Komercni Banka, A.s. · PSECZ:KOMB

Komercni Banka, A.s — Q1 2008 Earnings Presentation

35 slides from Komercni Banka, A.s's earnings presentation, May 14, 2008

  1. Slide 1: KB Group 1Q 2008 Financial Results

    KB Group 1Q 2008 Financial Results (International Financial Standards) Prague 14 May 2008 KB 1Q 2008 results – Prague – 14 May 2008

  2. 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

  3. Slide 3: Agenda

    Agenda ƒ Business Highlights ƒ Consolidated Financial Results ƒ Loan Portfolio Quality and Development ƒ Appendix 3 KB 1Q 2008 results – Prague – 14 May 2008

  4. Slide 4: Very successful Q1 for KB Group

    Highlights of 1st quarter of 2008 Very successful Q1 for KB Group ƒ Consolidated net banking income of KB Group reached CZK 7,845 million, up 12.5% ƒ Cost income ratio further improved to 45.5%, one of the best levels in the CEE region ƒ Net operating income increased by 12.7% ƒ Consolidated cost of

  5. Slide 5: Dynamic growth of KB's portfolio and networks

    Number of clients and distribution network Dynamic growth of KB's portfolio and networks Clients of KB (bank) ƒ Clients ƒ KB bank 1,590,000 clients (+4%) ƒ MPSS 763,000 clients (-4%) 1 515 1 577 1 590 ƒ PFKB 476,000 clients (+9%) 1 407 1 467 ƒ ESSOX 174,000 active clients (+12%) ƒ Network ƒ 389 bran

  6. Slide 6: Strong and successful development in the individuals segment

    Main business achievements in 1st quarter of 2008 - Individuals Strong and successful development in the individuals segment ƒ Continuing increase in number of KB’s individual customers by 5% to 1,306,000. ƒ Young clients acquisition brought gains of 166,000 Child accounts and 155,000 Gaudeamus pack

  7. Slide 7: KB strengthen its leading position in the corporate segment

    Main business achievements in 1st quarter of 2008 – Corporations KB strengthen its leading position in the corporate segment ƒ Total Group loans to business clients grew by 20.7% and reached CZK 186.3 billion. ƒ Revenues of Factoring KB up 6% to CZK 32.6 million. ƒ KB signed Framework Credit Agreeme

  8. Slide 8: Strong growth of deposit base

    Group deposits CZK billion By Customers 540.2 539.5 Strong growth of deposit base 490.7 506.9 508.0 64.1 63.7 59.8 59.5 59.9 145.7 146.6 136.7 144.0 146.1 ƒ Group deposits increased 10% YoY 22.7 23.3 19.5 20.8 21.6 ƒ KB represents 83% of CZK 539.5 billion of total 263.7 278.7 276.2 304.1 292.3 depos

  9. Slide 9: Rapid growth of lending continues

    Group lending activities CZK billion 328.5 Rapid growth of lending continues 299.4 314.1 283.3 34.3 265.3 33.0 29.8 27.7 ƒ Total lending expanded by 23.8% YoY. 26.0 75.0 78.0 64.7 68.8 59.9 25.6 22.5 24.5 ƒ Business loans grew by 20.7% YoY: 20.0 21.1 ƒ Small businesses (KB) +35.2% to CZK 16.5 bn. 16

  10. Slide 10: Agenda

    Agenda ƒ Business Highlights ƒ Consolidated Financial Results ƒ Loan Portfolio Quality and Development ƒ Appendix 10 KB 1Q 2008 results – Prague – 14 May 2008

  11. Slide 11: Profit and Loss Statement

    Consolidated financial results Profit and Loss Statement Change 1Q 2007 1Q 2008 YoY (CZK million, unaudited) Net interest income 4,357 5,074 16.5% Net fees & commissions 1,873 1,954 4.3% Income from financial operations 715 766 7.1% Other income 29 51 75.9% Net banking income 6,974 7,845 12.5% Perso

  12. Slide 12: Balance Sheet

    Consolidated financial results Balance Sheet 31 March 31 March Change (CZK million, unaudited) 2007 2008 YoY Assets 614,438 679,101 10.5% Cash and balances with central bank 17,039 13,918 -18.3% Amounts due from banks 207,962 202,250 -2.7% Loans and advances to customers (net) 256,588 318,780 24.2%

  13. Slide 13: Key ratios and indicators

    Consolidated financial ratios 31 March 31 March Change Key ratios and indicators 2007 2008 YoY Capital Adequacy (Basel II) n.a. 11.65% n.a. Capital Adequacy (Basel I) 11.20% 9.79% T Tier 1 Ratio (Basel II) n.a. 10.67% n.a. Tier 1 Ratio (Basel I) 9.80% 8.60% T Risk weighted assets for credit risk (CZ

  14. Slide 14: Benefiting from Basel II advanced approach under Pillar I

    KB Group Basel II capital adequacy Benefiting from Basel II advanced approach under Pillar I Tier 1 ratio 10.67% CZK billion Basel II Basel I 8.60% 1.27% Tier I 33.44 33.80 0.37% 0.38% Tier I + II 36.52 38.48 Capital requirement 25.08 31.43 Tier 1 ratio 10.67% 8.60% 8.22% 9.03% CAD 11.65% 9.79% ƒ KB

  15. Slide 15: Net Interest Income

    Net Interest Income Strong growth underpinned by volumes and widening deposit spreads 4,788 4,979 5,074 ƒ YoY increase in NII of 16.5%. QoQ NII rose 1.9% 4,357 4,666 435 457 456 392 ƒ MPSS NII (before adjustments) up 38%. ESSOX NII 372 1,647 1,667 1,535 1,586 up 29%. Standalone KB NII rose 12% YoY.

  16. Slide 16: Net Fees and Commissions

    Net Fees and Commissions Fees growing with strong economic activity and enlarged client base 1,939 1,920 2,025 1,954 1,873 151 ƒ YoY growth of 4.3%, QoQ seasonal decline of 3.5%. 149 161 155 153 498 494 484 490 489 ƒ Dynamic fee income from business clients, fees from 232 individuals growing in line

  17. Slide 17: Net Profit from Financial Operations

    Net Profit from Financial Operations Trading income supported by clients‘ transactions 841 ƒ Net profit from financial operations increased by 7.0% 790 766 715 636 YoY, declined by 8.9% QoQ. 521 583 583 ƒ Profit from FX operations generated mainly by client 538 441 spot operations. Contribution of i

  18. Slide 18: Operating costs

    Operating costs Increase in operating expenses from inflation and one-offs 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 ƒ Operating expenses grew 12% comparing 1Q 2008 and 1Q 2007, and declined 1.5% between 1Q 2008 -1,440 -1,500 -1,494 -1,480 -1,495 and 4Q 2007. ƒ Personnel costs rising with increase in

  19. Slide 19: Shareholders' Equity

    Shareholders‘ Equity Total shareholders‘ equity Total shareholders‘ equity + 3,692 as at 31 December 2007 as at 31 March 2008 Shareholders' equity 31/12/2007 1/1/2008 Increase Decrease 31/3/2008 Share capital 19,005 19,005 19,005 Capital and reserve funds 20,802 31,990 8 31,998 - Retained earnings,

  20. Slide 20: Agenda

    Agenda ƒ Business Highlights ƒ Consolidated Financial Results ƒ Loan Portfolio Quality and Development ƒ Appendix 20 KB 1Q 2008 results – Prague – 14 May 2008

  21. Slide 21: Loan Quality

    Loan Quality Robust and healthy growth of loan exposure and adequate provisions CZK billion 314.1 328.5 Gross exposure 283.3 299.4 265.3 ƒ Healthy QoQ growth of KB group loan exposure. Total loan portfolio up by CZK 14.4 billion. 272.0 287.6 302.3 238.9 258.1 ƒ Standard loan portfolio up by CZK +14.

  22. Slide 22: Cost of Risk

    Cost of Risk Stabilized cost of risk level confirming good quality of risk management ƒ Stabilization of KB consolidated cost of risk at 37 bp 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 45 39 37 37 37 ƒ Decreasing share of retail activities in net creation of 200 97 provision posted at CZK -443 mil. 15

  23. Slide 23: Agenda

    Agenda ƒ Business Highlights ƒ Consolidated Financial Results ƒ Loan Portfolio Quality and Development ƒ Appendix 23 KB 1Q 2008 results – Prague – 14 May 2008

  24. Slide 24: KB consolidated group

    KB consolidated group PENSION BUILDING CORPORATE CONSUMER INSURANCE OTHERS INSURANCE SOCIETY SERVICES CREDIT Penzijní fond KB Modrá pyramida Factoring KB ESSOX Komerční st. spořitelna pojišťovna 100% 100% 100% 51% 49% KB Bratislava (Slovakia) 100% MPSS: PFKB: - Until 3Q 2006 equity method - Full con

  25. Slide 25: Business performance of subsidiaries 1/2

    Business performance of subsidiaries 1/2 1Q 2007 1Q 2008 Change YoY MPSS Volume of new loans (CZK million) 2,439 2,855 17% Volume of total loans (gross, CZK million) 26,031 34,292 32% Target volume of new contracts (CZK million) 7,500 9,996 33% Volume of deposits (CZK million) 59,820 63,687 6% Numbe

  26. Slide 26: Business performance of subsidiaries 2/2

    Business performance of subsidiaries 2/2 1Q 2007 1Q 2008 Change YoY Factoring Factoring turnover (CZK million) 3,942 3,836 -3% KB New contracts (number) 58 58 0% Number of FTEs 39 41 4% KBB Total client loans (gross, CZK milion) 3,257 3,855 18% Total client deposits (CZK milion) 2,871 2,123 -26% Num

  27. Slide 27: Standalone results of KB Group companies and associated undertakings

    Standalone results of KB Group companies and associated undertakings Account. Share of Net Profit YoY Equity YoY Assets YoY standards KB CZK million KB IFRS n.a. 2,625 14% 52,893 6% 595,760 13% ESSOX, s.r.o. (IFRS) IFRS 51% 55 150% 2,216 84% 7,701 46% Factoring KB, a.s. CAS 100% 7 0% 1,390 609% 4,14

  28. Slide 28: Revaluation of MPSS balance sheet

    Revaluation of MPSS balance sheet Background ► 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 acquisition ► Valuation based on detailed data on the contracts of Modrá Pyramida Adjustments to pro

  29. Slide 29: Recurring profit: Pro-forma Profit and Loss without one-offs

    Recurring profit Pro-forma Profit and Loss without one-offs Change 1Q 2007 1Q 2008 YoY +20.6% Net banking income 6,875 7,760 12.9% Net interest income 4,258 4,987 17.1% Non-interest income 2,617 2,773 6.0% Operating costs -3,216 -3,513 9.2% Personnel expenses -1,440 -1,495 3.8% 3,023 Other costs -1,

  30. Slide 30: Overview of restatements

    Overview of restatements ƒ Several changes in accounting methodology have been implemented as of 1 January 2008 so that the accounting treatment better reflects the economic nature of the underlying events. These changes do not affect overall KB Group‘s result. ƒ Below is the overview of restatement

  31. Slide 31: Macroeconomic environment

    Macroeconomic environment Czech Republic Macroeconomic Indicators 2004 2005 2006 2007 2008* Real GDP (%) 4.5 6.4 6.4 6.5 4.8 Inflation (%) 2.8 1.9 2.5 2.8 5.5 Household income (%) 3.7 4.2 6.7 7.9 5.9 M2 (%) 4.4 8.0 9.9 13.2 11.0 3M PRIBOR (%, average) 2.4 2.0 2.3 3.1 4.2 Potential of the market 2003

  32. Slide 32: Interest Rates Evolution

    32 1,5% 2,0% 2,5% 3,0% 3,5% 4,0% 4,5% 5,0% 28.12.2001 28.2.2002 28.4.2002 28.6.2002 28.8.2002 28.10.2002 28.12.2002 28.2.2003 28.4.2003 28.6.2003 28.8.2003 28.10.2003 Pribor 3M 28.12.2003 KB 1Q 2008 results – Prague – 14 May 2008 28.2.2004 28.4.2004 28.6.2004 28.8.2004 Pribor 6M 28.10.2004 28.12.200

  33. Slide 33: Development of KB's share price and PX Index

    33 1. 10 .2 00 800 1 300 1 800 2 300 2 800 3 300 3 800 4 300 4 800 1. 1 1. 20 02 1. 4. 20 02 1. 7. 20 1. 0 10 2 .2 00 1. 2 1. 20 03 1. 4. 20 03 1. 7. 2 1. 003 10 .2 00 1. 3 1. 20 KB 1Q 2008 results – Prague – 14 May 2008 04 1. 4. 20 04 1. 7. 20 1. 0 10 4 .2 00 1. 4 1. 20 KB (left scale) 05 1. 4. 20

  34. Slide 34: KB Shareholders

    KB Shareholders Others 31% Société Générale 60% Investors Bank & Trust Co.* 9% *Shares held on behalf of third parties 34 KB 1Q 2008 results – Prague – 14 May 2008

  35. Slide 35: Investor Relations

    Investor Relations Jakub Černý, Olga Nevyhoštěná, Renáta Buchtová Tel.: +420 955 532 155-6, 955 532 734 E-mail: investor_relations@kb.cz - Internet: www.kb.cz 35 KB 1Q 2008 results – Prague – 14 May 2008

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