UPDATE: PKO BP lender prepared for very strong market competition, says CEO

"We are prepared for very strong competition. We assume that we could take over customers from the competition, including banks such as Erste. For us, the most important thing today is to build a strong value proposition. Because banks today have the problem that their acquisition offer is homogeneous, it is practically no different," PKO BP's CEO Szymon Midera said.

"Each of our seven initiatives that we have presented is subject to evaluation, we are detailing certain objectives. Monitoring what is happening on the market, in this environment, I do not rule out that we will also take a more offensive approach to all elements related to growth, not only organic one," he added.

The CEO stressed that potential acquisition transactions must be consistent and supportive to the bank's strategy.

The bank's deputy CEO responsible for finance and accounting Krzysztof Dresler said that he estimates PKO BP's sensitivity to a drop in interest rates at over PLN 500 million (EUR 118.1 mln) a year in ceteris paribus terms.

At the beginning of May, Austrian Erste Group announced that it had signed an agreement to acquire 49 percent stake in listed lender Santander Bank Polska and 50 percent in the bank's mutual funds unit Santander TFI for a total of EUR 7 billion. Erste expects the acquisition to be finalised by the end of 2025.

The balance of PKO BP's loan provisions in the first quarter of 2025 amounted to PLN 412 million (EUR 97.3 mln), which means an increase of 31 percent year on year and 5 percent quarter on quarter.

The bank said on Tuesday that the increase in provisions for non-financial assets mainly related to delays in principal repayments following the court annulment of CHF loan agreements.

"We have a very restrictive model there, which creates almost 100 percent write-offs in a very fast time. We think we will be able to significantly change, because of the behavioural nature of this portfolio, (...) in the next quarters, these levels will be significantly lower," said PKO BP's deputy CEO overseeing the risk management area Piotr Mazur.

In 2024, in a case brought by a borrower against PKO BP, the district court in Czestochowa has asked the CJEU to answer several questions about the WIBOR case. Amongst other things, the Court is to assess whether the way in which WIBOR is determined in loan agreements is compatible with EU law. The CJEU is due to take up the case on June 11.

"The CJEU proceedings are going according to plan and schedule. We are watching with great calmness what is happening and will continue to happen because we are dealing with a statutory indicator," CEO Midera said.

As of March 31, 2025, a total of 417 court proceedings were pending against the PKO BP group in which customers are challenging the basing of a mortgage loan agreement on a variable interest rate structure and the rules for setting the WIBOR reference rate. PKO BP has not established a provision on this account.

At the end of March, there were also 5,029 litigations against the group relating to the so-called sanction of free credit with a litigation value of PLN 123 million (EUR 29 mln), against 4,214 such litigations at the end of 2024.

"We are winning 90 percent of the cases, for now we are not making systemic provisions, we are of course making provisions where these cases are lost. We are thinking about it, but it seems that this risk is slowly decreasing," the CEO of PKO BP assessed.

seb/ kek/ ao/