Komercni banka sees 2023 net profit fall by 11.4% yr/yr to Kc15.6bn

Prague, Feb 8 (CTK) - Net profit of Komercni banka (KB) fell by 11.4 percent yr/yr to Kc15.6bn last year, total revenues decreased by 6.3 percent to Kc36.2bn and operating expenses increased by 8.2 percent to Kc17.3bn, according to consolidated data published on the bank's website today.

The board of directors will propose a dividend of Kc82.66 per share, totalling Kc15.7bn. Shareholders will vote on the proposal at the general meeting set for April 24, 2024.

For 2022, the dividend was Kc60.42 per share, with a total of Kc11.5bn.

"In the past year, we achieved strong results. We succeeded in growing the client base as well as the volumes of loans and deposits. Lending to clients expanded even though the demand was influenced by expectations for lower interest rates to come. Deposits from clients leapt by a tenth and exceeded the Kc1,000bn mark," said Jan Juchelka, the bank's board chairman and CEO.

KB group's lending to customers rose by 5.5 percent year on year to Kc827.7bn. Client deposits grew by 9.7 percent from a year earlier to Kc1,006.1bn. Volume of non-bank assets (mutual funds, pension funds, life insurance) under management expanded by 16.0 percent to Kc251.3bn.

Net interest income decreased by 10.6 percent year on year to Kc25.6bn. Net fee and commission income increased by 4.8 percent to Kc6.4bn. Net profit on financial operations was 4.5 percent higher at Kc3.8bn.

The bank's operating income and net profit for 2023 were below market estimates, XTB analyst Tomas Cverna told CTK. The former's annual decline is to blame on net interest income on deposits and the loan portfolio. The net interest margin fell to the lowest level since the third quarter of 2021 due to an increase in deposit funding costs and the abolition of interest on the Czech National Bank's required minimum reserves, Cverna said.

KB shares increased by more than 4 percent to Kc790 apiece on the Prague bourse after 10:30.

KB is one of the largest banking houses in the Czech Republic. It is therefore subject to the tax on extraordinary profits. The windfall tax was approved by the government as a 60 percent tax surcharge on excessive profits. The proceeds of the tax are to be used by the government to cover the extra costs that the state will incur in connection with the capping of energy prices.

KB said today it contributed significant amounts to the public budgets in 2023. For example, the group paid Kc4.8bn in income taxes, Kc0.4bn in advances for the windfall tax, Kc1.3bn into the Resolution and Deposit Insurance regulatory funds, Kc2.1bn for social and health insurance, Kc1.8bn in withholding tax, more than Kc0.8bn in VAT, and further amounts in other charges.

Following a correction in 2023, the group's total net operating income (revenues) for 2024 should return to growth by a low- to mid-single-digit figure.

Komercni banka's principal shareholder is France's Societe Generale. The bank's shares are traded on the Prague Stock Exchange.

vr/er

CZ0008019106
CZ0009009718