Komercni Banka's Q2 net profit falls touch more than expected

Komercni Banka as

01/08/2024 07:33

PRAGUE, Aug 1 (Reuters) - Czech lender Komercni Banka
 BKOM.PR  posted a 22% drop in second-quarter net profit, which
fell to 3.54 billion crowns  ($150.80 million), hit by base
effects a year after the release of loan loss provisions had
boosted earnings.
    Quarterly profit was just below the average estimate of 3.64
billion crowns in a Reuters poll. Net banking income fell more
than expected to 8.72 billion crowns, the bank said on Thursday,
while net interest income was down nearly 5%.
    "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.
    Cost of risk at the bank, majority-owned by France's Societe
Generale  SOGN.PA , was a big factor as Komercni Banka created
loan loss provisions in the quarter.
    In the year-ago period, its net release of provisions had
padded profit.
    The 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 said its operating income should rebound in
2024 and grow at rate in the low- to mid-single digits. 
    The loan portfolio should grow by mid-single digits for the
full-year, it said. Loan volume rose 3.7% in the first half.
    The bank confirmed its outlook for paying 100% of its 2024
profit in dividends.
 ($1=23.4750 Czech crowns)

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