Komercni banka’s unconsolidated IFRS Q1 2004 operating performance is expected to continue the recent trend of rebounding interest income after market interest rates stabilized and the lending portfolio (mostly to retail clients) is growing. Fees income should reflect the gradual increase in penetration of banking services in the Czech Republic, which is also contributing to KB’s improved sales. After several quarters of declining operating costs that reflected the positive effects of its restructuring, we expect them to moderately rise in Q1. Restructuring charges however should decline to zero as the restructuring process in the bank is close to its completion and KB is expected to exploit its current restructuring reserve of CZK 135m in 2004.
Note also that Q1 figures will be significantly affected by a one-off pre-tax gain estimated at CZK 840m from the sale of Muzo (the largest domestic indirect payment processor), KB’s 53% subsidiary. Moreover, net profit should reflect the decline in the CIT nominal rate from 31% to 28% this year.
The company is holding an in-house presentation at 11 a.m. CET and a conference call at 4 p.m. CET.