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UPDATE 1-Polish PKO earnings drop on record-low interest rates
August 29, 2013 / 6:53 AM / 4 years ago

UPDATE 1-Polish PKO earnings drop on record-low interest rates

(Releads on second quarter results, adds interest income)

WARSAW, Aug 29 (Reuters) - PKO BP, Poland’s top lender, said its earnings in the second quarter dropped by more than a fifth, as expected and despite cost cuts, after record-low interest rates took a large bite out of its income.

The state-controlled bank said on Thursday it earned 753 million zlotys ($234 million) in the second quarter compared with 726 million forecast by analysts polled by Reuters. In the first half its net profit was 1.53 billion zlotys.

Poland’s central bank has cut its main interest rate by nearly half since November to record lows to help boost the country’s lagging economy, but the campaign also erased a large part of what local lenders are earning on customer deposits.

PKO, which has the country’s largest retail deposit base, said its net interest income fell by 7.2 percent from the first three months of the year.

Shares in PKO have risen 3 percent this year, underperforming an 11-percent gain by Warsaw’s banks index . ($1 = 3.2142 Polish zlotys) (Reporting by Chris Borowski; Editing by Louise Ireland)

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