Polish lenders mBank SA and Bank Zachodni WBK SA will most likely not pay dividends on their 2016 profits, news agency PAP reported Jan. 25, citing the banks.

Poland's Financial Supervision Authority imposed dividend restrictions on banks with significant foreign-currency mortgage exposures, such as mBank and Bank Zachodni.

MBank CEO Cezary Stypulkowski said the current regulatory conditions provide "no room" for a dividend payment. In December 2016, the executive had said the lender would consider a dividend payment from its 2016 profit. Bank Zachodni CEO Michal Gajewski said his lender is analyzing regulatory recommendations, and will probably not pay a dividend.

PAP also cited Gajewski as saying the bank hopes to improve its core earnings and cost of risk in 2017. The bank posted an attributable net profit of 2.17 billion Polish zlotys in 2016, down by 6.9% year over year, with the results affected by factors such as the introduction of a new banking tax in Poland. The lender's cost of risk was at 75 basis points, PAP noted.

Bank Zachodni and mBank are units of Banco Santander SA and Commerzbank AG, respectively.

As of Jan. 25, US$1 was equivalent to 4.05 Polish zlotys.