Komerční banka today reported its consolidated results for the first quarter of 2017. Total revenues were up by 1.7% year on year to CZK 7.8 billion. This result was boosted by clients’ strong currency hedging activity ahead of the CNB’s ending its interventions. Reported operating expenditures declined by 18.5% to CZK 3.2 billion, reflecting the fact that this line includes also net gain from sale and revaluation of KB’s headquarters buildings. After adjusting for these one-off items, operating expenditures rose by 1.6% to CZK 4.0 billion. Recurring gross operating income (before provisions for risk expenses) was up by 1.7%. The cost of risk for the quarter was negligible (net provisions release of CZK 0.1 billion), reflecting the favourable economic environment and successful recovery performance. The reported net profit attributable to shareholders thus increased by 41.0% to CZK 4.1 billion. Recurring net profit, excluding one-off items relating to headquarters, was higher by 11.2%, at CZK 3.2 billion.
Gross loans to clients expanded by 8.6% to CZK 596.1 billion. Total deposits climbed by 12.7% to CZK 758.2 billion. Capital adequacy reached 15.7%. KB’s regulatory capital base was comprised solely of Core Tier 1 instruments. Liquidity measured by the ratio of net loans to deposits was at a strong 76.7%.
“The financial markets in the first quarter were affected by expectations that the central bank’s currency interventions were nearing their end. This attracted massive inflows of foreign capital, which influenced pricing and partly leaked into deposits in the banking system. At the same time, exporters were keen to hedge their future foreign revenues against potential appreciation of the Czech crown. From this perspective, the first quarter was not a usual one,” remarked Albert Le Dirac’h, KB’s Chairman of the Board of Directors and Chief Executive Officer. “As for KB, we grew the volumes of loans and assets under management and we took several steps to improve efficiency, enhance co operation among various teams within KB Group, and ensure that we will be well prepared for the future, such as by combining our headquarter functions within two locations in Prague” added Albert Le Dirac’h.