Getin Noble Bank SA will not generate a profit in 2019 and will need more time to reach capital adequacy ratios set in its financial recovery plan, the Polish lender said in its financial report for the first half.
Getin Noble, which has a capital shortfall of 1.6 billion Polish zlotys, is currently working on an updated recovery plan that it will present to the Polish Financial Supervision Authority at the beginning of October, with the regulatory approval of the plan expected to be issued by the end of 2019, news agency PAP said Sept. 20, citing the lender's CEO, Artur Klimczak.
Under the existing financial recovery plan, the lender is supposed to reach the required capital adequacy ratios by the end of 2019.
The bank, which posted a group net loss of almost 246.3 million zlotys for the first half, also said that its current financial targets do not assume attracting a financial investor. Having ended a search for an investor in August, the financially troubled bank said it was working on a strategy that will boost its profitability, strengthen its capital position and meet regulatory requirements, although it does not exclude the possibility of raising external capital in the future.
Getin Noble also noted that as of June 30 it was involved in 1,645 court cases launched against it by holders of Swiss franc-indexed mortgage loans, with the total value of the lawsuits amounting to 487 million zlotys. The lender set aside 14.3 million zlotys in provisions to cover legal risks related to the lawsuits. Most final rulings issued to date were made in favor of the bank. As of June 30, the total value of Swiss franc-denominated and indexed mortgage loans on Getin Noble's balance sheet stood at 8.98 billion zlotys.
The Court of Justice of the European Union will issue a ruling on Oct. 3 in a case analyzing the use of abusive clauses in Swiss franc-indexed mortgage contracts. The Polish Bank Association estimates local lenders could face costs of at least 60 billion zlotys in the event of an unfavorable ruling, although some analysts believe the costs would be lower.
As of Sept. 20, US$1 was equivalent to 3.98 Polish zlotys.
