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Poland's top bank PKO plans to raise profit above 5 billion zloty in 2022

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By Reuters

GDANSK/WARSAW, Poland (Reuters) – Poland’s top state-run lender PKO BP <PKO.WA> on Monday forecast net profit above 5 billion zloty ($1.29 billion) for 2022 and raised its target for return on equity (ROE) to 12% in the same period, as part of a new strategy by the company.

In its previous strategy for 2015-2020, the bank aimed for ROE above 10%, cost to income below 45% and cost of risk at 0.75%-0.85%. The revamped strategy assumes cost to income at around 41% and cost of risk at 0.60%-0.75%.

PKO said it wanted to still be able to pay dividends and in a regulatory filing gave no details about its planned mergers and acquisitions.

The market is closely following the ongoing sale of Poland’s fourth largest lender mBank <MBK.WA> by Commerzbank <CBKG.DE>. PKO had earlier expressed interest in the process.

With assets of 342 billion zloty, PKO, Poland’s biggest lender, is still 30 times smaller than Europe’s biggest bank HSBC Holdings Plc <HSBA.L>.

Since last year PKO’s share price has been nearly unchanged, as markets were deterred by its toxic Swiss franc credit portfolio, high competition, and fees and costly rules imposed by regulators.

(Reporting by Marcin Goclowski and Gdansk Newsroom; Editing by Shounak Dasgupta)