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UPDATE 1-Czech Komercni Q2 profit slips but beats forecasts

Published 08/05/2009, 03:09 AM
Updated 08/05/2009, 03:15 AM
SOGN
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* Q2 profit down 14 pct to 2.92 bln crowns vs 2.7 bln f'cast

* Net interest income 5.57 bln crowns vs 5.32 bln f'cast

* Provisioning up nearly three-fold

* Results better than expected

PRAGUE, Aug 5 (Reuters) - Komercni Banka said net profit fell by a less-than-expected 14 percent in the second quarter, helped by increased interest income, although Czech Republic's only listed bank lifted provisioning to counter a slipping economy.

Profit slipped to 2.92 billion crowns ($164 million) in the quarter from 3.39 billion a year ago, above analysts' average estimate of 2.7 billion crowns in a Reuters poll.

Komercni Banka said net interest income for the period rose 6.4 percent on the year to 5.57 billion crowns, above a forecast of 5.32 billion crowns.

The bank, majority owned by France's Societe Generale, said provisioning in the quarter rose 175.8 percent on the year to 1.25 billion crowns.

Provisioning at Komercni, one of the country's largest corporate lenders and the third biggest bank by assets, had jumped already in the first quarter with the bankruptcy of an energy trader which Komercni had financed.

Czech banks have seen the years of strong profit growth from the country's boom years come to an end as businesses lose foreign orders for their goods and the country falls into recession this year.

However, the domestic banking sector has been shielded from the financial crisis by high levels of savings, high capital adequacy and low borrowing in foreign currencies.

The Czech central bank has estimated non-performing loans would rise to almost 8 percent this year from 3.5 percent, but in stress tests released in June said the banking system would withstand all shocks in all projected scenarios.

Komercni banka shares have dropped 20.5 percent in the past year, underperforming a 24 percent fall in Prague's index but bettering a 31 percent fall for Europe's main banking index. ($1=17.81 Czech Crown) (Reporting by Jason Hovet; Editing by Hans Peters and Simon Jessop)

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