First-quarter profit declined to 781.4 million zloty ($244 million) from 1 billion zloty a year earlier, the state-controlled bank said in a regulatory statement today. That beat the 737.7 million zloty mean estimate of 15 analysts surveyed by Bloomberg. Net interest income, the difference between what the bank pays on deposits and what it charges for loans, plunged 18 percent to 1.69 billion zloty.
Polish banks’ combined profit fell 5 percent in the first quarter as the country battled the steepest slowdown in 12 years and the central bank cut borrowing costs to help revive growth, according to data released last week by the Warsaw-based financial regulator. The National Bank of Poland lowered interest rates by a total of 150 basis points between November and March and followed that by a further quarter-point reduction this month.
“While revenues surprised negatively, the bank managed to cut costs after quarters of nominal growth,” Dariusz Gorski, an analyst at Bank Zachodni WBK SA in Warsaw, said by phone today. “It’s positive that they addressed costs in a situation where it wasn’t possible to increase revenue.”
PKO shares gained 0.1 percent to 33.22 zloty as of 10:03 a.m. in Warsaw, trimming this year’s decline to 10 percent and valuing the bank at 41.5 billion zloty.
PKO’s profit decline compares with a 6.3 percent drop in first-quarter net income at its biggest competitor Bank Pekao SA, majority-owned by UniCredit SpA. Pekao, Poland’s second-biggest lender, reported earnings last week.
PKO’s net fees and commissions rose to 770.2 million zloty in the first quarter from 723.4 million zloty, while bad loan provisions fell 15 percent to 448 million zloty, it said.
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