Čtvrtek 28. března 2024, svátek má Soňa
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Lidovky.cz

Komerční banka Q3 profits down almost 30%

  11:11

Société Generale’s Czech subsidiary Komerční banka records 29.3% y/y drop in Q3 profit partly due to Greek bond exposure

Komerční banka quickly denied ProMoPro's allegation that the bank had leaked personal financial information foto: © Česká PoziceČeská pozice

Prague-listed Komerční banka, one of the big four Czech retail banks, has reported a net profit of Kč 7.041 billion for the third quarter of 2011, a 29.3% year-on-year drop. In Q3 Komerční banka wrote off 60%, or Kč 2.64 billion, of the value of its Greek bonds.

The bank said in the results published Tuesday that excluding the write-off of Greek bonds and Société Générale Equipment Finance losses, the bank’s net profit for the quarter reached Kč 10.235 billion; residual value representing 40% of nominal value of its Greek the bonds, amounts to Kč 2.886 billion.

“Revenues increased by 1.2% to Kč 24.4 billion. Despite support from volumes, growth was limited by low interest rates and pricing pressures,” the bank said in the results report (to see the full text of the press release click here).

Despite the considerable fall in profits caused by the Greek bond write-off, J&T Banka analyst Milan Vaníček assessed the results favorably. “Even though on first look the large write-off and the considerably lower-than-expected profit appear negative, from the longer-term perspective for us the figures published are quite a positive surprise thanks to the fast growth of the credit portfolio and the continuing fall of its share of bad loans [down to 6% from 6.4% at the end of June],” he told the server E15.cz. “Komerční banka now has most of its bond portfolio evaluated according to market prices and in the coming quarters there should not be a repeat of write-offs in such large volumes.”

Komerční banka’s majority owner Société Générale has posted net Q3 profits down 30.6% to €622 million (Kč 15.6 billion) on the year, considerably lower than analysts’ expectations. Similar to Komerční banka, Société Générale has written off 60% of the value of its Greek bonds, above the 50% prescribed by eurozone leaders for the bailout of Greece at the summit on October 26.

Société Générale has announced it will require €2.1 billion in new capital in order to meet the raise in capital requirements demanded by the European Union. Partly as a result of this new requirement, the French bank has announced that it will not pay a dividend to shareholders for 2011.

Komerční banka’s share price on the Prague Stock Exchange’s blue-chip PX index rose by 1.36% in two hours of trading following the publication of the results.

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