Laughing all the way to the bank

Recent data published by the General Inspectorate of Banking Supervision (GINB) reveal that the Q1 net profit of the Polish banking sector amounted to zł.2.97 billion, which is a 42-percent improvement on the same period last year. The industry's joint revenues jumped to zł.8.67 billion, up nearly 15 percent year-on-year. The results were to a large extent boosted by rapidly growing mortgage and consumer loans.

The figures come in the middle of the reporting season and last week four big lenders published their results. Poland's biggest bank, the state-controlled PKO BP posted a 16-percent rise in first-quarter net profits, beating market expectations. The lender's net profit reached zł.482 million.

Bank Pekao, owned by Unicredit, also announced on Friday that thanks to the high demand in loans and tight cost control, the company managed to improve its Q1 net profit by 27 percent year-on-year to zł.418 million.

In spite of uncertainties related to the merger of Pekao and BPH, BPH also managed to improve its results. The bank's net profit reached zł.285 million, almost 40 percent more than in the same period last year.

"The first quarter was simply fantastic and our April results are also excellent ... I expect our full-year results to be better than those in 2005," BPH CEO Józef Wancer told Reuters. "The present situation ... does not disturb us in carrying out our normal business operations. We will maintain our budget, our strategy and our tactics," he added.

According to analysts, uncertainty over the future of BPH might be a cause of concern for its clients, confused about whether they will be transferred to the merged Pekao-BPH entity or stay in BPH. However, Wancer assured investors that he is going to stick to his expansion plans in spite of the threat.

The fourth lender that published its Q1 results last week was ING, whose net profit increased by 19 percent to zł.162.4 million. "It's worth noting that our sales of mortgages almost doubled. A couple of weeks ago we also launched our first branch operating on the basis of a franchising agreement. This is one of the ways to strengthen the bank's sales potential," Brunon Bartkiewicz, ING's CEO said.

In Q1 this year Polish lenders granted loans for an overall amount of zł.269.1 billion. (Reuters)