UniCredit’s Pekao Says Second-Quarter Profit Beats Estimate

Bank Pekao SA, Poland’s second-largest bank and a unit of UniCredit SpA (UCG), said second-quarter profit rose 5.3 percent as declining costs helped offset lower revenue.

Net income increased to 741.8 million zloty ($233 million) from 704.2 million zloty a year earlier, the Warsaw-based bank said in a regulatory statement today. That exceeded the 647.8 million zloty average estimate of 12 analysts surveyed by Bloomberg.

Polish banks are trying to keep costs under control as revenue is pressured by record low interest rates and weak economic growth in the eastern European country. Still, they are starting to benefit from a decision by the financial market regulator to ease credit restrictions.

Pekao cut operating costs by 2.9 percent to 902.8 million zloty and increased retail lending by 3.8 percent in the first six months of this year compared to December.

Second-quarter net interest income, the difference between what the bank pays on deposits and what it charges for loans, fell 7.6 percent from a year earlier to 1.1 billion zloty. Fee income declined 1 percent to 573.4 million zloty.

Pekao shares climbed 1.6 percent to 167.5 zloty yesterday. The share is flat this year compared with an 11 percent increase for the main Polish banking index and a 6.9 percent decline for the benchmark WIG20 index.

To contact the reporter on this story: Marta Waldoch in Warsaw at mwaldoch@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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