Further improvement in results of the Capital Group PKO Bank Polski

Consolidated net profit after three quarters of 2011 years amounted to 2,855.3 million PLN, and individual net profit 2,896.7 million PLN. On an annual basis increases of 21.5 percent and 17.3 percent were recorded, respectively. The profit achieved during this period was influenced by dynamic growth in net interest income, primarily due to higher interest income and tight control of costs.

- In the last quarter the Capital Group of PKO Bank Polski managed to improve on the record results of the second quarter. The increase in the deposit base, the high level of equity and the issue of bonds covered the bank's growing financing needs, which in turn have followed the increase in lending. The Bank continues a stable and secure business development while maintaining high efficiency and solvency indicators, and remains a stable partner for its customers - said Zbigniew Jagiełło, CEO of PKO Bank Polski.

The Capital Group also noted its best ever effectiveness of activities, measured by the C/I ratio. It reached its lowest level in its history, at 39.5 percent (an improvement of 1.5 percentage points versus the same period last year). Thanks to the high growth in profits the financial efficiency of Group PKO Bank Polski increased significantly. In the 3rd quarter of 2011 net ROE for the Group amounted to 17.1 percent, and increase of 3 p.p.YOY. Net ROA in this period amounted to 2.1 percent YOY and was higher by 0.3 p.p.

Group PKO Bank Polski maintains a conservative policy on credit risk. Net write-downs in the first three quarters of 2011 amounted to 1,369.1m PLN and in relation to the end of September 2010 fell by 5 percent. In the third quarter of this year, the result due to the write-downs amounted to 487.7m PLN, 12.7 percent lower than in the third quarter of 2010. The credit impairment ratio remained stable and amounted to 8.1 percent.

Total assets of Group PKO Bank Polski at the end of the third quarter of 2011 amounted to 187 billion PLN. The volume of loans and credits to customers and the securities portfolio  were the main contributors to the 10.2 percent increase in relation to the end of 2010.

The capital adequacy ratio measuring the bank's solvency has been maintained at a high, safe level. At the end of the third quarter of 2011 the consolidated capital adequacy ratio was 12.3 percent. With respect to core funds, after the third quarter of 2011 the core Tier 1 capital adequacy ratio stood at 11.2 percent.

Capital Group PKO Bank Polski is distinguished by very good liquidity, built on a stable source of funding: primarily deposits, but supplemented by funds from the issue of debt securities. The loan/deposit ratio at the end of the third quarter of 2011 was 97 percent and with regard to long-term financing amounted to 89.3 percent.

During the first nine months of this year, PKO Bank Polski reported an increase in loan and deposit volumes. Thus it strengthened its market position as the largest Polish retail and  and corporate bank. It also retained its leading position in the market for the sale of mortgage loans. In the third quarter of this year sales of mortgages amounted to 2.1 billion PLN.

In August of this year, the Bank enriched the range of attractive deposit products with daily capitalization, which met with great interest from our customers. It has also maintained  high interest in its new current accounts. The total sales volume at the end of the third quarter of 2011 reached over 444,000 new accounts.

At the beginning of the third quarter PKO Bank Polski introduced pro-efficiency changes in the organization of the Group. Customer Asset Management was transferred from the bank's Brokerage House to PKO TFI. It was also decided to liquidate the company CFP, which is the owner and administrator of the premises of the Bank's head office. There was an improved financial performance of the following members of the Group: Kredobank, PKO BP Bankowy PTE and IFS. PKO TFI has strengthened its market position, moving to the third place in terms of net asset value. At the same time PKO BP Bankowy OFE at the end of September occupied first position in terms of the three-year rate of return published by the Polish Financial Supervision Authority.

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Polish PKO BP is the leader of the Polish banking sector. According to the calculations of Intelace Research, with assets of 42.232 billion euros at the end of 2010, it was also the largest bank in Central and Eastern Europe. Consolidated net profit of PKO Bank Polski after 3 quarters of 2011 amounted to 2.855 billion PLN. The Bank also occupies a leading position in sales of mortgages. PKO Bank Polski is regularly awarded in prestigious rankings. The Bank’s mortgage offer, in terms of adapting to untypical customer expectations, has been recognized as the best on the market by financial comparison engine Comperia.pl. The Bank is also praised for its flexibility to offer these loans, which may be granted to cover a variety of purposes, as well as for being the best savings and investment bank. As many as five products of PKO Bank Polski: mortgages, cash loans, accounts, deposits and credit cards, have been awarded by the magazine Reader's Digest with "Product of the Year 2010" certificates as the most often and most frequently chosen products by customers. The Bank has won the "Golden Banker" award as the best in the loan market and the loan market for firms, has also won the contest "Entrepreneur-Friendly Bank", holds the certificate "Customer-Friendly Company" and is the best commercial bank according to Warsaw Business Journal. PKO Bank Polski’s innovative solutions for corporate banking were awarded in the Europrodukt  competition. The bank received three statuettes in the last edition of the competition in the product category – payroll and consolidated account and escrow account. According to analysis by the research firm MillwardBrown SMG/KRC, among the surveyed financial institutions PKO Bank Polski enjoys the highest confidence – three quarters of respondents trust its financial stability. PKO Bank Polski is also the strongest bank in the country in terms of image, as shown by its position as leader in the "Top Brand"  ranking compiled by Press magazine. It is also the most valuable brand on the Polish banking market. Specialists from The Banker magazine estimated the value of its brand at 1.5 billion USD and in Rzeczpospolita "Polish Brands 2010" ranking  its value was set at 3.6 billion PLN. Recently the Institute for Accounting and Taxes awarded the 2010  Annual Report of PKO Bank Polski with the top prize in the competition "Best Annual Report" in the banks and financial institutions category. Moreover, the charity work of PKO Bank Polski has been recognised by the Academy for the Development of Philanthropy in Poland, which awarded the Bank and Inteligo Financial Services with the statuette "Benefactor of the Year 2010" and by the Donors' Forum in Poland which gave the Bank the Special Award for its long-term and consistent support for socially useful activities.