Ceska sporitelna’s Q1 2001 consolidated IAS results, released on Friday morning, were slightly worse than our forecasts and significantly below the market consensus. Net profit, at CZK 346 mil., and operating profit (before exceptional items), at CZK 1.18 bil., both underperformed our expectations: CZK 461 mil. and CZK 1.52 bil., respectively (Reuters’ consensus was CZK 748 mil. and CZK 1.48 bil., respectively). Ceska sporitelna thus reached 6.05% ROE, in line with its own 6% target for full-year 2001 ROE.
The main revenue figures (net interest income at CZK 3.43 bil., net fees income at CZK 1.38 bil.) showed solid growth, and were in line with our forecasts. However, operating costs were slightly higher than expected, mainly due to higher personnel costs (the effect of accounting for bonus payments and higher compensation for front-office employees) and other administrative costs (mainly transformation costs). Provisioning, at CZK 581 mil., was expected; CS almost completed its loan reclassification process in first quarter 2001. Total assets (+1.45% growth from year-end 2000) and major balance sheet items developed in line with our forecasts (e.g., net client loans grew in Q1 2001 by CZK 4.13 bil., to CZK 115.51 bil.).
Separately, CEO Jack Stack said on Friday that a stock incentive plan for Ceska sporitelna board members could include both Ceska sporitelna and Erste Bank stocks.
(Jan Hájek)