Prague, May 25 (CTK) – The first-quarter profit of four largest banks on the Czech market reached Kc13.1bn in total, which was nearly 2 percent more annually, according to the banks’ financial results.
Experts mostly describe the banks’ performance as favourable even though it is markedly influenced by one-off factors.
The household debt is growing but the Czech banking sector still has a very low share of non-performing loans, which has a positive impact on the banks’ net profit thanks to dissolving of reserves. That mostly affected the business results of Ceska sporitelna, Chytry Honza company analyst Karel Kotoun told CTK.
CSOB is starting to benefit from investments in big transformation projects focused on digitisation and business model diversification, he said.
“Komercni banka, on the other hand, is not much successful in attracting clients by its offer of products and services,” Kotoun said. It also did not take advantage of the operating lease boom, he added.
According to him, the net profit growth will start slowing down as from Q3, the reason being lifting of interest rates and overheating of the Czech economy.
Profits of banks are in line with expectations, said Finlord analyst Boris Tomciak. Net interest income is on the rise in particular. Loan volumes, too, keep growing as the economy is doing well, which is associated with growing household and corporate demand for capital.
On the other hand, banks are under pressure to raise costs, said Tomciak.
An outlook for the rest of the year is favourable, and the loan quality should not get worse, he added. Loans will grow and so will net interest income.
Within the EU, Czech banks still have above-average profits, being also strong in terms of capital, and their profitability thus has a firm foundation, said Cyrrus analyst Lukas Kovanda.
Ceska sporitelna’s net profit posted an annual increase of 15.4 percent to Kc4.1bn. Loans, net interest income and reserves’ dissolution is behind the profit growth.
CSOB’s net profit decreased by 14 percent to Kc4bn due to rising investments in employees’ wages and remuneration, lower operating profit and a higher comparative basis of last year.
Komercni banka’s net profit fell by 26.5 percent annually to Kc3bn. Adjusted for one-off items, the profit figure posted a drop of 8.4 percent to Kc2.9bn because of lower profit from financial operations.
UniCredit Bank generated a net profit of Kc2bn on the Czech and Slovak markets, the figure rising by nearly 40 percent in annual terms.
The largest banks’ net profit in Q1 2015-18 (Kc bn):
|
Q1 2018 |
Q1 2017 |
Q1 2016 |
Q1 2015 |
|
|
CSOB |
4.0 |
4.7 |
3.3 |
3.8 |
|
Ceska sporitelna |
4.1 |
3.5 |
3.4 |
3.7 |
|
Komercni banka |
3.0 |
3.2 |
2.9 |
3.5 |
|
UniCredit Bank CR and Slovakia |
2.0 |
1.5 |
1.3 |
1.7 |
Source: banks