Czech lender Komercni Banka's Q3 profit down, lending up

PRAGUE, Nov 6 (Reuters) - Komercni Banka on Wednesday posted an 8.5% drop in third-quarter net profit, in line with estimates as financial operations income fell and the Czech lender did not see a net release of bad loan provisions as in previous quarters.

Attributable net profit came in at 3.85 billion crowns ($167.25 million), versus the average estimate of 3.88 billion in a Reuters poll.

The bank, 60% owned by France’s Societe Generale, boosted net interest income and net fees by 2.1% and 1.2% year-on-year respectively.

Financial operations income was down 17.2% on the year as market activity was lower than in 2018 when the central bank was in the middle of a series of interest rate increases.

The central bank last hiked borrowing costs in May but has been in a wait-and-see mode since as global central banks mostly turn to easing.

Komercni Banka’s lending in the first nine months of 2019 grew 4%, in line with its previous guidance of mid- to low-single-digit growth in 2019, it said.

A solid Czech economy in recent years has boosted lending and helped push banks’ risk costs down.

Komercni Banka’s cost of risk, reflecting provisioning against losses from loans and investments, though showed a net creation of provisions.

However, year-to-date the bank has seen a net release and said there was potential for a significant one-off release in the fourth quarter as it was in the process of resolving a large corporate default.

$1 = 23.0190 Czech crowns Reporting by Jason Hovet; editing by David Evans