PKO Bank Polski One of the Most Resilient Banks in Europe

2021.08.02

PKO Bank Polski took part in the EBA 2021 EU-wide stress test of extreme conditions carried out by the European Banking Authority with the participation of the Polish Financial Supervision Authority.
PKO Bank Polski came fourth in the overview encompassing the impact of the tested scenarios on the Common Equity Tier 1 ratio, which confirms that it is one of the most resilient banks in Europe with respect to adverse macro-economic scenarios.
The tests are aimed at providing the supervision authorities and market participants with consistent and comparable data about the resilience of the European banks in case of adverse market conditions.

The European Banking Authority announced the results of the EBA 2021 EU-wide stress test of extreme conditions which covered fifty largest banks from Europe, including two from Poland. The test results have shown that in this group, PKO Bank Polski is one of the most resilient in Europe with respect to the adverse macro-economic scenarios.

“PKO Bank Polski made it through the time of economic turbulence caused by the COVID-19 pandemic unscathed. This was the result of the responsible approach to the issue of risk and a proper business strategy. The Bank’s credit portfolio is greatly diversified, while development of the new business lines in the areas of insurance or lease allowed us to quickly rebuild the results depleted by the pandemic and other events in the market environment. What is more, spot-on strategic decisions in the realm of risk and a modern risk management system, using advanced analytical solutions and a huge pool of data, also helped us retain our good standing. In each subsequent quarter, while publishing our financial statements, we show that our capital base is very strong. Therefore, it was not a surprise for us that the European stress tests - the first study of this type after the difficult 2020 - once again showed that PKO Bank Polski is one of the most resilient banks in Europe.”

said Jan Emeryk Rościszewski, Vice-resident of the Management Board of PKO Bank Polski, managing the work of the Management Board.

PKO Bank Polski One of the Most Resilient in Europe

The results of the performed tests confirmed high resilience of PKO Bank Polski to theoretical negative macro-economic scenarios and showed that it is one of the most resilient among all tested banks. PKO Bank Polski came fourth in the overview based on the influence of the tested scenarios on the Common Equity Tier 1 ratio in the transitional period (CET1 Transitional). With respect to the impact on the CET 1 Fully Loaded, PKO Bank Polski was fifth. The tests have shown that in case of an adverse scenario adopted for test purposes, in 2023 CET1 Transitional would drop down to the level of 15.37% from 16.99% at the end of 2020, i.e. would be reduced by 1.62 p.p., while CET1 Fully Loaded would drop 15.19% in 2023 from 16.39% at the end of 2020, i.e. would be reduced by only 1.2 p.p.

The Bank's strong capital base results in the fact that even in extremely adverse conditions, the forecast levels of the CET1 ratio meet the supervisory standards. Adequate strategic decisions in the area of risk and proper business strategy exert a positive impact on the accomplished results. The Bank’s credit portfolio is strongly diversified, while development of new business lines has allowed it to quickly rebuild the results depleted by the pandemic and the reduction of interest rates. PKO Bank Polski maintains a low cost of risk, which is assisted by the modern system of risk management, using advanced analytical solutions and Big Data.

In compliance with the Bank's financial report for the first quarter of 2021, the cost of risk in the first quarter of 2021 reached 0.68%, while the total capital ratio of the Bank's Group amounted to 18.1% and was much above the regulatory minimum. On the other hand, the Group's surplus capital was at PLN 14 billion.

European Stress Tests

Stress tests are cyclical tests aimed at providing the supervision authorities and market participants with uniform, consistent and comparable data about the solvency of European banks in case of adverse economic conditions (e.g. global economic slow-down, growth of unemployment and weakening of the Polish zloty as compared to euro and the Swiss franc). They cover a three-year period, which enables assessment of stability and resistance of the banks over an adequately long time horizon. Tests of extreme conditions were carried out on a sample of fifty banks from the European Union and Norway, covering approx. 70% of the assets of the European banking sector. PKO Bank Polski was covered by the study directly by the EBA as one of two banks from Poland.

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PKO Bank Polski is the indisputable leader at the Polish banking sector; the value of its assets amounts to PLN 384 billion. In the first quarter of 2021, it generated PLN 1.2 billion net profit. It is the supplier of financial services for all segments of clients, with the highest share in the market of savings (18.3%), loans (17.6%), market of mortgage loans (19.7%) and the market of investment funds of natural persons (19.2%). Thanks to the development of digital tools, including IKO, which has been activated 5.5 million times, PKO Bank Polski has become the most mobile bank in Poland. The Capital Group companies reinforce the Bank’s strong position. PKO Bank Polski Brokerage House is the leader with respect to the number and the value of IPO and SPO transactions on the capital market.

Szymon Pinderak

Press Center

prasa@pkobp.pl

+48 22 521 53 85

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