Another quarter of excellent, reproducible results

The net profit of the Bank’s Group after three quarters amounted to nearly PLN 3.3 billion, being 21.1 percent higher in comparison with the previous year. This, once again, is the best result in the Polish banking sector. Only in the third quarter of 2019, the bank made PLN 1.23 billion of consolidated profit, maintaining a high level of profit dynamics. The third quarter confirmed that the excellent financial results achieved by PKO Bank Polski are reproducible. Like in the previous quarter, this has been possible, among other things, thanks to the very good result on business operations. In the first three quarters of the year, it amounted to more than PLN 10.9 billion, and it increased mainly thanks to further improvement of the interest rate result (increase be 11.5 percent a/a to the level of PLN 7.7 billion).

PKO Bank Polski is growing fast. The Bank systematically breaks records in terms of the size of its assets, which are now worth almost PLN 342 billion. Financing for the Group's customers has increased to more than PLN 252 billion, and the amount of customer savings managed by the Group has exceeded PLN 303 billion. PKO Bank Polski has remained the unquestionable leader of the Polish banking sector with the highest shares in the market of loans, as well as savings.

Record-breaking profits, accompanied by a consistently high level of cost discipline, have translated to increase in profitability measured as return on equity, which has reached 10.9 percent. High cost effectiveness has allowed for a further reduction of the cost-income ratio to the level of 42.0. Prudent risk management and ability to take use the advantages of the good condition of the business environment in the first three quarters of the year allowed the bank to reduce the risk cost to 0.51 percent. The excellent condition of the company made it also possible to pay PLN 1.66 billion of a share in profit to its shareholders.

The PKO Bank Polski Capital Group has continued to engage in activity aimed at improving the condition of the environment. In March 2019, the Bank approved the credit policy for the high-emission sector. As a part of this policy, it plans to implement a gradual change in the structure of the loan portfolio through successive limiting of its engagement in transactions involving high-emission energy. The Bank has also improved its position in the ESG rankings, which assess the efforts made with regard to environmental protection, corporate social responsibility and corporate governance. The Bank’s rating by the MSCI has increased from BB to BBB. The Bank has also improved its position in the Sustainalytics rating, in which the ESG risk assessment has dropped from 32.9 to 24.0. The ESG Sustainalytics rating is used as one of the components of assessment of the bank’s involvement in the WIG-ESG index launched in September. The bank's share in the index is at the highest possible level of 10%.

One of the activities undertaken by the Bank is issue of Green Mortgage Bonds by PKO Bank Hipoteczny, which is the first mortgage bank in Poland to join the elite group of global issuers of securities of this kind. PKO Bank Polski, together with PKO Bank Hipoteczny, have also launched a project aimed at development of standardized pan-European mortgage loans for financing of apartments and houses implementing energy-saving solutions. This year, the bank also organized issue of green bonds for the State Treasury and introduced a new product - PKO Eco-Loan for purchase of photovoltaic equipment. The Bank also offers a “green mortgage”, thermal modernization loans for housing communities and cooperatives, as well as treasury products for corporate clients, enabling them to enter into transactions for CO2 emission allowances. In September, PKO Bank Polski participated in a consortium of banks, which provided one of the energy producing companies with financing in form of an ESG-linked loan for the amount of PLN 2 billion.

IKO, the mobile app of PKO Bank Polski, is the most popular and the most transaction-oriented application on the Polish market. Every half a second, the Bank’s customers make online payments using their mobile devices, and the frequency of logging into the application is 60 percent higher in comparison with the iPKO internet banking service. In October, IKO exceeded the record-breaking value of 4 million active applications. In total, the Bank has recorded 290 million mobile transactions in IKO. High popularity and the best user scores made IKO the winner in the ranking of the British Retail Banker International for the second time in a row, confirming the application’s status as the best in the world. Once again, IKO has outstripped apps of the biggest global banks, such as JP Morgan Chase, Barclays or Bank of America.

The mobile app of PKO Bank Polski is constantly under development. Apart from the number of users and transactions, the range of functions available through the application is growing as well. The possibility of buying tickets for public transportation, made available recently, became immediately very popular. This year, the Bank has also launched some other new functions, such as access to mobile authorization or the option of purchasing motor vehicle insurance. Another new function is the possibility of submitting applications for foreign currency accounts, revolving bank loans or connecting of credit cards as the source for BLIK transactions. Before the end of this year, the Bank is also planning to launch several other IKO functions, such as car park tickets, possibility of activating the application for foreign phone numbers and purchases without a BLIK code - in the case of repeated payments.

The National Cloud Operator, a company of PKO Bank Polski and the Polish Development Fund, which started its operating activity in April, has continued to acquire business partners and customers, successively developing the range of products and services offered. The NCO implements the multi-cloud concept: ultimately, it wants to offer services of global technology leaders, as well as its own services, which are now being developed intensively, using the infrastructure built and managed by the company. As a part of this strategy, in September, the NCO announced the beginning of its strategic partnership with Google. The cooperation is aimed at supporting Polish companies in implementing and using the potential offered by advanced computational cloud technologies in business. The Google Cloud Platform products will complement the product range of the National Cloud Operator, and Google will open in Warsaw the so-called Google Cloud region, which is a technical infrastructure and software hub, dedicated to clients from Poland and Central-Eastern Europe.

Simultaneously with initiation of NCO’s cooperation with subsequent partners and clients, PKO Bank Polski has extended the scope of services outsourced from the company. The National Cloud Operator has launched a platform for PKO to support the transformation processes - it is used for a fully automated process of launching of testing and development environments for the team of programmers engaged in development of banking applications. On the basis of this solution, the bank works on optimization of processes of development of banking applications, shifting from the traditional model to the new approach to IT tasks. A process of virtualization and migration to the cloud of workstations for almost 11 thousand consultants is also in progress. PKO BP is also planning to fully double in the cloud the bank’s IT systems in order to take full advantage of the modern and innovative solutions, which are now very difficult to implement in the traditional model. As a result, the bank will be able to develop its business activity faster and cheaper, reducing the system maintenance costs and at the same time caring for their security and continuity of operation.

PKO TFI, which is a member of the Bank's Capital Group, has continued to develop dynamically. PKO TFI has dominated the market of Employee Capital Plans and signed more than 1.5 thousand contracts for management of the ECP - more than any other financial institution. In total, companies, which have made the decision to cooperate with PKO TFI, have about 1.1 million employees. The company's clients include Allegro, Leroy Merlin Polska, T-mobile, Play, Jeronimo Martins Polska, Lidl  Polska and Azoty Group ZA „Puławy”. In PKO TFI, the ECP are based on the PKO Emerytura life cycle fund - specialized open investment fund, which includes 8 defined-date investment sub-funds. The user’s investments are automatically adapted to their age - that is, the closer they are to 60 years of age, the more assets are moved to less risky financial instruments. An additional advantage of the PKO TFI product range is the ECP handling system. Employers, who have decided to engage in cooperation with PKO TFI, obtain access to the dedicated iPPK system, which enables automatic management of the funds.

PKO Bank Polski has launched a Partnership Program for Premier League clubs. The new initiative allows clubs to obtain additional significant funds thanks to promotion of banking products among football fans. This is yet another component of cooperation between the football community and PKO Bank Polski. In total, through the Partnership Program and sponsorship contracts, the Bank may assign even up to PLN 100 million to Premier League clubs over three years.

The Partnership Program is a development-promoting, innovative program in sports marketing and cooperation between sponsors, the League and the football clubs. Polish football requires additional capital, and the Premier League sponsoring program, as well as the Partnership Program for Premier League clubs, fit into the context of objectives of the Premier League clubs - investing in schools, development of trainers and the sports infrastructure. This is the first project in the history of Polish football, which may improve financial stability of the League clubs on this scale. PKO Bank Polski as the titular sponsor of the Premier League, shares its experience and knowledge in order to continue the development and improvement of the standard of Polish club-based football in cooperation with the Polish Football Association, the League authorities and the clubs.

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