AIB's Polish banking subsidiary, Bank Zachodni WBK, posted a weaker than expected third-quarter net profit today.
Bank Zachodni, Poland's fifth largest private bank, said its earnings nearly halved to $9.4 million, far below a consensus forecast of $13.3 million.
The figures came despite a sharp fall in loan loss charges, as higher taxes and falling revenues from interest rate swap deals took their toll.
"A bigger tax burden looks to have hurt their bottom line. The bank might have been cleaning up its books, which led to higher tax payments," said Polish banking analyst Mr Artur Szeski at Pekao brokerage in Warsaw. "Otherwise the results are generally okay," he added.
The effective tax rate reached nearly 41 per cent in the third quarter against 17 per cent last year.
Bad debt provisions fell to an expected $7.4 million from $20 million a year ago as Poland's economic recovery improved the financial health of corporate borrowers.
Net interest income was $54.8 million, higher than an average forecast in the third quarter of last year, as the bank looks to have warded off stiff competition and sharply lower official interest rates.
But revenue from financial operations plunged to $4.1 million from $14.4 million a year ago as the bank said its income on swap transactions fell sharply in the wake of official interest rate cuts and a weakening of the Polish zloty.