WARSAW, March 29 Polish commercial banks expect
their combined net profit to fall by 12 percent in 2017,
financial regulator KNF said on Wednesday, mainly because last
year the banks' profits were boosted by the sale of their stakes
in Visa Europe.
The watchdog publishes its report on the banks' earnings
outlook annually, based on estimates provided by the banks. For
2016, the report forecast that the banks' combined net profits
would fall by 9.6 percent. Many of Poland's banks actually
reported higher profits last year due to the Visa Europe sale.
In its latest report, KNF said banks expected their interest
income to increase by 6.3 percent in 2017 and their income from
fees and commissions to rise by 6.5 percent this year, with
costs up by 4.1 percent.
The regulator's report also said commercial banks expected
that their combined portfolio of Swiss franc denominated
mortgages would decline by a total of 9.7 percent this year.
More than half a million Poles took out Swiss franc loans to
benefit from low interest rates in Switzerland, but now face
bigger repayments because the Swiss currency has doubled in
value against the zloty over the last few years.
The Swiss franc mortgages held by Polish banks were worth an
equivalent of 134 billion zlotys ($34.09 billion), or 7 percent
of GDP, at the end of 2016, according to a separate KNF report
published this year. The combined value of the mortgages
expressed in zlotys fell by 2.5 percent last year, the data from
the regulator showed.
Worries that the ruling PiS party could compel the banks to
bear the cost of converting the Swiss franc loans into zlotys
contributed to sharp falls in the banks' share prices last year.
But since then the government has softened its stance and
earlier this year the Financial Stability Committee recommended
that banks should put more capital aside if they hold foreign
exchange-denominated mortgages, in an effort to get more of the
loans converted to zlotys.
($1 = 3.9302 zlotys)
(Reporting by Marcin Goettig. Editing by Jane Merriman)