Pko Bank Polski Sa · GPW:PKO
Pko Bank Polski Sa — H1 2024 Earnings Presentation
51 slides from Pko Bank Polski Sa's earnings presentation, Aug 22, 2024
Slide 1: Financial Results 1H 2024
FINANCIAL RESULTS 1H 2024 Warsaw, 22nd of August 2024
Slide 2: Key achievements
1 Key achievements 2 3 4 2
Slide 3: Key financial highlights for 1H 2024
1 Key achievements 2 3 4 Key financial highlights for 1H 2024 KEY FINANCIAL CUSTOMERS’ NUMBER OF TOTAL ASSETS HIGHLIGHTS FINANCING CUSTOMERS PLN 507bn PLN 279 bn 12.0 mln (1) Increase of financing to ` customers by 9.3% y/y and +10.1% y/y +9.3% y/y +236 ths y/y savings by 14.4% y/y +2.1% q/q +1.0% q
Slide 4: Key financial highlights for 1H 2024
1 Key achievements 2 3 4 Key financial highlights for 1H 2024 KEY FINANCIAL (1) NET PROFIT ROE CORE INCOME HIGHLIGHTS PLN 4.4 bn of reported net profit, PLN 6.8 bn excluding PLN 4.4bn PLN 6.8bn 19.0% 28.6% 18.1% y/y extraordinary events +115.3% y/y +8.3 p.p. y/y (excl. extraordinary (excl. extraordi
Slide 5: Retail banking: solid growth of loans and investment funds y/y
1 Key achievements 2 3 4 Retail banking: solid growth of loans and investment funds y/y, excellent sales of consumer loans in Q2 Loans volume outstanding [PLN bn] Deposits(2) [PLN bn] +13.9% +7.3% +2.0% +1.5% 143.7 146.6 280.5 284.7 128.7 y/y q/q 265.3 35.5 36.5 +8.1% +2.9% 33.8 +16.0% +1.7% 94.9 10
Slide 6: We have completed a digital mortgage pilot
1 Key achievements 2 3 4 We have completed a digital mortgage pilot DIGITAL MORTGAGE is a new PKO mortgage product and process - the first holistic digital solution for mortgage loans in Poland, enabling fully remote process from the moment the customer is interested in a mortgage product (e.g. chec
Slide 7: New PKO Życie life insurance in the bank's offer
1 Key achievements 2 3 4 New PKO Życie life insurance in the bank's offer Life package* ⚫ New life insurance is offered as a standalone once or within offering Cash Loan process 22 ths the number of policies sold Health Package ⚫ PKO Życie is insurance granting coverage in the event of death and add
Slide 8: Corporate and investment banking – stable volume of customers financing
1 Key achievements 2 3 4 Corporate and investment banking – stable volume of customers financing Corporate customers financing [PLN bn] +3.4% -0.5% 96.7 100.6 100.0 12.5 Syndicated loan – new LBO – syndicated including 11.6 14.0 tranche under facility CF - syndicated trade finance 14.8 17.4 17.6 Inv
Slide 9: Financial results
1 2 Financial results 3 4 Note: Any differences in specific items, totals, shares and growth rates result from rounding off amounts to millions of PLN and rounding off percentages in the presented structures to one and/or two “decimal” places 9
Slide 10: Net profit
1 2 Financial results 3 4 Net profit Net profit [PLN mln] Quarterly net profit [PLN mln] +115.3% x4 +15.0% 2 780 4 395 2 351 2 044 2 041 587 681 6M23 6M24 2Q23 3Q23 4Q23 1Q24 2Q24 Extraordinary items(1) [PLN mln] Quarterly extraordinary items(1) [PLN mln] - 3 441 - 2 809 - 2 474 -1 883 - 1 471 - 1 3
Slide 11: Income growth driven by core income dynamic
1 2 Financial results 3 4 Income growth driven by core income dynamic Result on business activity [PLN mln] Quarterly result on business activity [PLN mln] +24.2%(2) +19.9% +16.5% 13 592 +5.7%(2) -1.4% 422 11 339 6 844 y/y q/q 192 6 673 6 748 5 794 6 167 197 176 225 156 +118% +14.2% 103 105 13 170 C
Slide 12: Net interest income - further improvement of net interest margin y/y
1 2 Financial results 3 4 Net interest income - further improvement of net interest margin y/y Net interest income [PLN mln] Quarterly net interest income [PLN mln] +25.1%(1) +19.4% +26.2%(1) +15.1% 10 246 5.50 +6.7%(2) -2.7% 9 300 8 579 5.00 4.69 4.31 4.50 5 077 5 192 5 054 4.48 5 400 4 662 7 300 4
Slide 13: Interest on assets and liabilities
1 2 Financial results 3 4 Interest on assets and liabilities Interest bearing assets and their yield [PLN bn] 500 466 9.0% 500 458 457 466 9.0% 419 419 431 400 400 7.6% 8.0% 8.0% 7.6% 7.5% 300 6.9% 300 7.2% 7.0% 7.0% 7.0% 200 200 7.1% 6.9% 6.7% 6.0% 6.6% 6.0% 100 100 0 5.0% 0 5.0% 6M23 6M24 2Q23 3Q2
Slide 14: Growth of fees and commissions income
1 2 Financial results 3 4 Growth of fees and commissions income Fees and commissions income [PLN mln] Quarterly fees and commissions income [PLN mln] +15.5% +15.1% 2 558 +0.1% 2 214 475 1 236 1 278 1 280 y/y q/q 333 1 175 1 111 578 240 242 233 +58.4% -3.8% 174 554 147 286 279 291 288 +1.1% -1.1% 409
Slide 15: High level of cost efficiency – C/I in 1H 2024 at 30.5%
1 2 Financial results 3 4 High level of cost efficiency – C/I in 1H 2024 at 30.5% Operating expenses [PLN mln] Quarterly operating expenses [PLN mln] +11.0% +12.3% -10.0% 4 141 3 731 2 114 2 179 456 1 962 430 1 746 1 790 142 394 63 1 483 Excl. 50 51 1 409 794 765 regulatory costs 725 747 718 +11.6%
Slide 16: MREL requirements
1 2 Financial results 3 4 MREL requirements Outstanding SNP and SP bond issues EUR 750 mln 22.18% 21.90% SP 1.36% 19.90% 1.58% EUR 500 mln EUR 500 mln 1.58% PLN 1 bln(1) CET1 (after CBR) Tier 2 Requirement 13.78% MREL TREA SNP 16.14% 17.50% Requirement Requirement of 15.36% 13.78% MREL TREA subordin
Slide 17: Cost of risk
1 2 Risk management 3 4 Cost of risk Net impairment allowance [PLN mln] Quarterly net impairment allowance [PLN mln] -18.9% +6.9% 800 1.35 676 700 1.15 +13.8% 600 2.10 600 493 0.95 500 1.60 500 463 0.75 400 400 1.10 0.55 300 230 248 246 300 216 0.53 0.60 200 0.35 200 0.61 0.39 0.48 0.47 0.10 100 0.1
Slide 18: Improved quality in the retail segment, lower classification in corporate segment
1 2 Risk management 3 4 Improved quality in the retail segment, lower classification of individual customers in the corporate segment Share of receivables in stage 2 and 3 [%] Provision coverage of receivables in stage 2 and 3 [%] Total 2Q 24 15.44% 67.1% 13.72% 14.43% 61.1% 60.8% 54.7% 60.8% 48.8%
Slide 19: Legal risk provisions for mortgages loans in CHF
1 2 Risk management 3 4 Legal risk provisions for mortgages loans in CHF Legal risk provisions [mln PLN] Status of credit agreements in CHF [ths] PLN 16.7 bn -87% 6 552 legal risk provisions since 2019 5 430 178 76 2 320 41 28 1 914 4 23 6 451 Total CHF remaining settlements final verdict cases in R
Slide 20: CHF mortgage settlement program
1 2 Risk management 3 4 CHF mortgage settlement program Share of motions submitted Share of successfully to the total no. of entitled completed cases in total CHF customers completed cases Number of cases regarding settlements of CHF borrowers 60% 73% 0.0% 100.0% 0.0% 100.0% 60.0 59.3 No. of CHF law
Slide 21: Large scale of AI/ML implementation in risk management
1 2 Risk management 3 4 Large scale of AI/ML implementation in risk management Good risk performance thanks to investments in analytics and cloud- MLops Precise analysis of corporate customers Increase of customer ratings’ precision thanks to ML models Decisions regarding ~PLN 60 bn corporate portfo
Slide 22: Solid capital position
1 2 Risk management 3 4 Solid capital position CET1 = Tier1 capital ratio [%] Total capital ratio (TCR) [%] 17.89 17.15 +4.93 p.p. +6.19 p.p. 12.96 12.54 10.54 10.96 Minimum regulatory Criterion for dividend PKO Bank Polski Minimum regulatory Criterion for dividend PKO Bank Polski capital ratio (1)
Slide 23: Conclusion
1 2 3 Conclusion 4 23
Slide 24: Conclusion: PLN 4.4 billion of net profit, further income growth
1 2 3 Conclusion 4 PLN 4.4 billion of net profit, further income growth, stable credit risk cost • Continuation of dynamic core income growth, increase of fees and commissions income by 15.5% y/y • Further increase of CHF legal risk provisions (+PLN 2.3 bn) • PLN 4.4 bn of net profit including PLN 2
Slide 25: Supplementary information
1 2 3 4 Supplementary information 25
Slide 26: Macroeconomic and banking sector forecasts
1 2 3 4 Macroeconomic backdrop Macroeconomic and banking sector forecasts 2022 2023 2024P 2025P 2022 2023 2024P 2025P GDP % y/y 5.6 0.2 3.5 3.8 Loans total % y/y 1.1 1.3 5.7 6.5 Consumption % y/y 5.4 -1.0 4.7 3.6 Mortgage loans P LN % y/y -1.6 2.2 8.0 8.1 Ne w sale s of mortgage Inve stme nts % y/y
Slide 27: Loan and deposit market (FX adjusted)
1 2 3 4 Macroeconomic backdrop Loan and deposit market (FX adjusted) Mortgage and consumer loans Private individuals’ deposits and net assets (TFI) 20 40 %, y/y %, y/y Mortgage loans (PLN) PKO forecast 30 15 Consumer loans 20 10 10 0 5 -10 Deposits - private individuals 0 -20 PKO TFI (net assets of
Slide 28: The economy remains on a growth path
1 2 3 4 Macroeconomic backdrop The economy remains on a growth path GDP and its main components Planned payments under the RRF Public finances 20 40 9 60 %, y/y PLN bn 34 grants loans 35 % GDP % GDP 15 35 32 58 31 8 30 10 30 7 56 26 25 22 54 5 22 6 20 19 52 0 5 50 15 4 -5 48 GDP PKO 10 3 -10 46 Fore
Slide 29: Stable rates despite the global shift towards monetary policy easing
1 2 3 4 Macroeconomic backdrop Stable rates despite the global shift towards monetary policy easing CPI inflation Central bank rates PLN exchange rate 20.0 CPI inflation 14 4.80 5.20 % y/y % PKO 17.5 baseline scenario 12 Czechia forecast EURPLN (L) USDPLN (R ) 4.70 5.00 15.0 Romania alternative scen
Slide 30: The increase in customers' financing and savings
1 2 3 4 Supplementary information The increase in customers’ financing and savings Gross customer financing [PLN bn](1) Customer savings [PLN bn](2) +9.3% +14.4% +1.0% +2.7% 562.0 278.7 547.3 Concentration by industry [%] 275.9 542.1 268.6 255.1 260.1 508.1 491.4 22.8% 29.7% Jun-23 Sep-23 Dec-23 Mar
Slide 31: Structure of loans and deposits and liquidity
1 2 3 4 Supplementary information Structure of loans and deposits and liquidity Currency structure of gross loans portfolio [%] Structure of funding [%] 69 68 68 68 16.2 16.9 14.3 15.4 13.8 17.9 66 65 64 64 83.8 83.1 85.7 84.6 86.2 82.1 64 63 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Banking sector 2Q23 3Q
Slide 32: Gross mortgage loans
1 2 3 4 Supplementary information Gross mortgage loans Volume of mortgage loans [PLN bn] (1) Volume of CHF mortgage loans, net [PLN bn](2) 130 5.0 5 4.5 -46.7% 110 5 7 4.0 8 8 108 110 -11.5% 90 103 95 96 3.5 70 3.0 2.5 50 2.0 5.8 5.7 30 1.5 4.8 1.7 1.6 1.3 1.0 10 1.1 3.5 0.9 0.5 3.1 -10 Jun-23 Sep-2
Slide 33: Retail customers - new products on offer
1 2 3 4 Supplementary information Retail customers - new products on offer Retail customers Number of IKO applications 11.4 mln 8.1 mln + 557 ths y/y + 201 ths y/y NEW FACILITIES FOR CUSTOMERS: SELECTED NEW IKO MOBILE BANKING SERVICES Purchase and preview of the new PKO Życie insurance policies
Slide 34: Leader in mobile banking
1 2 3 4 Supplementary information Leader in mobile banking Number of IKO applications Number of clients logging into IKO [mln](1) and number of transactions quarterly [mln] Share of digital clients in active clients’ base [%] 252 5.5 5.6 239 5.2 5.4 100% 235 5.5 5.1 95% 7.5 212 221 240 5.0 90% 7.0 4
Slide 35: Increased use of AI in customers service and sales
1 2 3 4 Supplementary information Increased use of AI in customers service and sales Calls with customers completed by bots [mln] ⚫ In the first half of the year, all bots conducted nearly 13 mln conversations 17 bots Supports our Easier access to work 6.7 ⚫ We are systematically improving the quali
Slide 36: Companies and entrepreneurs banking
1 2 3 4 Supplementary information Companies and entrepreneurs banking Loans volume for companies outstanding [PLN bn] NEW PRODUCTS AND SUPORT FOR CUSTOMERS +8.2% 609 ths CUSTOMERS +1.5% ⚫ Promotion for company and enterprise accounts with 20% refund for purchases at petrol stations with a VISA card
Slide 37: Corporate customers - new products on offer
1 2 3 4 Supplementary information Corporate customers - new products on offer Corporate customers 32 ths (corporate and enterprises) 23 ths Active users iPKO business + 7.1% y/y corporate customers NEW PRODUCTS IN DIGITAL BANKING Further financial and accounting systems have been integrated within
Slide 38: Capital adequacy
1 2 3 4 Supplementary information Capital adequacy Effective risk weight [%](1) +0.2 p.p. Quarterly change of the consolidated total capital ratio (TCR) [p.p.] -0.34 p.p. 34.3 34.3 34.3 34.5 34.5 18.22% 0.20% -0.05% 17.89% -0.38% -0.08% -0.02% 2Q23 3Q23 4Q23 1Q24 2Q24 Leverage ratio[%](1) -0.5 p.p.
Slide 39: KREDOBANK S.A.
1 2 3 4 Supplementary information KREDOBANK S.A. KREDOBANK S.A. is an universal bank servicing both retail and SME clients, Lviv Lutsk 11 4 Rivne Chernihiv operating mainly in western part of Ukraine and Kiev region 2 1 Sumy Zhytomyr Kyiv 1 1 65 branches 14 (Group) Lviv region Khmelnytskyi Poltava K
Slide 40: Market share
1 2 3 4 Supplementary information Market share Retail loans [%] Retail deposits [%] 24.79 23.97 23.08 21.58 +1.50 p.p. -0.81 p.p. 2Q23 2Q24 2Q23 2Q24 Loans of non-financial corporate Deposits of non-financial corporate entities [%] entities [%] 13.63 13.45 13.20 12.73 -0.17 p.p. +0.46 p.p. 2Q23 2Q24
Slide 41: Wholesale financing
1 2 3 4 Supplementary information Wholesale financing PKO BP financing structure by instrument Maturity profile by instrument type [bn PLN] type [bn PLN] +20.5% +6.4% 26.0 24.5 1.4 1.4 5.0 21.6 5.0 1.2 0.7 1.9 4.9 4.9 1.2 2.7 2.7 3.3 0.7 2.7 0.9 3.2 3.3 2.7 2.7 5.3 3.2 3.3 3.3 1.0 5.3 3.2 3.2 0,2 5.
Slide 42: The balance sheet of PKO Bank Polski Group
1 2 3 4 Supplementary information The balance sheet of PKO Bank Polski Group Assets (PLN billion) Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 y/y q/q Cash and balances with the Central Bank 13.9 16.5 17.8 15.9 17.5 +25.7% +9.5% Amounts due from other banks 14.1 15.2 14.4 11.2 11.3 -19.8% +1.5% Reverse repo t
Slide 43: The profit and loss account of PKO Bank Polski Group
1 2 3 4 Supplementary information The profit and loss account of PKO Bank Polski Group Profit and loss account (PLN million) 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 y/y q/q 6M 23 6M 24 y/y Net interest income 4 392 4 662 5 077 5 192 5 054 +15,1% -2,7% 8 579 10 246 19,4% Net fee and commission income 1 111 1 1
Slide 44: Key ratios
1 2 3 4 Supplementary information Key ratios Key ratios (%) 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 y/y q/q 6M 23 6M 24 y/y ROE ne t 5,9 25,5 6,0 17,7 20,0 +14,1 p.p. +2,3 p.p. 10,6 19,0 +8,3 p.p. ROTE ne t 6,4 27,9 6,5 19,3 21,8 +15,4 p.p. +2,5 p.p. 11,7 20,7 +9,0 p.p. ROA ne t 0,52 2,4 0,6 1,65 1,88 +1,36 p
Slide 45: Key operational data
1 2 3 4 Supplementary information Key operational data PKO Bank Polski operating data (eop) Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 y/y q/q Current accounts ('000) 9 183 9 236 9 279 9 316 9 361 +1,9% +0,5% Banking cards ('000) 10 420 10 532 10 680 10 875 10 852 +4,1% -0,2% of which: credit cards 942 939
Slide 46: Customer financing
1 2 3 4 Supplementary information Customer financing PLN billion Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 y/y q/q Financing 248,1 251,9 258,1 263,8 266,0 +7,2% +0,8% mortgages 102,7 104,1 109,6 113,4 114,9 +11,8% +1,3% mortgages in local currency 94,9 96,4 103,0 108,2 110,1 +16,0% +1,7% FX mortgages 7,8 7
Slide 47: Customer savings
1 2 3 4 Supplementary information Customer savings PLN billion Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 y/y q/q (1) Retail and private banking 388,1 397,3 415,5 431,1 443,6 +14,3% +2,9% deposits 265,3 268,5 275,5 280,5 284,7 +7,3% +1,5% retail mutual funds 33,6 35,4 39,0 42,8 46,5 +38,6% +8,6% saving trea
Slide 48: Credit / ESG ratings and ownership
1 2 3 4 Supplementary information Credit / ESG ratings and ownership Credit Ratings Shareholder structure (number of shares: 1 250 mln) Long-term rating Deposits A2 State Treasury Liabilities A3 8.53% 53.38% Nationale Counterparty risk A2 Nederlanden OFE 8.66% Allianz Polska OFE Moody's Outlook Stab
Slide 49: Investor Relations Office. Contact and Calendar
Investor Relations Office. Contact and Calendar Contact Investor Relation Office Dariusz Choryło 15 Puławska Str. 02-515 Warsaw Tel: +48 604 050 796 e-mail: dariusz.chorylo@pkobp.pl e-mail: ir@pkobp.pl www.pkobp.pl/investor-relations Calendar 7th of March, 2024 Annual report for FY2023 9th of May, 2
Slide 50: Glossary
Glossary Customers’ financing - Loans (excluding FX mortgage loans), corporate and municipal bonds (excluding PFR, BGK, EIB corporate bonds), leasing and factoring (excl. repo transactions) Customers’ savings - Deposits, TFI (mutual funds) assets and treasury savings bonds of the bank and other enti
Slide 51: Disclaimer
Disclaimer This presentation (the ”Presentation”) has been prepared by Powszechna Kasa Oszczędności Bank Polski S.A. (”PKO Bank Polski 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, i