Bank Pekao, Poland’s second-largest bank by assets, has announced a fourth-quarter profit increase of over 13%. The surge was primarily driven by reduced credit loss allowances, decreased Swiss franc legal provisions, and an increase in fee and commission income. Bank Pekao is a major financial institution in Poland, offering a range of services including retail banking, corporate banking, and investment products. The bank plays a significant role in the Polish economy by providing financial support to individuals and businesses.
The bank’s net profit reached 1.82 billion zlotys ($508.6 million), surpassing analyst expectations of 1.66 billion zlotys. This positive result comes as Polish banks navigate a complex period, with the central bank’s easing cycle impacting net interest margins after years of substantial earnings. The benchmark interest rate has been lowered to 4.00% by the end of 2025, putting pressure on profitability.
Despite the challenges, Pekao demonstrated resilience. While net interest income decreased by 1.7% to 3.40 billion zlotys due to lower borrowing costs, net fee and commission income rose significantly by 14.6% to 890 million zlotys, offsetting some of the yield pressures. Furthermore, the bank reported a 16% year-on-year increase in new net sales of cash loans, amounting to 1.9 billion zlotys in the fourth quarter.
Pekao also benefited from a 22% reduction in provisions for risks related to Swiss franc mortgage lawsuits, which fell to 288 million zlotys. Net allowances for expected credit losses also saw a substantial decrease of 50%. CEO Cezary Stypułkowski stated that the bank remains focused on enhancing customer experience, boosting operational efficiency, and creating long-term value as it moves into a more demanding 2026.
