Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Komercni Banka AS (XPRA:KOMB, Financial) reported a strong growth in client deposits by 2.3% and client loans by 2.5% year-over-year.
- The bank achieved a significant increase in assets under management, with mutual funds growing by more than 20%.
- Komercni Banka AS maintained a strong capital position with a total capital ratio of 18.77% and a liquidity coverage ratio of 166%.
- The bank's net income reached CZK 17.2 billion, marking the strongest revenue quarter in its history.
- The cost-to-income ratio improved to 48.2%, indicating efficient cost management.
Negative Points
- Net interest income (NII) was slightly negative on a full-year basis, impacted by regulatory interest costs.
- The bank's cost of risk increased compared to 2023, although it remained low overall.
- There was a slight decrease in term deposits and savings accounts, indicating a shift in client preferences.
- The effective tax rate was unusually low at 15% due to a one-time tax-free sale, which is not expected to continue.
- The bank's growth in corporate financing was described as mediocre, with more emphasis on retail growth.
Q & A Highlights
Q: How sustainable is the recent jump in cross-selling fees, and what is the outlook for capital market products?
A: The growth in cross-selling fees is driven by strong sales of wealth management solutions across retail market sub-segments. However, the recent boost from performance fees in pension funds is not sustainable, and a correction is expected in the next quarter. (Unidentified_6, CFO)
Q: Can you provide insights into the transition of customers to the new platform and its impact on business performance?
A: The new platform itself does not generate fees, but it helps maintain revenue levels post-migration, providing a solid base for further cross-selling. The focus is on increasing the number of products per client rather than raising prices per unit. (Unidentified_2, CEO)
Q: What are the future capital distribution plans, and could higher payout ratios be maintained post-2025?
A: The extraordinary payout ratio in 2025 reflects strong capital management. While we do not guide dividend payouts beyond the next 12 months, if conditions remain favorable, we will consider maintaining higher payout ratios. (Unidentified_6, CFO)
Q: What is the outlook for the effective tax rate, given the low rate in 2024?
A: The 15% effective tax rate in 2024 was due to the tax-free sale of a subsidiary. Going forward, the effective tax rate is expected to return to around 18%, with a slight potential for improvement. (Unidentified_6, CFO)
Q: What drove the sharp improvement in the current account structure, and what is the outlook?
A: The shift between paid and unpaid deposits was significant, partly due to resolution fund charges. A partial shift back to paid deposits is expected in the first quarter of 2025. (Unidentified_6, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
