The capital adequacy of the PKO Bank Polski SA Group as at the end of 2018 remained on a safe level, considerably above supervisory limits. As at 31 December 2018 the capital adequacy measures of the PKO Bank Polski SA Group were calculated based on the provisions of the CRR Regulation, taking account of prudential consolidation.
As at the end of 2018 the total capital ratio of the PKO Bank Polski SA Group increased by 1.51 p.p. y/y to 18.88%, and the Tier 1 capital ratio increased by 1.0 p.p. y/y to 17.54%.
The increase in the capital ratios was mainly due to an increase in own funds of PLN 3.8 billion, with a simultaneous increase in capital requirements of approx. PLN 0.4 billion (mainly in respect of credit risk).
The following factors had an impact on the increase in own funds: inclusion, at the consent of the PFSA, of part of the profit earned in 2018 of PLN 1.6 billion in own funds, issue of subordinated debt of PLN 1 billion, and accumulation of the profits of the Bank’s Group’s companies and the accumulation of 75.2% of the Bank’s profit from 2017 of PLN 2.1 billion (which led to an effective increase in own funds of PLN 0.3 billion, as part of the profit for 2017 of PLN 1.8 billion had already been included in own funds, at the PFSA’s consent, in previous quarters: in Q3 2017 part of the profit from H1 2017 of PLN 1,1 billion, and on Q4 2017 part of the profit from Q3 2017 of PLN 0.7 billion).
As at 31 December 2018 the following factors had an impact on the level of the PKO Bank Polski SA Group’s capital requirements: applying the preferential risk weight of 35% to housing mortgage-secured exposures in respect of exposures that do not have a rating in the form of a valuation survey prepared by a valuation expert, which reduced housing loan requirements by approx. PLN (-)0.8 billion and translated into an increase in the total capital ratio of 0.94 p.p. and the base capital ratio of 0.87 p.p.