Institutional Sign In


Česká spořitelna - Analysis of 3Q2014 Performance

Language: English
Company: Ceska Sporitelna
Provider: Helgi Library
Pages: 18

This report analyses the performance of the Bank for the 3Q2014. You will find all the necessary details regarding volume growth, market share, margin and asset quality development in the Bank.

The key highlights are:

Spořitelna's 3Q14 profit grows nearly 4% yoy..

Česká spořitelna reported a net profit of CZK 3,447 mil. in 3Q14, the highest among the large Czech banks this quarter. This is up 3.8% yoy when compared to last year. Since revenue and operating profit were down 2.6% and 6.5% yoy respectively, the net profit growth was driven only by the development in the area of other operating income such as revaluation of securities, or other income

The overall profitability and efficiency of the bank remain impressive. ROE reached 15% at the end of September while cost to income ratio remains at below 44%, an impressive figure for a retail bank

...but balance sheet momentum is a worry

Weak momentum remains the biggest worry for Česká spořitelna in our view. The bank's loan book grows more slowly than the market while deposits have been falling in absolute terms this year.

While deposit growth is partly a result of accounting changes (reclassification of pension fund deposits), the weak lending growth is truly disappointing. That is especially the case as most of the market growth comes from retail, the area in which Spořitelna has been historically strong.

In the last two quarters, for example, Spořitelna sold fewer mortgages than the more corporate-oriented Komerční banka (both in volume of loans as well as number of mortgages).

As a result, Česká spořitelna's market position continues to deteriorate:

Not that the bank suffers from a lack of capital or funding. With capital adequacy exceeding 18% and loans accounting for 73% of deposits only, the bank is well positioned to grow faster.

Asset quality slightly deteriorates

The conservative approach of the bank is partly reflected in asset quality developement. The volume of non-performing loans dropped by more than CZK 3.5 bil. in the last twelve months - the highest among Czech banks.

In addition, Česká spořitelna's provision coverage of 80% (of NPLs) is the second highest on the market (just behind Air Bank).

You will find more details about the bank at

Banking | Czechia | January 11, 2015
Excel Sheet, 18 pages