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- Komerční banka Group Financial Results as of 30 June 2019
Komerční banka Group Financial Results as of 30 June 2019
Prague, 1 August 2019 – Komerční banka reported today its unaudited consolidated results for the first half of 2019.
Total revenues increased by 5.0% to CZK 16.2 billion. Within this total, net interest income was higher by 8.0% from the year earlier, reflecting growth in the volume of assets by 6.6%. Net fees and commissions were down by a slight 0.7%, as lower fees for transactions and loans were almost offset by improving income from services to corporations, assets under management, and clients’ upgrading to higher account packages. Net gains from financial operations decreased by 4.9%, influenced by relatively stable CZK exchange and interest rates at the beginning of the year that limited clients’ demand for hedging.
Operating expenditures excluding one-off items from last year (creation of a reserve for restructuring and release of amounts accrued for corporate services) were up by 2.9%, at CZK 7.7 billion. Recurring personnel costs rose by 1.8%, as faster growth in average remuneration was partly offset by a 4.0% decrease in the average number of employees to 8,144. Recurring non-personnel expenses were higher by 4.0%, driven mainly by development of information technologies.
The Bank was again able to book a net release of provisions for credit losses of CZK 0.4 billion, thanks to continued low client default rates and good performance from recovery activities.
Recurring net profit attributable to the Group’s equity holders totalled CZK 7.2 billion, which was an improvement by 6.0% year on year.
Lending to clients increased by 3.2% to CZK 644.8 billion.[1] KB and Modrá pyramida’s financing of housing expanded by 3.6%. KB Group lending to businesses was up by 3.1%.
Deposits from clients climbed by 4.0% year on year to CZK 838.6 billion.[2] The volume of KB Group clients’ assets in mutual funds, pension savings, and life insurance rose by 6.6% to CZK 176.8 billion.
The capital adequacy ratio reached a strong 19.0%, and Core Tier 1 capital stood at 18.4%.
“In the first half, and specifically in the second quarter, we introduced several useful new services, mainly in the digital space. Moreover, our clients’ switch to using banking services through digital channels has been unrelenting. We have been investing significant resources into making our digital channels not only even more attractive to clients but also safer. At the same time, we remain committed to improving the client value proposition offered through the branch network. In the first half, we have managed to maintain a stable net interest margin in spite of continuing competitive pressure on lending spreads and decreasing long-term interest rates. Income from fees and from financial operations improved a bit in the second quarter, getting back on track with our revenues expectation for the full year. Operating expenditures clearly reflected our ongoing strategic transformation, including organisational optimisation and investments into digitalisation. The very good result seen in the cost of risk continues to show the support from the favourable environment.”
The Bank had 48,834 shareholders as of 30 June 2019 (up 629 year on year), of which 43,451 were private individuals from the Czech Republic (that number being higher by 572 from the year earlier). Strategic shareholder Société Générale maintained its 60.4% stake while minority shareholders owned 39.0% and KB held 0.6% of its registered capital in treasury.
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[1] Excluding volatile reverse repo operations with clients but including debt securities issued by KB’s clients and held by the Bank. If reverse repo operations are included, gross lending increased by 2.6% to CZK 651.7 billion.
[2] Excluding repo operations with clients. The total volume of ‘Amounts due to customers’ moved up by 7.3% to CZK 893.0 billion.