Full year target delivered
Bank Pekao achieved consolidated net profit for 2016 amounted to PLN 2 279 m, remaining at the level of the previous year, despite the PLN 450 m of bank tax. Net profit calculated for conditions comparable increased by +8.5% yoy. Bank achieved a return on equity ROE of 9.8%, while maintaining a very high level of capital adequacy ratio Core Tier 1 ratio amounting to 17.6%. Double-digit growth was reached in both core retail loans by + 10.0% yoy, and retail deposits by +10.7% yoy. In 2016 the value of new retail loans reached a record level of over PLN 14 bln.
Consolidated net profit reached PLN 2 279 m (-0.6% yoy). On comparable basis net profit was +8.5% yoy.
Gross operating profit increased by + 7.7% yoy and amounted to PLN 4 135 m. The increase in gross operating profit was possible thanks to the improvement of core revenues and effective cost control, as well as additional receipts from VISA transactions.
Operating income grew by +4.1% yoy and reached PLN 7 347 m. Core revenues increased by +2.7% mainly thanks to improving net interest income, which grew up by +5.2% to PLN 4 382 m. Net interest margin was stable at 2.77%.
Net fees and commission reached to PLN 1 959 m. Banking fees were stable, while capital market fees were under pressure, reflecting whole market trends.
Key retail loans increased by +10.0% yoy, to PLN 51 576 m. Key corporate loans, grew up to PLN 45 139 m (+1.9% yoy) and reflected weak demand driven by low corporates capex.
After 12 months Bank achieved the record level of new consumer loans at PLN 7 675 m. Almost PLN 6 884 m of new mortgage loans allowed for further market share gains. In 2016 Pekao achieved record level of new retail loans, which reached PLN 14 559 m.
Bank achieved double digit growth in retail deposits by +10.7% yoy to PLN 70 725 m. Corporate deposits grew up +5.9% yoy to PLN 61 178 m.
Operational cost reached PLN 3 212 m. Bank upgraded excellent costs efficiency, C/I was further improved at the end of the year to 43.7%.
All credit risk indicators were improved, cost of risk was reduced to 45 bps, NPL ratio at 6.0% and provision coverage ratio increased to 74.5%.
“I am very happy about our results. We have great people and with them we are ready to face new challenges and achieve our goals in 2017.” - 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 2016 is at the level of 17.6%). Rank no. 1 of Bank Pekao in Poland and among the biggest EU banks was confirmed by stress tests and AQR tests.