Bank Handlowy w Warszawie (BHW) Q3 2024 earnings summary

Executive summary

• Net profit for Q3 2024 was PLN 544.4 million, up 38% sequentially but down 8% year-over-year, mainly due to lower trading income and higher operating costs.

• Total revenue reached PLN 1,089 million, exceeding PLN 1 billion, but was 1% lower sequentially and 4% lower year-over-year.

• Lending increased 7% year over year, mainly from institutional clients, with institutional loan volumes up 8% year-over-year.

• Deposit volume rose 2% for the total bank, with household deposits up 8.5% year-over-year.

• The bank maintained strong capital ratios and continued to pay dividends in line with regulatory recommendations.

Financial highlights

• Net interest income for Q3 2024 was PLN 819.2 million, the highest in four quarters, up 2% quarter over quarter but down 1% year-over-year.

• Net fee and commission income fell 5% sequentially and 1% year-over-year.

• Cost/income ratio at 32%, reflecting strong cost discipline.

• Operating expenses decreased 2% sequentially but rose 4% year-over-year, mainly due to higher staff costs.

• No cost of credit recorded; COVID provision of PLN 17 million fully released.

Outlook and guidance

• Midterm growth expected, driven by client activity and GDP growth, with a more positive outlook for 2025.

• Bank forecasts a 100-basis-point drop in interest rates in 2025, with the first cut likely in March.

• Inflation expected to peak in March 2025, then decline toward the MPC's target by year-end, but remain above target in the coming months.

• GDP growth for Poland in 2024 forecasted below 3% YoY due to weak retail sales.

• Ongoing war in Ukraine and global geopolitical tensions remain significant risk factors.