Komercni Banka 3Q 20 - Weaker 3Q on F&C and COR
3Q earnings fared weaker than our and consensus expectations mainly on the back of higher risk costs and weaker F&C, while NII and opex fared better than expected. Loan growth was again accelerating with gross loans up 6% yoy (+2.4% qoq) driven by mortgage and corporate lending while consumer loans remained flat. NII came in ahead of expectations on back of a slight NIM recovery qoq (1.80% vs. 1.73% in 2Q), a solid loan growth and minor moratoria related one-offs (CZK 161 mn) in the past quarter. F&C income (down 16.6% yoy, -3% qoq) was the weak spot showing no recovery from 2Q level and eroding trends at all lines yoy with the exception of cross-selling fees and only a minor qoq rebound in transaction fees. Still, thanks to better income from financial operations/trading and good cost control as well as better NII gross operating income exceeded estimates.Komercni banka is a universal banking group based in the Czech Republic. Co. is engaged in the provision of a range of financial services in retail, corporate and investment banking. Co.'s operating segments include: Retail Banking, the provision of products and services to individuals, such as among others building savings, pension insurance, overdrafts, credit card and personal loans and mortgages; Corporate Banking, the provision of products and services to corporate entities such as foreign currency and derivative products, syndicated and export financing, and guarantee transactions; and Investment Banking, which involves trading in financial instruments.
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