Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — Q1 2022 Earnings Presentation
38 slides from Komercni Banka, A.s's earnings presentation, May 5, 2022
Slide 1: KB Group Results as of 31 March 2022
PRAGUE, 5 MAY 2022 KB GROUP RESULTS AS OF 31 MARCH 2022 According to IFRS, Consolidated, Unaudited
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 Highlights as of 31 March 2022 & ESG Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook update for 2022 Appendix KB GROUP AS OF 31 MARCH 2022│ 5 MAY 2022 │ 3
Slide 4: Highlights as of 31 March 2022
HIGHLIGHTS AS OF 31 MARCH 2022 Komerční banka – strong performance in a mixed environment Non-bank Loans (gross) * Client deposits * assets under management CZK 750.7 bil./ +8.1% YoY CZK 1,015.1 bil. / +3.0% YoY CZK 206.9 bil. / +7.6% YoY Revenues Operating expenses Cost of Risk CZK 9.5 bil. / +27.7
Slide 5: Reinforcing resilience by acting responsibly also in 1Q 2022
ESG REINFORCING RESILIENCE BY ACTING RESPONSIBLY ALSO IN 1Q 2022 ENVIRONMENT SOCIAL GOVERNANCE KB on path to carbon neutrality by 2026. Supporting the civilian victims of the war in On behalf of the Deposit Insurance Fund as of Greenhouse gas emissions in 2021 down 32.5% Ukraine (including approx. 3
Slide 6: Contents
CONTENTS Highlights as of 31 March 2022 & ESG Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook update for 2022 Appendix KB GROUP AS OF 31 MARCH 2022│ 5 MAY 2022 │ 6
Slide 7: Economy facing a number of difficulties
CZECH ECONOMY ECONOMY FACING A NUMBER OF DIFFICULTIES • GDP in 1Q 2022 +0.7% QoQ and +4.6% YoY, driven by household Czech GDP growth (%, YoY) consumption and fixed investments1 10 3.4 3.2 5 3.0 1.8 2.8 • Manufacturing and construction affected by supply chain disruptions and inflation in input price
Slide 8: Contents
CONTENTS Highlights as of 31 March 2022 & ESG Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook update for 2022 Appendix KB GROUP AS OF 31 MARCH 2022│ 5 MAY 2022 │ 8
Slide 9: Mobile banking prevailing in interactions with clients
DIGITAL & INNOVATIONS MOBILE BANKING PREVAILING IN INTERACTIONS WITH CLIENTS Awards in 1Q 2022 Mobile banking – volume of payments Mobile banking and KB Key Mastercard Awards – The Best Innovation of the year – KB’s (CZK billion per month) penetration (in thousands) League of Legends Esport card 1,2
Slide 10: Gross lending up 8.1% YoY
LOANS TO CLIENTS GROSS LENDING UP 8.1% YOY Group lending (w/o repo, but incl. client bonds) CZK billion Group business and other loans CZK billion +8.1% (w/o repo, but incl. client bonds) +1.6% +7.5% YoY +1.9% 708.1 724.8 738.9 750.7 691.4 694.7 YoY 69.0 72.5 76.0 78.8 +19.2% 63.9 66.1 361.0 366.9 3
Slide 11: Selected deals of the 1Q 2022
SELECTED DEALS SELECTED DEALS OF THE 1Q 2022 GAMING WHOLESALE TRADE REAL ESTATE REAL ESTATE WHOLESALE TRADE SAZKA Group a.s. EP Commodities CPI Property Group Accolade CZ 43, s.r.o., člen koncernu PRO-DOMA, SE Guarantee Facility Comprehensive Financing Package 8y Sustainability-Linked Bonds Syndicat
Slide 12: Client deposits up by 3.0% YoY, other AUM +7.6%
DEPOSITS AND OTHER AUM CLIENT DEPOSITS UP BY 3.0% YOY, OTHER AUM +7.6% GROUP DEPOSITS (excluding repo operations)LIENT NON-BANK ASSETS UNDER MANAGEMENTLIENT +3.0% CZK billion +7.0% CZK billion +7.6% YoY YoY 985.7 996.9 1,043.1 1,015.1 203.6 206.9 893.0 948.6 190.3 192.2 196.3 199.5 60.5 60.5 60.4 58
Slide 13: Contents
CONTENTS Highlights as of 31 March 2022 & ESG Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook update for 2022 Appendix KB GROUP AS OF 31 MARCH 2022│ 5 MAY 2022 │ 13
Slide 14: Positive operating jaws, limited increase in risk costs
R E C O N C I L I A T IPORNO O F IFT I & N CLOOM SSE POSITIVE OPERATING JAWS, LIMITED INCREASE IN RISK COSTS Drivers for year on year change in attributable net profit Development of quarterly net profit and its drivers (as of 31 March 2022) +75.9% +75.9% -15.7% 1,852 119 84 308 3,513 4,169 3,513 -2
Slide 15: Overall balance sheet growth steady
STATEMENT OF FINANCIAL POSITION OVERALL BALANCE SHEET GROWTH STEADY Assets Liabilities and Equity CZK billion +8.9% CZK billion +8.9% +12.4% +12.4% YoY YoY 1,398 1,398 1,283 1,244 1,283 1,244 124 +44.5% 407 +3.8% 86 83 392 287 +3.8% +8.7% 1,051 1,012 957 725 739 680 2 13 174 191 209 +19.9% 3 49 14 2
Slide 16: Strong solvency ratios
CAPITAL, RWA STRONG SOLVENCY RATIOS Contributions to capital adequacy ratio in 1Q 2022 (%) Contributions to equity in 1Q 2022 (CZK million) -112 bps 21.31 62 129,556 3,513 -801 -1.04 -0.47 126,782 0.73 20.19 -0.12 -0.21 31 Dec RWA RWA Interim Provision OCI & 31 Mar 1 Jan 2022 YtD profit Revaluations
Slide 17: Interest income growth driven by rates, volumes
NET INTEREST INCOME INTEREST INCOME GROWTH DRIVEN BY RATES, VOLUMES +37.0% Net interest margin (%) QtD NII 6.3% YtD 2.22% 2.22% 6,856 1.85% 2.03% 1.73% 1.73% 1.60% 1.70% 1.68% 1.70% 2.09% 1.93% 6,448 496 332 5,261 5,390 5,004 4,953 229 242 276 291 3,049 3,121 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021
Slide 18: Uptrend of fees
NET FEES AND COMMISSIONS UPTREND OF FEES NFC +8.7% ▪ Transaction fees – strong YoY recovery of all transaction types -3.3% from locked down 1Q21. Seasonally weaker than 4Q21 1,544 1,493 1,350 1,374 1,418 1,376 441 401 ▪ Deposit product fees – stable along with the client base 425 345 406 414 195 196
Slide 19: Strong demand for hedging of financial risks
NET PROFIT FROM FINANCIAL OPERATIONS STRONG DEMAND FOR HEDGING OF FINANCIAL RISKS NPFO +7.9% ▪ Strong client hedging activity linked to high volatility of CZK FX +60.1% and IR rates caused by the rapid CNB monetary tightening and 1,081 1,002 953 1,000 by first implications of the Russian invasion to
Slide 20: Opex growth under control despite much increased regulatory levies
OPEX GROWTH UNDER CONTROL OPERATING EXPENDITURES DESPITE MUCH INCREASED REGULATORY LEVIES Average number of employees (quarterly) +9.8% OPEX 1Q22/1Q21 +27.3% -3.3% 7,949 7,820 7,676 7,621 7,635 7,564 1Q22/4Q21 -1,836 -1,824 -1,843 -1,933 -1,939 -1,871 -0.9% 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q
Slide 21: Contents
CONTENTS Highlights as of 31 March 2022 & ESG Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook update for 2022 Appendix KB GROUP AS OF 31 MARCH 2022│ 5 MAY 2022 │ 21
Slide 22: 1Q 2022 asset quality
LOAN PORTFOLIO QUALITY 1Q 2022 ASSET QUALITY Gross lending CZK billion 750.7 695.4 708.1 724.8 738.9 691.4 691.4 ▪ Loan portfolio up 8% YoY and 1.6% QoQ 672.4 628.8 621.6 630.7 643.2 663.6 663.3 ▪ Stable credit risk profile of KB loan portfolio • NPL ratio slightly down to 2.4%, driven by low defaul
Slide 23: 1Q 2022 cost of risk development
COST OF RISK 1Q 2022 COST OF RISK DEVELOPMENT Total Cost of Risk (Year-to-date, in basis points) ▪ 1Q 2022 CoR net creation at CZK 278 million ▪ CZK 206 million created on non-retail portfolios • New provisions on Russia-related exposures following selective line- by-line portfolio reviews • Continu
Slide 24: Contents
CONTENTS Highlights as of 31 March 2022 & ESG Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook update for 2022 Appendix KB GROUP AS OF 31 MARCH 2022│ 5 MAY 2022 │ 24
Slide 25: Updated outlook for 2022
OUTLOOK FOR 2022 UPDATED OUTLOOK FOR 2022 This replaces the original outlook presented on 10 February 2022, mainly due to the effects of the Russian invasion of Ukraine. Investors are advised to consider higher than usual level of uncertainty and risks Macroeconomic • Czech GDP growth forecast for 2
Slide 26: Contents
CONTENTS Highlights as of 31 March 2022 & ESG Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook update for 2022 Appendix KB GROUP AS OF 31 MARCH 2022│ 5 MAY 2022 │ 26
Slide 27: Number of clients and distribution network
KB GROUP CLIENTS AND DISTRIBUTION NETWORK NUMBER OF CLIENTS AND DISTRIBUTION NETWORK 1Q 2021 1Q 2022 YoY Number of bank clients (thousands, CZ) Number of clients KB Group's clients 2,286,000 2,253,000 -32,000 1) 1,664 1,667 1,664 1,641 1,625 1,636 Komerční banka 1,641,000 1,636,000 -5,000 1) – indiv
Slide 28: Income statement
CONSOLIDATED INCOME STATEMENT INCOME STATEMENT Profit and Loss Statement Reported Change Change (CZK million, unaudited) 1Q 2021 4Q 2021 1Q 2022 YoY QoQ Net interest income 5,004 6,448 6,856 37.0% 6.3% Net fee & commission income 1,374 1,544 1,493 8.7% -3.3% Net profit of financial operations 1,002
Slide 29: Balance sheet
CONSOLIDATED STATEMENT OF FINANCIAL POSITION BALANCE SHEET Balance Sheet 31 Mar 31 Dec 31 Mar YoY YoY Ytd Ytd (CZK million, unaudited) 2021 2021 2022 rel. abs. rel. abs. Assets 1,283,490 1,244,353 1,398,297 8.9% 114,807 12.4% 153,944 Cash and current balances with central bank 23,612 29,947 57,491 >
Slide 30: Capital & profitability indicators
FINANCIAL RATIOS CAPITAL & PROFITABILITY INDICATORS Adjusted for IFRIC 21 Reported linearisation* (year-to-date, IFRS 9) 31/03/2021 31/12/2021 31/03/2022 31/03/2021 31/03/2022 Capital adequacy 22.5% 21.3% 20.2% Tier 1 ratio = Core Tier 1 ratio 21.8% 20.9% 19.8% Risk weighted assets for credit risk (
Slide 31: 1Q 2022 cost of risk structure
APPENDIX - COMPOSITION OF 1Q 2022 COST OF RISK 1Q 2022 COST OF RISK STRUCTURE Key components Contribution to 1Q 2022 CoR Non-retail NPL portfolio 10 bps Non-retail performing portfolio (Stages 1 & 2) 1 bps Retail NPL portfolio -2 bps Retail performing portfolio (Stages 1 & 2) 6 bps TOTAL 15 bps KB G
Slide 32: Business performance of subsidiaries 1/2
BUSINESS PERFORMANCE OF SUBSIDIARIES OVERVIEW OF KB SUBSIDIARIES 1/2 1Q 2021 1Q 2022 YoY Modrá pyramida (100%), #2 building savings & loans company Volume of new loans (CZK million) 7,264 6,548 -10% Volume of total loans (gross, CZK million) 66,145 78,843 19% Volume of deposits (CZK million) 60,511
Slide 33: Business performance of subsidiaries 2/2
BUSINESS PERFORMANCE OF SUBSIDIARIES OVERVIEW OF KB SUBSIDIARIES 2/2 1Q 2021 FY 2021 YoY Factoring KB (100%), #1 on the Czech factoring market Factoring turnover (CZK million) 13,311 18,475 39% Volume of total financing (gross, CZK million) 8,143 9,454 16% Average number of FTEs 41 42 1% Komerční po
Slide 34: Debt securities portfolio in the banking book
SECURITIES DEBT SECURITIES PORTFOLIO IN THE BANKING BOOK CZK billion 164.2 147.6 130.8 112.1 Slovakia 5.2 152.6 11.5 6.3 Poland 0.0 35.5 33.4 Czech sovereign securities 31/12/2021 31/03/2022 Foreign government bonds Debt securities at amortized cost Corporations Debt securities at FV through OCI Not
Slide 35: Macroeconomic environment – Czechia
MACROECONOMIC ENVIRONMENT – CZECHIA Macroeconomic Indicators 2016 2017 2018 2019 2020 2021 2022* 2023* Real GDP (%, average) 2.4 5.4 3.2 3.0 -5.8 3.4 1.8 2.8 Inflation (%, average) 0.7 2.5 2.1 2.8 3.2 3.8 12.6 7.2 Household consumption (%, average) 3.7 4.1 3.3 2.6 -7.0 4.5 2.0 0.9 Unemployment (%, a
Slide 36: Interest rates evolution
INTEREST RATES EVOLUTION For the period 1 Jan 2015 – 30 April 2022 KB GROUP AS OF 31 MARCH 2022│ 5 MAY 2022 │ 36
Slide 37: KB #1 listed Czech bank
KB #1 LISTED CZECH BANK Development of KB share price and PX index (1 January 2001 – 30 April 2022) Shareholder structure Free-float 39.6% Société Générale 60.4% • The number of shareholders comprised 60,857 corporate entities and private individuals. • Of the Bank’s total share capital of CZK 19,00
Slide 38: 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, +420 955 532 155, +420 955 532 734 Internet: www.kb.cz/investors Twitter: @KB_investors Reuters: BKOM.PR Bloomberg: KOMB CP KB GROUP AS OF 31 MARCH 2022│ 5 MAY 2022 │ 38