KBC Bank & Insurance Group Company presentation Autumn 2004 .
KBC Bank & Insurance Group
52
KBC Bank & Insurance Group 2000 Results Presentation for financial analysts 5 March 2001
description
KBC Bank & Insurance Group. 2000 Results. Presentation for financial analysts 5 March 2001. KBC Bank & Insurance Group. Group results and key features Results - Banking Results - Insurance Activities Retail bancassurance Asset management Corporate services Market activities - PowerPoint PPT Presentation
Transcript of KBC Bank & Insurance Group
KBCBank & Insurance Group
2000 Results
Presentation for financial analysts 5 March 2001
2
KBC Bank & Insurance Group
Group results and key features
Results - Banking
Results - Insurance
Activities Retail bancassurance Asset management Corporate services Market activities Central Europe
Strategy
Investor Considerations
3
Year 2000 Highlights
Net group profits increase : 87.7% (+20.2% excl. gain on CCF)
EPS up : 19.5% (excl. gain on CCF)
ROE increases to 23.3%
Central Europe established as second home market
Strong increase of assets under management
Merger integration progressing as planned
Strategy updated and objectives enhanced
4
In millions of EUR 20001999 %
Consolidated profit - Group share *excl. gain on CCF
- Banking *excl. gain on CCF
- Insurance
- Holding company
Key figures per share (in EUR)- Net earnings *excl. gain on CCF
- Net asset value
- Net dividend
969.7 969.7
714.7714.7
271.3
-16.3
3.263.26
33.8
0.9225
1820.7 1165.5
1520.9876.7
320.6
-20.9
6.093.90
35.2
1.065
87.7 20.2
112.822.7
18.2
-
- 19.5
4.1
15.4
Key Figures
5
Increased Profitability
707798
970
1166
1997 1998 1999 2000
Net profit ROE
+12.8%+34%
+21.6% +20.2%
1821incl. CCF
+87.7%
16.2% 16.1%
20.5%23.3%In
mill
ions
of
EU
R
6
Solid solvency ratios
2000Bank Tier-1 ratio CAD ratio
Insurance Solvency ratio (1)
7.2%
11.5%
311%
9.5%
16.0%
307%
(1) excluding unrealized capital gains
1998
7.4%
12.8%
298%
1999
7
KBC Bank & Insurance Group
Group results and key features
Results - Banking
Results - Insurance
Activities Retail bancassurance Asset management Corporate services Market activities Central Europe
Strategy
Investor Considerations
8
In millions of EUR 2000 Organic %
Gross operating incomeGeneral expenses
Operating result
Value adjustments and provisionsExtraordinary result
Profit before tax
Taxes
Minority interests
Profit after tax
Profit after tax excl. CCF
1999 %
3868-2524
1344
-565
207
986
-183
-88
715
715
4656-3094
1562
-334
693
1922
-243
-158
1521
877
20.422.6
16.3
-41.0
-
95.0
32.8
-
112.7
22.7
8.76.5
13.0
-43.0
-
26.1
25.3
-
-
17.1
BankingSummary
9
1960
732
610
133
2157
636
756
319
2437
836
1034
349
1998 1999 2000
In m
illio
ns o
f E
UR
+9%
+37%
+31%
+13%
+20.4%
Total3435
Total3868
Total4656
BankingIncome Stream
Other income 8% 8%Commission income 20% 22%Profit on financial transactions 16% 18%Net interest income (incl. dividends) 56% 52%
% of total income 1999 2000
10
BankingProvisioning for credit risks
Specific provisionsDomesticInternational
Loan loss ratioDomesticInternational
Gen. prov. for international loans
Provisions for country risks
Provisions for dioxin crisis
In millions of EUR 20001999
-270.4-103.2-167.1
0.24%0.48%
-12.0
-34.0
-25.2
-283.7-253.0
-30.7
0.53%0.09%
-24.5
48.0
18.9
11
KBC Bank & Insurance Group
Group results and key features
Results - Banking
Results - Insurance
Activities Retail bancassurance Asset management Corporate services Market activities Central Europe
Strategy
Investor Considerations
12
InsuranceSummary
In millions of EUR 2000
Gross marginGeneral expenses
Operating result
Non-recurring resultExtraordinary result
Profit before tax
Taxes
Minority interests
Profit after tax
1999
658-344
312
16-12
316
-41
-4
271
%
748-374
374
25-5
392
-74
2
321
13.78.8
19.1
--
29.6
80.3
-
18.2
13
InsuranceBusiness mix
1999Gross premiums
2144.5 million EUR
fire 8%
accepted business 8%
motor 12%
individuallife 58%
group life 4% other non-life
10%
2000Gross premiums
2704.7 million EUR (+26.1%)
individuallife 65%
group life 4%
fire 7%
accepted business 6%
motor 10%
other non-life 8%
14
101
117
18
117
128
67
161
124
86
1998 1999 2000
In m
illio
ns o
f E
UR
+28.4%
-3.1%
+37.6%
+18.9%
Total236
Total312
Total371
InsuranceContribution to recurring result
Non-technical 22% 23%Non-life 41% 33%Life 38% 43%
% of total recurring result 1999 2000
15
KBC Bank & Insurance Group
Group results and key features
Results - Banking
Results - Insurance
Activities Retail bancassurance Asset management Corporate services Market activities Central Europe
Strategy
Investor Considerations
16
Profit Contribution by Activity
1999 2000
353
452
2066
109
148
91
13191
173
306
196
+28%
+230%
+36%+44%
+90%-36%
In m
illio
ns o
f E
UR
Retailbancassurance
CentralEurope
Corporateservices
Assetmanagement
Marketactivities
Groupitems
% profit contribution 36% 39% 2% 6% 11% 13% 9% 11% 9% 15% 32% 17%
17
Retail Bancassurance
Overview 1999 2000 Profit contribution
Allocated equity
Percentage of equity
ROE
Progress in bancassurance and e-commerce
Merger operations on track
Prospects
353.2 m EUR
2091.6 m EUR
49.6%
16.8%
452.3 m EUR
2115.0 m EUR
36.6%
21.0%
18
Retail Bancassurance in BelgiumCross-selling penetration
Total clients bank1 337 204 (=) Total clients insurance
743 716 (+6.1%)
Cross-selling
510 896 clients holding at least 1 bank AND 1 insurance product 32.5% of overall client base 38.2% of bank client base
155 750 clients holding at least 3 bank AND 3 insurance products 9.9% of overall client base 11.6% of bank client base
510 896mutual clients
19
Merger Process UpdateIntegration of bank branches
907
1480
1315
1212
1118
800
900
1000
1100
1200
1300
1400
1500
1600
1999 2000 2001 2002 2003
planned-408
achieved-165
20
E-commerce
Expansion of e-banking & e-insurance a top priority
September 2000 : all retail KBC clients have free access to online Internet banking serviceson request
Mid-September 2000 : launch of ‘My KBC’Internet applications via e-mail, SMS
January 2001 : acquisition of Etrasoft e-commerce trading platform
KBC-Online : End of 2000 : 90 000 clients Target by end of 2002 : 300 000 clients
21
Asset ManagementFurther growth in assets under management
23,9
2,84,4
27,4
4,64,8
36,8
9,8
5,3
43,1
12,9
5,1
8,5
1997 1998 1999 2000
31.1
36.8 (+18.3%)
51.9 (+41%)
In b
illio
n s o
f E
UR
69.6 (+34.1%)
KBC AM ltd. (Ireland) - 12%Private Banking 10% 7%Institutional funds 19% 19%Mutual funds 71% 62%
% of total AUM 1999 2000
22
Asset Management
Overview 1999 2000
Profit contribution
Market share in Belgium,31 Dec. 2000:
Acquisition of UBIM : investment 105 m EUR or 1.35% of AUM
Prospects
90.7 m EUR
28.2%
131.2 m EUR
29.2%
23
Corporate Services
Overview 1999 2000
Profit contribution
Allocated equity
Percentage of equity
ROE
Focus on small- & mid-caps
Prospects
109.1 m EUR
1979.5 m EUR
46.9%
5.9%
148.0 m EUR
2188.3 m EUR
37.9%
7.1%
24
Market Activities
Overview 1999 2000
Profit contribution
Allocated equity
Percentage of equity
ROE
Strong performance by KBC Securities and KBC Financial Products
Acquisition of Peel Hunt key to building European platform
Prospects
90.8 m EUR
848.3 m EUR
20.1%
9.8%
172.4 m EUR
557.3 m EUR
9.6%
24.6%
25
Acquisition of Peel Hunt
Leading UK securities house specialized in small- & mid-caps
Offer price 260 m £ (450 p per share)
Acquisition funded with excess capital
Consistent with strategy to expand corporate finance activities
26
Central Europe
Overview 1999 2000
Profit contribution
Allocated equity
Percentage of equity
ROE
Prospects
20.3 m EUR
603.9 m EUR
14.3%
7.6%
66.3 m EUR
795.1 m EUR
13.8%
10.4%
27
Central Europe
PolandKredyt BankAgropolisaWarta
Czech & Slovak Rep.CSOBCSOB Pojist’ovnaPatria
HungaryK&H BankK&H Bank after mergerK&H LifeArgosz
49.9% (+1.4%)49.9% (+26.6%)40.0% (+40%)
81.5% (-0.8%)75.8% (=) 91.9% (+91.9%)
73.3% (+40.7%)60%50%95.4% (=)
Ownership (*)
213.47.2
123.2
1361.911.949.0
132.1- 2.5
23.9
investmentin millions of EUR
5.8%0.6%
12%
23.4%0.5% -
8.8%15.1%0.5%3.1%
market share
(*) change in ownership compared to 1999
28
IPB’s assets total 7.5 billion EUR
Assets acquired by CSOB with 100% guarantee from Czech government
75% of IPB loan book is non-performing
Strong client base (3 million retail clients)
Integration on track
Payment : recapitalization at 7% of RWA +20%
Negotiation to acquire IPB Insurance
IPB
29
KBC Bank & Insurance Group
Group results and key features
Results - Banking
Results - Insurance
Activities Retail bancassurance Asset management Corporate services Market activities Central Europe
Strategy
Investor Considerations
30
Group Strategy
To be an independent, medium-sized bancassurer in Europe.
To achieve high, sustainable growth in shareholder value.
31
Strategic Focus Focus on 4 activities
Retail bancassurance Corporate services Asset management Market activities
Focus on Europe Belgium : home market Central Europe : second home market Western Europe : smaller countries/regions, niches.
Other regions if higher return than general targets
Focus on ‘local’ clients Retail SME
32
ROE and Capital Allocation
ROE target per activity
Capital re-allocated : activities with low or volatile ROE activities with high or stable ROE
Corporate lending - Market activities
Retail bancassuranceAsset managementCorporate finance
33
Cost of capital
Creation of shareholder valueROE Targets per activity
Retailbancassurance
Corporate services
Asset management
Market activities
Central Europe
TOTAL at operational level
TOTAL at group level
8.5%
10.5%
8%
11.5%
13%
9.5%
-
MinimumROE target
ROE realized
20.0%
12.5%
13.0%
21.0%
15.0%
17%
22%
21.0%
7.1%
-
24.6%
10.4%
17.4%
23.3%
34
Minimum Target
Realized 31 Dec. ‘00
ROE at holding-co. level
EPS growth
Cost/income ratio bank
Combined ratio insurer
Tier-1 ratio bank
CAD ratio bank
Solvency ratio insurer
22%
15% p.a.
55% by 2004
103% by 2004
7%
11%
200%
23.3%
19.6%
64.2%
106.6%
9.5%
16%
307%
KBC Bank & Insurance GroupOverall financial targets
35
KBC Bank & Insurance Group
Group results and key features
Results - Banking
Results - Insurance
Activities Retail bancassurance Asset management Corporate services Market activities Central Europe
Strategy
Investor Considerations
36
KBC Bank & Insurance GroupInvestor considerations
Fundamentals Strong market shares - diversified income Unique bancassurance concept Sound solvency ratios
Strategy Focus ROE-based capital allocation Shareholder-value-driven
Outlook Merger benefits starting to realize Central Europe : solid base for expansion Continued high profitability in niches
KBCBank & Insurance Group
2000 Results
Presentation for financial analysts 5 March 2001
Appendix
39
Lending
Consumer creditMortgages
Deposits
Savings depositsSavings certificates
Mutual Funds
Insurance
Life (total)Unit-linkedNon-life
26.7%25.2%
19.4%17.9%
29.2%
12.8%18.1%
8.6%
+1.8%+0.9%
-0.5% +0.2%
+1%
+0.9%-1.9%-0.3%
Market Shares in BelgiumRetail Bancassurance
31-12-00 Dec 99
40
57,3
27,7
63,3
29,9
59,5
47,7
31-12-98 31-12-99 31-12-00
36,8
16,7
43,1
21,5
46,6
32,4
31-12-98 31-12-99 31-12-00
Banking
Lending Customer deposits
+50%
+8%
+60%
-6%
Belgium Abroad
In billions of EUR
Total53.5
Total64.6
Total79.0
Total85.0
Total93.2
Total107.2
41
Banking Asset quality
Non-performing credits versus total portfolio Domestic International (*)
Coverage of non-performingcredits by specific provisions Domestic International (*)
(*) Excluding the ‘historic portfolio’ of CSOB, which is fully covered by (state) guarantees and provisions.
1.8%
2.0%
1.3%
67.2%
69.3%
60.9%
31-12-98 31-12-99 31-12-00
2.1%
2.1%
2.1%
64.0%
64.5%
63.2%
2.1%
2.5%
1.7%
67.7%
67.2%
68.6%
42
Efficiency Ratios
31-12-00
Cost / Income ratio
Net expense ratio
° Non-life
Net loss ratio
Combined ratio
31-12-98 31-12-99
60.0%
33.4%
70.0%
103.4%
65.3%
33.6%
72.5%
106.1%
66.5%(*)64.2%
34.0%
72.6%
106.6%
(*) excl. impact change in consolidation scope
43
Insurance Evolution of gross premiums
924.5
407.5 408.5
170.8
934.5
1458.6
668.2 634.4 644.8
140.7 168.1 192.6
0
200
400
600
800
1000
1200
1400
1600
Trad. Life Unit Linked Non-life Acceptances
1998
1999
2000
In m
illio
ns o
f E
UR
(=)
(+56%)
(+1.6%)
(+14%)
44
InsurancePremium distribution by channel
65 67 69
2522 20
10 11 11
Agents Brokers Bankbranches
199819992000
12 11 106 5 5
82 8487
Agents Brokers Bankbranches
Non-life LifeIn %
45
KBC Bank & Insurance GroupMerger NPV
1572
36
-682
1518
346
-596
original NPV revised NPV
Integration costsIncome synergiesCost savings
Total: 926 mn EURTotal: 1268 mn EUR + 37 %
Merger NPVbetter than planned thanks to increasedincome synergies
Cross-sellingto CERA clients
NPV revised in oct 2000
46
Merger process updateCreation of the KBC ITplatform on target
100%
80%
60%
37%
18%
3Q‘99 h100 h200 h101
Done
IT-workload
remaining 20% is spread over time to close down old KB system
47
Almanij NV
KBC Bank & Insurance
Holding NV
KBC Bank KBC Insurance
67.8%
100%100%
28.5% FreeFloat
KBC Asset Man45%
55%
KBC Group structure
As controlling shareholder, Almanij is committed to support KBC
48As per Dec. 2000
KBC Bank & Insurance GroupGroup key features
Staff: 35 000
Customers: in first home market (Belgium): +/- 2.6
million in second home market (C-Europe): +/- 4.5
million
Branches: domestic bank branches: 1 454
(KBC+CBC) independent insurance agents: 765
International presence: 30 countries
49
19991998
Net profit
Net profit (excl. CCF)
P/E
Gross dividend
Pay-out ratio
Net asset value
Price/NAV
2.69
25.0
1.09
40.6%
32.3
2.1
3.26
16.4
1.23
37.7%
33.8
1.6
2000
6.09
3.90
11.8
1.24
36.4%
35.2
1.3
KBC Bank & Insurance GroupKey figures per share
50
1 HSBC 133.22 UBS 77.33 ING 73.24 Royal Bnk of Scotl. 63.55 Credit Suisse 60.96 Lloyds TSB 56.17 Deutsche Bank 55.88 Barclays 55.49 BBV Argentaria 51.9
10 Bco Santander 50.511 BNP 40.212 Fortis 39.913 ABN Amro 36.414 Bay Hypo Ver 35.1
15 Soc. Générale 27.816 Uni Credito 26.117 Abbey Natl 25.418 Halifax 24.719 Dresdner Bank 23.520 San Paolo - IMI 23.421 Banca Intesa 23.222 Nordic Baltic 23.123 Stand. Chrtd 18.024 Dexia 17.525 Bank Scotl. 15.126 Commerzbank 14.827 KBC Holdings 14.628 Danske Bank 14.2
(*) 01.03.01 - marketcapitalization in bn. EURO
KBC Bank & Insurance GroupRanking in Europe (*)
51
Number of outstanding shares 299 295 556per 30.09.00
Free float - 28.5% 85 405 006
- Quoted on Euronext Brussels (BXS)
- Included in the Euronext 100, Bel-20, Euro STOXX Financials, FTSE E300 Financials indices
Yield KBC Bel-20 DJEuroStoxx Banks
1 jaar (2000) -11.3% -6.0% 7.5%
3 jaar (1998-2000) 7.9% 11.1% 15.7%
6 jaar (1995-2000) 21.1% 17.6% 23.5%
KBC Bank & Insurance GroupShareholder information
KBCBank & Insurance Group
2000 Results
Presentation for financial analysts 5 march 2001
