PKO Bank Polski summarizes the financial results for 2022

2023.03.10

The net profit of the PKO Bank Polski group in 2022 amounted to over PLN 3,3 billion, and the profitability measured by return on equity (ROE) reached the level of 9.7 percent.
In the year burdened with the effects of the war in Ukraine and increased inflation, extraordinary items had a key impact on the financial results of PKO Bank Polski.
In a complicated external environment, the Group increased the scale of its operations. Its assets amounted to PLN 431 billion, the number of customers increased to 11,7 million, and the increase in income from core activities amounted to 17,5 percent.
The bank showed high cost effectiveness. The reported cost-to-income ratio (C/I) amounted to 45,3 percent.
In 2022, the Bank continued its digital transformation by introducing new functions in the IKO banking mobile app and dynamically increasing the share of remote channels and bots in customer service. The number of active IKO applications at the end of 2022 reached the level of 7,2 million.

In 2022, the PKO Bank Polski Group generated a net profit of over PLN 3,3 billion. Despite the complicated external conditions and the consequences of the war in Ukraine caused by Russia, the Group increased the scale of its operations. Its assets reached the level of PLN 431 billion, the number of customers increased to 11,7 million, and the increase in income from core activities exceeded 17,5 percent. The bank also demonstrated high cost effectiveness. The reported cost-to-income ratio (C/I) amounted to 45,3 percent, and the C/I adjusted for the impact of extraordinary events amounted to 33,8 percent. There was also a further improvement in the cost of risk to the level of 53 bp. Extraordinary items had a key impact on the financial results of PKO Bank Polski. From the first moments of the war in Ukraine, the PKO Bank Polski Group implemented and financed a number of aid activities addressed both to refugees and employees of the Group's companies operating in Ukraine.

Solid business result surrounded by a number of challenges

The results of PKO Bank Polski in 2022 were affected by extraordinary regulatory burdens.

- 2022 has clearly confirmed that PKO Bank Polski is a pillar of the Polish banking system and an institution perfectly prepared also for more difficult times. Our experience and scale of operations, supported by the professionalism of our employees, allowed us to adjust our activities to the current needs of customers and the entire national economy. After absorbing the effects of extraordinary events, we recorded a result of PLN 3 billion 333 million. It was possible thanks to a strong increase in income from core activities and cost and risk control

- said Paweł Gruza, acting CEO of PKO Bank Polski.

Improvement of the result on business activities

In 2022, the cost-to-income ratio (C/I) amounted to 45,3 percent, and the C/I adjusted for the impact of extraordinary events amounted to 33,8 percent. ROE amounted to 9,7 percent. The net result in 2022 was positively influenced by improvement of the result on business activities which reached the level of PLN 17,3 billion. This was mainly due to an increase in net interest income by over PLN 1,9 billion, despite the recognition in the third quarter of 2022 of the effects of credit holidays. The improvement in the results on business activities was also influenced by an increase in commissions and fees by PLN 574 million. This is the result of higher results on lending, insurance, leasing, cards, brokerage and currency exchange transactions.

Further increase in the scale of operations

The value of assets of the PKO Bank Polski Group increased over the last year by PLN 13 billion to the level of PLN 431 billion. Customer deposits increased to approximately PLN 340 billion (PLN +17 billion y/y), mainly as a result of an increase in retail and private banking deposits. This took place simultaneously with the increase in the number of customers to 11,7 million and the 0,5 million increase in the number of new accounts. The PKO Bank Polski Group also maintained its leading position in the market of investment funds for individuals and the sale of mortgage loans. The share of private individuals in the market of investment funds increased to 20,6 percent. Financing granted to customers amounted to approximately PLN 246 billion. The bank also recorded a significant increase (+13,5 percent) in financing in the corporate sector.

Risk costs under control and maintaining a strong capital position

The NPL ratio describing the quality of the loan portfolio at the end of 2022 was at the level of 3,8 percent. The cost of risk amounted to 0,53 percent. The Bank also maintained a safe capital and liquidity position. The total capital ratio of the Bank's Group amounted to 17,78 percent, and the Tier 1 ratio reached the value of 16,65 percent, clearly above the regulatory requirements enabling the payment of dividends.

Development of mobile services

PKO Bank Polski has been for years at the forefront of banks offering modern solutions for its customers. The number of active IKO apps increased by 1,1 million over the last year and exceeded the record 7,2 million on the Polish banking market. The IKO voice assistant made over 2,5 million conversations with customers. The number of conversations conducted via all voicebots amounted to over 18 million, and in 2022 alone there were 10,4 million of such conversations. In 2022, PKO Bank Polski, in response to the growing interest of customers in financing payments for purchases in the "buy now, pay later" formula, also introduced the "PKO Pay later" service.

New strategy and emphasis on ESG

For the PKO Bank Polski Group, customers are always the most important factor, which was reflected in the new Strategy for 2023 – 2025 announced in December 2022. Guided by their expectations, the Group will continue to strive to improve its offer and service by implementing solutions based on innovations, technology and sustainable development. Among the key goals for the coming years is also to support the Polish economy in the green transition. PKO Bank Polski wants to become the leader of the ESG transformation in the domestic banking sector. The priority is organic growth and maintaining the dividend policy. The Group will also actively look at acquisition opportunities. The Bank wants to continue to be a business partner for Polish companies, to help them expand internationally and find future markets. One of the important goals is also to help Ukraine rebuild.

Support for Ukraine

From the first moments of Russia's aggression against Ukraine, the PKO Bank Polski Group has been involved in aid activities, providing multidimensional support to refugees.

- In total, in 2022, the PKO Bank Polski Foundation provided approximately PLN 12 million of financial assistance from its own funds. In addition, the support also included the purchase of medical devices, preparation of special banking services for Ukrainians, organization of transport for refugees and assistance for KredoBank employees and their families. The Ukrainian KredoBank, which is part of the PKO Bank Polski Capital Group, donated a total of UAH 15,8 million (approximately PLN 2 million) for humanitarian activities related to the war. At the same time, it should be emphasized that the financial and organizational situation of KredoBank at the end of 2022 was stable,

added Paweł Gruza.

The bank offered the citizens of Ukraine a package of business facilities, for example simplified the process of opening a bank account. By the end of 2022, almost 367 thousand bank accounts were opened in a special offer. Citizens of Ukraine could also count on a quick and free issuance of a temporary account card, as well as no fee for keeping an account and ordering foreign cash transfers to banks in Ukraine. PKO Bank Polski, as the only one in Poland, also made it possible to exchange hryvnia for PLN at the exchange rate set by the National Bank of Ukraine. The exchange program was completed on September 9 2022. 103 thousand Ukrainian citizens exchanged 728 million UAH. The service was available in 100 bank branches.

Attractive deposit offer - successive increase in interest rates on deposits

PKO Bank Polski, operating in an environment of high inflation and high interest rates, met the expectations of customers. It prepared and successively updated the deposit offer, introducing new products and increasing the interest rates on the existing ones. As part of the offer for individual customers in 2022, it introduced a deposit for new funds, the interest rate of which was increased several times and at the end of December amounted to a maximum of 7.5% for a period of 3 months and 6.5% for a period of 12 months. High sales of deposits to individuals allowed to rebuild the share in the term deposit market, which at the end of 2022 amounted to nearly 24,2 percent.

CHF loan portfolio – the number of positively completed mediations is growing

In 2022, PKO Bank Polski continued to offer settlements for individual customers with active mortgage loans in Swiss francs. The total number of settlements concluded by December 31, 2022 amounted to 20 396 of which 19 786 were concluded in mediation proceedings and 610 in the course of court proceedings. In addition, in order to limit the interest rate risk, , the bank from the beginning of the settlement program, offers to the borrowers the possibility of interest at a fixed interest rate for 5 years.

***

PKO Bank Polski is the undisputed leader of the Polish banking sector, with the value of its assets amounting to PLN 431 billion. In 2022, the bank generated PLN 3.3 billion in net profit. The company serves 11.7 million customers. It is the basic supplier of financial services for all customer segments, achieving the highest shares in the market of deposits, loans and in the market of private investment funds. Thanks to the development of digital tools, including the IKO application, which is actively used by 7.2 million customers, PKO Bank Polski is the most mobile bank in Poland.

Michał Zwoliński

Press Center

prasa@pkobp.pl