Komercni Banka AS, the Czech unit of Societe Generale SA, said its third-quarter profit more than doubled as a one-time loss on Greek bonds from year earlier wasn’t repeated.
Net income for the three-month period rose to 3.32 billion koruna ($167 million) from 1.56 billion koruna a year earlier, the Prague-based lender said today in a statement. That missed the 3.38 billion-koruna median estimate by 10 analysts in a Bloomberg survey. Net interest income, the lender’s largest source of revenue, fell 2 percent to 5.46 billion koruna.
“Operational results dropped quarter-on-quarter as a result of a worsening economic situation” Cyrrus AS analyst Marek Hatlapatka said. “However, the drop was slightly bigger than we expected, which is disappointing.” Hatlapatka recommends investors to “buy” the shares.
The Czech economy contracted for three quarters through June as households curbed spending in response to the faltering economy and the country is facing the prospects of the longest recession on record. The Czech Republic, which isn’t part of the 17-country euro region, relies on the 27-nation European Union to buy 80 percent of exports.
Komercni’s performance was “generally successful in the challenging macroeconomic context,” Chief Executive Officer Henri Bonnet said in a separate statement. “In response to the uncertainty caused by slowing export demand and turbulence in domestic politics, Czech customers are more cautious, thus reducing the demand for loans despite extremely low interest rates.”
Komercni fell 73 koruna, or 1.9 percent, to 3,786.
Komercni’s third-quarter net banking income fell 5.5 percent to 7.8 billion koruna from a year earlier. Gross operating income declined 10 percent to 4.47 billion koruna.
Komercni hasn’t seen any changes in lending trend in the current quarter from the previous three months, Chief Executive Officer Henri Bonnet said at the press briefing today. The executive also reiterated Komercni policy of paying out 60 to 70 percent of profit in dividends, adding that there isn’t any commitment to it.
The lender said on Nov. 8 last year that it wrote down 2.64 billion koruna in Greek bonds.