ING, Commerzbank Polish Units Say Profits Cut by Rescue-Fund Fee

  • MBank, Slaski jointly paid 298.7 million zloty in SK Bank fee
  • Bankruptcy fee offset increase in both banks' revenue

The Polish units of Commerzbank AG and ING Groep NV said their fourth-quarter profits were reduced by an additional fee to cover the bankruptcy of the country’s biggest cooperative lender.

Commerzbank’s MBank SA said net income was little changed at 309.5 million zloty ($78 million), as the contribution offset higher interest and fee incomes. Similarly, ING Bank Slaski SA, whose revenue rose, said profit in the last three months of 2015 dropped 11 percent to 205.7 million zloty. Both banks’ earnings beat analysts estimates.

The bankruptcy of SK Bank last year, which cost all Polish banks a combined 2.02 billion zloty, added to tougher capital rules and record low interest rates piling pressure on local lenders. Their combined profit tumbled 30 percent in the first 11 months of last year. Fourth-quarter profit fell 38 percent at Bank Zachodni WBK SA, a unit of Banco Santander SA, and 66 percent at Bank Millennium SA, which have already reported their 2015 earnings. 

More challenges are ahead. The bank tax, which took effect as of Feb. 1, is estimated to fetch the state budget 4.4 billion zloty this year, which accounts for about a third of lenders’ record 2014 profit. Along with the levy, a planned law to force banks to potentially pay out billions of zloty to cover risks stemming from their foreign-currency mortgages is adding to uncertainty around the industry.

MBank advanced 2.4 percent to 321 zloty, the highest since Dec. 30, while Slaski gained 1 percent to 112 zloty as of 10:50 a.m. in Warsaw.

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