Polish Banks' Profit At All-Time High in 2012 Despite Slowing Economy

By Patryk Wasilewski

WARSAW--Poland's banks managed to beat the economic slowdown and posted record-high net earnings in 2012, helped by high interest rates and trading gains, data from the financial watchdog regulator KNF showed Tuesday.

Though Central and Eastern Europe's largest economy slowed sharply last year, banks managed to increase net profit 4% to 16.14 billion zlotys ($5.3 billion) from PLN15.5 billion a year earlier.

Poland's economy slowed to 2% in 2012 from 4.3% in 2011, but delays in interest rate cuts by the monetary panel allowed the banks to increase net interest income to PLN35.5 billion from PLN35 billion in 2011.

A rally in Polish treasurys that brought yields on ten-year treasury bonds to under 4% last year from above 5.6% in late 2011, fueled banks' income from trading operations to PLN8 billion from PLN7 billion a year earlier.

The country's two top banks - state controlled Powszechna Kasa Oszczednosci Bank Polski S.A. (PKO.WA) and Unicredit's (UCG.MI) unit Bank Polska Kasa Opieki S.A. (PEO.WA) will release their full-year results in March.

Write to Patryk Wasilewski at [e-mail]

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