Polish subsidiary books additional provisions for Swiss franc portfolio of the equivalent of €490 million
Operating result of Commerzbank in Q3 to be impacted by corresponding amount Bettina Orlopp: “Despite the new burden in Poland, we are maintaining our earnings target for the full year 2022.”
Commerzbank continues to expect a net result of more than €1 billion for the financial year 2022, despite a further revenue burden at its Polish subsidiary mBank. The outlook remains under the assumption that the economic consequences of the geopolitical developments do not deteriorate significantly and the uncertainties around energy supply do not require material additional provisions for potential future credit losses.
mBank had previously announced that it has booked further additional provisions for its Swiss franc portfolio of PLN2.336 billion (approximately €490 million) as a result of the announced model review. The total provisions for credit agreements indexed on foreign currencies now amount to around €1.43 billion. The additional provisions will have a corresponding negative impact on Commerzbank's results in the third quarter which will be booked as negative revenues in “Other net income”. mBank also announced a new settlement programme to reach individual agreements with customers.
The new burden adds to the negative revenues which were already announced for the third quarter in July this year due to possible deferrals of interest and repayment of private real estate financing (“payment holidays”) introduced in Poland by the legislation. Nevertheless, Commerzbank expects a positive operating result for the third quarter for the Group as long as the uncertainties about energy supply do not require a further significant risk provisioning.
“Despite the new burden in Poland, we are maintaining our earnings target for the full year 2022 in view of the strong overall revenue development,” said Bettina Orlopp, Chief Financial Officer of Commerzbank. “With the additional provision, mBank has further scope for settlements in its Swiss franc portfolio.”
