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Lidovky.cz

KB profits up one-fifth in 2010, higher dividend proposed

  16:06

Profit at Komerční banka (KB) group grew due to the economic recovery in late 2010; the board has recommends a Kč 270 dividend

Komerční banka is 61 percent owned by France’s Société Générale foto: (c)Česká PoziceČeská pozice

Komerční banka Group on Wednesday reported a net profit of Kč 13.33 billion for the full year 2010, a 21.1 percent year-on-year growth, with the increase driven by a slight rise in revenues, further savings on operating expenditures, and a significant reduction in the cost of risk. KB Group’s loans-to-deposits ratio reached 71.5 percent, and the capital adequacy ratio was 15.3 percent.

Komerční banka’s board of directors will recommend to the supervisory board that Kč 10.263 billion — some 77 percent of attributable net profit — be used for dividend payments. This comes to Kč 270 per share and corresponds to a gross dividend yield of 6.1 percent based on the 2010 closing share price. Prague-listed Komerční banka is 61 percent owned by Société Générale of France.

“The favorable financial and business results as well as the comfortable capital and liquidity position of KB make it possible for the board of directors to propose to the supervisory board a level of dividend that rewards all of our shareholders,” KB board chairman and CEO Henri Bonnet said in press release.

Total net banking income for 2010 increased by 1.5 percent from 2009 to reach Kč 32.662 billion. Gross operating income rose in 2010 by 5.6 percent to Kč 19.720 billion, it said.

Q4 beats expectations

For the fourth quarter of 2010, the KB Group’s net income reached Kč 3.37 billion, up 31 percent year-on-year, and above market expectations. Total operating revenue was Kč 8.37 billion, up 8 percent on the year. Net interest income reached Kč 5.5 billion.

“Overall, we consider the results positive since both the net profit and the amount of dividend beat expectations,” Milan Lavicka, an analyst at brokerage Atlantik finanční trhy, said in a market comment. “What is especially positive is the development in interest income. However, part of the market had expected a higher extraordinary dividend.”

Loan volume up in full year

KB in 2010 provided individual clients with 12,000 mortgages worth more than Kč 21 billion. The overall volume of mortgages to individuals rose by 9.0 percent to Kč 109.3 billion. Its subsidiary Modrá pyramida, the second-largest building society in the Czech Republic by loan volume, granted 13,900 new loans amounting to Kč 9 billion. The total volume of KB Group’s lending to business clients increased by 2.3 percent to Kč 211 billion. ‘The economic recovery in late 2010 generated new business opportunities, in particular in the area of lending.’

“The economic recovery in late 2010 generated new business opportunities, in particular in the area of lending. Thanks to its strong capital position, the Komerční banka Group could take advantage of this development, which was positively reflected in, for example, the dynamic growth of its loan portfolio,” Bonnet said.

In Q4 2010, Komerční banka decided to acquire a new office building in Prague that will bring together employees from various locations in the city and improve efficiency. KB Group also rearranged its capacities in Slovakia so it can focus on its corporate clients there.

As of the end of December 2010, the KB Group in its entirety had 2.5 million clients. Komerční banka had 1,590,000 clients, of which 1,321,000 were individuals. Other units in the group, aside from Modrá pyramida, include pension fund Penzijní fond KB and nonbanking loan company ESSOX. Komerční banka is the third-largest bank in the Czech Republic in terms of assets.

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