CSOB Says Quarterly Net Declined 30% on Greek Bond Charge

Ceskoslovenska Obchodni Banka AS, the Czech unit of KBC Groep NV, said its fourth-quarter profit fell 30 percent after the lender took a charge on Greek bonds.

Net income for the three months ended Dec. 31 dropped to 2.26 billion koruna ($123.4 million) from 3.22 billion koruna a year ago, the Prague-based lender said in a presentation on its website today. Net interest income, the lender’s main source of revenue, rose 1 percent to 6.25 billion koruna.

The bank was able to demonstrate “very strong” performance under more difficult and “certainly more volatile” market circumstances, Chief Finance Officer Bartel Puelinckx said the press conference in Prague today. The lender’s competitive advantage is its “strong-quality” credit portfolio, the executive said.

Ceskoslovenska Obchodni Banka, known as CSOB, took a charge on Greek bonds worth 600 million koruna in the fourth quarter, the lender said. The bank already provisioned 3.1 billion koruna of Greek state bonds and its remaining exposure as of Dec. 31 was 1.4 billion koruna, CSOB said.

The book value of CSOB’s Italian bonds is 940 million koruna, while the book value of Spanish bonds was 610 million koruna, the lender said. CSOB has no exposure to Irish and Portuguese state paper, it said.

The loan portfolio grew 10 percent from a year ago to 441.1 billion koruna, driven by growth in corporate lending and mortgages, the lender said. Deposits advanced 3 percent from a year ago to 611.6 billion koruna.

The final decision about a dividend has not been made yet and the matter also needs to be discussed with the regulator, Puelinckx said. CSOB will remain adequately capitalized to support growth in the local market, according to the executive.

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