Komercni Banka, a.s. · PSECZ:KOMB
Komercni Banka, a.s — FY2003 Earnings Presentation
41 slides from Komercni Banka, a.s's earnings presentation, Mar 31, 2004
Slide 1: Financial Results as at 31 December 2003
Financial Results as at 31 December 2003 (International Financial Reporting Standards) Prague - 31 March 2004
Slide 2: Economic Environment in 2003
ECONOMIC ENVIRONMENT IN 2003 Increasing competition in the banking sector Macroeconomic environment Increase of real GDP by 2.9% Total inflation stood at 1% Market interest rates continued to fall; average 3M PRIBOR dropped from 3.5% to 2.3% and 2W REPO rate from 2.75% to 2.0% at the end of 2003 Cze
Slide 3: Highlights of the Year 2003
HIGHLIGHTS OF THE YEAR 2003 • Increasing number of • Increasing efficiency, • Restructuring of the loan customers centralisation of processes portfolio • Successful implementation of and staff reduction • Low cost of risk new products and services • Structural changes in KB • Increasing cross-sale o
Slide 4: Success of the Company in 2003
SUCCESS OF THE COMPANY IN 2003 The trustworthiest and the most dynamic bank on the Czech market for the year 2003 Financial Results as at 31 December 2003 – Prague – 31 March 2004 3
Slide 5: Content
CONTENT • Business Performance • Financial Performance • Loan Portfolio Development • Appendix Financial Results as at 31 December 2003 – Prague – 31 March 2004 4
Slide 6: Number of Clients
NUMBER OF CLIENTS 7% increase in retail customers Thousands Individuals Y-on-Y Increase Entrepreneurs and Corporates + 69 thousands clients 1,331 1,274 1,279 1,290 1,262 965 974 980 992 1,034 297 300 299 298 297 December 2002 March 2003 June 2003 September 2003 December 2003 Financial Results as at
Slide 7: Direct Banking
DIRECT BANKING One half of KB clients use direct banking Guaranteed Payment Y-on-Y Increase PC Banking + 65% 647,032 Internet Banking 23,657 567,290 22,040 Phone Banking 23,786 506,668 21,466 146,738 23,616 445,851 21,009 116,028 392,279 23,192 20,339 101,271 22,246 23,386 88,442 72,671 273,976 313,
Slide 8: Sales Network for All Segments
SALES NETWORK FOR ALL SEGMENTS KB further redesigned the network to be closer to its clients Individuals Medium & Enterprises Small and Corporates Businesses Municipalities 335 39 8 Points MEM Business Corporate Business of Sales Centers Centers (including 40 regional branches) Number of ATMs grew y
Slide 9: Key Products for Individuals
KEY PRODUCTS FOR INDIVIDUALS Customised product offer sharply inceases the sales 176,906 IDEAL packages 171,937 PERFEKT KONTO packages Year on year 61,031 increase of active EXPRESS KONTO packages packages to individuals by 24,344 A-KONTO packages 47.4% 76,243 GAUDEAMUS packages Sold from 39,002 Sep
Slide 10: Retail Lending
RETAIL LENDING New retail loans continued to increase significantly Mortgages Consumer loans Number of mortgages granted in 2003 Number of consumer loans granted in 2003 + 18% 35,096 29,805 + 45% 7,688 5,306 2002 2003 2002 2003 Volume of mortgages granted in 2003 Volume of consumer loans granted in
Slide 11: Key Products for Small Businesses
KEY PRODUCTS FOR SMALL BUSINESSES New differentiated products attract clients 31,117 EFEKT packages 9,222 KOMFORT packages 45,135 total packages 833 Since April 2003 EXCELENT packages 3,963 OPTIMUM MEDICUM packages PROFI loan 2,675 sold Profi loans 4,774 sold loans in 2003 Four times more compared t
Slide 12: Loans to Small Businesses
LOANS TO SMALL BUSINESSES Redesigned product offer boosts granted loans CZK million Number of granted loans to small businesses Volume of granted loans to small businesses Profi loans* Profi loans* Other Business loans Other Business loans 6,344 4,774 1,257 + 197% + 303% 2,675 2,139 5,087 1,186 2,09
Slide 13: Individuals and Small Businesses - Penetration
INDIVIDUALS AND SMALL BUSINESSES - PENETRATION Further space for expansion Penetration ratio* 31.12. 2002 31.12. 2003 Change 03/02 Individuals PACKAGES 27.7 49.0 + 76.9% MORTGAGES 1.6 2.1 + 31.3% CONSUMER LOANS 7.5 8.4 + 12.0% PAYMENT CARDS 54.5 63.0 + 15.6% Small businesses PACKAGES 0. 5 16.3 - BUS
Slide 14: Loans to Medium Enterprises and Municipalities
LOANS TO MEDIUM ENTERPRISES AND MUNICIPALITIES Year-on-Year increase in volumes by 14% CZK million Number of loans to MEM Volume of loans to MEM Number of loans Volume of loans including overdrafts including overdrafts + 14% 30,200 6,700 26,600 + 16% 5,800 31.12.2002 31.12. 2003 31.12. 2002 31.12. 2
Slide 15: Cross-Selling Activities within the KB Group
CROSS-SELLING ACTIVITIES WITHIN THE KB GROUP Increasing exploitation of cross-selling potential Number of sold contracts 31.12. 2002 31.12. 2003 Change 03/02 through KB network Life insurance Vital 7,500 40,900 +445% Mutual funds investments 12.3 16.5 +34% (sales in CZK bil.) Pension insurance 11,00
Slide 16: Payment Cards
PAYMENT CARDS Utilisation of cards keeps increasing NUMBER OF MERCHANTS NUMBER OF POS NUMBER OF ISSUED CARDS + 6% + 19% + 36% By date Issued cards (th.) Merchants POS December 2001 972 17,098 6,019 December 2002 1,244 18,099 8,480 December 2003 1,688 19,210 10,104 Payment cards # of transactions (th
Slide 17: Deposits
DEPOSITS Falling interest rates brought increase in current accounts Volume of deposits Loans from customers (repo transactions excluded) Term deposits and saving accounts CZK billion Current accounts 345.9 344.0 343.1 335.6 329.2 36.3 29.8 33.8 35.5 33.4 • Year-on-year increase by 2% • Current acco
Slide 18: Loan Portfolio Development - Premier Bank
LOAN PORTFOLIO DEVELOPMENT – PREMIER BANK Year-on-year increase by 9% Business loans Volume of loans (Premier bank) Mortgage loans gross amount, CZK billion Consumer loans Y-on-Y increase + 9% • Year-on-year increase of the Premier Bank portfolio by 9% 127.4 133.6 123.6 123.0 123.1 • Retail loans re
Slide 19: New Strategic Programme
NEW STRATEGIC PROGRAMME Focus on processes and technologies The Bank launched a three-year strategic programme Focus on the reorganization of internal processes and technologies The project will bring new competitive advantages and an improvement in sales processes and in efficiency of the processin
Slide 20: Content
CONTENT • Business Performance • Financial Performance • Loan Portfolio Development • Appendix Financial Results as at 31 December 2003 – Prague – 31 March 2004 19
Slide 21: Financial Results and Ratios
FINANCIAL RESULTS AND RATIOS Lower costs, bigger release of provisions CZK million, unconsolidated Profit and Loss Statement FY 2002 FY 2003 Change 03/02 Net banking income 22,597 21,889 - 3.1% Operating costs -12,760 -11,728 - 8.1% Net operating income 9,837 10,161 + 3.3% Provisions for loan and in
Slide 22: Net Interest Income
NET INTEREST INCOME Net interest income stabilised on quarterly basis CZK million, unconsolidated Net Banking Income Net Interest Income Banks Customers 12,447 ČKA 11,937 Securities - 3.1% 22,597 • Negative impact of lower interest rates 21,889 • NII from banks impacted by: 7,414 - 7.3% 6,874 − decr
Slide 23: Net Fees and Commissions
NET FEES AND COMMISSIONS Increase in Net fees and commissions CZK million, unconsolidated Net Banking Income Net Fees and Commissions Non-FX FX foreign payments FX cash conversions 8,711 - 3.1% 8,320 22,597 21,889 • Non-FX F&C - positive impact of growth in volume of granted loans and number of KB’s
Slide 24: Trading Profits and Other Income
TRADING PROFITS AND OTHER INCOME CZK million, unconsolidated Net Banking Income Net profit from financial operations FX operations Securities Interest and Commodity 1,426 Derivatives - 3.1% • FX operations comprise re-pricing of 22,597 21,889 FX assets and liabilities and results 800 of FX derivativ
Slide 25: Operating Costs
OPERATING COSTS Significant reduction of total costs CZK million, unconsolidated Operating Costs Administrative expenses Personnel expenses 10,100 Other administrative 9,711 expenses • Decrease in personnel expenses 5,257 due to staff reduction and release of - 2.1% 5,149 12,760 - 8.1% an accrual fo
Slide 26: Operating Costs Q-on-Q
OPERATING COSTS Operating costs Q-on-Q CZK million, unconsolidated Restructuring costs Q-on-Q Operating Costs Depreciation and other provisions Other administrative expenses Personnel expenses 3,542 3,268 3,223 521 2,925 3,025 3,031 2,796 2,678 171 384 -3 105 235 511 428 432 282 0 310 264 377 333 32
Slide 27: 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 3,122 Comments + 117.7% • Positive impact of profits from sales of CAC Leasing and Reflexim in the 2Q 2003 • Low cost of risk on credit portfolio 1,434 • Rel
Slide 28: Recurring Profit
RECURRING PROFIT Increase of sustainable profitability CZK million, unconsolidated Net profit 9,262 for the year 8,763 General reserve General reserve release release One-off effects Sale of Deferred CAC Leasing tax assets and Reflexim 6,768 Recurring 6,320 net profit FY 2002 FY 2003 Financial Resul
Slide 29: Balance Sheet
BALANCE SHEET CZK million, unconsolidated Assets Liabilities and shareholders’ equity Change Change 439,753 447,565 439,753 447,565 Cash and balances 12,340 Amounts due 18,959 14,377 - 14.2% 22,549 - 15.9% with central bank to banks Amounts due from 199,729 201,638 + 1.0% banks Amounts due 341,114 3
Slide 30: Content
CONTENT • Business Performance • Financial Performance • Loan Portfolio Development • Appendix Financial Results as at 31 December 2003 – Prague – 31 March 2004 29
Slide 31: Client Portfolio Evolution
CLIENT PORTFOLIO EVOLUTION CZK billion Guaranteed portfolio On-balance Sheet Non-guaranteed portfolio 147.7 146.5 138.5 138.3 1.3 46.7 30.7 18.7 101.0 115.8 119.6 137.2 31.12.2000 31.12.2001 31.12.2002 31.12.2003 Off-balance Sheet 85.1 86.1 76.6 69.7 0 3.1 13.7 6.4 62.9 63.3 82.0 86.1 31.12.2000 31.
Slide 32: Loans and Advances to Customers
LOANS AND ADVANCES TO CUSTOMERS Further quality improvement in the client loan portfolio CZK million Client loans Specific and general provisions for loan losses On-balance sheet On-balance sheet Pro forma without guaranteed portfolio Pro forma without + 0.1% guaranteed portfolio 138,349 138,460 137
Slide 33: Results and Settlement of the State Guarantee
RESULTS AND SETTLEMENT OF THE STATE GUARANTEE KB used only 25% of the State Guarantee CZK billion Changes in the guaranteed porfolio (nominal values) 60.9 - CZK 41.5 bil. State Guarantee not utilised (repayments, non-fullfilment of the State Guarantee conditions) - CZK 18.1 bil. sales / write offs 1
Slide 34: CDO Portfolio
CDO PORTFOLIO Sound coverage of the portfolio Specific provisions / Invested amount Date of acquisition: September 2000 - April 2001 Initial invested amount: USD 426 mil. 17.9% 19.3% Year-end invested amount: USD 404 mil. Total coverage (as at 31.12.2003): USD 78 mil. Provisions and reserves based o
Slide 35: Financial Results and Ratios - Consolidated
FINANCIAL RESULTS AND RATIOS – CONSOLIDATED Increase in profit before income taxes by 10% CZK million Profit and Loss Statement FY 2002 FY 2003 Change 03/02 Net banking income 25,359 22,537 - 11.1% Operating costs - 15,356 - 12,513 - 18.5% Income from not fully consolidated companies - 74 384 - Prov
Slide 36: Subsidiary and Associated Undertakings Results
SUBSIDIARY AND ASSOCIATED UNDERTAKINGS RESULTS As at 31 December 2003, CZK mil., CAS/SAS Share of KB Profit after tax Equity Assets ASIS, a.s.* 100% NA NA NA Factoring KB, a.s. 100% 9 127 2,882 Investiční kapitálová společnost, a.s. 100% 74 319 377 Komercni Finance, B.V. 100% -1 7 8 Komerční banka B
Slide 37: Content
CONTENT • Business Performance • Financial Performance • Loan Portfolio Development • Appendix Financial Results as at 31 December 2003 – Prague – 31 March 2004 36
Slide 38: Development of KB's Share Price and Index PX50
DEVELOPMENT OF KB’s SHARE PRICE AND INDEX PX50 CZK 3 200 3 000 1 100 2 800 1 000 2 600 900 2 400 2 200 800 2 000 700 1 800 600 1 600 1 400 500 1 200 400 1 000 800 300 KB 600 200 PX 50 400 100 200 0 0 1.X.01 1.I.02 1.IV.02 1.VII.02 1.X.02 1.I.03 1.IV.03 1.VII.03 1.X.03 1.I.04 26.III.04 Financial Resu
Slide 39: Interest Rates Trend
INTEREST RATES TREND 5,00 4,75 4,50 4,25 4,00 3,75 3,50 3,25 3,00 2,75 CNB Repo 2,50 3M Pribor 2,25 6M Pribor KB Reference rate 2,00 1,75 31.XII.01 31.III.02 30.VI.02 30.IX.02 31.XII.02 31.III.03 30.VI.03 30.IX.03 31.XII.03 Financial Results as at 31 December 2003 – Prague – 31 March 2004 38
Slide 40: Structure of Shareholders
STRUCTURE OF SHAREHOLDERS Major shareholders of Komerční banka, a. s. with over 5% of the share capital as at 31 December 2003 Number of shares outstanding - 38 million Others Société Générale S.A. 34.17% 60.35% The Bank of New York ADR Department 5.48% Financial Results as at 31 December 2003 – Pra
Slide 41: Contacts - Investor Relations
CONTACTS Investor Relations Ladislav Šilha Head of Investor Relations Telephone: +420 222 432 155 E-mail: ladislav_silha@kb.cz Pavla Škvorová Ilona Katzová Investor Relations Officer Investor Relations Officer Telephone: +420 222 432 734 Telephone: +420 222 432 156 E-mail: pavla_skvorova@kb.cz E-mai