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Bank Handlowy w Warszawie SABank Handlowy counts on further credit growth helped by interest rate cuts
Bank Handlowy, the Warsaw-listed unit of Citigroup, observed higher demand for investment and working capital loans in the first quarter of 2025, the lender's volumes in the instututional banking segment grew faster than the market. The bank is counting on the growth in demand for financing among its customers to continue, which could be helped by Wednesday's MPC decision to cut interest rates, CEO Elzbieta Czetwertynska told a conference following the publication of bank's earning report.
"I am very pleased first and foremost with the growth in loans and especially with the growth in loans in the institutional banking segment, which we have already seen signs of," CEO Czetwertynska said.
"This is our strategic segment and growth in this segment is very important to us. We are growing above the market. The driver of this growth was our strategic corporate banking segment, but we also had interesting transactions in the corporate banking segment," she added.
Bank Handlowy's CEO pointed out that the lender has noticed an increased interest in working capital loans.
"We are seeing more interest in investments and also more demand for working capital loans, which I hope is not only a matter of this quarter, but a certain proxy for the future," Czetwertynska said.
"(...) I hope that this trend will continue in some way. Of course, it is difficult to say at the moment what will happen, because the geopolitical situation has changed significantly since the beginning of April," she added.
The CEO assessed that Wednesday's decision made by Poland's Monetary Policy Council to cut interest rates could have a positive impact on customer reported demand for loans.
However, she added, there is a lot of uncertainty in the markets due to the US tariffs.
"Our current analyses indicate that if tariffs are maintained, economic growth and inflation in Poland could be lower than we originally assumed. We currently think that economic growth in 2025 could be around 3.9 percent and inflation around 3 percent," Czetwertynska said.
When asked about the impact on interest rate cuts, the bank's deputy CEO and CFO Patrycjusz Wojcik reported that Handlowy actively manages its balance sheet.
"In our case, directly on the interest result, a shift of the curve by 25 basis points translates into about PLN 45 million of income in the interest result," he assessed.
"On the other hand, this will of course also depend on the structure of the balance sheet and credit volumes and, above all, business decisions when it comes to interest expenses, so this impact may be slightly different," he added.
Citi said on Thursday that in institutional banking, loan balances rose 17 percent year on year and 8 percent quarter on quarter. In the first quarter, the bank extended PLN 2.3 billion (EUR 538 mln) of new and enhanced financing to its corporate clients, three times more than in the prior year period and twice as much on a quarterly basis.
The volume of net loans granted to individual customers decreased slightly compared to the balance at the end of December 2024 (by 0.6 percent) and amounted to just over PLN 6 billion (EUR 1.4 bln).
The loan-to-deposit ratio at the end of March was 43 percent.
Bank Handlowy posted PLN 435 million (EUR 101.7 mln) of attributable net profit in the first quarter of 2025, above the market expectations for PLN 415.8 million (EUR 97.3 mln) net take.
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