Komercni banka is scheduled to release selected preliminary IAS results today, at around 10 a.m. CET. Only pre- and after-tax profit/loss, total assets and shareholder equity figures are scheduled to be released, accompanied by the bank’s own commentary. Detailed IAS results in the usual format will be released at the end of March. KB’s 2000 results are important since they will influence the price that the state will achieve on the sale of its 60% stake. Given that expectations of the selling price are currently the key driver of the stock’s price, we expect the price to be sensitive to the released results, particularly to the bottom line. Other key items, such as net provisions and operating profit, will likely not be reported today, which will make interpretation of the bottom-line figures more difficult. Reuters’ poll consensus is a CZK 870 mil. aftertax loss, we expect a CZK 724 mil. loss.
We recently revised our projections for several KB revenue items, though with a largely neutral impact on our estimate of KB’s 2000 profit before provisions (we now expect stronger fees and commissions revenues, but weaker other revenue items). We also lowered (by 4%) our estimate of 2000 provisions after KB earlier indicated that government guarantees made to the bank could have an impact on provisioning in 2000. In total, these changes led to a reduction in our bottom-line projection of an after-tax loss from CZK 1.05 bil. to CZK 0.72 bil.