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Polands BZ WBK net jumps 33 pct in Q3 but misses forecast on provisions UPDATE

(Adds more detail, analysts comment) WARSAW (Thomson Financial) - Polish lender BZ WBK, controlled by Allied Irish Banks, missed market expectations with a 33-pct jump in third-quarter net profit as risings provisions erased some gains from higher lending and inflows to mutual funds. Poland's seventh-largest lender by assets recorded a net profit of 225.7 mln zlotys between July and September, below the 229 mln zlotys expected on average by eight analysts polled by state news agency PAP. The bank had a net profit of 169.5 mln a year earlier.

The bank said its loan loss provisions rose almost fourfold to 21.5 mln zlotys from a year earlier.

"The results are fairly decent on the operating level, but nobody expected provisions to be so high," said Deutsche Bank analyst Dariusz Gorski. "Still the revenue side has made up for some of that shortfall, which is positive." Results of the Polish banks have in the past quarters benefited from the release of provisions with more borrowers paying off their past loans as the economic situation improved. But this effect has now petered out and provisions are set to come back to more "normal" levels, analysts said.

BZ WBK's fee income jumped 35 pct to 388 mln zlotys in the third quarter and was higher than 382 mln seen by analysts, on the back of its booming mutual fund business. Net interest income advanced 28 pct on the year to 329 mln zlotys, above expectations of 313 mln zlotys, boosted by higher lending to consumers and companies. Shares in BZ WBK have gained 2.9 pct in the past 3 months, underperforming the WIG20 index by 2 pct, according to Thomson Datastream data. The stock closed 0.4 pct lower at 261 zlotys.

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