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PPF Banka - Takeaways from 3Q2022 Results

Jiří Staník
November 24, 2022

PPF Banka almost doubled its net profit to CZK 746 mil in 3Q2022 with ROE of 18.8%.

Revenues increased 78% yoy and cost rose 0.685%, so cost to income decreased to 25.6%

Cost of risk amounted 1.60% and loan to deposit ratio decreased to 28.1%

Revenues & Costs

Revenues increased 78% yoy to CZK 1,261 mil in the third quarter of 2022. TOP line has been driven by higher interest rates (net interest income rose 159% yoy) as net interest margin increased 1.25 pp to 2.57% of total assets. Fee income grew 29.4% yoy and added a further 4.72% to total revenue. On the other hand, other income fell CZK 533 mil when compared to last year, which could be partly offseting the heavy net interest income increase. Still, when compared to three years ago, revenues were up 101%:

Average asset yield was 4.94% in the third quarter of 2022 (up from 1.70% a year ago) while cost of funding amounted to 2.52% in 3Q2022 (up from 0.406%).

Costs increased by only 0.685% yoy and the bank operated with impressive cost to income of 25.6% in the last quarter. Staff cost rose 8.38% as the bank employed one person less than last year. The Bank's staff amounted to CZK 166,725 per person per month including social and health care insurance cost:

Loans, Deposits and Capitalization

We estmate PPF Banka's loans grew approximately 3.7% yoy in the third quarter of 2022 while deposit growth amounted to around 12.7% yoy. That’s compared to average of 8.4% and 2.3% average annual growth seen in the last three years.

At the end of third quarter of 2022, PPF Banka's loans accounted for 28.1% of total deposits and 17.0% of total assets.

We estimate that PPF Banka has lost 0.042 pp market share in the last twelve months in terms of loans (holding 1.11% of the market at the end of 3Q2022). On the funding side, the bank seems to have gained 0.106 pp and held 2.49% of the deposit market:

Cost of risk reached 1.60% of average loans and provisions have "eaten" some 19.1% of operating profit in the third quarter of 2022. With no details provided on asset quality, we assume PPF Banka's non-performing loans reached 4.0-4.50% of total loans, up from 3.47% when compared to the previous year. Provisions might be covering some 60-70% of NPLs at the end of the third quarter of 2022 on our estimates, down from 73.0% for the previous year.

We estimate PPF Banka's capital adequacy ratio reached 20.4% in the third quarter of 2022, down from 23.1% for the previous year. The Tier 1 ratio amounted to 20.4% at the end of the third quarter of 2022 while bank equity accounted for 36.2% of loans:


Overall, PPF Banka made a net profit of CZK 746 mil in the third quarter of 2022, up 94.6% yoy. Operating profit increased even more, by 142% yoy. This means an annualized return on equity of 18.8%, or 21.8% when equity "adjusted" to 15% of risk-weighted assets:


Another set of very good results confirming positive trend seen in the Bank's profitability in the last quarters. While TOP line benefits from higher interest rates, costs remain under very good control and cost of risk does suggest any significant signs of deterioration.

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).