GDANSK, Oct 29 (Reuters) - The Polish arm of Spanish lender Santander posted a 27% jump in third-quarter net profit on Tuesday, supported by lower provisions for loans in Swiss francs and higher core revenues.
Santander Bank Polska ended the quarter with net profit of 1.94 billion zlotys ($482.4 million) versus 1.69 billion forecast in a Reuters poll.
The provisions accrued for legal risk connected with mortgages in Swiss francs slumped to just over 110 million zlotys versus 430 million a year earlier.
FX mortgage loans, primarily in Swiss francs, remain a burden for Polish banks.
Initially appealing due to low rates in the 2000s, their repayment costs have surged due the zloty's depreciation against the franc and Swiss rate hikes, inciting legal disputes and pressuring banks to seek settlements.
Santander BP expects that 33% of affected borrowers have already sued or will sue the lender, with assumption that majority of the cases will be filed by the end of 2025.
The bank had settled close to 12,000 cases by the end of third quarter, and was a defendant in more than 21,000 proceedings regarding FX loans with a dispute value totaling more than 7.68 billion zlotys.
Net interest income for the period rose more than 5% to 3.58 billion zlotys, while net earnings from fees and commissions climbed 9%, closing to 728 million.
($1=4.0214 zlotys)
Reporting by Mateusz Rabiega; Editing by Clarence Fernandez and Jan Harvey
Source: Reuters