Poland's mBank expects to return to profit in 2023 - CEO

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Adds details, CEO quotes, background

GDANSK, Feb 9 (Reuters) -Polish lender mBank MBK.WA expects to return to profit in 2023, Chief Executive Cezary Stypulkowski said on Thursday, after legal costs pushed it to a loss in 2022.

Earlier on Thursday, mBank reported a fourth-quarter net profit of 834.5 million zlotys ($189.4 million), although its bottom line for the year was a 702.7 million zloty loss.

Polish banks' 2022 earnings have been weighed down by costs related to Swiss franc mortgage loans, as well as relief measures for borrowers introduced by the Polish government.

Many Polish borrowers took out Swiss franc loans more than a decade ago to benefit from lower interest rates in Switzerland, however adverse currency movements meant the borrowers faced higher repayment costs and many mortgage-holders took the banks to court.

mBank expects the number of new settlements with Swiss franc mortgage borrowers to exceed new court cases in the coming quarters.

"We assume profit for 2023," Stypulkowski said on a conference call.

He noted that net interest income would probably drop slightly on the year, while net commission income shouldn't be lower, but a significant rise was rather doubtful.

"The question is how much can we count on a rise in new loans," Stypulkowski said.

The bank is planning up to two bond issues in 2023, aimed at boosting its required capital levels, as well as further securitisation transactions on its loan portfolio, Chief Risk Officer Marek Lusztyn said.

At 1145 GMT mBank's shares were up 2.45%, taking year-to-date gains to 10%.

($1 = 4.4059 zlotys)

Reporting by Karol Badohal and Maria Gieldon
Editing by Tomasz Janowski and Sharon Singleton


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