AIB's Polish unit shows 6.7% fall in Q1 profits

BANK ZACHODNI WBK SA, the Polish unit of Allied Irish Banks, said first-quarter profit declined 6.7 per cent after costs and provisions increased.

Net income fell to 243.1 million zloty (€71 million), or 3.33 zloty a share, from 260.6 million zloty (€76 million), or 3.58 zloty a share, a year earlier, according to a regulatory statement issued by the bank today.

The decrease was influenced by “a return to a natural tendency for banks to set aside provisions as well as to a higher level of costs related to organic growth and intensified promotion,” the bank said.

Zachodni, based in the western Polish city of Wroclaw, aims to double its market share to 10 per cent by 2012 by adding branches and increasing its franchise network.

The bank started a four-year, 400 million-zloty investment program last year.

Zachodni fell 1.5 percent to 173.4 zloty as of 9.46am in Warsaw, while the benchmark WIG20 Index was down 1.4 per cent.

Costs at Zachodni advanced 18 per cent to 405.9 million zloty in the quarter. The bank set aside 6 million zloty in provisions, compared with 20.6 million zloty it released a year earlier.

Fees and commissions fell 4.8 per cent as declines on the Warsaw stock exchange trimmed profit from asset management and brokerage services. Poland’s WIG Index has dropped 13.3 per cent this year.