PKO BP lender wants to wrap up CHF loans saga in 2025, hopes to maintain interest margin

"We can easily think about continuing to fund our customers, but also sharing the profit with shareholders," said the bank's CEO Szymon Midera.

"We are growing faster than the market, faster than the competition. We are catching further market shares, strengthening our position on the Polish market with high profitability," he added.

In 2024, financing granted to PKO BP customers increased by 9.6 percent year on year to PLN 294 billion (EUR 70 bln). Quarter-on-quarter growth was 3.4 percent, with the bank recording a historically low cost of risk of 39 basis points in 2024.

"We see a slight increase in non-working capital loans in the business segment, some companies are feeling the increase in energy costs, some companies are also feeling the slowdown in the German market," said PKO BP's deputy CEO overseeing the risk management area, Piotr Mazur.

"We see this through a slight increase in write-offs and also an increase in non-working loans. Given the growth ahead of us, we think this is a temporary deterioration," he assessed.

In 2024, PKO BP group's net profit was PLN 9.3 billion (EUR 2.2 bln), up by 69.1 percent year on year. After excluding CHF provisions and the effect of mortgage moratorium (so-called credit holidays under the state-subsidised mortgage programme), profit would reach PLN 14 billion (EUR 3.3 bln).

The legal risk costs of CHF loans in 2024 amounted to PLN 4.9 billion (EUR 1.2 bln).

"We hope that the CHF loans saga in its fundamental form has been addressed, we still foresee activities in this area this year, but we hope to enter 2026 with a clean slate in terms of mitigating the CHF loan risk," said the bank's deputy CEO overseeing finance and accounting, Krzysztof Dresler.

"We want to wrap up this saga this year," he added.

Dresler reported that the bank's operating costs in 2025, due to the first year of implementation of the new strategy, are likely to increase at a slight double-digit rate, with a target growth rate in the range of 5-10 percent.

"Our likely pattern of cost growth is low double-digit growth," the bank's deputy CEO said.

In 2024, the interest margin was 4.8 percent. The fourth-quarter margin increased to 5.18 percent (to 4.94 percent excluding credit holidays) from 4.89 percent in the third quarter.

"We expect to maintain the margin at the 2024 level," Midera assessed.

PKO BP is counting on the economic recovery and increased investment activity to boost loan demand. A good labour market situation with a record low unemployment rate is expected to maintain the good quality of the loan portfolio, while expected interest rate cuts are expected to stimulate loan demand.

"We anticipate a significant increase, a recovery in lending, primarily in the corporate segment," said the bank's chief economist Piotr Bujak.

PKO BP expects a resumption of interest rate cuts in 2025. In its analysts' opinion, the first cut may occur in the third quarter of 2025 and the reference rate will likely be 5 percent at the end of 2025.

In 2024, retail loans in the PKO BP group increased by 12 percent year on year and by 2.5 percent quarter on quarter to PLN 188.1 billion (EUR 44.8 bln). In the fourth quarter of 2024 alone, new sales of housing loans amounted to PLN 6.1 billion (EUR 1.45 bln), up 6.6 percent quarter on quarter, and consumer loans were at PLN 7.3 billion (EUR 1.74 bln), up 9.4 percent quarter on quarter.

PKO BP's market share in consumer loans increased to 19.41 percent and in mortgage (housing) loans - to 25.96 percent.

Corporate customer financing at the end of 2024 totalled PLN 106.2 billion (EUR 25.3 bln), up by 5.5 percent year on year and by 5.2 percent quarter on quarter.

seb/ ao/ han/