Bank Millennium profits fall 49% to March 29.7 million, but exceed estimates – Banking & Finance

Bank Millennium – 50.1% owned by BCP – saw profits fall 49%, year-on-year, in the first quarter of the year, to 128.4 million zlotys, equivalent to 29.7 million euros at the current exchange rateinformed the financial institution led by Miguel Maya, through a statement sent to the CMVM.

Even so, profits exceeded analysts’ estimates, compiled by Bloomberg, which pointed to the Polish bank recording a net profit of 124.5 million zlotys by March.

In the statement, BCP explains that “Bank Millennium’s results in the first quarter remained conditioned by charges related to the portfolio of mortgage loans denominated in Swiss francs which totaled 824 million zlotys before taxes (190.9 million euros)”.

When adjusted for specific items (mostly related to charges related to the mortgage loan portfolio denominated in Swiss francs), the net profit increased from 672 million zlotys (142.9 million euros) to 714 million zlotys (165.2 million euros), corresponding to a variation of 6% in local currency.

The conversion of credits in Swiss francs to the local currency, the zloty, has been an issue that has been ongoing for several years. The Court of Justice of the European Union, in 2019, ruled that customers of Polish banks could ask the courts for housing credit contracts concluded in 2008 and denominated in Swiss francs to be converted into the local currency. Since that decision, banks have been accumulating provisions.

Bank Millennium’s financial margin registered a year-on-year increase of 7.3% to 1.35 billion zlotys (310 million euros.

On the deposits side, there was a 16% growth compared to the first quarter, in the individual segment, while corporate deposits grew 4%.

On the loan side, credit granted to families remained stable and increased by 6% if credits denominated in foreign currency are not taken into account. The market share of new production of housing loans stood at 6.7% and the market share of new production of “cash loans” stood at 9%. Loans granted to companies registered a year-on-year drop of 6%.

The loan-to-deposit ratio was 65.3%. The impaired credit ratio (phase three) stood at 4.6%, a slight improvement compared to the same period of the previous year (4.7%).

You operating costs increased by 15% year-on-year, while core revenue grew by 6%. Net commissions decreased by 1%.

In terms of capital ratios, there was an improvement in the performance of these indicators. The ratio
total capital ratio (TCR) grew from 14.1% to 18%, while the T1 ratio increased from 11% to 14.9%thus exceeding the minimum level required by the supervisor.

(News updated at 8:51 am).