Komercni banka said yesterday that it has acquired 15% of its USD 200 mil. subordinated debt. The debt bears interest charges of 9% p.a., and this operation is expected to reduce KB's re-financing costs by CZK 35 mil.- 44 mil. p.a. Given KB's rather high capital adequacy ratio (14.2% in June 2002), the news is positive for the stock.
Separately, the Czech newsweekly Euro reported yesterday that three bidders are interested in a CZK 22 bil. portfolio of non-performing loans that KB has for sale. The magazine speculates that the selling price could amount to approx. CZK 3.5bn-4.0bn, which we consider as reasonable. Following due diligence, bids are expected to be submitted in November.
Jan Hajek