Komercní banka (KOMB) Q2 2024 earnings summary

Executive summary

• Net income for H1 2024 was CZK 6.3 billion, down 21.5% year-over-year, with Q2 net income at CZK 3.5 billion and ROE at 10.5% (11.0% IFRIC 21 linearised); Q2 ROE reached 11.6%.

• Cost-to-income ratio for H1 was 51.7% (49.5% IFRIC 21 linearised); Q2 ratio improved to below 50%.

• Client base grew by 47,000 year-over-year to 1,708,000; digital bank clients reached 439,000.

• Strong capital and liquidity positions with total capital ratio at 18.95% and liquidity coverage ratio at 170%.

• Total assets up 4.5% year-over-year to CZK 1,534 billion.

Financial highlights

• Client loans grew 3.7% year-over-year, led by retail and housing loans; housing loans up 4.7% and new housing loan sales up 42.3% year-over-year.

• Client deposits increased 6.5% year-over-year, with strong growth in both retail and corporate segments.

• Net interest income declined 2.9% year-over-year, mainly due to lower deposit income and higher funding costs; net fee and commission income rose 6.9%.

• Financial operations income dropped 17.8% year-over-year due to lower investment banking and hedging demand.

• Assets under management outside the balance sheet increased by 26.2%; total AUM in funds, pension, and life insurance up 13.9%.

Outlook and guidance

• GDP growth for 2024 downgraded to 0.7%; CNB policy rate expected at 3.75% by year-end.

• Loan growth guidance at lower end of mid-single digit, deposit growth upgraded to mid-to-high single digit.

• Revenue growth expected at low to mid-single digit, with cost growth at low single digit.

• Cost of risk guidance improved to around 10 bps for 2024, materially below the 20–30 bps through-the-cycle range.

• Extraordinary income from sale of Václavské náměstí 42 subsidiary (CZK 2.4–2.5 billion) to be booked in Q3.