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Foto gebouw. Impact of IFRS. Disclaimer. - PowerPoint PPT Presentation
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2
Disclaimer
By its nature, the information in this presentation involves numerous assumptions, uncertainties and opportunities, both general and specific. We caution readers of this presentation not to place undue reliance on this information as a number of factors could cause future Group results to differ materially.
All data in this document are unaudited and are meant as indications necessary to illustrate the changes introduced by IFRS which will affect future reportings.
KBC undertakes no obligation to revise or update any information to reflect changes in policy, events, expectations or otherwise.
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Content
1. Disclosure headlines
2. Impact on financial statements 2004
3. Impact on financial statements 2005
4
Headlines
22
33Corrections due to the first time application of IFRS valuation rules in opening B/S on 1-Jan-04 (exception: first time application of IAS 32/39 and IFRS 4 in opening B/S on 1-Jan-05)
Comparative figures of 2004 available (excluding impact of IAS 32/39 on financial instruments and IFRS 4 on insurance contracts)
First IFRS reporting 1Q 200511
Headlines – Impact 2004 – Impact 2005
5
Disclosure schedule, 2005
• New IFRS templates
• FY04 IFRS income statement and B/S (excl. impact IAS 32/39 and IFRS 4)
• Impact of IAS 32/39 on shareholders equity in opening B/S of 1-Jan-05Apr 28, 2005Apr 28, 2005
• 1Q05 earnings (full set of IFRS interim financial statements and notes)
• 1Q04, 2Q04, 3Q04 and 4Q04 earnings (IFRS reference P/L and B/S, incl. segments, excl. impact of IAS 32/39 and IFRS 4)
Jun 9, 2005Jun 9, 2005
Mar 23, 2005Mar 23, 2005
Headlines – Impact 2004 – Impact 2005
6Headlines – Impact 2004 – Impact 2005
Segment information, 2005
Financial statements
6 business segments
1) Banking2) Insurance 3) Asset Management 4) European private banking* 5) Specialized investment activities*6) Holding Co
P/L and B/S
3 geographical segments
1) Belgium2) CEE3) Rest of world
Key income figures
Management reporting
6 customer segments
1) Retail 2) CEE3) European private banking* 4) SME/corporate5) Capital Markets6) Specialized investment activities* + Group Item (= non-allocated activities)
P/L
* Temporarly solution for 2005: KBL and Gevaert as non-integrated divisions
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Main changes in valuation rules, 2004
Impact on earnings
Impact on book value
Impact start
Presentation of own equity before profit appropriation (instead of after profit appropriation)
X 2004
Stricter criteria for recognition of provisions (IAS 37) X X 2004
Recognition of deficit/excess of defined benefit pension plans (DBP) (IAS 19)
X X 2004
Broader criteria for recognition of deferred taxes (IAS12) X X 2004
Reclassification from operating to finance lease (IAS 17) X X 2004
Correction of depreciation of tangible assets and capitalisation of internal software (IAS 16/38)
X X 2004
Impairment testing of goodwill and no further depreciation (IAS 36 and IFRS 3)
X X 2004
Misceleneous other changes with limited impact, such as inclusion of SPV’s in scope of consolidation, etc.
X X 2004
Headlines – Impact 2004 – Impact 2005
8
IFRS Income statement FY 2004*
m euros KBC (Old)
KBC Group (Mergco)
Net interest incomeGross earned premium, insuranceDividend incomeNet gains from financial instruments at fair valueNet realised gains from available for sale assetsNet fee and commission incomeOther income
3 687 5 158
214 647513
1 029308
3 833 5 158
231725503
1 404479
Gross income 11 555 12 333
Operating ExpensesImpairments - o/w on loans and receivables - o/w on AFS assetsGross technical charges, insuranceCeded reinsurance resultShare in results, associated companies
-4 200-379-201-165
-4 633-6855
-4 944-365-198-150
-4 633-6822
Profit before taxes 2 329 2 345
Income tax expense
Minority interests
-498-172
-537-193
Net profit 1 659 1 615
* Non-audited figures (excl. impact of IFRS 4 and IAS 32/39) Headlines – Impact 2004 – Impact 2005
9
-34
-7 +0.4
+5
+38 -10
Net profit2004
BEL GAAP
Net profit2004 IFRS
Impact on profit 2004* - KBC Old
* Non-audited figures (excl. impact of IFRS 4 and IAS 32/39)
-92
1659
1758
Provisions
DBP
Tax Lease
Fixedassets
Goodwill Other
Headlines – Impact 2004 – Impact 2005
10
-35
+2 +0.4
+3
+89
-29
Net profit2004
BEL GAAP
Net profit2004 IFRS
Impact on profit 2004 - KBC Mergco
Non-audited figures excl. impact of IFRS 4 and IAS 32/39
-97
1615
1682 Provisions*
DBP
Tax LeaseFixedassets
Goodwill Other
* Mainly related to reversal of the use of the provision for financial risks in the insurance business
Headlines – Impact 2004 – Impact 2005
11
Impact on EPS 2004 *
EurosKBC (Old)
KBC Group(Mergco)
Basic EPS, Belgian GAAP 5.66 4.59
IFRS adjustments: - reversal of provisions - underfunding of DBP - adjustments of deferred taxes - reclassidication of lease - adjustments on fixed assets - adjustment of goodwill - other - change in definition of no of shares
-0.30-0.11-0.02+0.00+0.02+0.12-0.03+0.06
-0.27-0.10+0.01+0.00+0.01+0.24+0.04+0.08
Total IFRS adjustments -0.26 -0.10
Basis EPS, IFRS 5.40 4.49
* Non-audited figures (excl. impact of IFRS 4 and IAS 32/39) Headlines – Impact 2004 – Impact 2005
12
IFRS Balance sheet, 31-Dec-04 *
m euros KBC(Old)
KBC(Mergco)
Loans and advances to customersSecuritiesLoans and advances to banksDerivative financial instrumentsProperty and equipment (excl invest. property) Goodwill and other intangible fixed assetsInvestments in associated companiesOther assets
106 79890 88727 06515 376
1 782650615
9 160
111 17798 86238 46315 376
2 3001 0861 228
16 671
Deposits from customers and debt securitiesDeposits from banksDerivative financial instrumentsGross technical provisions, insuranceLiabilities under investment contracts, insuranceOther liabilities
141 95542 46017 72813 259
3 93120 847
157 71255 08317 72813 259
3 93123 351
Total equity- Parent company equity- Minorities
12 15410 641
1 513
14 09912 328
1 771
Balance sheet total 252 334 285 163
* non-audited figures (indicative only), excl. impact of IFRS 4 and IAS 32/39 Headlines – Impact 2004 – Impact 2005
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Headlines – Impact 2004 – Impact 2005
Impact on BPS, 31-Dec-04 *
EurosKBC (Old)
KBC Group
(Mergco)
Book value per share, Belgian GAAP 33.84 32.50
IFRS adjustments: - profit appropriation - reversal of provisions - underfunding of DBP - adjustments of deferred taxes - reclassidication of lease - adjustments on fixed assets - adjustment of goodwill - other - change in definition of no of shares
+1.19+0.05-1.31+0.03+0.03+0.28+0.12+0.00+0.35
+1.84+0.00-1.23+0.03+0.02+0.22+0.22+0.02+0.63
Total IFRS adjustments +0.74 1.80
Book value per share, IFRS 34.58 34.30
* non-audited figures excl. impact of IFRS 4 and IAS 32/39, based on 307.7m shares for ‘KBC old’ and on 359.5 m shares for ‘KBC Mergco’
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Headlines – Impact 2004 – Impact 2005
Main changes in valuation rules, 2005
Impact on earnings
Impact on book value
Impact start
Deposit accounting for unit-linked life products (IFRS 4) 2005
Derecognition of catastrophe / equalisation provision (4) X X 2005
Insurance liability adequacy test (IFRS 4) X X 2005
Adjustment of loan losses (NPV-approach and recognition of portfolio-based provisions) (IAS 32/39)
X X 2005
Recognition impairments on equity investments (32/39) X X 2005
Deduction of treasury shares from own equity (32/39) X X 2005
Convertible bonds to be considered as own equity (32/39) X X 2005
Marking to market,‘bonds available for sale’ (IAS 32/39) X 2005
Marking to market, ‘bonds at fair value’ (IAS 32/39) X X 2005
Marking to market, ‘shares available for sale’ (IAS 32/39) X 2005
Marking to market, ‘shares at fair value’ (IAS 32/39) X X 2005
Marking to market, derivatives not held for trading (32/39) X X 2005
15
Disclosure schedule 2005 - reminder
• Impact of IAS 32/39 on shareholders equity in opening B/S of 1-Jan-05Apr 28, 2005Apr 28, 2005
• 1Q05 earnings (full set of interim IFRS financial statements and notes, incl. impact of IAS 32/39 and IFRS 4)
Jun 9, 2005Jun 9, 2005
Headlines – Impact 2004 – Impact 2005
16
Indicative composition of portfolios*
Assets as of2005
Value at 31-12-04 *
Valuation (volatility impact)
Loans and receivables
Mortgages/consumer creditCorporate loans
28.3 bn78.2 bn
Amortized cost (no impact from volatility in valuation)
HTMinstruments
Bonds, banking bookBonds, insurance book
5.9 bn2.5 bn
Amortized cost (no impact from volatility in valuation)
AFS instruments
Bonds, banking bookBonds, insurance bookShares, banking bookShares, insurance bookUnit-linked investments
16.5 bn7.3 bn1.0 bn2.9 bn3.9 bn
Fair Value (adjustments recognized in shareholders’ equity)
Financial instruments at Fair Value
Bonds, banking bookBonds, insurance bookTrading portfoliosDerivatives, banking bookDerivatives, insurance book
18.5 bn0.6 bn
31.5 bnp.m.p.m.
Fair Value (adjustments in P&L)
* Figures for KBC pre-merger, book value according to B-GAAP Headlines – Impact 2004 – Impact 2005
17
Annex
Disclosure on IFRS available in the annual report at www.kbc.com:
Description of major differences between IFRS and B-GAAP
Full P/L and B/S 2004 IFRS with reconciliation to B-GAAP, for both ‘KBC’ (old) and ‘KBC Group’ (Mergco)