Profits Slide in Banking Sector

Prague, Dec 17 (CTK) – Net profit of the Czech banking sector fell by Kc700m yr/yr to Kc59.9bn in Q1-Q3 this year, and total assets in the sector were Kc1,300bn higher against the end of the year at Kc7,278bn, according to data published by the Czech National Bank (CNB).


Experts attributed the profit drop to last year’s sale of a stake at Visa company.


Profit from financial and operating activities decreased by Kc6.3bn annually to Kc133.2bn at the end of Sept.


Interest income went down by Kc900m to Kc108bn and net fee and commission income sank by Kc200m to Kc32.9bn.


Domestic banks were confronted with a difficult economic environment in the Jan-June period this year, said Cyrrus analyst Lukas Kovanda. Overall low interest rates cut their interest incomes, however, Q3 saw the first signs of a turnaround because interest rates that started to grow, though at a very mild rate. Q4 and mainly next year will see a bigger improvement in this respect, said Kovanda.


“The Czech banking sector ranks among the most stable sectors in the world,” Patrik Nacher, founder of the portal, told CTK.


“(The sector’s stability) is some sort of satisfaction for me despite the fact that fee incomes have been falling for five years including the latest figure for the Jan-Sept period,” said Nacher. “The result is influenced by an extraordinary income from the sale of Visa last year,” he added.


Net profit of CSOB posted an annual rise of 13 percent to Kc13.5bn in Jan to Sept this year. Komercni banka saw a net profit rise of 5.5 percent to Kc11.2bn, while Ceska sporitelna reported a profit drop of 1.8 percent to Kc11.7bn. UniCredit Bank in the Czech Republic and Slovakia generated a net profit of Kc5.5bn, a rise of 18.5 percent from the Jan-Sept period last year.


At the end of June, there were 47 banks, foreign bank branches and building societies operating on the Czech market.


Czech banks’ aggregate net profit (Kc bn):










Q3 2017

after-tax profit










Source: CNB