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UPDATE 1-Polish lender Millennium beats forecasts with Q1 profit
April 25, 2017 / 7:26 AM / 8 months ago

UPDATE 1-Polish lender Millennium beats forecasts with Q1 profit

* Millennium Q1 profit rises 2 pct y/y to 140.5 mln zlotys

* Bank beats forecasts on higher sales and lower deposit costs

* Millennium results pump up other lenders’ result expectations (Adds details, analyst comment)

By Marcin Goclowski

WARSAW, April 25 (Reuters) - Poland’s Bank Millennium beat expectations with a 2 percent rise in first-quarter net profit, as the lender slashed deposit costs and accelerated product sales.

Millennium’s positive earnings bode well for other lenders, which may also have improved their profitability in a super-low interest rate and high regulatory and fiscal cost environment, analysts said.

The Polish unit of Portugal’s Millennium BCP said its first-quarter net profit was 140.5 million zloty ($35.97 million), above analysts’ expectations of 117 million zlotys.

Millennium’s net interest income rose 13 percent year-on-year, while fees and commissions jumped by 24 percent, which offset the higher costs related to payments to guarantee funds.

“It may be a sign that others will also surprise with the result on the sale of insurance and investment products. If such a trend materialises, expectations regarding their profits could rise,” said Marcin Gatarz, analyst with Pekao Investment Banking.

Bank Zachodni WBK, a unit of Santander , as well as mBank the Polish arm of Commerzbank, are due to release first-quarter profits on Wednesday and Thursday, respectively.

Millennium shares rose 9.6 percent, with other banks likely to be supported by its upbeat results, Gatarz said, although on a smaller scale.

Millennium’s stock has risen by around a quarter so far this year, outperforming the broader banking sector index, on expectations that the ruling Law and Justice (PiS) party will abandon its plan to force banks to convert Swiss franc denominated credit portfolios into zlotys at their expense. ($1 = 3.9055 zlotys) (Reporting by Marcin Goclowski; Editing by Agnieszka Barteczko and Louise Heavens)

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