Letter from the CEO

The most fateful effect of the war in Ukraine in economic terms was the intensification of inflation factors. This referred to Poland and to almost all other countries in the world. In reaction to this, the central banks raised the interest rates. In turn, this affected the situation of the entire banking sector. We observed a subsiding demand for loans, especially mortgage loans. The extraordinary items in the balance sheet.

We met these challenges. The last year clearly confirmed that PKO Bank Polski is the cornerstone of the Polish banking system and an institution that is very well prepared for the difficult times. Our experience and scale of operation, combined with professionalism of our employees, allowed for aligning the actions to the current needs of clients and the entire national economy. Having absorbed the impact of extraordinary events, we recorded a result on the level of PLN 3 billion 333 million. This was possible thanks to the robust growth of income from basic activity and cost and risk control.

Today, at the beginning of March 2023, the situation begins to look more optimistic. More and more data show that the inflation shock is going to be followed by a time of de-inflation and a return to greater stability. We have also managed to avoid the black scenario of energy crisis, even though this is just a battle and not the war that was won. Thus, PKO Bank Polski starts 2023 boldly, with hope and a solid profit. In line with the slogan of the new strategy for 2023-2025 announced in December 2022, we are ‘Ready for the challenges, focused on the future.’ We put the people’s needs – our clients and employees – at the heart of our strategy. Being guided by their expectations, we will strive for improving our offer and services and implementing new solutions based on innovations, technology and sustainable development.

The new strategy also puts stronger emphasis on the performance of the ESG goals – both in aspects related to sustainable financing and limiting own emissions, as well as the social aspects and governance within the organisation. The Bank intends to implement unique solutions in the area of energy transformation financing, with a view to support the competitiveness of Polish companies with respect to high energy prices, business and regulatory requirements. The Bank will continue its engagement in pro-social activities and support diversity and equal treatment of employees, irrespective of their age, sex and origin. We are obviously not forgetting about reinforcing the position of the Capital Group of PKO Bank Polski at the market. Our priority is organic growth and maintenance of dividend policy; we will be actively looking at the possibilities of take-overs. By 2025, we plan to accomplish ROE above 12 percent, C/I below 45 percent and maintain the cost of risk between 0.7 and 0.9 percent.

The past year was also the time of further development of modern products and services by PKO Bank Polski, including ones offered via remote channels. Owing to adequately selected objectives and consistency in operation, the Bank is a leader in sharing modern solutions. The number of active IKO apps at the end of 2022 at the Polish market exceeded the record level of 7.2 million. The IKO voice assistant completed 2.5 million talks with the clients. The number of calls made by all voice bots approximated 18 million. In 2022 alone, there were 10.4 million of those calls.

Another event of importance with respect to the modern and unique solutions was launch of the Warsaw PKO Rotunda in the Metaverse. For PKO Bank Polski, presence in the Metaverse is an opportunity to gain experience and to test technological solutions that will be used to develop a new channel of communicating with clients and its business use in the future.

It must be said that 2022 was a difficult time – both for the banking sector and for Poles. However, in spite of the turbulence, Poland stands a good chance of recording economic growth in 2023. Hopefully, the future drop in interest rates will revert the effects of negative assessment of the portfolio of securities. We assume a growth of the value of equity by 60 percent by 2025, which results – apart from the aforementioned effect – from the accumulation of future profits. Our priority is capital management and accomplishment of proper profitability to share the profits that we have generated. We would like to have such capital surplus that allows us to think about the shareholders ‘generously’. Let me remind you that in 2022, 50 percent of the profit from 2021 was distributed among them.

As a bank, we are well prepared for the hard times; we see the possibility of further stable growth in 2023. We remain faithful to our mission and we are continually whetting our appetite for next successes, the beneficiaries of which will be our shareholders, clients, employees and the entire Polish economy.