Business segments

By the end of 2020, the aggregate financing of the retail segment customers amounted to nearly PLN 177 billion and went down by over PLN 3.1 billion (-1.7% y/y). The decrease in the foreign currency mortgage banking portfolio (of PLN -6.0 billion) was the main contributing factor.

Retail savings amounted to nearly PLN 312 billion and went up by PLN 48.7 billion (+8.5% y/y) in 2020. An increase in retail and private banking deposits (+13.2% y/y), Treasury savings bonds (+50.5% y/y) and deposits of firms and enterprises (+40.1% y/y) were the main contributing factors.

The group reinforced its position as market leader in terms of the number of checking accounts maintained (ROR). This number amounted to almost 8.3 million and went up by 245 thousand during the year. It covers all active accounts, which constitute growth potential for further cooperation with customers.

In 2020, the group sold nearly 284 million Treasury savings bonds (i.e. 64% more than in 2019), and the debt in respect of the Treasury savings bonds issued to the domestic market amounted (at nominal value) to PLN 40 billion and was more than PLN 13.4 billion higher than at the end of the prior year.

Nominal value of savings bonds for the domestic market.
Source: Brokerage Office of PKO Banku Polskiego

The group offers its retail and private banking customers 57 funds and subfunds for individuals in which assets amounting to PLN 32.2 billion have been accumulated (according to Analizy Online data).

In 2020, the group undertook the following activities with regard to housing loans:

• ranted loans to individuals for a total of PLN 11.7 billion, which allowed it to maintain top position on the market with a share of 19.7% throughout 2020,
• extended the offer to support borrowers with CHF mortgage loans until 31 December 2020 to limit the negative effects following from the changes in the exchange rate of CHF,
• enabled concluding annexes to agreements for changing interest rates from fluctuating to fixed over a period of five years for the MIX mortgage loans and mortgage advances,
• offered a “green mortgage” option according to which, based on an energy performance certificate for the property constituting collateral for the loan customers may be charged a lower margin.

Source: ZBP, sales data of PKO Bank Polski and PKO Bank Hipoteczny

With regard to consumer loans:

• introduced new cash loan insurance packages for high amounts of loans (over PLN 100 thousand net of the amount applied for),
• increased the maximum available amount of the loan for basic segment customers to PLN 200 thousand;
• introduced the option of individualizing the price of cash loans,
• introduced a new offer “Ekopożyczka” – loans for the purchase of photovoltaic (solar) panels and other ecological equipment and vehicles, available without the need to have an account with the bank,
• introduced a new offer of external consolidation with a flexible price in the bank’s branches,
• improved the process of remote sales with the participation of advisors.

With regard to loans for firms and enterprises:

• introduced a new special offer for financing photovoltaic equipment addressed to those customers of the group who are entrepreneurs,
• in cooperation with Operator Chmury Krajowej made available, as a pilot service, to customers who are firms and enterprises, the Cloud Disk service. The service allows saving files to an Internet disk (with a capacity of 100 GB), which allows the user unlimited access to those filed from a computer, smartphone or tablet, with ensured full privacy and security, and intuitive handling,
• introduced new services, which include the automation and digitization of applications for granting the de minimis BGK guarantees through remote channels, a multiple signature mechanism consisting of certifying documents using an SMS code, the payment gate of eService which allows customers to pay with their cards, the BLIK code, make pay-by-link transfers and an e-wallet.

With regard to transactions and savings offer:

• introduced Nowe PKO Konto za Zero (Zero-cost Account) to the offer addressed to those customers who use their accounts intensively, pay by phone or card and wish to use new technologies. The account provides the following free-of-charge services: maintaining the account, withdrawals from all ATMs in Poland using the BLIK code and abroad using the card, and free-of-charge multi-currency debit card at five non-cash transactions a month,
• as of November 2020 it made available a new offer of company accounts with multicurrency debit cards. The cards are issued for accounts in 22 currencies. The new offer promotes active customers who chose PKO Bank Polski to be their key financial partner, and it fully replaces the former business account offer,
• adapted the product offer to the current market conditions following, among other things, from the MPC’s decision to reduce interest rates, and among other things, it optimized the deposit product offer for firms and enterprises – it withdrew standard term deposits, negotiated deposits and automatic deposits from the offer.

With regard to investment and insurance offer:

• made available to Personal Banking customers an investment advice service provided by advisors,
• for participants of the Employee Capital Plans and Employee Pension Plans maintained by PKO TFI it introduced a system of discounts in OnkoPlan and Bezpieczny Plan insurance (10%) and a system of discounts for purchases of Moje Podróże24 and Mój Dom24 insurance through the iPKO Internet service (20% and 30% respectively),
• made available an offer for insuring children PKO Ubezpieczenie Dziecka.

The bank supports the Polish economy and participates in the financing of strategic investment projects and local government investments. Such financing takes the form of syndicated and bilateral loans or securities issues. Total financing of customers in the corporate segment (including loans, bonds issued and lease receivables) amounted to PLN 71 billion by the end of 2020 and decreased by PLN 2.6 billion (-3.5% y/y) since the beginning of the year.

The bank maintains securities accounts for customers and facilitates Polish and foreign market transactions, and acts as a depositary for pension and investment funds. The group offers wide access to funds to its customers for the financing of complex investment projects, and the services of advisors focused on selecting optimum forms of financing and repayment terms.

The level of savings of customers in the corporate segment as at 31 December 2020 amounted to PLN 46 billion and decreased by more than PLN 4.3 billion from the beginning of the year, mainly due to a drop in the largest customers’ sector current and term deposits. This drop was partly offset by investing more than PLN 4.5 billion in bonds issued by the group’s companies.

In 2020, the group undertook the following activities with regard to customer service and transaction banking:

• implemented regulatory and functional changes, which enable opening and closing subsidy accounts for PFR financing of the “Large Enterprises” and “Micro-, Small- and Medium-sized Enterprises” programmes,
• implemented regulatory changes to enable the signing of documents provided under the Cash Management products for corporate segment customers using a qualified electronic signature,
• adapted the product offer to the current market conditions following, among other things, from the MPC’s decision to reduce interest rates, and optimized the deposit product offer which included withdrawing the term deposits product,
• introduced new Cash Deposit Machines (Wpłatomaty) in customer locations, which accept cash in PLN and EUR, which are accounted for on-line,
• automated the SEPA Card Clearing service and implemented collective bookkeeping for the SEPA Direct Debit service for the purpose of the German branch.

With respect to financing and banking services, it concluded:

• agreements for the comprehensive servicing of budgets of Kraków, Katowice and Rzeszów,
• 143 communal bond issue agreements at a total value of PLN 1.55 billion.

With regard to financing the corporate segment customers:

• 21 loan agreements in the form of a banking syndicate for a total of PLN 24.5 billion EUR 3.8 billion and USD 0.7 billion, in which the bank’s share amounted in total to PLN 4.7 billion, EUR 0.4 billion and USD 0.1 billion,
• two agreements relating to the organization of corporate bond issues without guaranteeing the closing of the issues in the total amount of PLN 2.0 billion.

With regard to brokerage activities conducted by the bank’s Brokerage House:

•  as a joint offeror and joint bookbuilder it conducted the IPO of Allegro.eu S.A. with a value of PLN 10.6 billion,
• as an intermediary, it completed the subscription for the sale of shares of Energa S.A., announced by PKN ORLEN S.A., totalling nearly PLN 3.2 billion,
• as the global coordinator and joint bookbuilder, it completed a transaction on the primary market according to the ABB procedure relating to CCC S.A. shares with a value of approx. PLN 506.9 million and a transaction according to the ABB procedure relating to X-Trade Brokers Dom Maklerski S.A. shares with a value of approx. PLN 111 million,
• on behalf of Ghelamco Invest sp. z o.o., as part of its operations on the debt securities market, it completed in total issues of bonds with a value of PLN 350 million,
• maintained nearly 135 thousand securities and cash accounts and over 252.8 thousand registration accounts – in terms of the number of securities accounts (according to the data of the National Depository for Securities) the bank’s Brokerage House ranked third among 36 participants in the market,
• provided services concerning units in 432 funds and sub-funds managed by 11 fund management companies.

The bank’s customers can use iPKO and iPKO biznes services as part of the electronic banking services. These services provide customers with access to information on their accounts and products, and enable them to effect transactions through the Internet.

iPKO service

The bank constantly promotes iPKO Internet banking among retail customers and small- and medium-sized enterprises. It includes remote self-management of accounts, banking products and other services. The customers have fast, safe and easy access to their funds (also those entrusted to some other companies of the group). Fees for using iPKO banking services are lower than the commissions and fees charged for the operations in the traditional channels of contact with the bank.

In 2020, PKO Bank Polski introduced the following new features to iPKO to make it easier for customers to use banking services:

• the possibility to add documents to an application filed through a remote channel for a cash loan, renewable credit limit or a credit card,
• remote signing by customers of offers processed by an advisor at a branch as part of credit pre-limits under the Fabryka Ofert (Offer Factory) project; the agreement is automatically sent to the customer for signature through iPKO,
• new operations for business customers – loan activation or early repayment, appointment and cancellation of the appointment of a proxy for a business account, closing an auxiliary account, waiver of a credit limit, or filing an application to simultaneously register a firm and open a business account,
• activation of tourist vouchers,
• the “Moje aktywa” (My assets) function, which gives the customers access to a transparent list of all their financial assets (e.g. deposits, bonds, funds) in one place,
• the possibility to use iPKO by Customers who do not have accounts with the bank, but who have Employee Capital Plans (PPK) or Employee Pension Plans (PPE) with PKO TFI or a cash loan with the bank,
• the function of checking PPK and PPE register balances and the transaction history on such registers, provided that the registers are maintained by PKO TFI,
• informing about the estimated total amount of transfer in the currency of the account from which the transfer is sent before the payment transaction is authorized. The information also includes all transaction fees and fees for currency translation,
• new appearance of the iPKO home page and the log-in screens of the e-Tożsamość (e-Identity) platform and the ZUS (Social Insurance Institution) Electronic Service Platform.

iPKO business service

The iPKO business electronic banking system is addressed to all institutional customers who wish to have online and mobile access to the standard products and specialist banking services. In 2020, PKO Bank Polski made new functionalities available to the iPKO business users:

• a virtual account module and the possibility to make orders for transactions from virtual accounts,
• digitization of orders for e.g. cards or secure envelopes, activation of modules and sending e-Documents through iPKO business,
• a card module, which allows ongoing control of transaction history, available funds and limits on a business card; the application also allows setting up or changing PIN and card activation or blocking,
• bank also expanded the existing functions – bank statements, reports, white lists of counterparties, and simplified ordering transfers abroad,
• customers could file applications (and appeal against negative decisions) for PFR Financial Shield subsidies for micro-, small- and medium-sized enterprises through iPKO and iPKO business.

The Contact Center of PKO Bank Polski plays an important role in serving retail segment customers. Its purpose is to sell the bank’s products during incoming and outgoing calls and to provide efficient and effective customer service via a phone or the Internet.

PKO Bank Polski’s hotline employs several hundred consultants who remain at the customers’ service 24 hours a day. The consultants not only handle telephone calls but also answer customers’ questions and requests electronically – e-mails and website requests. Customers may also send messages in the iPKO or Inteligo transaction service.

As part of the robotization of the customer service process, since 2019 Contact Center consultants have been using the support of a robot, which presents responses to the verification questions during a call. This reduces the duration of conversations between the consultant and the customer by up to 20 seconds. Due to increase activitity of customers in remote channels, the number of incoming calls to the Contact Center increased by 17.8%, and the number of e-mails by 72.8%.

PKO Bank Polski, with an eye to providing convenient access to its products and services, provides its customers with a wide network of retail branches and agencies, private banking offices, corporate branches, as well as branches located abroad. The optimization of the branch network is carried out on a continuous basis, and decisions on whether to open a branch on a particular micro-market are made by reference to economic criteria, taking into account the growth potential of that micro-market (retail branches) and optimization of the coverage of business areas (corporate branches). At the end of 2020, the network of PKO Bank Polski’s branches comprised:

• 943 retail branches organized into 10 regional divisions, 8 private banking offices and 11 corporate banking offices,
• 23 regional corporate centres organized into 7 regional corporate branches, as well as the branches located in Germany and Czech Republic,
• 492 agencies that complement the bank’s branch and ATM network.

In relation to the end of the year 2019, the total number of retail units decreased by 101, including 100 retail branches, and the number of corporate units decreased by 10 regional corporate centres. The costs of liquidating branches in 2020 amounted to PLN 5.5 million. This amount mainly includes the costs of restoring the premises to their original condition and the costs of compensations resulting from the agreements signed with the property owners. The compensation costs do not increase the value of the lease agreements; they only change the dates of charging the costs to the bank’s financial result due to the earlier payment of rents.

The decrease in the number of branches is a result of the digital transformation, which is one of the key elements of the consistently implemented development strategy of PKO Bank Polski. The digital transformation supports customers switching to remote service channels and at the same time implements the assumptions of the government project “From paper to digital Poland”.

The bank is constantly improving customer service conditions in the branches as part of the so-called New Format of Branches. The model assumes creating a modern bank facility which is friendly to customers and the bank’s employees. The new standard is supported by new technologies – the WIFI zone, self-service cash desks, possibility of topping up mobile phones, LCD monitors, tablets, authorization of selected customer orders using text messages. All these technologies strongly support educating the customers and changing their habits.

PKO Bank Polski constantly develops Private Banking and enables customers to access a wide range of financial products and instruments. The Private Banking Offices serve customers in the largest cities of Poland: Warsaw, Gdańsk, Kraków, Katowice, Poznań, Wrocław, Łódź, Szczecin, Bydgoszcz (the branch is a part of the Private Banking Office in Szczecin), Białystok and Lublin (the branches are a part of the Private Banking Office in Warsaw).

By the end of 2020, the Private Banking Centre managed a portfolio of assets with a value of nearly PLN 45 billion. During 2020, the number of the customers served by the Private Banking Centre increased by more than 6% to 16 300 at the end of the year.

The Corporate Banking Centre of PKO Bank Polski is an optimum environment created for the development of businesses with revenues ranging from PLN 5 million to PLN 30 million and similar product and service needs. A separate Corporate Banking Centre makes it possible to build the image of PKO Bank Polski as a reliable business partner for Polish businesses thanks to:

• its service team,
• creating a specialized group of nearly 150 mobile advisors cooperating directly with credit analysts,
• improving the advisors’ credit competence, better matching of the product offer and price range to the customer’s needs, and reducing the waiting time for a credit decision due to improvements in the lending process,
• limiting paper documentation in relations with the bank, remotely communicating with customers, as well as automating the processes using iPKO business.

In 2020, the number of customers served by the Corporate Banking Centre increased by nearly 13% to 13.4 thousand at the end of the year.