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Strong operating results from core business. Financial results lowered by significant provisions for foreign currency loans11.05.2021
Bank Millennium S.A. Capital Group posted consolidated net loss of PLN311 million in 1Q21. Substantial provisions against legal risk related to FX-mortgage portfolio totalling PLN 533 million (portfolio originated by the Bank PLN512 million, portfolio of former Euro Bank PLN21 million) were the main drag on the results. More conservative inputs into the risk model, reflected, inter alia, more challenging environment - higher inflow of court claims and lower proportion of cases won by banks. At the end of March 2021, the balance of provisions for the portfolio originated by the Bank stood at PLN1,432 million, an equivalent of 10.8% of exposure. Excluding FX-provisions, the Group would post net profit of PLN182 million (up 24% vs. adjusted 1Q20 net profit). Moreover, reported operating profit amounted to PLN444 million, marginally below this in 4Q19, while operating profit before FX-provisions would amount to PLN363 million, only 7% below this in 4Q19, indicating that the Group has largely weathered the direct and indirect impacts of the pandemic.
On 10 May 2021 the Management Boards of Bank Millennium and Millennium Dom Maklerski decided about the planned split-up of Millennium Dom Maklerski where Bank Millennium is the acquiring company. It is the first step towards transferring all of the brokerage business to the Bank and integrating brokerage services within one company. The merger is planned for the turn of 2021/2022.