BCP’s Poland unit Bank Millennium reports 2020 profit down 96%

Profit at Bank Millennium, a bank in Poland in which Portugal’s Banco Comercial Português has a 50.1% stake, was last year down 96% on 2019 to 23 million zloty (5.1 million euros), BCP announced on Tuesday.

In a statement to Portugal’s securities markets regulator, the CMVM, the bank says that the result “was influenced by the Covid-19 pandemic and extraordinary items” and that, excluding these, net profit was 709 million zloty, down 23% from 2019.

It highlighted 677 million zloty in provisions made relating to legal risks associated with the of mortgages issued in foreign currency, with provisions in Q4 alone totalling 380 million zloty.

The Q4 saw a net loss of 109 million zloty; excluding extraordinary items, the unit had a 204-million profit, the bank said.

The BCP statement also reports 66.9 million zloty in “integration costs and provisions related to Euro Bank” but also 167.6 million zloty in synergies from the merger, noting that these were “comfortably above integration costs”.

According to BCP, Bank Millennium’s operating income last year rose 3%, as did net interest income, while commission income increased still faster, by 7%.

Operating costs, excluding mandatory contributions to the Bank Guarantee Fund, were down 1% on 2019, but in Q4, they were up 2% on the third.

The Polish group’s total capital ratio at end-year was 19.5%, with common equity tier 1 (CET1) at 16.5%; these figures are both above the regulatory requirements of 14.1% and 11.3% respectively.

In retail banking, there was a 2% increase in terms of active customers, to 2.63 million, a 1% increase in deposits and 9% in credit (or 14% if mortgages in foreign currency are excluded).

BCP in its statement highlights a “record high of 2.1billion [zloty] … in mortgages loans origination in 4Q20” for 6.8 billion in 2020 as a whole, up 57% on 2019. This, it adds, “translates in a 22% y/y growth of the mortgage loan book, excluding FX mortgages.”

In personal loans, output was 4.6 billion zloty in 2020, down 7% on the year; in Q4, the value of this item was 1 billion zloty, down 15%.

In corporate banking, Bank Millennium registered a 4% decrease in deposits last year, with a 18% quarter-on-quarter decrease in Q4. But the volume of current accounts grew by 37% in the year, and by 6% in the qurater.

There was also a 1% decrease in loans to companies compared to 2019, but growth of 1% on a quarterly basis; there was also 6% growth in factoring turnover in Q4.