CZECH REPUBLIC - Profits generated by Czech pension funds were slashed to CZK560m (€22.3m) for the first quarter from CZK1.4bn for the same period last year.

While profits for 2007 remained on a similar level to those for 2006 and even increased slightly to CZK4.4bn from CZK4.1bn, stock market declines in the wake of the US subprime crisis have now fully hit Czech pension funds, according to data released by the Czech pension fund association (APFCR).

"Although it is a decline, it is still a positive result considering the developments on the capital market, which many companies have struggled with," the association noted in a statement.

The pension fund operations of Aegon and CSOB PF progres were the only two funds to actually incur losses of CZK13m and CZK20m respectively.

Aegon is the newest company in the Czech market having started in November 2007. The subsidiary of the Dutch insurer noted the negative result was down to costs for starting up the new business. It added all losses were covered by the company's assets and not the clients'.

CSOB PF progres is the second largest fund of the largest Czech banking group which completed the merger with the then smallest fund Zemsky in early 2007.

Total assets managed by the 10 funds rose from CZK141.3bn to CZK167.3bn over the last 12 months.

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