Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — FY2023 Earnings Presentation
41 slides from Komercni Banka, A.s's earnings presentation, Feb 8, 2024
Slide 1: Komerční banka Group consolidated unaudited results as of 31 December 2023
Prague, 8 February 2024 Komerční banka Group Consolidated unaudited results as of 31 December 2023
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 31 December 2023 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 December 2023 3
Slide 4: Highlights of FY & Q4 2023
Highlights of FY&Q4 2023 Full year 2023: Sound performance amidst ongoing transformation and stagflationary economy Good business Strong balance sheet Full year 2023 Fourth quarter 2023 performance Group net income Group net income Client loans Liquidity coverage ratio CZK 15.6 billion CZK 3.3 billi
Slide 5: Agenda
Agenda Highlights as of 31 December 2023 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 December 2023 5
Slide 6: Economy likely to grow again this year, albeit slowly
Czech Republic - macro Economy likely to grow again this year, albeit slowly Czech GDP development (% year-on-year) 10 3.6 KB Economic Research Forecast GDP in 4Q 20231 up by 0.2% QoQ and down -0.2% YoY. Economic activity in quarter- 5 2.2 2.4 0.8 on-quarter terms was supported by foreign demand and
Slide 7: Agenda
Agenda Highlights as of 31 December 2023 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 December 2023 7
Slide 8: Gross loans to clients up 5.5%
Loans to clients Gross loans to clients up 5.5% Group lending (w/o repo, but incl. client bonds) (CZK billion) +5.5% +2.4% Net loans to deposits ratio at 82.8%. Liquidity coverage ratio 149% 787.2 784.9 789.1 794.6 808.3 827.7 Retail loan demand influenced by expected development of interest rates.
Slide 9: Corporate deals 2H 2023
Tombstones Corporate deals 2H 2023 KB Group results as of 31 December 2023 9
Slide 10: Client deposits +9.7%, other AUM up 16% YoY
Deposits and other AUM Client deposits +9.7%, other AUM up 16% YoY Group deposits (excluding repo operations) (CZK billion) +9.7% -1.6% Non-deposit assets under management (CZK million) 1,010.1 979.5 994.7 1,022.4 1,006.2 +16.0% 916.8 56.6 54.2 53.9 52.8 52.3 -6.5% 56.0 329.0 +4.4% 336.7 327.8 320.3
Slide 11: Agenda
Agenda Highlights as of 31 December 2023 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 December 2023 11
Slide 12: Normalisation of NII, better non-interest revenues, zero risk costs
Profit & Loss Normalisation of NII, better non-interest Development of quarterly net profit … (CZK million) revenues, zero risk costs -29.6% -23.6% Drivers for year on year change in attributable net profit 4,664 4,632 4,525 4,267 (as of 31 December 2023) 3,561 3,259 -11.4% 17,621 311 -0 1,167 710 1
Slide 13: Balance sheet up by 16.2% year-on-year
Statement of financial position Balance sheet up by 16.2% year-on-year Assets Liabilities and Equity (CZK billion) Year-on-year (CZK billion) Year-on-year +16.2% +16.2% 1,516 1,516 106 24.1% 1,305 1,305 424 71.4% 85 248 1,127 18.6% 951 781 834 6.7% 2.3% -4.1% 12 39 65 12 66.8% 227 217 94 78 -16.8% 4
Slide 14: Net interest income
Net interest income Interest income affected by higher deposit Year-to-date -10.6% costs and cancelled remuneration of reserves (CZK million) 28,632 2,718 -25% 25,595 Net interest margin (%) Other 2,040 2.12% 2.25% 2.21% 2.42% 2.01% 2.01% 1.91% 1.99% 1.86% 1.96% NII from deposits 13,281 -14% 1.75% 1
Slide 15: Broad-based growth in fee income
Net fees and commissions Broad-based growth in fee income Year-to-date +4.8% (CZK million) 6,414 6,121 Transaction fees Transaction fees 1% 1,816 1,805 Transaction fee income driven by card payments, overall transaction activity Deposit product fees 784 3% 804 increasing for non-cash transaction cat
Slide 16: Net profit from financial operations
Net profit from financial operations Solid result in context of soft economy Year-to-date +4.5% (CZK million) 3,666 3,832 Capital markets Capital markets 1,595 5% 1,676 Client activity mainly in 2H2023 hindered by weak real economy and confidence Net gains on FX from payments CZK volatility higher a
Slide 17: Operating expenditures
Operating expenditures Operating expenditures impacted by Year-to-date +8.2% inflation and transformation costs (CZK million) Personnel expenses - number of employees (average FTE) in FY 2023: 7,551 Personnel costs -7,734 8% -8,335 (+0.7% YoY) as decreasing staff numbers in support functions and dis
Slide 18: Agenda
Agenda Highlights as of 31 December 2023 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 December 2023 18
Slide 19: 4Q 2023 Asset quality
Loan portfolio quality 4Q 2023 Asset quality Group lending (CZK billion) 787.2 789.1 794.6 808.3 827.7 784.9 Loan portfolio up by 5.5% YoY and 2.4% QoQ Resilient and stable credit risk profile 690.4 664.1 663.5 665.8 672.9 685.9 Stage 2 ratio up to 14.7% (vs. 13.1% in 3Q 2023) due to fine-tuning of
Slide 20: 4Q 2023 Cost of risk development
Cost of risk 4Q 2023 Cost of risk development Total Cost of risk (Year-to-date, in basis points) 37 4Q 2023 CoR net creation at CZK 1,051 million 21 22 15 14 8 6 8 CZK 680 million net creation on non-retail exposures (concentrated on 0 8 9 -21 -16 one isolated client situation) -22 -14 -41 CZK 370 m
Slide 21: Agenda
Agenda Highlights as of 31 December 2023 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 December 2023 21
Slide 22: Dividend reflecting strong capital generation
Dividends Dividend reflecting strong capital generation Dividend history (Dividend per share, CZK) CZK % Pandemic 100 100 dividend • KB’s Board of Directors proposes to the Annual General Meeting payment of restrictions 80 80 dividends in the volume of CZK 15.7 billion (CZK 82.66 per share). This re
Slide 23: Capital position adjusted on upper part of target range
Capital Capital position adjusted on upper part of target range of 50-200 bps above minimum Contributions to shareholders’ equity in FY 2023 (CZK million) 15,612 -11,411 127,559 Total capital adequacy at 18.8% over the applicable Overall Capital Minimum of 124,676 17.1% effective from 1 January 2024
Slide 24: Agenda
Agenda Highlights as of 31 December 2023 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 December 2023 24
Slide 25: Assumptions and outlook for 2024
Outlook for 2024 Assumptions and outlook for 2024 Investors are advised to consider high level of uncertainty and risks when formulating their investment decisions based on expectations provided below. Macro- • Czech economy expected to grow marginally in 2023. A gradual recovery in household consum
Slide 26: Agenda
Agenda Highlights as of 31 December 2023 Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 December 2023 26
Slide 27: Number of clients and distribution network
KB Group clients and distribution network Number of clients and distribution network Number of bank clients 31-Dec-22 31-Dec-23 YoY (thousands, CZ) Number of clients 1,667 1,664 1,641 1,625 1,652 1,664 KB Group’s clients 2,240,000 2,199,000 -41,000 Komerční banka 1,652,000 1,664,000 13,000 – individ
Slide 28: Consolidated income statement
Consolidated income statement Income statement (CZK million, unaudited) FY 2022* FY 2023 YoY Net interest income 28,632 25,595 -10.6% Net fee & commission income 6,121 6,414 4.8% Net profit of financial operations 3,666 3,832 4.5% Dividend and other income 213 358 68.1% Net banking income 38,632 36,
Slide 29: Consolidated income statement
Consolidated income statement Income statement (CZK million, unaudited) 4Q 2022* 3Q 2023 4Q 2023 YoY QoQ Net interest income 7,132 6,507 6,275 -12.0% -3.6% Net fee & commission income 1,673 1,548 1,817 8.6% 17.4% Net profit of financial operations 753 776 993 31.9% 28.0% Dividend and other income 67
Slide 30: Consolidated statement of financial position
Consolidated statement of financial position Balance sheet (CZK million, unaudited) 31-Dec-22* 31-Dec-23 YoY rel. YoY abs. Assets 1,305,304 1,516,302 16.2% 210,998 Cash and current balances with central bank 14,190 12,835 -9.5% -1,355 Loans and advances to banks 233,398 411,644 76.4% 178,246 Loans a
Slide 31: Capital & profitability indicators
Financial ratios Capital & profitability indicators (year-to-date, IFRS 9) 31-Dec-22 31-Dec-23 Capital adequacy 19.5% 18.8% Tier 1 ratio = Core Tier 1 ratio 18.9% 17.7% Risk weighted assets for credit risk (CZK billion) 430.8 452.3 Net interest margin, annualised 2.4% 1.9% Loan (net) / deposit ratio
Slide 32: FY 2023 Cost of risk structure
Composition of Cost of risk FY 2023 Cost of risk structure Key components Contribution to FY 2023 CoR (bps) Non-retail NPL portfolio -17 bps Retail NPL portfolio 4 bps Non-retail performing portfolio (Stage 1 & 2) 9 bps Retail performing portfolio (Stage 1 & 2) 4 bps Total 0 bps KB Group results as
Slide 33: Business performance of subsidiaries (1/2)
Overview of KB subsidiaries Business performance of subsidiaries (1/2) FY 2022 FY 2023 YoY Modrá pyramida (100%) #2 building savings & loans company Volume of new loans (CZK million) 15,169 10,372 -32% Volume of total loans (gross, CZK million) 85,266 92,471 8% Volume of deposits (CZK million) 55,97
Slide 34: Business performance of subsidiaries (2/2)
Overview of KB subsidiaries Business performance of subsidiaries (2/2) FY 2022 FY 2023 YoY Factoring KB (100%) #1 on the Czech factoring market Factoring turnover (CZK million) 76,132 72,461 -5% Volume of total financing (gross, CZK million) 10,144 10,018 -1% Average number of FTEs 41 11 * -74% KB P
Slide 35: Debt securities portfolio in the banking book
Securities Debt securities portfolio in the banking book (CZK bilion) 171.9 166.7 141.8 Slovakia 4.9 150.0 155.9 10.8 5.9 Poland 0.0 30.1 16.7 31/12/2022 31/12/2023 Debt securities at amortized cost Czech sovereign securities Debt securities at FV through OCI Foreign government bonds Corporations No
Slide 36: MREL status, Tier 2
MREL, TIER 2 MREL status, Tier 2 Own funds and eligible liabilities (for MREL) 29.3% Total requirement = MREL + CBR As of 31 Dec 2023, KB Group has to fulfil final MREL 21.2% of the consolidated TRE and 10.6% (27.7% as of 31 Dec 2023) 5.91% of TE. In addition to the MREL, KB Group must fulfil the co
Slide 37: Capital requirements overview 2022 - 2024
Regulatory capital requirements Capital requirements overview 2022 - 2024 As from 01/03/2022 01/07/2022 01/10/2022 01/01/2023 01/04/2023 01/07/2023 01/10/2023 01/01/2024 Own funds 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% O-SII 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Conservation buffe
Slide 38: Macroeconomic environment – Czechia
Czech macroeoconomic environment Macroeconomic environment – Czechia Macroeconomic Indicators 2018 2019 2020 2021 2022 2023* 2024* 2025* Real GDP (%, average) 3.2 3.0 -5.5 3.6 2.4 -0.4 0.8 2.2 Inflation (%, average) 2.2 2.9 3.3 3.8 15.1 10.8 2.7 2.2 Household consumption (%, average) 3.3 2.6 -7.4 4.
Slide 39: Interest rates evolution
Interest rates Interest rates evolution % For the period 1 Jan 2015 – 31 January 2023 8 7 6 5 4 3 2 1 0 3M Pribor 6M Pribor 2W repo 5Y IRS 10Y IRS KB Group results as of 31 December 2023 39
Slide 40: 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 – 31 January 2023) KB PX 550 500 450 Free-float 400 39.6% 350 300 250 200 60.4% Société Genérále 150 100 50 0 • The number of shareholders comprised 73,478 c
Slide 41: 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