Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — Q3 2024 Earnings Presentation
39 slides from Komercni Banka, A.s's earnings presentation, Oct 31, 2024
Slide 1: Komerční banka Group consolidated unaudited results as of 30 September 2024
Prague, 31 October 2024 Komerční banka Group Consolidated unaudited results as of 30 September 2024
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 Highlights as of 30 September 2024 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Transformation journey and updated 2025 outlook Appendix KB Group results as of 30 September 2024 3
Slide 4: Nine months of 2024: Strong profitability, growing client base, progress in transformation
Highlights 9M&Q3 2024 Nine months of 2024: Strong profitability, growing client base, progress in transformation Nine months 2024 Three months 2024 Business performance Indicators financial results financial results Deposits Core Tier 1 ratio Total capital ratio Reported Group net income Reported Gr
Slide 5: Agenda
Agenda Highlights as of 30 September 2024 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Transformation journey and updated 2025 outlook Appendix KB Group results as of 30 September 2024 5
Slide 6: Economic recovery driven by domestic consumption
Czech Republic - macro Economic recovery driven by domestic consumption Czech GDP development (% year-on-year) 8 4.0 KB Economic 6 Research Forecast GDP in 3Q 20241) up by 0.3% QoQ and up by 1.3% YoY according to flash estimate. 2.9 0.0 4 0.8 1.5 2.2 YoY growth supported by final consumption and net
Slide 7: Agenda
Agenda Highlights as of 30 September 2024 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Transformation journey and updated 2025 outlook Appendix KB Group results as of 30 September 2024 7
Slide 8: Gross loans to clients up 3.7%, strong sales of housing loans
Loans to clients Gross loans to clients up 3.7% Group lending (excl. repo, incl. client bonds) Strong sales of housing loans (CZK billion) +3.7% +1.7% Net loans to deposits ratio at 80.0%. Liquidity coverage ratio 169%. Net stable funding 794.6 808.3 827.7 825.5 824.1 838.2 ratio 143% 88.5 90.6 92.5
Slide 9: Selected corporate deals 3Q 2024
Tombstones Selected corporate deals 3Q 2024 KB Group results as of 30 September 2024 9
Slide 10: Client deposits +3.4%, Other AUM up +13.7%
Deposits and other AUM Client deposits +3.4%, Other AUM up +13.7% Group deposits (excluding repo operations) Dynamic growth of managed clients’ assets (CZK billion) +3.4% -0.2% Non-deposit assets under management 1,022.4 1,049.8 1,059.4 1,057.5 994.7 1,006.2 (CZK billion) 52.8 51.3 50.8 50.4 -4.5% +
Slide 11: Agenda
Agenda Highlights as of 30 September 2024 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Transformation journey and updated 2025 outlook Appendix KB Group results as of 30 September 2024 11
Slide 12: Net profit improving even excluding one-off gain
Profit & Loss Net profit improving even excluding Development of quarterly net profit… (CZK million) one-off gain -12.8% Drivers for year-on-year change in attributable net profit +5.1% 6,195 (as of 30 September 2024) +1.5% 4,525 4,267 -18.5% 3,259 3,540 3,719 2,804 12,353 328 30 491 2,475 12,539 2Q
Slide 13: Balance sheet growth by 9.8% year-on-year
Statement of financial position Balance sheet growth by 9.8% year-on-year Assets Liabilities and Equity (CZK billion) +9.8% Year-on-year (CZK billion) +9.8% Year-on-year +9.5% +9.5% 1,660 1,660 1,512 1,516 1,512 1,516 74 -37.9% 119 106 548 24.6% 440 424 1,319 17.3% 1,125 1,127 846 4.5% 810 834 3.2%
Slide 14: Net interest income
Net interest income Lower deposit costs, stable lending spreads, Year-to-date -3.3% effect of cost of MREL and mandatory reserves (CZK million) 19,320 18,691 1,627 -15% 1,383 Net interest margin (%) Other 1.91% 1.99% 1.86% 1.96% 1.75% 1.94% 1.69% 1.69% 1.64% 1.71% 1.64% 1.64% NII from deposits 8,479
Slide 15: Fee income growth driven by wealth management, services for corporates
Net fees and commissions Fee income growth driven by wealth Year-to-date +7.1% management, services for corporates (CZK million) 4,925 4,597 Transaction fees Transaction fees 3% 1,373 1,334 Increase driven mainly by continued dynamic growth in card payments. Deposit product fees -9% 555 Increasing t
Slide 16: Solid result on improved activity in hedging, conversions
Net profit from financial operations Solid result on improved activity in Year-to-date -2.0% hedging, conversions (CZK million) 2,839 2,783 Capital markets 1,181 1,116 Net gains on FX from payments -6% Capital markets Other Some additional client flows and demand of exporters and importers for hedgi
Slide 17: Operating expenditures under control
Operating expenditures Operating expenditures under control Year-to-date +2.5% (CZK million) Personnel expenses – decrease in number of employees (-0.7% YoY to 7,487 in 9M Personnel costs -6,222 6% -6,581 2024; -0.9% YoY to 7,414 in 3Q 2024; average FTE), as effect of simplification is partly GAE (e
Slide 18: Agenda
Agenda Highlights as of 30 September 2024 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Transformation journey and updated 2025 outlook Appendix KB Group results as of 30 September 2024 18
Slide 19: 3Q 2024 Asset quality
Loan portfolio quality 3Q 2024 Asset quality Group lending (CZK billion) 808.3 827.7 825.5 824.1 838.2 794.6 Loan portfolio up by 3.7% YoY and by 0.7% QoQ QoQ stable Stage 2 share at 14.5% 672.9 685.9 690.4 684.4 685.1 699.6 QoQ stable NPL share at 2.0% (vs. 2.0% in 2Q 2024) 105.1 16.6 105.9 16.5 12
Slide 20: 3Q and 9M 2024 Cost of risk development
Cost of risk 3Q and 9M 2024 Cost of risk development Total Cost of risk development (CZK million) 466 138 3Q 2024 CoR net creation at CZK 369 million 501 -1 79 2 202 -1 0 112 1 -35 -144 -214 -168 • CZK 168 million net creation on non-retail exposures driven by one -315 -202 -680 -169 -100 material e
Slide 21: Agenda
Agenda Highlights as of 30 September 2024 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Transformation journey and updated 2025 outlook Appendix KB Group results as of 30 September 2024 21
Slide 22: Stable regulatory capital ratio safely above regulatory requirement
Capital Stable regulatory capital ratio safely above regulatory requirement Contributions to shareholders’ equity in 9M 2024 (CZK million) 12,539 -15,612 Total capital adequacy at 19.0% over the applicable Overall Capital Minimum of 128,284 90 125,115 16.4% effective from 1 July 2024 (due to decreas
Slide 23: Agenda
Agenda Highlights as of 30 September 2024 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Transformation journey and updated 2025 outlook Appendix KB Group results as of 30 September 2024 23
Slide 24: Assumptions and outlook for 2024
Outlook for 2024 Assumptions and outlook for 2024 The text below updates and replaces outlook for 2024 first presented alongside release of KB’s full year 2023 results on 8 February 2024 and updated with 1st quarter 2024 results on 3 May 2024 and with 2nd quarter results on 1 August 2024. Investors
Slide 25: Agenda
Agenda Highlights as of 30 September 2024 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Transformation journey and updated 2025 outlook Appendix KB Group results as of 30 September 2024 25
Slide 26: Delivering results in the transformative journey, #KB2025
Delivering results in the transformative journey, #KB2025 New Digital Bank - Fundamentally simplified and digitalised new client proposition based on a completely new technology stack • Retail clients onboarding and migration to the New Digital Bank is full speed. A total of 717,000 users enrolled i
Slide 27: Updated financial targets for 2025
Updated financial targets for 2025 ▪ Revenue growth expected to accelerate in 2025 with growing business volumes, improved functionalities of the New Digital Bank for retail clients as well as an increasing sales activity allowed by gradual relief of distribution capacity from migration assistance.
Slide 28: Agenda
Agenda Highlights as of 30 September 2024 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Transformation journey and updated 2025 outlook Appendix KB Group results as of 30 September 2024 28
Slide 29: Number of clients and distribution network
KB Group clients and distribution network Number of clients and distribution network Number of bank clients 30-Sep-23 30-Sep-24 YoY (thousands, CZ) Number of clients 1,664 1,641 1,625 1,652 1,664 1,709 KB Group’s clients 2,218,000 2,184,000 -34,000 Komerční banka 1,665,000 1,709,000 44,000 – Individ
Slide 30: Income statement – reported
Consolidated income statement Income statement – reported Year-to-date Quarter-to-date (CZK million, unaudited) 9M 2023 9M 2024 YoY 3Q 2023 2Q 2024 3Q 2024 YoY QoQ Net interest income 19,320 18,691 -3.3% 6,507 6,158 6,256 -3.9% 1.6% Net fee & commission income 4,597 4,925 7.1% 1,548 1,670 1,666 7.6%
Slide 31: Income statement – recurring
Consolidated income statement Income statement – recurring* Year-to-date Quarter-to-date (CZK million, unaudited) 9M 2023 9M 2024 YoY 3Q 2023 2Q 2024 3Q 2024 YoY QoQ Net interest income 19,320 18,691 -3.3% 6,507 6,158 6,256 -3.9% 1.6% Net fee & commission income 4,597 4,925 7.1% 1,548 1,670 1,666 7.
Slide 32: Balance sheet
Consolidated statement of financial position Balance sheet (CZK million, unaudited) 30-Sep-23 31-Dec-23 30-Sep-24 YoY rel. YoY abs. Ytd rel. Ytd abs. Assets 1,512,109 1,516,302 1,659,905 9.8% 147,796 9.5% 143,603 Cash and current balances with central bank 11,590 12,835 24,313 >100% 12,723 89.4% 11,
Slide 33: Capital & profitability indicators
Financial ratios Capital & profitability indicators Reported Recurring* (year-to-date, IFRS 9) 30-Sep-23 31-Dec-23 30-Sep-24 30-Sep-23 30-Sep-24 Capital adequacy 20.2% 18.8% 19.0% Tier 1 ratio = Core Tier 1 ratio 19.6% 17.7% 17.9% Risk weighted assets for credit risk (CZK billion) 433.7 452.3 448.7
Slide 34: Business performance of subsidiaries (1/2)
Overview of KB subsidiaries Business performance of subsidiaries (1/2) 9M 2023 9M 2024 YoY Modrá pyramida (100%) building savings & loans company Volume of new loans (CZK million) 7,541 9,308 23% Volume of total loans (gross, CZK million) 90,607 96,376 6% Volume of deposits (CZK million) 52,759 50,3
Slide 35: Business performance of subsidiaries (2/2)
Overview of KB subsidiaries Business performance of subsidiaries (2/2) 9M 2023 9M 2024 YoY Factoring KB (100%) factoring company Factoring turnover (CZK million) 53,856 54,064 0.4% Volume of total financing (gross, CZK million) 8,977 10,060 12% Average number of FTEs 14 1* -93% KB Pojišťovna (49%) u
Slide 36: Capital requirements, MREL, Tier 2
MREL, TIER 2 Capital requirements, MREL*, Tier 2 Own funds and eligible liabilities (for MREL) 29.9% Total requirement = MREL + CBR MREL requirement 21.2% RWA, 5.91% Total Risk Exposure 10.9% (27% as of 30 September 2024) Total requirement = MREL + CBR = 21.2% + 5.75% = 26.95% (as of 30 September 20
Slide 37: Czech macroeconomic environment and interest rates
Czech macroeoconomic environment and interest rates Czech macroeconomic environment and interest rates Macroeconomic Indicators 2022 2023 2024* 2025* 2026* Interest rates evolution Real GDP (%, average) 2.9 0.0 0.8 1.5 2.2 For the period 1 Jan 2015 – 30 September 2024 Household consumption (%, avera
Slide 38: KB - #1 listed Czech bank
KB shares and shareholder structure KB - #1 listed Czech bank Shareholder structure Development of KB share price and PX index (1 January 2001 – 30 September 2024) 600 500 Free-float 400 39.6% 300 200 60.4% Société Genérále 100 0 2005 2010 2015 2020 2025 KB PX • The number of shareholders comprised
Slide 39: Investor relations
Investor relations Komerční banka, a.s. Na Příkopě 33, 114 07 Prague 1 Email: investor_relations@kb.cz Tel.: +420 955 532 156, +420 955 532 734 Internet: www.kb.cz/investors Twitter: @KB_investors Reuters: BKOM.PR Bloomberg: KOMB CP