Komercni Banka 4Q 19 - Higher dividend, but weaker earnings
Weaker top-line led to result erosion: KB reported a 4Q net profit of CZK 3,840 mn 7% /6% below RCBe/consensus. The weaker result was top-line driven (NII, F&C, trading income), while opex was slightly better than expected. Thus net banking revenues eroded 4% yoy. NII came in slightly below estimates thanks to only flat (below sector) loan dynamics qoq (+3% yoy) and continued preasure on spreads in retail lending and lower rates in 2H. F&C fared weak dropping by 2.3% yoy (8% below RCBe, 3% below consensus) thanks to weaker transaction fees (only partly impacted by the new SEPA regulation effective since December 15) and only flat cross-selling fees yoy. The F&C and the NII line however was distorted by the reclassification of commitment fees from F&C to NII. Also income from financial operations came in below RCBe.
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