Ladies and gentlemen,
Year 2020 will undoubtedly be remember for a long time. Not only because of the global scale of the COVID-19 pandemic, but also because of the solutions in order to mitigate its impact in both health and economic dimensions. Today we cannot say yet that the most difficult period of the pandemic is certainly behind us. However, I believe that we passed well the test of responsibility, commitment and the ability to radically change the agenda of actions in order to achieve common goals in those difficult times.
Together with the Supervisory Board, we believe that Bank Pekao passed the stress test well, even though the pandemic to large extent limited ability of the entire banking sector to reach its financial ambitions. However, the pandemic did not alter the very fundamental approach of the Bank, i.e. focus to improve profitability, to increase operational efficiency and to even greater extent emphasise safety of employees and customers. The Bank showed a significant increase in the scale of operations, while ensuring that it was concentrated on segments most resilient to changes in the economic cycle. We intensified cost-effectiveness to support profitability. Traditionally, Bank Pekao remained a leader among large Polish banks in the risk management, this time prudently creating significant COVID-19 provisions. Referring to its strategic ambitions, the Bank has implemented a number of innovative solutions, thanks to which, Pekao strengthens its position as one of the leaders in the digital transformation of the sector. In the era of pandemic and simultaneous digital revolution, the solutions introduced by the Bank have a real impact on business development like record-breaking pace of customer acquisition, as well as a rapid migration of customers’ activity into remote channels. The Bank actively supported clients in accessing public liquidity support programs and offering clients with possibility of credit moratoria.
Further strengthening of cooperation between Bank Pekao and companies of the PZU Group allowed for the realization of tangible benefits in key strategic areas: bancassurance and assuredbanking. At the same time, we see vast potential in further development of the product offer and the use of distribution channels as well as expansion of the customer base. In the face of the digital transformation of the financial sector, we strive to identify and implement operational synergies. We want our activities to achieve tangible financial benefits, and therefore, we consider this as an important element of the new strategy of the Bank.
From the perspective of the financial sector, 2020 was an extremely demanding year, testing the diversification of business models, the degree of digitization and the balance sheet strength of banks. On the one hand, the sector has had to cope with a top-line income pressures from a slowing economic activity in an environment of lower interest rates that the pandemic brought. On the other hand, current financial results of the banks were also under pressure from the legal issues related to foreign currency mortgage loans. The pace of creating new provisions in this area significantly affected financial performance of the sector, especially for those banks, where exposure to foreign currency loans is the highest. Due to the negligible balance sheet exposure at Pekao, the scale of provisions for the CHF portfolio was consequently smaller compared to its key competitors. At the same time the level of provisions created by the Bank allowed to significantly reduce the cost of legal risk in the future, regardless of how the issue could resolve in the sector. The bank maintained a conservative approach to risk management in the face of elevated degree of uncertainty in the economy. At the same time, the Bank undertook many numerous actions allowing it to limit the negative effects of difficult environment on financial results thanks to high operational efficiency and additional strategic activities optimizing the cost base. The pandemic highlighted the tangible value of the digital transformation being implemented. Thanks to its effects, the Bank was able to swiftly adapt to operating remotely and also to remain close to customers thanks to remote channels. I am convinced that operating in a pandemic environment will be an impulse for further changes in the banking sector, not only in Poland, but globally as well, and the use of this potential will be the key to the success in a competitive financial services environment.
Together with the Supervisory Board, we attach great importance to the sustainable development and responsible activities of Bank Pekao supporting the implementation of its business goals and the positive and stabilizing effect that the Bank, thanks to its scale, can have on the environment, in which it operates. I would also like to emphasize the consistent development based on ESG factors (Environment, Social Responsibility and Corporate Governance) strongly embedded in the responsible business strategy of the entire PZU Group, which, as the largest financial institution in Poland and the entire region of Central and Eastern Europe, can actively support the energy transformation of the local economy. As the Supervisory Board, we will support Bank Pekao in further enhancement of competences in the ESG field and even stronger emphasis on the sustainable development in both commercial and operational activities in the new strategy of the Bank.
To summarize, on behalf of the Supervisory Board, we are convinced that Bank Pekao will continue to strengthen its leading position in the banking industry in Poland. I am also certain that with the perspective of all stakeholders in mind, the Bank will continue to focus on sustainable value creation. I believe that the strong foundations and focus on profitability will allow Pekao returning to dividend policy as the pandemic recedes and the economic conditions show tangible improvement.
On behalf of the Supervisory Board, I would like to thank the Management Board and all employees of the Bank and Bank’s Capital Group for their commitment and relentless focus in achieving commercial and corporate transformation goals in those demanding conditions. I would also like to thank all Banks’ stakeholders for their confidence in the Bank. The supervisory board will ensure that all decision taken by the Management Board of Pekao build value for all shareholders of the Bank and that Pekao meets highest regulatory, corporate governance and ethical standards.
dr hab. Beata Kozłowska-Chyła,
Chairwoman of the Supervisory Board of Bank Pekao S.A.