* Net excluding minorities up 6.9 pct
* Divi unchanged at 180 crowns
* Says flat 2009 would be success
* Says prepared for difficult 2 years
(Adds details, comment, share price)
By Jan Korselt
PRAGUE, Feb 18 (Reuters) - Net profit at Komercni Banka
<> rose in line with market forecasts in the fourth
quarter, and the only listed Czech bank said it was prepared for
a difficult two years as the economic crisis bites.
Czech banks are bracing for a sharp slowdown after the
economy boomed over the previous four years, fuelling business
and consumer lending, and Komercni Banka is seen as particularly
vulnerable due to a higher reliance on the corporate sector.
"We saw in the Czech Republic a severe deterioration at the
end of 2008," Chief Executive Laurent Goutard said.
"We are going to face very difficult times in 2009 and 2010.
We will certainly see a further decrease of the lending
activity, increase in cost of risk," Goutard told a press
conference.
The third biggest Czech bank, owned 60.4 percent by France's
Societe Generale <SOGN.PA>, posted a 6.9 percent increase in net
profit to 3.29 billion crowns ($142 million), propped up by
one-off gains of around 550 million crowns.
Adjusted for the one-offs, the figure actually fell due to a
jump in the cost of risk by 452 percent year-on-year to 1.3
billion crowns.
Komercni Banka shares closed 4.1 percent down to 1,683
crowns by 1445 GMT, recovering from double-digit losses earlier
in the session. Prague bourse's PX index <> dropped by 3.53
percent.
"We see the results rather neutral, with a slight downside
on the higher provisioning levels," said Marta Czajkowska, an
analyst at KBC Securities.
"It is a general sentiment towards financials, with regional
currencies depreciating further, which is not helping either,"
she said.
Komercni proposed paying a 180 crown per share dividend on
2008 profits, equal to the dividend it paid the year before.
OUTLOOK WEAK
Komercni said it had faced a sharp slowdown in both business
and financial performance in the first quarter of this year.
Goutard said the lender targeted a stable recurring profit
in 2009, though the plan has become increasingly "ambitious" due
to the volatile market environment.
New mortgages, the main profit driver in past years with an
annual growth rate of around 30 percent, could drop by 10 to 40
percent this year compared to 2008, the bank said.
But overall, Komercni said it should be able to outperform
its main peers and increase the market share, thanks to a strong
liquidity and a conservative loan policy.
"We still have more liquidity than we need for lending,"
said Chief Financial Officer Pavel Cejka told journalist.
Moody's Investors Services threatened this week to downgrade
euro zone banks with exposure to Eastern Europe, while Standard
& Poor's said it may review emerging Europe bank ratings.
Cejka said the Czech banking sector was less vulnerable to
the global economic crisis then other countries in the region,
with virtually no loans in foreign currencies.
Foreign currency lending has been common in countries such
as Poland and Hungary exposing clients of local banks to a risk
of default due to a recent drop in central Europe's regional
currencies.
"The Czech Republic is not mentioned (in the rating
agencies' reports) in a negative way, Cejka said.
"Investors in these nervous times do not sufficiently
distinguish between individual countries in the region."
Czech banks went through state bailouts and privatisation
around the year 2000, and have seen double-digit growth in
profits over the past years. Most of them have not unveiled
massive write-offs due to the latest crisis,
CSOB, the biggest Czech bank by total assets, owned by
Belgium's KBC's <KBC.BR>, booked a 430 million euro loss in its
CDO portfolio, but still managed to post a profit last year.
($1=23.17 Czech Crown)
(Additional reporting by Jason Hovet and Jana Mlcochova;
editing by Simon Jessop)
