Czech banks decreased net profit 10.1% yoy to CZK 21,116 mil in the first quarter of 2023 and generated an annualized ROE of 11.9%. Operating income fell 5.78% yoy, cost to income increased to 36.7% and banks' share of bad loans fell to 1.90%. In the last quarter CSOB generated the biggest profit while Modra Pyramida Stavebni Sporitelna produced the smallest one.
Revenues decreased 5.78% yoy to CZK 55,788 mil in the first quarter of 2023. Net interest margin declined by 0.133 bp to 1.73% of assets driven by a positive asset growth (2.91% yoy) and higher interest rates (up 233 bp to 7.19%).
Operating costs grew 5.77% yoy and banks operated with a cost to income ratio of 36.7% in the first quarter of 2023. With 39,115 employees in the sector, staff accounted for 59.5% of total costs. Banks paid their staff CZK 103,965 per person last quarter.
Banks put aside 398 in provisions in the first quarter of 2023. Provisions have "eaten" some 1.25% of operating profit in the first quarter of 2023 as cost of risk reached 0.039% of average loans. Share of bad loans decreased to 1.90% of total loans compared to last month and provisions covered 94.1% of non-performing loans.
Asset growth sped up to 9.42% qoq and loans increased 1.11% qoq (up 4.88% yoy). Mortgages added 0.669% qoq (up 3.45% yoy), consumer loans rose 0.815% qoq (up 4.10% yoy) and corporate loans increased by 1.63% qoq (up 2.85% yoy).
Deposits grew 13.1% qoq and rose 7.34% yoy, so loans to deposits reached 62.1% at the end of the quarter. Czech banks remain well-capitalized with Tier 1 ratio at 21.8% at the end of March 2023.
CSOB was the most profitable bank in the first quarter of 2023 with a net profit of CZK 3,617 mil, Ceska Sporitelna was the most cost efficient (cost to assets at 1.35%), Banka Creditas grew its loans the most (up 6.10% qoq) while UniCredit Bank Czecho-Slovakia had the biggest increase in deposits (51.7% qoq).
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