Komercni Banka, a.s. · PSECZ:KOMB
Komercni Banka, a.s — H1 2003 Earnings Presentation
39 slides from Komercni Banka, a.s's earnings presentation, Jul 31, 2003
Slide 1: Financial Results as at 30 June 2003
Financial Results as at 30 June 2003 (International Financial Reporting Standards) Prague - 31 July 2003
Slide 2: Content
CONTENT • Business Performance • Financial Performance • Loan Portfolio Development • Appendix Financial Results as at 30 June 2003 – Prague – 31 July 2003 1
Slide 3: KB Performance and Achievements in the First Half of 2003
KB PERFORMANCE AND ACHIEVEMENTS IN THE FIRST HALF OF 2003 Komerční banka performed very well in the first half of 2003 due to a successful implementation of new business model. Despite an unfavourable economic environment the Bank managed to significantly improve its business and financial results.
Slide 4: Clients of Komerční banka
CLIENTS OF KOMERČNÍ BANKA Continuous increase of the client base Individuals Year-on-year increase Enterpreneurs and Corporates +40,000 clients 1,261.8 1,278.8 1,244.6 1,239.2 945.3 941.7 965.5 979.6 299.3 297.5 297.3 299.2 December 2001 June 2002 December 2002 June 2003 Financial Results as at 30 J
Slide 5: Important Campaigns Launched
IMPORTANT CAMPAIGNS LAUNCHED Increased awareness, attractiveness and sales Print campaigns for all segments Focused internet campaigns radio, outdoor KB is in 1st position in terms of attractiveness TV campaigns - for the mass-market best TV campaign (3rd position before) of the year 2002 for financ
Slide 6: Direct Banking
DIRECT BANKING 40% share in the total client base Guaranteed Payment Year-on-year increase PC Banking + 68% 507,064 Internet Banking Phone Banking 23,616 21,385 392,295 101,271 22,246 302,300 23,402 5,546 72,671 247,187 29,473 44,355 27,077 23,820 273,976 360,792 222,926 196,290 December 2001 June 2
Slide 7: Sales Network for All Segments
SALES NETWORK FOR ALL SEGMENTS Individuals Medium & Enterprises Small and Corporates Businesses Municipalities 328 39 8 Points MEM Business Corporate Business of Sales Centers Centers (including 40 regional branches) Number of ATMs grew by 33 to the total of 473 since the end of 2002 Financial Resul
Slide 8: A Full Range of Packages for Individuals
A FULL RANGE OF PACKAGES FOR INDIVIDUALS Coverage of all market needs in place since October 2002 IDEAL PERFEKT KONTO EXPRESS KONTO A-KONTO STANDARD ACTIVE PERSPECTIVE AFFLUENT 11.3% Market Share 13.8% Market Share 20.3% Market Share 32.3% Market Share 42.0% of the Czech market 41.0% of the Czech ma
Slide 9: Individuals - Retail Loans
INDIVIDUALS - RETAIL LOANS Continuous positive trend Mortgages Consumer loans Number of mortgages granted in the first half of the year Number of consumer loans granted in the first half of the year + 24% 17,259 13,909 + 33% 3,010 2,260 1H 2002 1H 2003 1H 2002 1H 2003 Volume of mortgages granted in
Slide 10: Individuals - Life Insurance Product Vital
INDIVIDUALS - LIFE INSURANCE PRODUCT VITAL Good results in terms of premium collected CZK million KP is in terms of life insurance the third biggest insurance company in the Czech Republic 1,496.4 Vital - total volumes of premium underwritten 1,164.8 904.2 647.4 411.3 127.3 01/2003 02/2003 03/2003 0
Slide 11: A New Range of Packages for Small Businesses
A NEW RANGE OF PACKAGES FOR SMALL BUSINESSES EFEKT KOMFORT EXCELENT Current account in CZK Current account in CZK Current account in CZK Current account in EUR or USD Payment card VISA Electron Payment card embossed Payment card VISA Electron Payment card BUSINESS Silver Phone or Internet banking Ph
Slide 12: Small Businesses - Profi Loan
SMALL BUSINESSES - PROFI LOAN Simplified process of granting loans to this segment Business loan sale 2003 vs. 2002 Number of granted loans to Small Businesses segment Profi loan* vs. Standard loan comparison Profi loans Other Business loans Approval period 1,841 774 Before 30 days + 272% implementa
Slide 13: Payment Cards
PAYMENT CARDS Leading position of Komerční banka NUMBER OF ACTIVE CARDS NUMBER OF MERCHANTS NUMBER OF ISSUED CARDS NUMBER OF POS + 14% + 5% + 18% + 9% By date Active cards (th.) Issued cards (th.) Merchants POS Dec-01 662 972 17,098 6,019 Dec-02 796 1,244 18,099 8,480 Jun-03 908 1,463 18,992 9,233 P
Slide 14: Retail - Cross Selling Ratio
RETAIL - CROSS SELLING RATIO Positive trend confirms the strategic focus of the Bank KB cross-selling calculation Day-to-day banking • Current account • Debit card 4.5* • Authorised overdraft Direct banking • Internet banking 3.1 • Phone banking 2.8 2.9 2.5 2.6 Savings • Saving account • Term deposi
Slide 15: Key Business Indicators - Deposits
KEY BUSINESS INDICATORS Influence of decreasing interest rates Volume of deposits Depository notes Term deposits and saving deposits CZK billion Current accounts 345.9 336.0 329.2 326.9 316.3 36.3 35.9 33.4 • Year-on-year increase by 4% 35.8 35.2 • Current accounts increased their share 135.7 133.6
Slide 16: Key Business Indicators - Retail Lending
KEY BUSINESS INDICATORS Ongoing positive dynamics in retail lending Business loans Volume of loans (Premier bank) Mortgage loans gross amount, CZK billion Consumer loans 121.9 123.1 123.6 123.0 118.9 • Year-on-year increase of the Premier Bank portfolio by 3% • Retail loans represent 24% of the Prem
Slide 17: Cost of Risk
COST OF RISK Significantly improved quality of the loan portfolio Total client loans (gross) On-balance sheet Cost of Risk*: as at 30 June 2003 (Premier Bank) Standard Watch 91% Sub-standard 2002 : 72 bp Doubtful 9% 1H 2003 : 41 bp Loss Total CZK 129,923 mil. annualised net creation of provisions *
Slide 18: Efficiency and Cost Control
EFFICIENCY AND COST CONTROL • Operating costs reduced year-on-year by 14.4% driven mainly by the staff reduction • Number of employees decreased to 8,981 as at June 2003, representing a year-on-year decrease by 7% • Planned 3-year strategic program will bring a new competitive advantage and an incre
Slide 19: Content
CONTENT • Business Performance • Financial Performance • Loan Portfolio Development • Appendix Financial Results as at 30 June 2003 – Prague – 31 July 2003 18
Slide 20: Financial Results and Ratios
FINANCIAL RESULTS AND RATIOS Net operating income increased by 16% CZK million, unconsolidated Profit and Loss Statement 1H 2002 1H 2003 Change 03/02 Net banking income 11,605 11,384 - 1.9% Operating costs -6,810 -5,827 - 14.4% Net operating income 4,795 5,557 + 15.9% Provisions for loan and investm
Slide 21: Net Interest Income
NET INTEREST INCOME Net interest income stabilised on quarterly basis CZK million, unconsolidated Net Interest Income Banks Customers 6,425 - 1.9% 5,961 ČKA 11,605 11,384 Securities • NII from banks positively influenced 3,234 by interest income from bonds from + 12.3% 3,631 primary issue and decrea
Slide 22: Net Fees and Commissions
NET FEES AND COMMISSIONS Increase in Net fees and commissions CZK million, unconsolidated Net Fees and Commissions Non-FX FX foreign payments - 1.9% 11,605 4,205 FX cash conversions 11,384 4,085 • Increase in Non-FX F&C driven mainly by the fees and commissions 3,066 + 6.0% 3,249 from account mainte
Slide 23: Trading Profits and Other Income
TRADING PROFITS AND OTHER INCOME CZK million, unconsolidated Net profit from financial operations FX operations Interest and Commodity - 1.9% 861 Derivatives 11,605 Securities 11,384 789 345 • FX operations include primarily -17.9% repricing of accounts and results of 420 0 hedging instruments • Dec
Slide 24: Operating Costs
OPERATING COSTS Significant reduction of total costs CZK million, unconsolidated Administrative expenses Personnel expenses 4,966 Other administrative expenses 4,618 • Decrease of personnel expenses 6,810 2,701 driven mainly by staff reduction and - 14.4% - 12.7% 2,359 release of an accrual for 2002
Slide 25: Operating Costs Q-on-Q
OPERATING COSTS Operating costs Q-on-Q Restructuring costs Depreciation and other provisions Q-on-Q Total operating costs Other administrative expenses Personnel expenses 3,542 3,268 2,925 3,025 3,031 521 384 2,796 -3 105 235 511 428 432 282 264 377 333 1,138 1,127 1,162 1,416 1,161 1,098 1,372 1,32
Slide 26: Provisions for Loan and Investment Losses and Net Profit from Sale of Subsidiaries
PROVISIONS FOR LOAN AND INVESTMENT LOSSES AND NET PROFIT FROM SALE OF SUBSIDIARIES AND ASSOCIATES CZK million, unconsolidated Total provisions Comments 843 + 126.0% • Total provisioning comprises profits from sales of CAC Leasing and Reflexim • Provisions for loan losses positively affected by low c
Slide 27: Balance Sheet
BALANCE SHEET CZK million, unconsolidated Assets Liabilities and shareholders’ equity Change Change 439,753 439,753 432,120 432,120 Cash and balances Amounts due with central bank 14,377 13,960 - 2.9% 22,549 18,383 - 18.5% to banks Amounts due from 199,729 186,828 - 6.5% banks Amounts due 341,114 34
Slide 28: Content
CONTENT • Business Performance • Financial Performance • Loan Portfolio Development • Appendix Financial Results as at 30 June 2003 – Prague – 31 July 2003 27
Slide 29: Client Portfolio Evolution
CLIENT PORTFOLIO EVOLUTION CZK billion On-balance Sheet Guaranteed portfolio Non-guaranteed portfolio 147.7 146.5 138.3 129.9 46.7 30.7 18.7 12.5 101.0 115.8 119.6 117.4 31.12.2000 31.12.2001 31.12.2002 30.6.2003 Off-balance Sheet 85.1 85.1 76.6 69.7 3.1 2.6 13.7 6.4 62.9 63.3 82.0 82.5 31.12.2000 3
Slide 30: Loans and Advances to Customers
LOANS AND ADVANCES TO CUSTOMERS Loan portfolio influenced by the transfer of loans to GE CZK million Client loans Specific and general provisions for loan losses On-balance sheet On-balance sheet - 6.1% 138,349 129,923 Total standard 17,195 - 28.8% and watch loans 664 provisions Specific 12,243 - 13
Slide 31: State Guaranteed Portfolio – Focus
STATE GUARANTEED PORTFOLIO – FOCUS CZK billion 31. 12. 2000 30. 6. 2003 60.9* 4.2 11.3 • Guaranteed portfolio comprises: CZK 12.5 bil. on-balance and CZK 2.6 bil. off-balance sheet assets 20.0 • Total repayments of receivables amounted to CZK 23.3 bil., total sales and write-offs to CZK 16.7 bil. 35
Slide 32: CDO Portfolio
CDO PORTFOLIO Stable coverage of the portfolio Specific provisions / Purchase Price Date of acquisition: September 2000 - April 2001 Purchase price: USD 426 mil. 18.1% 17.6% Total coverage (as at 30 June 2003): USD 77 mil. Provisions and reserves based on a mark-to-model approach. 31.12.2002 30.6.20
Slide 33: Content
CONTENT • Business Performance • Financial Performance • Loan Portfolio Development • Appendix Financial Results as at 30 June 2003 – Prague – 31 July 2003 32
Slide 34: Financial Results and Ratios - Consolidated
FINANCIAL RESULTS AND RATIOS - CONSOLIDATED CZK million Profit and Loss Statement 1H 2002 1H 2003 Change 03/02 Net banking income 12,615 13,422 + 6.4% Operating costs (incl. creation of technical insurance reserves) - 7,964 -7,960 - 0.0% Income from not fully consolidated companies 54 369 + 583.3% P
Slide 35: Subsidiary and Associated Undertakings Results
SUBSIDIARY AND ASSOCIATED UNDERTAKINGS RESULTS As at 30 June 2003, CZK mil., CAS/SAS Share of KB Profit after tax Equity Assets ASIS, a.s.*,** 100% 4 13 15 Factoring KB, a.s. 100% 8 126 2,235 Investiční kapitálová společnost, a.s. 100% 63 309 374 Komercni Finance, B.V.** 100% 1 9 9 Komerční banka Br
Slide 36: Development of KB's Share Price and Index PX50
DEVELOPMENT OF KB’s SHARE PRICE AND INDEX PX50 CZK 2,400 900 2,200 800 2,000 700 1,800 1,600 600 1,400 500 1,200 400 1,000 800 300 600 200 KB 400 PX 50 100 200 0 0 1/Oct/01 1/Jan/02 1/Apr/02 1/Jul/02 1/Oct/02 1/Jan/03 1/Apr/03 30/Jun/03 Financial Results as at 30 June 2003 – Prague – 31 July 2003 35
Slide 37: Development of Interest Rates
DEVELOPMENT OF INTEREST RATES 5.15 4.80 4.45 4.10 3.75 3.40 3.05 CNB Repo 2.70 3M Pribor 6M Pribor 2.35 KB Reference rate 2.00 31/Dec/01 31/Mar/02 30/Jun/02 30/Sep/02 31/Dec/02 31/Mar/03 30/Jun/03 Financial Results as at 30 June 2003 – Prague – 31 July 2003 36
Slide 38: Structure of Shareholders
STRUCTURE OF SHAREHOLDERS Major shareholders of Komerční banka, a. s. with over 5% of the share capital as at 12 June 2003 Number of shares outstanding - 38 million Others 34.30% Société Générale S.A. 60.35% The Bank of New York ADR Department 5.35% Financial Results as at 30 June 2003 – Prague – 31
Slide 39: Contacts Investor Relations
CONTACTS Investor Relations Ladislav Šilha Head of Investor Relations Telephone: +420 222 432 155 E-mail: ladislav_silha@kb.cz Pavla Adamová Ilona Katzová Investor Relations Officer Investor Relations Officer Telephone: +420 222 432 734 Telephone: +420 222 432 156 E-mail: pavla_adamova@kb.cz E-mail: