May 14 (Bloomberg) -- PKO Bank Polski SA, Poland’s largest lender, headed for a three-week low after saying its bad-loan provisions soared in the first quarter and as European shares declined because of concern that Greece will quit the euro.
The shares slid as much as 2.5 percent to 31.48 zloty, and traded down 2.3 percent at 31.57 zloty, the lowest on a closing basis since April 23, at 1:54 p.m. in Warsaw.
Provisions for bad loans surged 20 percent to 527.5 million zloty ($158 million), driven by reserves for loans to construction companies and to small and medium-sized companies as Poland’s economic growth slows to 2.7 percent this year from 4.3 percent last year, according to European Commission forecasts on May 11.
“The quality looks slightly weak,“ Tomasz Walkowicz, a London-based analyst at UBS AG, wrote in a research note today. “Economic recovery in Poland may be slower than we expect and thus volume growth in the Polish banking sector, including PKO, may be below expectations.”
Net income increased to 1 billion zloty from 871 million zloty a year earlier, PKO said in a regulatory statement today. That was in line with the 1.02 billion-zloty mean estimate of 13 analysts surveyed by Bloomberg.
Stocks and commodities declined and the euro weakened to a three-month low on concern that Greece will withdraw from the single European currency as politicians in Athens struggle to form a government after a parliamentary election on May 6. Losses by German Chancellor Angela Merkel’s party in a regional ballot yesterday added to the negative sentiment.
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