Finance Minister Pavel Mertlik said in a newspaper interview today that there will be no more government assistance to the financial sector, apart from IPB (the government guarantees IPB assets recently sold to CSOB). In our opinion, his comments should not be interpreted as saying that there will not be any Komercni banka pre-privatization guarantees. Based on an earlier Cabinet decision, the size of the guarantees is to be approved by Cabinet in late August/early September following the results of the pre-privatization audit that is now underway in KB. (We believe that the boost to KB’s value related to the guarantees will be much smaller than in the case of the two last KB bailouts).
We do not attach much significance to the Finance Minister’s comment, but in the absence of real news, the market may look at this sort of information.