Aggregate net profit of Czech banks grows 15.8% y/y in Q1.

By bne IntelliNews June 1, 2010
The aggregate net profit of the 39 Czech commercial banks increased by 15.8% y/y to CZK 13.8bn (EUR 532.1mn) in Q1, according to central bank data. The three largest domestic banks - CSOB, Ceska Sporitelna and Komercni Banka, netted a total of CZK 10.2bn and accounted for 74.2% of the profit in the whole banking sector. The banks' total assets declined moderately by 0.4% y/y to CZK 4.1tn at end-March with the three major banks accounting for 58.8%. The banks' capital adequacy ratio reached 14.3% at end-March, up from 14.1% at end-December and from 12.86% a year ago. However, the share of uncollectible claims increased to 4.92% at end-March (to CZK 123.5bn, surging by 49.3% y/y) from 3.28% a year before, due to the lower ability of non-financial companies and individuals to repay their loans. At the same time, the costs linked to write-offs and provisions fell by 11.8% y/y to CZK 5.6bn at end-March. Out of the 39 banks in the sector, 32 are foreign-controlled. The continued sound performance of the banking sector in Q1, despite the adverse economic developments, was supported by the fact that local institutions have entered the crisis strong, well capitalised and have remained highly liquid, central bank vice-governor Miroslav Singer said. However, this year will be more difficult because of the still low demand for loans and the lower ability of households and companies to repay credits in view of the growing unemployment and number of bankruptcies, the deteriorating quality of the credit portfolio and the respectively higher provisions for bad loans.
 Banking Sector performance in Q1'2010
CZK billion Q1'2009 Q1'2010 y/y, %
Total Assets 4,128.2 4,111.5 -0.4
Net Profit 11.9 13.8 15.8
Net interest income 26.0 25.7 -1.0
Net fees & commissions 8.6 9.2 6.9
Loans 2,492.9 2,442.5 -2.0
Deposits 2,576.6 2,695.3 4.6
Source: Czech National Bank

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