Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — H1 2017 Earnings Presentation
30 slides from Komercni Banka, A.s's earnings presentation, Aug 2, 2017
Slide 1: Komerční banka Group Financial results as of 30 June 2017
Komerční banka Group Financial results as of 30 June 2017 According to International Financial Reporting Standards, consolidated, unaudited Prague, 2 August 2017
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 results 4 Financial results 10 Loan portfolio quality and cost of risk 19 Appendix 22 3
Slide 4: Economy of the Czech Republic
Economy of the Czech Republic Dynamic growth of the Czech economy GDP in 1Q17 up 1.5% QoQ, (+3.0% YoY) as private Real GDP outlook (YoY, %) consumption and foreign demand remained strong. Investments contributed still negatively, due to delays in public infrastructure projects On the supply side, GD
Slide 5: KB in first half 2017: strong and responsible participation to the Czech economic growth
KB in first half 2017: strong and responsible participation to the Czech economic growth KB Group’s lending to clients expanded by 5.1% year on year to CZK 599.8 billion Solid growth Total client deposits rose by 11.8% from year earlier to CZK 771.2 billion of business volumes Assets of KB Group’s c
Slide 6: Selected deals of the second quarter of 2017
Selected deals of the second quarter of 2017 6
Slide 7: Dynamic retail lending, corporate borrowing affected by abundant liquidity
Loans to clients Dynamic retail lending, corporate borrowing affected by abundant liquidity CZK billion 593.4 595.4 596.1 615.2 Gross loans (excluding repo) up by 5.1% YoY1, +0.6% 548.8 570.8 38.1 38.8 39.5 40.6 QoQ to CZK 599.8 billion. Total Loans and advances to 37.1 37.7 customers +7.8% YoY, +3.
Slide 8: Fast growth in deposits commensurate to inflow of liquidity onto the market
Deposits and other assets under management Fast growth in deposits CZK billion Group deposits commensurate to inflow of 758.2 781.9 694.3 708.6 699.4 liquidity onto the market 679.1 67.0 64.9 64.1 64.1 63.8 62.6 236.0 242.2 Standard Group deposits (excluding repo) grew by 200.5 208.9 215.8 230.1 +11
Slide 9: Agenda
Agenda Business results 4 Financial results 10 Loan portfolio quality and cost of risk 19 Appendix 22 9
Slide 10: Consolidated income statement
Consolidated income statement Net result boosted by clients’ extraordinary hedging activity on CZK rate, release of provisions Profit and Loss Statement Reported Recurring Change Change (CZK million, unaudited) 1H 2016 1H 2017 1H 2016 1H 2017 YoY YoY Net interest income 10,446 10,313 -1.3% 10,446 10
Slide 11: Consolidated statement of financial position
Consolidated statement of financial position Balance sheet structure influenced by inflow of deposits 30 Jun 31 Dec 30 Jun Balance Sheet 2016 2016 2017 YoY Ytd (CZK million, unaudited) Reported Reported Reported Assets 939,782 922,737 1,039,362 10.6% 12.6% Cash and balances with central bank 143,035
Slide 12: Shareholders' equity
Shareholders’ equity Shareholders’ equity lower year-to-date due to impact of higher interest rates on revaluation of hedges Contributions to equity in 1H 2017 Shareholders’ equity declined year to date by 5.6% to CZK 99.5 billion 7,697 Profit generation was offset by payment of the 105,400 -7,554 9
Slide 13: Financial ratios
Financial ratios Improved capital and profitability indicators Reported Recurring (year-to-date) 30/6/2016 31/12/2016 30/6/2017 30/6/2016 30/6/2017 Capital adequacy (reported, comprising only Core Tier 1 15.3% 16.2% 16.5% Total risk weighted assets (CZK billion) 429.8 442.9 451.3 Risk weighted asset
Slide 14: Net interest income
Net interest income NII underpinned by volume growth NII in 1H 2017 -1.3% YoY. NII in 2Q 2017 -0.3% QoQ 5,234 5,213 5,323 5,299 5,165 5,148 319 318 322 290 307 313 NII from loans – supported by volumes. Pressure on lending margin continued in the overliquid market 2,595 2,622 2,716 2,717 2,633 2,659
Slide 15: Net fees and commissions
Net fees and commissions Positive trend in fees from cross-selling and for services with higher added value NFC in 1H 2017 down by 5.4% YoY. 2Q +6.2% QoQ 1,700 1,708 1,676 1,661 1,599 1,564 Deposit product fees - More rewards paid out in the 259 197 204 201 203 267 MojeOdměny loyalty programme. Lowe
Slide 16: Net profit from financial operations
Net profit from financial operations Elevated client activity around end of currency floor NPFO in 1H 2017 down by 15.6% YoY due to last 1,626 year’s gain from VISA Europe share*. Excluding 373 this one-off, NPFO was up by strong 42.3% 297 1,051 941 826 In 2Q 2017, NPFO -10.5% QoQ because the 734 65
Slide 17: Operating expenditures
Operating expenditures Cost increase responsible 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 Recurring OPEX in 1H 2017 grew by 1.9% YoY, less 449 than inflation. Recurring 2Q 2017 down by 15.7% 1 QoQ due to recognition of full year cost of regulatory -1,692 -1,737 -1,810 -1,790 -1,763 -1,868 fun
Slide 18: Agenda
Agenda Business results 4 Financial results 10 Loan portfolio quality and cost of risk 19 Appendix 22 18
Slide 19: Loan portfolio quality
Loan portfolio quality Persisting sound asset quality Gross lending CZK billion 593.4 595.4 596.1 615.2 Loan exposure +7.8% YoY, QoQ +3.2% 570.8 548.8 LUSR exposure ratio down to 3.3% (vs. 4% in 2Q 2016) and NPL exposure ratio down to 540.3 563.2 563.6 565.3 585.5 2.2% (vs. 2.5% in 2Q 2016) driven b
Slide 20: Cost of Risk
Cost of Risk Cost of risk at exceptionally low level CoR in 1H 2017 at CZK 103 million in Total Cost of Risk (Year-to-date, in basis points) comparison with CZK -788 million in 1H 2016 64 65 71 YtD Cost of Risk in 1H 2017 at exceptionally low 38 29 30 32 level of -3 bps 17 13 -3 Cost of Risk on Corp
Slide 21: Agenda
Agenda Business results 4 Financial results 10 Loan portfolio quality and cost of risk 19 Appendix 22 21
Slide 22: 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 1,654,000 clients (0%) MPSS 482,000 clients (-4%) KBPS 533,000 clients (-1%) 1,626 1,647 1,654 1,654 1,602 1,589 ESSOX (Group) 212,000 active clients (+1%) Network 390 b
Slide 23: Consolidated income statement – quarterly view
Consolidated income statement – quarterly view Profit and Loss Statement Change Change 2Q 2016 1Q 2017 2Q 2017 YoY QoQ (CZK million, unaudited) Net interest income 5,213 5,165 5,148 -1.2% -0.3% Net fees & commissions 1,708 1,564 1,661 -2.8% 6.2% Income from financial operations 1,626 1,051 941 -42.1
Slide 24: Recurring P&L – quarterly view
Recurring P&L – quarterly view Profit and Loss Statement 2Q 2016 1Q 2017 2Q 2017 Change Change recurring recurring recurring YoY QoQ (CZK million, unaudited) Net interest income 5,213 5,165 5,148 -1.2% -0.3% Net fees & commissions 1,708 1,564 1,661 -2.8% 6.2% Income from financial operations 666 1,0
Slide 25: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 1H 2016 1H 2017 YoY Modrá pyramida (100%), #2 building savings & loans company Volume of new loans (CZK million) 4,723 7,054 49% Volume of total loans (gross, CZK million) 37,698 40,602 8% Volume of deposits (CZK million) 64,936 62,591 -4% Number of clients 5
Slide 26: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 1H 2016 1H 2017 YoY Factoring KB (100%), #1 on the Czech factoring market Factoring turnover (CZK million) 17,402 20,252 16% Volume of total financing (gross, CZK million) 6,647 7,437 12% Average number of FTEs 45 45 1% Komerční pojišťovna (49%), a universal
Slide 27: Macroeconomic environment – Czech Republic
Macroeconomic environment – Czech Republic Macroeconomic Indicators 2013 2014 2015 2016 2017* 2018* Real GDP (%, average) -0.5 2.7 5.4 2.5 3.7 3.1 Inflation (%, average) 1.4 0.4 0.3 0.7 2.3 2.2 Household consumption (%, average) 0.5 1.8 3.8 3.6 3.5 3.5 Unemployment (%, av., MLSA meth.) 7.8 7.6 6.4 5
Slide 28: Interest rates evolution
Interest rates evolution (for the period 1 January 2005 – 25 July 2017) 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 Pribor 3M Pribor 6M ČNB REPO Rate IRS 5Y IRS 10Y 28
Slide 29: KB shares and shareholders
KB shares and shareholders KB #1 listed Czech bank Development of KB share price and PX index As of 30 June 2017 (1 October 2001 – 25 July 2017) 500% The Bank had 46,224 shareholders as of the end of 400% the quarter (+398 year on year), of which 41,215 were private individuals from the Czech Republ
Slide 30: Investor Relations
Investor Relations Jakub Černý, Robert Janeček, Renata Swaczynová, Kamila Corbet Tel.: +420 955 532 156, 955 532 734, 955 532 155 E-mail: investor_relations@kb.cz - Internet: www.kb.cz 30