High profits earned in dynamic and changing environment

The net result of the PKO Bank Polski Group in the 1st quarter of 2022 exceeded PLN 1.4 billion and was over 20% higher than a year before. The growth in net result was primarily determined by improved result on business activities, which exceeded the level of PLN 4.5 billion, mainly in effect of growth of the interest result by 38.4 percent and the result on commission and fees by 14.1 percent.

The Group’s assets in the first quarter of 2022 grew by 9.6 percent y/y and amounted to PLN 422 billion, clients’ savings grew at a two-digit rate to PLN 322 billion while financing granted to clients approximated PLN 250 billion. Thus, the Bank has crossed yet another, symbolic barrier in the value of support intended for development of domestic economy and Polish families. Maintenance of cost discipline together with the cost dynamic which was definitely lower than the dynamic of income were conducive to earning the high net profit, which in turn allowed for accomplishing the C/I ratio on the level of 39.4 percent. In the first quarter of the year, the growth of corporate loans also accelerated to the level of 13.8 percent y/y; in the first quarter of the year only, this growth amounted to 5.6 percent.

The quality of the credit portfolio continued its gradual improvement with the NPL ratio on the level of 3.93 percent. The quarterly cost of risk in the first quarter of 2022 was 0.76 percent, including 314 million of reserves set up for the bank’s exposure in Ukraine. The bank has also retained a strong capital and liquidity position. The total capital ratio of the bank’s group after the first quarter of 2022 was 17.5 percent and was much higher above the regulatory minimum and the requirements for dividend disbursement. Very good standing of the company allowed the shareholders to decide about disbursement of dividend in the amount of PLN 2.287 billion from profit for 2021.

Since the very first moment of Russia’s aggression on Ukraine, the Bank’s Capital Group has become engaged in aid actions, offering multidimensional support for the refugees, not only in the area of humanitarian assistance, but also a broad range of business amenities. The Bank simplified the process of setting up bank accounts for Ukrainian citizens and as a result of it, by 31 March 2022, almost 218,000 accounts as part of the special offer were opened for them. The Bank has also offered quick and free issue of temporary cards to accounts for the Ukrainian citizens, as well as has waived fees, among others for account maintenance and for foreign transfer instructions to Ukrainian banks. It has also launched a special helpline for the Kredobank clients. The PKO Bank Polski clients can use the mobile IKO app, which makes the management of finances easier and it’s also available in Ukrainian. The Bank, as the only one in Poland, also enabled the exchange of hryvnias to zloty at a rate set by the National Bank of Poland. To date, 58,000 hryvnia exchange transactions were made, without fees and spread. The service is currently available in 100 branches of the Bank. Recently the Bank, as part of a package of benefits for Ukrainian entrepreneurs, has offered them an option of setting up a business account without selected fees for a period of 12 months.

PKO Bank Polski Capital Group immediately joined the #HelpUkraine action. The Bank, together with its Foundation, was the first in Poland to start a special fundraising for the war refugees. As of now, over PLN 11 million has been paid to the account of the Bank's Foundation and over PLN 5.5 million was already transferred to 50 organisations assisting refugees and the needy directly in Ukraine. The funds were used to purchase an ambulance and special medical equipment (transport vehicles, necessary medications, hundreds of tons of food and items of daily use). PKO Bank Polski is also supporting the employees of its Ukrainian subsidiary, Kredobank. It organised assistance for almost 900 employees of the Group in Ukraine and their families, using its own funds.

The liquidity standing of Kredobank, in spite of the ongoing conflict in Ukraine, remains on a stable and safe level. The company has not recorded any drops in liquidity measures and a significant outflow of deposits. Furthermore, Kredobank has been classified by the National Bank of Ukraine in the group of systemically important banks of Ukraine. Out of the network of 81 branches, between 50 and 60 remain permanently open, while the operation of the bank continues in regions not affected by military actions.

In the first quarter of 2022, PKO Bank Polski continued to offer settlements for individual clients who have active mortgage loans in Swiss francs. Since the start of the programme, the clients have filed almost 25,000 applications for mediation. The process is running smoothly and has resulted in 13,000 positively resolved mediation proceedings, which are awaiting to be finalized. The share of mediation ended positively as compared to mediation proceedings ended in total is approx. 78%.

In the first quarter of 2022, the PKO Bank Polski Group was consistently developing modern services and products, including the ones offered via remote channels. The number of active users of the IKO mobile app is systematically growing and at the end of March 2022 it exceeded PLN 6.4 million, which means an increase by 18% y/y/ In the first quarter of 2022, a record number of transactions carried out in the IKO app was also reported. It approximated 140 million, which means a growth of 44 percent y/y.

PKO Bank Polski is consistently building the eco-system of out-of-bank services in remote channels, in particular in the IKO mobile app. In the first quarter of 2022, it allowed its clients to verifying with the use of IKO app the identity of a bank adviser calling the client. Thanks to the innovative solution, clients’ safety has been greatly improved ˗ they can make sure that they are really talking to a bank employee and are not the victims of a fraud. At the beginning of March, the Bank was the first one at the Polish market to introduce a possibility of purchasing electronic highway toll in the e-TOLL system, thanks to which the clients will be able to use paid motorway sections in a comfortable way: A2 (Konin-Stryków) and A4 (Wrocław-Sośnica).

The Bank is increasing the share of remote channels and bots in client servicing and sale. In the first quarter of 2022, the share of digital sale for consumer loans was 79 percent, while the number of applications submitted by clients via iPKO website and the IKO mobile app was 320,000, which means a growth by 68 percent y/y. Over 60% of sale of investment funds is made via PKO Inwestomat, while the programme of settlements is carried out remotely in 85%.

At present, PKO Bank Polski has 12 conversation bots using artificial intelligence; the oldest one has been working for over two years. The number of conversations held by robots has exceeded 9.5 million. The robots service the incoming helpline, the outgoing helpline and the IKO voice assistance, while 100% of the incoming traffic at the bank's costumer service line is first handled by a bot which precisely directs the clients to consultants. The progressing robotisation is one of the pillars of the digital transformation of PKO Bank Polski. The Bank has already robotised 185 business processes, where the total number of completed operations exceeded 100 million.

The PKO Bank Polski Group supports Poland’s energy transformation and reduces negative impact of its operating activities on the environment. The Bank's actions are reflected in the improvement of ESG ratings. The values of ratings at the end of the first quarter of this year were: 3.7 (FTSE Russell), BBB (MSCI), 20.7 (Sustainalytics), 47 (V.E). In April 2022, the MSCI rating was raised to the A level. The most recent project with respect to the support for green energy is the co-financing by the Bank of the largest photovoltaic farm in Poland and in this part of Europe. The Zwartowo farm has a surface area of 300 hectares and is located in Pomorze, in the Wejherowo poviat. Eventually, the farm will deliver green energy to approx. 153,000 households.

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