Bank Pekao S.A.: double-digit net profit growth supported by strong commercial revenues

  • Consolidated, recurring net income in Q2 2019 – excluding employment restructuring, the voluntary retirement program costs and the Bank Guarantee Fund (BFG) contributions – increased by 11% y/y thanks to double-digit growth in core commercial revenues as well as continued cost discipline.
  • All business segments contributed to Q2 core revenue growth of 7.4% y/y.
  • The reported net income rose by over 8% to PLN 582m in Q2 2019 from PLN 540m in Q2 2018, with an increase in ROE to 10.1%.
  • In the full H1 2019 the net income was lower by 12%, and amounted to PLN 824m, mainly due to significant increase in Bank Guarantee Fund (BFG) contributions. Excluding BFG and employment restructuring costs, H1 2019 result rose by almost 11% y/y in line with management ambitions.
  • Lending growth in key business segments continued at double-digit pace, with the total loan book growing by 9% y/y.
  • At the end of June, Pekao had 21% more active mobile banking users than a year earlier.

– In the second quarter of 2019 we delivered  again robust operating results and a double-digit increase in the recurring net profit lifting RoE to double-digit level. What is  important, we are delivering those results despite an significant focus and resources dedicated to ongoing transformation of the bank, which include investments in boosting efficiency and modern operational solutions, as well as new products and services for our growing client base - said Michał Krupiński, CEO of Pekao S.A.  – We  are halfway through our 3-year strategic plan and on our way to achieve its goals. We are committed to maintaining pace of the transformation, while simultaneously ensuring rigorous approach to cost discipline. We have an ambition to establish an organization based on data-centric culture with a deep understanding of the client inspired by the approach adopted by global technology companies.

Strong business growth with ongoing prudence in risk management. Core revenue growth accelerated to 7.4% in Q2 2019. This was achieved thanks to a significant rise in commercial revenues, powered by corporate banking franchise delivering 13% growth, with retail banking maintaining high pace of activity with a 11% growth. Achieving a double-digit growth in net profit (in comparable conditions) could be attributed  to a consistent cost control. Operating costs, excluding one-off employment restructuring provision and the voluntary retirement program costs, grew by 1%, significantly below inflation, despite ongoing investments in operational transformation and digitization. The C/I ratio (excluding above-mentioned one-offs) in H1 fell by more than 2 p.p. to 42.9%, bringing Pekao significantly closer to the strategic goal of C/I below 40% by 2020.

Growth in lending volume. In April-June, Pekao continued a strong loan volume growth across all key business areas. Across the entire loan book, volumes grew by 9% y/y. In most profitable areas of corporate banking and small and medium enterprise segments combined loan book expanded by 16%, whilst in key retail products  grew by 13% in cash loans and increased by 11% in mortgages. The above mentioned allowed for 10% growth of net interest income.

On a way to 500k new currents in 2019. In H1 2019, Bank Pekao opened 208,000 new accounts for individual clients, i.e. 19% more than in H1 2018. Sale of accounts was supported by attractive offers of saving products and revolutionary card with a competitive offer of currency exchange and payments abroad. Supported with a ‘selfie-enabled’ current account opening process, Pekao aims to reach 500k of new current accounts already in 2019.

With attractive product proposition, Pekao is also actively consolidating its leading position among younger customers. In H1 2019, the number of new customers aged 13-17 grew by nearly 50%.

Continuation of strong dynamics in online and mobile banking. H1 2019 brought further development of  digital channels. Individual clients can now open current accounts in an entirely remote process. From April 2019 they can do so via Peopay mobile app. Moreover in Q2 2019, Pekao was also the first bank in Poland to introduce a remote process of current account opening also for corporate clients.

Number of active users of mobile banking continues to grow. As of the end of June, Pekao had 1.4m active users of mobile banking – 21% more than one year earlier. Comfort of clients using remote tools is reflected in sales data. Digital sale of cash loans “na klik” has been systematically outpacing growth in branch channel. In Q2 2019, the Bank originated 22% more loans in digital than in analogous period in 2018. At the end of the quarter, 37% of cash loans were sold via Pekao mobile banking.

Digital transformation bears fruits. In H1 2019, the bank was consistently carrying out its digital transformation strategy based on the development of applications and IT systems improving customer satisfaction and employees efficiency. The bank was creating cutting-edge, pioneer solutions in the Polish market. Pekao was the very first bank in Poland to have introduced a possibility to open a company account entirely remotely. Even before that, it was the first bank to offer ApplePay services for corporate clients. Additionally, thanks to Garmin Pay and Fitbit Pay it offered individual clients smartwatch payments option.


Bank Pekao S.A. , founded in 1929, is one of the largest financial institutions in the CEE region and top 3 universal bank in Poland with ca. PLN 197bn assets and market capitalization of ca. PLN 26bn.Through the second largest branch network, Bank Pekao serves over 5.5m retail customers. As the leading corporate bank in Poland, Bank Pekao serves every second among largest corporates in Poland. Status of a universal bank is underpinned by a market-leading private banking, asset management and brokerage operations. Diversified business profile is supported by a market-leading balance sheet and risk profile reflected in lowest cost of risk, strong capital ratios and resilience to macro conditions (top 3 banks in 2018 EU-wide EBA exercise).

Since 1998 Bank Pekao has been listed on the Warsaw Stock Exchange and has been a member of several local (incl. WIG 20 and WIG Banks) and international indices (incl. MSCI EM, Stoxx Europe 600, FTSE Developed). Pekao is among top dividend companies listed in Warsaw, with total payout of PLN 20bn during last 10 years. 

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