Komercni banka said yesterday that its board of directors has agreed to sell CZK 20 bil. worth of non-performing loans to GE Capital for more than CZK 4 bil. The sale price is at the upper edge of earlier estimates (CZK 3.5 bil.-4 bil.). The portfolio partially comprises state-guaranteed assets, but neither the exact share nor the portfolio structure were disclosed, thus making an estimate of the direct impact on KB’s P&L rather difficult at present.
Nevertheless, if all of KB’s state-guaranteed assets (which amount to CZK 26 bil.) were sold for 20% of their nominal value, KB could release, we estimate, up to CZK 2.6 bil. of its general reserves (out of the CZK 4.4 bil. held for the guaranteed portfolio in September 2002), but a significantly smaller amount is more likely.
The sale is expected to be approved by a KB EGM preliminary planned for January 2003.
Jan Hajek