Czech bank's profit drops due to Greek debt crisis
3. 8. 2011 13:54
Profits of Société Générale's Czech affiliate shrunk by 15.5 percent in first half of 2011due to Greek debt exposure

Prague -  It has been more than a year since the debt crisis emerged in Greece, spread to the euro-zone periphery, and started to haunt financial markets. Recently, even the largest economy's debt problems came under the spotlight.

Meanwhile, it appears that the Greek debt crisis starts to be directly felt even in EU countries which are not members of the euro-zone, such as the Czech Republic.

The net profit of Komerční banka (Commercial Bank), a Czech private sector bank, decreased by 15.5 percent, to CZK 5,480mil (EUR 226mil) in the first six months of 2011.

Read more: Greek default would be "no problem" for Czech banks
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The drop is caused by the decreased value of Greek government bonds worth CZK 1,633mil (EUR 67mil).

The bank's outlook for the second half of the year is more optimistic. In the second quarter it experienced a slight revival of the demand for credit by both citizens and private companies.

"This trend, it appears, confirms a relatively successful pace of the recovery of the Czech economy. On the other hand, we still see risks for the development in the following months, currently stemming above all from the problem of government debts in several countries in Europe and elsewhere," said Henri Bonnet, Chairman of Komeční banka.

Komerční banka's owner, the French bank group Société Générale, announced its results from the first half of the year too.

The group's net profit in the second quarter dropped 31 percent, to EUR 747mil. This result was way below the analysts' estimates. The reason of the drop is yet again the exposure to the Greek debt.

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