Komercni Banka, A.s. · PSECZ:KOMB
Komercni Banka, A.s — H1 2024 Earnings Presentation
37 slides from Komercni Banka, A.s's earnings presentation, Aug 1, 2024
Slide 1: Komerční banka Group consolidated unaudited results as of 30 June 2024
Prague, 1 August 2024 Komerční banka Group Consolidated unaudited results as of 30 June 2024
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 Highlights as of 30 June 2024 Update on ESG strategy implementation Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Appendix KB Group results as of 30 June 2024 3
Slide 4: First half 2024: Growth in the number of bank clients, client assets under management
Highlights of H1&Q2 2024 First half 2024: Growth in the number of bank clients, client assets under management First half 2024 Second quarter 2024 Business performance financial results financial results Deposits Other AUM Client loans Group net income Group net income +6.5% YoY +13.9% YoY +3.7% YoY
Slide 5: Agenda
Agenda Highlights as of 30 June 2024 Update on ESG strategy implementation Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Appendix KB Group results as of 30 June 2024 5
Slide 6: Sound ESG performance attested by high global ESG ratings and awards
ESG Sound ESG performance attested by high global ESG ratings and awards ESG ratings Awards FTSE4Good 4 3.3 3.6 Bank of the Year 2023 Green Crown Corporate bank of the Year KB Loan for sustainable technologies (1st) MSCI ESG AA AA Bank without Barriers SGEF Photovoltaics for CZK One (3rd) BBB Rating
Slide 7: Agenda
Agenda Highlights as of 30 June 2024 Update on ESG strategy implementation Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Appendix KB Group results as of 30 June 2024 7
Slide 8: Economic recovery driven by domestic consumption
Czech Republic - macro Economic recovery driven by domestic consumption Czech GDP development (% year-on-year) 10 KB Economic 4.0 Research Forecast GDP in 2Q 20241) up by +0.3% QoQ and up by +0.4% YoY according to flash estimate. 5 2.9 0.0 1.9 0.7 Growth supported by final consumption whereas net ex
Slide 9: Agenda
Agenda Highlights as of 30 June 2024 Update on ESG strategy implementation Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Appendix KB Group results as of 30 June 2024 9
Slide 10: Gross loans to clients up 3.7%
Loans to clients Gross loans to clients up 3.7% Group lending (excl. repo, incl. client bonds) (CZK billion) +3.7% -0.2% Net loans to deposits ratio at 78.5%. Liquidity coverage ratio 170%. Net stable funding ratio 135% 789.1 794.6 808.3 827.7 825.5 824.1 86.5 88.5 90.6 92.5 93.7 95.1 7.5% Consumer
Slide 11: Selected corporate deals 1H 2024
Tombstones Selected corporate deals 1H 2024 KB Group results as of 30 June 2024 11
Slide 12: Client deposits +6.5%, Other AUM up +13.9% YoY
Deposits and other AUM Client deposits +6.5%, Group deposits (excluding repo operations) Other AUM up +13.9% YoY (CZK billion) +6.5% +0.9% Non-deposit assets under management 1,022.4 1,049.8 1,059.4 979.5 994.7 1,006.2 (CZK billion) 52.8 51.3 50.8 -5.8% +13.9% 54.2 53.9 52.3 320.3 323.7 329.0 337.9
Slide 13: Agenda
Agenda Highlights as of 30 June 2024 Update on ESG strategy implementation Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Appendix KB Group results as of 30 June 2024 13
Slide 14: Net profitability beyond inflection point
Profit & Loss Net profitability beyond inflection point Development of quarterly net profit … (CZK million) -21.8% Drivers for year on year change in attributable net profit +26.2% 4,525 4,267 (as of 30 June 2024) 3,561 3,259 3,540 -21.5% 2,804 8,086 210 493 -377 -384 -477 355 6,344 1Q 2023 2Q 2023
Slide 15: Balance sheet up by 4.5% year-on-year
Statement of financial position Balance sheet up by 4.5% year-on-year Assets Liabilities and Equity (CZK billion) +4.5% Year-on-year (CZK billion) +4.5% Year-on-year +1.1% +1.1% 1,516 1,534 1,516 1,534 1,467 1,467 61 105 106 -42.3% 395 424 461 16.7% 1,127 1,201 10.0% 1,092 798 834 832 4.3% 5.2% 12 4
Slide 16: Net interest income
Net interest income Deposit costs began retreating, loan spreads up mildly, Year-to-date -2.9% effect of cost of MREL and mandatory reserves (CZK million) 12,812 12,435 1,224 -12% 1,071 Net interest margin (%) Other 2.01% 2.01% 1.91% 1.99% 1.86% 1.96% 1.75% 1.94% NII from deposits 5,456 1.69% 1.69%
Slide 17: Dynamic fee income growth
Net fees and commissions Dynamic fee income growth Year-to-date +6.9% (CZK million) 3,259 3,049 Transaction fees Transaction fees 4% 918 887 Increase driven mainly by continued dynamic growth in card payments. Deposit product fees -8% 375 Increasing trend also for other non-cash (out-of-branch) tran
Slide 18: Softer demand for financial hedging amid rates development, economy
Net profit from financial operations Softer demand for financial hedging Year-to-date -17.8% amid rates development, economy (CZK million) 2,063 Capital markets 1,695 Net gains on FX from payments 1,007 -35% Capital markets 659 Other Client demand for IR and FX hedging lower due to development and e
Slide 19: Operating expenditures flat year-on-year
Operating expenditures Operating expenditures flat year-on-year Year-to-date -0.2% (CZK million) Personnel expenses – decrease in number of employees (-0.3% YoY to 7,523 in 1H Personnel costs -4,069 7% -4,349 2024; -1.0% YoY to 7,479 in 2Q 2024; average FTE), affected by hiring and insourcing GAE (e
Slide 20: Agenda
Agenda Highlights as of 30 June 2024 Update on ESG strategy implementation Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Appendix KB Group results as of 30 June 2024 20
Slide 21: 2Q 2024 Asset quality
Loan portfolio quality 2Q 2024 Asset quality Group lending (CZK billion) 789.1 794.6 808.3 827.7 825.5 824.1 Loan portfolio up by 3.7% YoY and down by 0.2% QoQ QoQ stable Stage 2 share at 14.9% 690.4 684.4 685.1 665.8 672.9 685.9 QoQ minor contraction of NPL share to 2.0% (vs. 2.1% in 1Q 2024) drive
Slide 22: 2Q and 1H 2024 Cost of risk development
Cost of risk 2Q and 1H 2024 Cost of risk development Total Cost of risk development (CZK million) 434 466 0 138 2Q 2024 CoR net creation at CZK 100 million 523 501 -1 79 2 202 -1 0 112 -90 -35 -144 -214 • CZK 112 million net release on non-retail exposures driven by resolution -315 -680 -169 -100 of
Slide 23: Agenda
Agenda Highlights as of 30 June 2024 Update on ESG strategy implementation Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Appendix KB Group results as of 30 June 2024 23
Slide 24: Stable regulatory capital ratio safely above regulatory requirement
Capital Stable regulatory capital ratio safely above regulatory requirement Contributions to shareholders’ equity in 1H 2024 (CZK million) 128,284 6,344 Total capital adequacy at 18.9% over the applicable Overall Capital Minimum of -15,611 98 119,017 16.4% effective from 1 July 2024 (due to decrease
Slide 25: Agenda
Agenda Highlights as of 30 June 2024 Update on ESG strategy implementation Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Appendix KB Group results as of 30 June 2024 25
Slide 26: Assumptions and outlook for 2024
Outlook for 2024 Assumptions and outlook for 2024 The text below updates and replaces outlook for 2024 first presented alongside release of KB’s full year 2023 results on 8 February 2024 and updated with first quarter 2024 results on 3 May 2024. Investors are advised to consider high level of uncert
Slide 27: Agenda
Agenda Highlights as of 30 June 2024 Update on ESG strategy implementation Macroeconomic environment Business performance Financial performance Asset quality and cost of risk Capital Outlook for 2024 Appendix KB Group results as of 30 June 2024 27
Slide 28: Number of clients and distribution network
KB Group clients and distribution network Number of clients and distribution network Number of bank clients 30-Jun-23 30-Jun-24 YoY (thousands, CZ) Number of clients 1,664 1,641 1,625 1,652 1,664 1,708 KB Group’s clients 2,227,000 2,203,000 -24,000 Komerční banka 1,661,000 1,708,000 47,000 – individ
Slide 29: Income statement
Consolidated income statement Income statement Year-to-date Quarter-to-date (CZK million, unaudited) 1H 2023 1H 2024 YoY 2Q 2023 1Q 2024 2Q 2024 YoY QoQ Net interest income 12,812 12,435 -2.9% 6,463 6,276 6,158 -4.7% -1.9% Net fee & commission income 3,049 3,259 6.9% 1,534 1,589 1,670 8.9% 5.1% Net
Slide 30: Balance sheet
Consolidated statement of financial position Balance sheet (CZK million, unaudited) 30-Jun-23 31-Dec-23 30-Jun-24 YoY rel. YoY abs. Ytd rel. Ytd abs. Assets 1,467,274 1,516,302 1,533,717 4.5% 66,443 1.1% 17,415 Cash and current balances with central bank 11,913 12,835 35,265 >100% 23,352 >100% 22,43
Slide 31: Capital & profitability indicators
Financial ratios Capital & profitability indicators Adjusted for IFRIC 21 Reported linearisation* (year-to-date, IFRS 9) 30-Jun-23 31-Dec-23 30-Jun-24 30-Jun-23 30-Jun-24 Capital adequacy 20.0% 18.8% 18.9% Tier 1 ratio = Core Tier 1 ratio 19.5% 17.7% 17.8% Risk weighted assets for credit risk (CZK b
Slide 32: Business performance of subsidiaries (1/2)
Overview of KB subsidiaries Business performance of subsidiaries (1/2) 1H 2023 1H 2024 YoY Modrá pyramida (100%) building savings & loans company Volume of new loans (CZK million) 4,975 5,522 11% Volume of total loans (gross, CZK million) 88,485 95,084 7% Volume of deposits (CZK million) 53,921 50,8
Slide 33: Business performance of subsidiaries (2/2)
Overview of KB subsidiaries Business performance of subsidiaries (2/2) 1H 2023 1H 2024 YoY Factoring KB (100%) factoring company Factoring turnover (CZK million) 37,401 34,634 -7% Volume of total financing (gross, CZK million) 9,414 10,544 12% Average number of FTEs 21 1* -95% KB Pojišťovna (49%) un
Slide 34: Capital requirements, MREL, Tier 2
MREL, TIER 2 Capital requirements, MREL*, Tier 2 Own funds and eligible liabilities (for MREL) 29.7% Total requirement = MREL + CBR MREL requirement 21.2% RWA, 5.91% Total Risk Exposure 10.8% (27.5% as of 30 June 2024) Total requirement = MREL + CBR = 21.2% + 6.25% = 27.45% (as of 30 June 2024, to d
Slide 35: Czech macroeconomic environment and interest rates
Czech macroeoconomic environment and interest rates Czech macroeconomic environment and interest rates Macroeconomic Indicators 2021 2022 2023 2024* 2025* Interest rates evolution Real GDP (%, average) 4.0 2.9 0.0 0.7 1.9 For the period 1 Jan 2015 – 26 July 2024 Household consumption (%, average) 4.
Slide 36: KB - #1 listed Czech bank
KB shares and shareholder structure KB - #1 listed Czech bank Shareholder structure Development of KB share price and PX index (1 January 2001 – 26 July 2024) 600 500 Free-float 400 39.6% 300 200 60.4% Société Genérále 100 0 2005 2010 2015 2020 2025 KB PX • The number of shareholders comprised 74,90
Slide 37: Investor relations
Investor relations Komerční banka, a.s. Na Příkopě 33, 114 07 Prague 1 Email: investor_relations@kb.cz Tel.: +420 955 532 156, +420 955 532 734 Internet: www.kb.cz/investors Twitter: @KB_investors Reuters: BKOM.PR Bloomberg: KOMB CP