Poland's mBank returns to Q2 profit on lower provisions (updated)

Mbank SA

01/08/2024 06:06

(Adds details on FX mortgages provisions, background)
       GDANSK, Aug 1 (Reuters) - Commerzbank's  CBKG.DE  Polish
unit mBank  MBK.WA  beat market expectations on Thursday,
posting second-quarter net profit of 421.9 million zlotys
($106.54 million), after it accrued smaller provisions for legal
costs of FX mortgages than a year earlier.
    Analysts expected mBank to post net profit of 348 million
zlotys. Poland's fifth-biggest lender also reported a slight
drop in net interest income (NII) to 2.16 billion zlotys versus
2.23 billion seen in a Reuters poll.
    The bank's reserves for legal risk associated with loans in
Swiss francs dropped by more than half a billion zlotys to 1.03
billion in the second quarter.
    Additionally, the bank has signed 1,848 settlement
agreements one problematic mortgages in the quarter, resulting
in 17,016 conclusions so far.
    mBank said it expected to conclude 4,800 settlements in
future, or 21% of active Swiss franc loans.
    Like most Polish banks, mBank has been grappling with the
fallout from once-popular Swiss franc mortgages that have wiped
out more than 80 billion zlotys since 2021, exceeding the
sector's net profit for the same period by more than 25 billion
zlotys.
    If left unchanged, the Swiss franc mortgage issue could
persist in bleeding the sector's profit for another 12 to 15
years, Polish Bank Association data show.
($1=3.9602 zlotys)

 (Reporting by Mateusz Rabiega; Editing by Jacqueline Wong and
Clarence Fernandez)
 ((Mateusz.Rabiega@thomsonreuters.com; +48 58 769 67 57;))