UPDATE 1-Komercni H1 net beats forecast on one-off gain

...

By Marek Petrus

Czech lender Komercni Banka posted higher-than-expected first-half net profit on Friday, benefiting from fast lending growth in the booming economy and a one-off revaluation of its building society.

Komercni, the Czech unit of France's Societe Generale , reported a 9.3 percent year-on-year rise in net profit after minority interests to 5.28 billion crowns ($258.3 million).

The figure beat the average estimate of a 5 percent increase to 5.03 billion crowns in a Reuters poll of nine analysts.

The result included an unexpected 155 million crown gain from the revaluation of building society Modra Pyramida upon finalisation of its acquisition by Komercni. Net of this one-off item, the profit would have been only slightly above forecast.

"Nearly two-thirds of the difference (in net profit versus forecast) comes from the one-off revaluation," said Jiri Stanik, analyst at Wood & Company in Prague.

By 0900 GMT, the stock traded at 3,980 crowns, up 0.3 percent from pre-release levels and 0.8 percent higher on the day, outperforming a 0.2 percent rise in the PX index .

"Slightly better results might have some positive impact on the share price, (but) underlying trends are as expected, with no improvement in momentum," said Stanik, keeping his "hold" rating on the stock, with a 3,500 crown target price.

Growing household income and expectations of a further rise in borrowing costs have spurred demand for loans across the central European economy, whose expansion has topped 6 percent in the past eight quarters.

Komercni, the third-biggest Czech lender by total assets, said revenue grew 11.3 percent to 14.41 billion crowns, ahead of analysts' estimate of an 8 percent rise.

But Komercni's retail lending growth lagged that of its main competitors, suggesting it lost further market share.

Komercni posted a 31 percent rise in mortgage loans to individuals, compared with 43 percent reported by Ceska Sporitelna, the Czech unit of Prague and Vienna bourse-listed Erste Bank .

The bank's failure to keep pace with the rapid retail credit market expansion has hampered Komercni's share price after a 26 percent rise so far this year. A global equity sell-off has knocked it down from a record high 4,271 crowns in on July 19.

[PRAGUE/Reuters/Finance.cz]