The capital adequacy of the PKO Bank Polski S.A. Group in 2022 remained significantly above the supervisory limits.
As at the end of 2022 the total capital ratio of the PKO Bank Polski S.A. Group amounted to 17.78% and compared with the end of 2021 it decreased by 0.95 p.p., and the core capital Tier 1 ratio amounted to 16.65% and decreased by 0.88 p.p.
The drop in the capital ratios was determined by a decrease in own funds by PLN 1.4 billion with the capital requirements being PLN 0.3 billion higher.
The changes in own funds resulted mainly from: a decrease in the fair value of financial assets measured at fair value through other comprehensive income of approx. PLN 1.7 billion (following the application of provisions mitigating the impact of the COVID-19 pandemic (Article 468 of the CRR)), an increase in the value of deductions from funds due to exceeding the threshold from which excess capital commitments and deferred tax assets reduce funds by approximately PLN 0.2 billion and including in the core equity Tier 1 a part of the net profit earned for the period from 1 January 2022 to 30 June 2022 of PLN 946 million.
In 2022, there was an increase in the own funds requirement for operational risk by PLN 0.6 billion, mainly due to the recognition of the cost of legal risk of mortgage loans in convertible currencies. The decrease in own funds requirements for credit risk amounted to PLN 0.4 billion, mainly due to the application of a preferential risk weighting for foreign currency housing loans covered by the settlement program, which reduced requirements by about PLN 0.6 billion.
In 2022, the total capital ratio of PKO Bank Polski S.A. decreased by 1.37 b.p. to 18.86%, and the core capital T1 ratio by 1.29 b.p. to 17.56%. The decrease in capital ratios is mainly due to a decrease in own funds by PLN 2.3 billion and an increase in capital requirements by PLN 0.3 billion.
Own funds of PKO Bank Polski S.A. decreased by PLN 2.3 billion, mainly as a result of a decrease in the fair value of financial assets measured at fair value through other comprehensive income of approx. PLN 1.5 billion (following the application of provisions mitigating the impact of the COVID-19 pandemic (Article 468 of the CRR)), and an increase in the reduction due to exposures excluded from the exposure concentration limit, and deferred tax on the core equity Tier 1 position of PLN 1.0 billion. The increase in own funds resulted from the consent of the PFSA to include in the core equity Tier 1 a part of the Bank’s net profit earned for the period from 1 January 2022 to 30 June 2022 of PLN 895 million.
The own funds requirement for operational risk increased by PLN 0.6 billion, mainly due to the recognition of the cost of legal risk of mortgage loans in convertible currencies. The decrease in own funds requirements for credit risk amounted to PLN 0.5 billion, mainly due to the application of a preferential risk weighting for housing loans covered by the settlement program, which reduced requirements by about PLN 0.6 billion.