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Home News Polish loan struggles to weigh on Commerzbank profits

Polish loan struggles to weigh on Commerzbank profits

Published on 27/09/2022
Published from AFP.com

Germany’s second biggest lender Commerzbank said Tuesday it would take a roughly 490-million-euro ($470-million) hit to its profits in the third quarter to cover losses on foreign-currency mortgages at its Polish subsidiary.

In total, the provisions made by mBank set aside for loans issued to homebuyers in Swiss francs came to “around 1.43 billion euros”, Commerzbank said in a statement.

A European court ruling in 2019 found that Poles holding crippling foreign-currency mortgages could renegotiate them, entailing serious costs for the bank.

The extra 2.3-billion-zloty cushion announced by mBank on Tuesday came as the result of a “model review” of its risk provisions.

The new sum would have a corresponding hit of 490 million euros on Commerzbank’s result in the third quarter, the German lender said.

“Despite the new burden in Poland, we are maintaining our earnings target for the full year 2022,” Commerzbank’s chief financial officer Bettina Orlopp said.

The lender, which has seen its fortunes turn around in recent months, said it still expected to achieve a net profit of “more than one billion euros” in 2022.

Commerzbank will publish its full third-quarter results on November 9.

sea/rox