AIB’s Polish subsidiary BZWBK’s profits double to €27m increasing its forecast for the year

AIB’S Polish subsidiary doubled profits to over €27 million in the first three months of the year, the bank said yesterday.

Bank Zachodni WBK (BZWBK) increased its profit forecast for the year on the back of economic recovery in Poland that has fuelled demand for borrowing. The bank’s mortgage lending rose 33% in the first quarter, while total lending increased by 7.4%. BZWBK is considered a strong player in mortgage and retail lending, particularly in the credit card market.

Net banking revenue matched investor expectations with a 15% increase. Interest income was 8% ahead, while fees and commission-based revenue went up by 15%. The bank also collected €11m in dividends from its stake in the Polish arm of insurer Commercial Union.

Chief executive Jacek Ksen said the results reflected BZWBK’s restructuring programme, which would help keep costs under control. Mr Ksen predicted the bank would deliver 15% return on equity, which was higher than previous forecasts.

BZWBK shares, which are traded on the Warsaw stock exchange, were up by 1.7% after the results were announced. The results came in the same week as M&T Bank, the American bank in which AIB has a 22.5% stake, reported a mixed performance. M&T’s first quarter profits of $160m (€133m) were below market expectations but the bank said it would still meet its full-year target.