Bank Pekao reported 1Q16 consolidated net profit of PLN 573mn (PLN 654mn excluding the banking tax, +4.7% yoy). Bank experienced double-digit growth in key retail lending (+11.4% yoy) and solid development in corporate (+8.1% yoy).
Net profit reached PLN 573mn (PLN 654mn excluding the banking tax, +4.7% yoy). Gross operating profit of PLN 1,005mn was stable yoy, reflecting the impact of the adjustment of the balance sheet structure to the new market environment.
Operating income reached PLN 1,817mn, +0.5% yoy, as growth in NII offset the impact of weaker capital markets, while other income remained at the previous year’s level. NII rose to PLN 1,070mn, +2.6% yoy, due to increases in volumes.
The 1Q16 net interest margin increase to 2.75% on positive developments in both the asset mix and liabilities pricing.
Fees and commissions declined by -3.6% yoy to PLN 463mn, with stable banking fees and weaker capital markets fees.
Key retail loans increased by +11.4% yoy to PLN 47,739mn, while key corporate loans grew by +8.1% yoy to PLN 43,828mn. The bank achieved double-digit growth in retail deposits, up by +14.1% yoy to PLN 65,895 mn, supported by strong quarterly performance (+3.2% qoq), while corporate deposits reached PLN 57,586mn, with the dynamic reflecting the focus on margins while preserving a safe liquidity level. Strictly controlled costs were up by only +1.3% yoy to PLN 812mn. C/I ratio was at 44.7%.
Assets quality was maintained, with the cost of risk at 47bp and the NPL ratio at 6.5%, while the provision coverage ratio increased to 73.8%.
“The bank delivered a sound set of results. Acceleration of mortgages and consumer loans in April demonstrates that our commitment to supporting home financing is achievable despite less than spectacular market development.” - said Luigi Lovaglio, CEO and President of the Management Board of Bank Pekao S.A.
Bank Pekao SA operates for 85 years and is one of the largest financial institutions in Central and Eastern Europe. In terms of capital strength measured as capital adequacy ratio, Bank Pekao is a leader among large banks operating in Poland and one of the safest banks at the Pan-European level (Pekao Core Tier 1 ratio at the end of the 1st quarter of 2016 is at the level of 18.5%). Rank no. 1 of Bank Pekao in Poland and among the biggest EU banks was confirmed by stress tests and AQR tests.
Bank Pekao was awarded with many prestigious and popular prizes and titles, both in the national, as well as international level.
Bank Pekao SA is a leading lender financing economy development and a leader of corporate banking in Poland. As for corporate banking, Bank Pekao was honored three times with Euromoney Magazine awards. Innovative solutions are Bank Pekao’s competive advantage. In 2016 Pekao defended the most innovated bank title, by winning once again Złoty Bannkier trophy for Financial Innovation. Independent experts recognized multicurrency debit card issued by Pekao as the best innovation in banking sector in 2015. In last year Bank’s PeoPay contactless mobile payments application was recognized as 2014 Financial Innovation. In 2015, Bank was also awarded „Most innovative Bank in CEE & CIS” by EMEA Finance magazine.
Bank Pekao SA is a part of UniCredit Group, one of the leading international financial institutions.