Poland's mBank returns to Q4 profit aided by one-off gain (updated)

Mbank SA

06/02/2025 07:42

(Adds context, details on results and outlook throughout)
       Feb 6 (Reuters) - Commerzbank's  CBKG.DE  Polish unit
mBank  MBK.WA  swung to a profit in the fourth quarter from a
loss reported last year, supported by higher interest income and
a one-off gain from a deferred tax, it said on Thursday.
    Poland's fifth biggest lender by market capitalization also
said it expected its total revenue in 2025 to exceed 11 billion
zlotys ($2.7 billion), slightly lower than last year.
    Its net profit was 986 million zlotys in the fourth quarter,
compared to a loss of 20.3 million a year earlier and analysts'
average forecast for a profit of 920 million zlotys. 
    That was supported by a one-off effect of 390 million zlotys
from a deferred tax asset recognised in quarter, reflecting tax
effects of court rulings and settlement procedures related to
foreign currency lending.
    Foreign exchange mortgages, primarily in Swiss francs, were
popular in the 2000s but have since 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.
    But mBank said in October it expected the legal risk costs
of Swiss franc loans to largely subside by the end of 2025. It
had concluded 22,902 settlements with clients related to such
loans as of December 31, compared to 13,321 at the end of 2023.
    It saw a 36.8% reduction in the legal risk costs related to
these loans at 932.2 million zlotys in the fourth quarter,
slightly higher than its previous estimate of about 906.9
million zlotys.
    mBank's net interest income, or earnings on loans minus
deposit costs, jumped 6.7% year-on-year to 2.51 billion zlotys
in the quarter, supported by high interest rates. That was lower
than the average of 2.53 billion zlotys expected by analysts
polled by Reuters. 
($1 = 4.0463 zlotys)

 (Reporting by Anna Jaworska-Guidotti in Gdansk; editing by
Milla Nissi)
 ((anna.jaworska-guidotti@tr.com ; +48 58 769 65 56))