Banks riding high
The merging banks Pekao and Bank BPH both achieved their best ever Q1 results this year. The Pekao Group achieved revenues at the level of zł.1.22 billion (up 7.7 percent year-on-year) and a net profit of zł.503 million, a 20-percent increase in comparison to Q1 of 2006. BPH's revenues at the end of March equaled zł.881 million, while net profits saw a 63-percent growth to zł.463 million.
"These results were achieved by further growth of the business as well as tight control of costs," BPH's president Józef Wancer said. The bank's cost to income ratio (C/I) was at the level of 45.7 percent. "A result below 50 percent is very good by European standards," vice president of Pekao, Luigi Lovaglio, said. Pekao's C/I was 48.7 percent.
Both banks' results were also driven by growing loans. Pekao's loan portfolio grew by 13.7 percent, with retail loans growing especially quickly (27.9 percent). BPH's loan portfolio increased by 14.1 percent to zł.37 billion. Pekao also increased the sales of mutual funds by nearly a third to zł.26.1 billion.
The two banks are currently waiting for the Banking Supervision Commission's (KNB) approval for the planned division of BPH and a merger of the larger part with Pekao. "The division of BPH could take place within 30 days after the approval," the president of Pekao, Jan Krzysztof Bielecki, said. He predicts that the acquisition will be completed this year. The banks planned for the merger to take place in the third quarter of 2007.
The first three months were positive for other lenders as well. Citibank Handlowy had a profit of zł.197 million in the first quarter of this year, a 34-percent year-on-year increase. "No analyst expected such results. On average they estimated that we would be zł.145 million in the black," Citibank Handlowy's president, Sławomir Sikora said. He expressed hope that Citibank could record an annual net profit of over zł.800 million for the first time ever this year. The bank also saw an almost 10-percent increase in revenue which grew to zł.604 million. Another lender, Bank Zachodni WBK (BZ WBK) saw revenues increase by 24 percent, to reach zł.689 million, while net profits increased by over 50 percent year-on-year to zł.293 million.
