Regulatory and legal changes

The financial and organizational position of the PKO Bank Polski Group was also affected by a number of new legal and regulatory solutions that entered into force in 2020:
PKO Annual
Report Online

Solution Impact
Impact of COVID-19 on the regulatory environment, Anti-Crisis Shields and other supporting actions
Resolution of the Minister of Health:
  • dated 13 March 2020 on announcing the state of epidemic threat in the Republic of Poland (Journal of Laws of 2020, item 433),
Limiting the operations of specific institutions or workplaces, including of the bank’s customers and counterparties as well as the companies of the group.
  • dated 20 March 2020 on announcing the state of epidemic in the Republic of Poland (Journal of Laws of 2020, item 491, as amended).
Package of Acts on the so-called Anti-Crisis Shield, including:
  •  the Act of 31 March 2020, of 17 September 2020 and of 9 December 2020 on amending the act on specific solutions related to the prevention and counteracting of COVID-19, other contagious diseases and the crisis situations caused by them, and certain other acts (Journal of Laws of 2020, items 568, 1639, and 2255),
A drop in net interest income (“loan payment holidays”)
  • the Act of 16 April 2020 on specific supporting instruments in view of the proliferation of the SARS-CoV-2 virus (Journal of Laws of 2020, item 695),
An increase in the volume of corporate deposits
  • the Act of 14 May 2020 on amendments to certain Acts in respect of protective measures in view of the proliferation of the SARS-CoV-2 virus (Journal of Laws of 2020, item 875),
  • the Act of 19 June 2020 on additional payments with respect to interest on bank loans granted to entrepreneurs affected by the effects of COVID-19 and on simplified procedures for approving debt composition proceedings in connection with COVID-19 (Journal of Laws of 2020, item 1086).
A drop in corporate credit risk
Regulation of the Minister of Finance, Funds and Regional Policy dated 10 November 2020 amending the regulation on granting aid using financial instruments under the operational programmes for the years 2014-2020 to support the Polish economy in connection with the COVID-19 pandemic (Journal of Laws of 2020, item 2002). A decrease or change in tax charges and principles of discharging tax duties
The PFSA communique dated 20 March 2020 on BGK entrusting other banks with assessing the ability to repay liabilities and analyse the risk of paying liabilities with respect to loans guaranteed by BGK (performance of one of the elements of the Anti-Crisis Shield). Increased security against credit risk
Potential implementation of a package of quick fixes adopted by the European Commission on 28 April 2020 (and by the European Parliament on 18 June 2020) of the CRR (CRR quick fix). They are aimed at facilitating lending by banks to households and corporate entities in the European Union and thus at significantly reducing the negative impact of the coronavirus pandemic on its economy. Increased capital adequacy ratio
#PIN – a Supervisory Impulses Package for safety and Development in the area of the capital market announced by the Office of the PFSA and the Position of the Office of the PFSA under the Supervisory Impulses Package on the financing of corporate Customers by banks during the coronavirus pandemic. Easing regulatory obligations, postponing reporting deadlines, ensuring the continuation of insurance cover granted to customers based on the insurance contracts concluded
Communique of the Management Board of the NBP dated 16 March 2020 with reference to the coronavirus epidemic in Poland, informing among other things of implementing operations to supply banks with liquidity, purchasing Treasury bonds on the secondary market, introducing bill of exchange credit for banks. Increase in the bank’s liquidity
Regulation of the Minister of Development and Finance dated 18 March 2020 repealing the regulation on the systemic risk buffer (Journal of Laws of 2020, item 473). Drop in the minimum capital adequacy ratio
PFSA’s decisions recommending that the bank retain own funds to cover the additional capital requirement to hedge the risk following from foreign currency mortgage loans at an individual level, in the amount of 0.27 p.p. above the total capital ratio (0.40 p.p. to date) and at the group’s level in the amount of 0.24 p.p. above the total capital ratio (0.36 p.p. to date). Lowering the minimum supervisory requirements with regard to capital ratios
Interest rates
The MPC decisions dated 17 March 2020, 8 April 2020 and 28 May 2020 as a result of which the NBP reference rate was reduced by a total of 1.4 p.p., i.e. to 0.10%. Decrease in net interest income
The Council also decided to reduce the rate of the mandatory reserve from 3.5% to 0.5%, and to reduce interest on funds kept for mandatory reserve purposes from 0.5% to the level of the NBP reference rate.
Contributions to the Bank Guarantee Fund
Resolutions of the BGF Board of February 2020 (15/2020 and 17/2020), which implemented a change in the charges payable by the banking sector to the system of protection of bank deposits and compulsory resolution. Increase in operating expenses, drop in profit, lower profitability
BGF Communique dated 26 March 2020 on MREL actions taken in response to the events relating to the COVID-19 pandemic (i.e. the planned updating of the amount of MREL required from banks, determining the first binding interim MREL target as at 1 January 2022 and applying an extended (as a result of the implementation of BRRD2) target deadline for meeting the MREL requirement (extending it by one year, to 1 January 2024). Change in regulatory requirements relating to MREL

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