Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — Q1 2010 Earnings Presentation
39 slides from Komercni Banka, A.s's earnings presentation, May 5, 2010
Slide 1: KB Group Unaudited Financial Results as at 31 March 2010
KB Group Unaudited Financial Results as at 31 March 2010 (International Financial Reporting Standards) Prague 5 May 2010 KB 1Q 2010 results – Prague – 5 May 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 1Q 2010 results – Prague – 5 May 2010
Slide 4: Update on Czech economy
Update on Czech economy Confidence and activity in the economy improving from a low base QoQ GDP growth in 1Q 2010 expected to slow down Real GDP growth (%) from +0.6% QoQ in 4Q 2009 due to end of car scrap subsidies in euro zone and impacts of fiscal restrictions on domestic demand 6.4 7.0 6.1 2.3
Slide 5: Highlights of first quarter of 2010
Highlights of first quarter of 2010 Year on year comparisons Improved bottom line driven by discipline in cost and risk approach Total revenues down 3.5% to CZK 8.0 billion, as an exceptional trading income recorded in 1Q 2009 was not repeated Continued lending, portfolio of client loans grew by 1.0
Slide 6: Business achievements and initiatives in first quarter of 2010 – Individuals
Business achievements and initiatives in first quarter of 2010 – Individuals Year on year comparisons Sound footing for upcoming recovery Continued strengthening of Komerční pojišťovna on the Czech life insurance market. Total written premium improved by 185.1% to CZK 2,899 million, mainly due to ne
Slide 7: Business achievements and initiatives in first quarter of 2010 – Businesses
Business achievements and initiatives in first quarter of 2010 – Businesses Year on year comparisons Standing close to our clients Lasting support of small businesses. Underlying growth in the volume of loans to small businesses 4.9%*. Volume of loans to small businesses reached CZK 24.8 billion. Re
Slide 8: Group deposits
Group deposits CZK billion By Customers 554.6 538.8 532.1 551.8 541.2 524.9 Stable deposit base 65.3 64.8 64.0 67.1 68.0 64.4 154.2 156.9 154.0 153.7 152.8 153.7 25.7 26.0 26.4 27.2 YoY group deposits increased by 0.4%, QoQ down by 26.7 27.5 1.9% 305.8 286.0 284.7 276.9 295.2 284.6 KB represents 82%
Slide 9: Group lending activities
Group lending activities Lending still suffering from CZK billion 378.1 381.6 382.5 386.1 382.0 uncertainty 373.2 39.3 40.5 42.0 44.0 45.6 46.4 Gross loans rose 1.0% YoY, -1.1% QoQ. Adjusted for 90.4 92.5 96.2 98.2 100.2 101.7 exceptional elimination of loss exposure (CZK 1.8 28.2 28.7 29.7 30.3 29.
Slide 10: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 10 KB 1Q 2010 results – Prague – 5 May 2010
Slide 11: Consolidated financial results: Profit and Loss Statement
Consolidated financial results Profit and Loss Statement Change 1Q 2009 1Q 2010 YoY (CZK million, unaudited) Net interest income 5,228 5,294 1.3% Net fees & commissions 1,916 1,929 0.7% Income from financial operations 1,143 774 -32.3% Other income 25 25 0.0% Net banking income 8,312 8,022 -3.5% Per
Slide 12: Consolidated financial results: Profit and Loss Statement QoQ
Consolidated financial results Profit and Loss Statement Change 4Q 2009 1Q 2010 QoQ (CZK million, unaudited) Net interest income 5,404 5,294 -2.0% Net fees & commissions 2,033 1,929 -5.1% Income from financial operations 285 774 171.6% Other income 25 25 0.0% Net banking income 7,747 8,022 3.5% Pers
Slide 13: Consolidated financial results: Balance Sheet
Consolidated financial results Balance Sheet 31 March 31 Dec 31 March Change Change (CZK million, unaudited) 2009 2009 2010 YoY QoQ Assets 685,593 695,076 695,674 1.5% 0.1% Cash and balances with central bank 9,535 16,271 9,829 3.1% -39.6% Amounts due from banks 143,506 131,271 137,162 -4.4% 4.5% Lo
Slide 14: Consolidated financial ratios
Consolidated financial ratios 31 March 31 Dec 31 March Change Change Key ratios and indicators 2009 2009 2010 YoY QoQ Capital adequacy 12.1% 14.1% 14.1% Tier 1 ratio 10.7% 12.7% 12.8% Total capital requirement (CZK billion) 27.0 27.2 27.2 0.8% 0.0% Capital requirement for credit risk (CZK billion) 2
Slide 15: Net interest income
Net interest income Solid interest income despite low interest rate environment 5,479 5,404 5,294 5,228 5,350 5,259 NII up by 1.3% YoY, down by 2.0% QoQ 599 406 502 404 398 410 1,815 1,793 1,880 1,967 2,032 1,982 Solid contribution from retail subsidiaries – ESSOX +29%, Modrá pyramida +16%, PF KB +8
Slide 16: Net fees and commissions
Net fees and commissions Slower economic activity weighs upon fee income Fee income rose 0.7% YoY, off 5.1% QoQ due to 2,020 2,033 1,916 1,946 1,944 1,929 seasonally strong 4Q 149 142 132 200 170 174 497 485 499 410 462 Transaction fees – still weak due to subdued economic 495 276 349 activity but f
Slide 17: Net profit from financial operations
Net profit from financial operations Activity normalising, development subject to economic recovery in EU 1,543 Net profit from financial operations decreased by 1,143 32.3% YoY. QoQ result up 171.6% due to one-off 1,085 losses booked in 4Q 2009 in Penzijní fond KB and 896 774 1,069 699 CZK 30 mil.
Slide 18: Operating costs
Operating costs Operating expenses at bottom 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 OPEX YoY lower by 7.8%, QoQ down 15.5% -1,664 -1,606 -1,587 -1,629 -1,612 -1,457 Personnel costs down 9.3% upon average number of employees down 3.0% and lower variable part of -1,222 -1,328 -1,415 -1,264 re
Slide 19: Shareholders' equity
Shareholders‘ equity Total shareholders‘ equity Total shareholders‘ equity +3,979 as at 31 December 2009 as at 31 March 2010 Shareholders' equity 31/12/2009 1/1/2010 Increase Decrease 31/03/2010 Share capital 19,005 19,005 19,005 Capital and reserve funds 31,621 42,628 -19 42,609 - Retained earnings
Slide 20: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 20 KB 1Q 2010 results – Prague – 5 May 2010
Slide 21: Loan quality
Loan quality Stabilization of loan quality CZK billion 373.2 378.1 381.6 382.5 386.1 382.0 Gross exposure Limited QoQ decrease in loan exposure by -1.1% (CZK -4.1 billion) mainly driven by large corporations portfolio 341.2 342.4 342.4 343.2 346.2 340.8 Stable share of standard and watch loan exposu
Slide 22: Cost of risk
Cost of risk Overall improving trend in KB Group cost of risk 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 83 106 93 91 88 66 100 QoQ decrease in provisions for loan losses (from CZK 45 104 82 87 79 66 0 1.1 billion in 4Q 2009 to CZK 0.9 billion in 1Q 2010) 7 11 8 -100 1Q 2010 provisions for loan
Slide 23: Cost of risk - Corporate
Cost of risk - Corporate Zoom on corporate client segments Cost of Risk - Client Contribution CZK million Other Confirmed signs of portfolio quality improvement: 1 500 Top 5 no significant new inflow into insolvency some further growth in restructured exposure 1 000 overall lower provisioning comple
Slide 24: Cost of risk - Retail
Cost of risk - Retail Zoom on mass retail client segments 3M Default Rate - Individuals - 2.0% Consumer Loans and Credit Cards - KB Solo Increase in cost of risk from 88 bp in 4Q 2009 to 98 bp in 1Q 1.5% 2010 1.0% Higher risk profile of mortgage loan exposures resulting from 1Q 2008 2Q 2008 3Q 2008
Slide 25: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Development Appendix 25 KB 1Q 2010 results – Prague – 5 May 2010
Slide 26: Recurring profit: Pro-forma Profit and Loss without one-offs
Recurring profit Pro-forma Profit and Loss without one-offs Change +12.2% 1Q 2009 1Q 2010 YoY Net banking income 8,272 7,962 -3.7% Net interest income 5,188 5,263 1.4% Non-interest income 3,084 2,698 -12.5% Operating costs -3,304 -3,058 -7.4% 3,135 Personnel expenses -1,606 -1,457 -9.3% 2,794 Other
Slide 27: Number of clients and distribution network
Number of clients and distribution network Development of clients‘ portfolio and networks Clients of KB bank (thousands) Clients KB bank 1,609,000 clients (-1%) MPSS 714,000 clients (-2%) 1,577 1,629 1,620 1,609 PFKB 498,000 clients (+1%) 1,467 1,515 ESSOX 315,000 active clients (+29%) Network 398 b
Slide 28: 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 Second largest building society with 714,000 clients offering state-subsidised stavební society buildin
Slide 29: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 1Q 2009 1Q 2010 Change YoY MPSS Volume of new loans (CZK million) 2,153 1,665 -23% Volume of total loans (gross, CZK million) 40,526 46,403 15% Target volume of new contracts (CZK million) 9,545 8,847 -7% Volume of deposits (CZK million) 64,991 68,162 5% Numb
Slide 30: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 1Q 2009 1Q 2010 Change YoY Factoring Factoring turnover (CZK million) 3,128 2,351 -25% KB New contracts (number) 71 35 -51% Number of FTEs 42 39 -8% KBB Total client loans (gross, CZK milion) 6,128 4,797 -22% Total client deposits (CZK milion) 2,499 2,547 2%
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 n.a. 2,837 20.0% 66,283 11.7% 603,328 0.4% ESSOX, s.r.o. IFRS 51% 44 12.8% 2,529 7.8% 10,526 12.8% Factoring KB, a.s. CAS 100% -8 700.0% 1,516
Slide 32: Diversification of corporate loan exposure by sector
Diversification of corporate loan exposure by sector Zoom on corporate client segments / Sector diversification Exposure by Industry (Corporate) as of March 31, 2010 Public administration Other industries Food and agriculture 8% 10% 5% Mining Real estate 1% Chemistry and 5% pharmacy 3% Metallurgy Fi
Slide 33: 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 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 21,242 -846 Net fees & commissions 7,745 7,839 94 Income from financial
Slide 35: Macroeconomic environment: Czech Republic
Macroeconomic environment Czech Republic Macroeconomic Indicators 2005 2006 2007 2008 2009 2010* Real GDP (%, average) 6.4 7.0 6.1 2.3 -4.1 1.5 Inflation (%, average) 1.9 2.5 2.8 6.3 1.0 1.5 Household consumption (%, average) 2.6 5.2 4.8 3.5 -0.2 -0.9 Unemployment (%, av., MLSA meth.) 9.0 8.2 6.7 5.
Slide 36: Interest rates evolution
Interest rates evolution (for the period 28 December 2001 – 30 April 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 36 KB 1Q 2010 results – Pragu
Slide 37: Development of KB's share price and PX Index
Development of KB‘s share price and PX Index (for the period 1 October 2001 – 30 April 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 KB (
Slide 38: KB shareholders
KB shareholders As at 22 April 2009 According to excerpt from the Securities centre Others 39.6% Société Générale 60.4% 38 KB 1Q 2010 results – Prague – 5 May 2010
Slide 39: 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 39 KB 1Q 2010 results – Prague – 5 May 2010