Don Kenobi
/ 83.5.222.* / 2009-05-11 14:30
Polish units of UniCredit SpA, Allied Irish Banks Plc and KBC Groep NV may say profit fell as the slowing economy forced them to create more provisions for bad loans and companies’ losses on currency hedging contracts.
AIB’s Bank Zachodni WBK SA will probably say first- quarter net income fell 65 percent to 86 million zloty ($26.4 million), a Bloomberg News survey of 11 analysts by phone and e-mail showed. Profit at PKO Bank Polski SA, the country’s largest lender, dropped by a third, and at UniCredit’s Bank Pekao SA by half, according to analysts.
“This is just the calm before the storm,” Marcin Jablczynski, an analyst at Deutsche Bank AG in Warsaw, said by phone. “The market will be very negatively surprised in the coming quarters, because despite what some people say, we haven’t reached the bottom yet. We’re about to see a worsening of loan quality.”
Polish bank earnings may be crimped this year as they set aside money to cover companies’ currency bets that went bad, the financial markets regulator said last month. The 30 percent drop in the Polish currency from a record in July means companies have to spend more to deliver euros, exposing them to losses.