Central Europe Diversified Banks: Solid earnings despite Zl.1cbn costs triggered by the CJEU ruling on consumer loans

Research evidence excerpt

Central Europe Diversified Banks: Solid earnings despite Zl.1cbn costs triggered by the CJEU ruling on consumer loans

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21 Jul 2026 23:00:00 ET │ 19 pages

Central Europe Diversified Banks

Solid earnings despite Zl c.1bn costs triggered by the CJUE ruling on

consumer loans

Andrzej Powierza AC

CITI'S TAKE +48-22-690-3566

We expect relatively solid underlying earnings of Polish and Czech banks, on andrzej.powierza@citi.com

quarterly basis positively impacted by rising NII (driven by accelerating

lending) and lower OPEX (due to high regulatory costs in 1Q26). In Poland on

annual basis reported net profits were positively impacted by a decline in FX

mortgage costs, partially offset by to Zl -c.1bn consumer protection costs

(mainly, but not exclusively, due to CJUE ruling in case C-744/24). We expect

flattish yoy results in PZU, negatively impacted by lower contribution of

banks and positively by lower yoy weather related claims.

Polish banks: we expect net profit to decline -8% yoy but to rise +10% qoq — We

expect a high volume growth in the sector (+10% yoy in deposits and +9% yoy in

loans at the end of May 2026 according to NBP data) broadly offset the negative

impact of lower rates (NBP rate cut by 200bp Mar 2026 vs. Mar 2025) and expect

underlying NII of our coverage universe of 8 Polish banks to be flat yoy and grew +3%

qoq. Due to higher +6% yoy OPEX and higher tax rates we expect underlying net

profit declined -20% yoy but given lower qoq OPEX we think it rose +23% qoq. We

think reported net profit, positively impacted by -65% yoy decline in FX mortgage

costs and negatively by Zl c.1bn consumer protection costs, decreased -8% yoy.

Czech Bank: we expect +7% yoy increase in pre-provision operating profits — We