Bank Handlowy w Warszawie (BHW) Q1 2025 earnings summary

Executive summary

• Net profit for Q1 2025 was PLN 435 million, up 18% sequentially but down 4.2% year-over-year, with ROE at 20% and record balance sheet size driven by strong corporate lending and deposit growth.

• Revenue reached PLN 1.067 billion, nearly flat year-over-year but down 10% from the previous quarter due to a high base effect.

• Continued progress on exiting the consumer banking segment, with updates to be reported to the Warsaw Stock Exchange.

• Total assets increased by 6.5% from year-end 2024 to PLN 77.2 billion, mainly from higher credit volumes in Institutional Banking.

• Institutional Banking saw strong loan growth and deposit inflows, while Consumer Banking faced lower loan balances and fee income.

Financial highlights

• Loan portfolio grew 12% year-over-year, with net loans at PLN 24.8 billion, and deposits up 9% year-over-year.

• Net interest income was PLN 790 million, stable sequentially and down 1% year-over-year; fee and commission income reached a record PLN 181.1 million, up 5.1% year-over-year.

• Operating expenses increased 27% sequentially and 1% year-over-year, mainly due to higher remuneration and regulatory costs.

• Cost/income ratio rose to 45% from 32% in 4Q'24, but remained stable at 44% year-over-year.

• Cost of risk was PLN 8 million in Q1, with provision releases in consumer banking due to improved portfolio quality.

Outlook and guidance

• GDP growth in Poland is expected to accelerate to 3.9% in 2025, with inflation projected to decline to 4%.

• The bank anticipates increased lending demand following recent rate cuts and remains cautious due to global economic and geopolitical risks.

• Focus remains on cost discipline and maintaining strong client relationships, especially in turbulent environments.