Bank Zachodni WBK seeks to double net profit

Bank Zachodni WBK (BZ WBK) plans to double its net profit to zł. 290 million-zł. 300 million ($71 million-$73 million) in 2002, despite the country's sharp economic slowdown, a source close to the bank said last week. A BZ WBK spokesman said the bank does not issue forecasts. In the first half of the year, BZ WBK, a unit of Allied Irish Banks, saw its earnings rise nearly 8% zł. 144 million ($35 million), thanks to strong revenue growth, tight cost control and lower bad debt provisions. The upbeat forecast comes as Poland's ban-king sector struggles with a sharp economic slowdown, which has cut demand for credit and forced many lenders to create hefty provisions for risky loans as asset quality deteriorated sharply.

Shares in BZ WBK, the Warsaw Stock Exchange's (WSE) fifth-largest bank, were little changed last Thursday, edging up 0.6% to zł. 65.2. The stock hit an all-time high of zł. 78.2 in April, but worries over the health of the banking sector have depressed major financial issues in the past two months. "The forecast is largely in line with market expectations but a lot will depend on bad debt provisions, whose total effect is hard to estimate at the moment," said Robert Sobieraj, a banking analyst at Citigroup's Bank Handlowy in Warsaw. BZ WBK is AIB's key investment in post-communist Europe, contributing about 8% to the Irish group's total assets and accounting for nearly 6% of its total loans, according to estimates from investment bank Bear Stearns. - Reuters