for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

Komercni Banka beats Q2 profit estimates as loan growth recovers

PRAGUE, Aug 3 (Reuters) - Czech lender Komercni Banka posted on Tuesday a stronger than expected 76% jump in net profit, spurred by faster loan growth and lower cost of risk.

The Czech Republic’s third-largest lender said it expected revenue to be roughly flat for the full year, the cost of risk to decrease significantly and net interest income to drop slightly.

Komercni Banka’s board intends to call an extraordinary shareholder meeting (EGM) in the fourth quarter to decide on the distribution of an interim dividend from retained profit from 2019 and 2020, the bank said.

Profits were retained, as recommended by the Czech central bank, as the banking sector reeled from the impact of the global COVID-19 pandemic.

Komercni Banka, majority owned by France’s Societe Generale , reported attributable net profit of 3.13 billion Czech crowns ($145.85 million) in the second quarter, above the average estimate of 2.79 billion crowns in a Reuters poll.

Banking income rose 2% to 7.38 billion crowns despite the 0.9% decrease of net interest income to 4.95 billion.

Lending rose 4.7% in the first half, and the bank said that it expected it to grow at a higher mid-single-digit rate in retail, and at a mid-single-digit rate in its corporate division.

The cost of risk fell by 95% to 82 million crowns.

Central bank Governor Jiri Rusnok said on Monday that would allow banks to pay out part of accumulated dividends this year, in accordance with agreed limits.

$1 = 21.4610 Czech crowns Reporting by Robert Muller, Editing by Louise Heavens

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up