Czech banks increased net profit 53.7% yoy to CZK 31,133 mil in the second quarter of 2022 and generated ROE of 18.2%. Operating income rose 26.3%, cost to income dropped to 40.3% and banks' share of bad loans fell to 2.27%. Ceska Sporitelna generated the biggest profit while Max banka produced the biggest loss in 2Q2022.
Revenues increased 26.3% yoy to CZK 58,487 mil in the second quarter of 2022. Net interest margin increased by 0.475 bp to 1.81% of assets driven by a positive asset growth (9.59% yoy) and higher interest rates (up 616 bp to 6.64%).
Operating costs grew 1.74% yoy and banks operated with a cost to income ratio of 40.3% in the second quarter of 2022. With 39,012 employees in the sector, staff accounted for 46.7% of total costs. Banks paid their staff CZK 93,928 per person per month.
Banks put aside CZK -1,617 mil in provisions in the second quarter of 2022, or -4.63% of operating profit. Share of bad loans decreased to 2.27% of total loans and provisions covered 80.4% of non-performing loans.
Asset growth slowed down to 1.16% qoq as loans increased 0.834% qoq (up 6.93% yoy). Mortgages added 0.673% qoq (up 8.80% yoy), consumer loans rose 0.846% qoq (up 6.44% yoy) and corporate loans increased by 7.71% qoq(up 7.71% yoy).
Deposits grew 2.73% qoq and rose 8.29% yoy, so loans to deposits reached 62.4% at the end of the quarter. Czech banks remain well-capitalized with Tier 1 ratio at 20.9%.
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 Banka Creditas had the biggest increase in deposits (22.6% qoq).