Pekao and BPH exceed profit forecasts due to core business

Pekao closed the year with a net profit of zł.1.5 billion, which is 30% more than in 2004. while BPH's net profit exceeded zł.1 billion in 2005. Both banks expect further improvement in their results. "If the macroeconomic and political situation is stable, the bank has such good foundations that both profits and revenues will definitely be higher this year than in 2005," declared BPH president Józef Wancer, while Pekao deputy president Luigi Lovaglio stated: "We conservatively assume that the growth of this year's net profit will be one digit." Both companies generated most profits from their core activities, for example they both increased their loan portfolios. They also managed to control costs and Pekao's cost to income ratio was 53.2% and in the case of BPH it amounted to 49.4%. Return on equity in Pekao was 19.2%, while at BPH it totaled 16.7%. As a result of impressive profits both banks intend to allocate a large part of profits to dividends. "We will propose to pay out 80% of net profit in dividends," declared Wancer from BPH, while Jan Krzysztof Bielecki from Pekao stated that the dividend this year will be higher than the 82% paid out in 2005. (Puls Biznesu, pp. 1, 8; Parkiet, p.5) E.B.