This document is a translation of a document originally issued in Polish. The only binding version is the original Polish version.
ING Bank Śląski S.A. Group
in 2024
Annual Consolidated Financial Statements for the year 2024
SELECTED FINANCIAL DATA FROM CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December
in PLN million
in EUR million*
2024
2023
2024
2023
Net interest income
8,725
8,171
2,027
1,804
Net commission income
2,294
2,164
533
478
Net income on basic activities
11,246
10,648
2,613
2,351
Gross profit
5,545
5,720
1,288
1,263
Net profit
4,369
4,441
1,015
981
Weighted average number of ordinary shares (units)
130,143,180
130,117,872
-
-
Earnings per ordinary share (in PLN / in EUR)
33.57
34.13
7.80
7.54
Net cash flows
1,320
3,991
307
881
as at 31 December
in PLN million
in EUR million**
2024
2023
2024
2023
Liabilities to customers
260,359
245,361
60,931
56,431
Total assets
130
130
30
30
Share capital
17,170
16,736
4,018
3,849
Number of shares (pcs)
130,100,000
130,100,000
-
-
Book value per share (in PLN / in EUR)
131.98
128.64
30.89
29.59
Total capital ratio
14.85%
17.41%
-
-
*) to translate selected data into EUR for items of the Profit and Loss Account and for net cash flows, the exchange rate calculated as the average of the NBP exchange rates prevailing on the last day of each month in the period of 12 months of 2024 (PLN 4.3042) and 12 months of 2023 (PLN 4.5284) was used,
**) the average NBP exchange rate valid for 31 December 2024 (PLN 4.2730) and as at 31 December 2023 (PLN 4.3480) was used to convert selected data into EUR for items in the statement of financial position.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
ANNUAL CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2024 TO 31 DECEMBER 2024
Content
Consolidated income statement 2
9. Net income on the sale of securities and dividend income 25
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
Consolidated income statement
for the year ended 31 December
Note
2024
2023
Interest income
13,112
12,409
calculated using effective interest rate method
12,365
11,368
other interest income
747
1,041
Interest expenses
-4,387
-4,238
Net interest income
8,725
8,171
Commission income
2,887
2,722
Commission expenses
-593
-558
Net commission income
2,294
2,164
Net income on financial instruments measured at fair value through profit or loss and FX result
198
332
Net income on the sale of securities measured at amortised cost
-6
-
Net income on the sale of securities measured at fair value through other comprehensive income and dividend income
-3
1
Net (loss)/income on hedge accounting
10
-5
Net (loss)/income on other basic activities
28
-15
Net income on basic activities
11,246
10,648
General and administrative expenses
-3,958
-3,700
Impairment for expected credit losses
-944
-508
including profit on sale of receivables
80
24
Cost of legal risk of FX mortgage loans
-92
-106
Tax on certain financial institutions
-740
-644
Share of profit/(loss) of associates accounted for using the equity method
33
30
Gross profit
5,545
5,720
Income tax
-1,176
-1,279
Net profit
4,369
4,441
attributable to shareholders of ING Bank Śląski S.A.
4,369
4,441
for the year ended 31 December
Note
2024
2023
Net profit attributable to shareholders of ING Bank Śląski S.A.
4,369
4,441
Weighted average number of ordinary shares
130,143,180
130,117,872
Earnings per ordinary share (in PLN)
33.57
34.13
The diluted earnings per share are the same as the profit per one ordinary share.
The consolidated income statement should be read in conjunction with the notes to the consolidated financial statements being the integral part thereof.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
Consolidated statement of comprehensive income
for the year ended 31 December
Note
2024
2023
Net profit for the period:
4,369
4,441
Total other comprehensive income, including:
396
2,945
Items which can be reclassified to income statement, including:
384
2,861
debt instruments measured at fair value through other comprehensive income – gains on revaluation carried through equity
55
273
debt instruments measured at fair value through other comprehensive income – reclassification to financial result due to sale
9
5
cash flow hedging – gains on revaluation carried through equity
-1,447
425
cash flow hedging – reclassification to profit or loss
1,767
2,158
Items which will not be reclassified to income statement, including:
12
84
equity instruments measured at fair value through other comprehensive income – gains on revaluation carried through equity
15
93
actuarial gains/losses
-3
-9
Net comprehensive income for the reporting period
4,765
7,386
attributable to shareholders of ING Bank Śląski S.A.
4,765
7,386
The consolidated statement of comprehensive income should be read in conjunction with the notes to the consolidated financial statements being the integral part thereof.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
Consolidated statement of financial position
as at
Note
31 Dec 2024
31 Dec 2023
transformed data
01 Jan 2023
transformed data
Assets
Cash and cash equivalents
8,361
7,041
3,050
Loans and other receivables to other banks
21,635
19,620
4,449
Financial assets measured at fair value through profit or loss
1,948
2,274
1,953
Derivative hedge instruments
61
208
139
Investment securities
58,992
56,614
48,433
Transferred assets
179
165
164
Loans and other receivables to customers measured at amortised cost
166,677
156,521
154,975
Investments in associates accounted for using the equity method
185
181
179
Property, plant and equipment
1,011
1,002
949
Intangible assets
457
493
416
Current income tax assets
14
1
572
Deferred tax assets
690
1,097
1,829
Other assets
149
144
158
Total assets
260,359
245,361
217,266
as at
Note
31 Dec 2024
31 Dec 2023
01 Jan 2023
Liabilities
Liabilities to other banks
15,468
13,655
5,640
Financial liabilities measured at fair value through profit or loss
1,400
1,822
2,204
Derivative hedge instruments
83
280
370
Liabilities to customers
219,996
205,290
192,731
Liabilities from debt securities issued
509
404
405
Subordinated liabilities
1,499
1,526
1,644
Provisions
636
542
359
Current income tax liabilities
16
115
20
Deferred tax loss
1
-
-
Other liabilities
3,581
4,991
4,550
Total liabilities
243,189
228,625
207,923
Equity
Share capital
130
130
130
Share premium
956
956
956
Accumulated other comprehensive income
-4,699
-5,095
-8,040
Retained earnings
20,783
20,750
16,297
Own shares for the purposes of the incentive program
-
-5
-
Total equity
17,170
16,736
9,343
attributable to shareholders of ING Bank Śląski S.A.
17,170
16,736
9,343
Total equity and liabilities
260,359
245,361
217,266
The consolidated statement of financial position shall be read in conjunction with the notes to consolidated financial statements being the integral part thereof.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
Consolidated statement of changes in equity
for the year ended 31 December 2024
Note: 35
Share capital
Share premium
Accumulated other comprehensive income
Retained earnings
Own shares for the purposes of the incentive program
Total equity
Opening balance of equity
130
956
-5,095
20,750
-5
16,736
Net profit for the current period
-
-
-
4,369
-
4,369
Other net comprehensive income, including:
-
-
396
-
-
396
financial assets measured at fair value through other comprehensive income - revaluation gains / losses recognized in equity
-
-
70
-
-
70
debt securities measured at fair value through other comprehensive income – reclassification to profit or loss due to sale
-
-
9
-
-
9
cash flow hedge - revaluation gains / losses recognized in equity
-
-
-1,447
-
-
-1,447
cash flow hedge – reclassification to profit or loss
-
-
1,767
-
-
1,767
actuarial gains/losses
-
-
-3
-
-
-3
Other changes in equity, including:
-
-
-
-4,336
5
-4,331
dividend payment
-
-
-
-4,339
-
-4,339
valuation of employee incentive programs
-
-
-
4
-
4
purchase of own shares for the purposes of the employee incentive program
-
-
-
-
-6
-6
settlement of the acquisition of own shares and their transfer to employees
-
-
-
-1
11
10
settlement of the acquisition of an organized part of the enterprise
-
-
-
-
-
-
Closing balance of equity
130
956
-4,699
20,783
0
17,170
The consolidated statement of changes in equity should be read in conjunction with the notes to the consolidated financial statements being the integral part thereof.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
Consolidated statement of changes in equity – cont.
for the year ended 31 December 2023
Note: 35
Share capital
Share premium
Accumulated other comprehensive income
Retained earnings
Own shares for the purposes of the incentive program
Total equity
Opening balance of equity
130
956
-8,040
16,297
-
9,343
Profit for the current period
-
-
-
4,441
-
4,441
Other net comprehensive income, including:
-
-
2,945
-
-
2,945
financial assets measured at fair value through other comprehensive income – gains/losses on revaluation carried through equity
-
-
366
-
-
366
debt securities measured at fair value through other comprehensive income – reclassification to profit or loss due to sale
-
-
5
-
-
5
cash flow hedging – gains/losses on revaluation carried through equity
-
-
425
-
-
425
cash flow hedging – reclassification to profit or loss
-
-
2,158
-
-
2,158
actuarial gains/losses
-
-
-9
-
-
-9
Other changes in equity, including:
-
-
-
12
-5
7
valuation of employee incentive programs
-
-
-
17
-
17
purchase of own shares for the purposes of the employee incentive program
-
-
-
-
-9
-9
settlement of the acquisition of own shares and their transfer to employees
-
-
-
-4
4
-
settlement of the acquisition of an organized part of the enterprise
-
-
-
-1
-
-1
Closing balance of equity
130
956
-5,095
20,750
-5
16,736
The consolidated statement of changes in equity should be read in conjunction with the notes to the consolidated financial statements being the integral part thereof.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
Consolidated cash flow statement
for the year ended 31 December
Note
2024
2023
transformed data
Net profit
4,369
4,441
Adjustments, including:
-4,660
-6,810
Share of net profit (loss) of associates accounted for using the equity method
-33
-30
Depreciation and amortisation
340
327
Interest accrued (from the income statement)
-8,725
-8,171
Interest paid
-3,817
-4,023
Interest received
13,067
12,018
Dividends received
-8
-7
Gains (losses) on investing activities
1
1
Income tax (from the income statement)
1,176
1,279
Income tax paid
-975
-1,141
Change in provisions
91
172
Change in loans and other receivables to other banks
-1,999
-15,146
Change in financial assets measured at fair value through profit or loss
336
-315
Change in hedge derivatives
345
3,030
Change in investment securities
-7,762
-7,127
Change in transferred assets
-12
-2
Change in loans and other receivables to customers measured at amortised cost
-10,229
-1,268
Change in other assets
-58
443
Change in liabilities to other banks
642
564
Change in liabilities measured at fair value through profit or loss
-448
-382
Change in liabilities to customers
14,727
12,529
Change in liabilities from debt securities issued
5
-1
Change in subordinated liabilities
-27
-118
Change in other liabilities
-1,297
558
Net cash flows from operating activities
-291
-2,369
for the year ended 31 December
Note
2024
2023
transformed data
Purchase of property, plant and equipment
-127
-155
Purchase of intangible assets
-134
-162
Purchase of debt securities measured at amortised cost
-13,952
-6,504
Disposal of debt securities measured at amortised cost
19,524
5,991
Dividends received
37
35
Net cash flows from investing activities
5,348
-795
Long-term loans received
3,063
9,680
Repayment of long-term loans
-1,731
-2,113
Interest payment on long-term loans
-701
-270
Proceeds from the issue of debt securities
500
-
Redemption of debt securities
-400
-
Interests from issued debt securities
-25
-31
Repayment of lease liabilities
-98
-102
Purchase of own shares for the purposes of the employee incentive program
-6
-9
Dividends paid
-4,339
-
Net cash flows from financing activities
-3,737
7,155
Net increase/(decrease) in cash and cash equivalents
1,320
3,991
of which effect of exchange rate changes on cash and cash equivalents
302
497
Opening balance of cash and cash equivalents
7,041
3,050
Closing balance of cash and cash equivalents
8,361
7,041
The consolidated cash flow statement should be read in conjunction with the notes to the consolidated financial statements being the integral part thereof.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
Accounting policy and additional notes
Accounting policy
and additional notes
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
Accounting policy and additional notes
I. Bank and the Group details
1. Key Bank data
ING Bank Śląski S.A. (”Parent company”, “Parent entity”, “Bank”) with the registered office in Poland, Katowice, ulica Sokolska 34, zip code 40-086 was entered into the Entrepreneurs Register with the National Court Register maintained by the Commercial Division of the District Court in Katowice under the number KRS 0000005459. The Parent company statistical number is REGON 271514909, and the tax identification number is NIP 634-013-54-75.
2. Scope and duration of operations
ING Bank Śląski S.A. offers a broad range of banking services rendered to individual and institutional clients in line with the scope of services outlined in the Bank’s charter. The Bank runs operations both in the home currency and in foreign currencies. Additionally, through subsidiaries the Group conducts leasing and factoring activity and provides other financial services. The duration of business of the Parent company is indefinite.
3. Share capital
The share capital of ING Bank Śląski S.A. amounts to PLN 130,100,000 and is divided into 130,100,000 ordinary bearer shares with a nominal value of PLN 1.00 each. The Bank’s shares are listed on the Warsaw Stock Exchange (banking sector).
4. Shareholders of ING Bank Śląski S.A.
ING Bank Śląski S.A. is a subsidiary of ING Bank NV, which as at 31 December 2024 held 75% shares in the share capital of ING Bank Śląski S.A. and 75% shares in the total number of votes at the General Meeting of ING Bank Śląski S.A. ING Bank NV belongs to the Group, identified as ING Group for the purposes of these consolidated financial statements.
As at 31 December 2024, the following were shareholders with 5 or more percent of votes at the General Meeting of ING Bank Śląski S.A:
No.
Entity
Number of shares and votes
% of total number of shares
1.
ING Bank N.V.
97,575,000
75.00
2.
Allianz Polska Otwarty Fundusz Emerytalny
9,512,036
7.31
5. Entity authorised to audit the financial statements
The entity authorised to carry out the audit is Forvis Mazars Audyt Sp. z o.o. with its registered office in Warsaw.
6. Approval of financial statements
These annual consolidated financial statements of the ING Bank Śląski S.A. Group for the period from 1 January 2024 to 31 December 2024 were adopted for publication by the Bank’s Management Board on 5 March 2025.
The annual consolidated financial statements of the ING Bank Śląski S.A. Group for the period from 1 January 2023 to 31 December 2023 were approved by the General Meeting of ING Bank Śląski S.A. on 11 April 2024.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
7. ING Bank Śląski S.A. Management Board and Supervisory Board composition
Bank's Management Board
At the end of 2024, similarly to the end of 2023, the composition of the Management Board of ING Bank Śląski S.A. was as follows:
Mr. Brunon Bartkiewicz - President of the Management Board,
Ms. Joanna Erdman - Vice-President of the Management Board,
Mr. Marcin Giżycki - Vice-President of the Management Board,
Ms. Bożena Graczyk - Vice-President of the Management Board,
Ms. Ewa Łuniewska - Vice-President of the Management Board,
Mr. Michał H. Mrożek - Vice-President of the Management Board,
Mr. Sławomir Soszyński - Vice-President of the Management Board,
Ms. Alicja Żyła - Vice-President of the Management Board.
At its meeting on 11 April 2024, the Bank’s Supervisory Board decided to start the recruitment process for the position of the President of the Bank’s Management Board. The above decision was made in connection with the expiry in 2025 of the mandate of Mr. Brunon Bartkiewicz after the end of the current term of office as President of the Management Board of the Bank, i.e. on the date of the General Meeting approving the financial statements for 2024. Mr. Brunon Bartkiewicz has been the Chairman of the Bank’s Management Board since 2016.
On 3 September 2024, the Bank’s Supervisory Board adopted a resolution to appoint Mr. Michał Bolesławski as President of the Bank’s Management Board, subject to the required approval of the Polish Financial Supervision Authority (KNF). The Bank received information about the above-mentioned consent issued by the PFSA on 20 December 2024. The appointment will be effective as of the date of the General Meeting approving the financial statements for 2024. Mr. Michał Bolesławski meets all the requirements set out in the provisions of Article 22aa of the Act of 29 August 1997 - Banking Law. He is not engaged in any activities competitive to the business of ING Bank Śląski S.A., nor is he involved in any competitive company as a partner in a civil law company or partnership or as a member of a corporate body of a competitive legal person. He is also not listed in the Register of Insolvent Debtors maintained pursuant to the Act of 20 August 1997 on the National Court Register.
On 29 November 2024, the Bank received a letter from Mr. Sławomir Soszyński, Vice President of the Management Board of ING Bank Śląski S.A., regarding his resignation from applying for election to the Bank’s Management Board of the next term, which will start on the day of the General Meeting of ING Bank Śląski S.A. approving the financial statements for 2024.
Bank's Supervisory Board
On 8 March 2024, the Bank received a letter from Mr. Aleksander Galos, acting as the Chairman of the Supervisory Board of ING Bank Śląski S.A., regarding his resignation from applying for election to the Supervisory Board of the next term of office. The decision not to apply for election to the next term was dictated by the inability of Mr. Aleksander Galos to meet the independence criteria throughout the next full term of office, due to his long-term sitting on the Supervisory Board of the Bank.
On 12 February 2024, the Bank received a statement from Ms Katarzyna Zajdel-Kurowska on her resignation from the position of a member of the Bank’s Supervisory Board as of 29 February 2024. The reason for his resignation was his appointment to a position in an international financial institution.
In connection with the expiry of the term of office of the Supervisory Board, on 11 April 2024, the General Meeting of ING Bank Śląski S.A. appointed a new Supervisory Board of the Bank composed of:
Ms. Monika Marcinkowska – Chairman of the Supervisory Board, Independent Member,
Ms. Małgorzata Kołakowska – 1 st Vice-Chairman of the Supervisory Board,
Mr. Michał Szczurek – Vice-Chairman of the Supervisory Board,
Mr . Stephen Creese – Member of the Supervisory Board,
Ms. Dorota Dobija – Independent Member of the Supervisory Board,
Ms. Aneta Hryckiewicz-Gontarczyk - Independent Member of the Supervisory Board,
Mr. Arkadiusz Krasowski - Independent Member of the Supervisory Board,
Mr. Hans De Munck – Member of the Supervisory Board,
Mr. Serge Offers – Member of the Supervisory Board.
Mr. Stephen Creese, Ms Dorota Dobija, Ms Małgorzata Kołakowska, Ms Monika Marcinkowska, Mr. Hans De Munck and Mr. Michał Szczurek were on the Board of the previous term. The appointed members of the Supervisory Board meet all the requirements set out in the provisions of Article 22aa of the Act of 29 August 1997 - Banking Law. They are not engaged in any activities competitive to the business of ING Bank Śląski S.A., nor are they involved in any competitive company as a partner in a civil law company or partnership or in a capital company, nor do they participate in a competitive legal person as a member of its governing bodies. They are also not listed in the Register of Insolvent Debtors maintained pursuant to the Act of 20 August 1997 on the National Court Register.
At the end of 2024, the composition of the Bank’s Supervisory Board did not change.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
8. ING Bank Śląski S.A. Group
ING Bank Śląski S.A. is the parent entity of the ING Bank Śląski S.A. Group ("Capital Group", "Group"). The composition of the Group is as follows:
% of the Group's share in the share capital and votes
on the General Meeting
No.
name
type of activity
registered office
as at 31 Dec 2024
as at 31 Dec 2023
nature of
the capital relationship
recognition in the
Group consolidated financial statements
1.
ING Investment Holding (Polska) S.A., which holds shares in the following subsidiaries and associates:
financial holding
Katowice
100
100
subsidiary
full consolidation
1.1. ING Commercial Finance S.A.
factoring services
Warszawa
100
100
subsidiary
full consolidation
1.2. ING Lease (Polska) Sp. z o.o.*
leasing services
Warszawa
100
100
subsidiary
full consolidation
1.3. Paymento Financial S.A.
financial services and IT solutions for the financial sector
Tychy
100
n/a
subsidiary
full consolidation
1.4. Goldman Sachs TFI S.A.
investment funds
Warszawa
45
45
associate
consolidation by equity method
2.
ING Bank Hipoteczny S.A.
banking services
Katowice
100
100
subsidiary
full consolidation
3.
ING Usługi dla Biznesu S.A.
accounting, HR and payroll services related to access to information about the account
Katowice
100
100
subsidiary
full consolidation
4.
Nowe Usługi S.A.
education and promotion for the financial market and TURBO Certificates
Katowice
100
100
subsidiary
full consolidation
5.
SAIO Spółka Akcyjna
software sales, robotization of processes
Katowice
100
100**
subsidiary
full consolidation
6.
Dom Data IDS Sp. z o.o.
IT services
Poznań
40
n/a
associate
consolidation with the equity method
*) In the ING Lease (Poland) Sp. z o.o. Group there are 5 special purpose vehicles in which ING Lease (Poland) Sp. z o.o. holds 100% of the shares. These are: ING Aktywa Spółka z o.o., ING Finance Spółka z o.o., Rel Fokstrot Spółka z o.o., Rel Jota Spółka z o.o. and Rel Project 1 Spółka z o.o.
**) At the end of 2023, ING Investment Holding (Polska) S.A. was the direct owner of SAIO S.A.
Changes in the composition of the Capital Group
Acquisition by the Bank of an associate of Dom Data IDS Sp. z o.o.
On 19 January 2024, ING Bank Śląski S.A. obtained the consent of the President of the Office of Competition and Consumer Protection (UOKiK) for the concentration related to the acquisition of 40% of shares in Dom Data Services Sp. z o.o. in the 4th quarter of 2023. (The approval of the UOKiK’s president was a condition for the finalisation of the acquisition). In April 2024, the company’s name was changed to Dom Data IDS Sp. z o.o.
Acquisition by the Bank of shares in subsidiary SAIO S.A.
On May 27, 2024, i.e. on the date of entry in the shareholder register, ownership of 100% of the shares of SAIO S.A. from ING Investment Holding (Poland) S.A. was transferred to ING Bank Śląski S.A. (in accordance with the provisions of the sale agreement concluded on May 20, 2024 between ING Investment Holding (Poland) S.A. and the Bank).
Subject of activity of the Capital Group companies
ING Investment Holding (Polska) S.A.
ING Investment Holding (Poland) S.A. is a holding company. Through it, the Bank holds shares in three subsidiaries: ING Lease (Polska) Sp. z o.o. (100%), ING Commercial Finance S.A. (100%), Paymento Financial S.A. (100%) and in one associate company - Goldman Sachs TFI S.A. (45%)
ING Commercial Finance S.A.
The company’s core business is factoring, i.e. receivables financing and servicing services. The company offers factoring with and without recourse. Comprehensive debt management includes monitoring of recipients, preparation of current reports, mediation of debt insurance and debt collection.
ING Lease (Polska) Sp. z o.o.
The company offers all basic types of leasing which allow financing both movables (in the form of cars, vans, heavy transport vehicles, machinery and equipment, construction, medical, equipment and IT equipment) and real estate. The company services are targeted at all market segments: large, medium and small enterprises as well as micro clients (entrepreneurs).
Paymento Financial S.A.
The Company is a regulated entity authorised by the Polish Financial Supervision Authority to provide payment services as a National Payment Institution. The company provides professional financial services and IT solutions for the financial sector. Its services are addressed to financial market participants and e-commerce.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
ING Bank Hipoteczny S.A.
The purpose of the company is to acquire and then increase the share of long-term financing in the Group’s balance sheet by issuing long-term mortgage bonds based on mortgage-backed credit claims acquired from ING Bank Śląski or other banks.
ING Usługi dla Biznesu S.A.
The company conducts operations in the following business areas: running an online database of companies and an online B2B commerce and business platform (ALEO), running a platform for invoicing and payment management, accounting, HR and payroll services - accounting, HR and payroll services for entrepreneurs (ING Accounting) and runs and continues to develop the Firmove.pl website launched at the end of 2022, which supports entrepreneurs at every stage of business development and raises awareness in the ESG area.
Nowe Usługi S.A.
The company conducts educational and marketing activities. Provides a portal on investing and the stock market, where investment-related materials are published and a knowledge base is available (edukacjagieldowa.pl). The company is also involved in the popularisation of ING Turbo certificates on the Polish market. The instruments are issued by ING Bank N.V. Amsterdam and quoted at the Warsaw Stock Exchange The main activities of the company are the organisation of marketing campaigns, ING Turbo helpline service or technical support while running the ingturbo.pl website.
SAIO S.A.
The business of the company is the sublicensing of SAIO robotization software and the implementation of robotization of business processes at clients as part of its own activities and the partner network being built. The company also provides robotisation services to ING Bank Śląski and selected ING Group entities around the world.
Goldman Sachs TFI S.A.
The company conducts operations in the area of creation and management of investment funds, including acting as intermediary in the sale and redemption of participation units, representing them towards third parties and managing portfolios. The company is part of Goldman Sachs Asset Management - an American asset management company.
Dom Data IDS Sp. z o.o.
The company’s core business is the development and maintenance of processes on the Ferryt platform and processes on the IWA platform for individual, business and strategic customers and for back office employees handling business processes at the Bank.
II. Statement of compliance with International Financial Reporting Standards
These annual consolidated financial statements of the ING Bank Śląski S.A. Group for the period from 1 January 2024 to 31 December 2024 have been prepared in accordance with the International Financial Reporting Standards ("IFRS") approved by the European Union. The consolidated financial statements take into account the requirements of EU approved standards and interpretations.
1. Changes in accounting standards
In these annual consolidated financial statements, the Group included the following changes to the standards and new interpretations approved by the European Union and effective for annual periods beginning on or after 1 January 2024:
Change
Influence on the Group’s consolidated financial statements
IAS 1
Presentation of financial statements:
• classification of financial liabilities as current or long-term
• deferment of the date of application and
• long-term liabilities with covenants
The classification of financial liabilities as non-current depends on the existence of rights to extend the liability for a period longer than 12 months and the fulfilment of conditions (covenants) for the implementation of such a deferral at the balance sheet date. Disclosure of these covenants in the notes to the financial statements is also required.
The implementation of the change did not have an impact on the Group’s consolidated financial statements.
IFRS 16
Leases: Leasing liabilities in transactions
sale and leaseback.
The implementation of the changes did not have an impact on the Group’s consolidated financial statements.
IAS 7
Statement of cash flows and IFRS 7 Financial Instruments: Disclosures - Supplier financing agreements
The implementation of the changes did not have an impact on the Group’s consolidated financial statements.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
Published standards and interpretations, which were issued by 31 December 2024 and approved by the European Union, but were not applied by the Group earlier:
Change
(EU effective date provided for in the parentheses)
Influence on the Group’s consolidated financial statements
IAS 21
Effects of changes in exchange rates: Exchange rate forfeiture
(financial year beginning on 1 January 2025)
The Group’s analyses show that the implementation of the changes will not have a significant impact on the Group’s consolidated financial statements
Published standards and interpretations that were issued by 31 December 2024, but were not approved by the European Union as at 31 December 2024 and were not previously adopted by the Group:
Change
(expected IASB effective date provided for in the parentheses)
Influence on the Group’s consolidated financial statements
IFRS 18
Presentation and disclosures in financial statements
(financial year beginning on 1 January 2027)
The new standard published in April 2024, which will replace IAS 1. The implementation of the new guidelines aims to improve the comparability and transparency of the financial statements of the entities.
The Group’s analyses show that the application of the standard will have an impact on the presentation and scope of disclosures in the Group’s consolidated financial statements.
IFRS 19
Subsidiaries without public liability: disclosures
(financial year beginning on 1 January 2027)
The new standard published in May 2024 will be voluntarily applied by entities that do not have the status of an entity with public responsibility and that are dependent on entities preparing publicly available consolidated financial statements.
According to the Group’s analyses, application of the standard will not have an impact on the Group’s consolidated financial statements.
IFRS 9 Financial instruments and IFRS 7 Financial instruments: disclosures - Classification and measurement of financial instruments
(financial year beginning on 1 January 2026)
The introduced changes are the result of conclusions from the post-implementation review of the guidelines of both standards. The amendments are of a more precise nature with respect to the classification of financial assets (i.e.: resulting from agreements containing ESG or similar clauses) and the derecognition of financial instruments from the balance sheet that are settled via electronic payment systems.
The implementation of these changes will not exert a material impact on the Group’s consolidated financial statements.
Changes resulting from the annual update of the standards (volume 11)
(financial year beginning on 1 January 2026)
The amendments to IFRS F1, IFRS 7, IFRS 9, IFRS 10 and IAS 7 are editorial in nature. According to the Group’s analyses, the application of the amendments will not have an impact on the Group’s consolidated financial statements.
IFRS 9 Financial instruments and IFRS 7 Financial instruments: disclosures
Renewable electricity contracts
(financial year beginning on 1 January 2026)
The amendments are intended to better reflect contracts relating to electricity from renewable sources with physical or virtual supply in the financial statements. The changes focus on requirements for purchasing energy for own use, hedge accounting and disclosures.
The Group’s analyses show that applying the changes, from the perspective of the current economic situation, will not have an impact on the Group’s consolidated financial statements.
As at the date of adoption of this report for publication, taking into account the ongoing process of introducing IFRS standards in the EU and the Group's operations, with respect to the accounting principles applied by the Group there are no differences between the IFRS standards that have entered into force and the IFRS standards endorsed by the EU.
2. Going-concern
Consolidated financial statements of the ING Bank Śląski S.A. Capital Group for the period from 1 January 2024 to 31 December 2024 has been prepared on the assumption that the Group will continue as a going concern for a period of at least 12 months from the date of acceptance for publication i.e. from 5 March 2025. As at the date of signing the consolidated financial statements, the Management Board of the Bank does not find any facts or circumstances that would indicate any threat to the Group's ability to continue as a going concern within 12 months from the date of publication as a result of intentional or forced discontinuation or significant limitation of the Group's current operations.
3. Financial statements scope and currency
These annual consolidated financial statements of the ING Bank Śląski S.A. Group for the period from 1 January 2024 to 31 December 2024 contain data of the Bank and its subsidiaries and associates (together referred to as the "Group").
These annual consolidated financial statements have been prepared in Polish zlotys ("PLN"). All values, unless otherwise indicated, are rounded to the nearest million zlotys. There may therefore be mathematical inconsistencies in the totals or between the notes.
4. Reporting period and comparable data
Annual consolidated financial statements of the ING Bank Śląski S.A. Capital Group covers the period from 1 January 2024 to 31 December 2024 and includes comparative data:
for the consolidated statement of financial position as at 31 December 2023 and at 1 January 2023,
for items from the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the period from 1 January 2023 to 31 December 2023.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
5. Consolidation rules
The consolidated financial statements comprise the financial statements of the Bank as well as the financial statements of its subsidiaries. The documents were developed for the term of 12 months ended 31 December 2024.
After being adjusted for IFRS compliance, the financial statements of subsidiaries are developed for the same reporting period as the financial statements of the Parent entity, with the use of uniform accounting principles for similar transactions and business events. Adjustments are made to eliminate any discrepancies in the accounting principles applied.
All significant balances and transactions between Group members, including income and costs, unrealised profits as well as gains and losses under intragroup transactions were eliminated in full. Unrealised losses are eliminated, unless proving impairment occurrence.
III. Significant accounting principles
IFRS provide for the selected accounting policies that may be applied. The key areas where IFRS allow the entity to select the policy and which refer to the Group Accounting Policy include:
selection of accounting policy to continue to apply the hedge accounting requirements of IAS 39,
selection of accounting policy for valuation of buildings and land at revalued amount, being its fair value at the balance sheet date.
The Group Accounting Policy complies with IFRS. Group decisions as to the admissible policy selection are presented below.
1. Basis for preparation of consolidated financial statements
The financial statements are prepared in Polish zlotys rounded to one million (unless otherwise stated). The concept of fair value has been applied in the statements for own real property as well as financial assets and liabilities measured at fair value, including derivative instruments, and financial assets classified as measured at fair value through other comprehensive income. Other items of financial assets (including loans and advances) are presented at amortised cost less impairment or at purchase price less impairment. Recognized financial assets that were designated as hedged items in the fair value hedge strategy, and which, in the absence of such designation, would be measured at amortized cost, are measured at amortized cost, taking into account the hedged risk valuation
adjustment. Non-current assets held for sale are recognised at the lower of their carrying amount and the fair value less sales costs.
2. Professional judgment
In the process of accounting principles application to the matters discussed hereinbelow, besides the accounting estimates, professional judgment of the management staff was of key significance.
2.1. Deferred tax assets
The Group recognizes deferred tax assets based on the assumption that it is probable that taxable income sufficient to fully realize the deferred tax asset would be achieved.
2.2. Classification of leases
When acting as a lessor, the Group classifies leases as operating or financial. The classification is based on the assessment to what extent the risks and rewards of ownership of the subject of the lease and in relation to the lease of the assets resulting from the lease are attributable to the lessor and to which the lessee. The substance of each transaction is used to make the said assessment.
2.3. Classification of financial assets
The Group classifies financial assets on the basis of both the business model for holding the financial assets and assessment whether under the contractual terms require solely payments of principal and interest on the principal amount outstanding. The detailed information about assumptions in this regard is presented in item 13.2 . Classification of financial assets .
3. Accounting estimates
Estimates and assumptions applied to the presentation of the value of assets, liabilities, income and costs are made on the basis of historical data available and other factors considered to be relevant in given circumstances. The assumptions applied for the future and available data sources are the base for making estimates regarding the carrying amount of assets and liabilities, which cannot be determined explicitly on the basis of other sources. The estimates reflect the reasons for/ sources of uncertainties as at the balance sheet date. The actual results may differ from estimates.
The estimates and assumptions are reviewed on an on-going basis. Adjustments to estimates are recognised in the period when the estimate was changed provided that the adjustment applies to this period alone or in the period
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
when the estimate was changed and in the following periods, should the adjustment impact both the current and future periods.
Below are the most significant booking estimates made by the Group.
3.1. Estimation of expected credit losses for financial assets
The Group applies IFRS 9 requirements regarding impairment in order to recognize and measure the impairment for expected credit losses on debt financial assets that are measured at amortised cost or at fair value through other comprehensive income.
The expected loss in the portfolio of individually insignificant exposures is calculated collectively as a probability- weighted average from three macroeconomic scenarios with different probabilities of occurrence. The final level of the provisions results from the sum of the expected credit losses estimated each year in the future till the maturity date for Stage 2 and Stage 3 assets and in 12-month horizon for Stage 1 assets, including discount.
To determine impairment (or reverse it) in the ISFA (Individually Significant Financial Assets) portfolio, the present value of expected future cash flows has to be calculated. The amount of the future cash flows is determined among others taking account information about the current and forecasted economic standing of the borrower, the forecast value of the recovery amount from collateral of the credit exposure and the macroeconomic factors.
The methodology and assumptions used to estimate both the amount and the time of future cash flows are regularly reviewed and adjusted as needed.
Macroeconomic factors
Credit risk models for the purposes of IFRS 9 were built on the basis of historical relations between changes in economic parameters (i.e. GDP or interest rates) and their subsequent effect on changes in the level of credit risk (PD/LGD). By the end of 2019, changes in macroeconomic forecasts were relatively slow, moving smoothly from one phase of the cycle to another, without drastic and shocking events changing the macroeconomic situation. After sharp increases in interest rates and inflation, caused, among others, by the war in Ukraine, the situation is now beginning to stabilise. However, the introduced additional support programmes for mortgage loans mitigate the effect of changing macroeconomic forecasts in relation to what macroeconomic indicators alone would show.
As at 31 December 2024, the Group revised its macroeconomic indicators forecasts. The macroeconomic assumptions used to determine the expected credit losses are based on forecasts prepared by the Bank’s Macroeconomic Analysis Office, supplemented by management adjustments where, in the opinion of the management, recent economic events have not been fully captured. The effect of changes in macroeconomic
assumptions reduced the level of provisions for expected credit losses at the end of 2024 by PLN 82 million compared to the end of 2023.
Management adjustments and recalibration of models
In times of heightened volatility and uncertainty, where portfolio quality and the economic environment are changing rapidly, models are undermined in their ability to accurately predict losses. To mitigate model risk, additional adjustments can be made to address data quality issues, methodology issues or expert opinions. They also include adjustments resulting from overestimation or underestimation of allowances for expected credit losses by IFRS 9 models.
Due to the growing impact of climate risk on credit risk, at the end of 2024 the Group decided to create a management adjustment that measures potential financial losses resulting from the indirect or direct impact of clients’ compliance with low-emission requirements or with an economy based on sustainable development. The correction of PLN 30 million covered the portfolio of corporate clients, including strategic clients.
At the end of 2023, the Group introduced a management adjustment increasing the value of provisions for expected credit losses for models with very low default - uLDP MSSF9 (uLDP - ultra low default portfolio) - in the amount of PLN 17 million. In the 4 th quarter of 2024, the Group implemented the uLDP model, which includes previously used reserve models for strategic customers within the corporate portfolio, as a result of which the adjustment was terminated. Simultaneously with the implementation, the second stage of work on the uLDP model began, which is to cover a wider pool of models and reconstruction of capital models. The Group decided to apply a management adjustment to maintain the adequacy of provisions for the corporate portfolio until the implementation of the second stage. As at the end of 2024, the Group created an allowance for expected credit losses in the amount of PLN 9 million.
The trend of new insolvency in the real estate sector and underestimation of losses led the Group to create a management adjustment for strategic clients within the corporate portfolio, which would address the potential risk of underestimating future losses. As a result, as at 31 December 2024, the Group created a correction in the amount of PLN 4 million.
Due to incomplete implementation of new models or a time-based change of models for corporate clients (including the MSSF9 model for the SME portfolio, the in-default module for the portfolio of small and medium-sized enterprises), the Group estimated the impact of the use of new models on the amount of allowances for clients not yet covered by these models. As a result, at the end of 2024, the Group introduced a management adjustment
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
reducing the value of provisions for expected credit losses in the amount of PLN 37 million (at the end of 2023, the total impact of management adjustments for this reason resulted in a reduction of provisions by PLN 1 million).
At the end of 2023, the Group applied a management adjustment to address the risk associated with rising interest rates and inflation. Its amount was PLN 178 million (retail clients PLN 52 million, corporate clients PLN 126 million). Due to the stabilisation of interest rates and inflation, it was decided to reverse this adjustment at the end of 2024.
The aforementioned management adjustments did not affect the classification of exposures to Stages presented in these consolidated financial statements.
At the end of 2023, the Group applied a management adjustment in the amount of PLN 19 million, in connection with the statutory assistance programme enabling customers with PLN mortgage loans to suspend 4 instalments in 2022 and 2023, respectively. In the first half of 2024, the Group resolved this adjustment. At the same time, in connection with the introduction of a new aid programme in May 2024, the Group decided to cover exposures benefiting from support, the collective criterion of a significant increase in risk. As a result, exposures with a gross carrying amount of PLN 5,436 million were transferred to Stage 2.
The division of adjustments into stages and into corporate and retail segments is presented in chapter II. 2.10.2 . Quality of the loan portfolio , in section Risk and capital management .
In 4 th quarter 2024, the Group, in accordance with the provisions of Recommendation R, periodically recalibrated credit risk models. The recalibration involved the inclusion of newer data periods in the calculation of model risk parameters. The value of correlation of macroeconomic parameters with risk parameters has changed. Changes made in parameterisation of models resulted in an increase of provisions for expected credit losses by PLN 19 million for the retail portfolio and a decrease of provisions by PLN 53 million for the corporate portfolio.
Description of the indications for identification of impairment of financial assets, methodology of calculation of impairment losses and applied accounting principles are described in point 13.11. Expected credit losses .
Thresholds used to identify a significant increase in credit risk
Determining the threshold of a significant increase in credit risk requires judgment and is a significant source of uncertainty in the estimates of expected losses.
Thresholds of PD parameters increase in the lifetime of exposures in relation to PD at origination which indicate significant increase in credit risk are established for models based on assumed methodology.
At the end of 2024 and 2023 these triggers were as follows:
2024
Strategic clients portfolio
Corporate retail portfolio
(SME model)
Mortgages (MTG model)
SE&Micro portfolio (SBF model)
Consumer Lending Portfolio
(CLN model)
Investment portfolio
Relative threshold
0.61
1
0.98
0.5
0.7
0.61
Absolute threshold
100bp
250bp
75bp
300bp
350bp
100bp
2023
Strategic clients portfolio
Corporate retail portfolio
(SME model)
Mortgages and SE&Micro portfolio
(MTG and SBF model)
Consumer Lending Portfolio
(CLN model)
Investment portfolio
Relative threshold
1
1
0.5
0.7
1
Absolute threshold
100bp
250bp
75bp
350bp
100bp
Absolute threshold – indicates maximum difference between PD at the reporting date and PD at initial recognition which triggers classification to Stage 2
Relative threshold – indicates the maximum measure of the relationship between the PD as at the reporting date and the PD from the initial recognition of the exposure, taking into account the scaling factor determined at the level of a particular exposure, based on the PD from the initial recognition, beyond which the asset is classified to Stage 2.
Exceeding at least one of the above thresholds results in classification of a financial asset to Stage 2.
In addition, regardless of the relative and absolute thresholds described above, the Group has an additional condition for identifying a significant increase in credit risk - a three-fold increase in the PD parameter since the exposure was granted.
Different levels of triggers depending of the portfolio result from different characteristics of these portfolio and depend, among others, on the level of average default rates for specific portfolio.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
Sensitivity analysis of expected credit losses on assumed PD threshold
In order to show the sensitivity of expected losses to the level of the adopted PD threshold, the Group estimated the allowances for expected losses in Stages 1 and 2 with the following assumptions:
all these financial assets would be below the PD threshold and assigned 12-month expected losses and
all of these assets would exceed this PD threshold and have lifetime expected losses assigned to them.
These estimates show, as at 31 December 2024, hypothetical lower expected losses for Stage 1 and Stage 2 assets by approximately PLN 260 million (including PLN 170 million for corporate portfolio and PLN 90 million for retail portfolio) or higher by approximately PLN 670 million (respectively PLN 390 million for corporate portfolio and PLN 280 million for retail portfolio).
The estimates made as at 31 December 2023 show, respectively, hypothetical lower losses expected for Stage 1 and Stage 2 assets by approximately PLN 280 million (including PLN 190 million for corporate portfolio and PLN 90 million for retail portfolio) or by approximately PLN 600 million (respectively PLN 360 million for corporate portfolio and PLN 240 million for retail portfolio).
Macroeconomic forecasts and probability weights applied to each of macroeconomic scenarios
Below are presented the macroeconomic forecasts of of key factors adopted as at 31 December 2024 and 31 December 2023 and the deviations of expected losses in the upside, baseline and negative scenarios from the reported expected losses, weighted by the probability of the scenarios - broken down into corporate, retail and for the entire loan portfolio. The analysis takes into account changes in the time horizon of expected losses (migrations between Stages) resulting from the macroeconomic scenarios used in the analysis. The presented deviations from reported losses do not take into account the impact of management adjustments described earlier. The macroeconomic assumptions used to determine these deviations for the base scenario are based on forecasts prepared by the Bank’s Macroeconomic Research Bureau, with forward curves for interest rates based on year-end positions.
The tables present the results of the analysis of the change of exposure in Stages and the change of allowance coverage for the entire loan portfolio and separately for the corporate and retail portfolios.
For both the entire loan portfolio and its corporate and retail part, the selective application of a negative scenario with a weight of 100% increases the level of provisions in all Stages (1/2/3). The average increase of the allowance for the entire portfolio, on a consolidated basis, is about 12% compared to the average scenario used in the calculation of allowances at the end of 2024 (for the corporate portfolio, an increase of the impairment loss by 15% and for the retail portfolio by 6%). The increase of provisions in this scenario is mainly caused by the migration of exposures to Stage 2 caused mainly by negative GDP growth in the short term and moderate increase of the unemployment rate.
If a 100% weight were applied, for the positive scenario there would be a decrease of allowance by approx. 7% on the entire portfolio (for corporate portfolio by 8% and for retail portfolio by 5%). A positive effect of GDP growth and stable values of other variables are observed here (unemployment rate: about 2%, interest rate: 7.5%).
The application of a weight of 100% for the base scenario remains almost neutral for the amount of provisions (decrease by 1% on the entire portfolio).
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
2024
t otal loan portfolio
Expected losses weighted by probability – deviation from losses reported in %
Reported expected losses
(collective assessment in Stage 1, 2 and 3)
2025
2026
2027
Total
by Stages
Change in the share of Stage 2 in relation to the entire portfolio in %
Weight assigned to the scenario to determine the reported expected losses
Total
by Stages
GDP
4.7%
6.3%
4.6%
Unemployment
2.4%
2.2%
2.0%
Real estate price index
9.6%
6.0%
6.3%
Upside scenario
3 months’ interest rate
7.6%
7.7%
7.7%
-7%
Stage 1 Stage 2 Stage 3
-9%
-18%
-3%
-6%
20%
GDP
3.5%
3.8%
2.8%
Unemployment
3.0%
3.0%
2.9%
Real estate price index
6.5%
4.7%
3.9%
Baseline scenario
3 months’ interest rate
4.4%
4.2%
4.4%
-1%
Stage 1 Stage 2 Stage 3
-1%
-3%
0%
-1%
60%
GDP
1.7%
-0.3%
0.2%
Unemployment
4.3%
5.9%
7.1%
Real estate price index
2.0%
2.7%
2.6%
Negative scenario
3 months’ interest rate
3.6%
2.7%
2.3%
12%
Stage 1 Stage 2 Stage 3
2%
44%
3%
32%
20%
2,553
Stage 1 Stage 2 Stage 3
279
601
1,673
corporate portfolio
Expected losses weighted by probability – deviation from losses reported in %
Reported expected losses
(collective assessment in Stage 1, 2 and 3)
2025
2026
2027
Total
by Stages
Change in the share of Stage 2 in relation to the entire portfolio in %
Weight assigned to the scenario to determine the reported expected losses
Total
by Stages
GDP
4.7%
6.3%
4.6%
Unemployment
2.4%
2.2%
2.0%
Real estate price index
9.6%
6.0%
6.3%
Upside scenario
3 months’ interest rate
7.6%
7.7%
7.7%
-8%
Stage 1 Stage 2 Stage 3
-12%
-22%
-2%
-9%
20%
GDP
3.5%
3.8%
2.8%
Unemployment
3.0%
3.0%
2.9%
Real estate price index
6.5%
4.7%
3.9%
Baseline scenario
3 months’ interest rate
4.4%
4.2%
4.4%
-1%
Stage 1 Stage 2 Stage 3
-2%
-4%
0%
-2%
60%
GDP
1.7%
-0.3%
0.2%
Unemployment
4.3%
5.9%
7.1%
Real estate price index
2.0%
2.7%
2.6%
Negative scenario
3 months’ interest rate
3.6%
2.7%
2.3%
15%
Stage 1 Stage 2 Stage 3
0%
57%
2%
56%
20%
1,719
Stage 1 Stage 2 Stage 3
170
426
1,123
2023
t otal loan portfolio
Expected losses weighted by probability – deviation from losses reported in %
Reported expected losses
(collective assessment in Stage 1, 2 and 3)
2024
2025
2026
Total
by Stages
Change in the share of Stage 2 in relation to the entire portfolio in %
Weight assigned to the scenario to determine the reported expected losses
Total
by Stages
GDP
5.4%
4.6%
4.6%
Unemployment
2.2%
2.2%
2.0%
Real estate price index
5.6%
5.4%
7.8%
Upside scenario
3 months’ interest rate
7.0%
7.9%
8.1%
-8%
Stage 1 Stage 2 Stage 3
-15%
-21%
-2%
-7%
20%
GDP
2.5%
3.5%
3.0%
Unemployment
3.0%
3.0%
3.0%
Real estate price index
3.7%
4.1%
6.0%
Baseline scenario
3 months’ interest rate
4.4%
4.4%
4.6%
-2%
Stage 1 Stage 2 Stage 3
-4%
-4%
0%
-2%
60%
GDP
-1.7%
1.5%
0.9%
Unemployment
4.7%
5.9%
7.1%
Real estate price index
-1.9%
2.2%
3.9%
Negative scenario
3 months’ interest rate
2.8%
2.3%
2.2%
16%
Stage 1 Stage 2 Stage 3
9%
52%
3%
57%
20%
2,427
Stage 1 Stage 2 Stage 3
371
638
1,418
corporate portfolio
Expected losses weighted by probability – deviation from losses reported in %
Reported expected losses
(collective assessment in Stage 1, 2 and 3)
2024
2025
2026
Total
by Stages
Change in the share of Stage 2 in relation to the entire portfolio in %
Weight assigned to the scenario to determine the reported expected losses
Total
by Stages
GDP
5.4%
4.6%
4.6%
Unemployment
2.2%
2.2%
2.0%
Real estate price index
5.6%
5.4%
7.8%
Upside scenario
3 months’ interest rate
7.0%
7.9%
8.1%
-10%
Stage 1 Stage 2 Stage 3
-20%
-26%
-2%
-7%
20%
GDP
2.5%
3.5%
3.0%
Unemployment
3.0%
3.0%
3.0%
Real estate price index
3.7%
4.1%
6.0%
Baseline scenario
3 months’ interest rate
4.4%
4.4%
4.6%
-2%
Stage 1 Stage 2 Stage 3
-7%
-6%
0%
-2%
60%
GDP
-1.7%
1.5%
0.9%
Unemployment
4.7%
5.9%
7.1%
Real estate price index
-1.9%
2.2%
3.9%
Negative scenario
3 months’ interest rate
2.8%
2.3%
2.2%
21%
Stage 1 Stage 2 Stage 3
10%
67%
2%
67%
20%
1,493
Stage 1 Stage 2 Stage 3
238
435
820
19
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
2024
retail portfolio
Expected losses weighted by probability – deviation from losses reported in %
Reported expected losses
(collective assessment in Stage 1, 2 and 3)
2025
2026
2027
Total
by Stages
Change in the share of Stage 2 in relation to the entire portfolio in %
Weight assigned to the scenario to determine the reported expected losses
Total
by Stages
GDP
4.7%
6.3%
4.6%
Unemployment
2.4%
2.2%
2.0%
Real estate price index
9.6%
6.0%
6.3%
Upside scenario
3 months’ interest rate
7.6%
7.7%
7.7%
-5%
Stage 1 Stage 2 Stage 3
-5%
-11%
-3%
-1%
20%
GDP
3.5%
3.8%
2.8%
Unemployment
3.0%
3.0%
2.9%
Real estate price index
6.5%
4.7%
3.9%
Baseline scenario
3 months’ interest rate
4.4%
4.2%
4.4%
0%
Stage 1 Stage 2 Stage 3
0%
-1%
0%
0%
60%
GDP
1.7%
-0.3%
0.2%
Unemployment
4.3%
5.9%
7.1%
Real estate price index
2.0%
2.7%
2.6%
Negative scenario
3 months’ interest rate
3.6%
2.7%
2.3%
6%
Stage 1 Stage 2 Stage 3
5%
15%
3%
2%
20%
834
Stage 1 Stage 2 Stage 3
109
176
549
2023
retail portfolio
Expected losses weighted by probability – deviation from losses reported in %
Reported expected losses
(collective assessment in Stage 1, 2 and 3)
2024
2025
2026
Total
by Stages
Change in the share of Stage 2 in relation to the entire portfolio in %
Weight assigned to the scenario to determine the reported expected losses
Total
by Stages
GDP
5.4%
4.6%
4.6%
Unemployment
2.2%
2.2%
2.0%
Real estate price index
5.6%
5.4%
7.8%
Upside scenario
3 months’ interest rate
7.0%
7.9%
8.1%
-5%
Stage 1 Stage 2 Stage 3
-8%
-11%
-3%
-9%
20%
GDP
2.5%
3.5%
3.0%
Unemployment
3.0%
3.0%
3.0%
Real estate price index
3.7%
4.1%
6.0%
Baseline scenario
3 months’ interest rate
4.4%
4.4%
4.6%
0%
Stage 1 Stage 2 Stage 3
0%
-2%
0%
-2%
60%
GDP
-1.7%
1.5%
0.9%
Unemployment
4.7%
5.9%
7.1%
Real estate price index
-1.9%
2.2%
3.9%
Negative scenario
3 months’ interest rate
2.8%
2.3%
2.2%
7%
Stage 1 Stage 2 Stage 3
8%
17%
3%
13%
20%
934
Stage 1 Stage 2 Stage 3
133
203
598
20
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
3.2. Measurement of financial instruments not quoted in active markets
The fair value of financial instruments not quoted in active markets is measured using valuation models. For non- option derivatives, the models based on discounted cash flows apply. Options are measured using appropriate option valuation models. Valuation models used by the Group are verified prior to their usage.
As a rule, in models the Bank uses observable data from active markets. However, in certain circumstances, to choose the right valuation parameter, the Bank makes an estimate by comparing a given instrument to another one present in another market but having similar or identical features. Application of the prudence principle requiring to choose the lower value of assets and the higher value of liabilities as being more probable – especially in the conditions of lower liquidity or/and volatility in financial markets – is fundamental in the valuation made under this approach. Change of assumptions concerning these factors may impact valuation of some financial instruments.
Sensitivity analysis of the valuation of financial instruments not listed on active markets is presented in additional note 37 . Fair value .
3.3. Legal risk related to the portfolio of mortgage loans indexed to the Swiss franc exchange rate
The Group holds receivables due to CHF indexed retail mortgage loans. The table below presents the individual elements that make up the gross and net balance sheet value of these receivables.
as at 31 December
2024
2023
number of contracts (in pieces)
2,416
2,753
capital balance
484
584
the amount of the adjustment to the gross carrying amount
-387
-510
other elements of the gross carrying amount (interest, ESP)
5
3
gross carrying amount
102
77
impairment for expected credit losses, including:
-6
-8
Stage 2
-2
-3
Stage 3
-4
-5
Net carrying amount of CHF-indexed mortgage loans
96
69
Provision for legal risk of CHF-indexed mortgage loans
253
128
In addition, the table below presents the change in 2023 and 2022:
in gross carrying amount adjustments for CHF-indexed mortgage loans recognised in the statement of financial position, and
in provision for legal risk of CHF-indexed mortgage loans.
2024
2023
an adjustment to the gross carrying amount for loans recognized in the statement of financial position
provision for legal risk of CHF-indexed mortgage loans
an adjustment to the gross carrying amount for loans recognized in the statement of financial position
provision for legal risk of CHF-indexed mortgage loans
Balance at the beginning of the period
510
128
582
53
Changes in the period, including:
-123
125
-72
75
provisions recognised/ reversed
-12
102
93
12
transfer between provisions*
-34
38
-73
73
utilisation, including from settlements
-61
-15
-81
-10
FX differences
-16
-
-11
-
Balance at the end of the period
387
253
510
128
Provision for legal risk of CHF-indexed mortgage loans is presented in liabilities under Provisions and applies to:
mortgage loans indexed to CHF removed from the statement of financial position,
parts of CHF-indexed mortgage loans recognised in the statement of financial position, for which the estimated loss value exceeds the sum of gross exposures,
costs resulting from court proceedings with respect to CHF-indexed loans recognised in the statement of financial position.
As at 31 December 2024, the number of CHF-indexed mortgage loan agreements removed from the statement of financial position, excluding closed agreements as a result of cancellation of the agreement by the court or as a result of conversion to PLN loans in connection with the settlement (for more details, see the settlement programme in note 32 . Provisions ), amounted to 2,543 (2,479 as at 31 December 2023) and the corresponding disbursement amount was PLN 358 million (PLN 352 million as at 31 December 2023).
21
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
Detailed information on the legal environment related to the legal risk of the portfolio of CHF-indexed mortgage loans and information on court cases in connection with concluded CHF-indexed mortgage loan agreements are presented later in the report in note 32 . Provisions .
Changes in the period regarding the estimation of the adjustment / provision for legal risk, both in relation to loans in the Bank’s portfolio and in relation to repaid loans, the Group presents in the statement of profit or loss in the item Cost of legal risk of FX mortgage loans (note 10 . ).
The amount of the adjustment to the gross carrying amount / provision due to legal risk for the portfolio of CHF- indexed mortgage loans presented in the statement of financial position and already removed from the statement of financial position depends on many variables, i.e. the scale of settlements with borrowers, the expected number of future disputes, possible future legal settlements, ended with a nullifying judgement and the distribution of probabilities of individual scenarios.
As at 31 December 2024, a portfolio approach was used to estimate the adjustment to the gross carrying amount / legal risk provision for the CHF-indexed mortgage loan portfolio recognised in the statement of financial position and already removed from the statement of financial position.
The adjustment to the gross carrying amount of the CHF portfolio is aimed at reflecting the actual and expected changed cash flows resulting from the agreement (this approach results from the fact that the legal risk related to the portfolio of CHF-indexed mortgage loans changes the estimation of payments on these assets, and the introduction of a correction to the gross carrying amount allows the presentation of the gross carrying amount at a value that will reflect the actual and expected changed cash flows resulting from the agreement).
For financial assets that have already been removed from the statement of financial position, the creation of provisions for legal risk on a portfolio basis results from the assessment of the probability of a cash outflow.
As at 31 December 2024, potential losses due to legal risk are estimated as probability-weighted average of three scenarios - base, positive and negative - taking into account the estimated probability of occurrence. The scenarios on which the estimation is based are diversified in terms of the expected number of court cases (calculated on the basis of the Bank’s professional judgement resulting from the Bank’s experience to date and an analysis of the current market situation with regard to cases ended with a annulling judgement), as well as the scale of settlements with customers expected by the Bank.
As at 31 December 2024, for the portfolio of CHF-indexed mortgage loans recognised in the statement of financial position, the Bank assumes in each scenario that for a specific part of the portfolio there may be:
cancellation of the loan agreement after the end of the final court proceedings or
conversion of loans indexed to CHF to loans denominated in PLN (whose interest rate is determined based on the WIBOR rate) through voluntary settlements.
The calculation of losses in the event of cancellation of the loan agreement is based on the assumption that the Bank will refund instalments to the customer and return the principal of the loan granted to the Bank by the customer, without taking into account the recovery by the Bank of remuneration for the borrower’s use of the capital. This solution, depending on the scenario, covers from 54% to 58% of the portfolio of CHF-indexed mortgage loans included in the statement of financial position, which are not subject to legal proceedings. For CHF-indexed mortgage loans recognised in the statement of financial position being the subject of litigation, the Bank recognised the full loss resulting from the annulment. The positive, baseline and negative scenarios differ in the number of litigation cases and the size of the settlement portfolio, and the weights of the different scenarios are equal.
The calculation of losses in the case of conversion of loans from CHF-indexed to PLN-denominated through voluntary settlements was made in accordance with current estimates and terms of the settlements offered by the Bank with the right to remuneration. This solution, depending on the scenario, covers from 5% to 15% of the CHF- indexed mortgage portfolio recognised in the statement of financial position.
As at 31 December 2024, for financial assets already removed from the statement of financial position, the Bank assumes in each scenario that for a specific part of the portfolio there may be a cancellation of the loan agreement after the end of the legally binding court proceedings. The calculation of losses in the event of cancellation of a loan agreement is analogous to the CHF-indexed mortgage portfolio recognised in the statement of financial position. This solution, depending on the scenario, covers 10% to 15% of financial assets already removed from the statement of financial position, which are not subject to legal proceedings. For mortgage loans already removed from the statement of financial position being the subject of litigation, the Bank recognised the full loss resulting from the annulment. The positive, baseline and negative scenarios differ in their assumptions about the number of contentious cases, and the weights of the individual scenarios are equal. In 2024, the approach to costs related to penal interest and court costs and the estimate of the expected number of litigation cases were updated in the provision estimate, which affected the calculation of losses in the event of cancellation of the agreement. The other assumptions remained unchanged.
22
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
The change in the estimate due to the adjustment to the gross carrying amount / provisions for legal risks of mortgage loans indexed to CHF recognised in the statement of financial position and already removed from the statement of financial position in 2024 compared to their balance as at 31 December 2023 resulted from the periodic review of the main assumptions of the calculation, taking into account the expected number of new litigation cases and the update of other model parameters.
The main sources of uncertainty for the above estimates are the number of litigation cases and the propensity of clients to conclude settlements in accordance with the programme offered by the Bank.
As at 31 December 2024:
a change in the share of the portfolio of loans subject to voluntary settlements by +/-5 p.p. at the expense of the share of the portfolio of loans not affected by loss would result in a change in the level of gross carrying amount adjustment for CHF-indexed mortgage loans recognised in the statement of financial position by +/- PLN 12 million (compared to +/- PLN 7 million as at 31 December 2023),
a change in the share of the portfolio of loans affected by cancellation of the loan agreement by +/-5 p.p. at the expense of the share of the portfolio of loans not affected by loss would result in a change in the level of gross carrying amount adjustment for CHF-indexed mortgage loans recognised in the statement of financial position by +/- PLN 12 million (compared to +/- PLN 17 million as at 31 December 2023),
a change in the share of the portfolio of loans covered by voluntary settlements at the expense of the share of the portfolio of loans affected by the cancellation of the loan agreement by +/-5 p.p. would result in a change in the level of gross carrying amount adjustment for CHF-indexed mortgage loans included in the statement of financial position by +/- PLN 3 million (compared to +/- PLN 10 million as at 31 December 2023),
a change in the share of loans removed from the financial statements affected by the cancellation of the loan agreement at the expense of the share of loans removed from the financial statements not affected by loss by +/-5 p.p. would result in a change in the provision for legal risk for mortgage loans indexed to CHF already removed from the statement of financial position by +/- PLN 10 million (compared to +/- PLN 11 million as at 31 December 2023).
4. Consolidation policies
4.1. Subsidiaries
Subsidiaries are those entities that are controlled by the Bank. Control exists when the Bank has a direct or indirect influence on the financial and operating policy of the entity, which allows it to obtain a return (i.e. economic benefits) from the activity of this entity.
Conditions proving the exercise of control shall not be deemed to be fulfilled if the existing rights are of a purely protective nature, i.e.: they are defined as rights securing the Bank’s interests resulting from a given commitment.
The control reassessment is done each time if the facts and circumstances indicate a change to the terms and conditions being the basis for the analysis of a specific involvement, however at least once a year.
The financial statements of subsidiaries are included in the consolidated financial statements from the date of acquisition until the date on which the Parent company ceases to control the subsidiary, if applicable.
If the control ceases, the Bank:
no longer recognises the assets and liabilities of the unit that formerly was a subsidiary in the consolidated financial statements,
recognises any gains or losses associated with the loss of control events attributable to the former controlling interest.
Retained investments are recognised at fair value as at the control loss date, which is the date of initial recognition of the investment in the Bank’s books, depending on the conditions, as:
interest in joint arrangements, or
interest in associates or
financial assets classified and measured based on the purpose of holding thereof.
4.2. Associates
Associates are all entities over which the Bank has significant influence but not control in financial or operational terms, generally accompanying a share of between 20% and 50% of the voting rights. The consolidated financial statements include the Group share in profits or losses of associates according to its share in net assets of associates, from the date of obtaining significant influence until the date the significant influence ceases.
Investments in associates are initially recognised at purchase price and then accounted for using the equity method. The share of the Group in the profits (losses) since the date of acquisition is recognised in the statement of
23
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
profit or loss, whereas its share in changes in other capital since the date of acquisition – in other capital. The carrying amount of the investment is adjusted by the total changes of different items of equity after the date of their acquisition.
When the share of the Group in the losses of the investment becomes greater than the share of the Group in that investment, the Group discontinues the recognition of any further losses or creates provisions only to such amount it has assumed obligations or has settled payments on behalf of the respective investment.
Unrealised gains on transactions between the Group and such entities are eliminated pro rata to the Group's interest in those entities. Unrealised losses are also eliminated, unless there is evidence of impairment of the asset transferred.
4.3. Transactions eliminated in consolidation process
Intragroup balances and gains and losses or income and expenses arising from intra-group transactions are excluded from the consolidated financial statements.
4.4. Assumption of control over an entity other than an ING Group member
The acquisition approach is applied when settling the purchase of entities from non-associated parties. At the acquisition date, the Bank recognizes, separately from goodwill, purchased identifiable assets and taken over identifiable liabilities, taking into account recognition criteria and all non-controlling interests in the acquired entity.
5. Foreign currency
5.1. The functional currency and the presentation currency
These consolidated financial statements are presented in Polish Zloty, which is the functional currency and the presentation currency of the Bank.
5.2. Transactions in foreign currency
Transactions expressed in foreign currencies are translated at FX rate prevailing at the transaction date. The financial assets and liabilities, being result of the said transactions and denominated in foreign currencies are translated at the FX rate prevailing on a given day. The foreign exchange differences resulting from the settlements of the said transactions and the balance sheet valuation of the financial assets and liabilities denominated in foreign currency are recognised in the statement of profit or loss in the specific item FX result , which is an element of Net income on financial instruments measured at fair value through profit or loss and FX result .
Foreign exchange differences under changes to the fair value of debt financial instruments classified as financial assets at fair value through other comprehensive income are recognised in accumulated comprehensive income relating to financial assets classified to this financial category.
6. Net interest income
Interest income and expense for all financial instruments are recognised in the income statement.
Revenue from interest on financial assets measured at amortised cost and measured at fair value through other comprehensive income is recognised in the income statement at amortised cost using the effective interest rate or effective interest rate adjusted for credit risk.
The effective interest rate is the rate that discounts the estimated future cash inflows or payments made in the expected period until the expiry of the financial instrument, and in justified cases in the shorter period, to the net carrying amount of the asset or financial liability.
When calculating the effective interest rate, the Group estimates the cash flow, taking into account all the provisions of the financial instrument contract; however, it does not take into account potential future losses related to bad loans. The calculation includes all fees and commissions paid and received by the parties to the contract that form an integral part of the effective interest rate, transaction costs and all other bonuses and discounts.
Potential future credit losses are only taken into account for financial assets that are impaired due to credit risk at the time of initial recognition. The above is aimed at calculating the effective interest rate adjusted for credit risk.
Interest income includes interest and commissions (received or due) included in the calculation of the effective interest rate on: loans with repayment schedules, interbank deposits and securities.
In the case of financial assets or a group of similar financial assets classified under Stage 3, interest income is accrued from the net carrying amount of the receivable (i.e. value reduced by an impairment loss) using the interest rate used to discount future cash flows for the purpose of estimating impairment losses.
Interest income/expense on derivatives designated as hedging instruments in cash flow hedge accounting including interest income/expense from settlements of the price alignment amout resulting from the service in accordance with the settled-to-market approach are presented in Net interest income as other interest income .
7. Commission income and costs
Commission income arises from providing financial services by the Group and comprises i.a. fees for extending a loan, the Group’s commitment to extend a loan, cards issue, cash management services, brokerage services,
24
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
insurance products-related services and asset management services. Commission income comprises also margins on FX derivatives transactions.
Fees and commissions (both income and expenses) directly attributed to origination of financial assets with repayment schedule are recognised in the statement of profit or loss as effective interest rate component and are part of the interest income.
The Group recognizes the following effective interest rate-adjusting commissions:
commissions for application review and credit commitment letter issue,
commissions for limit/overdraft granted,
commissions for granting loan or limit/overdraft,
commission for restructured loan processing,
commission for amending the credit agreement as to the amount, currency or schedule of repayments,
costs of credit and cash loan agency commissions.
Other commissions attributed to origination of financial assets without the repayment schedule are settled using a straight-line method throughout the agreement term.
The Group recognizes the following commissions as the ones cleared on a straight-line basis:
the commissions described as the commissions adjusting the effective interest rate for the loans for whose commissions no cash flows can be estimated (first of all, current account overdrafts, working capital loans and revolving loans),
commissions for issuing, confirming or prolonging the time and increasing the amount of guarantees or letters of credit,
commissions for multi-facility agreements,
commissions for the loan or limit/overdraft granted to start another lending year.
Fees on commitment to extend a cash loan, which is likely to be taken, are deferred and as at the date of financial assets origination are settled as the component of effective interest rate or using straight-line method based on the above mentioned criterion.
Other fees and commissions relating to the financial services offered by the Group – like cash management services, brokerage services and asset management services – are recognised in the income statement including the five steps approach:
1) identify the contract with a customer,
2) identify individual performance obligations in the contract,
3) determine the transaction price,
4) allocate the transaction price to individual performance obligations,
5) recognise income when (or as) each performance obligation is satisfied.
Based on the performed analysis, the Group recognised commission and fee income:
once the service has been delivered (also for upfront fees) i.e. at transfer of the control over the goods or services,
over time, if the service delivery is over time,
at point-in-time, when the Group performs a key operation,
when there is an actual benefit from the perspective of the customer.
After (or during) satisfaction of the performance obligations, the Group recognises as income the amount which equals the transaction price, that was allocated to this individual performance obligation.
Commission income that was accrued and is due but was not paid on time is derecognised from the Group’s financial result upon the lapse of 90 days.
Income and costs under bancassurance commission
Fees and commission related to insurance products are recognised in the income statement according to their economic content and classified as:
commissions being part and parcel of a fee under a financial instrument wherewith the insurance product is linked,
fee for agency service, and
fee for additional services after the insurance product sale.
Prior to implementation of the insurance product, in order to recognise it properly in the statement of profit or loss, the Group analyses features of the insurance product and also the link between the insurance product and the banking product. In this analysis, the Group takes account of the prevalence of the economic content over the legal form. The factors analysed by the Group include but are not limited to:
25
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
manner in which an insurance product is offered, option of purchasing a banking product without the insurance product as well as option of purchasing only the insurance product at the Group,
pricing conditions of the two products sold together and separately,
profitability of the insurance and banking products sold together and separately,
sales target of combined products versus sales target of the same banking products sold without insurance,
option of concluding an insurance agreement outside the Group,
number of resignations and the value of refunded insurance premiums,
settlement cycle with a client,
scope of activities performed by the Group for the insurer and their duration.
Insurance products offered with loans are treated by the Group as linked to lending products, mainly because of lack of the possibility to purchase at the Bank an insurance product without a loan or a cash loan.
For the absolute majority of insurance products linked with lending products functioning at the Group, the income on insurance products is earned based on monthly settlements with both the insurer and the client. Since the client may resign at any time from the insurance coverage for the following month, the Group treats such insurance as renewed each month and settled for each month separately.
Therefore, the income on insurance products settled monthly is recognised in the income statement also on a monthly basis. The Group recognises the income on such insurance in the commission income on insurance products. The Group analogically presents the costs directly related to these insurance products. Such an approach ensures compliance with the matching principle.
The Group applies an analogical approach to real property insurance with mortgage loans. Taking account of the materiality principle, the Group presents full income on this insurance in the net commission income.
Most insurance products linked with the Group’s deposit products (current accounts and savings accounts) use the monthly-settlement structure. Therefore, the income on insurance products settled monthly is recognised in the income statement also on a monthly basis. The Group recognises the income on such insurance in the commission income on insurance products.
Commissions under insurance products not linked to banking products are recognised in the income statement:
on a straight-line basis during the insurance policy term – if the Group, apart from other sales operations, also provides additional services during the insurance term,
on a one-off basis – if the Group does not provide any additional services during the insurance policy term.
Should there be a risk of refund of the fee under the insurance product, the Group decreases its income by the amounts of estimated provisions. The provisions for refunds are established based on the historical data on actual refunds made in the past and based on projections as to the amount of refunds in the future.
8. Net income on financial instruments measured at fair value through profit or loss and FX result
Net income on financial instruments measured at fair value through profit or loss and FX result includes gains and losses arising from disposal and change of fair value of assets and liabilities measured at fair value through profit or loss at initial recognition excluding interest rate derivatives designated as hedging instruments in strategies based on cash flow hedge accounting principles..
Net income on financial instruments measured at fair value through profit or loss and FX result also includes fair value adjustments for pre-settlement credit risk and analogous risk generated by the Group (bilateral value adjustment).
9. Net income on the sale of securities and dividend income
Net income on the sale of securities measured at fair value through other comprehensive income consists of realised gains and losses arising from the sale of debt securities measured at fair value through other comprehensive income and dividend income.
Revenue from dividends is recognised in the income statement on the date of determining the shareholders' rights to receive them.
The result on the sale of securities measured at amortized cost consists of the realized profits and losses arising from the sale of debt securities measured at amortized cost.
10. Net (loss)/income on hedge accounting
This item includes the measurement of hedged and hedging transactions in fair value hedging accounting and the net income on measurement of hedging instruments in the ineffective part of hedge relationship of cash flows hedge accounting.
11. Net (loss)/income on other basic activities
Net income on other basic activities includes cost and income not attributed directly to Group’s banking and brokerage activity. These include in particular: net income due to sale of assets (non-current assets and intangible
26
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
assets), income on sales of other services, income due to recovered bad debts, received and paid damages, penalties and fines.
12. Lease contracts and factoring services
12.1. The Group as lessor
The Group is a party to lease contracts, on the basis of which it transfers for payable usufruct non-current assets for an agreed period. Lease contracts are classified by the Group based on the extent whereto the risk and benefits due to holding of leased asset are attributable to lessor and lessee.
The lease contract shall be concluded for the term ranging from five to ten years, including transfer of the legal title to the beneficiary (lessee) after lease contract expiry. The ownership of leased asset is the collateral for the liabilities arising from lease contracts.
There are no contingent lease payments within the Group. There are no unguaranteed residual values attributable to the lessor within the Group.
In case of lease contracts, which result in transferring substantially all the risks and rewards following holding of the leased asset (financial lease), the subject of such lease contract is derecognised from the statement of financial position. A receivable amount is recognised in an amount equal to the present value of minimum lease payments. Lease payments are divided into financial income and reduction of the balance of receivables in such a way as to achieve reaching a fixed rate of return from the outstanding receivables.
Interest on financial leases is presented in Interest income in the item Interest on loans and other receivables to customers .
Lease payments for contracts which do not fulfil requirements of a finance lease are recognised as income in the income statement, using the straight-line method, throughout the period of the lease.
12.2. Factoring services
The Group provides factoring services in local and international trade. Handling and financing receivables as well as risk management are their essence. In addition, as part of factoring activities, the Group provides additional services, in the field of financial limits for debtors, debt collection and taking over commercial risk. Domestic factoring without taking over risk (with recourse) is the dominant form of factoring activity of the Group.
Interest income and commissions included in the calculation of the effective interest rate are recognized in the income statement under Net interest income , and other commission income under Net commission income .
13. Financial assets and liabilities
13.1. Initial recognition
The Group recognizes a financial asset or liability in the statement of financial position when it becomes bound by the provisions of the contract of this instrument.
Purchase and sale transactions of financial assets measured at amortised cost, measured at fair value through other comprehensive income and measured at fair value through profit or loss are recognised in accordance with the accounting method adopted for all such operations on the transaction settlement date – the date on which the asset is delivered to the unit or delivered by the unit. Loans and receivables are recognised upon disbursement of funds to the borrower.
Upon initial recognition, a financial asset or financial liability is measured at fair value, increased in the case of a financial asset or liability not classified as measured at fair value through profit or loss, by significant transaction costs that can be directly attributed to the acquisition or issue of the financial asset or financial liability
13.2. Classification of financial assets
The Group classifies financial assets into one of the following categories:
measured at amortised cost,
measured at fair value through other comprehensive income,
measured at fair value through profit or loss.
Financial assets measured at amortised cost
Financial assets shall be measured at amortised cost if both of the following conditions are met and is not designated to be measured at fair value through profit or loss:
the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt financial assets measured at fair value through other comprehensive income
Financial asset shall be measured at fair value through other comprehensive income if both of the following conditions are met and it is not designated for measurement measured at fair value through profit or loss:
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Data in PLN milion
the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and sell financial assets and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Equity instruments measured at fair value through other comprehensive income
Equity instruments are measured at fair value through other comprehensive income in a situation where, upon initial recognition in the Group’s books, an irrevocable decision has been made to designate a specific investment to be measured at fair value through other comprehensive income.
Financial assets measured at fair value through profit or loss
All financial assets that do not meet the criteria for classification to financial assets measured at amortised cost or financial assets measured at fair value through other comprehensive income are classified as financial assets measured at fair value through profit or loss.
Business model assessment
The Group assesses the objectives of the business model at the level of the Group’s unit that manages financial assets and is a so-called business owner of the particular financial assets portfolio. The following business models are identified for managing the financial assets i.e. in order to:
collect contractual cash flows,
collect contractual cash flows and sell financial assets,
other (e.g.: in order to maximize profits on sales).
The business models are established at the level which is the best reflection of the Group approach to management of financial assets in order to fulfil business objectives and generate cash flows.
During assessment, the Group verifies all areas of Group’s units activities identified as business owners of a particular portfolio of financial assets and which may have influence on the decisions taken with regard to holding assets in the Group’s portfolio, including but not limited to:
assumptions of the product offer,
organisational chart of a Bank’s unit,
assumptions of assessment of the performance of the particular assets portfolio (e.g.: approach to planning, management information assumptions, key assessment indicators),
approach to compensation of the key managers in relation to portfolio performance or cash flows generated on the portfolio,
the risk generated by the assets portfolio and approach to management of those risks,
assessment of sales activities from assets portfolio (frequency, volume and reasons for the sales), and
assessment of expectations regarding sales activities in the future.
The Group permits the sales of financial assets held to collect contractual cash flows, due to the following reasons:
increase of credit risk,
sales close to maturity,
infrequent sales,
sales insignificant in value.
The Group took the following assumptions:
Sales close to maturity means the sales of financial assets whose:
original maturity is more than 1 year and sales occurs less than 6 months before maturity date,
original maturity is less than 1 year and sales occurs less than 3 months before maturity date.
infrequent sales means that the number of sales compared to the average number of items in the business model is less than 10%,
insignificant in value means for which both the value of the sales compared to the total value of the business model and the net gains from the sales compared to the total net interest income of the business model is less than 10%.
Assessment of cash flow characteristics
In order to assess the cash flow characteristics the Group formulated the following definitions:
principal – means fair value of the financial asset at initial recognition in the Group’s books,
interest – means the payment including consideration for:
time value of money,
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
credit risk resulting from principal amount outstanding within a specified period,
other basic lending risks and costs (e.g. liquidity risk and administrative costs), and
profit margin.
The assessment is to confirm that the realised cash flows are solely repayment of principal and interest on the principal amount outstanding. The Group verifies the contractual terms, which have influence on the timing of realised cash flows and the amount of the cash flow realised on particular financial asset.
In particular the Group verifies the following conditions:
contingent events which have influence on the timing and the amount of cash
leverage,
prepayment or funding extension conditions,
non-recourse conditions for the realised cash flows,
terms that modified the consideration for time value of money.
The assessment of the conditions that modified the time value of money is conducted based on qualitative or quantitative analysis.
In case the qualitative assessment does not provide the conclusions as to the realised cash flow characteristics, the Group performs a quantitative assessment. The quantitative assessment is based on comparison of the difference between:
undiscounted contractual cash flows and
undiscounted cash flows that would arise at benchmark asset that not include the conditions modifying consideration for time value of money.
If the difference between assessed cash flows is significant, then the verified asset will be obligatorily classified to measurement measured at fair value through profit or loss, as the realised cash flows are not solely repayments of principal and interest on principal amount outstanding.
13.3. Classification of financial liabilities
The Group classifies financial liabilities into one of the following categories:
measured at fair value through profit or loss,
measured at amortised cost,
financial guarantees.
Financial liabilities measured at fair value through profit or loss
Derivatives that are liabilities and financial liabilities recognised as a result of the short sale of securities are measured after initial recognition measured at fair value through profit or loss.
Financial liabilities measured at amortised cost
Financial liabilities being a contractual obligation to deliver cash or other financial asset to another entity not measured at fair value through profit or loss, being a deposit or loan received or a financial liability recognised in the result on financial asset sales transaction that cannot be derecognised from the statement of financial position.
Financial guarantees
A financial guarantee is a contract under which the issuer undertakes to make specified payments to the beneficiary to compensate the beneficiary for losses caused by the failure of a specified debtor to make repayments under the original or modified terms of a debt instrument contract.
13.4. Derecognition
The Group derecognizes a financial asset when, and only when: the contractual rights to the cash flows from the financial asset expire or the Group transfers the financial asset and the transfer qualifies for derecognition.
The Group transfers a financial asset if and only if it:
transfers the contractual rights to receive cash flows, or
retains contractual rights to receive cash flows but assumes a contractual obligation to remit the cash flows.
In a situation where the Group retains contractual rights to cash flows but assumes a contractual obligation to transfer these cash flows to a third party, the Group treats such a transaction as a transfer of a financial asset only if all of the following three conditions are met:
the Group is not required to pay the final recipients until it receives the corresponding amounts resulting from the original asset,
under the transfer agreement, the Group may not sell or pledge the original asset other than a security for the obligation to transfer cash flows established for the benefit of final recipients,
the Group is required to remit all the cash flows received from the original asset without material delay.
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
When transferring a financial asset, the Group assesses the extent to which it retains the risks and rewards of ownership of the financial asset. Accordingly, where the Group:
transfers substantially all the risks and rewards of ownership of the financial asset, it derecognizes the financial asset,
retains substantially all the risks and rewards of ownership of the financial asset, it continues to recognize the financial asset,
neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, then the Group determines whether it has retained control of the financial asset. In this case if the Group has retained control, it continues to recognize the financial asset, and if the Group has not retained control, it derecognizes the financial asset to the extent of its continuing involvement in the financial asset.
The Group derecognizes a financial liability (or part of a financial liability) from its balance sheet when, and only when the obligation specified in the contract is satisfied or cancelled or expires.
The Group derecognizes financial assets or their part, if the rights pertaining to the financial assets expire, the Group waives such rights, sells those receivables, they are cancelled or as a result of significant modification of the loan or cash loan contractual terms.
The Group reduce the gross carrying amount of a financial asset when the Bank has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. This principle is applied, among others, to accrued penalty interest, also when the principal amount of the related financial assets is still recognized in the statement of financial position.
The amounts of receivables written down as loss and recovered thereafter reduce the value of impairment loss in the income statement.
The derecognition of financial assets measured at amortised cost in connection with their sale is settled taking into account the previously created allowance for expected credit losses. Therefore, gains and losses resulting from derecognition of financial assets measured at amortised cost were presented in the statement of profit or loss in the item Impairment for expected credit losses - profit on sale of receivables and Result on sale of securities measured at amortised cost .
13.5. Modification of contractual cash flows
When the terms of the loan and cash loan agreements are renegotiated and contractual cash flows of a financial asset are modified, the Group assesses if such modification was significant and should result in the extinguishment of that financial asset and recognition of a new financial asset. A financial asset is extinguished if either the qualitative or the quantitative criteria are met.
Qualitative criteria
The Group assumes that such significant modification of the terms of the agreement will take place in case of a:
change of the debtor with the consent of the Group, or
change of the legal form/type of the financial instrument or
change of loan currency unless it was included in contractual terms, or
the modified financial asset does not meet the SPPI test, i.e. the cash flows from the financial asset do not represent, on specified dates, solely payments of principal and interest on the principal amount outstanding, or
change in interest rate from fixed to floating or vice versa for financial assets that are not credit-impaired, or
change of the financial instruments from revolving to non-revolving or vice versa for financial assets that are not credit-impaired, or
increase of the exposure amount of 50% or an extension of the tenor of the facility/instrument by 50%, if the present value of cash flows under the modified terms, discounted at the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original agreement, discounted using the original effective interest rate.
Quantitative trigger
A financial asset is deemed to be extinguished when the present value of cash flows under the modified loan terms, discounted at the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original agreement, discounted using the original effective interest rate.
For modifications that do not lead to a derecognition of the financial asset, the net present value difference (using the original effective interest rate) between the cash flows of the asset before and after modification is recognised in the statement of profit and loss.
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
13.6. Measurement
After initial recognition, the Group measures financial assets, including derivatives that are assets, at their fair values, except for the financial assets measured at amortised cost using the effective interest method.
After initial recognition, all financial liabilities are measured at amortised cost using the effective interest method, except for:
financial liabilities measured at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, are measured at fair value, in particular a derivative liability that is linked to and must be settled by delivery of an unquoted equity instrument,
financial liabilities resulting from the transfer of a financial asset which do not qualify for derecognition or which are recognised on a continuing involvement basis,
commitments to provide a loan at a below-market interest rate which it shall subsequently measure it at the higher of:
the amount of impairment for expected credit losses, and
the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with principles of IFRS 15,
contingent consideration recognised by the Group acting as an acquirer in a business combination to which IFRS 3 applies, which it shall subsequently be measured at fair value through profit or loss.
If the estimates of payments or inflows change (excluding immaterial modifications and changes in estimates of expected credit losses), the Group adjusts the gross carrying amount of the asset or the amortised cost of the financial liability (or group of financial instruments). For this purpose, the Group translates the gross carrying amount of a financial asset or the amortised cost of a financial liability as the present value of estimated future contractual cash flows that are discounted at the original effective interest rate of the financial instrument (or the credit-adjusted effective interest rate for purchased or credit-impaired financial assets created) or, where applicable, the revised effective interest rate.
In particular, the Group adjusts the gross carrying amount of the portfolio of mortgage loans denominated in foreign currencies, taking into account the changed estimated cash flows from these agreements resulting from the legal risk of this portfolio. The adjustment is recorded as a separate line in the income statement Cost of legal risk of FX mortgage loans.
Granted financial guarantees are measured at the higher of:
the amount being the most appropriate estimate of the expenditures needed to fulfil the current obligation arising from the financial guarantee, upon consideration of the probability of materialisation thereof;
the amount recognised at the initial recognition, adjusted with the settled amount of commission received for granting the guarantee.
13.7. Gains and losses resulting from subsequent measurement
A gain or loss arising from a change in the fair value of a financial asset or financial liability that is not part of a hedging relationship is recognised as follows:
a gain or loss on a financial asset or financial liability classified as measured at fair value through profit or loss is recognised in the income statement;
a gain or loss on an asset measured at fair value through other comprehensive income is recognised directly in equity through statement of changes in equity.
Interest income is calculated using the effective interest rate method. The relevant value is computed by applying the effective interest rate method to the gross carrying amount of the financial asset, except for:
purchased or originated credit-impaired financial assets. The Group applies the credit risk adjusted effective interest rate to the value of amortised cost of a financial asset as of the initial recognition, and
financial assets that are not purchased or originated credit-impaired financial assets which subsequently became credit-impaired financial assets (Stage 3).
For those financial assets the Group applies the effective interest rate to the value of amortised cost (net) of a financial asset in subsequent reporting periods.
Dividends on an equity instrument are recognised in the income statement when the entity’s right to receive payment is established.
Foreign exchange gains and losses arising from a change in the fair value of a financial asset measured at fair value through other comprehensive income denominated in foreign currency are recognised directly in equity only for non-monetary assets. Foreign exchange gains and losses arising from monetary financial assets (e.g. debt securities) denominated in foreign currency are recognised directly in the income statement.
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
At the moment of derecognition of financial assets from the balance sheet, cumulated gains and losses recognised previously in equity:
regarding debt financial assets are recognised in the income statement,
regarding equity instruments are recognised in equity.
The fair value of financial assets and liabilities quoted in an active market (including securities) is determined on the basis of the bid price for long position and offer price for short position. Should there be no active market for a given instrument or for the securities not quoted on an active market, the Group establishes the fair value with the use of valuation techniques that include using recent arm’s length market transactions, discounted cash flow analysis and option pricing models and other techniques commonly used by market players.
Market activity is assessed on the basis of frequency and the volume of effected transactions as well as access to information about quoted prices which by and large should be delivered on a continuous basis.
The main market and the most beneficial one at the same time is the market the Group can access and on which in normal conditions it would enter into sale/purchase transactions for the item of assets or transfer of a liability.
Based on the employed methods of determining the fair value, financial assets/liabilities are classified to the following categories:
Level 1: financial assets/liabilities measured directly on the basis of prices quoted in the active market.
Level 2: financial assets/liabilities measured on the basis of measurement techniques based on assumptions
using data from an active market or market observations.
Level 3: financial assets/liabilities measured on the basis of measurement techniques commonly used by the
market players, the assumptions of which are not based on data from an active market.
The Group verifies on a monthly basis whether any changes occurred to the quality of the input data used for individual measurement techniques and determines the reasons therefor and their impact on the fair value calculation for the financial assets/liabilities item. Each identified case is reviewed individually. Following detailed analyses, the Group takes a decision whether its identification entails any changes to the approach for fair value measurement or not.
In justified circumstances, the Group decides to make changes to the fair value measurement methodology and their effective date construed as the circumstances change date. Then, it assesses the impact of changes on the classification to the individual categories of the fair value measurement hierarchy. Any amendments to the
measurement methodology and their rationale are subject to detailed disclosures in a separate note to the financial statements.
13.8. Derivative instruments and hedge accounting
Derivative instruments are measured at fair value without cost of transactions, which are to be incurred. The base of initial fair value valuation of derivatives is the transaction price, i.e. fair value of received or paid amount.
Settlements exchanged for Interest Rate derivatives cleared via a central counterparty that are subject to settled to market contracts reduce the derivative’s carrying value.
The credit risk component is included in the fair value measurement for derivative instruments through credit valuation adjustments. Valuation adjustments are estimated per counterparty considering the expected pre- settlement exposure credit risk and the same risk generated by the Group. This approach provides for the possibility of occurrence of risk of bilateral value adjustments. The adjustment is made using the expected positive exposure estimated through numerous simulations (the results from the scenarios leading to a negative outcome are eliminated) and the present market value (or its estimation through referencing to comparable data) of credit default swaps (CDS). Own risk of the Bank and the risk of materialisation of a scenario of concurrent client and Group insolvency are calculated by analogy.
In addition, for receivables resulting from matured or terminated but unsettled derivatives, the Group establishes impairment losses using the methodology applied to assessing the risk of impaired credit receivables.
The two adjustments as mentioned above were differently reflected in the financial statements. Fair value adjustments due to risk for non-matured transactions were presented in the item Net income on financial instruments measured at fair value through profit or loss and FX result, whereas the impairments losses for matured transactions in the item Impairment for expected credit losses.
If a transaction whose fair value was adjusted in the previous reporting period in the item Net income on financial instruments measured at fair value through profit or loss and FX result becomes mature or subject to restructuring, then the amount of the previous fair value adjustment is moved to the item Impairment for expected credit losses and the added part of the impairment loss for such already matured transaction is presented in the statement of financial position in the item Impairment for expected credit losses. Therefore the financial result is impacted only by the amount of surplus of the current impairment loss (or write-down) for a mature transaction above the amount of the fair value adjustment made before the transaction has matured.
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
The Group uses derivative instruments in order to hedge against FX and interest rate risk, arising from activity of the Group. Those derivatives, which were not designated as hedge instruments pursuant to the principles of hedge accounting, are classified as instruments measured at fair value through financial result.
13.8.1. Hedge accounting
The Group applies the hedge accounting requirements of IAS 39.
Hedge accounting presents the offsetting effects of fair value changes of both hedging instruments and hedged items which impact the income statement.
The Group designates certain derivative instruments as fair value hedging instrument or cash flow hedging instrument.
Fair value hedge
The Group applies the fair value hedge accounting in order to hedge changes in fair value of fixed-rate debt instruments classified to the portfolio of assets measured at fair value through other comprehensive income and fixed-rate debt instruments classified to the portfolio of assets at amortised cost against the risk resulting from interest rate changes.
Cash flow hedge
The Group applies cash flow hedge accounting in order to hedge the amount of future cash flows of certain portfolios of assets/liabilities of the Group or the portfolio of highly probable planned transactions against the interest rate risk and the highly probable planned transactions against the FX risk.
13.8.2. Derivative instruments not qualifying as hedging instruments
Changes in fair value of derivatives that do not fulfil the criteria of hedge accounting are disclosed in the statement of profit or loss for the current period. Changes in fair value of interest rate derivatives arising from ongoing accrual of interest coupon are disclosed under Net interest income on derivatives , whereas the remaining part of changes in the fair value of interest rate derivatives is presented under Net income on financial instruments measured at fair value through profit or loss and FX result .
Changes in the fair value of FX derivatives are presented under Net income on financial instruments measured at fair value through profit or loss and FX result .
13.9. Offsetting financial instruments
The Group offsets financial assets and financial liabilities and presents them in a net amount in the statement of financial position when and only when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
In order to mitigate credit risk, the Group concludes master agreements with contracting parties, with which the Bank concludes transactions. These master agreements provide for offsetting financial assets and liabilities in case of a breach of the master agreement. Due to the conditional nature of these contractual provisions, there is no netting in the financial statements and the effects of conditional netting are presented in note 38 . Offsetting of financial instruments .
13.10. Repo / reverse repo transactions
The Group presents the financial assets sold with the repurchase clauses (repo, sell–buy–back transactions) in its statement of financial position, simultaneously recognising a financial liability under a repurchase clause. This is done in order to reflect the risks and benefits arising on this asset item that are retained by the Group after the transfer.
For the securities purchased with a reverse repurchase clause (reverse repo, buy–sell–back), the financial assets held are presented as receivables arising from repurchase clause, hedged with securities.
13.11. Expected credit losses
Estimation of the impairment loss is based on the expected credit loss. This approach shall be applied to debt financial assets measured at amortised cost and financial assets measured at fair value through other comprehensive income, lease receivables, contract assets, irrevocable loan commitments and financial guarantees, except for investment in equity securities.
At each reporting date, the Group measures the impairment for expected credit losses for a financial asset at an amount equal to the lifetime expected credit losses if the credit risk on that financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the Group measures the impairment for expected credit losses for that financial asset at an amount equal to 12-month expected credit losses.
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
The Group estimates expected credit losses in a way that takes account of:
an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes,
the time value of money, and
reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.
The Group applies the definition of exposures in default status, impaired exposures and non-performing exposures in accordance with regulatory requirements. A debtor or an exposure is assessed as default is also identified as an impaired and non-performing exposure.
Three stage approach
During the process of estimating expected credit losses, the change of the credit quality for a particular credit exposure since initial recognition is described based on three stages, the reflecting the various approaches to measurement the expected credit losses:
Stage 1 includes performing exposures that have not had a significant increase in credit risk since initial
recognition. Expected credit loss shall be measured based on 12-month expected credit losses (or till maturity date if such exposures will expire in less than 12 months).
Stage 2 includes performing exposures that have had a significant increase in credit risk since initial
recognition. Expected credit loss is calculated on the basis of anticipated losses throughout the lifetime, or from the reporting date until the remaining maturity.
Stage 3 – impaired exposures, which means non-performing loans. Expected credit loss shall be measured
based on lifetime expected credit losses and the probability of default (PD) = 100%.
The Group qualifies the financial exposures to Stage 1, 2 or 3 using a cascade approach in the following order:
1. Identification of impaired exposures and classification thereof to Stage 3,
2. Allocation to Stage 2 based on triggers for significant increase of credit risk.
3. Allocation of other exposures to Stage 1.
Significant increase in credit risk
The Group determines the significant increase in credit risk, which results in classification to Stage 2, based on one of the following triggers (where the first one is the leading one):
significant increase in the lifetime PD at reporting date comparing to the lifetime PD at initial recognition occurring over the period from the reporting date till maturity date;
watch list status,
threefold increase in PD
the asset has an internal rating of 18 or 19
customer service by a corporate restructuring unit,
forbearance status,
collective assessment of sifnificant increase in dredit ris of an entire portfolio
more than 30 days past due.
Thresholds of significant increase in PD parameters in the lifetime of exposure comparing to PD at initial recognition, indicating significant increase in credit risk, are established for models according to assumed methodology as:
absolute threshold – indicates maximum difference between PD at the reporting date and PD at initial recognition which triggers classification to Stage 2,
relative threshold – indicates the maximum measure of the relationship between the PD as at the reporting date and the PD from the initial recognition of the exposure, taking into account the scaling factor determined at the level of a particular exposure, based on the PD from the initial recognition, beyond which the asset is classified to Stage 2.
Exceeding at least one of the above thresholds results in classification of a financial asset to Stage 2.
The methodology of establishing PD thresholds to indicate significant increase in credit risk is based on performing an appropriate segmentation followed by statistical indication of the threshold to classify exposures to Stage 2 which maximizes discriminatory power of classification to stages, under certain assumptions, among others, minimization of classification errors.
Evidence and triggers for classification of assets at amortised costs to the Stage 3
At each balance sheet date, the Group assesses whether a financial assets item or a group of financial assets is impaired. A financial asset item or a group of financial assets is impaired if and only if, there is evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset item (a ‘loss event’) and that loss event (or events) has (have) an impact on the expected future cash flows of the financial asset item or a group of financial assets that can be reliably estimated. The Group recognizes the expected credit losses
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Data in PLN milion
based on reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.
Evidence of impairment
The evidence of impairment is:
identification of objective evidence of impairment (in the case of corporate and retail credit exposures), or
a delay in repayment of more than 90 days and, at the same time, the amount of the arrears exceeds the absolute and relative materiality threshold.
Objective evidence of impairment does not require expert judgment – identification of the occurrence of such evidence causes the credit exposure to be considered defaulted and, at the same time, impaired without further analysis. Objective impairment evidence of corporate or retail credit exposures cover the occurrence of minimum one of the following situations:
restructuring of the credit exposure for non-commercial reasons related to significant financial difficulties of the client, resulting in a change to the existing terms of the contract, full or partial refinancing of the exposure at risk, which would not have taken place if the client had not experienced financial difficulties (including forbearance), resulting in a loss of more than 1% of the present value of discounted future cash flows; for retail credit exposures – non-performing restructuring,
write-down or write-off by the Group in the process of restructuring of a significant amount of corporate client receivables resulting in a reduction in cash flows from a given financial asset,
filing by the Group, the client's counterparty or another bank for the client's bankruptcy or the initiation of proceedings under the restructuring law,
declaration of bankruptcy; in the case of corporate credit exposures, the client was put into liquidation, ceased operations,
the credit exposure becomes due to the termination of the credit agreement by the Group,
sale by the Group of a credit receivable (or its part) with a loss greater than 5% of the balance sheet exposure amount, if the sale was caused by the deteriorating credit quality of the exposure,
the occurrence of an overdue exceeding 30 days or granting another forbearance on a credit exposure classified initially as forbearance non-performing, and then healed and in the forbearance performing status during the trial period,
interest-free status (interest stoppage) for a credit exposure,
for retail credit exposure, over 3-month arrears in repayment of due liabilities under the loan with a one-off repayment of the entire mobilised capital at the end of the loan period,
for corporate credit exposures – making a decision to recover debts as part of the debt collection strategy,
questioning the balance sheet credit exposure by the client in court proceedings.
Impairment triggers
Impairment triggers require an individual expert assessment of the debtor's situation and a decision as to whether the classification to default as an impaired exposure is justified.
The triggers for impairment for corporate credit exposures (excluding exposures to entrepreneurs) include:
granting by a natural person in default of obligations, a surety at the Bank for significant obligations of a company belonging to it or when a natural person is a debtor of the Bank and the company belonging to it is in default,
over 3-month arrears in repayment (including all interest, principal and commissions) under the loan with a one-off repayment of all disbursed capital at the end of the loan period (not applicable if the repayment frequency exceeds one month),
the customer belongs to the same economic or legal group as the defaulting debtor,
disappearance of the possibility of refinancing,
for exposures resulting from transactions concluded on the financial market – disappearance of an active market (e.g. suspension of quotations on the WSE) for a given financial asset (shares, bonds, other securities) held by the Group due to financial difficulties of the issuer / client, which may have a negative effect on the future cash flows of a given financial asset,
the customer ceases to repay principal, interest or commission and the delay in repayment or the oldest unauthorised overdraft continues for more than 45 calendar days,
bankruptcy threat, submission of an application to initiate proceedings under restructuring law or other financial reorganization, which may result in non-repayment of a financial asset or its delay,
no intention or possibility of repayment by the debtor due to the existing financial problems; in particular, the following events may indicate significant financial difficulties (the events described in points "1" to "5" are not triggers for impairment if they were assumed in the client's financial plans at the time of granting the involvement and the Group accepted such plans:
1) negative equity at the end of the annual accounting period,
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
2) negative cash flows from operating activities in three consecutive annual accounting periods (from the cash flow statement, and if it is not prepared, then from the simplified cash flow statement),
3) revenues from core activities decrease significantly (over 50% year on year based on the results of annual accounting periods) or revenues from core activities decrease (over 30% year on year based on the results of annual accounting periods) and, at the same time, the ratio of debt to EBITDA (earnings before interest, taxes, depreciation and amortization, profit before deduction of interest on interest-bearing liabilities, taxes and depreciation) is greater than 4 or EBITDA is less than 0 (if the contract contains a different definition of the trigger, the event is a trigger for impairment, if it is exceeded level 4 as defined in the contract. If the contract indicates the level of the ratio> 4, then we identify the triggers for impairment when exceeding the level specified in the contract),
4) Negative EBITDA in two consecutive annual financial periods,
5) the implementation of financial projections by the client negatively differs from the range approved by the Group by at least 20%, which leads to a significant breakdown of financial ratios,
6) the events described in points "1" to "5" occurred during the accounting year, provided that they occurred in the amounts considered significant and the Group expects that the situation will not improve until the end of the annual accounting period and this situation may result in failure to repay the financial asset or its delay,
7) active enforcement to client accounts kept in the Group, if the oldest active enforcement order persists for more than 90 days and the total amount of active titles exceeds PLN 100 thousand; PLN for customers of the corporate sales network or PLN 500 thousand for strategic clients,
8) unsettled claims under guarantees granted by the Group (lack of customer funds), if the customer's overdue liability to the Group due to the payment of the guarantee by the Group persists for more than 45 days from the date of payment of the guarantee claim,
9) termination of a loan agreement with another bank of significant value,
a material breach of contractual terms by the customer, which may have a negative impact on future cash flows from a given financial asset (if there has been a material breach of contractual terms, but the Group, after identifying and assessing the causes and effects of such breach, accepted them (temporarily or permanently) or changed, such an event is not treated as a trigger for impairment),
unknown whereabouts of the client, resulting in a lack of representation in contacts with the Group and undisclosed assets of the client,
crisis of the sector in which the client operates, combined with the borrower's weak position in a given sector,
restructuring of the loan receivable for non-commercial reasons related to significant financial difficulties of the client, resulting in a change to the existing terms of the contract, full or partial refinancing of the exposure at risk, which would not have occurred if the client had not experienced these financial difficulties (including forbearance) and loss of the net present value of cash flows is equal to or less than 1%,
credit fraud of the debtor towards the Bank or another ING Group entity,
the exposure has received a forbearance 2 or more times in the last 5 years,
a significant deterioration of the client's rating resulting in its reclassification to a risk class of at least 17 with a simultaneous drop by at least 4 classes.
The Group has also determined the following additional triggers for impairment for leveraged transactions (i.e. transactions with a high level of debt relative to operating profit):
a significant breach of an important financial clause or failure to return to the state from before the breach, especially when the customer simultaneously requests a repayment facility,
forbearance refinancing of the existing borrower with an increased level of financial leverage (IBD / EBITDA, i.e. interest bearing debt / earnings before interest, taxes, depreciation and amortization, total liabilities / profit before deduction of interest on interest-bearing liabilities, taxes and depreciation) compared to leverage levels at the time of funding or previous refinancing,
refinancing of the exposure with the repayment of the entire mobilised capital at the end of the loan period in the event of financial difficulties of the client and with a low probability of refinancing by another bank under current market conditions,
the base case and stress case scenarios indicate the lack of sufficient and stable cash flows to service the debt in accordance with the adopted schedule;
and the following additional triggers for the revenue-generating real estate financing transactions:
LTV (Loan to Value)> 90% and this is not a temporary situation,
historical DSCR (debt service cover ratio) ratio <1.0 or ICR (interest coverage ratio) <1.0 (depending on which indicator is used for transaction risk assessments) for two consecutive annual accounting periods and cash flows generated by the real estate are, in the opinion of experts, insufficient to repay and service the loan in accordance with the adopted schedule.
The triggers for impairment for retail credit exposures and credit exposures to entrepreneurs include:
failure to meet a minimum of three debt repayment arrangements within the current period of arrears,
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
a natural person who has issued a surety in the Group for significant obligations of their company is in default or a natural person is a debtor of the Group and their company is in a state of default,
the business client is related to the same group of debtors (legally or economically) in which one of the debtors is defaulted,
no intention or possibility of repayment – in the Group's opinion, the debtor does not want to pay off the obligation or is unable to pay; the inability to repay the liability occurs when the debtor's sources of income are insufficient to repay the instalments due, e.g.:
for an individual client: loss of job, termination of social benefits payments, divorce, serious illness, death of the debtor, obtaining information on untimely servicing of a debt of significant value in another bank (over 90 days overdue) or commencement of enforcement / debt collection activities by another bank,
for a business client: (anticipated) cash shortfall, (anticipated) high or sudden increase in leverage, (anticipated) breach of financial clauses, (anticipated) deterioration in a market where the debtor's position is weak,
approving a forbearance to the customer that is not able to repay its financial obligations under a loan agreement with the Group due to existing or anticipated financial difficulties,
credit fraud of the debtor towards the Group – reasonable suspicion of extortion of a loan, i.e. an obligation whose credit documentation or the established facts indicate that it was granted as a result of deliberate misrepresentation of the Group by presenting documents, certificates, and statements that are not factually correct,
occurrence of minimum two forbearance instances within 5 years of granting the first forbearance.
In the process of identifying impairment, the Group first assesses whether there is any objective evidence or trigger for impairment for financial assets.
The entire loan portfolio of retail and corporate clients is subject to the control for impairment of exposure. Credit exposure is assessed for impairment in relation to the debtor automatically on a daily basis for customers from retail segments and on a current basis and on the applicable dates of regular and irregular portfolio monitoring in relation to corporate customers. Objective evidence of impairment requires the client to be reclassified to the portfolio of non-performing exposures.
Identification of the triggers for impairment of the credit exposure of corporate clients requires an individual expert assessment of the debtor's situation and a decision whether the classification to default is justified, i.e.:
assessment of the customer’s potential to repay all credit obligations to the Group in compliance with the agreement and a documented assessment,
if no default or impairment is identified, a written justification for leaving the client in the performing portfolio should be prepared,
if as a result of the assessment a situation of default or impairment was identified – reclassification of the client to the portfolio of non-performing exposures.
If, as a result of the assessment, it is concluded that there is no evidence of impairment for a given financial asset, the asset is included in groups of financial assets with similar credit risk characteristics that indicate the debtor's ability to repay the entire liability in accordance with the terms of the contract. In the groups designated in this way, the impairment loss is calculated using the collective method, based on the valuation of expected credit losses. If there is evidence that an impairment loss has been incurred on an asset measured at amortised cost, the amount of the impairment loss is the difference between the asset's carrying amount and the present value of estimated future cash flows discounted using the original effective interest rate of the financial instrument.
In practice, this means that for assets from the Stage 3 portfolio subject to individual assessment (individually significant financial assets, whose value exceeds the equivalent of EUR 1 million), the impairment is calculated directly using discounted future cash flows for a given asset, and for assets from the Stage 3 portfolio subject to collective assessment (financial assets insignificant) –is determined using the collective impairment method with the use of the expected credit loss over the life of the asset. When estimating future cash flows, the available information about the debtor is taken into account, in particular, the ability to repay the exposure is assessed, and in the event that the credit exposure has collateral, the estimation also takes into account the expected future cash flows from the realization of the collateral, taking into account inter alia time, costs and difficulties in recovering payments as a result of selling the collateral.
If the existing evidence of impairment of an assets item or financial assets group measured at amortised cost indicate that there will be no expected future cash flows from the above mentioned financial assets, the impairment loss of assets equals their carrying amount.
The Group applies a definition of default, in line with the guidelines of the European Banking Authority (EBA) No. EBA/GL/2016/07 of 18.01.2017 on the application of the definition of default under Article 178 of Regulation (EU) No 575/2013.
Recognition of an allowance for expected credit losses for assets measured at amortised cost
Impairment is presented as reduction of the carrying amount of the component, while the amount of loss is charged to the profit and loss account of the period.
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
If in the next period the amount of impairment loss decreases due to an event that occurred after the impairment (e.g. improvement in the debtor’s creditworthiness assessment), then the previously made impairment loss is reversed through the profit and loss account. The Group has defined the events that may result in the reversal of impairment of the credit exposure.
The Group applies the same criteria for the purpose of recovering a client from default and reversing impairment losses. The process of starting the trial period and then healing, i.e. transition from the non-performing portfolio (NPE) to the performing portfolio is carried out:
for customers from the mortgage and consumer loan segment - at the business segment level, unless it applies to a situation recognised at the debtor level (e.g. bankruptcy),
for corporate clients - at the debtor level.
If the debtor is in the impaired portfolio and has no exposure as a forbearance (facility), it shall be considered to be healthy and qualified as a performing (performing) portfolio if all of the following conditions are met in the following order:
no evidence of impairment or impairment triggers giving rise to a default or indicating a high probability of default - are active,
at least 3 months (trial period) have passed since the date of completion of proof/ indication of impairment and during this period the customer’s behaviour (intention to repay) and situation (ability to pay) have been positively assessed, and in the case of a corporate customer, the assessment of financial standing has been documented,
the customer made regular repayments, i.e. no arrears >30 days during the trial period,
after the end of the trial period, the customer was considered able to repay the loan liabilities in full, without using the collateral,
no arrears exceeding the absolute limit; if there are arrears in excess of the absolute limit, the trial period shall be extended until the arrears are reduced below that limit.
A client in an impaired portfolio with an exposure with the status of granted facility for repayment (forbearance) - shall be deemed to be cured and qualified to the working portfolio (performing) if all of the following conditions are met:
no evidence of impairment or impairment triggers giving rise to a default or indicating a high probability of default - are active,
at least 12 months have passed since the last of the following events (trial period):
granting the last restructuring measures, i.e. granting a facility for repayment (forbearance),
the exposure has been given default status,
end of the grace period specified in the restructuring agreement,
during the trial period, the customer made significant/regular repayments:
he customer, as part of his regular payments in accordance with the established restructuring conditions, repaid the material amount in the amount constituting the earlier overdue (if there were overdue amounts) or redemption (if there were no overdue amounts),
the client made regular repayments in accordance with the new schedule taking into account the conditions of restructuring, i.e. no arrears > 30 days during the trial period,
at the end of the probationary period, the customer has no past due amounts and has no concerns about the full repayment of the exposure under the terms of the restructuring agreement.
The Group has established the following additional terms of reversal of impairment / exit from default status (default) binding for all customers:
If in the trial period a proof or an indication of impairment is identified as a source of default/ indicating a high probability of default, the date of the end of the trial period will be re-established and the trial period starts to count from the beginning from the moment of expiry of the proof/ indication.
If a DPD event > 30 occurs during the trial period and after the grace period, the trial period end date will be reset and the trial period will begin to count from the beginning when the DPD has returned to less than 31 days.
All conditions for reversal of impairment/exit from default should also be met for new exposures to the client, in particular if previous credit exposures of this client previously in restructuring were disposed of or permanently written off.
An exception to the principle of lack of active evidence / impairment triggers constituting the source of default is evidence "classification to Stage 3 / provision" - its persistence does not suspend the start of the trial period (because it is the effect and not the cause of the default) - classification to Stage 3 and the provision is also maintained during the trial period.
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
Indications of classification of a financial asset measured at fair value through other comprehensive income to Stage 3
At each balance sheet date, the Group assesses whether there is objective evidence of impairment of debt financial assets classified as at fair value through other comprehensive income. Confirmation of the existence of objective evidence of impairment is the premise for classification of the asset to stage 3.
Evidence that a financial asset or group of financial assets is impaired permanently may be based on one or more of the following:
significant financial difficulties of the issuer (e.g.: significant negative equity, high losses incurred in the current year exceeding equity, termination of a credit agreement of significant value in another bank),
failure to meet contractual conditions, including in particular failure to pay or default on maturing liabilities (e.g. interest or notional amount), interpreted as materialisation of the issuer’s credit risk,
the granting by its creditors to the issuer of facilities for the repayment of liabilities which it would not otherwise have received,
high probability of bankruptcy or other financial reorganisation of the issuer,
identification of impairment of a financial asset in the previous period,
disappearance of an active market for a financial asset, which may result from the issuer’s financial difficulties,
published analyses and forecasts of credit rating agencies or other entities that confirm a specific (high) risk profile of a financial asset,
other observable data indicating a determinable decrease in the estimated future cash flows resulting from the group of financial assets that appeared after the date of their initial recognition in the Group’s books. The data referred to above may relate to unfavourable changes in the payment situation of a group of issuers, a country or local economic conditions that are correlated with the lack of repayments from the group of financial assets.
Recognition of an allowance for expected credit losses on debt financial assets measured at fair value through other comprehensive income
Impairment losses on debt financial assets measured at fair value through other comprehensive income are recognised in the statement of profit or loss. These losses are excluded from other comprehensive income.
Measurement of expected credit losses
In order to measure the expected credit losses under collective approach, the Group uses the adjusted to IFRS 9 requirements the existing regulatory capital models (PD, LGD, EAD) developed for the Advanced Internal Ratings Based (AIRB) approach. The models of risk parameters for the purpose of IFRS 9 follow the same structure as the models for regulatory capital purposes, however the manner of estimating the specified value of PD, LGD and EAD is adjusted to IFRS 9 requirements, in particular it includes reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecast of future economic conditions. The model’s parameters were calibrated in accordance with the “point-in-time” approach. EAD parameter includes the repayment schedules in accordance with credit agreements.
The amount of the revaluation charge calculated collectively is based on the history of losses for asset portfolios with similar credit risk characteristics. For the purposes of determining risk parameters, the Group uses over thirty models for the needs of which exposures are classified into homogeneous groups with similar characteristics based on different criteria (mainly product characteristics, e.g. loan duration, form of collateral and purpose of the loan, and type of client and financing). Exposures from the retail banking segment are divided into mortgage and consumer. Corporate banking exposures are grouped mainly by customer size (e.g. small and medium-sized enterprises, corporations), customer type (e.g. financial institutions), loan application (e.g. real estate financing, project financing) and product.
The Group measures the lifetime expected credit losses LEL (Lifetime Expected Loss) on exposures without impairment recognised as the discounted sum of partial losses during the life of the exposure, relating to the events of default in each 12-month period remaining to the maturity date of the exposure, taking into account the weights of the scenarios
For credit exposures classified to Stage 1, a 12-month expected credit loss is applied.
For credit exposures in default at Stage 3 and for which the collective provision is computed, the Group measured the lifetime expected credit losses.
The time value of money was reflected in expected credit losses by two discount factors:
The discount factor between the moment of default and the moment of debt recovery. It is used for the parameters of the regulatory LGD models.
Discounting between the reporting date and the moment the exposure becomes in default which is partly taken into account in calculating the lifetime expected loss LEL. The Group assumes that for each time window of 12 months the event of default occurs on average in the middle of the period 0-12 months.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
The Group measures the expected credit losses as the probability weighted average of the few macroeconomic scenarios (mostly three: a baseline, negative and positive scenario) with different probability to occur. The expected loss is determined separately for each scenario and the probability weighted average results from the weights (probabilities) assigned to each scenario (sum of weights = 100%). Such approach fulfils IFRS 9 requirements that the impairment for expected credit losses should reflect an unbiased and probability-weighted amount that is determined based on a number of possible outcomes.
Weightings of scenarios result directly from macroeconomic assumptions made. The Group has chosen for the 90th percentile of macroeconomic factors distribution as a downside scenario because it corresponds the assumptions of other calculations in the Group related to risk appetite, which use 90% confidence level (e.g. RWA at risk) and 10th percentile for positive scenario as a mirror approach. 90th and 10th percentile of the distribution imply directly the probabilities of realization of these scenarios – both have statistically a 20% probability of realization. Consequently, the baseline scenario is a supplement of these extreme scenarios and it has 60% probability weighting.
The forecast (measurement) of the expected loss is conducted at each point in time in the future depending on the expected future economic conditions at a given point. Based on the data about past events, the Group determined the relation between the observable parameters of expected loss (PD, LGD) and macroeconomic factors as functions, based on which – at predicted macroeconomic factors – Bank computes the predicted parameter values of expected loss in a given year in the future in accordance with forward looking “point in time” approach. The impact of macroeconomic factors on expected credit losses is ensured in the Group by including them in the modelling of particular risk parameters, which enables appropriate selection of factors specific for a given parameter and portfolio type. Selection of appropriate macroeconomic factors constitutes a part of model building process and includes several stages, both expert based that guarantee an economically interpretable relation as well as statistical approach which enables the assessment of their significance and power of relations. The assessment of the adequacy of the impact of macroeconomic factors is part of the overall assessment of the models for determining impairment for expected credit losses as part of the model monitoring performed by the Group.
For the purpose of measurement of the expected credit loss, the Group determines the level of EAD exposures only for irrevocable loan commitments through the use of CCF conversion factors (the range of utilization of the undrawn loan commitment during a period from the reporting date till the default event) from regulatory EAD models (estimated in accordance with “through the cycle” approach). EAD decreases during the time according to payment schedule of the particular credit exposure.
For exposures with a specified final repayment date, the time to maturity is equal to the final repayment date. If the final repayment date exceeds 30 years, the expected loss calculation period is limited to 30 years.
For the financial exposures without maturity payment date (e.g.: some revolving credit facilities and credit cards) the expected lifetime is determined by the statistical behavioural parameter.
The LGD parameter, which is a function of used techniques for mitigation of credit risk and it is expressed as percentage of EAD, it is estimated on a product and exposure level based on the parameters of the regulatory LGD models (estimated according to “through the cycle” approach) which were properly calibrated for the purpose of IFRS 9. Collateral recoveries are an integral part of the construction of LGD models and, as a rule, the criteria for recognizing collateral are consistent with the CRR requirements. The most important collaterals recognized by the Group include mortgage collaterals (residential and commercial) as well as guarantees and sureties.
The level of LGD which is used for the estimation of the amount of the impairment loss according to the collective method for defaulted exposures (PD = 100%), depends on the period during which the exposure was identified as defaulted. In addition, for corporate clients segment in the field of large and medium-sized companies, the value of the LGD parameter is 100% after at least 78 months of the exposure being in default. In a similar way, regarding the retail clients segment and enterpreneurs, the value of the LGD parameter is set to 100% if one of the following conditions is met:
the impairment event took place and the objective evidences of the impairment occurs continuously for 47 months from the date of recognition of impairment in relation to entrepreneurs,
defaulted exposures that belong to the impaired portfolio (POCI),
the exposures were assessed as credit fraud, i.e. they were registered as a suspicion of credit fraud or reported as a notification of a suspected crime.
13.12. Purchased or created financial assets impaired due to credit risk
The Group recognises as the separate category, the purchased or originated credit-impaired financial assets at initial recognition (POCI).
Such assets may be recognised due to following reasons:
purchase of credit impaired financial assets,
significant modification (described in item 13.5 . ) due to derecognition of original loan or
origination of new credit exposure for the client for which other exposures were classified to Stage 3.
Those assets are excluded from the three stage approach described in item 13.11 .
The change in the cumulated lifetime expected credit losses, both positive and negative, is recognised as impairment gain or loss in profit or loss.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
14. Property, plant and equipment and intangible assets
14.1. Property, plant and equipment
Own property, plant and equipment
Property, plant and equipment consist of controlled non-current assets and costs to construct such assets. Non- current assets include property, plant and equipment items with an expected period of use above one year, maintained to be used to serve the Bank’s needs or to be transferred to other entities, based on the lease contract or for administrative purposes.
Property, plant and equipment, with the exception of land and buildings, are recorded at purchase price or production cost i.e. after initial recognition they are recorded at historical cost less depreciation and impairment. The historical costs are made up of the purchase price/production cost and the costs directly related to the purchase of assets.
Each component part of property, plant and equipment items, whose purchase price or production cost is material in comparison with the purchase price or production cost of the entire item, is depreciated separately. The Group allocates the initial value of the property, plant and equipment into its significant parts.
Land and buildings are carried in accordance with the revaluation model, after initial recognition at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date.
The revaluation effect is reflected in other comprehensive income in case of the value increase, or carried through the income statement in case of the balance sheet asset’s value decrease. However, the increase of value is recognised as income statement insofar as it reverses the decrease of value due to revaluation of the same asset that was previously recognised as costs of a given period. Similarly, the decrease of the asset’s value resulting from revaluation shall be set off against the relevant surplus resulting from the previous revaluation of the same asset. The entire revaluation surplus is carried through retained earnings at the time of withdrawing from use or selling the asset item.
Fixed assets in leasing
The Group is a party to lease contracts, under which it receives the right to control the use of an identified asset for a given period in exchange for remuneration. The Group applies IFRS 16 to all lease agreements, except for all lease agreements for intangible assets and exemptions provided for in the standard and described below.
The Group identifies leasing and non-leasing components in concluded contracts. Non-lease payments under contracts are recognised as an expense in accordance with relevant IFRS. Lease payments are recorded in accordance with the rules described below.
At the date of commencement of the lease, the Group recognizes assets due to the right to use the assets. The initial valuation of the lease liability is determined by the Group at the present value of future lease payments. Identifying future lease payments requires a lease period to be determined. When determining the lease period, the Group takes into account the irrevocable lease period together with the periods for which the lease can be extended and the periods in which the lease can be terminated. In order to make an assessment, the Group takes into account all relevant facts and circumstances that create an economic incentive to use or not to use these options. At the start of the lease contract, the Group assesses whether it can be assumed with sufficient certainty that it will benefit the option to extend the lease, or that it will not use the option to terminate the lease. The Group reviews the lease period in order to reassess significant events or circumstances that may affect the estimated length of the lease period. Leasing ceases to be enforceable if both the lessee and the lessor have the right to terminate the lease without the other party's permission, which results in a slight penalty, at the most. For lease contracts concluded for an indefinite period, in which there is a two-sided notice and potentially high costs related to the termination of the contract, the Group estimates the lease period.
To determine the discounted value of lease payments, the Group uses the leasing interest rate, and if the rate is not easily available, the Group uses the marginal interest rate. The Group determines the leasing interest rate as the sum of swap interest rate and internal transfer price, taking into account currencies in which lease contracts and contract maturities are denominated. After the lease commencement date, the carrying amount of the liability:
increased by accrued leasing interest, which is recognised in the income statement and losses as interest expenses,
less lease payments paid,
updated as a result of reassessment, changes in leasing or changes in essentially fixed leasing fees.
At the commencement date of the lease, the Group recognizes assets due to the right to use equal to the initial measurement of the lease liability. The cost of an asset due to the right of use also includes:
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
fees paid on the date of commencement or before the date of commencement of the lease, less leasing incentives received,
initial direct costs incurred by the lessee,
costs to be borne by the lessee in connection with bringing the asset to its original condition.
The right to use is depreciated over the duration of the lease and is reduced for impairment losses. The value of the right to use is updated during the lease period as a result of modifications of the lease agreement.
The Group uses the exemption for:
short-term leases – a contract may be classified as a short-term contract if the duration of the contract does not exceed 12 months and a purchase option is not provided for the subject of the contract,
leases in which the subject of the contract has a low value – assets may be classified as low-value assets if the gross purchase price of the new component does not exceed EUR 5,000 and the subject of the contract is not and will not be sub-leased.
Lease payments under the above mentioned contracts are recognised by the Group as costs in the income statement in a systematic manner throughout the duration of the lease.
14.2. Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance.
Intangible assets are deemed to include assets which fulfil the following requirements:
they can be separated from an economic entity and sold, transferred, licensed or granted for use for a fee to third parties, both separately, and together with their accompanying contracts, assets or liabilities,
arise from contractual titles or other legal titles, irrespective of whether those are transferable or separable from the business entity or from other rights and obligations.
Goodwill
Goodwill arising on acquisition of an entity is recognised at the acquisition price being the surplus of the aggregate of:
provided payment,
sums of all non-controlling interest in the acquired entity, and
in the case of combining entities executed measured at fair value as at the day of acquiring interest in the capital of the acquired entity, previously belonging to the acquiring entity,
over the net amount determined as at the day of acquiring values of the identifiable acquired assets and assumed liabilities.
After the initial recognition, the goodwill is recognised at acquisition price less any accumulated impairment losses.
Computer software
Purchased computer software licences are capitalised in the amount of costs incurred for the purchase and adaptation for use of specific computer software.
Expenditures attached to the development or maintenance of computer software are recognised as costs when incurred.
Other intangible assets
Other intangible assets purchased by the Group, are recognised at purchase price or production cost less amortization and total amount of impairment losses.
Subsequent costs
Subsequent costs incurred after initial recognition of acquired intangible asset are capitalised only if the following conditions are met:
it is likely that the outlays (taking into account the new version of the software) will result in a significant increase in functionality in relation to the originally assessed performance standard, and
these costs can be reliably measured and attributed to internally used existing software.
In other cases, costs are recognised in the income statement in the reporting period in which they were incurred.
14.3. Depreciation and amortization charges
The depreciation/amortization charge of property, plant and equipment and intangible assets is applied using the straight line method, using defined depreciation/amortization rates throughout the period of their useful lives. The depreciable/amortisable amount is the purchase price or production cost of an asset, less its residual value.
The useful life, depreciation/amortization rates and residual values of property, plant and equipment and intangible assets are reviewed annually. Conclusions of the review may lead to a change of depreciation/amortization periods recognised prospectively from the date of application (the effect of this change is in accordance with IAS 8 carried through income statement).
In case of buildings measured at fair value, the accumulated depreciation balance at the revaluation date is removed from the carrying amount gross, and the net carrying amount is adjusted to the revalued amount.
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
Depreciation and amortization charges are recognised in the income statement. At each balance sheet date goodwill and other intangible assets with indefinite useful life are regularly tested for impairment. The depreciation/amortization periods are as follows:
lands and buildings 50 years
investments in external fixed assets, period of rental, lease, leasing, no longer than 10 years
devices 3 to 7 years
equipment 5 years
costs of development of software 3 years
software licenses 3 years
14.4. Impairment of other non-financial assets
For each balance sheet date, the Group assesses the existence of objective triggers for impairment of an asset.
If such a trigger exists, the Group performs an estimation of the recoverable value. If, and only if, the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset shall be reduced to its recoverable amount.
As regards company goodwill, it is tested for impairment as at the balance sheet date regardless of whether or not there are triggers for impairment in place.
Recognition of impairment loss
If there are triggers for impairment of common property, i.e. the assets which do not generate cash independently from other assets or groups of assets, and the recoverable amount of the individual asset included among common property cannot be determined, the Group determines the recoverable amount at the level of the cash-generating unit, to which the given asset belongs. An impairment loss is recognised if the book value of the asset or cash- generating unit exceeds its recoverable amount. The goodwill impairment is determined by estimating the recoverable amount of the cash-generating unit the given goodwill applies to. Should the recoverable amount of the cash-generating unit be lower than the carrying amount, impairment loss is made.
The impairment loss is recognised in the income statement under General and administrative expenses . Impairment losses for cash-generating units reduce the goodwill of the cash-generating units (group of units) in the first place and then reduce proportionally the book value of other assets in the unit (group of units).
Reversing impairment loss
Goodwill impairment loss is not subject to reversal.
An impairment loss of an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount.
An impairment loss can be reversed only up to the amount, at which the book value of impaired asset does not exceed its book value, which decreased by depreciation/amortization charge, would be established, if any impairment loss had not been recognised.
15. Other financial assets
Other financial assets include trade receivables and other receivables.
The Group introduced the simplified approach regarding to measurement of the impairment for expected credit losses and recognise the impairment at an amount equal to lifetime expected credit losses.
In justified cases, and in particular when receivables due to shortages and damages, claims are contested by debtors and other receivables for which the Group assesses the risk of non-recovery as high, revaluation write- downs are made immediately after such assessment is confirmed. In other cases, trade receivables are subject to impairment write-downs after reaching a certain overdue threshold.
If the effect of the time value of money is material, the value of receivable is determined by discounting the expected future cash flows to the present value, applying the discount rate that reflects the current market assessments of time value of money.
Budgetary receivables are recognised as part of other financial assets, except for corporate income tax receivables, which are a separate item in the statement of financial position.
16. Provisions
Provisions, including provisions for off-balance sheet items, are recognised in the statement of financial position when the Group has a legal or constructive obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation. If the effect is material, the amount of provision is measured by discounted, expected cash flows using pre-tax rate that reflects current market assessments of the time value of money and those risks specific to the liability. This is also applicable to the recognition of provisions for risk-bearing off-balance sheet items including non-financial guarantees, letters of credit and irrevocable unutilised credit lines.
43
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ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
Provisions for irrevocable unused credit lines for corporate exposures are recognized in the income statement under the item Impairment for expected credit losses .
The Group establishes provisions for restructuring costs only when the general criteria of recognising provisions under IAS 37 are met and in particular but not limited to the situation when the Group is in possession of a formal restructuring plan determining at least the operations or part thereof, basic locations, place of employment, the functions and estimated number of employees entitled to compensation, the expenditure to be undertaken and the term of execution. The commencement of restructuring procedure or the public announcement thereof is a condition indispensable for establishing the provision. The established provisions comprise only the direct and necessary expenditures to be undertaken due to the restructuring procedure, which are not related to the current business operations nor cover the future operating costs.
The Group creates provisions for legal risk on an individual or portfolio basis:
in an individual approach, the Group creates provisions for liabilities resulting from court cases and other legal claims if the probability of an outflow of resources to settle the obligation is higher than 50%.
in the case of a larger population of similar court cases or other legal claims, the probability of an outflow of resources to meet the Group's obligation is measured on a portfolio basis, taking into account the group of obligations as a whole, and the provision is estimated using the expected value method as a probability weighted average of a few scenarios (most often three: baseline, positive and negative) with different probabilities assigned to each scenario.
The Group applies the above principles to legal claims that do not affect cash flows from financial assets recognised in the statement of financial position – in this case the Group applies IFRS 9, as described in item 13.6 .
If the legal claim relates to a financial asset that has been excluded from the statement of financial position (e.g. repaid), provision is created on the basis of IAS 37.
17. Employee benefits
17.1. Benefits under the Act on employee pension programmes
Expenses incurred due to a programme of certain contributions are recognised as costs in the income statement.
17.2. Short-term employee benefits
Short-term employee benefits of the Group (other than termination benefits) comprise of remuneration, bonus, paid annual leave and social security contributions.
The Group recognizes the anticipated, undiscounted value of short-term employee benefits as an expense of an accounting period when an employee rendered service (regardless of payment date) in correspondence with other on-balance liabilities.
The amount of short-term employee benefits on the unused holidays to which Group employees are entitled is calculated as the total of unused holidays to which particular Group employees are entitled.
17.3. Long-term employee benefits
17.3.1. Benefits under the Labour Code regulations
Provisions for retirement benefits granted under benefits due to regulations of the Labour Code are estimated on the basis of the actuarial valuation. The provision resulting from actuarial valuation is recognised in Accumulated other comprehensive income and revalued on an annual basis.
Provisions for long-term employee benefits are recognised in the item Provisions in the statement of financial position in correspondence with salary costs in the statement of profit or loss.
A description of the assumptions of the method of calculating the provision for retirement and disability severance pays is included in note 32 . Provisions .
17.3.2. Variable remuneration programme benefits
Variable remuneration benefits to employees that are to be settled in cash are recognised as an expense during the performance period with a corresponding entry of a liability towards employees.
The share-based payment components that are to be settled in cash are recognised as an expense and liability during the performance period (the year for which the employee receives the benefits) based on the benefit’s fair value. The fair value is remeasured every balance sheet date until the settlement with the employee, with changes in the fair value recognised as gains or losses in the statement of profit or loss.
The share-based payment components that are to be settled in shares are recognised as an expense during the performance period based on the fair value. The corresponding entry is in equity. The fair value is remeasured at grant date and any changes are recognised in equity.
The fair value of the share-based payment components is determined with reference to the share price and the present value of estimated dividend payments during the deferral period.
44
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
18. Equity
Equity includes: share capital, supplementary capital from the sale of shares above their nominal value, accumulated other comprehensive income, retained earnings and own shares for the purposes of the employee incentive scheme. All amounts of equity and funds are presented at nominal value.
Share capital
Share capital is presented at nominal value, in accordance with the Articles of Association (the company’s charter) and entry into the commercial register of the National Court Register.
Dividends
Dividends for the financial year which have been approved by the General Shareholders’ Meeting, but not paid at the balance sheet date are disclosed under Dividend liabilities in the item Other liabilities .
Share premium
Share premium is formed from agio obtained from the issue of shares reduced by the attributable direct costs incurred with that issue.
Accumulated other comprehensive income
Accumulated other comprehensive income is created as a result of:
valuation of financial instruments classified for measurement measured at fair value through other comprehensive income,
valuation of derivatives for the element being the effective cash flow hedge,
valuation of non-current assets measured at fair value,
actuarial gains and losses.
The deferred tax assets and liabilities resulting from above mentioned valuations are included in the accumulated other comprehensive income. The accumulated other comprehensive income is not subject to profit distribution.
Retained earnings
Retained earnings are created from profit write-offs and are allocated for purposes specified in the Articles of Association (the company’s Charter) or other legal regulations. Retained earnings comprise of:
other supplementary capital,
other reserve capital,
general banking risk fund,
valuation of share-based payments,
undistributed result from previous years,
net result attributable to Parent entity.
Other supplementary capital, other reserve capital and general banking risk fund are created from profit write-offs and are allocated for purposes specified in the Articles of Association (the company’s Charter) or other legal regulations.
General banking risk fund is created in accordance with the Banking Law Act of 29 August 1997 as amended, from profit after tax.
The net financial result attributable to the Parent entity represents the gross result under the statement of profit or loss for the current year, adjusted with the corporate income tax and the result attributable to the minority shares.
Own shares for the purposes of the incentive program
The Group purchases its own shares in order to fulfil the obligations arising from the incentive scheme, variable remuneration components on the principles described in point 17.3.2 . Variable remuneration programme benefits .
19. Income tax
Income tax is recognised as current and deferred tax. Current income tax is recognised in the income statement. Deferred income tax is recognised in the income statement or equity depending on the type of temporary differences.
19.1. Income tax
Current tax is a liability calculated based on taxable income at the prevailing tax rate at the balance sheet date including adjustments of previous years’ tax liability.
19.2. Deferred income tax
The Group creates a provision for deferred tax in respect of a timing difference caused by different moment of recognising income as generated and costs as incurred in accordance with the accounting regulations corporate income tax provisions. A positive temporary net difference is recognised in liabilities as Deferred tax provisions . A negative temporary net difference is recognised under Deferred tax assets.
45
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
The deferred tax provision is created by using the balance sheet method for all positive timing differences as at the balance sheet date arising between tax value of assets and liabilities and their carrying amount disclosed in the financial statements, except for situations where deferred tax provision arises from:
initial recognition of goodwill,
goodwill the amortization of which is not a tax deductible expense,
initial recognition of an asset or liability under a transaction which does not constitute a business combination and which on its origination has no impact on the gross financial result or taxable income or loss.
Deferred tax assets are recognised with respect to all negative timing differences as at the balance sheet date between the tax value of assets and liabilities and their carrying amount disclosed in the financial statements and unused tax losses. Deferred tax assets are recognised in such amount in which taxable income is likely to be earned allowing to set off negative timing differences, except for the situations when the component of deferred tax assets arises from the initial recognition of an asset or liability with a transaction which does not constitute a business combination and on its origination have no impact on the gross financial result or taxable income or loss.
The carrying amount of a deferred tax asset shall be verified for each balance sheet date and reduced if it is no longer likely to achieve taxable income sufficient for a partial or full realization of the deferred tax assets component.
Deferred tax assets and deferred tax provisions are estimated with the use of the tax rates which are expected to be in force when the asset is realised or provision released, assuming the tax rates (and tax provisions) legally or factually in force as at the balance sheet date.
Income tax pertaining to items directly recognised in equity is recognised in equity.
Deferred tax assets and provisions are recognised by the Group in the statement of financial position after offsetting at the level of each entity subject to consolidation. The Group offsets deferred tax assets and deferred tax provisions, where it has legal title to effect such offsetting, and the deferred assets and provisions pertain to the same taxpayer.
IV. Comparability of financial data
Changes in the consolidated statement of financial position
In these annual consolidated financial statements for the period from 1 January 2024 by 31 December 2024, compared to the annual consolidated financial statements for the period from 1 January 2023 to 31 December 2023, the Group has introduced changes in the presentation of cash and cash equivalents in the consolidated statement of financial position. The Cash and balances at the Central Bank item has been replaced by Cash and cash equivalents . The new item included financial assets previously presented in the item Cash and balances with the Central Bank , i.e. cash, other cash and balances with the Central Bank and selected financial assets previously presented in the item Loans and other receivables granted to other banks , i.e. balances on current accounts and overnight deposit accounts with other banks and balances of collateral margins placed with other banks. The amendment was aimed at harmonising data on cash and cash equivalents between the statement of financial position and the statement of cash flows and adapts the presentation to the position of the IFRS Interpretative Committee and the requirements of IAS 7 S tatement of cash flows , as well as to the changing market practice in this respect.
The data as at 31 December 2023 have been restated in order to achieve comparability. The table contains individual items presented in assets of the consolidated statement of financial position, in the breakdown and at values presented in the annual consolidated financial statements for the period from 1 January 2023 to 31 December 2023 and in the breakdown and at values presented in these annual consolidated financial statements. Liabilities and equity did not change and did not require restatement.
46
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
as at 31 December 2023
in the annual consolidated financial statements for the period from 1 January 2023 to 31 December 2023 ( published data )
change
in the annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024 ( comparable data )
Assets
Cash in hand and balances with the Central Bank
6,752
-6,752
not applicable
Cash and cash equivalents
not applicable
7,041
7,041
Loans and other receivables to other banks
19,909
-289
19,620
Financial assets measured at fair value through profit or loss
2,274
2,274
Derivative hedge instruments
208
208
Investment securities
56,614
56,614
Transferred assets
165
165
Loans and other receivables to customers measured at amortised cost
156,521
156,521
Investments in associates accounted for using the equity method
181
181
Property. plant and equipment
1,002
1,002
Intangible assets
493
493
Current income tax assets
1
1
Deferred tax assets
1,097
1,097
Other assets
144
144
Total assets
245,361
0
245,361
Changes in the consolidated statement of cash flows
Compared to the annual consolidated financial statements for the period from 1 January 2023 to 31 December 2023, the Group changed the presentation of dividends received from associates. In previous periods, they were presented in changes in other assets in cash flows from operating activities, while starting from the annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024, they are presented in the item Dividends received in cash flows from investing activities. Data for 2023 have been revised to ensure comparability.
The table presents items in the consolidated statement of cash flows, the value of which has changed compared to those presented in the annual consolidated financial statements for the period from 1 January 2023 to 31 December 2023.
for the year ended 31 December 2023
in the annual consolidated financial statements for the period from 1 January 2023 to 31 December 2023 ( published data )
change
in the annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024 ( comparable data )
Operating activities
Adjustments, including:
-6,782
-28
-6,810
Change in other assets
471
28
443
Net cash flows from operating activities
-2,341
-28
-2,369
Investing activities
Dividends received
7
28
35
Net cash flows from investing activities
-823
28
-795
V. Notes to the consolidated financial statements
1. Segment reporting
Segments of operation
The management of the Group’s activity is conducted within the areas defined in the Group’s business model. The Group’s business model, above all for the purpose of management reporting, includes division of clients into two main segments:
retail banking segment,
corporate banking segment.
The basis for distinguishing individual segments are entity criteria and - in the case of division into sub-segments - financial criteria (especially turnover, level of collected assets). The specific rules of assigning clients to respective segments are governed by the clients segmentation criteria specified in the Group’s internal regulations.
The Group has separated in organisational terms the operations performed by the Centre of Expertise Treasury. The Centre of Expertise Treasury manages short-term and long-term liquidity risk in line with the effective regulations and risk appetite internally set at the Group, manages interest rate risk and invests surpluses obtained from business lines while maintaining the liquidity buffer in the form of liquid assets. The Centre of Expertise Treasury’s net income on operations is allocated to the business lines considering its support function for the Group’s business lines.
47
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
Retail banking segment
Within the framework of retail banking, the Group provides services to private individuals - the mass client segment and wealthy clients segment.
This activity is analyzed in terms of the main products, including: loan products (overdraft facilities, card-related loans, installment loans, mortgage loans), deposit products (current accounts, term deposits, savings accounts), structured, fund participation units, brokerage services and bank cards.
Corporate banking segment
Corporate banking area encompasses as follows:
providing services to institutional clients,
providing services to individual entrepreneurs,
financial Markets products.
Services to institutional clients encompass strategic clients, large corporate entities and mid-sized companies. For corporate activity, the Bank provides reporting broken down by leading products covering i.e. loan products (working loans, investment loans), deposit products (current accounts, term deposits and negotiated deposits, savings accounts), financial markets products, trust services, capital market operations conducted by the Parent company, products related to leasing and factoring services offered by ING Lease (Polska) Sp. z o.o. and ING Commercial Finance Polska S.A.
The service of individual entrepreneurs includes natural persons conducting business activity and partner companies that do not keep full accounting in accordance with the provisions of the Act on accounting, civil partnerships or general partnerships whose partners are only natural persons who do not keep full accounting in accordance with the provisions of the Accounting Act, and housing communities. The activity of entrepreneurs is reported in terms of the main products, including credit products (cash loan, credit line, credit card), deposit products (company account, foreign currency account, account for housing communities), leasing products offered by ING Lease (Polska) Sp. z o.o., accounting services, terminals and payment gateways.
Financial markets products encompass operations performed in money and capital markets, conducted both on the proprietary basis as well as for the customers’ benefit. Within the framework of this activity, currency, money and derivative instrument market products and securities operations (treasury securities, shares and notes) are specified.
Measurement
The measurement of the segment’s assets and liabilities, segment’s revenue and costs is based on the accounting standards applied by the Group, included in notes describing applied accounting standards. In particular, both internal and external interest income and costs for individual segments are determined with the use of the transfer price system within the Risk Transfer System (RTS). Transfer prices are defined based on the yield curve for a given currency that is common for assets and liabilities. The transfer price that is determined for the products being assets and liabilities with the same position on the yield curve is identical. The original transfer price – coming from the product measurement regarding the yield curve can be modified and the factors adjusting the transfer price can be the following: a premium for obtaining long-term liquidity, matching of the Group’s position, a hedging cost for sophisticated products and the pricing policy. Thereafter, based on quotation rates available at news services, yield curves are developed using mathematical equations. Revenue, costs, results, assets and liabilities for a given segment account for elements that are directly attributable to the segment in question, as well as element that may be attributed to that segment based on reasonable premises. The Group presents segment's interest income reduced by the cost of the interest.
Geographic segments
The Group pursues business within the territory of the Republic of Poland.
48
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
Income statement by segments
for the year ended 31 December
2024
2023
Retail
banking
Corporate banking
Total
Retail
banking
Corporate banking
Total
Income total
4,901
6,345
11,246
4,438
6,210
10,648
net interest income
4,153
4,572
8,725
3,779
4,392
8,171
net commission income, including:
671
1,623
2,294
589
1,575
2,164
commission income, including:
1,026
1,861
2,887
912
1,810
2,722
transaction margin on currency exchange transactions
83
634
717
79
629
708
account maintenance fees
113
371
484
115
361
476
lending commissions
23
479
502
25
466
491
payment and credit cards fees
460
187
647
393
174
567
participation units distribution fees
95
-
95
64
-
64
insurance product offering commissions
205
39
244
192
38
230
factoring and lease contracts commissions
-
61
61
-
57
57
other commissions
47
90
137
44
85
129
commission expenses
-355
-238
-593
-323
-235
-558
other income/expenses
77
150
227
70
243
313
General and administrative expenses
-1,978
-1,980
-3,958
-1,954
-1,746
-3,700
including depreciation and amortisation
-181
-159
-340
-184
-143
-327
Segment operating result
2,923
4,365
7,288
2,484
4,464
6,948
impairment for expected credit losses
-29
-915
-944
-5
-503
-508
cost of legal risk of FX mortgage loans
-92
-
-92
-106
-
-106
tax on certain financial institutions
-252
-488
-740
-231
-413
-644
share of profit/(loss) of associates accounted for using the equity method
33
-
33
30
-
30
Gross profit
2,583
2,962
5,545
2,172
3,548
5,720
Income tax
-
-
-1,176
-
-
-1,279
Net profit
-
-
4,369
-
-
4,441
attributable to shareholders of ING Bank Śląski S.A.
-
-
4,369
-
-
4,441
Assets, liabilities, and net cash flow by segments
as at 31 December
2024
2023
Retail
banking
Corporate banking
Total
Retail
banking
Corporate banking
Total
Assets of the segment
113,011
145,065
258,076
104,080
138,586
242,666
Segment investments in associates accounted for using the equity method
185
-
185
181
-
181
Other assets (not allocated to segments)
-
-
2,098
-
-
2,514
Total Assets
113,196
145,065
260,359
104,261
138,586
245,361
Segment liabilities
133,788
105,167
238,955
120,136
102,841
222,977
Other liabilities (not allocated to segments)
-
-
4,234
-
-
5,648
Equity
-
-
17,170
-
-
16,736
Total equity and liabilities
133,788
105,167
260,359
120,136
102,841
245,361
Capital expenditure
130
131
261
168
151
319
Net cash flow from operating activities
4,089
-2,659
1,430
1,932
-4,151
-2,219
Net cash flow from operating activities (not allocated to segments)
-
-
-1,721
-
-
-150
Net cash flow from operating activities total
4,089
-2,659
-291
1,932
-4,151
-2,369
Net cash flows from investing activities
2,467
2,881
5,348
-371
-424
-795
Net cash flows from financing activities
-6
-3,731
-3,737
-9
7,164
7,155
49
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
2. Net interest income
for the year ended 31 December
2024
2023
Interest income, including:
13,112
12,409
interest income calculated using effective interest rate method, including:
12,365
11,368
interest on financial instruments measured at amortised cost
10,611
9,867
interest on loans and other receivables to other banks
1,227
855
interest on loans and other receivables to customers
8,281
8,061
interest on investment securities
1,103
951
interest on investment securities measured at fair value through other comprehensive income
1,754
1,501
other interest income, including:
747
1,041
interest income related to the settlement of valuations of cash flow hedging derivatives
746
1,039
other interest on loans and other receivables to customers measured at fair value through profit or loss
1
2
Interest expenses, including:
-4,387
-4,238
interest on deposits from other banks
-789
-424
interest on deposits from customers
-3,050
-3,121
interest on issue of debt securities
-31
-31
interest on subordinated liabilities
-80
-76
interest on lease liabilities
-18
-17
other interest cost related to the settlement of valuations of cash flow hedging derivatives
-419
-569
Net interest income
8,725
8,171
The interest costs presented in the table relate to financial liabilities measured at amortised cost.
For assets in Stage 3, interest income is calculated based on net exposure amounts, i.e. amounts that include interest impairment for expected credit losses.
For 2024, interest income on financial assets in Stage 3 amounted to PLN 304 million compared to PLN 209 million in 2023.
Credit holidays
In May 2024, the Act of 12 April 2024 amending the Act on support for borrowers who have taken out a housing loan and are in a difficult financial situation and the Act on crowdfunding for business ventures and assistance to borrowers was published in the Journal of Laws. The Act introduced, among others, the possibility for some borrowers to suspend repayment of up to 4 monthly mortgage loan instalments in the period from June 1 to December 31, 2024 (credit holidays).
In 2024, borrowers representing approx. 9.5% of the PLN mortgage loan portfolio of the Bank’s Capital Group took advantage of the possibility to suspend instalment repayment. As a result, the Group’s interest income in 2024 decreased by a loss on modification in the amount of PLN 140 million. The impact of the adjustment is presented under interest on loans and other receivables granted to customers .
50
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
3. Net commission income
for the year ended 31 December
2024
2023
Commission income
2,887
2,722
transaction margin on currency exchange transactions
717
708
account maintenance fees
484
476
lending commissions
502
491
payment and credit cards fees
647
567
participation units distribution fees
95
64
insurance product offering commissions
244
230
factoring and lease contracts commissions
61
57
brokerage activity fees
52
51
fiduciary and custodian fees*
21
25
agency in financial instruments transactions
2
2
other commission
62
51
related to assets / liabilities not measured at fair value through profit or loss
7
3
other
55
48
Commission expenses
-593
-558
card fees paid
-336
-315
commission paid on agency in selling deposit products
-89
-78
brokerage activity fees
-19
-22
commission paid on disclosing credit information
-23
-22
commission paid on cash handling services
-26
-26
electronic banking services fees
-18
-18
commission paid on trading in securities
-12
-14
costs of the National Clearing House (KIR)
-20
-18
agency in financial instruments transactions
-7
-11
leasing services
-4
-4
other commission
-39
-30
related to assets / liabilities not measured at fair value through profit or loss
-8
-7
other
-31
-23
Net commission income
2,294
2,164
*) Fiduciary and custodian fees show the commissions earned on custody services, where the Group keeps or invests assets for their clients.
The table includes the following items relating to financial instruments that are not measured at fair value through profit or loss and which have not been included in the calculation of the effective interest rate:
revenues in the total amount of PLN 570 million from granting loans, factoring and leasing services (PLN 551 million in 2023),
costs in the total amount of PLN 124 million for intermediation in the sale of deposit products, providing credit information and leasing services (PLN 111 million in 2023).
Revenues from contracts with customers within the meaning of IFRS 15 amounted to PLN 2,317 million in 2024 compared to PLN 2,171 million in 2023.
51
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
4. Net income on financial instruments measured at fair value through profit or loss and FX result
for the year ended 31 December
2024
2023
FX result and net income on interest rate derivatives, including
205
218
FX result
145
193
currency derivatives
60
25
Net income on interest rate derivatives
-41
54
Net income on debt instruments held for trading
20
46
Net income on repo transactions
14
14
Total
198
332
The result on derivatives includes the net result on trading and fair value measurement of interest rate instruments (FRA, IRS/CIRS, cap options) and currency instruments (swaps, options).
The result on debt instruments includes the net result on trading in government securities and the result on the fair value measurement of these instruments.
5. Net income on the sale of securities and dividend income
for the year ended 31 December
2024
2023
Net income on the sale of securities measured at amortised cost
-6
-
Net income on sale of securities measured at fair value through other comprehensive income and dividend income, including:
-3
1
sale of debt securities
-11
-6
dividend income
8
7
Total
-9
1
Dividend income received in 2024 and 2023 comes from companies whose shares the Group kept as at 31 December 2024 and 31 December 2023, respectively, in its portfolio.
6. Net (loss)/income on hedge accounting
for the year ended 31 December
2024
2023
Fair value hedge accounting for securities
10
-9
valuation of the hedged transaction
-163
401
valuation of the hedging transaction
173
-410
Cash flow hedge accounting
-
4
ineffectiveness under cash flow hedges
-
4
Total
10
-5
For details of the hedge accounting applied by the Group, refer to the subsequent part of the financial statements, Risk and capital management section, in chapter II. 3.8 . Hedge accounting .
7. Net (loss)/income on other basic activities
for the year ended 31 December
2024
2023
Sale of other services
14
12
Net income on disposal of property, plant and equipment and intangible assets
-3
-2
Banking activity-related compensations and losses
-10
-28
Reversal of provisions for potential customer complaints
10
-
Other
17
3
Total
28
-15
52
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
8. General and administrative expenses
for the year ended 31 December
2024
2023
Personnel expenses, including:
-2,031
-1,936
wages and salaries, including:
-1,624
-1,584
variable remuneration programme
-45
-47
retirement benefits
-11
-9
employee benefits
-407
-352
Cost of marketing and promotion
-189
-165
Depreciation and amortisation, including:
-340
-327
on property, plant and equipment
-235
-239
including depreciation of the right to use
-119
-127
on intangible assets
-105
-88
Other general and administrative expenses, including:
-1,398
-1,272
IT costs
-493
-386
advisory and legal services, audit costs
-245
-178
mandatory payments to the Bank Guarantee Fund for the forced restructuring fund
-160
-171
communication costs
-151
-154
transport and representation costs
-52
-51
communication costs
-40
-55
fees to the Polish Financial Supervision Authority
-29
-24
disputed claims
-26
-24
costs from short-term leases and low-value leases
-14
-13
donation
-10
-8
other
-178
-208
Total
-3,958
-3,700
8.1. Employee benefits
Variable Remuneration Programme
Benefits are awarded to the employees covered with the Programme, based on their performance appraisal for a giv-en year. Variable remuneration programme benefits to persons holding managerial positions having a material im-pact on the risk profile of the Group (in accordance with guidelines and Regulation on the risk management system and internal control system, remuneration policy and a detailed method of capital estimation in banks have been granted in one of two programmes:
An equity-settled share-based payment and cash programme, which operates from mid-2022. In this pro- gramme the benefit is granted in two parts:
one paid in a fixed amount of cash (no more than 50%), and
one granted as rights to ING Bank Śląski shares (at least 50%); an equity-settled share-based payment.
A cash-settled share-based payment and cash programme, which operated until mid-2022. In this programme the benefit is granted in two parts:
one paid in a fixed amount of cash (no more than 50%), and
one paid in cash with the amount of cash based on the price of ING Bank Śląski shares (at least 50%); a cash-settled share-based payment.
The variable remuneration programme for any given performance year is settled over a period of up to six years (the deferral period) in tranches. Furthermore, the components that are settled in shares and in cash are subject to a one-year retention period after settlement.
The significant accounting principles applied to variable remuneration programme benefits are included in chapter III. Significant accounting principles, in item 17.3.2 . Variable remuneration programme benefits .
The tables on the following page show the instruments granted under share-based payment schemes.
53
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
2024
Fair value of instruments at the measurement date*
(in PLN million)
Number of instruments
granted
(pcs.)
Number of instruments
outstanding at the beginning of the period
(pcs.)
Number
of instruments exercised
during 2024
(pcs.)
Number of instruments granted but not yet exercised
as at 31 December 2024
(pcs.)
Equity-settled
Programme 2022
10
41,964
41,964
24,931
17,033
Programme 2023
16
64,428
64,428
-
64,428
Programme 2024
18
71,371
71,371
-
71,371
Total
177,763
177,763
24,931
152,832
Cash-settled
Programme 2017
19
67,029
799
398
401
Programme 2018
20
72,137
9,874
9,446
428
Programme 2019
20
72,259
19,780
9,370
10,410
Programme 2020
18
63,806
25,779
8,249
17,530
Programme 2021
14
51,021
21,109
4,087
17,022
Programme 2022
11
37,577
37,577
22,312
15,265
Programme 2023
-
265
265
-
265
Programme 2024
-
338
338
-
338
Total
364,432
115,521
53,862
61,659
2023
Fair value of instruments at the measurement date*
(in PLN millon)
Number of instruments
granted
(pcs.)
Number of instruments
outstanding at the beginning of the period
(pcs.)
Number
of instruments exercised
during 2023
(pcs.)
Number of instruments granted but not yet exercised
as at 31 December 2023
(pcs.)
Equity-settled
Programme 2022
11
41,964
41,964
-
41,964
Programme 2023
16
64,428
64,428
-
64,428
Total
106,392
106,392
106,392
Cash-settled
Programme 2017
17
67,029
9,573
8,774
799
Programme 2018
19
72,137
19,332
9,400
9,932
Programme 2019
19
72,259
29,108
9,328
19,780
Programme 2020
17
63,806
25,779
-
25,779
Programme 2021
13
51,021
51,021
29,912
21,109
Programme 2022
10
37,577
37,577
-
37,577
Programme 2023
-
265
265
-
265
Total
364,094
172,655
57,414
115,241
*) For equities settled in equity instruments: the product of the number of instruments granted and the fair value of shares calculated using the discounted dividend model. For cash-settled shares: the product of the number of granted instruments and the median price of ING Bank Śląski S.A. shares from 10 January to 20 February in the year following the assessment period.
54
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
9. Impairment for expected credit losses
Net impairment for expected credit losses
for the year ended 31 December
2024
2023
Loans and other receivables to other banks, including:
-
-1
measured at amortised cost
-
-1
Investment securities, including:
4
-16
measured at fair value through other comprehensive income
-
-9
measured at amortised cost
4
-7
Loans and other receivables to customers measured at amortised cost*, including:
-959
-481
corporate banking
-935
-476
corporate and municipal debt securities
-2
3
retail banking
-24
-5
Provisions for off-balance sheet liabilities
11
-10
Total
-944
-508
*) The values presented in the item Loans and other receivables to customers measured at amortised cost include, among others, the amounts of repayments regarding receivables previously removed from the balance sheet, which in 2024 amounted to PLN 1 million, similar to 2022.
Allowances on expected credit losses in the balance sheet
as at 31 December
2024
2023
Investment securities, including:
22
26
measured at fair value through other comprehensive income
12
12
measured at amortised cost
10
14
Loans and other receivables to customers measured at amortised cost, including:
3,959
3,508
corporate banking
3,079
2,525
corporate and municipal debt securities
4
2
retail banking
880
983
Provisions for off-balance sheet liabilities
105
116
Total
4,086
3,650
10. Cost of legal risk of FX mortgage loans
for the year ended 31 December
2024
2023
Provisions for legal risk of FX indexed mortgage loans, including:
relating to loans in the Bank's portfolio
-62
-94
relating to repaid loans
-30
-12
Total
-92
-106
Detailed information on the legal risk of CHF-indexed mortgage loans is presented later in the report in note 32 . Provisions. Significant assumptions regarding the calculation of legal risk provisions for CHF-indexed mortgage loans are described in chapter III. Significant accounting principles, in point 3.3 . Legal risk related to the portfolio of mortgage loans indexed to the Swiss franc exchange rate .
11. Tax on certain financial institutions
Under the Act on the Tax on Certain Financial Institutions (hereinafter referred to as the "Act"), banks are charged a so-called bank tax amounting to 0.0366% of the value of its assets on a monthly basis. The basis for taxation is the sum of assets after deductions provided for in the Act (i.a. by the value of PLN 4 billion, the value of own funds, the value of Treasury securities, the value of assets in the form of securities legally covered by the Treasury guarantee and the value of assets resulting from the repurchase transaction in which Treasury securities are subject). For 2024, the tax amounted to PLN 740 million (PLN 644 million for 2023).
55
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
12. Income tax
Income tax recognised in the income statement
for the year ended 31 December
2024
2023
Current tax, of which:
781
662
current tax for the financial year
779
661
tax on dividends
2
1
Deferred tax, including:
395
617
rise and reversal of temporary differences
-123
98
settlement of tax losses, including:
518
519
tax losses - Bank
516
518
tax loss - subsidiaries
2
1
Total
1,176
1,279
The amount presented in the item settlement of tax losses includes:
Settlement of tax losses incurred by the Bank in previous years - respectively 50% of the tax loss incurred in 2021 was settled and 50% of the tax loss incurred in 2022 was settled - the losses were settled in the amount of PLN 2,717 million and at the same time deferred tax in the amount of PLN 516 million was settled.
Settlement of the tax loss, incurred by the subsidiary ING Bank Hipoteczny S.A., incurred in 2023.
Current tax for the financial year
for the year ended 31 December
2024
2023
Current tax for the financial year included in the consolidated income statement
779
661
Current tax for the financial year included in consolidated equity
81
578
Total
860
1,239
The Group has two sources of current tax, a tax calculated on the profit and loss account and a tax calculated on the unrealised valuation of hedging instruments (IRS), recorded in other comprehensive income and pertaining to instruments settled in accordance with the STM (settled-to-market) approach.
Current income tax assets / liabilities
as at 31 December
2024
2023
Current income tax assets
14
1
Current income tax liabilities
16
115
Calculation of the effective tax rate
for the year ended 31 December
2024
2023
A. Profit before tax
5,545
5,720
B. 19% of profit before tax
1,054
1,087
C. Increases – non-deductible expenses, including:
245
199
tax on certain financial institutions
140
122
prudential fee in favour of BGF
29
29
provisions for legal risk of foreign currency mortgage loans and commission returns
17
20
costs of derecognition of credit and non-credit receivables from the balance sheet
7
3
impairment loss on receivables in a part not covered with the deferred tax
38
10
provisions for disputable debt claims and other assets
3
5
State Fund for Rehabilitation of Disabled Persons (PFRON) payments
2
3
representation expenses
1
1
other
8
6
D. Decreases – tax exempt income, including:
123
7
valuation using the equity method of subsidiaries
7
6
release of provisions for disputed claims
3
1
research and development allowance settled for 2017, 2022 and 2023
51
-
creation of deferred tax asset due to the forecasted research and development relief for 2024
40
-
creation of a deferred tax asset due to a tax adjustment of the CHF loan portfolio
22
-
E. Income tax from the income statement (B+C-D)
1,176
1,279
Effective tax rate (E : A)
21.21%
22.36%
The deviation in the effective tax rate above 19% in 2024 was mainly due to:
increase, including:
tax on certain financial institutions in the amount of PLN 740 million (PLN 644 million in 2023),
a fee for the BFG (contribution to the resolution fund) in the amount of PLN 151 million (PLN 154 million in 2023),
56
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
creation of provisions for legal risk of mortgage loans in foreign currencies in the amount of PLN 92 million (PLN 106 million in 2023).
reductions, including:
research and development tax credit in the amount of PLN 479 million, which consists of a tax credit settled for 2017, 2022 and 2023 in the amount of PLN 270 million and creation of a deferred tax asset for the projected research and development relief for 2024, based on the amount of PLN 209 million,
creation of a deferred tax asset due to a tax adjustment of the CHF loan portfolio, based on the amount of - PLN 118 million.
13. Earnings and book value per ordinary share
Basic earnings per share
The calculation of basic earnings per share of the Parent Company is based on net profit attributable to the shareholders of ING Bank Śląski S.A. and the weighted average number of ordinary shares outstanding at the end of the year.
for the year ended 31 December
2024
2023
Net profit attributable to shareholders of ING Bank Śląski S.A.
4,369
4,441
Weighted average number of ordinary shares
130,143,180
130,117,872
Earnings per ordinary share (in PLN)
33.57
34.13
Diluted earnings per share
In 2024 as well as in 2023, there were no factors that would dilute the profit per one share. In the described periods, ING Bank Śląski S.A. issued neither bonds convertible to shares nor options for shares. The share capital comprises ordinary shares only (no preference shares). Therefore, the diluted earnings per share are the same as the underlying profit per share.
Book value per share
The calculation of the book value per one share of the Parent Company is based on the amount of equity attributable to the shareholders of ING Bank Śląski S.A. and the number of shares outstanding at the end of the year.
as at 31 December
2024
2023
Book value
17,170
16,736
Number of shares
130,100,000
130,100,000
Book value per share (PLN)
131.98
128.64
14. Cash and cash equivalents
as at
31 Dec 2024
31 Dec 2023
transformed data
1 Jan 2023
transformed data
Cash in hand
774
783
933
Balances with the Central Bank
7,396
5,969
1,405
Balances on accounts with other banks, including:
191
289
712
current accounts
105
147
329
overnight deposits
51
73
22
call margins posted
35
69
361
Total
8,361
7,041
3,050
Starting from the consolidated financial statements for the period from 1 January 2024 to 31 December 2024, the Group changed the presentation of cash and cash equivalents in the statement of financial position. Some of the financial assets in the form of cash on accounts with other banks were transferred from the item Loans and other receivables granted to other banks to the new item Cash and cash equivalents. For more information, see chapter IV . Comparability of financial data . Data for earlier periods have been restated to ensure comparability.
57
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
Restricted cash and cash equivalents
The Group’s parent entity maintains on the current account with the National Bank of Poland the statutory reserve, which at the end of 2024 amounted to 3.5% of the value of deposits received (similar to the end of 2023 and 2022).
The arithmetic mean of the holdings of required reserves, which the Group’s parent entity is obliged to keep on a current account with the National Bank of Poland, during a given period, was:
PLN 7,602 million for the period from 31 December 2024 to 9 February 2025,
PLN 7,256 million for the period from 30 November 2023 to 1 January 2024,
PLN 6,532 million for the period from 30 November 2022 to 1 January 2023.
Holdings of statutory reserve funds on an overdraft account with the National Bank of Poland are remunerated during the reserve period in the amount determined by the Monetary Policy Council. As at 31 December 2024, as at 31 December 2023, the interest rate was 5.75% (6.75% as at 31 December 2022).
15. Loans and other receivables to other banks
as at
31 Dec 2024
31 Dec 2023
transformed data
1 Jan 2023
transformed data
Reverse repo transactions
20,779
19,000
3,760
Loans and advances
856
555
312
Interbank deposits (excluding overnight deposits)
-
65
377
Total (net)
21,635
19,620
4,449
Starting from the consolidated financial statements for the period from 1 January 2024 to 31 December 2024, the Group changed the presentation of cash and cash equivalents in the statement of financial position. Some of the financial assets in the form of cash on accounts with other banks were transferred from the item Loans and other receivables granted to other banks to the new item Cash and cash equivalents. For more information, see chapter IV . Comparability of financial data . Data for earlier periods have been restated to ensure comparability.
Due to the very good credit quality of loans and other receivables granted to other banks and the related insignificant level of the allowance for expected credit losses, the gross carrying amount of these assets is equal to their net carrying amount. Disclosures on the credit quality of loans and other receivables granted to other banks are presented later in the consolidated financial statements in Risk and capital management section, in chapter II. 2.10.6 . Credit quality of other financial assets .
16. Financial assets measured at fair value through profit or loss
as at 31 December
2024
2023
transferred debt securities
other finnancial assets measured at fair value through profit or loss
Total
transferred debt securities
other finnancial assets measured at fair value through profit or loss
Total
Financial assets held for trading, including:
179
1,926
2,105
165
2,235
2,400
valuation of derivatives
-
898
898
-
900
900
other financial assets held for trading, including:
179
1,028
1,207
165
1,335
1,500
debt securities:
179
521
700
165
719
884
Treasury bonds in PLN
179
499
678
133
600
733
Czech Treasury bonds in CZK
-
22
22
32
119
151
repo transactions
-
507
507
-
616
616
Financial assets other than those held for trading, measured at fair value through profit or loss, including:
-
22
22
-
39
39
loans obligatorily measured at fair value through profit or loss
-
21
21
-
39
39
equity instruments
-
1
1
-
-
-
Total
179
1,948
2,127
165
2,274
2,439
Detailed disclosures on the nominal values of derivative instruments and their valuation broken down into individual types of derivative instruments along with the remaining dates for their implementation are presented in note 17 . Valuation of derivatives .
Securities that can be pledged or sold by the collateral recipient are presented as transferred debt securities . These assets, as required by IFRS 9, are presented separately by the Group in the consolidated statement of financial position under Transferred assets . For further information on assets pledged as security for liabilities, see note 20 .
58
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
17. Valuation of derivatives
The tables below present the nominal values of derivatives whose valuation is presented in financial assets measured at fair value through profit or loss (positive valuation) and financial liabilities measured at fair value through profit or loss (negative valuation) of the Group's statement of financial position. Notional amounts of the same-currency transaction derivatives were presented in the amounts purchased, while two-currency transactions showed both purchased and sold amounts. The fair value valuation of derivatives includes a valuation adjustment for counterparty credit risk (CVA) and Group default (DVA).
2024
as at 31 December
Fair value
Nominal value of instruments with remaining maturity
Assets
Liabilities
up to
3 months
from
3 months
to 1 year
over 1 year
Total
Interest rate derivatives, including:
244
431
154,572
227,487
592,220
974,279
settled via CCP
145
135
154,358
226,041
581,887
962,286
contracts for the future FRA interest rate – PLN
5
6
88,974
53,798
5,406
148,178
Interest rate swaps (IRS PLN) fixed – float
179
350
48,020
154,296
526,609
728,925
Interest rate swaps (IRS EUR) fixed – float
49
60
13,962
13,984
40,801
68,747
Interest rate swaps (IRS USD) fixed – float
1
1
2,338
1,981
3,203
7,522
Interest rate swaps (IRS CZK) fixed - float
1
2
609
1,033
13,938
15,580
Interest rate swaps (IRS GBP) fixed - float
-
3
669
1,941
257
2,867
Interest rate swaps (IRS HUF) fixed - float
1
1
-
-
52
52
Interest rate swaps (IRS CHF) fixed - float
-
-
-
454
-
454
CAP options – EUR
8
8
-
-
1,934
1,934
CAP options – PLN
-
-
-
-
20
20
Currency derivatives, including:
652
301
40,700
26,192
7,784
74,676
currency contracts (swap, forward), including:
599
215
40,511
24,933
2,216
67,660
currency contracts (swap, forward) EUR / PLN
314
81
18,904
16,127
1,338
36,369
currency contracts (swap, forward) USD / PLN
30
86
9,921
3,659
43
13,623
currency contracts (swap, forward) EUR / USD
192
5
7,729
1,508
398
9,635
currency contracts - other currency pairs
63
43
3,957
3,639
437
8,033
CIRS, inluding:
53
86
189
1,259
5,568
7,016
CIRS EUR/PLN (float-float)
52
10
90
1,259
3,139
4,488
CIRS EUR/PLN (float-fixed)
1
76
99
-
2,429
2,528
Current off-balance sheet transactions, including:
2
1
24,439
-
-
24,439
foreign exchange operations
2
1
1,687
-
-
1,687
operations in securities
-
-
22,752
-
-
22,752
Total
898
733
219,711
253,679
600,004
1,073,394
2023
as at 31 December
Fair value
Nominal value of instruments with remaining maturity
Assets
Liabilities
up to
3 months
from
3 months
to 1 year
over 1 year
Total
Interest rate derivatives, including:
347
625
125,668
242,590
550,143
918,401
settled via CCP
223
255
124,912
240,262
541,167
906,341
contracts for the future FRA interest rate – PLN
8
13
59,408
73,894
38,225
171,527
Interest rate swaps (IRS PLN) fixed – float
257
444
43,087
160,428
461,737
665,252
Interest rate swaps (IRS EUR) fixed – float
51
136
17,377
7,006
35,554
59,937
Interest rate swaps (IRS USD) fixed – float
2
3
5,296
240
3,439
8,975
Interest rate swaps (IRS CZK) fixed - float
21
21
-
32
9,612
9,644
Interest rate swaps (IRS GBP) fixed - float
-
-
500
440
885
1,825
Interest rate swaps (IRS HUF) fixed - float
1
1
-
-
57
57
CAP options – EUR
7
7
-
550
612
1,162
CAP options – PLN
-
-
-
-
22
22
Currency derivatives, including:
549
431
30,935
12,092
9,548
52,575
currency contracts (swap, forward), including:
471
352
30,576
11,718
2,894
45,188
currency contracts (swap, forward) EUR / PLN
241
199
10,452
5,065
722
16,239
currency contracts (swap, forward) USD / PLN
125
46
4,644
2,938
714
8,296
currency contracts (swap, forward) EUR / USD
22
21
11,699
1,262
572
13,533
currency contracts - other currency pairs
83
86
3,781
2,453
886
7,120
CIRS, inluding:
78
79
359
374
6,654
7,387
CIRS EUR/PLN (float-float)
62
19
211
374
4,286
4,871
CIRS EUR/PLN (float-fixed)
16
60
148
-
2,368
2,516
Current off-balance sheet transactions, including:
4
4
23,661
-
-
23,661
foreign exchange operations
4
4
2,549
-
-
2,549
operations in securities
-
-
21,112
-
-
21,112
Total
900
1,060
180,264
254,682
559,691
994,637
59
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
Interest rate derivatives IRS/FRA settled-to-market
IRS/FRA interest rate derivatives submitted for clearing via central counterparties/CCP are settled in accordance with the "settlement-to-market/market settlement" approach. Under the terms of the said service, the balance sheet exposure resulting from the transaction is settled on a daily basis based on the change in the fair value of individual transactions. As a result, no Variation Margin is placed. The carrying amount of individual transactions includes cash flows realised as part of the daily settlement of exposures arising therefrom, including cash flows resulting from the settlement of the price alignment amout, which ensures the economic equivalence of the applied approach to the "collateralized-to-market/secured to the market" approach.
18. Derivative hedging instruments
In the consolidated financial statements prepared for 2024 (similarly to 2023), the Group applies fair value hedge accounting and cash flow hedge accounting. The table below presents the valuation of hedging instruments, broken down into instruments securing the fair value of securities and cash flow hedging instruments. The valuation of hedging instruments is presented in the item Derivative hedge instruments in assets (positive valuation) and liabilities (negative valuation) of the consolidated statement of financial position of the Group.
as at 31 December
2024
2023
Assets
Liabilities
Assets
Liabilities
Cash flow hedging instruments
61
72
205
273
Instruments hedging the fair value of securities
-
11
3
7
Total hedging instruments
61
83
208
280
For details of the hedge accounting applied by the Group, refer to the subsequent part of the financial statements, Risk and capital management section, in chapter II. 3.8 . Hedge accounting .
19. Investment securities
as at 31 December
2024
2023
Measured at fair value through other comprehensive income, including:
31,939
23,916
debt securities, including:
31,685
23,680
Treasury bonds in PLN
26,371
21,345
Treasury bonds in EUR
-
546
European Union bonds
2,064
-
European Investment Bank bonds
2,838
1,378
Austrian government bonds
412
411
equity instruments
254
236
Measured at amortised cost, including:
27,053
32,698
debt securities, including:
27,053
32,698
Treasury bonds in PLN
11,859
13,095
Treasury bonds in EUR
2,872
2,940
European Investment Bank bonds
6,654
6,701
Bonds of the Polish Development Fund (PFR)
3,860
3,860
Bank Gospodarstwa Krajowego bonds
1,808
1,805
NBP bills
-
4,297
Total
58,992
56,614
The value presented in the item equity instruments in the category of assets measured at fair value through other comprehensive income (FVOCI) includes investments in shares issued by entities that are considered to be material from the perspective of the Group's operations. The approach to the fair value measurement of these instruments is described in the further part of the report in note 37 . Fair value . In 2024, the Group received income in the form of dividends in the amount of PLN 8 million (PLN 7 million in 2023), which was presented in the consolidated profit and loss account under Net income on the sale of securities measured at fair value through other comprehensive income and dividend income .
Disclosures on the credit quality of investment securities are presented later in the consolidated financial statements in the section Risk and capital management , in chapter II. 2.10.6 . Credit quality of other financial assets .
60
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
20. Assets securing liabilities
Assets securing liabilities that meet the criteria for separate presentation in the statement of financial position (transferred assets)
The Group presents separately in the consolidated statement of financial position, assets securing liabilities that can be pledged or resold by the collateral recipient (transferred assets). IFRS 9.3.2.23(a) requires these assets to be segregated and presented separately from other assets in the statement of financial position.
As at 31 December 2024 (similar to 31 December 2023), the Group held assets securing liabilities in the portfolio of financial assets measured at fair value through profit or loss.
as at 31 December
2024
2023
Bods securing liabilities arising from securities sold with a repurchase agreement (sell-buy-back transactions), including:
Treasury bonds in PLN
179
133
Czech Treasury bonds in CZK
-
32
Total
179
165
Other assets securing liabilities
The carrying amount of other assets securing liabilities that do not meet the criteria for separate presentation in the consolidated statement of financial position is presented next to the table.
as at 31 December
2024
2023
portfolio of financial assets measured at fair value through other comprehensive income
portfolio of financial assets measured at amortised cost
Total
portfolio of financial assets measured at fair value through other comprehensive income
portfolio of financial assets measured at amortised cost
Total
Treasury bonds in PLN, including:
316
822
1,138
275
831
1,106
providing security for the benefit of the Bank Guarantee Fund
-
449
449
-
529
529
constituting a block on the obligation to pay a contribution to the guarantee fund of banks
-
201
201
-
200
200
constituting a blocking of the obligation to pay a contribution to the banks’ compulsory restructuring fund
286
-
286
245
-
245
constituting the lodging of securities collateral for initial margin
-
31
31
-
31
31
representing the payment of securities collateral for the initial margin for the ATS Market
-
61
61
-
61
61
providing security for the KDPW CCP settlement fund
-
10
10
-
10
10
relevant margin for the market of the ATS, the margin fund for the market of the ATS
-
70
70
-
-
-
pledged as collateral in the cover register of mortgage bonds
30
-
30
30
-
30
Treasury bonds in EUR, including:
-
66
66
-
68
68
constituting the margin for the settlement of EUREX transactions
-
66
66
-
68
68
European Investment Bank bonds, including:
200
390
590
202
397
599
providing security for settlements with LCH
-
252
252
-
257
257
constituting the margin for the settlement of EUREX transactions
200
113
313
202
115
317
in the Euroclear account, earmarked as collateral for transactions not submitted to clearing houses
-
25
25
-
25
25
Austrian Government bonds securing the settlements made with LCH
412
-
412
411
-
411
mortgage receivables securing the covered bonds
-
2,565
2,565
-
2,418
2,418
Total
928
3,843
4,771
888
3,714
4,602
61
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
The blocking of securities takes place taking into account the conditions resulting from:
Act on the Bank Guarantee Fund, deposit guarantee system and forced restructuring
Regulation of the European Parliament and of the Council (EU) No. 648/2012 of 4 July 2012
from concluded contracts,
liabilities under repo agreements.
The Group has liabilities due to the issue of mortgage bonds which are secured with the above-mentioned mortgage claims. At the end of 2024, the nominal value of the issued covered bonds was PLN 500 million (compared to PLN 400 million at the end of 2023). Detailed information on the issued mortgage bonds can be found in note 30 . Liabilities from debt securities issued .
The Group has deposited call-type margins as security for derivative transactions. Receivables in this respect are presented in note 14 . Cash and cash equivalents and in note 21 . Loans and other receivables to customers measured at amortised cost .
Restricted assets, apart from the instruments presented in this note, also include the value of the obligatory reserve that the Parent company of the Group is required to maintain in its current account with the NBP. More information on the required reserve is provided in note 14 . Cash and cash equivalents .
Securities not constituting the Group's assets accepted as collateral for liabilities under repo transactions
The market value of buy-sell-back / reverse repo securities was PLN 507 million as at 31 December 2024 compared to PLN 607 million as at 31 December 2023. As at 31 December 2024, securities worth PLN 487 million were further resold (compared to PLN 596 million as at 31 December 2023).
21. Loans and other receivables to customers measured at amortised cost
as at 31 December
2024
2023
gross
impairment for expected credit loss
net
gross
impairment for expected credit loss
net
Loan portfolio, of which:
167,394
-3,955
163,439
158,256
-3,508
154,748
Corporate banking
96,127
-3,075
93,052
93,364
-2,525
90,839
loans in the current account
14,934
-218
14,716
13,739
-140
13,599
term loans and advances
56,318
-2,462
53,856
55,373
-2,201
53,172
lease receivables
13,444
-102
13,342
13,209
-78
13,131
factoring receivables
6,860
-289
6,571
6,851
-104
6,747
debt securities (corporate and municipal)
4,571
-4
4,567
4,192
-2
4,190
Retail banking
71,267
-880
70,387
64,892
-983
63,909
mortgages
61,295
-181
61,114
55,719
-226
55,493
loans in the current account
688
-64
624
706
-63
643
other loans and advances
9,284
-635
8,649
8,467
-694
7,773
Other receivables, of which:
3,238
-
3,238
1,773
-
1,773
repurchase agreements
1,040
-
1,040
-
-
-
call margin posted
759
-
759
607
-
607
other
1,439
-
1,439
1,166
-
1,166
Total
170,632
-3,955
166,677
160,029
-3,508
156,521
Disclosures on the credit quality of the loan portfolio are presented later in the consolidated financial statements in the section Risk and capital management, in chapter II. 2.10.2 . Quality of loan portfolio .
Finance lease receivables
As at 31 December 2024, vehicles accounted for the largest share in the portfolio of leased items (51.0% of the portfolio value), while compared to the end of 2023, vehicle financing agreements increased by 0.3%.
Machines and equipment also account for a significant share in the portfolio (35.3% of the portfolio value) with a simultaneous increase by 4.4% compared to the value of the financed machinery and equipment at the end of 2023, other movables accounted for 9.5% of the portfolio value (an increase of 7.4% compared to the end of 2023).
At the same time, in 2024, the share in the real estate leasing portfolio decreased by 0.4 p.p. to 3.74% (portfolio value decreased by 6.8% compared to the end of 2023).
62
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
The future minimum lease payments that are to be received by the Group under lease contracts are as follows:
as at 31 December
2024
2023
up to 1 year
5,020
4,821
over 1 year and up to 2 years
3,654
3,345
over 2 years and up to 3 years
2,413
2,567
over 3 years and up to 4 years
1,360
1,391
over 4 years and up to 5 years
619
691
over 5 years
378
394
Total
13,444
13,209
Gross receivables under financial lease that will be received by Group are as follows:
as at 31 December
2024
2023
up to 1 year
5,734
5,543
over 1 year and up to 2 years
4,085
3,798
over 2 years and up to 3 years
2,643
2,817
over 3 years and up to 4 years
1,466
1,510
over 4 years and up to 5 years
662
738
over 5 years
415
429
Total
15,005
14,835
The present value of minimum lease instalments is as follows:
as at 31 December
2024
2023
(Gross) receivables under financial lease
15,005
14,835
Undue interest
1,561
1,626
Present value of minimum lease instalments
13,444
13,209
Revenues realised by the Group from financial lease contracts are as follows:
for the year ended 31 December
2024
2023
Profit from the sale of fixed assets (leasing items)
5
6
Net interest income from leasing investment
918
893
Variable leasing fees (commission fees)
22
22
Total
945
921
In 2024, as in 2023, no cases of significant modifications to finance lease agreements were identified.
How the lessor manages risks related to all rights that it retains with respect to the underlying assets
In finance lease contracts, the lessee retains substantially all the risks and rewards of ownership of the leased asset.
The main collateral for lease contracts are the objects of leasing, this applies to all contracts, due to the design of the standard lease contract and the fact that ownership of the subject of the leasing remains until the termination of the contract on the part of the lessor. Leasing items are fully insured by the Group or by the Customer at insurance companies approved by the Group. Before entering into a lease contract, the Group assesses the customer's creditworthiness and assesses the risk associated with the subject of the lease. In addition, with a view to limiting the potential loss in the absence of debt service, the Group aims to conclude additional security agreements. The type and value of collateral required depend on the amount and subject of financing, lease parameters (e.g. deductible, financing period, residual value). Pursuant to the terms of the lease contracts, if the lease contract is terminated, the resulting receivables become due. In addition, as part of securing the Group, the Group takes over the subject of the lease and immediately strives to develop it in the most advantageous manner (sale, re-leasing).
63
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
22. Investments in associates accounted for using the equity method
ING Bank Śląski S.A. holds an indirect share in the share capital of Goldman Sachs TFI S.A. through its subsidiary, ING Investment Holding (Poland) S.A. In 2024 ING Bank Śląski S.A. finalised the transaction of acquiring 40% of shares in Dom Data IDS Sp. z o.o. The Group recognises the above shares as investments in associates and measures using the equity method in accordance with IAS 28. The carrying amount of the shares was PLN 185 million at the end of 2024, compared to PLN 181 million at the end of 2023.
Selected data regarding the associate
2024
2023
Goldman Sachs TFI S.A.
Dom Data IDS Sp. z o.o.
Goldman Sachs TFI S.A.
Share in the capital of the entity
45%
40%
45%
Assets, including:
210
10
193
Fixed assets
14
-
21
Current assets
196
10
172
Liabilities and provisions for liabilities, including:
72
3
63
Long-term
7
-
11
Short-term
65
3
52
Net assets
138
7
130
Revenues
177
27
156
Net profit (loss) for the financial year
74
6
71
A reconciliation of the carrying amount of investments in associates for 2024 and 2023 is presented below.
for the year ended 31 December
2024
2023
Opening balance
181
179
Valuation using the equity method in the period
33
30
Devidends received
-29
-28
Closing balance
185
181
23. Property, plant and equipment
as at 31 December
2024
2023
Right of use assets, including:
491
462
real estate
465
442
means of transport
25
20
other assets
1
-
Own real estate
185
215
Investments in non-owned fixed assets
99
98
Computer hardware
101
101
Other property, plant and equipment
71
69
Fixed assets under construction
64
57
Total
1,011
1,002
There are no legal constraints on property, plant and equipment at the end of 2024 and 2023.
Contractual obligations to purchase property, plant and equipment
In 2024, the Group concluded agreements with business partners resulting in future increase in the value of property, plant and equipment in the total amount of PLN 58 million. Due to the framework nature of some of the contracts, this amount is not targeted - its amount will result from cost estimates calculated during the implementation. The agreements pertain to real estate (buildings and structures), investments in external fixed assets, fixed assets under construction and other fixed assets. At the end of 2023, the Group had agreements (partly framework agreements) on real estate (buildings and structures), investments in external fixed assets, fixed assets under construction and other fixed assets for the total amount of PLN 7 million.
64
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
The tables present changes in gross value and accumulated depreciation for individual groups of property, plant and equipment in 2024 and 2023.
2024
for the year ended 31 December
right of use assets
real estate
means of transport
other assets
Total
own real estate
investments in non- owned fixed assets
computer hardware
other property, plant and equipment
fixed assets under construction
Total
Opening gross value
881
50
1
932
406
516
491
412
57
2,814
Additions, including:
171
17
1
189
9
39
54
21
102
414
new contracts for the right of use
48
16
-
64
-
-
-
-
-
64
adjustment of the asset in connection with the recalculation of the lease liability
123
1
1
125
-
-
-
-
-
125
purchases
-
-
-
-
-
23
1
1
102
127
investment takeovers
-
-
-
-
9
10
53
20
-
92
other
-
-
-
-
-
6
-
-
-
6
Reductions, including:
-65
-10
-
-75
-3
-7
-3
-1
-95
-184
reduction of the scope and early termination of the contract
-53
-10
-
-63
-
-
-
-
-
-63
adjustment of the asset in connection with the recalculation of the lease liability
-12
-
-
-12
-
-
-
-
-
-12
sale and liquidation
-
-
-
-
-
-1
-3
-
-
-4
investment takeovers
-
-
-
-
-
-
-
-
-92
-92
other
-
-
-
-
-3
-6
-
-1
-3
-13
Fair value change, including:
-
-
-
-
-22
-
-
-
-
-22
included in income statement*
-
-
-
-
-22
-
-
-
-
-22
Closing gross value
987
57
2
1,046
390
548
542
432
64
3,022
Opening accumulated depreciation
-439
-30
-1
-470
-191
-418
-390
-343
-
-1,812
Changes in the period, including:
-83
-2
-
-85
-14
-31
-51
-18
-
-199
depreciation charges
-108
-11
-
-119
-15
-31
-51
-19
-
-235
reduction in scope and early termination of the contract
25
9
-
34
-
-
-
-
-
34
other
-
-
-
-
1
-
-
1
-
2
Closing accumulated depreciation
-522
-32
-1
-555
-205
-449
-441
-361
-
-2,011
Closing net value
465
25
1
491
185
99
101
71
64
1,011
*) in line General and administrative expenses , in detailed item maintenance costs of buildings and real estate valuation to fair value .
65
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
2023
for the year ended 31 December
right of use assets
real estate
means of transport
other assets
Total
own real estate
investments in non- owned fixed assets
computer hardware
other property, plant and equipment
fixed assets under construction
Total
Opening gross value
732
44
1
777
420
476
460
385
26
2,544
Additions, including:
206
16
-
222
12
52
32
27
117
462
new contracts for the right of use
80
15
-
95
-
-
-
-
-
95
adjustment of the asset in connection with the recalculation of the lease liability
126
1
-
127
-
-
-
-
-
127
purchases
-
-
-
-
-
36
1
2
117
156
investment takeovers
-
-
-
-
9
16
31
24
-
80
reclassification to/from another category of property, plant and equipment
-
-
-
-
3
-
-
1
-
4
Reductions, including:
-57
-10
-
-67
-
-12
-1
-
-86
-166
reduction of the scope and early termination of the contract
-35
-10
-
-45
-
-
-
-
-
-45
adjustment of the asset in connection with the recalculation of the lease liability
-22
-
-
-22
-
-
-
-
-
-22
sale and liquidation
-
-
-
-
-
-1
-1
-
-
-2
investment takeovers
-
-
-
-
-
-
-
-
-80
-80
other
-
-
-
-
-
-11
-
-
-6
-17
Fair value change, including:
-
-
-
-
-26
-
-
-
-
-26
included in income statement*
-
-
-
-
-26
-
-
-
-
-26
Closing gross value
881
50
1
932
406
516
491
412
57
2,814
Opening accumulated depreciation
-338
-29
-1
-368
-175
-388
-337
-327
-
-1,595
Changes in the period, including:
-101
-1
-
-102
-16
-30
-53
-16
-
-217
depreciation charges
-116
-11
-
-127
-15
-30
-52
-15
-
-239
reduction in scope and early termination of the contract
15
10
-
25
-
-
-
-
-
25
reclassification to non-current assets held for sale
-
-
-
-
-1
-
-
-1
-
-2
other
-
-
-
-
-
-
-1
-
-
-1
Closing accumulated depreciation
-439
-30
-1
-470
-191
-418
-390
-343
-
-1,812
Closing net value
442
20
0
462
215
98
101
69
57
1,002
*) in line General and administrative expenses , in detailed item maintenance costs of buildings and real estate valuation to fair value .
66
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
24. Intangible assets
as at 31 December
2024
2023
Goodwill obtained as a result of a branch of ING Bank NV contributed in kind
223
223
Software
166
232
Outlays for intangible assets
66
37
Other intangible assets
2
1
Total
457
493
Changes in 2024 and 2023 in particular groups of intangible assets are presented below.
2024
for the year ended 31 December
Goodwill
Software
Outlays for intangible
assets
Other
intangible
assets
Total
Opening gross value
223
1,588
37
20
1,868
Additions, including:
-
88
130
2
220
purchases
-
4
130
-
134
investment takeovers
-
84
-
2
86
Reductions, including:
-
-24
-101
-
-125
investment takeovers
-
-
-86
-
-86
sale and liquidation
-
-23
-
-
-23
other
-
-1
-15
-
-16
Impairment
-
-26
-
-
-26
Closing gross value
223
1,626
66
22
1,937
Opening accumulated depreciation
-
-1,356
-
-19
-1,375
Changes in the period, including:
-
-104
-
-1
-105
depreciation charges
-
-104
-
-1
-105
Closing accumulated depreciation
-
-1,460
-
-20
-1,480
Closing net value
223
166
66
2
457
2023
for the year ended 31 December
Goodwill
Software
Outlays for intangible
assets
Other
intangible
assets
Total
Opening gross value
223
1,413
23
19
1,678
Additions, including:
-
177
145
1
323
purchases
-
18
145
-
163
investment takeovers
-
129
-
1
130
acquisition of an organised part of an enterprise
-
30
-
-
30
Reductions, including:
-
-
-131
-
-131
investment takeovers
-
-
-130
-
-130
other
-
-
-1
-
-1
Impairment
-
-2
-
-
-2
Closing gross value
223
1,588
37
20
1,868
Opening accumulated depreciation
-
-1,244
-
-18
-1,262
Changes in the period, including:
-
-112
-
-1
-113
depreciation charges
-
-87
-
-1
-88
acquisition of an organised part of an enterprise
-
-27
-
-
-27
other
-
2
-
-
2
Closing accumulated depreciation
-
-1,356
-
-19
-1,375
Closing net value
223
232
37
1
493
67
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
Contractual obligations to purchase intangible assets
In 2024, the Group concluded agreements with contractors for the future purchase of intangible assets for a total amount of PLN 175 million, however, due to the framework nature of some of the agreements, this amount is not the target amount. These agreements, as in the previous year, concern the purchase of licenses and the implementation of computer software.
At the end of 2023, the Group had contracts (partly of a framework nature) for the purchase of licenses and software implementation for a total amount of PLN 39 million.
Impairment test of cash generating units with respective goodwill
The goodwill impairment test is carried out at least once every year, irrespective of identification of any triggers for impairment.
At the Bank, the impairment test covered the goodwill obtained as a result of a branch of ING Bank NV contributed in kind, which was assigned to the corporate activity of the Group. The smallest identifiable cash-generating units were determined and goodwill totalling PLN 223 million was assigned thereto. No other additional elements of intangible value and indefinite useful life were identified that could be assigned to the identified cash-generating units.
The test input data cover the economic capital, risk-weighted assets and profit before tax per segment and effective tax rate. The test is performed using the model that calculates and compares the current value of free cash flow of the unit to the estimated book value of the unit’s funds. The cash flows of the unit are defined as net profits less capital needed to maintain the solvency ratio at the required level.
At the end of 2024, a discount rate of 11.56% was used to discount the cash flows, representing the weighted average cost of capital, estimated on the basis of the risk-free rate (5.89%), the beta factor (1.03) and the equity risk premium (5.50%). As at 2023 yearend, the discount rate used to discount the flows was 11.42% and was estimated based on a risk-free rate of 5.20%, a beta factor of 1.13 and a share price risk premium of 5.50%. Other assumptions include the nominal growth rate after the forecast period (3.5% at the end of 2024 as well as at the end of 2023).
The recoverable value was determined based on the estimation of the useable value of the assets component taking into account the estimated forecast of expected future cash flows generated during the continued use. The cash flow forecasts are based on rational assumptions that reflect the most accurate appraisal of the management regarding all the conditions that will appear during the remaining lifetime of the assets. The cash flow forecasts are based on mid-term plan approved by the Group and the strategy covering the maximum period of the next three
years. The data regarding the subsequent years come from extrapolation. Extrapolation assumes that the cash flow generating centre will maintain the gross profit to risk weighted assets ratio at the level from the last year of the Group’s forecast and its profits will increase by previously determined growth rate. Legitimacy of the assumptions made is verified periodically, and any divergence between the cash flows estimated based on the future cash flows and the actual ones is analysed as appropriate.
The test showed the surplus of present value over the net book value of the cash-generating unit thus no impairment was determined.
N As at 31 December 2024, the sensitivity analysis of the goodwill impairment test shows that:
increasing the discount rate by 1 p.p. would result in a decrease in the surplus of net cash flows over the net book value of the cash-generating unit by 20% (compared to 18% at the end of 2023),
reduction of the discount rate by 1 p.p. would result in an increase in the surplus of net cash flows over the net book value of the cash-generating unit by 26% (compared to 24% at the end of 2023).
68
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
25. Deferred tax
Movements in temporary differences during the year
2024
for the year ended 31 December
opening balance
changes carried through profit or loss
changes carried through other comprehensive income
closing balance
Deferred tax assets
impairment for expected credit losses
429
48
-
477
valuation of operational leasing
223
2
-
225
revaluation of financial instruments
84
26
-34
76
employee benefits
88
5
-
93
provision for restructuring
22
-5
-
17
other provisions
142
-12
-
130
settlement of the difference between tax and balance sheet depreciation
26
16
-
42
finance lease
7
1
-
8
tax losses
519
-518
-
1
research and development relief for 2024
-
40
-
40
tax adjustment for the CHF loan portfolio
-
22
-
22
other
1
-1
-
-
Total
1,541
-376
-34
1,131
Deferred tax losses
revaluation of financial instruments
148
-
-21
127
accrued interest
232
12
-
244
effective interest rate adjustment
63
7
-
70
settlement of prepayments/accruals due to depreciation/ amortisation resulting from the investment relief
1
-
-
1
Total
444
19
-21
442
Deferred tax disclosed in the balance sheet, of which:
1,097
-395
-13
689
Deferred tax assets
690
Deferred tax losses
1
2023
for the year ended 31 December
opening balance
changes carried through profit or loss
changes carried through other comprehensive income
closing balance
Deferred tax assets
impairment for expected credit losses
404
25
-
429
valuation of operational leasing
166
57
-
223
revaluation of financial instruments
142
10
-68
84
employee benefits
77
11
-
88
provision for restructuring
9
13
-
22
other provisions
134
8
-
142
settlement of the difference between tax and balance sheet depreciation
18
8
-
26
finance lease
-
7
-
7
tax losses
1,038
-519
-
519
effective interest rate adjustment
91
-91
-
-
other
13
-12
-
1
Total
2,092
-483
-68
1,541
Deferred tax losses
revaluation of financial instruments
101
-
47
148
accrued interest
161
71
-
232
effective interest rate adjustment
-
63
-
63
settlement of prepayments/accruals due to depreciation/ amortisation resulting from the investment relief
1
-
-
1
Total
263
134
47
444
Deferred tax disclosed in the balance sheet, of which:
1,829
-617
-115
1,097
Deferred tax assets
1,097
69
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
Deferred tax recognised directly in equity
as at 31 December
2024
2023
Deferred tax in accumulated other comprehensive income, due to:
96
84
financial assets valued through other comprehensive income - debt instruments
50
67
financial assets valued through other comprehensive income - equity instruments
44
40
cash flow hedges
9
-16
actuarial gains/losses
-7
-7
Deferred tax in retained earnings due to:
5
4
incentive employee programs
5
4
Total
101
88
26. Other assets
as at 31 December
2024
2023
Prepayments, including:
109
106
accrued income
49
49
due to commissions
1
3
due to general and administrative expenses
59
54
Other assets, including:
40
38
settlements with recipients
17
24
public and legal settlements
14
12
other
9
2
Total
149
144
including financial assets
40
38
Expected settlement period of other assets
up to 1 year
76
142
over 1 year
73
2
Disclosures on the credit quality of other financial assets are presented later in the consolidated financial statements in the section Risk and capital management, in chapter II. 2.10.6 . Credit quality of other financial assets .
27. Liabilities to other banks
as at 31 December
2024
2023
Current accounts
826
633
Interbank deposits
330
168
Loans received*
13,735
12,535
Received call deposits
575
317
Other liabilities
2
2
Total
15,468
13,655
*) The financing of the long-term lease contracts in EUR (“the matched funding”) received by the subsidiary ING Lease Polska Sp. z o.o. from ING Bank NV and other banks not related to the Group is presented in item Loans received . This item also includes liabilities due to non-preferred senior loans (NPS) received by ING Bank Śląski S.A. from ING Bank N.V. More information on NPS loans can be found in the Risk and capital management section, in chapter I. 4 . MREL requirements .
28. Financial liabilities measured at fair value through profit or loss
as at 31 December
2024
2023
Financial liabilities held for trading, including:
valuation of derivatives
733
1,060
other financial liabilities held for trading, including::
667
762
book short position in trading securities
487
596
repo transactions
180
166
Total
1,400
1,822
Detailed disclosures on the nominal values of derivative instruments and their valuation broken down into individual types of derivative instruments along with the remaining dates for their implementation are presented in note 17 . Valuation of derivatives .
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ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
29. Liabilities to customers
as at 31 December
2024
2023
Deposits, including:
218,148
202,209
Corporate banking
92,474
90,123
current deposits
60,947
60,650
including O/N deposits
5,045
6,453
saving deposits
20,010
19,441
term deposits
11,517
10,032
Retail banking
125,674
112,086
current deposits
31,850
28,816
saving deposits
76,338
67,713
term deposits
17,486
15,557
Other liabilities, including:
1,848
3,081
liabilities under monetary hedges
751
823
call deposits
7
11
other liabilities
1,090
2,247
Total
219,996
205,290
30. Liabilities from debt securities issued
as at 31 December
2024
2023
Liabilities under issue of debt securities, including:
Covered bonds issued by ING Bank Hipoteczny S.A.
509
404
Total
509
404
At the end of 2024 and 2023, the Group had liabilities arising from the issue of covered bonds issued as part of the ING Bank Hipoteczny S.A. covered bond issue programme established in 2019 (Programme). The purpose of establishing the Programme was to create a legal infrastructure under which the Group will be able to issue covered bonds both on the local and foreign market.
In September 2024, as part of the Programme, ING Bank Hipoteczny S.A. issued 2 series of covered bonds with a total nominal value of PLN 500 million (i.e. 1,000 with a nominal value of PLN 500 thousand per 1 piece) and variable interest coupon in the amount of WIBOR 6M + 0.55%, payable every six months. The maturity date of covered bonds
is 11 September 2028, however it may be extended in accordance with the provisions of the Act of 29 August 1997 on covered bonds and mortgage banks. On 11 September 2024, the covered bonds were admitted to trading on the regulated market in Luxembourg and in Warsaw.
In October 2024, 1 series of covered bonds with a nominal value of PLN 400 million was redeemed.
31. Subordinated liabilities
ING Bank Śląski has in its balance sheet two subordinated loans resulting from agreements with the parent entity, i.e. with ING Bank N.V. based in Amsterdam. These are:
The agreement concluded 30 September 2019 in the amount of EUR 250 million.
Agreement concluded on 30 October 2018 for the amount of EUR 100 million.
Both loans were granted for a period of 10 years. The Bank has the right to early repayment of each of them after 5 years, subject to obtaining the relevant consent of the Polish Financial Supervision Authority (KNF). Interest on both loans is payable quarterly at EURIBOR 3M plus a margin (1,66% for the 2019 loan and 1,22% for the 2018 loan). The financial conditions of the loans do not differ from market conditions. The Bank obtained KNF’s consent for including both loans in the Tier 2 capital.
At the end of 2024, the total carrying amount of subordinated loans was PLN 1,499 million (PLN 1,526 million at the end of 2023).
32. Provisions
as at 31 December
2024
2023
Provision for off-balance sheet liabilities
105
116
Provision for legal risk of foreign currency mortgage loans*
253
128
Provision for retirement benefits
104
93
Provision for restructuring
91
116
Provision for litigation
46
39
Other provisions
37
50
Total
636
542
*) In addition to the provision for legal risk of foreign currency mortgage loans, the Group estimates the adjustment to the gross carrying amount of CHF-indexed mortgage loans recognised in the statement of financial position and recognises it in the consolidated statement of financial position in the item Loans and other receivables granted to
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|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
customers measured at amortised cost . In chapter III. Significant accounting principles , in item 3.3 Legal risk related to the portfolio of mortgage loans indexed to the Swiss franc exchange are presented the change in 2024 and and 2023, as well as assumptions regarding of both provisions and adjustment to the gross carrying amount due to the legal risk of CHF- indexed mortgages.
The tables below present the movements in the individual provisions in 2024 and 2023.
2024
for the year ended 31 December
Provision for off-balance sheet liabilities
Stage 1
Stage 2
Stage 3
Total
Provision for legal risk
Provision for retirement benefits
Provision for restructuring
Provision for litigation
Other provisions
Total
Opening balance
33
24
59
116
128
93
116
39
50
542
provisions recognised/ reversed
-9
10
-12
-11
102
8
-
10
-8
101
ransfer within provisions
-
-
-
-
38
-
-
-
-4
34
utilisation
-
-
-
-
-15
-
-25
-3
-1
-44
actuarial gains/losses
-
-
-
-
-
3
-
-
-
3
Closing balance
24
34
47
105
253
104
91
46
37
636
Expected provision settlement period:
up to 1 year
-
-
7
40
20
5
72
over 1 year
105
253
97
51
26
32
564
2023
for the year ended 31 December
Provision for off-balance sheet liabilities
Stage 1
Stage 2
Stage 3
Total
Provision for legal risk
Provision for retirement benefits
Provision for restructuring
Provision for litigation
Other provisions
Total
Opening balance
39
54
15
108
54
74
49
35
39
359
provisions recognised/ reversed
-5
-29
44
10
11
7
86
8
16
138
transfer within reserves
-
-
-
-
73
-
-
-
-
73
utilisation
-
-
-
-
-10
-
-19
-4
-5
-38
actuarial gains/losses
-
-
-
-
-
12
-
-
-
12
other
-1
-1
-
-2
-
-
-
-
-
-2
Closing balance
33
24
59
116
128
93
116
39
50
542
Expected provision settlement period:
up to 1 year
-
-
6
39
17
6
68
over 1 year
116
128
87
77
22
44
474
Provision for retirement benefits
The Group creates provisions for retirement and disability severance pays in accordance with IAS 19. The provision for retirement and disability severance pays granted under benefits under the regulations resulting from the Labour Code is calculated using the actuarial method by an independent actuary as the present value of the Group’s future, long-term liabilities to employees by headcount and pay as at the date of the update. Provisions resulting from actuarial valuation are recognised and revalued in annual periods.
The calculation of provisions is based on a number of assumptions, both with regard to discount rates, projected salary increases and employee turnover, death risk and others.
Assumptions adopted for the valuation:
discount rate – 5.80% (5.40% at the end of 2023),
long-term wage growth rate – 5.00%.
The table below includes revision of the balance-sheet liability.
for the year ended 31 December
2024
2023
Opening balance
93
74
Costs included in the income statement, including:
11
10
regular employment costs
6
5
costs of interest
5
5
Actuarial gains / losses
3
12
Paid benefits
-3
-3
Closing balance
104
93
72
|
ING Bank Śląski S.A. Group
|
Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
The sensitivity of the model to the assumed values of individual assumptions as at 31 December 2024 and 31 December 2023 is presented in the table below. The base variant is the value of pension and disability provisions recognised in the Group’s books as at 31 December 2024 and 31 December 2023, respectively.
Provisions for retirement and pension benefit (in PLN million)
2024
2023
lower bracket
base variant
upper bracket
lower bracket
base variant
upper bracket
Discount rate (-1% / base variant / +1%)
95
104
115
85
93
104
Deviation from the assumed dynamics of changes in salaries (- 0.5% / base variant / +0.5%)
99
104
110
88
93
99
Provision for restructuring
In 2023, the Bank’s Management Board decided to continue in 2024-2026 the process initiated in 2016, which is related to the employment restructuring resulting from the continuation of a long-term project to evolve the Bank’s organisational structure, including, above all, further optimisation of the number of outlets and development of digital channels in the retail segment, reconstruction of the organisational structure and processes in the corporate segment, as well as optimisation and automation of processes in the Bank’s business support units.
In 2023, a restructuring provision was created in the amount of PLN 86 million, which is intended to cover personnel costs. It was recognised in the consolidated statement of profit or loss under General and administrative expenses - personnel expenses .
The value of the restructuring provision at the end of 2024 was PLN 91 million, compared to PLN 116 million at the end of 2023.
Legal risk of foreign currency mortgage loans
The significant assumptions concerning the calculation of the amount of the gross balance sheet value adjustment / provision for legal risk for the CHF-indexed mortgage loan portfolio presented in the statement of financial position and already removed from the statement of financial position as at 31 December 2024 are described in chapter III. Significant accounting principles , in point 3.3 . Legal risk related to the portfolio of mortgage loans indexed to the Swiss franc exchange rate .
To date, the Bank has not received any class action, and neither of the clauses used by the Bank in the agreements has been entered in the register of prohibited clauses.
As at 31 December 2024, 1,673 court cases were pending against the Bank (1,389 cases at the end of 2023) in connection with concluded CHF-indexed loan agreements in PLN. The outstanding principal of the mortgage loans to which these proceedings related was PLN 284 million as at 31 December 2024 (PLN 291 million at the end of 2023). By 31 December 2024, 568 court cases had ended with a final court judgement.
As at 31 December 2024, the Bank was also subject to 22 court cases (11 cases at the end of 2023) in connection with concluded EUR mortgage loan agreements. The outstanding principal of the loans concerned by these proceedings was below PLN 1 million as at 31 December 2024 (similar to the end of 2023).
The most important findings of the Court of Justice of the European Union (CJEU) and the Supreme Court in recent years regarding loan agreements indexed or denominated in foreign currencies are presented below.
On 3 October 2019, the CJEU issued a judgment concerning the possible consequences of recognizing by a national court that a given contractual provision is abusive. The Court confirmed that the evaluation of the contract should not be automatic. It is up to the national court to assess whether, after finding that a given provision is abusive, the contract - in accordance with national law - cannot continue to be in force without such a provision. It is also for the national court to assess the potential consequences for the consumer of the annulment of the credit agreement in question.
On 7 May 2021, the Civil Chamber of the Supreme Court, composed of 7 judges, adopted a resolution, at the same time giving this resolution the force of a legal principle. The Supreme Court decided that the provision considered abusive (ineffective) from the beginning is not binding. In addition, according to this resolution, if the court finds the loan agreement invalid, each party will settle separately. Thus, the Supreme Court upholds the position that the bank's and the consumer's claims are independent and do not automatically offset each other. The Supreme Court did not decide that each indexed or denominated loan agreement should be annulled. A finding that a contractual provision is abusive should, as a rule, result in the application by national courts of such solutions that restore the balance. According to the Supreme Court, the contract should be considered definitively ineffective if the consumer - duly informed about the consequences - does not agree to be bound by a provision considered abusive.
On 8 September 2022, the CJEU issued a judgment on mortgage loans denominated in a foreign currency. This judgment confirmed the position already presented by the Court in the past, i.e. in the judgment of 3 October 2019, according to which, if the consumer objects to it, the national court cannot replace the unfair contract term concerning the exchange rate with an optional provision of domestic law. Nor can the national court remove only
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
the element of a contractual term which renders it genuinely unfair, leaving the remainder of it effective, if such removal would amount to altering the content of the term which affects its substance. If the loan agreement cannot continue to apply without a clause containing an unfair term, it should be declared invalid in absolute terms. The Tribunal also stated that the limitation period for the customer's claims may begin only when the consumer becomes aware of the unfair terms of the contract. The date of signing the contract does not matter.
On 5 April 2023, the Supreme Court issued a judgment in which it confirmed that the presence of abusive clauses in the contract does not automatically invalidate the entire contract. The purpose of Directive 93/13 is not to annul all contracts containing prohibited terms, but to restore the balance between the parties. It is therefore possible, on the basis of a specific court case, for the court to recognize that without the abusive indexation clause, the contract may continue to be in force. It seems, however, that the impact of this ruling on the jurisprudence of the courts is limited, because currently the courts conclude that the contract is invalid not from the mere fact of the presence of abusive clauses in them, but from the fact that without these clauses the contract cannot continue to function.
On 15 June 2023, the European Court of Justice (CJEU) issued a judgment in a case regarding the answer to the question of the referring court regarding whether the parties, in addition to reimbursement of money paid in performance of the contract (bank - loan principal, consumer - installments, fees, commissions and insurance premiums) and statutory interest for delay from the time of request for payment, may also demand any other benefits, including receivables (in particular remuneration, compensation, reimbursement of costs or indexation of the benefit).
As regards consumer claims, the CJEU referred to national law and emphasized that it is for the referring court to assess, in the light of all the circumstances of the dispute, whether the inclusion of such consumer claims complies with the principle of proportionality.
As regards banks' claims, the Court pointed out that the Directive precludes banks from being entitled to demand compensation from the consumer beyond the repayment of the capital paid out and beyond the payment of statutory interest for late payment, if this would lead to “compensation for the loss of profit which it intended to make from that contract.” Indicating the need to return the capital, the Court did not determine whether it is about its real or nominal value, which is a particularly important question in the light of high inflation.
In its judgment of 21 September 2023 in Case C-139/22, the CJEU held that :
1) In order for a contractual term to be regarded as unfair, it is sufficient to establish that its content correspo nds to the terms of a standard contract entered in the register of prohibited clauses, which does not preclud e, however, that in the particular proceedings the bank can prove that, in the light of all the relevant circum
stances of the case, that term is not abusive (in particular, it does not produce effects identical to those ent ered in the register of prohibited clauses) .
2) An unfair contract term shall not be made unfair by the fact that the consumer may choose to perform his contractual obligations under the contract on the basis of another contract term which is fair .
3) The trader shall be required to provide information on the essential characteristics of the contract and the ri sks inherent in the contract of each consumer, including where the relevant consumer has appropriate kno wledge and experience in the specific field .
4) In view of the answer to Question No 3, the CJEU considered it pointless to answer Question No 4 (that ques tion was asked only in the event that the third question was answered in the negative, which was not the c ase here) .
However, in the opinion of the banks, this judgment does not close the way for Polish courts to assess consumer c laims from the perspective known to Polish law and also the institution of abuse of rights present in other Europe an legal orders .
On 7 December 2023, the CJEU issued another adverse judgement for banks, which, however, does not bring anything groundbreaking. The CJEU stated that the consumer does not have to declare that he is aware of the consequences of the cancellation of the contract before the courts, and that the consumer has the right to reimbursement of the full value of the claims, without deducting capital interest.
In its judgement of 14 December 2023, the CJEU stated that the limitation period must be symmetrical for both parties. Therefore, the limitation period for client claims cannot start earlier than the limitation period for bank claims. The CJEU confirmed the sanction of permanent ineffectiveness, which means that the limitation period for both parties should be counted from the customer's express statement that he knows the consequences of cancellation of the contract. This is in line with the current case law of Polish courts after the resolution of the 7 judges of the Supreme Court of 7 May 2021.
By the resolution of the Supreme Court of 25 April 2024, the Supreme Court resolved legal issues regarding loans indexed to or denominated in foreign currency (the so-called Swiss franc loans), presented by the First President of the Supreme Court, stating that:
1) If it is concluded that a provision of an indexed or denominated loan agreement relating to the method of determining the exchange rate of a foreign currency constitutes an unlawful contractual term and is not binding, in the current legal situation it cannot be assumed that this provision is replaced by another method of determining the exchange rate of a foreign currency resulting from legal or customary provisions.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
2) If it is not possible to determine the foreign currency exchange rate binding on the parties in an indexed or denominated loan agreement, the agreement is also not binding to the remaining extent.
3) If, in performance of a loan agreement, which is not binding due to the unlawful nature of its provisions, the bank has disbursed to the borrower all or part of the loan amount, and the borrower has made repayments of the loan, independent claims for repayment of undue performance to each of the parties arise.
4) If the loan agreement is not binding because of the unlawful nature of its provisions, the limitation period for the bank’s claim for repayment of the amounts paid under the loan shall, as a rule, start to run from the day following the day on which the borrower has challenged the bank’s binding effect on the provisions of the agreement.
5) If the loan agreement does not bind due to the unlawful nature of its provisions, there is no legal basis for either party to claim interest or other remuneration for the use of its funds in the period from the fulfilment of undue performance until the moment of delay in the reimbursement of this benefit.
The above answers are in principle consistent with the approach to these issues in the existing case law, in particular in the CJEU judgments. Therefore, it seems that the resolution will not significantly change the situation of banks in these processes. However, it may cause courts to stop ruling on the ‘de-franking’ of loans in the event of clauses on exchange rate tables being found abusive, and in any event annul them.
On 24 October 2024, the CJEU issued a judgement in case C 347/23 in response to a preliminary question from the Regional Court in Warsaw. The judgement means that borrowers who took out a mortgage loan for the purchase of real estate in order to lease it (under the conditions described in the CJEU judgement) are subject to protection provided for in consumer regulations.
Settlement programme
From 25 October 2021, the Bank offers the possibility for borrowers to conclude voluntary settlements in accordance with the proposal presented in December 2020 by the Chairman of the Polish Financial Supervision Authority. The Bank's customers may submit a request for mediation through the Mediation Center of the Court of Arbitration of the Polish Financial Supervision Authority. The mediation process can be used by customers who have a housing mortgage loan or a housing construction and mortgage loan indexed with the CHF exchange rate at the Bank for their own housing purposes, excluding mortgage loans and the above-mentioned loans, where one of the purposes of lending was to consolidate non-housing liabilities. A mediation agreement can only be signed for one of the active housing loans. The conversion takes place on the terms presented by the Chairman of the Polish Financial Supervision Authority. Detailed rules for the settlement of the loan and determination of the type of interest rate for
the future are the subject of arrangements in the mediation process before the Polish Financial Supervision Authority in accordance with the current offer of settlements offered by the Bank. The Bank also proposes settlements for loans subject to court proceedings.
By the end of 2024, the Bank had concluded 840 settlements (by the end of 2023, 743 settlements), including 777 settlements before the PFSA Court of Arbitration (by the end of 2023, respectively 698 settlements).
33. Information on initiated administrative proceedings and significant court proceedings
The value of proceedings concerning liabilities or receivables pending in 2024 did not exceed 10% of the Group’s equity. In the Group’s opinion, none of the individual proceedings pending in 2024 in front of a court, arbitration court or public administration authority, or all of them jointly pose a threat to the Group’s financial liquidity.
Detailed information on the legal environment related to the legal risk of the CHF-indexed mortgage portfolio and information on court cases in connection with concluded CHF-indexed mortgage loan agreements are presented in note 32 . Provisions .
PFSA proceedings
On 12 October 2018, the Polish Financial Supervision Authority imposed a fine on the Bank in the amount of PLN 0.5 million, pursuant to Art. 232 sec. 1 of the Act on Investment Funds and Alternative Investment Funds Management, in the wording before the amendment made by the Act of 31 March 2016, in connection with the breach of depository’s obligations set out in Art. 72 of the Act in connection with the Bank acting as the depositary of the Inventum Premium SFIO and Inventum Parasol FIO funds with separate sub-funds. In the course of reconsidering the case, the PFSA confirmed the violations and did not identify any circumstances that would justify reducing the fine. In connection with the proceedings, a provision in the amount of PLN 0.5 million was created in December 2018. The Bank paid the imposed fine in the third quarter of 2020. On 1 October 2020, the Bank appealed against the said decision to the Provincial Administrative Court. In the judgment of 7 April 2021, the Provincial Administrative Court overruled the decision of 12 October 2018 and the decision of the Polish Financial Supervision Authority of 12 August 2020 upholding this decision. The PFSA filed a complaint with the Supreme Administrative Court on 27 July 2021. On 25 August 2021, the Bank responded to the complaint. The date of the hearing before the Supreme Administrative Court has not been set.
On 17 June 2020, the Polish Financial Supervision Authority (PFSA, KNF) initiated administrative proceedings to impose a penalty on ING Bank Śląski S.A, in connection with suspicion of breach of depositary duties defined in art. 72 of the Act on investment funds and management of alternative investment funds in connection with
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
|
Data in PLN milion
the Bank’s function of depositary of specific funds and Article 9(2) of the above mentioned act. The proceedings ended on 17 December 2021 with the issuance of a Decision under which the PFSA imposed an administrative penalty of PLN 4.3 million on the Bank. The fine of PLN 4.3 million was paid. On 21 November 2022, the Bank filed a complaint with the Provincial Administrative Court. Pursuant to the content of the complaint, the Bank demands that the Decision imposing an administrative penalty be repealed in its entirety. In a judgment of 8 March 2023, the Provincial Administrative Court dismissed the Bank's complaint in its entirety. The justification for the judgment was received on 21 June 2023, after analyzing it, the Bank decided to file a cassation complaint with the Supreme Administrative Court. The complaint was prepared and submitted on time. The date of the hearing before the Supreme Administrative Court has not been set.
On 22 November 2023, the Polish Financial Supervision Authority initiated an administrative proceeding regarding the imposition of a fine on ING Bank Śląski S.A. pursuant to Art. 176i sec. 1 point 4 of the Act on Trading in Financial Instruments. At this stage of the proceedings, it is not possible to reliably estimate the amount of the potential penalty.
Proceedings initiated by the President of the Office of Competition and Consumer Protection (UOKiK)
Proceedings on the application of practices infringing collective consumer interests regarding unauthorized transactions
On 22 June 2021, the UOKiK opened an investigation against ING concerning the Bank’s replies to customer reports of unauthorized transactions, including the reimbursement of transaction amounts at D+1. In the course of the proceedings, the Bank repeatedly provides the explanations and documents required by the Office.
On 22 November 2022, the Bank received a notice from the UOKiK to initiate proceedings for a practice damaging the collective interests of consumers, together with a request to respond to the following allegations:
non-reimbursement to consumers within D+1 of the consumer requesting the return of the unauthorized transaction or restoring the account to the condition that would have existed if the unauthorized payment transaction had not taken place; the only exceptions, according to the UOKiK, are situations where the Bank informs the law enforcement authorities of the suspicion of a criminal offense by the consumer or 13 months have elapsed from the date on which the transaction was debited or the day on which the transaction was to be executed; UOKiK claims that this may infringe Article 46(1) of the Payment Services Act and compromise the collective interests of consumers and, and may therefore constitute a practice that would be affected;
providing misleading information in response to a complaint by suggesting that the use of individual credentials means correct authentication, which in turn means demonstrating a correct authorization of transactions, which may mislead consumers regarding the obligations of the trader under Article 46 of the Act and the distribution of the burden of proof that the payment transaction has been authorized - which, according to the UOKiK, may constitute an unfair market practice and undermine the collective interests of consumers, and consequently constitute a practice that infringes the collective interests of consumers;
providing consumers with misleading, incorrect information about the correct authorization of transactions in response to a complaint, while pointing out the lack of consent of consumers to carry out a transaction (i.e. a lack of authorization) by indicating that the customer has led to the transaction as a result of a breach of one of the obligations referred to in Article 42 of the Act and that the customer is therefore fully liable for the transaction being advertised, and the recovery is possible as a result of action by the law enforcement authorities at the request of the injured party, which may constitute an unfair market practice and, consequently, constitute a practice which infringes the collective interests of consumers.
On 16 January 2023, the Bank sent a letter in the proceedings containing a very comprehensive explanation of its position rejecting the above-mentioned allegations, indicating both the correct interpretation of the provisions of the Payment Services Act in the Bank's opinion and the analysis of certain cases described in the order by the Office of Competition and Consumer Protection. The case is pending. UOKiK has decided to extend the deadline for completing the proceedings until 30 March 2025.
In connection with the proceedings, as at 31 December 2023, the Group created a provision in the amount of PLN 20 million. As at 31 December 2024, the provision amounted to PLN 22 million.
Proceedings on provisions providing for the possibility of changing a standard contract, contract or table of fees and commissions for important reasons, the so-called modification clauses
On 1 April 2019, the President of the Office of Competition and Consumer Protection (UOKiK) initiated ex officio proceedings to recognize a standard contract as illegal in terms of contractual provisions that may violate Art. 23a of the Act on competition and consumer protection. The proceedings concern provisions providing for the possibility of changing the standard contract, contract or table of fees and commissions for important reasons, the so-called modification clauses.
In the opinion of the President of UOKiK, the analysed modification clauses may constitute prohibited contractual provisions due to:
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
the possibility of unilaterally changing the general terms and conditions of the contract as to its essential provisions, in the scope of contracts enabling the generation of debt on the part of consumers, concluded for a specified period,
general, imprecise nature of the premises for a unilateral amendment to the contract, which does not allow consumers to verify them correctly, and in some provisions there are no time limits as to the scope of changes,
no provisions regarding the possibility of continuing a contract concluded for a specified period of time regarding crediting consumer needs under the existing rules in the event of failure to accept unilateral proposed changes from the bank.
In the letter of 13 May 2021, the Office for Competition and Consumer Protection notified the Bank that the collection of evidence had been completed. The Office for Competition and Consumer Protection decided to extend the deadline for the completion of the proceedings until 30 April 2025.
As at 31 December 2024 the Group has not identified any rationale for making provisions on this account, similarly as at 31 December 2023.
Proceedings on the allegation of practices restricting competition on the market of acquiring services related to payments with payment cards in Poland
After conducting antitrust proceedings against ING Bank Śląski S.A. and other banks, at the request of the Polish Trade and Distribution Organization - the Employers' Association (POHiD), the President of the Office of Competition and Consumer Protection issued a decision on 29 December 2006 stating that the Bank had committed practices restricting competition. UOKiK found competition-restricting practice consisting in the participation by various Polish banks, including the Bank, in an agreement limiting competition on the market of acquiring services related to the settlement of consumer obligations to merchants, for payments for goods and services purchased by consumers, using payment cards in Poland by jointly determining the interchange fee charged on transactions made with Visa and MasterCard cards in Poland. In connection with the finding of practices restricting competition, UOKiK imposed fines, including on the Bank in the amount of PLN 14 million.
The Bank appealed against the Decision to the Court of Competition and Consumer Protection (SOKiK). By judgement of 12 November 2008, SOKiK amended the UOKiK's decision, in that it did not find any practice restricting competition. On 22 April 2010, this verdict was overturned by the Court of Appeal, which referred the case to SOKiK for reconsideration. Another judgement of the Court of Appeal was upheld, which resulted in the obligation to pay a fine. However, the amount of the fine was refunded to the Bank following the judgement of the Supreme Court,
which overturned the judgement of the Court of Appeal. Currently, as a result of the Appellate Court’s decision of 23 November 2020, the case is being reconsidered by the SOKiK. Further hearings were held following an exchange of pleadings between the parties. The court admitted the evidence from the expert opinion. The opinion was served on the parties who replied to it.
Due to the lack of final decisions, the amount of the refunded penalty was not recognized in the profit and loss account. As at 31 December 2024, the value of the provision was PLN 14 million, similarly as at 31 December 2023.
Litigation concerning loans based on variable interest rate and the rules for determining the WIBOR reference rate
As at 31 December 2024, the Bank was subject to 196 court proceedings (92 proceedings as at 31 December 2023) in which clients question the basis of the mortgage loan agreement on the variable interest rate structure and the rules for determining the WIBOR reference rate. The Bank questions the validity of the claims raised in these cases, as the use of the WIBOR index is compliant with the law. The WIBOR benchmark is set by an administrator, independent of the bank, and supervised by the Polish Financial Supervision Authority. When granting such loans, the Bank provides clients with all the information required by law, i.e. the ratio and the risk of variable interest rate. This is confirmed by the case law to date, which is favourable for the Bank. As at 31 December 2024, 12 cases were already completed with a positive result.
The Częstochowa Regional Court in a case against one of the banks, in which the plaintiff raises objections regarding the WIBOR rate, decided to refer the following questions to the Court of Justice of the European Union by order of 31 May 2024:
1) Does Article 1(2) of Directive 93/13, which excludes from the directive the terms of a contract which reflect, inter alia, the applicable laws or regulations, permit the examination of variable-rate contractual terms on the basis of the WIBOR benchmark?
2) If the answer to the first question is in the affirmative, does Article 4(2) of Directive 93/13, which excludes the assessment of the unfairness of contractual terms relating to the determination of the main subject-matter of the contract or of the price/remuneration, permit the examination of variable-rate contractual terms on the basis of the WIBOR benchmark?
3) In the event of a positive answer to the first and second questions, can the provisions of the agreement on variable interest rates based on the WIBOR reference rate be regarded as contrary to the requirements of good faith and causing a significant imbalance in the parties’ rights and obligations arising under the agreement to the
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
detriment of the consumer, due to the consumer’s inadequate information regarding the exposure to the risk of a variable interest rate, including, in particular, the failure to indicate how the benchmark on which the variable interest rate is set is determined and what doubts are related to its non-transparency and the uneven distribution of this risk among the parties to the agreement?
4) If the previous questions are answered positively, is it possible to continue the operation of a contract in which the interest rate on the amount of the loan principal will be based on the second component determining the interest rate contained in the contract, i.e. the bank’s fixed margin, which will change the interest rate on the loan from variable to fixed?
On 3 July 2024, the request for a preliminary ruling was formally submitted to the CJEU and the case was given the case number C-471/24. On 28 October 2024, the Polish Government submitted to the CJEU its position on the preliminary questions asked in this case, in which it recommends a negative answer to all the above questions. This position is in line with the banks' arguments.
Court proceedings concerning the sanction of free credit
As at 31 December 2024, there were 75 court proceedings against the Bank (45 proceedings as at 31 December 2023) regarding the free loan sanction. As at 31 December 2024, 23 cases were already completed, and none of them had any irregularities in contracts that would have been the basis for recognising the statement on the sanction of the free loan.
A lawsuit by borrower against one of the banks was brought to the court in Poland for the imposition of a free loan sanction, i.e. depriving the lender of the right to interest and other fees resulting from the agreement. In the course of the proceedings, the court raised certain doubts, with which it referred a preliminary ruling to the CJEU. On February 13, 2025, the CJEU issued a judgement in Case C-472/23, answering the following questions asked by the Polish court:
1) The fact that the credit agreement refers to an annual percentage rate of charge which is overstated because certain terms of the agreement were subsequently found to be unfair (i.e. abusive) and therefore not binding on the consumer does not in itself constitute a breach of the obligation to provide information.
2) The fact that the credit agreement mentions a number of circumstances justifying an increase in the charges relating to the performance of the contract, without the consumer, who is reasonably well informed and reasonably observant and circumspect, being able to ascertain whether those charges have occurred or whether
they have had an effect on them, constitutes an infringement of the obligation to provide information, in so far as that indication is liable to call into question the consumer’s ability to assess the extent of his obligation.
3) Article 23 of Directive 2008/48 does not preclude national legislation which provides, in the event of a breach of the obligation to provide information imposed on the creditor, for a uniform penalty consisting in depriving the creditor of his right to interest and charges, irrespective of the individual degree of seriousness of the breach, in so far as that breach is liable to undermine the consumer’s ability to assess the extent of his obligation.
Ad 1) In this judgement, the CJEU reminded that the law requires a number of detailed information to be provided in a consumer credit agreement, including the actual interest rate (calculated according to the given mathematical formula) and the total cost of the credit incurred by the consumer. The case-law assumes that the lack of faithful provision of the required information deprives the consumer of the possibility to determine the scope of his obligation, i.e. the amount of amounts to be repaid (judgement of the CJEU of 21 March 2024 in Profi Credit Bulgaria, C 714/22).
It must be assumed literally that providing incorrect information about the APR does not have to be an underestimation of it, the bank may just as well overstate the APR, and ‘allowing a credit agreement to contain an overstated APR could deprive the indication of practical usefulness to the consumer’ (for the sake of clarity: one of the elements of the dispute was that, after removing the provision of the prohibited APR, the APR is lower than that provided in the contract). However, in the CJEU’s opinion, the situation that the removal of the contested provision leads to an overstatement of the RSSO — calculated by the lender according to this mathematical formula — does not mean a breach of disclosure obligations.
(Ad 2) However, this does not imply that the creditor had the right freely and freely to modify the terms of the contract, including the amount of the fees, in the course of its performance. Information on loan repayment terms is a key element, including the prerequisites for changing these parameters; therefore, the agreement should indicate in a transparent manner the reasons for and manner of changes in the amount of fees related to the loan granted. According to the CJEU, the lender’s use of variable (and evolving) economic indicators that are difficult to verify, including parameters controlled by the bank itself (e.g. the level of bank costs), is not a condition of a clear definition of the terms of the agreement.
Ad 3) Regarding, on the other hand, whether a civil court verdict may result in a free credit sanction depriving the bank of all its receivables, or whether it should be proportional to the scale of the infringements, the CJEU pointed out that according to the directive these consequences should be effective, proportionate and dissuasive, and therefore their severity should be adequate to the gravity of the infringement. Therefore, since the lack of correct information restricts the consumer’s exercise of his rights and makes it difficult to understand his obligations, the
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
CJEU considers that the sanction of a free loan provided for by national law can be considered disproportionate only if the breach of those obligations could not affect the consumer’s ability to assess his obligations. That, in turn, means that national law may allow a penalty in the form of deprivation of interest and other entitlements to the creditor - but the assessment of the conditions and circumstances obviously depends on the facts and must therefore be carried out by the referring court.
Other proceedings
On 23 January 2020, the Bank received a notice from the President of the Office for Personal Data Protection (President of the DPA) regarding the audit of the compliance of the processing of personal data with personal data protection regulations, i.e. 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) and the Act of 10 May 2018 on personal data protection. On 9 December 2021, the Bank received a notice from the President of UODO on the initiation of ex officio administrative proceedings in this area. The Bank shall take the action required by law during the proceedings.
As at 31 December 2024, the Group did not identify any indications to recognise provisions in this respect, similarly as at 31 December 2023.
34. Other liabilities
as at 31 December
2024
2023
Accruals, including:
1,053
1,163
due to employee benefits
406
375
of which variable remuneration programme
54
60
due to commissions
210
206
due to general and administrative expenses
437
582
O ther liabilities, including:
2,528
3,828
lease liabilities
529
484
interbank settlements
1,023
2,462
settlements with suppliers
163
169
public and legal settlements
196
162
liability to pay to the BFG guarantee fund
172
172
liability to pay to the BFG resolution fund
244
199
other:
201
180
Total
3,581
4,991
Including financial liabilities
2,528
3,828
Expected settlement period of other liabilities
up to 1 year
2,705
4,087
over 1 year
876
904
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
35. Equity
35.1. Share capital
The Parent entity's share capital is PLN 130,100,000 and is sub-divided into:
92,600,000 A-series ordinary bearer's shares with face value of PLN 1.00 each, and
37,500,000 B-series ordinary bearer's shares with face value of PLN 1.00 each.
Each ordinary share entitles its holder to dividend and one vote during the general meeting. All shares are fully paid .
35.2. Accumulated other comprehensive income
The following table presents the balances of accumulated other comprehensive income as at 31 December 2024 and 31 December 2022, respectively. The tables on next page show the reconciliation of changes in accumulated other comprehensive income during 2024 and 2023.
as at 31 December
2024
2023
Accumulated other comprehensive income, including:
from financial assets measured through other comprehensive income – debt instruments, including:
-5
-69
deferred tax
-50
-67
current tax *
51
83
from financial assets measured through other comprehensive income – equity instruments, including:
186
171
deferred tax
-44
-40
from cash flow hedges, including:
-4,849
-5,169
deferred tax
-9
16
current tax **
1,147
1,196
from actuarial gains / losses, including:
-31
-28
deferred tax
7
7
Total
-4,699
-5,095
*) current tax on the valuation of debt instruments - due to the fact that the debt securities included in all portfolios are jointly owned by one taxpayer of corporate income tax (hereinafter "CIT"), the Bank calculated for all portfolios jointly, separately for each security and using the FIFO method, tax results on purchase and sale of debt securities. The method of determining tax results on the purchase/sale of debt securities results in a different distribution of the results achieved in terms of valuation than for accounting purposes. Accounting unrealised valuation in accumulated other comprehensive income for CIT purposes becomes a real-ised valuation, on which the Bank pays
current tax. For this reason the current tax is recorded for the part of the unre-alised valuation in accumulated other comprehensive income that is realised in terms of CIT.
**) current tax on the valuation of hedging derivatives - the Group uses the service “settlement-to-market”, or “STM”, provided for by the Regulation of the KDPW/LCH/EUREX (CCP) in respect of the approach to the settlement of IRS and FRA instruments. Even though the effective portion of the de-rivative hedge instruments resulting from the measurement of derivative hedging instruments is recognised in other comprehensive income, due to the STM mechanism it is settled in cash and the amount paid to/ received from CCP represents tax income/ expense for the purpose of the corporate income tax (CIT). That is why the current tax is rec-ognised in other comprehensive income. Details on the STM services are presented in note 17 . Valuation of derivatives .
Accumulated other comprehensive income - change in balance
2024
for the year ended 31 December
changes in the fair value of financial assets measured through other comprehensive income
debt instruments
equity instruments
cash flow hedges
actuarial gains / losses
Total
Balance at the beginning of the period
-69
171
-5,169
-28
-5,095
gains/losses on revaluation carried through equity
55
15
-1,447
-
-1,377
transfer to financial result in connection with the sale
9
-
1,767
-
1,776
actuarial gains/losses
-
-
-
-3
-3
Balance at end of period
-5
186
-4,849
-31
-4,699
2023
for the year ended 31 December
changes in the fair value of financial assets measured through other comprehensive income
debt instruments
equity instruments
cash flow hedges
actuarial gains / losses
Total
Balance at the beginning of the period
-347
78
-7,752
-19
-8,040
gains/losses on revaluation carried through equity
273
93
425
-
791
transfer to financial result in connection with the sale
5
-
2,158
-
2,163
actuarial gains/losses
-
-
-
-9
-9
Balance at end of period
-69
171
-5,169
-28
-5,095
In the item financial assets measured at fair value through other comprehensive income – gains/losses on revaluation carried through equity in relation to debt securities, changes in the fair value of items classified in this category have
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
been presented, without taking into account the changes resulting from the valuation of the hedged risk , in terms of items covered by the fair value hedge accounting.
With respect to cash flow hedges:
gains/losses on revaluation carried through equity - the amount of the effective part of the hedging relationship in the cash flow hedging strategy of the portfolio of financial assets/liabilities is presented.
in the item transfer to the financial result - the amortization of the effective part of the hedging relationship of the cash flow hedging strategy was presented on the dates when the hedged item results in the profit or loss.
The rules relating to the above items are described in detail in chapter III. Significant accounting principles, in item 13.8.1 . and in the section Risk and capital management, in chapter II. 3.8 . Hedge accounting.
35.3. Retained earnings
as at 31 December
2024
2023
Other supplementary capital
315
315
Reserve capital
14,803
14,699
General risk fund
1,215
1,215
Valuation of share-based payments, including:
24
72
deffered tax
-5
-4
Retained earnings from previous years
57
8
Result for the current year
4,369
4,441
Total
20,783
20,750
Supplementary capital
Supplementary capital is formed from appropriations from profit after tax, surpluses generated under issue of shares above their face value and extra contributions paid up by the shareholders to be used for covering balance- sheet losses. The decision on the use of the supplementary capital is taken at the General Meeting.
Reserve capital
The reserve capital is created irrespective of the supplementary capital from profit after tax write-offs, in the amount passed by the General Meeting. The reserve capital may be allocated to cover special costs and expenses, and also to increase the share capital from the Bank’s funds. The decision on activation of the reserve capital is taken by the General Meeting.
General Risk Fund
The General Risk Fund is established in accordance with the Banking Law Act from the post-tax profits and is used for unidentified risk of banking activity. The decision on the use of the Fund is taken by the Management Board.
Dividend payout
The dividend is paid based on the financial result determined in the separate annual financial statements of the Parent company and the Group companies. Details of the Group’s dividend policy and divided payout constraints are included in the section Risk and capital management , in item I. 5 . Dividend Policy .
Retained earnings - change in balance
2024
for the year ended 31 December
Other supplemen- tary capital
Reserve
capital
General risk fund
Valuation of share-based payments
Retained earnings from previous years
Result for the current year
Total
Balance at the beginning of the period
315
14,699
1,215
72
4,449
0
20,750
net result for the current period
-
-
-
-
-
4,369
4,369
dividend payment*
-
-
-
-
-4,339
-
-4,339
write-down of profit to reserve capital
-
110
-
-
-110
-
-
valuation of incentive employee programmes
-
-
-
-48
52
-
4
using the reserve capital created for the implementation of the employee incentive programme
-
-6
-
-
6
-
-
Settlement of the acquisition and transfer of own shares to employees
-
-
-
-
-1
-
-1
Balance at end of period
315
14,803
1,215
24
57
4,369
20,783
*) In 2024, the Bank paid out a dividend from the 2023 profit and from the reserve capital allocated for the payment of dividend in the amount of PLN 4.339 million, i.e. PLN 33.35 per share.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
2023
for the year ended 31 December
Other supplemen- tary capital
Reserve
capital
General risk fund
Valuation of share-based payments
Retained earnings from previous years
Result for the current year
Total
Balance at the beginning of the period
315
12,994
1,215
59
1,714
0
16,297
net result for the current period
-
-
-
-
-
4,441
4,441
profit written off to reserve capital
-
1,714
-
-
-1,714
-
-
valuation of share-based payments
-
-
-
17
-
-
17
using the reserve capital created for the implementation of the employee incentive programme
-
-9
-
-
9
-
-
settlement of the acquisition and transfer of own shares to employees
-
-
-
-4
-
-
-4
accounting for the acquisition of an organised part of an enterprise
-
-
-
-
-1
-
-1
Balance at end of period
315
14,699
1,215
72
8
4,441
20,750
*) In 2022, the Bank paid a dividend from the profit for 2021 in the amount of PLN 689.5 million, i.e. PLN 5.30 per share.
36. Contingent liabilities
36.1. Contingent liabilities granted
as at 31 December
2024
2023
Undrawn credit facilities
42,512
41,697
Guarantees
8,014
8,113
Undrawn overdrafts in current account
1,409
1,418
Credit card limits
1,896
1,693
Letters of credit
393
277
Reverse transactions
281
-
Total
54,505
53,198
The Group discloses obligations to grant loans. These obligations include approved loans, credit card limits and overdrafts in current accounts.
The Group issues guarantees and letters of credits to secure fulfilment of obligations of the Group’s customers to third parties. The value of guarantees and letters of credit disclosed above reflects the maximum loss that can be incurred and that would be disclosed as at the balance sheet date should the customers fail to fulfil their obligations in full.
The Group charges commissions for contingent liabilities granted, which are settled in line with the specific nature of the particular instrument.
As at 31 December 2024, the Group also had granted off-balance sheet commitments (so-called commitments under binding offers) in the amount of PLN 904 million resulting from the transfer of a credit decision to the customer (in the case of mortgage loans) and additionally a draft agreement for a specific credit product (in the case of other loans and advances to natural persons).
Financial guarantee contracts by maturity
as at 31 December
2024
2023
up to 1 month
167
458
over 1 month and up to 3 months
865
1,073
over 3 months and up to 1 year
3,557
2,791
over 1 year and up to 5 years
2,749
2,989
over 5 years
676
802
Total
8,014
8,113
36.2. Contingent liabilities received
as at 31 December
2024
2023
Guarantees received
24,276
19,225
Financing
1,948
1,092
Total
26,224
20,317
Guarantee commitments received consist of collateral values for loans granted by the Bank. Funding commitments received include the value of deposits and loans that do not meet the criteria for recognition in the statement of financial position at the time of the financial statements.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
37. Fair value
37.1. Financial assets and liabilities measured at fair value in statement of financial position
Based on the methods used to determine fair value, the Group classifies individual financial assets/liabilities into one of three categories, the so-called level in the fair value measurement hierarchy. The description of particular levels of the valuation hierarchy is contained in chapter III. Significant accounting principles , in item 13.7 .
In 2024, as in 2023, there were no transfers between levels of the valuation hierarchy.
The carrying amounts of financial assets and liabilities measured at fair value are presented below, broken down by measurement hierarchy levels.
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ING Bank Śląski S.A. Group
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Annual consolidated financial statements for the period from 1 January 2024 to 31 December 2024
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Data in PLN milion
2024
as at 31 December
Level 1
Level 2
Level 3
Total
Financial assets, including:
32,385
1,466
276
34,127
Financial assets held for trading, including:
521
1,405
-
1,926
valuation of derivatives
-
898
-
898
other financial assets held for trading, including:
521
507
-
1,028
debt securities, including:
521
-
-
521
treasury bonds in PLN
499
-
-
499
Czech Treasury bonds
22
-
-
22
repo transactions
-
507
-
507
Financial assets other than those held for trading, measured at fair value through profit or loss, including:
-
-
22
22
loans are obligatorily measured at fair value through profit or loss
-
-
21
21
equity instruments
-
-
1
1
Derivative hedge instruments
-
61
-
61
Financial assets measured at fair value through other comprehensive income, including:
31,685
-
254
31,939
debt securities, including:
31,685
-
-
31,685
treasury bonds in PLN
26,371
-
-
26,371
treasury bonds in EUR
2,064
-
-
2,064
European Union bonds
2,838
-
-
2,838
Austrian government bonds
412
-
-
412
equity instruments
-
-
254
254
Transferred assets, including:
179
-
-
179
Treasury bonds in PLN from the portfolio of financial assets measured at fair value through profit or loss
179
-
-
179
Financial liabilities, including:
487
996
-
1,483
Financial liabilities held for trading, including:
487
913
-
1,400
valuation of derivatives
-
733
-
733
book short position in trading securities
487
-
-
487
repo transactions
-
180
-
180
Derivative hedge instruments
-
83
-
83
2023
as at 31 December
Level 1
Level 2
Level 3
Total
Financial assets, including:
24,564
1,724
275
26,563
Financial assets held for trading, including:
719
1,516
-
2,235
valuation of derivatives
-
900
-
900
other financial assets held for trading, including:
719
616
-
1,335
debt securities, including:
719
-
-
719
treasury bonds in PLN
600
-
-
600
Czech Treasury bonds
119
-
-
119
repo transactions
-
616
-
616
Financial assets other than those held for trading, measured at fair value through profit or loss, including:
-
-
39
39
loans are obligatorily measured at fair value through profit or loss
-
-
39
39
Derivative hedge instruments
-
208
-
208
Financial assets measured at fair value through other comprehensive income, including:
23,680
-
236
23,916
debt securities, including:
23,680
-
-
23,680
treasury bonds in PLN
21,345
-
-
21,345
treasury bonds in EUR
546
-
-
546
European Investment Bank bonds
1,378
-
-
1,378
Austrian government bonds
411
-
-
411
equity instruments
-