GDANSK (Reuters) -Santander Bank Polska on Wednesday reported a 7% fall in fourth-quarter net profit, hit by rising costs related to foreign currency mortgage loans, but beat analysts’ expectations.
Santander Bank Polska, part of Santander, said quarterly net profit amounted to 913.4 million zlotys ($225.25 million), above the 830 million zlotys expected by analysts in a Reuters poll.
Foreign currency mortgage loans, primarily in Swiss francs, remain a burden for Polish banks. Their low interest rates back in the 2000s made them attractive to borrowers, but repayment costs have surged due to the zloty’s depreciation against the franc and Swiss interest rate increases, resulting in legal disputes.
At the end of 2024, the number of settlements signed by the bank with clients reached 13,000, both pre-trial and post-litigation, CEO Maciej Gajewski, said during press conference.
Meanwhile, the cost of legal provisions for foreign currency mortgage loans was 1.44 billion zlotys in the fourth quarter compared with the bank’s earlier estimate of 1.17 billion zlotys.
The bank’s net interest income for the three months rose nearly 6% to 3.62 billion zlotys, almost exactly in line with analysts’ expectations. High interest rates and an increased demand for credit, notably consumer and corporate loans, helped to boost income, the bank said.
The bank, Poland’s second biggest lender by market capitalisation, expects its cost of risk, which measures potential loan losses, in 2025 to be at the lower end of a 0.70-0.90 basis point range set out in its strategy, said Maciej Reluga, board member for finance.
The costs of risk in the fourth quarter fell to 0.58 bp from 0.69 bp in the third quarter.
Net interest margin for 2024 came in at 5.27% compared with 5.39% in the previous year due to a decline in market interest rates and modifications made by the group, mainly to account for policy interest rate cuts and their expected evolution, the bank said.
Reluga added that the bank expects an upswing in loans to companies in 2025.
($1 = 4.0550 zlotys)
(Reporting by Anna Banacka; Additional reporting by Rafal W. Nowak;Editing by Mrigank Dhaniwala and Jane Merriman)
