Commerzbank will open its books next week and report on the past quarter. This has already happened today at the Polish subsidiary mBank, which has long been suffering from high provisions for Swiss franc loans. The CEO is skeptical about further developments.
mBank’s sales increased significantly over the last nine months: they rose by 17 percent to 7.91 billion Polish zloty (1.77 billion euros). The bottom line was a small profit of PLN 44.3 million, after a loss of PLN 1.54 billion in the same period last year.
There was also a loss in the past quarter (PLN 83 million). However, this was lower than the expected 87.6 million zloty. The fact that mBank has been accumulating losses for some time, even though the core business is highly profitable with a recent return on equity of 38.3 percent, is due to the high provisions in the last few quarters. These refer to the Swiss franc mortgage loans, whose borrowers were granted better conditions by the government at the expense of the Polish banks.
mBank CEO Cezary Stypulkowski said in a conference call with analysts that he did not expect that there would be no more provisions for the franc loans in the next few quarters. And this despite the fact that mBank has now backed 86 percent of the corresponding portfolio with provisions.
“Investors currently seem to be too optimistic about Polish Swiss franc loans,” said Stypulkowski. In fact, after the election in Poland around two weeks ago, hopes arose that the opposition around Donald Tusk could form a new government. The order to form a government has not yet been given, but investors had expected deregulation in the financial sector if this were to happen.
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The hope remains that mBank – especially under a new government – will be able to release part of the provisions for the Swiss franc loans in the foreseeable future. Then the parent Commerzbank could also benefit from a higher profit. Meanwhile, the price continues to bottom out today; the next hurdle is the 100-day line at 10.24 euros. Those who are brave can still access it before the numbers come out next week.
Note on conflicts of interest
The chairman of the board and majority owner of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has taken direct and indirect positions on the following financial instruments or related derivatives mentioned in the publication, which may benefit from any price development resulting from the publication: Commerzbank.
Commerzbank shares are held in a real portfolio of Börsenmedien AG
2023-10-31 10:36:09
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