Komercní banka (KOMB) Q3 2024 earnings summary

Executive summary

• Net income for the first nine months of 2024 reached CZK 12.5 billion, up 1.5% year-over-year, supported by a one-off gain from the sale of the historic headquarters building.

• Recurring net income (excluding the one-off) was CZK 10.1 billion, down 18.5% year-over-year.

• Q3 2024 reported net income was CZK 6.2 billion, the strongest quarterly result, significantly influenced by the property sale.

• Digital transformation advanced, with over 800,000 clients migrated and 717,000 users onboarded to the new digital bank by September 2024.

• Client base expanded by 44,000 to 1,709,000, with a target of 1 million users on the KB+ digital platform by year-end.

Financial highlights

• Net banking income for 9M 2024 was CZK 26.7 billion, down 1% year-over-year; net interest income fell 3.3% to CZK 18.7 billion, while net fee and commission income rose 7.1% to CZK 4.9 billion.

• Operating expenses increased 2.5% year-over-year to CZK 13.3 billion, mainly due to higher personnel and amortisation costs.

• Total assets grew 9.8% year-over-year to CZK 1.66 trillion, mainly driven by client deposits and repo operations.

• Cost of risk for 9M 2024 was 14 basis points, reflecting strong loan recovery and prudent provisioning.

• Cost-to-income ratio at 49.9% for 9M 2024.

Outlook and guidance

• 2025 guidance expects high single-digit revenue growth, driven by loan and deposit volume increases, especially in retail.

• Net interest margin expected to improve to 1.7–1.75% by year-end 2024.

• Cost of risk guidance widened to 5–15 basis points for year-end 2024 due to timing uncertainty of a positive corporate exposure evolution.

• Operating expenses in 2025 are projected to remain flat versus 2024, with efficiency gains offsetting higher personnel and digitalization costs.

• ROE target for 2025 is 13–14%, with cost-to-income ratio targeted at 43–44%.