Corporate and investment segment

In 2015 PKO Bank Polski SA, as in previous periods based its development on corporate business, on building stable relationships with customers, as a consequence of providing high-quality services, cooperation principles based on partnership and the specialized qualifications of the sales network. Financing of both current operations of companies (through working capital loans), as well as openness to participation in the implementation of the future projects (through investment loans), as well as support in the implementation of local government projects, have been constantly the main priorities of the corporate and investment segment of the bank.

The Bank is analysing market expectations systematically and, in order to meet customer expectations, tailored its product and service offer so as to cope with increasing competitive pressure. As a result, a broad range of transaction products and products mitigating financial risks (liquidity, settlement, interest rate, currency and commodity price risks) were being developed consistently.

In 2015, the corporate and investment segment, were working in the new structure which is based on greater specialization. Dividing it into sectors such as: energy, fuel, new technologies, construction and real estate finance, agriculture and food industry, heave industry and mining and manufacturing and trade, facilitated product offering according to their specific needs and the specificity of action of individual industries.

During this period, PKO Bank Polski SA, thanks to signing of agreements on next metropolis budget service, strengthened its position in the field of customer service of the local governments sector. The bank currently operates budgets of such provinces as: Mazowieckie, Wielkopolska, Zachodnio-Pomorskie, Lubelskie, and Kujawsko-Pomorskie. The Bank’s clients are eight provincial cities: Kraków, Katowice, Wrocław, Szczecin, Poznań, Rzeszów, Zielona Góra and Gorzów Wielkopolski. PKO Bank Polski SA offers a full service of city budgets and related budgetary units. Apart from keeping accounts and the execution of banking operations, services include: comprehensive card payments, mass payments, authorization of transactions at POS terminals and providing vending machines that allow payment of taxes or fees for driving license or ID card. The Bank also helps local governments to find the best and most optimal solutions for financing investments. In recent years, the Bank participated in many local government investments of non-standard nature, including Poland’s first Afrykarium-Ocenarium in Wrocław, the fast tram in Szczecin or modern waste incineration plant in Poznan, which is to be commissioned in 2016.

2015 was also marked by the strengthening of the Bank’s position in the field of public sector entities financing. According to the agreement signed with the Department of Social Insurance (ZUS), PKO Bank Polski SA will be responsible for the management and service of the consolidated accounts of ZUS, the Social Insurance Fund and the Bridging Pension Funds over the next four years. Well-built infrastructure of international settlements will serve to implement the foreign payments and pensions from the Social Insurance Institution.

At the end of the December 2015 almost 14.2 thousand clients were serviced in the segment, including 0.9 thousand of strategic clients and more than 4.0 thousand local government units and central government institutions together with budget-related and associated parties. Bank on the basis of newly acquired powers led service to about 0.7 thousand of affiliates and subsidiaries of parent undertakings having their office registered abroad.

Lending activity and structured financing

As at 31 December 2015, gross corporate loans amounted to PLN 46.8 billion and their balance increased by PLN 0.5 billion since the beginning of the year. The total financing provided to corporate customers, including bonds issued amounted to nearly PLN 60 billion, which means an increase by PLN 0.6 billion (by 1.0%).

Financing of the corporate clients (in PLN million)

  31.12.2015 31.12.2014 31.12.2013 31.12.2012 31.12.2011 Change: 2015/2014 Change (mPLN)
Corporate loans gross 46 763 46 257 38 947 39 273 33 853 1,1% 506
Debt securities* 13 132 13 064 6 292 6 330 5 740 0,5% 69
municipal 7 309 7 303 4 419 3 955 3 458 0,1% 6
corporate 5 823 5 761 1 873 2 375 2 282 1,1% 62
Financing total 59 895 59 321 45 238 45 603 39 594 1,0% 575
* Data presented including securities classified to the category loans and advances to customers.

The highest loan transactions concluded by the Bank in 2015 included financing in the form of investment and working capital loans granted to entities from the energy, financial sectors and to public finance sector entities. The unit values of the highest transactions ranged from PLN 50 million to PLN 1 billion.

The standard part of the Bank’s offer is to finance large investment projects in the form of loans as well as organization of the securities issue, for the most part with a guarantee of purchase by the Bank.

In 2015 the Bank participated in the signing of 15 agreements in the form of a consortium, where the total value of credit lines exceeded PLN 28 billion and the Bank’s share amounted to PLN 5.2 billion. In addition, the financing of entities related directly to the Bank concluded with signing of three guarantee agreements amounting to a total of almost PLN 370 million, a loan agreement for the amount of PLN 0.9 billion and an annex to the agreement increasing the amount of given credit by PLN 0.3 billion to PLN 0.9 million. Transactions with related parties were concluded under the market terms.

As a part of the activities related to the organization of securities issue, the Bank signed 13 agreements that opens corporate bonds without a guarantee of closing program with a total value of PLN 2.3 billion, 5 agreements of bonds issue with a guarantee of closing the issue in the total amount of PLN 0.3 billion and 2 agreements in the form of a bank consortium opening the bond issue program with a total value of PLN 7.5 billion, where the share of the Bank exceeded PLN 2.5 billion.

PKO Bank Polski SA as a one of the largest arrangers of corporate bonds issue, at the end of 2015 took the second place in terms of the value of placed bonds with a maturity of over one year and the third place in case of short-term bonds. i.e.:

  • Co-Organized the bond issue program for the Enea SA company in the amount of PLN 5 billion (the role of the Bank: Organizer, payments Sub-Agent, Sub-Custodian, Dealer, Technical Agent), in 2015 placing the bonds alone in the amount of PLN 500, and together with other banks – PLN 1 billion.
  • Independently organized the bond program of Gdańskie Przedsiębiorstwo Energetyki Cieplnej SA in the amount of PLN 120 million.
  • Conducted, along with other banks, the bond issue of Warsaw Stock Exchange in the amount of PLN 125 million, acting as Sub-Custodian, the payments Sub-Agent and Dealer.
  • Participated in the issue of the short-term bonds for Eurocash SA in the amount of PLN 500 million, holding the position as: Co-Organizer, Issue Agent, Payments Agent, Depository and Delaer.
  • Co-Organized the bond issue program for Tauron Polska Energia SA of PLN 6.27 billion (the role of the Organizer, Payments Sub-Agent, Sub-Custodian, the Guarantor).

The Bank is working closely with local governments units and is financing investment projects for the local community. In 2015 PKO Bank Polski SA maintained its leadership in the organization and service of municipal bond issues i.e.

  • Organized 150 of the approx. 250 issues done by the local governments in the last year, including emissions of the City of Siedlce (PLN 106 million), Lublin Province (PLN 50 million) and the City of Kalisz (PLN 45 million)
  • Conducted the emissions of municipal bonds in the amount of PLN 770 million which gave him the leader position and 33% market share.

The value of debt from the municipal bonds issued through the PKO Bank Polski SA amounted to approx.. PLN 8.5 billion, which accounted for 42% of the market.

Deposit activities and transaction banking

The volume of corporate customers deposits as at the end of 2015 amounted to PLN 42.9 billion and was higher by PLN 12 billion than in the corresponding period of the previous year. The main factor of growth of the deposit base is the strong position of the Bank’s product offer, which translates into expanding the volume of deposits both current and term.

Corporate clients’ deposits (in PLN million)

  31.12.2015 31.12.2014 31.12.2013 31.12.2012 31.12.2011 Change: 2015/2014 Change (mPLN)
Corporte deposits 42 908 30 907 21 336 23 968 28 653 38,8% 12 001

PKO Bank Polski SA is constantly improving the quality of the services in the field of transaction banking. In 2015, the Bank developed dedicated services to for entities characterized by extensive organizational structure (eg. Capital groups) allowing them to use various kinds of products and services to facilitate settlement of transactions with domestic and foreign partners.

While providing the electronic services by the PKO Bank Polski SA for its customers, the leading product segment of corporate banking is a banking system – iPKO business. In 2015, iPKO business application has been expanded with a new functionalities in order to improve the comfort of use, including the simplifying and redesigning the possibilities of performing the key operations on the site so that they are more friendly and intuitive. Currently the application iPKO business allows customers to monitor and manage accounts, payment cards and loans and submitting all kind of transfers.

The number of customers with access iPKO business (thousand)





Financial institutions

As part of the international settlement system, the Bank cooperates with financial institutions throughout the world and is one of the leading Polish banks in terms of the number of foreign payments cleared and sent to Polish beneficiaries. In 2015, in the course of current business, new customers were acquired that includes a number of new framework agreements with domestic and foreign financial institutions, including banks. On the basis of these agreements, the Bank offered innovative products to its customers to support the management of financial resources with the use of a wide range of clearing, deposit, treasury and risk hedging products.

Brokerage activities

Brokerage house of PKO Bank Polski SA (BH, office) has the leading role in the stock and bond market and is a leader in terms of number and value of transactions carried out on the capital market. In 2015, the share of BH in turnover (considering session transactions, and other Events) amounted 9.1%, which translates into second position in the market, while the first position on the market was guaranteed by high turnover in the bond market of BH (over 50%) and options (nearly 30%).

BH PKO Bank Polski is one of the most active participants in the market of IPO and SPO. In the past 2015, BH participated in the organization of the issue on the primary market of three companies: Virtual Poland Holding SA, Atal SA and Pekabex S.A. The transaction value exceeded PLN 0.5 billion. When it comes to the transactions on the aftermarket, it is worth to mention the share of BH in the organization of public offerings of companies: Rafako S.A., Globe Trade Centre SA and Pfeiderer Grajewo S.A.

In the field of Office activity in the Corporate Finance, it should be noted that the Office took part in transactions of the acquisition of shares of: Advanced World Transport VC PKP Cargo, participation in the consortium that distributes corporate bonds Ghelamco Invest Sp. z o.o. and KRUK S.A. Additionally, in 2015 the Bank participated in transactions of ABB (accelerated bookbuilding) Bank Millenium S.A. and the company Polenergia S.A. In addition BH participated in the calls on stocks of: Rovese S.A., Echo Investment SA, Infovide-Matrix S.A. and HUTMEN S.A., it also took part in the consortium selling the shares of :Private Equity Managers, Idea Bank, Vivid Games, Vind Mobile, Lokum Developer, Krynica Vitamin.

DM PKO BP SA in the turnover of the secondary stock market





BH is steadily expanding the range of products based on the latest technological solutions. Last year, the agency proposed new quality of investing in foreign markets. Customers have the opportunity to invest in securities in PLN and foreign currencies on the world’s 18 largest stock exchanges. The office network of sales amounts to over 1,100 units of Brokerage Services located in the Bank’s branches and more than 30 Customer Services Points. BH operates more than 350 thousand securities accounts (investment and registered)

Treasury products

Knowledge, experience and the Bank’s activity in the financial markets allows to offer the institutional clients a wide range of the Bank’s treasury products tailored to the needs resulting from the current operational activity as well as those of related to the protection of financial risk. Another advantage of the Bank in this area of activity is its extensive network of specialists and access to the most modern web platform iPKO dealer.

The largest share in sales of treasury products account for foreign exchange transactions SPOT. Good results are obtained by the Bank for the sale of derivative instruments, such as forwards, options, IRS, CIRS or commodity.

In December 2014, the Bank completed the work related to the implementation of the new autodealing system, connecting the branch network of the Bank’s headquarters. In the reported period Bank’s clients have gained access to such functions as limited order, series of FX, access to iPKO dealer via mobile devices, access to the market..

Interbank market

The Bank is the Treasury Securities Dealer and the Dealer on the Monetary Market, it also acts as a market maker on the domestic market of interest rate and foreign exchange. In the competition for the selection of Treasury Securities Dealer of 2015, Bank finished as fourth and third in the competition for the Money Market Dealer. The Bank has a significant portfolio of securities, which is financed from the deposit surplus. The portfolio perform the functions related to the management of current liquidity of the Bank and the function of the investment portfolio. The major part of the portfolio are the Treasury Securities.

In the past year the Bank issued three series of own bonds to buyers in the domestic market denominated in PLN and one series denominated in EUR. At the end of the year, the value of debt amounted to PLN 800 million and EUR 200 million.

In the middle of 2015, the Bank started setting IRS transactions through a clearing broker LCH Clearnet. Starting from July, all of the interbank transactions of IRS and FRA in PLN were settled by this chamber as well as some IRS transaction in EUR. Since November, the Bank as a chamber direct participant began setting IRS and FRA in PLN through KDPW_CCP.

Fiduciary services

PKO Bank Polski SA is a direct participant of the National Depository for Securities and Securities Register (NBP) is a member of the Council of Depositary Banks and the Council of Non-treasury Debt Securities at the Association of Polish Banks. The Bank operates securities accounts and handles transactions on the domestic and the foreign markets, as well as provides fiduciary services and acts as a depositary for pension and investment funds. The Bank is an active participant in the work related to developing regulations and market standards.

At the end of 2015 under the fiduciary service of securities, the Bank maintained more than 1.9 thousand of securities accounts and the value of customers assets stored within the fiduciary grew by almost 5% compared to 2014 to PLN 65.5 billion at the end of 2015.

Sales network

The sales network of the corporate and investment segment includes seven Corporate Macro-Regions including 32 Regional Corporate Centers. In 2015 the Bank successfully continued implementing a strategic program of corporate sale development, based on modern mechanisms of planning the development of relationships with the customers, cooperation in building financial strategies and services

Operational data in the corporate segment

 

  31.12.2015 31.12.2014 31.12.2013 31.12.2012 31.12.2011 Change 2015/2014 Change 2015-2014
Number of branches in the corporate segment: 39 39 39 64 67 0,0% 0
regional corporate branches 7 7 7 13 13 0,0% 0
corporate centres 32 32 32 51 54 0,0% 0

According to the announced expansion of the Bank on the foreign markets, in 2015 it launched first corporate facility of PKO Bank Polski SA in Germany. The product offer includes a wide range of services and products for corporate clients: transaction banking (including international cash pooling, electronic banking, treasury products, trade finance and corporate loans. Selecting the direction of international expansion is connected integrally with the high activity of institutional clients of the Bank on the German market, was the scale of bilateral trade and realized investments. Based on the strong relations with most of the leading Polish Groups, the bank provides support to their activities and investments abroad, thus effectively participate in the development of the international expansion of its clients.