Ceska Sporitelna was the most profitable bank in the second quarter of 2022 with a net profit of CZK 6,084 mil, Moneta Stavebni Sporitelna was the most cost efficient (cost to income at 14.6%).
Banka Creditas grew its loans the most (up 42.8% qoq) while Trinity Bank had the biggest increase in deposits (362% qoq).
The three largest banks created 52.7% of sector's total profit in the second quarter of 2022, down when compared to 54.4% seen three years ago.
Czech banks reported a net profit of CZK 31,133 mil in the second quarter of 2022, up 53.7% when compared to previous year. This implies ROE of 18.2% in 2Q2022. In the last twelve months, profits rose 80.7% yoy to CZK 93,891 mil and ROE reached 13.5%.
Ceska Sporitelna generated the largest net profit in the last quarter (CZK 6,084 mil) followed by CSOB and Komercni Banka. At the other end of the scale was Max banka with a reported loss of CZK 38.4 mil:
The three largest banks created 52.7% of sector's total profit in the second quarter of 2022, down when compared to 54.4% seen three years ago. In terms of revenue and operating profit, the trio generated 57.6% and 57.1% of the total:
Banks operated with average cost to income of 40.3% in the last quarter as operating costs rose 1.74% yoy. Staff accounted for 46.7% of operating expenditure with a total of 39,012 employees in the sector. While Moneta Stavebni Sporitelna was the most cost efficient based on the cost to income ratio in the second quarter of 2022 (with 14.6%), Hypotecni Banka operated with the lowest operating costs when compared to a sum of loans and deposits, i.e. when utilization of both assets as well as liabilities is taken into account (0.159%):
Commercial banks generated operating profit before provisioning of CZK 34,933 mil in the second quarter of 2022, up 50.8% when compared to last year:
Ceska Sporitelna generated the largest operating profit in the second quarter of 2022 (CZK 7,332 mil), whilst Fio banka was operating with the highest operating margin when compared with risk weighted assets (12.6%):
Provisions have "eaten" some -4.63% of operating profit in the second quarter of 2022 as cost of risk reached -0.078% of average loans. The volume of non-performing loans decreased by 15.1% qoq to CZK 89.8 bil and represented 2.27% of total loans at the end of June. Provisions covered 80.4% of NPLs, up from 75.0% a year ago:
Within the sector, Fio banka had to create the most provisions in the second quarter of 2022 relative to its loans (1.40%) and Moneta Stavebni Sporitelna the least (-1.98%). The cost of risk therefore "erased" 9.19% of bank's operating profit created during the quarter. In terms of overall asset quality, Trinity Bank was operating with the highest share of non-performing loans, some 9.08% of customer loans at the end of June:
Loans increased by 0.834% qoq to CZK 3,958 bil during the second quarter of 2022. This implies an annual growth rate of 6.93% in the last 12 months.
Raiffeisen Stavebni Sporitelna has grown the fastest in relative terms within the last quarter (19.5%% qoq), followed by Banka Creditas and Stavebni Sporitelna Ceske Sporitelny. In absolute terms, however, Ceska Sporitelna the largest piece of the pie when compared to the previous quarter (CZK 24,835 mil or 75.9% of the market net increase) followed by CSOB and Komercni Banka:
Overall, CSOB remains the largest lender with 27.1% of the market followed by Ceska Sporitelna with a 21.9% market share and Komercni Banka (19.1%). At the end of June 2022, most of CSOB's loans came from residential mortgages (46.5% of total). Corporate loans formed 31.1% and consumer loans represented a further 3.37% of the total loan book:
As partly seen above, the three largest banks held 68.2% of the loan market at the end of June (up from 66.0% a year ago) while the five largest banks provided 89.7% of loans (compared to 87.8% a year ago).
Average asset yield fell to 4.27% in the second quarter of 2022, up 2.42 bp when compared to the same period of last year. Banks charged on average 2.53% on mortgage loans (up 0.120 bp compared to last year's 2.41%), interest on consumer loans reached 8.22% (down 0.180 bp from 8.40%) and corporate loans were priced at 6.97% (up 4.34 bp) in the second quarter of 2022.
In the arena of 17 Czech banks, Air Bank has been operating with the highest asset yield in the second quarter of 2022 (6.81% on total assets), followed by Komercni Banka (6.15%) and Trinity Bank (5.08%). At the other end of the spectrum was UniCredit Bank Czecho-Slovakia with only 2.44% and Raiffeisen Stavebni Sporitelna with 2.66% of average assets.
In terms of momentum, Air Bank increased its asset yield the most in the last 12 months, by 172 bp to 6.81%, followed by CSOB (up by 171 bp) and Komercni Banka (up by 166 bp):
Mortgage loans grew 8.80% yoy in the last 12 months and were up 0.673% qoq in the last quarter. At the end of June, mortgages formed 41.4% of total loans.
Within the set of available data, Raiffeisen Stavebni Sporitelna has grown the fastest in mortgages in relative terms within the last quarter (21.6% qoq), followed by Stavebni Sporitelna Ceske Sporitelny and MONETA Money Bank. In absolute terms, however, Raiffeisen Stavebni Sporitelna appears to have captured most of the new market when compared to the previous quarter (CZK 11,249 mil or 103% of the market increase) followed by Ceska Sporitelna (82.2%) and CSOB (50.2%):
Overall, CSOB was the largest mortgage lender with 30.5% of the market followed by Ceska Sporitelna (with a 22.9% share ) and Hypotecni Banka (22.8%). Looking at the last 12 months, Air Bank gained the most in market share - 33.9 bp to 0.763% - compared to Raiffeisen Stavebni Sporitelna's 18.9 bp (to 3.86%) and Modra Pyramida Stavebni Sporitelna's 18.8 bp (a market share of 5.03%):
The combined trio of largest banks held 69.7% of outstanding mortgage loans in June 2022. We estimate they accounted for 60.3% of consumer and 90.6% of all corporate loans at the end of June 2022.
Consumer loans increased 0.846% qoq (up 6.44% yoy) and represented % of total bank loans while corporate loans. Raiffeisenbank Czech Republic seems to have grown the fastest in consumer loans within the last quarter (232% qoq), followed by mBank Czech Republic and Air Bank. In absolute terms, however, Komercni Banka was the largest consumer lender at the end of the quarter:
Corporate loans fell 0.112% qoq and were up 7.71% yoy to CZK 1,221 bil (or 30.8% of loans). We guesstimate that Ceska Sporitelna seems to have grown the fastest in corporate loans within the last quarter (9.70% qoq) while Komercni Banka was the largest corporate lender at the end of the quarter:
Customer deposits increased 2.73% qoq to CZK 6,340 bil during the second quarter of 2022. This means an annual growth rate of 8.29%, which is above the average growth of 7.50% we have seen in deposits in the last decade:
Households deposits grew 1.28% qoq and 3.05% yoy in the last 12 months and represented 52.4% of total customer deposits at the end of June 2022. Corporate deposits decreased by 0.868% qoq (or 5.63% yoy) and made up 20.9% of total.
Trinity Bank appears to have grown the fastest in deposits in relative terms last quarter compared to the next bunch of Czech banks (362% qoq), followed by Banka Creditas and CSOB. In absolute terms, when compared to the previous quarter, however, most new deposits went to Komercni Banka (CZK 52,350 mil) followed by CSOB and Raiffeisenbank Czech Republic:
Overall, CSOB is the largest deposit collector with a 22.1% market share followed by Ceska Sporitelna (21.2%) and Komercni Banka (17.4%). The three largest banks held 60.7% of customer deposits at the end of third quarter. When compared to the same period of last year, we estimate that they have gained 2.33% of the market.
Average cost of funding grew to 2.64% in the second quarter of 2022, down 2.09 bp when compared to the same period of last year. Banks paid on average 2.16% on outstanding corporate deposits (up 0.940 bp) and 1.10% on household deposits (up 0.370 bp).
Current account deposits represented 78.0% of the total as low interest and excess of liquidity did not inspire retailers to save nor banks to offer attractive rates. The share of current accounts increased from 56.9% of the total a decade ago:
With regard to the 17 banks below, Fio banka has been operating with the lowest cost of funding in the second quarter of 2022 (0.524% on total liabilities), followed by UniCredit Bank Czecho-Slovakia (0.976%) and Moneta Stavebni Sporitelna (1.36%). At the other end of the spectrum was Komercni Banka with 4.53% and Air Bank with 3.64%.
In terms of momentum, Air Bank's cost of funds increased the most in the last 12 months, from -0.079% to from 3.64%, followed by Komercni Banka (up by 3.66 bp) and Trinity Bank (up 3.18 bp):
Loan to deposit ratio accounted for 62.4% in Czechia at the end of second quarter of 2022, down from 63.2% a year ago and 76.1% in 2012. When comparing only household loans and deposits, the ratio was 63.2% at the end of June 2022:
Modra Pyramida Stavebni Sporitelna banka had the most "liquid" balance sheet measured by the loan to deposit ratio at the end of June 2022 (143%) followed by Hypotecni Banka with 115% and Raiffeisen Stavebni Sporitelna (107%). In relative terms, Raiffeisen Stavebni Sporitelna increased the utilization of the balance sheet the most measured by a relative increase in loan to deposit ratio:
Czech banks operated with capital adequacy ratio of 21.6% at the end of the second quarter of 2022, down 3.00 bp when compared to the same period of last year. Sector's Tier 1 ratio reached 20.9% and equity accounted for 16.5% of loans. This is up 3.11 bp and down %down bp when compared to five years ago.
Hypotecni Banka reported the highest capital adequacy ratio (45.3%) followed by Max banka (30.2%) and Stavebni Sporitelna Ceske Sporitelny. Moneta Stavebni Sporitelna and Raiffeisen Stavebni Sporitelna managed to operate with relatively low capital ratios of 13.1% and 16.4%, respectively:
Overall, Czech banks generated its shareholders an annualized return on equity of 18.2% in the second quarter of 2022 and 13.5% return in the last four quarters. When equity "adjusted" to 15% of risk-weighted assets, the return on equity would have reached 29.3% in 2Q2022 and 22.6% in the last twelve months.
Fio banka generated its shareholders the highest return in the last quarter (ROE of 45.6%) followed by Moneta Stavebni Sporitelna (42.5%) and Trinity Bank (25.8%). When adjusted for the same level of equity (i.e. 15% of RWA), Fio banka, Moneta Stavebni Sporitelna and CSOB would have made it to the top of the list: