Economic Results of Monetary Institutions

Unlike the difference between total revenues and total expenses, the financial performance of the monetary banking institutions is higher by the profits made from certain financial transactions (e.g. foreign currency, derivates and securities transactions). Since 2002, the financial performance of these institutions has been measured in terms of their results – i.e. as profits or losses from these financial transactions – and not in terms of revenues and expenses.

In the first three quarters of 2005 the difference between the total revenues and total cost was CZK 31,8 billion and the net profit from financial operations was CZK 8,7 billions. The banking monetary institutions made pre-tax net income amounting to CZK 40,5 billion, which translates into an increase of 27,4 % compared to the corresponding period of the previous year. The profit of monetary institutions still mostly comprises of the revenues and profits from consumer and mortgage credits and commissions receivable.

During the first three quarters of 2005 all 35 banks and building societies employed 36 616 actual persons on average, by 2,1 % less than in the same period of 2004. In terms of f/t equivalent, the average number of employed persons fell by 2,1 %, 36 163 persons. The average monthly wage related to f/t persons has continued in growing trend (increase by 8,6 %) and stood at CZK 41 096.

Interests receivable reached CZK 80,2 billion and interests payable reached the amount of CZK 32,5 billion in the three quarters of 2005. Interests receivable increased by 5,2 % year-on-year. Interests payable rose by 2,4 % year-on-year. This growth of interests receivable is caused by big call for mortgages and consumer credits. The interest margin grew from CZK 44,5 to 47,7 billion.

In comparison with the end of 3rd quarter of 2004 there was a drop of number of concluded contracts for savings for building purposes and purchases of a house. The fell was 361 522 contracts (total 6 202 453) year-on-year and translates into a fell of 5,5 % compared to the corresponding period of the year 2004. The number of contracts in saving stage accounting for 90,5 % of total number of contracts and stood at 5 614 978, which means the decrease by 393 995 contracts in comparison with the end of corresponding period of the previous year.

Non-banking monetary institutions (CZ-NACE, rev.1, code 65.2 and 67) made in the reference period a profit of CZK 6,3 billion. Growth in profit is 159,2 % in comparison with the same period of the last year and is positively determined by the favourable macroeconomic development and domestic economic conditions.

Investment companies and investment funds (CZ-NACE, rev.1, code 65.2) realized during the reference period a profit of CZK 2,8 billion. They profited from favourable market conditions, but mainly from continuous interest of domestic subjects in investment instruments. Wide range of shares funds, which respected different risk profiles of investors and their investment horizons, together with undemanding entry conditions, increased the concern about this kind of investment. There is an obvious trend to transfer the savings from population and investors to funds.

Financial leasing companies (CZ-NACE, rev.1, code 65.21) realized during the reference period a profit of CZK 1,3 billion, by almost 40 % more than year before. The reason of the raising of the profit can be generally ascribed to good results of the economy. Impact of Value-Added Tax law on market wasn’t too significant and didn’t result in its apparent consolidation. In comparison with the alternative form of financing, provided services still hold their competitiveness and further remain an attractive form of fixed assets acquisition.