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August 2, 2018 12:00 am | FILED UNDER: business

Komercni Banka’s Net Profit Falls 12% Year To Date

By ČTK

Prague, Aug 2 (CTK) – Komercni banka’s net profit fell by 12.4 percent year on year to Kc6.9bn in the first half of this year, its operating revenues dropping by 1.5 percent to Kc15.4bn, the bank said in a press release today.

 

Excluding one-off items such as last year’s sale of the headquarters building, the net profit was 1.2 percent lower.

 

The amount of loans granted to clients increased by 4.2 percent to Kc624.8bn. Loans for housing were 5.9 percent higher on the year and consumer loans rose by 5.8 percent. Business loans increased by 3.4 percent.

 

Net interest income, which constitutes the main contribution to revenues, grew by 3.7 percent to Kc10.8bn.

 

“The first half result was underpinned by better interest income and an excellent result in terms of cost of risk. We were able to grow lending to business clients, even though the market dynamics in this segment were rather disappointing,” said CEO Jan Juchelka.

 

The bank had 1.666 million clients at the end of June, 0.7 percent more than a year ago.

 

The total volume of deposits at the KB Group increased by 4.6 percent to Kc806.6bn. Deposits from individual clients grew by 9.7 percent to Kc265.5bn.

 

“Komercni banka’s Q1 profit exceeded the highest estimates. Net interest income for Q2 was a positive surprise as well,” Cyrrus analyst Lukas Kovanda said.

 

“Overall, the results of Komercni banka look optimistic. The forecasts saying that domestic banks will have notably toughened conditions after the return to the standard regime of the Czech National Bank’s monetary policy have not come true so far,” Kovanda said.

 

KB shares weakened by 0.1 percent to Kc941 on the Prague Stock Exchange (BCPP) after 11:00.

 

The company expects its operating revenues for the entire 2018 to reach a similar level as last year. The growth of net interest income is expected to be supported by higher volume of loans and deposits as well as by growing interest margins. On the other hand, it will be curbed by competition pressure on interest margins.

 

“The management expects that KB’s operations will generate sufficient profit in 2018 to cover the Group’s capital needs ensuing from its growing volume of assets as well as to pay 65 percent of consolidated net profit attributable to shareholders in dividend,” the bank said.

 

KB is majority owned by French group Societe Generale, which holds a share of 60.4 percent.

 

KB shares weakened by 1 percent to Kc940 apiece on the Prague Stock Exchange (BCPP) on Wednesday.

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