After two years of operations, PKO Bank Hipoteczny has become the market leader in terms of the volume of its outstanding covered bonds, with PLN 5.36 billion at the end of March 2017.
Rafał Kozłowski, CEO of PKO Bank Hipoteczny said: “When PKO Bank Hipoteczny was starting its operations in April 2015, we announced our ambition to be the biggest covered bond issuer in Poland in our third year of operations. It is my pleasure to announce that PKO Bank Hipoteczny is the new leader of the covered bond market in Poland already at the end of our second year. We are extremely pleased that after just two years, we have achieved leadership on the Polish covered bond market, which was established 20 years ago. This would not have been possible without changes in the law. The acceleration of the Polish covered bond market followed the amendments to the Act on Covered Bonds and Mortgage Banks that took effect on 1 January 2016. They enhanced investor safety and broadened the pool of investors, which triggered increased interest in Polish covered bonds.”
PKO Bank Hipoteczny is the most active covered-bond issuer in Poland. In 2016 it conducted the country’s first ever benchmark issue of Euro-denominated covered bonds, with a nominal value of EUR 500 million, as well as two benchmark zloty-denominated issues with a total value of PLN 1 billion. In 2017 PKO Bank Hipoteczny conducted covered bond issues with a total value of PLN 2,7 billion, including Euro-denominated issues with a nominal value of EUR 525 million.
PKO Bank Hipoteczny’s covered bonds are backed only by zloty-denominated residential mortgage loans, which meet conservative lending criteria, both in terms of assessment of borrower creditworthiness and in the valuation of the property that serves as collateral.
PKO Bank Hipoteczny’s covered-bond issuance programmes – both Euro- and Zloty-denominated – have been assigned an Aa3 long-term rating by Moody's Investors Service. PKO Bank Hipoteczny is the only Polish issuer whose covered bond programmes have achieved this rating – the highest possible level for Polish securities, which is capped by Poland’s country ceiling.
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PKO Bank Hipoteczny is 100% owned by PKO Bank Polski, Poland’s largest bank, and specialises in zloty-denominated housing loans. PKO Bank Hipoteczny’s main purpose is to secure long-term financing by issuing covered bonds. In August 2014, PKO Bank Polski received approval from Poland’s Financial Supervision Authority to set up a mortgage bank, which began operating in April 2015.