Net interest income

Financial Results of
the PKO Bank Polski Group
for 1Q 2016
9 May 2016
Highlights of Business Initiatives in Q1 2016
PKO Bank Polski Supports 500+ Programme
PKO Bank Polski was the first Polish bank to join the governmental “Family 500+” programme. Thanks to this, since April 1, customers have
been able to fill in an application for a child rearing benefit available in iPKO and Inteligo. Simultaneously with the start of the programme, we
launched a PKO Account for Zero on preferential terms for the beneficiaries of the programme and is about to launch a new long-term
savings plan “Capital for Child”.
HCE Contactless Payments in IKO App
In January 2016, PKO Bank Polski enhanced its IKO mobile app by adding the HCE technology, which supports contactless payments. The
new functionality was recognised by the Jury of the eDukat 2016 Competition. PKO Bank Polski won a prize in the category “Event of the
year in the Non-Cash World” for the implementation of HCE contactless payments in the IKO Mobile app. What was appreciated was the
scale at which IKO users use this transaction method as well as the convenience and security of the solution.
Loan Guarantees for Innovative Enterprises
PKO Bank Polski has entered into an agreement with Bank Gospodarstwa Krajowego concerning loan guarantees for innovative Small and
Medium-Sized Enterprises. Guarantees will be financed from the Guarantee Fund of the Innovative Economy Operating Programme (POIG).
The available funding pool in PKO Bank Polski amounts to PLN 55m, which will be sufficient to provide guarantee for loans in excess of PLN
90m. Guarantees will be issued commission-free. They will be available to businesses from May 2016.
Top Polish Companies Choose PKO Bank Polski’s Corporate Banking
March 1 marked the launch of a new campaign promoting the corporate banking business of PKO Bank Polski under the slogan “Together
we see more”. Our offer is endorsed by the CEOs of Polish bluechips, banking with the leader of the Polish financial sector (now PKO Bank
Polski serves nearly 15,000 corporate and merchant banking customers). We are constantly expanding our range, responding to the
development needs of Polish companies. In connection with the newly created opportunity to trade with Iran, PKO Bank Polski was the first
Polish bank to offer services for businesses interested in this direction. We have exchanged SWIFT keys with several Iranian banks, which
has paved the way for financial settlements between Poland and Iran.
PKO Bank Polski’s Brokerage House Wins ‘Bulls and Bears’ Competition
PKO Bank Polski’s Brokerage House won the title of the “Brokerage House of the Year” in the 22nd edition of the “Bulls and Bears”
Competition organized by the “Parkiet” Stock Exchange Newspaper. Last year, our Brokerage House was among the most active ones on the
equities and bonds markets. It was the leader in terms of the number and the value of transactions on the capital market. The retail range
was expanded by a modern and convenient tool for investing on foreign markets.
PKO Bank Polski and Microsoft Work Together on Web Security
PKO Bank Polski is the first bank in Europe to start cooperation with Microsoft within the Enterprise Customers Cyber Threat Intelligence
Program (ECCTIP). Its aim is to enhance security in cyberspace by exchanging information on potential threats. As a result of the letter of
understanding signed, it will be possible to react more quickly and effectively to dangerous events in the web.
2
Executive summary of financial performance
In 1Q 2016 the net profit of PKO Bank Polski Group amounted to PLN 639 mn and despite of „bank tax” was maintained at similar level as
compared to previous year, while increased by 43.7% q/q
On the level of consolidated net profit in 1Q 2016 largely influenced a tax on certain financial institutions ("bank tax") introduced in February
2016, which in this period amounted to PLN 148 mn. In comparable terms the net profit of the Group increased by 21.6% y/y and 77.1% q/q
The 1Q 2016 consolidated result on business activity of PLN 2.7 bn (+4.1% y/y) was determined by the increase in net interest income
(+10.9% y/y), mainly due to reduced interest expense of 29.3% y/y
Administrative expenses were 3.2% lower as compared to previous year mainly thanks to decrease in overhead costs and depreciation, while
personnel costs were maintained at similar level
Strengthening a leading market position
− asset base increased to PLN 267.1 bn (+4.1% y/y) with net loans growing to PLN 187.9 bn (+3.0% y/y), funded with customer deposits, which
rose to PLN 194.9 bn (+9.2% y/y)
− maintenance of market share in loans (17.6%) and deposits (17.3%)
Portfolio quality improved considerably
− cost of risk declined by 18 bp y/y to reach 72 bp on annual basis
− coverage ratio increased by 1.8 pp y/y to reach 64.6%
− NPL ratio declined by 0.2 pp. y/y to reach 6.6%
High operational efficiency retained
− Cost to Income ratio (C/I) in 1Q 2016 at 50.7% excluding bank tax (56.2% including tax))
− Return on Equity (ROE) at 9.3% excluding bank tax (8.8% including tax)
− Return on Assets (ROA) at 1.1% excluding bank tax (1.0% including tax)
− Net interest margin in 1Q 2016 at 3.12%
Solid liquidity and improving of capital strength
− Loans / Stable funding resources ratio at 84%
− Total capital adequacy ratio at 15.4% and Tier1 Capital ratio at 14.1%; (for the Bank 16.3% and 14.9% respectively) - an increase of 2.3 pp. y/y
resulting from the growth of total own funds of 12.4% y/y and decrease in the requirements as regard total capital requirements of 4.5% y/y.
The fulfilment of the additional capital requirements of PFSA allows to continue dividend policy in subsequent years
3
Financial summary
1Q'16
Net interest income
Change
q/q
Q4'15
1 671
+10.9%
1 853
1 856
-0.2%
635
679
-6.4%
635
694
-8.4%
2 685
2 581
+4.1%
2 685
2 791
-3.8%
-1 360
-1 405
-3.2%
-1 360
-1 924
Net impairment allowance
-382
-374
+2.3%
-382
-365
+4.7%
Bank tax
-148
0
x
-148
0
x
Net profit
639
647
-1.3%
639
444
+43.7%
Assets
267.1
256.6
+4.1%
267.1
266.9
+0.1%
Net loans
187.9
182.4
+3.0%
187.9
190.4
-1.3%
Deposits
194.9
178.4
+9.2%
194.9
195.8
-0.5%
Stable financial resources
222.8
212.7
+4.7%
222.8
224.1
-0.6%
31.0
28.3
+9.8%
31.0
30.3
+2.5%
Result on business activity
Balance sheet
(PLN bn)
Q1'16
1 853
Net F&C income
P&L items
(PLN mn)
Change
y/y
1Q'15
Administrative expenses
Total equity
*
-29.3%
*) In Q4 2015 one-off costs incurred in the amount of PLN 479.9 mn (PLN 337.9 mn charge for BFG in connection with the bankruptcy SK Bank and PLN 142.0 mn payment to
the Borrower Support Fund).
Excluding the above one-offs, administrative expenses in 1Q 2016 decreased of 5.8% q/q.
4
Key performance indicators
1Q'16
Key financial
indicators
Quality of loan
portfolio
(1)
(2)
(3)
(4)
(5)
Change
y/y
Q1'164)
Q4'154)5)
Change
q/q
ROE net (%)
8.8
11.5
-2.7 pp.
8.4
5.9
+2.5 pp.
ROE net (%) excluding bank tax
9.3
11.5
-2.2 pp.
10.3
5.9
+4.4 pp.
ROA net (%)
1.0
1.3
-0.3 pp.
1.0
0.7
+0.3 pp.
ROA net (%) excluding bank tax
1.1
1.3
-0.2 pp.
1.2
0.7
+0.5 pp.
C/I (%)
57.0
49.4
+7.6 pp.
56.2
68.9
-12.7 pp.
C/I (%) excluding bank tax
55.6
49.4
+6.2 pp.
50.7
68.9
-18.3 pp.
NIM1) (%)
3.08
3.36
-0.29 pp.
3.12
3.12
+0.01 pp.
NPL ratio2) (%)
6.60
6.79
-0.19 pp.
6.60
6.59
+0.01 pp.
Coverage ratio3) (%)
64.6
62.8
+1.8 pp.
64.6
63.3
+1.3 pp.
72
90
-18 pb.
70
72
-1 pb.
TCR (%)
15.44
13.11
+2.33 pp.
15.44
14.61
+0.84 pp.
Tier 1 capital ratio (%)
14.11
11.84
+2.27 pp.
14.11
13.27
+0.84 pp.
Cost of risk (bp.)
Capital position
1Q'15
Net interest margin = net interest income of last 4 quarters / average interest bearing assets at the beginning and the end of the period of last 4 quarters
(formula consistent with that applied in the PKO Bank Polski Group Directors’ Report)
Share of loans with recognised impairment in total gross loans
Coverage of loans with recognised impairment with impairment allowances
Ratios on quarterly basis; ROE, ROA, NIM and cost of risk – annualised
The level of Q4’15 ratios affected by one-off costs in the amount of PLN 479.9 mn (PLN 337.9 mn charge for BFG in connection with the bankruptcy SK Bank
and PLN 142.0 mn payment to the Borrower Support Fund)
5
Business volumes
Gross loans (PLN bn)
Customer deposits (PLN bn)
+2.7%
+9.3%
+0.6 %
190.3
192.8
193.5
194.2
195.5
1Q'15
1H'15
3Q'15
2015
1Q'16
Gross loans by business lines (as at 31.03.2016)
174.5
174.9
174.2
1Q'15
1H'15
3Q'15
-0 .1%
191.0
190.7
2015
1Q'16
Customer deposits by business lines (as at 31.03.2016)
60%
100%
50%
90%
Mortgage
96.2
Share in deposits portfolio
Share in loan portfolio
80%
40%
30%
52.1
Corporate
20%
23.6
23.6
10%
SME
Retail and private banking
0%
-5%
0%
5%
Volume growth rate (y/y)
10%
15%
70%
Retail and private banking
131.8
60%
50%
40%
Corporate
30%
20%
SME
10%
19.6
0%
-5% 0%
5%
10%
15%
39.3
20%
25%
30%
35%
40%
45%
Volume growth rate (y/y)
6
PKO Bank Polski market share
Mutual funds market share
Loans market share (%)
25.0
23.0
22.9
22.9
22.9
PLN bn
8.2
320
22.8
17.8
17.8
17.5
17.8
240
1
17.6
200
Total
15.0
12.9
12.9
12.4
13.0
3Q'15
4Q'15
12.6
20.0
15.0
21.4
21.1
Private individuals
17.5
17.5
16.8
Total
11.8
12.0
255
23.8
23.6
6.0
3.0
80
2.0
40
1.0
0.0
2Q'15
3Q'15
4Q'15
1Q'16
20.7
20.7
17.9
14.0
1
The decrease in market share of corporate loans by 0.2 pp. q/q mainly due
to lower market share in loans of non-monetary financial institutions
2
17.3
12.7
2
11.0
5.0
2Q'15
7.0
5.0
The market share of deposits lower by 0.6 pp. q/q due to decrease in market
share of corporate deposits (-1.3 pp. q/q), while maintaining market share
in retail deposits
3
1Q'15
8.0
4.0
1Q'15
Institutional entities
10.0
252
9.0
Total assets of mutuals funds (PLN bn)
PKO TFI market share (%)
Financial assets of private individuals *
24.8
24.6
24.2
21.6
232
7.3
0
1Q'16
Deposits market share (%)
25.0
230
7.3
120
10.0
2Q'15
220
3
160
Institutional entities
1Q'15
%
7.9
280
Private individuals
20.0
8.1
3Q'15
4Q'15
1Q'16
The increase in PKO TFI’s assets under management by 3.2% y/y with
maintaining the third market position
*) Share in the retail deposits market , including assets of private individuals in PKO TFI
7
2016 macroeconomic and banking sector outlook
GDP
Consumption
Investments
% y/y
% y/y
2013
2014
2015
2016F
1.3
3.3
3.6
3.5
0.2
2.6
3.1
4.0
% y/y
-1.1
9.8
5.8
2.9
Public sector deficit1) % GDP
-4.0
-3.3
-2.6
-2.6
Public debt2)
% GDP
53.3
48.1
49.0
50.0
%
0.9
0.0
-0.9
-0.4
Unemployment rate
% eop
13.4
11.4
9.8
8.9
WIBOR 3M
% eop
2.71
2.06
1.73
1.70
CPI
Reference rate
EURPLN
USDPLN
% eop
PLN eop
PLN eop
2.50
2.00
1.50
1.50
4.15
4.26
4.26
4.40
3.01
3.51
3.90
4.31
13.3
ESA2010
According to domestic methodology.
9.7
9.7
10.2
9.2
8.1
8.6
5.9
5.5
6.6
2010
16.0
2011
9.4
8.8
7.6
5.8
5.7
4.2
7.3
6.4
5.0
7.3
4.5
2012 2013 2014
Total
Private individuals
Instututional entities
2015
2016F
Loans- FX adjusted
growth rate (%)
16.2
11.5
7.4
7.1
11.0
4.5
4.7
1.1
2010
7.5
6.5
6.8
5.9 4.4
2011
-3.4
1)
2)
Deposits - FX adjusted
growth rate (%)
2012
-3.9
3.6
2.5
2013
5.8
4.6
2014
7.0
7.7
6.1
4.5
4.4
6.4
6.1
5.1
2015
2016F
Total
Residential Mortgages
Consumer
Institutional entities
Source: Bank’s forecasts
8
Financial results
9
Result on business activity
Split of result on business activity
PLN mn 1Q'16
7.3%
8.9%
23.7%
69.0%
1Q'16
26.3%
64.7%
1Q'15
Net interest income
7.3%
8.7%
23.7%
24.8%
69.0%
Q1'16
Net F&C result
Net interest income
1Q'15
Change
y/y
Q1'16
Q4'15
Change
q/q
1 853
1 671
+10.9%
1 853
1 856
-0.2%
Net F&C result
635
679
-6.4%
635
694
-8.4%
Net other income
197
231
-14.8%
197
242
-18.5%
Result on financial operations
and didvidens
42
76
-44.2%
42
42
+1.2%
Net FX result
94
72
+30.7%
94
110
-14.3%
Net other operating income
60
83
-27.5%
60
90
-32.9%
2 685
2 581
+4.1%
2 685
2 791
-3.8%
66.5%
Q4'15
Net other income
Result on business activity
10
Net interest income (1)
Interest income and expense (PLN mn)
and WIBOR 3M average in the period
Net interest income (PLN mn)
3 000
4.0
3.0
2.9
3.0
2.0
2 500
3.1
3.1
3.1
1
1 671
1 683
1 818
1 856
1 853
1 500
1 000
+10.9%
1.0
0.0
5.0
5.1
4.8
4.0
3.0
3.4
4.6
Q4'15
Q1'16
Net interest margin quarterly
3.2
2.0
1.0
4.4
2
3.1
3.0
2 356
1.87
1.67
1 500
76 2
672
1.72
615
2 392
1.73
580
2.00
1.69
1.50
538
0
1.00
Q1'15
Q2'15
interest income
1
4.3
2 436
2 433
500
0
Net Interest margin and average interest rates
on loans and deposits (%)
6.0
2 000
1 000
500
Q1'15
Q2'15
Q3'15
Net interest income quarterly
2 500
2 000
2.50
2 433
Q3'15
Q4'15
interest expense
Q1'16
WIBOR 3M (%)
Growth of net interest income was at PLN 182.5 mn (+10.9% y/y) and still remains
under pressure of the low level of market interest rates (for WIBOR 1M and 3M
decline amounted to -0.30 pp. and 0.18 pp. y/y). The decline has caused the
decrease in profitability of interest-bearing assets. As a result, the main driver of
growth in net interest income y/y was the decrease in interest expense, both
customer deposits and borrowing costs
3.1
2 The net interest margin decreased by 0.3 pp. y/y to 3.1% at the end of 1Q’16 as a
1.5
1.3
1.2
1.1
1.0
0.0
1Q'15
1H'15
3Q'15
2015
1Q'16
Average interest rate on loans 12M (1)
Average interest rate on deposits 12M (1)
Net interest margin 12M (2)
result of decrease in annualized net interest income (which was influenced by the
decrease in market interest rates which directly caused a faster decline in interest
rates on interest-earning assets based mostly on market rates than the decline in
interest rates on the deposit base) accompanied by an increase in the average
volume of interest-bearing assets (mainly mortgage loans, mortgage-backed loans,
consumer loans and securities portfolio).
(1) Interest income (expense) for last 4 quarters / average net loans (deposits) at the beginning and the end of the period of last 4 quarters
(2) Net Interest income for last 4 quarters / average interest bearing assets at the beginning and the end of the period of last 4 quarters (formula consistent with that applied
in the PKO Bank Polski Group Directors’ Report)
11
Net interest income (2)
Structure of interest income (PLN mn)
31
Structure of interest expense (PLN mn)
2 433
-1.7%
2 392
95
261
-0.5%
95
266
+2.1%
1
762
33
-29.3%
50
136
2
538
-33.7%
47
90
-2.3%
2 045
1 997
576
-30.3%
402
1Q'15
Customer loans
Securities
1Q'16
Derivative hedging instruments
1Q'15
Customer deposits
Other
Other
1
The decrease in interest income of 1.7% y/y mainly due to:
− the decrease in income from loans and advances to customers (-2.3% y/y) primarily a result of a decrease in PLN interest rates and the Lombard rate that
determines interest rates on consumer loans, partially offset by an increase in
the loan portfolio
− accompanied by the increase in income from securities of PLN 5.5 mn y/y as a
result of increase in the average volume of the portfolio
2
The decrease in interest expense of 29.3% y/y mainly the result of the decrease in:
− the cost of liabilities to customers, resulting from a lower average interest rates
on deposits as a result of lower market interest rates and adjusting pricing of
deposit products,
− expenses related to own issuance of debt securities and subordinated liabilities,
associated with the decrease in the level of liabilities from the issue of bonds in
the international financial markets and the decline in debt servicing costs on the
domestic market as a result of lower market interest rates.
Interest rates on term deposits vs. WIBOR 3M (%)
7
1Q'16
Debt securities in issue
%
6
5
4
3
2
0
Q1'08
Q2'08
Q3'08
Q4'08
Q1'09
Q2'09
Q3'09
Q4'09
Q1'10
Q2'10
Q3'10
Q4'10
Q1'11
Q2'11
Q3'11
Q4'11
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Q1'14
Q2'14
Q3'14
Q4'14
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
1
average interest rate on term deposits
averege WIBOR 3M
12
Net fee & commission income
Net fee and commission income (PLN mn)
y/y
Remaining result of the insurance business
recognized in net other operating income
14
14
679
12
24
679
-6.4%
281
-14.2%
32
757
721
694
635
93
+12.7%
150
-1.2%
155
-8.9%
1Q'15
Q1'15
1
Q2'15
Q3'15
Q4'15
Q1'16
1
635
241
q/q
-8.4%
-14.5%
104
-6.8%
148
+2.2%
142
-8.2%
1Q'16
Loans & insurance
Mutual funds & brokerage
Cards
Customer accounts & other
The level of net fee and commission income in 1Q’16 was mainly affected by:
− a decrease in net fee and commission income in respect of loan insurance, mainly due to the decrease in commissions from consumer loans
insurance; in 2015 there was an increase in sales of insurance products offered by the PKO Bank Polski SA Group, the results of which are presented
in categories: the remaining result of the insurance business,
− a decrease in income from loans and borrowings, as a result of lower sales of loans,
− income from securities transactions, among others due to the decline in commission for organizing the issue,
− an increase in the result on payment cards, which was a consequence of a higher number of cards
13
Net other income
Net other income (PLN mn)
Remaining result of the insurance business
242
231
197
154
14
y/y
14
-14.8%
+127.7%
24
14
231
69
12
197
72
+30.7%
1
-18.5%
32
+35.4%
28
-57.4%
94
-14.3%
42
+1.2%
-59.2%
32
160
q/q
218
217
140
165
148
76
-44.2%
1Q'15
1Q'16
Remaining result of the insurance business
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
Net other operating income
Net FX gains
Result on financial operations and didvidens
1 The decrease in net other result by 14.8% y/y mainly due to:
− decrease in net income from financial instruments measured at fair value of PLN 32 mn y/y, determined by situation on Polish debt market,
− decrease in net other operating income of PLN 41 mn y/y (excl. change of remaining result on insurance business), mainly as the result of lower sale
and disposal of fixed assets and assets held for sale,
− increase in FX result of PLN 22 mn y/y
14
Administrative expenses
q/q
y/y
Administrative expenses (PLN mn)
One-off costs*
1405
1372
1335
1924
480
15
1360
1444
-5.8% q/q
excl. one-offs
Q1'15
Q2'15
C/I ratio quarterly
54.4
One-off effect
52.9
49.5
Q3'15
68.9
17.2
51.7
Q1'15
Q2'15
Q3'15
Q4'15
Q4'15
56.2 2
1Q'16
-3.2%
111
-1.1%
1 360
110
206
-7.5%
191
385
-8.1%
354
687
+0.3%
689
1
-29.3%
17
-75.5%
-8.5%
-6.7%
-5.2%
Q1'16
1Q'15
Personnel expense
Depreciation
BGF expenditures
bank tax effect
5.5
50.7
1 405
Employment eop (FTEs)
Bank
Group
1Q'15
25 844
28 982
1Q'16
Overheads
Texes & fees
1Q'16
25 644
29 019
Change y/y
FTEs
%
-200
-0.8%
37
0.1%
1
The decrease in general administrative expenses of 3.2% y/y was mainly determined by the decrease in overhead costs and depreciation of tangible fixed
assets, with a stable level of employee benefits.
2
The effectiveness of the PKO Bank Polski SA measured with C/I ratio in annual terms amounted to 57.0%. C/I ratio excluding tax on certain financial
institutions stood at 55.6% and was influenced by one-off events of the previous quarter.
On a quarterly basis C/I ratio (without tax) was 50.7% compared to 54.4% realized in the first quarter of 2015
*one-off costs incurred in Q4 2015 in the amount of PLN 479.9 mn (PLN 337.9 mn charge for BFG in connection with the bankruptcy SK Bank and PLN 142.0 mn payment to the Borrower Support Fund)
15
Net impairment allowance
Net impairment allowance and write-offs (PLN mn)
Q1'15
0
-100
-200
-300
-400
-500
-600
-700
-800
Q2'15
Q3'15
Q4'15
Q1'16
-90
130
-374
-375
-362
-365
-382
y/y
1Q'15
150
110
-10.5%
-64
+38.7%
-195
-11.6 %
q/q
1Q'16
-0.1%
-80
+84.1%
-89
90
90
82
78
72
72
70
-21.8%
-172
Net impairment allowance (PLN mn)
Cost of risk 12M (bp.)
-24
-374
Share of loans with recognised
Consumer loans 1)
Corporate loans 1)
impairment3)
1Q'15
1Q'16
Change y/y
7.8%
8.7%
+0.8 pp.
2.7%
2.7%
-0.0 pp.
PLN
2.3%
2.2%
-0.1 pp.
FX
3.3%
3.6%
+0.3 pp.
11.6%
10.9%
-0.7 pp.
6.8%
6.6%
-0.2 pp.
Consumer loans
Mortgage loans
Corporate loans
Total
+4.7%
-40
+2.3%
1
-382
Mortgage loans 1) 2)
Other
1
Stabilization of net impairment allowance on the yearly basis. The
increase in net write-downs on the mortgage portfolio of PLN 25 mn y/y
was offset by an improvement of write-downs on the corporate portfolio
by PLN 23 y/y.
(1) management accounts data
(2) Housing loans to individuals
(3) Calculated by dividing the gross carrying amount of impaired loans and advances to customers by the gross carrying amount of loans and advances to customers
16
Consolidated statement of financial position
Total assets
3.9%
3.7%
Other assets
Loans and advances to
customers
1.1%
5.9%
2.2% 0.9%
3.9%
31.03.15
5.4%
15.9
+57.2%
4.6
2.5
-44.8%
5.6
3.0
-46.6%
44.3
47.4
+6.9%
182.4
187.9
+3.0%
Other assets
9.5
10.4
+9.4%
Total assets
256.6
267.1
+4.1%
Loans and advances to customers
1.0% 3.5%
1.1%
11.6%
1.3%
6 9.5%
73.0%
2.5%
7.6%
31.03.16
PLN bn
Total eqiuty
0.9%
0 .9%
Other li abilities
Debt securities in issue
31.03.15
Change y/y
Derivative financial instruments
Amoun ts due fro m other banks
Subordinated liabil ities
8.4%
10.1
31.03.16
Amounts due from other banks
Securities
Cash and balances with the
Cen.Bank
31.03.15
31.03.16
Total equity and liabilities
11.0%
1.2%
Cash and balances with the Cen.Bank
Deri vative financial instruments
17.8%
17.3%
1.8%
Securities
70.3%
71.1%
PLN bn
Liabilities of insurance
acti vities
Amoun ts due to customers
1.2%
Derivative financial
instruments
Amoun ts due to banks
Amounts due to banks
Derivative financial instruments
Amounts due to customers
Liabilities of insurance activities
Debt securities in issue
Subordinated liabilities
Other liabilities
Total eqiuty
Total eqiuty and liabilities
31.03.15
21.6
6.3
178.4
2.8
13.8
2.5
3.0
28.3
256.6
31.03.16
Change y/y
20.3
3.3
194.9
2.4
9.2
2.5
3.5
31.0
267.1
-6.1%
-47.7%
+9.2%
-12.9%
-33.3%
-0.1%
+18.0%
+9.8%
+4.1%
17
Loans and deposits
Deposits(1) (PLN bn)
1Q'15 1H'15 3Q'15
178.4 179.1 178.3
Gross loans (PLN bn)
1Q'15 1H'15 3Q'15 2015 1Q'16
190.6 193.7 193.7 198.7 196.2
Currency structure of gross loans portfolio
27.8%
72.2%
1Q'15
25.2%
26 .1%
25.3%
74.8%
73.9%
1H'15
74.7%
3Q'15
2015
FX
102.3%
103.5%
24.9%
75.1%
1Q'16
PLN
Term structure of total
2015
1Q'16
195.8
194.9
1
deposits1)
28.0%
53.2%
52.1%
51.7%
52.9%
51.3%
46.8%
47.9%
48.3%
47.1%
48.7%
1H'15
3Q'15
2015
1Q'16
72.0%
Banking
sector
1Q’16
1Q'15
current+O/N
term+other
10 3.9%
97.3%
96.4%
1
85.8%
87.0%
87.7%
85.0%
84.3%
Net loans/deposits
Net loans/stable sources of funding (2)
1Q'15
(1)
(2)
1H'15
3Q'15
2015
The increase in the volume of deposits on yearly basis by PLN 16.5 bn as a result
of growth of volume of deposits of private individuals by PLN 7.3 bn y/y, corporate
deposits by PLN 5.3 bn y/y and public entities by PLN 3.9 bn PLN y/y
1Q'16
Amounts due to customers
Amounts due to customers and long-term external funding in the form of: securities issues (including funds raised through issuance under an EMTN
programme executed by PKO Finance AB); subordinated debt; and amounts due to financial institutions.
18
Funding sources
Liabilities structure
(total as at 31 March 2016: PLN 236.1 bn)
Deposit structure
(total as at 31 March 2016: PLN 194.9 bn)
Amo unts
co ncerning
insurance
activity
1%
Amo unts due
to custo mers
83%
•
•
Amounts due
to corporate
entities
24%
Deb t securities
in issue
4%
Sub o rdinated
liab ilities
1%
Other
liab ilities
1%
Amo unts due
to
b
anks
Derivative
9%
financial
instruments
1%
Amounts due
to retail
clients
71%
Amounts due
to State
budget
entities
5%
Retail and corporate deposits are the primary funding source.
Financing agreements as at the end of 1Q 2016 included:
−
−
−
−
−
−
CHF 250 mn 5Y bond issued in July 2011
USD 1,000 mn 10Y note issued in September 2012 on the US market under Rule 144A
EUR 500 mn 5Y bond issued in January 2014
multi-currency (CHF 3,645.8 mn, EUR 465.4 mn and USD 3.7 mn) credit from Nordea Bank AB opened in April 2014
CHF 224 mn 10Y subordinated loan opened by Nordea Bank Polska in April 2012
PLN 1,600.7 mn 10Y subordinated bond issued in September 2012
19
Securities portfolio breakdown
44.3
0.20
43.7
41.3
0 .25
23.6
25.6
18.7
1.8
1Q'15
47.4
0.29
26 .3
44.5
28.3
0.21
0.31
12%
4%
11%
12%
3%
10%
16%
31.7
33%
14.6
15.2
13.1
40%
1.5
1H'15
2.5
3Q'15
0 .8
2015
2.3
1Q'16
1Q'15
Trading
ALPL
AFS
Issued by banks
Local government debt
securuties
59%
13.9
Other
NBP money market bills
Issued by State Treasury
1Q'16
HTM
Structure as at the 1Q 2016-end
Trading assets
Issued by
State
Treasury
94%
Financial assets designated at
fair value through P&L (ALPL)
Issued by
Eqiuty
banks
securities
1%
0%
Issued by
local
government
bodies NBP money
2% market bills
58%
Other
3%
Issued by local
government
bodies
2%
Other
14%
Issued by State
Treasury
27%
Investment securities
available for sale (AFS)
Issued by
State
Treasury
69%
Issued by
banks
5%
Issued by
local
government
bodies
15%
Equity
securities
2%
Other
10%
20
Risk management
21
Loan portfolio quality
Coverage of loans with recognised
impairment by impairment allowance
130
6.4%
6 .5%
110
6.0%
4.0%
90
70
6 3.9%
6.7%
2
64.6 %
6.6%
63.0 %
6.6%
8.0%
63.3%
6.6%
63.1%
6.6%
6 3.5%
6.9%
62.6%
6.9%
62.9%
6.8%
150
10.0%
62.2%
1
170
62.8%
Share of loans with recognised impairment
and cost of risk
90
96
82 86
78 81
1H'15
3Q'15
2.0%
72 75
72 71
2015
1Q'16
50
0.0%
1Q'15
1Q'15
Cost of risk for last 12M (bp) Group
Cost of risk for last 12M (bp) Bank
Share of impaired loans (Group)
Share of impaired loans (Bank)
10.0%
Quality
1H'15
3Q'15
Group
of loan portfolio vs. banking sector
2015
1Q'16
Bank
1
3
8.0%
Decrease in the share of loans with recognised impairment, both in the
Bank and the Group as compared to previous year
6.0%
2
4.0%
2.0%
Growth of the coverage of loans with recognised impairment by
impairment allowance on yearly an quarterly basis
3
1Q'15
1H'15
3Q'15
2015
1Q'16
Share of impaired loans (sector)
Share of impaired loans (PKO BP)
Share of loans delayed past due over 90 days ( sector)
Share of loans delayed past due over 90 days ( PKO BP )
Maintenance in the positive loan portfolio quality gap between the
Bank and the sector.
Source: Own calculations based on PFSA data for the banking sector
22
Loan portfolio quality
Standalone data
Coverage of loans with recognised
impairment by impairment allowance
1.6%
4.9%
1Q'15
6.5%
1.8%
1.6%
1.6 %
5.0%
4.9%
4.8%
4.9%
1H'15
3Q'15
2015
1Q'16
Other loans
63.9%
58.2%
69.0%
79.5%
1.7%
6.4%
63.0%
57.6%
68.8%
78.0 %
6.7%
6 3.1%
56.9%
70 .0 %
80 .8%
6.6%
62.6%
57.1%
69.0 %
81.1%
6.6%
1
62.2%
58.3%
65.5%
76.7%
Share of loans with recognised impairment
1Q'15
1H'15
3Q'15
2015
1Q'16
Loans delayed
past due over
90 days
Total
Cost of risk over the last 12M (bp.)
Corporate loans
Mortgage loans
Consumer loans
16 4
144
127
96
148
138
86
147
129
81
115
139
2
75
1
105
Share of loans with recognised impairment and of impairment allowance
increased on y/y basis. The highest percentage increase here occurred
in the mortgage loans portfolio.
71
2
30
32
27
1Q'15
1H'15
3Q'15
Total
Corporate loans
Mortgage loans
27
2015
29
Maintenance of the declining trend in the costs of risk of corporate
loans had been sustained over the past 12 months. The largest decline
on y/y basis was registered in corporate loans (-59 bp).
1Q'16
Consumer loans
23
Credit risk concentration
1
Structure of corporate1) loans by industry segment
Other exposure
30.7%
32.5%
Receiveables due from corporate1) entities (PLN bn)
83.9
84.0
84.2
84.0
84.9
+1.1%
14.2
14.0
14.5
14.7
14.3
+1.4%
69.8
69.9
69.7
69.3
70.6
+1.1%
Electricity, gas, water, hot water and air to the
mechanical systems production and supply
2.2%
9.1%
1.9%
8.6%
9.0%
7.0%
15.7%
15.3%
Public administration and national defence
obligatory social security
Construction
Wholesale and retail trade, repair of motor vehicles,
including motorcycles
16.4%
16.8%
Maintenance of real estate
16.9%
18.0%
31.03.2015
31.03.2016
Industrial processing
31.03.15 30.06.15 30.09.15 31.12.15 31.03.16
Gross loans Corparate and municipal bonds
1
The highly diversified structure of the loan book points to low sector exposure concentration. At the end of 1Q 2016 the biggest share in the portfolio had
a section „Industrial processing" (18.0%), whose share in the portfolio increased by 1.1 pp. y/y, which was the biggest increase on a yearly basis. The
largest decline of the share in the portfolio (-2.0 pp. y/y) was on the section „Construction”.
The share of the section „Mining and quarrying” in the corporate loans portfolio is approx. 1.1%.
(1) Gross loans of non-financial and state budget entities
24
Capital adequacy (1)
Own funds (PLN bn)
2.47
2.51
2.48
Group
2.48
2.48
30
2.42
25
20
24.82
24.77
22.94
26.11
24.6 1
PLN bn
Bank
26.34
15
25.4
13.1%
11.8%
15.5
27.3
27.3
13.9%
12.6%
15.7
14.5%
13.2%
15.1
27.1
14.6%
13.3%
14.8
Group
28.6
15.4%
14.1%
14.8
10
5
0
1Q'15
1H'15
Tier 2
3Q'15
2015
0.76
0.74
0.59
0.69
14.39
0.49
1Q'15
1H'15
Other risks
13.90
3Q'15
Operating risk
3Q'15
2015
1Q'16
Total capital requirement
Tier 1 capital ratio
Group
0.48
0.66
0.68
0.68
0.71
0.54
1
Bank
14.16
1H'15
Total own funds
Total capital adequacy ratio
Tier 1
Total capital requirement (PLN bn)
0 .59
1Q'15
1Q'16
20.0%
18.0% 1
16.3%
16.0%
Bank
14.0%
14.9%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
13.69
2015
13.45
12.88
•
In 1Q 2016, the capital adequacy ratios remained well above the
regulatory limits.
•
Increase in capital ratios as a result of PFSA’s approval for
inclusion of profits for 3Q 2015 in Common Equity Tier 1 in the
amount of PLN 1,495 mn (after deduction of any planned charges
and dividends), as well as continuation of risk weighted assets
optimization (off-balance sheet commitments)
1Q'16
Credit risk
25
Capital adequacy (2)
Minimum capital ratios - PFSA's expectations
Required capital ratios
regulatory/ supervisory
Banking Law / CRR Regulation
50% dividend
payment policy
100% dividend
payment policy
PFSA's letter from
2015/10/22 regarding
conservation buffer
PFSA's letter from
2015/10/23 regarding
additional capital
PFSA's stand as of
2015/12/15 regarding
banks' dividend payment
PFSA's stand as of
2015/12/15 regarding
banks' divident paymend
Common Equity Tier 1 ratio (CET1)
4.50%
Tier 1 ratio (T1)
6.00%
9% + 1.25% = 10.25%
10.25% + 0.57% = 10.82%
13.25%** + 0.57% = 13.82%
13.25% + 0.57% = 13.82%
Total Capital Ratio (TCR)
8.00%
12% + 1.25% = 13.25%
13.25% + 0.76% = 14.01%
13.25% + 0.76% = 14.01%
16.25% + 0.76% = 17.01%
* PKO BP's CET1=T1
** T1 ratio leve l recommended by the PFSA has be en incre ased by an additional 3 pe rcentage points of conservation capital (10.25% + 3% = 13.25%)
Capital buffers
2016
2017
2018
2019
Conservation buffer
1.25%
1.25%
1.88%
2.50%
max 2.5%
max 2.5%
max 2.5%
max 2.5%
Systemic risk buffer
max 5%
max 5%
max 5%
max 5%
O-SII buffer*
max 2%
max 2%
max 2%
max 2%
Common Equity
Tier 1 ratio CET1
*
5.75% -15.25%
5.75% -15.25%
6.375% -15.875%
7.0% -16.5%
Tier1 capital ratio
7.25% -16.75%
7.25% -16.75%
7.875% -17.375%
8.5% -18.0%
Total Capital ratio TCR
9.25% -18.75%
9.25% -18.75%
9.875% -19.375%
10.5% -20.0%
Countercyclical buffer
* Curre ntly PKO Bank Polski is not conside red as O-SII (other systemically important institutions)
26
Liquidity ratios
126%
123%
116%
1
121%*
100% - level
effective for
LCR from
2018
1
According to Capital Requirements Directive
IV / Capital Requirements Regulation
,implemented as at 31 March 2014, the
minimum LCR levels to be maintained are:
− 60% as of 1 October 2015
− 70% as of 1 January 2016
− 80% as of 1 January 2017
− 100% as of 1 January 2018
Liquidity Coverage Ratio (LCR)
31.03.2015
Net Stable Funding Ratio (NSFR)
31.03.2016
*) ratio as at 31.12.2015
27
Business activity by segments
28
Segment results
Retail Banking
Gross financial result of retail segment (PLN mn)
Gross loans (PLN bn)
646
+5.2%
680
y/y
q/q
140.1
142.5
142.2
143.1
143.5
93.9
95.6
94.9
96 .1
96.2
+2.5%
+0.2%
Administrative
expenses
24.5
24.6
23.8
23.5
23.6
-3.7%
+0.5%
21.7
22.3
23.5
23.5
23.6
+8.8%
+0.3%
Bank tax
31.03.15
30.06.15
30.09.15
31.12.15
31.03.16
Net interest income
+2.4% +0.3%
Net F&C income
1 477
+7.0 %
1 581
503
-5.3%
476
96
-87
-4.7%
-1 126
-305
Other income
32
-1 073
Net impairment
allowance
-250
-18.2%
1Q'15
1Q'16
Mortgage banking
SME
New sales of loans (PLN bn) - standalone data*
Deposits (PLN bn)
142.7
143.6
144.9
148.4
151.4
17.2
17.9
18.9
20.1
19.6
y/y
q/q
+6.1%
+2.0%
+13.5%
6.9
6.8
-2.8%
6.1
2.5
2.3
1.1
125.7
126.0
128.3
131.8
+5.0 %
30.06.15
SME
30.09.15
31.12.15
Retail and private banking
31.03.16
1.4
3.1
3.1
1.3
2.4
1.0
+1.5%
-9.4%
+13.3%
-5.6 %
-8.0 %
-21.1%
-3.4%
-7.5%
+2.8%
2.8
31.03.15
1.3
2.5
Q1'15
Q2'15
Mortgage banking
Q3'15
SME
2.9
q/q
1Q’16/1Q’15
6.7
6.0
2.1
125.5
Retail and private banking
2.7
Q4'15
Q1'16
Retail and private banking
*) Does not include renewals of SME loans, which in 1Q’16 amounted to ca PLN 1 bn
29
Segment results
Corporate and Investment Banking
Gross financial result of the corporate and investment
segment in PLN mn
180
Gross loans (PLN bn)
233
-22.9%
273
+25.4%
176
-9.1%
160
Other income
132
+18.6%
157
-58
Net impairment
allowance
+3.1%
-288
Administrative
expenses
-279
-68
Net interest income
342
+94.0%
1Q'15
Banking tax
1Q'16
31.3
50.3
51.3
51.2
52.1
31.03.15
30.06.15
30.09.15
31.12.15
31.03.16
39.3
y/y
q/q
+23.9%
-7.7%
7.8 *
30.06.15
7.9
+1.7%
1Q’16/1Q’15
7.0
6.3
q/q
+35.0% -10.3%
4.7
29.2
Q1'15
31.03.15
+3.7%
New loan sales (PLN bn), standalone data
Deposits (PLN bn)
31.7
50.2
q/q
Net F&C income
-132
42.6
y/y
30.09.15
31.12.15
31.03.16
Q2'15
Q3'15
Q4'15
Q1'16
*) Part of the increase in new sales in Q2'15 related to the operational merger carried out in April
2015 - framework agreements related to exNoBP accounts were registered in the IT system with the
April date, which increased the total amount of new sales
30
Additional information
31
PKO Bank Polski is a clear leader of Polish banking sector
Number of current accounts of induviduals
('000)
Number of corporate customers using iPKO Biznes
('000)
+8%
6621
6150
+58%
430k SME customers
6220
0.9k
Agencies
9.6
8.7
6.1
9.0 mn
2010
2012
Retail segment customers
(incl. SMEs)
2015
29.2k
Number of customers with access to e-banking
('000)
2010
Group
employment
7 832
3.2k
5 307
Users with access to
e-banking (incl. SMEs)
7.8 mn
+3,3p.p.
2012
Branches
2010
Number of retail agencies and branches ('000.)
+33%
3.2
3.1
-29%
2.3
IKO
4000
431
3000
2.1
3410
228
2000
1000
2015
2010
2012
2015
500
PKO TFI - value of assets under management
(PLN bn)
400
+88%
18.2
300
200
9.7
10.1
2010
2012
100
260
2013
2015
1296
101
0
2012
2012
Corporate segment
custmers
14k
2015
Number of ATMs ('000)
2010
9.2%
5.9%
1.2k
2.4
9.1%
ATMs
3 882
2.8
2015
The share of DM PKO BP SA in trading on the
secondary stock market
+102%
2010
2012
2014
2015
No. of active IKO apps ('000)
No. of operations via IKO ('000)
0
2015
32
Activity in Ukraine – Kredobank
Net loans (PLN mn)
854
Adequacy and liquidity
877
650
6 69
640
77.7%
84.2%
79.5%
73.3%
73.6%
16.1%
19.8%
14.5%
19.1%
15.4%
2012
2012
2013
2014
2015
Deposits (PLN mn)
1 100
2013
2014
2015
1Q'16
Capital adequacy N2 by UAS (min 10%)
Net loans/deposits
1Q 2016
Loan portfolio quality
1 041
817
913
86 9
38.7%
36.5%
24.3%
31.8%
6 1.0%
49.7%
32.5%
25.4%
6 2.3%
24.2%
2012
2013
2014
2015
1Q'16
Share of loans with recognized impairment
2012
2013
2014
2015
Coverage of loans with recognized impairment by
impairment allowance
1Q 2016
PKO BP’s exposure (PLN mn)
Financial results (PLN mn)
362
115
119
152
118
22
109
-37
2012
257
254
37 10
108
224
132
-46
-138
2013
2014
Result on business activity
2015
1Q 2016
Net financial result
2012
2013
Capital exposure
2014
224
84
81
2015
1Q 2016
Subordinated loan
33
Retail segment – mortgage loans
Standalone data
Market share of FX mortgage loans
30.0%
Average LTV
29.4%
29.1%
28.8%
28.8%
28.7%
25.7%
25.6%
25.6%
25.6%
25.6%
28.0%
26.0%
24.0%
21.6%
22.0%
21.6%
21.5%
21.5%
74%
74%
73%
74%
73%
70%
68%
69%
71%
71%
Q2'15
Q3'15
Q4'15
21.5%
20.0%
Q1'15
18.0%
31.03.15
30.06.15
30.09.15
Total
31.12.15
PLN
229
152
127
31.03.15
160
136
Average LTV of new sales
FX
30.06.15
222
220
160
137
30.09.15
Total
PLN
Current average LTV of loans portfolio (eop)
31.03.16
Average carrying value of mortgage loan
(PLN’000)
216
Q1'16
161
138
31.12.15
219
Average value of mortgage loan in new sales
(PLN’000)
206
213
213
208
Q1'15
Q2'15
Q3'15
Q4'15
196
159
138
31.03.16
Q1'16
FX
34
CHF denominated mortgage loans portfolio
Volume of FX mortgage loans (PLN bn eop)
37.2
37.8
4.2
4.2
33.0
33.5
31.03.15
30.06.15
CHF
*
Structure of mortgage loans by currrency
35.8
35.7
34.8
4.2
4.2
4.1
31.6
31.6
30.8
30.09.15
31.12.15
31.03.16
pozostałe
* waluty
4.5%
4.4%
4.4%
4.3%
4.3%
34.9%
34.8%
33.1%
32.9%
32.3%
60 .6 %
60.8%
62.5%
62.8%
63.4%
56.7%
31.03.15
30.06.15
30.09.15
31.12.15
31.03.16
Banking
sector
31.03.16
PLN
CHF
Other FX
8.2%
35.1%
Relief measures vis-a-vis the Bank’s customers with mortgage loans in CHF:
1) Inclusion of negative CHF LIBOR rate values in setting of the mortgage banking product rates;
2) Interim relief measures effective until the end of 2015 and extended until end-1H’16:
− Reduction of the currency spread rate to 1% for the mortgage banking products denominated in CHF;
− Enabling extension of lending tenors without any additional fee or charge;
− Refraining from actions aimed at seeking additional loan collateral;
− Enabling loan currency conversion at average NBP rate as at the date of the loan agreement annex signature (at no additional charge);
− An additional relief for CHF borrowers, including reimbursement to them of a part of their principal repayments whenever the negative reference rate
exceeds the Bank’s margin.
35
Macroeconomic trends
Solid GDP growth with positive trend in the labour market
Real GDP growth and its drivers (% y/y)
5
4
Labour market trends (%)
1
4.3 12
16
8
3
2
14
4
1
0
0
-1
GDP
household consumption expenditures
external trade contribution (pp)
gross fixed investments (RA)
-3
-4
-5
1
10.0
8
-8
6
LFS unemployment rate, sa1)
0
-1
7.1
-2
-12
Wages growth in enterprises (% y/y)
Nominal wages
4.6
4
3
3
4
10
7
5
2 2.7
2
1
6
5
12
-4
-2
Employment growth (y/y) RHS
Registered unemployment rate
3.7
3
The Bank estimates that GDP growth moderated in 1Q2016 to 3.3% y/y
(vs 4.3% y/y in 4Q2015) as the positive effects related to the end of the
“old” wave of EU funds unwound (EU-funded projects cumulation at the
end of 2015). Bank forecasts GDP growth of 3.5% in 2016 as a whole
(vs. 3.6% in 2015). Structure of the economic growth is changing
towards larger contribution of private consumption (supported with 500
PLN per child program) amid falling contribution of investments (esp.
drop in public investments by 0.6% of GDP in the whole year).
2
2 Stable economic growth translates into continuation of positive trends in
1
the labour market (acceleration in employment growth). The
unemployment rate in March 2016 dropped to the lowest level for March
since 1991.
0
-1
-2
Real wages
3
Wages have been growing at solid and stable pace of ca. 3.5% y/y in
nominal terms and over 4.5% y/y in real terms. There are signs of
stronger wage pressure. Solid incomes growth supports consumption.
(1) Percentage share of the number of unemployed population in the number of economically
active population (i.e. employed and unemployed persons); consistent with EU methodology.
36
Macroeconomic trends
Longer deflation, stable NBP interest rates
CPI and core inflation (% y/y)
5
PLN exchange rates
5
3
PLN/EUR
4
3.90
4
CPI inflation
3
PLN/CHF
2
4.27
3.76
Core inflation
1
3
-0.2
PLN/USD
0
-1
-0.9
1
2
-2
1 CPI inflation fell in 1Q2016 (on average to -0.9% y/y from -0.6% in 4Q2015)
due to lower core inflation (resulting from falling medicines’ and TV prices), as
well as energy prices. Food prices growth accelerated in 1Q. We expect
deflation to last untill 4Q 2015. Inflation will rise to ca. 0.6% y/y at the year-end
(low base effects, as well as stronger consumer demand). We expect fiscal and
regulatory policy to play a significant role in stimulating inflation in 2016.
Interest rates (% eop)
7
6
5
WIBOR 3M
4
3
2
1
2 The new MPC members continue the policy line of their predecessors hinting
5-year yield
that the interest rate level should remain flat in 2016. Despite deflation is
prolonging, it is mostly imported and does not have a negative impact on the
economy. The resumption of interest rate cuts could be detrimental to stability
of the financial system and would add to depreciation pressure on the PLN.
Reference rate
2.20
3 EURPLN at end of 1Q2016 was similar as at the end of 2015, but there were
1.67
1.50
2
waves of PLN weakening during the quarter, especially in January when S&P cut
Poland’s sovereign rating. Despite further monetary policy easing by the ECB,
weakening expectations of rate hikes in the US drove EURUSD higher, which
lowered USDPLN rate. CHFPLN was broadly unchanged.
37
Banking sector and mutual funds
Slower loans dynamics and faster deposits growth
Loan growth rates (% y/y)
20
30
Housing
25
Mutual funds market (PLN bn)
3
254.9
270
240
15
210
20
10
15
180
Total
10
Corporate
5
Consumer
0
5
8.3
7.8
1
4.6
2.7
0
-5
-5
150
120
net inflow
net mutual fund assets
90
-10
Deposit growth rates (% y/y)
1
17
15
Private individuals
13
11
10.1 2
9.1
9
7
5
3
1
-1
-3
2
7.2
Total
Corporate
3
Loans growth slowed down in 1Q2016 (to 4.6% y/y; FX adj. 4.9% y/y)
with stable rise in corporate loans (8.3%; FX adj. 6.9%), slower
mortgage loan growth (2.7%; FX adj. 4.7%) and stronger consumer
loans’ growth (7.8%; FX adj. 8.2%).
Deposits growth increased in 1Q2016 (9.1% y/y), amid faster rise in
households deposits (10.1% y/y) and significantly slower rise in
corporate deposits (7.2%). The Loan-to-Deposit ratio decreased to
100.1% from 103.0% in 4Q2015.
A moderate increase in the assets of mutual funds in 1Q2016, with the
improvement of the situation on the stock market and an increase in
the WIG by 5.5% q/q.
-5
-7
38
Summary operational data
PKO Bank Polski operating data (eop)
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
Change
y/y
q/q
Current accounts ('000)
6 661
6 583
6 600
6 621
6 643
-0.3%
+0.3%
Banking cards ('000)
7 452
7 450
7 489
7 523
7 558
+1.4%
+0.5%
821
838
845
838
835
+1.7%
-0.4%
Branches:
1 323
1 311
1 290
1 277
1 274
-3.7%
-0.2%
- retail
1 284
1 272
1 251
1 238
1 235
-3.8%
-0.2%
39
39
39
39
39
0.0%
0.0%
965
926
887
881
870
-9.8%
-1.2%
3 210
3 217
3 214
3 196
3 191
-0.6%
-0.2%
270
308
354
431
554 +105.2%
+28.7%
of which: credit cards
- corporate
Agencies
ATMs
Active IKO applications ('000)
39
Consolidated income statement of the PKO BP Group quarterly
Profit and loss account (PLN '000)
Net interest income
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16/
Q1'15
Q1'16
Q1'16/
Q4'15
1 670 738
1 683 362
1 818 099
1 856 396
1 853 195
+10.9%
-0.2%
Net fee and commission income
679 150
757 382
720 548
693 548
635 445
-6.4%
-8.4%
Other income
230 859
153 632
159 599
241 510
196 794
-14.8%
-18.5%
-
9 676
982
-
-
x
x
Net income from financial instruments designated at fair value
23 118
(14 247)
2 004
29 702
(8 439)
x
x
Gains less losses from investment securities
52 541
16 812
6 385
12 009
50 631
-3.6%
+321.6%
Net foreign exchange gains
72 239
94 449
92 247
110 159
94 420
+30.7%
-14.3%
Net other operating income and expense
82 961
46 942
57 981
89 640
60 182
-27.5%
-32.9%
2 580 747
2 594 376
2 698 246
2 791 454
2 685 434
+4.1%
-3.8%
(373 579)
(375 070)
(362 316)
(364 953)
(382 166)
+2.3%
+4.7%
(1 404 770)
(1 372 317)
(1 335 476)
(1 923 707)
(1 360 493)
-3.2%
-29.3%
-
-
-
-
(148 365)
x
x
8 515
7 308
8 279
14 013
3 318
-61.0%
-76.3%
810 913
854 297
1 008 733
516 807
797 728
-1.6%
+54.4%
(175 151)
(152 676)
(193 031)
(68 639)
(159 760)
-8.8%
+132.8%
Net profit attributable to non-controlling shareholders
(11 419)
(1 257)
454
3 911
(622)
-94.6%
x
Net profit attributable to the parent company
647 181
702 878
815 248
444 257
638 590
-1.3%
+43.7%
Dividend income
Total income items
Net impairment allowance and write-offs
Administrative expenses
Tax on certain financial institutions
Share in net profit (losses) of associates and jointly controlled entities
Profit before income tax
Income tax expense
40
Consolidated statement of financial position
of the PKO BP Group
Assets (PLN '000)
Cash and balances with the Central Bank
31.03.15
30.06.15
30.09.15
31.12.15
31.03.16
Change
y/y
Change
q/q
10 090 058
11 934 626
8 181 397
13 743 864
15 857 607
+57.2%
+15.4%
Amounts due from other banks
4 567 158
3 673 220
4 113 135
4 552 972
2 522 459
-44.8%
-44.6%
Trading assets
1 813 910
1 532 183
2 526 087
783 199
2 308 701
+27.3%
+194.8%
Derivative financial instruments
5 598 132
3 976 774
4 376 549
4 347 269
2 991 644
-46.6%
-31.2%
18 730 144
13 871 079
14 592 585
15 154 100
13 100 195
-30.1%
-13.6%
182 440 406
185 336 089
185 193 115
190 413 708
187 869 107
+3.0%
-1.3%
23 805 722
25 867 501
26 560 447
28 519 845
32 003 671
+34.4%
+12.2%
Tangible fixed assets
2 480 800
2 493 423
2 519 689
2 782 186
2 808 010
+13.2%
+0.9%
Other assets
7 057 596
6 838 732
6 857 426
6 642 776
7 629 374
+8.1%
+14.9%
256 583 926
255 523 627
254 920 430
266 939 919
267 090 768
+4.1%
+0.1%
Financial assets designated at fair value through P&L
Loans and advances to customers
Investment securities available for sale and securities held to maturity
TOTAL ASSETS
Liabilities and eqiuty (PLN '000)
Amounts due to the central bank
31.03.15
30.06.15
30.09.15
31.12.15
31.03.16
Change
y/y
Change
q/q
4 143
4 158
4 541
4 219
3 989
-3.7%
-5.5%
21 570 055
20 101 550
20 332 686
18 288 797
20 246 622
-6.1%
+10.7%
6 300 141
5 096 870
4 855 943
4 624 767
3 292 087
-47.7%
-28.8%
178 367 476
179 137 778
178 256 829
195 758 461
194 856 153
+9.2%
-0.5%
2 790 195
2 587 180
2 386 315
2 400 493
2 428 876
-12.9%
+1.2%
Debt securities in issue
13 815 938
14 139 104
14 114 895
9 432 973
9 218 641
-33.3%
-2.3%
Subordinated liabilities
2 478 949
2 521 227
2 471 649
2 499 163
2 477 481
-0.1%
-0.9%
Other liabilities
2 992 193
3 204 909
2 920 069
3 666 133
3 532 060
+18.0%
-3.7%
28 264 836
28 730 851
29 577 503
30 264 913
31 034 859
+9.8%
+2.5%
256 583 926
255 523 627
254 920 430
266 939 919
267 090 768
+4.1%
+0.1%
Amounts due to banks
Derivative financial instruments
Amounts due to customers
Liabilities of insurance activities
Total equity
TOTAL EQUITY AND LIABILITIES
41
Shares, rating and dividend policy
Basic information on shares
• Listed: Warsaw Stock Exchange since 10.11.2004 r.
• Indices:
WIG, WIG20, WIG30, WIG Banki
• ISIN:
PLPKO0000016
• Bloomberg:
PKO PW
• Reuters:
PKOB WA
Shareholders structure
State
(number of shares: 1 250 mn)
Treasury
29.43%
Others**
58.68%
Aviva OFE*
6.72%
NationaleNederalnden
OFE*
5.17%
*) Share reported by ING OFE after exceeding the threshold 5% of total
number of votes at GM of PKO Bank Polski by Nationale-Nederlanden OFE,
former ING OFE (as at 24.07.12) and Aviva OFE (as at 29.01.13)
**) Of which 1.96% BGK (State owned bank) as at 28.08.15
Rating
Rating:
Agency:
Moody’s
Longterm
Shortterm
Outlook
A2/A3
P-1/P-2
Stable
Dividend
Payment from the net profit
of the year
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
0.00
0.75
1.80
1.27
Dividend yield
(Div. Day)
x
1.9%
4.9%
3.9%
1.98
1,90
1.00
1.09
5.5%
4.2%
2.9%
2.2%
74.75%
97.65%
34.71%
40.07%
0,98
0.80
1.00
1.7%
2.1%
3.6%
47.87%
47.71%
66,18%
DPS (PLN)
Payout ratio
0.00%
31.65%
61.12%
40.15%
Principles of the dividend policy adopted on 22 March 2016
•
•
•
•
•
•
The general assumption of the Bank’s dividend policy is to maintain a stable level of dividend payments in the long term, in compliance with the principle of
prudent management of the Bank’s and the Bank’s Capital Group and with consideration of the financial capacity of the Bank and the Bank’s Capital Group as
determined on the basis of the adopted criteria.
The aim of the dividend policy is an optimization of the own funds of the Bank and the Bank’s Capital Group, taking into account the return on capital and its
cost, capital needs for development, while ensuring an appropriate level of capital adequacy ratios.
The dividend policy assumes the possibility of the Bank’s net profit distribution to shareholders in the long-term perspective in the amount of the surplus of
capital above minimal capital adequacy ratios considering the additional capital buffer.
The dividend policy takes into account factors related to the operations of the Bank and the Bank’s Capital Group companies, in particular, the requirements
and supervisory recommendations concerning capital adequacy.
The principles have been changed in connection with the issuance by the Polish Financial Supervision Authority on 15 December 2015 of the position on the
dividend policy of banks in 2016 for the year 2015, recommending higher minimum levels of capital adequacy measures enabling the dividend payment and
introducing a new condition for the dividend payment – the level of leverage.
Therefore, in accordance with the Principles, the capital adequacy ratios specifying the dividend criteria are as follows: total capital ratio above 14.01% and
common equity Tier 1 ratio above 13.82%, leverage ratio above 5%.
42
Disclaimer
This presentation (the ”Presentation”) has been prepared by Powszechna Kasa Oszczędności Bank Polski S.A. (”PKO BP S.A.”, ”Bank”) solely for use by its
clients and shareholders or analysts and should not be treated as a part of any an invitation or offer to sell any securities, invest or deal in or a solicitation
of an offer to purchase any securities or recommendation to conclude any transaction, in particular with respect to securities of PKO BP S.A. The
information contained in this Presentation is derived from publicly available sources which Bank believes are reliable, but PKO BP SA does not make any
representation as to its accuracy or completeness. PKO BP SA shall not be liable for the consequences of any decision made based on information
included in this Presentation.
The information contained in this Presentation has not been independently verified and is, in any case, subject to changes and modifications. PKO BP SA’s
disclosure of the data included in this Presentation is not a breach of law for listed companies, in particular for companies listed on the Warsaw Stock
Exchange. The information provided herein was included in current or periodic reports published by PKO BP SA or is additional information that is not
required to be reported by Bank as a public company.
In no event may the content of this Presentation be construed as any type of explicit or implicit representation or warranty made by PKO BP SA or, its
representatives. Likewise, neither PKO BP SA nor any of its representatives shall be liable in any respect whatsoever (whether in negligence or otherwise)
for any loss or damage that may arise from the use of this Presentation or of any information contained herein or otherwise arising in connection with this
Presentation.
PKO BP SA does not undertake to publish any updates, modifications or revisions of the information, data or statements contained herein should there be
any change in the strategy or intentions of PKO BP SA, or should facts or events occur that affect PKO BP SA’s strategy or intentions, unless such
reporting obligations arises under the applicable laws and regulations.
This Presentation contains certain market information relating to the banking sector in Poland, including information on the market share of certain banks
and PKO BP SA. Unless attributed exclusively to another source, such market information has been calculated based on data provided by third party
sources identified herein and includes estimates, assessments, adjustments and judgments that are based on PKO BP SA’s experience and familiarity with
the sector in which PKO BP SA operates. Because such market information has been prepared in part based upon estimates, assessments, adjustments
and judgments and not verified by an independent third party, such market information is, unless otherwise attributed to a third party source, to a certain
degree subjective. While it is believed that such estimates, assessments, adjustments and judgments are reasonable and that the market information
prepared is appropriately reflective of the sector and the markets in which PKO BP SA operates, there is no assurance that such estimates, assessments
and judgments are the most appropriate for making determinations relating to market information or that market information prepared by other sources
will not differ materially from the market information included herein.
PKO BP SA hereby informs persons viewing this Presentation that the only source of reliable data describing PKO BP SA’s financial results, forecasts,
events or indexes are current or periodic reports submitted by PKO BP SA in satisfaction of its disclosure obligation under Polish law.
This Presentation is not for release, directly or indirectly, in or into the United States of America, Australia, Canada or Japan.
43
Contact:
PKO Bank Polski SA Investor Relations Office
Lidia Wilk – Director
Pulawska 15
02-515 Warsaw
Poland
Tel: +48 22 521 91 82
Fax: +48 22 521 91 83
E-mail: lidia.wilk@pkobp.pl
E-mail: ir@pkobp.pl
PKO Bank Polski website:
website www.pkobp.pl
Investor’s calendar:
calendar:
8 August 2016
Publication of the 1H 2016 Report
7 November 2016
Publication of the Quarterly 3Q 2016 Report
6 March 2017
Publication of the 2016 Annual Report