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UniCredit Bank Czecho-Slovakia - Takeaways from 3Q2022 Results

Jiří Staník
November 16, 2022

UniCredit Bank Czecho-Slovakia decreased its net profit 3.04% yoy to CZK 2,104 mil in 3Q2022 and generated ROE of 11.6%.

Revenues increased 2.21% yoy and cost rose 2.10%, so cost to income decreased to 45.6%

Loan to deposit ratio decreased to 65.2% and capital adequacy increased to 22.7%

Revenues & Costs

Revenues increased 2.21% yoy to CZK 4,454 mil in the third quarter of 2022. Net interest income rose 5.28% yoy and formed 68.1% of total with net interest margin decreasing 0.038 pp to 1.23% of total assets. Fee income fell 2.95% yoy and other income decreased 4.8% yoy. When compared to three years ago, revenues were up only 1.80%:

Average asset yield was 2.45% in the third quarter of 2022 (up from 1.50% a year ago) while cost of funding amounted to 1.32% in 3Q2022 (up from 0.253%).

Costs remain under good control as operating expenses increased by only 2.10% yoy.  Inspite of weakrevenue growth, the bank operated with a solid cost to income of 45.6% in the last quarter. Staff cost rose 2.46% as the bank employed 2,862 persons (stable yoy) and average person cost the Bank CZK 100,862 per month:

Loans, Deposits and Capitalization

UniCredit Bank Czecho-Slovakia's customer loans grew 2.7% qoq and 4.73% yoy in the third quarter of 2022 while customer deposit growth amounted to 14.3% qoq and 26.4% yoy. That’s compared to average of 10.8% and 9.00% average annual growth seen in the last three years.

At the end of third quarter of 2022, UniCredit Bank Czecho-Slovakia's loans accounted for 65.2% of total deposits and 48.0% of total assets.

Retail loans grew 1.01% qoq and were 7.53% up yoy. They accounted for a third of the loan book at the end of the third quarter of 2022 while corporate loans increased 2.27% qoq and 4.14% yoy, respectively. Mortgages represented 30.8% of the UniCredit Bank Czecho-Slovakia's loan portfolio, consumer loans added a further 2.45% and corporate loans formed 50.8% of total loans:

We estimate that UniCredit Bank Czecho-Slovakia has lost 0.333 pp market share in the last twelve months in terms of loans (holding 12.1% of the market at the end of 3Q2022). On the funding side, the bank seems to have gained 1.73 pp and held 11.8% of the deposit market. Both numbers were calculated from Bank's consolidated numbers and included loans and deposits of Slovak operations, so actual market share data are somewhat lower than presented. Having said that, the trend might be useful to watch here:

Without disclosing details regarding asset quality in the third quarter, we assume UniCredit Bank Czecho-Slovakia's non-performing loans reached 2.5-3.0% of total loans, down from 2.98% when compared to the previous year. Provisions covered some 90-100% of NPLs on our estimates at the end of the third quarter of 2022, up from 77.3% for the previous year.

Loan loss provisions have "eaten" some 5.78% of operating profit in the third quarter of 2022 as cost of risk reached 0.115% of average loans:

UniCredit Bank Czecho-Slovakia's capital adequacy ratio reached 22.7% in the third quarter of 2022, up from 22.2% for the previous year. The Tier 1 ratio amounted to 22.4% at the end of the third quarter of 2022 while bank equity accounted for 14.9% of loans:


Overall, UniCredit Bank Czecho-Slovakia made a net profit of CZK 2,104 mil in the third quarter of 2022, down 3.04% yoy. This means an annualized return on equity of 11.6%, or 14.0% when equity "adjusted" to 15% of risk-weighted assets. Operating profit grew 2.3% yoy in the third quarter:


Relatively solid set of results in the third quarter of 2022 given the fall in non-interest income. The Bank continues in a good cost control, especially, given the rising inflationary pressures and low cost of risk suggests limited concerns from asset quality deterioration. However, lack of growth and limited profitability remain question marks

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).