Komerční banka has recorded a net profit of CZK 1.3 billion (IAS) for the first quarter of 2001. The Bank has thus been able to return to profitability following several periods of losses, and has achieved this feat through the reduced creation of provisions for loan losses, as well as positive changes in the Bank's business results. For the same period last year Komerční banka recorded a loss of more than one billion crowns.

For the first quarter of 2001 Komerční banka recorded a profit before the provisions for loan losses and income tax of CZK 2.5 billion. This is an improvement of 7.3% on the result for the first quarter of 2000.

The reason for the positive results is primarily the continuing increase in net interest income, which against the same period last year rose by almost 7% and the generation of more than 13% higher net fees and commissions. The positive effects of the agreement signed at the end of last year with Konsolidační banka could also be felt in the lower creation of reserves for loan losses. The agreement guaranteed Komerční banka's risk receivables.

The volume of total assets remains stable in comparison with the end of last year, amounting to CZK 401.7 billion. For the first quarter of 2001 the Bank recorded an increase of 1.3% in the volume of loans to clients, the final figure totalling CZK 128.6 billion.

Reductions continue to be made in the number of employees. During the first quarter the number of employees fell by 207 to 10,496.

According to the Chairman of the Board of Directors and Chief Executive, Radovan Vávra, the first quarter results fully reflect the beneficial impact of the changes implemented in the middle of last year by the new management. 'The move back into the black makes me very happy. The result is not a matter of chance but rather the beginning of a positive trend. The changes that we have set under way in the Bank are beginning to bear fruit,' was his reaction to the results.

Komerční banka's Profit and Loss Statement According to International Accounting Standards (in CZK million)

  31 March 2001
31 March 2000
Interest income 6,890 6,682
Interest expense (3,850) (3,837)
Net interest income 3,040 2,845
Net fees and commissions 1,876 1,659
Dealing profits / (losses) 340 693
Other income 82 145
Net operating profit 5,338 5,342
Administrative expenses (2,304) (2,129)
Depreciation and other provisions (486) (838)
Profit / (loss) before provision for loan losses and income taxes 2,548 2,375
Provision for loan losses (736) (1,800)
Profit / (loss) before income taxes 1,812 575
Income taxes (500) (1,600)
Net profit / (loss) for the period 1,312 1,025