Bank Millennium Group reported a record net profit of PLN 1.2 billion for 2025, up 67% year-on-year, with a return on equity (ROE) of 14.3%. This strong result was achieved despite ongoing costs related to legacy FX mortgage loans, which, although still significant at PLN 2.1 billion (pre-tax), have decreased by 26% compared to the previous year. Excluding these extraordinary costs, the underlying net profit would have exceeded PLN 3.2 billion.
The bank’s core business remained resilient despite a declining interest rate environment. Net interest income rose by 4% (or 2% after adjusting for the previous year’s credit holidays), while net commission income remained stable. Operating income grew by 6%, and the cost-to-income ratio was 36.9%. Operating costs increased by 13%, mainly due to higher contributions to the Bank Guarantee Fund, but cost growth slowed in the second half of the year.
Credit risk charges dropped by 19%, and the cost of risk reached a historical low of 30 basis points. The impaired loan ratio improved to 3.8% (from 4.5% a year ago), outperforming the bank’s strategic target. The loan portfolio grew moderately by 2%, with a strong 20% increase in corporate loans and a 4% rise in consumer loans. Retail mortgage loans declined due to repayments and settlements.
Deposits increased by 12%, supporting a 12% growth in total assets to PLN 156 billion. The loan-to-deposit ratio fell to a historic low of 58%, reflecting a strong liquidity position. The bank’s capital ratios remained solid (TCR at 15.1%, T1 at 13.7%), with a comfortable surplus over regulatory requirements, despite the impact of new regulations and higher risk-weighted assets.
The number of active retail clients rose by 145,000 to 3.27 million, and digital users exceeded 3 million. The bank maintained its leading position in customer service quality rankings and continued to invest in digitalization and innovation.
Legal risk related to FX mortgage loans continues to be a key issue, but the risk is gradually abating. The number of new lawsuits is declining, and the number of settlements remains stable. Provisions for legal risk now cover more than 160% of the gross active FX mortgage book. The bank has also started to see lawsuits related to PLN mortgage loans, mainly concerning the WIBOR reference rate, but so far these have not had a material financial impact.
Key risks for the future include ongoing legal uncertainties (especially around FX and PLN mortgage portfolios), potential changes in consumer protection regulations, and the impact of higher corporate income tax rates for banks (increased from 19% to 30% in 2026). The bank’s liquidity, capital position, and risk management remain strong, and the management expects continued growth in core business areas, especially in corporate lending and digital services.
Key financial highlights (2025 vs. 2024):
| Indicator | 2025 | 2024 | Change |
|---|---|---|---|
| Net profit (PLN mn) | 1,202 | 719 | +67% |
| Net interest income (PLN mn) | 5,756 | 5,530 | +4% |
| Net commission income (PLN mn) | 775 | 777 | 0% |
| Operating income (PLN mn) | 6,936 | 6,521 | +6% |
| Operating costs (PLN mn) | (2,556) | (2,253) | +13% |
| Cost-to-income ratio | 36.9% | 34.5% | +2.3 p.p. |
| Cost of risk (bps) | 30 | 40 | -10 |
| Total assets (PLN bn) | 155.7 | 138.9 | +12% |
| Net loans (PLN bn) | 76.4 | 74.9 | +2% |
| Deposits (PLN bn) | 130.8 | 117.3 | +12% |
| TCR (Total Capital Ratio) | 15.1% | 17.2% | -2.1 p.p. |
| ROE | 14.3% | 9.8% | +4.5 p.p. |
Interpretation: The bank’s strong profit growth and improved efficiency are positive for investors. The reduction in legal risk costs and stable asset quality support future profitability. However, ongoing legal uncertainties and higher taxes for banks in 2026 may affect future results. The bank’s liquidity and capital buffers remain robust, and its focus on digitalization and corporate lending offers further growth potential.
Approval of 2025 Annual Report: 27 February 2026.
Adoption of Transition Plan (ESG): 28 January 2026.
Supervisory Board assessment of 2025 reports: 27 February 2026.
Key terms explained:
- FX mortgage legal risk: Refers to the risk of losses from lawsuits and settlements related to foreign currency (mainly Swiss franc) mortgage loans, which have been the subject of many court cases in Poland.
- Cost of risk: The cost of provisions for expected credit losses on loans; a lower cost means better asset quality.
- Cost-to-income ratio: Measures efficiency; a lower ratio means the bank is generating more income relative to its costs.
- TCR (Total Capital Ratio): Indicates the bank’s capital strength; higher is better, but a decrease is not a concern if the ratio remains well above regulatory minimums.