Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — FY2017 Earnings Presentation
32 slides from Komercni Banka, A.s's earnings presentation, Feb 8, 2018
Slide 1: Komerční banka Group Financial results as of 31 December 2017
Komerční banka Group Financial results as of 31 December 2017 According to International Financial Reporting Standards, consolidated, unaudited Prague, 8 February 2018
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 Macroeconomic environment 4 Highlights of KB´s performance in 2017 5 Strategic priorities 6 Business performance 9 Financial performance, capital and dividends 12 Loan portfolio quality and cost of risk 21 Appendix 24 3
Slide 4: Czech economy performing strongly
Economy of the Czech Republic Czech economy performing strongly GDP in 3Q17 up 0.5% QoQ, +5.0% YoY, driven by Real GDP outlook (YoY, %) domestic consumption while fixed investments added to the growth, too. Negative QoQ contribution from net exports Industrial output grew dynamically and even co
Slide 5: KB in 2017: increases number of clients and volume of assets under management
Highlights KB in 2017: increases number of clients and volume of assets under management, improves digital banking The number of Komerční banka’s clients continued to grow. Number of bank clients 85% of clients use direct channels. Mobile banking used by 436,000 clients up by 10,100 to 1,664,000 Tot
Slide 6: Development of a client-centred business model
Strategic priorities for 2018 Development of a client-centred business model To develop a client-centred business model based on effectively understanding client needs and proximity to clients at their points of need, thereby enabling KB to offer relevant and valuable solutions To confirm clients’ p
Slide 7: Confirming market leadership in mobile banking
2017 progress in digital client services Confirming market leadership in mobile banking No. of mobile banking clients Volume of mobile payments No. of mobile banking 436,000 CZK billion 24.7 Per client interactions 303,000 13.6 2016 2017 2016 2017 Selected key achievements and deliveries in 2017 H
Slide 8: Developing omnichannel retail service model
2018 service digitalisation plan Developing omnichannel retail service model Vision for KB’s omnichannel model Seamless omnichannel customer experience Omnichannel customer journeys Digital sales & service Branch as an important point of maintaining proximity with clients, Digital with human t
Slide 9: Selected deals of the fourth quarter of 2017
Selected deals of the fourth quarter of 2017 PUBLIC SECTOR OIL AND GAS OIL AND GAS REAL ESTATE MĚSTO KRNOV Bestsport, a.s. MND a.s. MND a.s. Syndicated revolving facility L/T project financing Municipal Loan Bond issue EUR 74,000,000 CZK 2,202,000,000 CZK 2,050,000,000 CZK 124,000,000 Mandated Lead
Slide 10: Loans to clients: Growth driven by retail
Loans to clients Growth driven by retail CZK billion 615.2 625.8 607.4 593.4 595.4 596.1 Gross loans (excluding repo) up by 1.8% YoY, +0.1% 40.6 42.0 38.1 38.8 39.5 43.6 QoQ to CZK 606.1 billion. Total Loans and advances to customers +2.0% YoY, -2.9% QoQ to CZK 607.4 billion 201.1 207.8 210.1 213.
Slide 11: Deposit growth in line with the market
Deposits and other assets under management Deposit growth in line CZK billion Group deposits 781.9 797.1 with the market 708.6 699.4 758.2 63.8 62.6 62.5 762.0 62.7 64.1 64.1 242.2 245.7 236.0 251.5 Standard Group deposits (excluding repo) grew by 215.8 230.1 +8.9% YoY to CZK 756.1 billion. Season
Slide 12: Cost of risk at bottom, improving revenue trend
Consolidated income statement Cost of risk at bottom, improving revenue trend Profit and Loss Statement Reported Recurring Change Change (CZK million, unaudited) FY 2016 FY 2017 FY 2016 FY 2017 YoY YoY Net interest income 21,068 20,808 -1.2% 21,068 20,808 -1.2% Net fees & commissions 6,683 6,465 -3.
Slide 13: Balance sheet expanded at the pace of deposit growth
Consolidated statement of financial position Balance sheet expanded at the pace of deposit growth 31 Dec 31 Dec Balance Sheet 2016 2017 YoY (CZK million, unaudited) Reported Reported Assets 922,737 1,004,039 8.8% Cash and balances with central bank 112,241 32,663 -70.9% Amounts due from banks 51,771
Slide 14: Accounting equity decreased due to marked-to-market deposit hedges
Shareholders’ equity Accounting equity decreased due to marked-to-market deposit hedges Contributions to equity in FY 2017 Shareholders’ equity declined year to date by 4.8% to CZK 100.3 billion as accumulation of retained 14,930 earnings was more than offset by decrease in revaluation reserve for
Slide 15: Capital solid before increase in regulatory requirement
Financial ratios Capital solid before increase in regulatory requirement Reported Recurring (year-to-date) 31/12/2016 31/12/2017 31/12/2016 31/12/2017 Capital adequacy 16.2% 18.6% Tier 1 ratio = Core Tier 1 ratio 16.2% 18.0% Risk weighted assets for credit risk (CZK billion) 376.9 352.9 Net interest
Slide 16: Increase in payout ratio for 2018
Capital strategy and dividends Increase in payout ratio for 2018 Dividend per share (gross, in CZK, recalculated) In accordance with its intention announced in February 2017 regarding the share of 2017’s net profit to be paid out in dividends, and in view of KB’s 2017 result, the capital position
Slide 17: Net interest income: Positive influence of increasing interest rates
Net interest income Positive influence of increasing interest rates Net interest income in FY 2017 -1.2% YoY. 4Q 2017 5,323 5,299 5,165 5,148 5,323 5,172 +2.9% QoQ 322 290 307 313 322 351 Increases in central bank‘s repo rate and in market 2,716 2,717 2,633 2,659 2,609 2,621 rates reflected posi
Slide 18: Net fees and commissions: Improving trend
Net fees and commissions Improving trend NFC in FY 2017 down by 3.3% YoY. 4Q +8.0% QoQ 1,676 1,599 1,661 1,558 1,682 1,564 Deposit product fees – YoY affected by repricing and 204 267 229 201 203 196 introduction of new packages in August with basic 189 178 170 167 174 175 251 224 account chargi
Slide 19: Net profit from financial operations
Net profit from financial operations Good end of year after extraordinary first half NPFO in FY 2017 was up by a strong 24.3% 1,051 941 (excluding the gain from VISA Europe in 2016) 826 862 boosted mainly by strong clients’ activity before and 722 652 shortly after the release of the CZK currency
Slide 20: Operating expenditures: Maintained cost discipline
Operating expenditures Maintained cost discipline 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017 Recurring OPEX for FY 2017 grew by +1.2% YoY1, less than the inflation 449 1 Reported OPEX in FY 2017 decreased by -4.6% YoY. -1,810 -1,790 -1,763 -1,868 -1,887 -1,803 OPEX in 4Q 2017 up +6.2% QoQ
Slide 21: Loan portfolio quality: Further improvement in asset quality
Loan portfolio quality Further improvement in asset quality CZK billion Gross lending 596.1 615.2 625.8 607.4 Total loan exposure up 2% YoY, down 2.9% 593.4 595.4 QoQ LUSR exposure ratio down to 3.1% (vs. 3.8% 563.2 563.6 565.3 585.5 596.8 579.3 in 4Q 2016) and NPL exposure ratio down to 1.9% (v
Slide 22: Cost of risk exceptionally low
Cost of Risk Cost of risk exceptionally low CoR in FY 2017 at CZK 392 million (net release) Total Cost of Risk (Year-to-date, in basis points) 71 in comparison with CZK -1,818 million (net 65 creation) in 2016 32 30 YtD Cost of Risk decreased to -6 bps in FY 2017 13 11 4 (vs. 32 bps in FY 2016)
Slide 23: Agenda
Agenda Macroeconomic environment 4 Highlights of KB´s performance in 2017 5 Strategic priorities 6 Business performance 9 Financial performance, capital and dividends 12 Loan portfolio quality and cost of risk 21 Appendix 24 23
Slide 24: Number of clients and distribution network
Number of clients and distribution network Number of bank clients (thousands, CZ) KB Group’s 2.4 million clients, of which KB bank 1,664,000 clients (1%) MPSS 488,000 clients (-1%) KBPS 532,000 clients (-1%) 1,647 1,654 1,664 1,602 1,626 1,589 ESSOX (Group) 215,000 active clients (0%) Ne
Slide 25: Consolidated income statement – quarterly view
Consolidated income statement – quarterly view Profit and Loss Statement Change Change 4Q 2016 3Q 2017 4Q 2017 YoY QoQ (CZK million, unaudited) Net interest income 5,299 5,172 5,323 0.5% 2.9% Net fees & commissions 1,599 1,558 1,682 5.2% 8.0% Income from financial operations 826 722 862 4.4% 19.4% O
Slide 26: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 FY 2016 FY 2017 YoY Modrá pyramida (100%), #2 building savings & loans company Volume of new loans (CZK million) 9,430 14,639 55% Volume of total loans (gross, CZK million) 38,820 43,634 12% Volume of deposits (CZK million) 64,105 62,669 -2% Number of clients
Slide 27: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 FY 2016 FY 2017 YoY Factoring KB (100%), #1 on the Czech factoring market Factoring turnover (CZK million) 37,762 42,838 13% Volume of total financing (gross, CZK million) 7,455 7,974 7% Average number of FTEs 45 45 0% Komerční pojišťovna (49%), a universal i
Slide 28: Debt securities portfolio in the banking book
Debt securities portfolio in the banking book CZK billion, as of 31 December 2017 Available-for-sale portfolio Held-to-maturity portfolio CZK 29.5 billion CZK 59.9 billion 9.7 7.4 EIB, 1.1 Poland, 7.2 Poland, 0.8 Romania, 1.7 19.6 7.4 9.7 50.2 2.6 Slovakia, 3.8 Slovakia, 2.5 Czech sovereign Czech so
Slide 29: Macroeconomic environment – Czech Republic
Macroeconomic environment – Czech Republic Macroeconomic Indicators 2014 2015 2016 2017* 2018* Real GDP (%, average) 2.7 5.4 2.5 4.6 3.8 Inflation (%, average) 0.4 0.3 0.7 2.5 2.1 Household consumption (%, average) 1.8 3.8 3.6 4.2 3.9 Unemployment (%, av., MLSA meth.) 7.6 6.4 5.4 4.1 3.5 M2 (%, aver
Slide 30: Interest rates evolution
Interest rates evolution (for the period 1 January 2005 – 2 February 2018) 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Pribor 3M Pribor 6M ČNB REPO Rate IRS 5Y IRS 10Y 30
Slide 31: KB shares and shareholders
KB shares and shareholders KB #1 listed Czech bank Development of KB share price and PX index The General Meeting held on 22 April 2016 approved (1 October 2001 – 26 January 2018) a split of shares of KB in the ratio of 5:1. The split took effect on 25 April 2016 by its entry in the Register of
Slide 32: Investor Relations
Investor Relations Jakub Černý, Renata Swaczynová, Kamila Corbet Tel.: +420 955 532 156, 955 532 155, 955 532 734 E-mail: investor_relations@kb.cz - Internet: www.kb.cz 32