Poland's Bank Millennium returns to profit in first quarter

·2-min read
Logo of Millennium bank, Polish unit of Portugal's Millennium BCP, is pictured on the bank headquarters in Warsaw

GDANSK (Reuters) - Poland's Bank Millennium on Friday reported first-quarter net profit ahead of analysts' expectations, recovering from a loss last year though it said provisions for legal risk related to foreign currency mortgage loans remain high.

The bank made net profit of 252.1 million zlotys ($61 million) versus last year's 122.3 million zlotys loss, exceeding analysts forecast' of 244 million zlotys.

"Despite the high level of provisions for legal risk related to foreign currency mortgage loans, we achieved a positive result (...). This is very good news" bank's Chief Executive Officer Joao Bras Jorge said in a press release.

Hundreds of thousands of Poles took out mortgages in foreign currencies, mainly in Swiss francs, attracted by lower interest rates, but were then left paying far bigger instalments than expected after the franc soared against the zloty.

Many mortgage holders took banks to court, with some lenders offering out-of-court settlements.

Millennium said it continued to reduce its portfolio of foreign currency mortgage loans and continue to strike settlement with franc borrowers.

According to the bank, the number of voluntary settlements in the first quarter stood at 806, and since the beginning of 2020, when the process was launched on a large scale, nearly 18,600 settlements were struck.

As a result of negotiations, final verdicts and other natural factors, in the first quarter of this year the number of active foreign currency mortgage loans decreased by almost 1,200 to 36,782, added Jorge.

He also said that the bank was on the way to achieve its strategic goal of 3 million individual customers.

"In the first three months of the year, the number of active customers reached 2.923 million", he said.

($1 = 4.1554 zlotys)

(Reporting by Patrycja Zaras; Editing by Jacqueline Wong and Emelia Sithole-Matarise)