Komercni banka’s EGM of yesterday approved a new supervisory board (out of nine members, Societe Generale is represented by five, the National Property Fund by one, and KB employees by three) and approved Friday’s changes in the board of directors (which is now also dominated by SG representatives). At a press conference after the EGM, the new chairman of the board of directors, Alexis Juan of SG, said that KB should improve its ROE to above 25% (we find 20% achievable in and beyond 2002; above 25% seems rather ambitious), that KB will be a universal bank servicing both retail and corporate clients (which it does already), that it should use better alternative distribution channels, that there is growth potential in retail lending, life insurance, pension insurance, etc., and that KB will adopt SG’s loan-processing procedures. KB will keep its name, though its logo might change. Overall, this is nothing dramatically new. We reiterate our buy recommendation for the stock.
(Ondrej Datka)