BCP sets Aside €92 Million for Polish bank Provisions
Warsaw, Poland – October 9, 2024 - Banco Comercial Português (BCP) announced today it has allocated €92 million in provisions related to its Polish banking operations, a figure 43% higher than the provisions made in June 2024. The considerable increase reflects ongoing legal challenges and risk assessments concerning past lending practices.
The provisions cover potential liabilities stemming from loans originally granted by Eurobank, which Bank Millennium – majority-owned by BCP – acquired in 2018. an additional €21 million is specifically earmarked for loans transferred from Eurobank during that acquisition. This move underscores the financial impact of legacy issues continuing to affect BCP’s international holdings and highlights the complexities of cross-border banking acquisitions.
The provisions are a direct response to rulings from the Tribunal de Justiça da União Europeia (Court of Justice of the European Union) regarding the fairness of certain loan contracts in Poland, particularly those denominated in foreign currencies. These rulings have opened the door for borrowers to challenge loan terms,perhaps leading to important repayment obligations for banks.
Bank Millennium is actively addressing these challenges, and BCP anticipates further developments in these cases will require continued monitoring and potential adjustments to its provisioning levels. The financial impact of these provisions will be reflected in BCP’s upcoming financial reports.
