(Adds CEO quote, lending details, provisions release
PRAGUE May 4 Czech lender Komercni Banka
posted a 41 percent rise in first-quarter net profit,
boosted by the sale of its Prague headquarters building, the
bank said on Thursday.
Reported attributable net profit rose to 4.1 billion crowns
($167.12 million) while net profit adjusted for the
extraordinary gain was up 11 percent to 3.2 billion crowns.
The bank's earnings were also helped by a small net release
of provisions versus a net creation a year ago, along with a 43
percent rise in trading gains in the first quarter as market
expectations that the central bank would end an intervention
regime keeping the crown weak boosted corporate hedging
This rise compensated for falling net interest income and
net fees. Overall net banking income rose 2 percent to 7.8
billion crowns, in line with the average estimate in a Reuters
With the economy growing firmly and inflation back above
target, the Czech National Bank (CNB) abandoned its currency
regime on April 6.
Komercni Banka Chief Executive Albert Le Dirac'h said the
expectations around the currency regime exit in the first
quarter and the huge inflow of foreign investor money it brought
"influenced pricing and partly leaked into deposits in the
"At the same time, exporters were keen to hedge their future
foreign revenues against potential appreciation of the Czech
crown. From this perspective, the first quarter was not a usual
one," he said.
With the crown floating freely again, market attention has
turned to how soon the central bank may raise interest rates,
which have sat near zero since 2012. Analysts see the first rate
rise in the first half of 2018.
The low-rate environment has weighed on banks and they have
responded by stepping up lending.
Komercni Banka, which is the country's third biggest bank
and majority owned by France's Societe Generale,
raised lending by 8.6 percent year-on-year in the quarter,
boosted by both consumer and corporate lending.
Client deposits, excluding repo operations for clients, grew
($1 = 24.5330 Czech crowns)
(Reporting by Jason Hovet; Editing by Sunil Nair)