Bank Millennium (MIL) Q4 2023 earnings summary

Executive summary

• 2023 reported net profit was PLN576mn; adjusted net profit was PLN2,993mn, up 34% YoY, with positive net results in each quarter despite elevated FX-mortgage costs.

• Core income grew 10% YoY, NII excluding credit holidays rose 13%, and FY23 adjusted cost/income was 29.5%.

• Active retail customers reached 3.003mn and 90% were digitally active, achieving the 2024 customer target ahead of plan.

Financial highlights

• FY23 NII was PLN5,253mn reported and PLN5,263mn excluding credit holidays, up 13% YoY on the latter basis; Q4 NII excluding holidays fell 6% QoQ to PLN1,293mn.

• FY23 total operating income excluding credit holidays was PLN6,732mn, up 26% YoY; net commission income was PLN782mn, down 3%.

• Total costs fell 5% YoY to PLN1,993mn, while costs excluding BFG/IPS rose 14%; loan-loss provisions declined 16% to PLN299mn.

• FX-mortgage legal-risk provisions rose 52% YoY to PLN3,065mn; the bancassurance transaction contributed PLN652mn pre-tax in 2023.

• FY23 reported net profit was PLN576mn versus a PLN1,015mn loss in 2022; adjusted net profit was PLN2,993mn versus PLN2,239mn, up 34%.

Outlook and guidance

• 2024 strategic targets include 3mn active retail customers, over 90% digitally active clients, 80% digital sales share, cost/income below 37%, and NPL below 4.7%.

• MREL requirements are expected to decline in 2024, reflecting a recent 48bp reduction in P2R to 1.46%.

• 2024 Polish growth prospects were described as optimistic, with faster growth and lower inflation than 2023; only limited room for rate cuts was expected.

• Biznesmax Plus and Ecomax guarantee-backed financing was expected to become available in Q1 2024; new guarantee programmes were to be fully operational during 2024.