BNP Paribas Bank Polska (BNP) Q2 2024 earnings summary

Executive summary

• Net profit for H1 2024 reached PLN 1,214 million, up 28.1% year-over-year, driven by robust core activity and improved net interest income, despite PLN 203 million cost from Credit Holidays and ongoing CHF legal risk.

• Return on equity reported at 18.3%; would exceed 20% excluding Credit Holidays.

• Customer deposits increased 6.5% year-over-year to PLN 125 billion, while gross loans slightly decreased by 1.4% year-over-year to PLN 89 billion.

• Strategic return to mortgage lending in Q2, with PLN 265 million in new production and continued digital transformation and sustainable financing initiatives.

• Dividend of PLN 3.41 per share paid in May 2024, covering all shares issued.

Financial highlights

• Net banking income for H1 2024 was PLN 3,638 million (+2.4% y/y), with net interest income at PLN 2,622 million (+7.5% y/y) and net fee & commission income at PLN 623 million (-1.7% y/y).

• Net interest margin close to 3.6% excluding Credit Holidays.

• Operating expenses up 14% year-on-year, mainly from wage and administrative cost increases.

• Cost of risk at 20 basis points after six months, among the lowest in the market.

• Total capital ratio at 17.20% and Tier 1 capital ratio at 13.24% as of 30 June 2024, both above regulatory requirements.

Outlook and guidance

• Expectation of continued economic rebound, with GDP growth forecasted at 2.5%-3% for Q2 and inflation set to re-accelerate to around 5% in H2 2024 due to energy prices.

• Anticipate further relaxation of monetary policy and lower interest rates in 2025.

• Focus remains on customer acquisition, digital transformation, process optimisation, and efficient capital management.

• Ongoing management of CHF mortgage legal risk and regulatory challenges, including potential further credit holidays.

• Bank aims to grow in line with market, focusing on key client segments and maintaining conservative risk profile.