In Business News this week: first half homes loan figures set new record; central bank raises growth expectations for 2016; new car sales ease in July for first time this year; Komerční Banka squeezed on stock exchange after six month figures; and financial police poised to make a return.
Record home loan contracts and volume
Photo: Miroslav Zimmer, Czech Radio
A record 54,000 home loans totalling around 102 billion crowns were awarded in the first half of the year according to figures from the Ministry of Regional Development. That compares with 50,000 loans amounting to 88 billion crowns given out in the same period of 2015. In June alone loans worth 23.8 billion were agreed, a record monthly figure for the last 21 years.
Czech National Bank gives mixed news on growth
The Czech National Bank has upped its forecast for growth this year but dropped its expectations for 2017. Growth this year is expected to reach 2.4 percent, a slight advance on May’s previous figure 2.3 percent. But GDP growth has been shrunk in the latest prediction to 3.0 percent from the previous 3.4 percent. That 3.0 percent growth rate is now seen continuing into 2018. The bank board added that it does not expect its current low crown policy backed up by foreign exchange interventions to end before mid-2017 but that term could be stretched further if the 2.0 target annual inflation figure is not reached.
July figures take polish off new car sales outlook
Photo: Czech Radio - Radio Prague
Sales of new cars in July in the Czech Republic have fallen year on year for the first month since the start of the year. Sales were down 12.5 percent compared with the same month in 2015 and by just over 27 percent compared with June. Total car sales for the first seven months of the year, at almost 152,000, are still 12.5 percent up on the same period last year. The Czech Republic’s biggest car producer Škoda Auto has seen sales climb by around a third so far this year and retains around a third of the local market.
Komerční Banka says margins severely squeezed in first half
Photo: Filip Jandourek, Czech Radio
Czech bank Komerční Banka reported a 0.8 percent rise in profit for the first half of the year to 6.7 billion crowns. The increase was largely the result of a one off payment for the bank’s stake in credit card company Visa Europe. Without that boost profit would have fallen by almost 11 percent compared with a year earlier. The bank said that more customers and higher amounts on accounts could not compensate for the pressure on margins. Komerční is the first major Czech bank to report first half earnings figures. Shares took a beating following the news and likihood of smaller dividends in the future.
Interior minister says financial police to return from 2017
Milan Chovanec, photo: Filip Jandourek, Czech Radio
A financial police squad will be created from the start of 2017 as part of a wider police reorganisation, Minister of Interior Milan Chovanec announced on Thursday. Negotiations will take place with the Customs Administration about the division of responsibilities, he added. Terrorism, cybernetic crime, and the fight against corruption were picked out as the priorities for the new centralised police unit for combatting organised crime which started operations at the beginning of August. The minister added that only five police had left the service over the controversial reorganisation, which merged previous specialised units, with two or three more saying that they would leave. The reorganisation sparked a major row between government parties.
