In 2000 Komerční banka's total net income amounted to CZK 21.5 bn, having gone up by CZK 1.11 bn in comparison with end-1999. Komerční banka's Board of Directors views the growth in income, which the Bank experienced mainly in the latter half of the year, as sustainable.

The Bank exceeded its plan of net interest income by CZK 405 m when it achieved a level of CZK 12.287 bn. The increase as against the comparable period of 1999 amounts to CZK 340 m. Fees and commissions went up by CZK 72 m in comparison with 1999, to CZK 4.422 bn. This sum also covers a negative impact about CZK 500 m the Bank suffered in connection with the early termination of a securitisation transaction.

Administrative costs, net of restructuring costs, increased by a mere 0.9% as against end-1999, to CZK 10.383 bn. The Bank's management has identified and separately reports the costs incurred in KB's restructuring. In the latter half of 2000 these costs amounted to CZK 827 m. Restructuring costs also include staff level reductions and the resulting surplus of office space, and other related costs. The Bank has set aside specific reserves for the costs it expects but has not yet paid; this implies that the restructuring costs at the 2000 level can be seen as one-off costs, while the Bank's management does not envisage any significant restructuring costs in 2001.

Despite the massive impact of the on-off restructuring costs and the one-off negative impact on fees, total profit before reserves and provisions amounted to CZK 7.874 bn, which is CZK 254 m more than in the comparable period of 1999.

Setting aside reserves and provisions at CZK 7.875 bn takes fully into account the influence of the KONPO operation in the first half of last year, and the execution of the guarantee agreement with Konsolidační banka at the end of 2000.

The net loss of CZK 19 m is then the outcome of two major positive factors combining - the Government's continued support, and the results of the new Board of Directors' restructuring programme. Komerční banka therefore enters the final stage of its privatisation in a very god shape.

Note: All data is quoted under International Accounting Standards.