Poland's PKO BP profit quadruples on core business, low provisions
Adds details on provisions, loans; paragraphs 3-7
GDANSK, Aug 22 (Reuters) -PKO BP PKO.WA, Poland's biggest bank, said on Thursday its second-quarter net profit quadrupled from a year earlier, mainly helped by a strong uptick in its core business and a drop in legal provisions for Swiss franc mortgage loans.
Profit climbed to 2.35 billion zlotys ($611.61 million), while analysts polled had expected 2.14 billion. Net interest income, the state-owned lender's main revenue generator, jumped 15% to 5.05 billion zlotys.
The bank's reserves for legal risk associated with loans in Swiss francs fell 60% to just under 1 billion zlotys, as nearly 20% fewer borrowers decided to bring their case to court in the reported quarter.
Like most Polish banks, PKO BP has been grappling with the fallout from once-popular Swiss franc mortgages that have cost the sector more than 80 billion zlotys since 2021, exceeding the bank's net profit for the same period by more than 25 billion zlotys.
If left unchanged, the Swiss franc mortgage issue could persist in bleeding the sector's profit for another 12 to 15 years, Polish Banks Association data shows.
Sales of new retail loans at PKO BP jumped more than 32% to 10.5 billion zlotys, pushing up loan volume nearly 14% to 146.6 billion. The corporate financing portfolio, which consists of loans, leasing, and bonds, rose more than 3%.
In May, PKO BP's finance chief had said the lender aims to focus on utilising its capital surplus on further growth of loan volumes and strengthening market position.
($1=3.8423 zlotys)
Reporting by Mateusz Rabiega; Editing by Clarence Fernandez and Subhranshu Sahu
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