Ceska sporitelna (CS) bank saw its net profit fall by 14.8 percent yr/yr to Kc 2.7bn in Q1 because of the impacts of the coronavirus crisis, and operating profit decreased by 6.8 percent to Kc 5bn.
“The lower profit is mainly due to a decline in net interest income,” according to Cyrrus analyst Lukáš Pfeiler. The robust production of new loans failed to fully compensate for the thinning of net interest margins. He added to the weaker margins mainly due to lower yields on corporate loans, which are based on market rates, he added. According to him, the positive news is the development of risk costs, which decreased compared to the final quarter of 2020.
Consumer loans and mortgages increased in annual terms, the bank said.
“The volume of mortgages provided in Q1 2021 was 9 percent higher year on year. Consumer loans and deposits also grew. At the same time, we have seen only a very small increase in the share of non-performing loans. All this confirms our assumption that the economy will go through a quick post-COVID recovery, supported by strong growth in household consumption,” said CS board chairman Tomas Salomon.
The gross volume of customer loans increased by 4.2 percent yr/yr to Kc 790.9bn. The portfolio of retail loans amounted to Kc 443.6bn, representing a year-on-year increase of 6.6 percent driven by private mortgages. Consumer lending rose by 1.2 percent and loans to small businesses added 2.5 percent yr/yr. The volume of wholesale loans declined by 3.6 percent annually to Kc261.1bn, mainly due to a drop in loans to large corporations, which was affected by forex fluctuations, the bank said.
Household deposits posted an annual hike of 16.3 percent to Kc851.8bn. Deposits of businesses were 1.6 percent higher at Kc240.4bn. Deposits of public sector clients went down by 22.6 percent to Kc 173.1bn in annual terms.
CS, the largest bank in Czechia by client numbers, registered 4.5 million clients at the end of March.
Source: CTK
