BRE Bank improved greatly on its Q2 2009 net loss Courtesy of BRE Bank

Three of Poland’s top banks reported y/y profit rises in the second quarter, aided by an uptick in the economy.

Poland’s second-largest bank by assets, Bank Pekao, recorded a small increase in net profit in Q2 on the back of the economic recovery, which helped the bank reduce its provisions against non-performing loans.

The lender registered a zł.619 million profit in Q2, up from zł.613 million a year earlier.
Analysts noted that Pekao’s revenues remained largely flat because businesses are still not requesting large volumes of credit. For this same reason, banks in general will likely find it extremely difficult to record revenue growth in the coming quarters.

“Revenue streams will be the problem for H2,” Tomasz Bursa, analyst at Ipopema Securities, said. “Now that bases will become higher [than those from H1 2009], volumes will probably not increase much q/q or y/y.”

Mr Bursa explained that while banks may be able to earn on mortgage lending, the corporate and consumer credit segments will generate much weaker revenue.

A millennial improvement

Bank Millennium managed to impress with its results. It increased its Q2 profit almost eightfold y/y, due to both stronger revenue streams and lower provisions against non-performing loans.

Source: Banks' financial statements

Millennium endured a tough 2009 and significantly curtailed its lending over a year ago. When macroeconomic indicators improved in HI 2010, however, the bank loosened its purse strings by modifying restrictions on loans and altering some collateral rules.

Returns on the lender’s strategy are evident in its balance sheet, with net interest income more than doubling to zł.217.9 million from zł.84.9 million a year earlier.

BREathing a sigh of relief

BRE Bank, Poland’s third-largest bank by assets, meanwhile, reported a net profit of zł.123.4 million in Q2, up significantly from a net loss of zł.61.6 million seen a year earlier. It was also aided by lower provisions against non-performing loans.

After taking a big hit from foreign-exchange losses and high provisioning against bad loans last year, the bank has slowly returned to form. And, despite parting company recently with CEO Mariusz Grendowicz, BRE intends to keep its focus on development.

“We are determined to implement our strategy for the years 2010-2012,” said the bank’s interim chief executive, Wiesław Thor.