Komercni banka will release its 9M IAS results today, at 10 a.m. CET. An analysts’ presentation will be held at 11 a.m. CET. We expect KB continued improved revenue generation, but higher operating costs should result in only a modest growth in profit before provisions. We expect KB to create CZK 1.44 bil. of net provisions in Q3 (vs. CZK 0.74 bil. and CZK 0.92 in Q1 and Q2, respectively), partially due to the expectation of CDO-related provisions, and we expect more provisioning in Q4. The CDO exposure is an issue that has raised risks related to the stock, and new information on the CDOs (provisions, change of policy by new management, etc.) may have an impact on the stock. As usual, provisioning is the most uncertain item.
(CZK mil.) Patria Reuters 9M 2000 Change
Total oper. revenues 17,042 16,810 15,925 7.0%
Total oper. costs 9,979 n.a. 9,112 9.5%
Profit before provisions 7,063 7,000 6,813 3.7%
Provisions 3,096 n.a. 6,814 -54.6%
Pretax Income 3,967 n.a. -1 n.m.
Net Income 2,975 3,420 -1,351 n.m.