BNP Paribas BP bank counts on 30-40 bps cost of risk, wants to maintain interest margin

The bank said on Friday that its gross loans rose 1 percent quarter on quarter to PLN 89.5 billion (EUR 20.6 bln) in the third quarter. The bank reported a 0.2 percent drop in quarter on quarter personal customer loans and a 1.8 percent increase in institutional customer loans.

"We are beginning to see elements of business recovery, mainly in the corporate customer area. This marginal decline in volumes [in the retail segment - PAP ed.] is much lower than it was in the previous quarter, which seems to suggest a positive trend in this area," the CEO Przemek Gdanski told the conference.

"Our ambition is to grow, in terms of volumes, in each of the segments in which we are active," he added.

Cash loan sales amounted to PLN 935.8 million (EUR 215.5 mln), down 1.2 percent year on year, and mortgage sales were at PLN 295.6 million (EUR 68.1 mln), up 356 percent year on year. In the third quarter, the bank returned to the mortgage market.

"As we returned to this market more actively, with parameters significantly restrained. We are reviewing these parameters, we are easing some of them (...) I expect that our activity in this market will steadily increase," Gdanski said.

The bank reported that the market has been experiencing an increase in loan demand in all segments lately. The expected improvement in the economy next year - especially in industry - and lower interest rates should support further credit growth.

"We assume that next year will be more active in terms of lending, especially when it comes to investment loans. A more dynamic increase in demand for corporate loans awaits us," Gdanski said.

The cost of credit risk after the third quarter of 2024 was 28 basis points. The bank said that the normalization of the cost of credit risk is mainly related to the lack of positive impact of the revision of macroeconomic parameters.

"We are very comfortable in terms of the quality of the portfolio. We consider this level normalised," BNP Paribas BP's deputy CEO Wojciech Kemblowski said.

"We don't anticipate any shock increase in the cost of risk, I think between 30 and 40 basis points is the right level," he added.

The result from provisions for legal risk related to foreign currency loans amounted to PLN 277.2 million (EUR 63.8 mln) in the third quarter.

"This is not the end of the CHF loans story, with some optimism that the rate of growth of new lawsuits is slowing down," Gdanski said.

The bank said Friday that it received 634 new lawsuits related to CHF loans in the third quarter, compared to 712 such lawsuits in the second quarter. In total, the bank has 6,500 lawsuits, and the CEO reported that about 1,200 of them relate to the paid-off portfolio.

In the third quarter, net interest margin rose to 3.95 percent from 3.08 percent in the second quarter. Excluding the impact of the mortgage moratorium, NIM rose to 3.69 percent from 3.59 percent.

"Our goal is to maintain the interest margin, but when interest rates start to fall, it will be quite a challenge," Gdanski concluded.

seb/ nl/ ao/