1. Highlights of Bank Pekao S.A. Group
2. Highlights of Bank Pekao S.A.
4. External Activity Conditions
5. Important Events and Achievements
5.1 Changes in the Group’s structure
5.2 Changes in the Statutory Bodies of the Bank
6. Information for the Investors
6.1 The Bank’s share capital and share ownership structure
6.2 Performance of market valuation of Bank Pekao S.A.’s stock
6.5 Financial credibility ratings
6.5.1 Bank Pekao S.A. financial credibility ratings
6.5.2 Pekao Bank Hipoteczny S.A. financial credibility ratings
7. Activity of Bank Pekao S.A. Group
7.1 Important factors influencing the Group’s activities and results
7.2 Major sources of risk and threats
7.4 Bank Pekao S.A. on the Polish banking market
7.4.1 Retail Banking and Private Banking
7.4.2 Small and medium enterprises (SME)
7.5 Major areas of activities of the Group’s subsidiaries
7.5.6 Other financial services
7.6 Investing in human capital
7.7 Sponsorship and charity policy
8. Statement of Financial Position and Financial Results
8.1 The consolidated income statement – presentation form
8.2 Structure of the consolidated statement of financial position – short form
8.3 Consolidated income statement – long form
8.3.1 Consolidated income statement – long form
8.3.2 Consolidated statement of comprehensive income
8.3.3 Consolidated income statement – presentation form
8.3.4 Reconciliation of income statement – presentation form and long form
9. Statement of Financial Position and Financial Results
9.1 The unconsolidated income statement – presentation form
9.2 Structure of the unconsolidated statement of financial position – short form
9.3 Unconsolidated income statement – long form
9.3.1 Unconsolidated income statement – long form
9.3.2 Unconsolidated statement of comprehensive income
9.3.3 Unconsolidated income statement – presentation form
9.3.4 Reconciliation of income statement – presentation form and long form
9.4 The structure of the net profit
11.1 Factors which will affect the results of the Group
11.2 Strategic directions and business priorities
12. Representations of the Bank’s Management Board
14. Statement of Bank Pekao S.A. Group on Non-financial Data for 2020
14.1 About Bank Pekao S.A. Capital Group
14.1.1 Bank Pekao S.A. and Bank Pekao S.A. Capital Group
14.1.4 Organisational Structure
14.1.7 Communication with Stakeholders
14.1.8 Share in ESG indices and ratings
14.1.8.1 Gender-Equality Index (GEI)
14.2.2 Corporate values - Charter of Principles
14.2.3 Code of Conduct of the Pekao Group
14.2.4 Relations with Customers
14.2.5 Satisfaction Management
14.2.7 Relations with Suppliers
14.2.8 Conflict of Interest Management
14.2.9 Charity and Sponsoring Activities
14.2.10 Employee Volunteer Programme
14.2.10.1 Membership in Trade Associations and Organisations
14.3.1 Human Resources Management
14.3.1.1 Gender Equality and Diversity Policy
14.3.1.2 Selection and Suitability Assessment Policy
14.3.1.3 Mobbing Prevention Policy
14.3.1.4 Charter of Principles Advocates
14.3.1.5 Initiatives to Promote Diversity
14.3.2 Training and Development
14.3.4 Career Path and Recruitment Management
14.3.5 Terms of Employment, Work, and Benefits
14.3.5.1 Corporate Collective Labour Agreement
14.3.5.3 Benefits from the Company Social Benefits Fund
14.3.6 Relations with Trade Unions and Freedom of Association
14.3.7 Occupational Health and Safety
14.4.1 Reduction of Raw and Other Material Consumption
14.4.2 Responsible Procurement
14.4.3 Protection of Polish Wisents
14.4.4 Environmental Risk in Lending Activity
14.5.1 Corruption Prevention Programme
14.6.1 Personal Data Protection
14.6.5 Local Community Perspective
14.8 Selected Non-Financial Data
14.9.3 Table of Compliance with the Accounting Act
|
2020 |
2019 |
2018 |
2017 |
2016 |
2015 |
Income statement– SELECTED ITEMS |
|
|
(in PLN million) |
|||
Operating income (*) |
7,813 |
8,282 |
7,830 |
7,350 |
7,347 |
7,059 |
Operating costs |
(3,468) |
(3,537) |
(3,445) |
(3,263) |
(3,212) |
(3,220) |
Gross operating profit (*) |
4,345 |
4,745 |
4,387 |
4,087 |
4,135 |
3,839 |
Profit before income tax |
1,725 |
3,002 |
3,047 |
3,153 |
2,897 |
2,831 |
Net profit for the period attributable to equity holders of the Bank |
1,102 |
2,165 |
2,287 |
2,475 |
2,279 |
2,293 |
profitability ratios |
|
|
|
|
|
|
Return on average equity (ROE) - nominally |
4.5% |
9.5% |
10.2% |
11.0% |
9.8% |
9.7% |
Return on assets (ROA) |
0.5% |
1.1% |
1.3% |
1.4% |
1.4% |
1.4% |
Net interest margin |
2.5% |
2.9% |
2.8% |
2.8% |
2.8% |
2.8% |
Cost / income (*) (including BFG cost) |
49.3% |
48.2% |
47.4% |
48.1% |
47.3% |
49.5% |
Cost / income (*) (excluding BGF costs and provisions for legal risk related to FX mortgage loans) |
44.0% |
42.6% |
44.0% |
44.4% |
43.7% |
45.6% |
Costs of risk |
0.99% |
0.46% |
0.36% |
0.40% |
0.45% |
0.49% |
statement of financial position – SELECTED ITEMS |
|
|
(in PLN million) |
|||
Total assets |
233,217 |
203,323 |
191,090 |
185,466 |
174,215 |
168,786 |
Customers’ financing(**) |
151,684 |
151,384 |
140,032 |
132,300 |
122,663 |
117,299 |
Amounts due to customers(***) |
177,745 |
157,203 |
149,143 |
145,398 |
136,380 |
124,399 |
Debt securities issued and subordinated liabilities |
8,905 |
9,072 |
7,243 |
4,029 |
1,523 |
2,903 |
Equity |
25,495 |
23,398 |
22,808 |
23,268 |
22,912 |
23,424 |
STATEMENT OF FINANCIAL POSITION structure ratios |
|
|
|
|
|
|
Customers’ financing (**) / total assets |
65.0% |
74.5% |
73.3% |
71.3% |
70.4% |
69.5% |
Securities / total assets |
26.7% |
17.8% |
15.0% |
20.8% |
20.6% |
13.2% |
Deposits (****) / total assets |
80.0% |
81.8% |
81.8% |
80.6% |
79.2% |
75.4% |
Customers’ financing (*) / deposits (****) |
81.3% |
91.0% |
89.5% |
88.5% |
88.9% |
92.1% |
Equity / total assets |
10.9% |
11.5% |
11.9% |
12.5% |
13.2% |
13.9% |
Total capital ratio |
18.7% |
17.1% |
17.4% |
17.1% |
17.6% |
17.7% |
employees and network |
|
|
|
|
|
|
Total number of employees |
14,994 |
15,678 |
16,714 |
17,339 |
17,757 |
18,327 |
Number of outlets |
713 |
805 |
818 |
843 |
952 |
1,022 |
Number of ATMs |
1,592 |
1,648 |
1,708 |
1,745 |
1,761 |
1,759 |
(*) Starting from the first quarter of 2020 the Group made changes in the presentation of selected items of the income statement. The items: ‘Net result on other provisions, and ‘Gains (losses) on disposal of property, plant and equipment and intangible assets, are presented in the line ‘Net other operating income and expenses’ (and thus in operating income gross operating profit and relevant indicators). The above-mentioned changes resulted in restatement of comparable data, but without impact on the net profit for the period. In order to ensure comparability, data for for the years 2018-2019 have been restated in comparison to those previously published, data for earlier periods remain unchanged.
(***) Including net investments in financial leases to customers, non-treasury debt securities and excluding reverse repo transactions.
(****) Excluding repo transactions and lease liabilities.
(****) Deposits include amounts due to customers, debt securities issued and subordinated liabilities.
Note: Income statement data included in the table above and other notes to the Report on activities were presented according to income statement in a presentation form, which differs from the long form of the income statement presented in the Financial statements of the Group. Reconciliation of income statement in the presentation form and the long form is in the point 8.3.4 of the Report on activities.
|
2020 |
2019 |
2018 |
2017 |
2016 |
2015 |
|||
Income statement– SELECTED ITEMS |
|
|
(in PLN million) |
||||||
Operating income |
7,476 |
7,887 |
7,478 |
7,085 |
7,036 |
6,792 |
|||
Operating costs |
(3,191) |
(3,204) |
(3,119) |
(3,025) |
(2,991) |
(2,993) |
|||
Gross operating profit |
4,285 |
4,683 |
4,359 |
4,061 |
4,045 |
3,799 |
|||
Profit before income tax |
1,697 |
3,016 |
3,021 |
2,728 |
2,863 |
2,792 |
|||
Net profit |
1,126 |
2,247 |
2,311 |
2,088 |
2,278 |
2,290 |
|||
profitability ratios |
|
|
|
|
|
|
|||
Return on average equity (ROE) - nominally |
4.8% |
10.2% |
10.7% |
9.6% |
10.1% |
10.1% |
|||
Return on assets (ROA) |
0.5% |
1.2% |
1.3% |
1.2% |
1.4% |
1.4% |
|||
Net interest margin |
2.5% |
2.9% |
2.8% |
2.8% |
2.8% |
2.7% |
|||
Cost / income (*) (including BFG cost) |
47.7% |
46.4% |
45.3% |
46.4% |
46.2% |
48.1% |
|||
Cost / income (*) (excluding BGF costs and provisions for legal risk related to FX mortgage loans) |
42.3% |
40.5% |
41.7% |
42.7% |
42.5% |
44.1% |
|||
Costs of risk |
1.03% |
0.43% |
0.36% |
0.40% |
0.46% |
0.50% |
|||
statement of financial position – SELECTED ITEMS |
|
|
(in PLN million) |
||||||
Total assets |
222,381 |
194,650 |
184,347 |
182,077 |
170,989 |
165,761 |
|||
Customers’ financing(*) |
139,926 |
142,146 |
133,085 |
128,873 |
119,034 |
113,753 |
|||
Amounts due to customers(**) |
178,276 |
157,750 |
149,784 |
146,110 |
136,630 |
124,788 |
|||
Debt securities issued and subordinated liabilities |
3,281 |
4,369 |
3,745 |
2,727 |
301 |
1,669 |
|||
Equity |
24,647 |
22,527 |
21,822 |
22,259 |
22,283 |
22,794 |
|||
STATEMENT OF FINANCIAL POSITION structure ratios |
|
|
|
|
|
|
|||
Customers’ financing (*) / total assets |
62.9% |
73.0% |
72.2% |
70.8% |
69.6% |
68.6% |
|||
Securities / total assets |
28.2% |
18.6% |
15.5% |
21.1% |
20.8% |
13.3% |
|||
Deposits(***) / total assets |
81.7% |
83.3% |
83.3% |
81.7% |
80.1% |
76.3% |
|||
Customers’ financing (*) / deposits(***) |
77.1% |
87.7% |
86.7% |
86.6% |
86.9% |
90.0% |
|||
Equity / total assets |
11.1% |
11.6% |
11.8% |
12.2% |
13.0% |
13.8% |
|||
Total capital ratio |
20.8% |
18.7% |
18.7% |
18.4% |
18.2% |
18.2% |
|||
employees and network |
|
|
|
|
|
|
|||
Total number of employees |
12,870 |
13,779 |
14,569 |
15,316 |
15,882 |
16,387 |
|||
Number of outlets |
713 |
805 |
818 |
843 |
952 |
1,022 |
|||
Number of ATMs |
1,592 |
1,648 |
1,708 |
1,745 |
1,761 |
1,759 |
|||
(*) Starting from the first quarter of 2020 the Group made changes in the presentation of selected items of the income statement. The items: ‘Net result on other provisions, and ‘Gains (losses) on disposal of property, plant and equipment and intangible assets, are presented in the line ‘Net other operating income and expenses’ (and thus in operating income gross operating profit and relevant indicators). The above-mentioned changes resulted in restatement of comparable data, but without impact on the net profit for the period. In order to ensure comparability, data for for the years 2018-2019 have been restated in comparison to those previously published, data for earlier periods remain unchanged.
(**) Including non-treasury debt securities and excluding reverse repo transactions.
(***) Excluding repo transactions and lease liabilities.
(****) Deposits include amounts due to customers, debt securities issued and subordinated liabilities.
Note: Income statement data included in the table above and other notes to the Report on the activities were presented according to income statement in a presentation form, which differs from the long form of the income statement presented in the Unconsolidated Financial Statements of Bank Pekao S.A. for the period ended on 31 December, 2020. Reconciliation of income statement in the presentation form and the long form is in the point 9.3.4.
Net profit of the Bank Pekao S.A. Group attributable to the Bank's holders for 2020 amounted to PLN 1,101.7 million and was lower by PLN 1,063,3 million i.e. 49.1% y/y, mainly due to higher write-offs for impairment of financial assets, related to the COVID-19 coronavirus pandemic and provisions for legal risk related to foreign currency mortgage loans (PLN 672 million and PLN 377 million impact on net profit respectively).
Despite the COVID-19 coronavirus pandemic, the Group increased the size of its commercial activities, actively supported clients' financial liquidity and focused on further improving cost-effectiveness and protecting the portfolio:
In 2020, the Group recorded an improvement in its size of commercial activities, including an increase in mortgage loans by 6.1%, an increase in financing in the area of small and medium-sized enterprises, as well as in the area of leasing and factoring. There was a strong growth of household savings entrusted to the Group. All these activities translated into an increase in the balance sheet total by 14.7% y/y to the level of PLN 233 billion,
The Group focused on improving cost-effectiveness, security and quality of the loan portfolio. Operating costs were lower by 2.0% y/y (excluding restructuring provisions were lower by 3.4% y/y). Portfolio guarantees were actively used under the Liquidity Guarantee Fund prepared by Bank Gospodarstwa Krajowego, the risk appetite was adjusted, especially in relation to the most risky assets, while at the same time applying a very conservative approach to recognizing impairment losses on financial assets related both to coronavirus pandemic as well as increased legal risk related to foreign currency mortgage loans.
Advanced digital solutions were implemented, as well as digitization and process automation (including receipt of documents in electronic form), aimed at providing remote customer service and the process of mass use of electronic qualified signatures. A number of promotional and information campaigns were conducted, in which customers were encouraged to use banking services through the use of mobile channels and internet banking. Customer relations were strengthened, facilitating the use of remote channels, which contributed to the increase in the number of new active customers of mobile banking by 364 thousand y/y and exceeding the 50% share of consumer loan sales in remote channels in the total sales of this product.
The Group actively supported clients in maintaining financial liquidity during the COVID -19 pandemic, inter alia, by providing funds from government aid programs under the so-called "Anti-crisis shield" using the instruments of the Polish Development Fund - over 31,6 thousand customers took advantage of the subsidy through the Bank (applications for the amount of over PLN 7.4 billion were accepted), the government guarantee program (BGK de minimis and the Liquidity Guarantee Fund) and European guarantee programs for SMEs and micro enterprises. Customers were allowed to suspend loan installments payments for the duration of temporary liquidity problems during the pandemic.
New tools and processes were implemented to facilitate remote operations and the seven golden rules of safe banking were promoted. Out of concern for the safety of employees, thanks to the developed technological possibilities and digitization of processes, conditions for remote work were organized for those employees whose daily work is not related to direct contact with the client. All branches have been equipped with special protective measures to ensure the safety of both customers and employees. Opening hours and working hours were also reorganized.
The Group maintained the solid capital base (TCR amounted to 18.7% as at the end of December 2020) and the safe liquidity profile reflected by net loans to deposits ratio at 81.3%. This, together with high level of capital, enables for further solid and stable development of the Group’s activities.
Main P&L items
In 2020, the Group’s operating income amounted to PLN 7,812.8 million and was lower by 5.7% in comparison with 2019, mainly due to the negative impact of the economic situation including interest rate cuts, and lower customer activity.
Net interest income in 2020, amounted to PLN 5,202.0 million and was lower by PLN 266.0 million, i.e. 4.9% compared to 2019, mainly due to the negative impact of interest rate cuts.
The Group’s net fee and commission income in 2020, amounted to PLN 2,433.7 million and was lower by PLN 100.0 million, i.e. 3.9% compared to 2019, mainly due to lower customer activity due to the pandemic, which translated into lower commissions on card operations, investment funds and loans.
In 2020, the Group’s operating costs including contributions and payments to the Bank Guarantee Fund, amounted to PLN 3,848.9 million and were lower by PLN 142.9 million, i.e. 3.6% than in 2019.
The operating costs excluding restructuring provision amounted to PLN 3,333.2 million and were lower by 3.4% y/y, below inflation and despite the costs of investments in operational transformation and digitization and additional costs associated with the coronavirus pandemic. Nominal costs were lower by PLN 69.2 million, i.e. 2.0% compared to the costs achieved in 2019.
Bank Guarantee Fund fee in 2020 amounted to PLN 380.9 million, and were lower of PLN 73.8 million as compared to 2019.
The Group’s Net allowances for expected credit losses amounted to PLN 1,578.4 million in 2020, and was more than twice as compared to 2019, due to the creation of impairment related to the COVID-19 virus pandemic in accordance with IFRS 9. Impairment losses for financial assets related to the COVID-19 coronavirus pandemic were created based on the forecasted deterioration of the risk parameters of the loan portfolio in the amount of ca. PLN 830 million and estimated based on macroeconomic scenarios assuming an economic recession in Poland in 2020.
Tax on certain financial institutions in 2020 amounted to PLN 660.6 million and was higher by PLN 69.2 million, i.e. 11.7% as compared to 2019, due to an increase in Group’s assets.
Volumes
As at the end of December 2020, loans and advances at nominal value amounted to PLN 157,883.8 million, an increase of PLN 1,079.0 million, i.e. 0.7% in comparison to the end of December 2019. The volume of retail loans amounted to PLN 79,332.3 million, and was higher by PLN 2,411.2 million i.e. 3.1% y/y thanks to dynamic growth of PLN mortgage loans by 6.1% y/y. The volumes of corporate loans, including non-Treasury debt securities, loans amounted to PLN 78,551.5 million and was lower by PLN 1,332.2 by 1.7% y/y, but with a increase in volumes in the medium-sized enterprises segment (4.5% y/y) and significantly increasing lease receivables.
As at the end of December 2020, amounts due to the Group’s customers and debt securities issued amounted to PLN 186,649.8 million, an increase of PLN 20,374.1 million, i.e. 12.3% in comparison to the end of December 2019, with volume of corporate growing by 10.2% and retail deposits growing by 15.3% y/y, systematically increasing share in the financing structure.
The value of net assets of investment funds managed by Pekao TFI S.A. amounted to PLN 19,347.8 million as at the end of December 2020, an decrease of PLN 2,236.2 million, i.e. 10.4% in comparison to the end of December 2019. The decrease occurred mainly in March and was related with a pandemic situation in the country and abroad. Most of the funds from redemptions of funds were placed in bank deposits.
Impact of the COVID-19 pandemic on the functioning of the Group
In March 2020, as a consequence of the World Health Organization announcement of the COVID-19 coronavirus pandemic, the state of epidemic threat was introduced in Poland, followed by the state of epidemics, which resulted in the freezing of economy in Poland and in the world. The government reacted quickly to the threat and introduced changes in the law that limited the spread of the virus as well as assistance packages for banks, enterprises and individual clients. The Monetary Policy Council (MPC) has reduced interest rates as well as the mandatory reserve requirement and capital requirements for banks.
Despite the COVID-19 pandemic, the Group actively supported clients in maintaining financial liquidity, focused on further improving cost efficiency and protecting the portfolio, as well as ensuring the operational continuity of the Bank's operations.
The Group supported clients by making funds available from government aid programs under the so-called "anti-crisis shield" using the instruments of the Polish Development Fund (acceptance of applications for the amount of over PLN 7 billion), the government guarantee program (Bank Gospodarstwa Krajowego de minimis and the Liquidity Guarantee Fund) and European guarantee programs for SMEs and micro-companies. Customers were given the opportunity to suspend loan installments during the period of temporary liquidity problems during the pandemic. New tools and processes were implemented to facilitate remote operations and the seven golden rules of safe banking were promoted. In April 2020, the Bank was the first in Poland to enable entities from the SME and corporate segment to establish relationships and open a company account completely remotely, without the need to visit an advisor.
The Bank undertook initiatives aimed at ensuring the continuity of the Bank's operations, including the possibility of remote work for employees at the headquarter and has maintained the full functionality of most branches and outlets, ensuring security for both employees and customers. Digitization of processes was accelerated and customers were encouraged to use remote communication channels. The liquidity ratios remained at a safe level with a high level of capital, which proves the Bank's preparations for crisis situations, both in operational and financial aspects.
The Bank's activities were not only focused on business activities. The Bank, as a socially responsible institution, supported hospitals in fight against epidemic with a donation of PLN 5 million. The Bank Foundation donated 23 thousand sanitary masks for doctors, firemen and seniors. Bank employees as volunteers supported the information campaign and participated in a specially launched 24-hour helpline of the National Health Fund in the scope of providing information on the COVID-19 epidemic. Employees of the Bank and other PZU group companies organized a fundraiser for the purchase of barrier tents for hospitals, which protect both medical staff and patients against coronavirus infection. The collected funds were doubled by the Bank and transferred to selected hospitals.
The decline in economic activity in Poland translated was into a worsening of macroeconomic forecasts, a deterioration in the quality of the loan portfolio, a decline in the sale of credit products and the redemption of investment fund participation units due to the difficult situation on the financial markets. The impact of the COVID-19 pandemic on the results of the Bank and the Group will be weakened with the defrosting of the economy that began in May.
Despite the COVID-19 coronavirus pandemic, the Group increased its commercial activities, played an active role in supporting clients' financial liquidity and continued to work on its cost-effectiveness and portfolio protection.
Strategy execution key financial ratios
Due to the impact of the COVID-19 epidemic and consequently, reduction of economic activity, which will result in an increase in cost of risk, lower demand for banking products in Poland and a decrease in interest rates - in 2020 the Bank is not able to achieve key financial indicators at the levels fixed in the Strategy. The Bank plans to review its strategic goals within the process of new strategy preparation. Despite the pandemic, the Bank continues to implement adopted strategic directions, in particular in the areas of digital transformation and digitization as well as operational efficiency and quality.
Epidemic environment
The spread of SARS-CoV-2 virus which causes the COVID-19 disease forced authorities to introduce a wide array of containment measures that had serious impact on economic environment and functioning of enterprises, households and the financial sector. To limit the spread of the new coronavirus and mitigate pressure on healthcare system, schools and kindergartens were closed on 13, March 2020. In mid-March cross-border passenger travel was banned and shopping centers closed. Free movement of people and gatherings were restricted. Substantial part of services sector was virtually frozen. Additional restrictions to retail trade were introduced from the beginning of April.
The government deployed several programs aimed at limiting the negative economic impact of containment measures. Policies were focused on protecting employees and consumers (state paying part of wages, additional social transfers, exemptions from social security contributions), aiding particularly impacted sectors (tourism, transport, trade) and supporting enterprises (subsidies, credit guarantees). So-called “financial shield” is to provide PLN 100 billion (4.5% of GDP) to enterprises and up to PLN 60 billion could be non-returnable.
Support for the real economy was accompanied by monetary and regulatory actions targeted at aiding financial sector. The most important include:
NBP operations aimed at improving the liquidity of the sector (REPO transactions, bond purchase and others),
reduction of the systemic risk capital buffer from 3% to 0% (aimed at freeing up capital and thus providing credit support to the economy during the crisis),
reduction of the mandatory reserve requirement from 3.5% to 0.5%,
recommendations to retain all profits from previous years instead of paying out dividends,
milder requirements for the credit assessment of banks required by the PFSA (which is intended to provide more support for companies in financial difficulties),
looser requirements in terms of IFRS9 (reducing the translation of a crisis situation into risk costs),
deferred MREL requirements.
On the basis of published results and current reports, the Bank expects that the financial results of banks in 2020 will be significantly lower compared to the previous year. Deterioration of the macroeconomic environment have had an impact on credit products’ sales, while worse macro outlook results in write-downs and poorer portfolio quality. Negative consequences for banks stem also from lowering of interest rates to record-low, near-zero level.
In May authorities started gradually lifting containment measures of kay importance for economic activity, while maintaining sanitary regime. Since May 4 shopping centers and hotels were re-opened and granted permissions to allow access to nursery and kindergarten care. In the next stage sit in restaurant services and personal care services were allowed to operate. Indoor sport activities were also permitted. The final stage lifted limits on the number of persons in shops and restaurants. Gyms, fitness clubs, swimming pools, theaters and cinemas were also opened. Citizens were still advised to keep social distancing and cover their mouths and nose indoors and out.
Autumn brought a surge in the new COVID-19 cases (more than 10 thousand daily), number of deaths related to coronavirus infection and pressure on healthcare. In response authorities decided to restore some containment measures, mainly related to the use of retail and services floor space, remote teaching at university and high school levels as well as closing some types of services (fitness). Since October 24 the entire country was declared as a “red zone”, what introduced even more severe containment measures, including a ban on sit-in restaurants and limits on public gatherings. Following weeks brought further tightening of epidemic restrictions (schools and shopping centers closure). As a result, despite robust economic rebound following earlier lifting of containment measures, the recovery started losing steam at the end of the third quarter of 2020. Given the importance of pre-Christmas period for retail industry, shopping centers were allowed to open at the end of November and there were three trading Sundays in December. Restrictions were extended to January 2021 and tightened. Tightening of epidemic restrictions was accompanied by the extension of public support to the economy (Financial Shield with up to 100% support to be foregone), including targeted aid for sectors of the economy experiencing the strongest impact of containment measures.
Economic growth
In 2020 Polish economy shrank by 2.8%, while in 2019 Gross Domestic Product (GDP) expanded by 4.5%. Therefore the economy experienced the first recession in nearly three decades as a consequence of global COVID-19 pandemic. Domestic demand fell by 3.7%, while the positive contribution of foreign trade to GDP amounted to 0.8 percentage points. The decline in GDP was mainly the consequence of household consumption that moderated by 3.0% last year due to lower mobility and restrictions in access to some services as a result of containment measures. Lower economic activity was also resulting from sharp reduction in investment activity (-8.4%) amid exceptionally high uncertainty about economic prospects.
The economy is expected to rebound robustly in 2021 as COVID-19 vaccines become increasingly widespread. Vaccines leading to immunity of the most vulnerable parts of population (elderly, chronically ill) should allow for the most severe epidemic restrictions to be lifted. Normalizing economic environment and pent-up demand are believed to lead to surge in households consumption. Recovery will also be supported by expanding exports. Fixed investment recover is likely to lag behind.
Labor market
The coronavirus pandemic and associated restrictions had a significant impact on the labour market in 2020. When the full economic lockdown started in March, a significant deterioration in the labour market was expected and analysts predicted that the unemployment rate at the end of the year may increase even above 10%.
Eventually, the labour market proved to be relatively resilient to the effects of the pandemic. Employers treated the pandemic shock more as a natural disaster, not as a cyclical recession, and in the hope of a quick return to normality they decided to shorten working hours or not to extend fixed-term contracts rather than dismissing full-time employees (the so-called job hoarding). Such a reaction to employers was supported by implemented state aid programs (anti-crisis shields), which were conditioned by, among others, maintaining employment.
The unemployment rate at the end of 2020 was at 6.2% compared to 5.2% at the end of 2019. The unemployment growth rate was the highest in the first months of the spring lockdown. In the second half of the year, unemployment rate followed the seasonal pattern from previous years, which indicated a relative normalization of the labour market situation. In turn, the average employment in the corporate sector in December 2020 amounted to 6.329 mn - by 67k less than in December 2019. The largest number of jobs in 2020 were lost in the sectors most affected by epidemic restrictions, including accommodation and gastronomy. On the other hand, employment was supported by the industrial sector, as well as industries related to the IT sector.
Wage growth in the corporate sector recorded a slowdown in 2020 as well, but also less strongly than previously expected. The average wage in the corporate sector in 2020 rose by 4.8% compared to an increase of 6.6% in 2019. In the first months of the spring lockdown wage growth decreased significantly. However, in the following months, along with a gradual return to higher salaries after the period of downtime pay payouts as part of the economy reconstruction, the wage growth went up ranging from 4% to 6% yoy.
The year 2021 on the labour market will continue to be marked by the Covid-19 pandemic. The first months of the year will be particularly tough - continued economic restrictions will increase the pressure on layoffs, especially in the most affected sectors. However, in our opinion, as part of the progress of mass vaccination and rising immunity, especially by groups most at risk from the severe effects of Covid-19, the second half of 2021 will bring a recovery in the national economy and the labour market. We estimate that at the end of 2021 the unemployment rate will be at 5.9%.
Inflation and monetary policy
According to the Statistics Poland (GUS) data in 2020 consumer prices increased by 3.4% on average as compared with the CPI growth of 2.3% in 2019. At the end of 2020 headline inflation was close the National Bank of Poland (NBP) target of 2.5% +/- 1 p.p. and amounted to 2.4% yoy.
In 2020 consumer inflation was predominantly driven by higher core inflation and faster food price growth. In 2020 core inflation excluding food and energy prices increased to 3.9% from 2.0% in 2019 due to fast growth of services prices. Headline inflation was curbed by declined in prices of fuels for private vehicles that fell by 10.2% last year amid decline in global crude oil prices. Producers’ prices (PPI) went down by 0.6% in 2020 after rising by 1.2% in 2019.
In response to deteriorating economic prospects and the risk of sharp recession linked to COVID-19 epidemic, in 2020 the National Bank of Poland was easing monetary policy and reduced the reference rate by 140bps. At the end of last year the main policy rates was at 0.10%, the lombard rate at 0.50% and the deposit rate at 0.00%. On the top of that the central bank was conducting structural open market operations purchasing on the secondary market treasury bonds and state-guaranteed bonds. In 2020 the NBP purchased securities worth over PLN 100 billion.
In 2021 annual average price growth is expected to be slower than in 2020 due to lower core inflation and slower increase in food prices. Price growth will be supported by higher prices of fuels for private vehicles. Annual average increase in goods and services prices measured by the CPI index is projected at 2.6%. Half of the increase will be linked to higher administered prices and charges (higher cost of waste disposal, increase in electricity prices, power charge, renewable energy charge, “sugar tax”, retail tax). In such an environment the Monetary Policy Council will stabilize interest rate at the current level (the main policy rate still at 0.10%).
Fiscal policy
Epidemic situation had a profound impact on public finances in 2020. While the budget act assumed the first balanced state budget on a cash basis since beginning of economic transformation, its amendment set the deficit limit at record-high of PLN 109.3 billion. Eventually the state budget deficit was probably below PLN 100 billion last year. The scale of general government fiscal imbalance was substantially higher due to a large role of special purpose vehicles (SPVs) in financing public support for the economy in response to SARS-CoV-2 pandemic. The Bank Gospodarstwa Krajowego (BGK) state-owned bank issued PLN 100.7 billion worth of FPC series state-guaranteed bonds for COVID-19 Combating Fund. On the top of that the Polish Development Fund (PFR) issued state-guaranteed bonds worth PLN 64.5 billion for Financial Shield.
According to the Ministry of Finance preliminary data at the end of 2020 the state treasury debt, accounting for about 98% of state public debt, amounted to PLN 1 097.5 billion vs. PLN 973.3 billion at the end of 2019. Domestic debt increased by PLN 115.0 billion, while foreign debt rose by PLN 9.1 billion.
The 2021 budget act assumes budget revenues at PLN 404.4 billion and expenditures at PLN 486.7 billion. Therefore the state budget deficit limit in 2021 was set at PLN 82.3 billion. The bill is based on the assumption of 4% GDP growth and annual average CPI inflation of 1.8%. Government estimates 2021 general government deficit (EU ESA2010 methodology) at 6.0% of GDP and general government debt (the same methodology) at the end of this year at 64.7% of GDP.
External sector
The NBP data on the balance of payments for 2020 show that the current account registered a record surplus of EUR 18.3 billion compared to a surplus in 2019 of EUR 2.6 billion. This translates into a surplus of about 3.5% of GDP against 0.5% in 2019. This is the highest result in the history of the NBP balance of payments data (since 2004 according to new BPM6 methodology).
The improvement in the current account balance was mainly the result of a high trade surplus (EUR 11.7 billion against EUR 1.2 billion in 2019). The Covid-19 pandemic caused a strong reduction in Polish exports only during the spring lockdown. In the following months, exports grew dynamically on annual basis taking advantage of the structure of domestic production, in which consumer goods play an important role. Demand for this type of goods (especially durable goods) remained high during the pandemic with a significant decline in demand for intermediate and investment goods. In turn, imports was limited by a strong decline in investment (more import-intensive than consumption) and significant drops in oil prices. Ultimately, exports of goods fell by only 0.2% in 2020, while imports decreased by 4.8%.
The current account was still positively affected by a surplus in the services account, however, due to the pandemic it slowed down its dynamic growth from previous years (a surplus of EUR 24.0 billion in 2020 compared to EUR 23.6 billion in 2019). In turn, the primary income account continued to be in high deficit (EUR 15.9 billion in 2020 vs. a deficit of EUR 20.4 billion in 2019), however, it was lower than in the previous years due to strong decline in non-residents' income, including enterprises with foreign capital.
As for the financing side, there was a decrease in the inflow of foreign direct investment (FDI) – in 2020 FDI inflow amounted to 8.6 EUR billion (predominantly in equity funds) against 12.8 EUR billion in 2019. In the case of portfolio investment, in 2020 there was a high outflow of funds at the level of EUR 10.6 billion (EUR 7.7 billion – an outflow of funds from the domestic debt market, EUR 2.9 billion - an outflow of funds from the equity market) against also a high outflow of EUR 11.2 billion in 2019.
Assuming a positive scenario of global pandemic mitigation along with the ongoing vaccination campaign, in the second half of 2021 the economic activity of our trading partners should increase significantly and foreign demand will also spill over to other categories of exports goods (intermediate and investment goods). A return to normality will lead to lower current account surplus (from 3.5% of GDP in 2020 to forecasted 2.1% in 2021) with a rebound in import-intensive components of domestic demand. International trade in services will recover at the latest.
Capital markets
For equities, 2020 was an unparalleled rollercoaster. In the first weeks of the year markets were focused on the systematic improvement in global manufacturing and trade as well as on waning effects of trade wars following the US-China trade deal signed earlier in 2019. In February the COVID-19 epidemic (at the time not a pandemic officially) moved into the forefront and has stayed there ever since. In the first phase (mid-February to mid-March) stock indices remained in freefall and fears about the epidemic and the impact it and restrictions on social and economic life would have on the economy was the key background for the behavior of markets. The situations was first stabilized and then it turned around due to the coordinated and massive (in scale) response of monetary and fiscal policies in all major economies. Over the course of several weeks almost all major central banks cut interest rates to zero (if they had the appropriate room) and launched large-scale asset purchase programs. Meanwhile, governments loosened fiscal policy and announced sizable credit& liquidity programs – all to support the private sector at the time of widespread lockdowns. Despite the fact the epidemic has never been extinguished, the remaining part of the year was marked by near-monotonic increases in equity prices. The reflected faster-than-expected recovery from the recession in major economies and their bigger flexibility in the face of subsequent COVID waves. Additional factors influencing the equity pricing were US presidential and parliamentary elections as well as rapid progress on vaccines. Finally, world’s major stock indices were little changed over the year, although with significant geographical variation. S&P 500 and Dow Jones gained, respectively, 16.3 and 7.2%, German DAX rose by 3.5%, British FTSE lost 6.4% and French CAC dropped by 7.1%.
Performance of Warsaw Stock Exchange in 2020 varied greatly between segments and investors could have recorded vastly different returns depending on their exposure. The widest index WIG returned -1.4%, while the blue chip WIG20 lost 7.7%. Mid-cap index mWIG40 rose by 1.75%, while small-cap benchmark index sWIG80 rose by a respectable 33.6%. The differences are mostly attributable to sectoral composition. For instance, high share of utilities and banks weighed heavily on WIG20’s returns last year. In 2020 the multi-year trend of delisting was continued: 23 stocks were delisted and 7 IPOs were recorded. However, the latter attracted a lot of attention and turnover on WSE rose considerably, from PLN 189.9 billion in 2019 to 288.6 in 2020.
Banking sector
According to the Financial Supervision Authority (PFSA) data, in 2020 the sector generated an aggregated net profit of PLN 7.7 bn, which fell by 44% vs. 2019. The main reason for the deep decline was an unfavourable operating environment due to the COVID-19 outbreak, in particular its impact on the sector's cost of risk and demand for banking products, as well as further decline in interest rates. Increasing costs for legal risks connected with foreign currency housing loans posed an additional challenge.
The sector's total operating income contracted by 4.1% y/y. Weak macro environment and low interest rates affected the main component, net interest income (-4.3% y/y), while at the same time other income fell sharply (-28% y/y), mainly due to lower dividends. On the other hand, the banks managed to reduce losses to some extent by improving net fees and commissions income (+11% y/y). Operating expenses remained relatively flat (+0.1% y/y including depreciation and amortization). Cost of risk surged however by 35% y/y.
According to PFSA data, at the end of 2020 the banking sector assets amounted to PLN 2,356 billion and increased by 18% y/y. The growth rate was significantly higher than in 2019 (5.6% at the end of year). Deposits from the non-financial sector grew by 13.0% (vs. 9.6% in 2019), while receivables grew by 1.0% (compared to 4.5% in 2019).
According to National Bank of Poland (NBP) data, at the end of 2020 following developments were noted in terms of main deposit categories[1]:
the volume of households’ deposits increased by 10.6% y/y (vs. +9.5% y/y after 2019). Growth in this area has remained high for some time now, hovering around 10%. The pandemic has not hindered it as well, thanks to the protection of jobs with so-called anti-crisis shields (and further growth of salaries) and a simultaneous precautionary motive (maintaining savings in uncertain crisis environment). These effects were slightly diminished by the search for more attractive forms of capital investment vs. zero interest rates on deposits,
the volume of enterprises’ deposits rose by 19% y/y, a surge from +10% y/y pace recorded after 2019. Such high rate is entirely the result of the anti-crisis shields, under which companies could count on financial assistance to combat the effects of the pandemic,
other deposits grew by 17.4% y/y, in comparison to 0.8% y/y decline after 2019.
At the end of 2020 household deposits accounted for 65%, corporate deposits for 25%, and other deposits for 10% of all deposits. Around 79% of them were covered by current deposits.
In terms of main receivables categories[2], at the end of 2020 the following developments were noted:
in yearly terms, volume of receivables from households increased by 3.0%. The pace was markedly slower compared with the one observed a year earlier (+6.0% y/y). The resilience of the housing market (both in terms of demand and prices) resulted in further sound growth of PLN mortgages. However, the deterioration of the economic situation has been reflected in significantly lower dynamics of consumer loans,
receivables from enterprises declined by 5.5% y/y, while after 2019 a growth of 1.2% y/y was noted. The downward trend in this area, which has been going on for some time now, has been strongly reinforced by the COVID crisis – diminishing economic activity and general uncertainty have translated into lower demand from businesses for both current loans and investment loans,
other receivables increased by 38% y/y (in comparison to 9.4% y/y at the end of 2019).
As of the end of 2020 loans to households accounted for 58%, corporate loans for 27% and other loans for 15% of all loans.
Loan portfolio quality in general deteriorated in 2020, but its scale was only moderate taking into consideration unprecedented character and impact of the COVID crisis. In particular:
NPL ratio for corporate loans at the end of 2020 amounted to 9.1%, up from 8.6% year before. Bigger increase characterized small and medium enterprises (from 11.4% to 12.1%) than large companies (from 5.4% to 5.5%),
the share of non-performing loans in the portfolio of loans to households reached 6.0% at the same moment, in comparison to 5.7% after 2019. The ratio increased only slightly in case of mortgages (from 2.3% to 2.5%), while it worsened to a larger extent for consumer loans (from 10.4% to 11.2%).
The composition of Bank Pekao S.A. Group is presented in the Note 2 to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2020.
Change of the name of the Bank’s subsidiary
On the 17th of January 2020 the Registry Court entered into the Register of Entrepreneurs of the National Court Register the change to the founding act of Centrum Bankowości Bezpośredniej Sp. z o.o., resulting from the resolution of the Extraordinary General Meeting of Shareholders adopted on the 19th of December 2019, concerning the change of the company’s name, which currently is Pekao Direct Sp. z o.o.
Acquisition of the organised part of the enterprise of the Pekao Investment Banking S.A.
On the 1st of June 2020, the last stage of the process was completed, which was aimed at integration of the brokerage activities within the Bank Pekao S.A. Group. As a result, the Bank Pekao S.A. acquired the organized part of the enterprise of the Pekao Investment Banking S.A. related to the provision of certain brokerage services. During the process, part of the team of the Pekao Investment Banking S.A. joined the structures of the Bank's organizational unit - Biuro Maklerskie Pekao (Pekao Brokerage House). The remaining activity related to offering investment banking services remains with the Company.
Liquidation of a subsidiary
Due to the completion of the liquidation process, on 19 November, 2020, the District Court for the Capital City of Warsaw in Warsaw, XIII Commercial Division of the National Court Register removed the Powszechne Towarzystwo Emerytalne Spółka Akcyjna w likwidacji (Pekao PTE) from the Register of Entrepreneurs. The Bank Pekao S.A. owned 100% of the company's shares.
The liquidation was due to the earlier takeover by Powszechne Towarzystwo Emerytalne PZU SA of the management of Pekao PTE pension funds, which took place on 19 May, 2018. The Pekao PTE was put into liquidation on 1 June, 2018.
Affiliate Dissolution
On 30 December, 2020, the Bank received confirmation of the dissolution of the associated company, CPF Management Inc. The dissolution was carried out under British Virgin Islands law. The bank held 40% of the company's equity.
Changes in the Supervisory Board
On 15 April 2020 Mr. Paweł Surówka resigned from the position of the Chairman of the Supervisory Board of the Bank and from the composition of the Supervisory Board of the Bank, with the effect from 20 April 2020. As the reason for the resignation, Mr. Paweł Surówka indicated his earlier resignation from the position of the President of the Management Board of Powszechny Zakład Ubezpieczeń S.A., the strategic shareholder of the Bank.
On 21 April 2020 the Supervisory Board of the Bank appointed, effective as of the date of adoption of a resolution, Mr. Grzegorz Janas, member of the Supervisory Board of the Bank, to the function of the Chairman of the Supervisory Board of the Bank during the current joint term of office.
On 19 May 2020 all members of the Supervisory Board of the Bank of the joint term of office ending in 2020, i.e. Chairman of the Supervisory Board Mr. Grzegorz Janas, Vice-Chairmen of the Supervisory Board Mrs. Joanna Dynysiuk and Mr. Stanisław Ryszard Kaczoruk, Secretary of the Supervisory Board Mr. Paweł Stopczyński, as well as members of the Supervisory Board Mrs. Sabina Bigos-Jaworowska, Mrs. Justyna Głębikowska-Michalak, Mr. Michał Kaszyński and Mr. Marian Majcher, resigned from their positions in the Supervisory Board of the Bank and from the mandates in the Supervisory Board of the Bank of the joint term of office ending in 2020, with the effect from the day of the Ordinary General Meeting of the Bank for the financial year 2019. The resignations were submitted for prudential reasons, i.e. due to doubts expressed in jurisprudence and court rulings regarding the counting of the mandate and term of office of a member of the supervisory board, in particular the understanding of "last full year of service".
The Ordinary General Meeting of the Bank on 22 May 2020, taking into account the assessment of compliance with suitability requirements, appointed the members of the Supervisory Board of the Bank for a new joint term of three years, beginning on 23 May 2020. The following persons were appointed to the Supervisory Board of the Bank:
Mrs. Beata Kozłowska-Chyła – member of the Supervisory Board,
Mrs. Małgorzata Sadurska – member of the Supervisory Board,
Mr. Marcin Eckert – member of the Supervisory Board,
Mrs. Sabina Bigos-Jaworowska – member of the Supervisory Board,
Mr. Michał Kaszyński – member of the Supervisory Board,
Mrs. Joanna Dynysiuk – member of the Supervisory Board,
Mr. Marian Majcher – member of the Supervisory Board,
Mr. Stanisław Ryszard Kaczoruk – member of the Supervisory Board,
Mrs. Justyna Głębikowska-Michalak – member of the Supervisory Board.
According to the submitted statements none of the members of the Supervisory Board of the Bank conduct any business competitive to that of the Bank and none of the members is involved in a competitive business as a shareholder or partner in a civil law company, a partnership or a corporation or a member of a corporate body of a legal person. According o the submitted statements none of the members of the Supervisory Board of the Bank is registered in the Register of Insolvent Debtors kept pursuant to the provisions of the KRS (National Court Register) Act of 20 August 1997.
On the meeting held on 29 May 2020, the Supervisory Board of the Bank appointed:
Mrs. Beata Kozłowska-Chyła as the Chairwoman of the Supervisory Board of the Bank,
Mrs. Joanna Dynysiuk as the Deputy Chairwoman of the Supervisory Board of the Bank,
Mr. Marcin Eckert as the Deputy Chairman of the Supervisory Board of the Bank,
Mr. Stanisław Ryszard Kaczoruk as the Secretary of the Supervisory Board of the Bank.
The abovementioned appointments are effective on 29 May 2020 and took place for the period of the current joint three-year term of office of the Supervisory Board of the Bank, commenced on 23 May 2020.
The composition of the Supervisory Board of Bank Pekao S.A. has as follows:
AS AT THE DATE OF SUBMITTING THE REPORT FOR 2020 |
31 DECEMBER 2020 |
AS AT THE DATE OF SUBMITTING THE REPORT FOR THE third quarter of 2020 |
Beata Kozłowska-Chyła Chairman of the Supervisory Board |
Beata Kozłowska-Chyła Chairman of the Supervisory Board |
Beata Kozłowska-Chyła Chairman of the Supervisory Board |
Joanna Dynysiuk Deputy Chairman of the Supervisory Board |
Joanna Dynysiuk Deputy Chairman of the Supervisory Board |
Joanna Dynysiuk Deputy Chairman of the Supervisory Board |
Marcin Eckert Deputy Chairman of the Supervisory Board |
Marcin Eckert Deputy Chairman of the Supervisory Board |
Marcin Eckert Deputy Chairman of the Supervisory Board |
Stanisław Ryszard Kaczoruk Secretary of the Supervisory Board |
Stanisław Ryszard Kaczoruk Secretary of the Supervisory Board |
Stanisław Ryszard Kaczoruk Secretary of the Supervisory Board |
Sabina Bigos-Jaworowska Member of the Supervisory Board |
Sabina Bigos-Jaworowska Member of the Supervisory Board |
Sabina Bigos-Jaworowska Member of the Supervisory Board |
Justyna Głębikowska-Michalak Member of the Supervisory Board |
Justyna Głębikowska-Michalak Member of the Supervisory Board |
Justyna Głębikowska-Michalak Member of the Supervisory Board |
Michał Kaszyński Member of the Supervisory Board |
Michał Kaszyński Member of the Supervisory Board |
Michał Kaszyński Member of the Supervisory Board |
Marian Majcher Member of the Supervisory Board |
Marian Majcher Member of the Supervisory Board |
Marian Majcher Member of the Supervisory Board |
Małgorzata Sadurska Member of the Supervisory Board |
Małgorzata Sadurska Member of the Supervisory Board |
Małgorzata Sadurska Member of the Supervisory Board |
Changes in the Bank's Management Board
On 4 February 2020, the Supervisory Board of the Bank, after assessing suitability, appointed Mr. Jarosław Fuchs to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank, with the effect from 15 February 2020.
On 14 April 2020, the Supervisory Board of the Bank, after assessing suitability, appointed Mr. Leszek Skiba to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank, with the effect from 20 April 2020 and appointed Mr. Grzegorz Olszewski, who currently holds the position of the Member of the Management Board of the Bank, for the position of the Vice President of the Management Board of the Bank, effective from 15 April 2020.
In addition, on 21 April 2020, Mr. Marcin Gadomski resigned from the function of the Vice President of the Management Board of the Bank and from the composition of the Management Board of the Bank.
On 21 April 2020 Mr. Marek Lusztyn resigned, in an agreement with the Supervisory Board of the Bank, from the position of the President of the Management Board of the Bank, without resigning from the composition of the Management Board of the Bank. In the resignation there were no reasons for its submission. Simultaneously, the Supervisory Board of the Bank, after assessing suitability, entrusted Mr. Marek Lusztyn with the function of the Vice President of the Management Board of the Bank and, subject to obtaining the consent of the Polish Financial Supervision Authority and upon obtaining such consent, entrusted Mr. Marek Lusztyn with the function of the Vice President of the Management Board of the Bank supervising the management of material risk in the Bank's operations.
On 21 April 2020, the Supervisory Board of the Bank, after assessing suitability, appointed, effectively from 22 April 2020, Mr. Leszek Skiba, the current Vice President of the Management Board of the Bank, as the President of the Management Board of the Bank for the current joint term of office, subject to obtaining the consent of the Polish Financial Supervision Authority and upon obtaining such consent. Until the above condition is met, on which the appointment of Mr. Leszek Skiba as the President of the Management Board of the Bank depends, the Supervisory Board of the Bank entrusted him with managing the work of the Management Board of the Bank.
On 4 February 2021, the Polish Financial Supervision Authority unanimously expressed consent to the appointment of Mr. Leszek Skiba as the President of the Management Board of the Bank. Obtaining the said consent results in fulfillment of the condition of becoming the President of the Management Board of the Bank.
On 21 April 2020, the Supervisory Board of the Bank, after assessing suitability, appointed Mr. Krzysztof Kozłowski to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank, effectively from 22 April 2020.
According to the submitted statement Mr. Jarosław Fuchs did not conduct any business competitive to that of the Bank and he was not involved in a competitive of a legal person. Mr. Jarosław Fuchs was not registered in the Register of Insolvent Debtors kept pursuant to the provisions of the KRS Act of 20 August 1997.
According to the submitted statement Mr. Leszek Skiba did not conduct any business competitive to that of the Bank and he was not involved in a competitive business as a shareholder or partner in a civil law company, a partnership or a corporation or a member of a corporate body of a legal person. Mr. Leszek Skiba was not registered in the Register of Insolvent Debtors kept pursuant to the provisions of the KRS Act of 20 August 1997.
According to the submitted statement Mr. Grzegorz Olszewski did not conduct any business competitive to that of the Bank and he was not involved in a competitive business as a shareholder or partner in a civil law company, a partnership or a corporation or a member of a corporate body of a legal person. According to the submitted statement Mr. Grzegorz Olszewski was not registered in the Register of Insolvent Debtors kept pursuant to the provisions of the KRS Act of 20 August 1997.
According to the submitted statement Mr. Marek Lusztyn did not conduct any business competitive to that of the Bank and he was not involved in a competitive business as a shareholder or partner in a civil law company, a partnership or a corporation or a member of a corporate body of a legal person. Mr. Marek Lusztyn was not registered in the Register of Insolvent Debtors kept pursuant to the provisions of the KRS Act of 20 August 1997.
According to the submitted statement Mr. Krzysztof Kozłowski does not conduct any business competitive to that of the Bank and he is not involved in a competitive of a legal person. Mr. Krzysztof Kozłowski was not registered in the Register of Insolvent Debtors kept pursuant to the provisions of the KRS Act of 20 August 1997.
On 1 June 2020 Mr. Marek Lusztyn resigned with the effect at a future date, i.e. on 30 June 2020 from the position of the Vice-President of the Management Board of the Bank supervising the activities of the Risks Management Division as well as from the composition of the Management Board of the Bank. Taking into consideration continuity of decision making, and in line with good practices, Mr. Marek Lusztyn resigned with the effect at a future date, i.e. on 30 June 2020, in order to enable the Supervisory Board of the Bank to make a selection for the abovementioned position. The resignation did not contain the reasons for its submission.
On 16 June 2020 the Supervisory Board of the Bank, after assessing suitability, appointed Mr. Marcin Gadomski to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank with the effect from 1 July 2020. Additionally the Supervisory Board of the Bank, subject to obtaining the consent of the Polish Financial Supervision Authority and upon obtaining such consent, entrusted Mr. Marcin Gadomski with the function of the Vice President of the Management Board of the Bank supervising the management of material risk in the Bank's operations.
On 15 February 2021, the Polish Financial Supervision Authority unanimously expressed consent to entrust Mr. Marcin Gadomski with the position of the Member of the Management Board of the Bank supervising the management of material risk in the Bank's operations. Obtaining the said consent results in fulfillment of the condition of becoming the Vice President of the Management Board of the Bank supervising the management of material risk in the Bank's operations.
According to the submitted statement Mr. Marcin Gadomski does not conduct any business competitive to that of the Bank and he is not involved in a competitive business as a shareholder or partner in a civil law company or partnership or a member of a corporate body of a competitive corporation or legal person. Mr. Marcin Gadomski is not registered in the Register of Insolvent Debtors kept pursuant to the provisions of the KRS Act of 20 August 1997.
On 21 December 2020 Mr. Marek Tomczuk resigned from the position of the Vice-President of the Management Board of the Bank as well as from the composition of the Management Board of the Bank. The resignation was submitted with an immediate effect. and for personal reasons.
On 31 December 2020 Mr. Tomasz Styczyński and Mr. Grzegorz Olszewski resigned from the positions of the Vice-Presidents of the Management Board of the Bank as well as from the composition of the Management Board of the Bank.
Mr. Tomasz Styczyński’s resignation takes effect as of 31 January 2021. In accordance with the document containing resignation, it was submitted due to a different vision of Bank’s development and its forms serves a purpose of finalizing matters conducted by Mr. Tomasz Styczyński, in particular related to transformation of the Corporate Banking and MIB Division, and offers the Supervisory Board with a possibility to select a successor who will assume supervision over the Division and responsibility for the undertaken projects in accordance with the highest standards and in the spirit of responsibility for stable and prudent management.
Mr. Grzegorz Olszewski’s resignation takes effect with the end of 31 December 2020. In accordance with the document containing resignation, it was submitted due to a different vision of Bank’s development and the sense of responsibility for the stable and prudent management of the area of Technology and Corporate Services.
On 14 January 2021 the Supervisory Board of the Bank, after assessing suitability, appointed Mr. Błażej Szczecki to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank with the effect from 15 January 2021, Mr. Wojciech Werochowski to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank with the effect from 15 January 2021; and Mr. Jerzy Kwieciński to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank with the effect from1 February 2021.
According to the submitted statement Mr. Błażej Szczecki does not conduct any business competitive to that of the Bank and he is not involved in a competitive business as a shareholder or partner in a civil law company, a partnership or a corporation or a member of a corporate body of a competitive corporation or legal person. Mr. Błażej Szczecki is not registered in the Register of Insolvent Debtors kept pursuant to the provisions of the KRS (National Court Register) Act of 20 August 1997.
According to the submitted statement Mr. Wojciech Werochowski does not conduct any business competitive to that of the Bank and he is not involved in a competitive business as a shareholder or partner in a civil law company, a partnership or a corporation or a member of a corporate body of a competitive corporation or legal person. Mr. Wojciech Werochowski is not registered in the Register of Insolvent Debtors kept pursuant to the provisions of the KRS (National Court Register) Act of 20 August 1997.
According to the submitted statement Mr. Jerzy Kwieciński does not conduct any business competitive to that of the Bank and he is not involved in a competitive business as a shareholder or partner in a civil law company, a partnership or a corporation or a member of a corporate body of a competitive corporation or legal person. Mr. Jerzy Kwieciński is not registered in the Register of Insolvent Debtors kept pursuant to the provisions of the KRS (National Court Register) Act of 20 August 1997.
The composition of the Management Board of Bank Pekao S.A. has as follows:
AS AT THE DATE OF SUBMITTING THE REPORT FOR 2020 |
31 DECEMBER 2020 |
AS AT THE DATE OF SUBMITTING THE REPORT FOR THE third quarter of 2020 |
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Leszek Skiba President of the Management Board |
Leszek Skiba Vice President of the Management Board managing the work of the Bank’s Management Board |
Leszek Skiba Vice President of the Management Board managing the work of the Bank’s Management Board |
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Jarosław Fuchs Vice President of the Management Board |
Jarosław Fuchs Vice President of the Management Board |
Jarosław Fuchs Vice President of the Management Board |
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Marcin Gadomski Vice President of the Management Board |
Marcin Gadomski Vice President of the Management Board |
Marcin Gadomski Vice President of the Management Board |
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Krzysztof Kozłowski Vice President of the Management Board |
Krzysztof Kozłowski Vice President of the Management Board |
Krzysztof Kozłowski Vice President of the Management Board |
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Tomasz Kubiak Vice President of the Management Board |
Tomasz Kubiak Vice President of the Management Board |
Tomasz Kubiak Vice President of the Management Board |
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Jerzy Kwieciński Wiceprezes Zarządu Banku |
Grzegorz Olszewski Vice President of the Management Board |
Grzegorz Olszewski Vice President of the Management Board |
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Błażej Szczecki Vice President of the Management Board |
Tomasz Styczyński Vice President of the Management Board |
Tomasz Styczyński Vice President of the Management Board |
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Wojciech Werochowski Vice President of the Management Board |
Magdalena Zmitrowicz Vice President of the Management Board |
Marek Tomczuk Vice President of the Management Board |
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Magdalena Zmitrowicz Vice President of the Management Board |
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Magdalena Zmitrowicz Vice President of the Management Board |
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As of 31 December, 2020 the split of competences between the Members of the Management Board of the Bank was as follows:
Mr. Leszek Skiba, Vice President of the Management Board of the Bank, managed the work of the Management Board, convened and chaired the meetings of the Management Board of the Bank, presented the position of the Management Board of the Bank towards the Bank's bodies and in external relations, in particular towards the State bodies, coordinated the work of Members of the Management Board, issued orders and performed the powers and tasks assigned in Bank's internal regulations and resolutions of the Management Board, subject to exclusion of competences over which the Bank's Management Board exercises collective supervision.
Mr. Leszek Skiba, Vice President of the Management Board of the Bank, in charge of the work of the Management Board, supervised the following areas of the Bank's operations: security, human resources management and macroeconomic analyzes.
Mr. Leszek Skiba, Vice President of the Management Board of the Bank, who manages the work of the Management Board, was appointed as the Member of the Management Board responsible for the implementation of the obligations set out in the Act on counteracting money laundering and financing of terrorism.
Mr. Marcin Gadomski, Vice President of the Bank's Management Board, coordinated the work of the Risk Management Division, subject to exclusion of competences for which the Bank's Management Board exercised collective supervision and was responsible for supervising the risk management process in the bancassurance activity.
Mr. Tomasz Kubiak, Vice President of the Bank's Management Board, supervised the activities of the Financial Division and was appointed as a member of the Management Board to whom violations will be reported and who will be responsible for the day-to-day operation of the whistleblowing procedure.
Mr. Tomasz Styczyński, Vice President of the Bank's Management Board, supervised the activities of the Corporate Banking, Markets and Investment Banking Division.
Ms Magdalena Zmitrowicz, Vice President of the Management Board of the Bank, supervised the activities of the Small and Medium Enterprises Banking Division.
Mr. Jarosław Fuchs, Vice President of the Bank's Management Board, supervised the activities of the Private Banking and Investment Products Division and, until the appointment of a new Management Board Member, he supervised the activities of the Retail Banking Division.
Mr. Grzegorz Olszewski, Vice President of the Bank's Management Board, supervised the activities of the Technology and Operations Division, including digital transformation, and coordinates activities aimed at appropriate risk management related to the security of the ICT environment.
Mr. Krzysztof Kozłowski, Vice President of the Bank's Management Board, supervised the activities of the Corporate Services Division and the Bank's strategy.
Until the approval of the Polish Financial Supervision Authority for Mr. Leszek Skiba to act as the President of the Management Board of the Bank, the Management Board of the Bank collectively supervises the internal audit unit, compliance unit, corporate communication and investor relations.
Until the approval of the Polish Financial Supervision Authority for Mr. Marcin Gadomski to act as a member of the Management Board of the Bank supervising the management of risk that is significant in the Bank's operations, the Bank's Management Board supervises this risk collectively.
The Management Board of Bank Pekao S.A. is composed of nine members. Members of the Management Board are appointed by the Supervisory Board for a joint three-year term of office. The Management Board ensures that the management system at the Bank is transparent and effective and runs the Bank's affairs in compliance with applicable laws and Best Practices. The core values underlying the management of the Bank are professionalism, reliability and confidentiality.
LESZEK SKIBA President of the Management Board |
From 4 February 2021, Leszek Skiba is President of the Management Board. In 2015, he was appointed Undersecretary of State in the Ministry of Finance, where he was responsible for the supervision over macroeconomic policy and tax legislation. He was also supporting legislative works connected with financial and capital markets, and prepared general outline of the budget system reform. Between March 2019 and April 2020 he served as the President of the Council of the Bank Guarantee Fund. Between 2009 and 2015 Leszek Skiba worked at the National Bank of Poland, at the Economic Institute, where he worked on NBP’s report devoted to the consequences of Poland’s membership of the euro area and prepared analyses of the euro area economy. Since 2009, Leszek Skiba has been running public non-profit activities as the President of the Council and expert of the Sobieski Institute. Leszek Skiba is a graduate of master’s degree studies at the Warsaw School of Economics, in the faculty of International Economic and Political Relations. He’s the author of numerous publications in the field of his professional work and public activities. Leszek Skiba fulfills suitability requirements determined in art. 22aa of Banking Law Act.
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JAROSŁAW FUCHS Vice President of the Management Board supervising the Private Banking and Investment Products Division |
Jarosław Fuchs Vice President of the Management Board supervising the Private Banking and Investment Products Division. Jarosław Fuchs received his Master degree with honors in Marketing and Management, in the Faculty of Management of AGH University of Science and Technology in Cracow, as well as he graduated from Banking and Finance studies in Cracow University of Economics. He started his career in 1994, initially in Big Bank S.A. and AGH University of Science and Technology in Cracow, where he acted as a teaching assistant in Management Faculty. From 1996 to 1997, he worked for Raiffeisen Centrobank S.A. Branch in Cracow, where he was responsible for building relationships with corporate customers. From September 1997, Jarosław Fuchs worked for Societe Generale Warsaw Branch as a Senior Marketing Specialist in the Trade Office in Cracow. In October 2000, he moved to Fortis Bank Polska S.A., as a Senior Customer Advisor in Medium and Large Enterprises Center. From March 2003, Jarosław Fuchs worked for Bank Millennium S.A. in the position of the Senior Expert and, subsequently – Director of Małopolskie Customer Cooperation Center (Medium and Large Enterprises). From August 2004, he was associated with Bank BPH S.A. in Cracow and next, from December 2007 with Bank Pekao S.A. in managerial positions responsible for corporate customer relations. From March 2011, Jarosław Fuchs was responsible for management of Private Banking Relationship Managers Team as a Regional Sales Office Director in Cracow. At the same time, from 2013, Jarosław Fuchs was working for Pekao Central Brokerage House as a Director in the Region in Strategic Customers Office, where he was responsible for investment product distribution for strategic customers. Jarosław Fuchs fulfills suitability requirements determined in art. 22aa of Banking Law Act. |
MARCIN GADOMSKI Vice President of the Management Board supervising the Risk Management Division |
Marcin Gadomski Vice President of the Management Board supervising the Risk Management Division. Marcin Gadomski graduated from the Warsaw School of Economics, majoring in Finance and Banking. He was also a scholarship holder studying at the University of Kiel (Germany) and completed doctoral studies at the Warsaw School of Economics. He passed a number of professional certification exams, including: Financial Risk Manager (FRM), Association of Chartered Certified Accountants (ACCA), Project Management Professional (PMP). He participated in the Leadership Development Program run by The John Maxwell Team as well as the Deloitte Leadership Program. Marcin Gadomski began his professional career at the consulting company Ernst & Young (now EY) in 2002, where he conducted projects in the area of risk, finance and internal audit in financial institutions and non-financial enterprises. During this period, for several years he supported the Pekao Group in implementing among others requirements of IAS 39, Basel II and solutions regarding capital management as well as assets and liabilities management. Then he continued his career with Deloitte Advisory, first in 2008-2012 as a Senior Manager, and, after a break, in 2016-2018 as a Director. As part of Deloitte Advisory, Marcin Gadomski provided solutions for the largest financial institutions in Poland and abroad (banks, insurers, leasing companies, brokerage houses), among others in the field of credit policy, risk models, improving the credit process for retail and corporate clients, market and liquidity risk management, regulatory requirements (e.g. IFRS 9, the PFSA recommendations, regulations regarding capital requirements, liquidity, information or reporting obligations), due diligences for takeover purposes. In the years 2012 - 2016 Marcin Gadomski was the Director of Retail Credit Risk Unit at Bank Millennium. He was responsible for credit risk strategy, risk appetite, credit policy, credit assessment models, credit decision engines, risk reporting, credit product profitability assessment and credit process support for such business lines as unsecured consumer loans, mortgage loans and small business. From August 2018 to November 2019 Marcin Gadomski was a Member of the Management Board of Pekao Bank Hipoteczny S.A., where on 20 November 2018 he obtained the consent of the Polish Financial Supervision Authority to entrust him the function of the Member of the Management Board supervising the management of material risks in the bank's operations. Between 29 November 2019 and 21 April 2020 Marcin Gadomski held position of the Vice President of the Management Board of Bank Pekao S.A. responsible for Risks Management Division. Later he was Credit Risk Director there. Marcin Gadomski meets suitability requirements determined in art. 22aa of the Banking Law Act. |
KRZYSZTOF KOZŁOWSKI Vice President of the Management Board supervising the activities of the Strategy Division |
Krzysztof Kozłowski Vice President of the Management Board supervising the activities of the Strategy Division. He has a Ph.D. degree awarded in 2010 at the Faculty of Law and Administration of the Jagiellonian University. Since 2011, an associate professor at the Department of Constitutional Law at the Faculty of Law and Administration of the Jagiellonian University. Author of several of scientific publications, as well as a participant of foreign stays, internships and scientific programs. In 2013, entered on the list of advocates (as a non-practicing advocate). He also passed the judge exam. In the years 2013–2015 an assistant to a justice of the Constitutional Tribunal. In the years 2013–2015, he was a representative–substitute in the Group of Independent Experts of the European Local Government Charter of the Council of Europe in Strasbourg. From April 2015 to December 2015 he was a member of the Supervisory Board of Tomaszowski Towarzystwo Budownictwa Społecznego sp.z o.o. From December 2015 to September 2016, Undersecretary of State in the Ministry of Maritime Economy and Inland Navigation. From September 2016 to January 2018 he was the West Pomeranian Voivode. In the period from January 2018 to April 2020, he was the Secretary of State in the Ministry of the Interior and Administration. Krzysztof Kozlowski supervises the Bank's Strategy Division is responsible for the organization of projects of strategic importance for the Bank and the Group, preparation of the Strategy and services for the Bank's corporate bodies. Krzysztof Kozłowski fulfills suitability requirements determined in art. 22aa of Banking Law Act.
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TOMASZ KUBIAK Vice President of the Management Board supervising the Financial Division |
Tomasz Kubiak , Vice President of the Management Board supervising the Financial Division. Tomasz Kubiak, since 2001 has been professionally associated with Bank Pekao S.A. In addition, since 2018 he has been the Chairman of the Supervisory Board of Pekao Bank Hipoteczny S.A., where in 2011 - 2015 he was a Member of the Supervisory Board, whereas from 2017 he has been a Member of the Supervisory Board of Pekao Investment Banking and the Supervisory Board of Pekao Investment Management. He started his career in Finance Division in controlling area. In last years, he held the position of Managing Director of the Department of Capital Allocation and Asset and Liability Management, responsible for managing the balance sheet, liquidity and capital of the Bank. Tomasz Kubiak supervises the Bank's Financial Division, he is responsible, among others, for the area of planning and controlling, accounting and reporting, taxes, capital and liquidity management, and data management. He graduated of the Warsaw University of Technology, Faculty of Technical Physics and Applied Mathematics. He holds CFA and PRM (Professional Risk Manager) certificates, he was honored by Award of Merit by the international PRMIA organization, associating risk managers. Tomasz Kubiak meets suitability requirements determined in art. 22aa of the Banking Law Act.
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JERZY KWIECIŃSKI Vice President of the Management Board supervising the Corporate Banking and MIB Division |
Jerzy Kwieciński, Vice President of the Management Board supervising the Corporate Banking and MIB Division. He is a graduate of Faculty of Materials Engineering of the Warsaw University of Technology and holds a degree of Doctor in the field of technical science. He also completed a postgraduate course for managers at the Warsaw School of Economics and an international Master of Business Administration (MBA) programme run by the University of Antwerp, the University of Staffordshire, the Free University of Brussels and the University of Warsaw. Jerzy Kwieciński also has experience in academic and research and development work, which he gained, among others at the Warsaw University of Technology and as a visiting professor at Brunel University of West London. Jerzy Kwieciński has more than 30 years of international experience in strategic planning, management of large organizations, programs and projects in the public, private, non-governmental and scientific research sectors, including energy sector. From 1993 to 2004, he worked for the European Commission Representation in Poland, where his duties included management of programmes and projects financed by the European Union. He also participated in the works preparing Poland for membership in the European Union. Between 2004 and 2005 he was the President of Europejskie Centrum Przedsiębiorczości sp. z o.o, where in 2008-2015 he acted as a Vice-President of the Management Board. In 2005, Jerzy Kwieciński took a position of the Undersecretary of State at the Ministry of Regional Development, where he coordinated the national development policy and cohesion policy, including the work on the National Development Strategy for 2007-2015 and the National Cohesion Strategy for 2007-2013. Between 2008 and 2015, he served as President of the Management Board of JP Capital Group sp. z o.o., specializing in preparation and implementation of projects and innovations, including establishing and running start-ups. In that period he was also head of Fundacja Europejskie Centrum Przedsiębiorczości (European Entrepreneurship Centre Foundation). In 2015, he was appointed the Secretary of State in the Ministry of Development. Since 2015, he has been a member of the National Development CouncilIn November 2015, he was appointed the First Deputy of the Deputy Prime Minister in the Ministry of Development. From January 2018, he held the office of the Minister of Investment and Development, and from September 2019 he served also as the Minister of Finance. He held both functions until November 15, 2019. He worked on, among others on preparation and implementation of the Strategy for Responsible Development and implementation of cohesion policy. From January to December 2020 he acted as President of the Management Board of Polskie Górnictwo Naftowe i Gazownictwo S.A. (PGNiG), he has been a member of the Supervisory Board in TUW Polski Gaz, Europolgaz SA and President of the Board of Directors PGNiG Upstream Norway. Jerzy Kwieciński fulfills suitability requirements determined in art. 22aa of Banking Law Act. |
BŁAŻEJ SZCZECKI Vice President of the Management Board supervising Banking Operations and IT Division |
Błażej Szczecki, Vice President of the Management Board supervising the Banking Operations and IT Division. Professionally associated with the Pekao Group since 2004. From 2018 till 2021 he has served as the Chief Transformation Officer and subsequently as the Chief Strategy Officer of Bank Pekao, responsible a.o. for the digital and operational transformation, as well as for the coordination of the work on the strategy of the Bank. From 2017 till 2018 he was responsible for the Transformation and Services Division, where he managed a.o. IT and Operations of the Bank. In 2010- 2017 he was Member of the Management Board of Pekao Leasing Sp. z o.o., where he assumed responsibility for IT, operations, insurance business, and customer service. Previously, from 2004 till 2010 he held various leadership roles in the Corporate Banking Division of Bank Pekao,including participation in the taskforce preparing the merger of Bank Pekao with the BPH Bank. Before joining Bank Pekao, he worked as consultant for McKinsey and Co. in Frankfurt (Main) in Germany. He also served as a research associate at the University in Frankfurt (Oder) and in Giessen (Germany), as well as professional experience at Dresdner Bank. Since 2017 he has served as the Chairman of the Supervisory Board of Centrum Kart. In addition, from 2017 till 2020 he was also the Vice-chairmen of the Supervisory Board of Pekao Financial Services. He has a Ph.D degree in economics from the European University Viadrina Frankfurt (Oder), he graduated from the Faculty of Economics at the European University Viadrina Frankfurt (Oder). He participated in numerous courses and trainings in Poland and abroad, a.o. Unifuture in cooperation with the Institute for Management Development (IMD) in Lausanne (Switzerland). Błażej Szczecki fulfills suitability requirements determined in art. 22aa of Banking Law Act. |
WOJCIECH WEROCHOWSKI Vice President of the Management Board supervising the Retail Banking Division |
Wojciech Werochowski, Vice President of the Management Board supervising the Retail Banking Division. Manager with 20 years of experience in banking, for 3 years associated with Bank Pekao S.A., with the Retail Banking Division. From December 2017 served as a director of the Retail Customer Credit Products Department, where he managed retails customer credit products and was responsible for the sales activity, portfolio quality as well as financial performance of the product and product development. Before joining Bank Pekao S.A. he worked at PKO Bank Polski, Bank Citi Handlowy, and Bank BPH, where he was responsible for the development and management of credit products, including mortgage loans, and the CRM function. Between 2000 and2008 he was associated with General Electric Capital in Poland, with GE Money Bank. He has worked in a number of positions in the areas of product management, development of new business models, strategic pricing and finance management, Lean Six Sigma programs. He has a university degree and an MBA degree from the University of Gdańsk, Copenhagen Business School and Universiteit Antwerpen. He completed trainings under the GE Management Development Institute, including Six Sigma Black Belt and Advanced Manager Course. Wojciech Werochowski fulfills suitability requirements determined in art. 22aa of Banking Law Act.
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MAGDALENA ZMITROWICZ Vice President of the Management Board supervising the SME Banking Division |
Magdalena Zmitrowicz, Vice President of the Management Board supervising the SME Banking Division. In 2018 she started working in Bank Pekao S.A. as Managing Director in Corporate Banking Department and from December 1st, 2018 she was appointed as the Vice President of the Management Board of the Bank.She started her professional career in 1999 in Bank Handlowy w Warszawie S.A. in Retail Banking Sector. She pursued her career in Corporate Banking Division, holding various leadership roles in regional structures of the Bank, including a position of Head of Sales for Northern Region and Head of Public Sector for Regions in the Public Sector Department. Having worked for almost twenty years in the banking industry, she has gained extensive experience both in general banking operations, including in particular the areas of sales, risk, operations and foreign-currency market, as well as in various customers segments, such as retail clients, small, medium and large companies, institutional clients, public sector and international corporations. In 2016-2017, she managed the Corporate Banking Department in the structures of the CEEMEA Commercial Banking Group - Citigroup. She managed the activities of the Strategy Champions Group at Bank Handlowy w Warszawie S.A. She is a member of the Supervisory Boards of Pekao Leasing and Pekao Faktoring. A graduate of the Faculty of Social Sciences at the University of Gdańsk, postgraduate studies at the Faculty of Management at the University of Gdańsk and postgraduate Executive MBA studies (EMBA) organized at the Faculty of Management at the University of Warsaw. She completed many local and foreign trainings, including those in credit risk management, financial analysis and sales. In 2013, she graduated from Commercial Credit College in the USA New York as part of Citigroup. Magdalena Zmitrowicz meets suitability requirements determined in art. 22aa of the Banking Law Act. |
In 2020, organizational changes took place in the Bank's Head Office as well as in regional structure of the Bank.
The Technology, Corporate Governance and Services Area was created, which includes Corporate Governance and Services Division, IT Center, Operations Center, Digital Transformation Department and Insurance Banking Department. Legal, purchases and real estate management activities have been concentrated in Corporate Governance and Services Division.
It was created, mainly on the basis of so far existing Investment and Insurance Product Management Division and Private Banking Distribution and Brokerage Services Department - the Private Banking and Investment Products Division, which provides personalized service for Private Banking Clients, management of investment products and operates a Brokerage Office.
In Corporate Banking and MIB Division was created Credit Analytics and Administration Department, responsible for implementation of corporate credit process and administration of loans for corporate clients of the MID segment.
A new structure of Risk Management Division was implemented - including creation of Systems, Projects and Credit Risk Analytics Department responsible for centralized management of systems, projects and analytics in the area of credit risk for all business segments and Strategic Clients Risk Management Department dedicated for management the risk of key corporate clients.
The activity of Operations Center was expanded, to which were transferred activities related to management of cash turnover and logistic services performed under newly established Logistics and Cash Turnover Department.
In Strategy Division, activities of so far existing Transformation Accelerator were transferred to Digital Transformation Department, and activities of Data Management and Big Data Office to Financial Division, as well as activities of Macroeconomic Research Office to the group of organizational units reporting directly to Vice President of the Management Board, leading the Management Board.
Volunteer and Corporate Culture Office was established in Human Resources Division, responsible for issues related to promoting the idea of volunteering and corporate culture in the Bank.
In structures of Bank's Head Office were grouped activities related to servicing loans for SME and micro companies, which so far have been carried out in the structure of SME Banking Region and structure of Retail Banking Macroregion, respectively.
The activities of Bank Pekao S.A. gained wide recognition by clients, industry specialists, the market and the media, as evidenced by numerous awards and distinctions granted by Polish and foreign institutions. Measures aimed at providing customers with the highest quality products and services, innovation of the proposed solutions have been appreciated. Bank Pekao S.A. received a number of awards and distinctions in 2020.The most relevant honors are presented below.
Bank Pekao S.A. receive the Top Employers 2020 certificate
For the tenth time in a row, Bank Pekao S.A. received the Best Employers certification and thus become one of the few best employers in Poland. The award is granted to companies that exceed the international standards set in the HR, are focused on supporting the development of a group of potential employees, strengthening their competences and skills, as well as transparent work based on adopted values.
Bank Pekao S.A. was awarded the prestigious Friendly Workplace 2020 award
The Bank received a special award in the third edition of the Friendly Workplace program. The Friendly Workplace program awards companies that respect and support the work-life balance model, create a healthy and friendly work environment, focus on open and partner relations with employees, and invest in the development of their professional competences and interests.
The Bank obtained 24 points out of 25 possible, which makes it one of the best employers in Poland.
Bank Pekao S.A. – Best Trade Finance Provider in Poland
Bank Pekao was recognized by the Global Finance Magazine for the third time in history and it was ranked the best trade finance provider in Poland for 2021. Criteria for choosing the winners included: the value of trade finance transactions portfolio, market share, quality and competitiveness of services offered to clients, methods of risk management related to trade finance transactions as well as innovation and technologies used in constructing the bank’s offer.
Bank Pekao S.A. – the Best Sub-custodian Bank in Poland
For the eighth time Bank Pekao S.A. received the "Best Sub-custodian Bank in Poland in 2020" award by Global Finance magazine.
The assessment took into account customer relations, service quality, competitive fees, trouble-free implementation of non-standard inquiries, IT systems, and operational activities in the field of settlement of transactions on securities.
Bank Pekao S.A. – the Best Investment Bank in Central and Eastern Europe
Bank Pekao S.A. - for the first time in history - received the title of the "Best Investment Bank in Central & Eastern Europe 2020" from the Global Finance international magazine. The quality of services provided by the Bank, the ability to find market opportunities and the ability to adjust solutions to client needs were appreciated.
The Best Investment Bank in Poland according to Global Finance
Bank Pekao S.A. was ranked the ”The Best Investment Bank in Poland” for the third time in a row in the prestigious competition organised by the international Global Finance magazine.
The award was granted by a group of industry experts taking into account the reported deals completed in the past year. The opinion of financial circles, scope of provided advice and service and the institution’s ability to structure transactions were also analysed in addition to the applications submitted for the competition. Other criteria included the Bank’s market share, distribution network, pricing as well as the ability to respond to market needs, innovation and reputation.
Bank Pekao S.A. – the Best Cash Management and Treasury Provider
Bank Pekao S.A. - for the first time in history - received the award of the Best Cash Management and Treasury Provider by Global Finance. The award is granted by independent experts based on such criteria as knowledge of local conditions and corporate clients’ needs, quality of offered products and services, financial safety and soundness, market position, compliance and excellent customer service.
Global Finance is one of the top international magazines with more than 30-year history. The awards were granted for the twentieth time this year. The readers of the magazine include CEOs, CFOs, analysts and managerial staff responsible for taking strategic investment decisions in 191 countries worldwide.
Private Banking of Bank Pekao S.A. ranked the best in Poland in the Private Bank Awards 2021
Private Banking of Bank Pekao S.A. – already for the sixth time in a row - was recognized as the best in Poland, according to the Global Finance magazine. The Private Bank Awards 2020 of Global Finance is one of the most comprehensive rankings classifying bank offers for the sector of most affluent customers.
The highest rating for Private Banking services
Private Banking has already received the highest score for the third time - the prestigious five stars in the rating of Private Banking services, prepared by the Polish edition of the Forbes monthly. The quality of private banking offers was assessed by a representative group using Private Banking services, with particular emphasis placed on solutions that match market trends.
Two golden statuettes in the prestigious "Złoty Bankier" ranking:
Bank in a competition organized by the editors of Puls Biznesu and Bankier.pl in cooperation with content partners - Kantar TNS and Obserwatorium.biz. received two golden statuettes in the category:
The Best Banking Advertising Spot
The spot from the Bank's campaign "Bierz życie za rogi" was selected as the best banking advertising spot in the prestigious Złoty Bankier. The competition was organized by the editors of Puls Biznesu and Bankier.pl. Both the Internet users and the competition jury decided about the victory, appreciating the atypical and difficult to implement production.
The Best Mortgage Offer
The Bank's offer was appreciated for its very flexible mortgage loan offer, incl. by selecting the interest rate, types of installments, currency or loan objectives. The offer is tailored to the needs and expectations of customers.
Moreover, in the category of the best Personal Account, Konto Przekorzystne offered by the Bank, it came second, while in the category "Best bank in social media", the Bank came third. Internet users assessed the Bank's communication with customers via social media.
"Best Bank" - Bank Pekao the winner of the Gazeta Bankowa competition
Gazeta Bankowa awarded the title of the "Best Bank" in the category of large commercial banks. The bank also took second place in the "Leader 2019" competition in the banking category and received the award for the Selfie Account, which was the first on the market.
Distinction for Bank Pekao awarded by the Krajowy Depozyt Papierów Wartościowych (KDPW)
Bank Pekao S.A. was among the institutions awarded by the National Depository for Securities for the achieved results and contributed to the development of the Polish capital market.
The justification appreciated the wide range of services offered under KDPW_CCP, the leader position on the cash market, active participation in market consultations and commitment to testing new solutions.
Konto Przekorzystne Biznes recognized as the best business account in the Money.pl ranking
The authors of the ranking appreciated, among others transparent conditions of account management, an attractive bonus of up to 1,000 PLN and the ability to open an account without leaving home.
PeoPay 3% deposit, the best quarterly deposit on the market in the bankier.pl ranking
The promotional offer was valid until June 30, 2020 and it was possible to open it without visiting the branch.
1st place in the Stability category in the ranking organized by Dziennik Gazeta Prawna and the PwC company
In the sixth edition of the annual ranking of Dziennik Gazeta Prawna and PwC - "Banking Stars". The Bank took first place in the Stability category. The assessment takes into account the audited financial results for the previous year. The structure of the bank's balance sheet, unpaid receivables and capital ratios were analyzed. Bank Pekao S.A. it was distinguished by a strong balance sheet, the lowest cost of risk and the highest portfolio coverage ratio among key Polish banks, as well as a well-diversified loan portfolio.
Pekao Direct received three awards in the “Złota Słuchawka” competition
The Golden Earphone Competition is the most important and most demanding competition in the contact center industry, which has been organized for years by the Direct Marketing Association. This year, Pekao Direct gained three titles:
Best Employer,
The best team of Contact Center consultants on the market,
The Best Team supporting the Office of Modern Contact Channels,
The “Złota Słuchawka” competition was attended not only by other large banks, but also by the largest outsourcing companies providing contact center services on the Polish market.
Pekao Direct - awarded in the European Customer Centricity Awards competition
Pekao Direct was honored with the main prize in the European Customer Centricity Awards competition in the category "Best omnichannel experience". The jury appreciated the process of opening a personal account using a selfie, prepared in close cooperation with Bank Pekao SA. , foreign currency account and debit card in less than 15 minutes using a smartphone.
ECCA is one of the largest European competitions that promotes "customer centricity" and the Customer Experience perspective in business.
Pekao Direct - bronze medal in the 15th edition of the global Stevie Awards for Sales & Customer Service competition.
Pekao Direct won a bronze medal in the 15th edition of the global Stevie Awards for Sales & Customer Service competition. The jury awarded the award in the "Best use of technology in sales" category for handling and supporting the process of opening a selfie account for small businesses, which is the result of close cooperation between Bank Pekao and Pekao Direct. The judges appreciated the innovative solution, which translated into the growth of remotely opened company accounts as well as the safety and convenience of customers. The award-winning process enables small businesses to open an account remotely in 3 simple steps: just install the PeoPay application, fill out the form, take a photo of yourself and your ID. The process takes no more than 10 minutes, all you need is a smartphone. Pekao Direct consultants support the client at every stage and help.
Stevie Awards is one of the most important and prestigious awards in the business world. The organizers reward exceptional achievements, unique implementations and the most spectacular business successes from around the world. Small and large organizations from all industries compete for the award. Each year, the organizers receive a total of over 12 thousand. applications from over 70 countries.
As at 31 December, 2020, the share capital of Bank Pekao S.A. amounted to PLN 262,470,034 and remained unchanged until the date of submitting the report. The Bank's share capital was divided into 262,470,034 shares in the following series:
137,650,000 Series A bearer shares with a par value of PLN 1.00 per share,
7,690,000 Series B bearer shares with a par value of PLN 1.00 per share,
10,630,632 Series C bearer shares with a par value of PLN 1.00 per share,
9,777,571 Series D bearer shares with a par value of PLN 1.00 per share,
373,644 Series E bearer shares with a par value of PLN 1.00 per share,
621,411 Series F bearer shares with a par value of PLN 1.00 per share,
603,377 Series G bearer shares with a par value of PLN 1.00 per share,
359,840 Series H bearer shares with a par value of PLN 1.00 per share,
94,763,559 Series I bearer shares with a par value of PLN 1.00 per share.
All the existing shares are ordinary bearer shares. There are no special preferences or limitations connected with the shares, or differences in the rights attached to them. The rights and obligations related to the shares are defined by the provisions of the Polish Commercial Companies Code and other applicable law.
Shareholders of Bank Pekao S.A., holding directly or indirectly, through subsidiaries, at least 5% of the total number of votes at the General Meeting of the Bank, are as follows:
Shareholder’s name |
number of shares and votes at the General Meeting |
Share in share capital and total number of votes at the General Meeting |
number of shares and votes at the General Meeting |
Share in share capital and total number of votes at the General Meeting |
AS AT THE DATE OF SUBMITTING THE REPORT FOR 2020 |
AS AT THE DATE OF SUBMITTING THE REPORT FOR THE third quarter of 2020 |
|||
Powszechny Zakład Ubezpieczeń S.A. |
52,494,007 |
20.00% |
52,494,007 |
20.00% |
Polski Fundusz Rozwoju S.A. |
33,596,166 |
12.80% |
33,596,166 |
12.80% |
Aviva Otwarty Fundusz Emerytalny Aviva Santander S.A. |
13,281,544 |
5.06% |
13,281,544 |
5.06% |
Fundusze zarządzane przez Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A. |
13,201,655 |
5.03% |
13,201,655 |
5.03% |
Other shareholders (below 5%) |
149,896,662 |
57.11% |
149,896,662 |
57.11% |
Total |
262,470,034 |
100.00% |
262,470,034 |
100.00% |
On 24 January, 2020, in the current Report No. 1/2020, Bank Pekao S.A. informed that on 23 January, 2020, it received a notification from BlackRock, Inc. on increasing its stake above 5% of the total number of votes at the General Meeting of the Bank, taking into account also securities lending and contracts for difference (CFD). The total sum of the number of votes was 13,129,549 votes from shares, representing 5.00% of the Bank's share capital and the total number of votes in the Bank.
On 30 January, 2020, in the current Report No. 2/2020, Bank Pekao S.A. informed that on 29 January, 2020, it received a notification from Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A. (NN PTE) regarding the change in the total number of votes at the General Meeting of the Bank. According to the notification after the settlement of the transaction regarding acquisition of shares on 24 January 2020:
OFE held 13,170,209 shares of the Bank, which constituted 5.02% of the Bank's share capital. These shares entitle to 13,170,209 votes at the General Meeting of the Bank, which constituted 5.02% of the total number of votes at the General Meeting of the Bank,
OFE, DFE, FZD 2025, FZD 2030, FZD 2035, FZD 2040, FZD 2045, FZD 2050, FZD 2055, FZD 2060 held together 13,201,655 shares of the Bank, which constituted 5.03% of the Bank's share capital. These shares entitle to 13,201,655 votes at the General Meeting of the Bank, which constituted 5.03% of the total number of votes at the General Meeting of the Bank.
On 6 March, 2020, in the current Report No. 7/2020, Bank Pekao S.A. informed that on 6 March, 2020, it received a notification from BlackRock, Inc. on reducing the voting share below the threshold of 5% of the total number of votes in the Bank, taking into account also securities lending and contracts for difference (CFD).
On 27 March, 2020, in the current Report No. 11/2020, Bank Pekao S.A. informed that on 27 March, 2020, it received a notification from Aviva Powszechne Towarzystwo Emerytalne Aviva Santander S.A. (Aviva PTE) regarding the change in the ownership of Aviva Otwarty Fundusz Emerytalny Aviva Santander (Aviva OFE) in the total number of votes in the Bank. According to the information provided in the notification, after the settlement of the transaction regarding acquisition of Bank’s shares, on March 23, 2020 Aviva OFE held 13,281,544 shares of the Bank, which constituted 5.06% of the Bank's share capital, and entitles Aviva OFE to 13,281,544 votes in the Bank, which constituted 5.06% of the total number of votes in the Bank.
Until the date of submitting the report the Bank has not received any other notifications regarding changes in the ownership structure in accordance with par. 69 of the Act of July 29, 2005 on Public Offerings and Conditions Governing the Introduction of Financial Instruments to an Organized System of Trading, and on Public Companies.
Polish open-end pension funds (OFE) constitute the group of financial investors holding a significant equity interest in the Bank. Based on their publicly available financial reports, as of December 31, 2020 OFE’s held in aggregate 18.93% of the Bank’s shares.
The Polish open-end pension funds’ holdings in Bank Pekao S.A.:
SHAREHOLDER |
NUMBER OF SHARES AND VOTES AT GM |
% OF SHARE CAPITAL AND TOTAL VOTE AT GM |
NUMBER OF SHARES AND VOTES AT GM |
% OF SHARE CAPITAL AND TOTAL VOTE AT GM |
DECEMBER 31, 2020 |
DECEMBER 31, 2019 |
|||
Nationale-Nederlanden OFE |
15,742,052 |
6.00% |
12,827,975 |
4.89% |
Aviva OFE |
13,164,591 |
5.02% |
12,511,680 |
4.77% |
Aegon OFE |
4,518,634 |
1.72% |
3,894,258 |
1.48% |
MetLife OFE |
3,871,781 |
1.48% |
3,741,781 |
1.43% |
PKO BP Bankowy OFE |
3,264,272 |
1.24% |
1,953,190 |
0.74% |
AXA OFE |
3,153,684 |
1.20% |
2,983,684 |
1.14% |
Generali OFE |
3,048,933 |
1.16% |
2,492,839 |
0.95% |
Allianz Polska OFE |
2,115,460 |
0.81% |
1,948,507 |
0.74% |
OFE Pocztylion |
796,568 |
0.30% |
700,944 |
0.27% |
Total |
49,675,975 |
18.93% |
43,054,858 |
16.40% |
Source: OFE Reports, annual structure of open-end pension funds assets, closing share price of Bank Pekao S.A. as at end of the period.
The shares of Bank Pekao S.A. have been listed on the Warsaw Stock Exchange since June 1998 and they are one of the most liquid equities in Poland and Central and Eastern Europe. Since 2000, the Bank maintains Global Depositary Receipts (GDR) program. The Bank’s GDRs are traded on London Stock Exchange and on the over the counter market in the USA.
The Bank’s market capitalization as of December 31, 2020 amounted to PLN 16.0 billion making the Bank one of the largest listed company in Central and Eastern Europe. Given the high capitalization and liquidity the Bank’s shares are a part of many important stock indices maintained by domestic and foreign institutions including Polish blue chips index – WIG20 and WIG30, banking sector index WIG- Banks as well as MSCI Emerging markets. Since 2016, the shares of Bank Pekao S.A. had been included in RESPECT Index run by the Warsaw Stock Exchange, the index of responsible companies. In September 2019 RESPECT Index was replaced with WIG-ESG index. Pekao share in WIG-ESG index constitute 4.8%.
In September 2018 the shares of Bank Pekao S.A. were included in the STOXX Europe 600 Index, the index of the largest and most liquid securities in Europe and the FTSE Developed Equity Index, due to reclassification of Poland into developed market.
In January 2020, the Bank as the only company from Poland and one of the few in the entire region of Central and Eastern Europe, were included in the global Bloomberg Gender Equality Index, bringing together a listed company actively working for gender equality at work.
With the average daily turnover volume at the level of 1 108 thousand of shares and the worth of trading at PLN 16.4 billion in 2020, the share of the Bank’s stock in trading on the WSE amounted to 5.5%.
The share price of Bank Pekao S.A. decreased by 39.2% y/y and reached PLN 61.10 as at the end of December 2020 comparing to PLN 100,45 a year earlier. The return for the Bank's shareholders was lower than the return for the WIG Banks index, which fell by 29.6% in 2020.
Polish banks share price performance in 2020 was primarily affected by factors related to the COVID-19 pandemic and its negative economic consequences. The first recession in Poland in 30 years resulted in a decrease in demand for loans and an increase in the cost of risk, while interest rate cuts contributed to a decline in net interest income. The impact of these factors translated into a significant decline in the profits of the banking sector, and thus into a decline in share prices. Due to the recommendation of the Polish Financial Supervision Authority in March 2020, banks were forced to retain profits from previous years and withhold dividends, at least until the end of the first half of 2021. An additional negative factor affecting bank share prices was the consequences of the CJEU judgment on Swiss franc loans in 2019, which resulted in a marked increase in court cases lost by banks and an increase in provisions created in this connection.
Basic information about Bank Pekao S.A. shares
|
2020 |
2019 |
Share price at the end of the year (PLN) |
61.10 |
100.45 |
Maximum share price (PLN) |
107.60 |
118.25 |
Minimum share price (PLN) |
40,80 |
91.26 |
Number of shares |
262,470,034 |
262,470,034 |
Capitalization at the end of the year (PLN billion) |
16.0 |
26.4 |
Average trading volume |
1,108,242 |
642,925 |
Earnings per share (PLN)1 |
6.11 |
8.49 |
Book value per share (PLN)2 |
95.78 |
86.91 |
Dividend per share paid in a given year (PLN) |
0.00 |
6.60 |
P/E (x)3 |
10.0 |
11.8 |
P/BV (x)3 |
0.64 |
1.16 |
Data based on GPW statistics.
1 Earnings per share calculated as the sum of quarterly earnings per share for four consecutive quarters, where the last quarter is the third quarter of a given year.
2 Book value per share calculated on the basis of financial data for the third quarter of a given year.
3 Indicators calculated in relation to the financial data after the third quarter of a given year.
Performance of Bank Pekao S.A.’s shares in year 2020.
In 2020, the Bank did not pay dividends for 2019, which resulted from the PFSA recommendation to retain the entire profit generated in previous years, due to the situation related to the COVID-19 pandemic and its possible negative economic consequences and impact on the banking sector. The Bank was distributing dividends every year in 2010-2019 period. The total value of dividends distributed for the years 2009-2019 was close to PLN 20 billion. Consequently, the Bank has been one of the most generous dividend payers among the Polish companies.
The dividend payments from 2009 to 2019 are presented below:
|
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
Dividend for the year (in PLN million) |
761 |
1 785 |
1 412 |
2 202 |
2 614 |
2 625 |
2 283 |
2 278 |
2 074 |
1 732 |
- |
Dividend per 1 share (in PLN) |
2,90 |
6,80 |
5,38 |
8,39 |
9,96 |
10,00 |
8,70 |
8,68 |
7,90 |
6,60 |
- |
NOTE: Dividend presented in the year in which the profit intended for dividend payment was generated.
On 16 December, 2020, the PFSA adopted a position on the dividend policy of commercial banks, cooperative and associating banks, insurance companies, reinsurance companies, insurance and reinsurance companies, investment fund companies, universal pension companies and brokerage houses in 2021. According to this letter, the Commission considers its necessary to suspend dividends distribution by commercial banks in the first half of 2021. The position of the Polish Financial Supervision Authority on the dividend policy of commercial banks in the second half of 2021 will be presented separately after analyzing the financial situation of the banking sector in the first half of the year.
On 14 January, 2021, Bank Pekao received a recommendation from the Polish Financial Supervision Authority regarding suspension of dividend payment in the first half of 2021 (including undistributed earnings from previous years). Moreover, the Polish Financial Supervision Authority recommended not to undertake by the Bank, in the first half of 2021, without prior consultation with the Supervisory Authority, other actions beyond the scope of current business and operational activities that may result in a reduction of the capital position, including buyback of own shares.
The Bank’s activity, in the investor relations area, is focused on providing transparent and active communication with the market through active co-operation with investors, analysts and rating agencies, as well as fulfilling disclosure requirements within the frameworks of applicable law regulations.
The Bank’s representatives regularly hold many meetings with investors from Poland and abroad, and take part in most of the regional and sector dedicated investors conferences. In total, in 2020, the bank participated in 33 Investor conferences and roadshows meetings with institutional investors from key financial centers around the world. As part of the conference, the Bank held 462 meetings with investors last year. Financial results of Bank Pekao S.A. Group are presented quarterly at conferences that are simultaneously transmitted via Internet. Since the outbreak of the COVID-19 epidemic in Poland in March 2020, all meetings with capital market representatives this year have been held remotely in the form of video or teleconferences
The Bank’s financial results and its activity are regularly monitored by analysts representing Polish and foreign brokerage entities. In 2020, 21 analysts published reports and recommendations on the Bank.
Recommendation structure for Bank Pekao S.A. shares for 31 December 2020
|
|
Buy/Accumulate |
17 |
Hold/Neutral |
4 |
Reduce/Sell |
0 |
The activity of the Bank’s investor relations is to enable to make a reliable evaluation of the Bank’s financial situation, its market position and business model effectiveness in the context of banking sector conditions and macroeconomic situation in the domestic economy as well as on international markets.
Relevant information for the investors about the Bank is available on the Bank’s website:
https://www.pekao.com.pl/en/investors-relations.html
The Bank publishes also on-line annual report available on the Bank’s website, where is also posted “Information Policy of Bank Polska Kasa Opieki Spółka Akcyjna regarding communication with investors, media and customers”.
As of 31 December 2020, Bank Pekao S.A. had assigned following financial credibility ratings:
fitch ratings |
Bank pekao s.a. |
polaND |
Long-term rating (IDR) |
BBB+ |
A- |
Short-term rating |
F2 |
F2 |
Viability rating |
bbb+ |
- |
Support rating |
5 |
- |
Support rating factor |
No floor |
- |
Outlook |
Negative |
Stable |
National Long-Term Rating |
AA(pol) (negative outlook) |
- |
National Short-Term Rating |
F1+(pol) |
- |
S&P GLOBAL RATINGS |
BANK Pekao S.A. |
Poland |
Long-term rating in foreign currencies |
BBB+ |
A- |
Long-term rating in domestic currency |
BBB+ |
A |
Short-term rating in foreign currencies |
A-2 |
A-2 |
Short-term rating in domestic currency |
A-2 |
A-1 |
Stand-alone credit profile |
bbb+ |
- |
Outlook |
Stable |
Stable |
S&P GLOBAL RATINGS (RESOLUTION COUNTERPARTY RATING) |
BANK Pekao S.A. |
Poland |
Long - term RCR in foreign currencies |
A- |
- |
Short - term RCR in foreign currencies |
A-2 |
- |
Long - term RCR in domestic currency |
A- |
- |
Short - term RCR in domestic currency |
A-2 |
- |
Moody’s Investors Service |
BANK Pekao S.A. |
Poland |
Long-term foreign-currency deposit rating |
A2 |
A2 |
Short-term deposit rating |
Prime-1 |
Prime-1 |
Baseline Credit Assessment |
baa1 |
- |
Long-term counterparty risk assessment |
A1(cr) |
- |
Short-term counterparty risk assessment |
Prime-1(cr) |
- |
Outlook |
Stable |
Stable |
Long-term Counterparty Risk Rating (CRR) |
A1 |
- |
Short-term Counterparty Risk Rating (CRR) |
Prime-1 |
- |
1 On 7 January, 2021, rating agency Moody's Investors Service changed the assesments of the Bank. After the changes, the assessments are as follows: Long-term foreign-currency deposit rating: A2; Short-term deposit rating: Prime-1; Baseline Credit Assessment: baa2; Long-term counterparty risk assessment: A2 (cr); Short-term counterparty risk assessment: Prime-1 (cr); Outlook: Stable; Long-term Counterparty Risk Rating (CRR): A2; Short-term Counterparty Risk Rating (CRR): Prime-1.
On 8 April, 2020, rating agency S&P informed the Bank that it has revised the outlook for the Bank from “Positive” to “Stable” and has affirmed the long-term and short-term ratings of the Bank at the current level.
According to the rationale provided by S&P, the decision to change rating outlook for the Bank is a reflection of lowering of rating outlook for PZU S.A., the Bank's main shareholder. The change in rating outlook results from deterioration of financial and business conditions in Poland due to the outbreak of the COVID-19 pandemic. In the opinion of rating agency, this may pressure financial results of the Bank, however at the same time the Bank should maintain both profitability and capital position at a comfortable level and demonstrate general resilience in the face of more difficult financial and business conditions in Poland. S&P highlights that strong deposit-focused funding profile and historically comfortable liquidity position are a source of stable position of the Bank amid turbulent market conditions. Additionally, the above position will be supported by sound franchise, well-balanced business profile and proximity to customers.
On 14 April, 2020, the Fitch agency informed the Bank, in the light of the outbreak of COVID-19 pandemic, that it has revised the outlook for the Bank’s Long-term IDR and National Long-Term Rating from “Stable” to “Negative” and has affirmed the ratings of the Bank.
According to the rationale provided by the Fitch, in the light of the outbreak of COVID-19 pandemic, financial and business conditions in Poland have worsened. On March 30, 2020, as a result of revision of the outlook of the operating environment for Polish banks from “Stable” to “Negative”, the Fitch revised the sector outlook for Polish banks from "Stable" to "Negative", affirming sector rating at “bbb+”. The Fitch highlights that Pekao enters the economic downturn from a position of relative strength, given its strong domestic retail and corporate franchise, well diversified credit exposures, solid capitalisation and strong deposit-driven funding and liquidity. Sizeable CET1 capital buffers above revised regulatory minimums provide sizeable loss absorption capacity of around 7% of total gross loans compared with an average cost of risk of around 40 b.p. over the last 5 years. The bank’s loan book is well diversified and exposure to more vulnerable products/customer segments is low.
On 30 September, 2020 rating agency Fitch Ratings (the "Fitch") informed the Bank about maintaining all the Bank's ratings on unchanged level, including Long-Term Issuer Default Rating (IDR) at “BBB+” and Viability Ratings (VR) at “bbb+” and the Negative Outlook for the Long-Term IDR.
The affirmation of Bank's VR and IDRs reflects Fitch's view that the Bank's ratings have sufficient headroom under Fitch’s updated assessment to absorb pressure on asset quality, earnings and capitalisation of the Bank, which Fitch expect in its baseline scenario for Poland. The Negative Outlook on Bank’s Long-term IDR reflects downside risk to Fitch’s baseline scenario if the economic downturn is deeper or more prolonged than currently expected. The Outlook for the operating environment for Polish banks remains Negative reflecting downside risks to the Fitch's base line economic scenario and related profitability pressures for the sector. According to Fitch, the IDRs of the Bank are driven by the Bank’s intrinsic strength, as reflected in its VR. Bank’s VR of 'bbb+' reflects its well diversified business model as well as solid market share and franchise in both retail and corporate banking, conservative risk appetite, strong capitalisation and liquidity. Fitch believes that the economic fallout from the pandemic creates medium-term risks for Bank's credit profile, although the Bank entered the crisis from a position of strength. Fitch highlights the Bank’s moderate business risk, well-diversified credit risk (by industry and single name), strong coverage of bad debt by loan loss allowances and prudent underwriting resulting in the solid asset quality to date.
On 7 January, 2021, rating agency Moody’s Investors Service informed the Bank about maintaining the „A2” long term and „P-1” short term deposit ratings as well as stable outlook on the long term deposit ratings. Concurrently Moody’s downgraded the Bank’s Baseline Credit Assessment („BCA”) and Adjusted Baseline Credit Assessment („Adjusted BCA”) to „baa2” from „baa1”and its long term Counterparty Risk Ratings („CRR”) to „A2” from „A1”. Banks’s long term Counterparty Risk Assessment („CRA”) was also downgraded to „A2(cr)” from „A1(cr)”. The short term CRR and CRA were affirmed at „P-1” and „P-1(cr)” respectively.
According to Moody's, the rating update is a consequence of the Bank's announcement of the acquisition of the certain assets and liabilities of Idea Bank S.A. as part of Idea’s resolution under the legal framework of the Act of 10 June 2016 on the Bank Guarantee Fund, Deposit Guarantee Scheme and Resolution. Moody's stated that the transaction has a very limited impact on the Bank's credit profile and Moody's expectations on the Bank's financial fundamentals and performance are now more appropriately reflected in the BCA's of „baa2", which is a one-notch lower than before the assessment. At the same time, long-term deposit ratings were affirmed owing to rating uplift from the application of Moody’s Advanced Loss Given Failure analysis and a moderate likelihood of support from the government of Poland in case of need. The stable outlook for the ratings reflects the rating agency's expectation that the Bank will successfully execute the transaction within the set timelines, while maintaining its financial metrics broadly at current levels.
Fitch emphasizes that the rating of Pekao Bank Hipoteczny S.A. is related to the rating of Bank Pekao S.A., which holds 100% of the Bank's shares. In Fitch's opinion, the Bank's rating is influenced by the level of integration with the parent company, the scale of operations and the Bank's capital. Fitch believes that in light of the pandemic, the outlook for the assessment of the operating environment of banks in Poland remains negative, reflecting the risks in relation to the baseline economic scenario assumed by Fitch and the related pressure on the profitability of the sector.
At the end of December 2020, the mortgage bonds issued by Pekao Bank Hipoteczny S.A., a 100% subsidiary of Bank Pekao S.A., were rated "A-" by the international rating agency Fitch Ratings. The high rating of the letters means that Pekao Bank Hipoteczny S.A. has the ability to issue securities with a very high level of security and to obtain long-term funds for credit activities. Long-term assessment of Pekao Banku Hipoteczny S.A. was at the BBB + level, with a "Negative" perspective, including for the issued mortgage bonds.
On February 2, 2021, the Fitch Ratings agency announced that all the ratings for the mortgage bonds issued by the Bank would remain unchanged.
Fitch Ratings emphasizes that the ratings of Pekao Bank Hipoteczny S.A. is associated with the COVID-19 pandemic, which affects the current financial and business conditions in Poland.
In 2020, the Group’s activity was to large extent determined by the macroeconomic situation in Poland and abroad, decisively influenced by the COVID-19 pandemic.
The pandemic caused the first recession in the Polish economy in 30 years. In response to the threat of the pandemic, Polish government introduced serious restrictions, which resulted in a significant decline of GDP in our country. The most noticeable effects of the economy freezing were visible in the second quarter when the dynamics of Polish GDP amounted to -8.4% y/y. Throughout the year, the decline of GDP reached -2.6% according to the estimates of economists from Macroeconomic Analysis Department of Bank Pekao, positioning our country in a relatively good situation comparing to other European countries.
The pandemic and the accompanying recession in the economy caused that 2020 was a difficult and challenging period for the banking sector. The sudden economic slowdown translated into a decline of the banks’ customers’ activity and demand for loans.
The Monetary Policy Council, in response to the economic crisis caused by the pandemic, cut interest rates three times in the first half of 2020, by a total of 140 basis points. Interest rate cuts resulted in a significant decline in the interest income in the sector. Banks, including Bank Pekao, took some measures to mitigate the scale of the negative impact of interest rate cuts on the net interest income, gradually reducing interest rates on deposits and repricing of loans.
The recession increased the cost of risk in the sector as a result of the expected worsening of macroeconomic conditions in the wake of the COVID-19 pandemic. The scale of the provisioning for a possible deterioration of the loan portfolio quality varied in the sector. Bank Pekao stood out with its prudent approach comparing to the sector, continuing its strategy of conservative risk profile management and creating the largest prudential provisions in the sector for possible portfolio quality deterioration due to the negative effects of the pandemic.
Pressure on revenues driven by the deteriorating macroeconomic environment in the wake of changes in customer behavior, including the growing digitization of banking services, caused that the banks tried to reduce operating costs, including the downsizing of the branches and employees. Bank Pekao also continued to optimize its branch network and carried out next employment restructuring program.
The above factors lead to the significant drop of the financial results and profitability of the banking sector. In the first three quarters of 2020, the sector's net profit decreased by 49%.
At the same time, the capital resources of the banks improved due to the retention of 2019 net profits and the lack of dividend distribution, due to Polish Financial Supervision Authority opinion expressed in the letter from 26 of March, 2020. On 14 January, 2021, Bank Pekao received a recommendation from the Polish Financial Supervision Authority to suspend the dividend distribution in the first half of 2021, which will translate into further improvement of the Bank's capital resources.
In response to the economic crisis, the government introduced a number of measures under the so-called anti-crisis shields in order to support the economic situation and maintain jobs, including Polish Development Fund (PFR) program worth PLN 100 billion in subsidies for enterprises and Bank Gospodarstwa Krajowego guarantee program with a total limit of PLN 100 billion of granted guarantees. The PFR shield covered over 300 thousand companies employing 3 million people. Bank Pekao actively participated in the distribution of aid funds for enterprises, achieving a significant market share.
To support the clients in a difficult situation banks also introduced payment moratoria, i.a. deferment of loan repayment for a period from 3 to 6 months. In July 2020, also the so-called statutory payment moratoria started. Bank Pekao actively participated in supporting its clients, although the scale of this program was relatively small for the Bank.
Banks also had to adapt their service model to the pandemic situation, ensure the safety of its employees and customers and enable remote customer service. The pandemic, due to the hindered social mobility, significantly accelerated the digital transformation of the banking sector and the migration of the customers to remote channels. The increase in the number of online and mobile operations performed by customers made cybersecurity one of the most important challenges in the sector demanding significant investment.
In 2020, the number of lawsuits against banks regarding CHF loans increased after 2019 CJEU ruling and the percentage of cases won by the clients had increased, resulting in the increase of banks’ provisions for the CHF loan portfolio.
On 8 December, 2020, the chairman of the Polish Financial Supervision Authority, presented, during the annual meeting organized by the Polish Bank Association, his proposal to solve the problem of foreign currency loans in CHF, which assume the possibility to offer the customers voluntary agreements on attractive terms by banks that will allow to avoid court trials.
Bank Pekao exposure to these loans is marginal, and in the opinion of the Bank, the provisions created so far mostly cover the costs of materialization of the considered scenarios related to a further increase in the number of lawsuits or joining the program of concluding settlements with customers discussed by the banking sector.
In terms of capital requirements, in accordance with the law, Bank Pekao Group should maintain minimum levels of capital ratios at regulatory level of Pillar I resulting from the CRR Regulation, the Pillar II requirement under the Banking Law and the combined buffer requirement resulting from the Act on Macroprudential Supervision.
Pursuant to the CRR Regulation, the minimum level of capital ratios maintained by the Group and the Bank should be as follows:
Total capital ratio (TCR) - 8%,
Tier I (T1) capital ratio - 6%,
Common Equity Tier I (CET1) ratio - 4.5%.
Under Pillar II, banks with exposure to foreign currency mortgage exposure receive an additional, individual capital requirement. Bank Pekao does not have such a requirement, while the requirement for the Group is 0.01% for TCR and 0.0075% for Tier 1 capital and results from an individual requirement imposed on Pekao Bank Hipoteczny by the Polish Financial Supervision Authority.
The combined buffer requirement, as defined in the Act on Macroprudential Supervision, consists of the following buffers:
conservation buffer at 2.5%, that came into force on 1 January, 2019,
other systemically important institution buffer from 0% to 1.00% of risk exposure, (0.75% for Bank Pekao S.A. and Pekao Group),
countercyclical buffer, which is calculated in the weighted average of the countercyclical buffer ratios set by respective authorities of the states in which the Group has exposures, 0% for credit exposures in Poland, (0.01% for Bank Pekao S.A. and Pekao Group),
systemic risk buffer at 0.00%, which applies to all banks from 19 March, 2020, in connection with the Regulation of the Minister of Finance repealing the regulation on the systemic risk buffer, amounting to 3% so far (this buffer was changed in response to the economic crisis caused by the COVID-19 pandemic).
For the Pekao Group, as at 31 December, 2020, the minimum total capital ratio was 11.26%, the Tier 1 capital ratio was 9.26% and the Common Equity Tier 1 capital ratio was 7.76%.
In 2020, Bank Guarantee Fund fees increased by 14% y/y, from PLN 2.8 billion to PLN 3.2 billion for the sector, with a simultaneous change in the structure of allocation of fees between funds: the split was 50/50 between the deposit guarantee fund and the resolution fund, which had a negative impact on the increase in BGF costs for some banks. At the same time, the structure of fees in 2020 was more favorable for Bank Pekao, which in 2020 paid lower contributions to the BGF by 16%.
Banks also incurred high costs of adapting to numerous regulatory solutions (including MIFID II, GDPR, PSD2), as in previous years.
In 2020, the BGF informed the banks about the minimum requirement for own funds and eligible liabilities, the so-called MREL, which the sector must meet at the end of 2023. In the case of Bank Pekao S.A. the consolidated MREL is 12.88% of the sum of own funds and total liabilities, which is 19.04% of the total risk exposure, while at the individual level it is 12.23% of the sum of own funds and total liabilities, which is 19.02% of the total risk exposure. The above-mentioned levels should be achieved by the Bank as at 31 December, 2023. The BGF has also set a path to meet the above-mentioned requirements, both at the consolidated and individual level. Meeting these requirements will require banks to increase MREL capitals, including primarily the issue of debt securities that meet the criteria for inclusion in MREL capitals.
On 26 March, 2020, Bank Pekao received a letter from the Polish Financial Supervision Authority regarding retention of entire profit earned in previous years. In this letter, taking into account current situation related to the state of the epidemic announced in Poland and possible further negative economic consequences of this state, as well as their expected impact on banks, the PFSA expected that banking sector - regardless of any actions already undertaken in this respect - would retain entire profit earned in previous years. Moreover, the PFSA expected that no other actions would be undertaken without the agreement with the PFSA, in particular the actions outside of the scope of ongoing business and operating activities, which could result in weakening of capital position.
On 16 December, 2020, the PFSA adopted a position on the dividend policy of commercial banks, cooperative and associating banks, insurance companies, reinsurance companies, insurance and reinsurance companies, investment fund companies, universal pension companies and brokerage houses in 2021. According to this letter, the Commission considers its necessary to suspend dividends distribution by commercial banks in the first half of 2021. The position of the Polish Financial Supervision Authority on the dividend policy of commercial banks in the second half of 2021 will be presented separately after analyzing the financial situation of the banking sector in the first half of the year.
On 14 January, 2021, Bank Pekao received a recommendation from the Polish Financial Supervision Authority regarding suspension of dividend payment in the first half of 2021 (including undistributed earnings from previous years). Moreover, the Polish Financial Supervision Authority recommended not to undertake by the Bank, in the first half of 2021, without prior consultation with the Supervisory Authority, other actions beyond the scope of current business and operational activities that may result in a reduction of the capital position, including buyback of own shares.
On 31 December, 2020, Bank Pekao informed about the acquisition of certain assets and liabilities of Idea Bank SA with the exclusions, under the resolution of the Bank Guarantee Fund on 30 December, 2020. The acquisition by the Bank of certain assets and liabilities of Idea Bank SA with the exclusions took place on 3 January, 2021.
The acquisition by the Bank of certain assets and liabilities of Idea Bank S.A. with the exclusions, took place through the acquisition the assets and rights in the form of enterprise and the simultaneous acquisition of liabilities. The value of the acquired liabilities, as estimated by the Bank as at 31 August, 2020, amounted to PLN 14,628.10 million. Given the fact that the value of the liabilities being assumed exceeded the value of the acquired assets, rights and liabilities in the form of the enterprise, BGF granted the Bank a subsidy in order to cover the difference between the value of the liabilities being assumed and the value of the acquired assets and rights, in the amount of PLN 193 million. Moreover, the BGF granted to the Bank a Loss-Coverage Guarantee covering the losses resulting from the risk associated with the assets, rights and liabilities of the entity under resolution.
In accordance with the provisions of the Loss-Coverage Guarantee agreement, the Loss-Coverage Guarantee provides for a guarantee covering the losses resulting from the credit risk associated with the acquired loan assets and a guarantee covering the losses (other than the losses resulting from credit risk) associated with the Acquired Business. Thanks to the guarantee of coverage of losses related to the acquired credit exposures, the transaction will have minimal impact on the level of the Bank’s Tier 1 and TC capital.
The Bank estimates the cost synergies from the transaction at PLN 420 million before tax (10-year NPV). The main areas in which the Bank identifies synergies are: reduction of financing costs, operational cost synergies thanks to the rationalization of the combined network of branches and the functions of the Pekao headquarters after the merger, and potential additional synergies in terms of revenues from an enlarged customer base (strengthening relationships and cross-selling). At the same time, the Bank estimates one-off integration costs at PLN 120 million before tax. Most of the integration costs will be incurred in 2021. The integration is expected to be completed by the end of the fourth quarter of 2021.
The process of forced restructuring applied by the Bank Guarantee Fund to Idea Bank S.A. was conducted on the basis of the provisions of the Act of 10 June 2016 on the Bank Guarantee Fund, the Deposit Guarantee Scheme and Resolution. This act implements the European Union (EU) BRR Directive of 2014, which is the legal framework for the resolution of banks in the EU. The BRR Directive was introduced in the wake of the 2008 financial crisis to prevent bank failures and minimize the negative effects on depositors and the banking sector, and more broadly, costs for the economy and taxpayers. This transaction secures clients' funds and supports the stability of the domestic banking sector.
Risk management
Effective risk management is a prerequisite for maintaining a high level of security of the funds entrusted to the Group, and for achieving a sustainable and balanced profit growth within the risk appetite assumed by the Group.
The key risks material for the Group include credit risk, liquidity, market risks and operational risk. Moreover, the Group identifies the following risks as material in its business activity: business, macroeconomic, reputation, compliance, excessive leverage, bancassurance, real estate, financial investment, and model risks.
The Group has adopted a comprehensive and consolidated approach to risk management. It extends to all units of the Bank and subsidiaries. Risks are monitored and managed taking into account business profitability and the capital required to cover the losses resulting from these risks.
The Management Board of the Bank is responsible for achieving the strategic risk management goals, while the Supervisory Board, supported by the Risk Committee, oversees whether the Group’s policy of taking various risks is compliant with the overall strategy and financial plan. The Credit Committee plays an important role in the credit risk management, the Asset, Liability and Risk Committee and Liquidity and Market Risk Committee in market and liquidity risk management, the Operational Risk Committee in the management of the operational risk and the Model Risk Committee in model risk management.
The rules of managing each of the risks are defined by internal procedures and the guidelines set up by the credit risk policy, investment and market risk policy and the operational risk strategy and policy accepted annually by the Management Board and approved by the Supervisory Board. Detailed reports on credit, liquidity, market, operational and model risks are presented to the Management Board and the Supervisory Board on a regular basis.
The rules and instruments of managing each of the risks and information on the risk exposure are included in Note 6 to the Consolidated Financial Statements of Bank Pekao S.A. for the period ended on December 31, 2020 and in the document “Information in respect to capital adequacy of Bank Pekao S.A Group as at 31 December 2020” published on the Bank’s website.
Operational risk
The objective of proper operational risk management is to maintain the operational risk the Group takes, on the level consistent with a specific risk appetite. Operational risk management is based on internal procedures that are consistent with the law requirements, resolutions, recommendations and guidelines of the supervisor and includes: identification, assessment, monitoring, preventing and reporting of operational risk.
The operational risk profile is determined mainly by two operational event categories, in which the highest exposure to operational risk is identified i.e. Clients, products and business practices and Execution, delivery and process management.
This is reflected in the table below, which presents the distribution of losses resulting from operational events by categories as defined by the Article 324 of Regulation (EU) No 575/2013 of the European Parliament and of the Council. The Group executes mitigation actions for all of the operational event categories, with particular emphasis on categories of the highest relevance.
2020 |
2019 |
|
Internal frauds |
0.16% |
0.49% |
External frauds |
1.97% |
1.96% |
Employment practices and workplace safety |
0.47% |
6.49% |
Clients, products and business practices |
82.52% |
67.85% |
Damages to physical assets |
2.00% |
3.45% |
Business disruption and system failures |
0.06% |
0.15% |
Execution, delivery and process management |
12.82% |
19.61% |
Total |
100.00% |
100.00% |
Bank executes mitigation actions for all of the operational event categories, with particular emphasis on categories of the highest relevance.
OPERATIONAL EVENTS BY CATEGORIES |
2020 |
2019 |
Internal frauds |
0.17% |
0.38% |
External frauds |
1.46% |
2.06% |
Employment practices and workplace safety |
0.51% |
6.79% |
Clients, products and business practices |
82.21% |
66.93% |
Damages to physical assets |
2.20% |
3.60% |
Business disruption and system failures |
0.04% |
0.15% |
Execution, delivery and process management |
13.41% |
20.09% |
Total |
100.00% |
100.00% |
Credit risk
Managing credit risk and maintaining it at a safe level is vital for the Bank’s financial performance. In order to minimize credit risk, special procedures have been established, pertaining in particular to the rules of assessing obligor and transaction risk, collateralization of loan and lease receivables, credit decision powers and concentration risk management .
Prudent credit risk management at Bank Pekao S.A. is based on the new Credit Risk Policy, which focuses in particular on potential threats resulting from macroeconomic factors related to the COVID-19 pandemic and their impact on the quality of the loan portfolio. Lending activities are subject to limits following both from the external regulations (CRR) and the Bank’s internal standards, including limits concerning exposure concentration ratios for individual sectors of the economy, limit on the share of large exposures in the Bank’s loan portfolio, portfolio limits and limits of exposures to countries, foreign banks and domestic financial institutions.
The credit decision powers, lending restrictions as well as internal and external prudential standards, pertain to loans and guarantees as well as derivative transactions and debt instruments. The quality of the loan portfolio is also protected by periodic reviews and ongoing monitoring of the timely servicing of loans and the financial standing of customers.
Internal limits, lending restrictions and the calculation of allowances take into account the risks arising from the COVID-19 pandemic.
The Bank has continued to work on further rationalization of the credit process with an aim to obtaining better efficiency and security, including in particular enhancement of the procedures and tools for risk measurement and monitoring.
Credit risk concentration limits
According to the applicable regulations the total exposure of the Bank to the risks associated with the single borrower or a group of borrowers in which entities are related by capital or management may not exceed 25% of a bank’s equity. In 2020, the maximum exposure limits set forth in the external regulations were not exceeded.
Sector concentration
In order to mitigate credit risk associated with excessive sector concentration the Bank sets up a system for shaping the sectoral structure of credit exposure. Every year within Credit Policy the Bank defines sector limits for particular sectors of economy. These limits are subject to ongoing monitoring. The system applies to credit exposure in particular types of business activity according to the classification based on the Polish Classification of Economic Activities (Polska Klasyfikacja Działalności – PKD).
Concentration limits are set based on the Bank’s current credit exposure and risk assessment of each sector. Periodic monitoring of the Bank’s exposure allows for ongoing identification of the sectors in which the concentration of sector risk may be too excessive. In such cases, an analysis of the economic situation of the sector is performed including both the current and forecast trends and an assessment of quality of the current exposure to that sector. These measures enable the Bank to formulate the activities to reduce sector concentration risk and ongoing adaptation of the Bank’s Credit Policy to a changing environment.
The Group’s risk management process
The Bank supervises the risk related with subsidiaries. In particular an assessment on size and profile of risk related with their activities is performed. Risk management processes are consistent throughout the Group and adapted to the complexity of the risk profile of individual entities, in accordance with the principle of proportionality.
Compliance risk
Compliance risk is the risk resulting from breaching laws, internal regulations and market standards in the processes functioning within the Bank. Compliance risk can lead to criminal or administrative sanctions, material financial losses, diminished reputation, reduced brand value, reduced development potential and inability to perform contracts, as well as reduction or loss of business opportunities.
There is a separate unit for compliance matters functioning within the Bank, the Compliance Department, organisationally and operationally independent and subordinated directly to the President of the Management Board. Compliance Department is the key element of ensuring compliance within the Bank.
The Bank ensures compliance through application of suitable control mechanisms and compliance risk management process coordinated by the Compliance Department. Within the control function, the Compliance Department designsand supervises the implementation of control mechanisms with the aim to ensure compliance with law, internal regulations and market standards. The Compliance Department autonomously applies some of such control mechanism and performs independent monitoring of their compliance by other organizational units of the Bank, as well as reports the results of this monitoring. The compliance risk management process includes the following stages: identification, assessment, control, monitoring and reporting of the compliance risk level.
Within the control function, the Compliance Department ensures compliance, in particular through:
current vertical verification on a continuous basis within risk-based approach on selected processes operating at the Bank (ex-ante activities),
vertical testing, including monitoring of adherence to selected on risk-based approach control mechanisms, performed in the case of completed activities within selected processes functioning at the Bank (ex-post activities),
within the scope defined in the Regulations of functioning of the Compliance Department.
As part of compliance with laws, internal regulations and market standards each employee of the Bank applies appropriate control mechanisms and performs independent monitoring of adherence to control mechanisms, within the scope of duties assigned to him/her.
Assumptions of compliance risk management process were defined in Bank Pekao S.A. Compliance Policy developed by the Management Board and approved by the Supervisory Board and the Compliance Department Regulation There are following key elements supporting compliance risk management process:
supervision of the Supervisory Board and responsibility of the Management Board for the effective management of compliance risk and observance of the Compliance Policy,
responsibility of the Bank’s employees for ensuring compliance within the scope of their duties,
properly defined organizational structure including appropriate location of Compliance Department,
internal regulations on compliance matters,
training,
regular cooperation of Compliance Department with Internal Audit Department and other internal control system units.
The reports on performance of tasks by Compliance Department together with the level of assessed compliance risk are presented to the Management Board and Supervisory Board. The oversight of compliance risk related to the activities of subsidiaries is performed in the Bank.
Implementation and application of the compliance risk management standards are key factors in creating the enterprise value, reinforcing and protecting the Bank’s reputation, and winning public trust in the Bank’s activities and its standing.
Bank Pekao S.A. Group and Bank Pekao S.A.
Capital ratios are the basic measure applied for the measurement of capital adequacy according to Regulation of the European Parliament and of the Council (EU) No 575/2013 of June 26, 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, which entered into force since January 1, 2014 together with further amendments, in particular Regulation (EU) 2019/876 of the European Parliament and of the Council of 20 May 2019 amending Regulation (EU) No 575/2013 as regards the leverage ratio, the net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures, reporting and disclosure requirements, and Regulation (EU) No 648/2012, Regulation (EU) 2020/873 of the European Parliament and of the Council of 24 June 2020 amending Regulations (EU) No 575/2013 and (EU) 2019/876 as regards certain adjustments in response to the COVID-19 pandemic, as well as Commission Implementing Regulations or Delegated Regulations (EU) (CRR Regulation).
Capital ratios, capital requirements and own funds have been calculated in accordance with the above mentioned CRR Regulation using national options defined in article 171a of The Banking Act, Act of 5 August 2015 on macro-prudential supervision over financial system and crisis management in financial system (Act on macro-prudential supervision), as well as regulations of minister in charge of the finance institutions.
According to law, the Group and the Bank are required to maintain minimal values of capital ratios resulting from Pillar I level (CRR Regulation), capital requirement of Pillar II resulting from The Banking Act and combined buffer requirement resulting from Act on macro-prudential supervision.
Minimal value of capital ratios on Pillar I level are:
Total capital ratio (TCR) in amount of 8%,
Tier I capital ratio (T1) in amount of 6%,
Common Equity Tier I capital ratio (CET 1) in amount of 4.5%.
Combined buffer requirement as at 31 December 2020 consists of:
Capital conservation buffer in amount of 2.50%,
Countercyclical capital buffer in amount of 0.00%[3],
Other systemically important institution buffer in amount of 0.75%,
Systemic risk buffer in amount of 0.00%[4].
Capital requirement of Pillar II for Pekao Group, results from the recommendation of KNF regarding holding by the Group own funds to cover the additional capital requirement to secure the risk resulting from mortgage-secured foreign currency loans and credits to households, amounts to 0.008% for TCR, which should consist of at least 75% of Tier 1 (which corresponds to 0.006 pp) and at least 56% of the Common Equity Tier 1 (which corresponds to 0.004 pp).
On Pillar II, Bank has no additional capital requirement.
In total, Group is required to maintain:
Total capital ratio (TCR) in amount of 11.26%,
Capital ratio Tier I (T1) in amount of 9.26%,
Common Equity Tier (CET 1) in amount of 7.76%.
In total, Bank is required to maintain:
Total capital ratio (TCR) in amount of 11.25%,
Capital ratio Tier I (T1) in amount of 9.25%,
Common Equity Tier (CET 1) in amount of 7.75%.
The capital ratios of the Group and the Bank were significantly above the minimum required by the law.
Bank Pekao S.A. Group
As of 31 December 2020 Group total capital ratio amounted to 18.7% and common equity Tier I ratio amounted to 16.7%.
The table below presents the basic information concerning the Group capital adequacy as of 31 December, 2020 and 31 December 2019 according to regulation which were in force at those dates.
(in PLN thousand)
capital requirement |
31.12.2020 |
31.12.2019 |
Credit Risk |
10,207,165 |
10,107,188 |
Market Risk |
99,400 |
87,596 |
Counterparty credit risk including CVA |
173,859 |
119,803 |
Operational risk |
699,703 |
527,844 |
Total capital requirement |
11,180,127 |
10,842,431 |
|
|
|
OWN FUNDS |
|
|
Common Equity Tier I Capital |
23,331,784 |
20,387,099 |
Tier II Capital |
2,750,000 |
2,750,000 |
Own funds for total capital ratio |
26,081,784 |
23,137,099 |
|
|
|
Common Equity Tier I Capital ratio (%) |
16.7% |
15.0% |
Total capital ratio TCR (%) |
18.7% |
17.1% |
Total Capital Ratio of Pekao Group as at the end of December 2020 was higher by 1.6 p.p. compared to the end of December 2019, mainly due increase of own funds by 12.7%, partially compensated by higher capital requirements by 3.1%. Common equity Tier I Capital Ratio of Pekao Group as at the end of December 2020 was higher by 1.7 p.p. compared to the end of December 2019.
Increase of own funds for total capital ratio results mainly from retention of Bank’s entire net profit for year 2019 to Tier I capital after the General Meeting of Shareholders in accordance with the recommendation of KNF regarding the retention of the entire profit and retention of 25% of the Bank's net profit for the first half of 2020 after KNF approval.
Increase of total capital requirement results mainly from higher operational risk capital requirement mainly due to increase of provisions for loans denominated in foreign currencies and higher credit risk capital requirement mainly due to increase of loan volumes.
Bank Pekao S.A.
As of 31 December 2020 Bank total capital ratio amounted to 20.8% and common equity Tier I ratio amounted to 18.6%.
The table below presents the basic information concerning the Bank capital adequacy as of 31 December 2020 and 31 December, 2019 according to regulation which were in force at those dates.
(in PLN thousand)
capital requirement |
31.12.2020 |
31.12.2019 |
Credit Risk |
9,219,587 |
9,257,816 |
Market Risk |
99,495 |
87,707 |
Counterparty credit risk including CVA |
173,728 |
119,741 |
Operational risk |
597,848 |
443,575 |
Total capital requirement |
10,090,658 |
9,908,839 |
|
, |
, |
OWN FUNDS |
|
|
Common Equity Tier I Capital |
23,447,481 |
20,448,802 |
Tier II Capital |
2,750,000 |
2,750,000 |
Own funds for total capital ratio |
26,197,481 |
23,198,802 |
|
|
|
Common Equity Tier I Capital ratio (%) |
18.6% |
16.5% |
Total capital ratio TCR (%) |
20.8% |
18.7% |
Total Capital Ratio of the Bank as at the end of December 2020 was higher by 2.1 p.p. compared to the end of December 2019, mainly due increase of own funds by 12.9%, partially compensated by higher capital requirements by 1.8%. Common equity Tier 1 Capital Ratio of Bank as at the end of December 2020 was higher by 2.1 p.p. compared to the end of December 2019.
Increase of own funds for total capital ratio results mainly from retention of Bank’s entire net profit for year 2019 to Tier I capital after the General Meeting of Shareholders in accordance with the recommendation of KNF regarding the retention of the entire profit and retention of 25% of the Bank's net profit for the first half of 2020 after KNF approval.
Increase of total capital requirement results mainly from higher operational risk capital requirement mainly due to increase of provisions for loans denominated in foreign currencies.
Bank Pekao S.A. is a universal commercial bank offering all financial services available in Poland for individual and institutional clients. A wide range of products, innovative solutions and individual approach ensure comprehensive financial support for clients and an integrated customer service model is a guarantee of the highest quality of services and optimal adjustment to changing customer needs. Since 2017, Bank Pekao S.A. is part of the PZU S.A. capital group, the largest financial institution in Central and Eastern Europe.
A wide product offer, innovative solutions and individual approach provide comprehensive financial service to clients and the integrated customer service model provides the highest quality of services and their optimal adaptation to changing needs. The Bank has measurable advantages that allow it to compete effectively on the market and strengthen its market position in the strategic areas of the Bank's operations. The Bank offers competitive products and services on the Polish market, and high level of customer service and a well-developed distribution network.
Distribution channels
The Bank offers to its clients a broad distribution network with ATMs and outlets conveniently located throughout Poland as well as a professional call center and a competitive online and mobile banking platform for individual, corporate and micro companies.
|
31.12.2020 |
31.12.2019 |
Total number of outlets |
713 |
805 |
own outlets |
653 |
734 |
partner branches |
60 |
71 |
Total number of own ATMs |
1,592 |
1,648 |
The number of accounts
As at the end of December 2020, the Bank maintained 6,531.0 thousand PLN-denominated current accounts, 401.3 thousand mortgage loan accounts and 6,674.6thousand “Pożyczka Ekspresowa” (Express Loan) loan accounts.
(in thousand)
|
31.12.2020 |
31.12.2019 |
Total number of PLN current accounts (*) |
6,531.0 |
6,215.9 |
of which packages |
4,685.4 |
4,505.1 |
Number of mortgage loans accounts (**) |
401.3 |
394.3 |
of which PLN mortgage loans accounts |
371.6 |
362.8 |
Number of Pożyczka Ekspresowa loan accounts (***) |
674.6 |
717.2 |
(*) Number of accounts including accounts of prepaid cards.
(**) Retail customers accounts.
(***) Pożyczka Ekspresowa, Pożyczka Ekspresowa Biznes.
Business model
The Bank’s business model is based on customer segmentation with the following groups of customers:
Retail Banking and Private Banking – serving individual clients, including affluent private banking clients and micro enterprises. Private banking clients are offered investment advisory through private banking centers and remote channels, while all individual clients and micro-enterprises are served through a wide network of branches and partner outlets supported by market-leading remote service channels, including digital channels,
Small and Medium Enterprises (SME) – providing financial services to clients from the SME sector who are served by relationship managers with the support of product specialists. The service is carried out in specialized Business Customer Centers and universal retail branches. Customers are offered products and services tailored to their individual needs based on solutions proven in corporate banking and adapted to the needs of the SME segment,
Corporate and Investment Banking – providing financial services to medium and large enterprises (segmentation by revenues of companies), public sector entities, financial institutions and entities from the commercial real estate financing sector. Corporate and investment banking clients are served by relationship managers with the support of product specialists.
Strong response to challenges during the COVID-19 pandemic
At the end of the first quarter of 2020, as a result of the COVID-19 pandemic, the Bank Pekao S.A. undertook activities supporting employees, clients and partners, adapting its activities to the new situation and challenges. The implemented solutions were aimed at maintaining business continuity and reducing epidemic risk towards employees, as well as ensuring safe use of banking services for customers using the branch network.
The Bank has prepared and promoted among its clients the principle of "7 golden rules of secure banking" encouraging clients to use Pekao24 electronic banking and the PeoPay mobile application or to choose remote contact via chat, video or telephone and limit visits to bank branches, as well as safety rules during a visit to the branch. The Bank promoted contactless payments by card or phone. With concern for the safety of its customers, the Bank was one of the first to increase the limit for contactless transactions to PLN 100, without the need for authorization for all customers of the Bank using credit and payment cards.
The Bank organized remote work conditions for 6 thousand employees whose work did not require direct contact with the client or the contact was maintained through the use of remote and ICT channels. Thanks to the developed technological possibilities and digitization of processes, a significant part of tasks is performed by employees remotely or in dispersed locations.
Bank Pekao S.A. supported financial liquidity of clients. Retail banking customers were given the option of suspending the payment of consumer and mortgage instalments due to problems related to managing the home budget during a pandemic. (6% of the retail loan portfolio and 4% of the loan portfolio of micro-enterprises and SMEs were covered by credit holidays). The application process can be carried out in a remote process at Pekao24. In the third quarter of the year, the share of customers covered by credit holidays decreased from 6% to 2% of the retail loan portfolio and from 4% to 1% of the loan portfolio of micro-enterprises and SMEs.
Moreover, in connection with limiting the negative effects of the COVID-19 pandemic for enterprises, the Bank signed a portfolio agreement with Bank Gospodarstwa Krajowego (BGK) regarding the de minimis guarantee line, which allows introducing the possibility of securing loans for companies from the SME sector with a guarantee on special conditions: increased guarantee value to 80%, extending the warranty period from 27 months to 39 months, 0% commission fee until 31 December 2020. The Bank also signed a portfolio guarantee agreement with BGK as part of Fundusz Gwarancji Płynnościowych, under which the Bank may grant liquidity loans to medium and large companies up to the limit of PLN 15 billion. The Bank also introduces agreements with the Europejski Fundusz Inwestycyjny regarding free of charges guarantees for loans for micro-enterprises in the EaSI program and loans for micro, small and medium-sized enterprises in the COSME program.
Customers of Bank Pekao S.A. can also apply for a subsidy under the government program of the "financial shield" of the Polish Development Foundation for micro, small and medium-sized enterprises. Customers can submit applications via internet banking, as well as use the information contained on the website or the free hotline dedicated to the "PFR Financial Shield". At the end of July 2020, nearly 31.6 thousand customers benefited from the subsidy for a total amount of PLN 7.4 billion - the Bank's market share (both in the segment of micro, small and medium-sized enterprises) was 13%.
The Bank is monitoring the economic situation in the country and in the world on a current basis. Various scenarios of epidemic development and its impact on the economy are analyzed, as well as the most beneficial solutions that could be implemented by the Bank.
The bank focused on commercial activities, supporting clients in their needs, cost-effectiveness and prudence in building the loan portfolio. In response to the demanding conditions of the economic environment, the Bank was adapting to the changing needs and expectations of customers, increasing the pace of digitization, strengthening customer relations and increasing sales in remote channels.
Internal surveys conducted by the Bank regarding customer satisfaction conducted among 15 thousand customers showed that customers rated very highly the quality and satisfaction of service by an employee in the branch in the following categories:
opening an individual and business account,
purchase of a cash loan and credit card,
service visit of an individual and business client.
Strong customer acquisition
In 2020, the Bank promoted "7 golden rules of secure banking" encouraging customers to use the Pekao24 electronic banking and PeoPay mobile application and to use remote contact via chat, video or telephone, as well as safety rules when visiting a branch. Particular care was taken for seniors for whom a special portal and an educational campaign in social media were prepared, as well as remote processes enabling the issuance of a card, activation of electronic banking without the need to visit to the branch.
In 2020, the Bank opened 409 thousand. new accounts. The innovative solutions for customers had a positive impact on the level of sales of accounts, including, in particular, opening selfie accounts based on biometrics and implementing the PeoPay KIDS Package, which parents can also set up remotely without leaving home. In 2020, 26% of accounts for individual clients were initiated online, which is a 4x increase compared to 2019, and in the best months, even every third account was opened in this way.
In June 2020, the Bank launched the PeoPay KIDS application dedicated to children aged 6-13. Thanks to the application, children can learn how to save and manage their own funds in an easy and accessible way. Along with the application, the child can also receive their own PeoPay KIDS payment card, thanks to which they will be able to pay in stores and withdraw cash - the limit of card transactions is set by the parent. In the application, it is also possible to order simple operations, such as a transfer from Konto Przekorzystne or top-up a pre-paid phone. The bank does not charge fees for issuing and servicing the card. PeoPay KIDS is associated with the parent's panel in the PeoPay application and Pekao24 online banking, all transactions require authorization from the parent.
In 2020 was carried out, an advertising campaign for the account for families with the PeoPay KIDS Package on television, the Internet, social media and cinemas. During the campaign, attractive promotions were introduced for customers: PLN 100 for opening a selfie account, PLN 100 for an account recommendation and PLN 50 for opening an account for a child. Customers were also offered high interest rates on savings accounts of 2% for 120 days for both the parent and the child. As a result, the Bank acquired over 37 thousand. PeoPay KIDs for children and reached + 31% y/y dynamics of open accounts for children up to 12 years of age.
In 2020, the Bank carried out an online campaign of the Konto Świat Premium, which is aimed at affluent clients with savings, including 200 thousand PLN. The aim of the campaign was to encourage new customers to set up Konto Świat Premium together with the Konto Oszczędnościowe Premium directly via the Internet and to make payments for online purchases with Mastercard cards issued for this account.
Customers had the opportunity to sign up for the loyalty program Bezcenne Chwile organized by MasterCard, under which they gain access to the Premium zone with a rich catalog of rewards.
The bank promoted card payments emphasizing convenience, security, and also the additional benefits of using them. In October 2020, the Bank launched a large lottery, thanks to which customers could win an electric BMW i3 car and over 3,000. Allegro e-gift cards worth PLN 50. Each payment with the Bank's card increased the chance of winning.
The bank granted preferential credits and loans for investments related to environmental protection, limited the amount of paper used by encouraging customers to give up paper statements, and used recycled paper for the production of advertising materials.
In the first half of 2020, the Bank implemented a Smart City solution - a modern contactless payment card acceptance technology in public transport in Białystok Public Transport, which enables cashless purchase of tickets, and the card itself entitles you to travel by city bus. At the beginning of October, a new stage in the development of Smart City began. An innovative method of calculating the charge for multiple journeys per day has been introduced, which in Białystok acts as the so-called Smart Taryfa BKM. It assumes replacing the charges for individual journeys with one optimal toll, which is determined on the basis of the number of registered journeys. The card allows you to take into account different tariff zones. The bank is interested in implementing intelligent communication tariffs in other cities.
In 2020 the bank accepted applications under the government program Dobry Start for co-financing the school layette 300+, occupying a leading position among the banks with the largest number of online applications. Together with PZU was prepared an offer to purchase school accident insurance with a 10% discount.
Konto Przekorzystne consistently occupies a leading position in rankings prepared by independent experts in the category for young and adult clients. The wide package of benefits and attractive interest rates were appreciated. In September, Konto Oszczędnościowe Premium was ranked first in the bankier.pl ranking, Przekorzystne account for people under 26 was rated as one of the best for students in the Otopress ranking, and Konto Przekorzystne was ranked first in the Kontomaniak ranking. In October, money.pl appreciated the Przekorzystne Account for the most advantageous in terms of pricing conditions, and bankier.pl for the best account for people paying by card and telephone, both for active customers and people who cannot provide a constant, high impact and use the account only occasionally.
In 2020, Pekao Direct, by serving customers via remote communication channels (telephone, e-mail, SMS, chat, video), actively supported the implementation of the Bank's strategy by handling customer inquiries and selling products.
In 2020, Pekao Direct processed 13.4 million contacts with customers, recording a nearly 14% increase compared to the previous year in terms of the number of incoming calls (telephone, e-mail, chat, video). The greatest dynamics concerned the chat and video area, where contacts increased by 263% year on year.
Pekao Direct supported clients in opening Konto Przekorzystne in the selfie process, recording a year-on-year increase in digital acquisition by 140%. Thanks to the support of the contact center, the purchase of products such as cash loans and mortgage loans is possible without leaving your home.
Pekao Direct employees also supported clients applying for a subsidy under the PFR Financial Shield.
The high quality of the services provided was confirmed by awards received by Pekao Direct on the Polish and European arena.
The "Golden Earphone" competition is a unique event in the Polish call / contact center industry, the aim of which is to promote the best practices in managing contact center activities, the best projects implemented in this type of structures, as well as companies and people building professionalism in this industry. The company was awarded the title of the "Best Employer", the Office of Modern Contact Channels, which is responsible for handling the biometric account opening process, became the "Best Team of Contact Center Consultants" on the market, and the Department of Employee Experience Management "The Best Support Team". In the Golden Earphone competition, the Company competed not only with other large banks, but also with the largest outsourcing companies in the contact center industry on the Polish market.
In addition, Pekao Direct was honored with the main award in this year's European Customer Centricity Awards in the Best Omnichannel / Social Media Customer Experience category for handling the first selfie account opening process on the Polish banking market. ECCA is one of the largest European competitions that promotes "customer centricity" and the Customer Experience perspective in business.
Digitization - a rapid increase in the number of active customers of mobile banking and PeoPay
An important goal of the Bank's strategy is to increase the number of customers actively using mobile banking and the PeoPay application. In 2020, the number of active mobile banking customers increased by 364 thousand (increase by +22% y/y) and was about 1.6 times higher than two years ago. The number of active mobile customers using PeoPay increased by another 280 thousand customers in 2020 and was 2.4 times larger than 2 years ago.
In 2020, there was a significant increase in sales of the Bank's products in electronic channels. 26% of new accounts were opened using remote channels, and 51% of cash loans were sold online or through the PeoPay application.
(*) Unique user actively using electronic banking is a user who logged in to the system and the mobile service m.pekao24.pl, at least once during the last quarter. (in case of using different mobile channels, the client is counted only once).
(**) Unique user using mobile banking application (PeoPay application), who logged in to the system PeoPay at least once during the last quarter.
The new PeoPay mobile banking application
In the second quarter of 2020, the Bank provided customers with a new PeoPay mobile banking application. Modern graphic design ensures even better navigation and ease of use. The interface developed on the basis of experience and research with customers enables very convenient access to accounts and products and facilitates everyday mobile banking.
In the new PeoPay, users have the opportunity to check the account balance before logging in, and after entering the application, they will gain access to all their products and other services offered by the Bank. The new version of PeoPay also offers an intuitive view of the history of operations along with financial analysis, which makes it easier for customers to control expenses. From the home page, users can contact an advisor, and access to the BLIK code is even easier than before.
The PeoPay application also allows you to set up account by selfie, for both individual and corporate customers, and moreover, customers can switch between accounts and manage them from one PeoPay application. Thanks to the application, customers can easily and conveniently order a transfer to any account, make all the necessary payments, top up the phone, and pay by contactless phone and open a deposit.
In September 2020, the Bank's customers with Visa Debit Gold and Visa Business debit cards were able to connect them to Apple Pay. The service enables quick contactless payments using Apple devices such as iPhone, Apple Watch or iPad. To use convenient payments, just activate Apple Pay in the PeoPay application or add the card directly to Apple Wallet.
From December 2020, the Bank's customers can use Google Pay. Mastercard and VISA cardholders can use the service. In the case of the former, the possibility of mobile payments with credit cards will be a novelty.
In 2020, payments using the PeoPay application have doubled compared to 2019.
The Bank consistently developed the modern PeoPay mobile application - which offers a number of innovative solutions, including:
receiving a loan as part of the "click" process, without leaving your home - within 30 seconds of accepting the contract,
the possibility of concluding a loan agreement also at the bank's branch in the EKO "click on" formula no paper,
wide selection of payment methods: Apple Pay, BLIK, PeoPay payments, Garmin Pay, Fitbit Pay.
finger or face biometric approval of transfers and payments,
paying for online purchases on your phone without logging into online banking,
scanning account numbers from invoices without rewriting the account numbers to the application,
executing transactions both in PLN and selected foreign currencies without currency conversion, due to the link to the relevant currency accounts,
the ability to manage cards - from the application level the client can activate or block the card, as well as change card
withdrawal and payment limits,
- the ability to deposit and withdraw cash to their accounts by holders of individual and company accounts,
- the Messages module for correspondence with the bank was made available
- possibility of contacting a consultant via text messages (chat). and the possibility of using the Google Assistant in the PeoPay application.
the possibility of sending documents regarding insurance and life policies and concluding a contract for the transfer of rights under the real estate insurance contract.
Nowe Pekao24 - Electronic banking
From mid-May 2020, the Bank's clients can benefit from the new Pekao24 service. The new service is not only a modern and affordable way of presenting a graphical interface, but also optimized and well-established processes who respond to the needs of users, in this to manage finances without leaving the house.
New functionality in the service remained available to individual clients and clients of micro and small companies using Pekao24.
The most important achievments in the framework of the new service are targeted at remote processes:
Sales and offering
the possibility of filling in and downloading a form for transferring salary or pension to an account at Bank Pekao S.A.
the possibility of filling in an application for suspension of loan or loan installments,
the ability to quickly open an account for business activities,
new deposit offer,
remote policy renewal form for a loan,
remote application for the government's "Tarcza Finansowa PRF" programs for micro-companies using Pekao24,
remote signing of documents, the so-called e-Teczka for micro-companies using Pekao24,
Security and settings
remote recovery of the password to log in to Pekao24 without the need to contact the hotline consultant or the Bank's branch,
remote unlocking of the Pekao24 service from the new login page,
easy access to change the way of receiving correspondence from the bank, from paper to electronic (applies to statements and regulations regarding current accounts),
preview and management of marketing consents to contact the bank,
the possibility of determining tax residence,
friendly and clear handling of technical errors in the event of their occurrence,
easy access to the old version of the website maintained thanks to SSO (switching without relogging - impression of one whole),
possibility to connect with a consultant via chat or video,
Transactionality
technologically optimized and as part of UX (User Experience) improvements - transaction processes that are most often used by users of electronic banking, including:
optimized list and new functionalities for stored recipients (defined transfers)
defined foreign recipients,
transfer to the Tax Office to the Individual Tax Account and ZUS on new forms,
the ability to add standing orders from a separate form and when making a transfer (so far only available at a bank branch),
Instant transfers - Express Elixir,
Pekao24 Exchange Office (formerly the Currency Exchange Service),
Western Union money orders, shipment and reception,
Direct Debit
Products
many changes to the products owned by the client - available online without the need to visit a branch of the Bank, in particular:
management of selected payment cards,
the actual image of the payment card to facilitate card management,
new data on loan interest rates and an extensive history of events and operations on credit / loan products,
Others
brokerage and investment profile - adding a portfolio of brokerage products on the main tabs of the website - displaying the user's investment assets in the form of convenient tables and charts,
presentation of personal advisor data for affluent clients,
application for establishing the right to the 500+ child benefit,
application for Dobry Start 300+,
Bank Pekao S.A. launched the authentication service for customers with a PekaoID digital banking identity using the mojeID service (PekaoID) and the Trusted Profile using the so-called The eIDAS National Node, i.e. the administrative HUB, to which more than 100 offices are already connected, including state administration offices - www.gov.pl. As a result, the use of the commercial mojeID service (PekaoID) has been extended to include the context of public administration - bank customers can use one tool to authenticate both on the websites of commercial and public entities. In 2020, the number of customers using PekaoID was over 230 thousand.
In 2020, the Bank introduced the Autopay service to electronic, internet and mobile banking, thanks to which you can pay for selected sections of motorways automatically, without having to queue at the gates. The service can be activated from the level of PeoPay application and Pekao24 internet banking.
PeoPay KIDS
In June 2020, the Bank launched the PeoPay KIDS application dedicated to children aged 6-13. Thanks to the application, children can learn to save and manage their own funds in an easy and accessible way. The child can also receive their own PeoPay KIDS payment card, thanks to which they will be able to pay in stores and withdraw cash - the limit of card transactions is set by the parent. In the application, it is also possible to order simple operations, such as a transfer from Konto Przekorzystne or top-up the phone. The bank does not charge fees for issuing and servicing the card.
PeoPay KIDS is associated with the parent's panel in the PeoPay application and Pekao24 online banking, all transactions require authorization from the parent.
e-Commerce
On December 21, 2020, the Bank signed a preliminary agreement to purchase a share package (38.33%) of Krajowy Integrator Płatności S.A., operator of the Tpay.com system. Purchase by the Bank of a block of shares in KIP S.A. will enable the creation of a strategic partnership on the e-commerce market, while supporting the implementation of the assumed strategic goals of the Bank in the field of digital transformation.The transaction will provide the Bank's corporate clients with a comprehensive payment acceptance offer, supplemented with products for the e-commerce market. The closing of the transaction is planned at the turn of the first and second quarter of 2021.
Open banking
In December 2020, the Bank launched the open banking functionality on the Pekao24 service and the PeoPay application. Thanks to the service, after logging in to the Pekao24 website or the PeoPay application, account holders in various banks can check balances and transaction histories of PLN, foreign currency and savings accounts, as well as credit card accounts and order domestic and foreign transfers.
Two services are provided under open banking. Users of the Pekao24 website or the PeoPay application gain access to information about their accounts in various banks. The service is available for accounts maintained at: PKO BP, Inteligo, Santander, mBank, BNP Paribas, ING, Alior Bank and Millennium. Using the Pekao24 website, you can order a payment from the account in the form of a domestic transfer. Pekao S.A. as the only bank in Poland, as part of its open banking service, it also offers foreign transfers (SEPA, SWIFT) from accounts in PKO BP, BNP Paribas, Alior Bank and Millennium.
Key lending activities: PEX Cash Loans and Mortgage Loans
Cash loans
Activities carried out in 2020 were focused on providing customers with modern products and services that they can use without leaving home, at the place and time of their choice, which is particularly important during the COVID-19 pandemic.
The Bank continued its efforts to increase sales in the area of key retail loans, while being cautious and adapting its lending policy to the dynamically changing macroeconomic situation caused by the COVID-19 pandemic.
The net value of granted cash loans amounted to PLN 3.1 billion, of which sales via remote channels increased to PLN 1.05 billion net. In terms of quantity, every second loan is sold “by click” processes.
In the middle of the year, the bank introduced new sales processes in electronic channels: in the new Pekao24 service and the PeoPay mobile application, with new functionalities for customers. The bank launched a new "Halo" process that allows for remote sale of cash loans, account limits and credit cards remotely during a telephone conversation, both by a Pekao Direct consultant and by an advisor at a branch, with the approval of documents and loan agreement in the Pekao24 transaction service or in the PeoPay application . New solutions allow the customer to receive an individual solution that allows to finance his needs without the need to visit the branch office. The customer may apply for a loan or credit, both in terms of financing any consumer purpose, also with the option of repayment of loans held in other banks.
The bank developed the system of processing loan applications in branches, ensuring an increase in the efficiency of the process and enabling the sale of up to 3 different loan products (cash loan + loan limit in the account+ credit card) during one loan process. As a result, the scale of cross-selling has significantly increased while saving time for the client and the advisor. The bank also introduced a new process of selling loan limit in the account both in a branch and in remote processes, including "by click" in the Pekao24 transaction service and in PeoPay mobile banking.
The implemented initiatives and activities support the increase in the level of customer and employee satisfaction. The improvement of customer journey is noticed by the Bank's customers in the results of the NPS survey on satisfaction and assessment of the loan offer and the facilitating of the purchase process, and in the Institution of the Year survey in the cash loan category.
In 2020, customers have the option of sending documents regarding insurance and life policies and concluding a contract for the transfer of rights under the property insurance contract (assignment) in the PeoPay mobile application.
Mortgage Loans
In 2020, the Bank took steps to increase sales in the area of key retail loans, while being cautious and adapting its lending policy to the changing macroeconomic situation. The bank is one of the leaders in the sale of housing loans, in 2020 sales of housing loans amounted to PLN 8.1 billion.
The bank adjusted its housing loan offer to the changing market conditions on an ongoing basis and consistently optimized the processes of granting and servicing housing loans, introducing further improvements. The most important ones include the introduction of a PLN home mortgage loan for individual clients with a fixed interest rate. Moreover, the Bank expanded the methods of notifying customers about the amount of the loan installment and information about the change in interest rates. In addition to the current traditional mail form, the customer can choose the option of notification via e-mail or via the Pekao24 service.
In the Pekao24 service and the PeoPay mobile application, the possibility of sending documents regarding insurance and life policies without the need to visit a Bank branch has been added, and users have been able to conclude an agreement on the transfer of rights under the real estate insurance agreement.
In September 2020, Bank Pekao S.A. transferred 1,025 mortgage loan receivables for the total amount of PLN 245.5 million to Pekao Bank Hipoteczny S.A. As a result of the transaction, Pekao Bank Hipoteczny S.A. may issue covered bonds, thanks to which it will obtain a long-term and stable source of financing.
The bank in a competition organized by the editors of Puls Biznesu and Bankier.pl in cooperation with its substantive partners - Kantar TNS and Obserwatorium.biz. received a golden statuette in the category: The best mortgage loan offer.
The Bank's offer was appreciated for its very flexible mortgage loan offer, among others by selecting the interest rate, types of installments, currency or loan objectives. The offer is tailored to the needs and expectations of customers.
Increase in the area of deposits and development of the offer of investment products
In connection with the decisions of the Monetary Policy Council as a result of which the reference interest rate was reduced to a historically low level of 0.10%, the bank adjusted the interest rate on savings products, including savings accounts and term deposits. In the environment of low interest rates, individual clients much more often chose to deposit free funds on savings accounts ensuring, at a comparable interest rate, access to funds at any time. For new customers, it has prepared attractive promotional offers for selected savings products, including savings accounts (2% up to PLN 20 thousand, for a period of 4 months) and Premium savings accounts. The holders of newly opened savings accounts Mój Skarb in the PeoPay Kids application, the Bank offered an interest rate of 2% up to the amount of PLN 3 thousand. PLN for a period of 4 months, while holders of the PeoPay mobile deposit 3% up to the amount of PLN 10 thousand for a period of 3 months. New clients who decided to open their first account at the Bank with the help of a selfie, they could gain up to PLN 250. The bank also offered deposits with an interest rate of up to 2% to customers who decided to purchase selected types of investment funds
At the end of 2020, the total volume of retail clients' deposits amounted to PLN 107.2 million and was 18.6% higher compared to 2019. The bank increased its share in the household deposit market from 10.64% in December 2019 to 11.34% in December 2020.
Development of the investment fund offer
In 2020, a number of changes were introduced to the offer of Pekao TFI investment funds in connection with processes concerning, among others changes in the investment policy of funds / sub-funds offered by the Bank, including:
the Bank's offer was extended to include new debt sub-funds separated under Pekao Funduszy Globalnych SFIO, i.e. Pekao Obligacji Samorządowych and Pekao Pekao Bazowy 15 Obligacji Wysokodochodowych,
changes were made to the existing offer (Pekao Dłużny Aktywny replaced Pekao Alternatywny Dynamiczny Absolutnej Stopy Zwrotu and Pekao Bazowy 15 Dywidendowy replaced Pekao Stabilnego Inwestowania), thanks to which clients gained the opportunity to use new investment strategies with profit potential and relatively limited risk,
under the Pekao FIO umbrella fund, the Pekao Megatrends subfund was established, which focuses on investing in dynamically developing modern industries and sectors that best reflect the trends of changes in the global economy.
From July 2020, the Bank made it possible for customers to purchase and service regular accounts of investment funds in the new, modernized version of the Pekao24 website. In November, a functionality was implemented that enables direct payments to be made on the new platform to Individual Retirement Accounts and Individual Retirement Security Accounts.
Taking into account the epidemic situation in the country, the Bank promoted transactions in remote channels by introducing preferential price conditions related to investing in investment funds with their help.
Development in the area of insurance products
In 2020, the Bank developed and adapted the offer of insurance products to the needs of customers and the market environment, including in particular the improvement of sales and the availability of the offer via remote channels.
The Bank continued to increase the sales of insurance related to credit products. In 2020, the share of PEX cash loans sold with CPI reached the average annual level of 35% and was by 1 pp. higher than in 2019. The share of mortgage loans sold with the CPI reached the average annual level of 13 pp. higher than in the previous year.
In 2020, the Bank consistently developed cooperation with the PZU Group in extending the insurance offer available at the Bank, including in particular stand-alone products that complement the insurance offer related to banking products. The Bank's customers could take advantage of a 10% discount on the purchase of a school accident insurance. As part of the cooperation with PZU, the Bank made it possible for clients to take advantage of the school insurance offer on attractive price terms as part of the so-called Discount Gallery.
In 2020, the amount of the premium collected in products supplied by PZU was almost twice as high as in 2019.
As part of assurbanking activities carried out, among others in PZU branches, 30% more clients were acquired compared to 2019.
Private Banking
In 2020 the activities in the area of Private Banking focused on providing clients with effective and financial solutions adequate to changing market conditions.
416 new clients were acquired for servicing, and the value of investment product purchased amounted to PLN 1.9 billion, while the assets covered by the Investment Consulting service reached PLN 3.4 billion.
The Private Banking Account was implemented, which is an introduction to using the unique value package of products and services, dedicated exclusively for Private Banking customers. Thus, the process has been simplified for customers - currently one agreement provides access to the account and the Private Banking service. Private Banking Account and related services provide free cash withdrawals from ATMs around the world, standard transfer orders (domestic and foreign), orders and direct debits, issuing and renewing a debit card to the account, opening and maintaining payment accounts in 13 currencies. The card issued to the Account is the World Elite Debit Mastercard, a multi-currency card that, when paying in EUR, USD, GBP, CHF, recognizes currency transactions and charges the account without the obligation to convert currency, if the card is assigned the account in the payment currency and there are appropriate funds on it. In case of lack of account in the payment currency, the transaction is carried out at attractive exchange rates. The card provides access to airport lounges as part of a new service - Lounge Key (the first two entrances a year are free of charge as part of the promotion valid until recalled), you can join the Mastercard® Bezcenne® Chwile.
Another new service is Fast Track at the Chopin airport in Warsaw, available free of charge and unlimited access for owners of a new Private Banking Account and Pekao VISA Infinite card.
The Private Banking account is free of charge for clients with assets exceeding PLN 1 million.
In addition, Private Banking customers were offered:
Private Banking Savings Account with promotional interest rate for new customers,
telephone foreign currency transaction service enabling customers to directly negotiate rates with dealers for transactions above the equivalent of PLN 100,000 PLN,
a modified safe-deposit rental offer made available only by two banks on the market.
Another novelty in the offer for Private Banking Account owners is the Private Banking Savings Account with an interest rate promotion. New Private Banking Account owners can also profit from the free of charge brokerage account at the Biuro Maklerskie Pekao.
rokerage activities
In 2020, work continued on the consolidation of brokerage activities in the Bank Pekao S.A.Capital Group. In the first half of 2020, Biuro Maklerskie Pekao took over a part of the enterprise covering the brokerage activities of Pekao Investment Banking S.A. As a result of the consolidation process, all Pekao IB brokerage clients became clients of the Pekao Brokerage House. After the operational merger of the consolidated entities, the implemented project will strengthen the Group's market position by building a strong, integrated center of investment and capital competences.
At the end of 2020, the Pekao Brokerage House operated a total of 196.4 thousand investment accounts, servicing 140.9 thousand accounts with active access to services via remote channels. Direct service was provided within a nationwide network of 368 outlets providing brokerage services.
The value of the assets of Biuro Maklerskie Pekao and Dom Inwestycyjny Xelion S.A. as at 31 Dcember 2020, it amounted to PLN 26.0 billion
As part of the development of the product offer of Biuro Maklerskie Pekao, in 2020, structured certificates issued by UniCredit Bank AG and SG Issuer were offered to customers for purchase. Customers could invest funds in products with full capital guarantee and partial capital guarantee, in the following currencies: PLN, EUR and USD. The products had a capital protection of 97% to 100%.
As part of the offer dedicated to the Private Banking segment, customers had the opportunity to invest in structured autocall certificates with conditional capital protection, based on the quotations of the companies: Anheuser-Busch InBev NV, Swatch Group SA, Porsche Automobil Holding SE, Mastercard Inc., Microsoft Corp GlaxoSmithKline PLC and BMW AG; certificates with full or partial capital protection based on the following indices: STOXX® Europe 600 (Price) Index (EUR), STOXX Global ESG Leaders Diversification Select Price EUR, Solactive Just Transition Select Index AR 5%, Solactive Silver Economy AR 5% Index, Solactive Big Data Europe Low Volatility AR 5% Index, and based on the Pictet fund - Multi Asset Global Opportunities - R EUR.
In 2020 the Pekao Brokerage House serviced sales of:
6 series of Structured Certificates of Deposit issued by Bank Pekao S.A., accepting subscriptions with a total value of PLN 481.2 million,
9 public offers of structured certificates issued by UniCredit Bank AG and 8 public offers of structured products issued by Societe Generale, in which subscriptions were accepted for a total amount of PLN 213.26 million;
4 public offers of Investment Certificates of Closed-End Investment Funds, in which subscriptions were accepted for a total amount of approximately PLN 97.1 million,
5 public offerings of shares in the following companies: Allegro, Canal +, PCF Group, Answear and Mobruk, in which subscriptions for a total amount of approximately PLN 510 million were collected.
Moreover in 2020 the Pekao Brokerage House:
acted as an offering agent for the issue of PZU FIZ Akord Investment Certificates for the AG, AH, AI and AL series,
accepted subscriptions in 13 calls for the sale of shares as part of cooperation with the intermediary entity Pekao Investment Banking S.A .,
participated, in cooperation with the Financial Markets Department, in handling the early redemption of bonds of the Capital City of Warsaw and in the issue of bonds of Anwim S.A.,
acted as an offering agent for the covered bond issue program of Pekao Bank Hipoteczny S.A. - in 2020, 1 public offering of mortgage covered bonds was carried out, issued by Pekao Bank Hipoteczny S.A. worth PLN 100 million.
As part of the activities taken over from Pekao IB, Biuro Maklerskie Pekao organized a compulsory buyout of shares in 3 companies (North Coast, Ceramika Nowa Gala, MZN Property), and a buyback of own shares of CPD S.A. and SPO (second public offering) of MLP Group shares, under which subscriptions were accepted from institutional investors. Moreover, the Brokerage House was the guarantor of the issue of Allegro shares.
By expanding the offer of investment funds, in cooperation with Pekao TFI the offer was extended in terms of products that respond to low interest rates (a new subfund of Pekao Obligacji Samorządowych separated under Pekao Funduszy Globalnych SFIO). Due to the dynamic situation on the commodity markets, the Generali Złota subfund managed by Generali Investments TFI S.A. was introduced to the offer.
In 2020, the Pekao Brokerage House actively participated in initiatives aimed at the development and optimization of the Polish capital market, including:
in March 2020 Pekao Brokerage House was a strategic partner of the jubilee 20th Conference of the Chamber of Brokerage Houses under the slogan: "Development needs capital - Capital market for infrastructure and innovation",
in September 2020 Pekao Brokerage House was a co-organizer of the 17th Annual Emerging Europe Investment Conference, devoted to the challenges facing the market in the face of COVID - 19. The conference was attended by nearly 30 companies and over 90 Polish and foreign investors.
Business client (micro-entrepreneurs) - acquisition, credit activity and digitization
In 2020, the acquisition of new accounts for business clients in the micro segment amounted to 34 thousand. In 2020, micro-entrepreneurs could use the new version of the PeoPay application and the Pekao24 electronic banking service. The bank continued the promotion of "PLN 1,000 premii dla firm". An entrepreneur who set up an online business account and actively used banking products could receive up to 1,000. PLN return to the account.
At the beginning of 2021, a new service was implemented - the fast process of company registration in the Central Register and Information on Economic Activity (CEIDG) together with a company account. A customer with access to Pekao24 registers a company through one application, obtains NIP, REGON and banking products such as Konto Przekorzystne Biznes, debit card or auxiliary accounts. Filling in the application is intuitive, many fields are filled in automatically based on the customer data available in the Bank. The documents are signed with a trusted profile, opened in the business registration process.
In 2020, Bank Pekao S.A. launched the new NAPS BIZNES automatic credit application assessment system. It is a simple and quick process of granting a Business Loan or an overdraft to selected customers in the new Biznes Klik offer. Customers can take advantage of financing up to PLN 600,000 and use the credit limit for new financing and for the renewal or increase of the existing loan in the current account
The bank has introduced changes to credit regulations, including on simplifying and reducing the amount of the turnover clause in agreements and annexes to overdraft and debit limit agreements, limiting collateral, introducing a remote process of concluding agreements and annexes to overdraft loan agreements and loans for clients with Pekao24 dla Firm.
The Bank signed an annex to the Agreement on cooperation with Bank Gospodarstwa Krajowego introducing changes in the scope of granting the BiznesMax guarantee (FG POIR), allowing for the guarantee of a revolving loan (including KRB), a non-revolving working capital loan not related to an investment, a loan, provided that it meets the conditions of a loan that may be covered by the Biznes Max guarantee as well as the possibility to repay the working capital loan taken out in another bank.
Bank Pekao S.A. signed annexes to portfolio guarantee agreements with Bank Gospodarstwa Krajowego and the European Investment Fund. They extended the possibility of using the de minimis guarantee, the BiznesMax guarantee and the EFI COSME guarantee under the existing conditions, in the period from 1 January, 2021 to 30 June, 2021.
In 2020, business customers were offered additional professional IT assistance services, such as support of an experienced IT specialist in the daily use of equipment and assistance in the installation and selection of computer software.
In 2020, there was an increase in the turnover of payment cards in terminals by 16% compared to the previous year. The bank completed the migration of over 16 thousand. terminals for a new generation of devices at the largest merchant in Poland - in the Biedronka network. The installation work of devices at self-service cash registers, which only support cashless payments, is continued.
As part of Pekao24 electronic banking for companies, business clients have access to modern PeoPay mobile banking, whose scope of functionality and available services is as wide as for an individual customer. The PeoPay application offers innovative solutions on the market such as:
approving finger and face biometrics for transfers and payments,
paying for internet shopping on your phone without logging in to online banking,
BLIK and Apple Pay payments,
scanning invoice numbers from invoices without having to rewrite invoice numbers to the application,
the possibility of paying by phone abroad (or in a foreign online store) directly from the currency account without any additional fees and commissions for currency conversion.
At the end of December 2020, 67 thousand clients actively used mobile banking. The number of active users of electronic banking increased by 17 thousand compared to the end of 2019 and amounted 172 thousand customers.
Acquisition, credit activity and digitization
In 2020, thanks to the implementation of a new sales model and a consistently implemented strategy, despite the pandemic, we managed to maintain the growth rate of acquisitions and attract a record number of new customers. The acquisition growth rate was 7% y / y.
Customer service is provided in 55 dedicated Business Centers, where customers receive the support of qualified Advisors and Product Specialists (in the field of FX, Leasing, Factoring, Cash Management, EU Funds, CRE). The product offer includes both transaction banking (accounts, transfers, cash deposits and withdrawals), corporate financing supported by EU programs, treasury products as well as factoring and leasing.
In terms of cash services, facilities have been introduced allowing for faster availability of closed deposits directed directly to the Cash Distribution Centers of companies cooperating with the Bank, thanks to which the money is collected by the Bank's attendant directly from the customer's premises.
In the first half of 2020, as part of the development of operations and increasing the efficiency of services provided, the functionality of internet banking was expanded to include the possibility of remote customer service process and remote contracting. As part of the transformational and digital projects, services have been introduced that enable, among others:
– signing contracts remotely for company clients (bank accounts, cards, loans, guarantees or letters of credit),
– signing documents with a trusted profile and e-proof, increasing the security and availability of banking services (the first such solution for corporate clients on the Polish market),
– execution of ExpressElixir orders in the PekaoBiznes24 internet banking system (with a limit for a single transaction up to PLN 100 thousand).
Thanks to legal solutions and initiatives supporting remote cooperation processes, also the sale of treasury products was carried out in the mode of remote contracting. The volumes of treasury transactions concluded by SME clients in 2020 consistently increased compared to 2019: Fx Spot transactions by 3%, derivative transactions on the interest rate by over 25%, and derivative transactions on the foreign exchange rate by over 50%.
SME clients were offered an alternative form of investing financial surpluses in the form of debt funds as part of participation in Pekao TFI fund units, with the lowest investment risk.
As a result of the use of a multifunctional digital repository in which images of digitized documents are stored, from September 2020, customer documents are available online for the Bank's employees. As a result, customer service processes have been optimized.
The European Union Funds and Public Programs Office of the Bank, in cooperation with external EU advisory companies, also provides consulting and advisory services in financial matters. Clients receive comprehensive assistance in the preparation of application documents for EU subsidies.
In addition, due to the reduction of the negative effects of the COVID-19 pandemic on the functioning of enterprises, the Bank signed a portfolio agreement with Bank Gospodarstwa Krajowego regarding a de minimis guarantee line, which allowed for the introduction of the possibility of securing loans for companies from the SME sector with a guarantee on special conditions: increased value warranty up to 80% and extension of the warranty period to 39 months.
The bank made it possible for clients to submit applications for a financial subsidy from the government aid program under the "PFR Financial Shield", which is to help micro, small and medium-sized enterprises to maintain financial continuity. Customers eligible for subsidies could submit their applications via internet banking, as well as use the information posted on the website or a free, specially dedicated hotline.
Bank Pekao concluded an agreement with Bank Gospodarstwa Krajowego (BGK), under which it grants POIR liquidity loans to small and medium-sized enterprises (SMEs) from the Dolnośląskie, Opolskie and Mazowieckie voivodeships in order to limit the effects of the COVID-19 epidemic. The call for applications for loans started in October and will be conducted via dedicated mailboxes.
Despite the difficult market situation and economic environment related to the COVID-19 pandemic and the environment of low interest rates, the key business segments of the Corporate Division: the Strategic Clients Department and the Corporate Clients Department maintain positive dynamics of operating income which increased by + 3.8% y/y and +1.6% y/y respectively. The level of yearly operating income for the corporate banking area remains relatively stable as compared to the previous year. Given the high volatility of the macroeconomic and coronavirus-related situation, the results show the Bank’s strength and its strong position in the area of corporate banking.
Market position and main directions of activities in Corporate Banking
The year 2020 was a time of intense events, observations and analyses. It was also a time of quick adaptation to changes taking place both in the economy and in the area of relationships with corporate banking clients. The Bank was committed to ensure the continuity and smoothness of banking service and access to aid programs. The Bank took care about relations with clients providing them with solutions tailored to their needs and business profile, and it supported clients in the changing business environment.
These activities strengthened the market position of Bank Pekao as the first choice bank for the most demanding corporate clients. The Bank provides both the comprehensive services of a universal bank and the services from such areas as leasing, factoring, investment advisory services, advisory in M&A as well as highly advanced treasury and capital market products. A wide range of products and services, innovative solutions, customised approach and comprehensive financial services rendered to enterprises, institutions and public sector units are appreciated by clients and determine the strength of corporate banking of Bank Pekao S.A.
Bank Pekao S.A. continuously ensures smooth customer service at every stage of clients’ business activity. In order to meet the expectations resulting from the new economic situation both in Poland and in the world, the Bank is developing modern processes of customer service and financial management by implementing technological solutions, among others, in the areas of automation and digitalization of customer service. The Bank actively supports clients in their business activities and supports the cooperation with state-owned companies as part of the Anti-Crisis Shield. It finances current operations as well as it provides advice and funds for investments and international expansion. Customised approach and “tailor-made” corporate banking solutions of Bank Pekao S.A. are recognized both in Poland and internationally. The expertise and professional approach are confirmed by the unique projects carried out by the Corporate Division in 2020, such as: the project of financing an export contract, the debtor of which is a foreign public entity, the sole arrangement of the first in Poland issue of "ESG-linked" bonds. These projects demonstrate both the Bank's competences and its greater involvement in transactions supporting social responsibility and environmental initiatives
Specialized expertise and experience in arrangement and financing of investments, trading in Treasury securities, custodian business, trade finance or real estate finance are the areas of corporate banking appreciated by clients and a group of independent, national and international experts. Bank Pekao S.A. remains a leading financial partner for large and mid-sized enterprises as well as self-government units and financial institutions. The Bank's services are currently used by more than 13 thousand entities, including c.a. 3 thousand foreign clients. The significant market position is also reflected in the awards received from institutions that monitor the global banking market. The Global Finance magazine granted three prestigious awards to Bank Pekao: Best Investment Bank in Central and Eastern Europe 2020, Best Sub-custodian Bank 2020 and Best Treasury and Cash Management Provider 2020.
Bank Pekao S.A. consistently develops the level of digitalization. It automates processes and relieves relationship managers of operational work. The Bank has provided its clients with a wide range of digital solutions allowing to sign agreements and annexes in an easy and safe manner, and it increased the scope of operations available to clients in the PekaoBiznes24 internet banking - so that as many clients as possible could have at their disposal a fully digital environment enabling them to sign documents and conclude contracts remotely and securely, respond to changes in the operational processes of enterprises quickly and flexibly and allowing simple management of the company's finances.
The following enhancements have been introduced as part of the implemented transformation projects:
remote signing of contracts and annexes for corporate clients (including bank accounts, cards, loans, guarantees or letters of credit),
remote submission of instructions and applications via PekaoBiznes24 internet banking,
Qlips service that allows clients to send information about invoices via PekaoBiznes24 internet banking,
we were the first bank on the Polish market to offer corporate clients an option of secure signing of documents with a trusted profile and e-ID. Currently, we offer the possibility of remote signing of documents also with the use of electronic signatures, i.e. user's signature in PekaoBiznes24 or a qualified signature,
remote after-sale service of PekaoBiznes24 electronic banking, which allows clients, inter alia, to remotely manage system users and their authorizations, proxies, accounts and ongoing banking services,
the security of online payment transactions made with a business payment card has been strengthened by introducing an e-PIN code for strong authentication of transactions secured with the 3-D Secure service.
In 2020, the Bank changed the Business-Risk cooperation model for Medium-Sized Companies Segment, under which the process of credit and business analyses as well as credit disbursement and administration were transferred to the Corporate Division. The Credit Analyses and Administration Department was established within the Corporate Banking, Markets and Investment Banking Division, which is to ensure the highest effectiveness of activities, optimum use of employees' experience and competences in terms of credit processes with priority being given to a prudent approach to risk management. A Customer Service unit was also established to render a non-credit service to Relationship Managers and corporate clients. These changes are aimed at improving the quality of customer service and increasing the amount of time that the Relationship Manager devotes to clients and to sale activities.
In order to meet market expectations, a web page dedicated entirely to economic analyses prepared by experts - containing periodic analytical documents, sector studies, as well as cross-sectional special reports - was launched on the website of Bank Pekao S.A.,.
The Bank also focused on providing solutions to clients whose activities were or would be affected by the effects of the pandemic. The offered solutions were aimed at maintaining and improving clients’ financial liquidity and thus ensuring the continuation of their operations in the current difficult conditions. Thanks to the commitment and good preparation for cooperation under the PFR Anti-Crisis Shield and guarantee schemes supported by Bank Gospodarstwa Krajowego (BGK), a program was introduced that allows the use of special credit solutions in financing of clients struggling with the effects of the pandemic, i.e. clients were provided with the possibility to benefit from BGK subsidies to credit interest.
In addition, the Bank introduced the Portfolio Guarantee Line from the Liquidity Guarantee Fund prepared by Bank Gospodarstwa Krajowego (BGK) to its offer.
Transactional banking
The Bank is strengthening its leading market position in transactional banking. It offers corporate clients a wide range of products and financial services, including the modern PekaoBiznes24 Internet platform, which is the most commonly chosen electronic banking system for companies in Poland, and the Pekao Connect service – a high-tech and most modern solution allowing direct integration of financial-accounting system of the company with the Bank, which enables to automate the payment orders process and receive feedback information on transactions performed on bank accounts.
Despite the COVID -19 coronavirus pandemic and the economic slowdown, the Bank handled a greater number and volume of domestic and foreign transfers as compared to 2019:
the number and volume of domestic transfers increased by 7% and 3,5% respectively as compared to 2019,
the volume of incoming foreign transfers increased by 4 % as compared to 2019,
In addition, in comparison with 2019:
the number of Direct Debit transactions with the total volume of PLN 1 667 million increased by 5,92 %,
the volume of Pekao Zlecenie (Pekao Order) transactions rose by 52,17% (in total amount of PLN 2 604 millionn), the Bank processed 156 million Pekao Collect transactions (identification of clients’ mass payments) with the total volume of over PLN 186 billion, which – considering the number of transactions - marks an increase by 4,73 respectively.
In 2020, the Bank continued a number of changes aimed at automating and digitalizing processes. The Pekao Przekaz service was digitalized - a significant part of operational activities was automated. Bank Pekao SA was the first bank in Poland to enable entities from the SME and corporate segments to establish relationship and open a company account completely remotely, without the need to meet a relationship manager. The Bank confirms the data from the IDs of the company’s representatives using video-verification, while the agreement is concluded in the PekaoBiznes24 internet banking system. Products available as part of remote establishment of relationship include current accounts, auxiliary accounts and PekaoBiznes24 electronic banking.
Bank Pekao S.A., as one of the first banks in Poland, introduced the Qlips service to its offer which consists in transferring the information about the outstanding liabilities from the creditor to the payer (via Bank Pekao SA) and presenting the information about the issued invoice. The information is presented in electronic and mobile banking systems to enable quick payments based on the data generated by the creditor.
In terms of cash services, the facilities were introduced allowing for faster availability of deposits in closed form sent directly to the Cash Distribution Centers of companies cooperating with the Bank, thanks to which money is collected by the Bank's escort directly from the client's premises.
Trade finance
In 2020, the amount of newly granted guarantees and sureties increased by 13% as compared to 2019. The Bank's exposure resulting from the issued guarantees increased by as much as 23%. The Bank also recorded a double-digit growth dynamics in the area of documentary products (letters of credit and collections). The value of newly opened transactions increased by 18% as compared to 2019.
The number of invoices financed under the Open Financing Platform (OPF) was 2,5 bigger than in the previous year whereas their value was higher by PLN 240 million in comparison with 2019.
Bearing in mind the expectations of clients related to the prevailing COVID-19 pandemic, the Bank was developing trade finance products and focused on systematic automation and support of remote processes. Selected clients were offered a new invoice transmission channel in eFinancing programs (using SFTP) with the use of automatic data decryption and verification of electronic signatures. A new model for monitoring agreements financing car dealers, consisting in an automated analysis of current sales and inventory, was also implemented.
In 2020, Bank Pekao signed a “factoring portfolio guarantee line agreement” with Bank Gospodarstwa Krajowego (BGK). This agreement allows clients to use the BGK guarantee when applying for an eFinancing limit (the product is based on purchasing short-term receivables or liabilities of the client).
Thanks to the cooperation with Bank Gospodarstwa Krajowego, de minimis guarantees and FGP have also become acceptable collaterals for trade finance products granted under a multi-purpose credit limit agreement.
In September, the Bank signed an annex to the "Risk Participation" agreement with Bank Gospodarstwa Krajowego, which made it possible to execute transactions of confirmation or discount of export letters of credit – with extended maturity period up to 1,5 year - received from higher-risk countries for which the Bank did not establish transaction limits.
Cooperation with international clients
The Bank supports the export plans of Polish companies present on foreign markets or planning international expansion. The Bank's clients can benefit from a package of the most advantageous financial solutions tailored to the business model. An attractive product offer for financing foreign contracts is a key element of support and at the same time a condition for strengthening the presence of domestic entities on foreign markets.
The Bank granted loans and prepared comprehensive offers for short and long-term financing of international transactions, supporting the expansion of Polish enterprises on both European markets and in developing countries. When carrying out transactions, the Bank cooperated, among others, with KUKE (Export Credit Insurance Corporation), taking advantage of the concluded framework agreement.
In 2020, the framework agreements were signed with the two largest banks in Belarus - Belagroprombank and Belarusbank - establishing a cooperation model and a template for credit documentation. Consequently, the time needed to prepare financing for Polish companies exporting services and products to the Belarusian market has been reduced. As a result, the activity and position of Polish companies on that market will increase.
The Bank also continued the cooperation with the UniCredit Group which provides for servicing UniCredit clients on the Polish market and Polish clients on foreign markets. The agreement allows supporting Polish clients in conducting business in the countries where the UniCredit Group operates. The agreement also strengthens the role of the Bank as an expert in cross-border solutions for international clients and it positions Bank Pekao S.A. as a Polish European bank.
Investment banking, structured finance and commercial real estate
The Bank supports the development of enterprises and infrastructure through long-term financing of investments in different segments of economy. It offers clients a wide range of services in the field of investment banking, structured financing and commercial real estate project financing, including financing of warehouses.
The key projects financed by the Bank in 2020 include:
financing provided to a company from the decor industry in the amount of PLN 274 million,
financing for the construction of an office complex in Łódź built by a leading developer for the amount of EUR 33 million,
financing for the construction of warehouses in the Pomeranian Province for the amount of PLN 105 million,
financing for the construction of a warehouse complex in Goleniów for the amount of EUR 11 million,
financing provided to a company from the pharmaceutical industry in the amount of PLN 40 million,
financing for the activity of a company from the transport sector in the amount of PLN 250 million,
financing provided to a company from the fuel industry in the amount of PLN 150 million,
financing (Pekao Factoring) of the wholesale suppliers in the amount of PLN 125 million,
investment financing for a company from the processing industry in the amount of PLN 67 million.
Issuance of debt securities
In the area of arranging and servicing non-treasury debt securities, taking into account the outstanding debt as at 30 November 2020, Bank Pekao S.A. had nearly 28% market share (1st place), including:
over 33% market share in arranging mid-term corporate bonds – 1st place,
nearly 17% market share in the segment of bank debt securities (including pledge letters) – 2nd place,
over 24% market share in arrangement of municipal bonds issues – 2nd place.
In 2020, the non-treasury debt securities were issued through Bank Pekao S.A. for the total amount of over PLN 17,5 bln (excluding COVID-19 bonds).
In 2020, the Bank actively participated in arranging bond issues guaranteed by the State Treasury which were used to finance aid programs aimed at preventing the effects of the COVID-19 pandemic. The bonds were issued for the total amount of over PLN 165 billion and had maturities from 4 to 20 years.
Among the bond issues carried out by the Bank in 2020 the ones which deserve special attention are the pioneering on the Polish market issues of sustainable development bonds:
the first issue of 5-year sustainable development bonds in Poland with an interest rate based on the ESG rating (a measure of sustainable development covering environmental responsibility, social responsibility and implemented corporate governance) for the amount of PLN 1 billion for a leading fuel and energy company in Poland, in which the Bank acted as a coordinator, arranger, bookrunner and dealer,
issue of 5-year sustainable development bonds in the amount of PLN 1 billion for one of the leading energy groups in Poland, issued for the energy transformation of the group, in which the Bank participated as a co-arranger and additional dealer.
The remaining transactions in the area of issue of non-treasury debt securities in 2020 included the transactions in which the Bank participated as:
Joint Lead Manager (co-arranger) for the issue of three series of Eurobonds with maturities of 4 and 6 years for a total amount of PLN 1.9 billion for an international financial institution with the highest rating,
arranger and dealer for the issue of many series of bonds for companies from the real estate industry, including: 4-year bonds for the amount of PLN 325 million for a commercial real estate developer being a state-owned company, two series of 5-year bonds for the amount of EUR 45 million for a developer of warehouse space, 4-year bonds in the amount of EUR 40 million for an office and housing developer and 3,5 and 4-year bonds in the total amount of PLN 75 million for an international development group,
the sole arranger and dealer of debt securities issues for the companies from the Pekao S.A. Group, i.e. 17 series of bonds of the leasing company with maturities up to 1,5 year for the total amount of PLN 4.1 billion, 21 series of bonds of the factoring company with maturities of up to 4 months for the total amount of PLN 5.8 billion, one series of 3-year mortgage letters for the amount of PLN 100 million and three series of mortgage bank bonds with a maturity of up to 2 years for the amount of PLN 340 million,
coordinator and dealer of the issue of two series of bonds for a total amount of PLN 225 million for a company from the leasing industry belonging to an international financial group,
the sole arranger and dealer of the issue of 3-year bonds for the amount of PLN 69,2 million for a company which is the largest IT distributor in Poland,
the sole arranger and dealer for the inaugural issue of 3-year bonds for the amount of PLN 50 million for a private company from the fuel industry.
In addition, in 2020, Bank Pekao arranged the issues of 144 series of municipal bonds for the total amount of over PLN 1,15 billion for 39 self-government units.
Cooperation with international and domestic financial institutions
As at 31 December 2020, the Bank maintained 75 nostro accounts with 46 banks in 26 countries; it ran 221 loro accounts for 203 foreign clients (banks and other financial institutions) from 47 countries and 48 current accounts for 42 foreign financial institutions.
The Bank also intermediated in the execution of transactions for clients of other domestic banks, running 34 loro accounts for 14 Polish banks and maintaining 6 nostro accounts with 1 Polish bank.
In 2020, the subsidiary Pekao Leasing Sp. z o.o. launched two long-term loans in the total amount of EUR 200 million, granted by the European Investment Bank under the agreements signed in 2019. This financing is a part of the long-term cooperation strategy of the Pekao S.A. Group with small and medium-sized enterprises - the funds will be used for financing this sector of enterprises. Bank Pekao S.A. was both the transaction arranger and loan guarantor.
In addition, the cooperation of Pekao Leasing Sp. z o.o. with small and medium-sized enterprises and financing of their investments is supported with a loan granted to the company by Bank Gospodarstwa Krajowego in the amount of EUR 350 million. It was the third such financing of Bank Gospodarstwa Krajowego for Pekao Leasing and the total value of disbursed loans already exceeded PLN 1 billion. Bank Pekao S.A. was both the transaction arranger and financing guarantor.
Besides, Pekao Leasing Sp. z o.o. obtained financing from the Industrial and Commercial Bank of China in the amount of EUR 50 million. Pekao Leasing Sp. z o.o. In addition, it obtained financing in the amount of EUR 50 million from the Industrial and Commercial Bank of China. It was the first loan granted by this bank to a leasing company in Poland. The financing was arranged by Bank Pekao S.A., which was also the loan guarantor.
Comprehensive service of public sector finances
In 2020, Bank Pekao S.A. maintained its leading position in the field of ongoing service and financing of the Polish public sector. The Bank is recognizable and effective both in cooperation with metropolises as well as with smaller municipalities and municipal companies, stimulating and developing Polish infrastructure.
In 2020, the Bank provided almost PLN 7 billion to local government entities for financing development projects. The Bank's participation in financing various areas of municipal economy contributed to a significant improvement of the quality of life of local communities.
The Bank participated in arranging financing for local self-governments and municipal companies on the capital market. The Bank arranged the largest bond issue programs on this market, including the issue of bonds for the Capital City of Warsaw for the amount of PLN 400 million, for the city of Poznań for the amount of PLN 440 million, and for the city of Toruń for the amount of PLN 500 million.
A particularly notable is the largest financing program for a municipal company in the history of Polish local self-governments: the Agreement on the Bond Issue Program for financing the Project of modernization and development of the Municipal Solid Waste Disposal Plant for Warsaw. The value of the Program is nearly PLN 2.5 billion. The Bank acts as the Program Arranger and thus it supports the construction of the largest incineration plant in Poland (over 300,000 tonnes per year) and one of the largest in Europe. At the same time, it is one of the largest municipal infrastructure projects in Poland.
The Bank was actively involved in government programs to combat the effects of the COVID-19 pandemic. The Bank cooperates with the Polish Development Fund (PFR) on the PFR bond issue program which is a part of the government "anti-crisis shield" (the value of the bonds program is PLN 100 billion). The Bank acts as the Program Dealer and actively participates in the market of bonds issued by PFR.
The Bank was also active in developing the area of Public-Private Partnership, both in the institutional and regulatory sphere, as well as in the preparation of financing structures for a number of such projects.
The Bank cooperates with 11 out of 12 Polish metropolises and provides ongoing budget support for every third metropolis. The Bank cooperates with every fourth municipality in Poland. It also maintains business relations with 92% of towns with county rights and provides ongoing services to every fifth of them. The Bank also cooperates with every third county and with almost all provinces. It is also a leading Bank for state universities.
Bank Pekao S.A. is one of the leading providers of banking services and groups together a number of financial institutions active in the asset management, pension funds, brokerage services, transactional advisory, leasing and factoring markets.
Dom Maklerski, CDM and Xelion render brokerage services within the Group providing retail customers with a wide range of products and services on the capital markets. For detailed description of the brokerage activity refer to the point 7.4.1.
Below are described the areas of operations of the Group’s key companies from the financial sector.
Pekao Bank Hipoteczny S.A. – Pekao Bank Hipoteczny
Pekao Bank Hipoteczny, as a specialized mortgage bank, continued activities on the market of commercial properties, local government units, as well as loans for purchase, construction, refurbishment or modernization of housing loans to individuals.
As at the end of December 2020, net value of loans portfolio of Pekao Bank Hipoteczny amounted to PLN 2,614.6 million, a increase by PLN 249.3 million, i.e. 10.5% in comparison to end of December 2019. Loans granted to corporates and local governments represents 28.6% and 13.1% respectively and loans granted to individual clients represents 58.3% of loan portfolio.
In 2020, Pekao Bank Hipoteczny completed one issue, denominated in PLN, and one issue of covered bonds was issued. The total value of liabilities under mortgage bonds as at 31 December, 2020 was PLN 1,467.6 million. Pekao Bank Hipoteczny S.A. has the quality certificate The Covered Bond Label, which proves the safety and quality of the issued covered bonds and the highest standards of transparency for investors.
As part of the diversification of financing sources, Pekao Bank Hipoteczny issued six bond issues in 2020, while 3 issues were matured. The total value of liabilities under bonds as at December 31, 2020 was PLN 639.4 million, they were issued under the issuer's bond issue program up to the amount of PLN 1 billion.
Pekao Investment Management S.A.– Pekao IM
Pekao IM, in which Bank Pekao S.A. holds a 100% share, is an owner of Pekao Towarzystwo Funduszy Inwestycyjnych S.A.
Pekao TFI is the oldest investment fund in Poland providing customers with modern financial products and opportunity to invest on the Polish and the largest global capital markets. For many years, it creates savings programs, including programs offering additional savings for retirement under the third pillar, voluntary pension pillar. The Pekao TFI offer includes also a portfolio management service and Employee Capital Plans (PPK). The company has been entered into the PPK register, and its offer is available on the portal mojeppk.pl.
As at 31 December 31, 2020, the value of net assets of Pekao TFI investment funds (including PPK) amounted to PLN 19.3 billion and was lower by PLN 2.2 billion, i.e. 10.4% compared to the end of December 2019. The decline in the value of assets was adversely affected by the pandemic situation, and funds from the redemption of funds were largely deposited in bank accounts.
Pekao Leasing Sp. z o.o. – Pekao Leasing
Pekao Leasing provides financial services supporting purchases and sale of fixed assets, i.e. vehicles, plant and equipment, and office space, both in the form of operating and finance leases.
In 2020, the Company concluded 14.3 thousand new contracts. The value of leased assets was 11.7% lower than in 2019 and amounted to PLN 3.9 billion, including: 53.0% means of transport, 35.4% - plant and equipment, 8.6% - real estate, 3.0% - other. The company cooperates with the Bank in the sale of leasing to clients who are also the Bank's clients.
Pekao Faktoring Sp. z o.o. - Pekao Faktoring
The Company, besides the full range of factoring services (recourse and non-recourse factoring), offers additional services, such as collecting information on debtors’ standing, payments collection, debt recovery, settlements accounting and monitoring of payments on an ongoing basis. Additionally, the Company offers settlement of mass transactions, financial advisory and consulting services regarding selection of business financing methods, as well as extending factoring-related loans. The Company co-operates with Bank Pekao S.A. in developing new sales channels and enhancing sales through the existing ones.
The Company is ranked the 1st on the Polish factoring market, with 21% of market share.
Pekao Investment Banking S.A. – Pekao IB
Pekao IB focuses on serving institutional and corporate clients. The scope of services provided by Pekao IB includes, in particular, the acceptance and transmission of orders to purchase or sell financial instruments, execution of these orders on behalf of the client, offering financial instruments, as well as consulting for enterprises in the field of capital structure, corporate strategy as well as other merger services, division and acquisition of enterprises.
Pekao IB provided services of offering shares related to increasing the capital of two companies listed on the WSE, participated in one process of initial public offering of shares in the company and servicing the issue of bonds of 11 entities. He acted as an intermediary in calls for the sale of three companies and in the purchase of treasury shares by a company listed on the WSE, as well as in a number of transactions on the capital market, advising clients in company acquisition processes.
In 2020, he also provided advisory services related to obtaining aid funds under the government program, the so-called "Anti-crisis shield".
On May 29, 2020, Pekao IB as part of the consolidation and integration process of brokerage activities in Grupa Pekao S.A. concluded a sales contract with Bank Pekao S.A. an organized part of the enterprise covering brokerage activities.
Pekao Direct Sp. z o.o. (previously Centrum Bankowości Bezpośredniej Sp. z o.o.) – Pekao Direct
Pekao Direct provides financial intermediation services, as well as comprehensive services through alternative communication channels for clients of the non-banking sector.
The company supports Bank Pekao S.A. as the main customer in the field of service, internet banking, cards and product hotlines. As part of its operations, Pekao Direct serves clients through alternative communication channels, mainly in the form of telephone, e-mail and in the form of chats. The main communication channel is telephone connections - in 2020 Pekao Direct handled 13.4 million calls. From the very beginning, Pekao Direct has been participating in the innovative process of setting up selfie accounts, introduced by Bank Pekao S.A. in 2019 (in 2020, Pekao Direct verified 59.0 thousand accounts opened on selfi). In 2020, the Company recorded a more than threefold increase in the chat service within the PeoPay application, which was related to the search by customers for alternative forms of communication in the light of the pandemic situation. The company, in cooperation with the Bank, continues to conduct a number of projects aimed at developing communication with customers of Bank Pekao S.A. including with the use of mobile banking.
Pekao Financial Services Sp. o.o. – PFS
PFS outsourcing services to financial institutions in the field of operational solutions and technology, use of fund participants, as well as independent distribution of the funds. Operational and technological solutions are focused on providing customers with services of the highest quality and safety. PFS specialises in registers of participants in mutual and pension funds and PPK.
Among the clients served by the PFS there are companies with established market position. The company is the only entity that supports OFE funds using the services of an external transfer agent.
Centrum Kart S.A. - CK S.A.
The company provides comprehensive services related to, among others with support for payment card management systems, transaction authorization and card personalization.
The company continued the implementation of IT projects aimed at extending the Bank's product offer. The most important projects implemented in 2020 include: implementation of the new version of PeoPay and PeoPay KIDS for the Bank's youngest clients, participation in the implementation of Smart City services in Białystok Public Transport and implementation of the Moneysend functionality for Mastercard cards by transfer to the card account) and Google Pay payments.
Human Capital as a key asset
The principles of the Bank’s policy in the area of Human Resources (HR) development are set by its mission and values considered as the key for the Bank sustainable growth.
The Bank invests in training, professional development of employees (in line with their preferences and abilities), creation of a friendly work environment and it conducts questionnaire surveys on employees’ engagement and satisfaction. Significant area of the Bank’s HR policy is outstanding talents spotting within the organization and investing in development of their skills.
Training and professional development
The Bank creates learning opportunities and provides access to various forms of training for its employees. Educational activities focus on realization of in-class training programs, on-the-job learning, coaching and Virtual Class system allowing for distance learning in form of Webinars.
In 2020, the main training priorities of the Bank were as follows:
providing support for the Bank's employees in connection with changes in the way work is performed resulting from the COVID-19 epidemic
professional knowledge development of the Bank’s employees,
education of middle and top managers,
realization of mandatory training required under internal and external regulations.
Providing support for the Bank's employees in connection with changes in the way work is performed resulting from the COVID-19 epidemic
The Bank introduced changes to training projects in order to prepare employees for challenges related to COVID-19. The form of delivering trainings to on-line trainings has been changed. The content of the training was extended by pro-health topics, coping with pandemic related stress and psychological pressure, remote work and remote team management.
Professional knowledge development of the Bank’s employees
The Bank continued realization of training projects related with implementation of adopted business strategies. Training programs for employees with high potential and training for new employees were conducted.
In 2020, the Bank delivered in form of class room over 214 thousand of training hours (class room and virtual sessions), in which attended over 10,4 thousand of employees confirming the Bank’s determination in efficient implementation of products, methods, required regulations and customer care. E-learning courses and trainings were completed at a similar lever of over 330 thousand hours.
Additionally, the Bank has provided a number of e-learning courses, including a series of 4 trainings "simple Polish", thanks to which employees learn the rules of simple language, how to communicate effectively and how to avoid mistakes, as well as training projects regarding to newly implemented internal regulations, including MDR identification and tax schemes reporting.
Education of middle and top managers
In 2020, management training programs dedicated to two groups of managers were implemented. One of them was directed to Area Directors, while the other took over a group of Branch Directors. The purpose of the Programs was implemented with the support of an external training company. During 3 training modules, Area managers had the opportunity to improve such skills as: leadership, developing people, team management based on the N.E.W.S. methodology which is focused on active coping with situations of constant and rapid changes. Additionally, participants simultaneously acquired skills to work in dispersed project teams, whose task was to face the challenge and work out a proposal of a business project. At the same time, trainings dedicated to Branch Directors were aimed at development, building an effective organizational culture and integration of managers in the process of constant changes. Due to the pandemic, the program was implemented remotely using the Webex Center platform.
In 2020, development program ON-LINE LEADER was initiated aimed at supporting managers in a new distributed organization resulting from the COVID-19 epidemic. The main goal of the program is to strengthen the competences of managers in the field of effective management of a dispersed team, learning tools and techniques supporting managers as leaders managing dispersed teams, and building and developing a remote work culture in the organization. The program consisted of 3 training modules conducted in the on-line formula and provided individual substantive consultations with trainers both during the program and after its completion. The program covered Team Managers who manage dispersed teams and want to develop their competences in this area.
Realization of mandatory training required under internal and external regulations.
In line with the Insurance Distribution Act, the Bank carried out professional training, which covered all OFWCAs which - pursuant to the Act - had training obligations. The trainings were conducted in e-learning form and in total they met the requirement of 15 training hours a year.
The Bank also implemented the necessary updates and a review of knowledge resulting from the MIFID regulations, and a series of training courses required by the Mortgage Credit Act.
In 2020, the Bank provided also a comprehensive Cybersecurity training program with participation of outstanding external specialists. The trainings are designed in the way as to raise the awareness of the Bank's employees in this area. Some of them are carried out as compulsory training and they covered all employees of the Bank. The program, carried out on request of the Bank's Security Department, was approved by the Management Board and the Supervisory Board.
Development programs and initiatives
In 2020, development programs and initiatives were provided for the Bank employees, aimed at providing support in the development of managerial and interpersonal skills supporting realization of Bank’s strategic goals, with particular emphasis on a pandemic situationIn order to achieve this goal, the Bank currently operates the following processes:
Succession Plans, prepared for positions identified as those with significant impact on the Bank's risk profile, the list of which is prepared and updated by the Bank in accordance with the applicable external and internal regulations. The process of identifying Successors also covered a number of senior and middle management positions.
On request of employee organizations, in 2020, the Bank resigned from the process of strict monitoring of employee assessment in relation to Covid-19, while leaving the "interim feedback" process as an additional, not mandatory, tool for providing regular feedback to employees. Additionally, the Bank implemented a new competency assessment system in the form of Assessment 180 and Assessment 360 implemented in the SAP Success Factors system. Assessment Center / Development Center sessions – verification of professional potential, the results of which are used in decision-making processes related to employment, promotion and employee development. At the same time, the Bank implemented a mandatory assessment procedure in the form of an Assessment Center for key positions in the branch network, implemented on-line during the Covid-19 pandemic.
In addition, the Bank offers for employees development initiatives aimed at supporting professional development, skills, knowledge and competences, as well as a number of initiatives to develop employee engagement.
In 2020, a talent program Talents Up was developed and launches in scope of recruitment. The recruitment phase was participated by 216 candidates. The aim of the program is creating innovation culture in the organization and development of program participants’ competences.
Moreover, a development program Change Ambassadors was launched for branch organizational support employees from Operations Centre – 19 high potential employees were invited to the program.
Pro-Wellness activities
In 2020, on-line service Take health by the horns was created in order to address continuation of the pro-health activities started in the previous year and also as a response to the newly emerging epidemiological situation. As a part of the website, podcasts with a psychologist were made available to employees, aimed at mental support in a difficult situation of a sudden change related to the epidemic situation as well as webinars providing information on the coronavirus and related procedures.
Next, as a part of the website, regular on-line meetings with a dietitian were held, during which healthy eating was promoted, and systematic webinars as part of anti-stress inspirations were organized to help reduce stress. In addition, we encouraged employees to daily physical activity by sharing videos with short physical exercises and articles regarding the impact of physical activity on our body. In 2020, 32 dedicated articles and 40 videos were made available, whereas over 4,700 participants took part in the webinars.
Apprenticeship programs
One of the annual objectives of the Bank is to obtain a certain number of graduates of the best universities in Poland and abroad, offering them career development within the organization: the network of branches and units of the Head Office of the Bank.
The following programs were implemented in order to realize the above mentioned objective:
A year-long internship program addressed to university students and graduates. The internships last from 2 to 3 months and give the opportunity to gather experience in selected banking areas, in all organizational units of the Bank.
Summer Internship Program “Akademia Żubra” addressed to university students and graduates. The program lasts for 2 months and is a good start for students who want to learn about functioning of the Bank's business areas. Participants actively support units and implement individual projects. In the range of the Program Apprentices are invited to participate in workshops on soft and technical competences.
“Banking Champions” Internship Program is a unique internship offer on the market. The program is addressed to students of the best universities in Poland and abroad and who want to create modern solutions in the Polish banking sector. The program offers development in the areas of Investment Banking and Strategic Management of the Bank. The role of the Mentor is key, as he shares his knowledge and experience with the Apprentices.
Compensation policy
The compensation strategy was developed in line with the business standards and values underlying the Bank’s mission and reflected in the internal regulations as well as it constitutes the basis for enhancing and protecting the Bank's reputation and creating long term value for all the stakeholders. The key regulation in this area is the Remuneration Policy of Bank Polska Kasa Opieki Spółka Akcyjna, the last update of which entered into force by the Order of the President of the Management Board of October 7, 2020. This policy reflects the mission and values in the Bank's approach to remuneration systems, including:
– defines the compensation pillars, management of its structure, corporate and organizational processes,
– confirms the compliance requirements of the compensation systems with the generally binding law,
– defines the principles of market practice monitoring, and the approach to the matter of compensation systems which guarantees the sustainability of the Bank's functioning.
The remuneration structure ensures a direct link between remuneration and performance by guaranteeing financial stability and variable remuneration levels appropriate to the Bank's financial capacity, setting performance-based remuneration levels and developing incentive systems foreseeable the minimum levels of the Bank's performance below which the bonus is not paid. Variable remuneration covers all remuneration components, the granting of which depends on the results, and its payment is directly dependent on individual achievements and the results achieved by the Bank and adjusted to the risk.
Sustainable results contributing to the creation of long-term value for stakeholders relate to the actual results achieved and how they are achieved, with a view to measuring results consistent with shareholders' interests and profitability principles based on safe risk levels, sustainable risk management practices and a multi-dimensional performance analysis and quality of operation.
In order to ensure the competitiveness of the remuneration structures, as well as their transparency and an effective and fair remuneration system, the Bank monitors market trends in terms of forms of remuneration and the level of remuneration offered on the market. Decisions on the remuneration system at the Bank are made taking into account the available data on market trends in the area of fixed remuneration as well as incentive systems. Such data is obtained from consulting companies offering financial sector analyzes. An additional comparative analysis is carried out at the level of the Bank's organizational units in order to ensure consistency of remuneration in individual areas.
As part of the remuneration system, employees are offered non-wage benefits ensuring fair treatment and consistency of the remuneration system.
Each year, a report on the functioning of the Remuneration Policy at the Bank is prepared, which is then presented at the General Meeting of Shareholders in order to assess whether the functioning of the Remuneration Policy in force at the Bank, supports the development and security of the Bank's operations.
Information regarding remuneration value of each Member of the Management Board is presented in the point 10, the section of the Management Board and the Supervisory Board Remuneration.
The Subsidiaries of the Bank's Capital Group have remuneration policies adapted to the size and specificity of their activities and the remuneration principles
Incentive systems
In the Bank, there are three main incentive systems: an Executive Variable Compensation System, a System based on Management by Objectives (MBO), and a system based on provisions of Corporate Collective Labour Agreement, which is based on quarterly bonuses and incentive reward.
The top management is covered by a variable remuneration system dedicated to people who have a significant impact on the Bank's risk profile. The aim of the System is to support the execution of the Bank’s operational strategy and to mitigate excessive risk conflicts of interest. Participant covered by the system may receive a variable compensation based on a bonus pool approach. The System provides a comprehensive performance measurement at individual level, level of his/her organizational unit and results of the entire Bank, as well as verification of the participant’s compliant behavior with respect to law provisions, and standards adopted by the Bank. For reinforcement of care for long-term welfare of the Bank, under the system at least 50% of variable remuneration is provided in phantom shares based on the value of the Bank shares and at least 40% of the bonus is deferrable and paid after the end of the evaluation period it is payable for.
The system of variable remuneration components is developed by Human Resources Division, with the involvement and participation of other organizational units of the Bank, including Legal Department, Compliance Department, Risk Management Division, Financial Division, and in consultation with Internal Audit Department. This is to ensure compliance with the regulations, the Bank's articles of association and the standards of ethical conduct or other standards of conduct applicable to the Bank, in such a way that legal, compliance and reputational risks mostly related to customer relations are properly controlled and managed.
Variable remuneration systems implemented in the Bank's subsidiaries have schemes similar to the Bank for the division of remuneration into cash and financial instruments, taking into account general provisions and guidelines of market regulators regarding the sectors in which the subsidiaries operate.
MBO system covers employees employed under the management contract and refers in particular to the sales positions and to the managerial positions, which play a significant role in achieving the Bank’s commercial goals. Under the MBO system, employees receive individual goals for realisation, which result from the financial plan adopted for a given year and the Bank's key goals. The amount of the annual bonus depends on the level of implementation of these goals, as well as the result achieved by the Bank.
The system based on the provisions of the Corporate Collective Labour Agreement (CCLA) applies to all employees who are covered by it. According to the provisions of CCLA the basis of the system is a quarterly bonus which is discretionary and depends on evaluation of employee’s performance, the level of commitment and the results achieved by the Bank in a given year, as well as the incentive bonus, which is granted for outstanding achievements in professional work.
Introduced in 2019, guidelines for variable remuneration, i.e. the quarterly bonus for sales network employees covered by the CCLA , were suspended starting from the second quarter of 2020 as a consequence of the epidemic situation.
Selections and Suitability Assessment Policy
The Bank has a Policy of selecting candidates for the position of a member of the Management Board and the key function as well as assessing the suitability of proposed and appointed members of the Management Board, Supervisory Board and persons holding key functions at Bank Polska Kasa Opieki Spółka Akcyjna (Selection and suitability assessment policy) approved by the Bank's Supervisory Board on 30 December 2020. The aim of the Policy is to guarantee an optimal and uniform process of selecting candidates for the position of a member of the Management Board and the Key Function at the Bank, so as to ensure that tasks related to the implementation of the Bank's plans and business strategy are performed by persons who have the necessary knowledge, experience and skills, and who enjoy get a good reputation.
The policy of selecting and assessing suitability also defines the criteria for assessing the individual and collective suitability of candidates and members of the Management Board, Supervisory Board and Key Functions at the Bank at the stage of appointment and during the performance of the function, as well as events resulting in the need to conduct a suitability assessment, the course of the suitability assessment process, including the roles and responsibilities in the process and the impact of the assessment including corrective measures to ensure compliance with the suitability requirements.
In 2020, the individual and collective suitability of members of the Bank's Supervisory Board was assessed in connection with the commencement of the new term of office, and the individual and collective suitability of members of the Bank's Management Board was assessed due to changes in the composition of the Bank's Management Board.
The Subsidiaries are updating the existing Suitability Assessment Policy.
Gender equality and Diversity policy
The Bank has a Gender equality and diversity policy with regard to members of the Supervisory Board, members of the Management Board and persons holding Key Functions at Bank Polska Kasa Opieki Spółka Akcyjna (Gender equality and diversity policy) introduced on December 18, 2020 by the Order of the President of the Management Board, which defines the strategy in the scope of managing diversity of the Bank's employees, including diversity with regard to the appointment of members of the Supervisory Board, members of the Management Board and persons performing Key Functions at the Bank. The gender equality and diversity policy defines guidelines aimed at ensuring that the Bank's employees can manage their careers, achieve success and evaluate their work on the basis of individual achievements, regardless of gender.
The purpose of the Bank's diversity strategy referred to in the Gender Equality and Diversity Policy is to ensure high-quality performance of tasks by the Bank's employees, including the selection of competent persons to perform functions in the Supervisory Board, Management Board and Key Functions at the Bank, first of all applying objective substantive criteria and taking into account the benefits of diversity.
The gender equality and diversity policy, in accordance with the legislative process in force at the Bank, was adopted by the Bank's Management Board and approved by the Supervisory Board.
Gender equality enables the Bank's employees to manage their career, achieve success and evaluate their work on the basis of individual achievements, regardless of gender.
Corporate values
The Bank’s employees in their daily relations are guided by the corporate values. The Bank’s values defined in the Integrity Charter are the following: respect, reciprocity, transparency, fairness, confidence and freedom (to act). These values provide a reference system for routine work and for problem situations which are not always addressed by external and internal regulations. The foundation of this „System of Values’ is the work of Integrity Charter Ombudsmen who independent, experienced, retired manager to whom the employees may report behaviours which clash with the corporate values. The Ombudsmen use the available tools (meetings, notices), when they undertake measures to restore respect for the corporate values in relations among employees wherever they have been disrupted.
Relations with Trade Union Organizations
In 2020 the cooperation between the Bank and Trade Unions in the range of consultation, negotiations and other agreements were led pursuant to the rules defined in the labour law, with respect for both sides’ interests and social dialog rules.
In 2020, 54 meetings between the Bank and Trade Unions were taken place. The meetings were conducted both stationary and by means of teleconferencing due to COVID-19 pandemic announcement. The meetings between both sides were aimed at negotiating and agreeing on the matters resulted from the company – internal labour law and the generally applicable regulations, changes in the company – internal labour law, the agreement concerning the rules of Company Social Benefits Fund usage and other topics regarding the collective employees labour rights.
Additionally, in 2020 the Employer consulted with Trade Unions the plan to carry out the groups dismissals based on article 2 of Act dated March 13 2003 about specific rules of termination of Employment due to Reasons not Attributable to Employees. On March 12, 2020, the Bank concluded an agreement with seven Trade Union organizations operating in the Bank defining the principles of collective redundancies. One of the Trade Union did not accede to the above mentioned Agreement. The parties, among other matters, agreed on the selection criteria for employees whose employment contracts will be terminated and whose terms and conditions of employment will be amended as part of collective redundancies, severance pay conditions and additional compensation and the scope of the assistance program for dismissed employees. It was also agreed that collective redundancies will cover not more than 1 200 employees in case of termination of employment contracts and not more than 1 350 employees in case of amendment of terms and conditions of employment until 31 October 2020.
Additionally, during year 2020, the meetings and negotiations with one of the Trade Union operating in the Bank were taken place in the range of the disputes initiated in 2016 and 2019.
Trade Unions are entitled to place on the Bank’s intranet web sides their newsletters and information concerning the crucial employees matters, including dialogue conducted with the Employer.
Relations with the Works Council
On December 21, 2020. Bank, according to article dated 7 April 2006 about informing and conducting the consultations with the employees, defined Elections Commission and The Works Council Members Elections Regulations. The Bank appointed also the Elections Commission responsible for Works Council Members Election process for 2021 – 2025 term of office. The Election took place on 20 January, 2021. Due to not achieving 50% of frequency, the second round of Elections will be organized on 22 February, 2021.
Workforce in number
As at the end of December 2020, the Group employed 14,994 employees (in the Bank and the companies consolidated under full consolidation method) as compared to 15,678 employees as at the end of 2019.
As at the end of December 2020, the Bank employed 12,870 employees as compared to 13,779 employees as at the end of 2019. The average age of the employees was 46,1 years, 72,2% of the employees are university graduates (70,5% in 2019), women represent 72,4% of the total workforce.
The Bank’s policy within the scope of sponsorships and charitable activity aims at strengthening the Bank’s image as an open and modern institution, in proximity to customers and communities connected to the Bank’s operations.
Upon selecting initiatives, the Bank avoids single donations and passive reactions to requests for support, in favor of long-term social commitments relying on partnerships with selected organizations. In particular, the Bank supports organizations and institutions active in the following areas: responsible economic development, promotion of the Polish national brand and values, support of culture and sport, aid for children in need and environmental issues.
Bank’s support is provided at two levels: national – sponsorship of strategic events with major impact on the Polish culture; and regional – supporting initiatives dedicated to local communities. As a socially responsible institution, Bank Pekao S.A. has been striving to improve the quality of life of the Polish nation, and develop and reinforce long-lasting relationships with the community on the basis of a mutual understanding.
The charitable activity of Bank Pekao S.A. has been carried out mainly through the Marian Kanton Foundation of Bank Pekao S.A., established in 1997. The scope of the Foundation’s charitable and social activities is very wide. Its statutory objectives focus on supporting initiatives in the following areas: education of children and young adults; scientific and R&D projects undertaken by academia; promoting knowledge in the field of banking; support of patients suffering from illnesses or disabilities; environmental protection; and popularizing culture.
In 2020, due to the global COVID-19 pandemic, the ambitious charitable objectives of Bank Pekao S.A. have been rationalized and adjusted to best serve the nation-wide restrictions as defined by the Polish Government and the bank authority. Over the course of the year, the Bank has engaged in a series of pro-societal activities, including supporting the Polish national health service, healthcare facilities and service workers, who continuously led initiatives aimed at containing the spreading of the COVID-19 pandemic.
In March 2020, Bank Pekao S.A. in co-operation with the Marian Kanton Foundation has budgeted donations of PLN 5 million for 11 hospitals across the country. The capital has been used to purchase specialist medical equipment and consumables necessary to fight against the Coronavirus. The Marian Kanton Foundation has additionally secured 23,000 PPE masks, which have been distributed to hospitals, fire brigades and senior citizens.
In May 2020 (in partnership with PZU, Alior Bank and Link4) we were furthermore involved in the purchase of specialist barrier tents protecting medical workers from infection, later provided to hospitals and medical units. All of the banks’ employees were engaged in the fund raiser, and each personal donation was later matched by the participating organizations.
In July 2020, Bank Pekao S.A. together with the Marian Kanton Foundation has donated 150,000 PLN to a group of 20 animal shelters to support the day-to-day operations and basic needs of the animals. Similarly to the barrier tent initiative, the project was co-sponsored by the PZU Group, which supported an additional 60 shelters through the project.
Regardless of the pandemic, the Bank has nonetheless engaged in a series of nation-wide projects which materially uphold the continuity of our legacy multi-year initiatives and provided meaningful support for the community in this challenging period.
In 2020, the Bank has financially supported inter alia the following initiatives: NIKE’s XVIII Football Gala of Podkarpacie, a historical event dedicated to the 100th anniversary of the Battle of Warsaw, ‘1920. Grateful to the Heroes’; and the ‘Poland’s Great Project’ Congress.A significant element to the Bank's activities has been the support of important economic initiatives. In 2020 among others, the Bank was present at the World Economic Forum in Davos, where, in partnership with PZU, we facilitated the Polish House - a place dedicated to international meetings, debates and conferences. The Polish House in Davos allowed to promote the Polish economy and its achievements, as well as showcasing the values and potential of the broader Central and Eastern European region. The Polish House debates were attended by local leaders: Presidents and Prime Ministers from the CEE region, prominent economists, as well as representatives of the largest European businesses. Other key events involving Bank Pekao S.A. were the European Financial Congress and the Corporate Banking Congress in Warsaw.
In 2020 the Foundation (in partnership with the Bank, and despite pandemic-related challenges) has organized the second edition of the grant competition We are close (‘Jestesmy Blisko’), which supports our colleagues’ own volunteering initiatives benefiting their local communities. The projects included a series of initiatives in the fields of ecology, education, sport, culture and the arts, healthy lifestyle promotion or animal welfare. Such a wide range of covered issues allowed each colleague to propose a project best suited to the needs of the local community. Selected projects offered support to hospitals and patient care facilities, e.g. for purchase of bottled water for patients and medical workers of hospitals in Krakow and Zamosc (over 10 thousand donated bottles); or donating the DeVilbiss Oxygen Concentrator for the young patients of the Lublin Children’s Hospice, suffering from respiratory issues.
The Marian Kanton Foundation has additionally been involved in donations supporting the statutory activity of several non-profit organisations, managing initiatives which engage our Volunteers – the Bank’s employees.
For many years, the Bank has been committed to the preservation of the Polish bisons, a unique and endangered species. The Bank’s financial support is to help ensure the diversification and growth of the bison population, herd care, and the co-financing of scientific and educational projects at institutions such as the Bialowieza National Park, the Warsaw Zoo ‘Panda’, or the Agency for the Development and Promotion of the Pszczyna Region.
Consolidated income statement containing cumulated items for the period from 1 January to 31 December, 2020 and 2019 respectively is presented in the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2020.
The Report on activities of Bank Pekao S.A. Group for 2020 includes statement of financial position in a short form and income statement in a presentation form as well as the key, selected items from these statements are discussed.
Net profit of the Bank Pekao S.A. Group attributable to the Bank's holders for 2020 amounted to PLN 1,101.7 million and was lower by PLN 1,063,3 million i.e. 49.1% y/y, mainly due to higher write-offs for impairment of financial assets, related to the COVID-19 coronavirus pandemic and provisions for legal risk related to foreign currency mortgage loans (PLN 672 million and PLN 377 million impact on net profit respectively).
(in PLN million)
|
2020 |
2019 |
Change |
Net interest income |
5,202.0 |
5,468.0 |
(4.9%) |
Net fee and commission income |
2,433.7 |
2,533.7 |
(3.9%) |
Dividend income |
26.2 |
22.4 |
17.0% |
Trading result |
230.8 |
214.1 |
7.8% |
Net other operating income and expenses (*) |
(79.9) |
43.5 |
x |
Net non-interest income (*) |
2,610.8 |
2,813.7 |
(7.2%) |
Operating income (*) |
7,812.8 |
8,281.7 |
(5.7%) |
Operating costs |
(3,467.9) |
(3,537.1) |
(2.0%) |
Gross operating profit (*) |
4,344.9 |
4,744.7 |
(8.4%) |
Net allowances for expected credit losses |
(1,578.4) |
(696.0) |
> 100% |
Net operating profit |
2,766.5 |
4,048.6 |
(31.7%) |
Bank Guarantee Fund fee |
(380.9) |
(454.7) |
(16.2%) |
Tax on certain financial institutions |
(660.6) |
(591.4) |
11.7% |
Profit before tax |
1,725.0 |
3,002.5 |
(42.5%) |
Income tax expense |
(622.1) |
(835.9) |
(25.6%) |
Net profit |
1,102.9 |
2,166.6 |
(49.1%) |
Attributable to equity holders of the Bank |
1,101.7 |
2,165.0 |
(49.1%) |
Attributable to non-controlling interest |
1.2 |
1.6 |
(25.0%) |
(*) Starting from the first quarter of 2020 the Group made changes in the presentation of selected items of the income statement. The items: ‘Net result on other provisions, and ‘Gains (losses) on disposal of property, plant and equipment and intangible assets, are presented in the line ‘Net other operating income and expenses’ (and thus in net non-interest income, operating income, gross operating profit and net operating profit). The above-mentioned changes resulted in restatement of comparable data, but without impact on the net profit for the period. In order to ensure comparability, data for 2019 have been restated in comparison to those previously published.
Operating income
In 2020, the Group’s operating income amounted to PLN 7,812.8 million and was lower by 5.7% in comparison with 2019, mainly due to the negative impact of the economic situation including interest rate cuts, and lower customer activity.
Total net interest income
(in PLN million)
|
2020 |
2019 |
Change |
Interest income |
5,849.3 |
6,692.9 |
(12.6%) |
Interest expense |
(647.3) |
(1,224.9) |
(47.2%) |
of which on leasing |
(10.5) |
(13.4) |
(21.6%) |
Net interest income |
5,202.0 |
5,468.0 |
(4.9%) |
Net interest income in 2020, amounted to PLN 5,202.0 million and was lower by PLN 266.0 million, i.e. 4.9% compared to 2019, mainly due to the negative impact of interest rate cuts.
Interest income
In 2020, the interest income amounted to PLN 5,849.3 million and was lower by PLN 843.6 million y/y due to the negative impact of interest rate cuts on the interest rate of assets.
Interest expense
In 2020, the interest expense amounted to PLN 647.3 million and was lower by PLN 577.6 million y/y, mainly due to interest rate cuts, despite the strong increase in the volume of deposits.
Interest margin
The interest margin achieved in 2020, amounted to 2.45% and was lower by 0.42 p.p., under the pressure of the negative impact of interest rate cuts and faster growth in deposits than in loans.
Net non-interest income
(in PLN million)
|
2020 |
2019 |
Change |
Fee and commission income |
2,905.3 |
2,912.5 |
(0.2%) |
Fee and commission expense |
(471.6) |
(378.8) |
24.5% |
Net fee and commission income |
2,433.7 |
2,533.7 |
(3.9%) |
Dividend income |
26.2 |
22.4 |
17.0% |
Trading result |
230.8 |
214.1 |
7.8% |
of which gains on derecognition of financial assets and liabilities not measured at fair value through profit or loss |
61.1 |
71.9 |
(15.0%) |
Net other operating income and expense |
(79.9) |
43.5 |
>100% |
Net non-interest income |
2,610.8 |
2,813.7 |
(7.2%) |
The Group’s net fee and commission income in 2020, amounted to PLN 2,433.7 million and was lower by PLN 100.0 million, i.e. 3.9% compared to 2019, mainly due to lower customer activity due to the pandemic, which translated into lower commissions on card operations, investment funds and loans.
The table below presents the Group’s net fee and commission income divided according to the main areas of the activity.
(in PLN million)
|
2020 |
2019 |
Change |
Net fee and commission income |
2,433.7 |
2,533.7 |
(3.9%) |
on loans |
486.3 |
516.9 |
(5.9%) |
on cards |
260.3 |
346.2 |
(24.8%) |
on mutual funds |
390.2 |
435.7 |
(10.4%) |
on brokerage activate |
107.3 |
63.0 |
70.3% |
on margins on foreign exchange transactions with clients |
527.9 |
491.8 |
7.3% |
other |
661.7 |
680.1 |
(2.7%) |
Operating costs
In 2020, the Group’s operating costs including contributions and payments to the Bank Guarantee Fund, amounted to PLN 3,848.9 million and were lower by PLN 142.9 million, i.e. 3.6% than in 2019.
The operating costs excluding restructuring provision amounted to PLN 3,333.2 million and were lower by 3.4% y/y, below inflation and despite the costs of investments in operational transformation and digitization and additional costs associated with the coronavirus pandemic. Nominal costs were lower by PLN 69.2 million, i.e. 2.0% compared to the costs achieved in 2019.
(in PLN million)
|
2020 |
2019 |
Change |
Personnel expenses (*) |
(1,919.9) |
(1,992.7) |
(3.7%) |
Other administrative expenses (**) |
(874.4) |
(955.2) |
(8.5%) |
of which Financial supervision authority fee (PFSA) |
(20.6) |
(25.2) |
(18.5%) |
Depreciation and amortization |
(538.9) |
(504.2) |
6.9% |
Operating costs excluding restructuring provision |
(3,333.2) |
(3,452.1) |
(3.4%) |
Provisions for FTEs restructuring |
(120.0) |
(85.0) |
41.2% |
Network restructuring |
(14.7) |
- |
x |
Operating costs |
(3,467.9) |
(3,537.1) |
(2.0%) |
(*) Excluding restructuring provision.
(**) Excluding network restructuring.
In 2020, cost / income ratio excluding restructuring provision amounted to 42.6% and was higher by 0.9 p.p. y/y.
As of 31 December 2020, the Group employed 14,994 employees (in the Bank and the companies consolidated under full consolidation method) as compared to 15,678 employees as at the end of December 2019.
Bank Guarantee Fund fee
Bank Guarantee Fund fee in 2020 amounted to PLN 380.9 million, and were lower of PLN 73.8 million as compared to 2019.
Tax on certain financial institutions
Tax on certain financial institutions in 2020 amounted to PLN 660.6 million and was higher by PLN 69.2 million, i.e. 11.7% as compared to 2019, due to an increase in Group’s assets.
Net allowances for expected credit losses
(in PLN million)
|
2020 |
2019 |
Change |
financial assets measured at amortized cost |
(1,454.5) |
(635.1) |
> 100% |
financial assets measured at fair value through other comprehensive income |
(34.3) |
(10.8) |
> 100% |
financial liabilities measured at amortized cost |
(89.6) |
(50.1) |
78.8% |
Net allowances for expected credit losses |
(1,578.4) |
(696.0) |
> 100% |
The Group’s Net allowances for expected credit losses amounted to PLN 1,578.4 million in 2020, and was more than twice as compared to 2019, due to the creation of impairment related to the COVID-19 virus pandemic in accordance with IFRS 9. Impairment losses for financial assets related to the COVID-19 coronavirus pandemic were created based on the forecasted deterioration of the risk parameters of the loan portfolio in the amount of ca. PLN 830 million and estimated based on macroeconomic scenarios assuming an economic recession in Poland in 2020.
Costs of risk
The costs of risk in 2020 amounted to 0.99% and was higher by 0.53 p.p. y/y, due to the creation of loan loss provisions related to the COVID-19 pandemic.
The balance sheet of Bank Pekao S.A. determines the amount of total assets in balance sheet and the structure of the assets and liabilities of the Group. As at the end of December 2020, the total assets of Bank Pekao S.A. constitutes 95.4% of the total assets of the whole Group.
The table below presents the Group’s statement of financial position – short form.
Assets |
31.12.2020 |
31.12.2019 |
change |
||
PLN million |
structure |
PLN million |
structure |
||
Cash and due from Central Bank |
4,456.3 |
1.9% |
5,162.7 |
2.5% |
(13.7%) |
Loans and advances to banks (*) |
2,578.3 |
1.1% |
1,791.6 |
0.9% |
43.9% |
Loans and advances to customers (**) |
151,684.3 |
65.0% |
151,383.8 |
74.5% |
0.2% |
Reverse repo transactions |
280.6 |
0.1% |
502.3 |
0.2% |
x |
Securities (***) |
62,331.8 |
26.7% |
36,201.9 |
17.8% |
72.2% |
Property, plant and equipment and intangible assets |
3,927.5 |
1.7% |
3,537.8 |
1.7% |
11.0% |
Other assets |
7,958.4 |
3.4% |
4,742.8 |
2.3% |
67.8% |
Total assets |
233,217.2 |
100.0% |
203,322.9 |
100.0% |
14.7% |
(*) Including net investments in financial leases to banks.
(**) Including net investments in financial leases to customers and non-treasury debt securities.
(***) Including financial assets held for trading, other financial instruments at fair value through profit and loss and excluding non-treasury debt securities.
EQUITY AND liabilities |
31.12.2020 |
31.12.2019 |
change |
||
PLN million |
structure |
PLN million |
structure |
||
Amounts due to Central Bank |
0.0 |
0.0% |
4.5 |
0.0% |
x |
Amounts due to other banks |
9,950.7 |
4.3% |
6,539.5 |
3.2% |
52.2% |
Amounts due to customers |
177,745.2 |
76.2% |
157,203.4 |
77.3% |
13.1% |
Debt securities issued |
6,146.7 |
2.6% |
6,307.8 |
3.1% |
(2.6%) |
Subordinated liabilities |
2,757.9 |
1.2% |
2,764.5 |
1.4% |
(0.2%) |
Repo transactions |
152.6 |
0.1% |
379.8 |
0.2% |
(59.8%) |
Lease liabilities |
406.2 |
0.2% |
406.5 |
0.2% |
(0.1%) |
Other liabilities |
10,562.9 |
4.5% |
6,318.9 |
3.1% |
67.2% |
Total equity, including |
25,495.0 |
10.9% |
23,398.0 |
11.5% |
9.0% |
non-controlling interests |
11.3 |
0.0% |
11.7 |
x |
(3.4%) |
Total equity and liabilities |
233,217.2 |
100.0% |
203,322.9 |
100.0% |
14.7% |
Changes in the structure of assets
Loans and advances to customers and securities represent items of the largest value under assets. As at the end of 2020, they accounted for 65.0% and 26.7% of the total assets respectively in comparison with 74.5% and 17.8% respectively as at the end of 2019.
Cash and due from Central Bank
(in PLN million)
|
31.12.2020 |
31.12.2019 |
change |
Cash and due from Central Bank, including: |
4,456.3 |
5,162.70 |
(13.7%) |
Cash |
4,306.1 |
3,037.00 |
41.8% |
Current account at Central Bank |
150.2 |
2,101.80 |
(92.9%) |
Other |
0.0 |
23.9 |
x |
Customers’ Financing
Customer structure of loans and advances
(in PLN million)
|
31.12.2020 |
31.12.2019 |
CHANGE |
Loans and advances at nominal value (*) |
157,883.8 |
156,804.8 |
0.7% |
Loans and investments in financial leases |
148,373.5 |
145,805.9 |
1.8% |
Retail |
79,332.3 |
76,921.1 |
3.1% |
Corporate |
69,041.2 |
68,884.8 |
0.2% |
Non-treasury debt securities |
9,510.3 |
10,998.9 |
(13.5%) |
Other (**) |
1,104.1 |
1,122.8 |
(1.7%) |
Impairment allowances |
(7,303.6) |
(6,543.8) |
11.6% |
Total net receivables |
151,684.3 |
151,383.8 |
0.2% |
Reverse repo transactions |
280.5 |
502.0 |
(44.1%) |
Total Customers’ financing (***) |
158,164.3 |
157,306.8 |
0.5% |
(*) Excluding reverse repo transactions.
(**) Including interest and receivables in transit.
(***) Total customers’ financing includes loans and advances at nominal value, securities issued by non-monetary entities and reverse repo transactions.
As at the end of December 2020, loans and advances at nominal value amounted to PLN 157 883,8 million, an increase of PLN 1,079.0 million, i.e. 0.7% in comparison to the end of December 2019.
As at the end of December 2020, the volume of retail loans amounted to PLN 79,332.3 million, an increase of PLN 2,411.2 million, i.e. 3.1% in comparison to the end of December 2019, thanks to dynamic growth of PLN mortgage loans by 6.1% y/y.
As at the end of December 2020, corporate loans and non-treasury debt securities amounted to PLN 78,551.5 million, an decrease of PLN 1,332.2 million, i.e. 1.7% in comparison to the end of December 2019, however with the growth in the segment of medium-sized enterprises (4.5% y/y) and leasing receivables.
Receivables and impairment losses(*)
(in PLN million)
|
31.12.2020 |
31.12.2019 |
CHANGE |
Gross receivables |
158,987.9 |
157,927.6 |
0.7% |
Stage 1 |
123,458.6 |
129,127.6 |
(4.4%) |
Stage 2 |
26,926.5 |
20,588.6 |
30.8% |
Stage 3 |
8,602.8 |
8,211.4 |
4.8% |
Impairment allowances |
(7,303.6) |
(6,543.8) |
11.6% |
Stage 1 |
(423.5) |
(329.3) |
28.6% |
Stage 2 |
(1,175.0) |
(729.3) |
61.1% |
Stage 3 |
(5,705.1) |
(5,485.2) |
4.0% |
Total net receivables |
151,684.3 |
151,383.8 |
0.2% |
(*) Including net investments in financial leases to customers, non-treasury debt securities, interest and receivables in transit and excluding reverse repo transactions.
As at the end of December 2020 the ratio of impaired receivables (stage 3) to the gross receivables amounted to 5.4%.
The increase in Stage 2 was the result of an industry review and other activities of a similar nature, mainly due to the pandemic and related restrictions in the functioning of the economy.
Loans and advances to customers by currency(*)
|
31.12.2020 |
31.12.2019 |
change |
||
PLN million |
structure |
PLN million |
structure |
||
Denominated in PLN |
129,536.7 |
81.5% |
130,635.9 |
82.7% |
(0.8%) |
Denominated in foreign currencies (**) |
29,451.2 |
18.5% |
27,291.7 |
17.3% |
7.9% |
Total |
158,987.9 |
100.0% |
157,927.6 |
100.0% |
0.7% |
Impairment allowances |
(7,303.6) |
x |
(6,543.8) |
x |
11.6% |
Total net |
151,684.3 |
x |
151,383.8 |
x |
0.2% |
(*) Including net investments in financial leases to customers, non-treasury debt securities, interest and receivables in transit and excluding reverse repo transactions.
(**) Including indexed loans.
The currency structure of loans and advances to customers is dominated by amounts expressed in the Polish złoty, as at the end of December 2020, their share was 81.5%. The largest portion of foreign currency loans and advances to customers were represented by those denominated in EUR (81.9%), CHF (10.2) and USD (6.0%).
Loans and advances to customers by contractual maturities (*)
|
31.12.2020 |
31.12.2019 |
change |
||
PLN million |
structure |
PLN million |
structure |
||
Current and up to 1 month |
14,316.0 |
9.0% |
16,094.5 |
10.2% |
(11.1%) |
1 to 3 months |
5,740.7 |
3.6% |
5,512.1 |
3.5% |
4.1% |
3 months to 1 year |
16,483.2 |
10.4% |
15,157.0 |
9.6% |
8.7% |
1 to 5 years |
54,919.4 |
34.5% |
52,856.7 |
33.5% |
3.9% |
Over 5 years |
62,477.1 |
39.3% |
62,858.5 |
39.8% |
(0.6%) |
Past due |
3,947.4 |
2.5% |
4,326.0 |
2.7% |
(8.8%) |
Other |
1,104.1 |
0.7% |
1,122.8 |
0.7% |
(1.7%) |
Total |
158,987.9 |
100.0% |
157,927.6 |
100.0% |
0.7% |
Impairment allowances |
(7,303.6) |
x |
(6,543.8) |
x |
11.6% |
Total net |
151,684.3 |
x |
151,383.8 |
x |
0.2% |
(*) Including net investments in financial leases to customers, non-treasury debt securities, interest and receivables in transit and excluding reverse repo transactions.
As at the end of December 2020, loans and advances with maturity over 5 years represents 39.3% of total loans and advances (mainly attributed to mortgage loans, investment loans, and non-treasury debt securities).
Information on loan concentration is included in the Note 26 to the Consolidated Financial Statements of Bank Pekao S.A. Group for the period ended on 31 December, 2020.
Changes in the structure of liabilities
Amounts due to customers were the main item under the Group’s liabilities and equity. As at the end of 2020, amounts due to customers, debt securities issued and subordinated liabilities totaled PLN 186 649,8 million, and their share in the total assets was 80.0%, compared with 81.8% as at the end of 2019. The share of total shareholder’s equity in the total assets was 11.0% as at the end of 2020, compared with 11.5% as at the end of 2019.
External sources of financing
(in PLN million)
|
31.12.2020 |
31.12.2019 |
CHANGE |
Amounts due to Central Bank |
0.0 |
4.5 |
x |
Amounts due to other banks |
9,950.7 |
6,539.5 |
52.2% |
Amounts due to customers |
177,745.2 |
157,203.4 |
13.1% |
Debt securities issued |
6,146.7 |
6,307.8 |
(2.6%) |
Subordinated liabilities |
2,757.9 |
2,764.5 |
(0.2%) |
Repo transactions |
152.6 |
379.8 |
(59.8%) |
Total external sources of financing |
196,753.1 |
173,199.5 |
13.6% |
Amounts due to customers amounted to PLN 177 745,2 million, an increase by 13.1% to significant extent contributed to dynamic increase in loans.
The deposit base is widely diversified and is sourced from retail and corporate customers. In addition, the Group uses also funds borrowed on the interbank market. The Group is not dependent on any single customer nor group of customers.
Amounts due to customers and debt securities issued
(in PLN million)
|
31.12.2020 |
31.12.2019 |
CHANGE |
Corporate deposits |
71,664.5 |
65,044.6 |
10.2% |
Non-financial entities |
54,784.0 |
47,157.1 |
16.2% |
Non-banking financial entities |
4,598.9 |
6,972.1 |
(34.0%) |
Budget entities |
12,281.6 |
10,915.4 |
12.5% |
Retail deposits |
105,734.3 |
91,741.8 |
15.3% |
Other (*) |
346.4 |
417.0 |
(16.9%) |
Amounts due to customers(**) |
177,745.2 |
157,203.4 |
13.1% |
Debt securities issued, of which |
8,904.6 |
9,072.3 |
(1.8%) |
Structured Certificates of Deposit (SCD) |
523.3 |
831.3 |
(37.1%) |
Certificates of Deposit (CD) |
0.0 |
767.0 |
x |
Subordinated bonds |
2,750.0 |
2,750.0 |
0.0% |
Pekao Bank Hipoteczny S.A. covered bonds |
1,315.5 |
1,335.6 |
(1.5%) |
Pekao Bank Hipoteczny S.A. bonds |
355.0 |
299.2 |
18.6% |
Pekao Leasing Sp. z o.o. bonds |
1,476.7 |
2,113.0 |
(30.1%) |
Pekao Faktoring Sp. z o.o. bonds |
2,472.5 |
948.6 |
160.6% |
Interest |
11.6 |
27.6 |
(58.0%) |
Amounts due to customers and debt securities issued (**) |
186,649.8 |
166,275.7 |
12.3% |
Repo transactions |
152.6 |
379.8 |
(59.8%) |
Lease liabilities |
406.2 |
406.5 |
(0.1%) |
Amounts due to customers and debt securities issued, total (***) |
187,208.6 |
167,062.0 |
12.1% |
|
|
|
, |
Investment funds of Pekao TFI S.A. (ex. Pioneer Pekao TFI) |
19,347.8 |
21,584.0 |
(10.4%) |
Bond and money market funds |
15,388.7 |
17,676.7 |
(12.9%) |
Balanced funds |
2,171.1 |
2,167.8 |
0.2% |
Equity funds |
1,701.8 |
1,736.3 |
(2.0%) |
PPK |
86.2 |
3.1 |
>100% |
including distributed through the Group’s network |
18,852.7 |
21,168.4 |
(10.9%) |
(*) Other item includes interest and funds in transit.
(**) Excluding repo transactions and lease liabilities.
(***) Including repo transactions and lease liabilities.
As at the end of December 2020, amounts due to the Group’s customers and debt securities issued amounted to PLN 186 649,8 million, an increase of PLN 20,374.1 million, i.e. 12.3% in comparison to the end of December 2019.
The total volume of retail deposits, Structured Certificates of Deposit and other amounted to PLN 106,577.9 million as at the end of December 2020, an increase of PLN 13,612.5 million, i.e. 14.6% in comparison to the end of December 2019 and they increased their share in the structure of financing.
The total volume of corporate deposits, Certificates of Deposit, Subordinated bonds, Pekao Bank Hipoteczny S.A. covered bonds and bonds, Pekao Leasing Sp. z o.o. bonds, Pekao Faktoring Sp. z o.o. bonds interest and other amounted to PLN 80,071.9 million as at the end December 2020, an increase of PLN 6,761.6 million, i.e. 9.2% as compared to the end of December 2019.
The value of net assets of investment funds managed by Pekao TFI S.A. amounted to PLN 19,347.8 million as at the end of December 2020, an decrease of PLN 2,236.2 million, i.e. 10.4% in comparison to the end of December 2019. The decrease occurred mainly in March and was related with a pandemic situation in the country and abroad.
Amounts due to customers by currency (*)
|
31.12.2020 |
31.12.2019 |
change |
||
PLN million |
structure |
PLN million |
structure |
||
Denominated in PLN |
149 318,0 |
84,0% |
129 921,0 |
82,6% |
14,9% |
Denominated in foreign currencies |
28 427,2 |
16,0% |
27 282,4 |
17,4% |
4,2% |
Total |
177 745,2 |
100,0% |
157 203,4 |
100,0% |
13,1% |
(*) Including interest and amounts due in transit and excluding repo transactions and lease liabilities.
The bulk of the amounts due to customers are denominated in the Polish currency and its share as at the end of December 2020 amounted to 84.0%. The majority of amounts due to customers denominated in foreign currencies were in EUR (60.5%) and USD (32.8%).
Amounts due to customers by contractual maturities (*)
|
31.12.2020 |
31.12.2019 |
change |
||
PLN million |
structure |
PLN million |
structure |
||
Current accounts and overnight deposits |
156 956,2 |
88,5% |
109 738,4 |
70,0% |
43,0% |
Term deposits |
20 442,6 |
11,5% |
47 048,0 |
30,0% |
(56,5%) |
Total deposits |
177 398,8 |
100,0% |
156 786,3 |
100,0% |
13,1% |
Interest accrued |
46,6 |
x |
176,6 |
x |
(73,6%) |
Funds in transit |
299,8 |
x |
240,4 |
x |
24,7% |
Total |
177 745,2 |
x |
157 203,4 |
x |
13,1% |
(*) Excluding repo transactions and lease liabilities.
Provisions, deferred tax assets and liabilities
(in PLN million)
|
31.12.2020 |
31.12.2019 |
Change |
Total provisions |
988.7 |
752.6 |
31.4% |
of which: |
|
|
|
provisions for off-balance sheet commitments |
383.4 |
290.9 |
31.8% |
provisions for liabilities to employees |
426.6 |
357.4 |
19.4% |
other provisions |
178.7 |
104.3 |
71.3% |
Deferred tax liabilities |
27.8 |
29.9 |
(7.0%) |
Deferred tax assets |
1,248.7 |
1,094.6 |
14.1% |
Consolidated income statement for 2020 - Provided for comparability purposes.
(in PLN thousand)
|
Q4 2020 |
Q3 2020 |
Q2 2020 |
Q1 2020 |
Interest income |
1,277,205 |
1,307,670 |
1,547,044 |
1,717,440 |
Interest income calculated using the effective interest method |
1,225,600 |
1,248,391 |
1,478,805 |
1,658,059 |
Financial assets measured at amortised cost |
1,076,910 |
1,091,978 |
1,314,397 |
1,499,810 |
Financial assets measured at fair value through other comprehensive income |
148,690 |
156,413 |
164,408 |
158,249 |
Other interest income related to financial assets measured at fair value through profit or loss |
51,605 |
59,279 |
68,239 |
59,381 |
Interest expense |
(72,044) |
(104,618) |
(181,496) |
(289,189) |
1,205,161 |
1,203,052 |
1,365,548 |
1,428,251 |
|
Fee and commission income |
794,163 |
714,908 |
676,929 |
719,266 |
Fee and commission expense |
(137,863) |
(119,799) |
(109,082) |
(104,872) |
Net fee and commission income |
656,300 |
595,109 |
567,847 |
614,394 |
Dividend income |
7 |
268 |
25,748 |
255 |
Result on financial assets and liabilities measured at fair value through profit or loss and foreign exchange result |
83,386 |
26,178 |
50,703 |
10,272 |
Result on fair value hedge accounting |
22 |
(117) |
992 |
(1,744) |
Result on derecognition of financial assets and liabilities not measured at fair value through profit or loss |
12,285 |
4,672 |
23,049 |
21,126 |
Net allowances for expected credit losses |
(496,153) |
(277,387) |
(474,010) |
(330,910) |
Operating income |
16,062 |
16,436 |
16,490 |
19,192 |
Operating expenses |
(81,337) |
(22,426) |
(24,369) |
(19,979) |
Administrative expenses |
(898,960) |
(878,213) |
(909,932) |
(1,283,302) |
Personnel expenses |
(473,175) |
(459,178) |
(489,277) |
(618,236) |
Other administrative expenses |
(425,785) |
(419,035) |
(420,655) |
(665,066) |
Depreciation and amortization |
(141,329) |
(139,383) |
(134,704) |
(123,535) |
PROFIT BEFORE INCOME TAX |
355,444 |
528,189 |
507,362 |
334,020 |
Income tax expense |
(170,550) |
(157,089) |
(147,906) |
(146,569) |
NET PROFIT |
184,894 |
371,100 |
359,456 |
187,451 |
Attributable to equity holders of the Bank |
184,812 |
370,851 |
359,151 |
186,898 |
Attributable to non-controlling interests |
82 |
249 |
305 |
553 |
(*) Other administrative expenses includes tax on certain financial institutions and Bank Guarantee Fund fee.
Consolidated income statement for 2019 - Provided for comparability purposes.
(in PLN thousand)
|
Q4 2019 |
Q3 2019 |
Q2 2019 |
Q1 2019 |
Interest income |
1,722,641 |
1,703,631 |
1,668,660 |
1,597,982 |
Interest income calculated using the effective interest method |
1,660,906 |
1,633,256 |
1,603,554 |
1,537,349 |
Financial assets measured at amortised cost |
1,504,302 |
1,474,538 |
1,436,541 |
1,377,505 |
Financial assets measured at fair value through other comprehensive income |
156,604 |
158,718 |
167,013 |
159,844 |
Other interest income related to financial assets measured at fair value through profit or loss |
61,735 |
70,375 |
65,106 |
60,633 |
Interest expense |
(303,969) |
(312,201) |
(311,112) |
(297,586) |
Net interest income |
1,418,672 |
1,391,430 |
1,357,548 |
1,300,396 |
Fee and commission income |
758,856 |
743,649 |
725,062 |
684,885 |
Fee and commission expense |
(104,230) |
(100,872) |
(92,380) |
(81,306) |
Net fee and commission income |
654,626 |
642,777 |
632,682 |
603,579 |
Dividend income |
220 |
535 |
21,266 |
386 |
Result on financial assets and liabilities measured at fair value through profit or loss and foreign exchange result |
74,393 |
20,752 |
31,063 |
17,663 |
Result on fair value hedge accounting |
2,010 |
(1,972) |
(728) |
(976) |
Result on derecognition of financial assets and liabilities not measured at fair value through profit or loss |
32,447 |
19,592 |
8,430 |
11,432 |
Net allowances for expected credit losses |
(232,654) |
(176,463) |
(177,238) |
(109,683) |
Operating income |
55,835 |
30,352 |
31,250 |
25,007 |
Operating expenses |
(39,290) |
(40,934) |
(8,004) |
(10,710) |
Administrative expenses |
(908,456) |
(905,268) |
(993,200) |
(1,272,061) |
Personnel expenses |
(509,580) |
(502,264) |
(586,428) |
(479,424) |
Other administrative expenses |
(398,876) |
(403,004) |
(406,772) |
(792,637) |
Depreciation and amortization |
(125,416) |
(123,578) |
(126,576) |
(128,647) |
PROFIT BEFORE INCOME TAX |
932,387 |
857,223 |
776,493 |
436,386 |
Income tax expense |
(248,662) |
(200,329) |
(193,560) |
(193,321) |
NET PROFIT |
683,725 |
656,894 |
582,933 |
243,065 |
Attributable to equity holders of the Bank |
684,386 |
656,214 |
582,106 |
242,341 |
Attributable to non-controlling interests |
(661) |
680 |
827 |
724 |
(*) Other administrative expenses includes tax on certain financial institutions and Bank Guarantee Fund fee.
Consolidated statement of comprehensive income for 2020
(in PLN thousand)
|
Q4 2020 |
Q3 2020 |
Q2 2020 |
Q1 2020 |
Net profit |
184,894 |
371,100 |
359,456 |
187,451 |
Other comprehensive income |
- |
|
|
|
Item that are or may be reclassified subsequently to profit or loss: |
- |
|
|
|
Change in fair value of financial assets measured at fair value through other comprehensive income: |
196,774 |
124,982 |
525,077 |
(161,105) |
Profit or loss on fair value measurement |
201,032 |
130,304 |
548,841 |
(147,666) |
Profit or loss reclassification to income statement after derecognition |
(4,258) |
(5,322) |
(23,764) |
(13,439) |
Change in fair value of cash flow hedges |
(71,505) |
4,332 |
118,954 |
414,935 |
Tax on items that are or may be reclassified subsequently to profit or loss |
(23,800) |
(24,570) |
(122,366) |
(48,228) |
Items that will never be reclassified to profit or loss: |
- |
|
|
|
Effects of the revaluation or sale of investments in equity instruments designated at fair value through other comprehensive |
84,005 |
(6,572) |
21,880 |
(11,233) |
Remeasurements of the defined benefit liabilities |
(10,672) |
- |
- |
- |
Tax on items that will never be reclassified to profit or loss |
(13,878) |
1,249 |
(4,157) |
2,134 |
Other comprehensive income (net of tax) |
160,924 |
99,421 |
539,388 |
196,503 |
Total comprehensive income |
345,818 |
470,521 |
898,844 |
383,954 |
Attributable to equity holders of the Bank |
345,745 |
470,272 |
898,539 |
383,401 |
Attributable to non-controlling interests |
73 |
249 |
305 |
553 |
Consolidated statement of comprehensive income for 2019
(in PLN thousand)
|
Q4 2019 |
Q3 2019 |
Q2 2019 |
Q1 2019 |
Net profit |
683,725 |
656,894 |
582,933 |
243,065 |
Other comprehensive income |
|
|
|
|
Item that are or may be reclassified subsequently to profit or loss: |
|
|
|
|
Change in fair value of financial assets measured at fair value through other comprehensive income: |
(39,335) |
54,837 |
123,334 |
(9,750) |
Profit or loss on fair value measurement |
(10,426) |
69,776 |
130,615 |
1,806 |
Profit or loss reclassification to income statement after derecognition |
(28,909) |
(14,939) |
(7,281) |
(11,556) |
Change in fair value of cash flow hedges |
(76,199) |
59,352 |
27,302 |
64,768 |
Tax on items that are or may be reclassified subsequently to profit or loss |
21,952 |
(21,696) |
(28,621) |
(10,453) |
Items that will never be reclassified to profit or loss: |
|
|
|
|
Effects of the revaluation or sale of investments in equity instruments designated at fair value through other comprehensive |
(17,025) |
(7,795) |
16,556 |
802 |
Remeasurements of the defined benefit liabilities |
(2,783) |
- |
- |
- |
Tax on items that will never be reclassified to profit or loss |
3,763 |
1,481 |
(3,146) |
(152) |
Other comprehensive income (net of tax) |
(109,627) |
86,179 |
135,425 |
45,215 |
Total comprehensive income |
574,098 |
743,073 |
718,358 |
288,280 |
Attributable to equity holders of the Bank |
574,767 |
742,393 |
717,531 |
287,556 |
Attributable to non-controlling interests |
(669) |
680 |
827 |
724 |
Consolidated income statement for 2020
(in PLN thousand)
Q4 2020 |
Q3 2020 |
Q2 2020 |
Q1 2020 |
|
Net interest income |
1,205,161 |
1,203,052 |
1,365,548 |
1,428,251 |
Net fee and commission income |
656,300 |
595,109 |
567,847 |
614,394 |
Dividend income |
7 |
268 |
25,748 |
255 |
Trading result |
95,693 |
30,733 |
74,744 |
29,654 |
Net other operating income and expenses |
(65,275) |
(5,990) |
(7,879) |
(787) |
Net non-interest income |
686,725 |
620,120 |
660,460 |
643,516 |
Operating income |
1,891,886 |
1,823,172 |
2,026,008 |
2,071,767 |
Operating costs |
(830,682) |
(805,887) |
(831,712) |
(999,628) |
Gross operating profit |
1,061,204 |
1,017,285 |
1,194,296 |
1,072,139 |
Net allowances for expected credit losses |
(496,153) |
(277,387) |
(474,010) |
(330,910) |
Net operating profit |
565,051 |
739,898 |
720,286 |
741,229 |
Bank Guarantee Fund fee |
(43,913) |
(43,162) |
(43,081) |
(250,703) |
Tax on certain financial institutions |
(165,694) |
(168,547) |
(169,843) |
(156,506) |
Profit before income tax |
355,444 |
528,189 |
507,362 |
334,020 |
Income tax expense |
(170,550) |
(157,089) |
(147,906) |
(146,569) |
Net profit |
184,894 |
371,100 |
359,456 |
187,451 |
Attributable to equity holders of the Bank |
184,812 |
370,851 |
359,151 |
186,898 |
Attributable to non-controlling interest |
82 |
249 |
305 |
553 |
Consolidated income statement for 2019
(in PLN thousand)
|
Q4 2019 |
Q3 2019 |
Q2 2019 |
Q1 2019 |
Net interest income |
1,418,672 |
1,391,430 |
1,357,548 |
1,300,396 |
Net fee and commission income |
654,626 |
642,777 |
632,682 |
603,579 |
Dividend income |
220 |
535 |
21,266 |
386 |
Trading result |
108,850 |
38,372 |
38,765 |
28,119 |
Net other operating income and expenses |
16,545 |
(10,582) |
23,246 |
14,297 |
Net non-interest income |
780,241 |
671,102 |
715,959 |
646,381 |
Operating income |
2,198,913 |
2,062,532 |
2,073,507 |
1,946,777 |
Operating costs |
(864,770) |
(862,737) |
(950,881) |
(858,685) |
Gross operating profit |
1,334,143 |
1,199,795 |
1,122,626 |
1,088,092 |
Net allowances for expected credit losses |
(232,654) |
(176,463) |
(177,238) |
(109,683) |
Net operating profit |
1,101,489 |
1,023,332 |
945,388 |
978,409 |
Bank Guarantee Fund fee |
(20,562) |
(20,530) |
(20,472) |
(393,162) |
Tax on certain financial institutions |
(148,540) |
(145,579) |
(148,423) |
(148,861) |
Profit before income tax |
932,387 |
857,223 |
776,493 |
436,386 |
Income tax expense |
(248,662) |
(200,329) |
(193,560) |
(193,321) |
Net profit |
683,725 |
656,894 |
582,933 |
243,065 |
Attributable to equity holders of the Bank |
684,386 |
656,214 |
582,106 |
242,341 |
Attributable to non-controlling interest |
(661) |
680 |
827 |
724 |
Consolidated income statement for 2020
INCOME STATEMENT – PRESENTATION FORM's ITEMS |
LONG FORM'S ITEMS RECLASSIFFIED TO PRESENTATION FORM |
2020 |
Net interest income |
Net interest income |
5,202,012 |
Net fee and commission income |
Net fee and commission income |
2,433,650 |
Dividend income |
Dividend income |
26,278 |
Trading result |
- |
230,824 |
|
Net result on other financial instruments at fair value through profit and loss |
170,539 |
|
Result on fair value hedge accounting |
(847) |
|
(Gains) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss |
61,132 |
Net other operating income and expenses |
Net other operating income and expenses |
(79,931) |
|
Operating income |
68,180 |
|
Operating expenses |
(148,111) |
Net non-interest income |
- |
2,610,821 |
Operating income |
- |
7,812,833 |
Operating costs |
- |
(3,467,909) |
|
Personnel expenses |
(2,039,866) |
|
Other administrative expenses |
(1,930,541) |
|
less – Bank Guarantee Fund fee |
380,859 |
|
less – Tax on certain financial institutions |
660,590 |
|
Depreciation and amortization |
(538,951) |
Gross operating profit |
- |
4,344,924 |
Net allowances for expected credit losses |
Net allowances for expected credit losses |
(1,578,460) |
Net operating profit |
- |
2,766,464 |
Bank Guarantee Fund fee |
Bank Guarantee Fund fee |
(380,859) |
Tax on certain financial institutions |
Tax on certain financial institutions |
(660,590) |
Profit before income tax |
Profit before income tax |
1,725,015 |
Income tax expense |
Income tax expense |
(622,114) |
Net profit for the period |
Net profit for the period |
1,102,901 |
Attributable to equity holders of the Bank |
Attributable to equity holders of the Bank |
1,101,712 |
Attributable to non-controlling interest |
Attributable to non-controlling interest |
1,189 |
Consolidated income statement for 2019
INCOME STATEMENT – PRESENTATION FORM's ITEMS |
LONG FORM'S ITEMS RECLASSIFFIED TO PRESENTATION FORM |
2019 |
Net interest income |
Net interest income |
5,468,046 |
Net fee and commission income |
Net fee and commission income |
2,533,664 |
Dividend income |
Dividend income |
22,407 |
Trading result |
- |
214,106 |
|
Net result on other financial instruments at fair value through profit and loss |
143,871 |
|
Result on fair value hedge accounting |
(1,666) |
|
(Gains) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss |
71,901 |
Net other operating income and expenses |
Net other operating income and expenses |
43,506 |
|
Operating income |
142,444 |
|
Operating expenses |
(98,938) |
Net non-interest income |
- |
2,813,683 |
Operating income |
- |
8,281,729 |
Operating costs |
- |
(3,537,073) |
|
Personnel expenses |
(2,077,696) |
|
Other administrative expenses |
(2,001,289) |
|
less – Bank Guarantee Fund fee |
454,726 |
|
less – Tax on certain financial institutions |
591,403 |
|
Depreciation and amortization |
(504,217) |
Gross operating profit |
- |
4,744,656 |
Net allowances for expected credit losses |
Net allowances for expected credit losses |
(696,038) |
Net operating profit |
- |
4,048,618 |
Bank Guarantee Fund fee |
Bank Guarantee Fund fee |
(454,726) |
Tax on certain financial institutions |
Tax on certain financial institutions |
(591,403) |
Profit before income tax |
Profit before income tax |
3,002,489 |
Income tax expense |
Income tax expense |
(835,872) |
Net profit for the period |
Net profit for the period |
2,166,617 |
Attributable to equity holders of the Bank |
Attributable to equity holders of the Bank |
2,165,047 |
Attributable to non-controlling interest |
Attributable to non-controlling interest |
1,570 |
Unconsolidated income statement containing cumulated items for the period from 1 January to 31 December, 2020 and 2019 respectively is presented in the Unconsolidated Financial Statements of Bank Pekao S.A. for the period ended on 31 December 2020.
Below presented statement of financial position in a short form and income statement in a presentation form as well as the key, selected items from these statements are discussed.
Net profit of the Bank Pekao S.A. in 2020 amounted to PLN 1,126.4 million and was lower by PLN 1,121.1 million i.e. 49.9% y/y, mainly due to higher write-offs for impairment of financial assets, related to the COVID-19 coronavirus pandemic (about PLN 672 million impact on net profit).
(in PLN million)
|
2020 |
2019 |
Change |
Net interest income |
5,028.4 |
5,309.6 |
(5.3%) |
Net fee and commission income |
2,055.8 |
2,080.3 |
(1.2%) |
Dividend income |
236.7 |
291.4 |
(18.8%) |
Trading result |
217.9 |
197.7 |
10.2% |
Net other operating income and expenses (*) |
(63.0) |
8.0 |
>100% |
Net non-interest income (*) |
2,447.3 |
2,577.4 |
(5.0%) |
Operating income (*) |
7,475.8 |
7,887.0 |
(5.2%) |
Operating costs |
(3,190.8) |
(3,203.6) |
(0.4%) |
Gross operating profit (*) |
4,285.0 |
4,683.4 |
(8.5%) |
Net allowances for expected credit losses |
(1,549.5) |
(624.1) |
>100% |
Net operating profit |
2,735.5 |
4,059.3 |
(32.6%) |
Bank Guarantee Fund fee |
(378.5) |
(452.1) |
(16.3%) |
Tax on certain financial institutions |
(660.6) |
(591.4) |
11.7% |
Net result on investment activities |
0.8 |
0.0 |
x |
Profit before tax |
1,697.2 |
3,015.8 |
(43.7%) |
Income tax expense |
(570.8) |
(768.3) |
(25.7%) |
Net profit |
1,126.4 |
2,247.5 |
(49.9%) |
(*) Starting from the first quarter of 2020 the Group made changes in the presentation of selected items of the income statement. The items: ‘Net result on other provisions, and ‘Gains (losses) on disposal of property, plant and equipment and intangible assets, are presented in the line ‘Net other operating income and expenses’ (and thus in net non-interest income, operating income, gross operating profit and net operating profit). The above-mentioned changes resulted in restatement of comparable data, but without impact on the net profit for the period. In order to ensure comparability, data for 2019 have been restated in comparison to those previously published.
Operating income
In 2020, the operating income amounted to PLN 7 475,8 million and was lower by 5.2% in comparison with the 2019, mainly due to the negative impact of the economic situation including interest rate cuts, and lower customer activity.
Total net interest income
(in PLN million)
|
2020 |
2019 |
Change |
Interest income |
5,576.2 |
6,420.3 |
(13.1%) |
Interest expense |
(547.8) |
(1,110.7) |
(50.7%) |
of which on leasing |
(11.7) |
(16.6) |
(29.5%) |
Net interest income |
5,028.4 |
5,309.6 |
(5.3%) |
Net interest income in 2020, amounted to PLN 5 028,4 million and was lower by PLN 281.2 million, i.e. 5.3% compared to 2019, mainly due to the negative impact of interest rate cuts.
Interest income
In 2020, the interest income amounted to PLN 5,576.2 million and was lower by PLN 844.1 million y/y due to the negative impact of interest rate cuts on the interest rate of assets.
Interest expense
In 2020, the interest expense amounted to PLN 547.8 million and was lower by PLN 562.9 million y/y, mainly due to interest rate cuts, despite the strong increase in the volume of deposits.
Net interest margin
The interest margin achieved in 2020, amounted to 2.47% and was lower by 0.43 p.p., under the pressure of the negative impact of interest rate cuts and faster growth in deposits than in loans.
Net non-interest income
(in PLN million)
|
2020 |
2019 |
Change |
Fee and commission income |
2,519.6 |
2,453.7 |
2.7% |
Fee and commission expense |
(463.8) |
(373.4) |
24.2% |
Net fee and commission income |
2,055.8 |
2,080.3 |
(1.2%) |
Dividend income |
236.7 |
291.4 |
(18.8%) |
Trading result |
217.9 |
197.7 |
10.2% |
of which gains on derecognition of financial assets and liabilities not measured at fair value through profit or loss |
60.5 |
71.0 |
(14.8%) |
Net other operating income and expense |
(63.0) |
8.0 |
x |
Net non-interest income |
2,447.3 |
2,577.4 |
(5.0%) |
Net fee and commission income in 2020, amounted to PLN 2,055.8 million and was lower by PLN 24.5 million, i.e. 1.2% as compared with 2019, mainly due to lower customer activity due to the pandemic, which translated into lower commissions on card operations, investment funds and loans.
The table below presents the Group’s net fee and commission income divided according to the main areas of the activity.
(in PLN million)
|
2020 |
2019 |
Change |
Net fee and commission income |
2,055.8 |
2,080.3 |
(1.2%) |
on loans |
409.7 |
446.1 |
(8.2%) |
on cards |
260.3 |
346.2 |
(24.8%) |
on mutual funds |
132.8 |
121.9 |
8.9% |
on brokerage activate |
87.5 |
20.5 |
326.8% |
on margins on foreign exchange transactions with clients |
527.9 |
491.8 |
7.3% |
other |
637.6 |
653.8 |
(2.5%) |
Operating costs
In 2020, operating costs including contributions and payments to the Bank Guarantee Fund, amounted to PLN 3,569.3 million and were lower by PLN 86.4 million, i.e. 2.4% as compared with 2019.
The operating costs excluding restructuring provision amounted to PLN 3,056.1 million and were lower by 2.0% y/y, below inflation and despite the costs of investments in operational transformation and digitization and additional costs associated with the coronavirus pandemic. Nominal costs were lower by PLN 13.0 million, i.e. 0.4% compared to the costs achieved in 2019.
(in PLN million)
|
2020 |
2019 |
Change |
Personnel expenses (*) |
(1,684.2) |
(1,738.3) |
(3.1%) |
Other administrative expenses (**) |
(875.9) |
(919.5) |
(4.7%) |
of which Financial supervision authority fee (PFSA) |
(24.2) |
(16.5) |
46.7% |
Depreciation and amortization |
(496.0) |
(460.9) |
7.6% |
Operating costs excluding restructuring provision |
(3,056.1) |
(3,118.7) |
(2.0%) |
Provisions for FTEs restructuring |
(120.0) |
(85.0) |
41.2% |
Network restructuring |
(14.7) |
- |
x |
Operating costs |
(3,190.8) |
(3,203.7) |
(0.4%) |
(*) Excluding restructuring provision.
(**) Excluding network restructuring.
In 2020, cost / income ratio excluding restructuring provision amounted to 40.8% and was higher by 1.3 p.p. y/y.
As of 31 December 2020, the Bank employed 12,870 employees as compared to 13,779 employees as at the end of December 2019.
Bank Guarantee Fund fee
Bank Guarantee Fund fee in the 2020, amounted to PLN 378.5 million, an decrease of PLN 73.6 million, i.e. in comparison with of 2019.
Tax on certain financial institutions
Tax on certain financial institutions in 2020 amounted to PLN 660.6 million and was higher by PLN 69.3 million, i.e. 11.7% compared to 2019, due to an increase in Bank’s assets.
Net allowances for expected credit losses
(in PLN million)
|
2020 |
2019 |
Change |
financial assets measured at amortized cost |
(1,363.7) |
(560.7) |
> 100% |
financial assets measured at fair value through other comprehensive income |
(46.2) |
(10.7) |
> 100% |
financial liabilities measured at amortized cost |
(139.6) |
(52.7) |
> 100% |
Net allowances for expected credit losses |
(1,549.5) |
(624.1) |
> 100% |
The Group’s Net allowances for expected credit losses amounted to PLN 1,549.5 million in 2020, and was more than twice as compared with 2019, due to the creation of impairment related to the COVID-19 virus pandemic in accordance with IFRS 9.
Impairment losses for financial assets related to the COVID-19 coronavirus pandemic were created based on the forecasted deterioration of the risk parameters of the loan portfolio in the amount of ca. PLN 830 million and estimated based on macroeconomic scenarios assuming an economic recession in Poland in 2020.
Costs of risk
The costs of risk in 2020 amounted to 1.03% and was higher by 0.60 p.p. y/y, due to the creation of loan loss provisions related to the COVID-19 pandemic.
The table below presents the Bank’s statement of financial position – short form.
Assets |
31.12.2020 |
31.12.2019 |
change |
||
PLN million |
structure |
PLN million |
structure |
||
Cash and due from Central Bank |
4,456.3 |
2.0% |
5,138.8 |
2.6% |
(13.3%) |
Loans and advances to banks |
2,917.8 |
1.3% |
2,243.9 |
1.2% |
30.0% |
Loans and advances to customers(*) |
139,926.1 |
62.9% |
142,146.0 |
73.0% |
(1.6%) |
Reverse repo transactions |
280.6 |
0.1% |
502.3 |
73.0% |
(44.1%) |
Securities(**) |
62,791.0 |
28.2% |
36,179.9 |
18.6% |
73.6% |
Investments in subsidiaries |
1,542.8 |
0.7% |
1,626.4 |
0.8% |
(5.1%) |
Property. plant and equipment and intangible assets |
2,974.0 |
1.3% |
2,582.2 |
1.3% |
15.2% |
Other assets |
7,492.4 |
3.4% |
4,230.5 |
2.2% |
77.1% |
Total assets |
222,381.0 |
100.0% |
194,650.0 |
100.0% |
14.2% |
(*) Including non-treasury debt securities.
(**) Including financial assets held for trading, other financial instruments at fair value through profit and loss and excluding non-treasury debt securities.
EQUITY AND liabilities |
31.12.2020 |
31.12.2019 |
change |
||
PLN million |
structure |
PLN million |
structure |
||
Amounts due to Central Bank |
0.0 |
0.0% |
4.5 |
0.0% |
x |
Amounts due to other banks |
5,225.5 |
2.4% |
3,044.0 |
1.6% |
71.7% |
Amounts due to customers |
178,276.4 |
80.2% |
157,750.4 |
81.0% |
13.0% |
Debt securities issued |
523.3 |
0.2% |
1,604.3 |
0.8% |
(67.4%) |
Subordinated liabilities |
2,757.9 |
1.2% |
2,764.5 |
1.4% |
(0.2%) |
Repo transactions |
152.6 |
0.1% |
379.8 |
0.2% |
(59.8%) |
Lease liabilities |
398.3 |
0.2% |
414.5 |
0.2% |
(3.9%) |
Other liabilities |
10,399.6 |
4.7% |
6,161.3 |
3.2% |
68.8% |
Equity |
24,647.4 |
11.1% |
22,526.7 |
11.6% |
9.4% |
Total equity and liabilities |
222,381.0 |
100.0% |
194,650.0 |
100.0% |
14.2% |
Changes in the structure of assets
Loans and advances to customers and securities represent items of the largest value under assets. As at the end of 2020, they accounted for 62.9% and 28.2% of the total assets respectively in comparison with 73.0% and 18.6% respectively as at the end of 2019.
Cash and due from Central Bank
(in PLN million)
|
31.12.2020 |
31.12.2019 |
change |
Cash and due from Central Bank, including: |
4,456.3 |
5,138.9 |
(13.3%) |
Cash |
4,306.1 |
3,037.0 |
41.8% |
Current account at Central Bank |
150.2 |
2,102.0 |
(92.9%) |
Other |
0.0 |
0.0 |
- |
Customers’ Financing
Customer structure of loans and advances
(in PLN million)
|
31.12.2020 |
31.12.2019 |
CHANGE |
Loans and advances at nominal value (*) |
145,894.8 |
147,429.0 |
(1.0%) |
Loans and investments in financial leases |
134,382.1 |
136,430.1 |
(1.5%) |
Retail |
77,751.1 |
75,776.2 |
2.6% |
Corporate |
56,631.0 |
60,653.9 |
(6.6%) |
Non-treasury debt securities |
11,512.7 |
10,998.9 |
4.7% |
Other(**) |
1,053.8 |
1,068.4 |
(1.4%) |
Impairment allowances |
(7,022.5) |
(6,351.4) |
10.6% |
Total net receivables |
139,926.1 |
142,146.0 |
(1.6%) |
Reverse repo transactions |
280.5 |
502.3 |
x |
Total Customers’ financing (***) |
146,175.3 |
147,931.3 |
(1.2%) |
(*) Excluding reverse repo transactions.
(**) Including interest and receivables in transit.
(***) Total customers’ financing includes loans and advances at nominal value, securities issued by non-monetary entities and reverse repo transactions.
As at the end of December 2020, loans and advances at nominal value amounted to PLN 145,894.8 million, an decrease of PLN 1,534.2 million, i.e. 1.0% in comparison to the end of December 2019.
As at the end of December 2020, the volume of retail loans amounted to PLN 77,751.1 million, an increase of PLN 1,974.9 million, i.e. 2.6% in comparison to the end of December 2019, thanks to dynamic growth of PLN mortgage loans by 5.4% y/y.
As at the end of December 2020, corporate loans and non-treasury debt securities amounted to PLN 68,143,7 million, an decrease of PLN 3,509.1 million, i.e. 4.9% in comparison to the end of December 2019, however, with the growth recorded in the segment of medium-sized enterprises (4.5% y/y) and leasing receivables.
Receivables and impairment losses(*)
(in PLN million)
|
31.12.2020 |
31.12.2019 |
CHANGE |
Gross receivables |
146,948.6 |
148,497.4 |
(1.0%) |
Stage 1 |
113,200.1 |
120,679.5 |
(6.2%) |
Stage 2 |
25,772.7 |
20,144.5 |
27.9% |
Stage 3 |
7,975.8 |
7,673.4 |
3.9% |
Impairment allowances |
(7,022.5) |
(6,351.4) |
10.6% |
Stage 1 |
(418.8) |
(340.8) |
22.9% |
Stage 2 |
(1,145.1) |
(720.0) |
59.0% |
Stage 3 |
(5,458.6) |
(5,290.6) |
3.2% |
Total net receivables |
139,926.1 |
142,146.0 |
(1.6%) |
(*) Including non-treasury debt securities, interest and receivables in transit and excluding reverse repo transactions.
As at the end of December 2019 the ratio of impaired receivables (stage 3) to the gross receivables amounted to 5.4%.
The increase in Stage 2 was the result of an industry review and other activities of a similar nature, mainly due to the pandemic and related restrictions in the functioning of the economy.
Loans and advances to customers by currency(*)
|
31.12.2020 |
31.12.2019 |
change |
||
PLN million |
structure |
PLN million |
structure |
||
Denominated in PLN |
121,376.6 |
82.6% |
124,286.7 |
83.7% |
(2.3%) |
Denominated in foreign currencies(**) |
25,572.0 |
17.4% |
24,210.7 |
16.3% |
5.6% |
Total |
146,948.6 |
100.0% |
148,497.4 |
100.0% |
(1.0%) |
Impairment allowances |
(7,022.5) |
x |
(6,351.4) |
x |
10.6% |
Total net |
139,926.2 |
x |
142,146.0 |
x |
(1.6%) |
(*) Including non-treasury debt securities, interest and receivables in transit and excluding reverse repo transactions.
(**) Including indexed loans.
The currency structure of loans and advances to customers is dominated by amounts expressed in the Polish złoty; as at the end of December 2020, their share was 82.6%. The largest portion of foreign currency loans and advances to customers were represented by those denominated in EUR (69.8%), CHF (16.1%) and USD (5.8%).
Loans and advances to customers by contractual maturities(*)
|
31.12.2020 |
31.12.2019 |
change |
||
PLN million |
structure |
PLN million |
structure |
||
Current and up to 1 month |
13,147.5 |
8.9% |
15,480.0 |
10.4% |
(15.1%) |
1 to 3 months |
3,823.6 |
2.6% |
4,356.2 |
2.9% |
(12.2%) |
3 months to 1 year |
15,570.6 |
10.6% |
14,548.1 |
9.8% |
7.0% |
1 to 5 years |
49,314.5 |
33.6% |
48,032.8 |
32.3% |
2.7% |
Over 5 years |
60,423.2 |
41.1% |
61,093.8 |
41.1% |
(1.1%) |
Past due |
3,615.4 |
2.5% |
3,918.2 |
2.6% |
(7.7%) |
Other |
1,053.8 |
0.7% |
1,068.4 |
0.7% |
(1.4%) |
Total |
146,948.6 |
100.0% |
148,497.4 |
100.0% |
(1.0%) |
Impairment allowances |
(7,022.5) |
x |
(6,351.4) |
x |
10.6% |
Total net |
139,926.1 |
x |
142,146.0 |
x |
(1.6%) |
(*) Including non-treasury debt securities, interest and receivables in transit and excluding reverse repo transactions.
As at the end of December 2019, loans and advances with maturity over 5 years represents 41.1% of total loans and advances (mainly attributed to mortgage loans, investment loans, and non-treasury debt securities).
Information on loan concentration is included in the Note 26 to the Unconsolidated Financial Statements of Bank Pekao S.A. for the year ended on 31 December 2020.
Changes in the structure of liabilities
Amounts due to customers were the main item under the Bank’s liabilities and equity. As at the end of 2020, amounts due to customers, debt securities issued and subordinated liabilities totaled PLN 181 557,6 million, and their share in the total assets was 81.6%, compared with 83.3% as at the end of 2019. The share of total shareholder’s equity in the total assets was 11.1% as at the end of 2020, compared with 11.6% as at the end of 2019.
External sources of financing
(in PLN million)
|
31.12.2020 |
31.12.2019 |
CHANGE |
Amounts due to Central Bank |
0.0 |
4.5 |
x |
Amounts due to other banks |
5,225.5 |
3,044.0 |
71.7% |
Amounts due to customers |
178,276.4 |
157,750.4 |
13.0% |
Debt securities issued |
523.3 |
1,604.3 |
(67.4%) |
Subordinated liabilities |
2,757.9 |
2,764.5 |
(0.2%) |
Repo transactions |
152.6 |
379.8 |
(59.8%) |
Total external sources of financing |
186,935.7 |
165,547.5 |
12.9% |
Amounts due to customers amounted to PLN 178 276,4 million, an increase by 13.0% to significant extent contributed to dynamic increase in loans.
The deposit base is widely diversified and is sourced from retail and corporate customers. In addition, the Bank uses also funds borrowed on the interbank market. The Bank is not dependent on any single customer nor group of customers.
As at the end of 2020, the geographical structure of deposits acquired through the Bank’s domestic branches was as follows:
REGION |
% of total deposits |
Warszawski |
28.0% |
Małopolski |
12.5% |
Południowo-Wschodni |
12.3% |
Centralny |
11.4% |
Mazowiecki |
11.0% |
Pomorski |
8.8% |
Śląski |
8.7% |
Zachodni |
7.4% |
Total |
100.0% |
Amounts due to customers and debt securities issued
(in PLN million)
|
31.12.2020 |
31.12.2019 |
CHANGE |
|||
Corporate deposits |
72,196.1 |
65,617.4 |
10.0% |
|||
Non-financial entities |
54,778.7 |
47,139.4 |
16.2% |
|||
Non-banking financial entities |
5,135.8 |
7,562.6 |
(32.1%) |
|||
Budget entities |
12,281.6 |
10,915.4 |
12.5% |
|||
Retail deposits |
105,734.2 |
91,716.0 |
15.3% |
|||
Other(*) |
346.1 |
417.0 |
(17.0%) |
|||
Amounts due to customers(**) |
178,276.4 |
157,750.4 |
13.0% |
|||
Debt securities issued of which |
3,281.2 |
4,368.8 |
(24.9%) |
|||
Structured Certificates of Deposit (SCD) |
523.3 |
831.3 |
(37.1%) |
|||
Certificates of Deposit (CD) |
0.0 |
767.0 |
x |
|||
Subordinated bonds |
2,750.0 |
2,750.0 |
0.0% |
|||
Interest |
7.9 |
20.5 |
(61.5%) |
|||
Amounts due to customers and debt securities issued(**) |
181,557.6 |
162,119.2 |
12.0% |
|||
Repo transactions |
152.6 |
379.8 |
(59.8%) |
|||
Lease liabilities |
398.3 |
414.5 |
(3.9%) |
|||
Amounts due to customers and debt securities issued, total(***) |
182,108.5 |
162,913.5 |
11.8% |
|||
|
|
|
|
|||
Investment funds of Pekao TFI S.A. (ex. Pioneer Pekao TFI) |
19,347.8 |
21,584.0 |
(10.4%) |
|||
including distributed through the Bank’s network |
18,049.3 |
20,239.9 |
(10.8%) |
|||
(*) Other item includes interest and funds in transit.
(**) Excluding repo transactions and lease liabilities.
(***) Including repo transactions and lease liabilities.
As at the end of December 2020, amounts due to the Group’s customers and debt securities issued amounted to PLN 181,557.6 million, an increase of PLN 19,438.4 million, i.e. 12.0% in comparison to the end of December 2019.
The total volume of retail deposits, Structured Certificates of Deposit and other amounted to PLN 106,577.8 million as at the end of December 2020, an increase of PLN 13,638.2 million, i.e. 14.7% in comparison to the end of December 2019 and they increased their share in the structure of financing.
The total volume of corporate deposits, Certificates of Deposit, subordinated bonds, interest and other amounted to PLN 74,979.8 million as at the end December 2020, an increase of PLN 5,800.2 million, i.e. 8.4% as compared to the end of December 2019.
The value of net assets of investment funds managed by Pekao TFI S.A. amounted to PLN 19,347.8 million as at the end of December 2020, an decrease of PLN 2,236.2 million, i.e. 10.4% in comparison to the end of December 2019. The decrease occurred mainly in March and was related with a pandemic situation in the country and abroad.
Amounts due to customers by currency(*)
|
31.12.2020 |
31.12.2019 |
change |
||
PLN million |
structure |
PLN million |
structure |
||
Denominated in PLN |
149,871.7 |
84.1% |
130,529.8 |
82.7% |
14.8% |
Denominated in foreign currencies |
28,404.7 |
15.9% |
27,220.6 |
17.3% |
4.4% |
Total |
178,276.4 |
100.0% |
157,750.4 |
100.0% |
13.0% |
(*) Including interest and amounts due in transit and excluding repo transactions and lease liabilities.
The bulk of the amounts due to customers are denominated in the Polish currency and its share as at the end of December 2020 amounted to 84.1%. The majority of amounts due to customers denominated in foreign currencies were in EUR (60.4%) and USD (32.8%).
Amounts due to customers by contractual maturities(*)
|
31.12.2020 |
31.12.2019 |
change |
||
PLN million |
structure |
PLN million |
structure |
||
Current accounts and overnight deposits |
157,542.1 |
88.5% |
109,879.7 |
69.8% |
43.4% |
Term deposits |
20,388.2 |
11.5% |
47,453.5 |
30.2% |
(57.0%) |
Total deposits |
177,930.3 |
100.0% |
157,333.3 |
100.0% |
13.1% |
Interest accrued |
46.2 |
x |
176.6 |
x |
(73.8%) |
Funds in transit |
299.8 |
x |
240.4 |
x |
24.7% |
Total |
178,276.4 |
x |
157,750.4 |
x |
13.0% |
(*) Excluding repo transactions and lease liabilities.
Provisions, deferred tax assets and liabilities
(mln zł)
|
31.12.2020 |
31.12.2019 |
change |
Total provisions |
1,052.8 |
764.1 |
37.8% |
of which: |
|
|
|
provisions for off-balance sheet commitments |
468.2 |
303.8 |
54.1% |
provisions for liabilities to employees |
417.7 |
372.3 |
12.2% |
other provisions |
166.9 |
88.0 |
89.7% |
Deferred tax liabilities |
- |
- |
x |
Deferred tax assets |
940.0 |
849.9 |
10.6% |
Unonsolidated income statement for 2020 - Provided for comparability purposes.
(in PLN thousand)
|
Q4 2020 |
Q3 2020 |
Q2 2020 |
Q1 2020 |
Interest income |
1,206,979 |
1,245,503 |
1,482,767 |
1,640,978 |
Interest income calculated using the effective interest method |
1,154,759 |
1,185,718 |
1,413,433 |
1,580,643 |
Financial assets measured at amortised cost |
1,003,989 |
1,028,651 |
1,248,876 |
1,422,403 |
Financial assets measured at fair value through other comprehensive income |
150,770 |
157,067 |
164,557 |
158,240 |
Other interest income related to financial assets measured at fair value through profit or loss |
52,220 |
59,785 |
69,334 |
60,335 |
Interest expense |
(54,109) |
(84,363) |
(155,095) |
(254,219) |
Net interest income |
1,152,870 |
1,161,140 |
1,327,672 |
1,386,759 |
Fee and commission income |
685,563 |
624,546 |
592,536 |
616,962 |
Fee and commission expense |
(134,823) |
(118,295) |
(107,211) |
(103,460) |
Net fee and commission income |
550,740 |
506,251 |
485,325 |
513,502 |
Dividend income |
62,555 |
269 |
173,601 |
255 |
Result on financial assets and liabilities measured at fair value through profit or loss and foreign exchange result |
82,081 |
24,486 |
49,085 |
2,533 |
Result on fair value hedge accounting |
22 |
(117) |
992 |
(1,744) |
Result on derecognition of financial assets and liabilities not measured at fair value through profit or loss |
12,285 |
4,672 |
22,901 |
20,685 |
Net allowances for expected credit losses |
(489,099) |
(272,363) |
(441,620) |
(346,415) |
Operating income |
17,799 |
17,292 |
15,124 |
17,301 |
Operating expenses |
(68,971) |
(21,154) |
(21,122) |
(19,299) |
Administrative expenses |
(842,183) |
(820,656) |
(851,599) |
(1,219,449) |
Personnel expenses |
(412,457) |
(402,861) |
(430,072) |
(558,846) |
Other administrative expenses |
(429,726) |
(417,795) |
(421,527) |
(660,603) |
Depreciation and amortization |
(129,991) |
(128,753) |
(124,142) |
(113,147) |
Gains (losses) on subsidiaries and associates |
(331) |
1,543 |
- |
(365) |
PROFIT BEFORE INCOME TAX |
347,777 |
472,610 |
636,217 |
240,616 |
Income tax expense |
(153,193) |
(146,492) |
(143,573) |
(127,538) |
NET PROFIT |
194,584 |
326,118 |
492,644 |
113,078 |
(*) Other administrative expenses includes tax on certain financial institutions and Bank Guarantee Fund fee.
Unconsolidated income statement for 2019 - Provided for comparability purposes.
(in PLN thousand)
|
Q4 2019 |
Q3 2019 |
Q2 2019 |
Q1 2019 |
Interest income |
1,637,892 |
1,637,893 |
1,604,572 |
1,539,945 |
Interest income calculated using the effective interest method |
1,575,036 |
1,566,120 |
1,538,089 |
1,478,637 |
Financial assets measured at amortised cost |
1,417,881 |
1,406,941 |
1,370,776 |
1,318,215 |
Financial assets measured at fair value through other comprehensive income |
157,155 |
159,179 |
167,313 |
160,422 |
Other interest income related to financial assets measured at fair value through profit or loss |
62,856 |
71,773 |
66,483 |
61,308 |
Interest expense |
(270,583) |
(284,334) |
(283,220) |
(272,543) |
Net interest income |
1,367,309 |
1,353,559 |
1,321,352 |
1,267,402 |
Fee and commission income |
651,335 |
627,550 |
607,582 |
567,187 |
Fee and commission expense |
(102,954) |
(98,628) |
(91,464) |
(80,335) |
Net fee and commission income |
548,381 |
528,922 |
516,118 |
486,852 |
Dividend income |
44,810 |
46,018 |
136,247 |
64,352 |
Result on financial assets and liabilities measured at fair value through profit or loss and foreign exchange result |
71,059 |
16,512 |
27,306 |
13,523 |
Result on fair value hedge accounting |
2,010 |
(1,972) |
(728) |
(976) |
Result on derecognition of financial assets and liabilities not measured at fair value through profit or loss |
32,439 |
19,044 |
8,259 |
11,211 |
Net allowances for expected credit losses |
(198,169) |
(162,786) |
(162,011) |
(101,141) |
Operating income |
28,989 |
21,196 |
26,537 |
21,347 |
Operating expenses |
(33,066) |
(38,745) |
(7,789) |
(10,475) |
Administrative expenses |
(841,995) |
(832,297) |
(917,704) |
(1,194,266) |
Personnel expenses |
(451,255) |
(436,845) |
(521,312) |
(413,845) |
Other administrative expenses |
(390,740) |
(395,452) |
(396,392) |
(780,421) |
Depreciation and amortization |
(117,332) |
(112,036) |
(114,549) |
(116,951) |
Gains (losses) on subsidiaries and associates |
- |
- |
- |
- |
PROFIT BEFORE INCOME TAX |
904,435 |
837,415 |
833,038 |
440,878 |
Income tax expense |
(223,503) |
(187,140) |
(176,101) |
(181,555) |
NET PROFIT |
680,932 |
650,275 |
656,937 |
259,323 |
(*) Other administrative expenses includes tax on certain financial institutions and Bank Guarantee Fund fee.
Unconsolidated statement of comprehensive income for 2020
(in PLN thousand)
Q4 2020 |
Q3 2020 |
Q2 2020 |
Q1 2020 |
|
Net profit |
194,584 |
326,118 |
492,644 |
113,078 |
Other comprehensive income |
- |
- |
- |
- |
Item that are or may be reclassified subsequently to profit or loss: |
- |
- |
- |
- |
Change in fair value of financial assets measured at fair value through other comprehensive income |
205,377 |
126,202 |
524,656 |
(160,001) |
Profit or loss on fair value measurement |
209,635 |
131,524 |
548,271 |
(147,002) |
Profit or loss reclassification to income statement after derecognition |
(4,258) |
(5,322) |
(23,615) |
(12,999) |
Change in fair value of cash flow hedges |
(71,505) |
4,332 |
118,954 |
414,935 |
Tax on items that are or may be reclassified subsequently to profit or loss |
(25,435) |
(24,802) |
(122,285) |
(48,438) |
Items that will never be reclassified to profit or loss: |
- |
- |
- |
- |
Effects of the revaluation or sale of investments in equity instruments designated at fair value through other comprehensive |
84,005 |
(6,572) |
21,880 |
(11,233) |
Remeasurements of the defined benefit liabilities |
(10,370) |
- |
- |
- |
Tax on items that will never be reclassified to profit or loss |
(13,991) |
1,249 |
(4,157) |
2,134 |
Other comprehensive income (net of tax) |
168,081 |
100,409 |
539,048 |
197,397 |
Total comprehensive income |
362,665 |
426,527 |
1,031,692 |
310,475 |
Unconsolidated statement of comprehensive income for 2019
(in PLN thousand)
|
Q4 2019 |
Q3 2019 |
Q2 2019 |
Q1 2019 |
Net profit |
680,932 |
650,275 |
656,937 |
259,323 |
Other comprehensive income |
- |
- |
- |
- |
Item that are or may be reclassified subsequently to profit or loss: |
- |
- |
- |
- |
Change in fair value of financial assets measured at fair value through other comprehensive income |
(40,626) |
57,091 |
122,947 |
(9,323) |
Profit or loss on fair value measurement |
(11,725) |
71,783 |
130,057 |
2,012 |
Profit or loss reclassification to income statement after derecognition |
(28,901) |
(14,692) |
(7,110) |
(11,335) |
Change in fair value of cash flow hedges |
(76,199) |
59,352 |
27,302 |
64,768 |
Tax on items that are or may be reclassified subsequently to profit or loss |
22,197 |
(22,124) |
(28,548) |
(10,534) |
Items that will never be reclassified to profit or loss: |
- |
- |
- |
- |
Effects of the revaluation or sale of investments in equity instruments designated at fair value through other comprehensive |
(17,025) |
(7,779) |
16,540 |
802 |
Remeasurements of the defined benefit liabilities |
(2,665) |
- |
- |
- |
Tax on items that will never be reclassified to profit or loss |
3,741 |
1,478 |
(3,143) |
(152) |
Other comprehensive income (net of tax) |
(110,577) |
88,018 |
135,098 |
45,561 |
Total comprehensive income |
570,355 |
738,293 |
792,035 |
304,884 |
Unconsolidated income statement for 2020
(in PLN thousand)
|
Q4 2020 |
Q3 2020 |
Q2 2020 |
Q1 2020 |
Net interest income |
1,152,870 |
1,161,140 |
1,327,672 |
1,386,759 |
Net fee and commission income |
550,740 |
506,251 |
485,325 |
513,502 |
Dividend income |
62,555 |
269 |
173,601 |
255 |
Trading result |
94,388 |
29,041 |
72,978 |
21,474 |
Net other operating income and expenses |
(51,172) |
(3,862) |
(5,998) |
(1,998) |
Net non-interest income |
656,511 |
531,699 |
725,906 |
533,233 |
Operating income |
1,809,381 |
1,692,839 |
2,053,578 |
1,919,992 |
Operating costs |
(762,568) |
(737,699) |
(762,818) |
(927,742) |
Gross operating profit |
1,046,813 |
955,140 |
1,290,760 |
992,250 |
Net allowances for expected credit losses |
(489,099) |
(272,363) |
(441,620) |
(346,415) |
Net operating profit |
557,714 |
682,777 |
849,140 |
645,835 |
Bank Guarantee Fund fee |
(43,912) |
(43,163) |
(43,080) |
(248,348) |
Tax on certain financial institutions |
(165,694) |
(168,547) |
(169,843) |
(156,506) |
Net result on investment activities |
(331) |
1,543 |
- |
(365) |
Profit before tax |
347,777 |
472,610 |
636,217 |
240,616 |
Income tax expense |
(153,193) |
(146,492) |
(143,573) |
(127,538) |
Net profit |
194,584 |
326,118 |
492,644 |
113,078 |
Unconsolidated income statement for 2019
(in PLN thousand)
|
Q4 2019 |
Q3 2019 |
Q2 2019 |
Q1 2019 |
Net interest income |
1,367,309 |
1,353,559 |
1,321,352 |
1,267,402 |
Net fee and commission income |
548,381 |
528,922 |
516,118 |
486,852 |
Dividend income |
44,810 |
46,018 |
136,247 |
64,352 |
Trading result |
105,508 |
33,584 |
34,837 |
23,758 |
Net other operating income and expenses |
(4,077) |
(17,549) |
18,748 |
10,872 |
Net non-interest income |
694,622 |
590,975 |
705,950 |
585,834 |
Operating income |
2,061,931 |
1,944,534 |
2,027,302 |
1,853,236 |
Operating costs |
(790,225) |
(778,224) |
(863,286) |
(771,851) |
Gross operating profit |
1,271,706 |
1,166,310 |
1,164,016 |
1,081,385 |
Net allowances for expected credit losses |
(198,169) |
(162,786) |
(162,011) |
(101,141) |
Net operating profit |
1,073,537 |
1,003,524 |
1,002,005 |
980,244 |
Bank Guarantee Fund fee |
(20,562) |
(20,530) |
(20,544) |
(390,505) |
Tax on certain financial institutions |
(148,540) |
(145,579) |
(148,423) |
(148,861) |
Net result on investment activities |
- |
- |
- |
- |
Profit before tax |
904,435 |
837,415 |
833,038 |
440,878 |
Income tax expense |
(223,503) |
(187,140) |
(176,101) |
(181,555) |
Net profit |
680,932 |
650,275 |
656,937 |
259,323 |
Unconsolidated income statement for 2020
(in PLN thousand)
INCOME STATEMENT – PRESENTATION FORM's ITEMS |
LONG FORM'S ITEMS RECLASSIFFIED TO PRESENTATION FORM |
2020 |
Net interest income |
Net interest income |
5,028,441 |
Net fee and commission income |
Net fee and commission income |
2,055,818 |
Dividend income |
Dividend income |
236,680 |
Trading result |
|
217,881 |
|
Net result on other financial instruments at fair value through profit and loss |
158,185 |
|
Result on fair value hedge accounting |
(847) |
|
(Gains) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss |
60,543 |
Net other operating income and expenses |
|
(63,030) |
|
Operating income |
67,516 |
|
Operating expenses |
(130,546) |
Net non-interest income |
|
2,447,349 |
Operating income |
|
7,475,790 |
Operating costs |
|
(3,190,827) |
|
Personnel expenses |
(1,804,236) |
|
Other administrative expenses |
(1,929,651) |
|
less – Bank Guarantee Fund fee |
378,503 |
|
less – Tax on certain financial institutions |
660,590 |
|
Depreciation and amortization |
(496,033) |
Gross operating profit |
|
4,284,963 |
Net allowances for expected credit losses |
Net allowances for expected credit losses |
(1,549,497) |
Net operating profit |
|
2,735,466 |
Bank Guarantee Fund fee |
Bank Guarantee Fund fee |
(378,503) |
Tax on certain financial institutions |
Tax on certain financial institutions |
(660,590) |
Net result on investment activities |
|
847 |
Profit before income tax |
|
1,697,220 |
Income tax expense |
Income tax expense |
(570,796) |
Net profit for the period |
Net profit for the period |
1,126,424 |
Unconsolidated income statement for 2019
(in PLN thousand)
INCOME STATEMENT – PRESENTATION FORM's ITEMS |
LONG FORM'S ITEMS RECLASSIFFIED TO PRESENTATION FORM |
2019 |
Net interest income |
Net interest income |
5,309,622 |
Net fee and commission income |
Net fee and commission income |
2,080,273 |
Dividend income |
Dividend income |
291,427 |
Trading result |
|
197,687 |
|
Net result on other financial instruments at fair value through profit and loss |
128,400 |
|
Result on fair value hedge accounting |
(1,666) |
|
(Gains) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss |
70,953 |
Net other operating income and expenses |
|
7,994 |
|
Operating income |
98,069 |
|
Operating expenses |
(90,075) |
Net non-interest income |
|
2,577,381 |
Operating income |
|
7,887,003 |
Operating costs |
|
(3,203,586) |
|
Personnel expenses |
(1,823,257) |
|
Other administrative expenses |
(1,963,005) |
|
less – Bank Guarantee Fund fee |
452,141 |
|
less – Tax on certain financial institutions |
591,403 |
|
Depreciation and amortization |
(460,868) |
Gross operating profit |
|
4,683,417 |
Net allowances for expected credit losses |
Net allowances for expected credit losses |
(624,107) |
Net operating profit |
|
4,059,310 |
Bank Guarantee Fund fee |
Bank Guarantee Fund fee |
(452,141) |
Tax on certain financial institutions |
Tax on certain financial institutions |
(591,403) |
Net result on investment activities |
|
- |
Profit before income tax |
|
3,015,766 |
Income tax expense |
Income tax expense |
(768,299) |
Net profit for the period |
Net profit for the period |
2,247,467 |
(in PLN million)
|
2020 |
2019 |
Change |
Net profit of Bank Pekao S.A. |
1,126.4 |
2,247.5 |
(49.9%) |
Entities consolidated under full method |
|
|
|
Pekao Investment Management S.A. |
103.3 |
126.0 |
(18.0%) |
Pekao Leasing Sp. z o.o. |
31.0 |
83.5 |
(62.9%) |
Pekao Faktoring Sp. z o.o. |
25.8 |
19.2 |
34.4% |
Centrum Kart S.A. |
4.2 |
0.6 |
>100% |
Pekao Financial Services Sp. z o.o. |
3.6 |
4.7 |
(23.4%) |
Pekao Direct Sp. z o.o. (d. Centrum Bankowości Bezpośredniej Sp. z o.o.) (*) |
2.3 |
2.2 |
4.5% |
Dom Inwestycyjny Xelion Sp. z o.o. |
0.9 |
0.5 |
80.0% |
Pekao Powszechne Towarzystwo Emerytalne S.A. w likwidacji (**) |
0.2 |
0.7 |
(71.4%) |
Pekao Investment Banking S.A. (***) |
0.2 |
(19.0) |
x |
Pekao Fundusz Kapitałowy Sp. z o.o. w likwidacji |
0.1 |
0.4 |
(75.0%) |
Centralny Dom Maklerski Pekao S.A. (****) |
- |
12.0 |
x |
FPB "MEDIA" Sp. z o.o. w upadłości |
0.0 |
0.0 |
x |
Pekao Property S.A. w likwidacji |
(0.3) |
(0.1) |
>100% |
Pekao Bank Hipoteczny S.A. |
(12.4) |
(37.7) |
(67.1%) |
Exclusions and consolidation adjustments (****) |
(183.6) |
(275.5) |
(33.4%) |
Net profit of the Group attributable to equity holders of the Bank |
1,101.7 |
2,165.0 |
(49.1%) |
(*) On January 17, 2020, the name of the Centrum Bankowości Bezpośredniej limited liability company changed to Pekao Direct limited liability company, due to the registration of the amendment to the founding act in the register of entrepreneurs of the National Court Register.
(**) The liquidation process of Pekao Powszechne Towarzystwo Emerytalne S.A. in liquidation has been completed. On November 19, 2020, the Company was removed from the National Court Register.
(***) On May 29, 2020, Pekao IB concluded a sales agreement with Bank Pekao S.A. as part of the consolidation and integration process of the brokerage activities in the Pekao Group. an organized part of the enterprise covering brokerage activities. This transaction was classified as an intra-group transaction and the result of this transaction was recognized in the Group's equity.
(****) On 25 June, 2019, the Ordinary General Meeting of Centralny Dom Maklerski Pekao S.A. (CDM Pekao S.A.) and the Extraordinary General Meeting of CBB Sp. z o.o. and on 26 June, 2019, the Ordinary General Meeting of the Bank adopted resolutions accepting the division of (CDM Pekao S.A.).
The division plan was agreed by the management boards of the companies participating in the division on 27 February, 2019 and assumed that the division will be effected in accordance with art. 529 § 1 Section 1 of the Commercial Companies Code, i.e .:
by transferring to the Bank part of the assets (assets and liabilities) and the rights and obligations of CDM Pekao S.A. in the form of an organized part of the company CDM Pekao S.A. related to the provision of brokerage services,
by transferring to CBB Sp. z o.o. part of assets (assets and liabilities) and rights and obligations of CDM Pekao S.A. in the form of an organized part of the company CDM Pekao S.A. related to call center services.
(*****) Includes, among others, transactions within the Group (including dividends from subsidiaries for the previous years), and net profit attributable to non-controlling interest.
Results of the Bank’s major related entities
Pekao Investment Management S.A. – Pekao IM
In 2020, consolidated net profit of Pekao IM amounted to PLN 103.3 million compared with PLN 126.0 million in 2019. Net assets of investment funds managed by Pekao TFI S.A. was lower by ca. 10.4% compared to the end of December 2019 due to the impact of the COVID-19 pandemic on the capital market in Poland and worldwide.
Pekao Leasing Sp. z o.o. – Pekao Leasing
In 2020, Pekao Leasing reported a net profit of PLN 31.0 million compared with PLN 83.5 million in 2019. The result was lower due to the increase in the costs of risk related with the COVID-19 pandemic, despite the increase in revenues and strict cost control. In 2020, Pekao Leasing concluded new contracts by 13.1% y/y, i.e. by 2.2 thousand. The value of leased assets was lower by 11.7% y/y and amounted to PLN 3,892.1 million.
Pekao Faktoring Sp. z o.o. – Pekao Faktoring
In 2020, Pekao Faktoring reported a net profit of PLN 25.8 million, compared to a profit of PLN 19.2 million in 2019. The result for the current period is higher due to the factoring exposure increased by over 31% y/y. Pekao Faktoring ranks first on the Polish factoring market in terms of turnover.
Centrum Kart S.A. – Centrum Kart
In 2020, Centrum Kart reported a net profit of PLN 4.2 million, compared to a profit of PLN 0.6 million in 2019. The higher net result is related to the increase in the income generated as part of the services provided for the Bank.
Pekao Financial Services Sp. z o.o. – PFS
In 2020, Pekao FS reported a net profit of PLN 3.6 million (including the Bank's share of PLN 2.4 million), compared to a profit of PLN 4.7 million achieved in 2019. The net result was lower due to the fluctuation of revenues, taking into account the settlements of work carried out by Pekao FS, among others as part of the implementation of bancassurance products and an increase in costs caused by expanding the scope of activity primarily with services under the PPK program and preparation of PFS resources for its subsequent stages. The situation on the capital market related by COVID-19 also contributed to the decrease in revenues.
Pekao Direct Sp. z o.o. – Pekao Direct
In 2020, Pekao Direct generated a net profit of PLN 2.3 million, compared to a result of PLN 2.2 million in 2019. The result was influenced by the increase in services for the Bank using remote communication channels - including newly introduced: chat and video), and the increase in the scale of services provided with the use of alternative communication channels in connection with the COVID-19 pandemic.
Dom Inwestycyjny Xelion Sp. z o.o. – DI Xelion
Net profit in 2020 amounted to PLN 0.9 million, compared to the profit of PLN 0.5 million achieved in 2019. The result was affected by the unfavorable situation on capital markets, resulting in a further shift in customer preferences towards a lower level of acceptable risk.
Pekao Investment Banking S.A. – Pekao IB
In 2020, Pekao IB reported a net profit of PLN 0.2 million, compared to a loss of PLN 19.0 million in 2019. The results in both years were affected by the small number of advisory transactions and low income from brokerage activities provided to institutional clients (throughout 2019 and in connection with the sale of an organized part of the enterprise to Bank Pekao SA, including brokerage activities until the end of May 2020), also limited by the unfavourable economic situation.
Pekao Bank Hipoteczny S.A. – Pekao Bank Hipoteczny
In 2020, Pekao Bank Hipoteczny reported a net loss of PLN 12.4 million, compared to a loss of PLN 37.7 million in 2019. The result was influenced by an increase in the level risk of credit related with the pandemic and a reduction in interest rates. The Bank created additional provisions for litigation related to the portfolio of CHF-denominated loans in the amount of PLN 14.1 million, fully encumbering the result for 2020, increasing the total amount of the provision for 2020 to PLN 26.1 million against the provision of PLN 12,0 million established in 2019. The loss in 2019 resulted from the need to recognize additional write-offs in the amount of PLN 35.4 million gross due to the change in the methodology of estimating impairment for the credit portfolio of basket 3, dictated by the preparation for transferring receivables (pooling) and reviewing the approach used to estimate the write-offs of basket 3. Write-offs related to credit exposures granted in 2004-2008.
The Bank Pekao S.A. Group
(in PLN million)
|
31.12.2020 |
31.12.2019 |
CHANGE |
Contingent liabilities granted and received |
75,731.5 |
68,722.0 |
10.2% |
Liabilities granted: |
54,822.2 |
49,352.9 |
11.1% |
financial |
41,203.9 |
36,713.9 |
12.2% |
guarantees |
13,618.3 |
12,639.0 |
7.7% |
Liabilities received: |
20,909.3 |
19,369.1 |
8.0% |
financial |
563.5 |
1,297.6 |
(56.6%) |
guarantees |
20,345.8 |
18,071.5 |
12.6% |
Derivative financial instruments |
412,393.8 |
348,317.4 |
18.4% |
interest rate transactions |
247,242.1 |
219,255.0 |
12.8% |
transactions in foreign currency and in gold |
161,854.2 |
126,037.5 |
28.4% |
transactions based on commodities and equity securities |
3,297.5 |
3,024.9 |
9.0% |
Total off-balance sheet items |
488,125.3 |
417,039.4 |
17.0% |
Bank Pekao S.A.
(in PLN million)
|
31.12.2020 |
31.12.2019 |
CHANGE |
Contingent liabilities granted and received |
92,437.0 |
76,843.6 |
20.3% |
Liabilities granted: |
72,058.4 |
59,028.5 |
22.1% |
financial |
45,095.1 |
37,235.6 |
21.1% |
guarantees |
26,963.3 |
21,792.8 |
23.7% |
Liabilities received: |
20,378.6 |
17,815.1 |
14.4% |
financial |
563.5 |
233.4 |
>100% |
guarantees |
19,815.1 |
17,581.7 |
12.7% |
Derivative financial instruments |
417,710.2 |
354,041.3 |
18.0% |
interest rate transactions |
247,381.2 |
219,339.5 |
12.8% |
transactions in foreign currency and in gold |
167,031.6 |
131,678.1 |
26.8% |
transactions based on commodities and equity securities |
3,297.4 |
3,023.7 |
9.1% |
Total off-balance sheet items |
510,147.2 |
430,884.8 |
18.4% |
Information on loan concentration is included in the Note 45 to the Unconsolidated Financial Statements of Bank Pekao S.A. for the year ended on 31 December 2020.
Information required pursuant to Art. 111a of the Banking Law
Bank Pekao S.A. is a universal commercial bank providing a full range of banking services to individual and institutional clients in Poland. Bank Pekao S.A. Group includes financial institutions operating in banking, asset management, pension funds, brokerage services, transactional advisory, leasing and factoring markets.
The Bank and all subsidiaries of the Bank, within a consolidated basis under article 4, section 1, point 48 of the Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms, run its activities on territory of Poland.
As at the end of December 2020, the number of full-time jobs in the Group was 14,633 compared to 15,384 as at the end of 2019. As at the end of December 2020, the number of full-time jobs in the Bank was 12,693 compared to 13,648 as at the end of 2019.
In 2020, the Group’s operating income amounted to PLN 7,812.8 million, and was lower by PLN 468.9 million, i.e. 5.7% in comparison 2019.
In 2020, the Bank’s operating income amounted to PLN 7,475.8 million, and was lower by PLN 411.2 million, i.e. 5.2% in comparison 2019.
Profit before tax of Bank Pekao S.A. Group in 2020 amounted to PLN 1,725.0 million and was lower by PLN 1,277.5 million, i.e. 42.5% in comparison to 2019. Income tax expense in 2020 amounted to PLN 622.1 million vs. PLN 835.9 million in 2019 and was lower by 25.6%.
Profit before tax of Bank Pekao S.A. in 2020 amounted to PLN 1,697.2 million and was lower by PLN 1,318.5 million, i.e. 43.7% in comparison to 2019. Income tax expense in 2020 amounted to PLN 570.8 million vs. PLN 768.3 million in 2019 and was lower by 25.7%.
As at the end of December 2020, the return on assets (ROA) of the Group was 0.5% vs. 1.1% at the end of December 2019.
As at the end of December 2020, the return on assets (ROA) of the Bank was 0.5% vs. 1.2% at the end of December 2019.
In 2018, the Bank do not conclude any agreements according to article 141t, section 1 of the Banking Law Act.
Management Board position regarding the possibility of achieving previously published forecasts
The Bank has not published the forecast of the financial results for 2020.
Management Board remunerations
The amount of remunerations or benefits (in cash, payments in kind or in any form) paid or due to the Management Board Members in 2020.
(in PLN thousand)
NAME |
PERIOD |
BASE SALARY |
VARIABLE REMUNERATION(*) |
OTHER BENEFITS(**) |
|
Leszek Skiba |
20.04.2020 - 31.12.2020 |
679 |
0 |
4 |
|
Jarosław Fuchs |
15.02.2020 - 31.12.2020 |
817 |
0 |
138 |
|
Marcin Gadomski |
01.01.2020 - 21.04.2020 end 01.07.2020 - 31.12.2020 |
752 |
0 |
19 |
|
Krzysztof Kozłowski |
22.04.2020 - 31.12.2020 |
649 |
0 |
69 |
|
Tomasz Kubiak |
01.01.2020 - 31.12.2020 |
934 |
691 |
23 |
|
Marek Lusztyn |
01.01.2020 - 30.06.2020 |
483 |
653 |
251 |
|
Grzegorz Olszewski |
01.01.2020 - 31.12.2020 |
906 |
165 |
30 |
|
Tomasz Styczyński |
01.01.2020 - 31.12.2020 |
934 |
641 |
196 |
|
Marek Tomczuk |
01.01.2020 - 21.12.2020 |
911 |
1 038 |
46 |
|
Magdalena Zmitrowicz |
01.01.2020 - 31.12.2020 |
934 |
434 |
170 |
|
(*) The variable remuneration includes the cash bonuses paid in 2020 for 2018 and 2019 as well as phantom shares for 2017 and 2018 resulting from the Variable Remuneration System.
(**) Other benefits include, among others: compensation for non-competition, insurance policies, medical care
The present Members of the Bank's Management Board and former Members of the Bank's Management Board who held the positions during 2020 and the remainder of the variable remuneration in phantom shares is 18,643 shares. The value of this part of the variable remuneration as at 31 December, 2020 is PLN 1,139 thousand at the Bank Pekao share price as at 30 December 2020 amounting to PLN 61.1.
The present Members of the Bank's Management Board and former Members of the Bank's Management Board, who held the position in the Management Board during 2020, did not receive any remuneration or have no receivables in this respect from the Bank's subsidiaries and associates.
Former Members of the Bank's Management Board remuneration
(in PLN thousand)
NAME |
VARIABLE REMUNERATION |
OTHER BENEFITS(*) |
Diego Biondo |
272 |
0 |
Roksana Ciurysek Gedir |
423 |
540 |
Andrzej Kopyrski |
320 |
0 |
Michał Krupiński |
1 450 |
461 |
Michał Lehmann |
587 |
369 |
Luigi Lovaglio |
2 107 |
0 |
Adam Niewiński |
171 |
0 |
Grzegorz Piwowar |
518 |
0 |
Stefano Santini |
243 |
0 |
Marian Ważyński |
189 |
0 |
Piotr Wetmański |
352 |
331 |
(*) other benefits include, compensation for non-competition agreement and insurance policies.
The part of the variable remuneration in phantom shares due to former Members of the Bank's Management Board who held the position of members of the Bank's Management Board before 1 January, 2020, amount to 54,431 shares.The value of this part of the variable remuneration as at 31 December 2020 is PLN 3,326 thousand at the Bank Pekao share price as at 30 December 2020 amounting to PLN 61.1.
Supervisory Board remunerations
The amount of remunerations or benefits (in cash, payments in kind or in any form) paid or due to the Supervisory Board Members in 2020:
(in PLN thousand)
|
PERIOD |
TOTAL |
Paweł Surówka |
01.01.2020 - 20.04.2020 |
21 |
Sabina Bigos-Jaworowska |
01.01.2020 - 31.12.2020 |
177 |
Joanna Dynysiuk |
01.01.2020 - 31.12.2020 |
193 |
Justyna Głębikowska-Michalak |
01.01.2020 - 31.12.2020 |
193 |
Grzegorz Janas |
01.01.2020 - 22.05.2020 |
0 |
Stanisław Kaczoruk |
01.01.2020 - 31.12.2020 |
193 |
Michał Kaszyński |
01.01.2020 - 31.12.2020 |
177 |
Marian Majcher |
01.01.2020 - 31.12.2020 |
177 |
Paweł Stopczyński |
01.01.2020 - 22.05.2020 |
0 |
Beata Kozłowska-Chyła |
22.05.2020 - 31.12.2020 |
0 |
Marcin Eckert |
22.05.2020 - 31.12.2020 |
0 |
Małgorzata Sadurska |
22.05.2020 - 31.12.2020 |
0 |
In 2020, the Supervisory Board Members did not receive nor are due any compensation from subsidiaries and associated entities of Bank Pekao S.A.
Shares in the Bank and related entities held by the Bank's Directors
According to information available to the Bank, as at the date of submitting of Report on the activities of Bank Pekao S.A. Group for 2020 and as at the date of submitting of Report on the activities of Bank Pekao S.A. Group for the three quarters 2020, the Members of the Bank’s management and supervisory bodies did not held shares of Bank Pekao S.A.
Compensation for the Non-Competition after the termination of the Management Services Agreement
The following Members of the Bank's Management Board: Mr. Leszek Skiba - Vice President of the Management Board leading the Management Board, Mr. Tomasz Styczyński - Vice President of the Management Board, Mr. Jarosław Fuchs - Vice President of the Management Board, Marcin Gadomski - Vice President of the Management Board, Mr. Krzysztof Kozłowski - Vice President of the Management Board, Mr. Tomasz Kubiak - Vice President of the Management Board, Ms Magdalena Zmitrowicz - Vice President of the Management Board, Mr Grzegorz Olszewski - Vice President of the Management Board, in accordance with the provisions in the Management Services Agreement, are obliged to comply with the Competition Prohibition and not to conduct competitive activities during the term of the agreement and for the period specified in the agreement after its termination.
Members of the Management Board who resigned and stopped performing their functions in 2020 were also subject to the Competition Prohibition, and the payment of Compensation under the Competition Prohibition was, is or will be made subject to the submission by the Managing Person of a written declaration of compliance with the Non-Competition (Vice President of the Management Board, Mr. Marek Lusztyn and Vice President of the Management Board, Mr. Marek Tomczuk).
Liabilities due to pensions for former supervisors and managers
In 2020, there were no liabilities due to pension and similar benefits for former managers, supervisors or former members of the administrative authorities and liabilities incurred in relation to these pensions occurred.
Agreements with companies entitled to auditing of financial reports
On the basis of the agreement concluded on July 24, 2018, audit company KPMG Audyt sp. z o.o. Sp.k. is the company appointed to audit and review the financial statements of Bank Pekao S.A. and Bank Pekao S.A. Group for the years 2018 – 2020.
Audit remuneration for services of Bank Pekao S.A. Group is presented in the tale below.
(in PLN thousand)
|
2020 |
2019 |
Fee for the audit of annual financial statements |
2,550 |
2,449 |
Fee for other attestation services, including review of financial statements |
1,395 |
1,434 |
The amounts above do not include value added tax (VAT).
Audit remuneration for services of Bank Pekao S.A. is presented in the tale below.
(in PLN thousand)
|
2020 |
2019 |
Fee for the audit of annual financial statements |
1,788 |
1,788 |
Fee for other attestation services, including review of financial statements |
860 |
860 |
The amounts above do not include value added tax (VAT).
Average interest rates in Bank Pekao S.A. in 2020
The average nominal interest rates for the basic types of PLN deposits for non-financial sector residents:
PLN retail deposits |
0.3% p.a |
PLN corporate clients deposits |
0.1% p.a |
The average nominal interest rates for the PLN loans for non-financial sector residents:
Total retail loans |
3,5% p.a. |
Mortgage |
2.7% p.a. |
Consumption |
6.8% p.a. |
Other |
4.6% p.a. |
Corporate loans |
2.4% p.a. |
Number and value of titles of execution and value of collaterals
Bank Pekao S.A. has established specific policy with regard to collateral accepted to secure loans and guarantees. This policy is reflected under internal rules and regulations in the Bank. The type of collateral and its value are carefully analyzed and chosen regarding the particular risk of the secured transaction.
The Bank obeys the rule, according to which the value of collateral should relate directly to the value of secured liability, that is cash provided by the Bank to a client (capital or the amount of off-balance sheet commitments granted by the Bank) together with extraneous amounts due, for example, interest or commissions.
In order to hedge risk related to lending activities the Bank accepts legal collateral under the Civil Code, the law on bills of exchange or resulting from the habits adopted in domestic or foreign trade, i.e. bank guarantees, guarantee under the Civil Code, blank of promissory notes, aval, transfer of debts, mortgages, registered pledges, pledges, assignment as collateral, transfer of assets in bank account, blockade assets on client’s account.
For corporate clients, the total value of the collateral for impaired transactions as at December 31, 2020 amounted to PLN 1,819.9 million. For retail clients, the total value of the collateral for impaired transactions as at December 31, 2020 amounted to PLN 1,008.9 million.
Pending litigations
Information on significant legal proceedings pending before courts, arbitration bodies or public administration authorities in respect of liabilities and receivables of the Bank and its subsidiaries is included in Note 39 to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2020.
Information on significant agreements
In connection with the acceptance by the Bank Guarantee Fund on 31 December, 2020 the binding offer submitted by the Bank on 21 December 2020 for the acquisition of the assets and rights of Idea Bank S.A. comprising the enterprise within the meaning of Article 551 of the Civil Code of 23 April 1964 and the liabilities of Idea Bank S.A. except for certain assets, rights and liabilities (the “Acquired Business”), following the application by the BGF of a resolution tool, as referred to in Article 174(1)(1) and 174(1)(2) of the Act of 10 June 2016 on the Bank Guarantee Fund, the Deposit Guarantee Scheme and Resolution, on 31 December 2020, a loss coverage guarantee agreement was concluded between the Bank and the BFG (the "Loss Coverage Guarantee").
In accordance with the provisions of the Loss-Coverage Guarantee agreement, the Loss-Coverage Guarantee provides for: (i) a guarantee covering the losses resulting from the credit risk associated with the acquired loan assets (the “CRM Guarantee”) and a guarantee covering the losses (other than the losses resulting from credit risk) associated with the Acquired Business (the “Guarantee covering other risks”).
Such acquisition will involve the acquisition of credit assets constituting part of the Acquired Business and will result in an increase in the amount of risk-weighted exposures (which are calculated by multiplying the amounts of exposure and the risk weights specified in applicable laws). An increase in the level of such risk-weighted exposures will have an impact on the capital requirements applicable to the Bank.
Consequently, the CRM Guarantee will be used by the Bank as “eligible unfunded credit protection” within the meaning 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 and amending Regulation (EU) No. 648/2012 (the “CRR”). This will enable, with regard to credit risk, the assignment of the assumed exposures of the relevant risk weights applicable with respect to exposures to the entity providing coverage, i.e. the BGF, which qualifies as a public sector entity, in accordance with the opinion referred to in Article 116(4) of the CRR. Consequently, obtaining the opinion referred to in Article 116(4) of the CRR, and in the case the CRM Guarantee meets the conditions for “unfunded credit protection”, the exposures covered by the Loss-Coverage Guarantee agreement will qualify as exposures to the central government, thus resulting in a significant reduction of the capital requirements of the Bank on account of the credit risk.
In 2020, there have been no other significant agreements concluded by the Bank, in particular the Bank has not concluded material agreements with central bank or the competent supervision authorities.
Information on derivative financial instruments and hedge accounting
Information on derivative financial instruments and hedge accounting is included in Note 27 to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2020.
Related party transactions
In 2020, the Bank and its subsidiaries have not concluded any significant transactions (single or aggregate) with related entities other than those executed on arm’s length.
In 2020, the Bank and its subsidiaries did not provide any sureties in respect of loans or advances or did not provide any guarantees to an entity or a subsidiary of such entity, which the total value would be significant.
Detailed information on related party transactions is included in Note 49 to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2020.
Accounting principles adopted in the preparation of the report
Accounting principles adopted in the preparation of the report are described in Note 5 to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2020.
Seasonality or cyclical nature of the Bank’s activity
The demand for the financial services offered by the Bank is stable with no material impact of seasonal changes. Due to the nature of the Bank’s activity, it is not subject to seasonal or cyclical changes.
Issuance, redemption and repayment of debt securities
Structured Certificates of Deposit
Structured Certificates of Deposit are investment products for the Bank’s clients that form an alternative to traditional banks’ deposits. The total value of the Bank’s liabilities relating to these products amounted to PLN 523.3 (principal value) as at the end of December 2020. There is 9 issuances of Structured Certificates of Deposit open in PLN with the maximum maturity date on August 16, 2021. Liabilities with maturity up to 1 month account for 33.4%, up to 3 months account for 36.9%, up to 6 months account for 20.4% and over 6 months account for 9.3% of total liabilities.
Subordinated bonds
On 30 October 2017, the Bank issued 10 years subordinated bonds with a total nominal value of 1.25 PLN billion. The funds from the issue were designated – after receiving the approval of the Polish Financial Supervision Authority on 21 December 2017 – to increase the Bank's supplementary capital, pursuant to art. 127 para. 2 point 2 of the Banking Law and art. 63 of Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms. The bonds were introduced to trading on the ASO Catalyst market.
On 15 October 2018, the Bank issued 10 years subordinated bonds with a total nominal value of PLN 0.55 billion. The funds from the issue were designated – after receiving the approval of the Polish Financial Supervision Authority on 16 November 2018 – to increase the Bank's supplementary capital, pursuant to art. 127 para. 2 point 2 of the Banking Law and art. 63 of Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms. The bonds were introduced to trading on the ASO Catalyst market.
On 15 October 2018, the Bank issued 15 years subordinated bonds with a total nominal value of PLN 0.20 billion. The funds from the issue were designated – after receiving the approval of the Polish Financial Supervision Authority on
18 October 2018 – to increase the Bank's supplementary capital, pursuant to art. 127 para. 2 point 2 of the Banking Law and art. 63 of Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms. The bonds were introduced to trading on the ASO Catalyst market.
On 4 June 2019, the Bank issued 12 years subordinated bonds with a total nominal value of PLN 0.35 billion. The funds from the issue were designated – after receiving the approval of the Polish Financial Supervision Authority on 8 July 2019 – to increase the Bank's supplementary capital, pursuant to art. 127 para. 2 point 2 of the Banking Law and art. 63 of Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms. The bonds were introduced to trading on the ASO Catalyst market.
On 4 December 2019, the Bank issued 12 years subordinated bonds with a total nominal value of PLN 0.40 billion. The funds from the issue were designated – after receiving the approval of the Polish Financial Supervision Authority on 10 December 2019 – to increase the Bank's supplementary capital, pursuant to art. 127 para. 2 point 2 of the Banking Law and art. 63 of Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms. The bonds were introduced to trading on the ASO Catalyst market.
Pekao Bank Hipoteczny S.A. covered bonds
The total value of the company’s liabilities due to covered bonds amounted to PLN 1,464.1 million (principal value) as at the end of December 2020. Liabilities from covered bonds with maturity up to 3 months account for 22.5% up to 6 months account for 0.7% , up to 1 year account for 17.9%, up to 2 years account for 12.9%, up to 5 years account for 46.2% of the total nominal value.
Pekao Bank Hipoteczny S.A. bonds
The total value of the company’s liabilities under bonds amounted to PLN 639.0 million (principal value) as of December 2020. The liabilities under covered bonds with maturity date up to 1 month account for 15.6%, up to 6 months account for 37.5% and 1 year account for 46.9% of the total nominal value.
Pekao Leasing Sp. z o.o. bonds
The total value of the company’s liabilities under bonds amounted to PLN 1,835.1 million (principal value) as of 30 December 2020 with maturity date up to 6 months account for 74.9% and up to 1 year account for 25.1% of the total nominal value.
Pekao Faktoring Sp. z o.o. bonds
The total value of the company’s liabilities under bonds with maturity date to 6 months amounted to PLN 1,282.1 million (principal value) as of 31 December 2020.
Acquisition of Idea Bank S.A.
Detailed information on the transaction is presented in Note 52 to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2020.
Moody's Investor Service rating agency report with regards to Bank Pekao S.A. ratings
On 7 January 2021 rating agency Moody’s Investors Service (the „Moody’s") informed the Bank about maintaining the „A2” long term and „P-1” short term deposit ratings as well as stable outlook on the long term deposit ratings. Concurrently Moody’s downgraded the Bank’s Baseline Credit Assessment („BCA”) and Adjusted Baseline Credit Assessment („Adjusted BCA”) to „baa2” from „baa1”and its long term Counterparty Risk Ratings („CRR”) to „A2” from „A1”. Banks’s long term Counterparty Risk Assessment („CRA”) was also downgraded to „A2(cr)” from „A1(cr)”. The short term CRR and CRA were affirmed at „P-1” and „P-1(cr)” respectively.
As a result of the review, the following rating actions were taken:
affirmed Long term deposit rating at „A2”; Outlook: „Stable”;
affirmed Short term deposit rating at „P-1";
changed Baseline Credit Assessment (BCA) from „baa1" to „baa2";
changed Adjusted Baseline Credit Assessment (Adjusted BCA) from „baa1" to „baa2”;
changed Long term Counterparty Risk Rating (CRR) from „A1" to „A2”;
affirmed Short term Counterparty Risk Rating (CRR) at „P-1”;
changed Long term Counterparty Risk Assessment (CRA) from „A1(cr)" to „A2(cr)";
affirmed Short term Counterparty Risk Assessment (CRA) at „P-1(cr)".
Ratings for the Bank after the review are as follows:
long term deposit rating: „A2”; Outlook: „Stable”;
short term deposit rating: „P-1";
Baseline Credit Assessment (BCA): „baa2";
Adjusted Baseline Credit Assessment (Adjusted BCA): „baa2”;
long term Counterparty Risk Rating (CRR): „A2”;
short term Counterparty Risk Rating (CRR): „P-1”;
long term Counterparty Risk Assessment (CRA): „A2(cr)";
short term Counterparty Risk Assessment (CRA): „P-1(cr)".
According to Moody's, the rating update is a consequence of the Bank's announcement of the acquisition of the certain assets and liabilities of Idea Bank S.A. as part of Idea’s resolution under the legal framework of the Act of 10 June 2016 on the Bank Guarantee Fund, Deposit Guarantee Scheme and Resolution. Moody's stated that the transaction has a very limited impact on the Bank's credit profile and Moody's expectations on the Bank's financial fundamentals and performance are now more appropriately reflected in the BCA's of „baa2", which is a one-notch lower than before the assessment. At the same time, long-term deposit ratings were affirmed owing to rating uplift from the application of Moody’s Advanced Loss Given Failure („LGF”) analysis and a moderate likelihood of support from the government of Poland in case of need.
The stable outlook for the ratings reflects the rating agency's expectation that the Bank will successfully execute the transaction within the set timelines, while maintaining its financial metrics broadly at current levels.
Recommendation of the Polish Financial Supervision Authority regarding suspension of dividend payment in the first half of 2021
On 14 January 2021 received the following recommendations from the Polish Financial Supervision Authority:
1. to withhold by the Bank payment of dividend in the first half of 2021 (including undistributed earnings from previous years),
2. not to undertake by the Bank, in the first half of 2021, without prior consultation with the supervisory authority, other actions beyond the scope of current business and operational activities that may result in a reduction of the capital position, including buyback of own shares.
According to the above letter, the position of the PFSA on the dividend policy of commercial banks in the second half of 2021 will be presented separately following the analysis of the conditions of the banking sector in the first half of the year.
Appointment of the Vice Presidents of the Management Board of the Bank
On 14 January 2021 the Supervisory Board of the Bank, after assessing suitability, appointed:
Mr. Błażej Szczecki to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank with the effect from 15 January 2021,
Mr. Wojciech Werochowski to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank with the effect from 15 January 2021,
Mr. Jerzy Kwieciński to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank with the effect from1 February 2021.
Approval of the Polish Financial Supervision Authority to appoint Mr. Leszek Skiba as the President of the Management Board of Bank Pekao S.A.
On 4 February 2021, the Polish Financial Supervision Authority unanimously expressed consent to the appointment of Mr. Leszek Skiba as the President of the Management Board of the Bank.
On 21 April 2020, the Supervisory Board of the Bank appointed Mr. Leszek Skiba as the President of the Management Board of the Bank, subject to the consent of the Polish Financial Supervision Authority and upon obtaining such consent. Until that consent was obtained, Mr. Leszek Skiba was the Vice President of the Management Board of the Bank managing the work of the Management Board of the Bank. Obtaining the said consent results in fulfillment of the condition of becoming the President of the Management Board of the Bank.
Consent of the Polish Financial Supervision Authority to entrust Mr. Marcin Gadomski with the position of the Member of the Management Board of the Bank supervising the management of material risk in the Bank's operations
On 15 February 2021, the Polish Financial Supervision Authority unanimously expressed consent to entrust Mr. Marcin Gadomski with the position of the Member of the Management Board of the Bank supervising the management of material risk in the Bank's operations.
On 16 June 2020, the Supervisory Board of the Bank appointed Mr. Marcin Gadomski as the Vice President of the Management Board of the Bank supervising the management of material risk in the Bank's operations, subject to the consent of the Polish Financial Supervision Authority and upon obtaining such consent. Until that consent was obtained, Mr. Marcin Gadomski was the Vice President of the Management Board of the Bank. Obtaining the said consent results in fulfillment of the condition of becoming the Vice President of the Management Board of the Bank supervising the management of material risk in the Bank's operations.
Increase of provisions for the legal risk related to the foreign currency mortgage loan portfolio in CHF
On 18 February 2021 the Bank decided to increase provisions for the legal risk related to the foreign currency mortgage loan portfolio in CHF, by the amount of PLN 318 million. The increase in provisions took place in the fourth quarter of 2020 in the financial results of the Bank and the Bank's Capital Group.The material increase of provisions compared with previous quarters reflects a negative trend in court decisions, expected increase in number of disputes in the future, as well as the modification of considered scenarios, among others, to include the possibility of reaching settlements with borrowers.
Simultaneously, the total scale of provisions for the legal risk related to the foreign currency mortgage loan portfolio in CHF created so far by the Group in the amount of PLN 436 million is similar to the preliminary estimate of the impact on net financial result of the hypothetical conversion of the active portfolio of the abovementioned loans (under the conditions outlined by the Chairman of the Polish Financial Supervision Authority).
The activity of Bank Pekao S.A. and the Group’s companies is in majority conducted on the Polish territory, hence the Group’s performance will be mainly affected by economic situation in the country and international events that have influence on domestic economy.
After several years of solid growth, the economic environment deteriorated sharply in 2020 as a consequence of the measures taken in the context of the global COVID-19 pandemic. Economic activity was significantly reduced and companies and households experienced a substantial deterioration of their financial situation. The consequences of the whole situation are however to some extent mitigated by public help (so-called anti-crisis shield).In 2020 the Polish economy contracted by 2.8% y/y.
The epidemiological situation will remain the major risk factor in 2021. Although enterprises and consumers are now coping much better with its impact, many sectors (especially those most severely affected by lockdowns) will still face numerous challenges for at least the first half of the year. On the other hand, greater optimism in the forecasts comes from the strong belief that the ongoing vaccination process will bring a return to relative "normality" in 2021 and will represent a time of post-pandemic recovery for the economies.
Further development of the epidemic will have an impact on demand for banking products and possible further changes in the cost of risk as a result of updated assumptions about the economic situation.
Monetary policy is an important factor influencing banks' performance. In the current economic situation, the MPC has decided to significantly reduce interest rates, including the main interest rate from 1.50% to 0.10%. Very low interest rates have a strong, adverse impact on the results of the banking sector (through the impact on the net interest result of banks) and will continue to do so in 2021.
In addition to the economic situation and monetary policy, banks are also directly affected by the coronavirus epidemic, which results from actions taken by the regulator and the strategic role of the banking sector for the economy. Most important actions are described in the section about external conditions (“Epidemic environment”).
Independently from economic situation, tax and regulatory environment invariably plays major role for banks. In particular, this includes tax on certain financial institutions, high capital requirements, growing contributions to Bank Guarantee Fund (BFG), costs of further adjustment to a number of regulatory solutions (MIFID II, RODO, PSD II, MREL, among others), as well as introduction in Poland of cap on asset management fees. Maintained strict tax and regulatory environment coupled with unprecedented economic situation may constrain banks’ credit expansion and impact their financial results.
The issue of foreign currency mortgages continues to be one of the most important factors in the institutional environment. Considering no systemic solution in this matter, the banking system will be most affected by court decisions in individual cases. A number of events (i.a. the ruling of CJEU from 3 October 2019) has led towards higher number of borrowers seeking judicial resolution. This will have a strong negative impact on the performance of banks, especially those with a large portfolio of such loans. So far, the main channel of influence has been the reserves established by banks due the expected legal risk – they have already strongly impacted the 2020 results. According to most estimates, the total costs for the sector may reach several dozen billion zlotys, but they are difficult to estimate and may be spread over time. Much will depend on, among others, the actual number of lawsuits (how many borrowers will decide to take legal action), the interpretation of national courts in individual cases, the reactions of national supervisory institutions or the actions of the banks themselves.
Moreover, it cannot be ruled out that the issue of CHF loans will find a final solution by way of legislation. Bank Pekao S.A. will monitor the direction of decisions made by Polish courts, as well as market practice and borrowers' behaviour, and will assess on an ongoing basis the probability of cash outflow with respect to the mortgage loans in question. However, the impact may be indirect in case of potential financial problems of some smaller institutions with a particularly large exposure to the discussed risk.
Assuming further containment of the epidemic situation (thanks to vaccinations, among other things), a moderate scale of improvement in credit volumes can be expected in 2021. This may be visible in the retail segment to a greater extent (still solid demand for housing credit, rebound in consumer loans), while business sentiment will improve more slowly (gradually increasing interest in current account loans, still subdued demand for investment credit due to high uncertainty). With a strong labour market despite the impact of the pandemic, household deposits will still maintain a solid pace. High base (inflow of funds from anti-crisis shields in 2020) will in turn limit dynamics of corporate deposits, elevated in recent months.
In accordance with the adopted strategy for the years 2018-2020 „Strength of the Polish Bison”, the strategic priorities of the Bank in 2020 were: intelligent growth, digital and operational transformation and building long-term customer relationships based on an integrated service model that will strengthen the position of one of the most recognizable banks in Poland.
Key directions of the Bank's development outlined in the strategy translate into clearly defined business priorities:
Leader in smart growth – the Bank constantly improves its profitability, focusing on the most profitable and prospective business segments as well as strengthening acquisition activities and systematically developing the product offer in strategic business divisions i.e. retail and private banking, SME banking and corporate banking. Additional support for these activities is the implementation of income and cost synergies resulting from the developed cooperation within the PZU capital group,
Expert in efficiency and quality – the Bank undertakes numerous activities aimed at continuous improvement of process efficiency, cost discipline and service quality. They were implemented both in traditional sales channels (i.a. optimization of operational processes), as well as in constantly developed digital channels. The improvement of cost effectiveness was also implemented through the centralization of internal processes and their progressive automation and robotization,
Integrated risk management expert – the Bank, taking advantage of its strong position, continued the development of this area, which is crucial from the point of view of business transformation and safe growth in the new market conditions caused by the pandemic. These activities were focused primarily in the area of risk modelling and management and active cooperation of risk with business aimed at optimizing credit processes, as well as maintaining safe and responsible risk management in times of increased economic uncertainty,
Employer of the best talent – the continuous development of key competences and effective cooperation within the organization is extremely important for the Bank. Continuing the recruitment of talent and constant development of experts in key areas such as data analytics, technology and IT, the Bank undertook a number of activities aimed at amplifying its image as a modern institution and an employer for the best, which offers an attractive level of remuneration related to the results achieved and unique development opportunities.
The Bank's development plans and aspirations outlined in the strategy "Strength of the Polish Bison" were reflected in its ambitious financial goals for 2020. Nevertheless, the economic effects of the outbreak of the pandemic and the reduction of interest rates to a historically record low level radically changed the market conditions and significantly influenced the financial results of the banking sector, including the financial results of Bank Pekao, while rendering all assumptions and financial targets for 2020 that were developed and communicated prior to the outbreak of the pandemic. Rapid and sudden changes in the environment caused by the effects of the COVID-19 pandemic translated into the need to revise the financial aspirations communicated in previous years and strengthen a wide range of activities aimed at stable risk management in the era of increased uncertainty, as well as accelerating the digital transformation process in order to improve efficiency, and also providing support and making new services available to customers through remote channels.
In 2020, the timeframe of the strategy "Strength of the Polish Bison" for 2018-2020 ended, and therefore the Bank took steps to develop a new strategy for 2021-2023, which will be published by the end of the first quarter of 2021.
Strategy execution in 2020
The effects of the outbreak of the pandemic had a strong impact on the entire economy for most of 2020, including the banking sector and the operating conditions of Bank Pekao. As in the case of other banks and the banking sector as a whole, the level of aspirations for financial and business goals assumed before the pandemic for 2020 has lost its relevance with the outbreak of the pandemic and the subsequent reduction in interest rates.
The new challenges brought about by the pandemic required a series of dynamic and decisive actions which the Bank undertook on a large scale adjusting its activities to the new market situation. In the face of the effects of the pandemic, the Bank implemented a number of new solutions that fit into the four development levers, including primarily in the field of accelerating the digital transformation, improving efficiency and maintaining a responsible approach to risk management in a new significant more demanding economic environment.
Strategic activities undertaken in 2020, within the framework of the Bank’s four development levers defined in the strategy, significantly supported the business development as well as the importance of financial and efficiency indicators in the new market environment.
Leader of smart growth
Retail Banking
Due to the scale and potential of growth, Retail Banking is a priority area of the Bank’s development. The strategic activities carried out in 2020 were primarily aimed at maintaining the high level of the number of acquired clients achieved in the previous year (> 400 k gross clients in line with the Bank’s strategy), development of sales of key credit products for individual clients, i.e. consumer loans and mortgage loans, strengthening customer relations through active cross-selling thanks to an extensive offer of investment and insurance products, as well as the development of the business customer segment (micro companies). The achievement of these goals was supported by activities intensifying the ability to acquire customers in digital channels using the latest biometric solutions, automatic and fully remote credit process for cash loans and the development of cooperation with the PZU Group in the range of insurance and investment products.
In response to the new and more demanding economic conditions caused by the pandemic, the Bank also took a number of measures to adapt to the changing needs and expectations of customers, increased the pace of digitization, tightening customer relations and increasing sales in remote channels. As part of activities accelerating the digital transformation, in 2020 Bank Pekao made available to customers a new version of the PeoPay mobile banking application. Modern graphic design and new functionalities of the application ensure even better navigation and ease of use.
Striving to improve its market position in the youngest customer segment, the Bank launched a new application for the youngest, i.e. PeoPay KIDS, which is a dedicated solution in the Bank’s offer for children aged 6-13. As a result of successfully undertaken marketing and sales activities, the Bank acquired over 37 k PeoPay KIDS for children accounts and reached +31% yoy dynamics of open accounts for children up to the age of 12.
Apart from the two above-mentioned new mobile banking applications, the Bank also provided customers with a new version of the internet banking platform, i.e. New Pekao 24, with a modern graphical interface and optimized and simplified processes that meet the needs of users and, in particular, allow easy financial management without leaving home.
In 2020, the Bank consistently carried out activities aimed at amplifying the Bank's position on the consumer goods financing market. For new and existing clients, the Bank has prepared a competitive loan offer, in particular focused on the gradual increase in availability of the "click" processes. At the end of 2020, the Bank introduced a novelty to the "Cash Click" offer - a simple repayment of loans held by the customer at various banks. The possibility of taking a new loan via the Internet and, at the same time, remotely connecting the repaid loans from other banks in the electronic service and in the mobile application is the first such solution on the Polish market. Despite the unfavourable market situation caused by the pandemic, the value of granted cash loans measured by the net volume amounted to PLN 3.1 billion net. The bank increased remote sales (sales volume per click) to PLN 1.05 billion net. Every second cash loan sold by Pekao in 2020 was in click processes.
In 2020, the Bank also continuously adapted its housing loan offer to the changing market conditions and consistently optimized the processes of granting and servicing housing loans, introducing further improvements. The most important ones include the introduction of a PLN home mortgage loan for natural persons with a fixed interest rate. Moreover, the Bank extended the method of sending notifications to customers about the amount of the loan instalment and information about the change in interest rates. In addition to the current traditional mail form, the customer can choose the option of being notified by e-mail or via the Pekao24 service. In the Pekao24 website, the possibility of sending documents regarding insurance and life policies without the need to visit a branch of the Bank has been added, and users have been able to conclude an agreement on the transfer of rights under the property insurance agreement (assignment). The Bank remains one of the leaders in the sale of mortgage loans. In 2020, sales of housing loans amounted to PLN 8.1 billion and the portfolio of PLN housing loans increased to PLN 60 billion (+6% YoY).
In 2020, Bank Pekao S.A. also consistently developed the offer of insurance products, adopting it to the needs of clients and the changing market environment, including in particular in the field of improving sales and the availability of the offer via remote channels (Internet and telephone).The Bank continued to increase the sales of insurance related to credit products. In 2020, the share of PEX cash loans sold with CPI reached the average annual level of 35% and was by 1 pp higher than in 2019. In the case of mortgage loans, the share of loans sold with CPI reached the annual average level of 13 pp higher than in the previous year. In 2020, the strategic cooperation with PZU developed – the amount of the premium collected in the products provided by this Insurer was nearly twice as higher as in 2019. As part of the activities carried out in the area of assurbanking, i.a. in PZU branches, ~30% more clients were acquired compared to 2019.
Apart from the retail client segment, the business client segment remains one of the most important and prospective segments for the Bank. As part of the development of activities in this area, in 2020, the Bank carried out a number of activities increasing the attractiveness of the offer and increasing sales efficiency through optimization and digitization of processes.
As a result of the actions taken, the acquisition of new accounts for business clients in the micro segments amounted to 34 k. In the best months, every fifth micro-company became a client of the Bank via remote channels. This is largely due to digital processes enabling remote account opening and new functionalities of online and mobile banking systems. From 2020, micro-entrepreneurs can use the new version of the PeoPay application and the Pekao24 electronic banking service.
SME Banking
In 2020, the implementation of the strategy in the SME Banking division focused on the development of lending activities, process improvements and activities supporting acquisition and cross-sell.
In terms of the loan offer, the Bank focused on offering loans with BGK guarantees and on developing leasing and factoring sales. The Bank signed a portfolio agreement with Bank Gospodarstwa Krajowego regarding the de minimis guarantee line, which allowed the introduction of the possibility of securing loans for companies from the SME sector with a guarantee on special terms. Moreover, the Bank extended its offer of financing “on Click” to leasing with a credit decision within 15 minutes.
As part of activities aimed at reducing the negative effects of the COVID-19 pandemic on enterprises, Bank Pekao implemented a number of initiatives in the field of digitization by developing remote cooperation processes (e.g. by providing the possibility of remote contracting, or signing documents with a trusted profile and eID), and also introduced a number of solutions supporting the maintenance of financial liquidity of customers during the COVID-19 pandemic. Among others, also the solution in the form of the so-called "Credit holidays" for companies was introduced. The Bank also made it possible for customers to submit applications for a financial subsidy from the government aid program under the so-called "PFR financial shield". Customers entitled to receive a subsidy could submit applications via internet banking, as well as use the information posted on the website or a free, specially dedicated hotline.
In addition, Bank Pekao was the first in Poland to enable entities from the SME segment to establish relationships and open a company account completely remotely, without the need to visit a branch and meet an advisor.
Among the measures taken to optimize and digitize processes, the Bank also undertook, among others, implementation in Pekao Connect of a number of services that will allow improvements related to the integration of the client's financial and accounting system with banking systems, which will significantly optimize costs and shorten working time. Another example is the implemented cash service possibility facilitating the faster availability of closed deposits directed directly to Cash Distribution Centers of companies cooperating with the Bank.
The Bank's activities in the SME segment in 2020, despite exceptionally difficult economic conditions and record low interest rates, translated into an increase in the loan portfolio from PLN 5.1 billion to PLN 5.4 billion, which is + 5% YoY, at the same time, a very strong focus on increasing the portfolio security with BGK and EU guarantees, where the balance sheet exposure covered by guarantees increased by +0.4 billion from 1.5 to 1.9 billion (+ 25%). There was also a strong increase in the deposit base in the SME segment + 31% YoY, supported by liquidity programs for clients, as well as an increase in the number of acquired clients with a turnover above PLN 5 m by 6% compared to 2019.
Corporate and Investment Banking
In 2020, Bank Pekao consistently focused on building comprehensive relationships with customers, providing them with solutions tailored to their needs and business profile. This translated into strengthening Pekao's position as the bank of first choice for the most demanding corporate clients. A wide range of products and services, innovative solutions, individual approach and comprehensive financial services for enterprises, institutions and public sector units are appreciated by customers and constitute the strength of corporate banking of Bank Pekao S.A.
Similarly to the activities undertaken in the SME segment, also as part of the development of activities in the corporate banking segment and in order to increase the efficiency of the services provided, the Internet banking functionalities in the field of self-service were expanded, and a number of solutions were introduced to reduce the need to use paper documentation. It was made possible to conclude contracts remotely (bank accounts, cards, loans, guarantees or letters of credit) and sign documents with a trusted profile and eID and a durable medium was made available, enabling the transfer of all regulations and documentation to customers in a form ensuring authenticity and integrity and preventing unauthorized modifications of the document after publication. As part of the development of solutions that integrate clients' financial and accounting systems with online banking, PekaoBiznes24 has acquired two new partners. The solutions offered by the Bank's partners enable direct online communication with the Bank, while maintaining the highest security standards for an even larger group of customers.
The Bank also focused on providing solutions aimed at ensuring that customers maintain financial liquidity, and thus ensuring the continuation of their operations in the new economic conditions caused by the outbreak of the pandemic. A program was introduced that allows the use of special credit solutions in the field of financing, including extension of the repayment date, suspension of repayment of loan installments or other solutions of an individual nature agreed between the client and the Bank. Cooperation with Bank Gospodarstwa Krajowego was also developed in the field of systematic expansion of the list of products that can be secured with guarantees granted by BGK.
Despite the extraordinary economic situation, the volume of loans increased by 4% YoY and the number of customers in the strategic segment of medium customers (the so-called MID segment) grew by 3% YoY.
As a result of the undertaken initiatives, the commercial income of corporate banking in 2020 amounted to 1922 m PLN (income increased by 1% YoY).
Expert in efficiency and quality
In 2020, the Bank consistently implemented the digital transformation program, including initiatives aimed at sales development and improvement of service quality in remote channels, process automation and robotization, as well as enriching the offer with the latest digital services. In the face of the dynamic acceleration of changes in the area of customer behavior and needs caused by the pandemic, a number of projects in the area of digitization have been accelerated in order to ensure the continuity of cooperation with customers under the new sanitary regime.
In a period of strong pressure on banking income due to record low interest rates and new economic conditions, the Bank undertook a number of initiatives focused on improving efficiency. This applied to cost optimization activities in areas such as marketing, business travel, or consulting costs not related to transformation. The branch network optimization was also continued due to the changing customer behavior and greater use of digital channels (-92 branches YoY). At the end of 2020, the annual dynamics of operating costs was -2%, and the achieved cost-to-income ratio was 42,5%
Integrated risk management expert
In 2020, the Bank continued to develop its risk management competencies and undertook activities related to the optimization of credit process in all business segments by simplifying procedures and implementing modern tools to improve processes, including the implementation of automatic tools supporting credit decision making. Moreover, the new challenges brought about by the pandemic required a series of dynamic and decisive actions taken by the Bank in the area of risk management in order to ensure safety and stability of operations, as well as to support readiness for responsible business development in the face of increased uncertainty in the economic environment.
At the end of 2020, the cost of risk, excluding provisions related to COVID-19, amounted to 0.88%. As the leader in risk management, the Bank kept the cost of risk at one of the lowest levels in the sector, despite new and much more demanding economic conditions.
Employer of the best talent
Actions taken in 2020 were focused on supporting the transformation process and aimed at building a positive image of the Bank as an employer both inside and outside the organization. The Bank took part in image enhancement initiatives and campaigns despite the changed reality during COVID-19, moving its employer branding activities even more on-line. These activities were aimed at acquiring top-class specialists supporting the implementation of the strategy with their competences. Events important for the Bank, in which the Bank participated, include Career Week of the Warsaw School of Economics, Jobicon and the Summer Exchange School.
In 2020, the Bank implemented an integrated recruitment system based on the SAP Success Factors system and further streamlined the onboarding process. As part of supporting the managerial staff, the Bank launched Managerial Competence Development Programs and the Executive MBA program for key managerial staff.
The Bank continued its cooperation with academic centers in Poland, including with the University of Warsaw and the Warsaw School of Economics, despite the limitation of internship programs for students and graduates due to COVID-19. Thanks to integrated efforts in the area of employer branding, the Bank won a special award appreciated in the employer branding environment, i.e. Friendly Workplace and completed the TOP EMPLOYERS certification process, during which the Bank received this prestigious award for the 11th time.
Business priorities for 2021
In 2021, one of the Bank's top priorities will be to improve efficiency and profitability in an environment of low interest rates and in a newly defined economic environment following the outbreak of the pandemic. To this end, the Bank will consistently implement a number of strategic projects including digital transformation in selected areas, transformation of the retail banking sales network, improvement of credit processes, development of service and sales processes in remote channels as well as implementation of further optimization and process robotization activities. The bank will focus on acquiring new customers and strengthening relationships with the existing ones, striving to improve profitability through growth in the most profitable segments, i.e. in the area of consumer loans (PEX), Micro, SME and in the MID segment in the area of corporate clients. Moreover, the Bank will strive to strengthen a structured approach to data management and to develop competences in the field of data analytics. The Bank will continue to develop cooperation with the PZU Group in the area of insurance and investment products.
2020 was the last period in the perspective outlined by the strategy "Strength of the Polish Bison" for 2018-2020. The bank has full capacity and readiness to implement the new strategy for 2021-2023, which is currently at the final stage of work and will be published in the first half of this year.
At the beginning of 2021, Bank Pekao took over the enterprise and liabilities of Idea Bank S.A. under an administrative decision with the inclusions specified in the decision. The acquisition meant for the Bank an increase in the scale of operations and an increase in the client base of Micro and SMEs, which are strategic segments for the development of Pekao. In 2021, the Bank will implement activities aimed at achieving the planned synergy effects related to the acquisition. Therefore, the Bank is in the process of operational integration, the completion of which is scheduled for the end of 4Q 2021.
The Management Board of Bank Pekao S.A. declares to the best of its knowledge that:
Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2020 and comparative figures have been prepared in accordance with the binding accounting policies and that they reflect in a true, fair and clear manner Bank Pekao S.A. Group financial position and their results,
Report on the activities of Bank Pekao S.A. Group for the year 2020 provides the true picture of Bank Pekao S.A. Group development, achievements and situation, including the main threats and risks.
Acting on the basis of art. 66 par. 4 of the Act on accounting of 29 September 1994 and § 13 point 17 of the Statute of the Bank, the Ordinary General Meeting of June 21, 2018 selected KPMG Audyt Sp.z o.o. Sp.k. as an audit firm to audit and review the unconsolidated financial statements of Bank Polska Kasa Opieki Spółka Akcyjna and consolidated financial statements of the Capital Group of Bank Polska Kasa Opieki Spółka Akcyjna for the years 2018-2020.
The Management Board of Bank Pekao S.A. declares that the registered audit company performing the review of Consolidated Financial Statements of Bank Pekao S.A. Group for the period ended on 31 December 2019 has been selected in line with the binding legal regulations. The company and the registered auditors performing the review meet the requirements indispensable for issuing an objective and independent report on the annual consolidated financial statement, in line with the binding provisions of the law and professional standards.
As a public interest entity, the Bank implemented, based on the resolutions of the Supervisory Board of the Bank, the policies and procedures set out in Article 130 para. 1 item 5-7 of the Act of 11 May 2017 on statutory auditors, audit firms and public supervision (Journal of Laws of 2017, item 1089, hereinafter the "Act").
In order to meet the requirements of the Act, the following documents have been issued for use:
The policy of selecting an audit firm to carry out statutory audit of Bank Pekao S.A. financial statements,
The procedure of selecting an audit firm to carry out statutory audit of Bank Pekao S.A. financial statements,
The policy of carrying out the permitted non-audit services by the audit firm conducting the audit, by entities related to this audit firm and by any member of the network to which the audit firm belongs.
Maximum duration of continued duration of statutory audits, carried out by the same audit firm or audit firm associated with this audit firm or any member of the network operating in the European Union countries to which these audit firms belong, must not exceed 10 years. This period also applies to the key statutory auditor.
After the maximum duration of the order, the Bank cannot commission a statutory audit to the audit firm or any entity from its network operating within the European Union for the next 4 years, and in the case of a key statutory auditor after at least 3 years from the end of the last statutory audit.
According to §70 item 6 point 5 of the ordinance of Minister of Finance dated March 29, 2018 on current and periodic information published by issuers of securities and the conditions for recognition as equivalent the information required by the laws of a non-member state[5] (hereinafter referred to as “the ordinance of the Minister of Finance dated March 29, 2018”), Bank Polska Kasa Opieki Spółka Akcyjna (hereinafter referred to as the “Bank”) states that it falls within the following set of corporate governance rules, including standards that issuer applies voluntarily and corporate governance practices used by issuer beyond the requirements of national law.[6]
Corporate governance rules applied in the Bank i.e. a system of regulations and procedures defining guidelines for the activities of the Bank’s governing bodies, including their relations with entities interested in the Bank’s activities (stakeholders) result from generally applicable law, especially from the Commercial Companies Code, the Banking Law and capital market regulations, as well as the rules laid down in: Code of Best Practice for WSE Listed Companies 2016, Corporate Governance Rules for the Supervised Institutions issued by the Financial Supervision Authority on July 22, 2014 and Code of Banking Ethics of Polish Bank Association.
Subject with the exception of the matters presented below in 2020, the Bank applied corporate governance rules laid down in the Code of Best Practice for WSE Listed Companies 2016[7] (hereinafter referred to as “Best Practice”) set by WSE Supervisory Board’s Resolution No. 26/1413/2015 of October 13, 2015. The Bank partly applied the recommendation No. VI.R.3 and the detailed principle No. II.Z.7 of the Best Practice, regarding the tasks and functioning of committees operating on the supervisory board, according to which the Bank should apply the provisions of Annex I to the Commission Recommendation 2005/162 / EC of February 15, 2005 on the role of non-executive directors or supervisory directors of listed companies and on the committees of the (supervisory) board (hereinafter referred to as “EC Recommendation")[8]. Bank did not apply the EC Recommendation concerning composition of Nomination and Remuneration Committee due to the necessity of providing consistent remuneration standards for management board members and key managers within the group. Until the date of May 22, 2020 The Bank also partially applied Recommendation No. VI.R.1 of "Best Practice" regarding inclusion in remuneration policy the issue of remuneration of the company's bodies members and key managers, because the remuneration of Supervisory Board members was determined by the General Meeting taking into account generally applicable legal regulations including requirements of Act of June 9, 2016 on the principles of shaping the remuneration of persons managing certain companies. From May 23, 2020, Recommendation VI.R.1 "Good Practices" is fully adopted by the General Meeting on May 22, 2020. "Remuneration Policy of the Members of the Supervisory Board and the Management Board of Bank Polska Kasa Opieki Spółka Akcyjna".
Furthermore, Recommendation No. IV.R.2 of Best Practice did not apply to the Bank due to shareholder’s structure, lack of notifications regarding shareholders expectations concerning mode of conducting General Meeting with the use of electronic communication means and lack of possibility to ensure technical infrastructure necessary to efficiently conduct General Meeting with the use of electronic communication means and to maintain relevant level of electronic communication security during General Meeting. The Bank ensured General Meeting transmission in real time via Internet.
In 2020, the Bank also applied Corporate Governance Rules for the Supervised Institutions issued by the Polish Financial Supervision Authority on July 22, 2014[9] with the exclusion of:
chapter 9 of the Rules related to asset management at the client's risk, in view of the fact that the Bank does not pursue any activity in this area,
§ 49 section 4 and § 52 section 2 of the Rules in view of the fact that there is an audit unit and a compliance unit functioning in the Bank.
The Bank partially applied the principle set out in § 21 section 2 of the Corporate Governance Principles for the Supervised Institutions regarding the composition of the supervisory body, as regards the chairman of the Supervisory Board. The election of the chairman of the Supervisory Board was made on the basis of knowledge, experience, including the management of the body, and skills that confirm the competences necessary for the proper performance of supervision duties. In the view of the above, the criterion of independence was waived. The composition of the Bank's Supervisory Board meets the independence criteria resulting from the Bank's Statute and the Best Practices. Until May 22, 2020, the Bank also partially applied the Principle defined in § 29 section 3 of the Corporate Governance Rules for the Supervised Institutions regarding transparency and conclusion the rules for remuneration of members of the supervisory body in the relevant internal regulations of the Bank. The remuneration of the Bank Supervisory Board members is transparent and was determined by the General Meeting taking into account the generally applicable legal regulations including requirements of the Act of 9 June 2016 on the rules for determining the remuneration of persons managing certain companies. From May 23, 2020 the principle set out in § 29 section 3 of the Corporate Governance Principles for the Supervised Institutions is fully applied by the Bank in connection with the adoption by the General Meeting on May 22, 2020 of the "Remuneration Policy of the Members of the Supervisory Board and the Management Board of the Bank Polska Kasa Opieki Spółka Akcyjna".
Moreover, taking into account the lack of possibility for the Bank to ensure the technical conditions necessary to correctly identify shareholders and to ensure the appropriate level of security of electronic communication during the Ordinary General Meeting of the Bank for 2018, in particular during the process of voting at the General Meeting, the Management Board has resolved not to allow participation in this General Meeting with the use of electronic communication means and hence has decided not to apply § 8 section 4 of Corporate Governance Rules for the Supervised Institutions.
Information about not applying the above mentioned rule was published by the Bank on the website, in accordance with Corporate Governance Rules for the Supervised Institutions.
In the announcement on convening the Ordinary General Meeting of the Bank published in the current report 21/2020 on April 21, 2020 the Bank informed that: ”Considering the fact that the Shareholding of the Bank is characterized by a large number of shareholders, geographical and linguistic diversity, which means that for the Bank to meet the requirements necessary to identify the shareholders correctly and to ensure the appropriate level of security of electronic communication it is necessary for the Bank to provide highly advanced technical solutions which currently the Bank is not in possession of, in accordance with Art. 4065 § 1 of the Commercial Companies Code and § 8a sec. 2 of the Statute of the Bank, the Management Board of the Bank resolved not to allow participation with the use of electronic communication means in the Ordinary General Meeting of the Bank for the year 2019, referred to in Article 406 (5) § 2 point 1 and 2 Commercial Companies Code (two-way on line communication and voting by means of electronic communication).”
The Management Board of the Bank defines whether the participation in the General Meeting with the use of electronic communication means is possible if the Bank meets technical conditions necessary to participate in the General Meeting with the use of electronic communication means.
In 2020, the Bank applied corporate governance rules laid down in the Code of Banking Ethics of Polish Bank Association.[10]
Furthermore, the Bank has introduced the Integrity Charter, constituting a set of basic values for the Bank's employees, which are based on honesty, recognized as a guarantee of permanent transformation of profit into value for all stakeholders (including shareholders and investors).
The activities undertaken by the Bank comply with the laws regulations, the Bank’s Statute, internal Bank’s regulations, market standards and ethic norms.
Acting in compliance with par. 70.6.5c–m of above mentioned ordinance of Minister of Finance dated March 29, 2018, the Bank presents following information:
1) The description of key features of the Bank’s internal control and risk management systems related to the preparation of financial statements and consolidated financial statements[11]
The Management Board of the Bank is responsible for developing and implementing of an independent, adequate and efficient Internal Control System, one of whose objectives is to ensure the reliability of financial reporting.
The Supervisory Board supervises the introduction and ensuring the functioning of an adequate and effective Internal Control System. The Supervisory Board performs an annual assessment of the adequacy and effectiveness of the Internal Control System, including an annual assessment of the adequacy and effectiveness of control functions, compliance units and internal audit units.
The internal control system within the process of financial statements preparation is aimed at ensuring reliable, complete and correct disclosure of all commercial transactions executed over a given period.
In order to carry out the reporting process, the Bank shall have established accounting policies in accordance with the requirements of International Financial Reporting Standards and other applicable regulations, an account plan, detailed internal instructions, rules for the recording of particular types of economic transactions, as well as reporting systems.
At the same time, the Bank shall monitor developments in external legislation on an ongoing basis and shall carry out an assessment of the possible impact of these changes on accounting policies and reporting processes.
IT systems shall ensure that clear and centralised data obtained, confirming the entries in the accounts and ensuring the continuity of records and the transfer of turnover and balances and the preparation of financial statements.
The Bank shall have a formalised process for closing the accounts and drawing up its accounts, in particular on the basis of a fixed timetable which defines the activities and the bodies responsible for their implementation.
The responsibility for preparation of financial statements, periodic financial and supervisory reporting and the provision of information management informationrests with the Financial Division supervised by the Vice President of the Bank’s Management Board.
2) Identification of shareholders owning directly or indirectly a significant block of shares together with identification of number of shares owned by those shareholders, percentage of shareholders share in share capital, number and percentage of votes at general meeting resulting from owned shares[12]
[A] The main shareholders of the Bank from June 7, 2017 are:
- Powszechny Zakład Ubezpieczeń S.A. holding shares in the number of 52.494.007 (fifty-two million four hundred ninety four thousand seven) shares of the Bank, constituting approximately 20% (twenty percent) of the Bank's share capital and entitling to exercise 52.494.007 (fifty-two million four hundred and ninety four thousand seven) votes, representing about 20% of the total number of votes, and
- Polski Fundusz Rozwoju S.A. holding shares in the number of 33.596.166 (thirty-three million five hundred ninety six thousand one hundred and sixty six) of the Bank's shares, representing approximately 12.8% of the Bank's share capital and entitling to 33.596.166 (thirty-three million five hundred ninety six thousand one hundred sixty six) votes representing about 12.8% of the total number of votes.
[B] On January 24, Bank Polska Kasa Opieki Spółka Akcyjna (the “Bank”) hereby informs that on January 23, 2020 it received a notification from BlackRock, Inc. regarding the exceeding of the threshold of 5% of total number of votes in the Bank, taking into account also securities lending and contracts for difference (CFD) (the “Notification”).
The following information has been included in the Notification:
1.The date and type of the event that led to a change in the shareholding to which the notification relates:
January 22, 2020 - acquisition of shares.
2.The number of shares held before the change in the share and their percentage share in the Bank's share capital and the number of votes from these shares and their percentage share in the total number of votes:
Shares held before the change represented less than 5% of the Bank's share capital and the total number of votes in the Bank.
3.The current number of shares held and their percentage share in the Bank’s share capital and the number of votes attached to those shares and their percentage share in the total number of votes:
After the change in the share, BlackRock, Inc. subsidiaries hold 12,383,413 shares and votes in the Bank, representing 4.72% of the share capital of the Bank and the total number votes in the Bank.
4.Subsidiaries of the shareholder that makes the notification, which hold the Banks's shares or instruments referred to in items 5 and 6 below:
BlackRock Japan Co., Ltd.; BlackRock Investment Management, LLC; BlackRock Investment Management (UK) Limited; BlackRock Investment Management (Australia) Limited; BlackRock International Limited; BlackRock Institutional Trust Company, National Association; BlackRock Fund Advisors; BlackRock Financial Management, Inc.; BlackRock Asset Management Deutschland AG; BlackRock Asset Management Canada Limited; BlackRock Advisors, LLC; BlackRock Advisors (UK) Limited; BlackRock (Singapore) Limited; BlackRock (Netherlands) B.V.
Information regarding the chain of control over the abovementioned entities by Black Rock, Inc. has been presented in the attachment to this report.
5.The number of votes from shares, calculated pursuant to Article 69b.2 of the Act on Public Offering, the Conditions Governing the Introduction of Financial Instruments to Organized Trading, and on Public Companies (the “Act on Public Offering”), to acquisition of which they are entitled or obliged as a holder of financial instruments referred to in Article 69b.1 (1) of the Act on Public Offering, and financial instruments referred to in Article 69b.1 (2) of the Act on Public Offering which are not exercised solely by cash settlement, the type and the name of those financial instruments, the date of their expiration, and the date or time limit within which the acquisition of shares will or may occur:
163,504 votes from shares, representing 0.06% of the share capital of the Bank and the total number of votes in the Bank, related to securities lending. According to the Notification there is no date of expiration of the abovementioned instruments and no exercise or conversion period.
6.The number of votes from shares, calculated pursuant to Article 69b.3 of the Act on Public Offering, to which the financial instruments referred to in Article 69b.1 (2) of the Act on Public Offering refer directly or indirectly, the type and the name of these financial instruments, and the date of their expiration:
582,632 votes from shares representing 0.22% of the share capital of the Bank and the total number of votes in the Bank, related to contracts for difference (CFD) with cash settlement. According to the Notification there is no date of expiration of the abovementioned instruments and no exercise or conversion period.
7.The total number of votes as indicated pursuant to items (3), (5), and (6) and its percentage share in the total number of votes.
13,129,549 votes from shares, representing 5.00% of the share capital of the Bank and the total number of votes in the Bank.
[C] On January 30, The Bank Polska Kasa Opieki Spółka Akcyjna (the "Bank") hereby informs that on January 29, 2020 it received a notification (hereinafter "Notification") regarding the change in the total number of votes at the General Meeting of the Bank prepared on the basis of Article 69 in connection with Article 87 Section 1 item 2 letter (b) of the Act of July 29th, 2005 on Public Offering and Conditions Governing the Introduction of Financial Instruments to an Organized System Trading, and on Public Companies (Journal of Laws from 2009, No. 185, item 1439, as amended) made by Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A. (hereinafter "NN PTE").
According to the information provided in the Notification received from NN PTE as a result of the acquisition of the Bank's shares in transactions on the Warsaw Stock Exchange, settled on Janaury 24th, 2020, funds managed by NN PTE:
Nationale-Nederlanden Otwarty Fundusz Emerytalny (hereinafter „OFE”)
Nationale-Nederlanden Otwarty Dobrowolny Fundusz Emerytalny (dalej „DFE”)
Nationale-Nederlanden Otwarty Dobrowolny Fundusz Emerytalny Nasze Jutro 2025 (hereinafter „FZD 2025”)
Nationale-Nederlanden Otwarty Dobrowolny Fundusz Emerytalny Nasze Jutro 2030 (hereinafter „FZD 2030”)
Nationale-Nederlanden Otwarty Dobrowolny Fundusz Emerytalny Nasze Jutro 2035 (hereinafter „FZD 2035”)
Nationale-Nederlanden Otwarty Dobrowolny Fundusz Emerytalny Nasze Jutro 2040 (hereinafter „FZD 2040”)
Nationale-Nederlanden Otwarty Dobrowolny Fundusz Emerytalny Nasze Jutro 2045 (hereinafter „FZD 2045”)
Nationale-Nederlanden Otwarty Dobrowolny Fundusz Emerytalny Nasze Jutro 2050 (hereinafter „FZD 2050”)
Nationale-Nederlanden Otwarty Dobrowolny Fundusz Emerytalny Nasze Jutro 2055 (hereinafter „FZD 2055”)
Nationale-Nederlanden Otwarty Dobrowolny Fundusz Emerytalny Nasze Jutro 2060 (hereinafter „FZD 2060”)
increased the ownership of the Bank's shares above 5% of votes at the General Meeting of the Bank.
According to the information provided in the Notification received from NN PTE, before the settlement of the transaction regarding acquisition of shares on January 23rd, 2020:
OFE held 13,082,209 shares of the Bank, which constituted 4.98% of the Bank's share capital and were entitled to 13,082,209 votes at the General Meeting of the Bank, which constituted 4.98% of the total number of votes at the General Meeting of the Bank;
OFE, DFE, FZD 2025, FZD 2030, FZD 2035, FZD 2040, FZD 2045, FZD 2050, FZD 2055, FZD 2060 held together 13,112,982 shares of the Bank, which constituted 4.996% of the Bank's share capital and were entitled to 13,112,982 votes at the General Meeting of the Bank, which constituted 4.996% of the total number of votes at the General Meeting of the Bank.
According to the information provided in the Notification received from NN PTE, after the settlement of the transaction regarding acquisition of shares on January 24th, 2020:
OFE held 13,170,209 shares of the Bank, which constituted 5.02% of the Bank's share capital. These shares entitle to 13,170,209 votes at the General Meeting of the Bank, which constituted 5.02% of the total number of votes at the General Meeting of the Bank;
OFE, DFE, FZD 2025, FZD 2030, FZD 2035, FZD 2040, FZD 2045, FZD 2050, FZD 2055, FZD 2060 held together 13,201,655 shares of the Bank, which constituted 5.03% of the Bank's share capital. These shares entitle to 13,201,655 votes at the General Meeting of the Bank, which constituted 5.03% of the total number of votes at the General Meeting of the Bank.
[D] On March 6, Bank Polska Kasa Opieki Spółka Akcyjna (the “Bank”) hereby informs that on March 6, 2020 it received a notification from BlackRock, Inc. on reducing the voting share below the threshold of 5% of the total number of votes in the Bank, taking into account also securities lending and contracts for difference (CFD) (the “Notification”).
1.The date and type of the event that leads to a change in the shareholding to which the notification relates:According to the Notification, the change in the voting share took place on March 5, 2020 as a result of the disposal of the Bank's shares.
2.The number of shares held before the change in share and the proportion of the Banks's share capital represented by those shares, as well as the number of votes attached to those shares and their percentage share in the total number of votes:
According to the Notification before the change in the voting share the subsidiaries of BlackRock, Inc. held:
a) shares representing 4.72% of the share capital of the Bank and the total number votes in the Bank;
b) votes from shares, calculated in accordance with points (5) and (6) below, representing 0.28% of the share capital of the Bank and the total number of votes in the Bank;
c) the total number of votes, calculated in accordance with point (7) below, representing 5.00% of the share capital of the Bank and the total number of votes in the Bank.
3.The current number of shares held and the proportion of the Banks's share capital represented by those shares, as well as the number of votes attached to those shares and their percentage share in the total number of votes:
According to the Notification, the shareholding of the subsidiaries of BlackRock, Inc. is below 5.0% of the Bank's share capital and the total number of votes in the Bank.
4.Subsidiaries of the shareholder that makes the notification, which hold the Banks's shares or other instruments referred to the points (5) and (6) below:
BlackRock Japan Co., Ltd., BlackRock Investment Management, LLC; BlackRock Investment Management (UK) Limited; BlackRock Investment Management (Australia) Limited; BlackRock International Limited; BlackRock Institutional Trust Company, National Association; BlackRock Fund Advisors; BlackRock Financial Management, Inc.; BlackRock Asset Management Deutschland AG; BlackRock Asset Management Canada Limited; BlackRock Advisors, LLC; BlackRock Advisors (UK) Limited; BlackRock (Singapore) Limited; BlackRock (Netherlands) B.V Information regarding the chain of control over the abovementioned entities by Black Rock, Inc. has been presented in the attachment to this report.
5.The number of votes from shares, calculated pursuant to Article 69b.2 of the Polish Act on Public Offering, the Conditions Governing the Introduction of Financial Instruments to Organized Trading, and on Public Companies (the “Act on Public Offering”), to whose acquisition they are entitled or obliged as holders of financial instruments referred to in Article 69b.1 (1) of the Act on Public Offering, as well as financial instruments referred to in Article 69b.1 (2) of the Act on Public Offering which are not exercised solely by cash settlement, the type and the name of those financial instruments, the date of their expiration, and the date or time limit within which the acquisition of shares will or may occur: According to the Notification, the above number is below 5.0% of the share capital and the total number of votes in the Bank in connection with securities lending. Pursuant to the Notification, there is no expiry date for the above-mentioned instruments and no exercise and conversion period.
6.The number of votes from shares, calculated pursuant to Article 69b.3 of the Act on Public Offering, to which the financial instruments referred to in Article 69b.1 (2) of the Act on Public Offering refer indirectly or directly, the type and the name of these financial instruments, and the date of their expiration:
According to the Notification, the above number is below 5.0% of the share capital and the total number of votes in the Bank in connection with contracts for difference (CFD) with cash settlement. Pursuant to the Notification, there is no expiry date for the above-mentioned instruments and no exercise and conversion period.
7.The total number of votes as indicated pursuant the points (2), (5), and (6) and its percentage share in the total number of votes:
According to the Notification, the above number is below 5.0% of the share capital of the Bank and the total number of votes in the Bank.
[E] On March 27,The Bank Polska Kasa Opieki Spółka Akcyjna (the "Bank") hereby informs about receipt on March 27, 2020 from Aviva Powszechne Towarzystwo Emerytalne Aviva Santander S.A. (the “Aviva PTE”) a notification regarding the change in the ownership of Aviva Otwarty Fundusz Emerytalny Aviva Santander (the “Aviva OFE”) in the total number of votes in the Bank (the “Notification”). Notification has been prepared on the basis of Article 69 Section 1 and Section 4 of the Act of July 29, 2005 on Public Offering and Conditions Governing the Introduction of Financial Instruments to an Organized System Trading, and on Public Companies (the “Offer Act”).
According to the information provided in the Notification, in connection with the acquisitions of shares of the Bank, concluded on March 19, 2020 Aviva OFE, managed by Aviva PTE, increased the ownership of the Bank's shares above 5% of the total number of votes in the Bank.
According to the information provided in the Notification, before the settlement of the transaction regarding acquisition of Bank’s shares, on March 20, 2020 Aviva OFE held 13,114,591 shares of the Bank, which constituted 4.997% of the Bank's share capital, and entitled to 13,114,591 votes in the Bank, which constituted 4.997% of the total number of votes in the Bank.
According to the information provided in the Notification, after the settlement of the transaction regarding acquisition of Bank’s shares, on March 23, 2020 Aviva OFE held 13,281,544 shares of the Bank, which constituted 5.06% of the Bank's share capital, and entitles Aviva OFE to 13,281,544 votes in the Bank, which constituted 5.06% of the total number of votes in the Bank.
At the same time, according to the information provided in the Notification:
Aviva OFE does not have any subsidiaries holding the shares of Bank,
does not occur the situation described in art. 69 Section 4 Point 6 of the Offer Act,
Aviva OFE does not have any financial instruments referred to in art. 69b Section 1 Point 1) and 2) of the Offer Act.
Since none of the remaining shareholders held more than 5% of the total vote at the Bank’s General Shareholders Meeting, they were not required to disclose acquisitions of the Bank’s shares.
The shareholders of the Bank owning directly or indirectly through their subsidiaries at least 5% of the total number of voting rights at the Bank’s General Shareholders Meeting are as follows:
The shareholders of the Bank owning directly or indirectly through their subsidiaries at least 5% of the total number of voting rights at the Bank’s General Shareholders Meeting are as follows:
Shareholder’s name |
number of shares and votes at the General Meeting |
Share in share capital and total number of votes |
number of shares and votes at the General Meeting |
Share in share capital and total number of votes at the General Meeting |
DECEMBER, 31 2020 |
DECEMBER, 31 2019 |
|||
PZU S.A. |
52 494 007 |
20,00% |
52 494 007 |
20,00% |
PFR S.A. |
33 596 166 |
12,80% |
33 596 166 |
12,80% |
Aviva OFE |
13 281 544 |
5,06% |
- |
- |
Nationale-Nederlanden PTE SA |
13 201 655 |
5,03% |
- |
- |
Other shareholders (below 5%) |
149 896 662 |
57,11% |
176 379 861 |
67,20% |
Total |
262 470 034 |
100,00% |
262 470 034 |
100,00% |
3) Identification of holders of any securities with special control rights with description of those rights[13]
According to the Bank’s Statute all the existing Bank’s shares are ordinary bearer shares. There are no special preferences or limitations connected with the shares, or differences in the rights attached to them. The rights and obligations related to the Bank’s shares result from generally applicable laws, in particular provisions of the Polish Commercial Companies Code.
Securities issued by the Bank do not give their holders any special control rights.
4) Identification of any restrictions of voting rights, such as restriction of voting rights of holders of given number or percentage of votes, temporary restrictions of voting or provisions according to which rights resulting from securities are separated from the fact of holding those securities[14]
According to the Bank’s Statute there are no restrictions regarding voting rights of Bank’s shares (generally applicable laws may in certain circumstances restrict voting rights of shareholder).
5) Identification of any restrictions of ownership transfer of securities issued by the Bank[15]
According to the Bank’s Statute there are no restrictions of ownership transfer of securities issued by the Bank (generally applicable laws may in certain circumstances restrict ownership transfer of securities issued by the Bank).
6) Description of rules governing appointment and dismissal of Members of managerial bodies and their rights, in particular right to decide whether to issue or repurchase shares[16]
Management Board
As stated in the Bank’s Statute the Management Board is composed of 5 to 9 Members. Members of the Management Board are appointed by the Supervisory Board for the common term, which shall last three years. The Management Board comprises the President of the Management Board of the Bank, Vice Presidents of the Management Board of the Bank and Members of the Management Board of the Bank. Vice Presidents and Members of the Management Board are appointed and removed on the motion of the President. Appointment of the President of the Management Board and the Member of the Management Board supervising significant risk management or entrusting this function to the appointed Member of the Management Board, is subject to approval by the Financial Supervision Authority. The body which applies to the Financial Supervision Authority for the approval is the Supervisory Board.
At least half of the Members of the Management Board, including its President, should possess a thorough knowledge of the Polish banking market, i.e. they should meet all of the following criteria:
they have professional experience gained on the Polish market, relevant for the performance of a managerial function at the Bank,
they are permanently domiciled in Poland,
they have command of the Polish language.
The Management Board runs the business and represents the Bank. Each Member of the Bank’s Management Board is obliged to undertake actions in Bank’s interest. Members of the Management Board are prohibited from taking any decisions or actions that would lead to conflicts of interests or that would be incompatible with the Bank’s interests or their official duties. A Management Board Member is obliged to notify the Management Board of the Bank of any situation in which a conflict of interests might occur or has occurred as well as refrain from participating in discussion and voting on resolution in case of which a conflict of interest has occurred.
Members of the Management Board shall have rights under the generally applicable law.
The Bank’s Statute does not provide for the Management Board or its members right to decide whether to issue or purchase shares.
7) Description of rules governing amendment of the Statute of the Bank[17]
Amendment of the Bank’s Statute requires adoption by way of resolution of the Bank’s General Shareholders Meeting as well as registering the amendment in the National Court Register. Procedure of the General Shareholders Meeting of the Bank[18] defines detailed rules of conducting the Bank’s General Shareholders Meetings and adopting resolutions. The Bank’s General Shareholders Meetings resolutions concerning the amendments of the Bank’s Statute are being adopted by the three-quarter majority. Moreover, as stated in Par. 34.2 of the Banking Act, any amendment of the Statute of the Bank shall require the authorization of the Polish Financial Supervision Authority.
8) Functioning of the General Shareholders Meeting and its key powers, as well as description of the rights of shareholders and the manner of exercising these rights, in particular rules resulting from Rules of Procedure for the General Shareholders Meeting, unless these rules result directly from generally applicable law[19]
The operation of the Bank’s General Shareholders Meeting is governed by the Rules of Procedure for the Bank’s General Shareholders Meeting, adopted by way of Resolution No. 19 of April 8, 2003, amended by way of Resolution No. 41 of May 5, 2009, Resolution No. 41 of June 1, 2012 and Resolution No. 42 dated June 16, 2016. The Regulation of Shareholders’ Meetings of the Bank defines detailed rules of conducting General Shareholders Meetings and adopting resolutions. The Rules of Procedure are available to the public on the Bank’s website[20].
Apart from powers and authorities mentioned in binding laws, in particular in the Code of Commercial Companies and the Banking Law Act, in the Regulators’ recommendations and the Bank’s Statute, the Bank’s General Shareholders Meeting has the following powers and authority:
to review and approve the report on the Bank’s operations and the Bank’s financial statements for the previous financial year,
to adopt a resolution on profit distribution or coverage of loss,
to review and approve the report on the activities of the Supervisory Board,
to grant discharge to Members of the Supervisory Board and Management Board in respect of their duties,
to review and approve the report on the Group’s operations and the Group’s financial statements,
to set the dividend record date and dividend payment date,
to dispose of or lease a business or its organized part, and to encumber it with limited property rights,
to amend the Bank’s Statute and to draft its consolidated text,
to increase or decrease the Bank’s share capital,
to issue convertible bonds, bonds with pre-emptive rights to acquire shares, and subscription warrants,
to retire shares and to define the terms of retirement,
to decide on the Bank’s merger, demerger or liquidation,
to create and release special accounts,
to appoint and remove from office Members of the Supervisory Board, taking into account assessment of fulfilment of the suitability requirements,
to define the remuneration rules for Members of the Supervisory Board,
to conclude an agreement with a subsidiary which provides for the management of the subsidiary or for the transfer of profit by the subsidiary,
to select of on audit firm to audit financial statements,
to deal with other matters falling within the scope of the Bank’s activities which are submitted to the Bank’s General Shareholders Meeting.
The Bank’s General Shareholders Meeting is convened via the Bank’s website and in a way determined for passing current information according to rules regarding public offer and conditions, under which the financial instruments are introduced to organized turnover system and to rules regarding public companies. The convocation have to take place at least twenty-six days before the Bank’s General Shareholders Meeting.
The Ordinary General Shareholders Meeting should take place once a year, not later than six months after the end of each financial year. When determining the date of the Bank’s General Shareholders Meeting, the Management Board seeks to enable as many shareholders as possible to participate in the Meeting.
The Statute allows the participation in the General Meeting with the use of electronic communication means if the Management Board adopts such decision. Management Board adopts decision mentioned in the previous sentence in the case of fulfilling by the Bank technical conditions necessary for participation in the General Meeting with the use of electronic communication means what covers in particular:
1) real-life broadcast of General Meeting,
2) real-time bilateral communication where shareholders may take the floor during a General Meeting from location other than the General Meeting,
3) exercising the rights to vote during a General Meeting either in person or through a plenipotentiary.
According to the Bank’s Statute, in each case of convening the General Meeting, the Management Board of the Bank defines whether the participation in the General Meeting with the use of electronic communication means is possible and what are the requirements and limitations necessary to identify of shareholders and to ensure the safety of electronic communication. Detailed conditions of participation in the General Meeting with the use of electronic communication means are specified in regulation adopted by the General Meeting and notice of calling the General Meeting.
The Bank’s Supervisory Board can convene Annual General Shareholders Meeting, if the Management Board does not convene it in due time stated in the Statute and the Extraordinary Shareholders Meeting, if necessary.
The full documentation which is to be presented to the Bank’s General Meeting, together with the drafts of resolutions and information concerning the Bank’s General Meeting are made available to persons entitled to participate in the Bank’s General Meeting on the Bank’s website and in paper form which is available in the place indicated in the announcement about convening the General Meeting, published in accordance with Art. 402² of Code of Commercial Companies.
Official copies of the Bank’s Management Board on the Bank’s operations and financial statements as well as copies of the Supervisory Board’s report and external auditor’s opinion are issued to shareholders upon request no later than 15 days prior to the Bank’s General Meeting date.
The rights of the Bank’s shareholders include in particular:
the right of shareholders holding at least a half of the share capital or at least a half of the votes to convene Extraordinary Meeting of Shareholders. In this case, the shareholders elect the chairman of the Bank’s General Meeting,
the right of shareholders holding at least the twentieth of share capital to demand that specific issues be placed on the agenda of the next Bank’s General Shareholders Meeting. The demand should include the justification and the project of resolution’s project concerning proposed issue and should be submitted to the Management Board no later than twenty one days prior to the Meeting date. The demand can be submitted also in electronic form. The Management Board is obliged to announce changes in the Meeting agenda introduced because of shareholder’s demand as fast as possible and no later than eighteen days prior to the Meeting date. The Announcement takes place according to the way proper for General Meeting convocation,
the right of shareholders holding at least the twentieth of share capital to submit via electronic communication media projects of resolutions concerning issues introduced to the Bank’s General Meeting agenda or issues, which are supposed to be introduced to the Meeting agenda before the date of holding the Bank’s General Meeting. The Bank instantly announces projects of resolutions on the Bank’s website,
the right of every shareholder to submit projects of resolutions concerning issues introduced to the Meeting’s agenda,
the right of shareholders to participate in the Bank’s General Shareholders Meeting personally or by proxy,
the right of shareholders holding a tenth of the share capital represented at the Bank’s General Shareholders Meeting to demand that the attendance list of the Bank’s General Shareholders Meeting be checked by a committee appointed for that purpose and composed of at least three persons, including one person appointed by the parties making the demand,
the right according to which the Bank’s General Shareholders Meeting is not allowed to adopt a resolution to remove an item from the agenda or not to consider an issue which was placed on the agenda upon request of shareholders unless the shareholders express their consent to the same,
the right according to which the Bank’s General Shareholders Meeting may not be adjourned deliberately to obstruct the exercise of the shareholders rights,
the right of each individual participant of the Bank’s General Shareholders Meeting to nominate one or more candidates for membership on the Bank’s Supervisory Board,
the right of shareholders holding at least a fifth of the share capital to demand block voting on the appointment of the Supervisory Board; a relevant request should be submitted to the Management Board in writing at such time as to enable its placement on the agenda of the Bank’s General Shareholders Meeting,
the right to inspect the book of minutes and to receive copies of resolutions authenticated by the Management Board,
the right according to which the Chairperson of the Bank’s General Shareholders Meeting is obliged to ensure that the rights of minority shareholders are respected,
the right of shareholders who raise an objection against a resolution to justify the objection in a concise manner.
All issues submitted to the Bank’s General Shareholders Meeting have the opinion of the Supervisory Board. According to Par. 9 of the Bank’s Statute, issues submitted to the Bank’s General Shareholders Meeting should be submitted to the Supervisory Board for consideration.
The Bank’s General Shareholders Meetings are attended by Members of the Management Board and Supervisory Board in makeup that enables providing content-related answers to question in discussion. An auditor is present at the General Shareholders Meeting in particular Ordinary General Shareholders Meeting, if financial matters of the Bank are to be discussed at the Meeting.
The Bank’s Management Board, as a body responsible for providing legal service to the Bank’s General Shareholders Meeting, exerts every effort to ensure that resolutions are formulated in a clear and unambiguous manner.
The Rules of Procedure for the Bank’s General Shareholders Meeting contain provisions (Par. 13.10–17) regarding block voting on the appointment of the Supervisory Board.
Any amendments to the Rules of Procedure for the Bank’s General Shareholders Meeting take effect as of the date of the next General Shareholders Meeting.
Responsibilities and powers of the Chairperson of the General Shareholders Meeting include in particular taking care of the orderly and compliant with the agreed agenda conduct of the meeting, ensuring that the rights and interests of all shareholders are respected, counteracting any abuse of rights by the participants, and ensuring that the rights of minority shareholders are observed.
Within the scope of their competence and to the extent necessary to resolve issues placed under discussion of the Bank’s General Shareholders Meeting, Members of the Supervisory Board, Members of the Management Board and the auditor provide the participants with the required explanations and information concerning the Bank.
Voting on procedural matters may be carried out only on issues related to the conduct of the Meeting. This voting procedure cannot be applied to resolutions which may have impact on the exercise of the shareholders rights.
Removing an item from the agenda or a decision not to consider an issue placed on the agenda at the request of shareholders requires a resolution of the Bank’s General Shareholders Meeting, adopted with a three-quarter majority of the votes, following approval by all the present shareholders who submitted such a request.
9) Rules of procedure of the Bank’s managerial, supervisory or administrative bodies and it’s committees, indicating its composition and changes that occurred during last financial year as [21]
Management Board
The Management Board of the Bank acts according to the Bank’s Statute and the Rules of procedure adopted by virtue of its Resolution No. 64/II/19 of February 25, 2019 and subsequently amended by a Resolution No. 328/VII/20 of July 24, 2020. The Rules of procedure shall in particular define the matters which require joint consideration by the Management Board, and rules of holding Management Board meetings, including meetings held through means of remote communication and the rules for adopting resolutions by written procedure or by means of remote communication. The Rules of Procedure of the Management Board are available on the Bank’s website[22]. The Members of the Management Board shall coordinate and supervise the activity of the Bank pursuant to the binding division of competence adopted by the Management Board and approved by the Supervisory Board.
According to the Bank’s Statute, the Management Board shall conduct the matters of the Bank and represent the Bank. Issues not reserved by virtue of the provisions of the law or of the Statute to fall within the scope of competence of other Bank’s statutory bodies, shall fall within the scope of competence of the Bank’s Management Board.
Pursuant to the provisions of the Management Board’s Rules of procedure, the Bank’s Management Board prepares the development strategy for the Bank. The Supervisory Board issues its opinions on the Bank’s long-term development plans and annual financial plans, prepared by the Management Board. The Management Board ensures that the management system at the Bank is transparent and effective, and runs the Bank’s affairs in compliance with applicable laws and Best Practices. The core values underlying the management of the Bank are professionalism, credibility, while customer relations are underpinned by reliability and integrity, as well as compliance with applicable laws, including the provisions on anti-money laundering and financing of terrorism.
Pursuing the principle of efficient and prudent management, the Management Board is responsible for initiation and implementation of programs aimed at increasing the Bank’s value and rate of return for the shareholders, as well as protection of the employees’ long-term interests. In its decisions, the Bank’s Management Board makes every effort to ensure, to the maximum extent possible, the promotion of the interests of the shareholders, creditors, employees, as well as other entities and persons co-operating with the Bank in its business activity.
As at January 1, 2020 the Management Board of the Bank was composed of the following persons:
Marek Lusztyn Vice President of the Management Board, managing the work of the Management Board of the Bank (on February 4, 2020, the Polish Financial Supervision Authority, unanimously approved the appointment of Mr. Marek Lusztyn as the President of the Management Board of the Bank),
Magdalena Zmitrowicz Vice President of the Management Board,
Marcin Gadomski Vice President of the Management Board (a request has been made to the Polish Financial Supervision Authority for approval to appoint Mr. Marcin Gadomski as a Member of the Management Board supervising the management of risks significant for the Bank’s activity),
Tomasz Kubiak Vice President of the Management Board,
Tomasz Styczyński Vice President of the Management Board,
Marek TomczukVice President of the Management Board,
Grzegorz Olszewski Member of the Management Board.
On February 4, 2020, the Supervisory Board of the Bank, after assessing suitability, appointed Mr. Jarosław Fuchs to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank, with the effect from February 15, 2020.
On April 14, 2020, the Supervisory Board of the Bank, after assessing suitability, appointed Mr. Leszek Skiba to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank, with the effect from April 20, 2020 and appointed Mr. Grzegorz Olszewski, who currently holds the position of the Member of the Management Board of the Bank, for the position of the Vice President of the Management Board of the Bank, with the effect from April 15, 2020.
On April 21, 2020:
The Supervisory Board of the Bank, after assessing suitability, appointed, as of April 22, 2020, Mr. Leszek Skiba, the current Vice President of the Management Board of the Bank, as the President of the Management Board of the Bank for the current joint term of office, subject to obtaining the consent of the Polish Financial Supervision Authority and upon obtaining such consent. Until the above condition is met, on which the appointment of Mr. Leszek Skiba as the President of the Management Board of the Bank depends, the Supervisory Board of the Bank entrusted him with managing the work of the Management Board of the Bank.
Mr. Marek Lusztyn resigned, in an agreement with the Supervisory Board of the Bank, from the position of the President of the Management Board of the Bank, without resigning from the composition of the Management Board of the Bank. In the resignation there were no reasons for its submission. Simultaneously, the Supervisory Board of the Bank, after assessing suitability, entrusted Mr. Marek Lusztyn with the function of the Vice President of the Management Board of the Bank and, subject to obtaining the consent of the Polish Financial Supervision Authority and upon obtaining such consent, entrusted Mr. Marek Lusztyn with the function of the Vice President of the Management Board of the Bank supervising the management of material risk in the Bank's operations.
The Supervisory Board of the Bank, after assessing suitability, appointed Mr. Krzysztof Kozłowski to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank, with the effect from April 22, 2020.
Mr. Marcin Gadomski resigned from the function of the Vice President of the Management Board of the Bank and from the composition of the Management Board of the Bank. The resignation did not include the reason for its submission. Mr. Marcin Gadomski remains an employee of the Bank.
On June 1, 2020 Mr. Marek Lusztyn resigned with the effect at a future date, i.e. on June 30, 2020 from the position of the Vice-President of the Management Board of the Bank supervising the activities of the Risks Management Division as well as from the composition of the Management Board of the Bank.
Taking into consideration continuity of decision making, and in line with good practices, Mr. Marek Lusztyn resigned with the effect at a future date, i.e. on June 30, 2020, in order to enable the Supervisory Board of the Bank to make a selection for the abovementioned position. The resignation did not contain the reasons for its submission.
On June 16, 2020 the Supervisory Board of the Bank, after assessing suitability, appointed Mr. Marcin Gadomski to the Management Board of the Bank for the current joint term of office as the Vice President of the Management Board of the Bank with the effect from July 1, 2020. Additionally the Supervisory Board of the Bank, subject to obtaining the consent of the Polish Financial Supervision Authority and upon obtaining such consent, entrusted Mr. Marcin Gadomski with the function of the Vice President of the Management Board of the Bank supervising the management of material risk in the Bank's operations.
On December 21, 2020 Mr. Marek Tomczuk resigned from the position of the Vice-President of the Management Board of the Bank as well as from the composition of the Management Board of the Bank.
On December 31, 2020 Mr. Tomasz Styczyński and Mr. Grzegorz Olszewski resigned from the positions of the Vice-Presidents of the Management Board of the Bank as well as from the composition of the Management Board of the Bank.
Mr. Tomasz Styczyński’s resignation takes effect as of January 31, 2021. In accordance with the document containing resignation, it was submitted due to a different vision of Bank’s development and its forms serves a purpose of finalizing matters conducted by Mr. Tomasz Styczyński, in particular related to transformation of the Corporate Banking and MIB Division, and offers the Supervisory Board with a possibility to select a successor who will assume supervision over the Division and responsibility for the undertaken projects in accordance with the highest standards and in the spirit of responsibility for stable and prudent management.
Mr. Grzegorz Olszewski’s resignation takes effect with the end of December 31, 2020. In accordance with the document containing resignation, it was submitted due to a different vision of Bank’s development and the sense of responsibility for the stable and prudent management of the area of Technology and Corporate Services.
As at December 31, 2020 the Management Board of the Bank was composed of the following persons:
Leszek Skiba Vice President of the Management Board managing the work of the Management Board of the Bank (the Bank applied to the Polish Financial Supervision Authority for consent to appoint Mr. Leszek Skiba as the President of the Management Board of the Bank),
Magdalena Zmitrowicz Vice President of the Management Board,
Marcin Gadomski Vice President of the Management Board (the Bank applied to the Polish Financial Supervision Authority for consent to entrust Mr. Marcin Gadomski with the function of the Vice President of the Management Board, supervising the management of significant risk in the Bank's activity),
Tomasz Kubiak Vice President of the Management Board,
Tomasz Styczyński Vice President of the Management Board,
Grzegorz Olszewski Vice President of the Management Board,
Jarosław Fuchs Vice President of the Management Board,
Krzysztof Kozłowski Vice President of the Management Board.
Supervisory Board
The Supervisory Board acts on the basis of the Rules of procedure adopted by virtue of its Resolution No. 10/15 of February 6, 2015. amended by the Resolution No. 9/18 of the Supervisory Board of March 13, 2018 and also the Resolution No. 157/20 of the Supervisory Board of November 3, 2020. The Rules of procedure of the Supervisory Board are available on the Bank’s website.[23]
The role of the Supervisory Board is to exercise a general and permanent supervision over the Bank’s activities, taking into consideration the Bank’s function of a parent company regarding subsidiaries of the Bank. Apart from the competence defined in law, the Supervisory Board possesses competences stated in the Bank’s Statute, the Supervisory Board in particular examines every matter submitted to the Bank’s General Shareholders Meeting.
The Supervisory Board Members always act with due regard to the Bank’s interests and take all actions necessary to ensure efficient functioning of the Supervisory Board. Moreover, Members of the Supervisory Board of the Bank are prohibited from taking any decisions or actions that would lead to conflicts of interests or that would be not in line with the Bank’s best interest. About existing or potential conflict of interests the Member of the Supervisory Board informs the Supervisory Board and restrains from participating in a discussion and voting on resolution regarding issue in the case of which a conflict of interest occurred.
Each year, according to regulations in force, the Supervisory Board prepares and submits to the Bank’s General Shareholders Meeting an assessment of the report on the activities of the Bank and the Group prepared by the Bank’s Management Board, assessment of the Bank’s financial statements and consolidated financial statements of the Group, assessment of motion concerning profit’s division or losses coverage, as well as the Supervisory Board activities statements. The assessments prepared by the Supervisory Board are made available to the shareholders before the Bank’s General Shareholders Meeting.
The Supervisory Board set up dedicated committees which deal with specific areas of the Bank’s operations, including the Audit Committee, the Nomination and Remuneration Committee, and Risk Committee. Reports of the committees set up by the Supervisory Board are stored at the Bank’s Head Office. Annual reports of committees are annexed to and published with the Supervisory Board statement.
As at January 1, 2020 the Supervisory Board was composed of the following persons:
Paweł Surówka Chairman of the Supervisory Board,
Joanna Dynysiuk Vice Chairwoman of the Supervisory Board,
Stanisław Ryszard Kaczoruk Vice Chairman of the Supervisory Board,
Paweł Stopczyński Secretary of the Supervisory Board,
Sabina Bigos-Jaworowska Member of the Supervisory Board,
Justyna Głębikowska-Michalak Member of the Supervisory Board,
Grzegorz Janas Member of the Supervisory Board,
Michał Kaszyński Member of the Supervisory Board,
Marian Majcher Member of the Supervisory Board.
On April 15, 2020 Mr. Paweł Surówka resigned from the position of the Chairman of the Supervisory Board of the Bank and from the composition of the Supervisory Board of the Bank, with the effect from April 20, 2020. As the reason for the resignation, Mr. Paweł Surówka indicated his earlier resignation from the position of the President of the Management Board of Powszechny Zakład Ubezpieczeń S.A., the strategic shareholder of the Bank.
On the meeting held on April 21, 2020 the Supervisory Board of the Bank appointed, effective as of the date of adoption of a resolution, Mr. Grzegorz Janas, current member of the Supervisory Board of the Bank, to the function of the Chairman of the Supervisory Board of the Bank during the current joint term of office.
On May 19, 2020 all members of the Supervisory Board of the Bank of the joint term of office ending in 2020, i.e. Chairman of the Supervisory Board Mr. Grzegorz Janas, Vice-Chairmen of the Supervisory Board Mrs. Joanna Dynysiuk and Mr. Stanisław Ryszard Kaczoruk, Secretary of the Supervisory Board Mr. Paweł Stopczyński, as well as members of the Supervisory Board Mrs. Sabina Bigos-Jaworowska, Mrs. Justyna Głębikowska-Michalak, Mr. Michał Kaszyński and Mr. Marian Majcher, resigned from their positions in the Supervisory Board of the Bank and from the mandates in the Supervisory Board of the Bank of the joint term of office ending in 2020, with the effect from the day of the Ordinary General Meeting of the Bank for the financial year 2019.
The resignations were submitted for prudential reasons, i.e. due to doubts expressed in jurisprudence and court rulings regarding the counting of the mandate and term of office of a member of the supervisory board, in particular the understanding of "last full year of service".
The Ordinary General Meeting of the Bank on May 22, 2020, taking into account the assessment of compliance with suitability requirements, appointed the members of the Supervisory Board of the Bank for a new joint term of three years, beginning on May 23, 2020.
The following persons were appointed to the Supervisory Board of the Bank:
Beata Kozłowska-Chyła Member of the Supervisory Board,
Małgorzata Sadurska Member of the Supervisory Board,
Marcin Eckert Member of the Supervisory Board,
Sabina Bigos-Jaworowska Member of the Supervisory Board,
Michał Kaszyński Member of the Supervisory Board,
Joanna Dynysiuk Member of the Supervisory Board,
Marian Majcher Member of the Supervisory Board,
Stanisław Ryszard Kaczoruk Member of the Supervisory Board,
Justyna Głębikowska-Michalak Member of the Supervisory Board.
On the meeting held on May 29, 2020, the Supervisory Board of the Bank appointed: Mrs. Beata Kozłowska-Chyła as the Chairwoman of the Supervisory Board of the Bank, Mrs. Joanna Dynysiuk as the Vice Chairwoman of the Supervisory Board of the Bank, Mr. Marcin Eckert as the Vice Chairman of the Supervisory Board of the Bank, Mr. Stanisław Ryszard Kaczoruk as the Secretary of the Supervisory Board of the Bank. The abovementioned appointments are effective on May 29, 2020 and took place for the period of the current joint three-year term of office of the Supervisory Board of the Bank, commenced on May 23, 2020.
As at December 31, 2020 the Supervisory Board was composed of the following persons:
Beata Kozłowska-Chyła Chairwoman of the Supervisory Board of the Bank,
Joanna Dynysiuk Vice Chairwoman of the Supervisory Board,
Marcin Eckert Vice Chairman of the Supervisory Board,
Stanisław Ryszard Kaczoruk Secretary of the Supervisory Board,
Małgorzata Sadurska Member of the Supervisory Board,
Sabina Bigos-Jaworowska Member of the Supervisory Board,
Justyna Głębikowska-Michalak Member of the Supervisory Board,
Michał Kaszyński Member of the Supervisory Board,
Marian Majcher Member of the Supervisory Board.
Audit Committee
Audit Committee acts on the basis of the Rule of procedure of the Audit Committee of the Supervisory Board of Bank Pekao S.A., which was adopted by the Resolution No. 98/19 dated November 5, 2019. and subsequently amended by Previously in force Supervisory Board’s Resolution No 131/20 of July 15, 2020; by Resolution No 158/20 of November 3, 2020 and by Resolution 165/20 of November 10, 2020.
The Audit Committee supports the Supervisory Board in the performance of its duties, therein related to the monitoring financial reporting process, financial auditing activities, and regularity and effectiveness of the Bank’s internal control systems, management of risk and function of internal audit, compliance with applicable laws and procedures governing the Bank’s operations, independence of statutory auditor and auditing company and the resources of the Internal Audit Department. The Audit Committee is composed of 3 (three) to 5 (five) persons selected from among the Members of the Supervisory Board. At least one of the members of the Audit Committee has the knowledge and skills in the field of accounting or auditing.
Most Members of the Audit Committee, including its Chairman and a Member of the Committee with knowledge and skills in accounting or auditing of financial statements, are independent of the Bank in the meaning of the Par. 129 section 3 Act on statutory auditors, audit firms and public supervision.
The members of the Audit Committee have the skills necessary to properly perform the entrusted function, including appropriate education and professional experience. Qualifications of the members of the Audit Committee, including education and professional experience, together with an indication of how were acquired, were presented on the Bank’s website.[24]
Meetings of the Audit Committee are held as depending to the needs, but not less frequently than four times a year, in compatible terms with key dates in the Bank’s quarterly reporting cycle and the review of the annual audit plan presented by the Chief of the Internal Audit Department. In 2020 there were 15 meetings of the Audit Committee.
As at January 1, 2020 the Audit Committee was composed of the following persons:
Justyna Głębikowska-Michalak President of the Committee (independent member, has the qualifications of a statutory auditor, graduate of the Faculty of Economics UMCS in Lublin and post-graduate studies "Accounting" at the University of Economics in Poznań),
Joanna Dynysiuk Member of the Committee,
Grzegorz Janas Member of the Committee,
Sabina Bigos-Jaworska Member of the Committee (independent member),
Michał Kaszyński Member of the Committee (independent member).
On May 29, 2020, the newly established Supervisory Board established a new composition of the Audit Committee, which was as follows:
Justyna Głębikowska-Michalak President of the Committee (independent member, has the qualifications of a statutory auditor, graduate of the Faculty of Economics UMCS in Lublin and post-graduate studies "Accounting" at the University of Economics in Poznań),
Marcin Eckert Member of the Committee,
Joanna Dynysiuk Member of the Committee,
Sabina Bigos-Jaworowska Member of the Committee (independent member),
Michał Kaszyński Member of the Committee (independent member) .
At its meeting of May 29, 2020, the Audit Committee selected Martin Eckert as The Committee's Secretary.
As at December 31, 2020, the composition of the Audit Committee was as follows:
Justyna Głębikowska-Michalak President of the Committee (independent member, has the qualifications of a statutory auditor, graduate of the Faculty of Economics UMCS in Lublin and post-graduate studies "Accounting" at the University of Economics in Poznań),
Marcin Eckert Secretary of the Committee,
Joanna Dynysiuk Member of the Committee,
Sabina Bigos-Jaworowska Member of the Committee (independent member),
Michał Kaszyński Member of the Committee (independent member) .
In 2019 the audit firm selected to audit and review the financial statements of Bank and the consolidated financial statements of Bank Group provided non-audit services to the Bank and its subsidiaries.
Pursuant to the provisions of the policy adopted by the Bank - “Policy for conducting permitted non-audit services by an audit firm carrying out the statutory audit, entities related to this audit firm and any member of the network to which the audit firm belongs”, the Audit Committee of the Bank, the Audit Committee of the subsidiaries that are public interest entities and the Audit Committee of the Parent Entity granted an approval for provision of permitted services by the audit firm for the Bank and its subsidiaries.
Obtaining an approval was preceded by the Bank and its subsidiaries conducting an appropriate assessment of the threats and safeguards of independence referred to in art. 69-73 of the Act of 11 May 2017 on statutory auditors, audit firms and public supervision (Journal of Laws of 2019, item 1421, as amended, hereinafter referred to as the "Act").
As a public interest entity, the Bank implemented, based on the resolutions of the Supervisory Board of the Bank, the policies and procedures set out in Article 130 para. 1 item 5-7 of the Act.
In order to meet the requirements of the Act, the following documents have been issued for use:
1) The policy of selecting an audit firm to carry out statutory audit of Bank Pekao S.A. financial statements and the principles of cooperation with the audit firm, the statutory auditor and the supervisory authority,
2) The procedure of selecting an audit firm to carry out statutory audit of Bank Pekao S.A. financial statements,
3) The policy of carrying out the permitted non-audit services by the audit firm conducting the audit, by entities related to this audit firm and by any member of the network to which the audit firm belongs.
The main assumptions of the policies are as follows:
A. The policy of selecting an audit firm to carry out statutory audit of Bank Pekao S.A. financial statements and the principles of cooperation with the audit firm, the statutory auditor and the supervisory authority,
The selection of a firm authorized to conduct statutory audit of the Bank's financial statements and the Group’s consolidated financial statements is made by the General Meeting specifying the years for which the Bank's financial statements and the Group’s consolidated financial statements will be subject to statutory audit by a selected audit firm based on proposal of the Supervisory Board.
The Supervisory Board presents to the General Meeting a proposal regarding the appointment of an audit firm. The proposal takes into account the recommendation and preferences of the Audit Committee. In its recommendation, the Audit Committee states that its recommendation is free from the influence of a third party and that the Bank did not conclude agreements containing clauses limiting the possibility of selecting an audit firm by the General Meeting.
Recommendation of the Audit Committee regarding the selection of an audit firm carrying out a statutory audit, which does not concern the extension of the contract for the audit of the financial statements:
contains at least two options for the selection of the audit firm with justification and indication of the justified preference of the Audit Committee with respect to one of them;
is prepared following a selection procedure organized by the Bank, carried out in accordance with the principles set out in the Procedure of selecting an audit firm to carry out statutory audit of Bank Pekao S.A. financial statements.
The first contract for the audit of the financial statements is concluded with the audit firm for a period of not less than 2 years with the possibility of extension for another period of at least two years.
Maximum duration of continued duration of statutory audits, carried out by the same audit firm or audit firm associated with this audit firm or any member of the network operating in the European Union countries to which these audit firms belong, must not exceed 10 years, respectively for the key statutory auditor.
After the maximum duration of the order, the Bank cannot commission a statutory audit to the audit firm or any entity from its network operating within the European Union for the next 4 years, and in the case of a key statutory auditor after at least 3 years from the end of the last statutory audit.
B. The policy of carrying out the permitted non-audit services by the audit firm conducting the audit, by entities related to this audit firm and by any member of the network to which the audit firm belongs
The auditing firm carrying out the statutory audit of the Bank or any member of the network to which the audit firm belongs do not directly or indirectly provide to the Bank, its Parent Entity or its subsidiaries any prohibited services that are not audit of the financial statements in the following periods:
the period between the beginning of the period audited and the issuing of the audit report mentioned in the Article 5 para. 1 (without point e) of Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audits of public interest entities and repealing Commission Decision 2005/909/EC, and
the financial year immediately preceding the period between the beginning of the period audited and the issuing of the audit report in relation to the services of designing and implementing internal control or risk management procedures related to the preparation or control of financial information or designing and implementing financial information technology systems.
The audit firm carrying out the statutory audit of the Bank and each member of the network to which the audit firm belongs may provide to the Bank, its Parent Entity or its controlled undertakings the so-called permitted services that are not statutory audits of financial statements subject to the approval of the Audit Committee after it has properly assessed threats to independence and the safeguards as referred to in art. 69-73 of the Act.
The organizational unit of the Bank or entity controlled by the Bank requesting the purchase of services provided by the audit firm carrying out the statutory audit of the Bank or by members of the network to which the audit firm belongs must obtain the approval of the Audit Committee for the provision of a permitted service, after assessing whether the requested service is not a prohibited service and whether the requested permitted service will not exceed the limit for permitted services limited to no more than 70% of the average of the fees paid in the last three consecutive financial years for the statutory audits of the Bank and of its Parent Entity, of its controlled undertakings and of consolidated financial statements of that group of undertakings.
Entities belonging to the Pekao Group are required to obtain the approval of the Parent Entity's Audit Committee (PZU S.A.) for the purchase of a permitted service provided to these entities after the Parent Company's Audit Committee performs an assessment of threats to independence and the safeguards as referred to in art. 69-73 of the Act.
Recommendation of the Bank's Audit Committee regarding the selection of an audit firm carrying out statutory audit of the Bank's financial statements, which did not concern the extension of the contract for the audit of the financial statements:
was drawn up following a selection procedure organized by the Bank, carried out in accordance with the principles set out in the Procedure of selecting an audit firm to carry out statutory audit of Bank Pekao S.A. financial statements.
ensured the selection of an audit firm that meets the conditions for expressing unbiased and independent opinion on the financial statements of the Bank and of the Bank’s Group.
ensured the selection of an audit firm that has experience and knowledge to accurately assess the accuracy and reliability of recognition in the financial statements of any operations arising from the Bank's operations.
it contained justification and two options for the selection of the audit firm, along with an indication of the justified preferences of the Audit Committee with respect to one of them.
was free from third party influence.
Nomination and Remuneration Committee
The Committee operates on the basis of the Rules of Procedure of the Supervisory Board of the Bank and the Rules of Nomination and Remuneration Committee which was adopted by the Supervisory Board on April 10, 2020. - Resolution No 25/20 and subsequently amended by Resolution No 133/20 of July 15, 2020; Resolution No 160/20 of November 3, 2020 and Resolution No 167/20 of November 10, 2020. The Rules of Nomination and Remuneration Committee was adopted on April 27, 2015 and subsequently amended by Resolution No 75/16 of October 11, 2016 and expired by Resolution No 46/17 of June 9, 2017.
The purpose of the Nomination and Remuneration Committee is to assist the Supervisory Board in carrying out its tasks related, among other things, to the formation of the Management Board of the Bank and the supervision of the policy of the Management Board of the Bank with regard to the selection and appointment of persons holding managerial positions at the Bank. The Committee shall, in its action, be guided by prudent and stable management of risk, capital and liquidity and special attention to the long-term well-being of the Bank and the interests of the Bank's shareholders.
The Nomination and Remuneration Committee shall be responsible for, among other things :
a) determining the responsibilities of a candidate for the Board, as well as the requirements of knowledge and competence and the expected commitment in terms of the time spent necessary for the performance of the functions;
b) periodically assess, at least once a year, the knowledge, competence and experience of the Management Board of the Bank as a whole and of the individual Members of the Management Board of the Bank and to inform the Management Board of the Bank of the results of that assessment;
c) submitting proposals to the Supervisory Board in the field of: determining the remuneration for the members of the Management Board of the Bank, submitting proposals on remuneration to the General Meeting on remuneration for members of the Supervisory Board, the amount of remuneration (including bonuses) of the Director of the Compliance Department and the Director of the Internal Audit Department;
d) making recommendations to the Supervisory Board regarding: assessing the individual suitability of candidates for members of the Management Board of the Bank and members of the Supervisory Board at the stage of appointment of these bodies and members of those bodies in the performance of their duties, assessing the collective suitability of the Management Board of the Bank and the Supervisory Board in order to ensure an adequate level of collegial management or supervision of the Bank, succession plans of the members of the Management Board of the Bank in order to ensure the continuity of management.
e) preparation and submission to the Supervisory Board once a year of the report on the evaluation of the functioning of the Remuneration Policy of the Bank Polska Kasa Opieki Spółka Akcyjna.
As at January 1, 2020 Nomination and Remuneration Committee was composed of the following persons:
Paweł Stopczyński President of the Committee,
Sabina Bigos-Jaworowska Member of the Committee,
Paweł Surówka Member of the Committee,
Joanna Dynysiuk Member of the Committee.
On May 29, 2020, the newly established Supervisory Board established a new composition of the Nomination and Remuneration Committee, which was as follows:
Beata Kozłowska-Chyła Member of the Committee,
Małgorzata Sadurska Member of the Committee,
Sabina Bigos-Jaworowska Member of the Committee,
Joanna Dynysiuk Member of the Committee,
Marian Majcher Member of the Committee.
At its meeting of May 29, 2020, the Committee on Nominations and Remuneration elected Beata Kozlowska-Chyła as the President of the Committee and Małgorzata Sadurska as Secretary of the Committee.
As at December 31, 2020, the composition of the Nomination and Remuneration Committee was as follows:
Beata Kozłowska-Chyła President of the Committee,
Malgorzata Sadurska Secretary of the Committee,
Sabina Bigos-Jaworowska Member of the Committee,
Joanna Dynysiuk Member of the Committee,
Marian Majcher Member of the Committee.
Risk Committee
Risk Committee operates on the basis of “Rules of Procedure of the Risk Committee” which was adopted by the Supervisory Board in the Resolution no. 99/19 dated November 5, 2019, and then amended by Resolution no. 132/20 dated July 15, 2020, Resolution no 159/20 dated November 3, 2020 r. and Resolution no. 166/20 dated November 10, 2020. Mission of the Committee is to support the Supervisory Board in fulfillment of its obligations concerning supervision over risk management system and assessment of the adequacy and effectiveness of the said system. In its activities, the Committee is guided by careful and stable management of risk, capital and liquidity, and particular care for the long-term good of the Bank and the interests of shareholders.
The tasks of the Risk Committee include, among others, to express an opinion on:
a) the Bank's overall current and future risk appetite, expressed in the form of risk appetite,
b) a risk management strategy developed by the Bank's Management Board in the Bank's activities, including policies in the area of credit, financial and operational risk,
c) reports on the risk profile and implementation of the risk management strategy, presented by the Bank's Management Board.
As at January 1, 2020 the Risk Committee was composed of the following persons:
Stanisław Ryszard Kaczoruk President of the Committee,
Michał Kaszyński Member of the Committee,
Marian Majcher Member of the Committee.
On May 29, 2020, the newly established Supervisory Board established a new composition of the Risk Committee, which was as follows:
Stanislaw Ryszard Kaczoruk Member of the Committee,
Marcin Eckert Member of the Committee,
Michal Kaszyński Member of the Committee,
Marian Majcher Member of the Committee,
Małgorzata Sadurska Member of the Committee.
At its meeting of May 29, 2020, the Risk Committee elected Stanislaw Ryszard Kaczoruk as President of the Committee and Marcin Eckert as Secretary of the Committee.
As at December 31, 2020, the composition of the Risk Committee was as follows:
Stanislaw Ryszard Kaczoruk President of the Committee,
Marcin Eckert Secretary of the Committee,
Michal Kaszyński Member of the Committee,
Marian Majcher Member of the Committee,
Małgorzata Sadurska Member of the Committee.
10) Description of the Bank's diversity Policy applied to governing, managing and supervising bodies with respect in particular to such factors as age, gender or education and professional experience, aims of the diversity policy, manner of its realisation and results in the given reporting period[25]
On November 3, 2020 Management Board of the Bank adopted by resolution and on November 4, 2020 Supervisory Board of the Bank accepted by resolution on “Policy of gender equality and diversity with respect to the bank's employees, including members of the Supervisory Board, members of the Management Board and persons performing key functions in the Bank Polska Kasa Opieki Spółka Akcyjna" (hereinafter referred to as "Policy"). The previous “Diversity policy in reference to Supervisory Board members, Management Board members and Key Function Holders in Bank Polska Kasa Opieki Spółka Akcyjna" was repealed.
This Policy defines the Bank’s strategy of for managing the diversity of the Bank's employees, including diversity in reference to appointment the Supervisory Board members, Management Board members and Key Function Holders in the Bank, and defines guidelines aimed at ensuring that the Bank's employees are able to manage their careers, achieve success and evaluate their work on the basis of individual achievements, regardless of gender.
The purpose of diversity strategy of the Bank is to provide high quality of tasks execution by its employees, including selection of qualified people to hold function in the Supervisory Board, the Management Board and Key Function Holders in the Bank, using as the first objective criteria and taking into account the benefits of diversity.
The diversity strategy includes and uses to achieve the best outcome differences, which in addition to knowledge, skills and work experience result from educational background, geographical origin, gender and age. The diversity strategy, with regard to the selection of members of the Supervisory Board/ members of the Management Board / persons performing a key function in the Bank, is also conducted in the processes of selection, suitability assessment and succession.
The current share of women in managerial positions at the Bank is 58.8% and in senior managerial positions is 45.11%.
Application of diversity policy takes place in decision making processes in scope of: external selection, internal appointment, succession planning, taking into account provisions on equal treatment in the field of establishing an employment relationship, which include principle of gender equality.
Due to the regulations adopted in this regard and the importance that the Management Board pays for the values presented in the Policy, it is subject to constant review.
In 2018-2020 the share of men and women the Management Board was following.
|
31.12.2018 |
31.12.2019 |
31.12.2020 |
|||
|
No. of persons |
% |
No. of persons |
% |
No. of persons |
% |
Women |
1 |
14% |
1 |
14% |
1 |
12,5% |
Men |
6 |
86% |
6 |
86% |
7 |
87,5% |
Sum |
7 |
100% |
7 |
100% |
8 |
100% |
In 2018-2020 the share of men and women the Supervisory Board was following.
|
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
|||
|
No. Of persons |
% |
No. Of persons |
% |
No. Of persons |
% |
Women |
3 |
33% |
3 |
33% |
5 |
55,5% |
Men |
6 |
67% |
6 |
67% |
4 |
44,5% |
Sum |
9 |
100% |
9 |
100% |
9 |
100% |
Statement on Non-financial information of the Bank Pekao S.A. Capital Group for 2020
prepared together with the statement on Non-financial information of Bank Pekao S.A.
[GRI 102-1], [GRI 102-3], [GRI 102-4], [GRI 102-5], [GRI 102-6], [GRI 102-10], [GRI 103-2], [GRI G4-FS13],
Bank Polska Kasa Opieki Spółka Akcyjna (hereinafter: “Bank Pekao” or “Bank”) with its registered office in Warsaw, established in 1929, is one of the largest financial institutions in Central and Eastern Europe and one of the two largest universal banks in Poland with over PLN 200 billion in assets. As at 31 December 2020, the Bank’s market capitalisation amounted to PLN 16.0 billion.
It has the second largest branch network with a wide geographical exposure comprised of 713 outlets and provides services to approximately 5,5 million retail customers while providing them with 1,592 ATMs throughout the country. The Bank offers a full range of banking services to retail and institutional customers, and operates primarily in Poland. As a leading corporate bank in Poland, it serves half the corporations in Poland in 22 centres for medium-sized companies and 55 centres for SMEs. The status of a universal bank is based on the leading position on the market in private banking, asset management and brokerage activity. The diversified business profile of Bank Pekao is supported by a strong capital and liquidity position, while maintaining the highest risk management standards.
Since 1998, Bank Pekao is listed on the Warsaw Stock Exchange and participates in several local (including WIG 20, WIG, WIG ESG) and international indices (including MSCI EM, Stoxx Europe 600, and FTSE Developed). The total value of dividends paid for 2007-2018 amounted to nearly PLN 23 billion, making the Bank one of the companies with the highest level of dividends paid over the last years in Poland.
Since 2017, Bank Pekao S.A. has been a member of the PZU S.A. capital group (hereinafter: “PZU Group”), the largest financial institution in Central and Eastern Europe.
Bank Pekao is also a part of the Bank Pekao S.A. Capital Group (hereinafter: “Pekao Group” or “Bank Capital Group”)[[1] as a parent company. The Bank Pekao S.A. Capital Group includes financial institutions operating on the following markets: banking, asset management, brokerage services, transaction advisory services, leasing, and factoring. ]
The Pekao Group includes Bank Pekao and the following subsidiaries:
name of ENTITY |
REGISTERED OFFICE |
SCOPE OF ACTIVITY |
GROUP’S PERCENTAGE SHARE IN CAPITAL/VOTES
|
|
31.12.2020 |
31.12.2019 |
|||
Pekao Bank Hipoteczny S.A. |
Warsaw |
Banking |
100.00 |
100.00 |
Pekao Leasing Sp. z o.o. |
Warsaw |
Lease services |
100.00 |
100.00 |
Pekao Investment Banking S.A. |
Warsaw |
Brokerage services |
100.00 |
100.00 |
Pekao Faktoring sp. z o.o. |
Lublin |
Factoring services |
100.00 |
100.00 |
Pekao Powszechne Towarzystwo Emerytalne S.A. (under liquidation) |
Warsaw |
Pension fund management |
- |
100.00 |
Centrum Kart S.A. |
Warsaw |
Auxiliary financial services |
100.00 |
100.00 |
Pekao Financial Services Sp. z o.o. |
Warsaw |
Transfer agent |
66.50 |
66.50 |
Pekao Direct Sp. z o.o. |
Kraków |
Call centre services |
100.00 |
100.00 |
Pekao Property S.A. (in liquidation), including: |
Warsaw |
Developer activity |
100.00 |
100.00 |
FPB - Media Sp. z o.o.(in bankruptcy) |
Warsaw |
Developer activity |
100.00 |
100.00 |
Pekao Fundusz Kapitałowy Sp. z o.o. |
Warsaw |
Business consultancy |
100.00 |
100.00 |
Dom Inwestycyjny Xelion Sp. z o.o. |
Warsaw |
Financial intermediation |
100.00 |
100.00 |
Pekao Investment Management S.A., including: |
Warsaw |
Holding activity |
100.00 |
100.00 |
Pekao TFI S.A. |
Warsaw |
Asset management |
100.00 |
100.00 |
As at 31 December 2020, all subsidiaries were consolidated.
Changes in the Bank Pekao S.A. Capital Group in 2020
The most important changes in the Group that took place in 2020 are discussed below.
Change in the name of the Subsidiary
On 17 January 2020, the Register Court made an entry into the Register of Entrepreneurs of the National Court Register amending the Articles of Association of Centrum Bankowości Bezpośredniej Sp. z o.o. resulting from the resolution of the Extraordinary General Meeting of Shareholders adopted on 19 December 2019, consisting in a change of the Company’s name, which now reads Pekao Direct Spółka z ograniczoną odpowiedzialnością.
Acquisition of an organised part of Pekao Investment Banking S.A.
On 1 June 2020, the last stage of the process of integration of brokerage activities within the Bank Pekao S.A. Group was completed as a result of the acquisition by Bank Pekao S.A. of an organised part of the company separated from Pekao Investment Banking S.A. related to the provision of selected brokerage services to institutional customers. As part of the process, part of the Pekao Investment Banking S.A. team joined the structures of the Biuro Maklerskie Pekao. The remaining activities related to offering investment banking services remained with the Company.
Subsidiary Liquidation
In connection with the completion of the liquidation process, on 19 November 2020 the District Court for the capital city of Warsaw in Warsaw, 13th Commercial Division of the National Court Register struck Pekao Powszechne Towarzystwo Emerytalne Spółka Akcyjna in liquidation (Pekao PTE) from the Register of Entrepreneurs. The Bank held 100% of the company’s shares.
Liquidation took place in connection with the earlier takeover by Powszechne Towarzystwo Emerytalne PZU SA of the management of Pekao PTE’s pension funds, which took place on 19 May 2018. Pekao PTE was put into liquidation as at 1 June 2018.
Dissolution of the Affiliate
On 30 December 2020, the Bank received confirmation of the dissolution of the affiliated company CPF Management Inc. The dissolution was conducted in accordance with the legal procedures of the British Virgin Isles. The Bank held 40% of CPF Management Inc.’s capital.
In addition, in 2020, the Bank concluded the following agreements:
Dom Inwestycyjny Xelion Sp. z o.o.
On 18 December 2020, the Bank signed a preliminary agreement with Quercus TFI S.A. concerning the sale of 100% of shares in the Dom Inwestycyjny Xelion Sp. z o.o.
Execution of the sales transaction of shares in Xelion complements the process of integration of brokerage activities in Bank Pekao Group, initiated in 2018, as part of which the Dom Maklerski Pekao took over brokerage activities conducted by Centralny Dom Maklerski S.A., as well as by Pekao Investment Banking S.A. in the scope of service for institutional customers and by Xelion in the area of keeping brokerage accounts for retail customers. After the process of integrating brokerage activities has been completed, Xelion’s activity focused on brokering services, investment advice, and offering financial instruments through the largest network of exclusive Agents of the Investment Firm on the market.
The transaction value for the Bank is between PLN 38.5 million and PLN 39.5 million, depending on the value of Xelion’s cash paid to the Bank and will be increased by Xelion’s net profit (excluding non-cash one-off and unique events) in the period from 1 January 2020 to the transaction closing date. The notified transaction is conditional - closure requires appropriate regulatory approvals, as well as payment of part of Xelion’s cash to the Bank. Closure of the transaction is scheduled for the second half of 2021.
Krajowy Integrator Płatności S.A.
On 21 December 2020, the Bank signed a preliminary agreement for the acquisition of 38.33% of shares in the Krajowy Integrator Płatności S.A., the Tpay.com system operator. The acquisition of KIP S.A. shares by the Bank will enable the creation of a strategic partnership on the e-commerce market, while supporting the achievement of the Bank’s strategic objectives in the field of digital transformation and digitisation. The transaction will provide the Bank’s corporate customers with a comprehensive offer of payment acceptance, supplemented by products for the e‑commerce market. Closure of the transaction is planned for the turn of the first and second quarter of 2021 and depends on the lack of objection of the PFSA.
[GRI 102-2], [GRI 102-7], [GRI 103-2],
Bank Pekao is a universal bank offering financial services to individual and institutional customers. A wide range of products, innovative solutions, and an individual approach ensure that customers are provided with a comprehensive portfolio of financial services, while an integrated customer service model guarantees the highest quality of services and their optimised adaptation to changing needs.
The Bank’s business model is based on customer segmentation where the following areas are distinguished:
Retail Banking – serving individual customers and micro-enterprises that are supported by their own network of branches and partner outlets supported by leading remote service channels on the market, including digital channels,
Private Banking - serving wealthy customers, to whom investment advice is offered through private banking centres and remote channels,
Small and Medium-Sized Enterprise (SME) Banking – provides financial services to customers from the SME sector, who are serviced by advisors with the support of product specialists. The service is provided in specialised Business Customer Centres and universal retail branches. Customers are offered products and services tailored to their individual needs, based on solutions proven in corporate banking and adjusted to the SME segment,
Corporate and Investment Banking – provides financial services to medium-sized and large enterprises (segmentation based on revenue), public sector entities, financial institutions, and entities from the commercial real estate funding sector. Corporate and investment banking customers are serviced by consultants with the support of product specialists.
The Bank has measurable advantages that allow effective competition in the market and strengthening market position in strategic areas of the Bank’s activity. The Bank offers competitive products and services on the Polish market, a high quality of customer service, and a well-developed network of branches and ATMs that are conveniently accessible all over Poland, as well as a call centre and a competitive online and mobile banking platform for retail and corporate customers as well as small and micro businesses.
The Bank focuses on organic growth, but also monitors consolidation trends on the Polish and European markets, which may affect its competitive position and may offer opportunities to support the implementation of the Bank’s strategy through inorganic growth. At the same time, the Bank consistently develops cooperation with the PZU Group and synergies resulting from that cooperation.
[GRI 201-1],
Strategic directions and business priorities
In accordance with the adopted strategy for the years 2018-2020 „Strength of the Polish Bison”, the strategic priorities of the Bank in 2020 were: intelligent growth, digital and operational transformation and building long-term customer relationships based on an integrated service model that will strengthen the position of one of the most recognizable banks in Poland.
Key directions of the Bank's development outlined in the strategy translate into clearly defined business priorities:
Leader in smart growth – the Bank constantly improves its profitability, focusing on the most profitable and prospective business segments as well as strengthening acquisition activities and systematically developing the product offer in strategic business divisions i.e. retail and private banking, SME banking and corporate banking. Additional support for these activities is the implementation of income and cost synergies resulting from the developed cooperation within the PZU capital group,
Expert in efficiency and quality – the Bank undertakes numerous activities aimed at continuous improvement of process efficiency, cost discipline and service quality. They were implemented both in traditional sales channels (i.a. optimization of operational processes), as well as in constantly developed digital channels. The improvement of cost effectiveness was also implemented through the centralization of internal processes and their progressive automation and robotization,
Integrated risk management expert – the Bank, taking advantage of its strong position, continued the development of this area, which is crucial from the point of view of business transformation and safe growth in the new market conditions caused by the pandemic. These activities were focused primarily in the area of risk modelling and management and active cooperation of risk with business aimed at optimizing credit processes, as well as maintaining safe and responsible risk management in times of increased economic uncertainty,
Employer of the best talent – the continuous development of key competences and effective cooperation within the organization is extremely important for the Bank. Continuing the recruitment of talent and constant development of experts in key areas such as data analytics, technology and IT, the Bank undertook a number of activities aimed at amplifying its image as a modern institution and an employer for the best, which offers an attractive level of remuneration related to the results achieved and unique development opportunities.
The Bank's development plans and aspirations outlined in the strategy "Strength of the Polish Bison" were reflected in its ambitious financial goals for 2020. Nevertheless, the economic effects of the outbreak of the pandemic and the reduction of interest rates to a historically record low level radically changed the market conditions and significantly influenced the financial results of the banking sector, including the financial results of Bank Pekao, while rendering all assumptions and financial targets for 2020 that were developed and communicated prior to the outbreak of the pandemic. Rapid and sudden changes in the environment caused by the effects of the COVID-19 pandemic translated into the need to revise the financial aspirations communicated in previous years and strengthen a wide range of activities aimed at stable risk management in the era of increased uncertainty, as well as accelerating the digital transformation process in order to improve efficiency, and also providing support and making new services available to customers through remote channels.
In 2020, the timeframe of the strategy "Strength of the Polish Bison" for 2018-2020 ended, and therefore the Bank took steps to develop a new strategy for 2021-2023, which will be published in the first half of 2021.
Strategy execution in 2020
The effects of the outbreak of the pandemic had a strong impact on the entire economy for most of 2020, including the banking sector and the operating conditions of Bank Pekao. As in the case of other banks and the banking sector as a whole, the level of aspirations for financial and business goals assumed before the pandemic for 2020 has lost its relevance with the outbreak of the pandemic and the subsequent reduction in interest rates.
The new challenges brought about by the pandemic required a series of dynamic and decisive actions which the Bank undertook on a large scale adjusting its activities to the new market situation. In the face of the effects of the pandemic, the Bank implemented a number of new solutions that fit into the four development levers, including primarily in the field of accelerating the digital transformation, improving efficiency and maintaining a responsible approach to risk management in a new significant more demanding economic environment.
Strategic activities undertaken in 2020, within the framework of the Bank’s four development levers defined in the strategy, significantly supported the business development as well as the importance of financial and efficiency indicators in the new market environment.
Leader of smart growth
Retail Banking
Due to the scale and potential of growth, Retail Banking is a priority area of the Bank’s development. The strategic activities carried out in 2020 were primarily aimed at maintaining the high level of the number of acquired clients achieved in the previous year (> 400 k gross clients in line with the Bank’s strategy), development of sales of key credit products for individual clients, i.e. consumer loans and mortgage loans, strengthening customer relations through active cross-selling thanks to an extensive offer of investment and insurance products, as well as the development of the business customer segment (micro companies). The achievement of these goals was supported by activities intensifying the ability to acquire customers in digital channels using the latest biometric solutions, automatic and fully remote credit process for cash loans and the development of cooperation with the PZU Group in the range of insurance and investment products.
In response to the new and more demanding economic conditions caused by the pandemic, the Bank also took a number of measures to adapt to the changing needs and expectations of customers, increased the pace of digitization, tightening customer relations and increasing sales in remote channels. As part of activities accelerating the digital transformation, in 2020 Bank Pekao made available to customers a new version of the PeoPay mobile banking application. Modern graphic design and new functionalities of the application ensure even better navigation and ease of use.
Striving to improve its market position in the youngest customer segment, the Bank launched a new application for the youngest, i.e. PeoPay KIDS, which is a dedicated solution in the Bank’s offer for children aged 6-13. As a result of successfully undertaken marketing and sales activities, the Bank acquired over 37 k PeoPay KIDS for children accounts and reached +31% YoY dynamics of open accounts for children up to the age of 12.
Apart from the two above-mentioned new mobile banking applications, the Bank also provided customers with a new version of the internet banking platform, i.e. New Pekao 24, with a modern graphical interface and optimized and simplified processes that meet the needs of users and, in particular, allow easy financial management without leaving home.
In 2020, the Bank consistently carried out activities aimed at amplifying the Bank's position on the consumer goods financing market. For new and existing clients, the Bank has prepared a competitive loan offer, in particular focused on the gradual increase in availability of the "click" processes. At the end of 2020, the Bank introduced a novelty to the "Cash Click" offer - a simple repayment of loans held by the customer at various banks. The possibility of taking a new loan via the Internet and, at the same time, remotely connecting the repaid loans from other banks in the electronic service and in the mobile application is the first such solution on the Polish market. Despite the unfavourable market situation caused by the pandemic, the value of granted cash loans measured by the net volume amounted to PLN 3.1 bn net. The bank increased remote sales (sales volume per click) to PLN 1.05 bn net. Every second cash loan sold by Pekao in 2020 was in click processes.
In 2020, the Bank also continuously adapted its housing loan offer to the changing market conditions and consistently optimized the processes of granting and servicing housing loans, introducing further improvements. The most important ones include the introduction of a PLN home mortgage loan for natural persons with a fixed interest rate. Moreover, the Bank extended the method of sending notifications to customers about the amount of the loan instalment and information about the change in interest rates. In addition to the current traditional mail form, the customer can choose the option of being notified by e-mail or via the Pekao24 service. In the Pekao24 website, the possibility of sending documents regarding insurance and life policies without the need to visit a branch of the Bank has been added, and users have been able to conclude an agreement on the transfer of rights under the property insurance agreement (assignment). The Bank remains one of the leaders in the sale of mortgage loans. In 2020, sales of housing loans amounted to PLN 8.1 bn and the portfolio of PLN housing loans increased to PLN 60 bn (+6% YoY).
In 2020, Bank Pekao S.A. also consistently developed the offer of insurance products, adopting it to the needs of clients and the changing market environment, including in particular in the field of improving sales and the availability of the offer via remote channels (Internet and telephone).
The Bank continued to increase the sales of insurance related to credit products. In 2020, the share of PEX cash loans sold with CPI reached the average annual level of 35% and was by 1 pp higher than in 2019. In the case of mortgage loans, the share of loans sold with CPI reached the annual average level of 13 pp higher than in the previous year. In 2020, the strategic cooperation with PZU developed – the amount of the premium collected in the products provided by this Insurer was nearly twice as higher as in 2019. As part of the activities carried out in the area of assurbanking, i.a. in PZU branches, ~30% more clients were acquired compared to 2019.
Apart from the retail client segment, the business client segment remains one of the most important and prospective segments for the Bank. As part of the development of activities in this area, in 2020, the Bank carried out a number of activities increasing the attractiveness of the offer and increasing sales efficiency through optimization and digitization of processes.
As a result of the actions taken, the acquisition of new accounts for business clients in the micro segments amounted to 34 k. In the best months, every fifth micro-company became a client of the Bank via remote channels. This is largely due to digital processes enabling remote account opening and new functionalities of online and mobile banking systems. From 2020, micro-entrepreneurs can use the new version of the PeoPay application and the Pekao24 electronic banking service.
SME Banking
In 2020, the implementation of the strategy in the SME Banking division focused on the development of lending activities, process improvements and activities supporting acquisition and cross-sell.
In terms of the loan offer, the Bank focused on offering loans with BGK guarantees and on developing leasing and factoring sales. The Bank signed a portfolio agreement with Bank Gospodarstwa Krajowego regarding the de minimis guarantee line, which allowed the introduction of the possibility of securing loans for companies from the SME sector with a guarantee on special terms. Moreover, the Bank extended its offer of financing “on Click” to leasing with a credit decision within 15 minutes.
As part of activities aimed at reducing the negative effects of the COVID-19 pandemic on enterprises, Bank Pekao implemented a number of initiatives in the field of digitization by developing remote cooperation processes (e.g. by providing the possibility of remote contracting, or signing documents with a trusted profile and eID), and also introduced a number of solutions supporting the maintenance of financial liquidity of customers during the COVID-19 pandemic. Among others, also the solution in the form of the so-called "Credit holidays" for companies was introduced. The Bank also made it possible for customers to submit applications for a financial subsidy from the government aid program under the so-called "PFR financial shield". Customers entitled to receive a subsidy could submit applications via internet banking, as well as use the information posted on the website or a free, specially dedicated hotline.
In addition, Bank Pekao was the first in Poland to enable entities from the SME segment to establish relationships and open a company account completely remotely, without the need to visit a branch and meet an advisor.
Among the measures taken to optimize and digitize processes, the Bank also undertook, among others, implementation in Pekao Connect of a number of services that will allow improvements related to the integration of the client's financial and accounting system with banking systems, which will significantly optimize costs and shorten working time. Another example is the implemented cash service possibility facilitating the faster availability of closed deposits directed directly to Cash Distribution Centers of companies cooperating with the Bank.
The Bank's activities in the SME segment in 2020, despite exceptionally difficult economic conditions and record low interest rates, translated into an increase in the loan portfolio from PLN 5.1 bn to PLN 5.4 bn, which is + 5% YoY, at the same time, a very strong focus on increasing the portfolio security with BGK and EU guarantees, where the balance sheet exposure covered by guarantees increased by +0.4 bn from 1.5 to 1.9 bn (+ 25%). There was also a strong increase in the deposit base in the SME segment + 31% YoY, supported by liquidity programs for clients, as well as an increase in the number of acquired clients with a turnover above PLN 5 m by 6% compared to 2019.
Corporate and Investment Banking
In 2020, Bank Pekao consistently focused on building comprehensive relationships with customers, providing them with solutions tailored to their needs and business profile. This translated into strengthening Pekao's position as the bank of first choice for the most demanding corporate clients. A wide range of products and services, innovative solutions, individual approach and comprehensive financial services for enterprises, institutions and public sector units are appreciated by customers and constitute the strength of corporate banking of Bank Pekao S.A.
Similarly to the activities undertaken in the SME segment, also as part of the development of activities in the corporate banking segment and in order to increase the efficiency of the services provided, the Internet banking functionalities in the field of self-service were expanded, and a number of solutions were introduced to reduce the need to use paper documentation. It was made possible to conclude contracts remotely (bank accounts, cards, loans, guarantees or letters of credit) and sign documents with a trusted profile and eID and a durable medium was made available, enabling the transfer of all regulations and documentation to customers in a form ensuring authenticity and integrity and preventing unauthorized modifications of the document after publication. As part of the development of solutions that integrate clients' financial and accounting systems with online banking, PekaoBiznes24 has acquired two new partners. The solutions offered by the Bank's partners enable direct online communication with the Bank, while maintaining the highest security standards for an even larger group of customers.
The Bank also focused on providing solutions aimed at ensuring that customers maintain financial liquidity, and thus ensuring the continuation of their operations in the new economic conditions caused by the outbreak of the pandemic. A program was introduced that allows the use of special credit solutions in the field of financing, including extension of the repayment date, suspension of repayment of loan installments or other solutions of an individual nature agreed between the client and the Bank. Cooperation with Bank Gospodarstwa Krajowego was also developed in the field of systematic expansion of the list of products that can be secured with guarantees granted by BGK.
Despite the extraordinary economic situation, the volume of loans increased by 4% YoY and the number of customers in the strategic segment of medium customers (the so-called MID segment) grew by 3% YoY.
As a result of the undertaken initiatives, the commercial income of corporate banking in 2020 amounted to 1922 m PLN (income increased by 1% YoY).
Expert in efficiency and quality
In 2020, the Bank consistently implemented the digital transformation program, including initiatives aimed at sales development and improvement of service quality in remote channels, process automation and robotization, as well as enriching the offer with the latest digital services. In the face of the dynamic acceleration of changes in the area of customer behavior and needs caused by the pandemic, a number of projects in the area of digitization have been accelerated in order to ensure the continuity of cooperation with customers under the new sanitary regime.
In a period of strong pressure on banking income due to record low interest rates and new economic conditions, the Bank undertook a number of initiatives focused on improving efficiency. This applied to cost optimization activities in areas such as marketing, business travel, or consulting costs not related to transformation. The branch network optimization was also continued due to the changing customer behavior and greater use of digital channels (-92 branches YoY). At the end of 2020, the annual dynamics of operating costs was -2%, and the achieved cost-to-income ratio was 42.5%
Integrated risk management expert
In 2020, the Bank continued to develop its risk management competencies and undertook activities related to the optimization of credit process in all business segments by simplifying procedures and implementing modern tools to improve processes, including the implementation of automatic tools supporting credit decision making. Moreover, the new challenges brought about by the pandemic required a series of dynamic and decisive actions taken by the Bank in the area of risk management in order to ensure safety and stability of operations, as well as to support readiness for responsible business development in the face of increased uncertainty in the economic environment.
At the end of 2020, the cost of risk, excluding provisions related to COVID-19, amounted to 0.47%. As the leader in risk management, the Bank kept the cost of risk at one of the lowest levels in the sector, despite new and much more demanding economic conditions.
Employer of the best talent
Actions taken in 2020 were focused on supporting the transformation process and aimed at building a positive image of the Bank as an employer both inside and outside the organization. The Bank took part in image enhancement initiatives and campaigns despite the changed reality during COVID-19, moving its employer branding activities even more on-line. These activities were aimed at acquiring top-class specialists supporting the implementation of the strategy with their competences. Events important for the Bank, in which the Bank participated, include Career Week of the Warsaw School of Economics, Jobicon and the Summer Exchange School.
In 2020, the Bank implemented an integrated recruitment system based on the SAP Success Factors system and further streamlined the onboarding process. As part of supporting the managerial staff, the Bank launched Managerial Competence Development Programs and the Executive MBA program for key managerial staff.
The Bank continued its cooperation with academic centers in Poland, including with the University of Warsaw and the Warsaw School of Economics, despite the limitation of internship programs for students and graduates due to COVID-19. Thanks to integrated efforts in the area of employer branding, the Bank won a special award appreciated in the employer branding environment, i.e. Friendly Workplace and completed the TOP EMPLOYERS certification process, during which the Bank received this prestigious award for the 11th time.
Business priorities for 2021
In 2021, one of the Bank's top priorities will be to improve efficiency and profitability in an environment of low interest rates and in a newly defined economic environment following the outbreak of the pandemic. To this end, the Bank will consistently implement a number of strategic projects including digital transformation in selected areas, transformation of the retail banking sales network, improvement of credit processes, development of service and sales processes in remote channels as well as implementation of further optimization and process robotization activities. The bank will focus on acquiring new customers and strengthening relationships with the existing ones, striving to improve profitability through growth in the most profitable segments, i.e. in the area of consumer loans (PEX), Micro, SME and in the MID segment in the area of corporate clients. Moreover, the Bank will strive to strengthen a structured approach to data management and to develop competences in the field of data analytics. The Bank will continue to develop cooperation with the PZU Group in the area of insurance and investment products.
2020 was the last period in the perspective outlined by the strategy "Strength of the Polish Bison" for 2018-2020. The bank has full capacity and readiness to implement the new strategy for 2021-2023, which is currently at the final stage of work and will be published in the first half of this year.
At the beginning of 2021, Bank Pekao took over the enterprise and liabilities of Idea Bank S.A. under an administrative decision with the inclusions specified in the decision. The acquisition meant for the Bank an increase in the scale of operations and an increase in the client base of Micro and SMEs, which are strategic segments for the development of Pekao. In 2021, the Bank will implement activities aimed at achieving the planned synergy effects related to the acquisition. Therefore, the Bank is in the process of operational integration, the completion of which is scheduled for the end of 4Q 2021.
Bank
financial performance ratios |
2020 |
2019 |
Operating income [PLN million] |
7 476 |
7 938 |
Operating expenditures [PLN million] |
(3 191) |
(3 204) |
including personnel costs |
(1 804.20) |
(1 823.3) |
Provisions for risks |
(1 549.5) |
(624.1) |
Contributions and payments to the Bank Guarantee Fund |
(378.5) |
(452.1) |
Bank tax |
(660.6) |
(591.4) |
Gross profit [PLN million] |
1 697 |
3 016 |
Net profit [PLN million] |
1 126.4 |
2 248 |
Balance sheet total [PLN million] |
222 381 |
194 650 |
Return on equity (ROE) - nominal |
4.8% |
10.2% |
Return on assets (ROA) |
0.5% |
1.2% |
Interest margin |
2.5% |
2.9% |
Expenditures / income |
42.3% |
40.4% |
Risk costs |
0.48% |
0.42% |
Total Capital Ratio (TCR) |
20.8% |
18.7% |
(*) NOTE: Risk costs presented excluding Covid 19 provisions
Pekao Group
financial performance ratios |
2020 |
2019 |
Operating income [PLN million] |
7 813 |
8 282 |
Operating expenditures [PLN million] |
(3 468) |
(3 537) |
including personnel costs |
(2 039.9) |
(2 077.7) |
Provisions for risks |
(1 578.4) |
(696.0) |
Contributions and payments to the Bank Guarantee Fund |
(380.9) |
(454.7) |
Bank tax |
(660.7) |
(591.4) |
Gross profit [PLN million] |
1 725 |
3 002 |
Net profit [PLN million] |
1 102.9 |
2 166.6 |
Balance sheet total [PLN million] |
233 217 |
203 323 |
Return on equity (ROE) - nominal |
4.5% |
9.5% |
Return on assets (ROA) |
0.5% |
1.1% |
Interest margin |
2.5% |
2.9% |
Expenditures / income |
44.0% |
42.7% |
Risk costs |
0.47% |
0.46% |
Total Capital Ratio (TCR) |
18.7% |
17.1% |
(*) NOTE: Risk costs presented excluding Covid 19 provisions
Bank Pekao and entities of the Pekao Group have an organisational structure adapted to the size and specificity of their activities. The scope of competence of company bodies is defined in the provisions of [Polish] law, in particular the Code of Commercial Companies (kodeks spółek handlowych), the Banking Law Act (Ustawa - prawo bankowe), in supervisory recommendations of supervisory bodies and in the Articles of Association of Bank Pekao, and in Articles of Association/Partnership of companies and partnerships and internal regulations of entities of the Pekao Group.
Management Structure of Bank Pekao
General Meeting of Shareholders
The highest authority of Bank Pekao is the General Meeting which operates on the basis of the Code of Commercial Companies (kodeks spółek handlowych) and the Articles of Association of Bank Pekao. The scope of competence of the General Meeting is specified by the provisions of law, in particular the Code of Commercial Companies and the Banking Law Act, in supervisory recommendations of supervisory authorities and in the Articles of Association of Bank Pekao. Resolutions are adopted by an absolute majority of votes, subject to the provisions of the Code of Commercial Companies and the Articles of Association of Bank Pekao.
Supervisory Board
[GRI 102-18],
The Supervisory Board exercises continuous supervision over the Bank’s activities. The Supervisory Board consists of between 7 and 9 members appointed by the General Meeting for a common term of office of 3 years. The organisation and operation of the Supervisory Board are defined in the Rules of Procedure of the Supervisory Board. As at the report submission date, the Supervisory Board was comprised of 9 members, including 5 independent members.
The composition of the Supervisory Board was as follows:
31.12.2020 |
31.12.2019 |
Beata Kozłowska-Chyła Chair of the Supervisory Board |
Paweł Surówka Chair of the Supervisory Board |
Joanna Dynysiuk Deputy Chair of the Supervisory Board |
Joanna Dynysiuk Deputy Chair of the Supervisory Board |
Marcin Eckert Deputy Chair of the Supervisory Board |
Stanisław Ryszard Kaczoruk Deputy Chair of the Supervisory Board (independent member) |
Stanisław Ryszard Kaczoruk Secretary of the Supervisory Board (independent member) |
Paweł Stopczyński Secretary of the Supervisory Board |
Sabina Bigos-Jaworowska Member of the Supervisory Board (independent member) |
Sabina Bigos-Jaworowska Member of the Supervisory Board (independent member) |
Justyna Głębikowska-Michalak Member of the Supervisory Board (independent member) |
Justyna Głębikowska-Michalak Member of the Supervisory Board (independent member) |
Małgorzata Sadurska Member of the Supervisory Board |
Grzegorz Janas Member of the Supervisory Board |
Michał Kaszyński Member of the Supervisory Board (independent member) |
Michał Kaszyński Member of the Supervisory Board (independent member) |
Marian Majcher Member of the Supervisory Board (independent member) |
Marian Majcher Member of the Supervisory Board (independent member) |
The Supervisory Board performs its collective duties, however, in order to perform specific activities or to streamline the work of the Supervisory Board, it may appoint committees and teams from among its members. In addition, the Supervisory Board may delegate one or more of its members to independently perform supervision within the scope specified thereby. The following Committees operate within the structures of the Supervisory Board: Audit Committee, Nomination and Remuneration Committee, and Risk Committee. The committees appointed by the Supervisory Board submit annual reports on their activities to the Supervisory Board.
Audit Committee
The purpose of the Audit Committee is to support the Supervisory Board in performing its duties related to: controlling and monitoring the financial reporting process, financial audit activities, the effectiveness and adequacy of internal control and risk management systems and the internal audit function, compliance with laws and procedures regulating the Bank’s operations, the independence of the statutory auditor and the audit firm, resources of the Internal Audit Department, and the performance of other tasks stipulated in legal regulations.
Nomination and Remuneration Committee
The purpose of the Nomination and Remuneration Committee is to support the Supervisory Board in the performance of its duties, including by:
1) submitting proposals concerning the determination of the terms and conditions of agreements governing the employment or other legal relationship between the members of the Management Board and the Bank, including remuneration for the members of the Management Board, as well as concerning the approval of the policy of variable components of remuneration of persons holding managerial positions at the Bank in accordance with separate regulations and in order to submit proposals on remuneration of the members of the Supervisory Board to the General Meeting,
2) preparing recommendations concerning compliance with suitability requirements for appointing members of the Management Board of the Bank and members of the Supervisory Board in accordance with separate regulations,
3) drawing up a report for the General Meeting regarding the assessment of the functioning of the remuneration policy in place at the Bank.
Risk Committee
The purpose of the Risk Committee is, in particular, to:
1) review the Bank’s overall current and future risk appetite,
2) issuing opinions on the risk management strategy developed by the Management Board in the Bank’s operations and information submitted by the Management Board concerning the implementation of that strategy,
3) supporting the Supervisory Board in supervising the implementation of the risk management strategy in the Bank’s operations by senior management,
4) verification whether the overall level of prices of liabilities and assets offered to customers fully takes into account the Bank’s business strategy and risks, and if the price level does not adequately reflect the types of risk in accordance with these strategies, presenting proposals to the Management Board of the Bank aimed at ensuring the adequacy of prices of liabilities and assets to these types of risk.
The Management Board of the Bank
The Management Board of the Bank manages the Bank’s affairs and represents the Bank. Any issues that are not reserved – under legal regulations or the Articles of Association – for other governing bodies of the Bank shall fall under the purview of the Bank’s Management Board. The Management Board shall be composed of between five and nine members appointed for a common term of office of three years.
As at the date of submission of the report, the Management Board of the Bank consisted of nine members. The Management Board is comprised of the following members:
As at the report submission date |
31.12.2020 |
31.12.2019 |
Leszek Skiba President of the Management Board of the Bank |
Leszek Skiba Vice President of the Management Board of the Bank in charge of Management Board activities |
Marek Lusztyn Vice President of the Management Board of the Bank in charge of Management Board activities |
Jarosław Fuchs Vice President of the Management Board of the Bank |
Jarosław Fuchs Vice President of the Management Board of the Bank |
Marcin Gadomski Vice President of the Management Board of the Bank |
Marcin Gadomski Vice President of the Management Board of the Bank |
Marcin Gadomski Vice President of the Management Board of the Bank |
Tomasz Kubiak Vice President of the Management Board of the Bank |
Krzysztof Kozlowski Vice President of the Management Board of the Bank |
Krzysztof Kozlowski Vice President of the Management Board of the Bank |
Tomasz Styczyński Vice President of the Management Board of the Bank |
Tomasz Kubiak Vice President of the Management Board of the Bank |
Tomasz Kubiak Vice President of the Management Board of the Bank |
Marek Tomczuk Vice President of the Management Board of the Bank |
Jerzy Kwieciński Vice President of the Management Board of the Bank |
Grzegorz Olszewski Vice President of the Management Board of the Bank |
Magdalena Zmitrowicz Vice President of the Management Board of the Bank |
Błażej Szczecki Vice President of the Management Board of the Bank |
Tomasz Styczyński Vice President of the Management Board of the Bank |
Grzegorz Olszewski Member of the Management Board of the Bank |
Wojciech Werochowski Vice President of the Management Board of the Bank |
Magdalena Zmitrowicz Vice President of the Management Board of the Bank |
|
Magdalena Zmitrowicz Vice President of the Management Board of the Bank |
|
|
Important factors affecting the activities and results of the Pekao Group and the Bank in 2020
The activities of the Bank Pekao S.A. Capital Group in 2020 were mainly determined by the macroeconomic situation, domestically and internationally, which was determined by the COVID-19 pandemic.
The Pandemic has caused the first recession in the Polish economy for 30 years. In response to the threat of a pandemic, the Polish Government introduced serious restrictions which caused a significant drop in GDP. The effects of freezing the economy in the second quarter were most noticeable when the growth rate of Polish GDP was -8.4% y/y. Throughout the year, GDP fell by 2.6%, according to estimates of the economists of the Macroeconomic Analysis Department of Bank Pekao, which puts Poland in a relatively good position compared to other European countries.
The pandemic and the accompanying recession in the economy have made 2020 a difficult and challenging period for the banking sector. The sharp economic downturn has translated into a decline in the banking customers’ activity and a decrease in the demand for credit.
In response to the economic crisis caused by the pandemic, the Monetary Policy Council made three reductions in interest rates in the first half of 2020, totalling 140 basis points. Interest rate reductions have resulted in a significant decrease in interest income in the sector. Banks, including Bank Pekao, have undertaken actions aimed at limiting the negative impact of interest rate reductions on interest income by gradually reducing the interest rate on deposits and repricing of loans.
The economic recession has led to an increase in risk costs in the sector as a result of the expected deterioration in macroeconomic conditions due to the COVID-19 epidemic. The degree of provisioning for a possible deterioration in the quality of the credit portfolio was highly diversified in the sector. Bank Pekao distinguished itself from the rest of the sector with a prudential approach, continuing the strategy of conservative risk profile management and creating the largest prudential reserves in the sector for possible deterioration of portfolio quality due to negative consequences of the pandemic.
Pressure on revenues caused by the deteriorating macroeconomic environment following changes in customer behaviour, including the increasing digitisation of banking services, has led banks to seek to reduce operating costs, i.a., by reducing the number of branches and employees. Bank Pekao also continued optimising its branch network and carried out another employment restructuring programme.
The above factors led to a significant decrease in the financial performance and profitability of the banking sector. In the first three quarters of 2020, the net profit of the sector decreased by 49%.
At the same time, banks’ capital resources improved due to the retention of profits for 2019 and the lack of dividend payment, as a result of the position of the Polish Financial Supervision Authority expressed in the letter of 26 March 2020. On 14 January 2021, Bank Pekao received a recommendation from the Polish Financial Supervision Authority to suspend the payment of dividends in the first half of 2021, which will translate into further improvement of the Bank’s capital resources.
In response to the economic crisis, the Polish government introduced a number of aid measures under the so-called anti-crisis shields in order to support the economic situation and maintain jobs, including the Polish Development Fund (Polski Fundusz Rozwoju - PFR) assistance programme worth PLN 100 billion in subsidies for enterprises and the Bank Gospodarstwa Krajowego guarantee programme with a total limit of PLN 100 billion in guarantees granted. The PFR shield covered over 300 thousand companies employing 3 million people. Bank Pekao actively participated in the distribution of aid to enterprises, achieving a significant market share.
In order to support their customers in difficult times, banks have also introduced credit holidays, i.e. deferrals of loan instalments for a period of between 3 and 6 months. In July 2020, the so-called statutory credit holidays were also introduced. Bank Pekao actively participated in supporting its customers, although the scale of this programme was relatively small for the Bank.
Banks also had to adapt their service model to an epidemic situation, ensure the safety of their employees and customers, and allow remote customer service. Due to the difficult social mobility, the pandemic has greatly accelerated the digital transformation of the banking sector and the migration of customers to remote channels. The increase in the number of online and mobile operations carried out by customers has led to cybersecurity becoming one of the biggest challenges in a sector requiring significant investment.
In 2020, the number of court actions against banks concerning foreign currency loans in CHF increased, following the judgement of the CJEU of 2019, and the percentage of cases won by customers increased, resulting in an increase in the banks’ provisions for the CHF loan portfolio. The exposure of Bank Pekao to these loans is therefore marginal, and both the risk and the scale of write-offs related thereto are insignificant.
On 8 December, the Chairman of the Polish Financial Supervision Authority Jacek Jastrzębski presented, at an annual meeting organised by the Polish Bank Association, his proposal to solve the problem of currency loans in CHF, which assumes that banks may offer their customers voluntary agreements on attractive terms that will help avoid going to court.
With regard to capital requirements, in accordance with the law, Bank Pekao Group should maintain minimum levels of capital ratios at the regulatory level of Pillar I resulting from the CRR Regulation, Pillar II requirement resulting from the Banking Law Act and the requirement of a combined buffer resulting from the Macroprudential Supervision Act (Ustawa o nadzorze makroostrożnościowym).
In accordance with the CRR Regulation, the minimum values of capital ratios maintained by the Capital Group and the Bank at Pillar I level should be:
Total Capital Ratio (TCR) - 8%,
Tier 1 (T1) capital ratio - 6%,
Common Equity Tier 1 (CET1) capital ratio - 4.5%.
Under Pillar II, banks exposed to foreign currency mortgages receive an additional individual capital buffer. Bank Pekao does not have such a buffer, and the buffer for the Capital Group amounts to 0.01% for TCR and 0.0075% for Tier 1 capital and results from an individual requirement imposed on Pekao Bank Mortgage by the PFSA.
The requirement of a combined buffer, defined in accordance with the Macroprudential Surveillance Act, consists of the following buffers:
a collateral buffer of 2.5% applicable to all banks from 1 January 2019,
buffer of another systemically important institution in the amount of 0% to 1.00% of the total risk exposure amount (for the Bank and Pekao Group it is 0.75%),
countercyclical buffer, which is calculated in the value of weighted average buffer rates determined by the competent authorities of countries in which the Capital Group has exposures, 0% for credit exposures in the territory of Poland (for the Bank and the Pekao Group it is 0.01%),
systemic risk buffer of 0.00%, applicable to all banks from 19 March 2020, in connection with the Regulation of the [Polish] Minister of Finance repealing the regulation on the systemic risk buffer that up to this point has been 3% (the change of this buffer occurred in response to the economic crisis caused by the COVID-19 pandemic).
In the case of Bank Pekao Capital Group, as at 31 December 2020, the minimum total capital ratio was 11.26%, the Tier 1 capital ratio was 9.26%, and the CET1 ratio was 7.76%.
In 2020, fees to BFG increased by 14% y/y, from PLN 2.8 billion to PLN 3.2 billion for the sector, while changing the structure of allocation of fees between funds: 50% of the total contribution to the deposit guarantee fund and the restructuring fund, respectively, which had a negative impact on the increase in BFG costs for some banks. At the same time, the fee structure in 2020 was more favourable to Bank Pekao, which paid lower contributions to BFG by 16% in 2020.
As in previous years, banks also incurred high costs of adjustment to numerous regulatory solutions (including MIFID II, GDPR, PSD2).
In 2020, the BFG informed banks about the minimum levels of own funds and liabilities subject to redemption or conversion of the so-called MREL (minimum requirement for own funds and eligible liabilities) that the sector must meet at the end of 2023. In the case of Bank Pekao S.A., MREL at a consolidated level amounts to 12.88% of the total sum of own funds and liabilities, which represents 19.04% of the risk exposure amount, whereas at the individual level MREL amounts to 12.23% of the total sum of own funds and liabilities, which represents 19.02% of the risk exposure amount. The aforementioned levels must be achieved by the Bank by 31 December 2023. The BFG further determined the path towards the abovementioned requirements at both consolidated and individual level. Compliance with these requirements will require banks to increase the MREL capitals, including, in particular, the issuance of debt securities meeting the criteria for qualifying as MREL capitals.
On 26 March 2020, Bank Pekao received a letter from the Polish Financial Supervision Authority concerning the retention of the entire profit generated in previous years. In this letter, in view of the current situation related to the state of epidemic announced in Poland and the possible further negative economic consequences of this situation, as well as their expected impact on the banking sector, the PFSA expected banks – regardless of any actions already taken in this regard – to retain the entire profit generated in previous years. Moreover, the PFSA expected not to undertake, without agreement with the PFSA, other activities, in particular those outside the scope of current business and operating activities, which may result in weakening the capital base.
On 16 December 2020, it adopted its position on the dividend policy of commercial banks, cooperative and association banks, insurance undertakings, reinsurance undertakings, insurance and reinsurance undertakings, investment fund companies, general pension companies, and brokerage houses in 2021. In accordance with that letter, the Commission considers it necessary for commercial banks to withhold dividend payments in the first half of 2021. The position of the Polish Financial Supervision Authority on the dividend policy of commercial banks in the second half of 2021 will be presented separately after an analysis of the financial situation of the banking sector in the first half of 2021.
On 14 January 2021, Bank Pekao received a recommendation from the Polish Financial Supervision Authority to suspend the payment of dividends in the first half of 2021 (including undistributed earnings from previous years). In addition, the PFSA recommended that the Bank not undertake other activities outside the scope of current business and operating activities in the first half of 2021, without prior consultation of the supervisory authority, which may result in a lowering of the capital base, including redemptions of own shares.
On 31 December 2020, Bank Pekao informed about the acquisition of Idea Bank S.A.’s business and liabilities with exclusions as a result of the application of the compulsory restructuring instrument by the Bank Guarantee Fund on 30 December 2020, the acquisition by the Bank of Idea Bank S.A.’s business and liabilities with exclusions took place on 3 January 2021.
The acquisition by the Bank of Idea Bank S.A.’s business and liabilities with exclusions took place through the acquisition of property rights in the form of an enterprise and simultaneous takeover of liabilities. The value of the liabilities assumed, as estimated by the Bank as at 31 August 2020, was PLN 14,628.10 million. Since the value of the acquired liabilities exceeded the value of the acquired property rights in the form of an enterprise, BFG granted subsidies to the Bank in order to cover the difference between the value of the acquired liabilities and the value of the acquired property rights, in the amount of PLN 193 million. In addition, BFG provided the Bank with a guarantee to cover losses arising from the risks associated with the property rights or liabilities of the entity under restructuring. In accordance with the provisions of the Loss Coverage Guarantee Agreement, the Loss Coverage Guarantee shall include a guarantee to cover losses arising from credit risk related to credit assets and a guarantee to cover losses (other than losses resulting from credit risk) related to the acquired Activity. Thanks to the loss coverage guarantee on credit exposures taken over, the transaction will have a minimal impact on Tier 1 and TC capital levels.
The Bank estimates cost synergies from the transaction at the level of PLN 420 million before tax (10-year NPV). The main areas in which the Bank identifies synergies include: reduction of financing costs, operational cost synergies thanks to rationalisation of the combined network of branches and functions of the Pekao headquarters after the merger, and potential additional synergies on the revenue side from the increased customer base (strengthening of relations and cross-selling). At the same time, the Bank estimates one-off integration costs at the level of PLN 120 million before tax. Most of the integration costs will be incurred in 2021. Completion of integration is expected by the end of Q4 2021.
The compulsory restructuring process applied by the Bank Guarantee Fund to Idea Bank S.A. was carried out on the basis of the provisions of the Act on the Bank Guarantee Fund, Deposit Guarantee Scheme and Compulsory Restructuring (Ustawa o Bankowym Funduszu Gwarancyjnym, systemie gwarantowania depozytów oraz przymusowej restrukturyzacji) of 10 June 2016. The Act implements the 2014 European Union (EU) BRR Directive constituting the legal framework for the resolution of banks in the EU. The BRR Directive was introduced following the 2008 financial crisis in order to prevent bank insolvency and to minimise negative consequences for depositaries and the banking sector, as well as, more broadly, costs for the economy and taxpayers. This transaction secures customers’ funds and promotes the stability of the domestic banking sector.
Factors that will have an impact on the results of the Group
The operations of Bank Pekao S.A. and companies from the Group are carried out predominantly in the territory of Poland, which is why the Group’s results will be affected primarily by economic events taking place in the country and international events affecting the national economy.
After several years of solid development, the economic environment deteriorated sharply in 2020, as a consequence of the global COVID-19 pandemic. Economic activity has been significantly reduced and companies and households have suffered a deterioration in their financial situation. The effects of the crisis have been mitigated to some extent by public aid measures (so-called “anti-crisis shields”). According to the Bank’s current estimates, in 2020 the Polish economy could shrink by 2.6% y/y.
In 2021, the epidemiological situation will remain the main risk factor. Although companies and consumers are now dealing with its effects much better, many sectors (mainly those most severely affected by lockdowns) will face numerous challenges for at least the first half of 2021. On the other hand, greater optimism in the forecasts is linked to the conviction that the beginning of the vaccination process will bring about relative normalcy in 2021 and will be the time for the prospective recovery of economies.
Further developments in the epidemic will have an impact on the demand for banking products and possible further changes in risk costs as a result of the updating of economic assumptions.
An important factor affecting the results generated by banks is the monetary policy. In the current economic situation, RPP decided to significantly reduce interest rates, including the main one from 1.50% to 0.10%. The very low interest rates have a strong negative impact on the performance of the banking sector (through the impact on the interest income of banks), and the translation of this effect will continue to be strongly felt in 2021.
In addition to economic and monetary policy, banks are directly affected by the coronavirus epidemic, as a result of regulatory action and the strategic role of the banking sector in the economy. The main actions are listed in the report in the section on external conditions of action (“Epidemiological Situation”).
Regardless of the economic situation, the tax and regulatory environment continues to play an important role for banks, including, in particular, the tax on certain financial institutions, high capital requirements, increasing burdens on BFG, costs of further adjustments to numerous regulatory solutions (e.g. MIFID II, GDPR, PSD II, MREL), as well as the introduction of a maximum fixed remuneration for the management of investment funds in Poland. Maintaining a restrictive fiscal and regulatory environment combined with an unprecedented economic situation may translate into the ability of individual institutions to develop their lending activities and financial performance.
One of the most important factors in the institutional environment is the issue of foreign currency mortgages. In the absence of the final systemic solution in this matter, the biggest impact on the banking system will be exerted by court decisions regarding individual agreements. A number of events (including the judgement of the CJEU of 3 October 2019) led to an increasing number of borrowers resolving the dispute in court. This will have a strong negative impact on the performance of banks, in particular those with a large portfolio of such loans. So far, the main channel of influence has been the reserves set up by banks due to the expected legal risk - they have had a strong, negative impact on the performance of the sector in 2020. According to most estimates, total costs for the sector may reach several dozen billion PLN, but they are difficult to estimate and will be spread over time. Many will depend, among other things, on the actual number of actions (how many borrowers decide to go to court), the interpretation of national courts in individual cases, the reactions of national supervisory institutions or the actions of banks themselves.
It can also not be excluded that the matter of loans in CHF will be finally resolved by way of legislation. Bank Pekao S.A. will monitor the direction of the rulings of Polish courts, market practice, and behaviour of borrowers, and assess, on an ongoing basis, the likelihood of cash outflow in relation to the mortgage loans in question. However, the impact may be indirect and consist in possible financial problems experienced by certain smaller institutions with a particularly high exposure to the risk in question.
Assuming an improvement in the epidemic situation (including vaccination), a moderate increase in credit volumes can be expected in 2021. To a greater extent, this may concern the retail segment (continued strong demand for housing credit, reflection in terms of consumer credit), while the sentiment of companies will improve slower (progressively increasing interest in working capital credits, still muffled demand for investment credit due to high uncertainty). Under a strong labour market, despite the impact of the pandemic, household deposits will continue to be robust. The high base (inflow of funds from “anti-crisis shields” in 2020) will in turn reduce the very high dynamics of company deposits in recent months.
The activities of Bank Pekao S.A. gained wide recognition by clients, industry specialists, the market and the media, as evidenced by numerous awards and distinctions granted by Polish and foreign institutions. Measures aimed at providing customers with the highest quality products and services, innovation of the proposed solutions have been appreciated. Bank Pekao S.A. received a number of awards and distinctions in 2020.
The most relevant honors are presented below.
1. Bank Pekao S.A. receive the Top Employers 2020 certificate
For the tenth time in a row, Bank Pekao S.A. received the Best Employers certification and thus become one of the few best employers in Poland. The award is granted to companies that exceed the international standards set in the HR, are focused on supporting the development of a group of potential employees, strengthening their competences and skills, as well as transparent work based on adopted values.
2. Bank Pekao S.A. was awarded the prestigious Friendly Workplace 2020 award
The Bank received a special award in the third edition of the Friendly Workplace program. The Friendly Workplace program awards companies that respect and support the work-life balance model, create a healthy and friendly work environment, focus on open and partner relations with employees, and invest in the development of their professional competences and interests.
The Bank obtained 24 points out of 25 possible, which makes it one of the best employers in Poland.
3. Bank Pekao S.A. – Best Trade Finance Provider in Poland
Bank Pekao was recognized by the Global Finance Magazine for the third time in history and it was ranked the best trade finance provider in Poland for 2021. Criteria for choosing the winners included: the value of trade finance transactions portfolio, market share, quality and competitiveness of services offered to clients, methods of risk management related to trade finance transactions as well as innovation and technologies used in constructing the bank’s offer.
4. Bank Pekao S.A. – the Best Sub-custodian Bank in Poland
For the eighth time Bank Pekao S.A. received the "Best Sub-custodian Bank in Poland in 2020" award by Global Finance magazine.
The assessment took into account customer relations, service quality, competitive fees, trouble-free implementation of non-standard inquiries, IT systems, and operational activities in the field of settlement of transactions on securities.
5. Bank Pekao S.A. – the Best Investment Bank in Central and Eastern Europe
Bank Pekao S.A. - for the first time in history - received the title of the "Best Investment Bank in Central & Eastern Europe 2020" from the Global Finance international magazine. The quality of services provided by the Bank, the ability to find market opportunities and the ability to adjust solutions to client needs were appreciated.
6. The Best Investment Bank in Poland according to Global Finance
Bank Pekao S.A. was ranked the ”The Best Investment Bank in Poland” for the third time in a row in the prestigious competition organised by the international Global Finance magazine.
The award was granted by a group of industry experts taking into account the reported deals completed in the past year. The opinion of financial circles, scope of provided advice and service and the institution’s ability to structure transactions were also analysed in addition to the applications submitted for the competition. Other criteria included the Bank’s market share, distribution network, pricing as well as the ability to respond to market needs, innovation and reputation.
7. Bank Pekao S.A. – the Best Cash Management and Treasury Provider
Bank Pekao S.A. - for the first time in history - received the award of the Best Cash Management and Treasury Provider by Global Finance. The award is granted by independent experts based on such criteria as knowledge of local conditions and corporate clients’ needs, quality of offered products and services, financial safety and soundness, market position, compliance and excellent customer service.
8. Private Banking of Bank Pekao S.A. ranked the best in Poland in the Private Bank Awards 2021
Private Banking of Bank Pekao S.A. – already for the sixth time in a row - was recognized as the best in Poland, according to the Global Finance magazine. The Private Bank Awards 2020 of Global Finance is one of the most comprehensive rankings classifying bank offers for the sector of most affluent customers.
9. The highest rating for Private Banking services
Private Banking has already received the highest score for the third time - the prestigious five stars in the rating of Private Banking services, prepared by the Polish edition of the Forbes monthly. The quality of private banking offers was assessed by a representative group using Private Banking services, with particular emphasis placed on solutions that match market trends.
10. Two golden statuettes in the prestigious "Złoty Bankier" ranking:
Bank in a competition organized by the editors of Puls Biznesu and Bankier.pl in cooperation with content partners - Kantar TNS and Obserwatorium.biz. received two golden statuettes in the category:
The Best Banking Advertising Spot
The spot from the Bank's campaign "Bierz życie za rogi" was selected as the best banking advertising spot in the prestigious Złoty Bankier. The competition was organized by the editors of Puls Biznesu and Bankier.pl. Both the Internet users and the competition jury decided about the victory, appreciating the atypical and difficult to implement production.
The Best Mortgage Offer
The Bank's offer was appreciated for its very flexible mortgage loan offer, incl. by selecting the interest rate, types of installments, currency or loan objectives. The offer is tailored to the needs and expectations of customers.
Moreover, in the category of the best Personal Account, Konto Przekorzystne offered by the Bank, it came second, while in the category "Best bank in social media", the Bank came third. Internet users assessed the Bank's communication with customers via social media.
11. 1st place in the Stability category in the ranking organized by Dziennik Gazeta Prawna and the PwC company
In the sixth edition of the annual ranking of Dziennik Gazeta Prawna and PwC - "Banking Stars". The Bank took first place in the Stability category. The assessment takes into account the audited financial results for the previous year. The structure of the bank's balance sheet, unpaid receivables and capital ratios were analyzed. Bank Pekao S.A. it was distinguished by a strong balance sheet, the lowest cost of risk and the highest portfolio coverage ratio among key Polish banks, as well as a well-diversified loan portfolio.
12. Pekao Direct received three awards in the “Złota Słuchawka” competition
The Golden Earphone Competition is the most important and most demanding competition in the contact center industry, which has been organized for years by the Direct Marketing Association. This year, Pekao Direct gained three titles:
Best Employer,
The best team of Contact Center consultants on the market,
The Best Team supporting the Office of Modern Contact Channels,
The “Złota Słuchawka” competition was attended not only by other large banks, but also by the largest outsourcing companies providing contact center services on the Polish market.
13. Pekao Direct - awarded in the European Customer Centricity Awards competition
Pekao Direct was honored with the main prize in the European Customer Centricity Awards competition in the category "Best omnichannel experience". The jury appreciated the process of opening a personal account using a selfie, prepared in close cooperation with Bank Pekao SA. , foreign currency account and debit card in less than 15 minutes using a smartphone.
ECCA is one of the largest European competitions that promotes "customer centricity" and the Customer Experience perspective in business.
14. "Best Bank" - Bank Pekao the winner of the Gazeta Bankowa competition
Gazeta Bankowa awarded the title of the "Best Bank" in the category of large commercial banks. The bank also took second place in the "Leader 2019" competition in the banking category and received the award for the Selfie Account, which was the first on the market.
15. Distinction for Bank Pekao awarded by the Krajowy Depozyt Papierów Wartościowych (KDPW)
Bank Pekao S.A. was among the institutions awarded by the National Depository for Securities for the achieved results and contributed to the development of the Polish capital market.
The justification appreciated the wide range of services offered under KDPW_CCP, the leader position on the cash market, active participation in market consultations and commitment to testing new solutions.
16. Konto Przekorzystne Biznes recognized as the best business account in the Money.pl ranking
The authors of the ranking appreciated, among others transparent conditions of account management, an attractive bonus of up to 1,000 PLN and the ability to open an account without leaving home.
17. PeoPay 3% deposit, the best quarterly deposit on the market in the bankier.pl ranking
The promotional offer was valid until June 30, 2020 and it was possible to open it without visiting the branch.
[GRI 102-40], [GRI 102-42], [GRI 102-43], [GRI 102-44],
Bank Pekao conducts active, transparent and effective communication with all stakeholders of the Bank, taking into account their needs and providing them with equal access to information using various communication tools. The main groups of stakeholders include:
Investors, market analysts and rating agencies
Customers
Employees
Suppliers
General Public
Media
Supervision authorities (including: (including PFSA, BGF, the Office of Competition and Consumer Protection, NBP, Financial Stability Committee)
These stakeholder groups are particularly important in terms of our business model, implementation of the strategy and further development of the Bank.
The principles set out in the Bank’s information policy regarding contacts with investors, securities market analysts, media and customers are regulated by the Bank’s information policy, which is available on the website, under the “Responsible Business” tab:
https://www.pekao.com.pl/relacje-inwestorskie/raporty-i-sprawozdania/odpowiedzialny-biznes.html
Bank Stakeholder Map
STAKEHOLDER GROUP |
COMMUNICATION TOOLS |
COMMUNICATION FREQUENCY |
REPORTED TOPICS |
ACTIONS TAKEN BY THE BANK |
Investors (shareholders, bondholders, and purchasers of other securities issued by the Bank, market analysts and rating agencies) |
General Meeting of Shareholders |
At least once a year |
Implementation of strategies, building of value, organisational changes Macroeconomic and market forecasts Distribution of profits to shareholders |
Transparent operation, easy and fast access to information about the Bank, enforcement of external regulations and market standards. |
Roadshows and conferences |
A dozen or so times a year |
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Investor Day |
Depending on needs |
|||
Meetings and teleconferences |
Several hundred per year |
|||
Stock exchange and press releases |
On an on-going basis |
|||
Financial reports, data compilations and presentations on generated results |
Quarterly |
|||
Bank’s website and online information channels |
On an on-going basis |
|||
Meetings with rating agencies |
At least once a year |
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Constant cooperation with the Investor Relations Office
(institutional and individual investors, analysts and capital market organisations); |
On an on-going basis |
|||
Customers |
Branches, online and mobile banking |
On an on-going basis |
High quality of offered products and services, Fair consumer practices Security of entrusted funds Ease of communication with the Bank
|
Offering competitive, high-quality products and services tailored to the needs of Customers; applying procedures that ensure fair and safe management of Customers’ funds; ensuring a number of access channels; creating transparent terms and conditions of offers and agreements; collecting information on expectations and opinions of customers; contributing to the development of good practices and standards for advertising financial services and complying with them.
|
Bank’s website and online information channels |
On an on-going basis |
|||
Infoline |
On an on-going basis |
|||
Complaints |
On an on-going basis |
|||
Satisfaction surveys on products and services and quality of customer service |
On an on-going basis |
|||
Advertising campaigns and marketing activities |
On an on-going basis |
|||
Product offers, mailing |
On an on-going basis |
|||
Participation in fairs |
Where possible |
|||
Employees |
Internal communication |
On an on-going basis |
Employment stability and opportunities for professional growth Attractive remuneration system Bank’s strategy and its key goals Transparent organisational structure Balance between professional and private life |
Listening to employees’ opinions (chats, satisfaction surveys), providing employees with opportunities for growth (promotions, training), clear, measurable targets subject to monitoring, adequate wage and benefits policy, meetings with employees and on-going communication with employees, ensuring a friendly workplace: including through the implementation of remote work opportunities and pro-health and preventive measures. |
Intranet, chats, discussion forum |
On an on-going basis |
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Company trade union organisations |
On an on-going basis |
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Meetings with the participation of the Management Board |
Several times a year |
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Trips to attend competitions, olympiads |
At least once a year |
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Employee volunteer work programme |
On an on-going basis |
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Webinars |
On an on-going basis |
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Employee evaluation |
At least once a year |
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Internal publications |
On an on-going basis |
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Thematic questionnaires, evaluation questionnaires, employee opinion surveys |
Several times a year |
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Whistleblowing system |
On an on-going basis |
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Suppliers |
Meetings with suppliers, negotiations |
On an on-going basis |
Transparent rules for the selection of, and cooperation with, suppliers |
Transparent supplier selection procedures; timely performance of the provisions laid down in the contract, promotion of good procurement practices. |
Dedicated procurement platform, telephone number, e-mail |
On an on-going basis |
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On-going cooperation and performance of contracts |
On an on-going basis |
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General public |
Charity and sponsoring activities |
On an on-going basis |
Social and environmental projects Reduction of negative impact on the environment, environmental education of Customers and Employees Work and growth opportunities for students |
Implementing sponsorship and charity projects; supporting community development; encouraging employees to participate in social and environmental actions, reducing negative environmental impacts. |
Employee volunteer work programme |
On an on-going basis |
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Meetings with students, student internships |
At least once a year |
|||
Media |
Press conferences |
A dozen or so times a year |
Implementation and promotion of the bank’s strategy Release of accurate information on measures / condition of the bank to all groups of stakeholders through media Building the position of a leader / expert in the financial sector |
Transparent operation, easy and fast access to information about the Bank. |
Press releases |
On an on-going basis |
|||
Social media |
On an on-going basis |
|||
Interviews, expert statements |
On an on-going basis |
|||
Participation in economic conferences, etc. |
Several dozen times a year |
|||
Constant cooperation of the Corporate Communication Office (journalists, media) |
On an on-going basis |
|||
Regulators (including PFSA, BGF, the Office of Competition and Consumer Protection, NBP, Financial Stability Committee, WSE, National Depository of Securities) |
Reports, correspondence, audits |
On an on-going basis |
Compliance with requirements and regulations; Supporting the creation of new market principles, including good practices. |
Compliance with requirements, regulations and good practices, ongoing cooperation with the Regulators.
|
In January 2021, for the second time in a row, the Bank qualified for the Bloomberg Gender-Equality Index, which may include large stock exchange companies actively seeking gender equality in the working environment. The Bank was included in the index as only one of two companies from Poland and only a few from Central Europe. This is due to the observance of the Bank’s following policies: mobbing prevention, diversity, gender equality, and equal opportunities in employment.
Globally in 2021, 380 companies from 44 countries and representing 11 sectors of the economy were included in the index. Index participants were selected from stock exchange companies with a capitalisation of more than USD 1 billion. In order to be entered in the index, a sufficiently high result should be obtained in a survey based on 59 questions from five areas: women’s leadership and talent development, equal pay and wage parity, inclusive work culture, sexual harassment policy, and a pro-women brand. In the Bloomberg GEI survey, the Bank achieved a result of 73%, with an average result for all companies in the index of 66%. In some areas, the bank is particularly good, particularly with regard to gender equality in wages and gender equality in promotion and development. Women make up the majority of the Bank’s employees. They also form a vast majority of the managerial staff - 62%, and 91% of women returns to work after maternity leave.
The Bank is part of the WIG-ESG index, which replaced the Respect Index. The share of Pekao shares in the WIG-ESG index is 4.8%.
The WIG-ESG index has been published since September 2019 on the basis of the value of the portfolio of shares of socially responsible companies, i.e. those that comply with socially responsible business principles, in particular in the scope of environmental, social, economic, and corporate governance issues. The base value of the index was determined as at 28 December 2018 and amounted to 10,000.00 points. WIG-ESG is an income index, which means that both the prices of transactions concluded therein and the income from dividends are taken into account in its calculation. The share of a single company in the index is limited to 10%, whereas the aggregate share of companies the share of which exceeds 5% is limited to 40%.
In 2020, the Bank received its 4th consecutive “A” rating assigned as part of the MSCI ESG rating (Environmental, Social, Governance), which measures the resilience of companies to long-term risks in terms of environmental protection, corporate social responsibility and corporate governance. The credit rating agency has paid particular attention to the high level of safety of Pekao products, investing in the development of human capital and the stability of institutions against the background of changes in the financial system.
Pekao has maintained the “A” level in the ESG MSCI rating since 2017. In last year’s edition, the Agency assessed that the Bank is better prepared than the market to maintain a high level of safety of financial products offered to customers and achieves better results in terms of resistance to risks arising from changes in the financial system. The Bank’s comprehensive activities for employee development, including those related to management training, have also been distinguished.
In 2020, the Bank received a score of 3.1 (improvement from 2.3 from the previous year) granted by FTSE Russell ESG and was re-qualified to the FTSE4Good index.
FTSE Russell ESG assesses approximately 4 100 companies in 47 developed and developing countries. The purpose of the FTSE assessment is to facilitate investment in companies that meet internationally recognised corporate liability standards and is the basis for the inclusion of the company in the FTSE4Good index. FTSE4Good index companies have met strict environmental, social and corporate governance criteria and are able to exploit the benefits of responsible business practices.
In 2020, the Bank received a 26.9 rating from the credit Sustainanalytics rating agency. Last year, the Bank improved its assessment by 3.5 points and moved to the “Average Risk” category.
The ESG risk assessments issued by Sustainanalytics focus on the financially significant risks of ESG and cover more than 12 000 companies. The Agency’s methodology shall include an analysis of the exposure of undertakings to significant risks related to ESG issues and an assessment of how companies manage those risks. Risk factors are determined on the basis of the industry and are determined on the basis of an analysis of 20 factors specific to each industry.
The ESG (Environment, Social and Governance) covers environmental, social and corporate governance issues. Competences in this regard are placed in various organisational units of the Bank and the Pekao Group.
Having been aware of the importance of ESG and sustainable development issues, the Bank decided to develop an approach model for the management of ESG issues, with the involvement of representatives of Bank units key in terms of ESG topics and with the support of the Management Board.
In September 2020, a decision was made to establish an ESG unit, which will be the centre of competence in environmental, social and corporate governance topics and will deal, among other things, with direction setting, coordination of activities, monitoring, and non-financial reporting, which will allow to improve the management of ESG issues on the scale of the Bank and Pekao Capital Group.
In December 2020, the ESG Board was established, a new advisory body for the Management Board of the Bank, composed of senior managers representing key Bank units, both business and support, whose involvement is important for ESG issues, and two members of the Management Board of the Bank. The main task of the Board will be to recommend to the Management Board of the Bank the necessary activities in the field of ESG. At the same time, the Board is to consult on a broad range of strategic topics relating to ESG, taking into account the commercial perspective.
Upon the appointment of the Board, ESG Coordinators were appointed, representing individual organisational units of the Bank relevant to ESG issues and representatives of all subsidiaries of the Pekao Group covered by consolidated reporting.
Social responsibility is a permanent principle of conduct on which the Pekao Group and the Bank build their relations with their external environment.
Bank Pekao and entities of the Pekao Group, as responsible organisations and active participants in social life, comply with the applicable laws and standards also in the field of social responsibility.
The Bank does not have a single regulation which would cover social responsibility issues in a comprehensive way. Nevertheless, they are incorporated into other regulations adopted by the Bank. The Bank complies with the principles of the Code of Banking Ethics of the Polish Bank Association (Kodeks Etyki Bankowej Związku Banków Polskich) and the Canon of Good Financial Market Practices (Kanon dobrych praktyk rynku finansowego) adopted by the Polish Financial Supervision Authority. These documents provide for principles connected with the activities of banks in their contacts with customers, principles for mutual relations between banks, and the bank’s conduct as an employer towards employees.
In 2020, due to the worldwide coronavirus pandemic, the Bank’s ambitious plans in the area of activities related to the area of social responsibility were, for obvious reasons, verified and adapted to nationwide restrictions defined by the Polish government and banking supervision. Throughout the year, the Bank has not only implemented an aid plan for its customers, but has undertaken a number of social activities, such as support for Polish health care, health care and sanitation establishments, which have taken action to prevent the spread of COVID-19. This exceptional year, the Bank also took care of employees by implementing a number of initiatives aimed at reducing the risk of infection and spread of COVID-19 in banking establishments.
In 2020, in response to the epidemiological threat, the Bank committed itself to a number of initiatives related to the protection of the health of workers, customers, as well as to assistance for medical services and health facilities.
In order to emphasise the importance of issues related to social responsibility, Bank Pekao adopted the Charter of Principles, an internal set of corporate values, including respect, trust, equality, freedom (understood as a freedom of action), reciprocity and transparency. Social involvement of the Bank is an integral part of coherent activities carried out within the scope of corporate social responsibility. The Bank supports long-term projects based on partnership with selected and trusted social organisations to solve defined problems.
The Bank’s superior goal is to build a durable value for shareholders, stakeholders, customers, and employees. For customers, by ensuring the highest standards of service and introducing friendly, simple solutions. For employees, by creating a development-friendly working environment, by taking care of their satisfaction from the workplace and by strengthening their sense of pride in belonging to the organisation. For shareholders and stakeholders, i.a. through awareness of the Bank’s social responsibility and contributing to the development of local communities in which we operate. The Charter of Principles includes all these aspects.
The Charter of Principles also indicates the desired behavioural patterns which:
Support the construction of long-term relations with customers, based on: a sense of security, high service standards, and simple and friendly solutions.
They form the foundation of a sustainable working environment that takes care of the development and involvement of its employees and their sense of pride in belonging to the organisation.
The Code of Conduct defines the rules of conduct of the Bank’s and Pekao Group’s employees in order to ensure the highest standards of service provision and to protect the reputation of the Bank. Reputation is an invaluable non-financial value created mainly by employees. The rules specified in the Code shall apply to all persons remaining with Bank Pekao or another legal entity belonging to the Pekao Group in an employment relationship or other legal relationship of a similar nature, including members of statutory bodies of companies.
Employees must confirm in writing or via the IT system that they have familiarised themselves with and commit themselves to obey the Code.
Each employee is expected to behave in an ethical, honest and loyal way and show an approach that favours cooperation in achieving the objectives of the Pekao Group, respect for and prudent use of the Company’s assets, and in particular:
perform their duties at the top professional level to meet customer expectations in the best way and avoid behaviour that could be interpreted as ambiguous or inconsistent with intentions,
act in the best interest of the customers,
comply with legal regulations and recommendations of supervisory bodies;
comply with the Code and other internal regulations, which is one of the basic duties of all employees.
Persons managing employees are expected to take all possible steps to ensure that employees reporting to them act in compliance with applicable legal regulations, recommendations of supervisory bodies, internal regulations, and standards of conduct. The management shall be responsible in particular for:
ensuring that employees will be trained in the performance of their business duties in compliance with applicable legal regulations, recommendations of supervisory bodies, internal regulations and ethical standards; the training, if required by the employee’s scope of duties, should also include the product offer,
pointing out legal, compliance, and reputation risks and taking care that employees behave properly in this area;
taking actions if employees inform them about violations or reasonable doubts concerning issues set out in the Code;
ensuring that employees have relevant approvals to perform their business duties, as required by commonly applicable legal regulations.
Each employee should be aware that their conduct, both during the performance of their official duties and during their free time, may have an impact on the way in which the Pekao Group is perceived. Therefore, the Employee cannot act in a manner that could expose the Pekao Group to the risk of reputation loss. Each employee shall be responsible for taking care of the reputation of the Pekao Group in the performance of their duties, representing companies, or referring to employment with them. Principles set out in the Code of Conduct are as follows:
treating others with dignity and respect,
respecting human rights,
protecting reputation,
communication standards,
occupational safety and health,
protection of assets,
financial reporting,
taking care of natural resources,
responsible marketing and promotional actions,
protection of information protected by law,
counteracting money laundering and financing of terrorism,
consumer protection,
preventing monopoly practices and assuring fair competition,
confidential information and abuses in the market,
conflict of interests’ management,
counteracting corruption,
reporting breaches.
The Code of Conduct provides for examples of permissible and forbidden acts.
Procedures are constantly improved in the Pekao Group and the necessary actions are taken to respond quickly to customer complaints and to deal with them in a manner that takes utmost account of the legitimate interests of the customers. This is provided for in internal regulations on complaint handling management, as well as in commonly applicable legal regulations.
In addition, the Customer who is a consumer of the Bank may apply for out-of-court proceedings before the Bank Arbitrator operating at the Polish Bank Association or before the Financial Ombudsman.
Complaint Handling
The Bank carefully analyses each complaint and in the case of irregularities takes appropriate remedial actions. Systematic analysis of complaints allows to take appropriate measures to improve the processes and procedures applied at Bank Pekao or their elements.
The purpose of the complaint handling procedure is mainly to:
inform existing and potential customers in a transparent way about procedures for filing complaints as well as terms and conditions and time limits applicable to complaint handling,
review complaints in an unbiased, diligent, objective, and timely manner,
take improvement or remedial actions if any irregularities resulting in the complaint having been filed by the customer are identified.
Detailed operating procedures for handling complaints, set out in the Bank’s regulations, specify the obligations and competencies necessary to comply with complaint handling requirements referred to above in a transparent and accurate way.
As a result of the Bank’s actions in the area of complaint, 92% of complaints were handled within statutory deadlines.
The Bank has appointed a Customer Ombudsman to help customers in resolving disputes that may arise in connection with the services offered. The Ombudsman deals with the most difficult and non-standard matters that require an individual approach and additional legal opinions. Each customer may contact the Ombudsman if they do not agree with the decision concerning the submitted complaint, they believe that the case is complicated and requires an individual approach or if they want to submit remarks as to the operation of the bank.
The entities of the Pekao Group manage complaints on their own. The entities implement and carry out procedures for accepting and handling Customers’ complaints. These procedures:
have been defined in the form of internal regulations of entities,
have been included in the regulations and agreements concluded with Customers, or
result from generally applicable laws.
Complaints shall be handled in a reliable and objective manner, taking into account all information and documents related to the problem reported by the Customer and in accordance with the provisions of law and concluded agreements.
In 2020, the Bank conducted customer satisfaction surveys on the complaint submission and handling process. Based on the results of the research, the Bank made a number of changes to the process. Answers to complaints written in a manner comprehensible to customers. In addition, the process of submitting complaints in digital channels has been simplified. Customers logging in to electronic banking will be able to file a complaint in a very intuitive manner. The system literally guides the customer step by step and significantly facilitates the provision of information that affects the effectiveness of handling complaints.
Indicators Related to the Complaint Process:
In 2020, entities of the Pekao Group received 102902 applications, 38556 of which were examined within 14 days. Of all the cases, 64447 was processed, in whole or in part, for the benefit of the Customer.
Having due regard to the high quality of relations with customers, their satisfaction and loyalty are key to building lasting value for all Stakeholders of the Bank.
Therefore, in 2020, the Bank continued an integrated customer satisfaction and loyalty research programme covering the most important processes and contact points. The results of these studies were used to improve services provided by the Bank.
As part of the level and quality of service at the outlets, during the first quarter of 2020, the Mystery Customer visits were carried out at each outlet. Visits were focused on measuring the quality of sales processes of products such as personal account. Due to the introduction of the pandemic status, the Bank did not arrange Mystery Customer visits in the remaining quarters. More than 20 thousand customers, using the Bank’s services in branches and via remote and digital channels, participated in customer satisfaction studies. The research conducted in 2020 was aimed at getting to know customers’ opinions regarding the assessment of satisfaction with the service provided by an advisor, a branch, a helpline and digital channels and in the process of submitting and handling complaints. Research results were used on an ongoing basis to manage negative events at operational and strategic level.
In order to improve the level of customer satisfaction, the bank launched the “In Plain Polish” programme. Its aim is to improve direct communication with customers in all contact channels (branch, infoline, mass communication, remote channels, website). The Bank introduces the principles of simple language, reduces the use of bureaucratic language and industry-specific language. Legislative documents (agreements, regulations, promotional materials) are being simplified. The editorial skills of employees are being developed through a series of workshops, conferences and trainings. The Bank signed the ZBP declaration in order to comply with simple language standards in communication with customers.
Based on best market practices and experience of branch employees, Bank Pekao created a book of service standards at the branch during the pandemic. Maintaining the principles of safe service was one of the Bank’s priorities due to the well-being of the Bank’s employees and customers. In 2020, the Bank continued the implementation of the “Pekao without Barriers” (Pekao bez barrier) programme aimed at: building awareness and educating employees about the availability of the Bank’s services to persons with special needs, providing customers with special needs with the best service regardless of the place of contact with the Bank and meeting the requirements of the Act on ensuring accessibility to persons with special needs (Ustawa o zapewnianiu dostępności osobom ze szczególnymi potrzebami). Due to the pandemic, the Bank implemented an educational campaign encouraging senior citizens to use remote services without having to leave home.
Bank
Non-financial performance ratios |
|
2020 |
2019 |
NPS ratio (in comparison with the previous year) |
|
42% |
n/a |
[GRI 206-1], [GRI 417-1], [GRI 417-2], [GRI 417-3],
In addition, they are carried out in compliance with the Bank’s communication strategy, the Bank’s visual identity and image, adopted internal regulations and in a way that maintains the intelligibility of the message being communicated.
Key regulations that apply to this area insofar as the assessment of compliance risk is concerned include the New Product Implementation Policy of Bank Pekao S.A. (Polityka Procesu Wdrażania Nowych Produktów w Banku Pekao S.A.), updated on 10 August 2018, and Principles for Developing Marketing Communication of Bank Pekao S.A. (Zasady tworzenia komunikacji marketingowej Banku Pekao S.A.), amended on 20 December 2018; both regulations were enforced on the basis of the Regulation of the President of the Management Board.
In May 2019, the Ordinance Standard and Crisis Communication Policy of Bank Polska Kasa Opieki Spółka Akcyjna and the Principles of appropriate behaviours on Social Media (Polityka komunikacji standardowej i kryzysowej Banku Polska Kasa Opieki Spółka Akcyjna oraz Zasady odpowiednich zachowań w Mediach Społecznościowych) was introduced comprehensively addressing issues of communication as well as promotional activities conducted with the Bank’s stakeholders via social media.
The Regulation on the Principles of creating marketing communication of Bank Pekao S.A. (Zasady tworzenia komunikacji marketingowej Banku Pekao S.A.) has been prepared in connection with the decision of the Management Board of the Bank on the adoption by the Bank of Corporate Governance Rules for Supervised Institutions (Zasad Ładu Korporacyjnego dla Instytucji Nadzorowanych) issued by the Polish Financial Supervision Authority. This regulation takes into account, i.a., basic requirements applicable to the content of marketing and advertising materials, including the nature and specification of the relevant product, including: consumer loans, mortgage loans, bank accounts (in particular savings accounts, savings and settlement accounts, or term deposit accounts), insurance products, investment products.
Bank Pekao makes every effort to ensure that advertising messages do not undermine public confidence in advertising activities, do not contain content or images that offend generally applicable customs, do not abuse customer confidence by taking advantage of their lack of experience or knowledge, do not take advantage of a sense of fear, do not contain elements that could lead to or encourage acts of violence, and finally do not accept discrimination, in particular on grounds of race, religion or gender.
In this unique year of 2020 marked by the coronavirus pandemic, Bank Pekao S.A., as the leader of banking digitisation, decided to launch an exceptional, prosperous marketing campaign “Take the Internet by the Horns” (Bierz Internet za rogi) aimed at building a new, virtual dimension of social relations. The campaign, aimed at the elderly, senior citizens, emphasised the opportunities and convenience offered by online mobility and provided interesting information and educational content, including the use of electronic banking.
The aim of the campaign was to educate and activate older customers (55+) and to involve their relatives in activities aimed at increasing the security of our customers, inter alia, by making payments via Internet banking, using cashless transactions and limiting visits to banking establishments.
Bank
Non-financial performance ratios |
2020 |
2019 |
Value of penalties paid for the violation of consumer rights: |
0 |
0 |
Value of penalties paid for the violation of principles of free competition |
0 |
0 |
Pekao Group
Non-financial performance ratios |
2020 |
2019 |
Value of penalties paid for the violation of consumer rights: |
0 |
0 |
Value of penalties paid for the violation of principles of free competition |
0 |
0 |
The Pekao Group and the Bank treat counterparties with due respect and select suppliers of goods and services in an objective and impartial manner, thus taking care of good and fair commercial relations. In selecting suppliers, the Pekao Group and the Bank apply internal procedures in accordance with best practices and mandatory provisions of Polish law. The Pekao Group wants to build long-term relations with suppliers based on mutual trust, respect, and professionalism. In particular, suppliers who apply proven market practices and represent the highest level of professional ethics are appreciated.
In 2018, the Bank carried out a comprehensive review of internal purchasing processes, as a result of which three key regulations were developed, which were adopted at the Bank, i.e. “Procurement Policy of Bank Polska Kasa Opieki Spółka Akcyjna” (Polityka zakupowa w Banku Polska Kasa Opieki Spółka Akcyjna), adopted by way of the Regulation of the President of the Management Board in April 2018, as well as “Principles for Procurement Without the Participation of the Procurement Department of Bank Polska Kasa Opieki Spółka Akcyjna” (Zasady realizacji zakupów bez udziału Departamentu Zakupów w Banku Polska Kasa Opieki Spółka Akcyjna), which were both adopted by way of the Regulation of the President of the Management Board in December 2018. The rules were reviewed again in 2019 following a further transformation of the purchasing function in the Bank. Another step of the improvements initiated in 2019 shall be full digitisation of purchasing processes and communication with bidders at the stage of procurement procedures and order placement. The result of the work performed so far in the field of digitisation of purchasing processes is the implementation of the Integrated Procurement Tool, which took place on 31.12.2020. Following the new system, the purchase procedure in force at the Bank was also updated.
During the procurement process, products or services to be ordered are defined in the same way for all business partners to guarantee fair competition. Any company may be invited to take part in the procurement process and submit its bid in accordance with the Bank’s requirements. All companies that submitted their initial bids are entered in the supplier database and taken into account when the list of potential suppliers is drawn up.
Companies invited to take part in the process can ask questions concerning the specification provided. Information on the final decision is sent to all bidders. In order to ensure an impartial selection of suppliers of goods and services, Committees shall be set up to ensure o transparency of the supplier selection process and preparation of recommendations of the most favourable offer.
In accordance with the principles applicable to the Bank’s ordering procedures, most ordering procedures are based on negotiations in an electronic form, which definitely streamlines procedures with Polish and international partners. One of the advantages of such a solution is the high effectiveness and transparency of the negotiation process.
In tenders conducted by the Bank, suppliers must fill out Corporate Social Responsibility Declarations and provide information concerning environmental aspects, social standards and issues related to respect for human rights. In this way, Bank Pekao undertakes actions aimed at sustainable development, protection of the environment, and prevention of violations of human rights by the Bank’s business partners.
In addition, when conducting tenders, the Bank verifies potential bidders in terms of the risk of corruption and in terms of sanction lists (US and EU sanction lists) and public warnings of the PFSA.
Companies that provide products or services for the Bank are informed about the abuse prevention process and material provisions of the corruption prevention policy in force at the Bank.
The Bank has implemented the Regulations for the Management of Conflicts of Interest at Bank Pekao S.A. (Regulamin zarządzania konfliktami interesów w Banku Pekao S.A.), updated in October 2018, defining the rules for the management of Conflicts of Interest and defining the circumstances causing or likely to cause a conflict of interests in the Bank’s operations.
Measures used by the Bank to manage potential conflicts of interest are, among others, based on:
its organisational structure and consist in:
establishing information barriers (Chinese walls);
introduction of a division of tasks, taking into account the physical and competence separation of different Organisational Units of the Bank and Group entities in activities from which a conflict of interest may arise,
in particular the separation of the Bank’s Organisational Units,
implementing structural independence by allocating defined competences, method description, types of actions and operations to each business unit of the Bank to let it make independent decision and supervise the Bank’s employees,
preventing simultaneous or consecutive involvement of the Bank’s employees in service provision if such involvement can adversely affect the effective management of conflicts of interest,
internal regulations providing for remuneration rules in relation to the Bank’s employees by defining:
principles for remuneration that do not have a negative impact on the stakeholder’s interest and eliminate direct dependencies between a variable part of remuneration and business goals,
entry into own transactions, implementing procedures for preventing abuses connected with the performance of own transactions on financial instruments by establishing limitations to such transactions in relation to an employee or the Bank,
the transfer of the Bank’s employees to other jobs if a reporting relationship arises between partners or relatives.
If, despite of the application of all possible measures to manage conflicts of interest, there is a risk that the interests of the stakeholder to which the conflict refers to will be violated or there is a significant reputation risk, the conflict of interest is disclosed to the Stakeholder. The disclosure always includes the description of the underlying conflict of interest adjusted to the stakeholder’s knowledge and experience, which enables the stakeholder to make a well-informed decision concerning a specific service, as well as information about measures applied by the Bank to manage the conflict of interest and limit related risks. The disclosure of the conflict of interest does not release the Bank from its obligation to apply all possible measures connected with the management of conflicts of interest.
In addition, the Bank is bound by the Policy for managing conflicts of interest resulting from conducting non-banking activities in the Bank Pekao S.A. Group (Polityka zarządzania konfliktami interesów wynikającymi z prowadzenia działalności pozabankowej w Grupie Banku Pekao S.A.), introduced by the Order of the President of the Management Board in December 2017, in accordance with which non-banking activities related in any way to an entity that is a competitor, customer, or counterparty of the Bank may generate conflicts of interest. Furthermore, being a member of statutory bodies, providing consultancy services or working for members of the Bank Pekao S.A. Group other than the Bank, performing any functions in corporate bodies of companies as part of corporate oversight performed by the Bank, and acquiring shares in a public company may generate conflicts of interests. An Employee may not be involved in any transaction concluded by the Bank, Pekao Group, customer or counterparty if, as a result of that transaction, the Employee or their next of kin can obtain a direct or indirect personal benefit.
Before taking any non-banking actions, the employee must analyse whether they can generate conflicts of interest. Taking any actions for the customer, business partner, competitor or any other activity, if there are any circumstances that can give rise to reasonable doubts concerning the existence of a conflict of interest, the employee must notify the manager of the Bank’s unit where they work and in the case of top management a direct superior or the Compliance Department.
The policy implemented by the Bank and the Pekao Group in the area of sponsorship and charitable activities is aimed at strengthening the image of the Bank and entities of the Pekao Group as open and modern institutions close to customers and communities in which the Bank and the Pekao Group operate.
The key internal regulation of the Bank defining guidelines in this area is the Rules for Donation and Sponsorship by Bank Polska Kasa Opieki Spółka Akcyjna (Zasady przyznawania darowizn i sponsoringu przez Bank Polska Kasa Opieki Spółka Akcyjna) of November 2018, introduced by the Order of the President of the Management Board. The regulation takes into account, among other things, the appointment of a new body - Sponsorship and Donation Commission supporting the Management Board of the Bank in the decision-making process at the bank concerning involvement in sponsorship projects or in the scope of granting donations by the Bank.
When selecting initiatives, the Bank departs from activities based on one-off donations and a reactive response to requests for support to the benefit of long-term social involvement based on partnership with respectful organisations with social trust. In particular, the Bank gets involved in projects in such areas like: responsible economic development, promotion of national brand and Polish values, support for culture, sport, aid to children in need, or environmental protection.
The Bank provides its support at two levels: nation-wide, where the Bank sponsors events having a material impact on Polish culture, and locally to support initiatives dedicated to local communities.
There is no single policy at the level of the Pekao Group in the charity and sponsoring area. Several companies of the Pekao Group (Pekao Faktoring, Pekao IM/ Pekao TFI, and Pekao Property) have implemented donation and CSR policies, e.g. Pekao Faktoring has an internal Social and Sponsoring Policy in place.
In accordance with the Policy of Counteracting Corruption in the Pekao Group (Polityka przeciwdziałania korupcji w Grupie Pekao) in force at the Bank, a risk analysis (due diligence) is carried out before the donation or conclusion of the sponsorship agreement, which allows to minimise the risk of corruption and reputation risk.
In 2020, due to the global pandemic caused by the coronavirus, the ambitious intentions of Bank Pekao as part of sponsorship and charitable activities were verified and adapted to the nationwide requirements and restrictions defined by the Polish government and banking supervision.
Dr Marian Kanton Foundation of Bank Pekao S.A.
Bank Pekao S.A. carries out its charitable activities mainly through the Dr Marian Kanton Foundation of Bank Pekao S.A., which was established in 1997. Apart from activities carried out through the Dr Marian Kanton Foundation, the Bank cooperates directly with several public benefit organisations and supports them by subsidising their statutory activities.
The scope of the Foundation’s charitable and social activities is very extensive. The statutory goals of the Foundation are to support initiatives in the following areas:
education of children and young people,
scientific, R&D and teaching projects undertaken by academic institutions and schools,
promoting knowledge in the field of banking,
helping the ill and the disabled,
promoting physical activity and sport,
environmental protection,
projects and activities undertaken by charities,
promoting culture.
Main Initiatives Implemented in 2020
In March 2020, Bank Pekao and the Marian Kanton Foundation handed over PLN 5 million in the form of donations to 11 hospitals throughout Poland. The funds were used to purchase specialist medical equipment and equip the facilities with materials necessary to fight the coronavirus. Moreover, the Marian Kanton Foundation bought 23 thousand protective masks which were handed over to hospitals, firefighters, and senior citizens.
In May 2020, as part of the joint action of Bank Pekao, PZU, Alior Bank and Link4, specialist barrier tents protecting medics against infection were purchased and handed over to hospitals and emergency medical units. All employees were involved in the collection for this purpose and the companies matched the collected funds.
In July 2020, Bank Pekao and the Marian Kanton Foundation allocated PLN 150 thousand to 20 animal shelters in order to provide for their basic needs. As in the case of barrier tents, it was an organised action with the entire PZU Group, thanks to which 60 shelters received support.
However, the pandemic situation notwithstanding, the Bank has engaged in a number of projects organised on a country-wide basis which have significantly maintained the continuity of multi-annual initiatives and have provided important support to the community during this full period of challenges.
In 2020, the Bank provided financial support to i.a.: XVIII Gala Piłkarska Podkarpacka NIKE [18th NIKE Podkarpacie Football Gala], event to celebrate the 100th anniversary of the Battle of Warsaw “1920. Wdzięczni Bohaterom” [1920. Grateful to Our Heroes], or the “Polska Wielki Projekt” [Poland - the Great Project] Congress.
In 2020, the Bank also continued its long-standing commitment to protect Polish wisents – an exceptional and unique species on the verge of extinction. Financial support provided by the Bank is devoted, among other things, to population diversification and development, stock care, as well as to co-financing scientific and educational projects.
Economic and Commercial Initiatives
Bank Pekao, as a leader in the financial sector, is present during key economic and commercial initiatives organised in Poland and abroad, including as one of the organisers. The Bank’s involvement is based both on its financial and substantive support.
In 2020, the Bank was present, inter alia, at the World Economic Forum in Davos. In cooperation with PZU, the Bank opened and operated the “Polish House” (Dom Polski) - a place for international meetings, debates and conferences. The Polish House in Davos was a great way to promote the Polish economy and its achievements, and to showcase the value and the potential of the entire Central and Eastern European region. The debates were attended by the Presidents and Prime Ministers of the countries of the region, leading economists, and representatives of the largest companies in Europe. The Bank also participated, i.a., in the European Financial Forum and the Banking and Corporate Finance Congress.
“We Are Close” Grant Competition
In 2020, the Foundation, in cooperation with Bank Pekao S.A., successfully conducted the 2nd edition of the grant competition “We Are Close” (Jesteśmy blisko), under which the Bank’s employees, volunteered their time and carried out their own projects for the benefit of local communities. The projects covered a number of initiatives in categories such as ecology, education, sport, culture and art, promotion of health or assistance to animals. A wide range made it possible for each employee to propose a project related to a topic close to the needs of the local community. The selected projects concerned, among other things, the support of hospitals and care centres, e.g. the purchase of water for patients and medics for hospitals in Krakow and Zamość (over 10,000 water bottles were handed over) or DeVibliss oxygen concentrator for children suffering from respiratory failure from the Lublin Little Prince Hospice for Children.
Bank
Non-Financial Performance Ratios |
|
2020 |
2019 |
||
Total amount of donations made (excluding donations made to the Foundation of Bank Pekao S.A.) |
5,012,072 PLN |
3,028,000 PLN |
|||
Donation made to the Foundation of Bank Pekao S.A. |
1,237,000 PLN |
500,000 PLN |
|||
Pekao Group
Non-Financial Performance Ratios |
|
2020 |
2019 |
||
Total amount of donations |
5,232,293 PLN |
3,155,536 PLN |
|||
Donation made to the Foundation of Bank Pekao S.A. |
1,237,000 PLN |
500,000 PLN |
|||
The employee volunteer programme was launched at Bank Pekao at the beginning of 2018. Its assumptions are based on the results of the employee needs survey (on-line survey) and the strategy of CSR activities carried out at the bank. In response to the challenges posed by the COVID-19 pandemic, the scope of employee volunteering and the range of activities for employees were adapted to the needs reported by state institutions, local communities, and selected groups of beneficiaries. In 2020, 119 actions were carried out involving 826 volunteers who devoted approximately 4370 hours to volunteering.
Volunteering for the NFZ Infoline
In response to the invitation to cooperate addressed to the Bank by the National Health Fund in the period March – April 2020, 50 volunteers participated in assistance for the COVID-19 dedicated infoline. For 29 days of their time on call, employees, trained for their new role, received 7,566 calls from persons seeking information on quarantine rules, the way in which they came into contact with the Sanepid [Central Sanitary Inspectorate], or new medical care solutions. Volunteering as part of the initiative consisted in a total of 1 324 hours of calls at the infoline.
“We Are Close” Grant Competition
The “We Are Close” grant competition is a volunteer programme for local communities. Employees, as leaders, submit an idea for help, create a team of volunteers and provide real support where it is most needed. The initiative is supported by the grant of the Dr Marian Kanton Foundation of Bank Pekao S.A. The 2nd edition of the competition had 97 ideas submitted. A competition committee composed of representatives of Bank Pekao SA Foundation, Human Resources Division, and Marketing, Communication and Research Department awarded 54 grants in the following categories:
50 grants up to PLN 4,500
3 grants up to PLN 2,500
1 grant up to PLN 1,500
In 2020, initiatives of employees, as leaders, were implemented in October - November and adapted to the epidemiological conditions binding in Poland. Activities took place in small groups, while maintaining the rules of the sanitary regime. Each participant of the initiative was obliged to fill out a written health declaration in the context of the COVID-19 threat. 54 initiatives were finally implemented in 45 towns and cities in Poland. Nearly 270 volunteers have been involved in helping local communities, who have devoted more than 1,700 hours to the competition.
The projects awarded with the grant included, among other things, assistance for animal shelters, renovation of educational establishments, revitalisation of green areas, educational activities, and organisation of sports events. In Koszalin, Bank Pekao volunteers installed houses for feral cats for the winter, senior citizens from the nursing and care facility in Otwock received a library which included a selection of audiobooks, and the Lublin hospice for children got an oxygen concentrator for patients suffering from respiratory failure.
The effectiveness of the practice, implemented at the bank for the second time, was measured by way of feedback from interviews with representatives of the initiative leaders and project beneficiaries. More than 20 interviews were conducted with participants of the 2019 and 2020 initiatives. The beneficiaries were asked about, among other things, the impact of volunteers’ initiative on the organisation’s/establishment’s activities and the result obtained. They were used as a basis for thematic brochures in the form of a publication.
Operation Santa
“Operation Santa” (Akcja Mikołaj) is a Christmas initiative for employees to prepare packages with gifts for children under the care of the Stowarzyszenie SOS Children’s Villages Association. Volunteers are very interested in it and the bank goes beyond standard aid by organising meetings with the association’s wards. In 2020, the formula of the campaign was extended to include a new group of beneficiaries – senior citizens under the care of the Social Welfare House with its registered office in close vicinity of the bank. Thanks to the involvement of employees, 168 packages for children and 94 packages for senior citizens have been prepared.
Cooperation with Volunteering Partners
Sanitary restrictions and inability to organise stationary educational workshops forced the bank to modify its assumptions regarding cooperation with organisations receiving volunteers’ assistance. In the second part of the year, solutions were introduced which allowed both the provision of aid in remote form and educational activities in the on-line formula.
The Bank’s main partners in the organisation of volunteering in 2020 were: Narodowa Fundacja Ochrony Środowiska [National Environmental Protection Foundation], Warsaw Institute of Banking, SOS Children’s Villages Association, Polish Red Cross, and Towarzystwo Opieki nad Zwierzętami w Polsce [Polish Animal Welfare Society].
First Job Project
Thanks to cooperation with selected institutions, a competence-developing project under the name “First Job” was launched. The initiative has been prepared for wards of care institutions, who are at the cusp of adulthood including those of the SOS Children’s Villages. It includes a workshop conducted by a recruitment specialist, an expert lecture in the field of labour law, and educational materials for participants. Project participants will learn how the recruitment process is underway and how to prepare for it and what rights the new hires have.
The effectiveness indicator of the initiative was the content of information from questionnaires filled out by participants of the classes, after they were carried out. The questionnaire was filled in by 33 persons and thanks to feedback, the scope of substantive material was modified. The second source of information was consultation with representatives of the SOS Children’s Villages Association (director of the facility, educators) present at the classes.
The experience gained by volunteers during the meeting with the SOS Villages’ wards in Karlino was used in the #SamoDZIELNI project implemented by the PFR Foundation and experts from the Centralny Dom Technologii [Central Technology House]. The initiative included trainings, workshops and “development vouchers” for 30 children’s homes wards from all over Poland. The video summarising the participation of Bank Pekao SA volunteers who used the experience in the “First Job” project in the PFR Foundation’s initiative #SamoDZIELNI: https://www.youtube.com/watch?v=Q_IeczXJZZA
Assistance to Homeless Animals
As part of the continuation of cooperation with the Polish Animal Welfare Society, an online collection of funds for the shelter in Celestynów was organised, which ended with a meeting among employees of PLN 11,700 to help the facility.
Volunteers also actively participated in the #GrupaPZUzWierztom campaign. Thanks to the involvement of employees, gifts were collected and delivered to shelters. Volunteers helped in establishments in the following cities and towns: Biała Podlaska, Głowno, Lesko, Nowy Białynin (near Sochaczew), Opole (two institutions), Oświęcim, Radziemice Kolonia (near Krakow), Rzeszów, Żychlin. Approximately 680 kg. were collected and the online collection of funds for the Judyta Foundation for Puppies [Fundacja dla Szczeniąt Judyta] ended with collecting PLN 11,015 among the employees to help the facility.
Ecology Education
In 2020, for the first time since the launch of the initiative, measures have been taken to encourage volunteers to engage in pro-ecological activities. The starting point was to launch thematic lectures on climate change and biodiversity conservation (bee protection and promotion of urban beekeeping). Thanks to cooperation with the Apiterra Foundation, a cycle of webinars under the title “BANK MIODEM PŁYNĄCY” [A Bank of Honey] was conducted, during which 119 participants broadened their knowledge of the importance of bees in preserving biodiversity of the environment and received guidance useful for operating a home apiary. Webinar topics:
SOS bees! How do bees help us and how can we help them?
What is honey, what do you eat it with, and since when do we use it?
Why does a queen-bee sing and the bees dance? Trivia about day-to-day bee behaviour in hives.
You too can start an apiary and become an urban beekeeper! We’ll tell you how to do it.
Thanks to cooperation with the National Environmental Protection Foundation (UNEP/GRID Centre – Warsaw), the first series of thematic lectures devoted to environmental protection was conducted at the bank. The lecture conducted by GRID experts has brought together knowledge of the climate, described the link between the climate and our lifestyle, both professional and private. Participants could find out how the climate affects our everyday lives, and vice versa how our consumer choices, home habits, and lifestyles can and do influence the climate.
Actions Initiated by Employees
The Bank also supports actions initiated by employees, which involve the local community. In 2020, employees, in cooperation with the Volunteering and Corporate Culture Office (Biuro Wolontariatu i Kultury Korporacyjnej), organised actions supporting the collection of funds for treatment of the sick. Videos from the initiatives:
Initiative for Diana with the Participation of President Olszewski
Krasnystaw Branch Supports Alan’s Treatment
Volunteer Day / Volunteer Festival
Since the beginning of the employee volunteering initiative, an event takes place that integrates the employees engaged in the programme. Participation in the event under the slogan of the Volunteering Festival/Volunteer Day allows employees to expand their knowledge in the area of social activity, understand the idea of volunteering and their role in building the bank’s social responsibility.
On the occasion of Volunteer Day, a meeting of initiative leaders in the grant competition and employees engaged in volunteering for NFZ Covid-19 infoline was held on 4 December. The event involving over 90 people, organised on-line, was attended by volunteer leaders, representatives of the HR area and representatives of the Management Board of the Bank together with the President of the Bank. The purpose of the initiative was to present the role of volunteering in the company’s organisational culture, to appreciate the actions taken by employees and to inspire future activities. During the event, examples of employee involvement in volunteering and the impact of their activities on the local community were presented.
Solutions for Employees
There is a portal on the bank’s intranet where information on planned actions and publications summarising volunteers’ activities are published. Information about volunteering is also published in bank newsletters: Pekao News and (HR) FOR A GOOD WEEK’S START (Na dobry tydzień). Bank Pekao SA enables each employee to use two business days per calendar year for volunteering organised with the support of the employer. Workshops are organised for volunteer leaders and persons interested in participating in aid initiatives, that help prepare them for these events.
Blood Donation Drives
Bank Pekao S.A. has been conducting blood donation drives for many years. The Bank’s employees regularly participated in actions which resulted in over six hundred people donating 300 litres of blood. In 2020, together with the Polish Red Cross, blood donation drives were planned in selected cities throughout Poland. Due to the Covid-19 epidemic, these activities were postponed until 2021.
Bank
Non-financial performance ratios |
2020 |
|
2019 |
Number of partner organisations |
5 |
|
6 |
Total number of employees involved in volunteer initiatives |
826 |
|
880 |
Total number of hours of volunteer work |
4,370 |
|
5,011 |
Total number of volunteer initiatives |
119 |
|
246 |
Pekao Group
Non-financial performance ratios |
2020 |
|
2019 |
Number of partner organisations |
5 |
|
6 |
Total number of employees involved in volunteer initiatives |
826 |
|
883 |
Total number of hours of volunteer work |
4,370 |
|
5,031 |
Total number of volunteer initiatives |
120 |
|
247 |
Bank Pekao is active in trade associations and organisations. The Bank’s involvement in this area can be broken down into four main fields:
Polish Bank Association along with Committees and Councils, including: The Banking Cybersecurity Centre Committee, Real Estate Funding Committee, Payment Card Processor Committee, Bank Card Issuer Council, Electronic Banking Council,
International associations and organisations, including: Word Economic Forum, International Swaps and Derivatives Association (ISDA), Institute of International Finance (IIF), Association of Chartered Certified Accountants (ACCA),
Nationwide associations and organisations, including: Stowarzyszenie Emitentów Giełdowych [Exchange Issuer Association], Izba Domów Maklerskich [Brokerage House Chamber], Polskie Stowarzyszenie Zarządzania Kadrami [Polish Staff Management Association], Stowarzyszenie Dealerów Bankowych ACI Polska [ACI Poland Bank Dealer Association], Polskie Stowarzyszenie Inwestorów Kapitałowych [Polish Capital Investor Association],
Local associations and organisations: Lubelski Klub Biznesu [Lubelskie Business Club], Podkarpacki Klub Biznesu [Podkarpackie Business Club].
Bank
Non-Financial Performance Ratios Activity of the Bank in trade associations and organisations in the relevant year (number of memberships) |
|
2020 |
|
2019 |
Polish Bank Association as well as Committees and Councils associated therewith |
|
14 |
|
14 |
International associations and organisations |
|
14 |
|
14 |
Nationwide associations and organisations |
|
6 |
|
6 |
Local associations and organisations |
|
2 |
|
2 |
Pekao Group
Non-Financial Performance Ratios Activity in trade associations and organisations in the relevant year (number of memberships) |
|
2020 |
|
2019 |
International associations and organisations |
|
18 |
|
17 |
Nationwide associations and organisations |
|
14 |
|
16 |
Local associations and organisations |
|
2 |
|
2 |
The Pekao Group is a first-choice employer, thus acquiring the best candidates for work, and ensuring working conditions conducive to increased motivation, satisfaction and involvement for its employees.
An important goal of the Bank’s HR policy is to invest in the development of skills of all its employees, but the priority of the Bank’s development programme is to identify, review, verify, and develop present and future leaders.
As at the end of December 2020, the Bank employed 13,038 person, compared to 13,913 as at the end of 2019. The average age of employees is 46.1 with 72.3% having tertiary education (70.6% in 2019). Women constituted 72.6% of all employees.
At the end of December 2020, the number of employees of the Pekao Group in the Bank and companies consolidated with the full method was 15,203 compared to 15,857 at the end of 2019.
The Pekao Group and the Bank create opportunities for individual professional development of employees by investing in training and improving competences and skills of employees.
In creating a friendly working environment, the Bank conducts employee satisfaction and opinion surveys in order to continuously improve working conditions, communication, and employee relations.
There is no common policy for all companies in the Pekao Group, however, training and development procedures and instructions have been implemented. Regulations shall be introduced and implemented in accordance with the provisions of law, including those relating to the capital market.
In 2020, Bank Pekao received, for the tenth time, the prestigious Top Employers Polska certification mark, which confirms the pro-employee activities carried out thereby. The purpose of the Top Employers certificate is to identify companies that implement HR management principles in practice in the best way. The Top Employers certificate is granted solely to companies that stand out in terms of their HR strategy focused on supporting employees’ professional development, improving employee competencies and skills, as well as transparent operation in accordance with adopted values and principles.
Each company taking part in the Top Employers project is subject to identical and objective certification/assessment criteria based on international HRM standards. To obtain the prestigious Top Employers certification mark, the company must meet and exceed these standards.
The Top Employers Institute assessed the Bank’s practices in the following areas:
talent development strategy,
HR planning,
on-boarding,
training and development,
performance management,
leadership skill development,
career development and succession planning,
salaries and benefits,
culture.
Respect for diversity and equality, as well as the prohibition of discrimination, are principles deeply rooted in the organisational culture of Bank Pekao. They have been promoted and sanctioned for years by internal regulations. The Bank conducts activities aimed at conscious diversity management, including workshops and training for employees and managerial staff dedicated to diversity management, thus supporting the construction of an organisational culture aimed at recognising distinctness and individual differences, as well as preventing situations in which employees may be discriminated against due to such differences.
The implementation of a number of regulations and practices in the Pekao Group allows for carrying out activities as part of sustainable development, respecting diversity and equal treatment.
[GRI 102-41], [GRI 401-1],
Bank
Non-Financial Performance Ratios |
|
2020 |
|
2019 |
Number of employees of the Bank |
|
12,870 |
|
13,779 |
Number of the Bank's employees according to GRI |
|
13,038 |
|
13,913 |
Number of employees of the Bank (in FTEs) |
|
12,693 |
|
13,648 |
Number of Bank's employees according to GRI (in FTEs) |
|
12,859 |
|
13,782 |
Number of resignations from work (in FTEs) |
|
2,080 |
|
2,077 |
Number of employees of the with tertiary education |
|
72% |
|
71% |
% of women employed |
|
73% |
|
75% |
% of employees covered under a collective agreement |
|
77% |
|
77% |
Non-Financial Performance Ratios |
|
2020 |
|
2019 |
Number of employees |
|
14,994 |
|
15,678 |
Number of employees (according to GRI) |
|
15,203 |
|
15,857 |
Number of employees (in FTEs) |
|
14,633 |
|
15,384 |
Number of employees according to GRI (in FTEs) |
|
14,837 |
|
15,561 |
Number of resignations from work (in FTEs) |
|
2,597 |
|
2,677 |
Number of employees of the with tertiary education |
|
73% |
|
71% |
% of women employed |
|
72% |
|
74% |
% of employees under a collective agreement |
|
73% |
|
n/a |
Note: The total number of employees according to GR includes employees employed on the basis of an employment contract, appointment, election, appointment or a cooperative employment contract at the end of the reporting year in full-time positions / persons: both active (present) and inactive (absent) persons.
Percentage of employed women presented without members of the Bank's Management Board. Percentage of employees with higher education for the Pekao Group presented without Pekao Direct Sp. z o.o.
[GRI 405-1],
Bank
Percentage of employees in individual age categories by gender (in FTEs) |
Women |
Men |
<30 |
61% |
39% |
30-50 |
70% |
30% |
>50 |
79% |
21% |
Total |
73% |
27% |
Pekao Group
Percentage of employees in individual age categories by gender (in FTEs) |
Women |
Men |
<30 |
62% |
38% |
30-50 |
69% |
31% |
>50 |
78% |
22% |
Total |
72% |
28% |
[GRI 405-1],
Bank
Percentage of employees broken down by employment structure by gender (converted to persons) |
Women |
Men |
Members of the Management Board |
13% |
87% |
Managers |
58% |
42% |
Other |
75% |
25% |
Total |
73% |
27% |
Composition of the Supervisory Board by gender (converted to persons) |
Women |
Men |
Number of SB members |
56% |
44% |
Pekao Group
Percentage of employees broken down by employment structure by gender (converted to persons) |
Women |
Men |
Members of the Management Board |
21% |
79% |
Managers |
57% |
43% |
Other |
73% |
27% |
Total |
71% |
29% |
Composition of the Supervisory Board by gender (converted to persons) |
Women |
Men |
Number of SB members |
29% |
71% |
The Bank applies the Policy of Gender Equality and Diversity with Respect to Members of the Supervisory Board, Members of the Management Board and Key Function Holders at Bank Polska Kasa Opieki Spółka Akcyjna (Gender Equality and Diversity Policy) (Polityka równości płci oraz różnorodności w odniesieniu do członków Rady Nadzorczej, członków Zarządu oraz osób pełniących Kluczowe Funkcje w Banku Polska Kasa Opieki Spółka Akcyjna (Polityka równości płci oraz różnorodności)), introduced on 18 December 2020 by the Order of the President of the Management Board of the Bank, which defines the strategy for managing the diversity of the Bank’s employees, including diversification with regard to the selection of members of the Supervisory Board, members of the Management Board and Key Functions Holders at the Bank. The Gender Equality and Diversity Policy defines guidelines aimed at ensuring that the Bank’s employees are able to manage their careers, achieve success and assess their work on the basis of individual achievements, regardless of gender.
The aim of the Bank’s diversity strategy referred to in the Gender Equality and Diversity Policy is to ensure high quality performance of tasks by the Bank’s employees, including the selection of competent persons to perform their functions in the Supervisory Board, Management Board and Key Functions at the Bank, applying first and foremost objective substantive criteria and taking into account the benefits of diversity.
Gender equality ensures the Bank’s employees the opportunity to manage their careers, achieve success, and assess their work on the basis of individual achievements, regardless of gender.
Guidelines on gender equality apply to all HR processes carried out by the HR Division and provide for:
assuring of representation of both genders in external recruitment processes by preparing lists of recommended candidates including at least one candidate of each gender,
seeking to ensure representation of both sexes in internal recruitment processes, by drawing up lists of recommended candidates for a given post, which contain at least one candidate of each gender,
eliminating of discriminating criteria in relation to genders while preparing job offers and descriptions,
informing external partners operating in the areas of recruitment and training (temporary employment agencies, employment agencies, public labour agencies/labour offices, head-hunter agencies) about the scope and content
of the implemented Gender Equality and Diversity Policy and the Bank’s involvement in achieving the objectives of this policy,
assuring equal professional development opportunities to all Bank employees (training, coaching, mentoring, and other development actions at work) of any gender, accounting for professional duties, effectiveness, professional potential in accordance with the Bank’s organisational needs, standards and criteria defined in separate internal regulations,
ensuring equal treatment of the Bank’s employees in terms of remuneration and additional benefits, regardless of gender, in accordance with the Remuneration Policy of Bank Polska Kasa Opieki Spółka Akcyjna and generally applicable provisions of law in this regard,
promoting balance in professional and private life of employees by taking advantage of possibilities provided for in relevant regulations in this field and such available facilities like:
a) offering flexible working models (part-time employment, etc.) in a manner consistent with the applicable provisions of law, in particular the provisions of labour and social security law and internal regulations, taking into account business and organisational requirements and needs,
b) supporting employees during and after long-term absence (e.g. after parental leave, unpaid leave, sickness and any other long-term absence) by avoiding discrimination during and after long-term absence, enabling employees to remain in contact with the company during long-term absences and facilitating return after a long-term absence in accordance with applicable law, in particular: labour and social security law and internal regulations of the Bank,
c) incorporating issues related to gender equality in training programmes, including, without limitation, those addressed to management staff, adaptation programmes and other forms of training and communication.
The Gender Equality and Diversity Policy, in accordance with the legislative process in force at the Bank, was adopted by the Management Board of the Bank and approved by the Supervisory Board.
The Gender Equality and Diversity Policy also applies in 8 subsidiaries: Pekao Direct Sp. z o.o., Centrum Kart S.A., Pekao Bank Hipoteczny S.A., Pekao Financial Services Sp. z o.o., Pekao Investment Banking S.A., Pekao Leasing Sp. z o.o., Pekao TFI S.A., and Pekao Faktoring Sp. z o.o.
The Bank applies the Policy of Selecting Candidates for the Function of a Member of the Management Board and Key Functions and Assessing the Suitability of Proposed and Appointed Members of the Management Board, the Supervisory Board, and Persons Performing Key Functions at Bank Polska Kasa Opieki Spółka Akcyjna (Selection and Suitability Assessment Policy) (Polityka doboru kandydatów do funkcji członka Zarządu oraz kluczowej funkcji oraz oceny odpowiedniości proponowanych i powoływanych członków Zarządu, Rady Nadzorczej oraz osób pełniących kluczowe funkcje w Banku Polska Kasa Opieki Spółka Akcyjna (Polityka doboru i oceny odpowiedniości)) approved by the Supervisory Board of the Bank on 30 December 2020, the aim of which is to ensure the optimal and uniform process of selecting candidates for the function of a member of the Management Board and Key Functions at the Bank, so as to ensure the performance of tasks related to the implementation of the Bank’s business plans and strategy by persons with the necessary knowledge, experience and skills, as well as with good reputation.
The Selection and Suitability Assessment Policy also specifies the criteria for assessing the individual and collective suitability of candidates and members of the Management Board, the Supervisory Board, and Key Function Holders at the stage of appointment and in the course of performance of the function, as well as events resulting in the need to assess the suitability, the course of the suitability assessment process, including roles and tasks in the process and the effects of the assessment, including corrective measures applicable to ensure compliance with the suitability requirements.
The Candidate Selection Policy for the performance of the function of a member of the Management Board or a Key Function also applies to 4 subsidiaries: Dom Inwestycyjny Xelion Sp. z o.o., Pekao Financial Services Sp. z o.o., Pekao Bank Hipoteczny S.A., and Pekao Leasing Sp. z o .o.
Subsidiaries are in the process of updating the previously implemented Suitability Assessment Policy.
The Bank is bound by the “Mobbing Prevention Policy of Bank Polska Kasa Opieki Spółka Akcyjna” (Polityka antymobbingowa Banku Polska Kasa Opieki Spółka Akcyjna) introduced in November 2009 by the Order of the President of the Management Board of the Bank. It defines principles for the prevention of conduct and behaviour considered as mobbing. In addition, the purpose of the Mobbing Prevention Policy is to support the implementation of the provisions of labour law to the extent of the obligation to prevent mobbing.
Bank Pekao does not tolerate any mobbing activities or behaviours towards Employees in any way, and appropriate consequences are immediately visited on the perpetrators. In accordance with this regulation, each report is analysed by the Mobbing Prevention Committee, established by the employer to review mobbing complaints.
The policy has not been implemented in the Bank’s subsidiaries, however, some of them have developed internal procedures regulating this issue, among others Pekao Bank Hipoteczny, Pekao Investment Banking S.A., Pekao TFI S.A., and Pekao Financial Services Sp. z o.o.
Bank
Non-Financial Performance Ratios |
2020 |
|
2019 |
Number of cases reported and handled under the Mobbing Prevention Policy |
2 |
|
6 |
Pekao Group
Non-Financial Performance Ratios |
2020 |
|
2019 |
Number of cases reported and handled under the Mobbing Prevention Policy |
4 |
|
8 |
In practice, values set out in the Charter of Principles are translated into specific situations and relations at work through the System of Values. The basis of the System of Values is the activity of the Charter of Principles Advocate - an independent and retired manager or former employee of the Bank to whom employees can report any conduct that does not comply with the Bank’s corporate values.
Since January 2017, the Order of the President of the Management Board has been in force at Bank Pekao - Rules and Mode of Conduct for Examining Employee Notices on Infringing the Charter of Principles (Zasady i tryb działania Rzeczników Karty Zasad przy rozpatrywaniu zgłoszeń pracowników Banku o naruszenie wartości Karty Zasad), which defines actions which may be taken by employees and the Charter of Principles Advocate in order to examine requests of Bank employees for violation of the value of the Charter of Principles. The purpose of this regulation is to establish high-quality principles of social co-existence at the Bank, as referred to in Article 94.10 of the [Polish] Labour Code.
In accordance with this regulation, employees who observe or experience any behaviour that is inconsistent with the values set out in the Charter of Principles have the right to report them to the Charter of Principles Advocate. The Advocate is a trusted representative of the employees and is bound by confidentiality and discretion rules. The Advocate’s duty is to help employees solve problems connected with the violation of values. Having received a notice, the Advocate takes appropriate actions to reconcile conflicted parties and repair their relations using available tools, such as meetings or signalling, in order to find a solution, determine further conduct and its implications for the future.
The Pekao Group and the Bank are implementing a number of initiatives offering support for diversity addressed to all employees, including reporting their initiatives and active use of existing projects. The primary goal of these initiatives is to:
fully exploit the potential of all employees in the process of managing the company’s intellectual capital and building an organisational culture based on sharing knowledge and experience,
improve employees’ commitment and satisfaction across all age groups,
improve HR management strategy by developing leadership,
develop an employee-friendly organisation.
Employees may participate in the following initiatives:
workshops promoting the diversity of operating and communication styles among employees, which include a discussion on the types of personality and corresponding differences in the process of communication and relations development, as well as preferred methods of operation,
training for managers on “Diversified Team Management”. The purpose of those workshops is to educate managers in diversity management, turn their attention to diversified needs and methods used to motivate employees depending on their age, experience, skills and competences. At the training, issues related to diversity management, challenges faced by managers of diversified teams, including generational differences, diversified experience of employees, and their individual needs and motivators, are discussed,
actions supporting the development of women at management positions; the Bank also takes initiatives aimed at strengthening diversified leadership in terms of gender. On the Bank’s website there is a separate section “Women Leaders at the Bank” (“Liderki na Bank”), which presents, among others, extraordinary stories of women being Bank managers who succeeded in achieving their professional goals,
the “Sugar-Free” (Bez cukru) programme for women - women account for over 70% of employees at the Bank. Therefore, under the patronage of the Vice President of the Management Board, a project team was established in 2020 and work on the preparation of the programme started. The decision was then taken to create an initiative together with the stakeholders, based on the actual needs of women. An anonymous survey was carried out (attended by nearly 800 ladies, 84% of whom expressed their desire to participate in the programme) aimed at all women employed in the bank. It looked into the opinions on the programme, the level of interest in participation, the scope of interesting topics, and the formulae for action. It has been agreed that the programme will pursue the objectives of: inspiring comprehensive development; education on modern technologies; building engagement and attachment to the organisation (having the programme include mothers on leave; engaging local communities (creating a network of women, electing local female leaders)). In December 2020, a formal launch of the programme took place (more than 700 ladies have entered) and a competition for the name of the programme was decided. The company started an open dialogue with women and discussions about the needs of this group of employees.
Communication of Initiatives for the Benefit of Diversity
Information regarding initiatives carried out to support diversity is published in the Bank’s intranet.
On the “Diversity Management” tab available to managers, team leaders containing a number of hints and advice on how to manage a diversified team and how to create a friendly working environment (Diversity Management Guide, Manager Talks Manual) as well as a description of related internal regulations.
In 2020, the Bank participated for the second time in the Bloomberg - GEI 2020 (Gender-Equality Index) survey, sharing experience and solutions related to the possibility of promoting women in the workplace (through measurement and transparency) and qualified in the GEI index.
Training and Professional Development
The Pekao Group and the Bank create educational opportunities and provide access to various forms of training for their employees.
The Bank’s educational programmes include class training, workplace training, electronic training, coaching, as well as the Virtual Classroom system enabling remote transfer of knowledge in the form of Webinars.
The main internal regulation in this area is the Policy on the Training and Raising of Professional Qualifications of Employees of Bank Polska Kasa Opieki Spółka Akcyjna (Polityka Szkoleń oraz podnoszenia kwalifikacji zawodowych Pracowników Banku Polska Kasa Opieki Spółka Akcyjna), which also provides for procedures applicable to processes connected with employee participation in particular forms of raising professional qualifications, such as:
procedure for group classroom-based training,
procedure for domestic individual training,
procedure for individual language courses,
training needs survey,
post-graduate education and MBA,
e-learning group training procedure.
In 2020, the Bank’s major training priorities were as follows:
providing support to the Bank’s employees in connection with changes in the manner of work performance resulting from the COVID-19 epidemic,
disseminating specialist knowledge among the Bank’s employees,
training for mid-level and senior management staff;
implementation of mandatory training programmes arising from internal and external regulations.
Providing Support to the Bank’s Employees in Connection with Changes in the Manner of Work Performance Resulting from the COVID-19 Epidemic
The Bank has changed its training projects in order to prepare its employees for the challenges related to Covid-19. The form of providing training for online training has been changed. The content of the training was enriched with pro-health themes, coping with stress and psychological pressure resulting from the pandemic, remote work and remote team management.
Expanding the Know-How of Bank Employees
The Bank continued to implement training projects connected with the enforcement of its business strategies. Training courses dedicated to employees with a high potential and induction trainings for new employees of the Bank were conducted.
In 2020, the Bank held over 214,000 hours of synchronous (classroom-based and e-classroom based) training courses attended by over 10.4 thousand employees, which proves that products, methods, required regulations, and customer care are implemented effectively. The courses and training in the e-learning formula were provided at the level of more than 330 thousand hours.
In addition, the Bank has completed a number of courses in the form of e-learning, among others, a series of 4 trainings “in plain Polish”, thanks to which employees will learn the principles of simple language, how to communicate effectively, and what errors to avoid, and training projects devoted to newly implemented internal regulations, among others MDR identification and reporting of tax schemes.
Training for Mid-Level and Senior Management Staff
In 2020, management staff improvement programmes were implemented dedicated to two groups of managers. One of them was addressed to Area Directors, while the other included Branch Directors. The objectives of the Programmes were implemented with the support of an external training company. During the 3 training modules, Area Managers had the opportunity to improve skills such as leadership, development of others, team management based on the N.E.W.S. methodology, which focuses on coping with continuous and rapid changes. In addition, the participants also acquired skills in terms of working in dispersed project teams, whose task was to meet the challenge and to develop a joint proposal for a business project. On the other hand, trainings dedicated to Branch Directors were aimed at developing effective organisational culture and integrating managers in the process of continuous changes. Due to the pandemic, the programme was implemented remotely via the Webex Center platform.
In 2020, the LIDER ON-LINE programme was also implemented to support managers in a new dispersed organisation resulting from the Covid-19 epidemic. The main objective of the programme is to strengthen managers’ competencies in the field of efficient management of the distributed team, to learn tools and techniques supporting managers in their role as leaders managing distributed teams and to build and develop a culture of remote work in the organisation. The programme consisted of 3 training modules implemented online and provided individual substantive consultations with coaches both during and after the programme. The programme included Team Managers who manage dispersed teams and want to develop their competencies in this area.
Implementation of Mandatory Training Programmes Arising from Internal and External Regulations
In accordance with the Act on Insurance Distribution (Ustawa o dystrybucji ubezpieczeń), professional training was provided at the bank, which covered all OFWCA which – in accordance with the Act - it was obliged to provide. The training was provided in the form of e-learning and in total met the requirement of 15 training hours per year.
The Bank also implemented necessary updates and reviewed knowledge resulting from mifid regulations, as well as completed a series of trainings required by the Mortgage Loan Act (Ustawa o kredycie hipotecznym).
In 2020, the Bank also implements a comprehensive Cybersecurity training programme with outstanding market specialists. Training courses are designed in such a way as to raise the awareness of the Bank’s employees in this area. Some of them are provided as mandatory trainings and covered all employees of the Bank. The programme implemented at the request of the Bank Security Department has been approved by the Management Board and the Supervisory Board.
Development Programmes and Initiatives
In 2020, the Bank implemented development programmes and initiatives for its employees aimed at providing support for the development of interpersonal and managerial competencies, supporting the achievement of the Bank’s strategic objectives, with particular emphasis on the pandemic situation.
The Bank carries out four major processes connected with the above:
Succession Plans, which are key deliverables of the above processes and are of fundamental importance to ensure the continuity of employment at strategic positions, the implementation of long-term projects and the minimisation of operating risks,
Annual evaluation system - in 2020 the bank, at the request of employee organisations, deviated from the process of close monitoring of employees’ assessment in connection with Covid-19, while leaving the process of “semi-annual feedback” as an additional, non-mandatory tool for providing regular feedback to employees,
Assessment Centre/Development Centre sessions – in 2020 more than 80 of employees were invited to participate, with sessions being held online. The Bank has implemented a new competence assessment system in the form of the 180° Assessment and 360° Assessment carried out in SAP Success Factors. Assessment Centre/Development Centre sessions – an evaluation of professional potential; its results are used in decision-making processes related to employment, promotion, and employee development. At the same time, the Bank has implemented a mandatory assessment procedure in the form of Assessment Center for key positions in the branch network. Carried out online during the Covid-19 pandemic.
In addition, the Bank offers its employees development initiatives the purpose of which is to support the development of their skills, knowledge and competencies as well as their professional development, and a number of initiatives to improve employee commitment.
In 2020, recruitment for the Talents Up programme, prepared for talented individuals, was developed and launched. 216 candidates participated in the recruitment phase. The aim of the programme is to build a culture of innovation in the organisation and to develop the competencies of the participants, especially managers, manage changes and create new business solutions, including on the basis of the Design Thinking methodology.
In addition, a development programme – Ambassadors of Change - was launched for the employees responsible for operating support of the Bank’s branches working at the Operations Centre, inviting 19 employees with the highest potential. A number of actions to develop leadership competences have been carried out in support of managerial staff. We implemented, among other things, the Leader Online programme participated by mid-level managers. The objectives of the programme were to support managers in managing teams working remotely and in a hybrid formula; development of skills of work organisation, building employee involvement, and effective communication within a team.
Traineeship and Internship
One of the annual goals of the Bank is to attract a specific number of graduates from the best universities in Poland and abroad and offer them professional development opportunities within the organisation: in branches or units of the Bank’s Head Office.
To achieve this goal, the Bank implements the following programmes:
A year-long internship programme addressed to tertiary students and graduates. Internship lasts for 2 to 3 months and allows the participant to gather experiences in selected areas of banking, in all organisational units of the Bank.
The “Wisent Academy” (Akademia Żubra) Summer Internship Programme addressed to tertiary students and graduates. The programme takes 2 months and is a good start for students who want to learn how one of the business areas of the Bank operates. The participants actively support the Bank’s units and carry out their individual projects. Interns are also invited to participate in workshops on soft and technical skills.
The Banking Champions Internship Programme is a unique internship offer on the market. The programme is addressed to students of the best tertiary schools in Poland and abroad, who want to create modern solutions in the Polish banking sector. The programme offers development opportunities in the areas of Investment Banking and Strategic Management of the Bank. The role of the Mentor, who shares their knowledge and experience with the Interns, is crucial.
Good Practices Applied in Pekao Group
Practice no. 1: Candidate Recommendations Programme - Recruitment on Recommendation
Context of operation: Recruitment of the best employees for all positions at the Bank
Practice description: If the Employee knows a person who would like to work at the Bank, and that said person has the appropriate qualifications and experience in the area in which we are currently recruiting – they may recommend them. If the Recommendation turns out to be effective and meets all the requirements of the Regulations – the Bank will gain a good employee, and the recommending person will receive a gratification
Effects: Recruitment on Recommendation is an effective tool and entails lower costs for the Company. Employees participate in the development of the Company and this affects the level of their involvement in the organisation
Plans for the future: Maintaining the Recruitment on Recommendation programme
Practice no. 2: Online Recruitment - Jobicon
The Jobicon career expo is a new and flexible recruitment tool, a new dimension of interaction with job candidates. It is a place for meetings with candidates in a safe virtual environment. A development environment adapted to the needs of young people, created at the interface of knowledge, technology, and entertainment. Jobicon online provided a space for engaging in meetings with thousands of candidates. During the events, the following took place:
live interactive and personal meetings with online candidates - meetings in private rooms to which participants signed up beforehand
group sessions
webinars for wider audiences
Video conversation, chatting with candidates, making presentations available, or sending files – the company built relations in a way that was convenient for the parties and as expected by the candidates. In 2020, 106 individual meetings were held, nearly 1600 minutes of talks, 10 group workshops were held with business people entering the labour market and with professionals. As a result of the actions taken, thanks to Jobicon practice, the most desirable candidates for work from all over Poland were successfully and quickly acquired, deep and long-term relations with candidates were established and built, as well as the practice made it possible to share knowledge and experience with young people entering the labour market.
[GRI 404-1],
Bank
|
Non-financial performance ratios for 2020 |
|||||||
GENDER |
FUNCTION |
AGE |
TOTAL |
|||||
WOMEN |
MEN |
MANAGERS |
EMPLOYEES |
30 |
30-50 |
50 |
|
|
Average number of training hours per year per employee |
32 |
25 |
56 |
27 |
36 |
32 |
26 |
30 |
|
Non-financial performance ratios for 2019 |
|||||||
GENDER |
FUNCTION |
AGE |
TOTAL |
|||||
WOMEN |
MEN |
MANAGERS |
EMPLOYEES |
30 |
30-50 |
50 |
|
|
Average number of training hours per year per employee |
27 |
25 |
36 |
25 |
53 |
29 |
19 |
26 |
Pekao Group
|
Non-financial performance ratios for 2020 |
|||||||
GENDER |
FUNCTION |
AGE |
TOTAL |
|||||
WOMEN |
MEN |
MANAGERS |
EMPLOYEES |
30 |
30-50 |
50 |
|
|
Average number of training hours per year per employee |
31 |
23 |
51 |
25 |
31 |
30 |
25 |
28 |
[GRI 401-2],
Remuneration Policy at the Bank
The remuneration strategy developed in accordance with operating standards and values constituting the basis of the Bank’s mission is reflected in internal regulations and allows to develop and protect the Bank’s reputation and create permanent values for all stakeholders. The key regulation in this area is the Remuneration Policy of Bank Polska Kasa Opieki Spółka Akcyjna (Polityka Wynagrodzeń Banku Polska Kasa Opieki Spółka Akcyjna), the last update of which entered into force by the Order of the President of the Management Board of 7 October 2020. The policy reflects the Bank’s mission and values in its approach to remuneration systems, and:
defines remuneration pillars, the management of the Bank’s structure as well as corporate and organisational processes,
confirms requirements related to the compliance of remuneration systems with generally applicable laws,
defines principles for monitoring market practices and the Bank’s approach to remuneration systems ensuring the continuity of the Bank’s operations.
In the remuneration structure, remuneration is directly connected with performance, which guarantees financial stability and variable remuneration adjusted to the Bank’s financial capacity. The policy also provides for incentive systems including the minimum performance of the Bank below which a bonus is not paid. Variable remuneration includes all remuneration components which are dependent on performance and the payment of such remuneration is directly dependent on individual achievements and the Bank’s results adjusted by risk.
Sustainable results contributing to long-term value creation for stakeholders refer to the actual results achieved and the way in which they are achieved, with a view to measuring results consistent with shareholders’ interests and profitability principles based on a safe level of risk, sustainable risk management practices and multidimensional analysis of results and quality of activity.
To ensure that the remuneration structures are competitive and transparent and the remuneration system is effective and fair, the Bank monitors market trends in relation to remuneration forms and levels. Decisions concerning the remuneration system at the Bank are made taking into account the data on market trends in the area of fixed remuneration, as well as incentive systems. Such data shall be obtained from consultancy firms offering analyses of the financial sector. At the level of the Bank’s organisational units, a comparative analysis is performed in order to ensure consistency of remuneration in individual areas.
Based on the remuneration system, employees are offered non-financial benefits that ensure just treatment and consistency of the remuneration system.
Every year, a report on the remuneration policy of the Bank is prepared. It is presented at the General Meeting of Shareholders to assess whether the Bank’s remuneration policy is in favour of the development and safety of the Bank’s operations.
Companies of the Capital Group of the Bank have remuneration policies adapted to the size and specificity of their activities and remuneration principles.
Incentive Systems
The Bank has three main incentive systems in place: A Variable Remuneration System for Management Staff, Management by Objective (MBO) System, and a system based on the Collective Agreement providing, in particular, for a quarterly bonus and an incentive award.
Top management is subject to the variable remuneration system dedicated to persons having a significant impact on the Bank’s risk profile. The aim of the system is to support the implementation of the Bank’s strategy and to reduce excessive risk and conflicts of interest. In this system, a participant may obtain variable remuneration based on the bonus pool concept. The system provides for a comprehensive measurement of performance by individuals, business units and the whole Bank, including the evaluation of the participant’s compliance with law and the Bank’s standards. In order to strengthen care for the construction of a durable value of the Bank in the long term under the system, at least 50% of the bonus is implemented in phantom shares based on the value of the Bank’s shares and at least 40% of the bonus is deferred and paid after the end of the assessment period for which it is entitled.
The system of variable remuneration components is developed by the Human Resources Division, with the involvement and participation of other organisational units of the Bank, including the Legal Department, Compliance Department, Risk Management Division, Financial Division and in consultation with the Internal Audit Department. This is to ensure that the system complies with the Bank’s regulations, articles of association, and ethical standards or other standards of conduct that apply to the Bank in a way that legal, compliance and reputation risks that are mostly connected with customer relationships are duly monitored and managed.
Variable remuneration systems implemented in the Bank’s subsidiaries have similar schemes for the division of remuneration into cash and financial instruments, taking into account general provisions and guidelines of market regulators concerning sectors in which companies operate.
The MBO system is addressed to employees hired on the basis of a management contract, including in particular sales functions and management functions having a significant impact on the achievement of the Bank’s planned commercial objectives. As part of the MBO system, employees receive individual objectives that result from the Bank’s financial plan and key objectives adopted for a given year. The amount of the annual bonus depends on the level of performance of these tasks as well as the result achieved by the Bank.
The system based on the Collective Agreement applies to all employees subject to the Agreement. Pursuant to the Collective Agreement, the system is based on a quarterly discretionary bonus the amount of which is conditioned on the evaluation of an employee’s performance and commitment and the Bank’s results in a given year. It also provides for an incentive award which is granted for special professional achievements.
Guidelines on variable remuneration introduced in 2019, i.e. quarterly bonus for Employees of the sales network covered by ZUZP, were suspended from the second quarter of 2020 as a consequence of the epidemic situation.
The recruitment policy in the Pekao Group is aimed at acquiring the best external candidates, while promoting internal talents. Thanks to this, the Pekao Group employs people with various professional experience and competences.
The Bank conducts activities encouraging employees to participate in internal recruitment (throughout the Pekao Group) as part of professional development in other business areas.
Bank Pekao S.A., as a reliable and responsible employer, treats all issues connected with both internal and external recruitment of employees in a comprehensive way and provides support in the systematic development of persons hired by the Bank.
The main regulation in this area is the Procedure for External and Internal Recruitment (Procedura rekrutacji zewnętrznej i wewnętrznej), which was updated in January 2017. It guarantees optimal and uniform selection of persons to perform tasks in accordance with the HR policy and the Bank’s business plans and strategy. The procedure provides for recruitment to functions subject to the Collective Agreement and the MBO system from level N-3, inclusive. Recruitment for functions above the N-3 level is based on other procedures, including in particular the Policy for the Selection of Candidates for Members of the Management Board, Key Functions at Bank Polska Kasa Opieki Spółka Akcyjna and N-1 and N-2 Functions (Polityka Doboru Kandydatów do pełnienia funkcji członka Zarządu, Kluczowej Funkcji w Banku Polska Kasa Opieki Spółka Akcyjna oraz do objęcia Stanowiska N-1 oraz Stanowiska N-2) adopted in February 2016 by way of the Regulation of the President of the Management Board.
The recruitment is always focused on the identification and verification of the best candidate that meets the job requirements and those defined in the recruitment demand, has a relevant approach and key skills from the point of view of the organisation in accordance with the Bank’s Competence Model.
Career Paths
Career paths of the Bank’s employees are constructed on the basis of a multi-aspect evaluation and analysis of their potential. On such a basis, it is predicted to which direction and in what time a given employee can take on a new position. The mission of the Career Path Programme implemented at the Bank is to provide employees with the possibility of continuous professional development and self-implementation, using their professional capabilities and preferences in the work, for the benefit of themselves and the Bank.
The Bank strives that the recruitment process meets top standards. The Bank developed the internal Code of Best Practices in Recruitment, which includes key guidelines for particular projects.
Major advantages of the Career Paths Programme are as follows:
enabling employees to search for directions of their development,
defined clear and transparent development opportunities,
knowledge of requirements that must be met to be promoted;
control over own development, setting out short and long-term development goals,
decreasing uncertainty connected with the employee’s professional development,
expanding knowledge about the organisation,
ensuring the exchange of knowledge and experience between employees.
Competence Model
This model defines competences: knowledge, skills and approaches, which influence the employee’s personal effectiveness. Competences transparently define what Bank we want to create and describe how we should act to ensure the effectiveness of our own work and achieve measurable results for the Bank. The model includes the following competences:
WE Pekao - Together we can do more,
PERFORMANCE - We persistently aim at achieving our goals,
REPUTATION - We develop and take care of the Bank’s image,
ASPIRATIONS - We can achieve anything,
ADMIRATION - We act to inspire admiration and recognition in customers.
The Competence Model forms the basis of a yearly appraisal of employees’ approaches, as well as planning their career development and improvement of skills in defined areas. For the purpose of the development of our employees, we implemented the Development Guide, which contains proposals of development actions assigned to each of the competences. This tool inspires to self-improvement and supports development planning process for all employees.
Periodical Employee Assessment
At the request of the employees’ organisations, the Bank deviated from the process of close monitoring of employees’ assessment in relation to Covid-19 in 2020, while leaving the process of “interim feedback” as an additional, non-mandatory tool for providing regular feedback to employees. Additionally, the Bank has implemented a new competence assessment system in the form of the 180° Assessment and 360° Assessment carried out in SAP Success Factors.
[GRI 404-3],
Bank
|
Non-financial performance ratios for 2020 |
|||||||||||
GENDER |
FUNCTION |
AGE |
TOTAL |
|||||||||
WOMEN |
MEN |
MANAGERS |
EMPLOYEES |
< 30 |
30-50 |
>50 |
|
|||||
Number of employees receiving regular assessments of their results and information on professional development |
6,230 |
1,629 |
698 |
7,161 |
180 |
4, 207 |
3 472 |
7,859 |
||||
|
Non-financial performance ratios for 2020 |
|||||||||||
GENDER |
FUNCTION |
AGE |
TOTAL |
|||||||||
WOMEN |
MEN |
MANAGERS |
EMPLOYEES |
< 30 |
30-50 |
>50 |
|
|||||
Percentage of employees receiving regular evaluations of their performance and information on their professional development |
67% |
46% |
45% |
63% |
30% |
54% |
79% |
61% |
||||
Pekao Group
|
Non-financial performance ratios for 2020 |
|||||||
GENDER |
FUNCTION |
AGE |
TOTAL |
|||||
WOMEN |
MEN |
MANAGERS |
EMPLOYEES |
< 30 |
30-50 |
> 50 |
|
|
Number of employees receiving regular assessments of their results and information on professional development |
6,756 |
2,078 |
8 51 |
7, 973 |
291 |
4,917 |
3,626 |
8,834 |
|
Non-financial performance ratios for 2020 |
|||||||
GENDER |
FUNCTION |
AGE |
TOTAL |
|||||
WOMEN |
MEN |
MANAGERS |
EMPLOYEES |
30 |
30-50 |
50 |
|
|
Percentage of employees receiving regular evaluations of their performance and information on their professional development |
67% |
51% |
49% |
64% |
40% |
56% |
79% |
63% |
Terms of employment, work and social benefits are set out at Bank Pekao S.A. in internal legal acts, including in particular: The Corporate Collective Labour Agreement, individual employment contracts/management contracts, Work Regulations and the Regulations of the Internal Social Benefits Fund. Most companies of the Capital Group of the Bank introduced the Work Regulations, Remuneration Regulations and the Regulations of the Company Social Benefits Funds.
Corporate Collective Labour Agreement of Bank Pekao S.A. (C.A.) sets out terms and conditions of the Bank’s HR and remuneration policy, including remuneration for the Bank’s employees and principles for awarding other work-related benefits, including:
principles of the HR policy,
working time,
principles of the remuneration policy,
principles for basic pay,
bonus fund,
incentive award fund,
bonuses,
pension and annuity severance fees,
gratuities connected with termination of employment for reasons independent of employees.
The Company Collective Labour Agreement currently in force was concluded on 15 December 2005 between Bank Polska Kasa Opieki S.A. and company trade unions operating at the Bank.
Under the [Polish] labour law, Bank Pekao S.A. is one employer whose terms and conditions of remuneration and granting other benefits related to work are regulated by the Company Collective Labour Agreement (of 15 December 2005
as amended) and on the basis of individual management contracts (employment contracts) for employees that are excluded from the C.A.
The Work Regulations set out the organisation and structure of work at Bank Pekao as well as rights and obligations of the Bank and its employees. The currently binding Work Regulations were introduced by an Order in June 2019. The Regulations apply to all Employees of Bank Pekao S.A. regardless of the type of work performed and position held and regardless of the basis for establishing an employment relationship. In particular, the new Work Regulations:
precisely define basic obligations of employees and the Bank,
describe the Bank’s work time systems and work start and end time,
set out principles for recording work time, monthly working schedules for settlement periods,
regulate the issue of OHS training, medical examination to be undergone by employees, informing employees about work hazards, rules for the allocation of workwear and personal protective equipment.
Work Regulations have also been implemented in the Pekao Group.
Additional Information
In line with applicable regulations, the Pekao Group and the Bank must prevent discrimination in the process of entering into and terminating employment contracts, terms of employment, promotion, and access to training to improve professional qualifications, including in particular: discrimination due to gender, age, disability, race, religion, nationality, political opinions, membership in trade unions, ethnical origin, faith, sexual orientation, and employment for an unlimited or limited time, or full-time or part-time employment.
The Pekao Group and the Bank provide employees with equal treatment, personal and professional development, respect and deference for civil liberties.
Bank Pekao does not use any additional pension schemes, apart from the universal ones. As an employer, the Bank fulfils all its obligations arising in relation to the universal pension scheme and is not in arrears with any contributions payable from employees’ remuneration and the employer’s contributions. On the basis of the Collective Agreement, the Bank makes additional pension and retirement severance payments for employees entitled to such benefits under the universal pension and retirement insurance scheme.
The Bank applies notice periods arising from the Labour Code or employment contracts, provided that they are not less favourable than those arising from labour law. Consultation concerning the termination of employment contracts are conducted at the Bank in accordance with Polish legal regulations. In practice, in 2019 the Bank usually applied 1-month or 3-month notice periods.
Good Practices Applied in Pekao Group
Practice: Actions Aimed at Implementing the Principles of the Pekao Group Code of Conduct in the Company
Context of operation: Comprehensive recognition of good practices in the following areas: e.g. implementation of professional standards, respect for and dignity of co-workers, customers, contractors, communication standards, or conflict of interest management
Practice description: Adaptation of the Company’s internal regulations to the guidelines contained in the Pekao Group Code of Conduct
Effects: Optimisation of internal regulations
Plans for the future: Further (if required) update of internal policies/regulations based on regulations within the Group
The Bank’s social activities are organised in accordance with generally applicable laws and ensure the social security of its employees. The Fund Regulations set out terms and conditions for services and benefits financed from the Internal Social Benefits Fund and principles for the allocation of the Fund’s resources for particular goals and types of social activities.
The Company Social Benefits Fund is established at the Bank from the annual basic deduction, which amounts to 50% of the average monthly salary in the national economy in the previous year per one employed person,or in the second half of the previous year, if the average remuneration for that period was higher. The Bank does not charge the deduction for pensioners or retirees, however, it does take care of them.
The Social Fund at Bank Pekao is earmarked for co-financing:
Subsidies for holiday leave of employees, children of employees under 17 years of age, as well as bank’s pensioners and retirees,
individual financial and material aid,
housing loans;
cultural, educational, sports, and recreational activities.
The Fund’s expenditure plan shall be established annually with trade union organisations in accordance with the procedures and principles laid down in the Regulations.
The Bank also respects the freedom of association and engages in dialogue with trade unions, based on respect for fair interests of the parties. The Bank documents the conducted social dialogue and provides trade union organisations with dedicated intranet websites for communication with employees.
Relations with Trade Unions
In 2020, the Bank cooperated with trade unions in the form of consultations, negotiations and arrangements under terms and conditions set out by labour law and with respect for the parties’ interests and principles of social dialogue.
In 2020, 54 meetings between the Bank and trade union organisations took place. Meetings were held face-to-face, as well as, due to the announcement of the COVID–19 pandemic, in the form of teleconferences. The meetings were mainly devoted to negotiations and arrangements resulting from internal labour law and generally applicable regulations, changes in in-house labour laws, arrangements for the use of the Company Social Benefits Fund, and other topics related to collective employee rights.
In addition, in 2020, the Bank consulted trade union organisations on the intention to carry out group redundancies pursuant to Article 2 of the [Polish] Act of 13 March 2003 on Special Rules for Terminating Employment Relations with Employees for Reasons not Attributable to Employees. On 12 March 2020, the Bank concluded an agreement with seven trade union organisations operating at the Bank, specifying the rules for group exemptions. One of the Trade Union Organisations did not accede to this agreement. The parties to the agreement agreed, inter alia, on the criteria for selecting employees whose employment contracts have been terminated and whose terms and conditions of employment have been amended, the conditions of severance pay and additional benefits, and the scope of the assistance scheme for redundant workers. It was also agreed that group redundancies will cover a maximum of 1,200 employees in the scope of termination of employment contracts and at maximum 1,350 as regard changes in the terms and conditions of employment by 31 October 2020.
In addition, in 2020, talks and negotiations were conducted with one of the trade union organisations operating at the Bank as part of collective disputes initiated with the Bank in 2016 and 2019.
Trade unions are able to publish their bulletins and information on important employee issues, including their dialogue with the employer, on the Bank’s intranet pages.
Relations with the Works Council
On 21 December 2020, pursuant to the Act of 7 April 2006 on informing and consulting employees, the Bank established the Rules of Procedure of the Electoral Commission and Elections of Members of the Council of Employees of Bank Polska Kasa Opieki Spółka Akcyjna appointed the Electoral Commission responsible for holding Elections of Members of the Council for the term of office of 2021-2025. The election of the Members of the Works Council will take place on 20 January 2021. If 50% of the turnout is not reached, the 2nd round of elections will be held on 22 February 2021.
Bank
Non-Financial Performance Ratios |
|
2020 |
2019 |
Number of trade unions operating at Bank Pekao. |
|
8 |
8 (9 until August, 2019) |
Number of members of the Works Council of Bank Pekao S.A. |
|
0 |
7 |
Percentage of employees in trade unions at Bank Pekao S.A. |
|
54% |
55% |
Number of days lost because of strikes |
|
0 |
0 |
Trade unions also operate in Pekao Financial Services Sp. z o.o. and in Pekao Leasing Sp. z o.o.
The Pekao Group and the Bank, as institutions aware of the responsibility for the safety and health protection of employees, are primarily obliged to:
prevent accidents at work, occupational diseases and potential accidents by the use of, among others, technical and organisational advancements,
meet requirements set out by law and other requirements applicable to the Bank,
aim at continuous improvement of occupational health and safety,
take part in documenting and updating occupational risk assessment,
improve actions relating to occupational safety and health to avoid losses arising from accidents at work,
improve employees’ qualifications and involvement in OHS initiatives,
provide necessary technical and financial resources and competent personnel to carry out duties connected with the protection of employees’ safety and health.
The basic regulations on the safety of Employees binding at the Bank are introduced on 14 December 2020 by the Order of the President of the Management Board in the Occupational Safety and Health Manual and Fire Protection Manual (Instrukcja bezpieczeństwa i higieny pracy oraz Instrukcja ochrony przeciwpożarowej).
The key duty of OHS services is to inspect working conditions and in particular: the organisation and impact of working processes on working conditions and the technical condition of premises; make requests concerning OHS requirements and take part in the acceptance of reconstructed facilities.
By inspecting various aspects of work, the OHS services have a substantial share in the assessment of occupational risks. The purpose of the process is to find out which threats in the working environment can cause injuries or deterioration in the employee’s health and whether such treats can be eliminated and, if not, what actions should be taken to reduce the related occupational risks.
Based on demand, the OHS services organise and provide a relevant level of OHS training for newly hired employees, cooperates with relevant business units to hold periodical training, and with persons acting as social work inspectors.
To improve the process of performing the above tasks, in April 2001 the Bank established the OHS Committee, the rights and obligations of which are set out in a separate regulation on the establishment of the OHS Committee at Bank Polska Kasa Opieki Spółka Akcyjna. The last update of this regulation was implemented in October 2020 by an Order of the President of the Management Board.
The OHS Committee is responsible for inspecting working conditions, assessing OHS conditions on a periodical basis, prepare opinions on measures taken by the employer to prevent accidents at work and occupational diseases, draw conclusions concerning improvements in the working conditions, and cooperate with the employer in relation to the fulfilment of the employers OHS obligations.
Medical Care
Bank Pekao offers all Bank employees medical care provided since April 2020 by PZU Zdrowie. Bank employees may take advantage of the package of basic medical services with the possibility of extending them. The wide range of medical services negotiated by Bank Pekao S.A. may also be used by family members indicated by the employee, i.e. children, children over 26 years of age, spouses, partners, parents, parents-in-law, and senior citizens. The medical care offer is also addressed to retirees and pensioners of Bank Pekao S.A. under the specially negotiated package.
In cooperation with the medical care company, the Bank organises additional initiatives to improve the health of its employees. The most important actions are vaccinations against the flue and additional prophylactic examinations.
The average monthly number of packages paid by the Bank for employees is 15,873, and the monthly average number of packages paid by employees for themselves and reported family members is 10,707.
Group Companies also provide medical care for their employees.
Bank
Non-Financial Performance Ratios |
|
2020 |
2019 |
Total number of accidents at work |
|
35 |
66 |
Number of fatal accidents at work |
|
0 |
0 |
Frequency of accidents (number of accidents in relation to number of employees per 1000 of employees) |
|
2.72 |
3.3 |
Severity of accidents (number of working days lost as a result of absence due to an accident in relation to the number of all accidents) |
|
46.17 |
33.88 |
Pekao Group
Non-Financial Performance Ratios |
|
2020 |
2019 |
Total number of accidents at work |
|
41 |
72 |
Number of fatal accidents at work |
|
0 |
0 |
Frequency of accidents (number of accidents in relation to number of employees per 1000 of employees) |
|
2.76 |
4.62 |
Severity of accidents (number of working days lost as a result of absence due to an accident in relation to the number of all accidents) |
|
39.88 |
n/a |
The Pekao Group companies and the Bank, as responsible organisations and active participants of social life, comply with the applicable laws and standards also in the field of environmental protection.
The Bank does not have a single regulation which would cover environmental protection issues in a comprehensive way.
Nevertheless, they are incorporated into other regulations adopted by the Bank.
All employees of the Bank are obliged to take care of natural resources, whatever their function, seniority, working place or time. That is why relevant regulations on respect for the natural environment are set out in the Code of Conduct of the Pekao Group, which was updated in 2008.
Given the specific nature of operations in the financial sector, the Bank focuses on establishing a working environment that is based on the rational use of natural resources, including the limitation of consumption of raw and other materials. That is why Bank Pekao tries to minimise the environmental impact of its activities, among other things, by implementing environment-friendly technical solutions at its properties and branch network, replacing the most used company cars with new ones with lower emission levels, and by monitoring the consumption of raw and other materials.
Bank Pekao gradually increases its credit exposure to low-emission financing and supports customers in acquiring such financing from the capital markets. The Bank, together with the assessment of creditworthiness and credit risk, carefully assesses the specific risk of transactions, including environmental and climatic risks, or the risk of customer’s failure to comply with the principles of corporate social responsibility. Energy financing issues are included in the current credit risk policy of Bank Pekao. According to it:
Bank Pekao supports a gradual and orderly transition to a low-carbon economy, by limiting the financing of coal mining and fossil fuel energy production (oil, coal), in order to increase the financing of energy from renewable sources (water, wind, sun).
The Bank supports customers and green projects aimed at mitigating climate change, reducing environmental pollution and projects supporting sustainable social development.
The Bank considers infrastructure investments that are characterised by low CO2 emissions and resistant to climate change and disasters to be desirable.
In the credit policy, Bank Pekao takes into account climate, environmental, and social risks resulting, i.a., from the transition to an economy that is low-carbon and “resilient” to climate change and threats resulting from the so-called risk of physical climate change.
Bank Pekao engages in numerous projects aimed at improving the energy efficiency of customers, implementing environmental projects and financing Renewable Energy Sources. The Bank has exposure to green investments (e.g. financing wind farms, photovoltaic installations, low-emission urban transport).
The Bank and entities of the Pekao Group have implemented the following ecological projects in the last two years:
Bonds for the Silesian Agglomeration - Tramwaje Śląskie 2 - as part of the programme increasing the use of low-emission urban transport. Total value of PLN 328 million in a consortium with BGK.
Bank Pekao and EIB offer financing for small and medium-sized enterprises in the Kujawsko-Pomorskie Voivodeship The funds in the amount of PLN 150 million are intended to help finance projects related to increasing the energy efficiency of enterprises (April 2019).
Bank Pekao finances the construction of the largest inland wind farm in Poland (Potęgowo) - loan granted PLN 390 million (May 2019).
PLN >200 million EBRD investment in Pekao bonds (PLN 128.5 million in October 2018 and PLN 70 million in June 2019), commitment at the bank to allocate the equivalent of 150% of EBRD investment value to finance projects improving energy efficiency.
Bank Pekao launches a credit campaign to finance photovoltaic installations for own energy needs of enterprises (August 2019), PrzEKOrzystny loan for the purchase of photovoltaic panels for SME customers.
Pekao Leasing obtains EUR 100 million from the EIB to finance small and medium-sized enterprises. This amount serves, i.a., to improve energy efficiency and the development of renewable energy sources (December 2019).
Financing of photovoltaic micro-installations by Pekao Leasing. The offer enables micro-enterprises and SMEs to finance photovoltaic installations with a capacity of up to 50 kWp.
In the years 2018-2019, Pekao Leasing implemented 1 rental project and 2 lease projects for low-emission urban transport busses. The contracts were concluded as part of tender procedures concluded with the municipal companies providing passenger transport services. The buses supplied are characterised by low emissions and meet the Euro 6 require.
Issues of sustainable bonds for the largest Polish energy companies: Orlen and Tauron:
• The Bank was the coordinator, organiser, dealer and co-manager of the first demand book on the Polish market and one of the first ESG-linked bond issues in Europe carried out by PKN Orlen. Emission resources will be allocated by PKN Orlen to ongoing investment projects in line with the strategy for the group to achieve carbon neutrality by 2050.
• The Bank was a co-organiser, dealer and co-operator of the demand book for the first sustainable development bond issue (sustainability-linked bonds) on the Polish market. The bonds issued by Tauron Polska Energia totalling PLN 1 billion will be earmarked for the Group’s energy transformation as part of the Tauron Green Direction (Zielony Zwrot Taurona).
The Bank’s express loan for ecological purposes as part of the “Make Sure the Climate’s Good” (Zadbaj o dobry klimat) campaign on preferential terms (APRC 8.3% and commission 0%, amount of 5-50k, loan maturity 10 years). 80% of the credit value must be used for the purchase or installation of one of the following ecological objectives:
• renewable energy sources: solar collectors, solar panels/cells,
• central heating boilers (excluding coal boilers),
• heat pumps,
• windows, doors, and home warming materials,
• electric or hybrid passenger cars and electric motorcycles and scooters.
In total, the value of green and sustainable financing in the Pekao balance sheet exceeded PLN 8 billion in 2020.
The Bank also implements numerous internal environmental initiatives:
simplifying internal procedures to reduce the number of printouts,
green volunteering - e.g. planting of trees, cleaning of forests and parks,
maximum effective approach to daily work, e.g. reduction of documentation in paper form, waste segregation or a greater degree of remote work (lack of commuting and exhaust emissions),
implementing LED technologies,
optimising power consumption (reduction of so-called ordered capacity),
replacement of technologically obsolete UPS devices with new ones with higher maximum efficiency,
liquidating unnecessary backup power supply,
installation of air-conditioning systems with increasingly better indicators, with particular emphasis on solutions in the highest energy efficiency classes,
replacing air conditioning equipment using environmentally harmful refrigerants with equipment based on the blending of organic gases,
analyses aimed at installing reactive power compensation devices (and consequently eliminating unnecessary energy expenditure),
switching electrical devices at night to standby mode.
In addition, the Bank takes into account environmental issues as part of sponsorship and charitable activities, engages in the protection of wisents.
[GRI 306-2],
In its daily operational activity, Bank Pekao is guided by a pro-ecological approach, which is reflected in technical solutions implemented in the network of branch offices and facilities.
In 2020, the implementation of environmental solutions was continued, with particular emphasis on reducing power consumption and reducing negative environmental impacts, i.e.:
implementing LED technologies,
optimising power consumption (reduction of so-called ordered capacity),
replacement of technologically obsolete UPS devices with new ones with higher maximum efficiency,
liquidating unnecessary backup power supply,
installation of air-conditioning systems with increasingly better indicators, with particular emphasis on solutions in the highest energy efficiency classes,
replacing air conditioning equipment using environmentally harmful refrigerants with equipment based on the blending of organic gases,
analyses aimed at installing reactive power compensation devices (and consequently eliminating unnecessary energy expenditure),
switching electrical devices at night to standby mode.
The comprehensive modernisation of the properties owned by the Bank uses modern solutions, e.g. energy-saving LED lighting systems or sanitary faucets with aerators, which reduce water consumption.
The key regulation in this area is the Policy on Optimising Energy Consumption at Bank Polska Kasa Opieki Spółka Akcyjna (Polityka w sprawie optymalizacji zużycia energii w Banku Polska Kasa Opieki Spółka Akcyjna), updated in January 2019, laying down the principles and rules concerning standards and guidelines for optimisation of energy consumption in the Bank in the field of environmental protection based on the commitment to proper monitoring and prevention, where possible, of any negative environmental effects of its operations. The principles listed in this Policy should be treated as guidelines to be applied by each Employee, which contribute to increasing awareness of the environmental protection problem by optimising energy consumption. They should be applied with reasonable flexibility, taking into account the specific systemic situations existing at each workstation.
As part of waste management, the Bank systematically disposes of its paper documentation, IT carriers, furniture and white/brown goods to specialised utilisation. When new white/brown goods are ordered, services connected with the collection and utilisation of old equipment are taken into account. At the turn of 2019/2020, the assembly of crushers for empty juice and beverage bottles, cans, and cartons began. Waste is sorted out in five categories in accordance with the applicable regulation of the [Polish] Minister of Environment. The information campaign initiated in 2018 for the Bank’s employees regarding the principles of waste segregation was continued at both the Headquarter and outlets.
Activities aimed at significantly reducing paper consumption are implemented in the current operations of the Pekao Group and the Bank. The solutions used at the Bank include, among other things, multi-functional printing devices with the default option of duplex printing and a central system enabling buffering printouts and the possibility for the user to cancel outdated/unnecessary/erroneous printouts, allowing for a decrease in paper usage; scanning and sending documents in electronic form, a system of non-obligatory printing of paper confirmations of ATM and cash operations, processing applications and documents used in electronic HR processes, reducing the number of printed documents for customers, delivery handling system and correspondence circulation, placing a great emphasis on maintaining electronic correspondence registers. Paper consumption at the Bank has been decreasing year by year. The digital transformation programme continues to carry out a digitisation project covering further banking activities.
The Bank’s fleet is successively replaced with models characterised by lower emissions. Currently, the Bank is in the process of replacing a significant part of the fleet (approx. 75%) with new cars with a Euro 6DG exhaust emission standard.
In addition, the Bank has also, for years, identified with the objectives of the international “Earth Hour” event, in which it has participated since 2010, turning off all lights in the buildings of the Bank’s Headquarters in Warsaw at ul. Żwirki i Wigury 31, ul. Grzybowska 53/57, and ul. Iłżecka 24-26 on every last Saturday of March.
Environmental issues are important in the relations of the Pekao Group and the Bank with suppliers.
Since 2010, the Bank has been required to fill in the “Social and Environmental Liability Form (CSR)” (Formularz Odpowiedzialności Społecznej i Środowiskowej (CSR)), which includes, i.a., information on: environmental management.
The main purpose is to make suppliers of goods and services more aware of environmental issues, human rights and to strengthen the Bank’s reputation as a result of its cooperation with defined suppliers and business partners.
The Corporate Social and Environmental Responsibility Form (CSR) includes questions concerning the fulfilment of obligations to comply with applicable regulations on environmental protection and the performance of environment-friendly initiatives, like, among others:
possession of certificates confirming the pro-environmental activity profile of a given counterparty,
compliance with environmental regulations, inspections and criminal cases connected with the violation of applicable regulations,
the implementation of innovative environment-friendly new technologies,
the organisation of training and information meetings on environmental issues for employees.
For many years Bank Pekao has been involved in the protection of wisents in Poland - an exceptional and unique species on the verge of extinction. As part of these activities, cooperation with the three leading institutions for the protection of this largest European mammal was continued in 2020. The Bank’s partners are:
Białowieża National Park (BPN),
Fundacja Rozwoju Warszawskiego Ogrodu Zoologicznego ,,Panda’’ [“Panda” Foundation for the Development of the Warsaw ZOO],
Agencja Rozwoju i Promocji Ziemi Pszczyńskiej Sp. z o.o.
The Bank supports the diversification and development of the population, the maintenance of the BPN Wisent Breeding Centre, care of herds, and subsidises scientific and educational projects.
In 2018, Bank Pekao S.A., which has been providing financial support for the implementation of statutory tasks of the Białowieża National Park for two decades, received the official title of Partner of the Białowieża National Park and Caretaker of the Białowieża wisents. The Bank allocates funds for the protection of the wisent herd in the Białowieża Forest, which is the largest free-roaming herd in the world, covering a significant part of the Park’s expenditure for year-round support and monitoring the wisent in the Forest, securing the purchase of winter feed and supporting winter stocktaking.
For years, Bank Pekao S.A. has also been supporting wisents living in the Białowieża National Park’s livestock reserves, which combine the most genetically remote animals, in order to increase the chances of survival of the species.
Bank Pekao supports environmentally-friendly projects and takes into consideration environmental issues in the process of analysing credit risk connected with transactions being executed and in the process of monitoring those transactions.
The Bank supports customers and green projects aimed at mitigating climate change, reducing environmental pollution and projects supporting sustainable social development. In view of the above, the Bank supports a gradual and orderly transition to a low-carbon economy, by reducing the financing of coal mining and fossil fuel energy production (oil, coal), in order to increase the financing of energy from renewable sources (water, wind, sun). The Bank considers infrastructure investments that are characterised by low CO2 emissions and resistant to climate change and disasters to be desirable.
The Bank, together with the assessment of creditworthiness and credit risk in the strict sense, carefully assesses the specific risk of transactions, in particular legal, reputation, political, environmental risks, the risk of customer’s failure to comply with the principles of corporate social responsibility, money laundering and terrorist financing (e.g. conflict of interest, transparency, companies operating in tax havens).
In the environmental risk assessment, the Bank takes into account climate, environmental and social risks. It takes particular care of the risks arising, i.a., from the transition to an economy that is low-carbon and “resilient” to climate change, and threats arising from the so-called risks of physical climate change.
In its day-to-day operations, Bank Pekao has a special commitment to environmental protection issues. The assessment of environmental risks is one of the integral elements of the assessment of credit transactions made with all business entities. It covers a number of activities: review of the customer’s activities, assessment during which, inter alia, the customer’s place of business is visited and verification of documentation concerning environmental aspects is conducted, taking a credit decision, entering into an agreement and monitoring. Should environmental hazards connected with the type of business activities carried out by borrowers occur, the Bank shall cooperate with customers in order to mitigate potential consequences of environmental risks. This cooperation shall aim to identify, assess the degree of occurrence, and mitigate environmental risks and shall be carried out in the framework of the credit risk assessment process, on the basis of the methodology and using the relevant guidelines developed by the European Bank for Reconstruction and Development and the EBA.
If the customer is found incapable of mitigating environmental risks, the Bank defines conditions for particular environmental actions during the transaction and may activate environmental clauses in the credit facility agreement, among other possible solutions.
As regards environmental issues, the Bank does not finance some types of activities, i.e.:
activities declared illegal, phased out, or prohibited (e.g. production or trade of products containing polychlorinated biphenyls (PCBs), hazardous chemicals, psychoactive substances, ozone-depleting substances, persistent organic pollutants, wildlife and products thereof),
cross-border shipments of waste,
forced feeding of ducks and geese,
keeping animals for the primary purpose of fur production or any fur production activity,
the manufacture, placing on the market, and use of asbestos fibres, articles and mixtures containing these fibres intentionally added,
export of mercury and mercury compounds and the production, export, and import of a wide range of products containing mercury,
activities prohibited by the legislation of the host country or international conventions on the conservation of biological diversity resources or cultural heritage,
sea drift fishing with the use of nets exceeding 2,5 km in length,
forced evictions.
In addition, in its Credit Risk Policy, the Bank adopted the principle of not engaging in transactions related to the financing of nuclear power plants, activities generating a significant threat to the environment and limiting the financing of coal mining.
[GRI 301-1], [GRI 302-1], [GRI 307-1], [GRI 302-3], [GRI 302-4],
Non-Financial Performance Ratios |
2020 |
|
2019 |
Power consumption [MWh] |
56,171 |
|
58,000 |
Water consumption [m3] |
117,775 |
|
178,349 |
Petrol consumption [tonnes] |
1,327 |
|
963 |
Motor oil consumption [tonnes] |
181 |
|
179 |
Natural gas consumption [m3] |
1,011,075 |
|
1,275,975 |
Paper consumption [tonnes] |
740 |
|
986 |
Fuel oil [tonnes] |
202 |
|
273 |
Refrigerant [kg] |
168 |
|
n/a |
Value of procedures conducted with suppliers selected in terms of compliance with environmental criteria |
74% |
|
77% |
Value of penalties paid for the violation of environmental regulations: |
0 PLN |
|
0 PLN |
Pekao Group
Non-Financial Performance Ratios |
2020 |
|
2019 |
Power consumption [MWh] |
57,768 |
|
60,543 |
Water consumption [m3] |
121,106 |
|
185,274 |
Petrol consumption [tonnes] |
1,503 |
|
1,288 |
Motor oil consumption [tonnes] |
211 |
|
291 |
Natural gas consumption [m3] |
1,014,475 |
|
1,277,771 |
Paper consumption [tonnes] |
760 |
|
1,019 |
Fuel oil [tonnes] |
n/a |
|
n/a |
Refrigerant [kg] |
448 |
|
n/a |
Value of procedures conducted with suppliers selected in terms of compliance with environmental criteria |
n/a |
|
n/a |
Value of penalties paid for the violation of environmental regulations: |
0 PLN |
|
0 PLN |
[GRI 102-11], [GRI 205-1], [GRI 205-2],
Key principles for the prevention of corruption are defined in the Corruption Prevention Policy in the Bank Pekao S.A. Group (Polityka przeciwdziałaniu korupcji w Grupie Banku Pekao S.A.), the last update of which was introduced on 17 September 2020, replacing the previous regulation of 10 January 2018, the Policy defines general assumptions and competences in the area of corruption risk management, as well as introduces the Anti-Corruption Programme at Bank Pekao. The Policy applies to every activity undertaken by the Bank and refers to any person who remains in an employment relationship or other legal relationship of a similar nature with the Bank, including persons who are members of statutory bodies of the Bank and persons on internship in the Bank.
The policy applies to the Bank’s subsidiaries to the extent to which it does not violate applicable legal regulations, prudence principles, and the independence of subsidiaries, to the extent adjusted to their activity and having regard to a risk-based approach.
Most companies of the Bank’s Capital Group have anti-corruption policies adapted to the size and specificities of their operations.
The Bank combats all forms of corruption and situations that may contribute to corruption. The Bank does not tolerate any actions that may constitute corruption that are taken by the Bank’s employees or other persons or units having any relationships with the Bank. At the same time, the Bank protects the Bank’s employees who refuse to participate in activities bearing the hallmarks of corruption and those who reveal that such activities have been performed or attempted by other persons/entities. Such employees will neither be subject to disciplinary liability nor any other penalty, even if their behaviour will expose the Bank to financial losses. In addition, the Bank does not accept offering, promising, requesting, giving, or accepting any payments to accelerate any cases by the Bank’s employees or other persons or entities having any relationship with the Bank.
Bank Pekao has defined the main areas of corruption risk associated with its activities, which are:
using agent services,
gifts and entertainment,
recruitment policy,
services provided by business partners,
donations and sponsoring (including donations to political parties),
mergers and acquisitions,
significant investments,
the Bank’s participation in public procurement procedures.
The corruption risk analysis for the major corruption risk areas supplements the Bank’s due diligence applicable to other types of risk in these areas.
In accordance with the guidelines of its policy, the Bank adopted a corruption prevention programme, which includes the following elements:
rules and procedures applicable to:
cooperation with intermediaries,
gifts and entertainment,
recruitment process,
cooperation with counterparties,
donations and sponsoring (including donations to political parties),
mergers and acquisitions,
significant investments,
the Bank’s participation in public procurement procedures,
training and information programmes on preventing corruption addressed to the Bank’s employees,
designing and supervising the implementation of inspection mechanisms aimed at preventing corruption, applying and monitoring the compliance with such mechanisms by other business units of the Bank in accordance with the Bank’s internal regulations,
estimation of compliance risk for the “Anti-Corruption Process”,
establishing safe and easily accessible communication channels to be used by the Bank’s employees and other persons to report attempted corruption or actions regarded as corruption in a confidential way,
reporting the progress in the implementation of the corruption prevention programme to the Management Board of the Bank in the form of a quarterly report on the operations of the Compliance Department,
precise and fair registration of all transactions in the books and documents of the Bank and avoiding undisclosed or unregistered accounts, funds, assets or transactions.
Corruption Prevention Officer
To make this area in the Compliance Department more important, the Corruption Prevention Officer, who is responsible for reporting information about attempted corruption or actions regarded as corruption, was appointed.
Detailed duties of the Corruption Prevention Officer, including the development, implementation and supervision of the effective Corruption Prevention Programme, as well as the enforcement of the Bank’s internal regulations on corruption prevention, are set out in the Corruption Prevention Policy of the Bank Pekao S.A. Group (Polityka przeciwdziałania korupcji w Grupie Banku Pekao S.A.).
The Corruption Prevention Officer has the right to examine suspected or actual actions regarded as corruption and request a person that is suspected of corruption to submit documents, as well as to review such documents and report such circumstances in accordance with the applicable procedures.
The Whistleblowing Policy of Bank Pekao S.A., (Polityka zgłaszania naruszeń Banku Pekao S.A.) last updated in December 2019, reflects the commitment of Bank Pekao S.A. to promote a corporate culture supporting ethical behaviour, in accordance with the provisions of law, procedures and ethical standards in force at the Bank. The purpose of this policy is to establish safe channels to report any practices that do not comply with law, unfair or unethical practices or a reasonable suspicion of their existence as well as to ensure that the problems reported will be received, analysed, and properly handled and that the person who reported them in good faith will be protected against any retaliatory action.
Any early discovery of a violation and remedial actions taken in consequence of that violation contribute to the reduction or elimination of the Bank’s reputation risk. The culture of openness and honesty, contrary to the “culture of silence”, contributes to the growth of trust in the Bank’s transparent operation and constitutes a clear message that the Bank does not tolerate any illegal or unethical conduct.
The policy applies to:
all persons cooperating with the Bank under an employment relationship or any other legal relationship of a similar nature, including members of the Bank’s statutory bodies – regardless of the issue to which the report pertains,
entities/ persons performing operations for the Bank, regardless of the type of agreement between the Bank and the entity/ person – with regard to reporting actual or potential violations of regulations on counteracting money laundering and terrorism financing.
In the case of justified suspicions that an infringement has occurred or that there is information about a possible occurrence of an infringement, the designated member of the Management Board should be contacted immediately, and in special cases (e.g. when the report concerns a Member of the Management Board) with the Supervisory Board. Reports may be filed verbally, by e-mail or in writing via dedicated communication channels, such as an anonymous infoline, a special e-mail or traditional mail. All reports are handled by the Bank with due diligence and are subject to the procedure set out in the Policy. The notice of violation can be submitted anonymously or not.
If the identity of the reporting person is disclosed, the personal data is protected. The information concerning the filed report of a violation is classified as “Confidential” and stored with the use of appropriate security measures in accordance with applicable laws and the Bank’s information classification and management principles.
Good Practices Applied in Pekao Group
Practice: Implementation of Corporate Governance Principles for Supervised Institutions issued by the Polish Financial Supervision Authority (“Rules”) in the Company
Context of operation: They were adopted on the basis of the recommendation of Bank Pekao, applying the principle of proportionality, in order to adopt uniform practices in the Pekao Group. The rules are addressed to the shareholders, the Management Board, and the Supervisory Board of the Company
Practice description: The rules were approved by the Management Board and the Supervisory Board of the Company. The practices contained in the Rules are reflected in the Company’s internal regulations
Effects: Uniform practices applicable in the Pekao Group have been introduced, the Company’s operating standards have been increased (lack of numerical data).
Plans for the future: Review and verification of the implementation status and effectiveness of the application of the Principles
Bank
Non-Financial Performance Ratios |
2020 |
2019 |
Number of reports of violations submitted in accordance with the whistleblowing policy (only for Bank Pekao S.A.) |
8 |
14 |
Number of probable cases of corruption reported to law enforcement authorities |
0 |
0 |
Pekao Group
Non-Financial Performance Ratios |
2020 |
2019 |
Number of infringement reports using the whistleblowing mechanism |
14 |
17 |
Number of probable cases of corruption reported to law enforcement authorities |
1 |
0 |
The entities of the Pekao Group and the Bank, as responsible organisations and active participants of social life, comply with the applicable laws and ethical standards also in the field of respect for human rights.
Bank Pekao does not have a single regulation dealing comprehensively with the issue of respect for human rights. Nevertheless, the subject of human rights, with regard to all stakeholder groups - employees, customers, suppliers, and trading partners, as well as local communities - is present in other regulations adopted by the Bank.
The philosophy of activities, defined in Bank Pekao’s mission, clearly determines all areas of operation of the Bank and defines the path of building lasting value for all shareholders by creating values for the Bank’s customers, the best jobs for employees, active, and responsible impact on the development of local communities. Bank Pekao conducts a continuous, open dialogue with all interested parties, which enables optimisation of the activities carried out also in the context of respect for human rights.
All employees, whatever their function, seniority, workplace, and working time, must respect human rights. That is why relevant regulations on human rights are set out in the Code of Conduct of the Pekao Group.
The Bank focuses on developing the awareness of its employees and permanently improving its proceedings in relation to the protection of human rights in its internal and external relationships. The Bank also develops a working environment that is free of practices that violate human rights by, among other things, having a permanent and open dialogue with all stakeholders to optimise its actions, including those in the context of human rights. The above standards are also promoted among intermediaries, business partners, and suppliers during actions taken to ensure an ethical, honest and sustainable value chain.
As a result of the dialogue with all groups of stakeholders, the Bank has implemented a number of internal regulations which directly contribute to the respect for human rights. The most important regulations are as follows:
Code of Conduct of the Pekao Group,
Corruption Prevention Policy of the Bank Pekao S.A. Group,
Principles for authorising persons employed by the Bank to process personal data and access the Bank’s information.
Bank Pekao also adopted separate regulations which support actions taken for the benefit of human rights and apply to particular groups of stakeholders.
The Bank and entities of the Pekao Group comply with generally applicable laws and principles specified in Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC - General Data Protection Regulation (hereinafter: GDPR).
Personal data is processed at Bank Pekao in accordance with the provisions of law and with due diligence in order to protect the interests of data subjects.
Bank Pekao is both a data controller and a processor within the meaning of the GDPR and bears full responsibility for compliance with personal data protection regulations, in particular taking into account the principles concerning the processing of personal data specified in GDPR, such as:
The principle of lawfulness, fairness, transparency and accuracy of personal data processing in accordance with the law and reliably, fairly and in a transparent manner in relation to the data subject (Article 5.1 (a) and (d) of the GDPR).
The principle of purpose limitation by ensuring that the data is collected for specified, explicit, and legitimate purposes (Article 5.1 (b) of the GDPR).
The principle of data minimisation by ensuring that the data is adequate, relevant, and limited to what is necessary in relation to the purposes for which they are processed (Article 5.1 (c) of the GDPR).
The principle of integrity and confidentiality by ensuring that the data controller uses appropriate technical and organisational measures to ensure the appropriate security of the data (Article 5.1 (f) of the GDPR).
To warrant comprehensive actions in relation to personal data protection, the Bank implemented a project to prepare the organisation to meeting the GDPR requirements. As a result of the project, the Bank’s operations were analysed in terms of their compliance with the GDPR requirements for IT systems, processes, internal regulations, operations and patterns of documents.
As a result of the analysis, the scope of actions that must be carried out by the Bank was defined and a number of internal regulations applicable to particular areas of the Bank’s activities were adopted. These regulations include:
Information Security Policy with the Information Security Policy Documents,
Methodology for managing the risk of violation of rights and freedoms of natural persons at Bank Pekao S.A. (PIA Methodology),
Principles for personal data protection and obtaining consents to take actions for direct marketing purposes at Bank Polska Kasa Opieki Spółka Akcyjna,
Register of processing activities and the Register of categories of processing activities kept by Bank Polska Kasa Opieki Spółka Akcyjna,
Principles for authorising persons employed by the Bank to process personal data and access the Bank’s information,
Procedure for handling requests made by data subjects under the GDPR at Bank Polska Kasa Opieki Spółka Akcyjna,
Personal data retention policy of Bank Polska Kasa Opieki Spółka Akcyjna,
Procedure for managing personal data breaches at Bank Pekao S.A.,
Principles and procedures to be adopted by Bank Polska Kasa Opieki Spółka Akcyjna in connection with the outsourcing of services involving the processing of personal data,
Application security policy of Bank Polska Kasa Opieki Spółka Akcyjna,
Principles for information protection and management at Bank Polska Kasa Opieki Spółka Akcyjna,
Electronic Information Protection at Bank Polska Kasa Opieki S.A.
The heads of the Bank’s business units and information owners are fully liable for the organisation, security, and processing of personal data in their reporting units. In turn employees must process personal data in accordance with their authorisation arising from their job description.
Training on the Protection of Personal Data and Other Information
In order to ensure compliance with the obligations imposed in terms of personal data protection, Bank Pekao develops and implements obligatory training programmes for employees, while maintaining monitoring of completed trainings. As part of training in 2020, the following topics were implemented:
Electronic information protection at the Bank - 98.16% of employees were trained,
Protection of information/bank secrecy - 98.19% of employees were trained,
Personal Data Protection Regulation - 98.55% of employees were trained.
Attendance lower than 100% is due to staff turnover, including new hires.
Other Actions
[GRI 418-1],
The personal data protection aspect is also taken into account in the current activities of the Data Protection Officer’s Bureau when issuing opinions on new processes, designs and initiatives, as well as analysing internal regulations or agreements concluded by the Bank in terms of personal data. The Data Protection Officer, the Office of the Data Protection Officer, and the Bank Security Department verify new technological solutions in order to ensure compliance with requirements and principles set out in the GDPR and the highest possible level of security of processed personal data.
The Bank also decided to implement personal data protection principles as regards the use of technical and organisational measures to protect the processed data. The Operating Security Centre (OSC) was established within the structure of the Bank Security Department to monitor unauthorised data access (including access to personal data), and (through systems in place at the Bank) tasked with the prevention of personal data leaks.
In 2020, 104 incidents in the scope of personal data leaks were recorded at the Bank, whereas in the entire Pekao Group 93 such cases were noted.
Bank
Non-Financial Performance Ratios |
2020 |
2019 |
Number of incidents recorded in connection with personal data leaks |
104 |
78 |
Pekao Group
Non-Financial Performance Ratios |
2020 |
2019 |
Number of incidents recorded in connection with personal data leaks |
115 |
95 |
The Pekao Group and the Bank respect human rights with regard to employees through a number of internally regulated activities that take into account diversity and counteract exclusion, promote a culture based on respect and freedom to act, systematic dialogue conducted as part of cooperation with trade union organisations, freedom of association, and in particular:
respect for employee rights, including counteracting discrimination in the process of entering into and terminating employment contracts, terms of employment, promotion and access to training to improve professional qualifications, including in particular discrimination against gender, age, disability, race, religion, nationality, political opinions, membership in trade unions, ethnical origin, faith, sexual orientation, and employment for an unlimited, or limited time or full-time or part-time employment,
the gender equality policy, which is aimed to enable the Bank’s employees to manage their career, succeed and have their work appraised on the basis of their individual achievement, independently of their gender,
acting against all signs of mobbing,
maintaining a friendly and safe workplace,
continuously improving employees’ knowledge, including knowledge on occupational risk assessment,
providing a healthcare system for workers, i.a. through initiatives like “Take Health by the Horns” (Bierz zdrowie za rogi), which was aimed at continuing the pro-health activities launched in the previous year, and responding to the newly emerging epidemiological situation. Within the framework of the activities, a service was created which organised podcasts with psychologists for employees, aimed at supporting them in difficult situations, i.e. sudden change related to the epidemic situation, webinars providing information on the coronavirus and related procedures. Subsequently, the website regularly provided the opportunity to participate in online meetings with dieticians, during which healthy nutrition was promoted, as well as organised systematic webinars as part of anti-stress inspirations aimed at supporting the stress reduction. In addition, employees were encouraged to exercise daily by providing videos with instructions on short physical exercise regimes, as well as articles on the impact of physical activity on our body. During the year, 32 dedicated articles and 40 videos were made available, while over 4700 people participated in webinars,
ensuring equal treatment in terms of remuneration and extra benefits,
promoting balance in professional and private life of employees by taking advantage of possibilities provided for in relevant regulations in this field and such available facilities like: offering flexible working models in accordance with applicable legal regulations, including in particular: regulations of labour and national insurance law and internal regulations, as well as business and organisational requirements and needs,
support for employees during and after the end of a long-lasting absence (e.g. after maternity/paternity leave, unpaid leave, illness or any other long-lasting absence) by way of: avoiding discrimination during and after the end of such a long-lasting absence, enabling employees to stay in touch with the company during their long-lasting absence, and enabling their return after the long-lasting absence.
The Bank also respects the freedom of association and has a dialogue with employee representatives, i.e. trade unions and the Works Council based on respect for fair interests of the parties.
The most important internal regulations of Bank Pekao S.A. applicable to employees are as follows:
Work Regulations,
Charter of Principles and the Principles and procedure for the operation of Advocates of the Charter of Principles,
Code of Conduct of the Pekao Group,
Gender Equality Policy,
Mobbing Prevention Policy,
Remuneration Policy.
Taking care of customers’ interest is the major principle of the Bank’s operation.
The Pekao Group and the Bank are determined to build long-term relations with customers, strengthen their trust by continuously improving the quality of services provided, transparency of our activities, as well as security of transactions and protection of confidentiality of information.
The Pekao Group and the Bank conduct a regular dialogue with all customer segments, including by regularly examining their opinions, listening to their expectations and observations regarding all aspects of operation. In response, the Pekao Group and the Bank strive to systematically modify their product offer, regularly train and strengthen their employees’ competencies, and build appropriate corporate governance. The Bank’s desire to be a bank of first choice determines the conduct of business in a transparent manner, consistent with all regulations and based on respect.
The Bank also takes actions to reduce financial exclusion understood as a limited access to financial services because of disabilities. Therefore, taking into account the needs of persons with disabilities, the Bank provides alternative access channels to the products and services offered (websites adapted to the needs of the visually impaired, infoline, ATMs/CDMs, outlets), and consistently eliminates architectural barriers at banking establishments, adapting them to the needs of persons with disabilities.
In 2020, as part of the above-mentioned activities, the Bank established close project cooperation with the architectural office and furniture company in order to develop a solution adjusting the customer service desk for disabled persons. This solution is in the process of developing a prototype. Pending the development of the target desk design, the Bank implemented a substitute solution enabling comfortable signing of documents by disabled customers.
Due to the limitations in the implementation of works related to the risk of contracting Covid-19, it was decided to postpone the activities planned for 2020 in the “Pekao without Barriers” (Pekao bez barier) programme. The scope of the planned works included conducting audits of the next pool of outlets in terms of architectural availability, taking into account the needs of persons with disabilities. The results of the audits carried out are then used to indicate possible architectural difficulties and appropriate modernisation of the facilities, which ultimately allows for the granting of “Facility without Barriers” (Obiekt bez barier) certificates to subsequent establishments. The certificate confirms that the facility is friendly and tailored to the needs of persons with different disabilities, the elderly with reduced mobility and persons accompanied with small children.
The most important internal regulations of Bank Pekao S.A. applicable to customers are as follows:
Charter of Principles,
Code of Conduct of the Pekao Group,
Corruption Prevention Policy of the Bank Pekao S.A. Group,
Principles for authorising persons employed by the Bank to process personal data and access the Bank’s information.
Other regulations applicable to the Bank’s core activities.
Bank
Non-Financial Performance Ratios |
2020 |
2019 |
The number of branches/outlets of the Bank adapted to the needs of customers with disabilities (in terms of access to the branch) |
513 |
565 |
% of all branches/outlets |
72% |
77% |
Pekao Group
Non-Financial Performance Ratios |
2020 |
2019 |
Number of establishments adapted to the needs of disabled customers |
539 |
591 |
% of all branches/outlets |
71% |
76% |
Human rights issues are also important in the Bank’s relations with suppliers. Since 2010, in tenders conducted by the Bank, suppliers must fill out the “Corporate Social and Environmental Responsibility (CSR) Form”. Since 2018, the form contains, i.a., information on: compliance with human rights.
Bank Pekao treats counterparties with due respect and chooses suppliers of goods and services in an objective and impartial manner, thus taking care of good and fair commercial relations. The Bank choses its suppliers in accordance with its internal procedures that comply with best practices and absolutely applicable regulations of Polish law.
In 2018, a comprehensive review of purchasing processes was carried out, as a result of which three key regulations were developed, which were adopted at the Bank, i.e. “Procurement Policy of Bank Polska Kasa Opieki Spółka Akcyjna” (Polityka zakupowa w Banku Polska Kasa Opieki Spółka Akcyjna), adopted by way of the Regulation of the President of the Management Board in April 2018, as well as “Principles for Procurement Without the Participation of the Procurement Department of Bank Polska Kasa Opieki Spółka Akcyjna” (Zasady realizacji zakupów bez udziału Departamentu Zakupów w Banku Polska Kasa Opieki Spółka Akcyjna), which were both adopted by way of the Regulation of the President of the Management Board in December 2018. The rules were reviewed again in 2019 following a further transformation of the purchasing function in the Bank. Another step of improvement initiated in 2019 is full digitisation of purchasing processes and communication with bidders at the stage of purchasing procedures and placed orders. The result of the work performed so far in the field of digitisation of purchasing processes is the implementation of the Integrated Procurement Tool, which took place on 31.12.2020. Following the new system, the purchase procedure in force at the Bank was also updated.
In the Bank’s tenders of above PLN 1 million net, suppliers must fill the Corporate Social Responsibility Form, which includes, information about environmental protection, social standards, as well as respect for human rights. In this way, Bank Pekao undertakes actions aimed at sustainable development, protection of the environment, and prevention of violations of human rights by the Bank’s business partners.
The Corporate Social and Environmental Responsibility Form includes questions concerning the fulfilment of obligations to comply with such regulations like:
a ban on forced labour,
respect for legal regulations on working time,
respect for legal regulations on OHS,
compliance with regulations of labour law, including the payment of remuneration habitually applied in a given sector to all employees.
In addition, during the tenders, the Bank verifies potential bidders in terms of corruption risk and sanction lists (US and EU sanction lists) as well as public warnings published by the PFSA.
Companies that provide products or services for the Bank are informed about the abuse prevention process and material provisions of the corruption prevention policy in force at the Bank.
The most important internal regulations of Bank Pekao S.A. applicable to suppliers in terms of respect for human rights are as follows:
Rules for making purchases,
Code of Conduct of the Pekao Group,
Charter of Principles,
Corruption Prevention Policy of the Bank Pekao S.A. Group,
Principles for authorising persons employed by the Bank to process personal data and access the Bank’s information.
[GRI 102-12],
The involvement of the Pekao Group and the Bank with society is reflected in actions aimed at sustainable development through active participation in the economic development of the country, support for culture and socially important undertakings.
Actions taken by Bank Pekao S.A. are to shape the Bank’s image as a trustworthy financial institution that is socially committed, modern, open to dialogue, and understanding to customer needs. A systematic dialogue with the environment is fundamental for the performance of the Bank’s core activity and results from our social activeness and a role that we play for the economic development.
The Bank shows respect for human rights with regard to local communities through its charitable and sponsoring activities which are carried out in accordance with the Principles for Granting Donations and Sponsoring by Bank Polska Kasa Opieki Spółka Akcyjna (Zasady przyznawania darowizn i sponsoringu przez Bank Polska Kasa Opieki Spółka Akcyjna) adopted by the Bank. When selecting initiatives, the Bank departs from activities based on one-off donations and a reactive response to requests for support to the benefit of long-term social involvement based on partnership with respectful organisations with social trust. In particular, the Bank supports selected organisations and institutions that carry out projects in such areas as: high culture, sport, aid to children in need, environmental protection, responsible economic development. Before a donation is made or sponsorship agreement is concluded, the Bank shall perform a risk assessment (due diligence), in accordance with regulations on counteracting corruption and conflict of interest in force at the Bank.
For the benefit of local communities in 2020, in cooperation with the M. Kanton Foundation of Bank Pekao S.A., the Bank conducted the second edition of the grant competition called “We Are Close By” (“Jesteśmy blisko”).
The most important internal regulations of Bank Pekao S.A. applicable to local communities are as follows:
Charter of Principles and System of Values,
Code of Conduct of the Pekao Group,
The “ICAAP Policy – Risk and Capital Management Principles” defines the main elements of a comprehensive approach to the risk associated with the Bank’s operations and resulting from the adopted business strategy, both at the Bank’s level and at the Bank’s entire Capital Group. It defines the identified risks and the criteria for their recognition as material, indicating the objectives and associated risk management principles, the target risk structure associated with the activities carried out and the acceptable level and structure of risks, as defined in the adopted risk appetite.
Each identified risk shall be assessed in terms of its materiality and, if considered material, shall be measured (if classified as measurable) and monitored and controlled in accordance with the methods and procedures established for that type of risk. The purpose of risk assessment and measurement methods is to comply with applicable legal requirements, regulator guidelines and best practices.
The Bank uses formal risk reduction limits in accordance with its risk appetite and defines principles for handling situations when limits are exceeded. The Bank’s management information system enables it to monitor risk levels. The Bank’s organisational structure is adjusted to the size and profile of the Bank’s risks. While managing the risk of the Capital Group, the Bank shall supervise risks associated with the activities of its subsidiaries.
In the risk management systems in place at the Bank, the Management Board is responsible for developing, implementing and effective operation of risk management processes and an internal capital estimation process adjusted to the size and profile of the risk appetite, including the risk of the Bank’s subsidiaries. The Management Board of the Bank is regularly informed about the current risk profile of the Bank, about the largest exposures and concentrations of credit exposures.
The Supervisory Board, supported by the Risk Committee, supervises the assess risk management system and its adequacy and effectiveness. In addition, the Supervisory Board supervises the compliance of the Bank’s risk management policy with the strategy and financial plan of the Bank.
The risk management strategy (including risk appetite) and system of the Bank are reviewed and updated on a regular basis to keep them adequate in terms of their scale and complexity of the Bank’s operations.
The Bank’s risk management system constitutes an integral element of the Bank’s management system. Risk management improves decision-making processes while ensuring that decisions are in line with best market practices and applicable regulatory requirements.
Due to the nature of the Bank’s operations, all risks identified as significant and resulting from guidelines of regulatory bodies, including types of risks related to social, employee, environment, respect for human rights, anti-corruption, related to products and relations with external environment, including counterparties, have been appropriately defined and included in separate regulations. Selected regulations in this regard have been presented in this Statement on non-financial information of Bank Pekao for 2020.
Most companies of the Capital Group of the Bank have risk management policies adapted to the size and specificity of their operations.
Reputation Risk
Protection of reputation is crucial for the Bank due to the potential impact of this risk on the Bank’s financial results and capital, but also due to the role of the Bank as a public trust institution. In accordance with the guidelines of the “ICAAP Policy – Risk and Capital Management Principles”, which defines reputational risk as material, Bank Pekao has implemented a separate regulation relating to such risks. “Principles of Managing Reputational Risk at Bank Pekao” were implemented in March 2013 by an Order of the President of the Management Board.
Reputation is an assessment of the Bank’s image, i.e. the manner in which the Bank is perceived at a given moment by an environment which consists of customers, counterparties, investors, shareholders, regulators, and public opinion. The image is not only a marketing, but also a business issue. The acceptance of the Bank by market participants and resulting support for the sale of products and services is dependent on the image. Thus, the reputation risk is understood as the risk of negative perception of the Bank’s image, which contributes to the loss of present and future revenues or capitals.
The reputation risk is a secondary risk and is strictly connected with other types of risk connected with the Bank’s everyday activities, like credit, operational, market, liquidity, compliance risks. Actions with a potential impact on reputational risk have been defined for each of these risks.
The most important of them include:
1. In terms of credit risk:
financing enterprises in sensitive sectors of the economy, e.g. military industry, gambling companies,
financing political organisations,
financing activities generating a material threat to the natural environment,
financing authoritarian states, states that violate international regulations, states with inadequate protection of human rights or states subject to embargo.
2. In terms of operational risk:
internal and external frauds,
non-compliance with employment and workplace safety rules,
incidents connected with unequal treatment, discrimination, mobbing or employee disputes,
irregularities in customer service, product construction and unfair operating practices,
incorrect settlement of transactions, supplies and incorrect operating process management,
disturbances in the activity and failures of systems that influence customer service.
3. In terms of compliance risk:
applying business practices prohibited or inconsistent with the principles of good practices,
the Bank’s operation that does not comply with legal regulations,
incorrect implementation or failure to implement recommendations of control and supervision bodies,
conflicts of interest,
market abuse.
4. In terms of market risks:
dominant positions, including large transactions and monopolistic practices.
Given its nature, the reputation risk is classified as difficult to measure. According to the “ICAAP Policy – Risk and Capital Management Principles”, it is not subject to quantitative measurement. Ongoing management of the Bank’s reputational risk is limited to the management of original types of risk, supported by qualitative assessment, monitoring, reporting, and reduction of reputational risk by the Bank.
Bank Pekao consistently reduces the risk of reputation loss, including by:
applying an appropriate credit policy (including those sectors of the economy which the Bank does not involve itself in, e.g. military industry, nuclear energy),
implementing and applying best practices and ethical rules, e.g. “Principles of Best Practices in Banking of the Polish Banks Association” (Zasady Dobrej Praktyki Bankowej Zawiązku Banków Polskich), “Charter of Best Practices in the Financial Market” (Kanon Dobrych Praktyk Rynku Finansowego), “Best Practices of Companies Listed at the Warsaw Stock Exchange” (Dobre praktyki spółek notowanych na GPW SA), and the “Code of Conduct of the Pekao Group” (Kodeks Postępowania Grupy Pekao), which provides for a set of key values and standards of conduct for the Bank’s employees to ensure top standards of service and reputation protection,
disseminating knowledge about regulations, ethical and corporate governance rules, as well as principles for their appropriate application among the Bank’s employees; holding training on compliance risk,
managing conflicts of interest,
preventing corruption,
counteracting the use of the Bank’s operations for purposes connected with money laundering or terrorism financing,
managing frauds (including in particular internal frauds) by preventing, discovering and fighting frauds, minimising fraud consequences and taking actions aimed at discovering perpetrators, as well as, if justified, notifying law enforcement authorities,
ensuring a relevant level of information security, in particular including personal data of customers, as well as providing access to such information solely to authorised entities,
taking actions and initiatives aimed at increasing customer satisfaction level,
managing the customer complaint handling process,
management by objectives (defining objectives for employees at sales and management positions with regard to service quality and customer satisfaction),
analysing new products and services, as well as marketing campaigns in terms of the reputation risk,
consulting actions that are important for the Bank’s reputation with the Management Board of the Bank and the Supervisory Board.
The management of the Bank’s reputation is a continuous process which is actively attended by all business units and employees of the Bank. A special role in this process is played by statutory bodies of the Bank and organisational units directly responsible for the original types of risk, in accordance with competences arising from separate internal regulations of the Bank.
In December 2020, the reputation survey of Bank Pekao was conducted in cooperation with an external research institute, taking into account brand indicators and image attributes. The results of the audit were presented at the meeting of the Management Board of the Bank in February 2020. The Effective Reputation Index included 3 main research areas: honesty towards consumers, public responsibility, leadership and success. Public liability is the best assessed factor of Bank Pekao. The Bank is most perceived as a business supporting the economy and as a firm with a solid market position. Bank Pekao is among the best known brands of banks.
Good Practices Applied in Pekao Group
Practice: Actions aimed at raising awareness of the employees of the subsidiary in the area of business continuity management and response in crisis situations
Context of operation: Regular training in the area of business continuity and crisis response management
Practice description: Correspondence and training of all employees of the Company. Performance of tests of the Business Continuity Plan for critical processes identified in the Company
Effects: Increase the awareness of employees in the BCM area. As part of the tests of the Business Continuity Plan - update of emergency procedures for critical processes in the Company
Plans for the future: Maintain communication and meetings with employees and carry out planned tests.
Bank
Non-Financial Performance Ratios |
|
2020 |
2019 |
||||||||
NPS ratio (in comparison with the previous year) |
|
42% |
n/a |
||||||||
Value of penalties paid for the violation of consumer rights: |
0 PLN |
0 PLN |
|||||||||
Value of penalties paid for the violation of principles of free competition |
0 PLN |
0 PLN |
|||||||||
Total amount of donations made (excluding donations made to the Foundation of Bank Pekao S.A.) |
5,012,072 PLN |
3,028,000 PLN |
|||||||||
Donation made to the Foundation of Bank Pekao S.A. |
1,237,000 PLN |
500,000 PLN |
|||||||||
Number of partner organisations |
5 |
|
6 |
||||||||
Total number of employees involved in volunteer initiatives |
826 |
|
880 |
||||||||
Total number of hours of volunteer work |
4,370 |
|
5,011 |
||||||||
Total number of volunteer initiatives |
119 |
|
246 |
||||||||
Activity of the Bank in trade associations and organisations in the relevant year (number of memberships) |
|
|
|
|
|||||||
Polish Bank Association as well as Committees and Councils associated therewith |
|
14 |
|
14 |
|||||||
International associations and organisations |
|
14 |
|
14 |
|||||||
Nationwide associations and organisations |
|
6 |
|
6 |
|||||||
Local associations and organisations |
|
2 |
|
2 |
|||||||
Non-Financial Performance Ratios |
|
2020 |
2019 |
||||||||
NPS ratio (in comparison with the previous year) |
|
n/a |
n/a |
||||||||
Value of penalties paid for the violation of consumer rights: |
0 |
0 |
|||||||||
Value of penalties paid for the violation of principles of free competition |
0 |
0 |
|||||||||
Total amount of donations transferred |
5,232,293 PLN |
3,155,536 PLN |
|||||||||
Donation made to the Foundation of Bank Pekao S.A. |
1,237,000 PLN |
500,000 PLN |
|||||||||
Number of partner organisations |
5 |
|
6 |
||||||||
Total number of employees involved in volunteer initiatives |
826 |
|
883 |
||||||||
Total number of hours of volunteer work |
4,370 |
|
5,031 |
||||||||
Total number of volunteer initiatives |
120 |
|
247 |
||||||||
Activity in trade associations and organisations in the relevant year (number of memberships) |
|
|
|
|
|||||||
International associations and organisations |
|
18 |
|
17 |
|||||||
Nationwide associations and organisations |
|
14 |
|
16 |
|||||||
Local associations and organisations |
|
2 |
|
2 |
|||||||
Employee Issues
Bank
Non-Financial Performance Ratios |
|
2020 |
2019 |
Number of employees of the Bank |
|
12,870 |
13,779 |
Number of the Bank's employees according to GRI |
|
13,038 |
13,913 |
Number of employees of the Bank (in FTEs) |
|
12,693 |
13,648 |
Number of Bank's employees according to GRI (in full-time jobs) |
|
12,859 |
13,782 |
Number of resignations from work (in FTEs) |
|
2,080 |
2,077 |
Number of employees of the Bank with tertiary education |
|
72% |
71% |
% of women employed |
|
73% |
75% |
% of employees under a collective agreement (in FTEs) |
|
77% |
77% |
Average number of training hours per year per employee Number of the Bank's employees |
|
30 |
26 |
Number of cases reported and handled under the Mobbing Prevention Policy |
|
2 |
6 |
Number of trade unions operating at Bank Pekao |
|
8 |
8 (9 until August 2019) |
Number of members of the Works Council of Bank Pekao S.A. in the 2015-2019 term of office |
|
0 |
7 |
Percentage of employees in trade unions at Bank Pekao S.A. |
|
54% |
55% |
Number of days lost because of strikes |
|
0 |
0 |
Total number of accidents at work |
|
35 |
66 |
Number of fatal accidents at work |
|
0 |
0 |
Frequency of accidents (number of accidents in relation to number of employees per 1000 of employees) |
|
2.72 |
3.3 |
Severity of accidents (number of working days lost as a result of absence due to an accident in relation to the number of all accidents) |
|
46.17 |
33.88 |
Non-Financial Performance Ratios |
|
2020 |
2019 |
|
Number of employees |
|
14,994 |
15,678 |
|
Number of employees according to GRI |
|
15,203 |
15,857 |
|
Number of employees (in FTEs) |
|
14,633 |
15,384 |
|
Number of employees according to GRI (in FTEs) |
|
14,837 |
15,561 |
|
Number of resignations from work (in FTEs) |
|
2,597 |
2,667 |
|
Number of employees of the with tertiary education |
|
73% |
71% |
|
% of women employed |
|
72% |
74% |
|
% of employees under a collective agreement (in FTEs) |
|
69% |
n/a |
|
Average number of training hours per year per employee Number of the Bank's employees |
|
28 |
n/a |
|
Number of cases reported and handled under the Mobbing Prevention Policy |
|
4 |
8 |
|
Total number of accidents at work |
|
41 |
72 |
|
Number of fatal accidents at work |
|
0 |
0 |
|
Frequency of accidents (number of accidents in relation to number of employees per 1000 of employees) |
|
2.76 |
4.62 |
|
Severity of accidents (number of working days lost as a result of absence due to an accident in relation to the number of all accidents) |
|
39.88 |
n/a |
|
NOTE: According to GR, the total number of employees includes employees employed on the basis of an employment contract, appointment, selection, appointment or a cooperative employment contract at the end of the reporting year in full-time positions / persons: both active (present) and inactive (absent) people.
Natural Environment
Bank
Non-Financial Performance Ratios |
2020 |
2019 |
Power consumption [MWh] |
56,171 |
58,000 |
Water consumption [m3] |
117,775 |
178,349 |
Petrol consumption [tonnes] |
1,327 |
963 |
Motor oil consumption [tonnes] |
181 |
179 |
Natural gas consumption [m3] |
1,011,075 |
1,275,975 |
Paper consumption [tonnes] |
740 |
986 |
Fuel oil [tonnes] |
202 |
273 |
Refrigerant [kg] |
168 |
n/a |
Value of procedures conducted with suppliers selected in terms of compliance with environmental criteria |
74% |
77 % |
Value of penalties paid for the violation of environmental regulations: |
0 PLN |
0 PLN |
Pekao Group
Non-Financial Performance Ratios |
2020 |
2019 |
Power consumption [MWh] |
57,768 |
60,543 |
Water consumption [m3] |
121,106 |
185,274 |
Petrol consumption [tonnes] |
1,503 |
1,288 |
Motor oil consumption [tonnes] |
211 |
291 |
Natural gas consumption [m3] |
1,014,475 |
1,277,771 |
Paper consumption [tonnes] |
760 |
1,019 |
Refrigerant [kg] |
448 |
n/a |
Value of penalties paid for the violation of environmental regulations: |
0 PLN |
0 PLN |
Preventing Corruption
Bank
Non-Financial Performance Ratios |
2020 |
2019 |
Number of reports of violations submitted in accordance with the whistleblowing policy (only for Bank Pekao S.A.) |
8 |
14 |
Number of probable cases of corruption reported to law enforcement authorities |
0 |
0 |
Non-Financial Performance Ratios |
2020 |
2019 |
Number of infringement reports using the whistleblowing mechanism |
14 |
17 |
Number of probable cases of corruption reported to law enforcement authorities |
1 |
0 |
Respect for Human Rights
Bank
Non-Financial Performance Ratios |
2020 |
2019 |
Number of incidents recorded in connection with personal data leaks |
104 |
78 |
The number of branches/outlets of the Bank adapted to the needs of customers with disabilities (in terms of access to the branch) |
513 |
565 |
% of all branches/outlets |
72% |
77% |
Pekao Group
Non-Financial Performance Ratios |
2020 |
2019 |
Number of incidents recorded in connection with personal data leaks |
115 |
95 |
Number of establishments adapted to the needs of disabled customers (in terms of entry into the branch) |
539 |
591 |
% of all branches/outlets |
71% |
76% |
[GRI 102-1],
The Bank Pekao S.A. Capital Group and Bank Pekao S.A. present a Statement on non-financial information, which constitutes a separate part of the Report on the activities of the Capital Group of the Bank for 2020.
GRI 102-46]
In line with the materiality approach, individual non-financial information has been provided to the extent necessary to assess the development, results and situation of the Pekao Group. Sufficiently less focus was devoted to smaller units whose impact on the entire image of the Pekao Group is small or even marginal.
[GRI 102-45]
In accordance with the requirements of the Accounting Act, the report on non-financial information of the Pekao Group for 2020 includes information and consolidated non-financial data of the Pekao Group and its parent company of Bank Pekao, in accordance with the structure of the organisation included in the consolidated financial statements for the year ended 31 December 2020.
Non-financial data presented in the tables for Group Companies include the following entities: Pekao TFI S.A., Pekao Investment Banking S.A., Pekao Bank Hipoteczny S.A., Pekao Leasing Sp. z o.o., Pekao Faktoring Sp. z o.o., Centrum Kart S.A., Dom Inwestycyjny Xelion Sp. z o.o., Pekao Direct Sp. z o.o., Pekao Financial Services Sp. z o.o., Pekao Investment Management S.A., not include: sans entities, in liquidation or struck from the KRS (National Court Register).
[GRI 102-47],
This Statement on non-financial information of the Pekao Group and the Bank for 2020, containing key non-financial performance indicators related to the activities of the Pekao Group and Bank Pekao, as well as relevant information on social, employee, environmental issues, respect for human rights and anti-corruption, is the implementation of the requirements of the amended Accounting Act of 15 December 2016 (Ustawa o rachunkowości z dn. 15.12.2016) regarding disclosure of non-financial information resulting from the transposition of Directive 95/2014/EU1, and the Regulation of the Ministry of Finance of 25 May 2016 on information on diversity (Rozporządzenie Ministerstwa Finansów z 25.05.2016 roku w zakresie informacji dotyczących różnorodności).
The Statement includes a description of key policies implemented by the Bank and the companies of the Bank’s Capital Group in relation to social, employee, environment, respect for human rights and anti-corruption issues, as well as a description of the results of their application.
For the purposes of this Statement, it has been assumed that if the policies or internal legal acts of the companies of the Bank’s Capital Group (e.g. procedures, rules, regulations, instructions, etc.) regulating particular issues presented in this Statement have been introduced in more than 50% of the companies of the Bank’s Capital Group, they shall be deemed to have been introduced in most companies of the Bank’s Capital Group, with the exception of the following companies belonging to the Bank’s Capital Group: Pekao Property S.A. in liquidation, Pekao Fundusz Kapitałowy Sp. z o.o. in liquidation, and FBP Media Sp. z o.o. in bankruptcy.
[GRI 102-48]
The Statement shall not contain corrections to information from previous reports.
[GRI 102-50]
The Statement presents the activities of the Pekao Group for the period from 1 January 2020 to 31 December 2020.
[GRI 102-51]
The last non-financial statement of Bank Pekao S.A. was prepared for 2019 and was published on 27 February 2020. In the years 2017-2019, the Pekao Group published a Statement on Non-Financial Information of Bank Pekao S.A., this year, for the first time, it shall publish a Statement on Non-Financial Information of the Bank Pekao S.A. Capital Group.
[GRI 102-52]
The Pekao Group publishes statements on an annual basis.
[GRI 102-54]
The Statement has been prepared in accordance with the GRI Standards (“core” option) and in accordance with the non-financial reporting requirements set out in the Accounting Act (Ustawa o rachunkowości). The criteria of the entity obliged to draw up the Statement are met by both the Pekao Group and the parent company, i.e. Bank Pekao.
The individual issues included in the Statement were presented in the Pekao Group’s view, specifying the Bank.
[GRI 102-56]
The non-financial statement for 2020 shall not be audited externally.
The content of the Statement on non-financial information of Bank Pekao was defined at the end of 2017 and was verified in subsequent years. The process of defining the contents of the report consisted in reviewing current information subject to reporting and legal requirements, in accordance with three steps required by the GRI Standards, i.e. identification, prioritisation and validation. First, the legal requirements were reviewed and key issues related to corporate responsibility and business activity were selected, then an analysis of internal documents, procedures and best market practices in the field of non-financial reporting was carried out. This resulted in the creation of a list of issues that should be included in the report, which was subjected to prioritisation and validation by key managers of the Bank.
The reporting process involved employees and managers responsible for individual reporting areas. The parent entity, i.e. the PZU Group, was consulted as well.
Starting from 2020, the previous Statement on non-financial information of Bank Pekao S.A. has been replaced by the Statement on non-financial information of the Bank Pekao S.A. Capital Group prepared together with the statement on non-financial information of Bank Pekao S.A.and constitutes a separate part of the Report on the activities of the Bank Pekao S.A. Capital Group prepared together with the Report on the activities of the Bank Pekao S.A.
Requirements of the Accounting Act (Ustawa o rachunkowości) for disclosure of non-financial data |
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Description of the entity’s business model and key performance ratios |
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24.02.2021 |
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Leszek Skiba |
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President of the Management Board |
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The original Polish document is signed with a qualified electronic signature |
Date |
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Name/Surname |
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Position/Function |
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Signature |
24.02.2021 |
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Jarosław Fuchs |
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Vice President of the Management Board |
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The original Polish document is signed with a qualified electronic signature |
Date |
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Name/Surname |
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Position/Function |
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Signature |
24.02.2021 |
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Marcin Gadomski |
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Vice President of the Management Board |
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The original Polish document is signed with a qualified electronic signature |
Date |
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Name/Surname |
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Position/Function |
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Signature |
24.02.2021 |
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Krzysztof Kozłowski |
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Vice President of the Management Board |
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The original Polish document is signed with a qualified electronic signature |
Date |
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Name/Surname |
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Position/Function |
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Signature |
24.02.2020 |
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Tomasz Kubiak |
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Vice President of the Management Board |
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The original Polish document is signed with a qualified electronic signature |
Date |
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Name/Surname |
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Position/Function |
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Signature |
24.02.2021 |
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Jerzy Kwieciński |
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Vice President of the Management Board |
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The original Polish document is signed with a qualified electronic signature |
Date |
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Name/Surname |
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Position/Function |
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Signature |
24.02.2021 |
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Błażej Szczecki |
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Vice President of the Management Board |
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The original Polish document is signed with a qualified electronic signature |
Date |
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Name/Surname |
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Position/Function |
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Signature |
24.02.2021 |
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Wojciech Werochowski |
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Vice President of the Management Board |
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The original Polish document is signed with a qualified electronic signature |
Date |
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Name/Surname |
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Position/Function |
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Signature |
24.02.2021 |
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Magdalena Zmitrowicz |
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Vice President of the Management Board |
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The original Polish document is signed with a qualified electronic signature |
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Signature |
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[1] Excluding central government institutions.
[2] Excluding central government institutions. Receivables include debt securities.
3 Countercyclical capital buffer was calculated as of 31.12.2020 at the level 0.0028% for Bank and 0.0029% for Group.
4 According to the Regulation of the Minister of Finance, the systemic risk buffer was abolished on March 19, 2020. The buffer value applicable until that date was 3% of the total risk exposure amount for all exposures located only in the territory of the Republic of Poland.
[5] Journal of Laws 2018.757
[6] Par. 70.6.5.a and b of the ordinance of the Minister of Finance of March 29, 2018
[7] The document is publicly available on the WSE website:
[8] Dz.U.UE.L.2005.52.5, the document is publicly available on the website: http://eur-lex.europa.eu/legal-content/PL/TXT/?uri=CELEX%3A32005H0162
[9] The document is publicly accessible on the Polish Financial Supervision Authority web site: https://www.knf.gov.pl/dla_rynku/regulacje_i_praktyka/zasady_ladu_korporacyjnego
[10] The document is publicly accessible on the Polish Bank Association web site: http://zbp.pl/dla-bankow/zespoly-rady-i-komitety/dzialania-w-obszarze-legislacyjno-prawnym/komisja-etyki-bankowej
[11] Par. 70.6.5.c of the ordinance of the Minister of Finance of March 29, 2018
[12] Par. 70.6.5d of the ordinance of the Minister of Finance of March 29, 2018
[13] Par. 70.6.5.e of the ordinance of the Minister of Finance of March 29, 2018
[14] Par. 70.6.5.f of the ordinance of the Minister of Finance of March 29, 2018
[15] Par. 70.6.5 g of the ordinance of the Minister of Finance of March 29, 2018
[16] Par. 70.6.5.h of the ordinance of the Minister of Finance of March 29, 2018
[17] Par. 70.6.5.i of the ordinance of the Minister of Finance of March 29, 2018
[18] Adopted by virtue of the Resolution of the General Shareholders Meeting No. 19 of April 8, 2003 as amended
[19] Par. 70.6.5 .j of the ordinance of the Minister of Finance of March 29, 2018
[20] https://www.pekao.com.pl/o-banku/lad-korporacyjny.html
[21] Par. 70.6.5.k-l of the ordinance of the Minister of Finance of March 29, 2018
[22] https://www.pekao.com.pl/o-banku/lad-korporacyjny.html
[23] https://www.pekao.com.pl/o-banku/lad-korporacyjny.html
[25] § 70.6.5 m of the ordinance of the Minister of Finance of March 29, 2018
[[1] as a parent company. The Bank Pekao S.A. Capital Group includes financial institutions operating on the following markets: banking, asset management, brokerage services, transaction advisory services, leasing, and factoring. ][1] As at the end of 2020, the Pekao Group was composed of a parent company: Bank Pekao S.A., 11 direct subsidiaries, and 2 indirect subsidiaries