Financial Intermediation: Economic Results

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 and some other transactions (e.g. foreign currency, derivates and securities transactions). Since 2007, 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 2007 the difference between the total revenues and total cost was CZK 39,7 billion and the net profit from financial and some other operations was CZK 2,8 billions. The banking monetary institutions made pre-tax net income amounting to CZK 42,6 billion.

During the first three quarters of 2007 all 37 banks and building societies employed 38 191 actual persons on average, by 5,5 % more than in the same period of 2006. In terms of f/t equivalent, the average number of employed persons rose by 2,0 %, which means 36 461 employed persons. The average monthly wage related to f/t persons has continued in growing trend (increase by 9,2 %) and stood at CZK 48 360.

Interests receivable reached CZK 112,3 billion and interests payable reached the amount of CZK 50,7 billion in the three quarters of 2007. Interests receivable increased by 24,9 % year-on-year. Interests payable rose by 35,1 % year-on-year. This growth of interests receivable is caused by big call for mortgages and consumer credits. The interest margin grew by 17,5 % (from CZK 52,4 to 61,6 billion).

In comparison with the end of 3rd quarter of 2006 there was a drop of number of concluded contracts for savings for building purposes and purchases of a house. The fell was 83 856 contracts (total 5 798 747) year-on-year and translates into a fell of 1,4 % compared to the corresponding period of the year 2006. The number of contracts in saving stage accounting for 88,5 % of total number of contracts stood at 5 132 505, which means the decrease by 152 457 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) showed from the first to the third quarter of 2007 a profit of CZK 18,2 billion. In comparison with the same period of the previous year, it was an increase by 12,8%.

Investment companies and investment funds (CZ-NACE, rev.1, code 65.2) realized in the third quarter of the year 2007 financial loss more than CZK half billion. Despite this fact, they managed to reach the 109,5% increase in profit from January to September.

Financial leasing companies ( CZ-NACE, rev.1, code 65.21) reached a positive result when during the reference period realized a profit of CZK 3,7 billion. In comparison with the same period of the previous year, the profit rose by CZK 330 million.

In January to September insurance companies (CZ-NACE 66.01 and 66.03) made pre-tax profits amounting to CZK 14,9 billion, which translates into an increase of 16,7 % compared to the corresponding period of the previous year.

In the first three quarters of 2007 gross premiums written stood at CZK 99,0 billion, accounting for 41,3 % of total revenues and rising by 8,7 % year-on-year. Insurance claims paid amounted to CZK 45,4 billion, making up 20,2 % of total expenses of the insurance companies. Costs of these insurance claims increased by 5,7% year-on-year. Over the period of January to the end of September, total technical provisions for life insurance increased by CZK 9,4 billion to CZK 192,4 billion.

In the period from the beginning till the end of September all of the 48 insurance companies employed a total of 14 374 employees (actual persons) on average, i.e., by 0,4 % more than in the corresponding period of 2006. In terms of full-time equivalent (fte) persons, the average registered number of employees was 14 164; the employment thus increased by 0,2 %. The average monthly wage (related to the fte persons) was 37 785 CZK, increasing by 12,4 % in comparison to the same period of 2006.

During the first three quarters of 2007 there were concluded 5 174 457 non-life insurance contracts, by 16,2% more than in the same period of the previous year. The number of life insurance contracts concluded during the observed period of 2007 is 658 148, which translates into a increase of 11,0 %.

In the three quarters of 2007 pension funds (CZ-NACE 66.02) made their profits amounting to CZK 4,0 billion (an increase of 52,5 % year-on-year). Total expenses of 10 active pension funds during the period from January to the end of September reached CZK 4,6 billion, rising by 27,1 % year-on-year. Total revenues increased by 37,8 % year-on-year to CZK 8,6 billion. Financial expenses were 59,2 % of total expenses and financial revenues accounted for 98,6 % of total revenues.

The first three quarters of 2007 saw total technical provisions of pension funds growing by CZK 19,3 billion to CZK 155,5 billion. Contributions received from members and employers (excluding government contributions) stood at CZK 24,3 billion, increasing by 17,9 % year-on-year. Government contributions increased by 12,4 % in the observed period of 2007 and amounted to CZK 3,5 billion. Supplementary pension insurance benefits paid stood at CZK 9,6 billion, which is a year-on-year growth of 8,2 %.

There were 3 868 417 active supplementary pension insurance policy holders (members of pension schemes) in total on 30th September 2007. The number increased by 10,2 % in comparison with the end of the same period of 2006. Of the total, 3 816 692 persons received government contributions. The number of pension recipients increased by 657 to 5 939 persons since the beginning of 2007.

All of the pension funds employed a total of 465 actual persons on average in the first three quarters of 2007, by 1,0 % less in comparison with the same period of 2006. This employment in terms of full-time equivalent stood at 444 persons and fell by 0,7 % year-on-year. The average monthly wage related to fte persons was up by 9,1 % year-on-year and amounted to 45 508 CZK.