Poland's mBank quarterly profit more than doubles on lower FX legal costs (updated)

Mbank SA

30/04/2025 07:03

Fixes typographical error in media identifier

GDANSK, April 30 (Reuters) - Commerzbank's CBKG.DE Polish subsidiary mBank MBK.WA posted a 169% jump in first-quarter profit on Wednesday, driven by reduced legal risk costs tied to foreign currency (FX) loans, as it reaffirmed its financial targets for 2025.

mBank, in which Commerzbank's CBKG.DE holds a 69% stake, reaffirmed its forecast for 2025 revenue to exceed 11 billion zlotys ($2.93 billion), slightly lower than 12 billion zlotys earned in 2024, with assumption that Polish Monetary Policy Council (MPC) may cut its interest rates in May.

mBank, Poland's fifth-biggest lender by market capitalization, expects the legal risk costs related to FX mortgages to burden its results for the last time in 2025.

The lender reported a 52% year-on-year reduction in FX legal risk costs for the quarter, totaling 661.8 million zlotys — higher than its earlier estimate of around 643.5 million zlotys, but down from 1.37 billion zlotys in the same period last year, according to its presentation.

Mortgages in foreign currencies, primarily in Swiss francs, were popular in the 2000s, but have become a burden for Polish banks after Swiss rates and the franc spiked, driving up repayment costs and triggering legal disputes that pushed banks to seek settlements.

Its net profit came in at 705.7 million zlotys, up 169% year-on-year, and exceeded analysts' average forecast for a profit of 622 million zlotys.

mBank's net interest income (NII), or earnings on loans minus deposit costs, jumped 4% year-on-year to 2.44 billion zlotys in the first quarter, supported by high interest rates and in line with analysts' average forecast for NII of 2.44 billion zlotys.

($1 = 3.7517 zlotys)

 (Reporting by Anna Jaworska-Guidotti; Editing by Sherry Jacob-Phillips)

 ((anna.jaworska-guidotti@tr.com ; +48 58 769 65 56))