PKO BP's results could be lowered due to CHF legal risk provisions for few more quarters

Poland's largest lender by assets PKO BP expects CHF legal risk provisions to weigh on the bank's results for a few more quarters, the bank's deputy CEO in charge of risk management Piotr Mazur said. He added that a slight increase in non-performing loans in the large corporate segment was possible.

"We cannot guarantee that this is the end of provisions [for CHF legal risk - PAP ed.] but we think that for a few more quarters these provisions may burden the bank's result account, although we can see that this trend is already declining," Mazur said.

PKO BP's results were burdened in the second quarter by a large provision for the CHF loan portfolio - the cost of legal risk of mortgage loans in convertible currencies amounted to PLN 982 million (EUR 229 mln). This provision was at the level previously estimated by the bank.

The quarterly cost of credit risk fell to 0.13 percent from 0.47 percent in the first quarter of 2024.

The bank said on Thursday that the quality of the loan portfolio had improved in the retail segment, while the lower classification included individual customers in the corporate segment.

"We can expect a slight increase, a seasonal increase in non-performing loans. This is an effect we can expect when it comes to large corporate customers," Mazur said.

In the second quarter, there were 1,800 new mediation applications and the number of pending court cases fell by 22 percent quarter on quarter to 2,059.

Mazur maintained that in the third quarter, the number of CHF loan settlements could equal the number of lawsuits filed.

seb/ nl/ ao/