Bank Millennium lost over €290 million in 2021
Bank Millennium closed 2021 with losses of more than PLN 1,330 million, equivalent to just over €290 million. Net profit was punished by provisions.
Bank Millennium, which is 50.1% owned by BCP, posted losses of more than PLN 1.3 billion in 2021, equivalent to more than €290 million. The Poland-based bank had made a profit of PLN 23 million (€5.1 million) in the previous year, already a 96% drop.
According to a statement sent to the Securities Market Commission (CMVM) on Tuesday, Bank Millenium said that the group’s consolidated net result for 2021 was negative by PLN 1.3 billion, equivalent to approximately €291.9 million.
The bank justifies the losses by the substantial impact of “provisions related to legal risks associated with the portfolio of mortgage loans granted in foreign currency” in the amount of PLN 2.3 billion (€505.3 million). A significant part, above €457 million, relates to the FX mortgage portfolio granted by the bank and the Euro Bank portfolio.
On October 6, 2021, it was reported that the bank increased the number of provisions for legal risks related to the portfolio of foreign currency (FX) mortgage loans, at which point it warned investors of likely losses in 2021. This Tuesday, Bank Millennium said the cumulative provisions represent 25.7% of the FX mortgage portfolio.
Last year, the sales of new mortgage loans reached PLN 9.8 billion (€2.1 billion). That’s a 46% year-on-year growth. “Cash loans sales have increased 21% year-on-year,” Bank Millennium indicates in the statement. Return on equity (ROE) for 2021 was negative 16.3%, while the cost/income ratio rose to 46.2%.
The financial institution also stressed that operating income shrank 0.5% year-on-year, although it grew 9.2% in the last quarter of the year. Net interest income rose 5% year-to-date, but 14.7% in the three months to December, “reflecting the impact of increase in official interest rates in 2021”. Net fees grew 11.3% in 2021.
In terms of operating costs, this indicator fell 6.3% year-on-year. According to the bank, this improvement is “supported by lower BFG fees and cost saving initiatives.”
At the end of last year, BCP’s Polish bank had 2.69 million active customers, 30 thousand more in the last quarter alone, despite signalling that the methodology for calculating this indicator has changed as of December 2020.
