Bank Millennium S.A. Capital Group’s reported net profit of PLN229 million in 2Q24 and 357 million in 1H24. This strong quarterly result was achieved despite credit holidays cost, continued elevated costs related to FX-mortgage portfolio and returning bank tax charge.
2Q24 was another solid quarter from the operating perspective. Deposit collection was strong and increased 3% q/q and 16% y/y, despite lowered pricing. Loan book w/o FX-mortgages grew 2% q/q and 3% y/y owing to retail PLN portfolio (originations of cash loans was at record PLN2bn level, up 33% y/y) and continued improvements of leasing volumes (origination at PLN1bn, up 14% q/q and up 26% y/y). Number of active retail clients increased by 5% y/y to the level of 3,083 thousand.
We are pleased with the Bank’s performance in the 2Q2024, which we ended with net profit amounting to PLN 229 million despite the costs of loan holidays and continued CHF burden. There are three aspects I would like to stress: our business results continued to be strong in both retail and corporate banking and the new solutions have been offered to clients, such as a refreshed mobile application, currency exchange platform or Blik Pay Later; second, we reached another 1,000 amicable settlements with CHF borrowers having over 23.5 thousands settlements signed since the beginning of the programme; and we have completed the recovery plan what allows us to focus with full energy on further development of the Bank. We achieved all this while maintaining excellence of customer service, care about quality of the Bank as an employer and last but not least ensuring reaching the targets of our 2022-2024 strategy “Inspired by People” – said Joao Bras Jorge, Chairman of Bank Millennium, commenting on the results.
In 2Q2024 Bank remained highly focused on reduction of its FX-mortgage portfolio and the related risk and therefore continued to actively offer its customers amicable solutions (i.a. conversions to Polish zloty, pre-payments, early repayments or collectively ‘amicable settlements’) regarding FX-mortgages on negotiated terms. The number of amicable settlements reached 1,007 in 2Q24 (1H24: 2,111), slightly less than in the preceding quarter. Over 23,500 amicable settlements took place since early 2020 when more intensive effort started. This represents over 38% of the number of active FX-mortgage agreements at the start of the effort. As a result of these negotiations, final court verdicts and other natural drivers, in 2Q24 the number of active FX-mortgage loans decreased by 2,004 (1H24: 3,666) to 28,759, following the 5,586 drop in 2003 overall.
Significant decision taken by the Board of the Bank in 2Q2024 was a completion of the implementation of the Recovery Plan, stemming from the 2022-23 credit holiday scheme for PLN borrowers and resultant negative implications for capital ratios in 2022, In the Bank’s Management Board’s opinion, all key assumptions of the Recovery Plan have been achieved. In particular, all indicators defined in the Plan have reached safe levels, profitability and financial results of Bank Millennium S.A. Capital Group improved sustainably, capital ratios were restored to levels well above required regulatory minimums while the Bank and the Group meet MREL requirements, including the combined buffer requirements. The Bank’s Management Board also does not identify future circumstances that would justify further continuation of the Recovery Plan.
Bank Millennium pursued its 2022-24 strategy “Inspired by People”. After 2Q24 the Bank noted that most objectives are on track to be delivered at levels targeted in 2024. Bank has already achieved some crucial goals e.g. exceeded ahead of time 3 million retail active clients, reached the share of digital active clients above 90%, decreased the share of FX mortgages (before deduction of legal risk provisions) in the loan book below 10%.
Summarising the presentation of 2Q2024 results Joao Bras Jorge said: With results of 2Q2024 we are closer to full implementation of our strategy 2022-2024 “Inspired by people”. In the 2Q24 the highlights are definitely the new digital solutions for our clients. We are pleased with the very good sales of cash loans and the fact that the portfolio growth in the corporate segment is gaining momentum. Also we are very proud of the first issue of covered bonds by Millennium Mortgage Bank, already listed on Polish Stock Exchange. Ahead of us preparation of the strategy for the period 2025-2028, which is planned to be presented in the fourth quarter.
