Slide 1: Komerční banka Group Financial results as at 30 September 2012
Komerční banka Group Financial results as at 30 September 2012 According to International Financial Reporting Standards, consolidated, unaudited Prague, 8 November 2012
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 results 4 Financial results 10 Loan Portfolio Quality and Cost of Risk 19 Appendix 23 3
Slide 4: Czech economy
Czech economy Real GDP outlook (YoY, %) Economy contracted in 2Q 2012 by 1.0% YoY, 2.9 2.6 1.7 despite significant positive contribution from net 0.3 exports, pushed down mainly by household -0.8 consumption -4.5 Industrial production decreased by 2.3% YoY in 3Q 2012. Capacity utilisation in industr
Slide 5: Key results as of 30 September 2012
Key results as of 30 September 2012 Client deposits rose by 3.1% to CZK 568.3 billion Gross volume of loans to clients expanded by 6.2% to CZK 462.3 billion Sufficient liquidity buffer, net loans-to-deposits ratio 78.4% (82.9% excluding PF KB clients‘ assets) Solid capital adequacy, Basel 2 Core Tie
Slide 6: Business highlights
Business highlights Solid growth of lending continued to be driven by mortgages and large corporate loans Rising trend of deposits despite quarter-over-quarter decline influenced by short-term placements from large corporate clients around the end of 2Q 2012 Czech National Bank has granted a licence
Slide 7: Deposits and assets under management
Deposits and assets CZK billion By Customers 582.4 under management 546.8 551.1 560.7 564.8 70.8 568.3 70.9 70.4 69.7 70.9 70.9 159.9 162.4 162.6 160.5 Group deposits +3.1% YoY. QoQ -2.4% 156.3 156.9 30.4 31.0 31.7 influenced by large short-term deposit 29.7 29.9 31.2 placements booked in 2Q 2012 28
Slide 8: Lending activities
Lending activities CZK billion 450.5 450.5 456.2 462.3 422.3 435.1 51.4 50.8 50.3 49.8 50.6 51.3 Gross loans rose 6.2% YoY driven mainly by 123.0 128.2 130.5 118.0 125.3 mortgages and large corporates. QoQ +1.3% 114.6 27.7 27.6 27.4 27.4 27.4 with improved dynamics in small business 27.6 Business lo
Slide 9: Agenda
Agenda Business results 4 Financial results 10 Loan Portfolio Quality and Cost of Risk 19 Appendix 23 9
Slide 10: Consolidated financial results
Consolidated financial results Change Change Profit and Loss Statement 1-3Q 2011 1-3Q 2011 1-3Q 2012 1-3Q 2012 YoY YoY (CZK million, unaudited) Reported Recurring Reported Recurring Reported Recurring Net interest income 16,519 16,149 16,500 16,118 -0.1% -0.2% Net fees & commissions 5,585 5,576 5,26
Slide 11: Consolidated statement of financial position
Consolidated statement of financial position 30 Sep 31 Dec 30 Sep Change Change Balance Sheet 2011 2011 2012 YoY YtD (CZK million, unaudited) Assets 748,562 754,810 771,470 3.1% 2.2% Cash and balances with central bank 20,981 16,980 8,557 -59.2% -49.6% Amounts due from banks 100,178 101,393 78,045 -
Slide 12: Financial ratios
Financial ratios 30 Sep 31 Dec 30 Sep Change Key ratios and indicators 2011 2011 2012 YoY (year-to-date) Capital adequacy (Basel II) 16.0% 14.6% 14.5% Tier 1 ratio (Basel II) 14.7% 13.4% 14.5% Total capital requirement (CZK billion) 28.4 30.4 29.6 4.5% Capital requirement for credit risk (CZK billio
Slide 13: Shareholders' equity
Shareholders‘ equity Development year-to-date Total shareholders‘ equity +13,304 Total shareholders‘ equity as at 31 December 2011 as at 30 September 2012 Shareholders' equity 31/12/2011 1/1/2012 Increase Decrease 30/09/2012 Share capital 19,005 19,005 19,005 Capital and reserve funds 38,693 48,168
Slide 14: Net interest income
Net interest income 5,569 5,579 5,671 5,543 5,502 5,455 559 495 528 540 521 468 NII in 9M 2012 slightly down by 0.1% YoY. 3Q decreased by 0.9% QoQ 2,198 2,278 2,296 2,279 2,302 2,341 NII from loans – driven by solid volume growth. Marginal decrease in average spread due to slightly increasing share
Slide 15: Net fees and commissions
Net fees and commissions 1,882 1,837 1,807 1,720 1,773 160 1,683 NFC in 9M 2012 -5.7% YoY. 3Q -5.1% QoQ. 183 205 143 177 135 Recurring fee income down 4.6% YoY 397 392 136 324 255 354 Maintenance fees – reduction in charged fees 344 343 345 326 336 347 due to client rewards scheme introduced in 2011
Slide 16: Net profit from financial operations
Net profit from financial operations 1,228 Net profit from financial operations in 9M 2012 1,018 957 465 increased by 30.4% YoY. QoQ -49.2% due to 816 one-offs in 2Q 2012 (sale of KB‘s stake in 672 400 457 624 CMZRB guarantee bank and divestment of 424 332 344 309 remaining Greek and Portuguese bond
Slide 17: Operating costs
Operating costs 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 OPEX in 9M 2012 increased by 0.4% YoY. -1,653 -1,682 -1,586 -1,677 -1,671 -1,719 3Q 2012 up 0.3% QoQ. Personnel costs in 9M 2012 up 2.6% YoY. 3Q up -1,316 -1,138 -1,132 -1,196 2.9% QoQ. YoY growth driven by increase in -1,579 -1,185 ave
Slide 18: Agenda
Agenda Business results 4 Financial results 10 Loan Portfolio Quality and Cost of Risk 19 Appendix 23 18
Slide 19: Loan quality
Loan quality Gross lending CZK billion 450.5 450.5 456.2 462.3 422.3 435.1 Loan exposure +6.3% YoY, +1.3% QoQ Share of Standard and Watch loan exposure 381.1 394.7 410.2 411.9 417.2 424.8 stable at 94.3% (94.3% in 2Q 2012) Share of LUSR exposure stable at 5.7% (5.7 % in 14.0 14.1 14.6 12.8 12.8 11.3
Slide 20: Cost of risk
Cost of risk 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 133 181 175 3Q 2012 total cost of risk at CZK 0.4 billion 52 43 62 56 44 40 49 24 48 56 31 32 0 compared to CZK 2.9 billion in 3Q 2011 (-87.3%), 3 3 25 -200 -365 -641 -630 -355 -391 mainly influenced by write-downs of Greek -581 -400 -1,08
Slide 21: Commercial cost of risk - zoom on client segments
Commercial cost of risk - zoom on client segments KB Group – Corporate Segments QoQ cost of risk volume increased on Corporates 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 150 and decreased on Retail 42 26 29 35 9 8 50 YoY corporate cost of risk down to 8 bps mainly 87 -50 40 -25 thanks to the s
Slide 22: Agenda
Agenda Business results 4 Financial results 10 Loan Portfolio Quality and Cost of Risk 19 Appendix 23 22
Slide 23: Number of clients and distribution network
Number of clients and distribution network Number of bank clients (CZ) KB Group‘s 2.5 million clients, of which KB bank 1,605,000 clients (+0%) MPSS 616,000 clients (-6%) PFKB 521,000 clients (+5%) 1,577 1,629 1,620 1,590 1,602 1,605 ESSOX 273,000 active clients (-5%) Network 399 branches for retail
Slide 24: Consolidated financial results
Consolidated financial results Change Change Profit and Loss Statement 3Q 2011 2Q 2012 3Q 2012 YoY QoQ (CZK million, unaudited) Net interest income 5,579 5,502 5,455 -2.2% -0.9% Net fees & commissions 1,837 1,773 1,683 -8.4% -5.1% Income from financial operations 816 1,228 624 -23.5% -49.2% Other in
Slide 25: Income statement adjusted for SGEF acquisition
Income statement adjusted for SGEF acquisition Change Change Profit and Loss Statement 1-3Q 2011 1-3Q 2011 1-3Q 2012 1-3Q 2012 YoY YoY (CZK million, unaudited) Reported Pro forma Reported Pro forma Pro forma Net interest income 16,519 16,273 16,500 16,172 -0.1% -0.6% Net fees & commissions 5,585 5,5
Slide 26: KB consolidated group
KB consolidated group Pension Penzijní fond KB #4 pension fund in the Czech Republic with 521,000 clients. PF will be transformed in a insurance (100%) pension asset management company from 2013 Modrá pyramida Building #2 largest building savings bank according to loan volume with 616,000 clients an
Slide 27: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 1-3Q 2011 1-3Q 2012 Change YoY MPSS Volume of new loans (CZK million) 6,185 3,244 -48% Volume of total loans (gross, CZK million) 51,273 49,848 -3% Target volume of new contracts (CZK million) 18,542 16,563 -11% Volume of deposits (CZK million) 69,675 73,836
Slide 28: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 1-3Q 2011 1-3Q 2012 Change YoY Factoring Factoring turnover (CZK million) 11,103 13,877 25% KB Volume of total financing (gross, CZK million) 2,391 2,812 18% Average number of FTEs 40 40 0% KP Newly concluded policies (number) 597,945 644,112 8% of which in l
Slide 29: Standalone results of KB group companies and associated undertakings
Standalone results of KB group companies and associated undertakings Account. Share of Net YoY Equity YoY Assets YoY standards KB Profit CZK million KB IFRS 100% 9,661 59.7% 82,942 14.8% 677,411 5.4% - o/w KB branch in Slovakia IFRS 100% 108 151.2% n.a. n.a. 16,328 74.7% ESSOX, s.r.o. IFRS 50.93% 31
Slide 30: Securities portfolio in the banking book
Securities portfolio in the banking book CZK billion Available-for-sale portfolio Held-to-maturity portfolio CZK 140.6 billion CZK 3.3 billion 95.6 3.1 0.2 1.5 24.3 1.0 18.1 Czech sovereign Foreign sovereign Czech sovereign Foreign sovereign Czech financial institutions Foreign financial institution
Slide 31: Foreign sovereign exposure
Foreign sovereign exposure CZK billion 24.3 EFSF, 1.0 EIB, 2.5 Poland, 6.1 Slovakia, 6.4 2.4 Italy, 8.2 Poland, 0.1 0.2 Slovakia, 2.3 France, 0.2 1) 1) 2) Trading book Available-for-sale Held-to-maturity Measurement at [1] fair value; [2] amortized cost 31
Slide 32: Overview of items excluded in order to calculate recurring profit
Overview of items excluded in order to calculate recurring profit 9M 2012 (impact net of tax, KB Group share): amortisation of MPSS acquisition revaluation (CZK 18 mil.) SGEF acquisition (CZK 40 mil.) accounting change in amortisation of origination fees and costs (CZK 119 mil.) sale of bonds in PF
Slide 33: Acquisition of SGEF – fair value assessment of assets and liabilities
Acquisition of SGEF – fair value assessment of assets and liabilities Background KB acquired on 4 May 50.1% stake in SG Equipment Finance Czech Republic, s.r.o. (SGEF) for a purchase price of CZK 1,800 million. SGEF has been consolidated in KB Group accounts using full consolidation method since May
Slide 34: Macroeconomic environment – Czech Republic
Macroeconomic environment – Czech Republic Macroeconomic Indicators 2008 2009 2010 2011 2012* 2013* Real GDP (%, average) 2.9 -4.5 2.6 1.7 -0.8 0.3 Inflation (%, average) 6.4 1.0 1.5 1.9 3.3 2.5 Household consumption (%, average) 3.0 -0.3 0.5 -0.6 -2.6 0.7 Unemployment (%, av., MLSA meth.) 5.5 8.4 9
Slide 35: Interest rates evolution
Interest rates evolution (for the period 1 January 2005 – 1 November 2012) 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 01/01/2005 01/01/2006 01/01/2007 01/01/2008 01/01/2009 01/01/2010 01/01/2011 01/01/2012 Pribor 3M Pribor 6M ČNB REPO Rate IRS 5Y IRS 10Y 35
Slide 36: Development of KB's share price and PX Index
Development of KB‘s share price and PX Index (for the period 1 October 2001 – 1 November 2012) 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 01/10/01 01/10/02 01/10/03 01/10/04 01/10/05 01/10/06 01/10/07 01/10/08 01/10/09 01/10/10 01/10/11 01
Slide 37: KB shareholders
KB shareholders As at 30 September 2012 Shares on registered capital according to excerpt from the Securities centre Others 39.6% Société Générale 60.4% As at 30 September 2012, KB held 238,672 own shares in treasury, representing 0.63% stake on registered capital. 37
Slide 38: Investor Relations
Investor Relations Jakub Černý, Georgina Olegrová, Robert Janeček Tel.: +420 955 532 156, 955 532 734, 955 532 155 E-mail: investor_relations@kb.cz - Internet: www.kb.cz 38