By Leos Rousek
PRAGUE--UniCredit Bank Czech Republic AS, a Czech unit of
Italy's lender UniCredit SpA (UCG.MI) Monday said it has more than
doubled its profit in the six months through end-June on higher
fees and net interest income.
Net profit advanced to 1.61 billion koruna ($79.4 million) from
CZK668 million a year earlier. In contrast the UniCredit group
reported an 18% year-on-year drop to 1.1 billion euros ($1.4
billion) last week.
The Czech unit of UniCredit is among the top five Czech lenders,
all controlled by major European banks, which dominate the local
banking sector. All five European lenders, which also include Erste
Group Bank AG (EBS.VI), KBC Group NV (KBC.BT), Societe Generale SA
(GLE.FR) and Raiffeisen Bank International AG (RBI.VI), are highly
profitable in the Czech market.
UniCredit Bank Czech boosted its net fees and commission 12% on
the year to CZK941 million and net interest income 2% on the year
to CZK3.18 billion in the first half.
Lenders operating in the Czech Republic owe their profitability
levels mainly to large volumes of client deposits, the cheapest
form of financing for banks.
The loan-to-deposit ratio of the Czech banking sector as a whole
is 73%, among the lowest in the European Union, showing that local
banks have surplus liquidity. Moreover, Czech banks are mostly net
creditors of their European lending parents, according to data
compiled by the Czech central bank.
Write to Leos Rousek at leos.rousek@dowjones.com
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