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Market Cap £6.70bn
Enterprise Value £3.72bn
Revenue £7.68bn
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Czechs scramble for mortgage loans before tighter rules bite

Wed 26th September, 2018 9:28am
* Prague apartment prices rise 50 pct in three years
    * Stock of mortgages over three years climbed 46 pct
    * Tougher income requirements aimed to cool market

    By Jason Hovet
    PRAGUE, Sept 26 (Reuters) - Czech mortgage loan demand has
jumped by up to 30 percent for many lenders in recent months due
to a last-minute dash by borrowers before tougher income
requirements take effect on Oct. 1, part of central bank efforts
to cool a hot housing market.
    The Czech housing market has boomed in recent years, with
the price of new apartments in Prague rising about 50 percent in
the last three years. The stock of mortgage loans has grown by
46 percent in that time, Development Ministry data shows.
    A number of factors have boosted the market, including
falling unemployment that is the lowest in the European Union,
surging wages, a dwindling supply of new apartments, a period of
record low interest rates and the rise of services like Airbnb.
    Tighter income requirements are the Czech National Bank's
latest measure to tame the market. It has recommended banks cap
loan-to-value (LTV) ratios on mortgages at 80 percent, or 90
percent in some cases.
    From Oct. 1, the regulator is recommending borrowers' debt
should not exceed nine times their salary and monthly payments
should not exceed 45 percent of net income.*:nL8N1TE1IU
    The result so far has been a rush by many to grab loans
before the measures take effect. Some banks estimate up to a
quarter of applicants may be disqualified by the income demands.
But analysts say rising interest rates will help buoy bank
earnings despite an expected slowdown in loan growth.
    "We have recorded a significant rise in demand for new
mortgages in August and September," said Filip Hruby, spokesman
for Ceska Sporitelna, the country's second largest bank by
assets which is part of Austria's Erste Group Bank  ERST.VI .
    He said demand is 30 percent higher in both months versus
July. About half of new mortgages were being fixed for eight
years or longer, he added.
    Other banks contacted by Reuters also reported a rise in
demand of 20-30 percent since the beginning of summer, including
the Czech units of Austrian bank Raiffeisen  RBIV.VI , Italian
lender UniCredit  CRDI.MI  and Prague-listed Moneta Money Bank
    Komercni Banka  BKOM.PR , also listed in Prague and majority
owned by French group Societe Generale  SOGN.PA , did not give
estimates on mortgage growth but said it expected a drop in
demand next year. But it said it was hard to say if that would
be as low as 10 percent or as much as 30 percent.
    The central bank is hoping the new income requirements can
slow the mortgage market.
    "Certainly a slight cooling of the market is an adequate
result," Governor Jiri Rusnok told Reuters in an interview on
Sept. 11. "For us it is about the health of our banks."

 (Reporting by Jason Hovet
Editing by Edmund Blair)
 ((; +420 224 190 476; Reuters
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