business achievements in 3Q 2007 As of 30 September 2007, year-on-year comparison Subsidiaries Strengthened market position of Penzijní Fond KB resulting from increase in number of clients by 13% to 455,000. Continuing fast growth of consumer financing by ESSOX: volume of new loans almost C
Slide 9: Main business achievements of MPSS and recent innovations
Main business achievements of MPSS and recent innovations Solid performance of Modrá pyramida: volume of new loans up 23%; number of newly concluded savings contracts up 14%. The second step of deeper integration of Modrá pyramida (following the common credit card with ESSOX) – new products intr
Slide 10: Group lending activities
Building saving loans Group lending activities Mortgages to individuals Consumer loans As of 30 September 2007, CZK billion Business loans Other loans + 20.3% Corporate loans grew by 17% YoY: 299.4 283.3 Small businesses (KB) +18% to CZK 13.6 billion 260.7 265.3 29.8 248.8* 27.7 Corporates (KB+KBB
Slide 11: Group deposits
Building savings Group deposits KB individual deposits Clients’ pension assets As of 30 September 2007, CZK billion Business deposits Other deposits + 8.7% 508.5 KB represents 83% of CZK 509 billion of total 507.4 481.3 491.2 467.9* depositary base, of which: 59.5 59.9 59.8 KB individuals deposits
Slide 12: Komerční banka awards
MasterCard® [4 Banka roku 2007 FIREMNi 2007 BANKA ROKU MasterCard® G| Stavebni sporitelna roku 2007 11
Slide 13: Contents
Contents Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix Komerční banka 12
Slide 14: Consolidated Financial Results
Financial Results of KB Group Consolidated Financial Results Profit and Loss Statement 1Q-3Q 2006 1Q-3Q 2007 Change 1Q-3Q 2007 Change CZK million, unaudited restated* YoY reported YoY Net interest income 11,866 12,748 7.4% 13,703 15.5% Net fees & commissions 6,430 6,680 3.9% 6,856 6.6% Income from f
Slide 15: Consolidated Financial Ratios
Financial Results of KB Group Consolidated Financial Ratios Key ratios and indicators 9/2006 9/2007 YoY 9/2007 YoY restated* reported Capital Adequacy 11.6% 12.3% S 10.8% T Tier 1 Ratio 12.1% 11.2% T 9.5% T Risk weighted assets (CZK billion) 281 333 18.5% 358 27.4% Net Interest Margin (NII/Av. Inter
Slide 16: NII increase resulting from strong volume growth
Net Interest Income NII increase resulting from strong volume growth CZK million, consolidated. Restatement based on same consolidation scope as 1-3Q 2006 Group Net Interest Income Composition Contributions to Consolidated NII Other NII from deposits KB NII from loans NII from Investment Banking Gro
Slide 17: Total fees growing with enlarged client base
Net Fees and Commissions Total fees growing with enlarged client base CZK million, consolidated. Restatement based on same consolidation scope as 1-3Q 2006 Group Net Fees and Commissions Contributions to Consolidated F&C KB Non-FX FX clean payments FX other transactions Group companies 6,430 6,680 6
Slide 18: Profit from financial operations supported by clients' transactions
Financial Operations Income Profit from financial operations supported by clients’ transactions CZK million, consolidated. Restatement based on same consolidation scope as 1-3Q 2006 Net Profit from Financial Operations Contributions to Consolidated NPFO Profit from FX operations Profit from Commodit
Slide 19: Total expenses increase driven by personnel costs
Total operating costs Total expenses increase driven by personnel costs CZK million, consolidated. Restatement based on same consolidation scope as in 1-3Q 2006 Total Group Expenses Composition Contributions to Consolidated Expenses Personnel costs General admin. costs Depreciation Personnel General
Slide 20: Cost of risk
Cost of risk Group cost of risk at 37 bp and for KB standalone at 31 bp CZK million. Restatement based on same consolidation scope as 1-3Q 2006 Total Group Cost of Risk Composition Contributions to loan loss provisions Provisions for loan losses Provisions for other risk expenses KB Provisions for s
Slide 21: KB Group Balance Sheet
KB Group Balance Sheet Assets Liabilities CZK billion, consolidated KB Group Group companies 646.2 646.2 KB standalone 598.1 16.4 598.1 31.7 15.0 14.6 535.3 535.3 7.7 32.2 508.5 214.0 Amounts due 481.3 Cash and balances with central bank to banks 208.7 412.3 233.4 Amounts due from banks 290.4 252.5
Slide 22: KB Group Shareholders Equity
KB Group Shareholders Equity Development since the end of 2006 CZK million, consolidated Total shareholder’s equity Total shareholder’s equity as at 31 December 2006: - 2,523 as at 30 September 2007: 50,598 48,075 Shareholders’ equity 12/ 2006 1/1/2007 Increase Decrease 9/2007 Share capital 19,005 1
Slide 23: Contents
Contents Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix Komerční banka 22
Slide 24: Overall quality of loan portfolio well under control
KB Group Loan Quality Overall quality of loan portfolio well under control CZK million, consolidated. Restatement based on same consolidation scope as 1-3Q 2006 Gross client loans 299,437 +32.6% Standard loans Watch loans 269,629 +19.4% Loans under special review 225,831 • Share of standard loans in
Slide 25: Improved provision coverage
KB Group Loan Coverage Improved provision coverage CZK million, consolidated. Restatement based on same consolidation scope as 1-3Q 2006 Specific provisions and reserves +16.8% 9,366 +21.6% Watch loans 8,991 Loans under special review 7,701 718 660 +8.9% +18.5% 606 • Increase in overall specific pro
Slide 26: Contents
Contents Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix Komerční banka 25
Slide 27: Business performance of subsidiaries
Business performance of subsidiaries 1-3Q 2006 1-3Q 2007 YoY change Volume of new loans (CZK mil) 7,903 9,007 +23% Volume of total loans (gross, CZK mil) 22,949 29,481 +28% Volume of new saving contracts (target sum, 17,893 23,502 +31% CZK mil) MPSS Volume of total saving contracts (CZK mil)
Slide 28: Business performance of subsidiaries
Business performance of subsidiaries 1-3Q 2006 1-3Q 2007 YoY change Factoring turnover (CZK mil) 12,269 13,056 +6% Factoring New contracts (number) 237 165 -30% KB Number of FTEs 38 44 +14% Total client loans (gross, CZK mil) 2,761 3,775 +37% Total client deposits (CZK mil) 2,107 3,527 +67
Slide 29: Subsidiary and associated undertakings results
Subsidiary and associated undertakings results As at 30 September 2007, CZK mil. Share of KB Net profit YoY Equity YoY Assets YoY ESSOX, s.r.o. (IFRS) 51% 36 +/- 1,219 +4,588% 6,097 +67% Factoring KB, a.s. * 100% 19 0% 1,304 +620% 4,281 +64% Komerční banka Bratislava, a.s. (IFRS) 100% 51 +34% 706 +1
Slide 30: Unconsolidated Financial Results
KB Financial Results Unconsolidated Financial Results Profit and Loss Statement 1Q-3Q 2006 1Q-3Q 2007 Change CZK million, unaudited YoY Net banking income 18,350 19,291 5.1% Operating costs -8,500 -8,994 5.8% Net operating income 9,850 10,297 4.5% Cost of risk -1,243 -838 -32.6% Profit on subsidiari
Slide 31: Loan portfolio growing in all client segments
KB Loan portfolio Loan portfolio growing in all client segments Volume of loans (unconsolidated, CZK billion, gross amount) Individuals Small businesses Corporates and Municipalities Top Corporations +19.9% Other 264.5 249.5 230.4 233.5 220.6 86.0 32% 80.9 ■ Year-on-year growth of the loan portfolio
Slide 32: Growth in deposits driven by current accounts
KB clients’ deposits Growth in deposits driven by current accounts Volume of primary client deposits (unconsolidated, CZK billion) Current Accounts incl. O/N Term and Savings Accounts Loans from Customers (excl. repo transactions) +10.2% 428.0 426.3 386.9 394.9 397.6 ■ Depositary base increased by 1
Slide 33: KB Shareholders Equity
KB Shareholders Equity Development since the end of 2006 CZK million, unconsolidated Total shareholder’s equity Total shareholder’s equity as at 31 December 2006: - 2,016 as at 30 September 2007 48,683 46,667 Shareholders’ equity 12/2006 1/1/2007 Increase Decrease 9/2007 Share capital 19,005 19,005
Slide 34: Number of clients and distribution network
Clients and Network Number of clients and distribution network As of 30 September 2007, year-on-year comparison Clients KB bank 1,560,000 clients - increase by 57,000 (+4%) • of which 1,277,000 are individual clients (+5%) MPSS 776,000 clients PFKB 455,000 clients Essox 167,000 active clients Ne
Slide 35: Development of consolidated recurring profit
Development of consolidated recurring profit CZK million Profit and Loss without one-offs (pro-forma) 1-3Q 2006 1-3Q 2007 Change Net banking income 19,006 20,605 8.4% Net interest income 11,604 12,748 9.9% Non-interest income 7,402 7,857 6.1% Operating costs - 9,106 - 9,506 4.4% 7,670 Personnel expe
Slide 36: Valuation of MPSS balance sheet
Revaluation of MPSS balance sheet Valuation of MPSS balance sheet Background • Preliminary goodwill on acquisition of Modrá pyramida at CZK 2,741 million • In accordance with IFRS 3 A&L valuation to be completed within 12 months after acquisition • Valuation based on detailed data on the contracts o
Slide 37: KB consolidated group
KB consolidated group KOMERČNÍ BANKA PENSION BUILDING CORPORATE CONSUMER INSURANCE OTHERS INSURANCE SOCIETY SERVICES CREDIT Penzijní fond Modrá pyramida Factoring KB ESSOX Komerční KB st. spořitelna pojišťovna 100% 100% 100% 51% 49% KB Bratislava (Slovakia) 100% MPSS: PFKB: - Until 3Q 2006 equity me
Slide 38: Macroeconomic Environment
Macroeconomic Environment Czech Republic Macroeconomic indicators 2004 2005 2006 2007* 2008* Real GDP (%) + 4.6 + 6.5 + 6.4 + 5.8 +5.0 Inflation (%) + 2.8 + 1.9 + 2.5 + 2.8 +4.0 Households income (%) + 4.9 + 4.8 + 5.8 + 6.0 +5.5 M2 (%) + 4.4 + 8.0 + 9.9 + 11.0 +10.0 3M PRIBOR (%, average) 2.4 2.0 2.
Slide 39: Interest Rates Evolution
1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 31/12/01 28/2/02 30/4/02 30/6/02 31/8/02 31/10/02 31/12/02 Komerční banka 28/2/03 30/4/03 30/6/03 31/8/03 Interest Rates Evolution 31/10/03 Pribor 3M 31/12/03 29/2/04 30/4/04 30/6/04 Pribor 6M 31/8/04 31/10/04 31/12/04 28/2/05 TBU 30/4/05 30/6/05 31/8/05 KB Re
Slide 40: Development of KB's share price and PX Index
KB share price Development of KB’s share price and PX Index CZK 4,800 2,100 4,600 2,000 4,400 1,900 4,200 1,800 4,000 1,700 3,800 1,600 3,600 3,400 1,500 3,200 1,400 3,000 1,300 2,800 1,200 2,600 1,100 2,400 1,000 2,200 900 2,000 800 1,800 700 1,600 1,400 600 1,200 500 1,000 400 800 300 06 02 02 04
Slide 41: Structure of Shareholders
KB Shareholders Structure of Shareholders Major shareholders of Komerční banka, a. s. as of 30 September 2007 Number of outstanding shares – 38,009,852 Free Float: 39.65% Société Générale S.A. 60.35% Others 30.98% Investors Bank & Trust Co.* 8.67% * Shares held on behalf of third parties Komerční ba
Slide 42: Investor Relations - Contacts
Contacts Investor Relations - Contacts JAKUB ČERNÝ Head of Investor Relations Phone: +420-222 432 156 Email: jakub_cerny@kb.cz OLGA NEVYHOŠTĚNÁ RENÁTA BUCHTOVÁ Investor Relations Investor Relations Phone: +420-222 432 734 Phone: +420-222 432 155 Email: olga_nevyhostena@kb.cz Email: renata_buchtova@k