Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — Q1 2023 Earnings Presentation
39 slides from Komercni Banka, A.s's earnings presentation, May 12, 2023
Slide 1: Komerční banka Group
PRAGUE, 12 MAY 2023 Komerční banka Group Consolidated unaudited results as of 31 March 2023
Slide 2: Disclaimer
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 me
Slide 3: Highlights as of 31 March 2023
Highlights as of 31 March 2023 Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook for 2023 Appendix
Slide 4: Solid results amid slow economy; entering KB's new era of banking
HIGHLIGHTS OF FIRST QUARTER 2023 Solid results amid slow economy; entering KB’s new era of banking Group net income Solid business Strong balance Shareholders’ First quarter 2023 performance sheet decisions Client loans Liquidity coverage ratio Dividend CZK 3.6 billion +1.4% year on year +5.1% YoY 1
Slide 5: Delivering on KB2025 strategic initiatives
HIGHLIGHTS OF FIRST QUARTER 2023 Delivering on KB2025 strategic initiatives Introduction of New Era of #2022 VISA Awards Deposit clients referral Banking written by KB to the KB #1 Sustainable bank agreement market Rooftop photovoltaics at HQ KB signed referral agreement with BNP Sustainable e-shop
Slide 6: New Digital Bank: new era of banking written by KB
KB2025 STRATEGY New Digital Bank New era of banking written by KB Complete overhaul of banking infrastructure and client-facing as well as internal bank processes New client- facing New applications analytics New simple digital New IT products infrastructure Implementation timeline 2021 2022 2023 20
Slide 7: Macroeconomic environment
Highlights as of 31 March 2023 Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook for 2023 Appendix
Slide 8: Economy past shallow recession, inflation taming
MACRO Economy past shallow recession, inflation Czech GDP growth (% year-on-year) taming 10 3.6 5 3.0 2.5 1.8 0.6 GDP in Q1 231 was up by 0.1% QoQ and down by 0.2% YoY. The YoY 0 recovery in Czech GDP reflected further improvements in net exports offsetting negative contributions from household cons
Slide 9: Business performance
Highlights as of 31 March 2023 Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook for 2023 Appendix
Slide 10: Loans to clients up 5.1%, growth in retail as well as corporate segments
LOANS TO CLIENTS Loans to clients up 5.1%, growth in retail Group lending (w/o repo, but incl. client bonds)* (CZK billion) +5.1% as well as corporate segments +0.5% 738.9 750.7 769.4 787.2 784.9 789.1 76.0 78.8 81.5 83.8 85.3 86.5 9.8% Net loans to deposits ratio at 80.5%. Liquidity coverage ratio
Slide 11: Deposits down -3.5% amid stiff competition, Other AUM up 9.8%
DEPOSITS AND OTHER AUM Deposits down -3.5% amid Group deposits (excluding repo operations) (CZK bilion) stiff competition, Other AUM up 9.8% -3.5% Non-deposit assets under management +6.8% (CZK bilion) 948.6 1,015.1 1,024.3 1,010.1 979.5 +9.8% 916.8 60.9 58.9 58.0 56.6 54.2 -8.1% +4.8% 56.0 354.9 35
Slide 12: Financial performance
Highlights as of 31 March 2023 Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook for 2023 Appendix
Slide 13: Improvement in bottom line on the back of sound asset quality
PROFIT & LOSS Improvement in bottom line Development of quarterly net profit… (CZK million) on the back of sound asset quality +1.4% -24.1% Drivers for year on year change in attributable net profit 4,806 4,608 4,694 (as of 31 March 2023) 4,169 3,513 3,561 +1.4% 3,513 710 61 36 3,561 22 101 4Q 2021
Slide 14: Moderate balance sheet growth
STATEMENT OF FINANCIAL POSITION Moderate balance sheet growth (CZK billion) +2.3 % (CZK billion) +2.3% +9.6 % +9.6% Year-on-year Year-on-year 1,398 1,431 1,398 1,431 1,305 1,305 82 -33.8% 124 356 -12.4% 85 407 248 1,080 2.7% 1,051 951 781 788 6.7% 739 -6.3% 12 39 12 38 15x 13 2 209 227 238 14.1% 78
Slide 15: Increase in CT1 ratio by 31 bps QoQ adjusted for 65% dividend provision
CAPITAL Increase in CT1 ratio by 31 bps QoQ Contributions to shareholders’ equity in 1Q 2023 (CZK million) adjusted for 65% dividend provision -37 47 128,246 124,676 3,561 Total capital adequacy at 19.76% over the current minimum of 17.9% CET 1 ratio at 19.22% over the required 13.1% (minimum T1 at
Slide 16: Net interest income affected by higher average cost of funding
NET INTEREST INCOME Net interest income affected by higher Year-to-date (CZK million) -7.4% average cost of funding 6,856 494 30% 6,349 642 Other Net interest margin (%) Quarter-to-date Year-to-date 3,121 -13% NII from deposits 2,727 2.09% 1.93% 2.22% 2.22% 2.17% 2.22% 2.12% 2.25% 2.21% 2.42% 2.01%
Slide 17: Growth in fees driven by card payments
NET FEES AND COMMISSIONS Growth in fees driven by card payments Year-to-date (CZK million) +1.4% 1,494 1,515 Transaction fees 401 8% 432 Transaction fees Transaction activity trending up, with seasonal peak in Q4. Rising all main transaction types, mainly card payments, except cash and in-branch Dep
Slide 18: Gains from financial operations still strong
NET PROFIT FROM FINANCIAL OPERATIONS Gains from financial operations still strong Year-to-date (CZK million) -7.5% 1,081 1,000 Capital markets Client FX hedging activity affected in the context of mostly appreciating Capital markets 624 -13% 545 CZK and lower business confidence levels Net gains on
Slide 19: Operating expenditures well controlled
OPERATING EXPENDITURES Operating expenditures well controlled Year-to-date (CZK million) +5.0% Personnel expenses - number of employees (average FTE) in 1Q 2023: 7,541 Personnel costs -1,871 4% -1,944 (-0.3% YoY, +0.2% QoQ). Temporary recent increment due to hiring and GAE (excl. Res. and similar fu
Slide 20: Asset quality & cost of risk
Highlights as of 31 March 2023 Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook for 2023 Appendix
Slide 21: 1Q 2023 Asset quality
LOAN PORTFOLIO QUALITY 1Q 2023 Asset quality Group lending (CZK billion) 750.7 769.4 787.2 784.9 789.1 738.9 Gross loan portfolio up by 5.1% YoY and 0.5% QoQ 672.4 698.8 664.1 663.5 665.8 Resilient credit risk profile 663.3 • Stable Stage 2 share at 13% • Stable NPL ratio at 2.2% 57.3 18.2 60.1 18.2
Slide 22: 1Q 2023 Cost of risk development
COST OF RISK 1Q 2023 Cost of risk development Total Cost of risk (Year-to-date, in basis points) 43 40 37 1Q 2023 CoR net release at CZK 432 million 24 21 22 10 15 14 15 9 8 CZK 523 million in net provision releases recorded on non-retail -17 7 8 exposures -5 -21 -55 Net provision creation recorded
Slide 23: Outlook for 2023
Highlights as of 31 March 2023 Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook for 2023 Appendix
Slide 24: Outlook for 2023
OUTLOOK FOR 2023 Outlook for 2023 The below text updates and replaces outlook for 2023 first presented on 8 February 2023 alongside release of KB’s full year 2022 results. Investors are advised to consider high level of uncertainty and risks when formulating their investment decisions • Czech econom
Slide 25: Appendix
Highlights as of 31 March 2023 Macroeconomic environment Business performance Financial performance Asset quality & cost of risk Outlook for 2023 Appendix
Slide 26: Number of clients and distribution network
KB GROUP CLIENTS AND DISTRIBUTION NETWORK Number of bank clients Number of clients and distribution network (thousands, CZ) 31-Mar-22 31-Mar-23 YoY 1,667 1,664 1,641 1,625 1,652 1,656 Number of clients KB Group’s clients 2,253,000 2,232,000 -21,000 Komerční banka 1,636,000 1,656,000 20,000 – individ
Slide 27: Income statement
CONSOLIDATED INCOME STATEMENT Income statement (CZK million, unaudited) 1Q 2022 4Q 2022 1Q 2023 YoY QoQ Net interest income 6,856 7,132 6,349 -7.4% -11.0% Net fee & commission income 1,493 1,673 1,515 1.5% -9.4% Net profit of financial operations 1,081 753 1,000 -7.5% 32.8% Dividend and other income
Slide 28: Balance sheet
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Balance sheet (CZK million, unaudited) 31-Mar-22 31-Dec-22 31-Mar-23 YoY rel. YoY abs. Ytd rel. Ytd abs. Assets 1,398,297 1,305,304 1,431,062 2.3% 32,765 9.6% 125,758 Cash and current balances with central bank 57,491 14,190 16,967 -70.5% -40,524 19.6% 2,
Slide 29: Capital & profitability indicators
FINANCIAL RATIOS Capital & profitability indicators Adjusted for IFRIC 21 Reported linearisation* (year-to-date, IFRS 9) 31-Mar-22 31-Dec-22 31-Mar-23 31-Mar-22 31-Mar-23 Capital adequacy 20.2% 19.5% 19.8% Tier 1 ratio = Core Tier 1 ratio 19.8% 18.9% 19.2% Risk weighted assets for credit risk (CZK b
Slide 30: 1Q 2023 Cost of risk structure
COMPOSITION OF 1Q 2023 COST OF RISK 1Q 2023 Cost of risk structure Key components Contribution to 1Q 2023 CoR (bps) Non-retail NPL portfolio -23 bps Retail NPL portfolio 2 bps Non-retail performing portfolio (Stage 1 & 2) -2 bps Retail performing portfolio (Stage 1 & 2) 2 bps Total -21 bps KB Group
Slide 31: Business performance of subsidiaries (1/2)
OVERVIEW OF KB SUBSIDIARIES Business performance of subsidiaries (1/2) 1Q 2022 1Q 2023 YoY Modrá pyramida (100%) #2 building savings & loans company Volume of new loans (CZK million) 6,548 2,069 -68% Volume of total loans (gross, CZK million) 78,843 86,542 10% Volume of deposits (CZK million) 58,943
Slide 32: Business performance of subsidiaries (2/2)
OVERVIEW OF KB SUBSIDIARIES Business performance of subsidiaries (2/2) 1Q 2022 1Q 2023 YoY Factoring KB (100%) #1 on the Czech factoring market Factoring turnover (CZK million) 18,475 17,329 -6% Volume of total financing (gross, CZK million) 9,454 9,006 -5% Average number of FTEs 42 40 -3% KB Pojišť
Slide 33: Mobile banking growth continues apace
DIGITAL Mobile banking growth Mobile banking – volume of payments Mobile banking and KB Key penetretation (CZK billion per month) (in thousands) continues apace 50 1,200 1,169,000; 70.6% Mobile banking 40 1Q 2023 CZK 114.3 billion 1,000 KB Key Share of sales by channel* (+ 28% YoY) 1,116,000; 800 (s
Slide 34: MREL target and fulfilment status, Tier 2
MREL, TIER 2 MREL target and fulfilment status, Tier 2 Own funds and eligible liabilities (for MREL) As of 1 January 2023, the recommended volume of KB Group’s MREL was at 17.4% of the 26.5% Total requirement = consolidated total risk exposure and 5.18% of consolidated total exposure. MREL + CBR (ex
Slide 35: Debt securities portfolio in the banking book
SECURITIES Debt securities portfolio in the banking book (CZK bilion) 184.2 171.9 155.4 Slovakia 4.6 141.8 174.0 10.1 5.5 Poland 0.0 30.1 28.8 31/12/2022 31/03/2023 Debt securities at amortized cost Czech sovereign securities Debt securities at FV through OCI Foreign government bonds Corporations No
Slide 36: Interest rates evolution
INTEREST RATES Interest rates evolution % For the period 1 Jan 2015 – 28 April 2023 8 7 6 5 4 3 2 1 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 3M Pribor 6M Pribor 2W repo 5Y IRS 10Y IRS KB Group results as of 31 March 2023 12 May 2023 36
Slide 37: KB #1 listed Czech bank
KB #1 listed Czech bank Shareholder structure Development of KB share price and PX index (1 January 2001 – 28 April 2023) KB 600 PX 500 Free-float 39.6% 400 300 60.4% 200 Société Genérále 100 0 2002 2005 2008 2011 2014 2017 2020 2023 • The number of shareholders comprised 71,447 corporate entities a
Slide 38: Macroeconomic environment – Czechia
MACROECONOMIC ENVIRONMENT Macroeconomic environment – Czechia Macroeconomic Indicators 2017 2018 2019 2020 2021 2022 2023* 2024* Real GDP (%, average) 5.3 3.2 3.0 -5.5 3.6 2.5 0.6 1.8 Inflation (%, average) 2.4 2.2 2.9 3.3 3.8 15.1 11.8 2.0 Household consumption (%, average) 4.0 3.3 2.6 -7.4 4.2 -0.
Slide 39: 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