Komercni Banka, a.s. · PSECZ:KOMB
Komercni Banka, a.s — H1 2007 Earnings Presentation
40 slides from Komercni Banka, a.s's earnings presentation, Aug 3, 2007
Slide 1: KB Group 1H 2007 Financial Results
JJ Mois Année KB Group 1H 2007 Financial Results (International Financial Reporting Standards) Prague – 3 August 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 n Business Highlights n Consolidated Financial Results n Loan Portfolio Quality and Development n Appendix Komerční banka 2
Slide 4: Successful growth of the business performance and Group profitability
Successful growth of the business performance and Group profitability n Consolidated net banking income of KB Group reached CZK 14,407 million, up 11.3% year on year n Cost income ratio stable at 45.5% n Net operating income increased by 10.9% year on year n Consolidated cost of risk at 39bp n Conso
Slide 5: Significant growth in consolidated recurring profit
Significant growth in consolidated recurring profit CZK million Profit and Loss without one-offs (pro-forma) 1H 2006 1H 2007 Change Net banking income 12,682 13,635 7.5% Net interest income 7,592 8,280 9.1% Non-interest income 5,090 5,355 5.2% Operating costs - 6,014 - 6,250 3.9% 4,988 Personnel exp
Slide 6: Main business achievements in retail
Main business achievements in retail As of 30 June 2007, year-on-year comparison n Number of individual clients increased by 5% to 1,261,000 n Continuing dynamic performance in the children and young clients’ segments 4 159,000 Child accounts (+15%); 140,000 Gaudeamus packages (+22%) n Rise in the v
Slide 7: Main business achievements in corporate segment
Main business achievements in corporate segment As of 30 June 2007, year-on-year comparison n Successful reorganization of corporate segment since January 2007 n Total volume of loans to corporates grew by 15% n Revenues from investment banking continued to accelerate (up 27% in 1H 2007) n KB was ap
Slide 8: Sales of subsidiaries’ products
Sales of subsidiaries’ products As of 30 June 2007, year-on-year comparison n Strengthening position of Modrá pyramida: volume of new bridging loans up 21% and volume of target sums of new saving contracts up 22%. The number of newly signed contracts increased by 12.3%. 4 The first step of deeper in
Slide 9: Introducing product and services innovations
Introducing product and services innovations n Flexible Mortgage – as the first bank in the Czech market, KB will offer a giving clients the possibility to change the monthly instalment level or to defer up to three monthly instalments. n Optimization of the distribution process for mortgages – 1,20
Slide 10: Group lending activities
Building saving loans Group lending activities Mortgages to individuals Consumer loans As of 30 June 2007, CZK billion Business loans Other loans +19.8% n Corporate loans grew by 16% YoY: 283.3 260.7 265.3 27.7 4 Small businesses (KB) +22% to CZK 12.9 bil. 248.8* 236.5* 24.7 26.0 22.9 4 Corporates (
Slide 11: Group deposits
Building savings Group deposits KB individual deposits Clients’ pension assets As of 30 June 2007, CZK billion Business deposits Other deposits +12.4% 507.4 480.1 490.1 n KB represents 83% of CZK 490 billion of total 451.5* 467.9* 59.5 depositary base, of which: 59.8 55.0 59.7 54.5 4 KB individuals
Slide 12: Contents
Contents n Business Highlights n Consolidated Financial Results n Loan Portfolio Quality and Development n Appendix Komerční banka 11
Slide 13: Consolidated Financial Results
Financial Results of KB Group Consolidated Financial Results Profit and Loss Statement 1H 2006 1H 2007 Change 1H 2007 Change CZK million, unaudited restated* YoY reported YoY Net interest income 7,854 8,280 5.4% 8,922 13.6% Net fees & commissions 4,320 4,434 2.6% 4,561 5.6% Income from financial ope
Slide 14: Consolidated Financial Ratios
Financial Results of KB Group Consolidated Financial Ratios Key ratios and indicators 6/2006 6/2007 YoY 6/2007 YoY restated* reported Capital Adequacy 11.8% 12.7% ▼ 11.2% ▼ Tier 1 Ratio 12.4% 11.6% ▼ 9.9% ▼ Risk weighted assets (CZK billion) 276 323 17.0% 346 25.4% Net Interest Margin (NII/Av. Inter
Slide 15: 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 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 1H 2006 Group Net Interest Income Composition Contributions to Consolidated NII Other NII from deposits KB NII from loans NII from Investment Banking Group
Slide 17: Changing trend in total fees development
Net Fees and Commissions Changing trend in total fees development CZK million, consolidated. Restatement based on same consolidation scope as 1H 2006 Group Net Fees and Commissions Contributions to Consolidated F&C KB Non-FX FX clean payments FX other transactions Group companies 4,320 + 2.6% 4,434
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 1H 2006 (MPSS has no impact on NPFO) Net Profit from Financial Operations Contributions to Consolidated NPFO Profit from FX oper
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 1H 2006 Total Group Expenses Composition Contributions to Consolidated Expenses Personnel costs General admin. costs Depreciation Personnel General admi
Slide 20: Cost of risk
Cost of risk Group cost of risk at 39bp and for KB standalone at 34bp CZK million. Restatement based on same consolidation scope as 1H 2006 Total Group Cost of Risk Composition Contributions to loan loss provisions Provisions for loan losses Provisions for other risk expenses KB Group companies -845
Slide 21: KB Group Balance Sheet
KB Group Balance Sheet Assets Liabilities CZK billion, consolidated KB Group Group companies 639.3 639.3 KB standalone 598.1 12.1 598.1 24.7 15.0 14.6 512.8 512.8 507.4 Cash and balances 11.7 227.2 Amounts due 23.9 481.3 with central bank to banks 208.7 397.0 Amounts due 215.5 from banks 274.6 252.5
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: - 6,111 as at 30 June 2007: 50,598 44,487 Shareholders’ equity 12/ 2006 1/1/2007 Increase Decrease 6/2007 Share capital 19,005 19,005
Slide 23: Contents
Contents n Business Highlights n Consolidated Financial Results n Loan Portfolio Quality and Development n Appendix Komerční banka 22
Slide 24: Overall quality of loan portfolio under control
KB Group Loan Quality Overall quality of loan portfolio under control CZK million, consolidated. Restatement based on same consolidation scope as 1H 2006 Gross client loans 283,332 +31.7% Standard loans Watch loans +18.8% 255,652 Loans under special review 215,161 • Share of standard loans in total
Slide 25: Improved provision coverage
KB Group Loan Coverage Improved provision coverage CZK million, consolidated. Restatement based on same consolidation scope as 1H 2006 Specific provisions and reserves 8,770 9,113 +25.4% Watch loans +20.6% 650 Loans under special review 7,269 601 +8.5% 599 +0.3% • Increase in overall specific provis
Slide 26: Contents
Contents n Business Highlights n Consolidated Financial Results n Loan Portfolio Quality and Development n Appendix Komerční banka 25
Slide 27: Business performance of subsidiaries
Business performance of subsidiaries 1H 2006 1H 2007 YoY change § Volume of new loans (CZK mil) 5,105 5,589 +9% § Volume of total loans (gross, CZK mil) 21,377 27,680 +29% § Volume of new saving contracts (target sum, 12,251 14,998 +22% CZK mil) MPSS § Volume of total saving contracts (CZK mil) 54,5
Slide 28: Business performance of subsidiaries
Business performance of subsidiaries 1H 2006 1H 2007 YoY change § Factoring turnover (CZK mil) 8,054 8,582 +7% Factoring § New contracts (number) 168 121 -28% KB § Number of FTEs 38 41 +8% § Total client loans (gross, CZK mil) 2,611 3,510 +34% § Total client deposits (CZK mil) 2,061 3,224 +56% KBB §
Slide 29: Subsidiary and associated undertakings results
Subsidiary and associated undertakings results As at 30 June 2007, CZK mil. Share of KB Net profit YoY Equity YoY Assets YoY ESSOX, s.r.o. (IFRS) 50.9% 22 +/- 1,205 +5,377% 5,726 +80% Factoring KB, a.s. * 100% 10 -38% 1,299 +634% 4,037 +62% Komerční banka Bratislava, a.s. (IFRS) 100% 32 +28% 718 +27
Slide 30: Unconsolidated Financial Results
KB Financial Results Unconsolidated Financial Results Profit and Loss Statement 1H 2006 1H 2007 Change CZK million, unaudited YoY Net banking income 12,386 12,793 3.3% Operating costs - 5,565 - 5,909 6.2% Net operating income 6,820 6,884 0.9% Cost of risk - 783 - 681 -13.0% Profit before income taxe
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 +18.6% Other 249.5 230.4 233.5 220.6 210.3 80.9 32% 72.0 75.6 ■ Year-on-year growth of the loan port
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) + 15.3% 428.0 386.9 394.9 397.6 371.1 ■ Depositary base increased by
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: - 5,393 as at 30 June 2007 48,683 43,290 Shareholders’ equity 12/2006 1/1/2007 Increase Decrease 6/2007 Share capital 19,005 19,005 - - 1
Slide 34: Number of clients and distribution network
Clients and Network Number of clients and distribution network As of 30 June 2007, year-on-year comparison n Clients 4 KB bank 1,544,000 clients - increase by 60,000 (+4%) • of which 1,261,000 are individual clients (+5%) 4 MPSS 783,000 clients 4 PFKB 448,000 clients 4 Essox 161,000 active clients n
Slide 35: KB consolidated group
KB consolidated group KOMERČNÍ BANKA PENSION BUILDING CORPORATE CONSUMER INSURANCE OTHERS INSURANCE SOCIETY SERVICES CREDIT Penzijni fond Modra pyramida Factoring KB ESSOX Komercni KB st. sporitelna pojistovna 100% 100% 100% 51% 49% KB Bratislava (Slovakia) 100% MPSS: PFKB: - Until 3Q 2006 equity me
Slide 36: 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 +3.0 Households income (%) + 4.9 + 4.8 + 5.8 + 6.0 +5.5 M2 (%) + 4.4 + 8.0 + 9.9 + 10.0 +9.5 3M PRIBOR (%, average) 2.4 2.0 2.3
Slide 37: Interest Rates Evolution
31 /1 2/ 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 01 31 /3 / 02 30 /6 / 02 30 /9 / 02 31 /1 2/ Komerční banka 02 31 /3 / 03 30 /6 / 03 30 /9 Interest Rates Evolution / 03 31 /1 2/ Pribor 3M 03 31 /3 /0 4 30 /6 /0 4 30 /9 Pribor 6M /0 4 31 /1 2/ 04 31 /3 /0 5 30 /6 /0 5 30 /9 /0 5 KB Reference Rate 31
Slide 38: Development of KB’s share price and PX Index
KB share price Development of KB’s share price and PX Index CZK 4,350 1,950 4,150 1,850 1,750 3,950 1,650 3,750 1,550 3,550 1,450 3,350 1,350 3,150 1,250 2,950 1,150 2,750 1,050 950 2,550 850 2,350 750 2,150 650 1,950 550 1,750 450 02 03 04 05 06 3 3 3 4 4 4 5 5 5 6 6 6 7 7 /0 /0 /0 /0 /0 /0 /0 /0 /
Slide 39: Structure of Shareholders
KB Shareholders Structure of Shareholders Major shareholders of Komerční banka, a. s. as of 25 May 2007 Number of shares outstanding – 38,009,852 Free Float: 39.65% Société Générale S.A. 60.35% Others 31.32% Investors Bank & Trust Co.* 8.33% * Shares held on behalf of third parties Komerční banka 38
Slide 40: Investor Relations - Contacts
Contacts Investor Relations - Contacts JAKUB ČERNÝ Head of Investor Relations Phone: +420-222 432 156 Email: jakub_cerny@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@kb.cz