Czech banks are seeing fading demand for loans, with high
interest rates especially hitting mortgage markets and boosting
competition between lenders.
Komercni's net banking income fell 5.5% on the year, while
net interest income dropped 7.4%.
The bank said its 2023 revenue would likely decline from
2022, having previously forecast little change.
Net interest income will fall at a "high-single-digit pace"
due to deposit costs rising as customers shift from current
accounts to term and saving deposits which pay higher rates, it
said.
"High rates are here longer than banks were expecting,"
Chief Financial Officer Jiri Sperl told reporters.
Part of the drop is also due to a high base after net
interest income shot up while the central bank sharply increased
interest rates between June 2021 and June 2022. Since the bank
paused rate hikes, that effect faded.
Komercni Banka shares fell 2.8% on Friday by 1036 GMT and
are down 6.7% in the past year.
A growing minority of central bankers voted for a rate hike
at the last meeting, although markets expect rate cuts later
this year.
Komercni Banka said first-quarter results were impacted by
subdued consumer and business confidence as the economy
gradually emerges from recession.
Lending rose 5.1%, in line with the bank's 2023 outlook.
Sperl said a higher corporate tax rate, if approved as part
of the government's budget consolidation plans, could have a 400
million crown negative bottom-line impact in 2024.
($1 = 21.2420 Czech crowns)
(Reporting by Jason Hovet, Editing by Louise Heavens)
PRAGUE, May 12 (Reuters) - Czech lender Komercni Banka lowered its outlook for banking revenue in 2023 on
Friday as it pays the price for customers moving to higher
yielding term deposit accounts amid rising inflation.
The country's third-biggest bank, majority owned by France's
Societe Generale , reported a net profit of 3.56
billion crowns ($167.59 million), above a Reuters poll forecast
of 3.33 billion, mainly due to the release of loan provisions.
The bank's French parent also beat expectations on Friday
after turmoil in bond and currency markets boosted its trading
business.
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