Stronger than ever

BRE Bank's 2006 results have confirmed that the lender has bounced back from its 2002-2004 slump. The bank made zł.421.3 million in net profit and had revenues of zł.1.7 billion last year. "This is the best result this decade and the second best in the bank's 20-year history," BRE Bank's president Sławomir Lachowski announced.

"The year 2006 was a very good one for banks, for enterprises and for individual clients who were more eager to use banking services," Lachowski explained. The value of loans given by the bank jumped by 49 percent last year while the value of deposits grew by over 21 percent. The retail loan portfolio enjoyed particularly dynamic growth (by 104 percent) to reach zł.8.2 billion, the bulk of which (zł.7.03 billion) came from mortgages.

Corporate banking still makes up the largest portion of BRE Bank's profits (with a 41-percent share), followed closely by investment banking. However, 2006 saw an explosion of the bank's activities in the retail sector. Grupa BRE Bank's retail arms - Mbank and Multibank - accounted for 20 percent of its profits in comparison to just four percent in 2005. "This shows that our income structure is becoming more balanced," said Lachowski.

The profit is likely to stay in the bank rather than be paid out in dividends. "We will recommend that the Supervisory Board keep the profits," Lachowski said, explaining that he wants to make sure the bank's capital adequacy ratio (CAR) stays above 10 percent. BRE Bank also wants to reinvest some profits this year to maintain growth. "We hope to get a 20-percent return on the funds invested," he declared.

Positive experiences at home have inspired BRE Bank to repeat its success abroad. Lachowski announced that a decision had been made to launch operations "with Mbank's business model" in the Czech Republic and Slovakia. He didn't reveal details of the investment plans, but disclosed that BRE Bank plans to start operating in those countries in the second half of the year.