So, good afternoon, ladies and gentlemen. Welcome from Komerční banka, and thank you for sharing your time with us today. It is the 6th of February, 2026, and we are going to discuss the results of Komerční banka Group for the Q4 and for the full year 2025. Please note that this call is being recorded. Today we have the entire board of directors together in one room, led by the Chairman and CEO of Komerční banka Jan Juchelka, and we also have Margus Simson, Chief Digital Officer; Miroslav Hiršl, Head of Retail Banking; Katarína Kurucová, Head of Corporate and Investment Banking; Anne de Kouchkovsky, Chief Risk Officer; Jitka Haubová, Chief Operations Officer; and with them, of course, Etienne Loulergue, Chief Financial Officer. As always, we will begin with the presentation of results, which will be followed by a questions-and-answer session.
During the presentation part, all participants will be on listen-only mode. We would appreciate if you could keep your microphones muted during that time. Now let me ask the CEO, Jan Juchelka, to begin the presentation. Thank you.
Thank you, Jakub. Hello everyone, thank you for sharing your time with us. We very appreciate your attention you paid to Komerční. It's my pleasure, together with the top management team, to lead you through the presentation of Q4 2025 results and the full year 2025 results. We can start with page number 4. Komerční in 2025 printed solid growth of financing of Czech economy across the board, all segments, with the emphasis on housing loans. We grew by 6.8% the Q4 , contributed by 4.3%. On the side of deposits, we grew almost by 6%, which we didn't find optimal. This is why, in Q4 , we opened the gate a little bit for gaining a bit more deposits from the market in order to build solid foundations for 2026 commercial and business growth. Assets under management outside the bank grew by 5.5%.
For us, it's a combination of mutual funds made by Amundi, the private banking product engine schemes, and insurance products from Komerční pojišťovna. Here we saw a little drop on the new sales and new origination for the investment products by Amundi. I will come back to it in a bit of in a few minutes in a detail. Balance sheet and capital remains very strong. We are sitting on 17.9% of capital. 17.1% is quarter one. Loans to deposits in safe territory of 83.1%, and both short-term and long-term indicators of liquidity remain far above the requested 100%: LCR for 159% and NSFR for 130%. Full year's results were translated into CZK 18.1 billion net profit. On a reported basis, it's 4.7% growth if we take out the extraordinary income stemming from the sales of the headquarters building last year at Václavské Square in Prague.
We are showing 22.3% on a year-over-year basis growth. It represents CZK 95.61 per share, and all this money will go back to shareholders as we are as a board of directors advising the shareholders' meeting, which will take place in April this year. Cost-to-income ratio of KB remained at 46.1%, return on equity at 14.2%. Looking forward, we will guide or we are guiding the market for 2026 dividend guidance at 80%, the payout ratio, and we feel we are fulfilling our promise that after the extraordinary period of time, which took three consecutive years, where we were giving back 100%, we will go lower, but we are still 15% above the traditional payout ratio, which used to be at 65% before COVID. In the bank, there was one remarkable corporate governance-related event.
We are welcoming Hervé Audren de Kerdrel as a new supervisory board member since 1st January 2026. Hervé is a lifelong banker, which is a retired SG banker joining the team and enlarging the diversity of supervisory boards. In 2025, Komerční made an important step towards the new realities. We are closing our KB 2025 transformation program, probably the largest transformation initiative in the Czech banking history for the last 20 years, where we delivered the fully rebuilt digital platform from the 21st century, replacing the core banking, the accounting and payment systems, and other relevant systems, and launching new client propositions and new applications for the front office in branches for internet banking and for mobile banking. Thanks to that, we are also able to learn new disciplines, how to acquire hundreds of thousands of new clients. In 2025, it was 135,000 new clients using our platform, KB Plus.
The total number of KB Group customers overshot 2.2 million, so currently we are recording 2,268,000 clients whom we are servicing in the entire group. In 2025, we gained a couple of recognitions on the Mastercard Bank of the Year. We were named as the Bank of the Year in corporate banking and Bank Without Barriers . We can move to page number five. Speaking about strategy, let me open this chapter with the statement that we have a completely new, fully digital platform working 24/7 with a multicurrency account in place, in which we are currently finding almost the entire portfolio of our retail clients. So 2025 was a year of a finalization of a huge maneuver of transferring clients from the old to the new system. And we are gaining also the expertise how to onboard, how to activate, and how to cross-sell the new clients.
We will come back to it in detail through my colleague Miroslav Hiršl in a second. We have created a competitive advantage with higher digital sales penetration. We are currently achieving 54%-55%, and heading to 60% of the total sales of our product in a digital way, improving customer satisfaction thanks to the very modern design of our new app and new interface in the internet banking and in the branches. The modern technology is done in the world where we have applicated the agile way of working for the software crafting and software coding, thanks to which we are able to come to the market much faster with new innovations. And we will show you the picture of what might be those in 2026. We were very strict on working on costs. The cost base was redefined.
In 2025, we were super strict, even in the context of our NBI slightly lagging behind our original expectations. So we took the measures on the cost side immediately. And we see that the new platform, combined with much simpler, much faster processes, and much simpler organization, is bringing a higher level of efficiency. We are keeping the bank strong on capital. We will obviously continue with that, not only from the, let's say, strict supervision point of view, which is represented by Czech National Bank, but also by our strong conviction that the large and stable capital base is enabling us for the future to grow organically. We are a recognized ESG leader. Combining MSCI ESG rating, S&P Global CSA score, as well as FTSE4Good, is keeping us amongst the top 5% of players of that kind.
We continue financing also the energy transition in the country and other relevant programs. So we are exiting the program as a simpler, more agile, more efficient bank, well-positioned to deliver the organic growth down the road starting 2026. Next page, please. At page number seven, I'm handing over to Margus Simson, the Chief Digital Officer.
Good afternoon from my side. Just looking into the things that we delivered during these last 5-6 years of transformation, then I would probably point out three of the most important ones. The first one, the new digital bank is completely cleaned up, completely simplified compared to the setup that we had in the past. Just taking a simple example, on the retail platform side or retail customer side, we had 600 products before. In the legacy system, we have only a bit more than 30 in the new one, effectively bringing down 20 times the number of products. This is not only speeding up the way how fast we can develop things, but it also brings down the operational complexity.
It is helping to bring up our time to market from 18 months that we had rather before in the old system to rather to a couple of months in the new system. So the ability to innovate, the ability to deliver anything to the market is significantly changed thanks to that kind of complexity reduction that we have been going through. So simplification in every terms, the things that the customer sees, the things that are happening inside. 90%, the biggest benefit of the transformation from that end. When looking at the functionality, then obviously the new technology brought different opportunities as well: multicurrency account, the very similar setup what, for example, Revolut has. This has been enabled only by the new solution being up and running.
The account customization, I believe, one of the very unique opportunities that the customers tend to love, and this one is that they can choose their own account numbers. This is something that seems trivial or seems like a little bit unnecessary development, but at the same time, we see that the customers like when the services are really tailored rather towards their own needs and their own initiatives. When we're looking from the security perspective, then previously we had our authentication tool separately and our mobile application separately. Now they've merged into one, which makes the usage for the customer significantly easier, but also makes sure that we do not have the complexity also from that side burdening our customers and ourselves.
When we are looking at the security options that are sitting in KB Plus, then just imagine a modern solution that needs to be there in order to make sure that the customer's money is safe and we do have it. With that one, handing over to Miroslav Hiršl to focus on the questions of what has been really changing on the business side, what has been delivering the results.
Thank you, Margus. Hello to everyone. Let me guide you by using a few highlights through how all of that was explained so far is reflected in the business life and business activity of the bank on the next slide, if I may. I will start by commenting the number of users, by the way. The first thing to say is our new bank is up and running. It's stable. Today, there's more than 1.6 million active users. When I say even more, it is by additional 30,000 clients. The number is basically increasing every week, every day, and even every time you click on a refresh button on the screen. It's moving forward. It's not just only a number of users. It is also the number of new clients that are there on the platform.
When you look at 2025 and 2024, we basically almost doubled our acquisition capacity compared to the usual years before. Even though in the brackets, you see another year that was pretty good, I would stick to my doubling the acquisition capacity, which is quite a success. Another point I'd like to highlight goes to customer migration. You heard it already. So we finalized the migration of private individuals to the new platform. There are still a few left on the old one, but it will be a lower and lower number, and it's not critical anymore for the activity of the bank. If you would ask me, "Is it done?" I would say, "Yes, it's done for private individuals." What is not yet done, but will be done soon, is other client segments starting by small entrepreneurs.
Already more than 50% of clients have been migrated to the new platform, and we will finish the process by Christmas this year. Number three out of my four chapters is private banking clients. Even though there are not so many, they are quite specific in many cases. We will start the migration with the first cluster next month, in a few weeks. Again, the strong commitment and confidence on our side that we will be able to finalize the migration process until the year end. There's one chapter more, and this is legal entities. This will take by a year longer, but we will not wait for 2027. We will start the beginning of summer this year already, and we would like and will finalize the process in 2027 by the year end. Moving to the next slide, a few more things to say.
The first one, it's true that we went through quite important and even sizable streamlining of the distribution network over the recent years. It was branches, number of branches, but not only that. It was number of front office people and probably even more number of managers, not just the number as such, but also the number of layers and the whole organization structure. And it is true that when you go through so significant changes, it creates certain friction in the organization and takes part of your energy away for the change itself. This was the first thing that was symptomatic for our distribution network. The second one was, by the way, the focus of distribution network or front office people to migration as such because it was taking approximately 20% of their capacity. Good news is that it's all done.
Even though there's still some migration to go through, it will just be part of business as usual, not taking much of our distribution capacity, which should allow us to spend even more time with our clients and to spend even more time on our business activity, which gives me a lot of optimism for the years to come. From the same basket, let me speak a bit about the increase of digital sales. A few years ago, we were starting from quite modest, humble numbers. In 2025, we were already around 55% of all sales happening in digital way. And when I say digital, it's not just paperless, but it means it goes end-to-end digitally without any human being in the bank touching the process at all.
It is true even for some quite significant products such as consumer loans that we are already about 50% of all the tickets being processed super fast without any touch of a human being. So if I should close the story by the last element, it has to be client satisfaction because what we were doing, we were not doing because of transformation per se or migration per se. We were doing it to make the bank better for the clients. You can see on the graph that we did and that the customer satisfaction measured by NPS is consistently increasing month by month. Where we were starting at very humble levels, today we are already moving in the corridor between 35-40 points. We still believe in our ambition to get to 50, but we will need a few more quarters for doing so.
But it is true that with every other migration wave finished, with clients getting used to the new environment, with the new environment being very stable, we are quite convinced that this is going to happen. I would stop here, and I would give the floor to Etienne, our CFO.
Not yet. Not yet. So in fact, the word goes back to me, not because of my function, but because this is the order how we agreed at the beginning. So let me say page number 10, just to summarize what was this chapter of our transformation about. We went out as a streamlined organization, which much lower level of number of managerial layers. We were turned down from seven to eight to the existing four to five. We have increased our span of control at the level of approximately 8.1, and we want to stay around eight for the time to go. We came out as a team of people who knows how to run and deliver the complex transformation of that size of that kind using an agile at scale way of crafting the software and running the projects across all the disciplines of banking.
That being combined with microservices architecture of our IT is giving us the advantage of much faster time to market when launching new innovations, when launching new functionalities, when launching new products. The system is much more stable than the previous one. We are seeing higher than 95% of operational stability and availability of the systems as we speak. The overall platform is obviously much better ready for working in a smarter way with data and implement the AI functionalities in it in a smoother way. We are not abandoning our very strong culture of compliance and risk management, which was, by the way, one of the contributors also into our net profits in 2025. We have gained already in various parts of the bank very high productivity increase.
Let me name the housing loans production, which is back at record high levels, delivered by approximately 50% of the staff than it was before, and further cost rationalization across the bank. Let me move to the next page, please. Now we are inviting you back to the traditional pages of our presentation. We are very lucky together with our main competitors to make the banking business in the Czech Republic. This is a growing economy. We expect in 2025 the total growth of GDP was 2.5%. 2026, after the revision of our macroeconomic team, we believe it might go even higher to 2.7%. The industrial production is back to the growth, followed by already growing construction businesses. Wages are beating the inflation. So without any surprise, households are the main engine of this growth and large contributor in the growth of GDP. Thanks to that, also, unemployment is down.
So this is one of the assumptions we are making that consumer lending, consumer loans produced by Komerční banka in 2026 should be one of the fastest growing parts of our loan book. The inflation, as I mentioned, is nowadays even for January, even below 2%. Czech National Bank has not touched the two-week repo rate, and they are keeping it at the existing 3.5%. And Czech koruna is slightly stronger and stronger vis-à-vis both euro and dollar. So the overall frame seems fine when you combine it with the fact that the current government seem to be pro-investment and pro-business, and we see that there is also more and more decisions of our clients to follow this enthusiasm by private investments. Let me move to the next page, which is the business performance. The loans are up by almost 7%, the main engine being mortgages.
Komerční is back to the market, taking from the market anything what oscillates around 20% of the new production. When you see the Q4 of 2024 and Q4 of 2025, you see also the fascinating growth by 82.2%. Having said that and having repeated that, we are delivering it with one-half of people than previously. When moving to consumer loans, we would love to have higher numbers in 2025. It didn't happen, but we have our new format of consumer loan in KB Plus, which is fully digital from beginning to the end. We have 15%-20% of the capacity of our branches back to sale and less to assist the clients with transfers and migration.
We are orchestrating the branches, the digital KB advisory services, third parties, and KB contact center in the best way to approach the market with a real omnichannel approach and simply speaking to sell more in 2026. When moving from retail to corporate, there was very dynamic growth in the Q4 , very strong Q4 , promising Q4 . We believe that the rebound of Czech manufacturing industry, machinery industry, defense sector, and a few more is bringing us back to faster growth of the faster growth and positive trajectory. On that front, KB will be assisting its clients at the maximum, and we believe that here the dynamism will continue. When speaking about corporate clients, we need to remind ourselves also the performance of SGEF, which became 100% subsidiary to KB, which is delivering 6.2% growth. Let's move to the next page.
You see that Komerční was all over the place during 2025, during the Q4 of 2025, assisting clients with financing or advisory in their transformative projects. Miroslav spoke about NPS for retail clients. Let me say that our strong activity on corporate and investment banking side is bringing us back very high levels of net promoter score in corporate and investment banking business. Higher we go through the portfolio, we are drifting towards 80 positive points of the feedback, of the satisfaction feedback by corporate clients. We are very proud of it, but we are not complacent from that. So we will continue pushing the button on the side of corporate clients, midsize clients, municipalities, as we do today, and confirming our leading position in corporate financing. Let me go to the next page. Page number 16 is deposits.
I need to confess it grew by a little bit suboptimal levels. We wanted to grow more, and we opened the gates in the Q4 to get more long-term deposits, mainly from retail, to build even stronger funding for our future commercial and business growth. Despite the fact, we were growing by 5.8%, which is probably not a disappointing number, but our ambition was slightly higher. When speaking about deposits, what is probably the most important part of it is that the savings accounts and term deposits are growing by almost 30% in the mix between the paid and non-paid deposits. The non-paid deposits, i.e., current accounts, are slightly down.
When going from the balance sheet of the bank to assets under management outside the bank, you know that we have this partnership with Amundi, where the sales of mutual funds were down by 14% on a year-over-year basis between 2025 and 2024. We should keep in mind that, yes, on one hand, we are not super satisfied with that. On the other hand, 2024 was super strong, and we were sitting together with Amundi to get the appropriate action plan in place and to get it back to growing trajectory. Inside that, KB has collected more fees even from that structure thanks to the change or transformation of the composition of fees charged to the clients, mainly thanks to the fact that there was much less money market funds sold and much more equity, fixed income, and other funds sold to our retail clients.
Having said that, insurance was growing by double digit, 15.2% in total, Life 15.3%, Non-life 15%, both somehow being also or taking the benefit from the growing book of housing loans. But not only that, you can see in our KB Plus application that there is an extra button for the insurance product, which is bringing first fruits to the P&L. Next page, please. Here I'm handing over to Etienne Loulergue, our CFO. Thank you.
Thank you, Jan. We'll guide you through the financial performance of Komerční banka for 2025. 2025, Komerční banka delivered, again, a very solid financial performance, bottom line, with a net profit reaching more than CZK 18 billion on a full-year basis. If we compare it to the reported 2024 net profit, which was CZK 17.2 billion, it's a growth of more than CZK 800 million, representing 4.7%. If we look at the full-year 2024, excluding the exceptional positive one-off of the capital gain coming from the sale of the historical building of Václavské náměstí, we start from CZK 14.7 billion in 2024, recurring. Therefore, the growth year-on-year is 22%, representing CZK 3.3 billion within 2025. The main drivers for this growth are the following.
First, we have the influence of the net cost of risk evolution in 2025, which represents year-on-year positive evolution of CZK 2.5 billion. Second, and it is very important to highlight in 2025 performance, we have a visible decrease of our operating expenses base by more than CZK 700 million on the full-year basis with two main components. Of course, we enjoy the fact that we have a lower contribution to the resolution fund in 2025, and it helps for CZK 380 million. But more important than that, we were able to decrease our internal cost base by more than CZK 360 million with efforts, which we'll explain a little bit later. The third driver for growth is, of course, the growth of the net banking income overall driven by our commercial performance.
The overall growth of the net banking income is +CZK 70 million, representing +0.2%. Within this net banking income, we have, of course, a first driver, which is the net interest income growing by more than CZK 560 million and, unfortunately, slightly compensated by a decrease in the overall net fees and commission and net profit from financial operations. This more than CZK 18.1 billion of net profit in 2025 enables to deliver a return on average tangible equity at 16.1%, growing year-on-year by more than 70 basis points on a reported basis. If we compare to the recurring basis, it's even bigger with more than 300 basis points. You can see also that the return on average assets stands at 1.2%, which is also growing year-on-year by approximately 10 basis points.
On the bottom right part of the chart, you can see the evolution quarter-over-quarter with regular growth of the net banking income and a solid control of the operating expenses. We can move to the next slide, please. Evolution of the balance sheet. We had a solid growth of the balance sheet and a sound growth of the balance sheet. It represents 4.1% additional year-on-year or CZK 60.4 billion, and we reached CZK 1.6 trillion of balance sheet at the end of 2025. On the asset side, the first driver for this growth is obviously the commercial loan performance with a growth of CZK 52 billion, representing 6% for this part of the balance sheet. On top of that, we grew also our cash and liquid instrument by CZK 17 billion, representing 4%.
On the liability side, the growth was driven by the client deposits for CZK 47 billion year-on-year, representing 4%. Additionally, we also grew our portfolio of securities issued with CZK 17 billion from an issuance of covered bonds that we achieved in the last quarter of 2025. The purpose of such an initiative is to diversify our sources of funding and secure a satisfactory level of liquidity ratios. I recall at this stage, considering the balance sheet evolution, that we have a comfortable, high-quality liquid asset portfolio on the asset side, representing more than CZK 400 billion or one-fourth of the balance sheet, which enables to sustain the liquidity coverage ratio at a flattish level, 159%, and the net stable funding ratio at 130%, also stable year-on-year.
Now, if we move to the next slide to go in more details regarding the composition of the net banking income, first, we have the net interest income, which is growing year-on-year by 2.2%, more than CZK 560 million. As a first driver, the growth of the balance sheet, we have the growth of the loan books by, we mentioned just in the previous slide, contributing by plus CZK 300 million in the net interest income or plus 3%, and the growth of the deposit contributed with plus CZK 185 million in the net interest income or 2% for this specific category. Important to highlight also on the top left of the page, you can see that we maintained our net interest margin overall at a stable level, 1.72%, coming from 1.74% in 2024.
This is a very positive achievement considering that in 2024, we had to suffer a decrease of this net interest margin by almost 20 basis points. 2025 stabilizing is a very satisfactory performance. Now the challenge is to continue the growth on volumes. If we move to the next page, on fees and commissions, the overall picture year-on-year is in decrease by CZK 330 million, representing 4.6%. However, we have to remind that in the base of 2024, we benefited from some exceptional additional fees and commissions, coming namely from the exceptional performance of asset management in 2024. We benefited from extra performance fees in this field. We also benefited from very important transactions in the field of syndicated loans, generating also additional fees in 2024. The exceptional fees that we had in 2024 represented slightly more than CZK 300 million.
So if we exclude them and we compare to a recurring base, we are year-on-year more or less flattish in terms of fees and commissions. Second point to highlight in the fees and commission, flattish with factoring the fact that in 2025, we have performed this significant migration of our private individual clients to the new digital solutions under a new framework in terms of fees, as the client now benefits from subscription plans. So the structure of fees is changing, and we are much more consistent with market practice. It influenced the transaction fees by -CZK 200 million in 2025 compared to 2024. And now we are on a new base on which we count with growth thanks to additional volumes. You can see also on the bottom of the page, the quarterly evolution of the fees and commission and their mix.
You can see a steady growth in the second half of 2025 with a nice rebound in the Q4 . If we move to the next page, the third component of the net banking income is net profit from the financial operations. In this front, we are growing nicely by more than CZK 100 million year-on-year, representing 2.8%. The first driver is very sound as it is our sales activity, mostly for hedging instruments for our client. The growth represents plus CZK 130 million or 8%. On the front of net gains from foreign exchange operations from payments, we are, in terms of overall revenue, flattish. However, we see a continuous growth of number of transactions and volumes, but we have also a slight pressure on the spreads.
You can see also on the bottom right of the page, the evolution quarter-over-quarter of these two activities. I would like to highlight that Q4 is kind of normal quarter compared to Q3, which was a historically high quarter, obviously the best of 2025 and probably one of the best historically speaking. Next slide, please. Now moving to the cost part. Here, this is a remarkable achievement in 2025 with the reduction of the cost base. It was made possible thanks to the transformation, which was explained at the beginning of the presentation by my colleagues, where we have invested massively in the digital transformation, and now our digital solutions are up and running. We have also reorganized and refocused the network in an orderly manner. Now we benefit from these gains in productivity and efficiency. It is visible in our operating expenses.
The first driver of the operating expenses decrease is the Personnel costs with -5%, representing CZK 450 million year-on-year. It is driven by a reduction in the number of average positions by approximately 6.5% year-on-year. I would like also to highlight that we keep a very strong discipline on the overhead costs, and especially on the general administrative expenses, which were also decreased by 4%, representing almost CZK 200 million year-on-year. I recall once more the reduction in the resolution fund contribution, helping also to reduce the overall cost base. The last element in the operating expenses that is important to comment, and it is growing, it is the depreciation part, growing by 7%.
We confirm that we have it completely under control as it is our roadmap, following all the investments we have capitalized in the previous years to deliver this massive digital transformation at the bank level. Reducing the operating expenses in such a big scale enabled to deliver a significant positive Jaws effect on the cost-to-income ratio. We decreased by more than two points our cost-to-income ratio, which reached a level of 46.1% on a full-year basis in 2025. I will now hand over to Anne de Kouchkovsky, our Chief Risk Officer for the Asset Quality and Cost of Risk.
Thank you, Etienne. So I will start with the asset quality. So the Q4 is in prolongation to what was seen during the full year. As it was mentioned earlier, the portfolio of loan grew up to almost 7%. And this was in the context of very stable and excellent quality of our loan portfolio. So this is seen in the Stage 2 and Stage 3. So you see that the Stage 2 is dropping down. But this is mainly driven by the effects of the inflation reserve that was created some years back. And we commented in the previous quarter that the scenario of inflation not being realized, that we just saw the prospective figures, that we decided to release this reserve. So this is creating this effect in Stage 2. But despite from that, it was very low inflow of Stage 2. Same remark for Stage 3.
You see that here we are dropping to 1.6% share of the portfolio in non-performing loan. And this is also influenced by some write-off and successful resolution of big corporate client files that were non-performing and some sales of receivable. As far as the provision coverage of the non-performing loans is concerned, it's very stable. And the effect, and I would say the variation is linked to these sales of receivable and resolution of corporate files. So maybe more interesting is to see the effect on the cost of risk. So if we can go to the next slide. So for the Q4 , we are in net release of CZK 130 million. And here on the non-retail portfolio, once again, it's driven by the release of the inflation reserve and this successful resolution of client situation that I mentioned earlier.
At the same time, we also decided to modify a bit some assumptions on our reserve and to keep reserve with more broader assumptions linked to this unstable situation, whether it's macroeconomic or geopolitical. On the retail exposures, this is net creation here. But this is driven by also the adjustment in the reserve assumptions. And this is, I would say, for the new early assumption created for the reserve for the coming years, we are here impacting more the small business exposures. So all in all, for the full year, it's a net release of almost CZK 1.5 billion, so minus 16 basis points, which is obviously a very low point, but it was logical given all quarters' evolutions. Here, maybe one comment is that cost of risk is always seen as more through the cycle.
So some years might be obviously impacted by some exceptional resolution of a long-dated situation with clients. This was the case this year. We also had the positive impact of the very high-quality portfolio, which led to very low inflow of problematic loans. This is also linked to what was mentioned, that we are growing with mortgage and big corporate loans, which are, I would say, the bulk of our exposures. And we are less present in segments which naturally bring some cost of risk. And this is what we are going to develop for the coming years. So again, on the non-retail side, it's mainly this effect of repayments and successful resolution and the adjustment of assumptions of the overlay. And on the retail, as I mentioned, it's intrinsically very low inflows of default and the adjustment of overlay. And I give you the floor back, Etienne.
Thank you, Anne. I will comment on the capital adequacy ratio situation. So we maintain a solid level of solvency ratio with 17.9% at the end of 2025, which is well above the overall capital requirement set by the regulation. We are more than 130 basis points above this requirement. The composition of this capital adequacy ratio is very qualitative with a core Tier 1 ratio standing at 17.1%. And the Tier 2 instrument in our own funds represents 0.8%. The main components of the evolution of this ratio are stable core equity Tier 1 part of the capital, stable level of Tier 2 instrument in 2025, so stable in terms of regulatory own funds, while on the denominator side, the risk-weighted assets grew by 2.4% in 2025 to reach a level of CZK 580 billion.
Of course, we have maintained our provisioning for the dividend at 100% on the cumulated net profit of 2025. This is the transition for the next slide. Being in this solid capital adequacy ratio situation, we confirmed our intention to distribute 100% of the net profit 2025 as guided across 2025. We will distribute the CZK 18.1 billion of total net profit for last year. It represents an impact per share at CZK 95.6. Now, coming to the forecast for 2026, considering our ambition to grow further our loan book and contribute more to the funding of the Czech economy and grow our commercial footprint, we see an acceleration of our loan production in 2026 and therefore an acceleration also of our risk-weighted assets.
As we, of course, want to stay always with a solid capital adequacy ratio, we consider that it is time to slightly reduce the payout policy. Remember that we have distributed 100% of the net profit for three consecutive years, but always mentioning that it is kind of extraordinary situation. With an expectation to accelerate again on the credit side for 2026, we consider that it is prudent but still very satisfactory to guide a distribution of 80% of the net profit 2026. Next slide, please. To comment on our outlook for the year 2026, of course, in a central scenario. First, the assumptions on which we based our scenario are the following. We foresee again solid growth of the gross domestic product of the Czech Republic at 2.7%.
We also forecast good control of the inflation below 2% and also a stability of overall of the interest rate environment, starting with the short-term rates, the two-week repo at 3.5%. By the way, probably as you noticed, it was confirmed yesterday by the Czech National Bank in their public statement. Based on this assumption and our ambition to continue to grow our commercial books, we forecast for the loans to clients a growth in a range mid to high single digit in both segments, retail and corporate, probably slightly higher in retail thanks to the dynamism of the household consumption. On the front of client deposits, we also target to grow mid to high single digit as it is consistent with the loan book.
On the net banking income, our ambition is to grow mid- to high-single-digit with the contribution of the main component, of course, the net interest income first, but also growing again on net fees and commission and net profit from the financial operations. On the front of operating expenditures, after having decreased in 2025 compared to 2024, we count with coming back in slight growth of the OPEX in 2026, but with low-single-digit growth. The combination of this low-single-digit growth in OPEX and higher growth in the net banking income should enable to deliver again a positive jaws effect in 2026 for the cost-to-income ratio and decrease it in a range of 43%-44%.
Regarding the net cost of risk in 2026, coming from the exceptional 2025, which was in net release representing 16 basis points of net release overall, now in 2026, we are cautious and we expect to return to creation of loan loss provisions. However, in a range that is lower compared to the average level that we have observed through the cycle. Bottom line, the return on equity should stay in a very satisfactory level between 13%-14%, considering again that the net cost of risk should come back in creation of provisions. Of course, we commit to maintain a solid level of capital adequacy ratio, and we maintain our guidance to stay in a range of 17.5%-18.5% for our ratio, which is 100 basis points above the overall capital requirement set by the regulation. I hand over to Jan Juchelka for the final conclusion.
Thank you very much, Etienne. Thank you for giving us your attention. There is a hard work behind us in 2025, especially on the side of cost management, on the side of crafting the finalization of the transformation program. We believe we are perfectly equipped for 2026 on both retail and corporate segments to attack the market with growing loan book and growing deposit base. We believe that in the dialogue of Czech Banking Association, where KB is an important member, we will continue the constructive dialogue with the government who presented pretty ambitious parts of public investments. We believe that private investments from our corporate clients will follow, and the consumption and investments of households will continue remaining strong. This is the main assumptions on which we are building our conviction that 2026 should be another strong year of Komerční banka. Thank you very much.
I am handing the word back to Jakub Černý for conducting the Q&A part. Thank you.
Thanks to all the speakers. In the next part of today's meeting, we will be happy to answer your questions. Let me remind you that this meeting is being recorded. If you have a question, please click on the raised hand icon on the top bar of the screen, and then please wait to be called. If you are connected through a telephone and would like to ask a question, I will invite you later on. Thank you. Our first question comes from the line of Cihan Saraoglu from HSBC. Cihan, please go ahead.
Hello. Thank you very much for the presentation. I have two quick questions. One is with regards to how much inflation overhang you have left. Have you consumed all of those, released all of those in 2025? And the second one is with regards to competitive landscape in the deposit market. Particularly, I remember in the first half of 2025, deposit competition was somewhat escalating. And then you're also saying that you commented that you were not really too happy with the acceleration in your deposit book in terms of growth. So how do you see the competitive landscape, and how confident are you with regards to your deposit growth guidance? Thank you.
I will start with your question on the inflation reserve. So here, just maybe to remind, the models are backward-looking with some forward-looking coefficients. And what we put in the reserve is more like what we cannot capture with the models. Then this is based on many assumptions. And as I explained, inflation being no more one of our concerns, and we see that it's going to very, I would say, lower level than it used to be in the past, we considered changing the assumption. So under the so-called pure inflation, we don't have any reserve, but we considered that the environment being still very unstable on the other, I would say, geopolitical, macroeconomic concerns, we kept the reserve both in the corporate and on the small business for the retail part.
If I may continue with the deposits and the competition on that front, yes, you are right. The composition of our deposits was and remains, let's say, slightly different on the side of current accounts versus savings accounts or term deposits. So if you wish, unpaid versus paid parts of the deposits. It's visible here in the Czech Republic that we are opening advertising campaign with pretty attractive levels of rates for our retail clients. We see the tendency of our clients to either bring back fresh money should they be already existing clients or bringing money as a new client. So slowly but steadily, we believe that we will be building an even stronger pillar of our deposits for further funding of financing of Czech economy. As far as pricing is concerned, we are not the leader. We are not proposing the highest ever rates.
Nonetheless, we know that it will not go forward without leaving some money on the table in favor of attracting fresh money into the bank. So if you wish, we slightly adjusted our approach to collection of new deposits. When speaking about deposits on the corporate side, we believe that the smaller the company is, longer the deposits stay in the bank. So we are, again, more or less, as we speak, we are back to the market with very attractive rates for small businesses where we were lagging behind our traditional market shares. And we continue pushing on a cross-sell of these clients using the deposits as an anchor product in the new platform.
Thank you very much. Thank you.
Thank you. Again, if you have a question, please use the raised hand button. Or if you would like to ask a question via telephone, please unmute yourself pressing star and six. But we still have a question from Marta Czajkowska from IPOPEMA. Marta, please go ahead.
Yes. Hi. Thank you for your presentation. I have a few questions. First, you mentioned that there was a pressure on credit margins in the Q4 . Can you just elaborate on that, which credit lines are more exposed to that pressure and whether you expect this to continue? The other question is on the 2026 outlook. Where do you see the potential for growth for NII? Is this coming only from loan growth, the mix of the loan growth, or the margin expansion? And also on the fee income, where do you see the prospects for higher growth to support the revenue streams? And on the cost side, if I may, you mentioned you expect slower growth. If you could elaborate on the potential for cost savings in 2026? Thank you very much.
I will start with the outlook. So you are right that we expect growth of the net interest income. Our assumption is based on growth of the volumes, not only loans, deposit as well. Even though, indeed, we have higher growth on the paid deposit than on the non-paid deposit, even paid deposit, we are able to generate margins additional on them. So we expect growth from deposit and loans volumes. And if we focus more on the loan portfolio, it's also a question of mix, indeed. We forecast to accelerate on consumer loans, for example, where we didn't grow so much in 2025, and we have a much higher expectation in 2026. And definitely, on this type of loan, we have better margins. In the field of fees, we expect to grow in different categories of them.
I will mention, of course, the cross-selling fees where we expect a rebound in asset management fees, definitely, but also transactional fees as after having achieved the migration to the new subscription plans, now we expect to grow thanks to volume growth. Regarding costs, we have mentioned that in 2026, we expect rather an increase compared to 2025, but in a low single digit. So we don't expect to decrease further the OpEx in 2026 compared to 2025, but to be back slightly in growth under very good control, of course. This growth is driven by an increase in the depreciation that is expected and, again, fully under control because we have a roadmap of the put in use of all the investment we have achieved in the recent years.
On top of that, a slight increase of the other component of the operating expenses, both staff and general administrative, sorry, expenses, but in a very low single digit in both cases. Coming back to the pressure on margins, on credits, it is true that the market is very competitive, and we saw it in Q4. We can say that, for example, on mortgages, which is a market growing very fast, we are also facing intense competition, and we saw a pressure of a few basis points on the margin on the mortgages.
However, as this product remains a core product to anchor the long-term relationship with the clients, and with this product, we are able to generate cross-sell, especially on fees, but also by securing some stable deposit on the balance sheet, we truly believe that it is worth accepting a slight decrease on the spread on mortgages, but securing additional revenues aside. If I may, just a few additional words to Etienne. You probably know that in the field of consumer loans, in the field of small businesses, we are somehow lagging behind our natural market share. We believe that we have the means to fill the gap here and to be much more active on providing consumer loans to Czech households and providing the appropriate financing to small businesses. We have acquisitive ambitions on that front. We want to grow.
This is one of the main sources of NII down the road, especially when you take into account that households will continue their strong economic activity also in 2026 and on. We believe that those are also two subsegments where the margins are still achieving pretty nice, pretty nice, pretty nice numbers. Let me also remind that on the side of mortgages, we are currently collecting anything around 20% of new production from the market. Again, I will never miss the opportunity to say that we do it with one half of people than we used to be, than there used to be. There is still, obviously, a margin lower than on consumer loans. We see that oscillating between 60-80 bps for 2025.
Hence, here, the volumes will be, let's say, prevailing and creating also the perfect base for cross-sell to clients which are taking long-term mortgage from KB. Thank you.
Okay. Thank you very much for that explanation. Just one follow-up on your dividend policy. Going forward post-2026, could the market expect a continuation of 80% payout ratio in the following years as well?
We feel super responsible in front of the shareholders. When speaking about shareholders, obviously, there is one which collects 60% of the ownership, but there is anything between 70-80 thousand institutional and private individuals which are representing the 40%. We are simply guiding our dividend payout through the filter of, do we have better use for the excess of capital or not? If not, we are giving it back to the shareholders. When we see our forward-looking predictions, we will always keep as much capital as needed for securing our organic growth, and the rest will be for investors. Should that be 80% on the long term, it's pretty too early to say. We rather stay on the safe side and guide the market only for the ongoing year. We will do our best to keep it at satisfactory levels.
Okay. Clear. Thank you very much.
Thank you. Again, you can either use the raised hand button on your screen, or you can unmute yourself and ask your question directly if you wish so. So we don't seem to have any further questions at this point. So I'm handing back to the CEO for a concluding remark, please.
All right. Again, thank you very much for this numerous presence in our conf call. We very appreciate your attention paid to Komerční. We are looking forward to coming back to you at the latest with the next Q1 presentation. In the meantime, we entirely stay at your disposal for potential questions should you have any. And thank you very much to the team of investor relations and all my colleagues here to help with the presentation and answering your questions. Thank you and have a good rest of the day.
Thank you. All this has concluded our call today. You can now disconnect.