Bank Millennium reports net profit of PLN 128 million, strong business results and strengthened capital ratios in 1Q2024
Financial and business results of Bank Millennium Capital Group in 1Q2024
Bank Millennium Group reported net profit of PLN128 million in 1Q24. Again, the three digit net result was achieved despite the still high costs related to FX-mortgage portfolio. 1Q24 was another solid quarter from the operating perspective. Deposit collection was strong (up 6% q/q) despite visibly lower pricing, helping to reverse the negative trend in NII. Loan book w/o FX-mortgages grew 1% q/q with improved originations of PLN mortgages (+78% y/y) and greens-shoots in leasing (origination +14% y/y) and loans to micro-companies (+7%). Number of active retail clients remained in a steady up trend (3,045 thousand, up 4% y/y) while volume of investment products grew 10% q/q to nearly PLN9bn. Active digital channel users grew to 2.77 million and as much as 2.55 million users logged on to the Bank on mobile devices, meaning an increase in mobile users of 9 per cent y/y.
We are pleased with the Bank’s performance in the 1Q2024, which we ended with net profit amounting to PLN 128 million. It was a good beginning of the year for at least three reasons: we reported strong business results in both retail and corporate banking; we continued reaching amicable settlements with CHF borrowers decreasing the share of FX loans to below 10%; and we further improved our capital ratios to levels above the regulatory requirements, what allows us to plan completion of the recovery plan in June 2024. It is worth to be noted that 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.
Number of new amicable settlements with FX-mortgage borrowers remained well above the 1,000 mark, with settlements to date totalling 22,500, an equivalent of 37% of the number of loan agreements active at moment of the full roll-out of amicable settlements effort. Inflow of FX-mortgage claims against the Bank continued to trend down, while its legal risk provisions include relevant assumption connected with future inflow of court cases.
As reported in 2023 Annual Report, the Bank and the BM Group have significantly improved their capital ratios, placing them clearly above the new regulatory requirements. During 1Q24, all capital ratios remained at comfortable levels, close to these at YE23. Assuming no extraordinary factors, the Group plans to maintain its capital ratios above the minimum required levels with a safe surplus in the rest of 2024 and in subsequent periods. The Bank monitors all the leading indicators of the Recovery Plan and prepares to complete its implementation. The Bank expects that this may take place by the end of June 2024, assuming no material negative extraordinary events.
Bank Millennium pursues its 2022-24 strategy “Inspired by People”. After 1Q24 the Bank notes that most results are on track to be delivered at levels targeted in 2024 as well as range of business achievements, that was announced in the strategy, incl.: decrease of share of FX mortgages (before deduction of legal risk provisions) in the loan book below 10%. refresh of advertising format with a new brand ambassador, release of new omnichannel credit card application process, EVP (Employee Value Proposition) development recognized with the title of Top Employer 2024 and Reliable Employer 2023.
Summarising the presentation of 1Q2024 results Joao Bras Jorge said: 1Q2024 opened last year of implementation of our strategy 2022-2024 “Inspired by people”, which gives us direction for our actions. As we reported at the end of 2023 some of the targets we reached ahead of time e.g. we already exceeded 3 million active customers, which we planned to reach at the end of 2024 and we achieved the landmark of 90% of them using digital channels. In the 1Q24 the highlight is definitely the decrease of share of FX mortgages in the loan book below 10%. Now with three quarters of the year ahead of us we are in the final sprint to attain all remaining goals at same time that we begin working with our teams on defining the strategy for the period 2025-2028, which in the second half of the year will be presented to the public.
