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Max banka - Takeaways from 2Q2023 Results

Jiří Staník
August 13, 2023

Max banka posted a record net profit CZK 89.3 mil in 2Q2023 and generated ROE of 13.9%. 

Revenues more than doubled as deposits increased four-fold. Cost fell 9.7%, so cost to income decreased to 64.1% from more than 100% last year.

With almost 90% of its assets placed with Central Bank and 97% of its revenues coming from interest income, further challenges lay ahead.

With loan to deposit at 7.9% and capital adequacy in access of 30%, the Bank is well positioned to address the asset side when the interest rate differential narrows. 

Max banka made a second consecutive quarterly net profit of CZK 89.3 mil improving its bottom line by hefty CZK 128 mil when compared to last year. A jump in interest income from a 4-fold increase in deposits, absence of trading losses, good cost control and additional provision writebacks all contributed to the strong performance last quarter:

Revenues & Costs

Revenues increased 115% yoy to CZK 181 mil. With net interest margin falling further 21 pp last quarter (down 1.46 pp yoy) to 1.58% of total assets, the increase is driven purely by a massive volume growth in retail deposits. Absence of other income/trading losses helped also last quarter when compared to last year:

Average asset yield was 6.93% in the second quarter of 2023 (up from 4.96% a year ago) while cost of funding amounted to 5.68% in 2Q2023 (up from 2.30%). With CZK 42.5 bil, or almost 90% of total assets placed with Central Bank, Max banka continues to rely heavily on attracting new customers at high deposit rates and "parking" its access liquidity with the Central Bank:

Having said that, costs decreased by 9.7% yoy and the bank operated with average cost to income of 64.1% in the last quarter. That's a great improvement from a figure of more than 100% seen in the past. Good cost control has been seen particularly at the personnel with staff costs falling almost 20%:

Loans, Deposits and Capitalization

Max banka's customer loans decreased further 18.1% qoq in the second quarter of 2023 as post-acquisition clean up continues. At the end of second quarter of 2023, loans accounted for only 7.9% of total deposits and 7.3% of total assets.

On the other hand, retail deposits continued flowing in and they increased further 23.7% qoq last quarter. When compared to last year, they rose more than 4-times:

However irrelevant given their low volumes and part of assets, retail loans fell 5.3% qoq and were 22.3% up yoy. They accounted for 21.5% of the loan book at the end of the second quarter of 2023 while corporate loans decreased 23.7% qoq (down 36% yoy, respectively):

Based on the above, we estimate that Max banka has lost 0.048 pp market share in the last twelve months in terms of loans (holding 0.083% of the market at the end of 2Q2023). On the funding side, the bank seems to have gained 0.514 pp and held 0.645% of the Czech deposit market:

With no official data on asset quality in the last two quarters, we assume Bank's numbers remained good. This is due mainly to a post-acquisition clean up of the loan portfolio (NPL ratio of 0.8% at the end of 2022) and further CZK 30 mil provision write-back we have seen in the first half of 2023.

We therefore assume NPLs to stay at around 1.0% of loans and to be well covered by provisions:

With low exposure to customer lending (and no official details), we assume Max banka's capital adequacy ratio has reached 30-40% in the second quarter of 2023, up from 27.9% for the previous year:


Overall, Max banka made a net profit of CZK 89.3 mil in the second quarter of 2023, up CZK 128 mil when compared to last year. This means an annualized return on equity of 13.9%, or 3.49% when equity "adjusted" to 15% of risk-weighted assets:


The profit turnaround of Max banka looks impressive and the Bank seems to be reaping benefits  of its price-aggressive deposit-taking campaign started in the last quarter of 2022. The volumes bring economies of scale, though it's still a long way to go for the Bank when having a vast majority of the new deposits "parked" with the Central Bank. The Bank has a plenty of liquidity and funding to utilize its asset side, though this is also where the bigger challenges lay ahead...

Jiří Staník
Jiří Staník
CEO & Founder
He spent nearly two decades analysing companies in the region of Central and Eastern Europe, primarily in the area of financial services. Jiri built and headed Equity Research at Wood & Company, a Central European brokerage firm, and got several awards (such as The Best Equity Research or The Best Analyst by Euromoney).