Komercni Banka Beats Forecast, Net Profit Up 19%William Malcolm
Czech lender Komercni Banka reported a better-than-expected 19 percent rise in third-quarter attributable net profit, boosted by a jump in income from trading operations and higher net interest income from rising rates.
Profit rose to 4.20 billion crowns ($185.55 million), above the average estimate of 3.58 billion crowns in a Reuters poll. The profit also exceeded the highest estimate in the poll.
Komercni Banka, the country’s third largest bank and part of the Societe Generale group, said income from financial operations surged 40 percent year-on-year in the quarter, lifted by extraordinary large client hedging deals.
However, some clients are less enthusiastic currently to open new interest rate hedging positions, the bank said.
The Czech National Bank, the most aggressive in the European Union in tightening policy, has lifted its main rate at its last four meetings and seven times overall since August 2017.
The rise in borrowing costs and loan growth – which was up 3.8 percent at the end of September – boosted net interest income for Komercni Bank by 10 percent to 5.74 billion crowns in the quarter, higher than analysts’ estimates.
This article originally appear in Reuters