(Adds lending outlook, analyts comment, share reaction)
PRAGUE Feb 12 Komercni Banka, which
reported a dip in fourth-quarter profit on Wednesday, predicted
a pick up in lending growth this year as the Czech economy
starts to recover.
Komercni, 60.4 percent owned by Societe Generale,
and other Czech banks have already been able to boost loan
growth because official interest rates have been near zero since
the end of 2012.
"We expect lending will be an important element in our
business growth, meaning we assume the portfolio to grow 6 to 7
percent. The growth is going across all segments," Chief
Financial Officer Libor Lofler said on Wednesday.
Gross loans rose by 4.8 percent year-on-year last year.
Czech manufacturing and exports grew the most in over two
years at the end of 2013 thanks to a weaker crown and recovery
in key trade partners in the euro zone.
The Czech central bank intervened to weaken the crown last
November and has pledged to keep it weak going into 2015 to
fight deflation risks. The currency is down 6 percent since the
interventions, which will help exporters and boost the economy
as it recovers from a record long recession.
But the country's low interest rates have hit banks' net
Komercni's net banking income fell to 7.61 billion crowns,
down 4.3 percent year-on-year. The biggest portion of that was
net interest income, dipping 2.3 percent year-on-year and 3.5
percent for all of 2013 due to limited returns in the low
interest rate environment.
"I expect NII (net interest income) will grow in 2014...
roughly more than 2 percent."
Fourth-quarter attributable net profit at Komercni fell 2.1
percent to 2.97 billion crowns ($147.81 million), in line with
the average estimate of 2.96 billion in a Reuters poll.
The bank's board proposed paying a 230 crowns per share
dividend for 2013 profit, unchanged from the previous year.
Shares in Komercni Banka traded up 0.7 percent at 4,489.0
crowns by midday, underperforming a 1.2 percent drop in the
"(2014) results should be flat. It means, in terms of
dividend, the same level might be expected next year," BH
Securities analyst Petr Hlinomaz said.
Komercni Banka's capital adequacy ratio ended 2013 at 15.8
percent, well above regulatory minimums.
($1 = 20.0939 Czech crowns)
(Reporting by Jason Hovet; Editing by Mark Potter and Jane