Komercní banka (KOMB) Q4 2023 earnings summary

Executive summary

• FY2023 net profit attributable to shareholders was CZK 15.612bn, down 11.4% YoY, as lower net interest income and higher operating costs outweighed growth in fees and financial operations.

• Customer loans grew 5.5% and deposits 9.7%; assets in funds, pensions and life insurance increased 16.0%.

• Digital transformation continued, with 120,854 clients on KB+ at year-end and more than 180,000 by the announcement; the year-end target was 1m retail clients on the new banking services.

Financial highlights

• FY operating revenues fell 6.3% to CZK 36.2bn; net interest income declined 10.6% to CZK 25.6bn, partly offset by 4.8% growth in fees and 4.5% growth in financial operations.

• Operating costs rose 8.2% to CZK 17.3bn; operating profit fell 16.5% to CZK 18.9bn and profit before tax fell 12.5% to CZK 19.1bn.

• 4Q23 revenues fell 4.4% YoY to CZK 9.2bn, costs rose 9.5% to CZK 4.3bn and attributable net profit declined 29.7% YoY to CZK 3.3bn; loan impairments were CZK 1.1bn.

• FY attributable net profit was CZK 15.612bn, down 11.4%; EPS was CZK 82.66. Consolidated profit was CZK 15.8bn, down 11.3%.

Outlook and guidance

• FY2024 revenues are expected to grow modestly, with net interest income, fees and commissions, and financial operations supporting growth; operating costs are expected to rise more slowly than revenues.

• FY2024 loans and deposits are expected to grow at mid-single-digit rates; fund assets are forecast to rise at a double-digit rate, while life-insurance technical reserves may decline.

• FY2024 cost of risk is expected to rise from its near-zero 2023 level and remain within the normalized 20–30 bps through-cycle range.

• Management intends to propose a dividend equal to 100% of FY2024 attributable consolidated net profit.