Komercni Says Quarterly Net Fell on Lower Financial Income

Komercni Banka AS, the Czech unit of Societe Generale SA (GLE), said fourth-quarter profit declined 2.1 percent as proceeds from financial operations and net interest income dropped.

Net income for the three months ended Dec. 31 dropped 2.97 billion koruna ($147 million) from 3.04 billion koruna a year earlier, the Prague-based lender said in a statement today. Net interest income, the lender’s largest source of revenue, fell 2.3 percent 5.33 billion koruna. The board proposed a full-year dividend of 230 koruna per share, it said.

“Recently we have observed multiple positive signals indicating recovery of the Czech economy,” Chief Executive Officer Albert Le Dirac’h said in the statement. Taking into account that central bank measures to weaken the koruna will help exporters and positively influence the unemployment rate and real wages, Komercni looks on the economic prospects for 2014 with “modest optimism,” Le Dirac’h said.

Total lending activity accelerated in the last quarter, driven mainly by mortgages, loans to large corporations and “modestly” reviving consumer loans, Komercni said. The bank’s loan portfolio will probably grow 6 percent to 7 percent this year, Chief Financial Officer Libor Lofler said during a news conference in Prague.

Komercni shares rose 0.5 percent to 4,480 koruna at 10:55 a.m. in Prague trading. The stock has gained 1.3 percent since the beginning of the year.

Income from financial operations dropped 31 percent to 503 million koruna in the fourth quarter from a year earlier.

Czech banks, which reported record profits in 2012, have been suffering from pressures on interest income because of low base rates. The Ceska Narodni Banka left the benchmark interest rate at 0.05 percent for a 10th meeting last week. It also pledged to keep a cap on koruna gains in place until at least early 2015 after its move to weaken it helped boost domestic consumption and industry benefited from rising foreign demand.

To contact the reporter on this story: Lenka Ponikelska in Prague at lponikelska1@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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