Warsaw-based PKO Bank Polski SA will likely meet analysts' expectations of double-digit net profit growth, so long as economic growth remains strong and the company's business development continues as planned, CEO Zbigniew Jagiello said.
"Taking into account a positive macroeconomic scenario and the development of our business, we should meet analysts' expectations [in 2018] as we did in the first quarter," Jagiello told journalists following the publication of PKO's first-quarter earnings.
The Polish economy grew by 4.9% year over year in the first quarter, according to the country's National Statistics Office. State-owned PKO is Poland's largest bank in terms of assets.
Jagiello said the quarter had been "promising," and that PKO would probably see an improvement on the 3.1 billion zloty net profit reported in 2017, assuming it faces
PKO posted a 44% rise in first-quarter net attributable profit to 757 million zlotys, up from 525 million zlotys in the same period of 2017. Net interest income rose on a yearly basis by 8.4% to 2.22 billion zlotys from 2.05 billion zlotys.
The bank benefited from a rise in fees and commissions from loans, mutual funds and credit cards; net fees and commissions increased by 3.9%. The net interest margin rose to 3.40% from 3.21%.
Jagiello also said the bank was on track to meet 2020 financial targets. It is targeting a return on equity of more than 10%; its first-quarter ROE was 9.5%, up from 9% at the end of 2017.
Meanwhile it is aiming for a cost of risk of between 0.75% and 0.85% in 2020. In the first quarter, cost of risk stood at 0.69%, down from 0.76% in the same period of 2017.
Poland's banking sector is highly fragmented and competitive, with many players fighting for market share. Jagiello said consolidation in the Polish banking market would continue given banks' low profitability, the high investment costs related to digital banking and the need to create scale.
Raiffeisen Bank International AG agreed to sell the core banking operations of its Polish unit to BNP Paribas SA's Bank BGZ BNP Paribas SA in April, while Banco Santander SA said in December 2017 that it would acquire Deutsche Bank Polska SA's retail and private banking businesses, bolstering its Wroclaw-based Bank Zachodni WBK SA subsidiary.
As of May 21, US$1 was equivalent to 3.66 Polish zlotys.
