Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — Q3 2010 Earnings Presentation
37 slides from Komercni Banka, A.s's earnings presentation, Nov 3, 2010
Slide 1: KB Group Unaudited Financial Results as at 30 September 2010
KB Group Unaudited Financial Results as at 30 September 2010 (International Financial Reporting Standards) Prague 3 November 2010 KB 3Q 2010 results – Prague – 3 November 2010
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 3Q 2010 results – Prague – 3 November 2010
Slide 4: Czech economy: Recovery vulnerable to external environment
Czech economy Recovery vulnerable to external environment Real GDP growth (%) GDP dynamic recently but open economy is exposed to potential slowdown in West Europe 7.0 6.1 2.3 2.1 1.7 Public finance situation relatively favourable, deficit in 2010 below 6% of GDP, public debt below 40% -4.0 Healthy
Slide 5: Positive underlying business trends
Highlights of the first three quarters of 2010 Year on year comparisons Positive underlying business trends Portfolio of client loans grew by 1.7% to CZK 389.0 billion Total deposits up 2.0% to CZK 535.3 billion Total revenues slightly down 0.6% to CZK 24.3 billion due to high base of trading income
Slide 6: Keeping eyes upon needs of customers
Business achievements and initiatives in the first three quarters of 2010 – Individuals Year on year comparisons Keeping eyes upon needs of customers New concept of client rewards MojeOdměny introduced, aimed at improving client satisfaction and loyalty New Premium Loan for affluent clients, unsecur
Slide 7: KB supporting economic recovery
Business achievements and initiatives in the first three quarters of 2010 – Businesses Year on year comparisons KB supporting economic recovery KB well positioned to face new challenges and opportunities in the changed post- recession landscape and to outperform the market in lending Increase in loa
Slide 8: Deposit base stable
Group deposits CZK billion By Customers 551.8 541.2 536.5 535.3 Deposit base stable 532.1 524.9 67.1 64.0 64.4 68.0 68.5 69.0 154.0 153.7 153.7 152.8 152.2 151.3 YoY group deposits increased by 2.0%, QoQ down by 26.4 26.7 27.2 27.5 27.8 28.2 0.2% 284.7 276.9 295.1 284.6 281.1 280.7 KB represents 82%
Slide 9: Demand for loans started picking up
Group lending activities Demand for loans started CZK billion picking up 381.6 382.5 386.1 382.0 385.6 389.0 42.0 44.0 45.6 46.4 47.6 48.7 Gross loans rose 1.7% YoY, 0.9% QoQ. (Not adjusted 96.2 98.2 100.3 101.7 104.2 106.4 for write-offs of fully provisioned long overdue loans 29.7 30.3 29.3 28.7 2
Slide 10: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 10 KB 3Q 2010 results – Prague – 3 November 2010
Slide 11: Profit and Loss Statement (1-3Q)
Consolidated financial results Profit and Loss Statement Change 1-3Q 2009 1-3Q 2010 YoY (CZK million, unaudited) Net interest income 15,838 15,982 0.9% Net fees & commissions 5,806 5,943 2.4% Income from financial operations 2,739 2,301 -16.0% Other income 65 70 7.7% Net banking income 24,448 24,296
Slide 12: Profit and Loss Statement (quarterly)
Consolidated financial results Profit and Loss Statement Change Change 3Q 2009 2Q 2010 3Q 2010 YoY QoQ (CZK million, unaudited) Net interest income 5,259 5,415 5,273 0.3% -2.6% Net fees & commissions 1,944 1,998 2,015 3.7% 0.9% Income from financial operations 699 675 852 21.9% 26.2% Other income 14
Slide 13: Balance Sheet
Consolidated financial results Balance Sheet 30 Sep 31 Dec 30 Sep Change Change (CZK million, unaudited) 2009 2009 2010 YoY YtD Assets 657,356 695,076 697,435 6.1% 0.3% Cash and balances with central bank 11,246 16,271 21,216 88.7% 30.4% Amounts due from banks 105,768 131,271 96,675 -8.6% -26.4% Loa
Slide 14: Key ratios and indicators
Consolidated financial ratios 30 Sep 30 June 30 Sep Change Change Key ratios and indicators 2009 2010 2010 YoY QoQ Capital adequacy 13.9% 14.7% 14.9% Tier 1 ratio 12.6% 13.5% 13.6% Total capital requirement (CZK billion) 27.1 28.4 28.2 4.1% -0.5% Capital requirement for credit risk (CZK billion) 23.
Slide 15: Impact of low interest rates mitigated by asset mix
Net interest income Impact of low interest rates mitigated by asset mix 5,350 5,259 5,404 5,294 5,415 5,273 502 404 398 410 504 450 NII up by 0.9% YoY, down by 2.6% QoQ 1,880 1,967 2,032 1,982 2,013 2,021 Pressure from low interest rate environment on NIM mitigated by increased asset swap spreads on
Slide 16: Focus on customer experience to protect against price erosion
Net fees and commissions Focus on customer experience to protect against price erosion 2,033 1,998 2,015 1,946 1,944 1,929 Fee income rose 2.4% YoY and 0.9% QoQ 200 175 166 142 132 174 485 499 411 463 451 Transaction fees – benefiting from pick up in economic 465 313 349 353 383 activity but seasona
Slide 17: Partial recovery of client demand, markets calming down
Net profit from financial operations Partial recovery of client demand, markets calming down 896 852 Net profit from financial operations decreased 699 774 675 by 16.0% YoY. QoQ result up 26.2% 285 606 602 578 608 522 Treasury operations –lower volatility on the 479 markets, reduced share of proprie
Slide 18: Successfully implemented operational efficiency measures
Operating costs Successfully implemented operational efficiency measures 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 OPEX lower by 4.5% YoY, QoQ up 0.6% -1,587 -1,629 -1,612 -1,457 -1,514 -1,613 Personnel costs down by 4.9% YoY, average number of employees down 2.5%. QoQ increase in accrual for
Slide 19: Shareholders' equity
Shareholders‘ equity Total shareholders‘ equity Total shareholders‘ equity +9,179 as at 31 December 2009 as at 30 September 2010 Shareholders' equity 31/12/2009 1/1/2010 Increase Decrease 30/9/2010 Share capital 19,005 19,005 19,005 Capital and reserve funds 31,621 42,628 -6,436 36,193 - Retained ea
Slide 20: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 20 KB 3Q 2010 results – Prague – 3 November 2010
Slide 21: Stable loan quality
Loan quality Stable loan quality CZK billion 381.6 382.5 386.1 382.0 385.6 389.0 Gross exposure Moderate QoQ increase in loan exposure by 0.9% (CZK 342.4 343.2 346.2 340.8 345.8 349.2 3.4 billion) Share of standard and watch loan exposure in line with 15.7 14.0 14.4 14.2 14.3 14.5 Q2 2010 (93.5% in
Slide 22: Continued reduction in cost of risk
Cost of risk Continued reduction in cost of risk 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 93 91 88 66 62 56 100 Continued QoQ decrease in provisions for loan losses 82 87 79 66 57 46 0 (from CZK 0.8 billion in Q2 2010 to CZK 0.6 billion in Q3 80 7 84 -100 2010) -648 -200 -803 YtD commercial c
Slide 23: Zoom on corporate client segments
Cost of risk - Corporate Zoom on corporate client segments CZK million Cost of Risk - Evolution 1 000 Improving loan quality and decreasing level 102 96 91 of new provisions: 54 54 500 46 709 704 579 low risk profile of mid-size corporate 454 447 250 exposures 0 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 20
Slide 24: Zoom on mass retail client segments
Cost of risk - Retail 3M Default Rate - Individuals - Zoom on mass retail client segments 2.0% Consumer Loans and Credit Cards - KB Solo 1.5% Some further and moderate decrease in cost of risk (from 1.0% 85 bp in Q2 2010 to 82 bp in Q3 2010) 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q
Slide 25: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 25 KB 3Q 2010 results – Prague – 3 November 2010
Slide 26: Development of clients' portfolio and networks
Number of clients and distribution network Development of clients‘ portfolio and networks Number of new building saving contracts (MPSS) Clients KB bank 1,595,000 clients (-3%) MPSS 701,000 clients (-2%) 187,900 PFKB 498,000 clients (+1%) 161,300 116,200 107,400 124,100 108,300 ESSOX 320,000 active
Slide 27: KB consolidated group
KB consolidated group Pension Penzijní fond KB Fourth largest pension fund in the Czech Republic offering pension insurance to insurance (100%) almost 498,000 clients. Modrá pyramida Building Second largest building society according to loan volume with 701,000 clients, stavební society offering sta
Slide 28: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 1-3Q 2009 1-3Q 2010 Change YoY MPSS Volume of new loans (CZK million) 7,746 6,550 -15% Volume of total loans (gross, CZK million) 43,992 48,724 11% Target volume of new contracts (CZK million) 25,518 23,044 -10% Volume of deposits (CZK million) 64,411 68,963
Slide 29: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 1-3Q 2009 1-3Q 2010 Change YoY Factoring Factoring turnover (CZK million) 9,300 8,450 -9% KB New contracts (number) 144 106 -26% Number of FTEs 41 38 -9% KBB Total client loans (gross, CZK milion) 5,359 4,013 -25% Total client deposits (CZK milion) 2,100 2,24
Slide 30: Standalone results of KB group companies and associated undertakings
Standalone results of KB group companies and associated undertakings Account. Share of Net YoY Equity YoY Assets YoY CZK million standards KB Profit KB IFRS n.a. 9,302 17.9% 70,641 21.0% 603,570 5.4% ESSOX, s.r.o. IFRS 51% 127 -11.2% 2,611 6.6% 10,667 1.7% Factoring KB, a.s. CAS 100% 26 -42.2% 1,562
Slide 31: Zoom on corporate client segments - sector diversification
Diversification of corporate loan exposure by sector Zoom on corporate client segments - sector diversification Exposure by industry as of September 30, 2010 Agriculture and Food Consumer Products Manufacturing 1.3% 4.8% Public Sector and Automotive Multisector Holding Related Activities 1.8% Compan
Slide 32: 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 33: Czech Republic macroeconomic environment
Macroeconomic environment Czech Republic Macroeconomic Indicators 2006 2007 2008 2009 2010* 2011* Real GDP (%, average) 7.0 6.1 2.3 -4.0 2.1 1.7 Inflation (%, average) 2.5 2.8 6.3 1.0 1.5 2.1 Household consumption (%, average) 5.2 4.8 3.5 -0.2 1.3 0.9 Unemployment (%, av., MLSA meth.) 8.2 6.7 5.5 8.
Slide 34: Interest rates evolution
Interest rates evolution (for the period 28 December 2001 – 22 October 2010) 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 Pribor 3M Pribor 6M KB Reference Rate ČNB REPO Rate 34 KB 3Q 2010 res
Slide 35: Development of KB's share price and PX Index
Development of KB‘s share price and PX Index (for the period 1 October 2001 – 22 October 2010) 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 01
Slide 36: KB shareholders
KB shareholders As at 30 September 2010 According to excerpt from the Securities centre Others 39.6% Société Générale 60.4% 36 KB 3Q 2010 results – Prague – 3 November 2010
Slide 37: 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 37 KB 3Q 2010 results – Prague – 3 November 2010