Poland's Bank Millennium posted a 54% drop in fourth-quarter net result on Tuesday due to lower interest income and higher provisions for foreign currency mortgages, but beat market expectations aided by a 10% jump in operating income.

The lender's net result was 115 million zlotys ($28.5 million) in the last three months of the year, down from 249 million in the same period in 2022 but above analysts' forecast of 104 million in a Reuters poll.

Quarterly net interest income, adjusted for the cost of Poland's mortgage "payment holiday" scheme, amounted to 1.28 billion zlotys, down from 1.35 billion a year earlier and below market expectations of 1.33 billion.

Total provisions against legal risk related to Millennium's foreign currency mortgage portfolio totalled 702 million zlotys in the quarter before taxes.

Millennium earlier in January said it had set aside 620 million zlotys in provisions related to foreign currency mortgage loans, and additional 82 million for those granted by the former Euro Bank which it bought in 2018.

The Polish arm of Portugal's Millennium bcp said its full-year net profit amounted to 576 million zlotys.

The bank said the results were preliminary and have yet to be audited. It will announce final annual results on Feb. 28. ($1 = 4.0350 zlotys) (Reporting by Anna Banacka; editing by Milla Nissi)