Bank Pekao, Poland’s second-largest lender by assets, reported a net profit of 1.82 billion zlotys ($508.6 million) for the fourth quarter of 2025, exceeding analyst expectations of 1.66 billion zlotys, according to a statement released Thursday.
The increase in profit was attributed to lower credit loss allowances and reduced provisions for legal challenges related to Swiss franc mortgages, alongside a rise in fee and commission income. Net interest income, though, experienced a 1.7% decrease to 3.40 billion zlotys, reflecting the impact of declining borrowing costs as Poland’s central bank continues its easing cycle.
The Polish banking sector is navigating a period of transition following the central bank’s reduction of the main interest rate to 4.00% by the end of 2025, a move that is compressing net interest margins after a period of historically high earnings. Pekao’s results demonstrate the challenges and opportunities facing Polish banks in this evolving landscape.
Despite the decline in net interest income, Pekao reported a 14.6% increase in net fee and commission income, reaching 890 million zlotys. The bank too saw a 16% year-on-year increase in new cash loan sales, totaling 1.9 billion zlotys in the fourth quarter.
Provisions for lawsuits stemming from Swiss franc mortgage borrowers decreased by 22% to 288 million zlotys, although net allowances for expected credit losses were halved, falling by 50%. A 180-million-zloty gain from revaluing tax assets in anticipation of a corporate tax increase also contributed to the bank’s strong performance.
“Entering a more demanding 2026, we remain focused on further improving customer experience, increasing operational efficiency and building lasting value,” said Cezary Stypułkowski, CEO of Bank Pekao, in a prepared statement.
Recent reports indicate a broader trend of investment firms increasingly resembling banks, a development that could reshape the financial landscape globally. Euronext, a major European exchange, also recently reported strong fourth-quarter results, with its Q4 revenue up nearly 10%, and an expanding pipeline of initial public offerings.
Meanwhile, global markets experienced volatility this week, with a Wall Street rally losing momentum as European shares reached record highs and crude oil prices surged due to supply concerns. Glencore, a major commodities trader, announced a $2 billion payout to shareholders despite a decline in earnings.
