Slide 1: KB Group Unaudited Financial Results as at 31 December 2009
KB Group Unaudited Financial Results as at 31 December 2009 (International Financial Reporting Standards) Prague 18 February 2010 KB FY 2009 results – Prague – 18 February 2010
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 2009 results – Prague – 18 February 2010
Slide 4: Economy proved flexible despite dependence on exports
Czech economy Economy proved flexible despite dependence on exports Real GDP growth (%) Preliminary Czech 2009 GDP figure showed a decline by 4.3% YoY. 4Q 2009 GDP again down 0.6% QoQ after growth had renewed in 2Q and 3Q 2009. 6.4 7.0 6.1 Asymmetric W shape economic development expected 2.3 1.5 wit
Slide 5: Consistent profitability delivered across cycle
Highlights of the year 2009 Year on year comparisons Consistent profitability delivered across cycle Total revenues down 2.0% to CZK 33.0 billion, adjusted for one-offs up 1.3% Continued lending, portfolio of client loans expanded by 3.4% to CZK 386.6 billion Net interest margin improved to a 3.5% l
Slide 6: Business achievements Q4 2009 – Individuals
Business achievements and initiatives in the fourth quarter of 2009 – Individuals Year on year comparisons Positioning the Group to take advantage of upcoming opportunities Number of KB Group clients over 2.7 million. Fastest growth at ESSOX (+38% to almost 312,000). Total number of the standalone K
Slide 7: Business achievements Q4 2009 – Corporations
Business achievements and initiatives in the fourth quarter of 2009 – Corporations Year on year comparisons Supporting client needs throughout the downturn Volume of loans to small businesses rose by 5.5% to CZK 24.5 billion. Lending to corporations afflicted by lower demand coming from decreased in
Slide 8: Deposit base almost stable year on year
Group deposits CZK billion By Customers 551.1 554.6 538.8 551.8 532.1 524.9 Deposit base almost stable 63.9 65.3 64.8 67.1 64.0 64.4 year on year 151.8 154.3 156.9 154.0 153.7 153.7 25.0 25.7 27.2 YoY group deposits decreased by 0.5%, QoQ up by 26.0 26.4 26.7 5.1% 306.5 305.8 286.0 284.7 276.9 295.1
Slide 9: KB gains market share on a subdued lending market
Group lending activities KB gains market share on a CZK billion subdued lending market 364.3 374.0 378.9 382.5 383.5 386.6 39.3 40.5 42.0 44.0 45.6 37.5 Gross loans rose 3.4% YoY, 0.8% QoQ. Adjusted for 86.5 90.5 92.6 96.3 98.3 100.4 one-off elimination of loss exposure (CZK 2.3 billion), 28.4 28.8
Slide 10: Proposed distribution of 2009 profit
Proposed distribution of 2009 profit Group to remain equipped for future growth 68,753 62,292 6,462 11,007 Increased payout ratio reflects very solid 38,741 43,287 capitalisation level of KB Group Dividends proposed offer an attractive 19,005 19,005 dividend yield for shareholders Before dividend Af
Slide 11: Priorities for 2010
Priorities Priorities for 2010 Stand by our clients in long-term partnerships throughout the economic decline To take advantage of the expected continuation of the medium- to long-term convergence and growth scenario of the Czech Republic In the retail segment, to fully employ the cross-selling pote
Slide 12: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 12 KB FY 2009 results – Prague – 18 February 2010
Slide 13: Profit and Loss Statement
Consolidated financial results Profit and Loss Statement Change FY 2008 FY 2009 YoY (CZK million, unaudited) Net interest income 21,262 22,088 3.9% Net fees & commissions 8,050 7,745 -3.8% Income from financial operations 4,222 3,024 -28.4% Other income 180 184 2.2% Net banking income 33,714 33,041
Slide 14: Profit and Loss Statement – 4Q
Consolidated financial results Profit and Loss Statement Change Change 4Q 2008 3Q 2009 4Q 2009 YoY QoQ (CZK million, unaudited) Net interest income 5,676 5,484 5,584 -1.6% 1.8% Net fees & commissions 2,002 1,918 2,006 0.2% 4.6% Income from financial operations 1,543 699 285 -81.5% -59.2% Other incom
Slide 15: Pro-forma Profit and Loss without one-offs
Recurring profit Pro-forma Profit and Loss without one-offs Change Change FY 2008 FY 2009 YoY 4Q 2008 4Q 2009 YoY Net banking income 32,638 33,067 1.3% 8,591 8,133 -5.3% Net interest income 20,874 21,939 5.1% 5,508 5,551 0.8% 11,998 Non-interest income 11,765 11,128 -5.4% 3,083 2,582 -16.3% -10.2% O
Slide 16: Consolidated financial results Balance Sheet
Consolidated financial results Balance Sheet 31 Dec 30 Sep 31 Dec Change Change (CZK million, unaudited) 2008 2009 2009 YoY QoQ Assets 699,044 657,317 695,037 -0.6% 5.7% Cash and balances with central bank 13,961 11,246 16,271 16.5% 44.7% Amounts due from banks 146,098 105,768 131,271 -10.1% 24.1% L
Slide 17: Key ratios and indicators
Consolidated financial ratios 31 Dec 30 Sep 31 Dec Change Change Key ratios and indicators 2008 2009 2009 YoY QoQ Capital adequacy 12.1% 13.9% 14.1% Tier 1 ratio 10.8% 12.6% 12.7% Total capital requirement (CZK billion) 26.9 27.1 27.2 1.3% 0.3% Capital requirement for credit risk (CZK billion) 23.0
Slide 18: Better asset spreads offset continuing deposit margin compression
Net interest income Better asset spreads offset continuing deposit margin compression 5,276 5,676 5,450 5,570 5,484 5,584 YoY increase in NII of 3.9%, QoQ up 1.8% 434 599 406 502 404 398 MPSS NII up 19%, ESSOX +31%, PFKB +12% YoY 1,805 1,900 1,884 1,962 2,056 2,109 NII from loans – underpinned by hi
Slide 19: Slower economic activity weighs upon fee income
Net fees and commissions Slower economic activity weighs upon fee income 1,989 2,002 1,925 1,918 2,006 1,896 Fees down -3.8% YoY, seasonally higher 4.6% QoQ. 152 149 201 170 143 133 Comparison influenced by positive one-off in 2008 504 497 410 495 485 499 (interchange fees settlement of CZK 205 mill
Slide 20: Net profit from financial operations
Net profit from financial operations Underlying performance remaining solid, impacts of one-offs 1,543 Net profit from financial operations decreased by 1,143 28.4% YoY. QoQ result down 59.2% due to loss on 956 1,085 sale and impairment of equity instruments in Penzijní 896 632 1,069 699 fond KB 285
Slide 21: Demonstrable cost control
Operating costs Demonstrable cost control 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 OPEX YoY lower by 3.3%, QoQ up 8.1% -1,602 -1,664 -1,606 -1,587 -1,629 -1,612 Personnel costs up 1.8% on stable average headcount and higher base salaries General Administrative Expenses significantly -1,519 -1
Slide 22: Shareholders' equity
Shareholders‘ equity Total shareholders‘ equity Total shareholders‘ equity +5,779 as at 31 December 2008 as at 31 December 2009 Shareholders' equity 31/12/2008 1/1/2009 Increase Decrease 31/12/2009 Share capital 19,005 19,005 19,005 Capital and reserve funds 25,203 38,364 -6,783 31,581 - Retained ea
Slide 23: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 23 KB FY 2009 results – Prague – 18 February 2010
Slide 24: No material deterioration of loan quality since mid-2009
Loan quality No material deterioration of loan quality since mid-2009 CZK billion 382.5 386.6 374.0 378.9 383.5 364.3 Gross exposure 0.8% (+CZK 3.1 billion) overall QoQ increase in loan exposure (+0.3% in 3Q 2009) with some product and/or 335.5 341.2 342.4 342.4 343.2 346.2 segment disparities Stabl
Slide 25: Stabilization of KB Group cost of risk in 4Q 2009
Cost of risk Stabilization of KB Group cost of risk in 4Q 2009 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 89 112 99 97 94 46 100 QoQ provisions for loan losses decreased from CZK 93 83 110 88 1.3 billion in 3Q 2009 to CZK 1.2 billion in 4Q 2009 38 51 0 11 11 8 7 -100 4Q 2009 provisions for loan
Slide 26: Zoom on corporate client segments
Cost of risk Zoom on corporate client segments Cost of Risk - Client Contribution CZK million Other client YtD cost of risk stable at 72 bp in 4Q 2009 contributors 1,600 (excluding one-off case) Top 5 client 1,200 contributors No major shift in individual client contribution 800 level (top 5 contrib
Slide 27: Zoom on mass retail client segments
Cost of risk Zoom on mass retail client segments 3M Default Rate - Individuals - 2.0% Consumer Loans and Credit Cards - KB Solo YtD cost of risk stable at 100 bp in 4Q 2009 1.5% Some moderate rise in early risk indicators of mortgages 1.0% 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2
Slide 28: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 28 KB FY 2009 results – Prague – 18 February 2010
Slide 29: Development of clients' portfolio and networks
Number of clients and distribution network Development of clients‘ portfolio and networks Clients of KB bank (thousands) Clients KB bank 1,620,000 clients (-1%) MPSS 720,000 clients (-4%) 1,577 1,629 1,620 PFKB 498,000 clients (+1%) 1,407 1,467 1,515 ESSOX 312,000 active clients (+38%) Network 398 b
Slide 30: KB consolidated group
KB consolidated group Pension Penzijní fond KB Fourth largest pension fund in the Czech Republic offering pension insurance to insurance (100%) almost 498 thousand clients. Modrá pyramida Building Third largest building society with 720,000 clients offering state-subsidised stavební society building
Slide 31: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 FY 2008 FY 2009 Change YoY MPSS Volume of new loans (CZK million) 11,471 10,392 -9% Volume of total loans (gross, CZK million) 39,312 45,611 16% Target volume of new contracts (CZK million) 39,155 40,063 2% Volume of deposits (CZK million) 65,805 67,202 2% Nu
Slide 32: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 FY 2008 FY 2009 Change YoY Factoring Factoring turnover (CZK million) 17,259 12,766 -26% KB New contracts (number) 197 266 35% Number of FTEs 41 39 -4% KBB Total client loans (gross, CZK milion) 5,973 5,220 -13% Total client deposits (CZK milion) 2,952 2,824
Slide 33: 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. 10,369 -12.1% 62,651 6.2% 605,047 -0.8% ESSOX, s.r.o. IFRS 51% 177 21.2% 2,485 7.7% 10,644 17.1% Factoring KB, a.s. CAS 100% 28 -46.2% 1,5
Slide 34: Pro-forma restatement of 2009 P&L
Pro-forma restatement of 2009 P&L considering accounting methodology changes effective as of 1 January 2010 Profit and Loss Statement FY 2009 FY 2009 Effects reported restated (CZK million, unaudited) Net interest income 22,088 21,201 -887 Net fees & commissions 7,745 7,839 94 Income from financial
Slide 35: Sector diversification of corporate loan exposure
Diversification of corporate loan exposure by sector Zoom on corporate client segments / Sector diversification Exposure by Industry (Corporate) as of December 31, 2009 Public administration 8% Other industries Food and agriculture 8% 6% Real estate Mining 5% 1% Chemistry and pharmacy 3% Finance and
Slide 36: 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 37: Czech Republic macroeconomic environment
Macroeconomic environment Czech Republic Macroeconomic Indicators 2005 2006 2007 2008 2009 2010** Real GDP (%, average) 6.4 7.0 6.1 2.3 -4.3* 1.5 Inflation (%, average) 1.9 2.5 2.8 6.3 1.0 1.7 Household consumption (%, average) 2.6 5.2 4.8 3.5 1.6** -0.1 Unemployment (%, av., MLSA meth.) 8.9 8.1 6.6
Slide 38: Interest rates evolution
Interest rates evolution (for the period 28 December 2001 – 10 February 2010) 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 28/12/2001 28/12/2002 28/12/2003 28/12/2004 28/12/2005 28/12/2006 28/12/2007 28/12/2008 28/12/2009 Pribor 3M Pribor 6M KB Reference Rate ČNB REPO Rate 38 KB FY 2009 results – Pr
Slide 39: Development of KB's share price and PX Index
Development of KB‘s share price and PX Index (for the period 1 October 2001 – 10 February 2010) 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 01/10/2009 K
Slide 40: KB shareholders
KB shareholders As at 31 December 2009 According to excerpt from the Securities centre Others 39.6% Société Générale 60.4% 40 KB FY 2009 results – Prague – 18 February 2010
Slide 41: 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 41 KB FY 2009 results – Prague – 18 February 2010