Komercni Banka's Q2 net profit below estimates, keeps revenue outlook (updated)

Komercni Banka as

01/08/2024 10:54

(Adds CFO comments on outlook, shares, cost of risk outlook in
paragraphs 4-9 and 12)
       PRAGUE, Aug 1 (Reuters) - Czech lender Komercni Banka
 BKOM.PR  posted a 22% drop in second-quarter net profit on
Thursday, hit by base effects a year after the release of loan
loss provisions had boosted earnings.
    Quaterly profit of 3.54 billion crowns ($151 million) was
just below the average estimate of 3.64 billion crowns in a
Reuters poll. Net interest income fell nearly 5%, also trailing
estimates.
    "Interest income was under pressure mainly because
competition on the deposit market was intense and demand in the
market for investment loans remained subdued," Chief Executive
Jan Juchelka said.
    Komercni Banka shares fell more than 2% on Thursday.
    Earlier on Thursday Komercni Banka's majority owner,
France's Societe Generale  SOGN.PA , beat second-quarter
earnings estimates but cut a key target for its French retail
activities, sending its shares tumbling. 
    Komercni said revenue in the second quarter fell 4.6%
year-on-year to 8.72 billion crowns. It expected it to rebound
in 2024 and grow at a low- to mid-single digit pace.
    Chief Financial Officer Jiri Sperl said falling interest
rates would help accelerate loans in the second half of the year
and that margins should "go rather north than south".
    Deposits are also growing and the bank saw a decrease in
deposit costs last quarter, he said.
    Cost of risk at Komercni Banka was a big factor last quarter
as the bank created loan loss provisions. In the year-ago
period, its net release of provisions had padded profit.
    But the country's third biggest bank, like others in the
Czech market, faces low risks from bad loans as the economy
starts to recover on the back of a rebound in consumer activity,
coming after the inflation surge of previous years had hammered
the spending power of households.
    Komercni Banka lowered its cost of risk outlook for 2024.
    It also said the loan portfolio should grow by mid-single
digits for the full-year. 
 ($1=23.4750 Czech crowns)

 (Reporting by Jason Hovet; Editing by Clarence Fernandez)
 ((jason.hovet@thomsonreuters.com;))