Czech KBC unit sees no provision for $1.3 bln suit

...the Czech state, CSOB said on Friday.

The Czech government has filed a claim for 26.7 billion crowns ($1.3 billion) in compensation for the net book value of failed bank IPB, which CSOB took over in 2000, countering the bank's earlier 1.7 billion crown claim.

CSOB acquired IPB from the state for one crown under massive state guarantees in a deal that has been hotly disputed, given IPB was the largest bank to ever collapse in the Czech Republic.

CSOB, the country's largest bank, and the government have for years wrangled over various claims that the state guaranteed.

"A thorough legal analysis of the finance ministry's counter suit has confirmed our complete certainty over the justification of CSOB's claim," the bank said in a statement.

"In that case, the international financial reporting standards rule out completely the possibility of creating provisions," CSOB added.

Earlier on Friday, it posted a first-half net profit of 5.97 billion crowns, down from 6.07 billion a year ago.

[Reuters/Finance.cz]