ING BSK is scheduled to report its 4Q12 results on Wednesday 13 February 2013. We forecast net profit at PLN 201.9m (down 0.6% q/q and 5.5% y/y) for the period. This is above with consensus estimates of PLN 192.2m (with a range between PLN 178m and PLN 214m, according to PAP), mainly on higher margin expectations.
Net interest income is forecast at PLN 516.0m (up 0.1% q/q and 7.6% y/y) in 4Q12. We expect the net interest margin at 2.80% (flat q/q) with the positive change in the asset mix offset by competitive pressure on deposit spreads. We forecast the bank’s net loans to increase by 1.9% q/q in 4Q12, while deposits should increase by 3.0% q/q in the period.
Non-interest income is expected to increase slightly to PLN 268.3m (up 0.7% q/q and 3.8% y/y) in 4Q12. Net fee income is estimated at PLN 252.7m (up 0.6% q/q and 1.1% y/y) in the period, driven by card-related fees but depressed by a seasonal increase in fee expenses.
We do not expect the bank to have realized any major trading gains in 4Q12, thus net trading and FX income is expected to rise just 6.7% q/q in the period. Operating expenses are estimated to drop to PLN 446.2m (down 1.8% q/q, up 7.8% y/y) in 4Q12. We expect the usual reverse seasonality in non-staff expenses (down 4.3% q/q, up 12.6% y/y), while personnel expenses should increase slightly (up 1.0% q/q and 3.3% y/y) in the fourth quarter.
Net provisioning is expected to fall to PLN 95.9m (up 16.1% q/q and 89.8% y/y) in 4Q12. In line with previous management guidance we expect additional provisioning in the corporate segment in 4Q12, especially in the building sector. We forecast the cost of risk to increase to 75bp of average gross loans in 4Q12 from 66bp reported in 3Q12. Thus the cost of risk should come in line with the management’s guidance of 80bp of average gross loans in full-year 2012.