Slide 1: Komerční banka Group Financial results as at 31 March 2012
Komerční banka Group Financial results as at 31 March 2012 According to International Financial Reporting Standards, consolidated, unaudited Prague, 3 May 2012
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 results 4 Financial results 10 Loan Portfolio Quality and Cost of Risk 20 Appendix 24 3
Slide 4: Czech economy
Czech economy Real GDP development (%) Stagnating economy despite resilient exports (+15.2% YoY in February) due to lower 2.9 2.6 1.6 1.3 household consumption and government 0.1 austerity Solid delivery on government deficit reduction -4.5 plan. Public finance deficit in 2011 at 3.1% of GDP compare
Slide 5: Key results as of 31 March 2012
Key results as of 31 March 2012 Consolidated deposits rose by 5.3% to CZK 564.8 billion Gross portfolio of loans to clients expanded by 13.1% to CZK 450.5 billion (+10.8% like-for-like) Sufficient liquidity buffer, net loans-to-deposits ratio 76.8% (81.0% excluding client assets in Penzijní fond KB)
Slide 6: Business highlights
Business highlights Steady growth in the mortgage portfolio (by 13.0% year on year to CZK 126.5 billion) and further improvements in KB’s mortgage market position Continued increase in the volume of deposits, with the most dynamic growth recorded in saving accounts Penzijní fond KB yielded 2.04% for
Slide 7: Deposits and assets under management
Deposits and assets CZK billion By Customers 551.1 560.7 564.8 under management 538.1 536.1 546.8 70.4 69.7 70.9 70.9 69.0 69.2 153.7 154.2 156.3 156.9 159.9 162.4 Solid growth of deposits by 5.3% YoY. QoQ 29.7 29.9 30.4 31.2 up by 0.7% with some seasonal influences 28.8 29.0 Volumes on current acco
Slide 8: Lending activities
Lending activities CZK billion 450.5 450.5 422.3 435.1 399.7 398.2 51.3 51.4 50.8 50.6 49.7 50.0 Strong YoY growth slowed in 1Q. Gross loans 119.1 124.1 126.5 115.7 rose 13.1% YoY, stable QoQ (adjusted for 109.3 112.0 27.1 27.0 26.8 27.2 SGEF acquisition up by 10.8% YoY) 27.2 27.0 Business loans up
Slide 9: Agenda
Agenda Business results 4 Financial results 10 Loan Portfolio Quality and Cost of Risk 20 Appendix 24 9
Slide 10: Consolidated income statement
Consolidated income statement Change Change Profit and Loss Statement 1Q 2011 1Q 2012 1Q 2012 YoY YoY (CZK million, unaudited) Pro forma Pro forma Net interest income 5,372 5,543 5,434 3.2% 1.2% Net fees & commissions 1,866 1,807 1,801 -3.2% -3.5% Income from financial operations 713 1,018 1,028 42.
Slide 11: Recurring financial results
Recurring financial results Change Change Recurring P&L 1Q 2011 1Q 2011 1Q 2012 1Q 2012 YoY YoY (CZK million, unaudited) Reported Recurring Reported Recurring Reported Recurring Net interest income 5,372 5,357 5,543 5,421 3.2% 1.2% Net fees & commissions 1,866 1,866 1,807 1,848 -3.2% -1.0% Income fr
Slide 12: Consolidated statement of financial position
Consolidated statement of financial position 31 March 31 Dec 31 March 31 March Change Change Change Balance Sheet 2011 2011 2012 2012 YoY YoY YtD (CZK million, unaudited) Pro forma Pro forma Assets 703,984 754,810 753,552 744,334 7.0% 5.7% -0.2% Cash and balances with central bank 14,016 16,980 12,0
Slide 13: Financial ratios
Financial ratios 31 March 31 Dec 31 March 31 March Change Change Key ratios and indicators 2011 2011 2012 2012 YoY YoY (year-to-date) Pro forma Pro forma Capital adequacy (Basel II) 15.5% 14.6% 13.6% 14.0% Tier 1 ratio (Basel II) 14.2% 13.4% 13.6% 14.0% Total capital requirement (CZK billion) 27.0 3
Slide 14: Shareholders' equity
Shareholders‘ equity Development year-to-date Total shareholders‘ equity +4,380 Total shareholders‘ equity as at 31 December 2011 as at 31 March 2012 Shareholders' equity 31/12/2011 1/1/2012 Increase Decrease 31/03/2012 Share capital 19,005 19,005 19,005 Capital and reserve funds 38,693 48,168 16 48
Slide 15: Net interest income
Net interest income 5,449 5,569 5,579 5,671 5,543 5,372 431 559 495 528 540 498 Growth in NII driven by business volumes 2,122 2,078 2,198 2,278 2,296 2,279 NII in 1Q 2012 up by 3.2% YoY (+1.2% adjusted for SGEF acquisition). 1Q down 2.3% QoQ 2,874 2,785 2,815 2,816 2,836 2,720 NII from loans – driv
Slide 16: Net fees and commissions
Net fees and commissions 2,028 1,866 1,882 1,837 1,807 211 1,720 193 160 183 Fee income in 1Q 2012 down 3.2% YoY 367 177 205 396 (-3.5% adjusted for SGEF acquisition). 435 392 200 359 1Q up 5.1% QoQ 352 344 326 343 319 336 196 143 Maintenance fees – reduction in charged fees 125 143 121 125 due to c
Slide 17: Net profit from financial operations
Net profit from financial operations 1,018 957 804 816 Net profit from financial operations in 1Q 2012 713 457 672 400 increased by 42.8% YoY (+44.2% adjusted for 434 424 SGEF acquisition). 4Q result up 6.4% QoQ 394 344 313 395 Penzijní fond KB realised gains totalling CZK 367 319 355 260 million in
Slide 18: Operating costs
Operating costs 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 OPEX in 1Q 2012 increased by 1.9% YoY -1,491 -1,605 -1,653 -1,682 -1,586 -1,677 (0.3% adjusted for SGEF acquisition). OPEX down 12.6% QoQ after seasonally strong 4Q 2011 -1,446 -1,122 -1,316 -1,138 -1,579 -1,132 Personnel costs in 1Q 20
Slide 19: Agenda
Agenda Business results 4 Financial results 10 Loan Portfolio Quality and Cost of Risk 20 Appendix 24 19
Slide 20: Loan quality
Loan quality Gross lending CZK billion 435.1 450.5 450.5 422.3 399.7 398.2 Loan exposure +13.1% YoY (incl. SGEF acquisition), flat QoQ development 381.1 394.7 410.2 411.9 360.9 359.4 Share of Standard and Watch loan exposure stable at 94.3% (94.3% in 12M 2011) 13.0 14.0 14.0 14.1 14.6 12.8 Share of
Slide 21: Cost of risk
Cost of risk 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 133 181 175 1Q 2012 cost of risk at CZK 0.6 billion 80 55 52 43 62 56 75 55 56 0 49 24 43 compared to CZK 0.5 billion in 1Q 2011 62 227 3 -365 -200 -760 -775 -581 -641 -630 -400 YoY cost of risk increase by 14.6 % influenced -1,086 -600 by
Slide 22: Commercial cost of risk - zoom on client segments
Commercial cost of risk - zoom on client segments KB Group – Corporate Segments 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 Decreasing QoQ cost of risk on corporates and stable cost of risk on retail 80 150 57 42 35 26 29 50 YoY corporate cost of risk down to 35 bps 40 -50 -123 compared to 57 bp
Slide 23: Agenda
Agenda Business results 4 Financial results 10 Loan Portfolio Quality and Cost of Risk 20 Appendix 24 23
Slide 24: Number of clients and distribution network
Number of clients and distribution network KB Group‘s 2.6 million clients, of which Number of bank clients (CZ) KB bank 1,599,000 clients (+1%) MPSS 642,000 clients (-5%) PFKB 515,000 clients (+3%) ESSOX 283,000 active clients (-6%) 1,577 1,629 1,620 1,590 1,602 1,599 Network 398 branches for retail
Slide 25: Consolidated financial results
Consolidated financial results Change Change Profit and Loss Statement 1Q 2011 4Q 2011 1Q 2012 YoY QoQ (CZK million, unaudited) Net interest income 5,372 5,671 5,543 3.2% -2.3% Net fees & commissions 1,866 1,720 1,807 -3.2% 5.1% Income from financial operations 713 957 1,018 42.8% 6.4% Other income
Slide 26: KB consolidated group
KB consolidated group Pension Penzijní fond KB #4 pension fund in the Czech Republic with 515,000 clients. PF will be transformed in a insurance (100%) pension asset management company from 2013. Modrá pyramida Building Second largest building society according to loan volume with 642,000 clients an
Slide 27: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 1Q 2011 1Q 2012 Change YoY MPSS Volume of new loans (CZK million) 1,798 1,039 -42% Volume of total loans (gross, CZK million) 50,022 50,763 1% Target volume of new contracts (CZK million) 6,843 6,602 -4% Volume of deposits (CZK million) 69,182 74,676 8% Avera
Slide 28: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 1Q 2011 1Q 2012 Change YoY Factoring Factoring turnover (CZK million) 3,088 4,052 31% KB Volume of total financing (gross, CZK million) 1,913 2,630 38% Average number of FTEs 38 40 5% KP Newly concluded policies (number) 133,660 222,426 66% of which in life i
Slide 29: Standalone results of KB group companies and associated undertakings
Standalone results of KB group companies and associated undertakings Account. Share Net YoY Equity YoY Assets YoY standards of KB Profit CZK million KB IFRS 100% 2,965 5.3% 76,268 8.3% 660,523 7.9% - o/w KB branch in Slovakia IFRS 100% 44 193.3% -19 n.a. 15,291 70.9% ESSOX, s.r.o. IFRS 50.93% 93 52.
Slide 30: Securities portfolio in the banking book
Securities portfolio in the banking book CZK billion Available-for-sale portfolio Held-to-maturity portfolio CZK 128.9 billion CZK 3.2 billion 82.5 3.1 0.2 25.2 1.4 3.2 16.6 Czech sovereign Foreign sovereign Czech sovereign Foreign sovereign Czech financial institutions Foreign financial institution
Slide 31: Foreign sovereign exposure
Foreign sovereign exposure CZK billion 25.2 Portugal, 0.2 Greece, 0.4 EFSF, 1.0 EIB, 2.4 Slovakia, 6.1 Poland, 7.3 2.2 Italy, 7.7 Slovakia, 1.9 0.2 Poland, 0.4 France, 0.2 1) 1) 2) Trading book Available-for-sale Held-to-maturity Measurement at [1] fair value; [2] amortized cost 31
Slide 32: Overview of items excluded in order to calculate recurring profit
Overview of items excluded in order to calculate recurring profit 1Q 2012 (impact net of tax, KB Group share): amortisation of MPSS acquisition revaluation (CZK 8 mil.) SGEF acquisition (CZK 16 mil.) accounting change in amortisation of origination fees and costs (CZK 43 mil.) sale of bonds in PF KB
Slide 33: Acquisition of SGEF – fair value assessment of assets and liabilities
Acquisition of SGEF – fair value assessment of assets and liabilities Background KB acquired on 4 May 50.1% stake in SG Equipment Finance Czech Republic, s.r.o. (SGEF) for a purchase price of CZK 1,800 million. SGEF has been consolidated in KB Group accounts using full consolidation method since May
Slide 34: Macroeconomic environment – Czech Republic
Macroeconomic environment – Czech Republic Macroeconomic Indicators 2008 2009 2010 2011 2012* 2013* Real GDP (%, average) 2.9 -4.5 2.6 1.6 0.1 1.3 Inflation (%, average) 6.3 1.0 1.5 1.9 3.3 2.0 Household consumption (%, average) 3.0 -0.4 0.5 -0.5 -0.7 1.4 Unemployment (%, av., MLSA meth.) 5.5 8.0 9.
Slide 35: Interest rates evolution
Interest rates evolution (for the period 1 January 2005 – 25 April 2012) 5.5% 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 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 2011 – 25 April 2012) 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 01/10/01 01/10/02 01/10/03 01/10/04 01/10/05 01/10/06 01/10/07 01/10/08 01/10/09 01/10/10 01/10/11 KB (
Slide 37: KB shareholders
KB shareholders As at 31 March 2012 Shares on registered capital according to excerpt from the Securities centre Others 39.6% Société Générale 60.4% As at 31 March 2012, KB held 238,672 own shares in treasury, representing 0.63% stake on registered capital. 37
Slide 38: Investor Relations
Investor Relations Jakub Černý, Georgina Olegrová, Robert Janeček Tel.: +420 955 532 156, 955 532 734, 955 532 155 E-mail: investor_relations@kb.cz - Internet: www.kb.cz 38