Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — FY2014 Earnings Presentation
38 slides from Komercni Banka, A.s's earnings presentation, Feb 12, 2015
Slide 1: Komerční banka Group Financial results as of 31 December 2014
Komerční banka Group Financial results as of 31 December 2014 According to International Financial Reporting Standards, consolidated, unaudited Prague, 12 February 2015
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 24 3
Slide 4: Solid macroeconomic performance in the context of very low interest rates
Economy of the Czech Republic Solid macroeconomic performance in the context of very low interest rates Czech GDP in 3Q14 +2.4% YoY, +0.4% QoQ. Real GDP outlook (YoY, %) Recovery estimated to continue in the last quarter driven by domestic demand 2.7 2.3 2.3 2.0 Public sector deficit in 2014 accordi
Slide 5: Komerční banka in 2014: growth in business volumes counterbalanced margin pressure
Komerční banka in 2014: growth in business volumes counterbalanced margin pressure Increase in number of clients thanks to competitive product range and trust of clients Valuable Growing deposits from individuals and businesses, inflow into non-bank assets under franchise A dynamic management commer
Slide 6: Priorities for 2015
Priorities for 2015 KB’s strategy is based on developing long-term partnerships with clients, growth of lending, quality advisory and offer of value added products, proximity to clients through the branch network and direct channels. This is combined with a consistent focus on operational efficiency
Slide 7: Selected deals of the fourth quarter of 2014
Selected deals of the fourth quarter of 2014 SAZKA, a.s. O2 Czech Republic a.s. Borgers AG Term Loan Facilities Agreement Term Loan Facility Agreement Term and Revolving Facilities Agreement CZK 7,500,000,000 CZK 4,000,000,000 EUR 210,000,000 Coordinator, Underwriter, Mandated Sole Arranger Mandated
Slide 8: Solid pace of total lending growth
Loans to clients Solid pace of total lending growth CZK billion 513.4 491.5 484.9 491.8 494.7 475.7 Gross loans up 4.5% YoY, +3.8% QoQ. The YoY 43.6 40.8 39.6 38.3 45.2 42.1 growth mainly driven by large corporate lending 146.2 151.2 155.4 159.8 and mortgages 141.5 147.8 28.5 28.7 29.0 29.0 28.0 28.
Slide 9: Inflow of deposits and assets under management
Deposits and assets under management Inflow of deposits and CZK billion By Customers 701.9 assets under management 609.3 649.2 658.9 656.5 679.0 71.8 72.4 72.3 72.5 72.1 71.3 172.9 178.4 Group deposits +8.2% YoY to CZK 676.1 bil., 161.8 162.9 167.8 157.3 38.8 39.6 +2.0% QoQ (excluding repos with cli
Slide 10: Agenda
Agenda Business results 4 Financial results 11 Loan portfolio quality and cost of risk 21 Appendix 24 10
Slide 11: Lower margins offset by increase in business volumes
Consolidated income statement Lower margins offset by increase in business volumes Profit and Loss Statement Change FY 2013 FY 2014 YoY (CZK million, unaudited) Net interest income 21,207 21,423 1.0% Net fees & commissions 7,077 6,752 -4.6% Income from financial operations 2,490 2,385 -4.2% Other in
Slide 12: Balance sheet growth driven by client deposit inflow
Consolidated statement of financial position Balance sheet growth driven by client deposit inflow 31 Dec 31 Dec Change Balance Sheet 2013 2014 YoY (CZK million, unaudited) Assets 863,980 953,261 10.3% Cash and balances with central bank 44,405 152,903 244.3% Amounts due from banks 125,735 59,699 -52
Slide 13: Rise in equity due to earnings and revaluation of hedges
Shareholders’ equity Rise in equity due to earnings and revaluation of hedges Development year-to-date Total shareholders’ equity +12,956 Total shareholders’ equity as of 31 December 2013 as of 31 December 2014 31/12/2013 1/1/2014 Increase Decrease 31/12/2014 Share capital 19,005 19,005 19,005 Capit
Slide 14: Solid foundations for further growth
Financial ratios Solid foundations for further growth Key ratios and indicators 31 Dec 31 Dec Change 2013 2014 YoY (year-to-date) Capital adequacy * 15.8% 16.4% n.a.* Tier 1 ratio * 15.8% 16.4% n.a.* Total risk weighted assets (CZK billion) * 373.8 384.2 n.a.* Risk weighted assets for credit risk (C
Slide 15: Increased payout, solid capital equipment preserved
Dividend proposal Increased payout, solid capital equipment preserved DPS in 2010-2014 (Gross, in CZK) Out of KB’s attributable net income for 2014, Board of Directors proposed to pay in dividends CZK 11,783 million, or CZK 310 per share 310 The proposed amounts would represent a 270 230 230 dividen
Slide 16: NII slightly up despite very challenging environment
Net interest income NII slightly up despite very challenging environment NII in FY 2014 up by 1.0% YoY. NII in 4Q 2014 5,293 5,328 5,279 5,335 5,395 5,414 increased by 0.4% QoQ 480 478 490 468 447 467 NII from loans – reflecting volume growth and 2,346 2,400 2,360 2,424 2,450 2,493 protection of spr
Slide 17: Positive contribution to fee income from cross-sell and structured financing
Net fees and commissions Positive contribution to fee income from cross-sell and structured financing 1,790 1,761 1,711 NFC in FY 2014 down by 4.6% YoY. In 4Q 2014 1,690 1,647 1,703 rose by 3.4% QoQ 204 165 242 205 185 196 336 286 243 217 262 236 Deposit product fees – drop in account 324 309 296 33
Slide 18: Improved market activity and offer to clients in the second half
Net profit from financial operations Improved market activity and offer to clients in the second half Net profit from financial operations in FY 2014 661 646 663 down by 4.2% YoY. NPFO in 4Q increased by 571 506 503 2.6% QoQ 332 341 346 205 285 200 Client demand for FX hedging improved following inc
Slide 19: Cost discipline maintained
Operating expenditures Cost discipline maintained 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 OPEX in FY 2014 -0.9% YoY. 4Q 2014 up by 6.1% QoQ affected by seasonality -1,719 -1,694 -1,655 -1,679 -1,733 -1,687 Personnel costs in FY 2014 up by 0.4% YoY. Average staff level decreased by 1.0% -1,12
Slide 20: Agenda
Agenda Business results 4 Financial results 11 Loan portfolio quality and cost of risk 21 Appendix 24 20
Slide 21: Exposure growth with good loan quality
Loan portfolio quality Exposure growth with good loan quality CZK billion Gross lending 494.7 513.4 475.7 491.5 484.9 491.8 Loan exposure +4.5% YoY, +3.8% QoQ mainly thanks to newly granted loans to Corporate clients 438.7 454.4 447.6 454.7 458.9 477.0 Share of LUSR exposure down to 5.2% (5.5% in 3Q
Slide 22: Further improved cost of risk
Cost of risk Further improved cost of risk Total Cost of Risk (Year-to-date, in basis points) CoR in FY 2014 -25.5% YoY. 4Q 2014 -30.8% OoQ 44 43 40 42 38 37 36 YoY cost of risk decreased to 26 bps in FY 2014 34 38 39 37 from 37 bps in 2013, thanks to continuing 34 32 30 26 favourable environment in
Slide 23: Agenda
Agenda Business results 4 Financial results 11 Loan portfolio quality and cost of risk 21 Appendix 24 23
Slide 24: 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 1,626,000 clients (+2%) MPSS 554,000 clients (-3%) KBPS 555,000 clients (-1%) 1,620 1,590 1,602 1,602 1,589 1,626 ESSOX 274,000 active clients (-4%) Network 398 branches for
Slide 25: Consolidated financial results
Consolidated financial results Profit and Loss Statement Change Change 4Q 2013 3Q 2014 4Q 2014 YoY QoQ (CZK million, unaudited) Net interest income 5,328 5,395 5,414 1.6% 0.4% Net fees & commissions 1,761 1,647 1,703 -3.3% 3.4% Income from financial operations 503 646 663 31.8% 2.6% Other income 20
Slide 26: KB consolidated group
KB consolidated group KB Penzijní Pension Management company for Transformed Fund (pension fund with 555,000 clients) and for společnost insurance new pension funds in 2nd and 3rd pillars of the Czech pension system (100%) Modrá pyramida Building #2 largest building savings bank according to loan vo
Slide 27: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 Change FY 2013 FY 2014 YoY MPSS Volume of new loans (CZK million) 3,350 3,441 3% Volume of total loans (gross, CZK million) 43,555 38,294 -12% Volume of deposits (CZK million) 72,280 72,396 0% Number of clients 574,342 554,309 -3% Average number of FTEs 343 3
Slide 28: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 Change FY 2013 FY 2014 YoY Factoring Factoring turnover (CZK million) 26,540 34,114 29% KB Volume of total financing (gross, CZK million) 4,548 6,229 37% Average number of FTEs 42 42 1% KP Volume of technical reserves (CZK million) 34,760 42,610 23% Premium w
Slide 29: 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% 12,796 -2.5%* 95,634 14.3% 862,766 11.5% - o/w KB branch in Slovakia IFRS 100% 235 n.a. n.a. n.a. 24,517 -2.0% ESSOX, s.r.o. IFRS 50.93% 5
Slide 30: Effects of TF deconsolidation on income statement
Pro forma consolidated income statement Effects of TF deconsolidation on income statement Profit and Loss Statement FY 2014 FY 2014 Effect of deconsolidation (CZK million, unaudited) Reported Pro forma Net interest income 21,423 20,595 -828 Net fees & commissions 6,752 7,085 333 Income from financia
Slide 31: Effects of TF deconsolidation on balance sheet
Pro forma consolidated statement of financial position Effects of TF deconsolidation on balance sheet 31 Dec 31 Dec Effect of Balance Sheet 2014 2014 deconsolidaton (CZK million, unaudited) Reported Pro forma Assets 953,261 911,829 -41,432 Cash and balances with central bank 152,903 152,904 0 Amount
Slide 32: Securities portfolio in the banking book
Securities portfolio in the banking book As of 31 December 2014 CZK billion Available-for-sale portfolio Held-to-maturity portfolio CZK 77.4 billion CZK 76.5 billion 66.2 39.9 9.1 19.8 2.9 10.3 5.7 Czech sovereign Foreign sovereign Czech financial institutions Foreign financial institutions Czech so
Slide 33: Foreign sovereign exposure
Foreign sovereign exposure As of 31 December 2014 CZK billion 10.3 9.1 EIB, 1.5 Poland, 1.4 Poland, 5.1 EIB, 0.1 Slovakia, 6.2 Slovakia, 5.2 2.6 Poland, 0.1 Slovakia, 2.4 Trading book 1) Available-for-sale 1) Held-to-maturity 2) Measurement at [1] fair value; [2] amortized cost 33
Slide 34: Macroeconomic environment – Czech Republic
Macroeconomic environment – Czech Republic Macroeconomic Indicators 2011 2012 2013 2014* 2015* 2016* Real GDP (%, average) 2.0 -0.7 -0.7 2.3 2.3 2.7 Inflation (%, average) 1.9 3.3 1.4 0.4 -0.1 2.0 Household consumption (%, average) 0.3 -1.8 0.4 1.3 2.3 1.5 Unemployment (%, av., MLSA meth.) 6.6 6.8 7
Slide 35: Interest rates evolution
Interest rates evolution (for the period 1 January 2005 – 9 February 2015) 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 Pribor 3M Pribor 6M ČNB REPO Rate IRS 5Y IRS 10Y 35
Slide 36: Development of KB's share price and PX Index
Development of KB’s share price and PX Index (for the period 1 October 2001 – 9 February 2015) 500% 400% 300% 200% 100% 0% 2001 2003 2005 2007 2008 2010 2012 2014 KB PX index 36
Slide 37: KB shareholders
KB shareholders As of 31 December 2014 The number of shareholders comprised 43,294 corporate entities and private individuals. Of the Bank’s total share capital of CZK 19,004,926,000 divided into 38,009,852 shares with a nominal value of CZK 500 each, Société Générale S.A. holds 60.35%. Others 39.6%
Slide 38: 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 38