Bank Millennium (MIL) Q4 2025 earnings summary

Executive summary

• Net profit for 2025 reached a record PLN 1,202 million, up 67% year-over-year, with ROE at 14.3% and adjusted net profit at PLN 3,222 million, up 1% year-over-year; strong asset quality, liquidity, and capital positions maintained.

• Retail customer base grew to 3.27 million, with 94% digitally active; digitalization and customer acquisition remained strong.

• Corporate loan volume increased by nearly PLN 3 billion year-over-year, with overall corporate financing up 20%.

• The year saw limited extraordinary items, mainly FX-mortgage related costs, which declined 21% year-over-year.

• The bank continued to execute its 2025-28 strategy, surpassing key KPIs, including a non-performing loan (NPL) ratio below 4%.

Financial highlights

• Net interest income grew 4% year-over-year to PLN 5,756 million; net interest margin (NIM) for the year at 4.01%.

• Cost-to-income ratio at 36.9% reported, 35.8% adjusted; cost of credit risk at 30 basis points over total loans.

• Non-performing loan (NPL) ratio dropped to 3.8%, below the 2028 strategic target; NPL coverage by provisions increased to 78.9%.

• Fee and commission income flat year-over-year; cost growth at 13% (10% excluding Bank Guarantee Fund contributions).

• Customer funds grew 14% year-over-year to PLN 146,274 million; deposits up 12%, loans up 2%.

Outlook and guidance

• Expectation of continued loan growth in 2026: PLN mortgage portfolio targeted to grow 3%, consumer loans to maintain current growth rate, and corporate lending to continue strong volume increases.

• NII expected to remain resilient in 2026, though a drop is anticipated in Q1 due to further interest rate cuts; NIM may decline to 3.5% before stabilizing.

• Cost of risk likely to normalize to around 50 basis points over total loans in 2026.

• FX mortgage-related costs expected to drop by more than 50% in 2026 versus 2025.

• Effective tax rate projected to rise to around 40% in 2026 due to non-deductible costs.

• Dividend payments expected to resume in 2027, with a payout ratio target of 35%-50%.

• The bank expects continued solid GDP growth in Poland (3.8% in 2026), with investments co-financed by EU funds supporting further expansion.