Komercni Banka, a.s. · PSECZ:KOMB
Komercni Banka, a.s — Q3 2005 Earnings Presentation
36 slides from Komercni Banka, a.s's earnings presentation, Oct 31, 2005
Slide 1: Financial Results as at 30 September 2005
JJ Mois Année Financial Results as at 30 September 2005 (International Financial Reporting Standards) Prague - 31 October 2005
Slide 2: Contents
Contents n Strategy and Business Highlights n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 1
Slide 3: Business environment
Business environment Market conditions: Big potential and challenge for the future 4.9% GDP (YoY growth) 4.4% • GDP growth is accelerating: + 5.1% in 2Q 3.2% 2.6% 2005 (4.4% in 2004, 3.2% in 2003) 1.5% • Household loan growth still at high 33% in September 2005 while the household 2001 2002 2003 200
Slide 4: KB's business strategy confirmed by its results
KB’s Strategy KB’s business strategy confirmed by its results n KB business model is based on: 4 The long-term relationship with clients and cross-selling activities, focus on transparency and communication with clients 4 Continuously improving level of services based on technologic innovations and
Slide 5: KB Challenges for the future
KB Challenges for the future KB will continue focusing on the revenues’ growth • Increase of the client base mainly by ► Opening new branches and installing ATMs ► Enlarging the sales’ force ► Focusing on youngsters and affluent clients • Increase of the cross-selling ratio by ► Expanding further th
Slide 6: Operating profit increased by 8%
Highlights of 1-3Q 2005 Operating profit increased by 8% As of 30 September 2005, year-on-year comparison • Total revenues increased by 3% driven by lending activities • Total costs kept under tight control declined by almost 1% • Operating profit up 8% thanks to rising revenues and effective cost m
Slide 7: Dynamic Business Performance - Expansion in loan portfolio
Highlights of 1-3Q 2005 Dynamic Business Performance - Expansion in loan portfolio As of 30 September 2005, year-on-year comparison • Outstanding mortgages to individuals: + 40% to CZK 39.6 billion • Outstanding consumer loans: + 19% to CZK 12 billion of which CZK 1.56 billion comprise loans on cred
Slide 8: Success in mutual funds and insurance products
Highlights of 1-3Q 2005 Dynamic business performance – Success in mutual funds and insurance products As of 30 September 2005, year-on-year comparison n Growth in number of KB clients by 70,000 (i.e. 5%) to 1,450,000, of which 1,169,000 are individual clients n Komerční banka has reached the mark of
Slide 9: Expansion of the loan portfolio in all client segments
Loan portfolio Expansion of the loan portfolio in all client segments Individuals SME Volume of loans Corporates CZK billion, Gross amount Other + 22.5% 184.9 173.5 164.7 157.8 151.0 51.6 28% ■ Year-on-year growth of the loan portfolio 48.1 by 22.5% 43.9 41.6 38.2 ■ Total mortgage loans amounted to
Slide 10: Persisting stability of client deposits
Clients’ deposits Persisting stability of client deposits Current Accounts incl. O/N Volume of primary client deposits Term and Savings Accounts CZK billion Loans from Customers (excl. repo transactions) + 2.2% 354.0 356.7 ■ Year-on-year slight increase of 349.2 352.2 346.6 depositary base mainly dr
Slide 11: Continual improvement of cross-selling activities
Penetration of products Continual improvement of cross-selling activities 30. 9. 2004 30. 9. 2005 YoY Change Cross-selling ratio* Individuals 4.39 4.84 +10% Penetration ratio – Individuals** Packages 60.3 67.3 +12% Mortgages 2.4 2.9 +21% Consumer loans 9.5 10.8 +14% Payment cards 66.2 67.5 +2% Penet
Slide 12: Contents
Contents n Strategy and Business Highlights n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 11
Slide 13: Unconsolidated Financial Results of KB
Unconsolidated Financial Results of KB Net operating income growth by 7.8% Unconsolidated Profit and Loss Statement 1-3Q 2004 1-3Q 2005 Change CZK million 05/04 Net banking income 16,801 17,376 +3.4% Operating costs -8,643 -8,584 -0.7% Net operating income 8,158 8,792 +7.8% Provisions for loan and i
Slide 14: Net Interest Income
Net Interest Income Lending activities managed to offset pressures on spreads CZK million, unconsolidated Net Interest Income Net Banking Income Other + 3.4% 17,376 10,060 NII from loans 16,801 9,061 NII from deposits +40.3% 965 • YoY growth driven especially by 688 boosting volumes in retail lendin
Slide 15: Net Fees and Commissions
Net Fees and Commissions Growth in Non-FX fee income driven by lending and cross-selling CZK million, unconsolidated Net Fees and Commissions Net Banking Income Non-FX + 3.4% 17,376 6,379 6,463 FX clean payments 16,801 FX cash conversions • The non-FX fees are positively impacted by growing fee inco
Slide 16: Trading Profits and Other Income
Trading Profits and Other Income KB trading profit sustained by clients FX operations CZK million, unconsolidated Net Profit from Financial Operations Net Banking Income FX operations 17,376 951 Securities and security + 3.4% derivatives 16,801 608 Interest and Commodity Derivatives 443 • Increase i
Slide 17: Operating Costs
Operating Costs Cost efficiency still improving CZK million, unconsolidated Personnel Costs Operating Costs • Positive impact of capitalization of internal costs and lower average 3,652 - 3.2% 3,534 headcount YoY • Due to expanding business related activities the number of employees has 8,643 - 0.7%
Slide 18: 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 2,880 2,807 2,843 2,784 436 496 373 404 415 416 425 1,281 1,310 1,190 1,503 1,202 1,355 1,237 1,15
Slide 19: 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 23 bp mainly resulting from increasing quality of large corporate clients -900 -20.3% -717 segment. • Neut
Slide 20: Balance Sheet
Balance Sheet Assets Liabilities CZK million, unconsolidated 474,137 Change 474,137 Change 448,294 12,955 448,294 + 29.2% 23,747 + 28.0% Cash and balances 10,025 Amounts due 18,548 with central bank to banks Amounts due from 231,361 229,564 - 0.8% banks Amounts due 358,825 363,573 + 1.3% to customer
Slide 21: Shareholders Equity development since 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: + 5,298 as at 30 September 2005: 43,578 48,876 Shareholders’ equity 31. 12. 2004 1. 1. 2005 Increase Decrease 30. 9. 2005 Share capital 19,0
Slide 22: Contents
Contents n Strategy and Business Highlights n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 21
Slide 23: Client loan portfolio
Client loan portfolio Strong loan growth does not hamper loan portfolio quality CZK million, unconsolidated Client loans, On-balance sheet Specific provisions Gross amount +17.2% 184,900 157,734 + 12.2% 6,001 5,348 Standard loans 131,712 + 20.8% 159,057 Total watch loans 517 - 4.4% 494 provisions Sp
Slide 24: CDO portfolio: Restructuring finalized
CDO portfolio Restructuring of the portfolio finalized As of 30 September 2005 ● The divestment process aimed at selling lines with relatively significant default risk was finalized in Q3; ● Overall in 2005, almost 50% of the portfolio (book value) was sold; ● The resulting profile is assessed as sa
Slide 25: Contents
Contents n Strategy and Business Highlights n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 24
Slide 26: Consolidated Financial Results and Ratios
Financial Results of KB Group Consolidated Financial Results and Ratios Profit and Loss Statement 1-3Q 2004 1-3Q 2005 Change CZK million 05/04 Net interest income 9,592 10,839 +13,0% Net fees & commissions 6,588 6,478 -1,7% Income from financial operations 1,097 785 -28,4% Other income 160 7 -95,6%
Slide 27: Subsidiary and associated undertakings results
Financial Results of KB Group Subsidiary and associated undertakings results As at 30 September 2005, CZK mil., CAS/SAS/IFRS Share of KB Profit after tax Equity Assets ESSOX, s.r.o. (IFRS) 51% -25 123 2,033 Factoring KB, a.s. (CAS) 100% 12 156 4,195 Komercni Finance, B.V. 100% NA NA NA Komerční bank
Slide 28: KB Clients and Network
KB Clients and Network Active products of direct banking reached 1 million as at 30 September 2005 § 1,450,000 clients* - 1,169,000 individuals and 281,000 corporates - YonY increase in number of clients by 70,000 (+5%) § Network - 339 points of sale for retail clients - 37 business centres for medi
Slide 29: Sales of key products
Products for Individuals and Small Businesses Sales of key products Financial Packages 30. 9. 2004 30. 9. 2005 YoY Change PACKAGES FOR 581,900 681,427 + 17% INDIVIDUALS packages packages GAUDEAMUS 97,660 115,827 + 19% package for young clients packages packages 79,208 118,830 + 50% CHILD ACCOUNT acc
Slide 30: Payment cards
Payment cards Success of card business 30. 9. 2004 30. 9. 2005 YoY Change Debit cards - active 1,126,595 1,227,105 +9% Credit cards - active 52,641 103,072 +96% Number of POS (points of sales using 12,049 14,675 22% electronic device) 1-3Q 2004 1-3 Q 2005 Number of transactions via 62.3 mil. 70,0 mi
Slide 31: Cross-selling activities
Cross-selling activities Co-operation within KB/SG Group and Strategic Partnerships Provided in 1-3Q 2004 1-3Q 2005 Change 05/04 co-operation with: Life insurance Vital (number of sold policies through KB) Komerční pojišťovna 35,133 37,601 +7% Non-life insurance Allianz (number of sold policies thro
Slide 32: Macroeconomic Environment
Macroeconomic Environment Czech Republic Macroeconomic indicators 2003 2004 2005* 2006* 2007* GDP (%) + 3.2 + 4.4 + 4.5 + 4.2 + 4.5 Inflation (%) + 0.1 + 2.8 + 2.0 + 3.0 + 2.5 Households income (%) + 4.8 + 4.9 + 5.0 + 5.0 + 5.5 M2 (%) + 6.9 + 4.4 + 5.5 + 6.0 + 6.5 3M PRIBOR (%) 2.3 2.4 1.9 2.3 2.8 P
Slide 33: 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% 01 02 03 04 2 2 2 3 3 3 4 4 4 5 5 5 .0 .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 .9 .1 .1 .1 .1 31 30 30 31 30 30 31 30 30 31 30 30 31 31 31 31 Pribor 3M Pribor 6M KB Re
Slide 34: KB Share price
KB Share price Development of KB’s share price and Index PX50 CZK 3 900 1 500 3 700 1 400 3 500 1 300 3 300 1 200 3 100 1 100 2 900 1 000 2 700 900 2 500 800 2 300 700 2 100 600 1 900 500 1 700 400 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 30.9.05 KB
Slide 35: Structure of Shareholders
KB Shareholders Structure of Shareholders Major shareholders of Komerční banka, a. s. as at 30 September 2005 Number of shares outstanding - 38 million Others Société Générale S.A. 35.15% 60.35% The Bank of New York ADR Department 4.5% Komerční banka 34
Slide 36: 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