Presentation of Komercijalna Banka AD Skopje as at December 31, 2012
Contents • • • •
Komercijalna Banka Overview The Republic of Macedonia The Macedonian Banking Sector Komercijalna Banka Financial Overview
3 9 11 19
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
2
Komercijalna Banka Overview
Overview (I): A cornerstone of Macedonia’s financial sector... Leading Market Position •
Expected to keep market position as one of the leading banks in Macedonia with assets (EUR 1,345.9 m) and deposits from customers (EUR 1,111.0 m) and in terms of net loans to customers (EUR 743.0 m) as of December 31, 2012.
Customer Base • Leading corporate customer base (42,211 customers) • Second largest retail customer base (848,078 customers) One of Macedonia’s Most Prominent Financial Institutions • Long-standing history • Well-established customer relationships Strong Brand Recognition • Associated with quality, innovation and trustworthiness Modern Corporate Governance Structure • Privatisation completed with 98.19% private ownership (50.96% foreign, as at December 2012) and about 2% held by the Public sector • Diversified ownership structure with one single shareholder owning 10% (East Capital Explorer Investments AB, Stockholm, Sweden) • EBRD active shareholder with Board representation (more than 5% participation) • Comprehensive, ‘best-practise’ corporate governance • Rigorous risk management and money laundering practices
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
4
Overview (II):...with a track record of significant achievements... Experienced Team of Executives • Providing leading position in number of areas combined with maintaining stable market position • History of product innovation and investments in new technologies Well Invested Distribution channels • Very well presented branch network - over 70% of the current network newly opened or refurbished in the past five years • Rapidly developing multi channel distribution network comprising POS Terminals, ATM’s, Infokiosks, E-Banking (both retail & corporate, as well as f/x and in denars), Telephone banking Fully Integrated IT platform • State-of-the-art system • Fully protected and readily upgradeable Driver of Sector Innovation • First to issue credit cards (1996) • First to operate ATMs and POS terminals (1996) • First to establish a dedicated brokerage house (1997) • Founded one of the country’s two second pillar pension funds (2005) • Founded the investment fund KB Publikum Invest AD (2009) Profitable Operation with Sound Asset Quality • History of profitable operations • Adequately provisioned loan portfolio
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
5
Overview (III):...a long-standing successful history... 1990
1973
1966
1963
1955 Established as Komunalna Banka under municipal ownership
Leading role in rebuilding the economy and housing after disastrous earthquake in Skopje
Name change to Komercijalno Investiciona banka Skopje and merger with 3 banks
Operating as Stopanska Banka, Skopje Branch as part of an integrated banking system
Incorporated as an open joint stock company Start of a significant expansion phase based on organic and acquisitive growth establishing nationwide coverage
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
6
Overview (IV): ...the largest distribution network in the country... 67 branches including headquarters as at December, 2012
Branch Network
- Coverage of all major cities and economically significant regions - 56 city branches (36 in Skopje + HQ1 & HQ2) - 11 regional branches
Second largest ATM network in the country - 149 installed ATMs as at December 2012 (142 as at Dec 2011)
Fast expanding merchant network – Over 6,500 POS terminals installed as at December 2012(>6,200 as at Dec 2011)
State-of-the-art IT infrastructure – Fully integrated – Real time
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
7
Overview (V): ...and an enviable market position Banking Awards
Market share as at December 31, 2012 Total assets Capital and reserves
23.5% 22.9%
Total deposits from non-financial sector
27.6%
Total net-loans to non-financial sector
23.8%
Total number of debit cards issued
16.7%
Total number of credit cards issued Total number of merchants in the country acquiring bank cards issued by KB
19.0%
Total number of POS and ATM acquiring cards Total value of realized domestic payment operations Total number of accounts opened to legal entities Total trading realized at the MSE Total number of transactions realized at the MSE
41.6% 23.6% 21.5% 21.5% 17.9% 17.0%
- Bank of the Year for 2001, 2002, 2004 , 2005, 2010, 2011 and 2012 - The Best Bank for 2002, 2003 & 2004 - The Best Bank by Assets Strength for 2005, 2006 & 2007 - The Best Bank by Capital Strength for 2005 - The Best Bank by Gross Profit for 2005 & 2007 - The Best Bank by ROE for 2007 -The Best Bank in Macedonia for 2004, 2005, 2006, 2007, 2008 2009 , 2010, 2011 and 2012 - Best Developing Trade Financier for 2003, 2004, 2008 -Most active issuing bank In Macedonia in 2009
The most transparent company for 2008, 2009 & 2010
2007 Participant in the best financial deal
STP Excellence Award for 2007,2009,2010 and 2011 - Super brand in Macedonia for 2009 Non government organization – Transparency zero corruption - Prize for best corporate governance - National prize for the social responsibility practice of companies in RM for 2008 2009 & 2011 Red Cross of the Republic of Macedonia
- Gold Supporter Award 2012
price for Corporate Social Responsibility Integrated Approach for 2009, 2010 and 2011
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
8
The Republic of Macedonia
The Republic of Macedonia - Macroeconomic Environment: Key economic indicators (1)
2008
2009
2010
2011
2012
Population (000's)
2,048
2,053
2,057
/
/
GDP per capita (in EUR)
3,283
3,269
3,434
3,645
/
5.0
-0.9
2.9
2.8(2)
0.0
Real GDP growth (%) Central Government Budget surplus/deficit (% of GDP) Inflation (CPI%) av. Current Account Bal.(EUR'm)
-0.9
-2.7
-2.4
-2.5
-3.5
8.3
-0.8
1.6
3.9
3.3
-143.6 -224.3
-291.4
-862.2 -457.1
Gross External Debt (EUR'm)
3,304
3,780
4,106
4,847 5,070(3)
FX Reserves (EUR'm)
1,495
1,598
1,714
2,069
2,193
Foreign direct invest.(EUR'm) Unemployment Rate (%)
399.9
145.0
160.0
336.8
104.8
33.8
32.2
32.0
31.4
/
61.3
61.3
61.5
61.5
61.5
MKD/EUR year end.
(1) Source: Ministry of Finance, State Statistical office, NBRM (2) Preliminary data (3) As at 30.09.2012
The Fitch agency affirmed Macedonia’s foreign currency rating at “BB+”, In May 2012, the credit rating agency Standard & Poor’s has affirmed the credit rating of Macedonia for foreign and local currency as “stable BB/B with good outlook for future”. The rating affirmation is due to the favourable fiscal policy, low indebtedness, as well as to the expectations for the possible accession to EU.
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
10
The Macedonian Banking Sector
Macedonian Banking Sector (I): The structure and the characteristics Structure • 16 active banks (4 large, 8 medium and 4 small) • 7 saving houses Characteristics • High concentration with four large banks • Low level of financial intermediation Significant growth prospects • Continuous growth of the level of privatization • Continuous growth of the participation of the foreign capital • Improvement of the ownership structure • Increased network • Increased total assets • Growth in loans and deposits • Increased banking capital • Constant increase in profitability and efficiency
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
12
Macedonian Banking Sector (II)
...assets...
Total assets (EUR'm) 7,000 6,000 5,000
3,654
4,000 3,000
2,296
4,082
4,390
2008
2009
4,964
5,385
5,738
2,846
2,000 1,000 0
2005
2006
2007
2010
2011
2012
Total assets
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
13
Macedonian Banking Sector (III)
...and placements to non-financial entities... Placements to non-financial entities (net) (EUR'm) 3,500 3,000 2,500
1,000
2,569
2008
2009
2,737
3,104
2011
2012
1,861
2,000 1,500
2,512
2,943
1,302 963
500 0 2005
2006
2007
2010
Placements to non-financial entities (net)
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
14
Macedonian Banking Sector (IV)
...and deposits from non-financial entities... Deposits from non-financial entities (EUR'm) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0
2,621 1,601
2005
2,946
3,071
2008
2009
3,468
3,807
3,990
2011
2012
2,013
2006
2007
2010
Deposits from non-financial entities
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
15
Macedonian Banking Sector (V) ...and capital & reserves... Capital & reserves (EUR'm) 700 600 500 400 300 200 100 0
354
364
2005
2006
416
2007
471
500
524
2008
2009
2010
595
2011
641
2012
Capital & reserves
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
16
Macedonian Banking Sector (VI)
...and financial results influenced by
the crisis... Net profit (EUR'm) 70
60
60
56
46
50
38
40 30
27
26
24 19
20 10 0
2005
2006
2007
2008
2009
2010
2011
2012
Net profit
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
17
Macedonian Banking Sector (VII)
...and drop of profitability from 2009... Profitability indicators (EUR'm and %) 200.0 180.0 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0
16.0%
15.2% 12.5%
14.0%
184.9
12.3%
12.0%
169.1 175.0
169.0
10.0% 7.5%
8.0%
7.3% 148.0
124.0 75.9
1.2%
102.0
5.6%
1.8%
2006
2007
2008
NII
2009
ROAA
2.0%
0.8%
0.6%
2010
6.0% 4.0%
1.4%
1.8%
2005
3.4%
3.8%
0.4%
2011
0.0% 2012
0.4%
ROAE
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
18
Komercijalna Banka Financial Overview
Financial Performance (I): Highlights Key Performance Indicators Key Performance Indicators Net Interest margin Net Interest margin Net fees and Commission / Income Net fees and Commission / Income Cost/Income Cost / Income NPLs / Total Loans NPLs / Total Exposure NPL Coverage
2007 3.9% 24.5% 45.8% 10%
2008 2005 4.1% 5.3% 20.3% 23.0% 45.8% 54.5% 7% 9.1%
2009
2010
2011
2012
2006 2007 2008 3.5% 3.4% 3.4% 3.45% 3.8% 3.9% 4.1% 3.5% 20.4% 21.9% 22.7% 20.0% 24.5% 20.3% 24.8% 53.0% 52.0% 47.8% 44.3% 45.8% 45.8% 53.0% 56.6% 8% 8.1% 9.6% 13.1% 5.2% 5.4% 6.2% 6.9 %
78.8%
83.8% 89.8% 83.9% 92.6% 79.0% 87.3%89.9%79.2% 72.6% 72.6% 81.2 %
NetNet Loans / Deposits (Customers) Loans / Deposits (Customers)
54.3%
54.3% 78.1% 66.9% 42.4% % 76.6% 47.478.1% 70.4% 76.6% 65.1%
(1) ROE ROE (1)
19.2%
19.2% 15.5% 5.86% 8.9% % 22.0% 16.615.5% 17.9% 22.0% 11.4%
1.9%
1.0% 1.7 % 2.5% 1.8%
10.5%
14.8% 11.8 %(2) 9.9% 10.6%
ROA (1) Capital adequacy (1) After taxation
1.9% 2.5% 1.8% 2.0% 1.4% 0.68 % 10.5% 11.1%
9.9% 10.6% 13.5% 13.2%
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
20
Financial Performance (II): Financial indicators Financial indicators
2007
2008
2009
2010
2011
2012
Earnings per share (EPS)
8.3
11.2
8.8
11.6
7.8
4.0
Book value (BV)
42.7
50.6
56.5
64.6
68.0
68.4
112.7
44.8
45.8
52.8
42.9
39.0
Dividend Yield
2.73%
6.88%
6.06%
5.22%
7.58%
8.33%
Price/Earnings (P/E) (2)
13.58
3.99
5.21
4.57
5.45
9.73
2.64
0.88
0.81
0.82
0.63
0.57
0.262
0.100
0.093
0.092
0.075
0.066
227.1
90.2
92.2
106.4
97.8
88.9
(1)
Market price per share
Price/Book value (P/B)
(2)
Price/Total assets (P/A)
(2)
Market capitalization(in mill. EUR)
Presentation of Komercijalna Banka AD Skopje 1) Last traded price 2) Calculation according data in MKD
Skopje, April 2013
21
Financial Performance (III):Income statement (IFRS) in million EUR 2007
2008
2009
2010
2011
2012
Index 08/07
Index 09/08
Index 10/09
Index 11/10
Index 12/11
Net interest income
34.6
41.9
39.1
40.4
43.5
46.9
121.1
93.3
103.3
107.7
107.8
Net fee & commission income Other income Total income
13.5 7.0 55.1
12.4 6.6 60.9
11.2 4.7 55.0
12.6 4.9 57.9
13.9 3.9 61.3
14.6 11.6 73.1
91.9 94.3 110.5
90.3 71.2 90.3
112.5 104.3 105.3
110.3 79.6 105.9
105.0 297.4 119.2
-25.3 -12.5 17.3
-28.0 -7.9 25.0
-29.3 -8.4 17.3
-30.3 -29.4 -4.5 -14.4 23.1 17.5
-32.5 -31.8 8.8
110.7 63.2 144.5
104.6 106.3 69.2
103.4 53.6 133.5
97.0 320.0 75.8
110.5 220.8 50.3
Share of loss from associate Profit before tax/loss
0.1 17.4
0.2 25.2
0.3 17.6
0.3 23.4
0.3 17.8
0.4 9.2
200.0 144.8
150.0 69.8
100.0 133.0
100.0 76.1
133.3 51.7
Taxation Profit after tax/loss
-0.9 16.5
-2.8 22.4
0.0 17.6
-0.1 23.3
-0.1 17.7
-0.1 9.1
311.1 135.8
78.6
132.4
100.0 76.0
100.0 51.4
Operating expenses Impairment losses Operating profit
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013 22
Financial Performance (IV): Balance sheet (IFRS) in million EUR 2007
2008
2009
2010
2011
2012
Index
Index
Index
Index
Index
08/07
09/08
10/09
11/10
12/11
Assets Cash and cash equivalents Customer loans
172.5 401.8
180.1 570.7
144.0 635.1
383.1 663.9
479.2 698.7
488.7 743.0
104.4 142.0
80.0 111.3
266.0 104.5
125.1 105.2
102.0 106.3
Bank placements and loans
226.0
90.4
149.0
17.1
22.1
15.6
40.0
164.8
11.5
129.2
70.6
Total loans and placements Other assets Total assets
800.3 63.5 863.8
841.2 56.0 897.2
928.1 64.4 992.5
1,064.1 87.6 1,151.7
1,200.0 103.3 1,303.3
1,247.3 98.6 1,345.9
105.1 88.2 103.9
110.3 115.0 110.6
114.7 136.0 116.0
112.8 117.9 113.2
103.9 95.5 103.3
Liabilities Total deposits
752.7
770.9
843.5
971.9
1,091.8
1,128.6
102.4
109.4
115.2
112.3
103.4
Borrowings & other liabilities Total liabilities
25.1 777.8
24.4 795.3
35.3 878.8
49.6 1,021.5
56.6 1,148.4
61.4 1,190.0
97.2 102.2
144.7 110.5
140.5 116.2
114.1 112.4
108.5 103.6
Shareholders funds Share capital Share premium Reserves
32.9 1.8 32.6
32.9 1.8 45.0
32.9 1.8 61.5
32.8 1.8 72.4
37.1 12.5 87.6
37.1 12.5 97.2
100.0 100.0 138.0
100.0 100.0 136.7
99.7* 100.0 117.7
113.1 694.4 121.0
100.0 100.0 111.0
Retained earnings
18.7
22.2
17.5
23.2
17.7
9.1
118.7
78.8
132.6
76.3
51.4
Shareholders funds Total liabilities and shareholders funds
86.0
101.9
113.7
130.2
154.9
155.9
118.5
111.6
114.5
119.0
100.6
863.8
897.2
992.5
1,151.7
1,303.3
1,345.9
103.9
110.6
116.0
113.2
103.3
* The decrease is a result of changing the course of the denar against the euro
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013 23
Financial Performance (V): Total Assets Total assets (1) (in million EUR)
1,600
8%
1,152 1,200 1,000
1,346
1,303
1,400 993 864
897
36%
8% 33%
36% 54%
58%
2%
6%
7%
6%
15%
20%
20%
64%
600
47%
64%
15%
26%
10%
400
800
8% 55% 1%
1%
200 0 2007 Placements to banks
2008
2009
Loans to customers
2010
2011
Cash and equivalents
2012 Other assets
(1) Total balance sheet assets (based on net loans after provisions) (2) In 2006 and 2011 the Bank’s Independent Auditor is changed
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
24
Financial Performance (VI): Gross Loans to Customers Total Loans - Corporate vs Retail (EUR'm) 860.2 707.9
634.8 122.1
457.8 94.7
19%
130.3
787.0
738.6 18%
132.8
18%
129.2
16%
136.9
16% 84%
84% 82%
82% 81%
21%
605.8
657.8
723.3
512.7
577.6
2008
2009
2010
2011
2012
79%
363.1
2007
Corporate loans
Retail loans
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
25
Financial Performance (VII): Liabilities
Total Liabilities (EUR'm) 1,190
1,148 1,022 879
795
778 3% 97%
2007
2008 Total deposits
95%
95%
4% 3% 97%
5% 95%
5%
5%
96%
2009
2010
2011
2012
Borrowed funds & other liabilities
(1) Total deposits include deposits from banks which represent less than 2% within total liabilities
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
26
Financial Performance (VIII): Deposits – Customer Breakdown Deposits by customer category (EUR'm)
1,128.6
1,091.8 971.9 752.7 263.4
770.9 231.1 35%
269.1 30%
241.6
29%
65% 489.3
539.8
601.9
2007
2008
2009
Retail deposits
28% 72%
71%
70%
271.4
287.3
843.5
702.8
2010
26%
24%
74%
76%
804.5
857.2
2011
2012
Corporate deposits
Presentation of Komercijalna Banka AD Skopje (1) Corporate deposits include deposits from banks which represent 1.9% within total deposits
Skopje, April 2013
27
Financial Performance (IX):Shareholders Equity and Capital Adequacy 68%
Shareholders Equity and Capital Adequacy (EUR'm) 130.2
10.5%
113.7
101.9 86.0
10.6% 9.9%
40%
34%
11%
15% 57%
22% 38%
154.9*
54%
31%
14%
13.5% 6%
12% 13.2%
10%
18%
22% 44%
11.1%
155.9
62%
8% 6%
55%
4%
27%
32%
2%
32%
0%
2007
2008
Share capital incl.share premium
2009 Reserves
2010
2011
Retained earnings
2012 Capital adequacy
*VI-th issue of shares in the amount of 15 million EUR
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
28
Financial Performance (X): Income Breakdown Income (EUR'm) 73.1 60.9
55.1
55.0
41.9
13.5
12.4
7.0
2007 Total income
11.2 6.6
2008
12.6
4.7
2009
Net interest income
13.9
14.6
11.6
3.9
4.5
2010
46.9
43.5
40.4
39.1
34.6
61.3
57.5
2011
Fee and commission income
2012 Other income
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
29
Financial Performance (XI): Expenses Breakdown Operating expenses (EUR'm) 25.3
10% 15% 11% 15%
12% 13% 11% 16% 48%
16% 13% 11% 18% 42%
15% 12% 11% 16% 46%
30.3
29.3
28.0
32.5
16%
29.4 18%
8% 18% 10% 16% 48%
49%
9% 15%
42% 2007
2008
2009
Wages, salaries and other employees' costs Depreciation and amortization Other expenses
2010
2011
2012
Materials and services Insurance
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
30
Financial Performance (XII): Efficiency Total income and efficiency (million EUR and %) 53.0%
80
54.0%
52.0%
70
52.0%
60 45.8%
50 40
50.0%
47.8% 55.1
30
73.1
46.0%
45.8%
57.9
60.9
20
48.0%
44.3%44.0%
61.3
42.0%
55.0
10
40.0%
0
38.0%
2007
2008
2009 Total income
2010
2011
2012
Cost/Income
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
31
Financial Performance (XIII): Non-Performing Loans Total loans (1) vs Non-Performing Loans (EUR'm) 1,000.0 860.2
900.0 800.0
738.6
707.9 (2)
700.0
787.0
634.8
600.0 457.8
500.0 400.0 300.0 200.0 100.0 0.0
46.5 36.7 10% 14% 84%
78.80 %
2007 Total loans
NPL
46.0 38.5 7% 83.80 10%78.8%
55.9 50.2 89.8%
8% 83.8% 89.8% 7%
59.9 55.5 92.6% 8.1% 89.8% 8%
75.6 66.0 9.6% 87.3% 8.1%
92.6
113.1
89.6
10.7%79.2% 87.3% 13.1% 9.6%
%
2008
2009
NPL provisions
(1) Gross corporate and retail loans excluding bank placements (2) New methodology applied as of 01.01.2009
2010
% NPLs/Total loans
2011
2012
% NPL provisions/NPLs
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
32
Financial Performance (XIV): Asset Quality Asset Risk Categories (%) 3.3% 1.6% 3.2% 9.9% 82.0%
3.6% 1.5% 3.2% 5.9% 85.8%
4.8% 0.6% 2.0% 4.6% 88.0%
5.3%
5.0% 0.5% 2.0% 4.5% 88.0%
4.4% 1.6% 2.1% 3.2% 88.7%
2.3% 2.8% 6.1% 83.5%
2007
2008
2009 A
B
2010 C
2011 D
2012
E
Presentation of Komercijalna Banka AD Skopje Skopje, April 2013
33