Net earnings came in at PLN 260.6m for 1Q07, up 58.2% q/q and 48.6%
y/y, above both our forecast of PLN 215.0 m and the consensus estimate of
PLN 214m (range of PLN 200m – PLN 224m, according to PAP). The betterthan-
expected results were mainly attributable to a net provisioning release
of PLN 20.6m, whereas our expectation had been more conservatively for a
net creation of provisions of PLN 15.2m.
However, pre-provision operating profits also came in some 10% above our expectation at PLN 345.8m for
1Q07, up 47.3% q/q and 38.2% y/y, attributable mainly to lower-thanexpected
operating costs and higher net fees and trading income. Overall,
though the results were boosted by non-recurrent income, we expect the
results to have a positive impact on earnings estimates. We expect this to
have a favourable impact on trading today, though we maintain our Sell
rating on BZ WBK, trading on a 2008F P/E of 21.4x and at a 21% premium to the CEE sector of 17.7x.