Poland's BNP Paribas BP Q2 profit jumps 36% on provisions, deferred tax

BNP Paribas Bank Polska SA

13/08/2024 07:36

GDANSK, Aug 13 (Reuters) - Poland's BNP Paribas BP
 BNP1.WA  posted a bigger than expected 36% jump in
second-quarter net profit on Tuesday, supported by a one-off
positive impact from deferred tax, and lower legal provisions
related to Swiss franc mortgages.
    
    BY THE NUMBERS
    Net profit at Polish unit of BNP Paribas  BNPP.PA  totalled
623 million zlotys ($158.4 million) with steady net interest
income of 1.22 billion zlotys. Net fee and commission earnings
fell 7% on the year to stand at more than 287 million zlotys.
    Legal provisions for Swiss franc denominated mortgages
almost halved to about 190 million zlotys.
    The gross loan book was 88.58 billion zlotys, down 1.4%
year-on-year.
    
    WHY IT'S IMPORTANT
    Rulings in favour of those who took out mortgages
denominated in Swiss francs have cost Poland's banks more than
80 billion zlotys since 2021, exceeding the sector's net profit
over the same period by more than 25 billion zlotys.
    Courts are still handling tens of thousands of Swiss franc
loan cases with the government working on a standardised
settlement format.
    Polish Bank Association data shows that without resolution
the issue could persist in dampening the sector's profit for
another 12 to 15 years.
    
    CONTEXT
    A strengthening Swiss franc and higher interest rates led to
unexpectedly high repayments for hundreds of thousands of Poles
who had taken Swiss franc mortgages at a time of low interest
rates in the 2000s and early 2010s. 
    Many of these borrowers, backed by the Poland's
anti-monopoly office and later EU courts, initiated legal
actions against the banks.

($1 = 3.9332 zlotys)

 (Reporting by Mateusz Rabiega; 
Editing by Kirsten Donovan)
 ((Mateusz.Rabiega@thomsonreuters.com; +48 58 769 67 57;))