Komerční banka’s net profit for the three quarters of this year rose by 40.7 percent year on year to 8.6 billion crowns. The bank’s loans and client deposits increased. Net operating income for the first nine months increased by 1.3 percent year on year to 22.6 billion crowns. Operating costs fell by 0.7 percent to 11.4 billion crowns. The bank, majority-owned by France’s Société Générale, announced consolidated financial results in a press release.
“Net profit exceeded even the highest analytical estimates,” Cyrrus analyst Tomáš Pfeiler told ČTK. According to him, the lower cost of the risk associated with the release of reserves contributed to the positive surprise. The increase in fee and commission income also contributed to the result. The financial house is helped by considerable cost discipline, he added. KB’s shares on the Prague Stock Exchange rose by 2.5 percent to CZK 910 at 10:00.
On Wednesday, Komerční banka announced that the General Meeting had approved in writing to pay a dividend of CZK 4.535 billion, ie CZK 23.86 per share, from retained earnings for 2019 and 2020. Shareholders voted electronically on the proposal from October 18 to November 2. The bank determined the dividend in accordance with the restrictions set by the CNB in March this year. Next year, the stricter rules will no longer apply, and according to Pfeiler, the financial house should pay a higher dividend, estimated at CZK 42 per share.
Total loans to clients increased by 4.7 percent year on year to 724.8 billion crowns, mainly due to the growth in the volume of housing loans, which increased by 8.9 percent. According to the bank, consumer loans fell by one percent due to uncertainty and restrictions related to the pandemic. Loans to corporations and other entities rose by 1.6 percent.
Client deposits rose by 12.1 percent year on year to 1,043.1 billion crowns. According to the bank, deposits of individuals and corporate clients, with the exception of large corporations, recorded strong growth.
Despite the growth in the volume of loans and deposits, net interest income decreased by 4.7 percent to CZK 15.3 billion, due to a sharp decline in interest rates after the outbreak of the pandemic last year, the bank said. Net fees and commissions improved by eight percent to 4.2 billion crowns, according to the bank due to cross-selling revenues, corporate client demand for services on debt capital markets and a recovery in economic activity compared to last year. The net result from financial operations of three billion crowns was 33.2 percent higher year-on-year. Dividend income and other income decreased by 5.3 percent to CZK 160 million.
The bank’s operating costs decreased despite the fact that the costs of mandatory contributions to the Crisis Resolution Fund and the Deposit Insurance Fund increased by 10.6 percent. Savings were recorded in personnel and administrative costs. The average number of employees fell by almost five percent to 7,705. The amount of depreciation was higher year-on-year, reflecting continued investment in digitization.
Compared to the beginning of the year, total equity increased by 8.6 percent to CZK 127.2 billion.
Profits are also growing for competing banks. Česká spořitelna’s net profit for the first three quarters of this year rose by 36.3 percent year on year to 10.8 billion crowns. Monety Money Bank’s net profit for the three quarters this year rose by 51.2 percent year on year to 2.897 billion crowns. The Czech and Slovak UniCredit Bank reported a net profit of 5.7 billion crowns in the same period, which was a year-on-year increase of 41.4 percent.
The French bank Société Générale, which is the majority owner of the Czech Komerční banka, almost doubled its net profit to EUR 1.6 billion (approximately CZK 41 billion) in the third quarter from EUR 862 million a year ago.
Société Générale almost doubled its quarterly profit
The French bank Société Générale, which is the majority owner of the Czech Komerční banka, almost doubled its net profit to EUR 1.6 billion (approximately CZK 41 billion) in the third quarter from EUR 862 million a year ago. The company announced it today. Its financial results were supported by higher revenues from corporate and investment banking and a reduction in provisions for credit losses.
The quarterly profit significantly exceeded the expectations of analysts, who, according to Refinitiv, estimated it at 952 million euros. “Société Générale has had a great quarter,” said Frédéric Oudéa, the bank’s chief executive. For the first three quarters of this year, the bank reported a net profit of 3.85 billion euros after a loss of 728 million euros in the same period last year.
Société Générale is the third largest French bank after competitors BNP Paribas and Crédit Agricole. The company also announced today that it is launching a repurchase of its own shares in the amount of around 470 million euros.