* Bank's risk provisions smaller than expected
* Bank says cost of risk coming under control
* Shares close up 3.6 pct
(Adds details, comments)
PRAGUE, May 7 (Reuters) - Net profit at Komercni Banka
<> fell 7.3 percent in the first quarter, less than
analysts' estimates due to lower provisions and despite building
pressure from a slipping Czech economy.
The country's top corporate lender has seen its clients
suffer under an economy heading for its first recession in more
than a decade, which boosted its provisioning in the first
quarter by an annual 244 percent.
Komercni, which has said it targets flat profit in 2009
after double-digit growth in previous years, said the cost of
risk should stay stable this year.
"Komercni Banka is ready for further impact of the recession
of the Czech economy," Chief Executive Laurent Goutard said.
"There is definitely the capacity to keep the cost of risk
under control."
Attributable net profit dropped to 2.8 billion crowns
($139.4 million), from 3.05 billion a year ago, above the 2.23
billion expected in a Reuters poll.
Net interest income at Komercni, majority owned by France's
Societe Generale <SOGN.PA>, rose to 5.42 billion crowns, up 6.8
percent on the year but below an estimate of 5.51 billion.
The bank said the volume of loans provided in the quarter
grew 15.3 percent to 378.9 billion crowns.
Komercni shares rose more than 5 percent before closing up
3.6 percent at 2,888 crowns, outpacing a 3.25 percent rise in
the Prague index <>.
"The market was positively surprised both on the operating
level and the bottom line," Wood & Co. analyst Jiri Stanik said,
adding that pressure will build on the bank in 2009 that could
see profit down up to 40 percent on the year.
"Being the largest corporate bank in a country where the
pressure (on the economy) is clearly there, I think that if it
wasn't visible in the first quarter the pressure on the asset
quality is going to come in the next quarters," Stanik said.
Provisions for losses from loans, investments and
unspecified "other risks" at the only listed Czech bank jumped
annually to 1.58 billion crowns -- less than 2 billion expected
by some analysts.
Komercni said it has provisioned 850 million crowns for
unsecured claims of 1 billion after energy trader Moravia Energo
went bankrupt, with 650 million provisioned in the first
quarter.
The bank said the top five clients contributing to net
provisions totalled over 80 percent of provisioning in the first
quarter.
"We continue to have a limited number of corporate clients
which are now in a difficult position," the bank's risk officer,
Didier Colin, said.
The Czech central bank forecast on Thursday the economy
would contract 2.4 percent in 2009.
(Reporting by Jason Hovet; Editing by John Stonestreet and
Andrew Macdonald)
($1=20.08 Czech Crown)
