Slide 1: KB Group Unaudited Financial Results as at 31 December 2010
KB Group Unaudited Financial Results as at 31 December 2010 (International Financial Reporting Standards) Prague 16 February 2011
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 Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 3 KB FY 2010 results – Prague – 16 February 2011
Slide 4: Czech economy: Solid fundaments but slight slowdown expected
Czech economy Solid fundaments but slight slowdown expected GDP growth in 2010 driven by exports and Real GDP growth (%) benefited from investments in solar energy sector 7.0 6.1 First half 2011 to slow down due to austerity 2.3 2.3 1.9 measures in the Czech Republic and abroad, -4.0 lower sales of
Slide 5: Highlights of the year 2010
Highlights of the year 2010 Year on year comparisons Strong growth of net profit along with development of business Gross lending to clients up 3.5% to CZK 399.7 billion Total revenues increased by 1.5% to CZK 32.7 billion, all components contributed Stable net interest margin 3.3% despite low inter
Slide 6: Active development of lending and long-term savings
Business achievements and initiatives in the fourth quarter of 2010 – Individuals Year on year comparisons Active development of lending and long-term savings In 2010, KB provided 12,000 new mortgages in the amount of more than CZK 21 billion. Overall volume of mortgages to individuals rose by 9.0%
Slide 7: Contribution to financing the Czech economy
Business achievements and initiatives in the fourth quarter of 2010 – Businesses Year on year comparisons Contribution to financing the Czech economy Strong capacity to finance the renewed growth of the economy Lending to corporations rose by 2.3% to CZK 183.5 billion Volume of loans to small busine
Slide 8: Deposits stable overall but pressure on sensitive parts
Group deposits CZK billion By Customers 551.8 541.2 536.5 535.3 538.1 524.9 Deposits stable overall but 67.1 68.0 68.5 69.0 69.0 64.4 pressure on sensitive parts 153.7 153.7 152.8 152.2 151.3 153.7 YoY group deposits decreased by 2.5%, QoQ up 27.2 27.5 27.8 28.2 28.8 26.7 by 0.5% 276.9 295.1 284.6 2
Slide 9: Improved demand for new loans
Group lending activities Improved demand for new CZK billion 389.0 399.7 loans 382.5 386.1 382.0 385.6 44.0 45.6 46.4 47.6 48.7 49.7 Gross loans rose 3.5% YoY, 2.8% QoQ 98.2 100.3 101.7 104.2 106.4 109.3 Business loans increased by 2.3% YoY: 30.3 29.3 28.3 28.7 28.4 28.3 Small businesses (KB) +2.1%
Slide 10: KB strategy: Priorities for 2011
KB strategy Priorities for 2011 Significant investment into upgrade of direct channels and improvements in branch network Improve customer satisfaction, one of key KB targets, by reinforcement of high quality advisory approach seen as KB‘s strong competitive advantage Growth in lending, with primary
Slide 11: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 11 KB FY 2010 results – Prague – 16 February 2011
Slide 12: Profit and Loss Statement
Consolidated financial results Profit and Loss Statement Change FY 2009 FY 2010 YoY (CZK million, unaudited) Net interest income 21,242 21,431 0.9% Net fees & commissions 7,839 8,038 2.5% Income from financial operations 3,024 3,098 2.4% Other income 90 95 5.6% Net banking income 32,195 32,662 1.5%
Slide 13: Profit and Loss Statement 4Q
Consolidated financial results Profit and Loss Statement Change Change 4Q 2009 3Q 2010 4Q 2010 YoY QoQ (CZK million, unaudited) Net interest income 5,404 5,273 5,449 0.8% 3.3% Net fees & commissions 2,033 2,015 2,095 3.0% 4.0% Income from financial operations 285 852 797 179.6% -6.5% Other income 25
Slide 14: Balance Sheet
Consolidated financial results Balance Sheet 31 Dec 31 Dec Change (CZK million, unaudited) 2009 2010 YoY Assets 695,076 698,014 0.4% Cash and balances with central bank 16,271 13,689 -15.9% Amounts due from banks 131,271 112,179 -14.5% Loans and advances to customers (net) 372,302 384,593 3.3% Secur
Slide 15: Key ratios and indicators
Consolidated financial ratios Key ratios and indicators 31 Dec 30 Sep 31 Dec Change Change (year-to-date) 2009 2010 2010 YoY QoQ Capital adequacy 14.1% 14.9% 15.3% Tier 1 ratio 12.7% 13.6% 14.0% Total capital requirement (CZK billion) 27.2 28.2 27.5 0.9% -2.8% Capital requirement for credit risk (CZ
Slide 16: Proposed distribution of 2010 profit
Proposed distribution of 2010 profit Attractive dividend yield and strong capacity to grow business Pro-forma KB Shareholders‘ equity Increased payout ratio reflects capital level 76,078 65,816 10,263 sufficient for facilitating growth of the KB 13,330 Group and accommodation of the proposed 46,811
Slide 17: Net interest income
Net interest income Solid interest income in spite of low rates 5,259 5,404 5,415 5,273 5,449 5,294 404 398 410 504 450 432 NII up by 0.9% YoY, 3.3% QoQ 1,967 2,032 1,982 2,013 2,021 2,122 Retail subsidiaries dynamic – ESSOX +14%, Modrá pyramida +10%, PF KB +10% YoY 2,839 2,930 2,847 2,849 2,786 2,8
Slide 18: Net fees and commissions
Net fees and commissions Successful products driving fee income 2,095 1,944 2,033 1,998 2,015 Fee income rose 2.5% YoY and 4.0% QoQ 1,929 211 132 200 175 166 174 411 451 407 Maintenance fees – continuing price erosion, slight 499 465 463 decline in number of accounts 349 383 365 334 322 353 97 139 1
Slide 19: Net profit from financial operations
Net profit from financial operations Partial improvements in client demand 852 774 797 Net profit from financial operations increased by 2.4% 699 675 YoY. QoQ result down 6.5% 285 602 578 615 Treasury operations – environment of decreased 608 522 479 volatility and low liquidity not supportive for p
Slide 20: Operating costs
Operating costs Operational expenses decreased further 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 OPEX lower by 4.3% YoY, QoQ up 6.6% Personnel costs decreased 5.6% YoY, average -1,612 -1,457 -1,514 -1,613 -1,491 -1,629 number of employees down 2.2%. CZK 164 million one-off positive impact in Q
Slide 21: Shareholders' equity
Shareholders‘ equity Total shareholders‘ equity Total shareholders‘ equity +7,286 as at 31 December 2009 as at 31 December 2010 Shareholders' equity 31/12/2009 1/1/2010 Increase Decrease 31/12/2010 Share capital 19,005 19,005 19,005 Capital and reserve funds 31,621 42,628 -6,454 36,174 - Retained ea
Slide 22: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 22 KB FY 2010 results – Prague – 16 February 2011
Slide 23: Loan quality: Stable portfolio quality
Loan quality Stable portfolio quality CZK billion 399.7 Gross exposure 382.5 386.1 382.0 385.6 389.0 QoQ increase in loan exposure by 2.8% (CZK 10.7 billion) 343.2 346.2 340.8 345.8 349.2 360.9 Share of standard and watch loan exposure unchanged from Q3 2010 (93.5%) 14.0 14.4 14.2 14.3 14.5 13.0 Sha
Slide 24: Cost of risk
Cost of risk Confirmed decline of cost of risk throughout the year 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 91 88 66 62 56 55 100 YoY decrease in provisioning by 39% confirmed improved 87 79 66 46 50 trend of asset quality in 2010 57 0 7 84 35 -100 Moderate QoQ increase in provision charges f
Slide 25: Cost of risk - Corporate
Cost of risk - Corporate Zoom on corporate client segments CZK million Cost of Risk - Evolution Increased QoQ cost of risk driven by a limited 1 000 96 91 number of items: 54 54 500 46 46 704 579 Provision complements posted on already 454 447 344 250 0 defaulted and previously provisioned cases 3Q
Slide 26: Cost of risk - Retail
Cost of risk - Retail Zoom on retail client segments 3M Default Rate - Individuals - 2.0% Consumer Loans and Credit Cards - KB Solo Stable overall cost of risk in line with previous 1.5% quarters 1.0% 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 Continued decreasing trend
Slide 27: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 27 KB FY 2010 results – Prague – 16 February 2011
Slide 28: Recurring profit: Pro-forma Profit and Loss without one-offs
Recurring profit Pro-forma Profit and Loss without one-offs Change Change FY 2009 FY 2010 YoY 4Q 2009 4Q 2010 YoY Net banking income 32,221 32,530 1.0% 7,953 8,347 5.0% Net interest income 21,093 21,330 1.1% 5,371 5,431 1.1% Non-interest income 11,128 11,200 0.6% 2,582 2,916 12.9% Operating costs -1
Slide 29: Number of clients and distribution network
Number of clients and distribution network Evolution of clients‘ portfolio and networks Number of clients at Penzijní fond KB Clients KB bank 1,590,000 clients (-2%) MPSS 691,000 clients (-4%) PFKB 501,000 clients (+1%) 491,000 498,000 501,000 470,000 ESSOX 316,000 active clients (+1%) 417,000 361,0
Slide 30: KB consolidated group
KB consolidated group Pension Penzijní fond KB #4 pension fund in the Czech Republic with more than 501,000 clients insurance (100%) Modrá pyramida Building Second largest building society according to loan volume with 691,000 clients stavební society and 1,470 strong agent distribution network spoř
Slide 31: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 FY 2009 FY 2010 Change YoY MPSS Volume of new loans (CZK million) 10,392 9,025 -13% Volume of total loans (gross, CZK million) 45,611 49,700 9% Target volume of new contracts (CZK million) 40,063 33,208 -17% Volume of deposits (CZK million) 67,090 69,019 3% A
Slide 32: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 FY 2009 FY 2010 Change YoY Factoring Factoring turnover (CZK million) 12,233 12,035 -2% KB New contracts (number) 266 133 -50% Average number of FTEs 41 38 -7% (former) Total client loans (gross, CZK milion) 5,220 3,871 -26% KB Total client deposits (CZK mili
Slide 33: Standalone results of KB group companies and associated undertakings
Standalone results of KB group companies and associated undertakings Account. Share Net YoY Equity YoY Assets YoY CZK million standards of KB Profit KB IFRS n.a. 12,168 17.4% 69,137 10.3% 605,151 0.0% ESSOX, s.r.o. IFRS 51% 163 -7.9% 2,648 6.6% 10,496 -1.4% Factoring KB, a.s. CAS 100% 9 -67.9% 1,506
Slide 34: Diversification of corporate loan exposure by sector
Diversification of corporate loan exposure by sector Zoom on corporate client segments - sector diversification Exposure by industry as of December 31, 2010 Agriculture and Food Manufacturing Consum er Products Public Sector and 1,1% 5,5% Related Activities 10% Autom otive 1,5% Capital Goods Financi
Slide 35: Revaluation of MPSS balance sheet
Revaluation of MPSS balance sheet Background ► Remaining 60% in Modrá pyramida acquired in October 2006. Full consolidation of MPSS since 4Q 2006 ► Preliminary goodwill on acquisition of Modrá pyramida at CZK 2,741 mil. ► In accordance with IFRS 3 A&L valuation to be completed within 12 months after
Slide 36: Macroeconomic environment: Czech Republic
Macroeconomic environment Czech Republic Macroeconomic Indicators 2006 2007 2008 2009 2010* 2011* Real GDP (%, average) 7.0 6.1 2.3 -4.0 2.3 1.9 Inflation (%, average) 2.5 2.8 6.3 1.0 1.5 2.1 Household consumption (%, average) 5.2 4.9 3.4 -0.2 0.8 0.5 Unemployment (%, av., MLSA meth.) 8.2 6.7 5.5 8.
Slide 37: Interest rates evolution
Interest rates evolution (for the period 28 December 2001 – 10 February 2011) 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 28/12/2001 28/12/2002 28/12/2003 28/12/2004 28/12/2005 28/12/2006 28/12/2007 28/12/2008 28/12/2009 28/12/2010 Pribor 3M Pribor 6M KB Reference Rate ČNB REPO Rate 37 KB
Slide 38: Development of KB's share price and PX Index
Development of KB‘s share price and PX Index (for the period 1 October 2001 – 10 February 2011) 4,800 2,100 4,300 1,900 1,700 3,800 1,500 3,300 1,300 2,800 1,100 2,300 900 1,800 700 1,300 500 800 300 01/10/2001 01/10/2002 01/10/2003 01/10/2004 01/10/2005 01/10/2006 01/10/2007 01/10/2008 01/10/2009 0
Slide 39: KB shareholders
KB shareholders As at 31 December 2010 According to excerpt from the Securities centre Others 39.6% Société Générale 60.4% 39 KB FY 2010 results – Prague – 16 February 2011
Slide 40: Investor Relations
Investor Relations Jakub Černý, Renáta Swaczynová, Georgina Olegrová Tel.: +420 955 532 156, 955 532 155, 955 532 734 E-mail: investor_relations@kb.cz - Internet: www.kb.cz 40 KB FY 2010 results – Prague – 16 February 2011