Banking sector cashes in
Banks, it seems, are queuing up with good news. First, the second-largest Polish bank, Pekao SA, announced that it had closed the year with a zł.1.34 billion record-high profit. Then the medium-sized BZ WBK posted a zł.444 million net gain, growing by 245 percent against 2003 numbers. Finally, Poland's number three, BPH bank, proudly announced topping zł.1 billion in gross profit (zł.788 million net). All three reported significant growth on their return on equity (ROE) ratios, by four to five points to 17-18 percent. They also noted a shift in entrepreneurs' demand for credit.
"We received a positive signal at the end of last year. The process began with large corporations," says the president of BPH bank, Józef Wencer. The small- and medium-sized enterprise sector is apparently less eager to invest, but will likely catch up during this year.
The banks capitalized on a conducive economic situation and finished restructuring, which improved their cost structures. BZ WBK spent zł.1.2 billion on operations in 2004, a 10.2 percent fall against 2003. BPH reduced costs by six percent to zł.1.5 billion.
Despite the all-time high incomes, share prices are expected to remain at current levels. The latest Q4 numbers did no more than confirm a rise in deposit volumes and consumer credit throughout the past 12 months. The president of Pekao SA, Krzysztof Bielecki, said that the dividend will at least stay at 2003's level (80 percent of profit) and BZ WBK management advised its supervisory board to double its dividend to 40 percent. Banks promise even better revenues in 2005, despite large investment plans, in particular BPH, which is enlarging its network by 77 local offices.
Financial institutions also put high hopes on investment, forecasted to grow by some 11 percent this year. However, as Józef Wencer says: "The retail sector will remain the powerhouse of banking for at least the next 10 years."
Luckily for those largest retailers, consumer spending is to rise by 3.2 percent according to BPH analysts and individual deposits by 7.3 percent according to Pekao forecasts, both of these growing at rates not seen since 1999.
"We received a positive signal at the end of last year. The process began with large corporations," says the president of BPH bank, Józef Wencer. The small- and medium-sized enterprise sector is apparently less eager to invest, but will likely catch up during this year.
The banks capitalized on a conducive economic situation and finished restructuring, which improved their cost structures. BZ WBK spent zł.1.2 billion on operations in 2004, a 10.2 percent fall against 2003. BPH reduced costs by six percent to zł.1.5 billion.
Despite the all-time high incomes, share prices are expected to remain at current levels. The latest Q4 numbers did no more than confirm a rise in deposit volumes and consumer credit throughout the past 12 months. The president of Pekao SA, Krzysztof Bielecki, said that the dividend will at least stay at 2003's level (80 percent of profit) and BZ WBK management advised its supervisory board to double its dividend to 40 percent. Banks promise even better revenues in 2005, despite large investment plans, in particular BPH, which is enlarging its network by 77 local offices.
Financial institutions also put high hopes on investment, forecasted to grow by some 11 percent this year. However, as Józef Wencer says: "The retail sector will remain the powerhouse of banking for at least the next 10 years."
Luckily for those largest retailers, consumer spending is to rise by 3.2 percent according to BPH analysts and individual deposits by 7.3 percent according to Pekao forecasts, both of these growing at rates not seen since 1999.
