Asset quality of Czech banks remains very good. Volume of non-performing loans decreased 2.2% qoq last quarter to CZK 76.6 bil and their share fell to 1.82% of total loans at the end of June 2023. Specific provisions covered 93.9% of non-performing loans, up from 80.4% seen a year ago.
Cost of risk amounted to only 0.27% of loans in the second quarter of 2023 as banks put aside CZK 2.8 bil in provisions. Provisions have therefore "eaten" only 7.2% of banks' operating profit in the last quarter.
Mortgage loans traditionally represent the best level of quality with only 0.71% of them not performing. On the other hand, some 2.99% of corporate loans were classified as well as 5.66% of consumer loans.
With no hard data for all banks, we estimate that Hypotecni banka operated with the highest-quality performing loan portfolio - only 0.57% of loans were not performing at the end of June 2023. On the other hand, we assume J&T Banka reported the highest NPL ratio with around 8-9%.
Having said that, the comparison does not take into account size and quality of the loan collateral, for example.
Helgi Library 
