Slide 1: KB Group Unaudited FY 2008 Financial Results
KB Group Unaudited FY 2008 Financial Results (International Financial Reporting Standards) Prague 18 February 2009 KB FY 2008 results – Prague – 18 February 2009
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 Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 3 KB FY 2008 results – Prague – 18 February 2009
Slide 4: Highlights of 2008
Highlights of 2008 Year on year comparisons Record profit and growing activities despite worsening environment in the fourth quarter Net banking income of KB Group rose 13.6% to CZK 33.7 billion Volume of client gross loans up 18.9% to CZK 374.0 billion Client deposits increased 2.7% to CZK 55
Slide 5: Business initiatives in 2008
Business initiatives in 2008 Improvements of products, convenient access to financial services Profi loan FIX – business loan with fixed instalments throughout time of repayment KB Guaranteed Deposit and KB Savings Account – combine attractive return and greatest possible safety Mojeplatba ser
Slide 6: Business achievements in 2008 – Individuals
Business achievements in 2008 – Individuals Year on year comparisons Resilient commercial performance but slowing demand for credit Number of KB‘s individual clients continued increasing, by 52,000 (4%) to 1,344,000. Number of active KB payment cards rose by 5% to 1,694,000, of which credit card
Slide 7: Business achievements and initiatives in 2008 – Corporations
Business achievements and initiatives in 2008 – Corporations Year on year comparisons Solid results of business segments Overall lending to business clients expanded by 17% to 209.0 billion in spite of slowdown in Q4 Strong 30% growth of lending to small business clients thanks to product improv
Slide 8: Group deposits
Group deposits CZK billion By Customers Group deposits increased 2.7% 540.2 539.5 532.5 551.1 554.6 508.0 year-on-year 64.1 63.7 63.8 63.9 65.3 59.9 145.7 146.6 147.3 151.8 154.3 146.1 QoQ group deposits rose 0.6% 22.7 23.3 24.4 25.0 25.7 21.6 KB represents 83% of CZK 554.6 billion of total 276.
Slide 9: Group lending activities
Group lending activities Total lending expanded by 18.9% CZK billion 350.7 364.3 374.0 328.6 39.3 year-on-year 299.5 314.5 35.9 37.5 33.0 34.3 29.8 86.5 90.5 82.3 75.0 78.0 QoQ gross loans rose 2.7% 68.8 27.2 28.4 28.8 24.5 25.6 22.5 Business loans grew by 17.3% YoY: Small businesses (KB) +29.
Slide 10: Proposed distribution of 2008 profit
Proposed distribution of 2008 profit Maintaining strong capital position 56,132 62,974 6,842 13,161 Pro-forma solvency ratios including 2008 30,808 37,127 net profit and after proposed dividend Capital adequacy 14.0% 19,005 19,005 Tier 1 ratio 12.7% Before dividend payment After dividend payment
Slide 11: Priorities for 2009
Priorities Priorities for 2009 Continue in long term investments in KB Group key assets - employees and clients Use KB strengths as strong liquidity and capital to continue in long-term partnership with its clients throughout the economic decline and selectively attract new clients from competit
Slide 12: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 12 KB FY 2008 results – Prague – 18 February 2009
Slide 13: Consolidated financial results
Consolidated financial results Profit and Loss Statement Change FY 2007 FY 2008 YoY (CZK million, unaudited) Net interest income 18,790 21,262 13.2% Net fees & commissions 7,756 8,050 3.8% Income from financial operations 2,982 4,222 41.6% Other income 141 180 27.7% Net banking income 29,670 33,714
Slide 14: Quarterly financial results
Quarterly financial results Profit and Loss Statement Change 4Q 2007 4Q 2008 YoY (CZK million, unaudited) Net interest income 4,979 5,676 14.0% Net fees & commissions 2,025 2,002 -1.1% Income from financial operations 841 1,543 83.5% Other income 39 48 23.1% Net banking income 7,883 9,269 17.6% Pers
Slide 15: Consolidated financial results: Balance Sheet
Consolidated financial results Balance Sheet 31 Dec 31 Dec Change (CZK million, unaudited) 2007 2008 YoY Assets 661,819 699,044 5.6% Cash and balances with central bank 13,557 13,961 3.0% Amounts due from banks 201,090 146,098 -27.3% Loans and advances to customers (net) 304,938 364,040 19.4% Securi
Slide 16: Consolidated financial ratios
Consolidated financial ratios 31 Dec 31 Dec Change Key ratios and indicators 2007 2008 YoY Capital Adequacy (Basel II) n.a. 12.13% n.a. Capital Adequacy (Basel I) 10.10% 9.85% T Tier 1 Ratio (Basel II) n.a. 10.77% n.a. Tier 1 Ratio (Basel I) 8.87% 8.75% T Risk weighted assets for credit risk (CZK bi
Slide 17: Net interest income
Net interest income Income underpinned by rising volumes, stabilizing spreads 5,276 5,676 YoY increase in NII of 13.1%. QoQ NII rose 7.6% 5,074 5,236 436 4,788 4,979 610 478 436 457 MPSS NII (before adjustments) up 34%. ESSOX NII 392 1,929 up 21% YoY. Standalone KB NII rose 11% YoY 1,667 1,748 1
Slide 18: Net fees and commissions
Net fees and commissions Fees developing with economic activity, clients‘ number and one-off 2,105 YoY growth of 3.8%, QoQ fees flat. 2008 fee income 1,920 2,025 1,954 1,989 2,002 158 benefited from inter-bank settlement of interchange 153 156 160 163 160 fees on cards (CZK 205 mil., in transactio
Slide 19: Net profit from financial operations
Net profit from financial operations Trading income successful in volatile markets 1,543 Net profit from financial operations increased by 41.6% YoY. QoQ high increase of 61.4% 956 958 1,085 4Q Profit from securities includes CZK 485 million in 841 766 net impact of sale of shares of Prague Stoc
Slide 20: Operating costs
Operating costs Operating expenses under control, fourth quarter seasonally higher 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 4Q 2008 YoY growth of 6.4%, QoQ OPEX rose by 11.3% due to seasonality -1,494 -1,480 -1,495 -1,558 -1,602 -1,664 Personnel costs up 6.8% on the back of higher average number
Slide 21: Shareholders' equity
Shareholders‘ equity Total shareholders‘ equity Total shareholders‘ equity +12,320 as at 31 December 2007 as at 31 December 2008 Shareholders' equity 31/12/2007 1/1/2008 Increase Decrease 31/12/2008 Share capital 19,005 19,005 19,005 Capital and reserve funds 20,802 31,990 -6,787 25,203 - Retained e
Slide 22: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 22 KB FY 2008 results – Prague – 18 February 2009
Slide 23: Loan quality
Loan quality First impacts of the on-going economy downturn on loan quality CZK billion 350.7 364.3 374.0 328.6 Gross exposure 299.5 314.5 2.7% (+CZK 9.7 billion) QoQ increase of loan portfolio, confirming slower growth of lending activities (3.9% for Q3 2008 and 5.0% for Q4 2007) 324.2 335.5 341.
Slide 24: Cost of risk
Cost of risk Rising cost of risk driven by corporate exposures 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 4Q 2008 53 37 37 39 QoQ provisions for loan losses up from CZK 643 million in 37 35 Q3 2008 to CZK 1 285 million in Q4 2008 75 200 15 12 8 -359 -441 -443 -445 YtD provisions for loan losses hig
Slide 25: Cost of risk: zoom on corporate client segment
Cost of risk Zoom on corporate client segment Cost of risk - Client concentration* 1,000 Fast rising cost of risk from 20 bp range in Q1-Q3 2008 period to 43 bp in 2008 High level of client concentration in net Other client contributors provision creations 500 Sector diversification of exposur
Slide 26: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 26 KB FY 2008 results – Prague – 18 February 2009
Slide 27: Number of clients and distribution network
Number of clients and distribution network Dynamic growth of KB's portfolio and networks Clients of KB (bank) Clients KB bank 1,629,000 clients (+3%) MPSS 747,000 clients (-3%) PFKB 491,000 clients (+4%) 1,577 1,629 1,467 1,515 1,331 1,407 ESSOX 226,000 active clients (+31%) Network 39
Slide 28: KB consolidated group
KB consolidated group Pension Penzijní fond KB Fourth largest pension fund in the Czech Republic offering pension insurance to almost insurance (100%) 491 thousand clients. Modrá pyramida Building Third largest building society with 747,000 clients offering state-subsidised building stavební spořite
Slide 29: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 FY 2007 FY 2008 Change YoY MPSS Volume of new loans (CZK million) 14,055 11,471 -18% Volume of total loans (gross, CZK million) 32,995 39,312 19% Target volume of new contracts (CZK million) 34,967 39,155 12% Volume of deposits (CZK million) 64,051 65,805 3%
Slide 30: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 FY 2007 FY 2008 Change YoY Factoring Factoring turnover (CZK million) 18,144 16,280 -10% KB New contracts (number) 220 197 -10% Number of FTEs 41 41 0% KBB Total client loans (gross, CZK milion) 4,203 5,973 42% Total client deposits (CZK milion) 3,427 2,952 -
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 n.a. 11,795 16.0% 58,977 19.8% 609,962 3.6% ESSOX, s.r.o. IFRS 51% 146 97.3% 2,307 6.8% 9,088 21.9% Factoring KB, a.s. CAS 100% 52 85.7% 1,512
Slide 32: Revaluation of MPSS balance sheet
Revaluation of MPSS balance sheet Background ► Remaining 60% in Modrá pyramida acquired in October 2006. Full consolidation of MPSS since 4Q 2006 ► Preliminary goodwill on acquisition of Modrá pyramida at CZK 2,741 mil. ► In accordance with IFRS 3 A&L valuation to be completed within 12 months after
Slide 33: Recurring profit: Pro-forma Profit and Loss without one-offs
Recurring profit Pro-forma Profit and Loss without one-offs Change FY 2007 FY 2008 YoY Net banking income 29,240 32,638 11.6% +16.0% Net interest income 18,404 20,874 13.4% Non-interest income 10,836 11,765 8.6% Operating costs -13,804 -14,618 5.9% 12,070 Personnel expenses -5,915 -6,320 6.8% 10,450
Slide 34: Macroeconomic environment
Macroeconomic environment Czech Republic Macroeconomic Indicators 2005 2006 2007 2008* 2009* Real GDP (%, average) 6.3 6.8 5.9 3.5 -1.6 Inflation (%, average) 1.9 2.5 2.9 6.3 2.1 Household consumption (%, average) 2.5 5.4 5.2 2.5 0.9 Unemployment (%, ILO meth., average) 7.9 7.1 5.3 4.5 6.2 M2 (%, ye
Slide 35: Interest rates evolution
Interest rates evolution (for the period 28 December 2001 – 30 January 2009) 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 28/12/2001 28/12/2002 28/12/2003 28/12/2004 28/12/2005 28/12/2006 28/12/2007 28/12/2008 Pribor 3M Pribor 6M KB Reference Rate ČNB REPO Rate 35 KB FY 2008 results – Prague – 18 Februar
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 – 30 January 2009) 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 01/10/2001 01/10/2002 01/10/2003 01/10/2004 01/10/2005 01/10/2006 01/10/2007 01/10/2008 KB (left scal
Slide 37: KB shareholders
KB shareholders As at 31 December 2008 According to excerpt from the Securities centre Others 39.6% Société Générale 60.4% 37 KB FY 2008 results – Prague – 18 February 2009
Slide 38: Investor Relations
Investor Relations Jakub Černý, Renáta Buchtová, Georgina Olegrová Tel.: +420 955 532 156, 955 532 155, 955 532 734 E-mail: investor_relations@kb.cz - Internet: www.kb.cz 38 KB FY 2008 results – Prague – 18 February 2009