STRONG START, EXCELLENT PACE IN RETAIL
The comparable consolidated net income of Bank Pekao SA in the first quarter 2017, excluding regulatory costs and extraordinary items, amounted to PLN 676 million, what means an increase by 14.2% on comparable terms. The reported net profit amounted to PLN 350 million. The Bank achieved a record high level of new key retail loans, which grew by + 58% Y/Y to PLN 4.4 bn.
In the first quarter 2017, the comparable consolidated net income of Bank Pekao S.A., excluding regulatory costs and extraordinary items, amounted to PLN 676 million, what means an increase by 14.2% in comparable terms. The reported net profit amounted to PLN 350 million and was subject to burden of PLN 125 million banking tax and the Bank Guarantee Fund charge in the amount of PLN 201 million.
Gross operating profit increased by + 11.1% in comparable terms and amounted to PLN 951m, thanks to both an increase in core income and a decrease in operating expenses.
Operating income amounted to PLN 1,744 million, +4,6% y/y on comparable terms thanks to improvement of both interest income and fee and commission income.
Net interest income, supported by significant increase in retail volumes, increased by 4.2% y/y to PLN 1,115m. Net interest margin increased to 2.76%.
Key retail loans increased by 11.3% y/y to PLN 52,919 million, supported also by a strong quarterly increase of 3.3%. Corporate loans increased by 6.4% y/y to the level of PLN 56,184 million. Bank Pekao in the first quarter reached a record level of new key retail loans at PLN 4.4 bn, + 58% y/y. New PLN denominated mortgage loans increased by 63.8% y/y and amounted to PLN 2,458 million, while new consumer loans reached the level of PLN 1,957m, +51.3% y/y.
Bank achieved double-digit growth of retail deposits by 10.3% y/y, which amounted to PLN 72,698m, supported by robust quarterly growth of 2.8%. Corporate deposits amounted to PLN 60,076m, +4.3% y/y.
Fee and commission income increased by 2.0% y/y to PLN 573m, due to increased fees and commissions for card payments, foreign exchange transactions and capital markets.
Bank continued further reduction of operational costs, which decreased by 2.3% y/y to PLN 794m.
The total costs in the first quarter were charged in addition by the fully recognized annual contribution to the compulsory banks restructuring fund and the banking tax expense. Cost / income ratio amounted to 45.5%.
Assets quality was maintained persistently at a high level. The cost of risk in the first quarter amounted to 40 basic pts., the NPL ratio fell to 5.9%, while the provision coverage ratio increased to 75.1%.
We had very good start of the year. Achieved results confirm strength, stability and good health of Pekao. We realize our plans also this year - said Luigi Lovaglio, CEO and President of the Management Board of Bank Pekao S.A.
Bank Pekao SA operates for 88 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 first quarter of 2017 is at the level of 17.7%). Rank no. 1 of Bank Pekao in Poland and among the biggest EU banks was confirmed by stress tests and AQR tests.