Komercni Banka, a.s. · PSECZ:KOMB
Komercni Banka, a.s — Q3 2006 Earnings Presentation
37 slides from Komercni Banka, a.s's earnings presentation, Nov 9, 2006
Slide 1: Komerční Banka's Results as at 30 September 2006
JJ Mois Année Komerční Banka’s Results as at 30 September 2006 (International Financial Reporting Standards) Prague - 9 November 2006
Slide 2: Contents
Contents n Strategy and Business Highlights n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 1
Slide 3: Financial highlights: Operating profit up 12%
Financial highlights Operating profit up 12% As of 30 September 2006, year-on-year comparison • Total revenues increased by almost 6% driven mainly by net interest income. • Total costs declined by almost 1% helped by savings in general administrative expenses and by one-off items. • Operating profi
Slide 4: Significant Acquisition on the Czech Market
Acquisition of Modrá pyramida Significant Acquisition on the Czech Market n On 13 October 2006, KB completed the previously announced purchase of 60% stake in Modrá pyramida stavební spořitelna for total of EUR 144 million (approx. CZK 4.2 billion). As a result, KB has gained 100% control over MPSS.
Slide 5: Expanding product offer and services of Komerční banka
Expanding offer Expanding product offer and services of Komerční banka For students of higher education colleges and universities Komerční banka introduced a new VISA credit card with up to CZK 20,000 limit depending on the year of enrolment. The card can be used for both direct payments at retailer
Slide 6: Business growth across segments
Business highlights Business growth across segments As of 30 September 2006, year-on-year comparison n Number of total clients increased by 53,000 to 1.5 million year on year, mainly as a result of individual clients’ acquisition. 56% of the KB clients are using direct banking products. n KB network
Slide 7: Loan portfolio growing in all client segments
Unconsolidated Loan portfolio Loan portfolio growing in all client segments Individuals SME Corporates Volume of loans * Other Unconsolidated, CZK billion, Gross amount +19.2% 220.6 210.3 200.4 191.3 185.1 67.4 31% 63.2 ■ Year-on-year growth of the loan portfolio 55.7 58.6 by 19.2% 51.6 ■ Total mort
Slide 8: Strong loan growth on the Group level
Group lending activities Strong loan growth on the Group level As of 30 September 2006, year-on-year comparison, outstanding volumes, CZK mil. Consumer loans Business Loans Building saving loans 152,150 + 13.6% 133,901 + 26.3% 22,949 +30.4% 18,088 18,169 13,871 30. 9. 2005 30. 9. 2006 30. 9. 2005 30
Slide 9: Growth in deposits driven by current accounts
Unconsolidated clients’ deposits Growth in deposits driven by current accounts Current Accounts incl. O/N Term and Savings Accounts Volume of primary client deposits Loans from Customers (excl. repo Unconsolidated, CZK billion transactions) + 8.5% 386.9 367.3 371.1 363.1 ■ Depositary base increased
Slide 10: Contents
Contents n Strategy and Business Highlights n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 9
Slide 11: Unconsolidated Financial Results
Unconsolidated Financial Results Unconsolidated Profit and Loss Statement 1-3Q 2005 1-3Q 2006 Change CZK million, unaudited 06/05 Net banking income 17,376 18,350 + 5.6% Operating costs - 8,569 - 8,495 - 0.9% Net operating income 8,807 9,855 + 11.9% Cost of risk - 732 - 1,248 + 70.5% Profit on subsi
Slide 12: Net Interest Income
Net Interest Income NII increase resulting from strong volume growth CZK million, unconsolidated Net Interest Income Net Banking Income Other 11,082 NII from loans + 5.6% 18,350 10,060 NII from deposits 1,066 NII from Investment Banking +23.1% 17,376 866 • Strong growth of NII from loans 3,423 3,082
Slide 13: Net Fees and Commissions
Net Fees and Commissions Structure of fee income: Most fees still from daily banking CZK million, unconsolidated FX fees Loan fees Other fees Maintenance fees Fees from cross-selling Transaction fees 6,463 - 0.5% 6,430 • Net fees from expanding business activities with individual clients 1,172 - 1.4
Slide 14: Trading Profit and Other Income
Trading Profit and Other Income Profit from financial operations up by 23% CZK million, unconsolidated Net Profit from Financial Operations Net Banking Income FX operations 608 + 23.4% 750 Securities and security + 5.6% derivatives 18,350 Interest and Commodity Derivatives 17,376 488 363 - 25.6% • T
Slide 15: Operating Costs
Operating Costs Cost decrease underpinned by one-off items CZK million, unconsolidated Operating Costs Personnel Costs 3,532 + 3.5% 3,654 8,569 - 0.9% 8,495 • Growth in average number of employees (+2% YoY to 7,525) due to expanding business related activities • In 1Q positive impact of CZK 147 mil.
Slide 16: 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 3,024 2,896 2,931 2,913 2,892 2,764 2,668 415 478 370 418 416 425 394 1,182 1,348 1,251 1,341 1,226 1,215 1,218 1,15
Slide 17: 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 -732 + 70.5% -1,248 • Higher loan provisions mainly due to significant provision reversals on corporate exposures in 1 – 3Q
Slide 18: Balance Sheet
Balance Sheet Assets Liabilities CZK million, unconsolidated YoY YoY 511,729 + 7.9% 511,729 + 7.9% 493,738 493,738 474,137 7,644 - 41.0% 30,275 + 27.5% Cash and balances 9,231 474,137 12,955 Amounts due 31,526 with central bank to banks 23,747 Amounts due from 229,564 245,953 228,077 - 0.6% banks Am
Slide 19: Shareholders Equity
Shareholders Equity Development since the end of 2005 CZK million, unconsolidated Total shareholder’s equity Total shareholder’s equity as at 31 December 2005: - 4,628 as at 30 September 2006: 50,314 45,686 Shareholders’ equity 31. 12. 2005 1. 1. 2006 Increase Decrease 30. 9. 2006 Share capital 19,0
Slide 20: Contents
Contents n Strategy and Business Highlights n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 19
Slide 21: Overall quality of loan portfolio remained satisfactory
Client loan portfolio Overall quality of loan portfolio remained satisfactory CZK million, unconsolidated Client loans, On-balance sheet Gross amount + 19.2% 220,637 YoY change 191,307 185,112 165,578 195,697 +22.9% Standard loans 159,269 Watch loans 16,741 16,811 15,071 - 10.0% LUSR* 9,102 8,918 9,
Slide 22: Improved provision coverage
Client loan portfolio Improved provision coverage CZK million, unconsolidated Specific provisions + 18.5% YoY change 6,200 7,111 6,001 Total watch loans 486 578 + 17.0% 494 Total loans under special review 5,507 5,714 6,533 + 18.6% 30. 9. 2005 31. 12. 2005 30. 9. 2006 • Increase in overall specific
Slide 23: Contents
Contents n Strategy and Business Highlights n Financial Performance n Loan Portfolio Development n Appendix Komerční banka 22
Slide 24: Consolidated Financial Results and Ratios
Financial Results of KB Group Consolidated Financial Results and Ratios Profit and Loss Statement * 1-3Q 2005 1-3Q 2006 Change CZK million, unaudited 06/05 Net interest income 10,839 11,866 +9.5% Net fees & commissions 6,478 6,430 -0.7% Income from financial operations 795 909 +15.8% Other income 7
Slide 25: Consolidated Financial Results and Ratios
Financial Results of KB Group Consolidated Financial Results and Ratios Assets * 30.9. 2005 30.9. 2006 Change CZK million, unaudited 06/05 Cash and balances with national banks 13,168 7,741 -41.2% Amounts due from banks 231,159 229,582 -0.7% Loans and advances to customers, net 182,567 218,451 +19.7
Slide 26: Subsidiary and associated undertakings results
Financial Results of KB Group Subsidiary and associated undertakings results As at 30 September 2006, CZK mil. Share of KB Net profit YoY Equity YoY Assets YoY ESSOX, s.r.o. (IFRS) 51% -24 -4% 26 -79% 3,650 80% Factoring KB, a.s. * 100% 19 +61% 181 17% 2,618 32% Komerční banka Bratislava, a.s. (IFRS
Slide 27: Strong growth in alternative distribution channels
KB Clients and Network Strong growth in alternative distribution channels As of 30 September 2006, year-on-year comparison § 1,503,000 clients - increase by 53,000 (+4%) - of which 1,221,000 are individual clients (+4%) § Network - 360 points of sale for retail clients - including 35 business centre
Slide 28: Strategic Target - Expansion of KB Loan Portfolio
Business highlights Strategic Target - Expansion of KB Loan Portfolio As of 30 September 2006, year-on-year comparison • Outstanding mortgages to individuals: + 34% to CZK 53.0 billion • Outstanding consumer loans: + 21% to CZK 14.4 billion • Outstanding loans on credit cards: + 63% to CZK 2.6 billi
Slide 29: Ongoing growth of penetration ratios
Penetration of products Ongoing growth of penetration ratios 30. 9. 2005 30. 9. 2006 YoY Change Cross-selling ratio* Individuals 4.84 5.15 +6% Penetration ratio – Individuals** Mortgages 2.9 3.6 +24% Consumer loans 10.8 12.2 +13% Credit cards 7.2 9.7 +35% Life insurance 8.4 10.2 +21% Penetration rat
Slide 30: Sales of key products
Products for Individuals and Small Businesses Sales of key products Financial Packages 30. 9. 2005 30. 9. 2006 YoY Change PACKAGES FOR 681,427 732,719 + 8% INDIVIDUALS packages packages GAUDEAMUS 115,827 126,083 + 9% package for young clients packages packages 118,829 142,489 + 20% CHILD ACCOUNT acc
Slide 31: Further expansion of card business
Payment cards Further expansion of card business 30. 9. 2005 30. 9. 2006 YoY Change Debit cards - active 1,227,105 1,299,988 +6% Credit cards – active 103,072 155,826 +51% o/w to entrepreneurs 16,738 36,465 +118% Number of POS (points of sales using 14,675 16,262 11% electronic device) 1-3Q 2005 1-3
Slide 32: Co-operation within KB/SG Group and Strategic Partnerships
Cross-selling activities Co-operation within KB/SG Group and Strategic Partnerships Provided in 1-3Q 2005 1-3Q 2006 Change 06/05 co-operation with: Life insurance Vital (number of sold policies through KB) Komerční pojišťovna 37,910 30,916 -18% Non-life insurance Allianz (number of sold policies thr
Slide 33: Macroeconomic Environment
Macroeconomic Environment Czech Republic Macroeconomic indicators (%) 2003 2004 2005 2006* 2007* GDP + 3.6 + 4.2 + 6.1 + 5.8 + 4.8 Inflation + 0.1 + 2.8 + 1.9 + 2.8 + 2.5 Households income + 4.8 + 4.9 + 4.8 + 5.0 + 5.0 M2 + 6.9 + 4.4 + 8.2 + 8.5 + 8.0 3M PRIBOR 2.3 2.4 2.0 2.3 2.8 Potential of the m
Slide 34: 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% 1 2 3 4 5 02 02 02 03 03 03 04 04 04 05 05 05 06 06 06 /0 /0 /0 /0 /0 / / / / / / / / / / / / / / / 2 2 2 2 2 /3 /6 /9 /3 /6 /9 /3 /6 /9 /3 /6 /9 /3 /6 /9 /1 /1 /1 /1 /1 31 30 30 31 30 30 31 30 30 31 30 30
Slide 35: KB Share price
KB Share price Development of KB’s share price and PX Index CZK 3,950 1,650 3,750 1,550 3,550 1,450 1,350 3,350 1,250 3,150 1,150 2,950 1,050 2,750 950 2,550 850 2,350 750 2,150 650 1,950 550 1,750 450 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
Slide 36: Structure of Shareholders
KB Shareholders Structure of Shareholders Major shareholders of Komerční banka, a. s. as at 30 September 2006 Number of shares outstanding – 38,009,852 Free Float: 39.65% Société Générale S.A. 60.35% Others 33.61% Investors Bank & Trust Co.* 6.04% * Shares held on behalf of third parties Komerční ba
Slide 37: 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