A number of Polish banks posted year-on-year net profit increases in the first quarter of 2012, mainly due to improved margins.

In particular, both Nordea Bank Polska and BZ WBK made strong starts to the year. Nordea’s Q1 net profit increased from zł.56.9 million to zł.74.5 million year-on-year, while BZ WBK’s net profit rose to zł.314 million compared to zł.270 million in Q1 2011.

“The results for the first quarter of 2012 are positive … net profit increased by nearly 31 percent compared to the corresponding period of 2011,” Nordea Bank wrote in its report. 

Tomasz Bursa, an analyst at Ipopema Securities, said that both Nordea and BZ WBK have done exceptionally well so far this year. 

“They increased their client volumes and we are now seeing the effects of that.

Also, both banks have a very low risk profile, because both have very good credit policies,” Mr Bursa said. 

Bank Millennium’s Q1 profit also rose, but not by as much as the profits of BZ WBK and Nordea. 

In Q1, Millennium earned a profit of zł.110 million compared to last year’s zł.101 million.

“Millennium’s Q1 results were in line with analysts’ expectations,” said Michał Konarski, an analyst at Wood & Company.

ING Securities analyst Piotr Palenik explained that Polish lenders have seen their takings rise due to their improved margins. 

“What has affected the increased year-on-year net profit for banks is the improvement in margins, which is a result of the increase in interest rates and reduced competition, as well as better loan volumes, especially in the corporate segment,” he said. 

But although the beginning of 2012 has been positive for Poland’s banking sector, analysts predict that this won’t continue after the end of this year.

“The future for the banking sector this year depends on how the economy is going to behave, and on whether we will experience an economic slowdown after the Euro 2012 soccer tournament,” Mr Konarski said.

“I predict that there will be a decrease in the growth rate of profit by the end of this year, and next year the banking sector won’t be doing as well due to economic slowdown and increased credit risk,” Mr Bursa said.