The Group’s top priority is to maintain a strong capital position, including effective management of capital adequacy, to retain stable sources of financing which form the basis for business development, to support Polish entrepreneurship, ensuring customer satisfaction, engagement in developing new market standards, preventing cyberthreats, without compromising priorities in terms of operational efficiency, effective cost control and an appropriate assessment of the risk level. To this end, in 2018, the Group increased its portfolio of short-term bonds amounting (mainly 3-6 months) from PLN 3.3 billion at the end of 2017 to PLN 4.1 billion at the end of 2018.
On 8 February 2018, the Bank made a full early repayment of a credit line granted by Nordea Bank AB (publ) based on an agreement dated 1 April 2014. The Bank disclosed the execution of the agreement and its terms and conditions in its current report no 26/2014. Initially, the credit line was granted for a period of seven years, which means that the Bank repaid it three years before its original maturity;
On 8 March 2018, the Polish Financial Supervision Authority approved the allocation of proceeds from the issue of subordinated bonds made on 5 March 2018 with a total par value of PLN 1 000 000 000 to increase the Bank’s Tier 2 capital under Article 127(2)(2) of the Banking Act in conjunction with Article 63 of the Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012.
On 21 December 2017, having obtained the necessary corporate consents, the Bank concluded a guarantee agreement with a counterparty ensuring unfunded credit protection with regard to the portfolio for selected corporate loan receivables of the Bank, in accordance with the CRR Regulation. The total value of the Bank’s portfolio covered by the Guarantee is PLN 5 495 million, and the portfolio comprises the bond portfolio amounting to PLN 1 097 million and a portfolio of other receivables of PLN 4 398 million.
Within the Group, the portfolios of mortgage loans originally granted by PKO Bank Polski SA are successively transferred to PKO Bank Hipoteczny SA. The value of the portfolio transferred in 2018 amounted to approx. PLN 2.5 billion.
In 2018, PKO Bank Hipoteczny SA conducted five issues of mortgage bonds denominated in PLN addressed to institutional investors with a total nominal value of PLN 1 590 million and redemption period of 4 to approx. 10 years from the date of issue. Both domestic and international institutional investors acquired these mortgage bonds. PKO Bank Hipoteczny SA’s mortgage bonds are among the safest debt instruments on the Polish financial market. This is reflected in the highest possible rating which can be obtained by Polish securities of Aa3 assigned by Moody’s.
In 2018, PKO Bank Hipoteczny SA conducted one issue of mortgage bonds denominated in EUR addressed to institutional investors, with a nominal value of EUR 500 million and redemption period of approx. 6 years from the date of issue. Both domestic and international institutional investors acquired these mortgage bonds.
On 23 October 2018, the Bank obtained about PLN 646 million of financing from the European Investment Bank (EBI), maturing in October 2023. Furthermore in 2018, PKO Leasing obtained EUR 40 million of financing from the EBI and EUR 50 million of financing from the CEB maturing in March 2023 and November 2023 respectively.
As a result of the legal merger between PKO Leasing SA and Raiffeisen-Leasing Polska SA (on 28 April 2017), conceptual and implementation work was performed to integrate risk management in the combined PKO Leasing SA Group. In 2017, the works performed included, among other things, harmonizing parts of the internal risk management regulations governing the assumption of the material types of risk (in particular credit risk, market risk and operating risk), and the implementation of new tools for risk measurement and assessment, represented by IT systems also made available to the subsidiaries of PKO Leasing SA.