According to PAP, citing Cezary Stypulkowski, CEO of BRE Bank, the bank is expected to post similar results in 2013 compared to those reported in 2011 and 2012. CEO has commented that in 2012 BRE Bank managed to fulfill its target of posting net profit similar to 2011 level. He has added that 2013 will be difficult due to margin pressure and lower interchange fees, while it could be also affected by higher provisions and effects of higher unemployment in the economy. But at the same time, he has added that BRE Bank’s cost management has improved visibly. Stypulkowski has also added that it is likely that BRE Bank will pay dividend out of 2012 net profit. He has stated that it will definitely be lower than 50%, but it could reach some 25%-30%.
Comments concerning 2012 results imply that 4Q12 was slowest quarter in 2012, but the bank was persistent in its guidance through the year. Guidance concerning 2013 results looks demanding given all the risks mentioned, however so did 2012 guidance. In our view it will depend more on the external environment i.e. FX rates (given high share of FX mortgage loans), risk perception (given plans to tap debt market, avoidance of margin pressure on the deposit market), etc. Dividend in our view became possible following changes in dividend recommendation from the Polish Financial Supervision Commission, which lifted the requirement concerning share of FX loans in the retail lending.
However we would not expect dividend higher than 30%, which implies some PLN 8.25 per share and dividend yield of 2.6%. We believe the news is positive. However the interview was published yesterday during trading and the stock price rise only 0.4% at the close, thus the news may have a neutral trading impact.