A National Property Fund spokeswoman denied earlier reports that Societe Generale is seeking a reduction in the CZK 40 bil. purchase price it agreed to pay for the state’s 60% stake in the bank. Despite the statement, however, the fact is that the agreement between the state and SG does allow an adjustment to the privatization price by +/- CZK 2 bil. (depending on KB’s NAV at the time of the transaction, which is expected later this year), so a reduction to approximately CZK 38 bil. cannot be ruled out. The bottom line is that the impact (on KB’s P&L and on the privatization price) of possible additional provisioning against KB’s CDO investment remains uncertain and this does not help the stock. Neutral.
Separately, a KB spokeswoman said in this connection that KB has implemented earlier (June) recommendations by the central bank towards improving its internal control mechanism. Neutral.
(Ondřej Daťka)