Dear Shareholders,
2024
was
a
good
year
for
the
banking
sector
in
Poland,
as
well
as
for
the
Bank
Pekao
Group.
The
parameters
of
monetary
policy
did
not
change
over
the
year.
This
supported
maintaining
the
interest
margin
at
a
stable
level,
which,
combined
with
the
development
of
lending,
contributed
significantly
to
the
profitability of banks.
The
economic
situation
remains
favorable
for
the
quality
of
the
sector's
assets.
The
situation
on
the
labor
market,
where
wage
growth
has
clearly
exceeded
the
average
price
growth
for
some
time
now,
and
the
economy
is
close
to
full
employment,
favors
very
low
risk
costs
in
the
area
of
retail
banking.
In
corporate
banking,
apart
from
individual
cases
of
borrower
problems,
we
do
not
observe
negative
credit
events
of
a
broader nature.
The
banking
sector,
to
a
greater
extent
than
Bank
Pekao,
continued
to
struggle
with
the
problem
of
foreign
currency
mortgage
loans.
Although
the
scale
of
provisions
for
these
loans
has
already
reached
a
high
level,
this
still
does
not
mean
the
end
of
the
problems.
We
owe
the
fact
that
systemic
risk
threatening
the
stability
of
the
sector
does
not
materialize
to
the
favorable
business
environment.
I
am
anxious
about
other legal risks that are looming on the horizon.
The
large
share
of
treasury
bonds
in
bank
balance
sheets
means
that
the
banking
sector
remains
more
dependent
on
investors'
valuation
of
the
risk
of
these
instruments
as
a
derivative
of
the
development
of
the
country's
economic
situation.
The
scale
of
the
announced
public
investments
is
optimistic.
I
hope
that
it
will
be
a
driving
force
for
the
growth
of
private
investments
and
the
improvement
of
the
economic
situation.
Consequently,
it
will
allow
for
more
effective
allocation
of
capital
entrusted
to
banks.
We
are
ready
to
wait
for
the
growth
of
investment
activity
of
enterprises.
We
hope
that
the
banking
sector
will
be
able to better use its potential.
The
geopolitical
situation
in
the
world
and
its
consequences
for
the
Polish
economy
have
gained
in
importance,
which
will
not
be
without
significance
for
the
economic
situation
in
Poland.
In
the
perspective
of
2025,
we
expect
a
moderate
easing
of
monetary
policy,
which
will
have
the
greatest
impact
on
the
profitability
of
the
banking
sector
and
Bank
Pekao.
The
expected
reduction
in
interest
rates
may
be
a
signal
for
investments.
Other
trends
that
have
been
visible
in
the
banking
sector
and
Bank
Pekao
for
some
time
now,
such
as
cost
pressure,
low
share
of
commission
income,
stable
risk
costs
will
continue.
I
see
increased
activity
in
the
area
of
mergers
and
acquisitions
of
European
banks,
which
may
have
an
impact on the banking sector in Poland.
Financial results
Operating
income
in
2024
amounted
to
PLN
16.0
billion,
which
was
6%
higher
than
income
achieved
in
2023,
mainly
due
to
net
interest
income.
Net
interest
income
earned
in
2024
amounted
to
PLN
12.7
billion
and
was
7%
higher
than
in
the
previous
year,
thanks
to
higher
volumes
and
a
stable
interest
margin,
despite
the
inclusion
of
the
costs
of
the
so-called
credit
holidays
in
the
amount
of
PLN
153
million.
Net
fee
and
commission
income
achieved
in
2024
amounted
to
PLN
2.9
billion
and
was
only
2%
higher
than
in
the
previous
year,
which
resulted
from
the
fact
that
the
Bank's
fee
table
has
not
changed
significantly
for
several
years.
The
aforementioned
small
increase
was
achieved,
among
others,
thanks
to
higher
fees
from
investment
funds,
thanks
to
higher
gross
sales
and
a
higher
level
of
assets
under
management.
Operating
expenses
in
2024
amounted
to
PLN
5.2
billion
and
were
higher
by
PLN
0.6
billion,
i.e.
by
13%
compared
to
2023,
mainly
due
to
inflationary
indexation
of
salaries,
variable
parts
of
personnel
costs
related
to
the
result
and
the
reserve
for
the
voluntary
departure
program.
The
result
of
write-offs
for
expected
credit
losses
of
the
Bank
Pekao
Capital
Group
in
2024
increased
to
PLN
0.8
billion,
i.e.
by
41%