Record profit of PKO Bank Polski

2022.02.24

The net profit of PKO Bank Polski Capital Group in 2021 approximated PLN 5 billion and was 20% higher than before the pandemic.
The Group expanded the range of its operation. Its assets in 2021 grew by 10.9% and at the end of the year amounted to PLN 418 billion.
The company, in spite of the inflation pressure, has retained cost efficiency with the C/I ratio on the level of 40.6% and improved profitability measured with Return on Equity (ROE) which grew up to 12.1%.
The Bank’s significant capital surplus, high profitability and efficiently handled process of entering into settlements on foreign currency mortgage loans foster conditions for return to the disbursement of dividend.

The PKO Bank Polski Capital Group worked out record profits. The net profit in 2021 reached PLN 4.9 billion and was 20% higher than before the pandemic. A dynamic increase in the financing of clients made the assets of the PKO BP Group grow up to PLN 418 billion. The Bank increased profitability measured by return on equity (ROE) to 12.1% thanks to an increase in income and cost control, which allowed for improvement of the C/I ratio to 40.6%. There was also further improvement in the cost of risk to the level of 55 base points. PKO Bank Polski continues the implementation of the digitization strategy and builds long-term relations with clients based on the omni-channel service model. The share of remote channels in the sale of consumer loans is at 78%, while in the fourth quarter of 2021 there was 6.1 million active IKO mobile apps. The Bank continues to support Poland and Poles in fighting the pandemic.

The Capital Group of PKO Bank Polski has fully used the favourable economic situation in Poland. In 2021, the Capital Group generated PLN 5 billion of net profit and its assets grew up to 418 billion. We are the first bank in the history of Poland with the balance sheet sum to exceed USD 100 billion and the profit to exceed USD 1.2 billion,”

said Iwona Duda, President of the Management Board of PKO Bank Polski.

Robust economic growth will support the Bank's operation also in 2022. In line the forecasts of the economists of PKO Bank Polski, after a period of rapid growth visible in 2021, the economy will continue to develop at a rapid rate, exceeding 4%. The unemployment rate according to the BAEL methodology will remain on a level below 3%, while the reference rate of the National Bank of Poland will grow up to 4.25%. Such economic scenario will create favourable conditions for the development of Polish families and enterprises, thus supporting the bank's growth and income.

Record Profit

The profit generated by PKO Bank Polski is the highest both in the history of the company that exceeds 100 years and in the history of the Polish banking sector. Its accomplishment was possible due to the robust growth of the business activity result which amounted to PLN 15.2 billion and was 3.9% higher than a year before. High growth of the result on fees and commission which increased by 13% y/y and reached PLN 4.4 billion was more than enough to compensate the pressure on the interest result, which was the effect of lowering of interest rates in 2020. Thanks to rigid cost discipline, the cost of operation of the Bank grew by 3.2%, below the income dynamic. The cost to income ratio (C/I) for the Group reached 40.6% which means that the goal of the Strategy for years 2020-2022 was met.

Assets Above PLN 400 Billion

The Group’s assets grew to PLN 418 billion thanks to increase of client financing, which amounted to PLN 248 billion and was approx. 5% higher than a year before. 2021 passed under the sign of dynamic growth of new sale of retail loans and in the second half of the year, also corporate loans. Clients’ deposits continued to grow. Their sum at the end of the year was at PLN 322 billion and was 14.1% higher than at the end of 2020. The increase in the range of operation of PKO Bank Polski is accompanied by a responsible approach to risk management. The cost of risk grew to 55 base points and the share of loans at the third stage dropped below 4%.

PKO Bank Polski continues to support entrepreneurs who are using its services. It also tightens relations with clients which has translated to very good business results. The Company met the financial goals included in the 2020-2022 Strategy a year in advance and has already started to work on designating further directions of development. Our new strategy will have to accurately respond to changes in the environment, which took place in the recent years, such as demographic changes, rapid digitization, increase in the significance of ESG, increases of interest rates or changes in the geo-political situation,”

said Iwona Duda, President of the Management Board of PKO Bank Polski

High Profitability and Strong Capital Base

The excellent results translated to the Group’s high profitability. ROE was at 12.1% and was 2.1 percentage points higher than before the pandemic. The Bank retains a very strong capital base, while the total capital ratio (TCR) is at 18.23% and is higher by approx. 6.5 percentage points than the regulatory requirements. The Bank’s high equity power was confirmed by the results of European stress tests, announced in July 2021, which showed once again that PKO Bank Polski is one of the most resistant banks in Europe as far as economic turmoil is concerned.

Significant capital surplus of the bank, high profitability and efficiently handled process of entering into settlements on foreign currency mortgage loans foster conditions for return to the disbursement of dividend. The Bank’s Supervisory Board and Management Board recommended disbursement of PLN 2.3 billion from profit for 2021 in this form,”

said Iwona Duda, President of the Management Board of PKO Bank Polski.

Support for Poland and Poles in Fighting the Pandemic

PKO Bank Polski supports Poland and Poles in fighting the pandemic. Since the very beginning, it has been engaged in fighting its effects and supporting local communities and activities organised on the national level. So far, the Company has transferred donations with a total value of approx. PLN 26 million for this purpose to medical facilities and aid organisations. The bank was also actively involved in saving Polish companies and the jobs they created. At the beginning of the pandemic, together with KIR, it designed a system for applying for subsidies from the Polish Development Fund (PFR) financial shield, which was subsequently made available to other market participants. The Company is a leader in distribution of funds from the Financial Shield of the PFR and has joined the distribution of aid for companies distributed by BGK. In 2021, entities from the so called industries at risk were offered moratoria on the repayment of loan agreements. The companies from the Capital Group also joined the offer of help. The National Cloud Operator has designed and launched the e-registration vaccination system and the system of medical video consultations offered by medical personnel without leaving home.

Further Digitisation of Client Relations

The Bank’s Capital Group continues performance of a digitisation strategy and is building long-term relations with clients based on an omni-channel model of service. The share of digital channels in the sale of consumer loans has already reached 78%. Simple and bulks actions are performed more and more often by robots using the AI solutions. They are responsible for the servicing the first contacts with clients at the bank helpline. They already handle 0.5 million calls monthly. The artificial intelligence also supports the actions of PKO Inwestomat. The Bank sells a half of its investment funds with the use of it.

The IKO mobile app is helpful in building digital solutions for clients while in the fourth quarter of 2021 there was 6.1 million active apps. The number of transactions processed with the use of it is systematically growing and in the fourth quarter of 2021 it approximated 140 million. Last year, the clients who do not have an account in PKO Bank Polski also received the possibility of using the application. This solution is going to help encourage new groups of clients to use IKO and expand the scale of operation even further. Since September, the clients have also had access to the entire offer of investment funds offered by PKO TFI and the services of the Brokerage Office via the mobile app. The participants of the Employee Capital Plans and Employee Pension Plans operated by PKO TFI may check the balance of their funds via the app.

Efficient Course of Settlements

On 4 October, PKO Bank Polski launched the programme of settlements for Swiss franc borrowers. Since that moment, the Bank's clients have filed over 24 000 applications for mediation. The process is handled smoothly and has already resulted in 9 200 settlements and additionally 2 000 successfully completed mediation proceedings which are awaiting for finalisation. The share of successfully completed mediation proceedings in relation to completed mediation is at approx. 80%. The proposal of settlements is a response to the expectations of clients whose situation aggravated as a result of growth of the CHF exchange rate. The solution assumes conversion of the loan currency to PLN, as if it was a PLN loan since the very beginning. The settlements allow the clients to get totally free from the foreign exchange risk. They are a quick, convenient and secure alternative to a long-lasting and costly court dispute. The entire process is handled in a remote mode, while the borrowers come to the Bank branch only once ˗ at the moment of signing the settlement.

Sustainable Business Development

PKO Bank Polski not only wishes to generate the best results for its shareholders as it has been doing so far, but is also additionally looking for possibilities to develop in an even more sustainable manner. Therefore, it incorporated the ESG indices into its non-financial goals. The Bank became liable for complete elimination of exposure to the coal mining sector by 2030 and declared that it would increase the scale of green financing by at least 5% y/y. The indices also include the Bank’s liability for curbing the emission of greenhouse gases to 40,000 tons in 2025, i.e. by 60% as compared to 2019. In 2021, the Company made significant progress in meeting these obligations and is on track to fulfilling them.

***

PKO Bank Polski is the indisputable leader at the Polish banking sector; the value of its assets amounts to PLN 418 billion. In 2021, it earned a net profit of PLN 4.9 billion. The Bank services 11 million retail clients. The is the basic supplier of financial services for all segments of clients, having highest shares in of deposits (17.8%), credit (17.4%) and the market of investment funds of natural persons (19.9%). Thanks to the development of digital tools, including IKO, which has been activated on more than 6 devices of clients, PKO Bank Polski has become the most mobile bank in Poland. The company is reinforcing its foreign presence via corporate branches operating in Germany, Czech Republic and Slovakia.

Szymon Pinderak

Press Center

prasa@pkobp.pl

+48 22 521 53 85

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