According to an interview with Rafal Juszczak (current acting CEO of Bank PKO BP) in Gazeta Prawna, Bank PKO BP should report net income for 2Q07 similar to that reported for 1Q07. At the same time Juszczak expects costs to be higher then in previous quarter.
Rafal Juszczak also stated that the key near-term strategic objective for Bank PKO BP is to increase the number of customers using e-banking services and to tighten cooperation with Post Bank. PKO BP would like to offer a wider range of products, not necessarily under the PKO BP brand name, throughout the Post Bank distribution grid.
Our view: An increase in costs in 2Q07 was expected, given that the bank's annual wage round takes effect in April, and we expect the earnings outlook to have a slightly positive trading impact today. At the same time, earnings quality remains an issue at PKO BP, with earnings in 1Q07 boosted by a very low net provisioning requirement, and the market should also be looking for signals regarding the outlook revenue growth.