By Leos Rousek
PRAGUE--Ceskoslovenska Obchodni Banka AS, or CSOB, a Czech unit
of Belgian lender KBC Group NV (KBC.BT), said Tuesday its net
profit in the six months through end-June rose 27% on the year to
7.88 billion koruna ($390 million), partly due to an 84% cut in
CSOB's impairment losses.
CSOB's earnings contrast with those of its parent. KBC swung to
a net loss of 160 million euros ($199 million) in the first half
from a EUR1.15 billion net profit in the first half of 2011.
KBC's Czech unit booked CZK333 million in impairment losses in
the first half from CZK2.04 billion a year earlier, as it nearly
eliminated its exposure to Greek, Spanish and Italian bonds. Most
of its impairment booked in the six moths through end-June are in
the form of provisions against non-performing loans, issued to
CSOB's Czech clients, the bank said.
CSOB, the largest Czech lender in asset terms, confirms its role
as a key profit generator for its Belgium parent which has said it
is refocusing its business on Belgium, Central and Eastern
Europe.
KBC's Czech unit is one of the top five Czech lenders, all of
which are controlled or fully-owned by European banks and account
for most of the local banking sector. All five European lenders,
which also include UniCredit SpA (UCG.MI), Erste Group Bank AG
(EBS.VI), Societe Generale SA (GLE.FR) and Raiffeisen Bank
International AG (RBI.VI), are highly profitable in the Czech
market.
CSOB said its net interest income rose 3% on the year to
CZK12.62 billion in the first half, while its net fees and
commissions dropped 9% on the year to CZK2.80 billion.
Write to Leos Rousek at leos.rousek@dowjones.com
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