This article first appeared on GuruFocus .
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Net Profit (First Half 2026):PLN708 million, a 39% increase year-on-year.
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Net Profit (Second Quarter 2026):PLN408 million, a significant improvement from the previous quarter.
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Return on Equity (ROE):14.5% for the first half of 2026; 14.8% in the second quarter.
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Net Interest Income (NII):Flat in the second quarter versus the previous quarter; a 3% decrease in the first half year-on-year.
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Net Interest Margin:3.4% in the second quarter.
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Net Fee and Commission Income:11% growth year-on-year in the first half.
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Operating Costs Growth:9% year-on-year in the first half; 6% in the second quarter versus the prior year.
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Cost of Risk:34 basis points over total loans in the first half.
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Non-Performing Loan (NPL) Ratio:3.4%, a new all-time low.
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Total Loans:Record level of PLN81 billion, with 10% year-on-year growth.
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Total Deposits:16% year-on-year growth.
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Corporate Financing:32% year-on-year growth; loans up 41% year-on-year.
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Consumer Loans:5% year-on-year growth.
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Mortgage Disbursements:PLN5.2 billion in the first half, almost 3 times higher year-on-year.
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Leasing Portfolio:8% year-on-year growth.
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Investment Funds:27% year-on-year growth.
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Active Retail Clients:3,354,000, with a net growth of 83,000 in the first half.
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Consolidated Total Capital Ratio:17.1%.
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Tier 1 Ratio:16.1%.
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Loan to Deposit Ratio:58%.
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FX Mortgage Legal Risk Costs (Pre-Tax):Dropped 65% year-on-year in the first half.
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Release Date: July 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Net profit surged 39% year-on-year to PLN708 million in H1 2026, driven by resilient net interest income and lower FX mortgage costs.
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Total net loans grew 10% year-on-year to a record PLN81 billion, with corporate financing up 32% and mortgage disbursements nearly tripling.
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Customer deposits increased 16% year-on-year, with retail active clients reaching 3.354 million, supported by a 94% digital adoption rate.
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Credit quality improved significantly, with the NPL ratio hitting an all-time low of 3.4% and the coverage ratio rising to 82%.
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Capital position remained robust, with a total capital ratio of 17.1% and Tier 1 ratio of 16.1%, providing ample buffers for future growth.
Negative Points
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Net interest margin compressed to 3.4% in Q2 2026 due to lower interest rates and margin pressure in corporate lending.
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Operating costs grew 9% year-on-year in H1 2026, though decelerating, still reflecting high single-digit growth from strategic investments.
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Consumer loan legal risks emerged after an ECJ ruling, leading to a PLN61 million provision and a PLN35 million NII adjustment, with uncertain future impacts.
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Corporate loan spreads faced significant compression amid competitive market conditions, pressuring profitability in that segment.
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The regulatory and political environment in Poland remained challenging, with concerns over rule of law and potential tax changes adding uncertainty.
Q & A Highlights
Here are the key highlights from the Bank Millennium SA ( FRA:1HN ) earnings call for the first half of 2026.
Q: What is the bank's outlook for the Net Interest Margin (NIM) and Net Interest Income (NII) given the lower interest rate environment and strong volume growth? A: Fernando Cardoso Rodrigues Bicho (Deputy Chairman & CFO) stated that while the NIM has been under pressure from lower rates and a growing bond portfolio, it is expected to gradually stabilize. The NII remains resilient, supported by strong double-digit loan growth, a gradual decrease in deposit costs, and the expected stabilization of interest rates in Poland for the remainder of the year.
Q: What is the bank's strategy regarding the strong growth in corporate lending, and what are the margin dynamics in this segment? A: Joao Bras Jorge (CEO) explained that the bank is maintaining its strong growth momentum, targeting net growth of PLN 3-4 billion per year. While there is significant margin compression in the corporate segment, the bank prioritizes building long-term relationships over price concessions, accepting lower spreads to gain customers and leverage other business lines like FX and transaction services.
Q: What actions has the bank taken regarding the legal risks associated with consumer loans following the April 2026 ECJ ruling? A: Fernando Cardoso Rodrigues Bicho (Deputy Chairman & CFO) detailed two specific actions taken in Q2 2026. First, a PLN 35 million one-off adjustment was booked through net interest income for future lower interest income. Second, a PLN 61 million charge was set aside through other operating costs to cover the current uncertainty. The bank will continue to monitor court rulings and claim inflows but cannot provide further guidance at this stage.
Q: What is the bank's expectation for the cost of risk and the cost of FX mortgage provisions in the second half of 2026? A: Fernando Cardoso Rodrigues Bicho (Deputy Chairman & CFO) noted that the cost of risk remains low at 34 basis points, supported by a strong NPL ratio of 3.4% and a high coverage ratio. Regarding FX mortgages, he confirmed the expectation for a very substantial decrease in legal risk costs for the full year, following a 65% year-on-year drop in the first half, which is in line with the bank's previous guidance.
Q: What is the bank's dividend payout policy given the strong pace of loan growth and capital position? A: Joao Bras Jorge (CEO) reiterated the bank's policy of a 35% to 50% payout ratio. He emphasized that while the bank aims to maintain healthy shareholder relations through dividends, the final decision is subject to regulatory conditions and recommendations from the KNF (Polish Financial Supervision Authority), and must be balanced with the need to generate capital to support the strong lending growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
