Czech banks increased net profit 36.3% yoy to CZK 27,165 mil in the third quarter of 2022 and generated ROE of 16.3%. Operating income rose 25.7%, cost to income dropped to 40.4% and banks' share of bad loans fell to 2.13%. Komercni Banka generated the biggest profit while Max banka produced the biggest loss in 3Q2022.
Revenues increased 25.7% yoy to CZK 56,944 mil in the third quarter of 2022. Net interest margin increased by 0.420 bp to 1.85% of assets driven by a positive asset growth (5.71% yoy) and higher interest rates (up 614 bp to 7.25%).
Operating costs grew 5.15% yoy and banks operated with a cost to income ratio of 40.4% in the third quarter of 2022. With 39,187 employees in the sector, staff accounted for 49.8% of total costs. Banks paid their staff CZK 97,430 per person per month.
Banks put aside CZK 2,588 mil in provisions in the third quarter of 2022, or 7.62% of operating profit. Share of bad loans decreased to 2.13% of total loans and provisions covered 85.9% of non-performing loans.
Asset growth sped up to 5.71% yoy as loans increased 2.69% qoq (up 7.60% yoy). Mortgages added 1.13% qoq (up 6.80% yoy), consumer loans rose 1.40% qoq (up 5.72% yoy) and corporate loans increased by 7.90% qoq(up 7.90% yoy).
Deposits grew 1.21% qoq and rose 7.87% yoy, so loans to deposits reached 63.3% at the end of the quarter. Czech banks remain well-capitalized with Tier 1 ratio at 21.1%.
Komercni Banka was the most profitable bank in the third quarter of 2022 with a net profit of CZK 4,650 mil, Hypotecni Banka was the most cost efficient (cost to income at 13.6%), Trinity Bank grew its loans the most (up 39.2% qoq) while Trinity Bank had the biggest increase in deposits (309% qoq).