ING Bank Slaski (ING) Q3 2024 earnings summary

Executive summary

• Q3 2024 net profit was PLN 1,102 million, up 14% sequentially but down 5% year-over-year, mainly due to higher costs and provisions.

• Net profit for the first nine months of 2024 reached PLN 3,060.0 million, slightly down from PLN 3,170.1 million year-over-year.

• Transaction volumes, especially in retail, grew by about 10% year-over-year, with a 73% rise in mortgage loan production and a 40% increase in card-related commission income.

• The client base expanded by 78,000 new retail and 15,000 new corporate clients in Q3 2024, with digital engagement and BLIK transactions up significantly.

• The bank continues to focus on process streamlining, digitalization, and client security amid rising cyber threats.

Financial highlights

• Net income for the first nine months reached PLN 3.06 billion, down 3% year-over-year; adjusted for credit moratorium, performance is nearly flat.

• Net interest income for the first nine months was PLN 6,463.5 million, up from PLN 6,004.3 million year-over-year; commission income reached PLN 1,729.4 million.

• Operating costs increased by 11% year-over-year, mainly due to inflation and higher payroll; total expenses including bank levy were PLN 956.2 million (+11% y/y).

• Risk costs rose sharply to PLN 428 million in Q3 and PLN 348.9 million in Q3 2024, mainly due to legal risk on FX mortgage loans.

• ROE for Q3 2024 was 27.1% (-7.0 p.p. y/y); adjusted ROE for MCFH was 20.5% (-0.5 p.p. y/y); cost-to-income ratio at 42.6% after nine months.

Outlook and guidance

• Management expects risk costs to decline if macroeconomic conditions improve, but will maintain a prudent approach.

• The bank expects continued economic recovery in Poland, though growth is uneven across sectors and inflation is expected to peak in March 2025.

• Capital adequacy ratio is expected to be impacted by regulatory changes and buffer increases in coming quarters.

• Dividend policy targets up to 50% of yearly net profit, subject to regulatory and financial conditions.

• No major changes to the bank's long-term strategy are planned; current direction is considered effective.