REG - Komercni Banka - AGM Statement

Komercni Banka asAnnouncement

05/05/2022 15:15

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RNS Number : 5097K  Komercni Banka  05 May 2022

 

 

Translation from the Czech language

 

Komercni banka, a.s. http://www.kb.cz/en (http://www.kb.cz/en)

Prague 1, Na Prikope 33, building identification number 969, Post Code 114 07

Identification No.: 45 31 70 54

LEI Code: IYKCAVNFR8QGF00HV840

incorporated in the Commercial Register maintained with the Municipal Court in
Prague,

section B, insert 1360

Disclosed on 5 May 2021

 

The Information is available also at the following link:
https://www.kb.cz/en/about-the-bank/for-investors/shareholders-shares-and-dividends/general-meetings-and-dividend-payment

Komercni banka, a.s. informs its shareholders about the Minutes of the Annual
General Meeting of Komerční banka, a.s.

MINUTES

 

of the proceedings of the Annual General Meeting (hereinafter referred to as
the "General Meeting") of Komerční banka, a.s. with its registered office

in Prague 1, Na Příkopě 33 Reg. no. 969, postal code 114 07, corporate ID
45317054 (hereinafter referred to as "Komerční banka", the "Company", "KB"
or the "Bank") held on 20 April 2022 from 01:00 p.m. at náměstí Junkových
2772/1, Stodůlky, Prague 5, postal code 155 00

 

 

Mr Pavel Henzl opened the meeting at 1 p.m. He welcomed those present and
stated that he had been appointed by the Board of Directors of the Bank to
chair the General Meeting until the election of its Chairman. He further
stated that the proceedings of today's General Meeting will be held in Czech
and English with simultaneous interpretation. For this purpose, the
shareholders were given headphones at the attendance registration desk, which
are set up for reception in the Czech language on channel No. 1., and for the
English language, channel No. 2 is set. Materials for today's General Meeting
are contained in tablets, which shareholders received at attendance
registration. Mr Pavel Henzl also asked the shareholders to return both
devices to the attendance service staff upon their leaving.

 

Mr Henzl said that the members of the Board of Directors were present at
today's General Meeting: Chairman Mr Jan Juchelka, as well as Mr Didier Colin,
Mr David Formánek, Mr Jitka Haubová, Mr Miroslav Hiršl and Mr Margus
Simson. A majority of the members of the Supervisory Board of Komerční
banka, a. s., headed by its Vice-Chair Ms Petra Wendelová, are also present.
The Chairman of the Supervisory Board, Mr Giovanni Luca Soma, apologised for
urgent work reasons. Also present in the hall is the notary dr. Lucie
Foukalová, who will draw up the notarial deed.

 

Mr Pavel Henzl stated that in accordance with the Articles of Association of
the Bank in effect, representatives of the audit company Deloitte Audit,
s.r.o., are invited as guests to today's General Meeting. At the same time, he
announced that the company AV MEDIA had been entrusted with the technical
provision of the entire course of the General Meeting, including attendance
sheet and voting. He also pointed out that coffee and water were prepared for
shareholders in the lobby throughout the General Meeting.

 

Mr Pavel Henzl stated that the statement from the issue of book-entry shares
provided on the record date, i.e. 13 April 2022, was used for attendance
record. He further stated that, according to the report of the persons in
charge of the registration of attending shareholders, the shareholders having
shares with a nominal value representing in aggregate 78.877574 % of the
Bank's registered capital are present at the General Meeting.

 

He announced that based on the attendance registration information stated, in
compliance with the valid Articles of Association, this General Meeting
constitutes a quorum and is competent to adopt decisions, and that no
objection against the exercise of voting rights has been submitted.

 

Mr Pavel Henzl also asked shareholders to identify themselves by means of a KB
identification card, which they will hang around their necks. The card was
received by shareholders at attendance registration, as this identification
card also serves to register their leave or eventual return, as the case may
be.

 

Subsequently, he opened the proceedings of the General Meeting.

 

Mr Pavel Henzl stated that the Notice of the Annual General Meeting and all
documents for the meeting were published in Mladá Fronta DNES daily and on
websites of Komerční banka on 18 March 2022.

 

He further stated that the business on the agenda of today's General Meeting
is stated in the Notice of General Meeting, which the shareholders received as
part of the materials for today's General Meeting and is contained in their
tablet. The Notice also includes draft resolutions, including their reasoning.

 

He reminded that according to the valid Articles of Association of Komerční
banka, a. s., voting is performed using an electronic voting device, i.e.
tablets, which the shareholders received at attendance registration. First,
the proposal of the Board of Directors is voted on. If the proposal of the
Board of Directors is adopted by the required majority, no vote is taken on
other proposals. Voting on other proposals or counterproposals is taken in the
time sequence in which they were submitted.

 

He also acquainted the shareholders in more detail with the method of voting
using the tablets distributed to them. The results of the voting will also be
available to shareholders in tablets.

 

The electronic voting device is operated by the buttons FOR (PRO) and AGAINST
(PROTI). The voting option will appear on the tablet at the moment when
shareholders are asked to vote. The name of the item on agenda voted on is
shown at the top of the screen. Shareholders can abstain from voting by not
clicking on any voting button when voting. Once the shareholders have voted,
the selected option will be highlighted and until the voting is completed,
shareholders can change their decision by clicking on another button. If no
voting option is highlighted, the shareholder abstains from voting. In case of
doubt, the present scrutineers can be asked for assistance. In the event of a
failure of the electronic voting device, scrutineers may be asked for a
replacement electronic voting device.

 

He further stated that the premises designated for proceedings of the General
Meeting are considered to be the premises of this hall and toilets. Upon
leaving these premises, the shareholders will be deregistered and upon entry
they must be registered again, using the identification card they received at
attendance registration. In the event of leaving these premises of the General
Meeting, it is also necessary to return the identification card, tablet and
interpreting station.

 

Mr Pavel Henzl noticed that the quorum of the General Meeting and the results
of the voting will be displayed on the screens here in the hall.

 

Mr Pavel Henzl further informed the shareholders that there is an information
centre of the General Meeting available to them at the back of this hall where
employees of Komerční banka are ready to answer any questions or provide the
relevant explanations. He invited them that at this place they can also submit
any written requests for explanations or protests.

 

Mr Pavel Henzl mentioned that this year shareholders can again use an
opportunity to vote on proposed resolutions before venue of the General
Meeting using an electronic remote communication platform. The conditions of
this voting are provided in the Notice of GM. The results of the
correspondence voting are included in the quorum of the General Meeting as
well as in the results of the voting on individual resolutions.

 

Approval of the rules of procedure and voting rules of the General Meeting,
and election of its Chairman, minutes clerk, minutes verifier and persons in
charge of votes counting.

 

Mr Pavel Henzl then proceeded to the procedural issues of the General Meeting,
i.e. "Approval of the General Meeting's rules of procedure and voting rules
and election of its chairman, minutes clerk, minutes verifier and persons in
charge of vote counting".

 

He stated that the text of the Procedure and Voting Rules, which stipulate
only the technical point of the exercise of voting rights and the proceedings
of the General Meeting, is contained in a tablet, which the shareholders
received at attendance registration. The rules for conduct of the General
Meeting, including the method of voting at the General Meeting and the legal
conditions for exercising the voting right, are regulated by the Articles of
Association of the Bank. At the same time, he reminded that the shareholders
were acquainted with the way of using the tablet as a voting device.

 

Mr Pavel Henzl then raised a question whether any written request for an
explanation, a proposal or a counterproposal, or an objection relating to this
item of the agenda had been submitted. This was not the case.

 

Then he asked whether there was any oral request for an explanation, a
proposal, a counterproposal or objection relating to this item of the agenda.
This was not the case.

 

He then stated that before the voting on the proposal to be subsequently
presented, the General Meeting represents a quorum and is competent to adopt
decisions, as shareholders having shares with the nominal value totalling
78.880584 % of the registered capital of the Bank are present.

 

Mr Pavel Henzl submitted a draft resolution of the General Meeting, on which
the shareholders are to vote:

 

Resolution One:

The General Meeting approves the rules of procedure and voting rules of the
General Meeting of Komerční banka, a. s., in accordance with the proposal
submitted by the Board of Directors.

He announced that an absolute majority of votes of the attending shareholders
is required for adoption of this resolution.

 

Subsequently, he called on shareholders to use the electronic voting device in
voting round 1 by clicking on the button FOR to express their consent. To
express disagreement then they click on the button AGAINST. If they want to
abstain from voting, they need not click on either button.
 

 

Mr Pavel Henzl called on shareholders to vote. He then asked if anyone else
wanted to vote and then closed the voting.

 

 

After completion of the voting, the Chairman of the General Meeting, Mr Pavel
Henzl, stated that according to results of voting the resolution was adopted.
He stated that shareholders can view the exact results of the voting on the
screens here in the meeting room and will be listed in the Minutes of the
General Meeting.

 

The final results of the voting on Resolution One were as follows:

 

in favour voted by shareholders having 131,131,154 votes, which corresponds to
88.024833 % of the number of votes present, shareholders having 1,340 votes,
which corresponds to 0,000900 %, voted against, and shareholders having
17,838,143 votes, which corresponds to 11.974268 % of the present number of
votes, abstained from voting.

 

Mr Pavel Henzl the presented a proposal of the Board of Directors relating to
officers of the General Meeting as follows:

 

Mr Pavel Henzl as the Chairman of the General Meeting, Markéta Batalová as
the minutes clerk, Ms Alena Krčilová as the minutes verifier and Ms Tereza
Kafková and Ms Eva Novotná as persons in charge of votes counting
(scrutineers). He announced that all these candidates are elected only for the
proceedings of this Annual General Meeting and their duties will be to ensure
its due course in accordance with the requirements of law and the Articles of
Association of the Bank.

 

Mr Pavel Henzl then raised a question whether any written request for an
explanation, a proposal or a counterproposal, or any objection relating to
this item of the agenda had been submitted. This was not the case. Then he
asked whether there was any oral request for an explanation, a proposal, a
counterproposal or an objection relating to this item of the agenda. This was
not the case.

 

Mr Pavel Henzl stated that before the voting on the proposal to be presented,
the General Meeting represents a quorum and is competent to adopt decisions,
as shareholders having shares with the nominal value totalling 78.880584 % of
the registered capital of the Bank are present.

 

Thereupon he submitted a draft resolution of the General Meeting, on which the
shareholders are to vote:

 

 

Resolution Two:

The General Meeting elects

Mr Pavel Henzl as the Chairman of the General Meeting

 

He announced that an absolute majority of votes of the attending shareholders
is required for the adoption of this resolution. Subsequently, he called on
the shareholders to use the electronic voting device in voting round 2.

 

After completion of the voting, the Chairman of the General Meeting, Mr Pavel
Henzl, stated that according to results of voting the resolution was adopted.

 

 

The final results of the voting on Resolution Two were as follows:

in favour voted shareholders having 131,136,959 votes, which corresponds to
88.025184 %( )of the present number of votes, shareholders having 20.944
votes, which corresponds to 0.014059 %, voted against, and shareholders having
17,818,734 votes, which corresponds to 11.960757 % of the present number of
votes, abstained from voting.

 

Mr Pavel Henzl stated that the election of the minutes clerk would now be put
to the vote. He stated that the General Meeting represents a quorum and is
competent to take decisions, as shareholders having shares with a nominal
value representing a total of 78.880584 % of the registered capital of the
Bank are present.

 

 

Resolution Three:

The General Meeting elects

Markéta Batalová as the minutes clerk

 

He announced that an absolute majority of votes of the attending shareholders
is required for the adoption of this resolution. Subsequently, he called on
the shareholders to use the electronic voting device in voting round
3.

 

After completion of the voting, the Chairman of the General Meeting, Mr Pavel
Henzl, stated that according to results of voting the resolution was adopted.

 

The final results of the voting on Resolution Three were as follows:

in favour voted shareholders having 131,136,903 votes, which corresponds to
88.025147 % of the present number of votes, shareholders having 0 votes, which
corresponds to 0.000000 %, voted against, and abstained shareholders having
17,839,734 votes, which corresponds to 11.974853 % of the present number of
votes, abstained from voting.

 

 

Mr Pavel Henzl stated that now election of minutes verifier would now be put
to the vote. He stated that the General Meeting represents a quorum and is
competent to take decisions, as shareholders having shares with a nominal
value representing a total of 78.880584 % of the registered capital of the
Bank are present.

 

 

Resolution Four:

The General Meeting elects

Alena Krčilová as minutes verifier

 

He announced that an absolute majority of votes of the attending shareholders
is required for the adoption of this resolution. Subsequently, he called on
the shareholders to use the electronic voting device in voting round 4.
 

 

After completion of the voting, the Chairman of the General Meeting, Mr Pavel
Henzl, stated that according to results of voting the resolution was adopted.

 

The final results of the voting on Resolution Four were as follows:

in favour voted shareholders having 131,099,688 votes, which corresponds to
87.999634 % of the present number of votes, shareholders having 1,319 votes,
which corresponds to 0.000885 %, voted against, and shareholders having
17,876,530 votes, which corresponds to 11.999480 % of the present number of
votes, abstained from voting.

 

Mr Pavel Henzl stated that now the election of a person in charge of votes
counting would now be put to the vote. He stated that the General Meeting
represents a quorum and is competent to pass decisions, as shareholders having
shares with a nominal value representing a total of 78.880584 % of the
registered capital of the Bank are present.

 

Resolution Five:

The General Meeting elects

Tereza Kafková as a person in charge of votes counting

 

He announced that an absolute majority of votes of the attending shareholders
is required for the adoption of this resolution. Subsequently, he called on
the shareholders to use the electronic voting device in voting round 5.

 

After completion of the voting, the Chairman of the General Meeting, Mr Pavel
Henzl, stated that according to results of voting the resolution was adopted.

 

The final results of the voting on Resolution Five were as follows:

in favour voted shareholders having 131,179,176 votes, which corresponds to
88.052990 % of the present number of votes, shareholders having 22,263 votes,
which corresponds to 0.014944 %, voted against, and shareholders having
17,776,098 votes, which corresponds to 11.932066 % of the present number of
votes, abstained from voting.

 

 

Mr Pavel Henzl stated that now the election of a second scrutineer as a person
authorised to count the votes would now be put to the vote. He stated that the
General Meeting represents a quorum and is competent to take decisions, as
shareholders having shares with a nominal value representing a total of
78.884238 % of the registered capital of the Bank are present.

 

Resolution Six:

The General Meeting elects

Eva Novotná as a person in charge of votes counting

 

He announced that an absolute majority of votes of the attending shareholders
is required for the adoption of this resolution. Subsequently, he called on
the shareholders to use the electronic voting device in voting round 6.

 

After completion of the voting, the Chairman of the General Meeting, Mr Pavel
Henzl, stated that according to results of voting the resolution was adopted.

 

The final results of the voting on Resolution Six were as follows:

in favour voted shareholders having 131,176,695 votes, which corresponds to
88.051325 % of the present number of votes, shareholders having 0 votes, which
corresponds to 0.000000 %, voted against, and shareholders having 17,800,842
votes, which corresponds to 11.948675 % of the present number of votes,
abstained from voting.

 

Mr Pavel Henzl thanked the shareholders for the confidence shown and asked the
other persons elected as officers of this General Meeting to take up their
offices.

 

Consequently Mr Pavel Henzl, the Chairman of the General Meeting, announced
that he will proceed with the agenda of the General Meeting.

 

 

Item 1 - Discussion over the annual financial statements for the year 2021
with the proposal for the distribution of profit for the year 2021 and over
the consolidated financial statements for the year 2021

 

The chairman of the General Meeting, Mr Pavel Henzl, said that the
shareholders have in their tablet the text of the Annual Report for the year
2021 on this item, which includes the annual financial statements and
consolidated financial statements. These documents, along with other
documents, have been available at the bank's headquarters since 18 March 2022
and can be downloaded from the bank's website. The vote will take place under
items 4, 5 and 6.

 

He subsequently asked the Chairman of the Board of Directors, Mr Juchelka, to
present his comment on this item on the agenda.

 

Mr Juchelka welcomed shareholders and members of the Supervisory Board at
today's General Meeting and decided to present them with the main information
on the state of Komerční banka Group's activities in the year 2021,
including the development of the macroeconomic environment, financial and
business performance as well as some non-financial activities. Mr Jiří
Šperl, KB's Financial Director, will present this part together with
him.
 

 

The Chairman of the Board of Directors, Mr Juchelka, pointed out on page three
the development of the main macroeconomic activities in the Czech Republic and
informed that Komerční banka is doing business in the Czech Republic and to
a lesser extent in Slovakia. The Czech economy recorded a partial recovery in
the year 2021 from the slump caused by the Covid-19 pandemic in the year 2020.
GDP growth for last year thus reached 3.3 %. Mr Juchelka pointed out that it
should be added that the economy is currently facing a number of difficulties,
some of which were already manifesting themselves in the year 2021. In
particular, the manufacturing industry and the construction sector were
hampered by problems with the supply of important inputs, which led to
shutdowns and across individual sectors as well as price increases. He also
pointed out that the labour market situation has been tense for a long time,
with the difficulty of filling vacancies, which limits the development
potential of the
economy.

 

On the chart at the bottom right, Mr Juchelka showed that inflation has
started to accelerate significantly since the first half of last year, and
this growth is continuing even now, when price increases have already exceeded
double-digit rates. The Czech National Bank, as one of the first central
banks, reacted to this development by raising monetary policy rates quite
sharply. In view of this, short- and long-term interest rates on the financial
market have also been rising. At the end of the year 2021, the Czech National
Bank's base two-week Repo rate was 3.75 %, it is now at 5 %, and the yield on
the ten-year Czech government bond was 2.7 %, compared to nearly 4 % today.
 

 

Mr Juchelka also reported that this year the external environment has further
deteriorated as a result of the Russian invasion of Ukraine. He summed up that
after a short recovery, the Czech economy has found itself in relatively
difficult conditions again, but it can be assumed that solid fundamentals will
allow the Czech economy to successfully overcome this situation in the medium
term.

 

On the other hand, Mr Juchelka pointed out that the new situation caused first
by the Covid-19 pandemic and now by the war in Ukraine has underlined the
necessity to build a robust and resilient business model for the bank and the
whole group, which will enable us to cope with adverse conditions and take
advantage of the opportunities presented by the changing environment.

 

In Komerční banka's strategy, factors supporting long-term resilience
include not only capital endowment, strong liquidity and prudent risk
management, but also socially responsible behaviour in accordance with
recognised principles for environmental protection, social environment
development and corporate governance. Komerční banka implements its
sustainability policy through a number of specific
activities.

 

Mr Juchelka also said that KB is aware of the risks arising from climate
change and is committed to contributing to their mitigation. KB is moving
towards carbon neutrality in the year 2026. Greenhouse gas emissions from the
Bank's operations in the year 2021 decreased by 32.5 % compared to the year
2019. The bank offers clients new sustainable products in the areas of
financing, investment and consulting. The bank assesses loans provided to
corporate clients according to the taxonomy of the European Union, while in
the year 2021 KB provided CZK 21 billion in financing to projects with a
sustainable positive impact, and this figure will continue to grow. In
contrast, KB announced a gradual exit from coal financing by the year
2030.
 

 

Mr Juchelka also said that in the social field KB is continuing with a number
of projects, whether as individual companies of the KB Group or through the
Jistota Foundation. Significant activities include joining Komerční banka,
the Blue Pyramid and the Essox company in the Gracious Summer initiative,
which allowed people in financial difficulties to pay off their debts without
fines. He also noted that the Jistota Foundation distributed grants amounting
to nearly CZK 20 million last year, of which approximately 7 mil. CZK was used
to mitigate the effects of the tornado in southern Moravia. Inside the bank,
KB is closing the gender pay gap. It currently stands at 4.2 %, while on the
Czech market this difference averages 10-11 %. The bank is also taking steps
to ensure that the gender pay gap at KB disappears completely in the coming
years.

 

Given its importance, Mr Juchelka also informed shareholders about this year's
assistance of the Komerční banka Group and its employees to civilian victims
of the war in Ukraine. Komerční banka donated 10 mil. CZK to the Czech Red
Cross to buy medical supplies and equipment for Ukraine and another 5 mil. CZK
was collected between employees of Komerční banka and the Komerční banka
Group. KB, or its Jistota Foundation, doubled this amount and donated to
non-profit organizations helping refugees from Ukraine in the Czech Republic.
Komerční banka has also provided its accommodation facility in Prague at
Palmovka and several apartments elsewhere in the country to accommodate
refugees. Mr Juchelka also said that the bank has created a special current
account for refugees, which provides a contribution of CZK 2,000 and several
other benefits, such as payments to Ukraine without a fee or access to online
medical advice.

 

Mr Juchelka also noted that in the new situation, the overall revision of
client information in line with the latest regulations, which we finalized
last year, is also proving particularly prudent and has significantly reduced
the risk that KB's financial services could be used to circumvent sanctions or
money laundering. Strengthening our protections against cyber-attacks and for
fraud prevention seems equally
important.
 

 

The Chairman of the Board of Directors, Mr Juchelka, was also pleased to say
that Komerční banka's efforts were also appreciated in independent surveys
and awards. Among other things, KB won the titles Top Responsible Large Firm
for the year 2021, Sustainable Bank of the year 2021 and won the SDG Award for
non-financial
reporting.

 

Mr Juchelka also said that the bank greatly appreciates the award The Bank of
the Year 2021 Czech Republic, which KB received from the renowned magazine The
Banker. The international jury focused on how the banks helped their customers
and the economy in the pandemic, on the banks' ability to constantly innovate,
as well as on a sustainable approach to
business.

 

All these values are also reflected in Komerční banka's strategic plan, KB
Change 2025, which updates Komerční banka's strategic direction and responds
to new challenges and opportunities for building a strong client-focused bank.
Mr Juchelka noted that he had presented the new strategy to shareholders last
year and now shared the first deliveries in its implementation in the year
2021.

 

Mr Juchelka further informed that Komerční banka's goal is to build together
with its clients a better and sustainable future through responsible and
innovative financial solutions. KB wants to be a leader in a new era of
banking for 2 million active clients. The strategy builds on the pillars of
responsiveness, development and responsibility. During the year 2021, the Bank
has already made tangible progress in the ten areas in which the KB Change
2025 strategy is being developed.

 

Mr Juchelka further presented that the building of a new digital bank with a
core built on the Temenos Transact system has already reached the first phase,
in which a functional bank with basic functionalities is being tested by five
hundred clients from among the Bank's employees, while noting that he is
pleased to be one of these
testers.

 

Chairman of the Board of Directors Mr Juchelka noted that branches remain an
important building block of KB's multi-channel strategy. The bank has created
a new model of servicing and designing branches, more favourable for providing
advice and dealing effectively with clients' various financial needs. The
first branch under the new concept was opened in July 2021 in Prague-Dejvice.

 

Komerční Banka is adapting its organisation towards fully digital sales and
services. In the mobile banking application, clients have been able to obtain
several other products since last year, such as consumer credit, property
insurance, savings account, overdraft or wallet insurance. The share of
consumer credit sales made completely through digital channels increased to 29
% in the year 2021, from 11 % in the year 2019. In addition, 19 % of "My
Account" accounts were set up digitally, up from 4 % in the year 2019, and
approximately 15 % of framework contracts for investment in mutual funds were
negotiated fully online in the year
2021.

 

Mr Juchelka also said that KB is building an ecosystem of additional financial
services with the aim of providing new sources of revenue, through its own
development, cooperation with both start-up and established service providers,
including the acquisition of shares in fintech companies through its 100 %
owned subsidiary KB SmartSolutions, s.r.o. He informed that recent activities
include the establishment of Finbricks, s.r.o., an aggregation platform for
financial services operating under the PSD2 Directive, an internal startup
founded by our colleagues, an increase in Komerční banka's share in upvest
s.r.o., a crowdfunding platform for real estate projects, as well as the
launch of digital identification services for public sector services through
Banking Identity, and a joint offer with ČEZ ESCO for the installation of
photovoltaic power plants on the roofs of residential houses as well as
industrial
factories.

 

Mr Juchelka also presented that Komerční banka and Modrá pyramida stavební
spořitelna, a.s. are also building a new common infrastructure and front-end
system for products focused on housing financing. Komerční banka aims to
strengthen its leading position in the market in services for corporate
clients, it introduced the advisory portal spolecne-udrzitelne.cz for
sustainable development and transformation of business models. Corporate
clients also appreciated the new Trade & Finance Online platform for
managing documentary payments, guarantees and other international business
services. In year-on-year terms, KB's market share in corporate lending
improved by around half a percentage point to 17.6 % at the end of the year
2021.
 

 

Mr Juchelka informed that Komerční banka intends to contribute to climate
protection by supporting a fair, ecological and inclusive energy transition,
while respecting that not all energy sources are equivalent in cost to
consumers and that the energy sector represents thousands of jobs. The Bank
has committed to counteract global warming and reduce its direct emissions in
line with the scenario of not exceeding 1.5°C under the Paris Agreement. In
addition, Komerční banka will contribute to carbon emission reduction
projects with the aim of achieving carbon neutrality of its own operations by
the year 2026. In the year 2021, the Bank's total emissions decreased by 32.5
% compared to the year 2019 to 23,090 tonnes of CO2 equivalent, representing
14.7 kilograms per client. The measurement is audited annually by the
non-profit organization Prefered by
Nature.

 

In addition, Mr Juchelka, Chairman of the Board of Directors, said that for
the year 2021, the bank concluded credit agreements amounting to CZK 21.9
billion to finance projects with a sustainable positive impact and introduced
new products compatible with environmental and social objectives, such as
mutual funds investing in companies that do business in accordance with
environmental, social responsibility and corporate governance standards, the
so-called ESG; consultancy and financing of energy savings projects and
renewable energy sources; or payment cards made from recycled plastics.
Komerční banka also committed to gradually reduce to zero its exposure in
projects actively related to the coal sector by the year 2030. On this basis,
the bank no longer provides new financial products to clients who have more
than 50 % of revenues related to coal. For existing clients who have more than
25 % of their revenues linked to the coal sector, KB is refraining from
providing new products or services unless there is a public, time-limited plan
for the transition to leaving the
sector.

 

Mr Juchelka said that Komerční banka has further strengthened its
capabilities in the area of cyber security and fraud prevention. In the area
of credit risk, tools using machine learning algorithms have been implemented
to identify and evaluate early warning signals regarding the bank's exposure
to corporate clients, allowing the bank's analysts to save time on routine
monitoring and to focus on more complex cases. The deployment of new risk
management modules has supported the automation and digitisation of credit
provision. The increase in the average frequency of bank application updates
to 11 per product per year has improved KB's ability to deliver product
innovations and to respond to client requests or alerts. The implementation of
the Objectives and Key Results methodology, the so-called OKR, has
strengthened the agile and effective cooperation and consistent target setting
throughout the bank. To increase efficiency and strengthen internal know-how,
Komerční banka has also created several dozen new jobs to provide tasks that
were previously purchased from external
suppliers.

 

Along with the centralization of the main support functions across the
Komerční banka Group, the headquarters of all remaining subsidiaries have
moved to the KB Group headquarters in Prague-Stodůlky, with the exception of
ESSOX, which remains managed from České Budějovice. The average number of
employees for the year 2021 has decreased by 4.6 % compared to the previous
year. Mr Juchelka added that as of 1 April this year, Komerční banka has
closed another 25 branches and 19 branches are newly providing cash services
via ATMs.

 

On the next page of the presentation Mr Juchelka showed that the operational
objectives of the plan are formulated for the Bank itself, i.e. not the
consolidation entity. The aim is to increase the level of customer
satisfaction measured by the Net Promoter Score in the retail and small and
medium-sized segments, while stabilising this satisfaction at an already very
high level of more than 50 positive points in the large corporate customer
segment. Compared to the year 2019, customer satisfaction with Komerční
banka in all segments has increased and even exceeds the target level for
corporate clients. The improvement in the year 2021 was contributed by high
satisfaction with digital channels and a significantly better perception of
the stability of the Bank's systems. The traditional strength remains the
quality of advice provided by bank
advisors.

 

Mr Juchelka further informed that the excellent experience of clients with
different sales channels should have helped the bank to increase the number of
customers to 2 million by the year 2025, including a possible boost to growth
through acquisitions. In the year 2021, the number of the Bank's clients
decreased slightly, but this was influenced by the termination of client
relationships, about which the bank did not have the full set of information
needed to fulfil regulatory obligations in the area of prevention of money
laundering and circumvention of sanctions.

 

Mr Juchelka further noted that branches will remain an important contact point
for clients, but given the trend of providing services in the digital
environment, the Bank plans to operate 200 branches by the year 2025. At the
end of the year 2021, Komerční banka had 242 branches and this number
further decreased by 25 in April this year. Optimising operations through
digitisation, branch reduction and switchover to cashless banking, automation
of support functions and deployment of robotics will mean that the full
operation and services of the bank itself will be provided by approximately
5,500 employees. At the end of the year 2021, there were 6,743 employees.

 

Mr Juchelka also stated that the improved working and management methods will
lead to employee empowerment and effective teamwork throughout the company.
Improving motivation, importance perception, recognition and effective
management should help to achieve further improvement in the level of employee
engagement measured by its own composite index to 83 points, compared to the
already high score of 78 points in the year 2019 and 77 points in the year
2021.

 

Komerční banka has chosen the globally recognized FTSE4Good index of
sustainably managed companies as a benchmark for achieving success in the
environmental, social and administrative areas. The goal for this index will
be to exceed the level of 4 points, compared to 3.3 points in the year 2021.

 

The Chairman of the Board Mr Juchelka further commented on the consolidated
business results. A clear trend is the rapid transition of service provision
to mobile banking. The volume of payments via KB mobile banking increased by
181 % year-on-year and mobile banking is already used by 1,034,000 clients,
which is approximately 64 % of all the Bank's clients. The number of clients
using the KB key authentication application, of which there are less than one
million, is also growing rapidly. In terms of product sales, digital channels
have the largest share in the area of consumer loans, with 63 % of newly
granted loans in the bank going through the digital environment and in Essox
almost all of them, or more precisely 98 % of the loans provided.

 
 

Mr Juchelka further informed that Komerční banka achieved good business
results in both loans and deposits in the year 2021. The growth of the Group's
loan portfolio reached the level we had planned, i.e. roughly 7 %. Contrary to
expectations, housing loans grew faster, but this was offset by
slower-than-planned growth in consumer loans. The Group's retail loan
portfolio grew marginally slower than this segment of the entire Czech market.
The financing of corporate clients fulfilled the ambitions for the year 2021
despite the fact that businesses were still cautious about launching new
investment projects and that the reported crown value of loans to businesses,
often provided in euros, was negatively affected by the strengthening of the
Czech currency. Komerční banka's market share in corporate lending increased
year-on-year.

 

On the next page, Mr Juchelka showed a selection of several prestigious deals
on the Czech banking market in the year 2021, in which KB participated in an
exclusive or significant role. Mr Juchelka was proud to point out that the
capital strength and excellent liquidity endowment enable Komerční banka to
finance the most important transactions of the Czech economy and development
activities of the Czech economy, across all sectors throughout the country.
Komerční banka thus significantly supports the economic growth of the Czech
Republic.

 

Furthermore, Mr Juchelka said that the growth in deposits even slightly
exceeded the budgeted level, especially in the segment of citizens, where KB
strengthened its market share in the year 2021. Komerční banka's high
liquidity strengthens the Bank's competitiveness on the market and deposits
are now an important driver of interest income growth, as Mr Jiří Šperl, a
colleague, will shortly describe. With a loan-to-deposit ratio of 76 %,
Komerční banka has created an excellent space for further expansion in
business and
financing.

 

On another page, Mr Juchelka showed that the KB Group has also managed to
accelerate the growth of the total volume of non-bank assets of clients under
management, i.e. in mutual funds, pension fund or life insurance. In this way,
the assets of clients in mutual funds grew the fastest, and this growth was
accompanied by a gradual shift of clients' preference to equity products,
which corresponds to KB's strategy. Mr Juchelka also said that the influence
of these business results on the Group's financial performance will be
discussed by Mr Šperl, CFO of Komerční banka, and he thanked for his
attention.

 

 

The Chairman of the General Meeting, Mr Pavel Henzl, then invited Mr Šperl,
the Executive Director for Strategy and Finance, to comment on this item and
on the item Approval of Acquisition of Own Shares and on the item Decisions on
Designation of an Auditor to Perform a Statutory Audit for the year 2022.

 

Mr Šperl greeted the shareholders and decided to comment on five items on the
agenda of the General Meeting, namely Consolidated Financial Statements,
Annual Financial Statements, Proposal for Distribution of Profit for the year
2021, Proposal for Designation of an Auditor for the year 2022 and finally a
proposal for Approval of Acquisition of Own
Shares.

 

Mr Šperl started by commenting on the financial statements and results of the
KB Group for last year. He said that the business results of last year were
very satisfactory, so the financial results correspond to this. He noted with
satisfaction that the KB Group was able to generate approximately CZK 12.7
billion in net profit after tax for last year, i.e. almost 60 % more than in
the previous year. On the graph he showed that almost all categories, with the
exception of income tax, contributed positively to this result. This is
understandable and logical, because bigger profits pay more taxes. Mr Šperl
mentioned the biggest contributors to the year-on-year increase in profit,
which was primarily the significantly reduced cost of risk, which added
approximately CZK 3.8 billion in year-on-year terms due to the excellent
payment discipline of the Bank's clients, despite the environment of the covid
pandemic. Revenue grew by 5.7 % year-on-year, while costs grew by only 0.7 %.
This led to a further improvement of one of the key indicators of operational
efficiency of the KB Financial Group. In this area, the Bank has long been
among the market leaders not only in the Czech Republic but also in Europe.
This fact was also reflected in other key indicators of the Group's
profitability. Mr Šperl mentioned one, namely the profitability of tangible
capital (or ROTE), which reached almost 12 % last year, and the Bank's
management expects the trend of improvement to continue this
year.

 

Mr Šperl also said that the key categories of the balance sheet, i.e. client
loans and deposits, had already been discussed by Mr Juchelka, the CEO. Mr
Šperl therefore focused on the overall development of the Group's balance
sheet. Total assets grew by a solid 6.6 % year-on-year basis and reached a
value of more than CZK 1.2 trillion. On a year-round basis, this is the
highest in the history of the KB Group. In absolute terms, this means a
year-on-year increase of almost CZK 80 billion, which on the liabilities side
was driven mainly by client deposits, which represent 70 % of the total
growth, and other drivers of growth were successful Euro-bonds issued at the
beginning of the year 2021 and capital. On the active side, approximately 3/5
of these new resources were used to finance client loans, which is one of the
Bank's big priorities, and the rest, i.e. the liquidity surplus, was invested
in Czech government bonds. The loan-to-deposit ratio is held at 76 %, which
means that the liquidity of the Bank is at a very strong level and that there
is good potential and room for further growth in
loans.

 

Mr Šperl further informed that on the following three slides he will focus on
the key accounting categories, starting with net operating income, which rose
by a strong 5.7 % year-on-year driven by all its components, i.e. both
interest income and fee and commission income as well as income from financial
operations.

 

Net interest income rose by 2 % year-on-year and was supported mainly by a
dynamic increase in the Bank's business activities, both on the loans and on
the deposits side. The effect of the environment was also positive, especially
the sharp increase in interest rates, with the CNB's key 14-day REPO rate
rising from 0.25 % to 3.75 % in the second half of last year and this trend
continues this year. The net interest margin of 1.9 % has not yet reached the
level of the previous year, when it was about 10 basis points higher. Mr
Šperl, however, has no doubt that this will happen this
year.

 

Another subcategory is net fees and commissions. A strong increase of almost
10 % was reported here and was driven mainly by two areas, which are strategic
for KB, namely cross selling fees following the very dynamic sales of non-bank
assets to clients in administration. In this area, Mr Šperl is thinking
mainly of sales of mutual funds, pension funds and life insurance. These fees
rose by about 20 % year-on-year. The second contributor was fees relating to
specialised financial services in the area of capital markets and consultancy,
which increased by almost 40 % year-on-year. Mr Šperl said that this was a
very good result, better than was expected in the planning documents before
the beginning of the year.

 

Mr Šperl informed that this also concerned revenues from financial
operations, where the bank also grew by 40 % year-on-year, which was
positively influenced in particular by the provision of hedging operations for
the bank's clients. The increased demand for these services was influenced a
lot by the overall volatile environment throughout the year and especially in
the second half.

 

 

Mr Šperl then presented, that operating costs were traditionally under
control, in nominal terms the Bank reports an increase of just 0.7 %, i.e. in
real terms due to relatively high inflation, this is a not insignificant
decrease. The Group paid less in staff costs by 1.5 % year-on-year; other
operating costs increased slightly, but here the growth was driven by an
increase in "regulatory costs", namely an increased contribution to the CNB's
Resolution Fund. Mr Šperl believes that this is evidence that cost
discipline, efficiency and productivity are part of Komerční banka's DNA and
it has long prided itself on its "top in class" position in this area.

 

In another slide, Mr Šperl described the cost of risk, which dropped
significantly after the record-breaking provisioning in Covid 2020, reaching a
value of just under CZK 800 million. More provisions were made for exposures
of our corporate clients, for retail clients the bank was able to dissolve
part of the provisions as concerns about the covid year 2020 that the
delinquency of these retail clients would increase were not realised. The cost
of risk relative to the average loan volume fell sharply, reaching 10 basis
points from 68. In the coming years Mr Šperl expects a gradual return to the
normalised level, which is 30-40 basis points.

 

Mr Šperl also said that the Bank's management evaluated the year 2021 very
positively, the objectives were achieved, and this fills the management with
optimism that the objectives of the KB Change 2025 strategic plan will also be
achieved. Mr Šperl then showed shareholders the slide that he presented to
them and the markets two years ago. The key financial indicators are two,
namely the cost-to-income ratio (Cost Income Ratio) below 40 % by the year
2025 and the Return on Equity (ROE), where the target is set at more than 15
%. These objectives are not yet met, but the Bank continues on schedule and Mr
Šperl believes that this will be confirmed in the year
2022.
 

 

Mr Šperl then showed a slide focused on Komerční banka's rating and said
that the sound financial and business position of KB Group was also
appreciated by international rating agencies, all of which confirmed the
Bank's rating and some of them even improved the outlook, which is the case
with Standards and Poors and Fitch. In their reports to Komerční banka, the
rating agencies valued its conservative risk appetite, strong market position
and capital endowment, stable sources of client deposits and high
liquidity.

 

Mr Šperl also presented the Bank's capital position and the draft profit
distribution for the year 2021. The Bank's capital position is very strong. At
the end of the year 2021, the capital adequacy reached 21.3 %, which was more
than 6 pps above the regulator's minimum requirement. The KB's Board of
Directors therefore intends to renew the standard dividend policy, which was
discontinued due to pandemic measures, and to pay a dividend in the range of
60-70 % of the net profit generated in previous
years.

 

The proposal to the General Meeting is to pay 65 % of the year 2021 profit,
i.e. in absolute terms a dividend of CZK 8.3 billion, which represents CZK
43.8 per share, before tax. The dividend will go to shareholders who hold the
share on 29 April 2022 and is due on 23 May 2022. Even after this dividend,
the Bank's capital position will be very strong and further steps to release
excess equity will be considered in the second half of the year 2022 after the
completion of the annual regulatory stress tests. For the year 2022, the Board
of Directors approved a dividend policy of 65 %, which will be confirmed after
the end of this
year.

 

Mr Šperl also stated KB's own unconsolidated result due to the fact that the
dividend is paid to shareholders by the parent company of the KB Group. The
reported net profit after tax was CZK 12.4 billion. As the bank is the main
contributor to the overall result of the Group, the results here are very
correlated with the result of the KB Group. The biggest deviations are
dividends paid by subsidiaries to KB, which are part of the revenues on a
separate basis, while not on a consolidated basis, where they are taken
out.

 

Mr Šperl informed that the KB's Board of Directors proposes to this General
Meeting to approve the distribution of Komerční banka's profits for the year
2021 so that the dividend will be CZK 8.3 billion and the remainder, i.e.
approximately CZK 4 billion, will be transferred to the retained earnings of
past years account.

 

Mr Šperl then presented the penultimate point, which is a proposal to renew
the right to buy back (redemption of) shares. In this matter, it is necessary
to go back 5 years. Based on the decision of the KB's General Meeting held in
April 2017, KB may acquire its own shares under the conditions set by the
decision of the General Meeting and the applicable regulations. This right
expires right now. Currently, KB holds in its own books about 1.2 million
pieces of its own shares, which amounts to about 0.6 % of the Bank's
registered capital. As of 2017, this number has not increased. The Board of
Directors therefore requests an extension of the ability to acquire its own
shares, as an additional capital adequacy management tool. It is therefore
proposed that the General Meeting approve KB's right to acquire its own shares
under very similar conditions as for the current programme. The terms are
printed in the presentation and Mr Šperl has decided to focus on the selected
ones. The first of the conditions is that the maximum number of shares a Bank
can hold at any given moment is approximately 19 million pieces of ordinary
shares. The second condition is that the acquisition price of the share must
be at least CZK 1.00 per share and at most CZK 2,100 per share. The third
condition is that the period of time a Bank can acquire shares under this
permission from the General Meeting is 5 years. Here, too, the same condition
is set as five years ago. The last condition is that the execution of this
permission must comply with other relevant laws and regulations. In addition,
KB must obtain the approval of the Czech National Bank before purchasing its
own shares and all transactions connected with the acquisition of its own
shares must be made
public.
 

 

At the end of his presentation, Mr Šperl presented a proposal for an external
auditor for the year 2022. Given the positive experience and in accordance
with regulatory requirements, the Board of Directors proposes to re-appoint
one of the world's most important audit firms, Deloitte Audit, as KB's
external auditor in the Czech Republic and Slovakia, which will be voted on in
Resolution No.11. After that, Mr Šperl thanked for the attention and passed
the floor to Mr Henzl, the Chairman of the General
Meeting.

 

Mr Henzl thanked Mr Šperl and announced that he had several written questions
from the shareholder, Mr Martin Müller, and decided to read them.

 
 

 

First question:

At the General Meeting in the year 2019, Mr Šperl said in response to my
question: "… in the case of KB, one increase in the Repo rate leads to an
improvement in the results in interest income by about CZK 200 million. Is
that still true? Or how did this value change when the Repo rate was raised by
0.25 %? Am I able to calculate this value and
how?

 

Mr Šperl replied that Mr Müller would not be able to calculate the value,
but would probably be able to work out a reliable figure. Mr Šperl confirmed
that KB's sensitivity to the increase in short-term interest rates, i.e. to
the aforementioned Repo rate, remains at approximately CZK 200m. What would
help to get the number of overall sensitivity is the second frequently
reported sensitivity, namely sensitivity to a parallel increase in the yield
curve by 1 %, i.e. 100 basis points, in this case we are talking about a
positive impact when it is an increase of roughly CZK 1 billion in the next 12
months.

 

Second question:

What kind of interest rate development do you expect in the year 2022?

 

Mr Šperl replied that currently short-term rates are at 5 %, the curve up to
five years is linear, therefore the five-year rate is around 5 %, then the
curve starts to go down, i.e. the markets are expecting a decline in interest
rates. Furthermore, Mr Šperl started with short-term rates, when the base
scenario he expects is that the CNB will still make one increase of 0.25 %,
i.e. it will stay at 5.25 % and at this level it will keep the rate at least
until the end of the year and then it will start progressively lowering those
short-term interest rates. This will of course also be monitored by long-term
rates, i.e. in the coming months these rates will go down rather than up.

Third question:

We have a period of high inflation. In which areas high inflation has a
positive effect on KB's business and in which areas high inflation has a
negative effect on KB's
business.

 

Mr Šperl replied that there are not many positive effects and therefore he
focused more on the negative ones, where it is about the impact on management
costs, whether it concerns employees' salaries, rent, energy, all other
related services that the Bank has to buy, so here it is clearly a negative
impact, which was already announced to shareholders and analysts during the
presentations of the results for the year 2021, that costs in the year 2022
will grow differently and faster than they used to and for the main reason,
which is inflation and also a relatively brutal increase in so-called
regulatory costs, especially the costs of the Resolution Fund and costs of
deposit insurance after payments made by Sberbank's clients. Then Mr Šperl
mentioned another negative cost, which will probably affect the capacity of
clients to repay in particular their mortgages and consumer loans, but here
the impact is very limited.

 

Fourth question:

What should be the overall impact of high inflation on KB's business, rather
positive or
negative?

 

Mr Šperl replied that it was rather negative.

 

Fifth question:

What do you expect to see in inflation in the year 2022 and beyond the year
2023?

 

Mr Šperl replied that in the year 2022 inflation is expected to stay at
current levels, i.e. 12-13 %, for the year 2023 it is expected to go back, not
to the target set by the CNB, i.e. 2 % +-1 %, but sometimes in between, he
said that this is quite difficult to expect, especially given the development
of the situation to the east of us.

 

Mr Henzl then asked questions about the dividend for the coming years.

 

Sixth question:

In how many instalments and when do you expect to pay out retained earnings
from years 2019 and
2020?

 

Mr Šperl briefly summarised the overall context, when the CNB banned any
dividend payments from years 2019 and 2020 following the Covid pandemic. The
situation changed last year, when the CNB allowed all Czech banks to pay out a
part of the retained earnings, in simple terms it allowed to pay out up to 100
basis points from risk-weighted assets, measured towards the end of the year
2020. This release for Komerční banka amounted to CZK 4.5 billion already
paid out at the end of the year 2021 in numerical terms. The next phase of the
payout is the 65 % that are proposed to the General Meeting for approval
today, i.e. 65 % of the year 2021 earnings. Further steps will be considered
in the second half after the stress tests have been evaluated. Other banks are
also considering these steps, as this cap did not apply only to KB.

 

Seventh question:

As shareholders, how big should we expect the size of this amount per share?

 

Mr Šperl pointed out that his statement would be retrospective, not
prospective and informed that the sustainable dividend pay-out is between 65
%, which it has been in the past with the exception of two covid years. For
years 2019 and 2020 they have already paid out CZK 4.5 billion and if the
balance is added up to 65 %, this would lead to an additional CZK 10.5
billion, so together the retained earnings would be at the level of CZK 15
billion. Mr Šperl pointed out that this is a simulation, but this information
was also communicated to investors on the year-round Earning call. If the
entire balance, i.e. the CZK 10.5 billion, were also theoretically paid out,
it would lead to the capital adequacy remaining within the management buffer,
where the management of this bank wants to
move.

 

Mr Henzl thanked Mr Šperl and started to address questions in the area of
mortgages.

 

Eighth question:

What impact do you expect from increased interest rates for the development of
mortgage
lending?

 

This question was answered by Mr Hiršl, who noted that it is not possible to
distinguish exactly which reason is most affecting production. Interest rates
play a role there because the growth was really dramatic. There are also new
measures by the regulator, where the CNB tells the Bank that it must be even
stricter in mortgage lending, which many clients know and far not everyone who
reached a mortgage six months ago will reach it today. Mr Hiršl then
mentioned a third factor, which is the generally rising cost of living and
energy costs and some uncertainty that makes mortgage decisions more difficult
than before. Mr Hiršl said that the decline is estimated to be -40 % year on
year basis in the volumes of mortgages provided, a more dramatic decline is
expected in the numbers of mortgages provided, namely -50 %. This was already
evident in the first three months of this year, and this trend is expected to
continue. Mr Hiršl further noted that it should be noted that last year was
extraordinary, i.e. now a return to the usual production levels of the past
years is expected. It is important to mention that a large part of the annual
volumes was refinancing, with this category being reduced to one-quarter,
which means a dramatic impact.

 

Ninth question:

Do you observe increased delinquency (delays in instalments, inability to pay
instalments) in mortgages compared to the past years? If so, to what do you
attribute this?
 

 

This question was answered by Mr Colin, who said that expectations regarding
the increase in defaults are such that the increase will be quite limited, for
several reasons. The first reason is that certain factors are already taken
into account in the process of allocation and approval, and the other reason
is that the unemployment rate is quite low, which is an external factor that
will certainly help to limit this risk, and overall it can be said that KB's
credit policy is based on factors that have historically been set at a
conservative level, which certainly also helps to limit the other possibility
of default risk in
mortgages.

 

Tenth question:

How do you expect that increasing interest rates or anything else will affect
delinquency in years 2022 and
2023?

 

Mr Colin said that this question has already been answered.

 

Mr Pavel Henzl therefore moved on to questions from the Fintech area, which
are similar to what they were in the year
2019.

 

Eleventh to fourteenth
question:

Threat or opportunity for KB in the year
2022?

 

Please note the development of the share of KB and competitors in this market
in years 2019-2021 in terms of individual metrics (number of downloaded
applications, number of users, number of transactions). Who do you see as the
biggest competitor in this
area?

 

How many percent of KB clients use third-party applications to control their
account with KB? What is the trend and what rate? Is the number of KB clients
using third-party applications increasing or decreasing and the pace is
accelerating or slowing over
time?

 

How are the number of KB clients growing who exclusively use third-party
applications to control their accounts with KB?

 

How far is KB in the possibility of controlling the accounts of other banks
through the KB application? And how interesting this is for clients, the
percentage of people who use it and the
trend.

 

Mr Juchelka started answering questions and said that at past General Meetings
of KB it has already been said that KB sees in fintech and start-up companies
rather opportunities for expanding product offerings and for finding and
testing potential sources of returns. They do not see them as a threat, but as
an opportunity. They observe them from a strategic point of view, they do not
see this trend as short-term, one-year-lasting. Mr Juchelka also said that for
this opportunity KB SmartSolutions was founded, which constantly monitors what
is happening in the fintech market in the Czech Republic and abroad, KB
communicates with the Societé General Group, which is interested in creating
an ecosystem of other companies, in cooperation with which it delivers new
solutions and new innovations to clients and thereby accelerates the
innovation cycle from the Bank to clients.

 

Mr Juchelka further informed that local efforts are driven by a simple logic,
where the basis is not portfolio investments in the fintech scene with the
expectation of a return, but they look very carefully and individually for an
opportunity that will complement well the product offerings or solutions that
are offered to clients and the cooperation then has different characters. It
can be a pure presentation of third-party products on KB's website or in a
mobile application, which is an example for Facturoid, which provides a simple
solution for invoicing for small and medium-sized entrepreneurs, or Fidoo,
which supplies a special payment card and a system of reporting on a payment
card for small and medium-sized enterprises. Furthermore, it can be a joint
procedure or a joint offer with a third party to joint clients. Here, Mr
Juchelka mentioned cooperation between a young company belonging to the
conglomerate of the CEZ Group, CEZ Esco, then Komerční banka and between
KB's sister company, SGEF from the leasing group, which together offers
entrepreneurs the installation and financing of photovoltaic power plants on
roofs of the premises of small and medium-sized
enterprises.

 

Another investment is KB's direct capital entry into a specific company. Here
Mr Juchelka mentioned three publicly known investments, namely Lemonero, which
supplies a virtual finance director for small and medium-sized e-shops and the
financing of inventories and the financing of receivables, Roger payment
institution, which is a company that supplies a product of micro-factoring or
supply chain financing, and the last one is Abvest, which is a peer to peer
platform company connecting the world of real estate developers and retail
educated investors. Another form of fintech development is the so-called
home-made fintechs, i.e. founded by employees. Here Mr Juchelka mentioned one
initiative that has been transformed into a form of business, and that is
Finbricks s.r.o.. Komerční banka primarily pursues the creation of better
solutions for its clients and secondarily the creation of new sources,
alternative returns for the KB Group.

 

 

Mr Juchelka then started to address questions from the group about competitors
in this area, stating that KB does not compare itself with any other bank, in
the initiative of how many fintechs who invests in or how much money each bank
spends. Investments in Fintech companies are seen purely as own investments of
incremental increases in returns or added value that is created for its own
clients and
shareholders.

 

Mr Juchelka then asked Mr Hiršl to answer questions about the use of
third-party applications for controlling accounts in KB and, conversely,
controlling accounts in other banks through KB
applications.

 

Mr Hiršl added a few comments on payment system and control of accounts. He
said that the number of clients who exclusively use third-party applications
to look at their products at a Bank is marginal, it is hundreds or units of
thousands. The reason is that the Bank provides more information and much more
functionality in its mobile or internet banking, this is true for all banks in
general. An example is the fact that only accounts that are used for payments
are visible to their account via a third-party application. Before the
application of their own bank, you can also see e.g. a credit account,
products negotiated with subsidiaries, their pension savings or investments,
so there is much more information. Mr Hiršl then also gave specific figures.
In the past year, less than 40,000 unique clients have tried out these
functionalities brought about by the PSD2 regulation. These clients have come
and entered either passive aggregation, when they can look at the account, or
active aggregation, when they can control their account via a third-party
application. Not all users have stayed with this functionality, because it is
necessary to renew the ability of their involvement in the system with a
certain frequency. Currently, about 20,000 clients use passive aggregation and
about 15,000 have stayed on the side of active aggregation. In the question of
competitors, Mr Hiršl mentioned the fact that the emergence of fintech
companies is much less visible than expected a few years ago, because the
relationship with the Bank still remains very strong. Competitors are then
more from the banking sector than fintech companies because of a client who
keeps more accounts with different banks, so one of them can just take over
the role of contact person for the client through these functionalities, and
the other banks remain without this possibility and only provide the product
as
such.
 

 

Mr Pavel Henzl thanked Mr Hiršl and continued with questions in the field of
payment and credit cards and cross-border transactions, which he read out and
asked Ms Haub to
answer.
 

 

Fifteenth to nineteenth
question:

What volume and number of transactions are cross-border transactions with
payment and credit cards from the total volume and number of transactions?
Please state the development in years
2018-2021.

 

Does KB as a card issuer have a greater percentage of income (from an
individual transaction) from a cross-border transaction than from a domestic
transaction? How does it differ? Is a cross-border transaction at the same
nominal amount of payment for KB as a card issuer more advantageous (it has a
greater income from it)?

 

KB has about a 3 % spread between the middle rate and the card payment rate,
right? Is this spread the whole additional income for KB for cross-border
transactions (in addition to income as a card
issuer)?

 

Although I like KB and I am its shareholder, I started using Revolut instead
of direct payment with a KB card in cross-border transactions because of the
very large forex spread. Are you able to trace such behaviour with other KB
clients? What is the development of the number or percentage of people who
send money from KB to Revolut or other similar
services?

 

What is the difference in KB's income as a card issuer if I pay the same
amount in a shop or send money to myself through a Revolut card?

 

Ms Jitka Haubová commented on the questions, stating that the ratio of
cross-border transactions to the whole is roughly 10 % in terms of the number
of transactions, in terms of volume it is about 15 %. From the year 2018 to
the first quarter of the year 2020 this figure does not change significantly,
the drop was in the year 2020 due to the covid pandemic, which reduced the
numbers of cross-border transactions. On the contrary, in the year 2021 and
the first quarter of the year 2022 we can see a significant increase, which is
higher than it was, for example, in the year 2018. Furthermore, Ms Haubová
explained the principle of Revolut, which is a mobile application with which a
card is connected, which needs to be recharged through a bank account or a
bank card. Some of the Bank's clients use Revolut for foreign payments, but
their number is not significant. Ms Haubová agrees with Mr Hiršl on this
point, who previously stated that fintech companies are not as important
competition for the Bank as other
banks.

Ms Haubová also commented on KB's income as a card issuer. KB, like other
banks, receives an interchange fee, which is the same in the Czech Republic as
in Europe and is subject to international regulation. For a debit card it is
0.2 %, for a credit card it is 0.3 % and for a company card it is 1.6 %. For
cross-border transactions it is a currency transfer, the difference between
the centre value and KB's exchange rate is 3 % for euro and dollar payments.

 

Ms Haubová further informed that if clients send money from the bank to
Revolut, KB and other banks get an interchange fee from this and do not get FX
currency conversion from this, which is the additional income. This additional
income is the main income, which allows cards better parameters and options
than those of fintech applications. This is particularly the case for very
sophisticated monitoring of fraudulent transactions, where clients are
contacted by the Bank in case of non-standard transactions and for cards there
is a chargeback, which is the possibility to return the transaction if the
goods do not arrive. This is particularly important today, when the number of
payments on the internet not only abroad, but especially at domestic e-shops
has increased by almost 40 % year on year.

 

Mr Henzl thanked Ms Haub and read another question.

 

Twentieth
question:

When I get an email from KB, it writes me "information" or "mujnazor" not "KB"
or "Komerční banka". I am very annoyed that when I get an email from KB, I
never know immediately that it comes from KB. Even the Czech Post can
introduce itself. KB still can't do it. Isn't it time to do something about
it? So KB can build a brand through email communication? I tried using
"Suggestions for improvement" and "mujnazor" but still nothing happened, so I
try it at the General Meeting.

 

Mr Henzl asked Ms Hana Kovářová to answer the question.

 

Ms Kovářová replied that it is better to consult this matter individually,
the information that the message is sent from KB is given in the header, which
is part of the images, which if they do not download, it is not visible and is
not displayed. In this case, it may not be obvious who the sender is, because
the logo is not visible and the plain text begins. The final information that
it is a message from KB is always in the footer, including the identification
and ID. Ms Kovářová thanked for the topic, will look at it and will
consider the suggestion to place the identification of KB in the plain text
top, so that even clients who do not download the images will know that it is
a communication of Komerční
banka.

 

Mr Hiršl completed Ms Kovářová and assured that this suggestion had not
fallen out, he received it a few days ago and it is the issue of the sending
address, which can be changed. Mr Juchelka also thanked for the suggestion and
assured that it will be
addressed.

 

Mr Pavel Henzl noted that the written questions had been exhausted and asked
if anyone had any oral request for an explanation, suggestion,
counter-suggestion or a protest on this item on the
agenda.

 

 

Twenty-first to twenty-third question:

The shareholder Mr Jiří David thanked for the word and said that he was
shocked by the CEO's speech. He believes that KB's management does not have an
overview of what is happening in the Czech Republic and Europe. He expressed
concern that KB wants to stop investing in coal by the year 2030, even though
gas and electricity prices are at current levels. At the same time, he said
that we are 98 % tied to Russian gas, which, if it does not flow to us, would
mean a collapse for the Czech Republic. In his opinion, the closure of gas
from Russia can be expected at any moment, either because of the EU's decision
not to source gas from Russia or because Russia decides not to supply gas to
Europe. House heating, residential heating, chemical and glass industries,
road construction and other sectors depend on gas. Mr David therefore
expressed concern and indignation that KB, instead of supporting investment in
coal, would stop investing in coal by the year 2030. He therefore asked for
record in the resolution and for KB's plans to be revised to take account of
the facts he had
said.

 

In another initiative, Mr David mentioned the fact that there are no
sandwiches or anything for coffee available at the General Meeting, which he
found undignified even considering that a number of shareholders are
pensioners who do not have much
resources.

 

Mr David's initiative was complemented by a shareholder, Mr Mach, who owns
shares in several companies in the Czech Republic and compared them in terms
of the possibility of refreshments available at the general meeting. Other
companies are more generous in this respect, providing refreshments and meals
for shareholders, including schnitzel. He gave this information to the Board
of Directors for reflection.
 

 

Mr Juchelka, CEO, thanked two questioners for their questions and said that he
would think about the catering, even though he believes that the purpose of
the General Meeting is different. He considers Komerční banka's commitment
to the Paris Agreement, to the principles of the ESG and the resulting
strategic decisions of Komerční banka and the Societé General Group to be a
bigger issue. He said that we are currently in the phase of the biggest war
conflict since the Second World War in Europe and to assess through the lens
of the currently ongoing conflict any Company's strategic intentions offer a
whole range of potential criticisms and points for discussion. Mr Juchelka
reminded that the plans reflect the interests of the year 2021, the invasion
of Russia into Ukraine took place on 24 February 2022. Komerční banka makes
a public promise that it will not finance the opening of new coal mines and
related energy resources, nothing like this is currently happening in the
Czech Republic. KB is one of the biggest financiers of, for example, the
company ČEZ mentioned today, which is publicly available information.
Komerční banka has currently lent more than CZK 750 billion to the Czech
economy, thus playing a systemically important role in financing the
development of the Czech economy. Mr Juchelka did not want to speculate
whether the current war conflict will contribute to slowing down or
accelerating the departure of European energy systems from coal. He said that
it is currently the case that the forthcoming regulation in the field of the
environment, social impacts of business and corporate governance does not
deviate so far in the European context from the basic principles that were
presented in the original
presentation.

Furthermore, Mr Juchelka said that KB sees through the lens of what is the
growth of individual power generation sources in the Czech Republic as the
most dynamically developing area of installation of small-scale photovoltaic
power plants, he mentioned that it is also because it is growing from a
relatively low base, at the same time it can be seen that the high energy
price contributes to the record financial results of individual energy
companies doing business in the Czech Republic and there is no increased
interest in external financing by banks or capital
markets.

 

Mr David clarified that the situation is different in the context of the Czech
Republic and France. He said that France is only 20 % dependent on Russian
gas, unlike the Czech Republic, where it is 98 %. For this reason, he believes
that it is not possible to have the same concept as Europe. He disagrees with
the fact that Europe has decided that coal is not a priority and it is not
possible to further finance activities in this area. In this respect, he
expressed his concern that if there are no coal-fired power plants in the
Czech Republic, people will freeze next winter.

 

Mr David was then complemented by shareholder Mr Jedlička. He pointed out the
problem that in the past years, pipelines have been built only from east to
west and for political reasons, pipelines from north to south have not been
constructed. He proposed to focus investments on the construction of LNG
ports, the financing of which could also be helped by Komerční banka, and on
the construction of pipelines from south to north to us. He also said that in
his opinion coal is necessary for the Czech Republic and he sees withdrawing
from it as suicide. He also informed that as a shareholder of Moneta, he has
information that it still allows investment in the coal
business.
 

 

Mr Henzl asked if anyone had a question, a request for an explanation.

 

Twenty-fourth
question:

The representative of the shareholder Helens, a.s., has a question about Mr
Šperl's speech and about the buyback of Bank's own shares. He would like to
know the reason and the meaning of the buyback of these shares, why the shares
can and will be redeemed. The proposal does not state how they will be dealt
with over a period of five years, whether the registered capital will be
reduced or will be sold
off.

 

Mr Henzl clarified that it is not a holding of the Bank's shares for a period
of five years, but that the Bank can acquire them during this period and after
a period of five years they can still be held by the
bank.

 

The representative of Helens, a.s. added a question about how KB can acquire
these shares, whether on the Prague Stock Exchange or whether it is a direct
acquisition from selected
investors.

 

The question was answered by Mr Šperl, who considers some parts of the
question premature, the procedure is not yet addressed and he said that the
buyback of shares is one of the standard methods of capital management,
especially in Western Europe and the USA, where it is even the predominant
option. The Bank's management wants to expand the flexibility of capital
management, which has not been implemented in the previous ten, eleven years,
also because the CNB regulation is very strict. The reason why this has not
been implemented so far is also the tax reason, because it would not be tax
efficient for some shareholders. He also added that the purchases will be made
on the stock exchange.

 

Mr Henzl asked if anyone had another oral request for an explanation.

 

Twenty-fifth
question:

Shareholder Pavel Dobranský had a question about the development of the
Return on Equity indicator from the perspective of retained dividends, which
entered into equity and played a significant role in the development.

 

Mr Šperl said that Mr Dobranský was right about the fact that there is an
increased capital base, which leads to a decrease in this indicator. That
percentage, if the 10.5 billion, which is also retained there, would be paid
off, would increase the indicator by about 1 pp. Independently of the
expectations and the Bank's goal is to increase this key value in the year
2022.

 

Twenty-sixth question:

Mr Dobranský asks about the Resolution Fund, the crisis resolution fund,
whether the deposit in it is
interest-bearing.

 

Mr Šperl said that unfortunately it is not
interest-bearing.

 

Twenty-seventh
question:

Mr Dobranský was intrigued that the high inflation environment has a negative
impact on the Bank's business, which is incompatible with his understanding of
the macroeconomic view, when financial institutions should live better in an
environment of increasing interest
rates.

 

 

Mr Šperl agreed with Mr Dobranský, saying that in his presentation he only
commented on the impact of inflation and made it clear that at the same time
there is a correlation between inflation and interest rates, which he took as
an isolated effect. The higher the interest rate, the more the banks benefit
from it, all banks in the Czech Republic at least are positively sensitive to
the increase in interest rates.

 

Twenty-eighth
question:

Mr Dobranský wanted to make sure about inflation. Its assumption for this
year is around 13 %, growth is expected around 2 %, a total of 15 %, nominal
GDP should then increase by 15 %,
right?

 

Mr Šperl replied that KB's current base scenario is that GDP will grow by 3 %
and currently macroeconomists of the Bank are working on an update, there will
probably be a decrease in the number and he pointed out that it is real, i.e.
inflation has to be added to
it.

 

Mr Dobranský then verified that the expected nominal increase in GDP is 13-15
%, which Mr Šperl confirmed. Then Mr Dobranský stated that if the Czech
government did not increase the state debt this year, the Czech Republic's
debt would be significantly reduced in terms of the ratio to GDP. Mr Šperl
confirmed this
information.

 

Mr Henzl asked if anyone had another question, a request for an explanation, a
proposal for a counter-proposal, or a protest on this item on the agenda.

 

Twenty-nineth
question:

The representative of shareholder Helens, a.s. raised a question about Mr
Šperl. In his presentation, the development of the economic result for the
year 2021 related to provisioning was mentioned. There it was clear that there
had been a decrease from 60 to 10 basis points in the volume of provisioning
and it was suggested that a return to the standard volume of 30-40 basis
points was expected in the future. Was this plan of provisioning already made
in the period that was hit by the sharp increase in interest rates in the
Czech Republic and reflects the increase in delinquency caused by the sharp
rise in interest rates? Does this consideration reflect this situation or was
it made
earlier?

 

Mr Šperl explained that the value of 30 to 40 basis points in banking is
called "Through the cycle of risk" and it is a long-term average value
regardless of surrounding factors. It is a setting of risk appetite, when it
is not e.g. 60 basis points, which banks that provide purely consumer loans
tend to have. KB sees risk appetite as optimal, in some years the number is
higher as in the year 2020, but when looking at the long-term horizon of 10-15
years it is 30 and 40 bps. He specified that it is not a plan, but a setting
of risk appetite.
 

 

Thirtieth question:

Shareholder Mr Fiala asked about the profit that will be withheld and will be
decided in the second half of the year. He asked for a specification, when
will the decision be
made?

 

Mr Šperl informed that it is not possible to say the exact date, but the
process is known and the timetable, i.e. this stress testing, has been
discussed at the Board of Directors and will be delivered to the Czech
National Bank by the end of April. The CNB must analyse the submitted
material, then it will be discussed at the Colleges in Frankfurt by the ECB
and subsequently the documents will be returned at the end of the summer and
the beginning of the autumn, i.e. they will be able to be more open at this
time, Mr Šperl estimates that it will be in the month of
September.

 

Thirty-first question:

Shareholder Mr Dobranský asked about the outlook of the cost of risk, which
is now low and he wondered if it is sustainable in the annual horizon. Mr
Dobranský fears a recession, which would change the
situation.
 

 

Mr Colin thanked for the question and informed that this topic was discussed
on the occasion of the publication of the results for the 4(th) quarter, which
was at the beginning of February. At that time, the level of 15 bps was
discussed. Mr Colin confirmed that the trend was increasing, but the forecasts
were made on the basis of the baseline and macroeconomic scenarios and the
level that was seen was low in the cycle through which the bank came over the
last years and is in the range of 20-30 bps, which is the level by cycle and
corresponds to the central macroeconomic scenario. Furthermore, stress
scenarios are made and according to them the expected level is higher and
depends on various variables and parameters that are defined in the scenarios
and can change in the range of 15-60 bps. This is how the CNB sets
it.

 

Thirty-second question:

The shareholder, Mr Dobransky, also asked for a numerical expression of the
range for the management
buffer.

 

Mr Šperl informed that the management buffer is defined in KB as a range of
50-200 bps above the Minimum Capital Requirement. This figure was 15.2 at the
end of the year 2021, which was 600 bp above the capital adequacy.

 

Mr Henzl thanked and asked whether anyone had an oral request for an
explanation, a proposal, a counter-proposal or a protest on this item on the
agenda. This was not the
case.

 

Item 2 - Position of the Supervisory Board on the annual financial statements
for the year 2021, on the proposal for the distribution of profit for the year
2021 and on the consolidated financial statements for the year 2021; Report of
the Supervisory Board on its activity; and Supervisory Board's information on
the results of the examination of the Board of Directors' report on relations
among related entities for the year
2021

Mr Pavel Henzl stated that the Supervisory Board's position and report were
published together with other documents for the General Meeting on 18 March
2022.

 

The Chairman of the General Meeting, Mr Pavel Henzl, said that there was no
vote on the report and asked the Vice-Chairwoman of the Supervisory Board, Ms
Wendel, for her
opinion.

 

Ms Wendel presented, on behalf of the absent Chairman of the Supervisory
Board, the Supervisory Board's comments on the annual financial statements for
the year 2021, on the proposal for distribution of profit for the year 2021,
on the consolidated financial statements for the year 2021, on the Report of
the Board of Directors on relations among related entities prepared under the
Business Corporations Act and information on the Supervisory Board's control
activities for the period from the General Meeting held on 2 Nov 2021 to
today's General Meeting.

 

The Supervisory Board, in accordance with the Articles of Association of the
Bank, reviewed the annual financial statements of Komerční banka a.s. as at
31 December 2021 and the consolidated financial statements as at the same date
in accordance with the International Financial Reporting Accounting Standards
(IFRS).

 

The Supervisory Board, after reviewing the Bank's annual and consolidated
financial statements for the period from 1 January to 31 December 2021 and
based on the opinion of an external auditor, notes that the accounting records
and records have been kept in a conclusive manner and in accordance with the
generally binding regulations governing the keeping of the Bank's accounts, as
well as in accordance with the Bank's Articles of Association. The accounting
records and records show the financial situation of Komerční banka, a.s.
from all important aspects. The financial statements prepared on the basis of
these accounting records give a true and fair view of the subject of the
Bank's accounting and financial
situation.

 

The Supervisory Board recommends the General Meeting to approve the annual
financial statements as well as the consolidated financial statements for the
year 2021 as proposed by the Board of Directors of the
Bank.

 

The Supervisory Board of the Bank has reviewed the Board of Directors'
proposal for the distribution of net profit for the financial year 2021 in
accordance with the provisions of the Bank's Articles of Association, and
since the proposal for the distribution of profit is in accordance with the
legal regulations and the Bank's Articles of Association, the Supervisory
Board recommends to the General Meeting to approve the proposal for its
distribution as proposed by the Board of Directors of the
Bank.
 

 

The Supervisory Board has reviewed the Report on Relations among Related
Entities in the year 2021 and on the basis of the submitted documents states
that no contract or agreement concluded, other legal action taken or accepted
by Komerční banka, a. s., or any influence otherwise imposed by Société
Générale, has caused Komerční banka, a. s. any harm in the financial year
from 1 January 2021 to 31 December
2021.
 

 

Subsequently, Ms Wendelová informed shareholders about the supervisory
activities of the Supervisory Board of Komerční banka, a. s., since the last
General Meeting to
date.

 

The Supervisory Board has been continuously informed about the activities of
the bank in the past period. It has been regularly presented with reports and
analyses. In particular, the Supervisory Board evaluated the functionality and
effectiveness of the Bank's management and control system. The Supervisory
Board noted that the management and control system is effective and covers all
the Bank's activities, while there are some areas for improvement for which
action plans have been adopted. Furthermore, the Supervisory Board discussed
the internal audit actions and their results, including proposed remedial
measures, and at the same time expressed its favourable opinion on the
strategic internal audit plan for the period 2023-2026 and the annual internal
audit activity plan.

 

The Supervisory Board was informed about risk management, including compliance
risk management, and discussed material related to significant transactions.
The Supervisory Board discussed the Bank's quarterly economic results and its
position on the market with regard to the development of the macroeconomic
environment.

 

It also discussed the budget of the KB Financial Group for the year 2022. The
Supervisory Board also discussed the annual analysis of the resolution of all
complaints sent to KB as well as to its ombudsman. It was regularly informed
about all steps taken within the KB 2025 Plan.

 
 

The Supervisory Board also proposed an external auditor for the year 2022 to
the General Meeting on the basis of a proposal from the Audit Committee. The
Supervisory Board also based its work on four of its committees. It extended
the competency of the Appointment Committee to monitor the setting of ethical
rules at the Bank, including anti-corruption and conflict of interest rules,
the results of compliance with them and the measures taken. The Appointment
Committee discussed the re-election of the members of the Board of Directors,
namely of Mr David Formánek and Miroslav
Hiršl.

 

At the same time, it assessed the suitability of the members of the
Supervisory Board and the Board of Directors for the performance of their
offices and the collective suitability of the Board of Directors in its
management function and the Supervisory Board in its supervisory function, in
accordance with General Guidelines EBA/GL/2017/12 for assessing the
suitability of members of the Management
Body.

 

The Remuneration Committee discussed issues relating to the remuneration
system of the Bank's employees, in particular the rules for the design of
salaries and the payment of bonuses, including deferred bonuses and the link
between bonus payments and key performance indicators. It also discussed
issues relating to the remuneration of members of the Board of Directors and
internal control functions, the setting of their key performance indicators
and reported on the updating of the remuneration principles. It was also
informed about the results of collective bargaining and the results of the
audit of the remuneration system.

 

The Risk Committee dealt with issues relating to the Bank's risk management
system, including the credit risk profile of the Bank. At the same time, the
Supervisory Board was always informed at its meetings about matters discussed
by the Audit Committee. All committees regularly informed the Supervisory
Board about their activities and within their competencies they recommended to
it further
procedures.

 

Individual members of the Board of Directors and the executive officers of the
Bank commented on the materials submitted to the Supervisory Board directly at
the meetings. On the basis of the recommendations of its committees, the
Supervisory Board then took its decisions within its competency given by the
law and the Bank's Articles of
Association.

 

Within its competency, the Supervisory Board set bonuses for the members of
the Board of Directors for the year 2021 at a total amount of CZK 35,906,000.
In determining the bonus, it based itself on the deferred variable
remuneration scheme and, in particular, on the Bank's overall results, taking
into account the consistency of these results with the Bank's strategy, its
objectives, acceptable risk levels and long-term interests. The Supervisory
Board assessed all these indicators and set bonuses for the members of the
Board of
Directors.

 

Ms Wendel noted that the Supervisory Board monitored the performance of the
tasks of the Board of Directors, supervised the performance of the Board of
Directors, supervised the accounting records and other financial records of
Komerční banka, a. s., the efficiency, overall functionality and
effectiveness of the management and control system, which it regularly
evaluated. Last but not least, it noted that the Bank's business activities
were carried out in accordance with the legal regulations and the Articles of
Association of the Bank and thanked for the
attention.

 

Subsequently, the Chairman of the General Meeting, Mr Pavel Henzl, thanked Ms
Wendel for the position of the Supervisory Board and asked whether any written
request for an explanation, a proposal, a counter-proposal, or a protest had
been submitted on this item on the agenda. This was not the case.

 

He also asked whether anyone had an oral request for an explanation, a
proposal, a counter-proposal, or a protest on this item on the agenda. This
was not the case.

 

 

Item 3 - Discussion over the Audit Committee's report on the results of its
activity for the year
2021

 

The Chairman of the General Meeting, Mr Pavel Henzl, stated that the Audit
Committee's report had been published together with the other documents for
the General Meeting on 18 March 2022 and that there was no vote on the report.

 

He then invited the Chairwoman of the Audit Committee, Ms Wendel, to present
the Audit Committee's
report.

 

Ms Wendel stated that she would present the Audit Committee's report on the
progress and results of its work for the period from the General Meeting on 21
April 2021 to today's General
Meeting.

 

During this period, the Committee met in seven ordinary meetings. The Audit
Committee's main activity over the past period can be divided into four areas.
The number one area is the supervision of the Bank's financial reporting.
Within its competency, the Audit Committee followed the process of preparing
the annual financial statements and consolidated financial statements and
commented on the consistency and integrity of the Bank's accounting and
financial reporting system.

 

The Committee relied on information and documentation submitted by the Bank's
management and the external auditor to request and receive additional
information and explanations as necessary. The Audit Board did not find any
errors in this area.

 

The second area of activity of the Audit Committee was the assessment of the
effectiveness of the Bank's internal controls and risk management system. In
this context, the Committee monitored the effectiveness of the internal audit
and its functional independence in particular by discussing the regular
reports of the Internal Audit Department on its activity, the content and
results of the actions undertaken, the remedial actions imposed and the state
of their implementation.

 

The Committee also addressed the risk mapping, including the IT, security and
Know Your Client areas, the Annual Internal Audit Plan for the year 2022 and
the Strategic Audit Plan for the period
2023-2026.

 

The Audit Committee used the opportunity to engage with the management of the
Internal Audit and Risk Management, making recommendations and receiving any
additional information it requested. On this basis, the Committee made
recommendations on matters related to the Internal Audit of the Board of
Directors of the Bank, monitored the way the Bank's management responded to
the department's findings and recommendations and did not find any serious
deficiencies.

 

The Committee discussed the overall functionality and effectiveness of the
Bank's governance system for the year 2021, noting that the system covers all
key risks of the Bank, with some areas for improvement, for which plans were
adopted. The Audit Committee considered the internal audit and risk management
activities to be effective and concluded that the main risks of the Bank had
been properly identified and
managed.

 

A third area of interest was the assessment of the external auditor's
performance and independence. Throughout the period, Deloitte Audit, s.r.o.
acted as the external auditor of the Bank. The Committee was informed about
the external audit activities in the preparation of the financial statements
for the year 2021 and the ongoing activities of the external auditor, whose
representatives participated in the meetings of the Audit Committee and
answered the questions of the Committee. The Audit Committee also discussed
the contract with the external auditor and did not object. The Committee
discussed, among other things, the Constructive Service Letter prepared by
Deloitte Audit, s.r.o., dealing with the external auditor's findings during
the audit of the financial statements for the year 2021, including
recommendations of remedial measures for their resolution.

 

The Committee followed the course of the statutory audit and noted that the
Bank's management followed the recommendations of the external auditor. The
Committee also discussed the so called "Extended Report" of the external
auditor on the audit results for the year 2021. The Audit Committee was also
obliged to assess the independence of Deloitte Audit, s.r.o. with regard to
the function of the external auditor and the provision of additional, i.e.
non-audit services to the Bank by companies of the Deloitte
Group.

 

The Audit Committee noted that the external auditor met the conditions of
independence. Furthermore, the Committee recommended to the Supervisory Board
to submit a proposal to the General Meeting for approval of Deloitte Audit,
s.r.o. as the Bank's external auditor also for the year 2022.

 

The last important area of the Audit Committee's activities is discussing the
financial results of the Komerční banka Group and presentations for
investors. The Audit Committee regularly discussed the results of the Bank's
financial group for individual quarters and the budget for the year 2022.
Attention was also paid to the capital adequacy of the Bank and the entire
financial group, the objectives and impacts of regulation, including the
expected development of this indicator in the future period. The Committee was
also presented with information on the credit risk profile of the
Bank.

 

The Committee also discussed the annual financial results of the KB financial
group for the year 2021 and the statements and annexes of KB's consolidated
and annual financial statements as of 31 December 2021, prepared according to
the International Financial Reporting Standards, and a proposal for
distribution of profit for the year 2021. The Committee regularly addressed
the impact of the pandemic situation on the Bank's finances and discussed
updating the Bank's strategic plan. The Committee was regularly presented with
presentations of the Komerční banka Group's results quarterly intended for
investors in Komerční banka's shares traded on the public
market.

The Committee has given a positive assessment of the submitted material and
considers the level of information and consistency of the data provided to
investors to be
adequate.
 

 

At all meetings of the Audit Committee, the relevant members of the Board of
Directors and executive officers of the Bank presented and commented on the
submitted materials. Representatives of the external auditor always attended
the meetings. Additional reports and information requested by the audit
committee were also
submitted.

The Committee also discussed and approved a report on its activities over the
past period and submitted it to the Public Audit Oversight Board.

 

The Audit Committee exercised all its competences in accordance with the
statutory regulations and the Articles of Association of the Bank. Ms Wendel
then thanked the shareholders for their
attention.

 

The chairman of the General Meeting, Mr Pavel Henzl, thanked Ms Wendel for the
report on the results of the Audit Committee's activities and asked whether
there had been a written request for an explanation, a proposal, a
counter-proposal, or a protest on this item on the agenda. This was not the
case.

 

He then asked whether anyone had an oral request for an explanation, a
proposal, a counter-proposal, or a protest on this item on the agenda. This
was not the case.

 

Mr Henzl had received one written request, which was not related to Ms
Wendel's presentation, but related to the previous
part.

 

Thirty-third question:

The shareholder, Mr Petr Veselý, submitted a written question about KB's view
of the trend of competing banks, of the closure of subsidiaries providing
building savings and the transfer of products to the Banks' portfolio?

 

Mr Hiršl replied that it was impossible to separate the existence of building
savings banks from the legislative framework, which is still evolving over the
years, which does not change the fact that the pursuit of greater efficiency,
synergy, the joint use of resources is necessary and correct. He informed that
one step, which will be seen next year, is internally called One Mortgage
Factory, by which both providers of home loan products secured by real estate,
which is now Komerční banka and its mortgages, and on the other side, Modrá
Pyramida building savings bank, its Hypoloan or bridging loan from building
savings, will produce everything in one place under one roof, already on
product development, with one team of people. A business pilot is planned for
the beginning of next year and full launch is expected in the course of the
year 2023. This intention could be disrupted by a change in the legislative
framework, which cannot be ruled
out.

 

Mr Henzl thanked Mr Hiršl and asked whether anyone had an oral request for an
explanation, a proposal, a counter-proposal or a protest on this item on the
agenda. This was not the
case.

 

 

Item 4 - Approval of the annual financial statements for the year 2021

 

Comments on this point were heard by shareholders under item 1, the annual
financial statements for the year 2021 are contained in the Annual Report,
which is stored in their tablet.

 

According to the data on the monitor, Mr Henzl stated that before the vote on
the proposal to be presented, the General Meeting represented a quorum and was
competent to take decisions, as there were shareholders with shares with a
nominal value representing a total of 78.862278 % of the Bank's registered
capital.

 

He then presented a draft resolution of the General Meeting, which the
shareholders will vote on.

 

 

Resolution seven:

The General Meeting approves the Annual Financial Statements of Komerční
banka, a. s. for the year 2021 in the wording submitted by the Board of
Directors and published on the internet pages of Komerční banka, a. s.

 

Then the Chairman of the General Meeting, Mr Pavel Henzl, stated that an
absolute majority of votes of the attending shareholders is required for the
adoption of this resolution. Subsequently he called on the shareholders to use
the electronic voting device in voting round 7.

 

After completion of the voting, the Chairman of the General Meeting, Mr Pavel
Henzl, stated that according to the information on the monitor the resolution
was adopted.

 

The final results of the voting on Resolution seven were as follows:

in favour voted shareholders having 148,608,967 votes, which corresponds to
99.774348 % of the present number of votes, shareholders having 21 votes,
which corresponds to 0.000014 %, voted against, and shareholders having
336,077 votes, which corresponds to 0.225638 % of the present number of votes,
abstained from voting.

 

 

 

Item 5 - Decision on the distribution of profit for the year 2021

 

The Chairman of the General Meeting, Mr Pavel Henzl, stated that the
shareholders had listened to the comment as part of item 1, the draft
resolution as well as its reasoning are stated in the Notice of General
Meeting. At the same time, the shareholders have the document "Conditions and
the method of payment of the share on profit" at their disposal in their
tablet.

 

According to the data on the monitor, Mr Henzl stated that before the vote on
the proposal to be presented, the General Meeting has a quorum and capacity to
take decisions, as there are shareholders with shares with a nominal value
representing a total of 78.862278 % of the Bank's registered capital.

 

 

He then presented the draft resolution of the General Meeting as follows:

 

 Resolution Eight:

 The General Meeting approves the distribution of the profit of Komerční
 banka, a. s., for the year 2021 in the amount of CZK 12,353,459,613.98 as
 follows:

 Share in the profit to be distributed among shareholders

 (dividends)
                                      8,324,158,588.00
 CZK

 Retained
 earnings
 4,029,302,025.98 CZK

 The amount of the dividend per share is CZK 43.8 before taxation. The dividend
 can be claimed by each shareholder holding a share of Komerční banka, a. s.,
 with ISIN CZ0008019106 as of 29 April 2022. The dividend shall be due on 23
 May 2022.

 

 

Then the Chairman of the General Meeting, Mr Pavel Henzl, stated that an
absolute majority of votes of the attending shareholders is required for the
adoption of this resolution. Subsequently he called on the shareholders to use
the electronic voting device in voting round 8.

 

After completion of the voting, the Chairman of the General Meeting, Mr Pavel
Henzl, stated that according to the information on the monitor the resolution
was adopted.

 

The final results of the voting on Resolution Eight were as follows:

in favour voted shareholders having 148,794,582 votes, which corresponds to
99.845337 % of the present number of votes, shareholders having 100,051 votes,
which corresponds to 0.067137 %, voted against, and shareholders having
130,435 votes, which corresponds to 0.087526 % of the present number of votes,
abstained from voting.

 

 

 

 

Item 6 - Approval of the consolidated financial statements for the year 2021

 

The Chairman of the General Meeting, Mr Pavel Henzl, stated that the
shareholders had heard the comment under item 1. The consolidated financial
statements for the year 2021 are contained in the Annual Report, which is
stored in their tablet.

 

According to the data on the monitor, Mr Henzl stated that before the vote on
the proposal to be presented, the General Meeting represented a quorum and was
competent to take decisions, as there were shareholders with shares with a
nominal value representing a total of 78.862278 % of the Bank's registered
capital.

 

He then submitted the draft resolution of the General Meeting as follows:

 

 Resolution Nine:

 The General Meeting approves the consolidated financial statements of
 Komerční banka, a. s., for the year 2021 in the wording submitted by the
 Board of Directors and published on the website of Komerční banka, a. s.

 

 

Then the Chairman of the General Meeting, Mr Pavel Henzl, stated that an
absolute majority of votes of the attending shareholders is required for the
adoption of this resolution. Subsequently he called on the shareholders to use
the electronic voting device in voting round 9.

 

After completion of the voting, the Chairman of the General Meeting, Mr Pavel
Henzl, stated that according to the information on the monitor the resolution
was adopted.

 

The final results of the voting on Resolution Nine were as follows:

in favour voted shareholders having 148,462,912 votes, which corresponds to
99.797138 % of the present number of votes, shareholders having 818 votes,
which corresponds to 0.000549 %, voted against, and shareholders having
301,335 votes, which corresponds to 0.202313 % of the present number of votes,
abstained from voting.

 

 

Item 7 - Discussion over the explanatory report on matters under Sec. 118 (5)
(a) - (k) of Act No. 256/2004 Coll., the Capital Market Undertakings Act as
amended

 

Mr Henzl stated that the text of the Explanatory Report on matters required
under the Capital Market Undertakings Act is available to shareholders in a
tablet. This report must be submitted by the Board of Directors to
shareholders at a general meeting each year and must explain the defensive
structures and mechanisms in the event of a takeover bid.

 

The Board of Directors submits this summary explanatory report to shareholders
and declares that it provides all information concerning the matters required
by the aforementioned provisions of the Capital Market Undertakings Act.

This report shall not be put to the vote.

 

Mr Pavel Henzl asked whether a written request for an explanation, a proposal,
a counter-proposal or a protest had been submitted on this item on the agenda.
This was not the case.

He also asked whether anyone had an oral request for an explanation, a
proposal, a counter-proposal or a protest on this item on the agenda. This was
not the case.

 

 

Item 8 - Discussion over the Board of Directors' report on relations among
related entities for the year 2021

 

Mr Henzl noted that the report on relations is attached to the Annual Report,
which the shareholders have in their tablet. Under the Business Corporations
Act, the Board of Directors is obliged to draw up and subsequently inform the
shareholders of the conclusions of the report on relations among related
entities. The Board of Directors reviewed all relations between the Bank and
the companies that are part of the business grouping for the financial year
2021 and stated that no contract, agreement, other legal acts made or accepted
by the Bank or any influence otherwise exerted by Société Générale S.A. as
a controlling entity, caused any harm to the Bank.

 

This report is not voted on.

 

Mr Pavel Henzl asked whether a written request for an explanation, a proposal,
a counter-proposal or a protest had been submitted on this item on the agenda.
This was not the case.

He also asked whether anyone had an oral request for an explanation, proposal,
counter-proposal or a protest on this item on the agenda.

 

Thirty-fourth question:

The shareholder, Mr Dobransky, noticed that Société Générale had one of
the most significant exposures to the Russian market from European banks and
wondered whether this could in any way affect Komerční Banka's business.

 

The question was answered by the CEO, Mr Juchelka, who informed that Société
Générale had decided to cease its business in Russia and to sell all its
banking and insurance activities within the Russian Federation. Its exposure
on the spot was approximately the equivalent of EUR 15 billion, which is
approximately the size of the balance sheet of Rosbank's sister bank and
approximately another EUR 3-4 billion was within the so-called offshore
exposure, which is booked in London or Paris. None of these decisions and
neither the existing exposure of SG Group nor the decision to sell and exit
the Russian market have any direct influence on Komerční banka's business.

 

Mr Dobranský then clarified to the question whether this situation has an
indirect influence on Komerční banka's business.

 

Mr Juchelka asked for clarification, KB is not a shareholder of Rosbanka and
has a minimum direct exposure to the Russian Federation through the financing
of some Czech exporters from the past. None of these indicators have any
material influence on KB's financial performance. The only link that exists is
the fact that SG Group is a 60 % shareholder of Komerční banka and at the
same time was a 100 % shareholder of Rosbanka. Thus, it has no influence on
Komerční banka.

 

Mr Henzl then moved on to the next item on the agenda.

 

 

Item 9 - Approval of the acquisition of own shares

 

Mr Henzl stated that Mr Šperl had provided information on this item to
shareholders in the context of discussion the financial statements. Both the
draft resolution and the statement of reasons were included in the Notice of
GM.

 

 

Mr Pavel Henzl asked whether a written request for an explanation, a proposal,
a counter-proposal or a protest had been made on this item on the agenda. This
was not the case.

He then asked whether anyone had an oral request for an explanation, a
proposal, a counter-proposal or a protest on this item on the agenda.

 

 

Thirty-fifth question:

The representative of Helens raised an additional question concerning the
price range, which is wide and the nominal number of potentially acquired
shares is high. At the maximum, at the maximum price and the maximum number,
this can be as high as 34.7 % of the equity of the bank. Why is such a large
volume of shares proposed and why is the price range so wide?

 

Mr Šperl stated that the price range was chosen so wide deliberately, also
because of the volatility of the share prices on the capital markets.

 

The representative of shareholder Helens stated that it was 10 % of all public
shares issued by the Bank. Mr Šperl stated that it was a parameter.

 

Mr Pavel Henzl asked if anyone had any further questions. This was not the
case.

 

According to the data on the monitor, Mr Henzl stated that before the vote on
the proposal to be presented, the General Meeting represented a quorum and was
competent to take decisions, as there were shareholders with shares with a
nominal value representing a total of 78.858677 % of the Bank's registered
capital.

 

 

 Resolution Ten:

 The General Meeting consents to the acquisition of own ordinary shares of a
 nominal value of CZK 100 under the following conditions:

 ·    The maximum number of shares that can be held by the Bank at any
 specific moment shall be 19,004,926 pieces of ordinary shares representing the
 total nominal value of CZK 1,900,492,600.

 •     The share acquisition value must be at least CZK 1.00 per piece
 and no more than CZK 2,100.00 per piece.

 •     The time for which the Bank may acquire the shares is 5 years.

 ·    Shares may not be acquired by the Bank should such acquisition breach
 the conditions stipulated in Sec 301 (1) (b) and (c) and Sec 302 of the
 Business Corporations Act or, as the case may be, any other applicable
 legislation of the Czech Republic or of the European Union.

 

Afterwards, the Chairman of the General Meeting, Mr Pavel Henzl, stated that
an absolute majority of the votes of the shareholders present was required for
the adoption of this resolution. He then called on the shareholders to use the
electronic voting device in the voting round 10.

 

After completion of the voting, the Chairman of the General Meeting, Mr Pavel
Henzl, stated that according to the data on the monitor the resolution had
been adopted.

 

The final results of the vote on the Resolution Ten were as follows:

in favour voted shareholders having 147.673.255 votes, which corresponds to
99.103403 % of the present number of votes, shareholders having 1.078.458 818
representing 0.723752 %, voted against, and shareholders having
257.555 votes, which corresponds to 0.172845 % of the present number of
votes, abstained from voting.

 

 

Item 10 - Approval of the Report on Remuneration for the year 2021

 

Mr Henzl stated that the Board of Directors presents to shareholders the
Report on Remuneration prepared on the basis of a proposal from the
Remuneration Committee. This is a full overview of the remuneration, including
the benefits provided to the members of the Bank's bodies for the financial
year 2021. The auditor verified that the Report on Remuneration contains the
information required by the Capital Market Undertakings Act. The Report on
Remuneration is included in the tablet for shareholders. Both the draft
resolution and the justification are included in the Notice of GM.

 

Mr Pavel Henzl asked whether a written request for an explanation, a proposal,
a counter-proposal or a protest had been submitted on this item on the agenda.
This was not the case.

He also asked whether anyone had an oral request for an explanation, a
proposal, a counter-proposal or a protest on this item on the agenda. This was
not the case.

 

According to the data on the monitor, Mr Henzl stated that before the vote on
the draft resolution to be presented, the General Meeting represented a quorum
and was competent to take decisions, as there were shareholders present with
shares with a nominal value representing a total of 78.856030 % of the Bank's
registered capital.

 

 

 Resolution Eleven:

 The General Meeting approves the Report on Remuneration for the year 2021 in
 the wording submitted by the Board of Directors.

 

Afterwards, the Chairman of the General Meeting, Mr Pavel Henzl, stated that
an absolute majority of the votes of the shareholders present was required for
the adoption of this resolution. He then called on the shareholders to use the
electronic voting device in the voting round 11.

 

After completion of the voting, the Chairman of the General Meeting, Mr Pavel
Henzl, stated that according to the data on the monitor the resolution had
been adopted.

 

The final results of the vote on the Resolution Eleven were as follows:

in favour voted shareholders having 125,615,284 votes, which corresponds to
84.348433 % of the present number of votes, shareholders having 23,214,833
representing 15.588348 %, voted against, and shareholders having 94,148 votes,
which corresponds to 0.063219 % of the present number of votes, abstained from
voting.

 

 

Item 11 - Decision on the appointment of a statutory auditor to make the
statutory audit for the year 2022

 

The chairman, Mr Henzl, said that Mr Šperl had given information on this item
to shareholders in the context of the financial statements. Both the draft
resolution and the justification of reasons were included in the Notice of GM.

 

Mr Pavel Henzl asked whether there had been a written request for
explanations, a proposal, a counter-proposal or a protest on this item on the
agenda. This was not the case.

He then asked whether anyone had an oral request for explanations, a proposal,
a counter-proposal or a protest on this item on the agenda. This was not the
case.

 

According to the data on the monitor, Mr Henzl stated that before the vote on
the proposal that would be presented, the General Meeting represented a quorum
and was competent to take decisions, as shareholders with shares with a
nominal value representing a total of 78.856030 % of the Bank's registered
capital were present.

 

 

 Resolution Twelve:

 The General Meeting appoints company Deloitte Audit s.r.o. with its registered
 office at Italská 2581/67, Vinohrady, 120 00 Praha 2, identification No.
 49620592 as the external auditor of Komerční banka, a. s., for the year
 2022, and company Deloitte Audit s.r.o. with its registered office at Digital
 Park II, Einsteinova 23, Bratislava 851 01, as the external auditor of the
 branch of Komerční banka, a. s. located on the territory of the Slovak
 Republic.

Afterwards, the Chairman of the General Meeting, Mr Pavel Henzl, stated that
an absolute majority of the votes of the shareholders present was required for
the adoption of this resolution. He then called on the shareholders to use the
electronic voting device in the voting round 12.

 

After completion of the voting, the Chairman of the General Meeting, Mr Pavel
Henzl, stated that according to the data on the monitor the resolution had
been adopted.

 

The final results of the vote on the Resolution Twelve were as follows:

in favour voted shareholders having 148,545,616 votes, which corresponds to
99.692189 % of the present number of votes, shareholders having 262,578 which
represents 0.176222 %, voted against, and shareholders having 196,074 votes,
which corresponds to 0.131590 % of the present number of votes, abstained from
voting.

 

 

Subsequently, the Chairman of the General Meeting, Mr. Pavel Henzl, said that
all items on the agenda of today's General Meeting of shareholders of
Komerční banka had been exhausted. On the screens in the vestibule and in
the tablets of shareholders are available voting protocols with exact voting
results for individual resolutions of today's General Meeting.

 

The Chairman of the General Meeting, Mr Pavel Henzl, informed the shareholders
that minutes of this meeting will be made within 15 days. The minutes and the
results of voting on individual resolutions can also be found on internet
address - website of Komerční banka.

 

In conclusion, Mr Henzl thanked the shareholders for their participation and
active approach to proceedings of the General Meeting.

 

 

Enclosures:

1. Written requirements of shareholders for explanations

2. Sheet of shareholders present

 

 

Minutes clerk: Markéta Batalová

 

Minutes verifier: Alena Krčilová

 

Chairman of the General Meeting: Pavel Henzl

 

 

 

 

 

 

 

 

General Meeting of KB 2022

Shareholder Martin Müller

 

No. 1 Questions for KB representatives

 

Interest rates, inflation and economic development

1) At the General Meeting of 2019, Mr Šperl said in response to my question
"... in the case of KB, one increase in the Repo rate leads to an improvement
in the results in interest income by about CZK 200 million."

Is this still the case? Or how did this value change when the Repo rate was
raised by 0.25%? Am I able to calculate this value? How?

2) What interest rate development do you expect in 2022?

3) We have a period of high inflation. In which areas does high inflation have
a positive effect on KB's business. And in which areas, on the other hand,
does high inflation have a negative effect on KB's business.

4) What should be the overall impact of high inflation on KB's business,
rather positive or rather negative?

5) What do you expect to see in inflation in 2022 and further in 2023?

 

Mortgages

1) What impact do you expect from increased interest rates for the development
of mortgage provision?

2) Do you observe increased "delinquency" (delays in instalment payments,
inability to pay instalments, ...) in mortgages compared to previous years? If
so, what do you attribute it to?

3) How do you expect that increasing interest rates or anything else will
affect "delinquency" in 2022 and 2023?

 

Fintech - similar questions as in 2019         /

1) Threat or opportunity for KB in 2022?

2) Please note the development of the share of KB and competitors in this
market in 2019-2021 in terms of individual metrics (number of downloaded
applications, number of users, number of transactions, ...)? Who do you
perceive as the biggest competitor in this area?

3) How many percent of KB's clients use third-party applications to control
their account with KB? What is the trend and what rate? Does the number of KB
clients using third-party applications increase/decrease and does the rate
accelerate or slow over time?

4) How does the number of KB clients grow who use exclusively third-party
applications to control their accounts with KB?

5) How far is KB in the possibility of controlling other banks' accounts
through the KB application? And how interesting is this for clients (% of
people who use it + trend)?

 

Debit and credit cards, cross-border transactions.

1) What volume and number of transactions are cross-border transactions with
debit and credit cards out of the total volume and number of transactions?
Please state the development in 2018-2021.

 

2) Does KB as a card issuer have a greater percentage of income (from an
individual transaction) from a cross-border transaction than from a domestic
transaction? How is it different? Is a cross-border transaction with the same
nominal amount of payment more advantageous for KB as a card issuer (has it a
greater income from it)?

3) KB has about a 3% spread between the mid-point and card payment rates,
right? Is this spread the whole additional income for KB in cross-border
transactions (in addition to income as a card issuer)?

4) Despite the fact that I like KB and am its shareholder, I started using
Revolut instead of direct payment with a KB card in cross-border transactions.
For reasons of the just large forex spread. Are you able to trace this
behaviour with other KB clients? What is the development of the number or % of
people who send money from KB to Revolut (or other similar services?

5) What is the difference in KB's income as a card issuer if I pay the same
amount in the store or send money to myself through a card to Revolut?

 

Dividend for the upcoming years

1) In how many instalments and when do you expect to pay undistributed profits
from 2019 and 2020?

2) How big should we as shareholders expect the size of this amount per share?

 

When I get an email from KB, it writes to me "information" or "mujnazor" and
not "KB" or "Komerční Banka"

I am very annoyed that when I get an email from KB, I never know immediately
that it is from KB. Even Česká Pošta can introduce itself. KB still can't
do it. Isn't it time to do something about it? So that KB can build a brand
through email communication as well? I tried it with "Suggestions for
improvement" and "mujnazor", but still nothing is happening. So I am trying it
at the general meeting.

 

information             Received mail:  We wish you all the best
on your birthday (business communication) - Happy birthday...

 

information             Received mail: Prevent misuse of your
payment card - Good day, the time for Christmas and shopping is approaching,
which unfortunately...

 

mujnazor, I 2          Received mail: We are interested in your
opinion on the new service • with the name of KB and or Komerční Banka and
not as "i…

 

Česká pošta    We have received your shipment

 

Thank you all for your answers and wish a successful year 2022

 

Martin Müller

 

 

No. 2 Questions for KB representatives

 

Shareholder Petr Veselý:

How does KB view the trend of competing banks to discontinue daughters
providing building savings and move products to the banks' portfolio?

 

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