Bank Zachodni WBK SA, the Polish unit of Allied Irish Banks, said fourth-quarter profit declined 76 per cent on provisions related to foreign-currency deals and a fall in fees.
Net income dropped to 40.8 million zloty ($10.9 million) from 170.4 million zloty a year earlier, the bank said in a statement today.
Zachodni and rivals such as ING Bank Slaski SA and Bank Handlowy SA are increasing provisions for potential losses from wrong-way bets on currencies.
Polish banks may have currency related writedowns totalling as much as 2.25 billion zloty, according to the country’s financial regulator.
Zachodni set aside 300.9 million zloty in provisions, compared with 6.8 million zloty a year earlier.
Fees declined to 333.3 million zloty from 401.4 million zloty last year. Net interest income, the difference between what the bank pays on deposits and what it charges on loans, rose 18 percent to 428.5 million zloty.
Zachodni also reiterated that it won’t pay dividend on 2008 earnings.