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- Komerční banka Group Financial Results as of 30 September 2019
Komerční banka Group Financial Results as of 30 September 2019
Total revenues increased by 3.0% to CZK 24.4 billion. Within this total, net interest income was higher by 6.0%, while the volume of assets was 7.9% greater year on year. Overall income from fees and commissions was stable, even though that from services to corporations improved swiftly and a growing volume of client assets under management and clients’ upgrading to premium account packages also contributed positively. On the other hand, fees for transactions and loans were down. Net gains from financial operations decreased by 10.0% compared with the base from the year earlier that included some extraordinarily large hedging deals put together for clients.
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 2.8%, at CZK 11.2 billion. Recurring personnel costs rose by 2.0%, as faster growth in average remuneration was partly offset by a 3.3% decrease in the average number of employees to 8,155. Recurring non-personnel expenses were higher by 3.7%, driven mainly by development of information technologies.
In the nine months of 2019, KB posted a net release of provisions for credit losses of CZK 0.3 billion, as the client default rates were very low and results from recovery activities remained good.
Recurring net profit attributable to KB’s shareholders improved by 0.5% year on year to CZK 11.0 billion. Including various one-off items from this year and last [1], net profit rose by 0.9%.
Lending to clients increased by 4.0% to CZK 654.0 billion. [2] KB and Modrá pyramida’s financing of housing expanded by 3.5% to CZK 281.7 billion. Consumer lending from KB and ESSOX grew by 1.2% to CZK 39.0 billion. KB Group lending to businesses and other clients was up by 4.8%, at CZK 333.2 billion.
Deposits from clients climbed by 6.3% year on year to CZK 860.2 billion. [3] The volume of KB Group clients’ assets in mutual funds, pension savings, and life insurance swelled by 6.5% to CZK 179.8 billion.
The capital adequacy ratio reached a strong 19.4%, and Core Tier 1 capital stood at 18.9%.
“The changes we’ve introduced in the past year, and in particular full rollout of the agile@KB work method, are helping us improve our ability to address changes in customers’ expectations for our product offer in a timely manner. We’ve just started working on a strategic update for the period beyond 2020, and we plan to have that ready before next year’s shareholders’ meeting. Of course, we will remain committed to constantly improving the client value of our services.”
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[1] Items considered “one-off” in the covered periods:
9M 2019: Adjustment of the selling price of Komerční pojišťovna (CZK 55 mil. in Profit attributable to exclusion of companies from consolidation)
9M 2018: Finalisation of sale price for KB’s former stake in Cataps in connection with the sale of additional 19% in Cataps (CZK 82 mil. in Profit attributable to exclusions of companies from consolidation), restructuring reserve (CZK -223 mil. in Pers. expenses, CZK -71 mil. in GAE and CZK 56 mil. in Income taxes) and release of corporate service fees for SG assistance (CZK 193 mil. In GAE and CZK -37 mil. in Income taxes)
[2] 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 657.1 billion.
[3] Excluding repo operations with clients. The total volume of ‘Amounts due to customers’ moved up by 5.8% to CZK 899.9 billion.