Poland’s Bank Millennium beats Q3 profit view as Swiss franc loan provisions fall

Oct 27 (Reuters) - Poland’s Bank Millennium MILP.WA beat market forecasts for third-quarter profit on Tuesday, as a drop in costs from Swiss franc mortgage lawsuits outweighed lower interest rates and the income tax hike for banks aimed at funding defence spending.

Polish banks earned a record 49 billion zlotys ($12.4 billion) last year on high interest rates. But while rate cuts, higher taxes and consumer-loan claims squeeze profits this year, lenders with Swiss franc mortgage books are cushioned as costs from related lawsuits fade.

• Q3 net profit rose 16.2% to 400.4 million zlotys; analysts polled by Reuters had expected 377 million zlotys

• Provisions for legal risk related to Swiss franc loans fell 63% from a year ago to 178 million zlotys

• Net interest income rose 2.6% to 1.48 billion zlotys, in line with forecasts, as higher business volumes cushioned the impact of lower market rates

• Net fee and commission income rose 4.4% to 213.4 million zlotys, also meeting forecasts, driven primarily by higher lending fees from strong loan sales

• Net loans rose 11% year-on-year, led by corporate and public-sector lending that jumped 25%

($1 = 3.9390 zlotys)