Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — Q1 2007 Earnings Presentation
38 slides from Komercni Banka, A.s's earnings presentation, May 11, 2007
Slide 1: KB Group 1Q 2007 Financial Results
JJ Mois Année KB Group 1Q 2007 Financial Results (International Financial Reporting Standards) Prague – 11 May 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: 1Q 2007: Growth of Group's revenues
1Q 2007: Growth of Group‘s revenues n Further expansion of client base, sales force and network 4 Increase in number of KB Group clients by 49,000 year-on-year 4 Increase of employees directly involved in sales activities 4 Private Banking branch and Expat-center opened in 1Q 4 Zlin selected as a lo
Slide 5: Significant growth in consolidated profit without one-offs
Significant growth in consolidated profit without one-offs CZK million Profit and Loss without one-offs 1Q 2006 1Q 2007 Change (pro-forma) Net banking income 6,165 6,592 6.9% Net interest income 3,714 4,043 8.9% Non-interest income 2,451 2,549 4.0% Operating costs - 2,947 - 3,029 2.8% Personnel expe
Slide 6: Main business achievements
Main business achievements As of 31 March 2007, year-on-year comparison n Improvement in the cross-selling ratio for individuals to 5.26 from 5.02 in 1Q 2006 n Emphasis on card business: the number of active credit cards increased 34% to 177,655 n Continuing dynamic performance in the children and y
Slide 7: Development of new products to meet clients needs
Development of new products to meet clients needs n 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 – KB Flexible mortgage. n With newly introduced „all-inclusive“ packages Extra
Slide 8: Sales of subsidiaries' and 3rd parties' products
Sales of subsidiaries’ and 3rd parties’ products As of 31 March 2007, year-on-year comparison n Continued growth of PF KB sales: number of new contracts increased by 6% to reach 29,603 n Consumer financing by ESSOX continued to rise: sales volume up 22% to CZK 867 million n Growth in factoring: turn
Slide 9: Group lending activities
Building saving loans Group lending activities Mortgages to individuals Consumer loans As of 31 March 2007, CZK billion Business loans Other loans +17.8% 260.7 265.3 248.8* n Corporate loans grew by 15% YoY: 236.5* 26.0 24.7 225.2* 22.9 4 Small businesses (KB) +23% to CZK 12.2 bil. 21.4 Retail 20.3
Slide 10: Group deposits
Building savings Group deposits KB individual deposits Clients’ pension assets As of 31 March 2007, CZK billion Business deposits Other deposits n KB represents 83% of CZK 490 billion of total +9.3% 480.1 490.1 depositary base, of which: 451.5* 467.9* 448.3* 59.8 4 KB individuals deposits CZK 137 bi
Slide 11: Contents
Contents n Business Highlights n Consolidated Financial Results n Loan Portfolio Quality and Development n Appendix Komerční banka 10
Slide 12: Consolidated Financial Results
Financial Results of KB Group Consolidated Financial Results Profit and Loss Statement 1Q 2006 1Q 2007 Change 1Q 2007 Change CZK million, unaudited restated* YoY reported YoY Net interest income 3,881 4,043 4.2% 4,237 9.2% Net fees & commissions 2,110 2,175 3.1% 2,241 6.2% Income from financial oper
Slide 13: Consolidated Financial Ratios
Financial Results of KB Group Consolidated Financial Ratios Key ratios and indicators 3/2006 3/2007 YoY 3/2007 YoY restated* reported Capital Adequacy 12.8% 12.4% 11.2% Tier 1 Ratio 13.3% 11.2% 9.8% Risk weighted assets (CZK billion) 261 305 16.9% 327 25.3% Net Interest Margin (NII/Av. Interest Bear
Slide 14: 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 1Q 2006 Group Net Interest Income Composition Contributions to Consolidated NII Other NII from deposits KB NII from loans NII from Investment Banking Group
Slide 15: Total fees affected by rising business volumes
Net Fees and Commissions Total fees affected by rising business volumes CZK million, consolidated. Restatement based on same consolidation scope as 1Q 2006 Group Net Fees and Commissions Contributions to Consolidated F&C KB Non-FX FX clean payments FX other transactions Group companies 2,241 YoY 2,2
Slide 16: Profit from financial operations improved
Financial Operations Income Profit from financial operations improved CZK million, consolidated. Restatement based on same consolidation scope as 1Q 2006 Net Profit from Financial Operations Contributions to Consolidated NPFO Profit from FX operations Profit from Commodity and IR KB Profit from secu
Slide 17: Total expenses increase driven by rising number of employees
Total operating costs Total expenses increase driven by rising number of employees CZK million, consolidated. Restatement based on same consolidation scope as 1Q 2006 Total Group Expenses Composition Contributions to Consolidated Expenses Personnel costs General admin. costs Depreciation Personnel G
Slide 18: Cost of risk
Cost of risk Group cost of risk at 45bp and for KB standalone at 38bp CZK million. Restatement based on same consolidation scope as 1Q 2006 Total Group Cost of Risk Composition Contributions to loan loss provisions Provisions for loan losses Provisions for other risk expenses KB Group companies -344
Slide 19: KB Group Balance Sheet
KB Group Balance Sheet Assets Liabilities CZK billion, consolidated KB Group Group companies 613,9 KB standalone 613.9 597.6 597.6 17.0 17.7 15 14.6 506,4 506.4 17.5 490.1 7.5 Amounts due Cash and balances 208.0 480.1 with central bank 208.7 to banks 393.3 Amounts due 233.5 from banks 252.5 256.6 Am
Slide 20: 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: + 1,629 as at 31 March 2007: 50,598 52,227 Shareholders’ equity 12/ 2006 1/1/2007 Increase Decrease 3/2007 Share capital 19,005 19,00
Slide 21: Contents
Contents n Business Highlights n Consolidated Financial Results n Loan Portfolio Quality and Development n Appendix Komerční banka 20
Slide 22: 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 1Q 2006 Gross client loans 265,300 +29.4% Standard loans 239,269 Watch loans +16.7% Loans under special review 204,956 • Share of standard loans in total
Slide 23: Improved provision coverage
KB Group Loan Coverage Improved provision coverage CZK million, consolidated. Restatement based on same consolidation scope as 1Q 2006 Specific provisions and reserves 8,814 +29.0% Watch loans +24.0% 8,467 Loans under special review 691 645 +22.1% 6,830 566 +14.0% • Increase in overall specific prov
Slide 24: Contents
Contents n Business Highlights n Consolidated Financial Results n Loan Portfolio Quality and Development n Appendix Komerční banka 23
Slide 25: Business performance of subsidiaries
Business performance of subsidiaries 1Q 2006 1Q 2007 YoY change § Volume of new loans (CZK mil) 2,525 2,439 -3% § Volume of total loans (gross, CZK mil) 20,259 26,031 +28% § Volume of new saving contracts (target sum, 6,263 7,500 +20% CZK mil) MPSS § Volume of total saving contracts (CZK mil) 54,924
Slide 26: Business performance of subsidiaries
Business performance of subsidiaries 1Q 2006 1Q 2007 YoY change § Factoring turnover (CZK mil) 3,707 3,942 +6% Factoring § New contracts (number) 75 58 -23% KB § Number of FTEs 38 39 - § Total client loans (gross, CZK mil) 2,445 3,257 +33% § Total client deposits (CZK mil) 2,311 2,871 +24% KBB § Num
Slide 27: Subsidiary and associated undertakings results
Subsidiary and associated undertakings results As at 31 March 2007, CZK mil. Share of KB Net profit YoY Equity YoY Assets YoY ESSOX, s.r.o. (IFRS) 50.9% 22 +/- 1,205 n.m. 5,292 95% Factoring KB, a.s. * 100% 7 -50% 199 11% 2,625 16% Komerční banka Bratislava, a.s. (IFRS) 100% 16 14% 702 +21% 4,601 -1
Slide 28: Unconsolidated Financial Results
KB Financial Results Unconsolidated Financial Results Profit and Loss Statement 1Q 2006 1Q 2007 Change CZK million, unaudited YoY Net banking income 6,017 6,209 3.2% Operating costs - 2,668 - 2,884 8.1% Net operating income 3,349 3,325 - 0.7% Cost of risk - 319 - 345 8.2% Profit on subsidiaries and
Slide 29: 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 +16.5% Corporates and Municipalities Top Corporations 230.4 233.5 Other 220.6 210.3 200.4 ■ Year-on-year growth of the loan portfolio 72.0 75.6 32
Slide 30: 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) + 8.2% 386.9 394.9 397.6 367.3 371.1 ■ Depositary base increased by 8
Slide 31: 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: + 1,457 as at 31 March 2007: 48,654 50,111 Shareholders’ equity 12/2006 1/1/2007 Increase Decrease 3/2007 Share capital 19,005 19,005 - -
Slide 32: Number of clients and distribution network
Clients and Network Number of clients and distribution network As of 31 March 2007, year-on-year comparison n Clients 4 KB bank 1,526,000 clients - increase by 49,000 (+3%) • of which 1,243,000 are individual clients (+4%) 4 MPSS 794,000 clients 4 PFKB 436,000 clients 4 Essox 155,000 active clients
Slide 33: 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: - 1-3Q equity method - Fu
Slide 34: Macroeconomic Environment
Macroeconomic Environment Czech Republic Macroeconomic indicators 2004 2005 2006 2007* 2008* Real GDP (%) + 4.2 + 6.1 + 6.1 + 5.0 +4.8 Inflation (%) + 2.8 + 1.9 + 2.5 + 2.0 +3.0 Households income (%) + 4.9 + 4.8 + 5.8 + 5.5 +5.0 M2 (%) + 4.4 + 8.0 + 9.9 + 9.0 +8.5 3M PRIBOR (%) 2.4 2.0 2.3 2.7 3.4 P
Slide 35: Interest Rates Evolution
31 /1 2/ 0 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 1 31 / 3/ 0 2 30 / 6/ 0 2 30 / 9/ 2 0 31 /1 2/ Komerční banka 02 31 /3 /0 3 30 /6 /0 3 30 Interest Rates Evolution /9 /0 3 Pribor 3M 31 /1 2/ 03 31 /3 /0 4 30 /6 Pribor 6M /0 4 30 /9 /0 4 31 /1 2/ 04 31 /3 /0 5 30 /6 /0 5 KB Reference Rate 30 /9 /0
Slide 36: Development of KB's share price and PX Index
KB share price Development of KB’s share price and PX Index CZK 4,150 1,850 3,950 1,750 3,750 1,650 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 31/12/02 31/3/03 30/6/03 30/9/03 31/12/03 31/3/04 30/6/04 30/9/04 31/12/04 31/3/
Slide 37: Structure of Shareholders
KB Shareholders Structure of Shareholders Major shareholders of Komerční banka, a. s. as at 18 April 2007 Number of shares outstanding – 38,009,852 Free Float: 39.65% Société Générale S.A. 60.35% Others 31.65% Investors Bank & Trust Co.* 8.00% * Shares held on behalf of third parties Komerční banka
Slide 38: 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