Komerční banka's nine-month net profit falls 2.8 per cent to CZK 13.2bn

Komerční banka's net profit attributable to shareholders fell 2.8 per cent year on year to CZK 13.2bn in the first nine months of 2026, the Czech bank said on 29 October, as competition narrowed its spreads on loans and deposits.

Lending to customers rose 11.1 per cent to CZK 964.6bn and client deposits 6.7 per cent to CZK 1,129.7bn. Total revenues increased 1.8 per cent to CZK 28.0bn and operating expenditure fell 2.1 per cent to CZK 12.5bn. Net interest income rose 2.0 per cent to CZK 19,700m, and the net interest margin was 1.6 per cent against 1.7 per cent a year earlier, the results report says.

Operating profit rose 5.2 per cent to CZK 15,490m. The bottom line fell because credit costs gave less help than a year earlier: the net release of provisions was CZK 144m, against CZK 1,353m in the first nine months of 2025. In the third quarter alone, revenues rose 1.8 per cent to CZK 9.5bn and net profit fell 1.9 per cent to CZK 4.7bn. The group served 2,331,000 customers, 81,000 more than a year earlier, and 1,789,000 Komerční banka customers already used its KB+ app.

The market environment, "characterised by lower margins on some key products", has so far prevented the bank from turning business growth into commensurate revenue growth, Jan Juchelka, chairman of the board of directors and chief executive, said in the release. The capital adequacy ratio stood at 18.6 per cent and Core Tier 1 at 16.5 per cent, both adjusted for a foreseeable dividend at an 80 per cent payout, and the liquidity coverage ratio was 172 per cent.

Targets to 2029

The bank published an updated strategy to 2029 with the results. It targets revenues of more than CZK 43bn in 2029, about 16 per cent above the roughly CZK 37bn of 2025, and operating expenditure of about CZK 16bn, around 5 per cent below the 2025 level of about CZK 17bn. The principal targets for 2029 are a return on tangible equity of at least 16 per cent, a cost-to-income ratio below 40 per cent against 46.1 per cent in 2025, and a capital adequacy ratio of 18 per cent, with at least 17.5 per cent throughout 2026 to 2029.

For shareholders, the bank reiterated an 80 per cent payout from the 2026 result and targets at least 70 per cent for each of the results of 2027 to 2029. It plans to win 150,000 new clients a year and reach 2 million retail banking clients by 2029, with about 65 per cent of retail production originated digitally. The plan assumes average Czech GDP growth of about 2.4 per cent. For 2026 the bank targets a return on equity of 13 to 14 per cent, a cost-to-income ratio of about 45 per cent and a cost of risk of about 5 basis points, against about 20 basis points over a full cycle.

Rates and the board

After a 25 basis point increase on 18 June, the Czech National Bank kept its two-week repo rate at 3.75 per cent through the third quarter. At its meeting on 6 August all seven board members voted to hold, and the board said the earlier increase had brought the desired tightening of monetary conditions. Czech inflation was 2.5 per cent in September and core inflation 3.1 per cent, the bank's report says.

The results are the first since Etienne Loulergue left the board of directors this month. Komerční banka had 95,086 shareholders at the end of September, 15,246 more than a year earlier, of whom 88,843 were private individuals in the Czech Republic. In Hungary, the central bank held its base rate at 5.50 per cent in October.