GRI
2022 Annual Report

Group on WSE

2022 Annual Report

Share capital and shareholders

As at 31 December 2022, the share capital of PKO Bank Polski S.A. amounted to PLN 1,250,000,000 and was divided into 1,250,000,000 shares with a nominal value of PLN 1 each. All the shares have been fully paid. The amount of the Bank’s share capital did not change in 2022.

Series Type of shares Number of shares Nominal value of 1 share Nominal value of series
Series A ordinary registered shares 312,500,000 1 PLN 312,500,000 PLN
Series A ordinary bearer shares 197,500,000 1 PLN 197,500,000 PLN
Series B ordinary bearer shares 105,000,000 1 PLN 105,000,000 PLN
Series C ordinary bearer shares 385,000,000 1 PLN 385,000,000 PLN
Series D ordinary bearer shares 250,000,000 1 PLN 250,000,000 PLN
1,250,000,000 1,250,000,000 PLN

According to the best knowledge of PKO Bank Polski S.A., as at 31 December 2022 the following three shareholders held, directly or indirectly, significant blocks of shares (at least 5%): the State Treasury, Nationale Nederlanden Open Pension Fund and the Allianz fund group.

As at 31.12.2022 As at 31.12.2021 Change in the share in the number of votes at the GSM
Number of shares Share in the number of votes at the GSM and in the share capital Number of shares Share in the number of votes at the GSM and in the share capital
State Treasury 367,918,980 29.43% 367,918,980 29.43% –
Nationale Nederlanden Open Pension Fund1) 108,266,112 8.66% 103,500,000 8.28% 0.38 p.p.
Allianz fund group1),2),3) 106,567,559 8.53% 96,568,413 7.73% 0.80 p.p
Other shareholders4) 667,247,349 53.38% 682,012,607 54.56% -1.18 p.p
Total 1,250,000,000 100.00% 1,250,000,000 100.00% –
1) Calculation of shareholdings as at the end of the year published by Universal Pension Fund Management Companies (PTE) in annual information about the structure of fund assets and quotation from the securities exchange official list (Ceduła Giełdowa).
2) The group includes: Allianz Polska Open Pensions Fund, Allianz Polska Voluntary Pension Fund, Drugi Allianz Polska Open Pension Fund.
3) The figure as at 31 December 2021 includes shares held by former funds: Aviva Open Pension Fund and Allianz Open Pension Fund; it does not include shares held by Allianz Polska Voluntary Pension Fund.
4) Including Bank Gospodarstwa Krajowego, which as at 31 December 2022 and 31 December 2021 held 24,487,297 shares carrying 1.96% of the votes at the GSM.

The shares of PKO Bank Polski S.A. and other securities issued by the Bank do not carry any specific control rights.

The Bank is not aware of any agreements concluded in 2022, based on which any changes could occur in the future in the proportions of the shares held by the current shareholders or bond holders.

Shareholder Number of shares Share in the number of votes at the GSM and in the share capital Number of shares Share in the number of votes at the GSM and in the share capital
As at 31.12.2022 As at 31.12.2021
Nationale-Nederlanden OFE 108,266,112 8.66% 103,500,000 8.28%
Grupa funduszy Allianz OFE1),2) 106,555,815 8.52% 96,568,413 7.73%
PZU OFE 56,683,943 4.53% 52,915,942 4.23%
Aegon OFE 31,967,391 2.56% 32,878,074 2.63%
NNLife OFE (dawny Metlife OFE) 30,040,414 2.40% 30,298,318 2.42%
UNIQA OFE (dawny AXA OFE) 23,513,483 1.88% 23,513,483 1.88%
Generali OFE 21,445,456 1.72% 19,928,593 1.59%
Pocztylion OFE 6,443,630 0.52% 6,293,630 0.50%
1) The group includes: Allianz Polska Open Pension Fund and Drugi Allianz Polska Open Pension Fund.
2) The figure as at 31 December 2021 includes shares held by former funds: Aviva Open Pension Fund and Allianz Open Pension Fund.

Restrictions imposed on shares of PKO Bank Polski S.A.

All shares of PKO Bank Polski S.A. carry the same rights and obligations. No shares are preference shares, in particular with respect to voting rights (one share carries one vote) or dividend.

The Articles of Association of PKO Bank Polski S.A. limit the voting right of shareholders holding more than 10% of the total number of votes at the General Shareholders’ Meeting and prohibit these shareholders from exercising more than 10% of the total number of votes at the General Shareholders’ Meeting. The above restriction does not apply to:

  • those shareholders who on the date of passing the resolution of the General Shareholders’ Meeting introducing the limitation of the voting rights had rights from the shares representing more than 10% of the total number of votes in PKO Bank Polski S.A. (i.e. the State Treasury and BGK);
  • shareholders who have rights from A-series registered shares (the State Treasury);
  • shareholders acting jointly with the shareholders referred to in the second bullet point based on agreements concluded concerning the joint execution of voting rights on shares.

The Bank has not identified any other restrictions relating to transfer of the ownership rights arising from the Bank’s securities.

The limitations to the voting rights of the shareholders expire at the moment when the share of the State Treasury in the Bank’s share capital drops below 5%.

In accordance with:

  • § 6 (2) of the PKO Bank Polski S.A.’s Articles of Association, the conversion of A-series registered shares into bearer shares and the transfer of these shares requires the approval of the Council of Ministers in the form of a resolution. The conversion into bearer shares or transfer of A-series registered shares, after obtaining such approval, results in the expiry of restrictions in respect of the shares subject to conversion into bearer shares or transfer, to the extent to which this approval was given;
  • Article 13 (1) (26) of the Act of 16 December 2016 on the principles for public property management (apart from the statutory exceptions), the shares belonging to the State Treasury or rights from these shares cannot be sold,
  • Article 77 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms, amending Regulation (EU) No 648/2012, any reduction, redemption or repurchase of Common Equity Tier 1 instruments issued by the Bank is only possible with the prior permission of the PFSA.

Share price and capitalization

2022 was a difficult year for nearly all financial asset classes, including shares. PKO Bank Polski S.A.’s share price fell by 33% and the rate of return on the shares, taking into account dividend payments, was – 28%, as was the WIG index for Banks (WIG-Banki), which also fell by 28%. The main reasons for the decline in shares included a significant increase in the risk premium demanded by investors as a result of the outbreak of war in Ukraine, escalating international tensions and increased uncertainty about possible regulations and their impact on performance, as well as an increase in the risk-free rate as a result of the surge in market interest rates.

Na koniec 2022 roku PKO Bank Polski S.A. był największym krajowym bankiem notowanym na Giełdzie Papierów Wartościowych w Warszawie. Na koniec ostatniej sesji 2022 roku inwestorzy wyceniali jego wartość na 38 mld PLN.

Duża płynność i wysoka kapitalizacja powodują, że akcje Banku wchodzą w skład wielu indeksów giełdowych tj. indeksu dużych polskich spółek WIG20 i WIG30, indeksu sektora bankowego WIG-Banki, indeksu spółek reprezentujących najwyższe standardy społecznej odpowiedzialności WIG-ESG, indeksu rynków wschodzących MSCI Emerging Markets oraz indeksu dużych spółek FTSE Russell i STOXX Europe 600.

Key data on the PKO Bank Polski S.A. shares

2022 2021
Share price at the end of the year (PLN) 30.29 44.93
Maximum share price (PLN) 50.44 50.36
Minimum share price (PLN) 21.14 27.51
Rate of return since the beginning of the year (%) -27.57 56.44
Number of shares 1,250,000 1,250,000
Capitalization at the end of the year (PLN million) 37,862.5 56,162.5
Average trading volume per session 3,483,522 2,293,578
Share in trading volume (%) 9.64 6.91
Average number of transactions per session 8,110 6,030
Earnings per share (PLN) 2.67 3.90
Book value per share (PLN) 28.35 30.15
P/E (x)1) 8.94 11.95
P/BV (x)1) 1.14 1.24
Source: Data based on the WSE Statistical Bulletin
1) Source: Bloomberg as of February 20, 2023.

Ratings

The creditworthiness of PKO Bank Polski S.A. is assessed by Moody’s Investors Service rating agency which awards a paid rating to the Bank.

Ratings of PKO Bank Polski S.A. as at 31 December 2022 (paid rating)

Moody’s Investors Service
Long-term deposit rating A2 with stable outlook
Short-term deposit rating P-1
Senior unsecured debt rating A3 with stable outlook
MTN Programme rating (P)A3
Other short-term liabilities of the Programme rating (P)P-2
Counterparty risk assessment – long-term A2
Counterparty risk assessment – short-term P-1
Opinion on counterparty risk (CR) – long-term A2(cr)
Opinion on counterparty risk (CR) – short-term P-1(cr)

ESG ratings of PKO Bank Polski S.A. as at 31 December 2022

FTSE Russell 3,3
MSCI A
Sustainalytics 21 (Medium)
V.E 46

Ratings of PKO Bank Polski S.A. as at 31 December 2022 (paid rating)

Moody’s Investors Service
ong-term issuer rating A3
Short-term issuer rating P-2
Counterparty risk assessment – long-term A2
Counterparty risk assessment – short-term P-1
Opinion on counterparty risk – long-term A2(cr)
Opinion on counterparty risk – short-term P-1(cr)
Rating for PLN mortgage covered bonds issued Aa1
Rating for EUR mortgage covered bonds issued Aa1

Outlook: stable

As at 31 December 2022, bonds issued by Polish Lease Prime 1 DAC, a special purpose vehicle established within the PKO Leasing S.A. Group for the purposes of the asset securitization programme, had the following ratings:

Ratings of Polish Lease Prime 1 DAC bonds as at 31 December 2022 (paid rating)

A-class bonds rating
Scope Agency AAA
ARC Agency AA-
B-class bonds rating
Scope Agency BB-
ARC Agency BB+

As at 31 December 2022, KREDOBANK S.A. had the following ratings granted by Ukrainian rating agencies:

Ratings of KREDOBANK S.A. as at 31 December 2022 (paid ratings)

“Expert-Rating” Rating Agency
Credit rating on country-wide scale uaAAA with stable outlook
“Standard-Rating” Rating Agency
Credit rating on country-wide scale – long-term uaAAA with stable outlook
Credit rating on national scale – short-term uaK1 with stable outlook
Deposit rating on country-wide scale ua1 with stable outlook

The long-term credit rating of KREDOBANK S.A. on a country-wide scale reflects the investment level, and thus meets Ukrainian statutory requirements regarding investing funds from insurance reserves by insurers and investing pension fund assets.

Investor relations

PKO Bank Polski S.A. maintains regular contact with investors and financial market analysts and aims at maintaining high communication standards. The Bank’s representatives ensure transparent, reliable and complete access to information on the functioning of the Bank, its financial performance and the situation in the banking sector. The Bank allows various forms of contact preferred by the investors and analysts.

Due to the change in the form of contact caused by the COVID-19 pandemic, a significant proportion of meetings with investors and analysts were held remotely by teleconference and video conference. In 2022, 304 investor meetings were held.

In 2022:

  • the Bank’s and the Bank Group’s financial performance was presented after each quarter by the Bank’s Management Board; the performance presentation was broadcast over the Internet,
  • The Bank’s Management Board participated in a number of investor conferences held by brokerage firms: 223 meetings were held during 10 online conferences and 9 face-to-face conferences with investors from Poland (51%), the UK (18%), other European countries (16%), North America (mainly from the US) and South America (13%), Asia (1%),
  • 81 individual meetings took place, of which 61 were held online and 20 took place in the Bank’s office.

PKO Bank Polski S.A. is observed by a wide group of analysts from brokerage houses who issue recommendations to entities listed on the Warsaw Stock Exchange on an ongoing basis. At the end of the year 2022, 18 Polish and foreign analysts published reports and recommendations concerning the Bank’s shares. The average target price of the Bank’s shares as of end 2022 was PLN 35.40.

Dividend

Dividend policy

On 15 of December 2022, PKO Bank Polski S.A. adopted a dividend policy for the Bank and the Bank’s Group (“Dividend policy”). The Dividend policy takes into account the Bank’s intention to provide stable dividend payments in the long term, in accordance with the principle of prudent management of the Bank and the Bank’s Group, in compliance with the law and the PFSA position on the dividend policy assumptions of commercial banks. The objective of the Dividend policy is to optimize the capital structure of the Bank and the Bank’s Group, while considering the return on equity, the cost of capital and the capital needs for development, and maintaining an appropriate level of the capital adequacy ratios and meeting the minimum requirement for own funds and eligible liabilities (MREL).

In accordance with the Dividend policy, the buyback of own shares for redemption is an additional tool for capital redistribution. The General Meeting gives its consent to the acquisition of own shares by the Bank, after prior approval of the Supervisory Board, specifying the terms of the acquisition, including the maximum number of shares to be acquired, the period of authorization to acquire shares, which may not exceed five years and the maximum and minimum amount of consideration for the acquired shares, if the acquisition takes place for consideration. Purchase of own shares for redemption in each case requires the Bank to obtain the prior consent of the Polish Financial Supervision Authority.

In December 2022, the Polish Financial Supervision Authority adopted a position on the 2023 dividend policy of supervised institutions, which was subsequently confirmed in a letter dated 23 December 2022.

The dividend payment criteria for commercial banks indicated in the PFSA’s positions are as follows:

  1. an amount of up to 50% of the profit for 2022 may only be paid out by banks that fulfil all of the following criteria:
    • not implementing a recovery programme;
    • positively assessed in the supervisory review and assessment process (BION) – final BION score not worse than 2.5;
    • having a leverage ratio (LR) of more than 5%;
    • having a Tier 1 core capital ratio (CET1) of not less than the required minimum: 4.5% +56.25% x P2R requirement + combined buffer requirement (including 3% supervisory buffer);
    • having a Tier 1 capital ratio (T1) not lower than the required minimum: 6% +75% x P2R requirement + combined buffer requirement (including 3% supervisory buffer);
    • having a total capital ratio (TCR) not lower than the required minimum: 8% + P2R requirement + combined buffer requirement (including 3% supervisory buffer);
  2. an amount of up to 75% of the profit for 2022 may be paid only by banks meeting at the same time the criteria for payment of 50% taking into account, as part of the capital criteria, the bank’s sensitivity to an adverse macroeconomic scenario;
  3. an amount of up to 100% of the profit for 2022 may be paid only by banks meeting at the same time the criteria for payment of 75% and whose portfolio of receivables from the non-financial sector is characterised by good credit quality (share of NPLs, including debt instruments, not exceeding 5%).

The criteria set out in points 1-3 should be met by the bank both at the individual and consolidated level.

Additionally, the PFSA indicated that the banks which have considerable portfolios of foreign currency housing loans should adjust the rate of dividend distribution based on two additional criteria:

  • Criterion 1 – based on the share of foreign currency housing loans for households in the total portfolio of amounts due from the non-financial sector;
  • Criterion 2 – based on the share of loans granted in 2007 and 2008 in the foreign currency housing loans for households’ portfolio.

The PFSA recommended that appropriate adjustments be applied, depending on the size of the Bank’s portfolio:

  • Criterion 1:
    • banks with a share exceeding 5% – adjustment of the dividend rate by 20 p.;
    • banks with a share exceeding 10% – adjustment of the dividend rate by 40 p.;
    • banks with a share exceeding 20% – adjustment of the dividend rate by 60 p.;
    • banks with a share exceeding 30% – adjustment of the dividend rate by 100 p.;
  • Criterion 2:
    • banks with a share exceeding 20% – adjustment of the dividend rate by 30 p.;
    • banks with a share exceeding 50% – adjustment of the dividend rate by 50 p.

whereas the total value of the adjustment (maximum 100%) is the sum of adjustments resulting from both criteria.

The Bank’s sensitivity to an unfavorable macroeconomic scenario is measured using the results of supervisory stress tests and has been defined by the PFSA in the form of a recommendation (P2G).

In a letter dated 23 December 2022, PFSA advised the Bank to mitigate the risks inherent in the Bank’s operations by maintaining own funds to cover an additional capital add-on to absorb potential losses resulting from a stress event, in the amount of 0.72 p.p. at the individual level and 0.66 p.p. at the consolidated level over the value of the total capital ratio.

According to the letter from the PFSA, the Bank will also receive an individual recommendation regarding both the possibility to pay dividends and other actions that may result in a reduction of the capital base.

As at 31 December 2022 the ratios amounted to:

  • at the consolidated level:
    • Tier 1 capital ratio (T1) and core equity ratio Tier 1 (CET1) = 16.65%;
    • total capital ratio (TCR) = 17.78%;
    • Criterion 1 = 5.03%;
    • Criterion 2 = 32.90%;
  • at the separate level:
    • Tier 1 capital ratio (T1) and core equity ratio Tier 1 (CET1) = 17.56%;
    • total capital ratio (TCR) = 18.86%;
    • Criterion 1 = 6.09%;
    • Criterion 2 = 33.80%.

The Bank’s intention is to pay dividend in 2023 from the net profit for 2022. The recommendation of the Bank’s Management Board regarding dividends will be determined after receiving an individual dividend policy recommendation from the PFSA.

Pursuant to Article 395 § 2(2) of the Commercial Companies Code, the decision on profit distribution remains within the competences of the Bank’s Annual General Meeting.

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