Slide 1: KB Group Unaudited Financial Results as at 30 September 2011
KB Group Unaudited Financial Results as at 30 September 2011 (International Financial Reporting Standards) Prague 8 November 2011
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 Cost of Risk Appendix 3 KB 3Q 2011 results – Prague – 8 November 2011
Slide 4: Czech economy: Short-term development to be determined by Euro zone
Czech economy Short-term development to be determined by Euro zone Expected Czech GDP growth in 2011 continues to Real GDP growth (%) be driven by net exports, outlook for 2012 with high level of uncertainty 6.1 Industrial production benefited from strong foreign 2.3 2.2 2.1 1.2 demand, but slowdown
Slide 5: Highlights of the first three quarters of 2011
Highlights of the first three quarters of 2011 Year on year comparisons Solid business volumes, headwinds for financial performance Group deposits rose by 2.9% to CZK 551.1 billion. Safe liquidity position with net loans-to-deposits ratio at 76.1% Gross lending to clients rose 11.9% to CZK 435.1 bil
Slide 6: Business achievements in Q3 2011 – Individuals
Business achievements and initiatives in the third quarter of 2011 – Individuals Year on year comparisons Sound foundations for continued business progress KB‘s market share on sales of mortgages in 1-3Q 2011 exceeded 24%*. New sales increased by 44.6% to CZK 21.9 billion. Outstanding volume expande
Slide 7: Business achievements in Q3 2011 – Businesses
Business achievements and initiatives in the third quarter of 2011 – Businesses Year on year comparisons Improved demand for credit Dynamic lending to small businesses. Volume of loans up by 8.6% to CZK 27.1 billion Total volume of KB loans to corporations rose by 4.9% to CZK 185.1 billion Rebound i
Slide 8: Group deposits
Group deposits CZK billion By Customers 535.3 538.1 536.1 546.8 551.1 536.5 Deposit growth driven by 68.5 69.0 69.0 69.2 70.4 69.7 current accounts 156.3 156.9 152.2 151.3 153.7 154.2 YoY group deposits increased by 2.9%, QoQ up 27.8 28.2 28.8 29.7 29.9 29.0 by 0.8% KB represents 82% of CZK 551.1 bi
Slide 9: Group lending activities
Group lending activities CZK billion 435.1 Dynamic growth of lending to 399.7 398.2 422.3 385.6 389.0 51.3 individuals and businesses 49.7 50.0 50.6 47.6 48.7 Gross loans rose 11.9% YoY, 3.0% QoQ 115.7 119.1 104.2 106.4 109.3 112.0 (adjusted for SGEF acquisition up by 8.6% YoY, 28.4 28.3 28.3 3.2% Q
Slide 10: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Cost of Risk Appendix 10 KB 3Q 2011 results – Prague – 8 November 2011
Slide 11: Consolidated financial results: Profit and Loss Statement
Consolidated financial results Change Change Profit and Loss Statement 1-3Q 2010 1-3Q 2011 1-3Q 2011 YoY YoY (CZK million, unaudited) Pro forma Pro forma Net interest income 15,982 16,519 16,273 3.4% 1.8% Net fees & commissions 5,698 5,585 5,576 -2.0% -2.1% Income from financial operations 2,331 2,2
Slide 12: Recurring financial results
Recurring financial results Change Change Recurring P&L 1-3Q 2010 1-3Q 2010 1-3Q 2011 1-3Q 2011 YoY YoY (CZK million, unaudited) Reported Recurring Reported Recurring Reported Recurring Net interest income 15,982 15,899 16,519 16,239 3.4% 2.1% Net fees & commissions 5,698 5,698 5,585 5,576 -2.0% -2.
Slide 13: Consolidated financial results: Profit and Loss Statement
Consolidated financial results Change Change Profit and Loss Statement 3Q 2010 2Q 2011 3Q 2011 3Q 2011 QoQ QoQ (CZK million, unaudited) Pro forma Pro forma Net interest income 5,273 5,569 5,579 5,440 0.2% -2.3% Net fees & commissions 1,931 1,882 1,837 1,844 -2.4% -2.0% Income from financial operatio
Slide 14: Consolidated financial results: Balance Sheet
Consolidated financial results 30 Sep 31 Dec 30 Sep 30 Sep Change Change Balance Sheet 2010 2010 2011 2011 YtD YtD (CZK million, unaudited) Pro forma Pro forma Assets 697,435 698,014 748,562 736,596 7.2% 5.5% Cash and balances with central bank 21,216 13,689 20,981 20,980 53.3% 53.3% Amounts due fro
Slide 15: Consolidated financial ratios: Key ratios and indicators
Consolidated financial ratios 30 Sep 30 June 30 Sep 30 Sep Change Change Key ratios and indicators 2010 2011 2011 2011 YoY YoY (year-to-date) Pro forma Pro forma Capital adequacy 14.9% 16.1% 16.0% 16.3% Tier 1 ratio 13.6% 14.6% 14.7% 15.0% Total capital requirement (CZK billion) 28.2 28.8 28.4 27.0
Slide 16: Shareholders' equity
Shareholders‘ equity Development year-to-date Total shareholders‘ equity Total shareholders‘ equity +6,473 as at 31 December 2010 as at 30 September 2011 Shareholders' equity 31/12/2010 1/1/2011 Increase Decrease 30/09/2011 Share capital 19,005 19,005 19,005 Capital and reserve funds 36,174 49,504 -
Slide 17: Net interest income
Net interest income Growth in interest income driven by business volumes 5,415 5,449 5,569 5,579 5,273 5,372 504 431 559 486 NII in 9M up by 3.4% YoY (+1.8% adjusted for SGEF 450 498 acquisition). 3Q up 0.2% QoQ (-2.3% adjusted) 2,013 2,021 2,122 2,078 2,198 2,286 NII at subsidiaries – ESSOX +7%, Mo
Slide 18: Net fees and commissions
Net fees and commissions Decreasing prices, higher commissions paid 2,028 1,911 1,931 1,866 1,882 Fee income in 9M down 2.0% YoY (-2.1% adjusted for 1,837 167 211 174 193 160 SGEF acquisition). 3Q down 2.4% QoQ (-2.0% adj.) 183 400 367 408 416 396 386 Maintenance fees – decline due to lower prices.
Slide 19: Net profit from financial operations
Net profit from financial operations Recent development of local environment supportive for client flows 864 804 816 Net profit from financial operations in 9M decreased by 713 685 672 5.6% YoY (-7.2% adjusted for SGEF acquisition). 3Q 488 434 424 result up 21.4% QoQ (+15.2% adjusted) 345 394 344 Tr
Slide 20: Operating costs
Operating costs Developing competitive advantage 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 OPEX in 9M rose by 5.9% YoY (5.0% adjusted for SGEF acquisition). OPEX in 3Q down 3.9% QoQ. (-5.2% adj.). YoY comparison affected by positive -1,514 -1,613 -1,491 -1,605 -1,653 -1,682 one-offs booked in
Slide 21: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Cost of Risk Appendix 21 KB 3Q 2011 results – Prague – 8 November 2011
Slide 22: Loan quality
Loan quality Increased volume with improved loan quality Gross lending CZK billion 421.9 434.7 Loan exposure rose by 11.7% YoY and by 385.6 389.0 399.7 398.2 3.0% QoQ driven by organic growth mainly thanks to mortgages to individuals 380.7 394.3 345.8 349.2 360.9 359.4 Share of Standard and Watch lo
Slide 23: Cost of risk
Cost of risk Cost of risk negatively affected by GGB impairment 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 9M cost of risk at CZK 5.6 billion compared 181 92 83 80 133 150 to CZK 2.4 billion in 9M 2010 55 52 43 50 85 66 72 55 49 24 3Q non-commercial cost of risk of 2.5 billion 8 4 8 35 10 -50 -
Slide 24: Commercial cost of risk - Corporates
Commercial cost of risk - Corporates KB Group – Corporate Segments Zoom on corporate client segments 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 95 150 82 80 9M cost of risk down to 26 bps compared to 57 42 26 100 50 0 82 bps in 9M 2010 40 -50 -100 -123 -150 -250 -273 -200 YoY decrease in provis
Slide 25: Commercial cost of risk - Retail
Commercial cost of risk - Retail KB Group – Retail Segments Zoom on retail client segments 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 250 178 9M cost of risk down at 87 bps from 97 bps 175 171 168 166 151 150 in 9M 2010 100 97 94 98 93 87 88 85 83 88 82 78 50 QoQ decrease in overall cost of ris
Slide 26: Agenda
Agenda Business Highlights Consolidated Financial Results Loan Portfolio Quality and Cost of Risk Appendix 26 KB 3Q 2011 results – Prague – 8 November 2011
Slide 27: Number of clients and distribution network
Number of clients and distribution network Evolution of clients‘ portfolio and networks Number of KB clients (CZ) KB Group‘s 2.6 million clients, of which KB bank 1,597,000 clients (+0%) MPSS 656,000 clients (-6%) PFKB 498,000 clients (+0%) 1,577 1,629 1,620 1,590 1,597 1,515 ESSOX 288,000 active cl
Slide 28: KB consolidated group
KB consolidated group Pension Penzijní fond KB #4 pension fund in the Czech Republic with 498,000 clients insurance (100%) Modrá pyramida Building Second largest building society according to loan volume with 656,000 clients stavební society and 1,258 strong agent distribution network spořitelna (10
Slide 29: Business performance of subsidiaries 1/2
Business performance of subsidiaries 1/2 1-3Q 2010 1-3Q 2011 Change YoY MPSS Volume of new loans (CZK million) 6,550 6,185 -6% Volume of total loans (gross, CZK million) 48,724 51,273 5% Target volume of new contracts (CZK million) 23,044 18,542 -20% Volume of deposits (CZK million) 68,963 69,675 1%
Slide 30: Business performance of subsidiaries 2/2
Business performance of subsidiaries 2/2 1-3Q 2010 1-3Q 2011 Change YoY Factoring Factoring turnover (CZK million) 8,450 11,103 31% KB Volume of total financing (gross, CZK million) 1,896 2,391 26% Average number of FTEs 38 40 5% KP Newly concluded policies (number) 356,752 597,945 68% of which in l
Slide 31: 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% 6,050 n.a. 72,249 n.a. 642,535 n.a. - o/w KB branch in Slovakia IFRS 100% 43 n.a. 67 n.a. 9,347 n.a. ESSOX, s.r.o. IFRS 51% 229 80.3% 2,87
Slide 32: Securities portfolio in the banking book
Securities Securities portfolio in the banking book CZK billion Available-for-sale portfolio Held-to-maturity portfolio CZK 124.1 billion CZK 6.8 billion 76.2 76.2 5.9 0.9 26.3 26.3 1.5 1.5 3.2 3.2 17.0 17.0 Czech sovereign Foreign sovereign Czech financial institutions Foreign financial institution
Slide 33: Foreign sovereign exposure
Foreign sovereign exposure Foreign sovereign bond holdings by country and portfolio CZK billion 26.3 EIB, 2.4 Greece, 2.9 Slovakia, 5.3 Italy, 7.8 EIB, 0.1 France, 0.2 2.1 Slovakia, 0.7 Portugal, 0.3 Poland, 7.9 0.9 Poland, 1.3 Italy, 0.5 1) 1) 2) Trading book Available-for-sale Held-to-maturity Mea
Slide 34: 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 35: 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 M
Slide 36: Macroeconomic environment: Czech Republic
Macroeconomic environment Czech Republic Macroeconomic Indicators 2006 2007 2008 2009 2010 2011* Real GDP (%, average) 7.0 6.1 2.3 -4.0 2.2 2.1 Inflation (%, average) 2.5 2.8 6.3 1.0 1.5 1.8 Household consumption (%, average) 5.2 4.9 3.4 -0.2 -0.1 -0.3 Unemployment (%, av., MLSA meth.) 8.2 6.7 5.5 8
Slide 37: Interest rates evolution
Interest rates evolution (for the period 28 December 2001 – 31 October 2011) 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 Pribor 3M Pribor 6M ČNB REPO Rate IRS 5Y IRS 10Y 37 KB 3Q 2011 results – Prague – 8 No
Slide 38: Development of KB's share price and PX Index
Development of KB‘s share price and PX Index (for the period 1 October 2001 – 31 October 2011) 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 01/10/200101/10/200201/10/200301/10/200401/10/200501/10/200601/10/200701/10/200801/10/200901/10/20100
Slide 39: KB shareholders
KB shareholders As at 30 September 2011 Shares on registered capital according to excerpt from the Securities centre Others 39.6% Société Générale 60.4% As at 30 September 2011, KB held 172,400 own shares in treasury, representing 0.45% stake on registered capital. 39 KB 3Q 2011 results – Prague – 8
Slide 40: 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 40 KB 3Q 2011 results – Prague – 8 November 2011