Komercni Banka shares jump on higher dividend, improving outlook (updated)

Komercni Banka as

08/02/2024 10:42

(Adds CFO comment, shares)
       PRAGUE, Feb 8 (Reuters) - Czech lender Komercni Banka
 BKOM.PR  boosted its dividend on Thursday, planning to pay out
100% of its 2023 and 2024 net profit amid strong capital
generation as it forecast a return to growth in business.
    Shares in the bank had jumped more than 5% by midday, on
course for the biggest one-day gain since October 2022.
    The bank, the country's third biggest, reported an 11% fall
in 2023 net profit, to 15.61 billion crowns ($674.88 million),
as a more than 10% decline in net interest income dragged on
revenue.
    Komercni Banka said it expected its revenue, which dropped
6% last year, to rebound in 2024 and grow at a low- to
mid-single digit pace, as interest income also recovers.
    The bank, like others in the country, saw profits rise as
the Czech central bank sharply lifted interest rates in
2021-2022 to battle high inflation.
    But last year was tougher as clients sought higher-yielding
deposits, which raised banks' financing costs, and still-high
interest rates hit loan demand.
    The bank's board proposed paying out the full 2023 profit,
equal to 82.66 crowns a share and up from 60.42 crowns for 2022,
saying it reflected strong capital generation, with capital
adequacy above requirements.
    "The proposal is in line with the long-term capital
management plan, which maintains capital adequacy at a level
appropriate to the risks assumed and with respect to the Bank's
business opportunities," the bank said.
    It said it expected to pay out 100% of net profit for 2024
as well.
    Komercni Banka's Chief Financial Officer Jiri Sperl said the
elevated payouts were mainly a one-off.
    "With this we are not changing our sustainable dividend
policy, which is in the range of 60-70%," Sperl told a news
conference.
    In the fourth quarter alone, Komercni Banka reported net
attributable profit of 3.26 billion crowns, down from 4.63
billion a year earlier and below a Reuters poll estimate of 3.49
billion crowns. 
    Net interest income dropped by 12% year-on-year in the
quarter, while cost of risk - reflecting provisioning - reached
over 1 billion crowns, above expectations of 663 million crowns.


($1 = 23.1300 Czech crowns)

 (Reporting by Jason Hovet; Editing by Subhranshu Sahu and Miral
Fahmy)
 ((jason.hovet@thomsonreuters.com;))