Page 36 - CE Outlook Regions 2024

2022. The six largest banks in the Czech market registered a net income of CZK57.1bn (€2.3bn) in Q1-Q3 of 2023.
CNB’s 7% interest rate policy contributed to the increased costs to finance deposits, but the banking portfolios are described by analysts as very healthy.
The six largest banks are also subject to the windfall tax introduced last year, which consists of a 60% levy on excessive profits as defined by the legislation which largely avoided taxing 2022 profits. In August, the Ministry of Finance estimated the total collection of windfall tax in 2023 would amount to CZK46bn, well below the initial projections. At the end of December, the final figure was CZK39.1bn, according to the Ministry of Finance, prompting local analysts to conclude that banks made adjustments after it was clear that the cabinet will implement the legislation for 2023 and will leave 2022 out. The legislation will apply also to 2024 and can be scrapped if the cabinet deems it not effective.
3.1.3 Industry
Car manufacturing continued to be the key driver of industrial output throughout 2023, pushing it above the negative figures towards the end of the year.
The car industry also experienced disruption in supply chains following the damaging floods in Slovenia, prompting some of the plants to shutter production. At the same time analysts warned of challenges industry faces, including energy costs and drops in manufacture of electronics, pharmaceuticals and basic metals.
The steel industry in particular has been experiencing difficult times, intensified by the Russian full-scale invasion of Ukraine. Czech steel consumption dropped to a 10-year low to 6.6mn tonnes, which is down by more than 1mn tonnes, or 16% y/y. The Czech steel union does not expect the situation to improve until the second half of 2024, given Germany’s struggling construction market. 2023 was also Czechia’s lowest steel export year since the financial crisis of 2009. In November, the Czech Minister of Industry and Trade confirmed Czechia is pushing for an extension of exemption from EU sanctions on imports of Russian steel.
3.1.4 Energy & power
In November 2023, Czechia secured an additional 2bn cubic metres of gas import capacity at the Stade LNG terminal under construction near the German port city of Hamburg. The capacity is reserved until 2027 and is closer to the country than the existing capacity at the Dutch terminal at Eemshaven.
Prague-based regional energy conglomerate, and one of the three largest polluters in the EU, EPH controlled by Daniel Kretinsky and his Slovak business partner Patrik Tkac, was calculated to become the largest taxpayer in Czechia when the financial authorities publish the
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