Interest and Noninterest Profits and Profitability in the Czech Banking Sector (in Czech)

This study explores bank´s transformation in the Czech Republic from the point of view of their profit. It considers factors that influenced domestic banks and income structure of peer groups. Under conditions of equal competition, the peer groups showed different characteristics in terms of profitability, pricing policy, yield mark-up, and profit structure. A comparison of the behavior of major domestic banks with a peer group of foreign-owned banks showed how the large domestic banks reacted to competitive pressures. In particular, the study focused on the volatility and substitution of interest and noninterest profits in the two peer groups. The testing of the convergence in these variables confirmes a different pattern of behavior. Speculating about future developments, we believe that the big Czech-owned banks will be forced to bring in line their profit policies similar with those of the foreign-owned banks.