(Removes Moravia Energo connection to rise in 2009 provisions
in paragraph 9)
* Q4 net profit 2.57 bln crowns vs 2.48 bln forecast
* Cost of risk remains stable, may rise
* Cuts dividend to 170 crown/shr vs 180 crowns
* Shares recover early losses, up 0.7 pct
(Adds CFO comment, shares)
By Jan Korselt
PRAGUE, Feb 18 (Reuters) - Czech lender Komercni Banka
<> posted a better than expected fourth-quarter net
profit on lower provisioning for bad loans but warned of a
possible rise in provisions in the first half of this year.
"It may be a conservative projection, but we think that the
amount of provisioning could still see some increase over the
first two quarters, as the economy is also doing slightly worse
than expected," Chief Financial Officer Pavel Cejka told
Reuters.
The third-largest Czech bank, which saw years of strong
profit growth reverse last year when the economy contracted more
than 4 percent, said retail lending was still restrained by a
national unemployment rate that looks set to top 10 percent for
the first time since 2004.
Sixty percent-owned by France's Societe Generale <SOGN.PA>,
the bank said net profit dropped 22 percent in the final quarter
of last year to 2.57 billion crowns ($136 million) and cut its
dividend for the year to 170 crowns per share from 180 crowns
last time. []
Analysts on average had forecast a fourth-quarter net profit
of 2.48 billion crowns, according to a Reuters poll, with the
year-ago result boosted by one-off gains.
Net interest income dipped to 5.58 billion crowns, but in
line with market expectations. Net fees were stable.
"It is good news, it is mainly due to slightly better income
and lower costs," Erste Bank analyst Guenter Hohberger said. He
said net provisions were below his expectations.
Komercni's share price was up 0.7 percent at 3,735 crowns by
1236 GMT, recovering from an earlier low of 3,620 crowns.
BAD DEBT PROVISIONS
Komercni's loan provisions for the fourth quarter fell to
1.19 billion crowns from 1.29 billion in the same period of
2008. Loan provisions nearly doubled in the full year, rising to
5.35 billion crowns from 2.82 billion crowns in 2008.
A Czech economic recovery this year is expected to ease
pressure on Komercni's corporate clients. Still, the bank said
it expected the cost of risk in the corporate sector to rise to
80-90 basis points, up from 72 bps in the fourth quarter.
The bank said it would also watch real estate prices and
mortgage collection. A survey this week showed Czech residential
prices dropped last year for the first time in 20 years.
In December Chief Executive Henri Bonnet told Reuters that
the cost of risk was stabilising on the corporate side, and
despite a further increase in the consumer segment, the bank
could release some provisions later this year. []
Komercni's shares have risen 56 percent in the past 12
months and outperformed a 43 percent rise in the Prague index
<>.
They trade at 12.8 times expected earnings, compared with 11
times for Austria's Erste Group <>, which owns the
second largest Czech bank Ceska Sporitelna.
The country's largest bank, KBC <KBC.BR> unit CSOB, is set
to be listed in Prague this year. Last week, it reported a 17
percent fall in underlying profit mainly from lower income on
market operations like hedging and international payments.
($1=18.90 Czech crowns)
(Additional reporting by Jason Hovet and Jana Mlcochova;
Writing by Jason Hovet; Editing by Greg Mahlich)
