Nov 13 (Reuters) - Polish corporate lender Bank Handlowy

on Thursday posted a 14% fall in its third-quarter net

profit, as lower net interest income and higher bad loans

provisions weighed.

BY THE NUMBERS

Profit in the July-September quarter at the Polish division of

Citigroup ( C/PN ) declined to 469.4 million zlotys ($129.08

million), while its net interest income shrunk 7% to 516.2

million zlotys.

Fees grew slightly to 105.8 million zlotys. The quarterly

provisions accrued for bad loans came in at 19.5 million zlotys

compared to 1.3 million in the year-ago period.

WHY IT'S IMPORTANT

Bank Handlowy is targeting a shift to institutional banking and

diversifying its revenue streams from 2027 onward, as it aims to

finance the country's key investments in defence and energy

sectors.

CONTEXT

Despite having faced multiple headwinds from legal provisions

for Swiss franc mortgages, mortgage moratoria, falling interest

rates, and most recently looming taxes increase, the majority of

Polish banks is still enjoying high profitability.

The country's lenders are still benefiting from high interest

rates with the deposit rate standing at 4.25%, much higher than

the euro zone's 2%, helping the banks resist pressure on their

margins.

Additionally, most of the Polish banks have forecast a drop in

the long-running legal risk associated with disputes regarding

Swiss franc mortgages.

($1 = 3.6365 zlotys)

(Reporting by Mateusz Rabiega, editing by Anna Pruchnicka)