According to the bank, these losses are justified mainly by the "upfront recognition of costs of credit holidays imposed on Polish banks in July".
Bank Millennium reported a net loss of €270.5 million in the first nine months. According to a statement sent to the Securities and Exchange Commission (CMVM), these losses are justified mainly by the “upfront recognition of costs of credit holidays imposed on Polish banks in July”.
In the third quarter, the bank’s net loss was -€214.3 million, rising to -€270.5 million in the first nine months.
“This unprecedented level of quarterly loss was entirely an outcome of upfront recognition of costs of credit holidays (PLN 1,423 million pre-tax, €304.6 million / PLN 1,153 million after tax, €246.8 million) imposed on Polish banks in July,” BCP explains.
Excluding these costs, Bank Millennium Group would show a net profit of €32.5 million (including the contribution to the banking sector of €14.6 million), “despite incurring high costs related to FX-mortgages (PLN 640 million pre-tax, €137 million /PLN 591 million after-tax altogether, €126.5 million) and a couple of sizeable negative extraordinary items.”
BCP says this was the second consecutive quarter in which core business results offset costs related to the legal risk of zloty-denominated loans.”Similarly, to recent reporting periods, costs related to FX-mortgage portfolio (legal risk provisions, costs of amicable settlements and legal costs) remained elevated and continued to be the main drag on the increasingly profitable core business of the Group.”
The statement said that net interest income increased 75.3% year-on-year and 7.8% in the quarter, “reflecting the increase in interest rates that occurred since October 2021”. Net fees fell 1.5% year-on-year and 13% in the quarter.
Operating costs increased 34.5% year-on-year in 2021 and declined 31.8% in the quarter, “mainly due to a much higher contribution to Banking Guarantee Fund (BFG) funds and contribution to the institutional protection scheme (‘IPS’) established by eight Polish banks”. Total operating income increased 48.1% year-on-year and 5.1% for the quarter.
Bank Millennium had 2.9 million active clients in September, an increase of 50,000 in the quarter and 190,000 year-on-year. Retail deposits increased 3% for the year, while retail loans grew 1% year-on-year.