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INTERVIEW-Komercni Banka seeing slowdown in Czech corporate borrowing
September 20, 2017 / 3:34 PM / a month ago

INTERVIEW-Komercni Banka seeing slowdown in Czech corporate borrowing

* Komercni Banka CFO says may revise lending outlook down

* Says weakening corporate lending main driver

* Sees mortgage lending down in 2018 as interest rates rise

* Confirms 2017 dividend guidance, to keep guiding year by year

By Jason Hovet

PRAGUE, Sept 20 (Reuters) - Komercni Banka, the Czech unit of Societe Generale, said its loan growth may not be as strong as expected this year as corporate borrowing has started to slow.

Chief Financial Officer Jiri Sperl told Reuters that the Czech Republic’s third-largest bank expects “broadly flattish” banking revenue for the full-year, despite a boost from the central bank’s interest rate tightening cycle that began last month.

Higher rates would help and that was already visible in August, he said. But with a slowdown in corporate lending growth, Komercni Banka is likely to cut its loan growth outlook for this year, previously seen in the mid- to high-single digits.

“Without any doubt there is a slowdown,” Sperl said on Wednesday, without commenting directly on a new outlook.

“I cannot exclude that we will have to revise down a bit (the overall lending growth outlook).”

He said the slowdown was partly due to structural shifts in the market and increased lending in euros rather than the Czech crown. He said Komercni Banka was more cautious about the trend.

“We don’t participate too much in euro-denominated loans. This is another reason there is not such huge (lending) growth like we had indicated,” he said.

The Czech central bank has also sought to get ahead of a hot housing market by setting tougher recommendations on mortgage lending that mean borrowers need a bigger down payment, often disqualifying many potential buyers.

Sperl said mortgage growth this year would be relatively fast but would halve next year to around 4 percent.

He also said the bank was sticking to its plan to pay out 60 percent of recurring net profit for the year 2017 as dividends. The bank was not ready to reinstate an official dividend policy range for future years like it had in the past but would guide investors on a year-by-year basis, he said. (Reporting by Jason Hovet; Editing by Susan Fenton)

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