WARSAW (Reuters) - Net profits at BZ WBK BZW.WA, the Polish unit of Spanish bank Santander (SAN.MC), will exceed analysts’ forecasts for six percent growth this year because of the recovery in Poland’s economy, the bank’s chief executive said on Monday.
“The 1.5 billion zlotys ($479.5 million) that analysts expect as our net profit for this year is a pessimistic forecast,” Mateusz Morawiecki, whose bank is no.3 in the Polish market, told a Reuters Investment Summit.
He said he saw a pick-up in Poland’s economic growth translating into higher profits for the sector as well as for the lender, which earned 1.43 billion zlotys last year.
“We see some economic rebound. Banks’ results should only rise now, taking their cue from better interest margins,” Morawiecki said.
Analysts had expected bank profits to fall this year due to a weakening economy in the first half and downward pressure from lower rates, after the Polish central bank’s Monetary Policy Council cut borrowing costs by 225 basis points since November.
But the sector surprised the market with a 7-percent rise in its aggregate net profit in the second quarter, after which the country’s economy began to pick up.
“The sector is healthy compared to the region and Europe. Our ratios confirm that very strongly,” Morawiecki said.
BZ WBK last year acquired Kredyt Bank, the Polish unit of Belgian lender KBC <KBC.BR, allowing it to join the top three banks in Poland.
Morawiecki said that following the acquisition, his bank was half-way through a program to realize savings of 340 million zlotys, or 13-14 percent of the merged operation’s costs.
“It’s not an aggressive goal and we will fare better than that,” the CEO said.
Poland’s fragmented banking sector is considered ripe for mergers and acquisitions. As well as BZ WBK’s acquisition of Kredyt Bank, the market leader, PKO PKO.WA, bought Nordea’s (NDA.ST) Polish unit earlier this year.
Morawiecki said he expected more such deals, though not in the near term.
“There’s still merger potential among Polish banks,” Morawiecki said. “Looking five years ahead, we’ll see some more consolidation, but the process should cool down in the coming year.”
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Writing by Adrian Krajewski; Additional reporting by Karolina Slowikowska and Pawel Bernat; Editing by Jane Merriman