• In the first half of 2022, PKO Bank Hipoteczny’s profit before tax amounted to PLN 76.5 million and its net profit reached PLN 50.8 million.
  • As at the end of June 2022, the Bank continued to be the leader of the Polish mortgage bank market in terms of the balance of mortgage covered bonds, with mortgage covered bonds of PLN 9.9 billion. In addition, as at the end of June, the Bank carried out the opening subscription of green mortgage covered bonds in EUR for our region with a nominal value of EUR 500 million, for which the issue date was set at 4 July 2022.
  • The loan portfolio of PKO Bank Hipoteczny exceeded PLN 20.8 billion as at the end of June 2022 and maintained a very high quality in terms of the credit risk.

The first half of 2022 was yet another period of stable financial results in PKO Bank Hipoteczny’s operations, despite the geopolitical turmoil related to Russia’s aggression against Ukraine and the continuing Covid-19 pandemic. The Bank’s profit before tax amounted to PLN 76.7 million, i.e. was PLN 20.6 million higher than a year before, while the net profit for the period was PLN 50.8 million, which represents an increase of PLN 16.9 million compared with the similar period of 2021. 

Although the loan portfolio successively decreased as a result of accelerated depreciation, net interest income increased, mainly due to an increase in interest rates of 1.6% compared with the first half of 2021, and amounted to PLN 155.2 million. Despite recording additional provisions of PLN 2 million against borrowers from Russia, Belarus and Ukraine, net allowances for expected credit losses amounted to an income of PLN 0.2 million, compared with a loss of PLN 1.5 million a year before, which was mainly due to an improvement in the liquidity situation of customers covered by provisions in connection with the Covid-19 pandemic.

As a result, the Bank’s profitability has remained stable, despite having to incur costs of regulatory charges of PLN 30.9 million and costs of tax on certain financial institutions of PLN 37.0 million.

As at the end of June 2022 total assets amounted to PLN 22.5 billion with PLN 20.8 billion worth of residential mortgage loans as the key item of assets. PKO Bank Hipoteczny acquires loans for its portfolio through strategic cooperation with PKO Bank Polski, including through selling residential loans in the largest network of branches, intermediaries and agents in Poland, and by purchasing receivables portfolios from PKO Bank Polski. In the first half of 2022, PKO Bank Hipoteczny granted mortgage loans amounting to PLN 121 million but did not purchase any receivables from PKO Bank Polski.

“In the past six months, PKO Bank Hipoteczny generated satisfactory financial results. We have maintained a high profitability of the mortgage loan portfolio while maintaining its high quality. At the same time, we continuously improve our operating effectiveness and streamline the processes executed in the Bank. In tandem with PKO Bank Polski, we also implement solutions which support our customers”, says Katarzyna Surdy, Vice President of the Management Board of PKO Bank Hipoteczny.

The balance of mortgage covered bonds issued by PKO Bank Hipoteczny which remained in trading as at the end of June 2022 was PLN 9.9 billion. It accounted for approximately 50.4 per cent of the total amount of mortgage covered bonds issued by Polish banks. This positions PKO Bank Hipoteczny as the largest issuer of mortgage covered bonds in Poland.

As at the end of June 2022, the Bank carried out a subscription of 8-series green mortgage covered bonds in EUR with a nominal value of EUR 500 million, for which the issue date was set at 4 July 2022. This was the first foreign issue in Poland and the Central and Eastern Europe of green mortgage covered bonds secured solely with high quality residential mortgage loans in Polish zlotys.

“Our strategic objective remains to ensure that the PKO Bank Polski Group remains ready to issue mortgage covered bonds, including green bonds. By being able to issue green mortgage covered bonds, we reaffirm the importance of sustainable development in our Bank’s and the Group’s operations. In June 2022, we published an updated methodology for selecting green assets and the rules for issuing green mortgage covered bonds. The update consisted primarily of verifying that the criteria adopted by the Bank for identifying assets as green are consistent with the standard set by the Climate Bond Initiative for residential real estate in Poland, and that the principles meet the requirements set by the ICMA Green Bond Principles. We are particularly proud of the fact that in July 2022 we were the first issuer from Poland to conduct a benchmark issue of green mortgage covered bonds in the Euro”, emphasized Katarzyna Surdy.

Mortgage covered bonds are a type of bonds which are secured with mortgage loan receivables. PKO Bank Hipoteczny’s mortgage bonds are issued on the basis of solely residential mortgage loans in Polish zlotys, which are granted based on conservative criteria in terms of both the assessment of creditworthiness and the valuation of the underlying real properties. The high security of PKO Bank Hipoteczny’s mortgage bonds is reflected in the Aa1 rating assigned by Moody’s Investors Service in December 2020. It is the highest possible rating for Polish debt securities.

The first half of 2022 was also marked by the Bank’s adaptation to significant changes in the legal and regulatory environment, related to the amendment of the Act on mortgage covered bonds and mortgage banks and in connection with the entry into force of the Act on crowdfunding for business ventures and assistance to borrowers. On the latter issue, the Bank estimated the impact of the loan repayment holiday at PLN 644 million, assuming that 63% of customers would benefit from the suspension of repayments, and the amount of the adjustment was recognized in the books of account in July 2022.

“Although the actual impact of the “loan repayment holiday” solution is still unknown, and will depend, among other things, on the number of customers who would benefit from these solution, it is already worth emphasizing in this context that the Bank’s capital and liquidity position remains safe”, adds Jakub Niesłuchowski, Member of the Supervisory Board of PKO Bank Hipoteczny acting as Member of the Management Board.     

Contact for the media

Katarzyna Majchrzak

Director of the Treasury Office

e-mail: katarzyna.majchrzak@pkobh.pl

mobile phone: +48 887 098 809