Slide 1: Komerční banka Group Financial results as at 31 December 2012
Komerční banka Group Financial results as at 31 December 2012 According to International Financial Reporting Standards, consolidated, unaudited Prague, 13 February 2013
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 11 Loan Portfolio Quality and Cost of Risk 21 Appendix 25 3
Slide 4: Czech economy
Czech economy Real GDP outlook (YoY, %) Czech GDP contracted by approx. 1.0%* in 2012. 2.9 2.3 1.9 Consumers remain cautious, retail sales down -0.1 1.1% in 2012. Businesses reduced investments -1.0 due to weak outlook and less utilized capacities, -4.3 government due to fiscal consolidation. Net ex
Slide 5: Key results of the year 2012
Key results of the year 2012 Gross volume of loans to clients grew by 4.1% to CZK 469.1 billion Client deposits rose by 3.3% to CZK 579.1 billion Sufficient liquidity buffer, net loans-to-deposits ratio at 78.0% (82.5% excluding pension fund) Solid capital adequacy, Basel II Core Tier 1 ratio at 14.
Slide 6: Business highlights
Business highlights KB outperformed the market in lending growth year over year, across client segments Solid pace of deposits underpinned by rising current account volumes, attesting to quality of KB‘s client franchise Growth in volume of savings in non-bank products in line with KB‘s strategy to d
Slide 7: Lending activities
Lending activities CZK billion 469.1 450.5 450.5 456.2 462.3 435.1 50.3 49.8 49.3 51.3 51.4 50.8 Gross loans rose 4.1% YoY. QoQ +1.5%. 123.0 125.3 128.2 130.5 133.3 118.0 Mortgages and loans to large corporations 27.4 27.5 27.7 27.6 27.4 27.4 most dynamic in the portfolio Business loans up 4.5% YoY,
Slide 8: Deposits and assets under management
Deposits and assets CZK billion By Customers 582.4 579.1 under management 551.1 560.7 564.8 70.9 70.8 568.3 70.9 71.8 69.7 70.9 159.9 162.4 162.6 160.5 156.4 Group deposits +3.3% YoY (+2.1% YoY 156.9 30.4 31.2 31.0 31.7 31.9 excluding repos with clients). QoQ +1.9%. 29.9 Volumes on current accounts
Slide 9: Priorities for 2013
Priorities for 2013 Growth of lending activities driven by mortgages, small business and corporate loans including export financing, benefiting from KB‘s client relationships, liquidity and capital strength Providing of financing and high value added services to corporate clients, including expert a
Slide 10: Agenda
Agenda Business results 4 Financial results 11 Loan Portfolio Quality and Cost of Risk 21 Appendix 25 10
Slide 11: Consolidated financial results
Consolidated financial results Change Change Profit and Loss Statement FY 2011 FY 2011 FY 2012 FY 2012 YoY YoY (CZK million, unaudited) Reported Recurring Reported Recurring Reported Recurring Net interest income 22,190 21,714 21,947 21,430 -1.1% -1.3% Net fees & commissions 7,305 7,446 7,018 7,266
Slide 12: Consolidated statement of financial position
Consolidated statement of financial position 31 Dec 31 Dec Change Balance Sheet 2011 2012 YoY (CZK million, unaudited) Assets 754,810 786,836 4.2% Cash and balances with central bank 16,980 28,057 65.2% Amounts due from banks 101,393 64,111 -36.8% Loans and advances to customers (net) 434,386 451,54
Slide 13: Financial ratios
Financial ratios 31 Dec 30 Sep 31 Dec Change Key ratios and indicators 2011 2012 2012 YoY (year-to-date) Capital adequacy (Basel II) 14.6% 14.5% 14.7% Tier 1 ratio (Basel II) 13.4% 14.5% 14.7% Total capital requirement (CZK billion) 30.4 29.6 29.3 -3.8% Capital requirement for credit risk (CZK billi
Slide 14: Proposed distribution of 2012 profit
Proposed distribution of 2012 profit Capital adequacy development analysis (Total CAD, CNB methodology, Basel II) +144 bps Board of Directors proposal is subject to approval by KB‘s Supervisory Board and by the Annual General Meeting of the 16.0% bank 16.1% 14.7% Dividend payment of CZK 8,687 millio
Slide 15: Shareholders' equity
Shareholders‘ equity Development year-to-date Total shareholders‘ equity +18,726 Total shareholders‘ equity as at 31 December 2011 as at 31 December 2012 Shareholders' equity 31/12/2011 1/1/2012 Increase Decrease 31/12/2012 Share capital 19,005 19,005 19,005 Capital and reserve funds 38,693 48,168 -
Slide 16: Net interest income
Net interest income 5,579 5,671 5,543 5,502 5,455 5,447 495 528 608 589 542 529 NII in FY 2012 down by 1.1% YoY. NII in 4Q 2,278 2,296 decreased by 0.1% QoQ 2,279 2,302 2,341 2,418 NII from loans – driven by solid volume growth. Marginal decrease in average spread due to 2,816 2,836 2,653 2,605 2,55
Slide 17: Net fees and commissions
Net fees and commissions 1,837 1,807 1,773 1,720 1,683 1,755 183 205 143 NFC in FY 2012 -3.9% YoY. 4Q +4.3% QoQ. 177 135 145 Recurring fee income down 2.4% YoY 392 136 324 223 354 255 Maintenance fees – Impacted by strong sales of 343 360 326 336 345 347 pension fund policies and by accelerated 207
Slide 18: Net profit from financial operations
Net profit from financial operations 1,228 Net profit from financial operations in FY 2012 1,018 957 465 increased by 14.0% YoY, 4Q12 +16.5% QoQ. 816 727 400 457 624 4Q12 result influenced by credit value adjustment 424 332 220 of negative CZK 66 million applied to certain 309 395 313 340 interest d
Slide 19: Operating costs
Operating costs 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 OPEX in FY 2012 increased by 0.2% YoY. -1,682 -1,586 -1,677 -1,671 -1,719 -1,721 4Q 2012 up 9.6% QoQ driven by seasonal marketing and move to new HQ building Personnel costs in FY 2012 rose by 4.0% YoY. -1,138 -1,132 -1,196 -1,185 -1,57
Slide 20: Agenda
Agenda Business results 4 Financial results 11 Loan Portfolio Quality and Cost of Risk 21 Appendix 25 20
Slide 21: Loan quality
Loan quality Gross lending CZK billion 456.2 462.3 469.1 435.1 450.5 450.5 Loan exposure +4.1% YoY, +1.5% QoQ Share of Standard and Watch loan exposure stable at 94.2% (94.3% in 3Q 2012) 410.2 411.9 417.2 424.8 431.0 394.7 Share of LUSR exposure stable at 5.8% (5.7% in 3Q 2012). QoQ increase of LUSR
Slide 22: Cost of risk
Cost of risk 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 181 175 FY 2012 cost of risk at CZK 1.9 billion compared 62 56 44 40 46 43 to CZK 7.3 billion in 2011 (-74.5%) 24 48 56 31 32 41 0 3 3 25 1 -200 -365 -641 -630 -355 -391 -527 -400 4Q 2012 cost of risk at CZK 0.5 billion compared -1,086 -60
Slide 23: Commercial cost of risk - zoom on client segments
Commercial cost of risk - zoom on client segments KB Group – Corporate Segments 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 FY 2012 corporate cost of risk down to 19 bps 150 from 29 bps in FY 2011 mainly thanks to the 26 29 35 9 19 50 8 successful recovery development -50 40 87 -25 QoQ corporate
Slide 24: Agenda
Agenda Business results 4 Financial results 11 Loan Portfolio Quality and Cost of Risk 21 Appendix 25 24
Slide 25: Number of clients and distribution network
Number of clients and distribution network Number of bank clients (ths., CZ) KB Group‘s 2.5 million clients, of which KB bank 1,602,000 clients (+0%) MPSS 609,000 clients (-6%) PFKB 571,000 clients (+13%) 1,577 1,629 1,620 1,590 1,602 1,602 ESSOX 266,000 active clients (-7%) Network 399 branches for
Slide 26: Consolidated financial results
Consolidated financial results Change Change Profit and Loss Statement 4Q 2011 3Q 2012 4Q 2012 YoY QoQ (CZK million, unaudited) Net interest income 5,671 5,455 5,447 -3.9% -0.1% Net fees & commissions 1,720 1,683 1,755 2.0% 4.3% Income from financial operations 957 624 727 -24.0% 16.5% Other income
Slide 27: Income statement adjusted for SGEF acquisition
Income statement adjusted for SGEF acquisition Change Change Profit and Loss Statement FY 2011 FY 2011 FY 2012 FY 2012 YoY YoY (CZK million, unaudited) Reported Pro forma Reported Pro forma Pro forma Net interest income 22,190 21,848 21,947 21,511 -1.1% -1.5% Net fees & commissions 7,305 7,286 7,018
Slide 28: KB consolidated group
KB consolidated group Pension Penzijní fond KB #4 pension fund in the Czech Republic with 571,000 clients. PF KB was transformed into insurance (100%) KB Penzijní společnost (pension company) as of 1 January 2013 Modrá pyramida Building #2 largest building savings bank according to loan volume with
Slide 29: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 FY 2011 FY 2012 Change YoY MPSS Volume of new loans (CZK million) 7,785 4,342 -44% Volume of total loans (gross, CZK million) 51,369 49,271 -4% Target volume of new contracts (CZK million) 25,008 23,845 -5% Volume of deposits (CZK million) 70,857 71,803 1% Av
Slide 30: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 FY 2011 FY 2012 Change YoY Factoring Factoring turnover (CZK million) 16,096 19,531 21% KB Volume of total financing (gross, CZK million) 2,832 3,014 6% Average number of FTEs 38 40 5% KP Newly concluded policies (number) 823,480 829,891 1% of which in life i
Slide 31: Standalone results of KB group companies and associated undertakings
Standalone results of KB group companies and associated undertakings Account. Share of Net YoY Equity YoY Assets YoY standards KB Profit CZK million KB IFRS 100% 12,248 54.0% 87,583 20.9% 689,457 4.4% - o/w KB branch in Slovakia IFRS 100% 140 154.5% n.a. n.a. 18,016 70.3% ESSOX, s.r.o. IFRS 50.93% 4
Slide 32: Securities portfolio in the banking book
Securities portfolio in the banking book CZK billion Available-for-sale portfolio Held-to-maturity portfolio CZK 141.8 billion CZK 3.3 billion 96.9 3.1 0.2 1.5 24.3 1.0 18.1 Czech sovereign Foreign sovereign Czech sovereign Foreign sovereign Czech financial institutions Foreign financial institution
Slide 33: Foreign sovereign exposure
Foreign sovereign exposure CZK billion 24.3 EFSF, 1.0 EIB, 2.5 Poland, 6.2 Slovakia, 6.6 2.5 Italy, 7.9 Poland, 0.1 0.2 Slovakia, 2.3 France, 0.2 1) 1) 2) Trading book Available-for-sale Held-to-maturity Measurement at [1] fair value; [2] amortized cost 33
Slide 34: Overview of items excluded in order to calculate recurring profit
Overview of items excluded in order to calculate recurring profit FY 2012 (impact net of tax, KB Group share): amortisation of MPSS acquisition revaluation (CZK 21 mil.) SGEF acquisition (CZK 46 mil.) accounting change in amortisation of origination fees and costs (CZK 167 mil.) sale of bonds in PF
Slide 35: Acquisition of SGEF – fair value assessment of assets and liabilities
Acquisition of SGEF – fair value assessment of assets and liabilities Background KB acquired on 4 May 50.1% stake in SG Equipment Finance Czech Republic, s.r.o. (SGEF) for a purchase price of CZK 1,800 million. SGEF has been consolidated in KB Group accounts using full consolidation method since May
Slide 36: Macroeconomic environment – Czech Republic
Macroeconomic environment – Czech Republic Macroeconomic Indicators 2008 2009 2010 2011 2012* 2013* Real GDP (%, average) 2.9 -4.3 2.3 1.9 -1.0 -0.1 Inflation (%, average) 6.4 1.0 1.5 1.9 3.3 2.3 Household consumption (%, average) 2.9 0.3 0.9 0.7 -2.8 0.4 Unemployment (%, av., MLSA meth.) 4.1 6.4 7.
Slide 37: Interest rates evolution
Interest rates evolution (for the period 1 January 2005 – 7 February 2013) 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 01/01/2005 01/01/2006 01/01/2007 01/01/2008 01/01/2009 01/01/2010 01/01/2011 01/01/2012 01/01/2013 Pribor 3M Pribor 6M ČNB REPO Rate IRS 5Y IRS 10Y 37
Slide 38: Development of KB's share price and PX Index
Development of KB‘s share price and PX Index (for the period 1 October 2001 – 7 February 2013) 4,800 2,100 4,300 1,900 1,700 3,800 1,500 3,300 1,300 2,800 1,100 2,300 900 1,800 700 1,300 500 800 300 01/10/01 01/10/02 01/10/03 01/10/04 01/10/05 01/10/06 01/10/07 01/10/08 01/10/09 01/10/10 01/10/11 01
Slide 39: KB shareholders
KB shareholders As at 31 December 2012 Shares on registered capital according to excerpt from the Securities centre Others 39.6% Société Générale 60.4% As at 31 December 2012, KB held 238,672 own shares in treasury, representing 0.63% stake on registered capital. 39
Slide 40: Investor Relations
Investor Relations Jakub Černý, Georgina Olegrová, Robert Janeček Tel.: +420 955 532 156, 955 532 734, 955 532 155 E-mail: investor_relations@kb.cz - Internet: www.kb.cz 40