BCP bank shares in Poland soar 11% with progress in foreign currency loans – Banking & Finance

Bank Millennium’s shares are up sharply for the second consecutive session, due to news reports showing positive progress on the topic of foreign currency loans, which have put strong pressure on the results of Polish banks in recent years.

The Polish bank controlled 50.1% by BCP is shooting 11.73% to 4,362 zlotys on the Warsaw stock exchange. It has already been rising 13.7% and liquidity is about six times higher than usual.

Already yesterday the bonds had shot up 4.66% after the Polish newspaper Puls Biznesu reported that the country’s banks were asking customers to sign agreements to drop court cases until March 25, the day the Supreme Court will make public its decision on this dispute between banks and customers that has lasted for several years.

Investors believe that this will be the final episode on a theme that has forced Polish banks to record large provisions in their accounts to cover the indemnities payable to customers who have borrowed in foreign currency (mainly Swiss francs) and have been heavily penalized by fluctuations exchange rates.

Last year, Bank Millennium made provisions of 677 million zlotys (150 million euros) related to the topic of foreign currency credits, which justifies the drop in net results in 2020 to 23 million zlotys (5.1 million euros). euros). In the fourth quarter, the Polish bank controlled by BCP recorded losses of 109 zlotys (24 million euros).

Despite the fact that banks stopped granting credits in foreign currency for several years, the invoice has been paid every year, as customers have won a large part of the lawsuits they have filed against banks. In the case of Bank Millennium, since 2008, it has not granted housing loans in foreign currency, and its exposure to this type of financing has been decreasing.

Now investors believe that these high provisions will not be repeated in 2021 and the Polish central bank also estimates a recovery in banks’ profitability, which justifies the optimism with the sector. In 2021, Millennium’s shares have already risen 33.6%.

BCP’s shares rise 1.3% to 0.125 euros in this Tuesday’s session.

Source: Jornal de Negócios by www.jornaldenegocios.pt.

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