Ceska Sporitelna, the Czech Republic’s second largest lender by assets, reported a 0.8% annual drop in first-half net consolidated profit to CZK 8.15bn (EUR 315.4mn) as almost zero market interest rates continue to weigh on income, the bank said in a statement.
The bank’s net interest income declined 9.9% on the year to CZK 14bn in January to June 2013 and the net fee and commission income was down by 4% to CZK 5.7bn. The operating profit fell by 6.4% y/y to CZK 12.3bn as a 5.8% y/y drop in operating expenses could not outweigh a 6.1% fall in operating income.
Ceska Sporitelna's total assets rose 4.7% y/y to CZK 958.2bn as of end-June 2013. The bank’s lending portfolio grew 2.7% to CZK 496.2bn helped by an increase in mortgages to private institutions, loans to SMEs and large corporations. The quality of the loan portfolio improved as the share of NPLs of total customer loans fell to 5.2% from 5.4%. Loans to retail clients were up by 2.5%, corporate loans added 5.8% y/y, while consumer lending declined 5.4%. Private mortgages grew by 9.7% y/y to CZK 146bn.
Deposits at the bank were 6.6% higher on the year at CZK 856.4bn. Return on equity (ROE) fell to 17.1% from 19.7% and return on assets (ROA) decreased to 1.7% from 1.8%. The cost-to-income ratio rose was stable at 42%.
Ceska Sporitelna is owned by Austria's Erste Group, eastern Europe's third-largest bank by assets, that reported on July 30 a 34% y/y slump in H1 net profit to EUR 301.2mn due to falling interest income.
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