Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — FY2013 Earnings Presentation
38 slides from Komercni Banka, A.s's earnings presentation, Feb 12, 2014
Slide 1: Komerční banka Group Financial results as of 31 December 2013
Komerční ní banka Group Financial results as of 31 December 2013 According to International Financial Reporting Standards, consolidated, unaudited Prague, 12 February 2014
Slide 2: Disclaimer
Disclaimer This document contains a number of forward-looking 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.
Slide 3: Agenda
Agenda Business results 4 Financial results 11 Loan Portfolio Quality and Cost of Risk 22 Appendix 26 3
Slide 4: Czech economy
Czech economy Real GDP outlook (YoY, %) Confirmed exit from recession thanks to stronger 2.5 2.3 foreign demand. 3Q 2013 GDP +0.2% QoQ 1.8 1.5 Expected improvement in demand to be broad- -0.9 based in 2014 -1.4 Confidence indicators improved across sectors 2010 2011 2012 2013* 2014* 2015* Industrial
Slide 5: Key results as of 31 December 2013
Key results as of 31 December 2013 Gross volume of loans to clients up 4.8% to CZK 491.5 billion. Overall lending activity accelerated in the last quarter, driven by mortgages, loans to large corporations. Moderate revival of consumer lending Client deposits expanded by 9.1% to CZK 624.6 billion (ex
Slide 6: Business highlights of the fourth quarter
Business highlights of the fourth quarter Positive response of clients to upgraded MojeOdměny MojeOdmě rewards programme: improving sales of Group products and increasing number of active clients New web tools for financial planning of individuals (MojePlány) ( and for small businesses (KB podnikate
Slide 7: Selected deals of the fourth quarter
Selected deals of the fourth quarter PPF Group PPF Group CTP Property, a.s. Senior Dual Currency Term and Real Estate Finacing Revolving Facilities Agreement Guarantee Facility Agreement Derivatives Hedging Acquisition of 65,9% share in Acquisition of 65,9% share in EUR 79,500,000 Telefónica Czech R
Slide 8: Lending to clients
Lending to clients CZK billion 475.0 475.7 491.5 462.3 469.1 472.3 46.8 45.2 43.6 49.8 49.3 48.3 Gross loans rose 4.8% YoY, +3.3% QoQ.* 146.2 130.5 133.3 134.4 137.3 141.5 Accelerated mortgages, consumer loans and 28.5 27.4 27.5 27.0 27.5 28.0 large corporate lending, influenced by M&As Business loa
Slide 9: Deposits and assets under management
Deposits and assets CZK billion By Customers 649.2 under management 568.3 579.1 598.7 606.9 609.3 72.3 71.8 71.4 71.3 70.9 71.8 161.8 Group deposits up 9.1% YoY to CZK 624.6 billion, 157.7 157.4 157.3 160.5 156.4 35.8 +5.5% QoQ* (excluding repos with clients), 33.2 34.0 34.9 31.7 31.9 affected by sh
Slide 10: Agenda
Agenda Business results 4 Financial results 11 Loan Portfolio Quality and Cost of Risk 22 Appendix 26 10
Slide 11: Consolidated financial results
Consolidated financial results Profit and Loss Statement FY 2012 FY 2012 FY 2013 FY 2013 Change Change YoY YoY (CZK million, unaudited) Reported Recurring Reported Recurring Reported Recurring Net interest income 21,969 21,969 21,207 21,207 -3.5% -3.5% Net fees & commissions 6,971 7,252 7,077 7,077
Slide 12: Consolidated statement of financial position
Consolidated statement of financial position 31 Dec 31 Dec Change Balance Sheet 2012 2013 YoY (CZK million, unaudited) Assets 786,836 863,980 9.8% Cash and balances with central bank 28,057 44,405 58.3% Amounts due from banks 64,111 125,735 96.1% Loans and advances to customers (net) 451,547 473,090
Slide 13: Shareholders' equity
Shareholders‘ equity Development year-to-date Total shareholders‘ equity -4,000 4,000 Total shareholders‘ equity as of 31 December 2012 as of 31 December 2013 Shareholders' equity 31/12/2012 1/1/2013 Increase Decrease 31/12/2013 Share capital 19,005 19,005 19,005 Capital and reserve funds 42,181 56,
Slide 14: Financial ratios
Financial ratios Key ratios and indicators 31 Dec 31 Dec Change 2012 2013 YoY (year-to-date) Capital adequacy (Basel II) 14.7% 15.8% Tier 1 ratio (Basel II) 14.7% 15.8% Total capital requirement (CZK billion) 29.3 29.9 2.1% Capital requirement for credit risk (CZK billion) 24.7 25.3 2.3% Net interes
Slide 15: Pro-forma CRD IV / CRR (Basel III) implementation
Pro-forma forma CRD IV / CRR (Basel III) implementation As of 31 December 2013 Impacts on RWA • Correlation coefficient for large -0.1% -0.5% Minimum capital ~13 13.9% fin. institutions requirement • Credit Value Adjustments of ~0.9% derivatives Pillar 2 (estimated) 2.5% Conservation buffer • EU RWA
Slide 16: Proposed distribution of 2013 profit
Proposed distribution of 2013 201 profit Pro-forma capital adequacy including retained earnings of 2013 (Total CAD, CNB methodology) +1 p.p. Board of Directors proposal is subject to approval by KB‘s Supervisory Board and by the Annual General Meeting of the 16.0% bank 16.8% 15.8% Dividend payment o
Slide 17: Net interest income
Net interest income 5,461 5,452 5,327 5,259 5,293 5,328 539 526 501 462 419 416 NII in 2013 down by 3.5% YoY. NII in 4Q 2013 up by 0.7% QoQ 2,347 2,423 2,350 2,434 2,395 2,448 NII from loans – up due to growing volumes. Higher share of relatively lower-spread loans (mortgages, corporate loans) on th
Slide 18: Net fees and commissions
Net fees and commissions 1,742 1,800 1,790 1,761 1,671 1,725 142 176 217 177 NFC in 2013 up by 1.5% YoY due to low base 134 185 222 319 272 reflecting 2012 pension fund client acquisition 255 337 322 356 334 costs. NFC in 4Q down by 1.6% QoQ 341 331 372 340 147 165 173 Deposit product fees – lower i
Slide 19: Net profit from financial operations
Net profit from financial operations 727 729 Net profit from financial operations in 2013 down 624 661 597 by 30.8% YoY affected by exceptional items – 220 503 359 positive in 2012 and negative in 2013 309 332 297 205 340 4Q 2013 down 23.9% QoQ impacted by changes 309 to derivative valuation (CVA, F
Slide 20: Operating costs
Operating costs 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 OPEX in FY 2013 decreased by 2.5% YoY. 4Q up by 6.3% QoQ due to seasonality -1,719 -1,721 -1,634 -1,681 -1,719 -1,694 Personnel costs in FY 2013 lower by 0.8% YoY. Average number of employees down 1.7% -1,044 -1,184 -1,128 -1,310 -1,179
Slide 21: Agenda
Agenda Business results 4 Financial results 11 Loan Portfolio Quality and Cost of Risk 22 Appendix 26 21
Slide 22: Loan quality
Loan quality Gross lending CZK billion 491.5 462.3 469.1 472.3 475.0 475.7 Loan exposure +4.8% YoY, +3.3% QoQ Share of Standard and Watch loan exposure stable at 94.4% (94.2% in 3Q 2013) 424.8 431.0 434.5 437.0 438.7 454.4 Share of LUSR exposure at 5.6% (5.8% in 3Q 11.3 11.1 10.4 10.8 9.6 9.6 2013)
Slide 23: Cost of risk
Cost of risk Total Cost of Risk development 4Q 2013 cost of commercial risk increased QoQ 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 driven by Corporates. Release of non-commercial 46 42 60 40 40 38 37 40 cost of risk driven by implementation of new 41 40 41 32 32 33 20 Retail provisioning mode
Slide 24: Commercial cost of risk - zoom on client segments
Commercial cost of risk - zoom on client segments KB Group – Corporate Segments 4Q 2013 QoQ increase in cost of risk on 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 150 Corporates driven by creations on the larger 38 19 29 35 34 8 50 segment -50 -25 YoY Corporate cost of risk up to 38 bps from -1
Slide 25: Agenda
Agenda Business results 4 Financial results 11 Loan Portfolio Quality and Cost of Risk 22 Appendix 26 25
Slide 26: 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 1,589,000 clients (-1%) MPSS 574,000 clients (-6%) KBPS 564,000 clients (-2%) 1,629 1,620 1,590 1,602 1,601 1,589 ESSOX 284,000 active clients (+7%) Network 398 branches for
Slide 27: Consolidated financial results
Consolidated financial results Profit and Loss Statement Change Change 4Q 2012 3Q 2013 4Q 2013 YoY QoQ (CZK million, unaudited) Net interest income 5,452 5,293 5,328 -2.3% 0.7% Net fees & commissions 1,742 1,790 1,761 1.1% -1.6% Income from financial operations 727 661 503 -30.8% -23.9% Other income
Slide 28: KB consolidated group
KB consolidated group KB Penzijní Pension Management company for Transformed Fund (pension fund with 564,000 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 29: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 Change FY 2012 FY 2013 YoY MPSS Volume of new loans (CZK million) 4,342 3,350 -23% Volume of total loans (gross, CZK million) 49,271 43,555 -12% Target volume of new contracts (CZK million) 23,845 31,062 30% Volume of deposits (CZK million) 71,803 72,280 1% A
Slide 30: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 Change FY 2012 FY 2013 YoY Factoring Factoring turnover (CZK million) 19,531 26,540 36% KB Volume of total financing (gross, CZK million) 3,014 4,548 51% Average number of FTEs 40 42 5% KP Newly concluded policies (number) 829,891 839,788 1% of which in life
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 100% 13,123 7.1% 83,702 -4.4% 773,892 12.2% - o/w KB branch in Slovakia IFRS 100% 13 -90.7% n.a. n.a. 25,020 38.9% ESSOX, s.r.o. IFRS 50.93% 61
Slide 32: Securities portfolio in the banking book
Securities portfolio in the banking book CZK billion Available-for-sale portfolio Held-to-maturity portfolio CZK 141.2 billion CZK 4.2 billion 98.2 4.0 0.2 17.4 1.6 2.2 21.8 Czech sovereign Foreign sovereign Czech sovereign Foreign sovereign Czech financial institutions Foreign financial institution
Slide 33: Foreign sovereign exposure
Foreign sovereign exposure CZK billion 17.4 EFSF, 0.6 EIB, 1.4 Poland, 5.9 Slovakia, 9.5 EIB, 0.2 1.5 Poland, 0.1 Slovakia, 1.3 0.2 France, 0.2 Trading book1) Available-for-sale 1) Available 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 2009 2010 2011 2012 2013* 2014* Real GDP (%, average) -4.3 2.3 1.8 -0.9 -1.4 1.5 Inflation (%, average) 1.0 1.5 1.9 3.3 1.4 0.9 Household consumption (%, average) 0.3 0.9 0.5 -2.1 0.0 0.6 Unemployment (%, av., MLSA meth.) 6.4 7.0 6.
Slide 35: Interest rates evolution
Interest rates evolution (for the period 1 January 2005 – 5 February 2014) 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 01/01/2005 01/01/2006 01/01/2007 01/01/2008 01/01/2009 01/01/2010 01/01/2011 01/01/2012 01/01/2013 01/01/2014 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 – 5 February 2014) 4,800 2,100 4,300 1,900 3,800 1,700 1,500 3,300 1,300 2,800 1,100 2,300 900 1,800 700 1,300 500 800 300 1/10/01 1/10/02 1/10/03 1/10/04 1/10/05 1/10/06 1/10/07 1/10/08 1/10/09 1/10/10 1/10/11 1/10/12 1/10/
Slide 37: KB shareholders
KB shareholders As of 31 December 2013 Shares on registered capital according to excerpt from the Securities centre Others 39.6% Société Générale 60.4% As of 31 December 2013, KB held 238,672 own shares in treasury, representing 0.63% stake on registered capital. 37
Slide 38: Investor Relations
Investor Relations Jakub Černý, erný, Georgina Olegrová, Olegrová Robert Janeček Tel.: +420 955 532 156, 955 532 734, 734 955 532 155 E-mail: mail: investor_relations@kb.cz - Internet: www.kb.cz 38