The last meeting of the Monetary Policy Council had a definitely positive tone in the context of the stock exchange valuation of the Polish banking sector. Both in the accompanying statement and in the press conference of President Adam Glapiński, it was confirmed that interest rate cuts cannot be expected this year, and the first realistic date is the first quarter of 2025. Everything will depend on the development of inflation in the coming months, which most likely achieved only the short-term target due to the expected release of energy prices and an increase in the VAT rate on food. In these conditions, it is no wonder that the growth leaders are the banks that occupy the first five positions. The following quarters do not herald a change in this trend.
Alior Bank – consistent increase in net profit
Alior Bank (WA:) quotations have gained 38.5% since the beginning of the year, which puts the company in a leading position ex-aequo with mBank in this respect. The basic source of the sector’s strength, apart from the general boom in global stock markets, are the persistently high levels of interest rates, which will most likely remain at current levels at least until the end of the year. It is therefore not surprising that there was an increase of over +7.5% during the last 3 sessions, which was influenced by, among others, NBP statement. The good situation of Alior Bank is reflected in the financial condition indicator and quarterly net profit readings, which have been consistently increasing since Q4 2022.
Figure 1. Alior Bank’s net profit dynamics, source: InvestingPro
One of the effects of the very good financial situation is the green light from the Polish Financial Supervision Authority for the payment of a dividend of no more than 50% of the net profit achieved in 2023 for the first time in the company’s history. It is very possible that this will not be a one-off, and next year Alior Bank will share the profit with shareholders again.
Write-offs for legal risk provisions weigh on mBank’s net profit
Although mBank cannot boast of such an impressive increase in net profit dynamics as Alior Bank, the quotations maintain a clear upward trend. The main reason that affects net profits are settlement write-offs related to the legal risk of Swiss franc loans. In Q4 2023 alone, they amounted to PLN 1.48 billion, which is currently sufficient to cover virtually all risky mortgages related to the questioned loans.
Additional information should include changes in the pricing policy, which includes, among others: increasing fees for withdrawals from foreign ATMs. As a result, some customers announced they would transfer their accounts to competitors, to which the bank responded by updating its offer by proposing a new account – an eKonto account dedicated to services. These changes, however, do not significantly affect the current situation of the company’s quotations, which remain within a dynamic upward trend.
PKO BP (LON:) completes the podium at WIG20
In terms of the rate of return, PKO BP completes the podium with a result of 24.76%, where we can also observe the north direction. Currently, the basic scenario is the continuation of the upward trend, which continues to set new historical highs above PLN 60 per share.
Figure 2. Technical analysis of PKO BP
When looking for appropriate levels to join the current trend, it is worth paying attention to support around the round area of PLN 60 per share, where the upward trend line also falls. The next defense levels for buyers are PLN 58.50 and PLN 57 per share.
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