PRAGUE, Aug. 3 (Reuters) – Czech lender Komercni Banka posted a 76% jump in its net profit larger than expected on Tuesday, boosted by faster loan growth and a lower cost of risk.
The Czech Republic’s third-largest lender said it expected revenues to be roughly stable for the full year, the cost of risk to decline significantly, and net income from interest decreases slightly.
The board of directors of Komercni Banka intends to call an extraordinary general meeting of shareholders in the fourth quarter to decide on the distribution of an interim dividend on retained earnings of 2019 and 2020, the bank said.
Profits have been kept, as recommended by the Czech central bank, as the banking sector has been rocked by the impact of the global COVID-19 pandemic.
Komercni Banka, majority owned by French Societe Generale, reported second quarter attributable net profit of CZK 3.13 billion ($ 145.85 million), higher than the average estimate of Kroner 2.79 billion in a Reuters poll.
Banking income rose 2% to 7.38 billion kroner despite the 0.9% drop in net interest income to 4.95 billion.
Loans rose 4.7% in the first half of the year, and the bank said it expects growth at a higher mid-single-digit rate in retail and an mid-single-digit rate in its business division.
The cost of risk fell 95% to 82 million crowns.
Central bank governor Jiri Rusnok said on Monday he would allow banks to pay part of the dividends accrued this year, within agreed limits.
$ 1 = 21.4610 Czech crowns Report by Robert Muller, edited by Louise Heavens