PKO Posts Weakest Profit in Three Years as Loans Revenue Shrinks

PKO Bank Polski SA, Poland’s largest lender, posted the lowest quarterly profit in three years as income from loans shrank.

Net income dropped 21 percent to 752.8 million zloty ($234 million) in the second quarter from a year earlier, the Warsaw-based bank said in a presentation on its website today. This compares with the 724.5 million zloty mean estimate of 13 analysts surveyed by Bloomberg. Net interest income, the difference between what PKO pays on deposits and charges for loans, fell 21 percent to 1.57 billion zloty.

State-controlled PKO has seen profit fall this year after the country’s record cuts in interest rates reduced income from loans. The National Bank of Poland has slashed borrowing costs by 225 basis points, or 2.25 percentage point, since November to 2.5 percent after the country’s inflation rate slumped amid an economic slowdown.

PKO’s fee income fell 1 percent to 772.4 million zloty in the second quarter, while bad-loan provisions declined to 418.9 million zloty from 573.8 million zloty a year earlier.

PKO shares fell 0.8 percent to 37.8 zloty at 9:20 a.m. in Warsaw, heading for the lowest close since Aug. 7.

To contact the reporter on this story: Marta Waldoch in Warsaw at

To contact the editor responsible for this story: Frank Connelly at

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