UPDATE 2-Komercni's H1 profit beats forecast on one-off gain

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By Marek Petrus

Czech lender Komercni Banka posted higher-than-expected first-half net profit on Friday, benefiting from fast lending growth in a 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 on finalisation of its acquisition by Komercni. Net of this one-off item, the profit would have been only slightly above forecast.

By 1040 GMT, the stock was trading up 0.1 percent at 3,954 crowns, underperforming a 0.3 percent rise in the blue-chip 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 Jiri Stanik, analyst at Wood & Company. He kept a "hold" rating and a 3,500 crown target price.

Chief Executive Laurent Goutard said the bank aimed to sustain about 10 percent growth in recurring profit -- net of the Modra Pyramida revaluation and other one-off items -- in the coming years after an 11.7 percent rise in the first half.

"Our target is to continue in the same trend as we did in the last quarter and maintain recurring profit growth at around 10 percent (in coming years)," he told a news conference.

MORTGAGE EXPANSION

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.

But retail lending growth at Komercni, the third-biggest Czech lender by total assets, 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 .

Goutard said Komercni would like to expand its mortgage credit market share to 25 percent within about two years from slightly more than 20 percent now.

"I would not say it is a strategic target. We would not commit to that. We have to keep in mind the profitability of the business," he said.

The bank's failure to keep pace with the rapid retail credit market expansion has hampered Komercni's share price after rise of about 26 percent so far this year. A global equity sell-off helped knock it off a record high 4,271 crowns on July 19. (Additional reporting by Jan Korselt)

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($1=20.43 Czech Crown)

Keywords: KOMERCNI RESULTS/

[PRAGUE/Reuters/Finance.cz]