Poland's Bank Pekao posts 5% fall in quarterly profit, but beats expectations (updated)

Bank Polska Kasa Opieki SA

30/07/2026 06:19

Adds details on results in paragraphs 2 -3 and 6-7,  background in paragraphs 4-5 and 8.
GDANSK, July 30 (Reuters) - Poland's second-biggest lender Bank Pekao PEO.WA reported a 5.3% drop in its second-quarter profit on Thursday due to higher taxes and costs, but beat market expectations aided by growth in fees and commission income.
Sales of new mortgage loans jumped 42% from a year ago to 3.9 billion zlotys ($1.03 billion), Pekao said.
That cushioned a drop in the net interest margin, a profitability measure reflecting the difference between interest earned and interest paid out, which was at 3.91% at the end of June, compared to 4.26% in the same period a year ago.
Polish banks are looking for stronger lending and fee income to support their profit this year, as lower interest rates and higher taxes slow an earnings boom that had made the sector one of Europe's stronger stock market performers.
The National Bank of Poland left its main interest rate unchanged at 3.75% in July for a fourth straight month. Governor Adam Glapinski said he could propose a 25-basis-point cut after the summer, though other Monetary Policy Council members may be more cautious about further easing.
Pekao said its net fee and commissions income was up 8.8% at 832 million zlotys, lower than analysts' consensus of 841 million zlotys, while net interest income fell 4.2% to 3.30 billion zlotys, in line with market expectations. 
First-half net interest income was hit by lower interest rates and a 126 million zloty reduction related to the recent ruling by the European Court of Justice that barred lenders from charging interest on loan costs, the bank said.
The April 23 ruling adds a new legal cost stream for Polish lenders, alongside shrinking but still-present provisions for lawsuits related to once-popular Swiss-franc mortgages.
Pekao's quarterly net profit was 1.52 billion zlotys, which beat the consensus estimate of 1.46 billion zlotys.
($1 = 3.7746 zlotys)

(Reporting by Anna Jaworska-Guidotti and Alicja Surdy; Editing by Milla Nissi-Prussak)
((anna.jaworska-guidotti@tr.com ; +48 58 769 65 56))