Poland's third-biggest lender - Bank Zachodni WBK - controlled by Spain's Banco Santander - posted consolidated net profit of PLN 504mn in Q2 of 2014, up from PLN 419mn a year before and up vs. market consensus of PLN 505mn. In H1, it increased its earnings by 20% y/y to PLN 953mn. Furthermore, its president Mateusz Morawiecki declared that the bank targeted PLN 2.0bn profit for the entire year and stressed it wants to continue to improve its results.

In April, he expected BZ WBK's net earnings (without one-offs) to increase by more than the 3-5% growth expected by "various other bank CEOs." In 2013, it posted consolidated net profit attributable to owners of the mother company of PLN 1.98bn, up by 21.3% y/y.

Morawiecki also said he expects the bank's interest margin to stabilise at around 3.7% reported in Q2 of 2014 (vs. 3.6% in Q1 of 2014 and compared to 3.4% in Q2 of 2013).

In H1 of 2014, BZ WBK's gross loans rose by 3% y/y to PLN 75.2bn, while deposits were up by 4% to PLN 77.8bn. In May of 2014, its market shares were: 7.41% in deposits and 7.96% in loans.

The management also pointed to improving credit quality with loan loss provisions below management expectation - its NPLs were 7.5% in Q2, unchanged from Q1 of 2014 and down from 7.9% at the end of 2013.

In H1 of 2014, BZ WBK's ROE improved by 4.6pps y/y to 17.2%, while excluding integration costs, it amounted to 18.8%. Its capital adequacy ratio was 13.3% and Tier 1 reached 12.0%.