Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — Q1 2024 Earnings Presentation
39 slides from Komercni Banka, A.s's earnings presentation, May 3, 2024
Slide 1: Komerční banka Group consolidated unaudited results as of 31 March 2024
Prague, 3 May 2024 Komerční banka Group Consolidated unaudited results as of 31 March 2024
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 Highlights as of 31 March 2024 and update on New Digital Bank Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 March 2024 3
Slide 4: Highlights of Q1 2024
Highlights of Q1 2024 First quarter 2024: Accelerating progress in strategic transformation Financial Business Shareholders’ performance performance decisions Dividend Supervisory Board and Statutory auditor Group net income Client loans Audit Committee CZK 82.66 per share KPMG Audit CZK 2.8 billion
Slide 5: New Digital Bank – business driven and technology enabled transformation of KB
New Digital Bank – business driven and New Digital Bank (retail part) technology enabled transformation of KB New distribution Change of the full technological stack, digitalizing the whole bank, improving efficiency, New simple channels customer service and increasing ability to adapt to constantly
Slide 6: Agenda
Agenda Highlights as of 31 March 2024 and update on New Digital Bank Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 March 2024 6
Slide 7: Economic recovery to be driven by domestic consumption and investments
Czech Republic - macro Economic recovery to be driven by domestic consumption and investments Czech GDP development (% year-on-year) KB Economic 10 3.6 1.4 Research Forecast GDP in 1Q 20241) up by +0.5% QoQ and up by +0.4% YoY according to flash estimate. 5 2.2 2.4 QoQ growth was driven by household
Slide 8: Agenda
Agenda Highlights as of 31 March 2024 and update on New Digital Bank Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 March 2024 8
Slide 9: Gross loans to clients up 4.6%
Loans to clients Gross loans to clients up 4.6% Group lending (w/o repo, but incl. client bonds) (CZK billion) +4.6% -0.3% Net loans to deposits ratio at 79.9%. Liquidity coverage ratio 154% 784.9 789.1 794.6 808.3 827.7 825.5 Consumer lending growth boosted by credit cards and overdrafts 85.3 86.5
Slide 10: Client deposits +7.2%, other AUM up +15.3% YoY
Deposits and other AUM Client deposits +7.2%, Group deposits (excluding repo operations) other AUM up +15.3% YoY (CZK billion) +7.2% +4.3% Non-deposit assets under management 1,022.4 1,006.2 1,049.8 916.8 979.5 994.7 (CZK million) 52.8 52.3 51.3 -5.2% +15.3% 56.0 54.2 53.9 320.3 323.7 329.0 337.9 33
Slide 11: Agenda
Agenda Highlights as of 31 March 2024 and update on New Digital Bank Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 March 2024 11
Slide 12: Net profit development affected by provision release last year
Profit & Loss Net profit development affected by Development of quarterly net profit … (CZK million) provision release last year -21.3% Drivers for year on year change in attributable net profit 4,632 4,525 -14.0% 4,267 (as of 31 March 2024) 3,561 3,259 -21.3% 2,804 413 3,561 74 -73 -136 -210 2,804
Slide 13: Balance sheet up by 12.8% year-on-year
Statement of financial position Balance sheet up by 12.8% year-on-year Assets Liabilities and Equity (CZK billion) +12.8% +12.8% Year-on-year (CZK billion) Year-on-year +6.5% +6.5% 1,614 1,614 1,516 1,516 101 1,431 1,431 22.5% 106 517 45.1% 82 356 424 1,229 13.8% 1,080 1,127 788 834 839 6.4% 7.4% -8
Slide 14: Net interest income
Net interest income Loan spreads stabilised, deposit costs still elevated, Year-to-date -1.1% effect of cost of MREL and mandatory reserves (CZK million) 6,349 6,276 642 -9% 583 Net interest margin (%) Other 2.21% 2.42% 2.01% 2.01% 1.91% 1.99% 1.86% 1.96% NII from deposits 2,715 -2% 2,659 1.75% 1.94
Slide 15: Growth in fee income driven by cross-selling and services for corporations
Net fees and commissions Growth in fee income driven by cross-selling Year-to-date +4.9% and services for corporations (CZK million) 1,589 1,515 Transaction fees Transaction fees 432 2% 440 YoY higher overall transaction activity, seasonally slower Q1. Increasing trend Deposit product fees -6% 193 L
Slide 16: Net profit from financial operations
Net profit from financial operations Result affected by slow economy, Year-to-date -16.2% rate expectations, competition (CZK million) 1,000 838 Capital markets Capital markets Subdued hedging activity of clients in 1Q 2024 amid weakening CZK FX rate, Net gains on FX from payments 545 -35% 356 decre
Slide 17: Operating expenditures under control
Operating expenditures Operating expenditures under control Year-to-date -4.1% (CZK million) Personnel expenses - number of employees (average FTE) in 1Q 2024: 7,563 Personnel costs -1,944 10% -2,131 (+0.3% YoY) as decreasing staff numbers in support functions and distribution were GAE (excl. Res. a
Slide 18: Agenda
Agenda Highlights as of 31 March 2024 and update on New Digital Bank Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 March 2024 18
Slide 19: 1Q 2024 Asset quality
Loan portfolio quality 1Q 2024 Asset quality Group lending (CZK billion) 789.1 794.6 808.3 827.7 825.5 784.9 Loan portfolio up by 4.6% YoY and down by 0.3% QoQ QoQ stable Stage 2 share at 15% 690.4 684.4 663.5 665.8 672.9 685.9 NPL ratio up to 2.1% (vs. 1.8% in 4Q 2023) reflecting higher inflows int
Slide 20: 1Q 2024 Cost of risk development
Cost of risk 1Q 2024 Cost of risk development Total Cost of risk (Year-to-date, in basis points) 31 22 1Q 2024 CoR net creation at CZK 485 million 15 14 22 8 6 8 0 15 CZK 315 million net creation on non-retail exposures driven by -16 9 -21 -22 • higher inflows into default for SME portfolios and -14
Slide 21: Agenda
Agenda Highlights as of 31 March 2024 and update on New Digital Bank Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 March 2024 21
Slide 22: Stable regulatory capital ratio safely above regulatory requirement
Capital Stable regulatory capital ratio safely above regulatory requirement Contributions to shareholders’ equity in 1Q 2024 (CZK million) 60 131,051 Total capital adequacy at 18.8% over the applicable Overall Capital Minimum of -97 128,284 2,804 16.9% effective from 1 April 2024 CET 1 ratio at 17.7
Slide 23: Agenda
Agenda Highlights as of 31 March 2024 and update on New Digital Bank Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 March 2024 23
Slide 24: Assumptions and outlook for 2024
Outlook for 2024 Assumptions and outlook for 2024 The text below updates and replaces outlook for 2024 first presented alongside release of KB’s full year 2023 results on 8 February 2024. Investors are advised to consider high level of uncertainty and risks when formulating their investment decision
Slide 25: Agenda
Agenda Highlights as of 31 March 2024 and update on New Digital Bank Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital and dividends Outlook for 2024 Appendix KB Group results as of 31 March 2024 25
Slide 26: Number of clients and distribution network
KB Group clients and distribution network Number of clients and distribution network Number of bank clients 31-Mar-23 31-Mar-24 YoY (thousands, CZ) Number of clients 1,664 1,641 1,625 1,652 1,664 1,678 KB Group’s clients 2,232,000 2,195,000 -37,000 Komerční banka 1,656,000 1,678,000 22,000 – individ
Slide 27: Consolidated income statement
Consolidated income statement Income statement (CZK million, unaudited) 1Q 2023 4Q 2023 1Q 2024 YoY QoQ Net interest income 6,349 6,276 6,276 -1.1% 0.0% Net fee & commission income 1,515 1,817 1,589 4.9% -12.5% Net profit of financial operations 1,000 993 838 -16.2% -15.6% Dividend and other income
Slide 28: Consolidated statement of financial position
Consolidated statement of financial position Balance sheet (CZK million, unaudited) 31-Mar-23 31-Dec-23 31-Mar-24 YoY rel. YoY abs. Ytd rel. Ytd abs. Assets 1,431,062 1,516,302 1,614,499 12.8% 183,437 6.5% 98,197 Cash and current balances with central bank 16,967 12,835 23,044 35.8% 6,077 79.5% 10,2
Slide 29: Capital & profitability indicators
Financial ratios Capital & profitability indicators Adjusted for IFRIC 21 Reported linearisation* (year-to-date, IFRS 9) 31-Mar-23 31-Dec-23 31-Mar-24 31-Mar-23 31-Mar-24 Capital adequacy 19.8% 18.8% 18.8% Tier 1 ratio = Core Tier 1 ratio 19.2% 17.7% 17.7% Risk weighted assets for credit risk (CZK b
Slide 30: Composition of Cost of risk
Composition of Cost of risk 1Q 2024 Cost of risk structure Key components Contribution to 1Q 2024 CoR (bps) Non-retail NPL portfolio 7 bps Retail NPL portfolio 2 bps Non-retail performing portfolio (Stage 1 & 2) 7 bps Retail performing portfolio (Stage 1 & 2) 6 bps Total 22 bps KB Group results as o
Slide 31: Business performance of subsidiaries (1/2)
Overview of KB subsidiaries Business performance of subsidiaries (1/2) 1Q 2023 1Q 2024 YoY Modrá pyramida (100%) building savings & loans company Volume of new loans (CZK million) 2,069 2,180 5% Volume of total loans (gross, CZK million) 86,542 93,713 8% Volume of deposits (CZK million) 54,174 51,34
Slide 32: Business performance of subsidiaries (2/2)
Overview of KB subsidiaries Business performance of subsidiaries (2/2) 1Q 2023 1Q 2024 YoY Factoring KB (100%) factoring company Factoring turnover (CZK million) 17,329 15,906 -8% Volume of total financing (gross, CZK million) 9,006 8,765 -3% Average number of FTEs 40 1* -98% KB Pojišťovna (49%) uni
Slide 33: Debt securities portfolio in the banking book
Securities Debt securities portfolio in the banking book (CZK billion) 184.2 165.9 155.4 4.0 Poland 156.8 9.0 Slovakia 5.0 150.9 0.0 28.8 15.0 31/03/2023 31/03/2024 Debt securities at amortized cost Czech sovereign securities Debt securities at FV through OCI Foreign government bonds Corporations *
Slide 34: MREL status, Tier 2
MREL, TIER 2 MREL status, Tier 2 Own funds and eligible liabilities (for MREL) 29.6% Total requirement = MREL + CBR As of 31 March 2024, KB Group has to fulfil MREL requierement at 21.2% of the 10.8% (27.7% as of 31 March 2024) consolidated TRE and 5.91% of TE. In addition to the MREL, KB Group must
Slide 35: Capital requirements development 2023 - 2024
Regulatory capital requirements Capital requirements development 2023 - 2024 As from 01/01/2023 01/04/2023 01/07/2023 01/10/2023 01/01/2024 01/04/2024 Own funds 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% O-SII 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Conservation buffer 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% Count
Slide 36: Macroeconomic environment – Czechia
Czech macroeoconomic environment Macroeconomic environment – Czechia Macroeconomic Indicators 2018 2019 2020 2021 2022 2023 2024* 2025* Real GDP (%, average) 3.2 3.0 -5.5 3.6 2.4 -0.2 1.4 2.3 Inflation (%, average) 2.2 2.9 3.3 3.8 15.1 10.8 2.1 1.8 Household consumption (%, average) 3.3 2.6 -7.4 4.2
Slide 37: Interest rates evolution
Interest rates Interest rates evolution % For the period 1 Jan 2015 – 26 April 2024 8 7 6 5 4 3 2 1 0 01/2015 01/16 01/17 01/18 01/19 01/20 01/21 01/22 01/23 01/2024 3M Pribor 6M Pribor 2W repo 5Y IRS 10Y IRS KB Group results as of 31 March 2024 37
Slide 38: KB - #1 listed Czech bank
KB shares and shareholder structure KB - #1 listed Czech bank Shareholder structure Development of KB share price and PX index (1 January 2001 – 26 April 2024) 600 500 Free-float 400 39.6% 300 200 60.4% Société Genérále 100 0 2000 2005 2010 2015 2020 2025 KB PX • The number of shareholders comprised
Slide 39: Investor relations
Investor relations Komerční banka, a.s. Na Příkopě 33, 114 07 Prague 1 Email: investor_relations@kb.cz Tel.: +420 955 532 156, +420 955 532 734 Internet: www.kb.cz/investors Twitter: @KB_investors Reuters: BKOM.PR Bloomberg: KOMB CP