Strong growth in retail business, investments in new products and taking advantage of favourable market conditions resulted in a consolidated profit of PLN 4,4 billion. PKO Bank Polski has reported very good results and summarised its activities in the first half of this year.

2024.08.22

· In the first half of 2024, the PKO Bank Polski Group capitalised on favourable market conditions, generating a ROE of 19,0 per cent and an interest margin of 4,48 per cent while maintaining cost efficiency. The C/I ratio improved further to 30,5 per cent.

· The bank recorded significant growth in the retail segment, with an increase of +14 per cent in retail loans, +39 per cent in mutual funds and +7 per cent in retail deposits y/y.

· The Group continued to expand its operations in a controlled and measured manner. At the end of June, total assets reached PLN 507 billion, representing a y/y growth of +10,1 per cent.

· The Group is investing in growth: digital mortgage and life insurance will soon be available to a wide range of customers.

· The value of financing provided to customers, of which there are already more than 12 million, increased by 9,3 per cent to reach PLN 279 billion. Similarly, savings accumulated increased by 14,4 per cent to reach PLN 562 billion.

· In the first half of 2024, income from our core business increased by 18,1 per cent. Net interest income continued to grow by 19,4 per cent y/y, driven by further improvements in the interest margin. Net fee and commission income increased by 15,5 per cent y/y.

· The bank proceeded with its digital transformation by developing mobile banking:

- the number of active IKO mobile apps, as of June 30th this year reached 8,1 million;

- the number of transactions completed quarterly by customers in IKO exceeded a quarter of a billion for the first time in history.

· Consequently, consolidated net profit of PKO Bank Polski Group reached PLN 4,395 billion, despite the substantial impact of legal costs associated with CHF mortgage loans and the effect of suspension of mortgage repayments (without the above-mentioned extraordinary events, the profit would have amounted to PLN 6,8 billion net).

The net profit of the PKO Bank Polski Group in H1 2024 amounted to PLN 4,4 billion, and PLN 6,8 billion after excluding CHF provisions and the effect of suspension of mortgage repayments. The bank steadily increased the scale of its operations and grew income from its core business by more than 18 per cent y/y. Assets increased to PLN 507 billion at the end of the first half of the year and the number of customers exceeded 12 million. The bank demonstrated excellent cost efficiency and high profitability. The cost to income (C/I) ratio improved to 30,5 per cent and ROE was 19 per cent. The cost of risk ratio reached 39 bps and NPL stood at 3,54 per cent. The PKO Bank Polski Group developed new products such as digital mortgages and life insurance and recorded solid growth in the retail segment (e.g., in loans and investment funds and consumer loans).

We are making the most of favourable market conditions, as can be seen in the very strong business and financial results for the first half of the year. The 14 per cent year-on-year increase in retail loan sales, +39 per cent year-on-year in investment funds and our investments in new products for customers, such as digital mortgages, provide an excellent base for further growth. From the outset, the aim of the new management was to focus on the customer perspective and to gradually activate the potential of the PKO Bank Polski Group. I am also pleased with the development of our digital services platform and the IKO mobile app, which is already a key distribution channel for services – not only of the bank, but more broadly of the entire Capital Group. We have a new strategy ahead of us and further ambitious goals to achieve, and the very good results from the first half of 2024 are a good prognosis for the future,"

said Szymon Midera, the CEO of PKO Bank Polski.

Solid growth in retail business, a pilot programme for the digital mortgage, new life insurance

In the first half of this year, the PKO Bank Polski Group achieved robust results across all business segments. The retail segment demonstrated particularly strong performance. The bank recorded y/y growth of 14 per cent in retail loans, 39 per cent in investment funds and 7 per cent in retail deposits. Furthermore, the bank expanded its range of modern products by extending a pilot programme for the digital mortgage and introducing the new PKO Życie insurance. The average daily sales of this product in the second quarter were 350 units.

A quarter of a billion of IKO transactions in the second quarter of the year

PKO Bank Polski has systematically and consistently increased the usage of remote channels for both service and sales, benefitting its customers. The number of IKO mobile apps has reached 8,1 million. In the second quarter, IKO recorded a total of 252 million transactions, surpassing the previous record of a quarter of a billion transactions in a three – month period. Additionally, the bank has expanded its platform of value added services (VAS). IKO and iPKO offer customers access to a variety of services that reach beyond traditional banking. On average, customers use e-banking channels to purchase 4 million services per month.

A stable volume of corporate customer financing

In the first half of this year, the bank recorded stable volumes in customer financing (+3,4 per cent y/y) in the corporate segment in anticipation of an increase in the level of investment in the domestic economy. In contrast, the bank recorded a significant increase of over 20,6 per cent y/y in leasing and factoring.

19 per cent increase in net interest income, 15,5 per cent increase in net fee and commission income

The consolidated net profit of PKO Bank Polski after the first six months of 2024 amounted to 4,4 billion, despite a charge to the result for legal risks related to CHF mortgage loans and suspension of mortgage repayments. Return on equity (ROE) stood at 19 per cent and, excluding extraordinary items, 28,6 per cent. In the first six months of the year, PKO Bank Polski also recorded a significant increase in income from core activities exceeding 18 per cent, including an over 19 per cent increase in net interest income. The interest margin amounted to 4,48 per cent, including the cost of credit holidays. Net fee and commission income increased by 15,5 per cent to PLN 2 558 million, driven primarily by improved income from the capital market and card business.

C/I of 30,5 per cent.

The bank's performance was enhanced by a commitment to cost discipline and growth in business scale. The cost to income ratio improved to 30,5 per cent. The Group's assets reached PLN 507 billion, while the number of customers exceeded 12 million – enabling improved efficiency through economies of scale.

Effective risk management and a solid capital position

The NPL ratio, which provides insight into the quality of the loan portfolio, showed a low level of 3,54 per cent at the end of H1 2024. The cost of risk was 0,39 per cent, reflecting a further improvement in asset quality and an increase in provision coverage. The Bank also maintained a robust capital position. At the end of June, the Group's total capital ratio (TCR) was 17,89 per cent and Tier 1 was 17,15 per cent, both of which exceeded the regulatory minimums. The Bank also developed the use of artificial intelligence and machine learning mechanisms in the assessment of credit risk, both in the area of credit decisions and in support of recovery and monitoring of credit portfolios.

Presentation of 1H2024 financial results - PDF file - click here

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PKO Bank Polski is the undisputed leader of the Polish banking sector, and the value of its assets increased to PLN 507 billion at the end of the first half of 2024. The net profit of the PKO Bank Polski Group amounted to PLN 4.4 billion. The number of customers exceeded to 12 million. The Bank is the basic provider of financial services for all customer segments, achieving the highest market shares in the deposits, loans and investment funds market of individuals. Thanks to the development of digital tools, including the IKO application, which has been activated by customers 8.1 million times, PKO Bank Polski is the most mobile bank in Poland.

Michał Zwoliński

Press Center

prasa@pkobp.pl

+48 22 521 46 36