On Wednesday, February 5th, Santander Bank's Polish division reported a 7% decrease in its preliminary fourth-quarter net profit, attributing the decline to increased costs associated with FX mortgage loans. Despite these challenges, the bank outperformed analysts' predictions.
Santander Bank Polska, the second-largest bank in Poland by market capitalization, disclosed a quarterly net profit of 913.4 million zlotys ($225.25 million), surpassing the anticipated 830 million zlotys from a Reuters poll.
The persisting issue of foreign currency mortgage loans, notably in Swiss francs, continues to weigh on Polish banks. Initially appealing for their low interest rates in the early 2000s, these loans have become more costly due to the zloty's depreciation against the franc and rate hikes in Switzerland. This has led to legal disputes and pressure on banks to find resolutions.
The bank reported a nearly 6% increase in net interest income for the quarter, reaching 3.62 billion zlotys, in line with analysts' expectations. Strong interest rates and heightened demand for various loans, especially consumer and corporate, drove the income growth.
In the fourth quarter, the bank's legal provisions for foreign currency mortgage loans totaled 1.44 billion zlotys, up from the earlier estimate of 1.17 billion zlotys.
The net interest margin for 2024 decreased to 5.27% compared to 5.39% in the previous year, reflecting market interest rate declines and adjustments made by the group in response to policy rate cuts and their projected trajectory.
(1 US dollar equals 4.0550 zlotys)