Bank Millennium Q3 profit jumps 82% as franc loan costs fall

GDANSK, Oct 24 (Reuters) – Bank Millennium on Friday reported an 82% year-on-year rise in third-quarter net profit to 345 million zlotys ($86.8 million), as the lender booked lower, though still substantial, costs for its Swiss franc mortgage portfolio.

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WHY IT’S IMPORTANT Bank Millennium, an arm of Portugal’s Millennium bcp , is the first among Polish lenders to report its third-quarter results, offering a glimpse on the shape of the sector as central bank embarked on rate cuts and as the industry deals with long-time Swiss francs lending issue. BY THE NUMBERS The lender’s third-quarter net interest income was broadly flat year-on-year at 1.47 billion zlotys. Provisions for legal risks relating to the mortgages fell 30% in the quarter compared to a year earlier and stood at 485 million zlotys, the bank said. KEY CONTEXT Initially appealing to borrowers in the 2000s due to low interest rates, Swiss franc loans have become a significant burden for the sector as repayment costs surged following the zloty’s depreciation and Swiss interest rate hikes. This has led to widespread legal disputes, pressuring Polish banks to offer settlements and book substantial provisions, weighing on their results for years. ($1 = 3.6776 zlotys) (Reporting by Marta Maciag; Editing by Anna Pruchnicka) (The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)