This report analyses the building savings business in the Czech Republic for the 4Q2012. You will find all the necessary details regarding volume growth, market share, margin and asset quality development in the building savings (as well as mortgage lending segment). Also, the report compares profitability and efficiency ratio of the largest player CMSS with the main player in the mortgage lending business - Hypotecni Banka to find out how market dominance translates into economies of scale and superior profitability.
The key highlights from 4Q2012 we discuss in this report are:
• The business remains under pressure in spite of its impressive profitability. ROE fell to 15.2% in 2012 and net profit dropped 6% yoy in 4Q
• Lending continues to fall and is losing to mortgages. In 4Q12, the annual decline deepened to 3.3% yoy
• 4Q12 confirmed a recovery in terms of the number of new contracts sold, while deposits grew by a seasonally strong 3.2% qoq
• ČMSS remains the leader, but Raiffeisen grabs most of the growth
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