Poland's Alior Bank posts 16% Q3 profit jump on higher core revenue, lower provision
24/10/2024 06:30
GDANSK, Oct 24 (Reuters) - Poland's Alior Bank ALRR.WA
posted a bigger-than-expected 16% rise in third-quarter net
profit on Thursday, supported by higher net interest and
commission income, as well as lower provisions related to
payment holidays for mortgage holders.
WHY IT'S IMPORTANT
After the risks from legal concerns over a Swiss franc
loans-induced lull in the acquisition scene in the Polish
banking sector, voices mentioning potential mergers echo
throughout the market.
Poland's state assets ministry spoke of the need for
national insurer PZU PZU.WA to come up with a strategy to
tackle ownership of two banks, which complicates its valuation.
The insurer owns 20% stock in Alior Bank and is expected to
address the issue in its strategy.
BY THE NUMBERS
Alior's net profit totalled 665.9 million zlotys ($165.29
million) for the quarter, compared with analysts' average
estimate of 632 million zlotys in a Reuters poll.
Its net interest income jumped 11% on the year to 1.36
billion zlotys, while net fee and commission earnings rose 20%
to stand at nearly 207 million zlotys.
Alior's non-performing loans ratio (NPL) was 7.10% in the
quarter, compared with its aim of a sub-7% reading in 2024. Net
expected credit losses remained flat at close to 155 million
zlotys.
Its gross loan book was at 66.3 billion zlotys, up 3%
year-on-year.
KEY CONTEXT
The Polish government has approved a bill to extend payment
holidays for mortgage holders for 2024, allowing borrowers to
postpone payments of up to eight instalments, with the number of
possible payment suspensions cropped to four.
But due to lower-than-expected applications, Alior adjusted
their estimate, dissolving 24 million zlotys worth of provisions
it had set aside for the scheme in the latest quarter.
($1 = 4.0286 zlotys)
(Reporting by Mateusz Rabiega; Editing by Savio D'Souza)
((Mateusz.Rabiega@thomsonreuters.com; +48 58 769 67 57;))