73. Information on securitization of the lease portfolio and package sale of receivables

In connection with the acquisition of Raiffeisen-Leasing Polska S.A. and its subsidiaries, on 1 December 2016, the Group consolidated a special purpose vehicle ROOF Poland Leasing 2014 DAC with its registered office in Ireland. The SPV is buying securitized receivables resulting from lease agreements sold by Raiffeisen-Leasing Polska S.A. (currently: PKO Leasing S.A.) under the securitization plan which was initiated in December 2014. The receivables acquired by the SPV were financed by an issue of securities. The objective of and benefit from selling these receivables to the SPV was to obtain and diversify sources of long-term financing.

Redemption of debt securities in the period from 1 January to 31 December 2020 at their nominal value totalled PLN 146 million, including PLN 85 million redeemed on 2 January 2020, and PLN 61 million redeemed on 2 April 2020.

The redemption of debt securities in the period from 1 January to 31 December 2020 according to their nominal value totalled PLN 491 million, including PLN 153 million redeemed on 2 January 2019, PLN 134 million redeemed on 2 April 2019, PLN 110 million redeemed on 2 July 2019 and PLN 94 million redeemed on 2 October 2019.

On 2 July 2020, the securitization programme with the participation of special purpose vehicle, ROOF Poland Leasing 2014 DAC, was completed, and PKO Leasing S.A. exercised its option to buy the remaining lease receivables left in the programme (the clean-up-call option). The reason for launching the process of completion of the transaction in question was repayment of the last bonds issued by the SPV, ROOF Poland Leasing 2014 DAC, which took place on 2 April 2020. As of that day, PKO Leasing S.A. was the only creditor of the company in relation to the subordinated loan. The proceeds from the resale of the lease receivables were used – after paying fees to entities which handled the transaction – to repay the subordinated loan granted by PKO Leasing S.A. to the SPV. Subsequently, procedures are pending to initiate the liquidation procedure in respect of ROOF.

In September 2019, PKO Leasing S.A. carried out securitization of lease receivables with a value of PLN 2 500 million. On 26 September 2019, the Company sold lease receivables to the special-purpose vehicle Polish Lease Prime 1 Designated Activity Company (Polish Lease Prime 1 DAC) with its registered office in Dublin (Ireland). The receivables purchased by the SPV were financed mainly with an issue of securities (bonds) conducted on 26 September 2019 with the redemption date falling on 28 December 2029 and with funds obtained as part of the PKO Leasing S.A. Group. Bonds with a nominal value of PLN 1 835 million were taken up by entities from outside the PKO Bank Polski S.A. Group. The objective of and benefit from selling these receivables to the SPV was to obtain and diversify sources of long-term financing.

As at 31 December 2020, the value of receivables constituting the object of the securitization transaction for lease receivables amounted to PLN 2 457 million, and as at 31 December 2019 it was PLN 2 723 million.

Carrying amounts of the financial assets and financial liabilities covered by securitization are presented in the table below.

Moreover, in 2020 the Group performed sales of impaired loan portfolios (balance sheet and off-balance sheet receivables) of more than 26.8 thousand individual receivables from retail and business customers amounting to approximately PLN 716 million (PLN 1 790 million in 2019). The total carrying amount of the provisions for potential claims on the sale of impaired loan portfolios as at 31 December 2020 amounted to PLN 1.9 million (as at 31 December 2019 it was PLN 2 million). As a result of the sale of the receivables all risks and rewards were transferred, hence the Group derecognized these assets.

The Group did not receive any securities as a result of these transactions.