Press release
As at the end of September 2021, the Bank was the leader in the Polish market for mortgage banks in terms of the balance of mortgage covered bonds remaining in trading and the balance of residential mortgage loans.
As at the end of the third quarter of 2021, the loan portfolio of PKO Bank Hipoteczny reached PLN 23.5 billion, while maintaining a very high quality in terms of credit risk.
The value of the mortgage covered bonds issued by the Bank remaining in trading as at the end of September represented approximately two-thirds of the total value of mortgage covered bonds issued by Polish banks, remaining in trading.
PKO Bank Hipoteczny ended the third quarter of 2021 earning a net profit of PLN 59.4 million, which represents an increase of PLN 2.9 million compared with the corresponding period of 2020. The net interest income earned in that period amounted to PLN 226.9 million, which is a drop of PLN 26.0 million compared with the corresponding period of the previous year, resulting from the amortization of the loan portfolio and a drop in interest rates. Net allowances for expected credit losses after the third quarter of 2021 amounted to as little as PLN 0.8 million, which mainly resulted from an improvement in the forecasts for the key macroeconomic indicators concerning Gross Domestic Product and unemployment.
- In the first nine months of 2021, PKO Bank Hipoteczny achieved very good financial results. We ensure stable profits for the PKO Bank Polski Group and we support it in developing its product mix, based on an effective and efficient business model. In a low interest rate environment and faced with pandemic-related turmoil in the markets, we maintained the high profitability of the portfolio, while preserving its excellent quality – says Daniel Goska, Vice-President managing the work of the Management Board of PKO Bank Hipoteczny.
PKO Bank Hipoteczny obtains loans for its portfolio thanks to strategic cooperation with PKO Bank Polski, including by way of selling residential loans in the largest network of branches, intermediaries and agents in Poland, as well as by purchasing portfolios of receivables from PKO Bank Polski. In three quarters of 2021, PKO Bank Hipoteczny granted mortgage loans of PLN 272.6 million and purchased receivables from PKO Bank Polski of PLN 158 million. As at the end of September 2021, the Bank’s loan portfolio reached PLN 23.5 billion. PKO Bank Hipoteczny remains the largest issuer of mortgage covered bonds in Poland. Although the Bank did not issue any mortgage covered bonds in 2021, the value of the mortgage covered bonds issued by the Bank and remaining in trading amounted to PLN 16.0 billion as at the end of September 2021 and represented 63 per cent of the total value of the mortgage covered bonds issued by Polish mortgage banks, remaining in trading. The Bank also diversified its sources of financing, among other things, by issuing unsecured bonds the balance of which amounted to PLN 3.6 billion as at the end of September.
- It is worth stressing that our effective business model based on a strong relationship with the PKO BP Group is positively assessed by financial market participants. In July, the Moody’s Investors Service informed about PKO Bank Hipoteczny’s rating being upgraded. The Bank’s long-term issuer rating was upgraded from Baa1 to A3, the long-term counterparty risk rating was upgraded from A3 to A2, and the short-term counterparty risk rating was upgraded from P-2 to P-1. Having the strong support of our Group, a favourable assessment by the financial markets and the largest potential for the issue of mortgage covered bonds (including green ones) in Poland, we wish to remain the leader in the mortgage covered bond market in Poland - adds Vice-President Daniel Goska.
Mortgage covered bonds are a type of bond secured with receivables in respect of mortgage loans. The mortgage covered bonds of PKO Bank Hipoteczny are issued solely on the basis of residential loans in Polish zlotys which meet conservative criteria for granting such loans, both in terms of the assessment of creditworthiness and the valuation of the real estate put up as collateral for them. The high security of the mortgage covered bonds of PKO Bank Hipoteczny is reflected in the Aa1 rating awarded by the Moody’s Investors Service in December 2020. This is the highest rating which Polish debt securities can obtain.
For more information, please contact:
Katarzyna Majchrzak
Head of Treasury
t: +48 22 521 57 55
e-mail: katarzyna.majchrzak@pkobh.pl