The bank has reached a total of 5,050 settlements. Looking ahead, the bank said decelerating loan volumes could impact interest income, while wage and inflationary pressures weigh on operating costs. An upward trend in customer numbers and transactions may be offset by a slowing economy and weaker demand for banking products, it added. "We're for sure not expecting two things: continued growth of net interest income and significant improvement of margin," the bank's chief executive, Cezary Stypulkowski, said on a conference call. According to the CEO, the bank is aiming for about an 80 basis point cost of risk for this year but he also warned that "loan activity in 2023 will be under certain pressure". The bank confirmed it was still planning to launch two MREL issues this year, though expected for later in the year. ($1=4.1557 zlotys) (Reporting by Patrycja Zaras, additional reporting by Mateusz Rabiega; Editing by Clarence Fernandez and Mark Potter)
(Adds CEO quotes)
By Patrycja Zaras
GDANSK, April 28 (Reuters) - One of Poland's top
lenders, mBank , reported on Friday a 72% fall in
first-quarter net profit, hit by provisions related to a dispute
over Swiss franc mortgages.
Net profit dropped to 142.8 million zlotys ($34.4 million),
from 512.3 million zlotys in the same period last year, missing
analysts’ average forecast of 206 million zlotys.
However, the bank said core revenues were back on an upward
trend thanks to an increase in net interest income (NII) and
improving net fees.
It said the cost of risk, which stood at 79 basis points,
was within the guided range, with more of its Swiss franc
mortgage portfolio covered by legal provisions. The cost of
those in the first quarter amounted to 808.5 million zlotys.
Hundreds of thousands of Poles took out mortgages in foreign
currencies, mainly in Swiss francs, attracted by lower interest
rates, but were then left paying far bigger instalments than
expected after the franc soared against the zloty.
Many mortgage holders took banks to court, with some lenders
offering out-of-court settlements.
mBank said its number of active Swiss franc mortgage loan
contracts as of April 19 was 38,826, down 19.6% from the end of
2021. It said nearly all active loan holders had received
settlement proposals.
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