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 four quarters of 2005 the difference between the total revenues and total cost was CZK 38,4 billion and the net profit from financial operations was CZK 10,9 billions. The banking monetary institutions made pre-tax net income amounting to CZK 49,3 billion, which translates into an increase of 9,3 % 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 all four quarters of 2005 all 36 banks and building societies employed 36 499 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 2,2 %, 36 049 persons. The average monthly wage related to f/t persons has continued in growing trend (increase by 6,1 %) and stood at CZK 40 518.

Interests receivable reached CZK 107,1 billion and interests payable reached the amount of CZK 43,1 billion in four quarters of 2005. Interests receivable increased by 3,9 % year-on-year. Interests payable fell by 0,6 % year-on-year. This growth of interests receivable is caused by big call for mortgages and consumer credits. The interest margin grew from CZK 59,8 to 64,0 billion.

In comparison with the end of 4th 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 301 197 contracts (total 6 154 846) year-on-year and translates into a fell of 4,7 % compared to the corresponding period of the year 2004. The number of contracts in saving stage accounting for 90,4 % of total number of contracts stood at 5 565 132, which means the decrease by 334 163 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 23,0 billion. Increase in profit is 17,3 % in comparison with the same period of the last year. Trend of growth was slowed down in fourth quarter, when the profit slumped by 64,1 percentage points. The presumed cause of this condition is the strong Czech crown, which negatively influences inflation and economy.

Investment companies and investment funds (CZ-NACE, rev.1, code 65.2) realized during the year 2005 a profit of CZK 7,7 billion. In the period of the 1st to 3rd quarter the majority of basic economic indicators were significantly growing. The year-end brought considerable reduction in volume of business with domestic securities and it came about the fall in profit, which was related to rapid decrease of income on financial operations.

Financial leasing companies (CZ-NACE, rev.1, code 65.21) realized during the reference period a profit of CZK 5,2 billion, by 7,6 % less than year before. The sector noted decrease in concluded leasing contracts compared to the last year together with increasing interest in non-leasing financial products, mainly in consumer credits. The decrease in profit is most considerable in the 4th quarter. In this period leasing companies took advantage of Christmas time for their campaigns, which will bring benefit not until subsequent year.