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Bank Pekao beats expectations with PLN 349.7 mln in Q1

TAG'S: PEKAO, Banking

Bank Pekao, the Warsaw-listed unit of Italy's Unicredit, posted PLN 349.7 mln attributable net profit in Q1 2017, down 29% q/q but 7% above the consensus expectations for PLN 327.1 mln net take, the consolidated Q1 financial report showed.

PEKAO'S Q1 EARNINGS VS CONSENSUS & PRIOR PERIOD:

Full size
  Q1 2017 Consensus Q1 q/q Q1 y/y vs Cons.
  PLN mln PLN mln % % %
Net interest 1 115,0 1104,7 0,2 4,2 0,9
Net fees & commissions 573,5 479,3 -6,4 2,0 19,6
Banking income 1 699,2 1720,4 -2,6 -5,7 -1,2
Net impairment -115,1 -129,8 8,4 -11,0 -11,3
adj. OPEX -995,5 -991,6 14 13 0,3
Attrib Net Profit 349,7 327,1 -29,3 -39,0 6,9
 

Fee income missed consensus wildly, but that followed a change in accounting of margins on client FX transactions from trading to fees. Those fees rose 6.4% or PLN 7 mln y/y to cover the decline in lending fees.

 

A 0.2% increase in net interest earnings comes with net margin flat q/q at 2.8%, but a 1.5% increase in the group's client loan book offsetting balance sheet declines in other asset categories.

 

Loan loss provisioning came in at nearly PLN 15 mln below consensus. Management claims to have tweaked the NPL ratio down yet another point to 5.9% after a major downward jump in the prior quarter.

 

An adjusted measure of costs largely met the consensus expectations, although the raw figures showed a hefty increase on prior periods, both on a surge in banking guarantee charges by PLN 67 mln to PLN 201 mln and the rise in asset taxes, implemented in mid-Q1 2016. Management claimed a Q1 cost to income ratio of 45.5%, up from 44.7% in the prior year period.

 

The balance sheet showed a decline in group assets overall, but a 1.5% gain in the gross loan book, tipped towards retail sector growth.

2017-05-10



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