GDANSK (Reuters) -Poland's Bank Handlowy posted a 4.2% fall in its first-quarter net profit on Thursday, mainly due to the reduced earnings from protection against financial risks. The Polish lender,
Bank Handlowy's Q1 Profit Falls 4.2% but Exceeds Expectations
GDANSK (Reuters) -Poland's Bank Handlowy posted a 4.2% fall in its first-quarter net profit on Thursday, mainly due to the reduced earnings from protection against financial risks.
The Polish lender, three-fourths of which is owned by Citigroup, posted a net profit of 435 million zlotys ($115.3 million), beating expectations of 417 million zlotys, as per a Reuters poll.
WHY IT'S IMPORTANT
On Wednesday Poland's central bank cut interest rates for the first time since October 2023. The key interest rate came down to 5.25%, slashing the cost of credit by 50 basis points.
Lower interest rates may translate positively into greater demand for mortgage loans as more people will be able to afford them.
BY THE NUMBERS
Bank Handlowy's net interest income fell 1% year-on-year to 789.6 million zlotys.
Net fee and commission earnings stood at 150.8 million zlotys compared to 144.3 million zlotys a year ago.
CONTEXT
In March, the bank said that it had secured approval from the Polish Financial Supervision Authority to distribute up to 75% of its 2024 profit as dividend.
During a conference call that same month, Deputy CEO Patrycjusz Wojcik said that the dividend for 2024 would be the second-highest in the bank's history.
For 2023, the bank distributed a total of 1.45 billion zlotys in dividend or 11.15 zlotys per share.
($1 = 3.7721 zlotys)
(Reporting by Anna Banacka and Julia Kotowska; Editing by Mrigank Dhaniwala)
