Total cost of risk (pro-forma), whichcomprises net impairment provisions, fair value adjustment (of part of credit portfolio) and result on modifications, bore by the Group in 2018, amounted to PLN 236.6 million and were 7.4% lower than this cost recognized in 2017. The charges for retail segment stood at PLN 176.9 million and were slightly higher than in the previous year while for corporate segment and other amounted to PLN 59.7 million and decreased yearly by PLN 23.3 million. In relative terms, cost of risk (i.e. net charges to average net loans) in 2018 reached 48 bps level (i.e. 6 bps lower when compared to 2017).
Operating profit, as the difference between operating income and costs (including costs of risk), reached PLN 1,223.1 million and increased by 9.8% compared to the previous year, as a consequence of evolution of all described above elements. Then banking tax grew by 5.4% yearly (higher assets) and income tax grew by 8.2% (higher income). When summing both taxes (PLN 463 million) and VAT paid by the Bank (PLN 30 million), effective tax rate reached 40% of operating profit. Additionally, if adding other obligatory payments for public purpose (BFG contribution and KNF costs), effective tax rate increases to 45%. It is also worth mentioning, that due to the cut of obligatory reserve remuneration, done by NBP since January 2018, operating profit of the Bank in 2018 year fell by PLN 17 million.
Gross profit before income tax in 2018 amounted to PLN 1,024.6 million and increased by 10.7% yearly.
Net Profit reported in 2018 amounted to PLN 760.7 million and was 11.7% higher than an year ago. This was the highest yearly profit in Bank’s entire history.
The key relative measures of Group’s profitability based on net profit generated in 2018 were the following:
- Return on Assets (ROA) of 1.0%
- Return on Equity (ROE) of 9.6%
The breakdown of Group’s Net Profit by the Group’s companies is presented in the table below:
Group's profit structure (PLN million)
|Millennium Dom Maklerski (brokerage house)
|Millennium TFI (mutual fund)
|Other consolidated companies
|Consolidated Net Profit of the Group