Komercni Banka, a.s. · PSECZ:KOMB
Komercni Banka, a.s — H1 2005 Earnings Presentation
38 slides from Komercni Banka, a.s's earnings presentation, Jul 29, 2005
Slide 1: Financial Results as at 30 June 2005
JJ Mois Année Financial Results as at 30 June 2005 (International Financial Reporting Standards) Prague - 29 July 2005
Slide 2: Highlights of 1H 2005: The most successful quarter in all respects
Highlights of 1H 2005 The most successful quarter in all respects confirming KB business strategy As of 30 June 2005, year-on-year comparison • Success in sales of mortgages to individuals during 1H: +49% in volume of new sales; +54% in number of new sales, in 2Q sales increased by 60% Y-on-Y • Outs
Slide 3: Highlights of 1H 2005: Growth of net profit by 10%
Highlights of 1H 2005 Growth of net profit by 10% As of 30 June 2005, year-on-year comparison • Net interest income increased by 14% driven by lending activities • Non-FX fees and commissions rose by 4%, total fees and commissions increased slightly by 1% limited by FX fees income • Total costs kept
Slide 4: New offer in mobile banking
Expanding offer in second quarter New offer in mobile banking Komerční banka as the first bank in the Czech Republic, and one of the first in the world, is bringing its clients a new service - Mobile banking, which works on the basis of the Java technology. It enables the clients to communicate with
Slide 5: Contents
Contents n Business Performance n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 4
Slide 6: 21% year-on-year growth in volume of the loan portfolio
Loan portfolio 21% year-on-year growth in volume of the loan portfolio Individuals Volume of loans SME Corporates CZK billion, Gross amount, without transferred loans Other + 20.7% 173.5 164.7 157.8 151.0 143.7 48.1 28% ■ Year-on-year growth of the loan portfolio by 43.9 38.2 41.6 35.6 20.7% ■ Total
Slide 7: Long term stability of client deposits
Clients’ deposits Long term stability of client deposits Volume of primary client deposits Individuals CZK billion SME Corporates Other + 0.7% 351.5 349.2 352.2 346.6 354.0 ■ Year-on-year stable depositary base ■ Current accounts represent 60% share of 128.0 127.9 126.7 127.6 128.7 total primary dep
Slide 8: Continuous boost in retail lending
Retail lending Continuous boost in retail lending Mortgages to Individuals Consumer loans Loans to Small Businesses Total volume outstanding in CZK mil. Total volume outstanding in CZK mil. Total volume outstanding in CZK mil. 36,508 + 40% 25,987 + 21% 11,623 9,588 + 39% 8,685 6,258 30. 6. 2004 30.
Slide 9: Penetration of products: Everlasting improvement
Penetration of products Everlasting improvement 30. 6. 2004 30. 6. 2005 YoY Change Cross-selling ratio* Individuals 4.27 4.77 +12% Penetration ratio – Individuals** Packages 58.6 66.3 +13% Mortgages 2.3 2.7 +17% Consumer loans 9.3 10.5 +13% Payment cards 65.4 67.3 +3% Penetration ratio - Small busin
Slide 10: KB Group strategy within Société Générale Group (1)
KB Group strategy within Société Générale Group (1) KB Group strategy within Société Générale Group n KB business model clearly separates production and distribution lines. n KB is a distributor of a complete range of products being also in charge of marketing, sales and strengthening the relationsh
Slide 11: Sale of 100% of IKS to SG Asset Management in May 2005
KB Group strategy within Société Générale Group (2) Sale of 100% of IKS to SG Asset Management in May 2005 n Purpose of the sale is to facilitate a more effective transfer of the global SGAM expertise to IKS. As a result KB business and financial performance will benefit from the enlarged and improv
Slide 12: Sale of 51% of KP to SOGECAP in the third quarter 2005
KB Group strategy within Société Générale Group (3) Sale of 51% of KP to SOGECAP in the third quarter 2005 n This transaction follows KB Group’s strategy and the change in ownership is in line with the involvement of SOGECAP during more than two years in KP. This enabled the company to overcome a ve
Slide 13: Further sale to be completed till the end of 2005
KB Group strategy within Société Générale Group (3) Further sale to be completed till the end of 2005 Sale of 17% of ESSOX to Franfinance (currently owner of 49%) to be finalised by the end of 2005 4 Currently KB holds 51% of ESSOX, company providing consumer financing through merchants and third pa
Slide 14: Contents
Contents n Business Performance n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 13
Slide 15: Net banking income growth by 2.9%
Unconsolidated Financial Results of KB Net banking income growth by 2.9% Unconsolidated Profit and Loss Statement 1H 2004 1H 2005 Change CZK million 05/04 Net banking income 11,183 11,511 + 2.9% Operating costs -5,802 -5,704 - 1.7% Net operating income 5,381 5,807 + 7.9% Provisions for loan and inve
Slide 16: Net interest income on rise
Net Interest Income Net interest income on rise CZK million, unconsolidated Net Interest Income Net Banking Income Other NII from loans + 2.9% 6,671 11,511 NII from deposits 11,183 5,864 +46.9% 662 • YoY growth by 13.8% especially driven by 450 boosting lending activities and higher NII 2,002 from i
Slide 17: Growth in Non-FX fee income driven by lending and payment cards
Net Fees and Commissions Growth in Non-FX fee income driven by lending and payment cards CZK million, unconsolidated Net Fees and Commissions Net Banking Income Non-FX 4,244 4,286 FX clean payments + 2.9% 11,511 FX cash conversions 11,183 • Increase in fee income from loans following the pick-up in
Slide 18: Investment activities of clients drive KB trading profits up
Trading Profits and Other Income Investment activities of clients drive KB trading profits up CZK million, unconsolidated Net Profit from Financial Operations Net Banking Income FX operations Securities and security + 2.9% derivatives 11,511 692 394 Interest and Commodity 11,183 Derivatives 298 +17.
Slide 19: Total costs - everlasting focus on the Bank's efficiency
Operating Costs Total costs - everlasting focus on the Bank´s efficiency CZK million, unconsolidated Personnel Costs Operating Costs • Release of over accruals of bonuses 2,403 -4.0% 2,307 significantly higher in 2004; without this the personnel costs would have decreased by 7.6% - 1.7% • Number of
Slide 20: Operating costs Q-on-Q development
Operating Costs Operating costs Q-on-Q development CZK million, unconsolidated Depreciation, impairment and disposal of fixed assets General administrative expenses Personnel expenses 3,146 2,995 2,920 2,807 2,843 2,784 496 436 404 415 373 425 1,310 1,190 1,503 1,281 1,355 1,202 1,154 1,249 1,249 1,
Slide 21: Cost of risk, Profit from subsidiaries
Cost of risk, Profit from subsidiaries CZK million, unconsolidated Cost of Risk Provisions for loan losses Impairment of securities Comments Provisions for other risk expenses • Cost of risk at 24 bp mainly resulting from increasing quality of large corporate clients -702 -28.9% -499 segment. • Neut
Slide 22: Balance Sheet: Assets Liabilities
Balance Sheet Assets Liabilities CZK million, unconsolidated 472,982 Change 472,982 Change 448,294 448,294 11,777 + 17.5% 20,925 + 12.8% Cash and balances with 10,025 Amounts due 18,548 central bank to banks Amounts due from 231,361 235,295 + 1.7% banks Amounts due 358,825 363,652 + 1.3% to customer
Slide 23: Shareholders Equity: Development since the end of 2004
Shareholders Equity Development since the end of 2004 CZK million, unconsolidated Total shareholder’s equity Total shareholder’s equity as at 31 December 2004: + 4,058 as at 30 June 2005: 43,578 47,636 Shareholders’ equity 31. 12. 2004 1. 1. 2005 Increase Decrease 30. 6. 2005 Share capital 19,005 19
Slide 24: Contents
Contents n Business Performance n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 23
Slide 25: Client loan portfolio
Client loan portfolio 10% year-to-date growth combined with a satisfactory risk profile CZK million, unconsolidated Client loans, On-balance sheet Specific provisions Gross amount, without transferred loans +10.0% 173,464 157,734 + 9.8% 5,872 5,348 Standard loans 131,712 + 11.4% 146,764 Total watch
Slide 26: CDO portfolio: Significant divestments and improved risk profile
CDO portfolio Significant divestments and improved risk profile As of 30 June 2005 Specific provisions / Invested amount Date of acquisition: September 2000 - April 2001 20.9% 21.0% Initial invested amount: USD 426 mil. Invested amount as at 30. 6. 2005: USD 194 mil. Total coverage (as at 30. 6. 200
Slide 27: Contents
Contents n Business Performance n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 26
Slide 28: Financial Results of KB Group
Financial Results of KB Group Financial Results and Ratios Profit and Loss Statement 1H 2004 1H 2005 Change CZK million 05/04 Net banking income 11,528 11,969 + 3.8% Operating costs -6,285 -6,195 - 1.4% Income from not fully consolidated companies and exclusion of subsidiaries from consolidation 652
Slide 29: Subsidiary and associated undertakings results
Financial Results of KB Group Subsidiary and associated undertakings results As at 30 June 2005, CZK mil., CAS/SAS/IFRS Share of KB Profit after tax Equity Assets ESSOX, s.r.o. (IFRS) 51% -10 138 1,755 Factoring KB, a.s. (CAS) 100% 9 154 3,815 Komercni Finance, B.V. 100% NA NA NA Komerční banka Brat
Slide 30: KB Clients and Network
KB Clients and Network Continuous dynamics in number of KB clients as at 30 June 2005 § 1,436,000 clients* - 1,154,000 individuals and 282,000 corporates - YonY increase in number of clients by 82,000 (+6%) § Network - 338 points of sale for retail clients - 37 business centres for medium enterprise
Slide 31: Sales of key products
Products for Individuals and Small Businesses Sales of key products Financial Packages 30. 6. 2004 30. 6. 2005 YoY Change PACKAGES FOR 544,958 666,329 + 22% INDIVIDUALS packages packages GAUDEAMUS 87,696 108,503 + 24% package for young clients packages packages 67,786 113,116 + 67% CHILD ACCOUNT acc
Slide 32: Success of card business
Payment cards Success of card business 30. 6. 2004 30. 6. 2005 YoY Change Debit cards - active 1,137,523 1,299,759 +14% Credit cards - active 48,949 93,062 +90% Number of POS (points of sales using 11,374 14,051 +24% electronic device) 1Q 2004 1Q 2005 Number of transactions via 39,951 45,325 +13% pa
Slide 33: Cross-selling activities
Cross-selling activities Co-operation within KB/SG Group and Strategic Partnerships Provided in 1H 2004 1H 2005 Change 05/04 co-operation with: Life insurance Vital (number of sold policies through KB) Komerční pojišťovna 25,069 26,648 +6% Non-life insurance Allianz (number of sold policies through
Slide 34: Macroeconomic Environment: Czech Republic
Macroeconomic Environment Czech Republic Macroeconomic indicators 2003 2004 2005* 2006* 2007* GDP (%) + 3.2 + 4.4 + 4.0 + 4.0 + 4.0 Inflation (%) + 0.1 + 2.8 + 1.6 + 2.0 + 3.0 Households income (%) + 4.8 + 4.9 + 5.0 + 5.0 + 5.5 M2 (%) + 6.9 + 4.4 + 6.5 + 6.5 + 7.0 3M PRIBOR (%) 2.3 2.4 1.9 2.2 2.8 P
Slide 35: Market Interest Rates
Market Interest Rates Interest Rates Evolution 5,00% 4,50% 4,00% 3,50% 3,00% 2,50% 2,00% 1,50% 2 2 2 3 3 3 4 4 4 5 5 01 02 03 04 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 2. 2. 2. 2. .3 .6 .9 .3 .6 .9 .3 .6 .9 .3 .6 .1 .1 .1 .1 31 30 30 31 30 30 31 30 30 31 30 31 31 31 31 Pribor 3M Pribor 6M KB Reference Rat
Slide 36: Development of KB's share price and Index PX50
KB Share price Development of KB’s share price and Index PX50 CZK 1 300 3 700 1 200 3 500 1 100 3 300 1 000 3 100 900 2 900 2 700 800 2 500 700 2 300 600 2 100 500 1 900 400 1 700 300 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 31.3.05 30.6.05 25.7.05 KB PX 50 Komerční
Slide 37: Structure of Shareholders
KB Shareholders Structure of Shareholders Major shareholders of Komerční banka, a. s. with over 5% of the share capital as at 28 May 2005 Number of shares outstanding - 38 million Others Société Générale S.A. 34.25% 60.35% The Bank of New York ADR Department 4.36% Chase Nominees Limited 5.4% Komerčn
Slide 38: Investor Relations - Contacts
Contacts Investor Relations - Contacts ILONA KATZOVÁ Head of Investor Relations Phone: +420-222 432 156 Email: ilona_katzova@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@k