mBank's Q1 profit jumps 84% on interest income, lower taxes and NPL provisions
GDANSK, May 10 (Reuters) -Poland's fifth largest bank by assets mBank MBK.WA posted an 84% rise in first-quarter net profit on Friday, mainly on rising interest income, lower taxes, and declining provisions for non-performing loans (NPL).
Net profit for the period amounted to 242.5 million zlotys ($60.95 million), while net interest income (NII) rose 15% year-on-yearto 2.34 billion.
Net interest margin (NIM) climbed 53 basis points to 4.37%.
The bank provided a neutral outlook for this year's NII and NIM as it expects interest rates in Poland to remain stable.
Rebounding loan volumes should support interest income, but the potential for improvement in margin stemming from optimising deposit pricing seems to be "exhausted", it said.
Quarterly mortgage loan sales more than tripled on the year to 2.26 billion zlotys, aided by the Safe 2% Credit scheme, which accounted for 1.29 billion worth of a boost. The bank also paid 48% less tax, helping boost its bottomline.
mBank noted solid growth of non-mortgage, and corporate loans, which rose by 30% and 51% year-on-year, respectively.
The positive performance of the first-quarter interest revenue was partly offset by yet another provision for the cost of legal risk regarding Swiss franc loans that rose 70% to 1.37 billion zlotys.
The bank said its provisions covered 116% of the Swiss franc mortgage portfolio and that as of March-end it had signed settlements with 15,168 clients who had taken out the product.
The lender said it expects to conclude 5,500 settlements in future, corresponding to 21% of active Swiss franc loans.
($1 = 3.9786 zlotys)
Reporting by Mateusz Rabiega; Editing by Janane Venkatraman
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