Half Year 2026 BNP Paribas Bank Polska SA Earnings Call

August 12, 2026

Przemysław Gdański: Ladies and gentlemen, welcome to our quarterly results presentation. I welcome both the people in the room and those participating online. Without further ado, let us move on to the presentation of our results. You know the composition of our group very well, so I will not introduce my colleagues at this point. The agenda, as you see, is behind me. It is fairly standard again. Let us move on to the key information about Q2 2026. Ladies and gentlemen, it was a very solid quarter for the bank. It has shown growth, increase of revenues in practically every revenue category, also significant increase in net profit. Quarter-to-quarter, we achieved PLN 600 million of net profit, which after H1, gives us a profit of PLN 975 million.

Speaker #1: Ladies and gentlemen, welcome to our quarterly results presentation. I welcome both the people in the room and those participating online. Without further ado, let us move on to the presentation of our results.

Speaker #1: You know the composition of our group very well, so I will not introduce my colleagues at this point. The agenda, as you see, is behind me.

Speaker #1: It is fairly standard. Again, so let's move on to the key information about the second quarter of 2026. Ladies and gentlemen, it was a very solid quarter for the bank.

Speaker #1: It has shown growth, an increase of revenues in practically every revenue category, and also a significant increase in net profit on a quarter-to-quarter basis. We achieved 600 million Polish zlotys of net profit, which, after 6 months, gives us a profit of 975 million.

Speaker #1: The growing trend is also observed in credit volumes—both loan volumes—in retail and corporate banking, as well as SMEs, with the important exclusion of the CIB area.

Przemysław Gdański: The growing trend is also observed in credit volumes, both loan volumes, both in retail and corporate banking, SMEs, with important exclusion of CIB area. We have maintained our interest margin, and I do believe it is an important achievement of our bank. We have worked to optimize it, and we worked very hard. So the level we have achieved is the same as previously, and it is an important strategic challenge for us. Quarter-to-quarter, the ROSI indicator has improved. Cost to Income ratio has also remained stable. We will talk about that in a moment. Let us look at our strategic objectives. You are familiar with them. We have announced them as part of Accelerate 2030 strategy. We have some good news. The increase in client base in retail banking, we have an increase of 122,000 clients.

Przemysław Gdański: The growing trend is also observed in credit volumes, both loan volumes, both in retail and corporate banking, SMEs, with important exclusion of CIB area. We have maintained our interest margin, and I do believe it is an important achievement of our bank. We have worked to optimize it, and we worked very hard. The level we have achieved is the same as previously, and it is an important strategic challenge for us. Quarter-to-quarter, the ROSI indicator has improved. Cost to Income ratio has also remained stable. We will talk about that in a moment. Let us look at our strategic objectives. You are familiar with them. We have announced them as part of Accelerate 2030 strategy. We have some good news. The increase in client base in retail banking, we have an increase of 122,000 clients.

Speaker #1: We have maintained our interest margin, and I do believe it is an important achievement of our bank. We have worked to optimize it, and we worked very hard.

Speaker #1: So, the level we have achieved is the same as previously, and it is an important strategic challenge for us. Quarter-to-quarter, the RoTE indicator has improved. The C/I ratio has also remained stable.

Speaker #1: We will talk about that in a moment. Let's look at our strategic objectives. You are familiar with them. We have announced them as part of the Accelerate 2030 strategy.

Speaker #1: Some good news—we have some good news. The increase in client base in retail banking: we have an increase of 122,000 clients. Of course, this works towards our goal of a 1 million increase by 2030.

Przemysław Gdański: Of course, this works towards our goal of 1 million increase by 2030. So maintaining this kind of dynamics brings us much closer to that goal. As for CIB banking and corporate banking for SMEs, our portfolio has grown. We have not increased our market share, though. Market is moving forward very fast, and we remain true to our principles of risk, quality, and the structures that we finance. Also, return on capital is important for us. So the market is growing a little bit faster than our portfolio. Nonetheless, we are happy with our growth due to quality of assets that we took onto our balance sheet. The final reflection, sale of sustainable loans. We had a very good H1 of the year. Once again, compared to the strategic objective, we have made significant progress, and we are moving in the right direction.

Speaker #1: So, maintaining this kind of dynamics brings us much closer to that goal. As for CIB banking and corporate banking for SMEs, our portfolio has grown.

Speaker #1: We have not increased our market share, though. The market is moving forward very fast, and we remain true to our principles of risk, quality, and the structures that we finance.

Speaker #1: Also, return on capital is important for us. So, the market is growing a little bit faster than our portfolio, nonetheless we are happy with our growth due to the quality of assets that we took onto our balance sheet.

Speaker #1: The final reflection: sale of sustainable loans. We had a very good first half of the year. Once again, compared to the strategic objective, we have made significant progress, and we're moving in the right direction.

Speaker #1: Let me only mention that, in the first half of this year, we achieved— we were able to reverse the negative trend in SME loans.

Przemysław Gdański: Let me only mention that in H1 of this year, we were able to reverse the negative trend in SME loans. We do not see very significant growth yet, but the reversal of the trend allows us to be optimistic about the future. The second element that is worth mentioning is the new conversion model for the clients who use our merchant loans to a full-scale banking relationship. This is working very well. As a result, we have 13% new accounts opened in our bank stemming from this particular conversion and this model. Let us move on. Our favorite illustrative look at the dynamics. As you see on the graphics, on the diagrams, every element includes very positive information. As you see, personal accounts, significant growth, double digit quarter-to-quarter, improved attractiveness of both retail and corporate banking, major increase in mortgage loans and consumer loans.

Speaker #1: We do not see very significant growth yet, but the reversal of the trend allows us to be optimistic about the future. The second element that is worth mentioning is the new conversion model.

Speaker #1: For the clients who use our loans—merchant loans—to a full-scale banking relationship, this is working very well. As a result, we have 13% new accounts opened in our bank stemming from this particular conversion and this model.

Speaker #1: Let us move on. Our favorite illustrative look at the dynamics. As you see on the graphics, on the diagrams, every element includes very positive information.

Speaker #1: As you see, personal accounts, significant growth, double-digit quarter-to-quarter. Improved attractiveness of both retail and corporate banking, major increase in mortgage loans and consumer loans.

Speaker #1: Now, let us look at the volume dynamics. Let's start with the loan part. Here, the total portfolio growth exceeds 2%. The retail part, including mortgages and cash loans as well as merchant loans, have reached record levels. There is nearly double-digit growth in SME loans and in SME—sorry, corporate banking, including CIB.

Przemysław Gdański: Now, let us look at the volume dynamics. Let's start with the loan part. Here, the total portfolio growth exceeds 2%. Retail part at the mortgages and cash loans, as well as merchant loans, have reached record levels. Nearly double-digit growth in SME corporate banking, including CIB. One important thing worth mentioning is the reversal of trends in terms of the structure of loans in those segments. We see an increasing number of investment midterm loans, which is positive for both the economy as a whole and the bank, the durability of revenues that is generated by this kind of financing. As for deposits, I have mentioned our strategic focus on maintaining the interest margin, and here, indeed, we have achieved a lot. However, at the expense of slightly lowered volume.

Speaker #1: One important thing worth mentioning is the reversal of trends in terms of the structure of new loans in those segments. We see an increasing number of investment mid-term loans.

Speaker #1: This is positive for both the economy as a whole and the bank—the durability of revenues that is generated by this kind of financing.

Speaker #1: As for the deposits, I have mentioned our strategic focus on maintaining the interest margin. And here, indeed, we have achieved a lot. However, this came at the expense of a slightly lowered volume. It is nothing to be concerned about because the bank remains very liquid—over-liquid, actually, as is the entire market.

Przemysław Gdański: It is nothing to be concerned about because the bank remains very liquid, over-liquid, actually, as is the entire market. Finally, increased number of customers, 122,000 new clients. That's a very solid 2.7% growth in retail part. It's one of our key strategic objectives, and I hope, I'm actually convinced, that our ability to attract new valuable clients and maintaining the clients we already have, retaining our client base, is improving. Now, a few numbers in a slightly different graphical presentation. The NBI, so the result on banking activity. The quarterly increase is over 3%, which is obviously a positive phenomenon. We intend to maintain strict cost discipline. We have demonstrated it in the past quarters. I do not expect many changes in this respect. It's also time. I mean, the time of relatively low cost related to risk of Swiss franc loans.

Speaker #1: Finally, increased number of customers—122,000 new clients. That's a very solid 2.7% growth in the retail part. It's one of our key strategic objectives, and I hope—I'm actually convinced—that our ability to attract new valuable clients and to maintain the clients we already have, retaining our client base, is improving.

Speaker #1: Now, a few numbers in a slightly different, more difficult graphical presentation. The NBI, so the result on banking activity, the quarterly increase is over 3%, which is obviously a positive phenomenon.

Speaker #1: We intend to maintain strict cost discipline. We have demonstrated it in the past quarters. I do not expect many changes in this respect.

Speaker #1: It's also time, I mean, the time of relatively low cost related to the risk of Swiss franc loans. The cost of risk in that category remains at very healthy levels.

Przemysław Gdański: The cost of risk in that category remains on very healthy levels. This cost of risk includes also some provisions established due to geopolitical risk and not relating to any specific customer risk. Now, net and gross profit. I've already mentioned net profit. Let's look at gross profit. The level is pretty much identical as in Q2 of the previous year, and we know that the interest rate environment, in the meantime, has changed. Key financial indicators. The cost-income ratio, after excluding regulatory costs, has slightly improved, but it is not a breakthrough. The net interest margin, as I say, we have maintained its stable level, and we perceive it as an achievement for the bank. It's a positive thing. The cost of credit risk is still very decent and attractive. We do not expect any unfavorable surprises in the H2 of the year.

Speaker #1: This cost of risk also includes some provisions established due to geopolitical risk, and not relating to any specific customer risk. Now, net and gross profit.

Speaker #1: I've already mentioned net profit. Let's look at gross profit. The level is pretty much identical to that in the second quarter of the previous year.

Speaker #1: And we know that the interest rate environment, in the meantime, has changed. Key financial indicators—the cost/income ratio, after excluding regulatory costs—have slightly improved.

Speaker #1: But it is not a breakthrough. The net interest margin, as I say, we have maintained at a stable level, and we perceive it as an achievement for the bank.

Speaker #1: It's a positive thing. The cost of credit risk is still very decent and attractive. We do not expect any unfavorable surprises in the second half of the year.

Speaker #1: And the final diagram was the return on equity. This is it from me, and now I would like to give the floor over to Michal.

Michał Dybuła: The final diagram was the return on equity. This is it from me, and now I would like to give the floor over to Michał. Good morning, ladies and gentlemen. Despite the war in the Persian Gulf, Q2 was really pretty good for Polish economy. The preliminary estimates concerning GDP growth will be published on Friday. However, given the acceleration in both industry construction and very solid results of commerce, it would seem that the growth rate is closer to 4% than 3.5%, as it was in Q1. What is important here is that it is not one or two factors supporting our economic upturn. It's really a widespread growth, which includes external demand and competitiveness of Polish exports. All those elements foster economic growth. Of course, risk factors in the nearest future, the nearest quarters or years, are abundant, certainly.

Przemysław Gdański: The final diagram was the return on equity. This is it from me, and now I would like to give the floor over to Michał.

Speaker #1: Good morning, ladies and gentlemen. Despite the war in the Persian Gulf, the second quarter was really pretty good for the Polish economy. The preliminary estimates concerning GDP growth will be published on Friday.

Michał Dybuła: Good morning, ladies and gentlemen. Despite the war in the Persian Gulf, Q2 was really pretty good for Polish economy. The preliminary estimates concerning GDP growth will be published on Friday. However, given the acceleration in both industry construction and very solid results of commerce, it would seem that the growth rate is closer to 4% than 3.5%, as it was in Q1. What is important here is that it is not one or two factors supporting our economic upturn. It's really a widespread growth, which includes external demand and competitiveness of Polish exports. All those elements foster economic growth. Of course, risk factors in the nearest future, the nearest quarters or years, are abundant, certainly.

Speaker #1: However, given the acceleration in both industry construction and very solid results of commerce, it would seem that the growth rate is closer to 4 than 3.5, as it was in the first quarter.

Speaker #1: What is important here is that it is not one or two factors supporting our economic upturn. It's really widespread growth, which includes external demand and competitiveness of Polish exports.

Speaker #1: All those elements foster economic growth. Of course, risk factors in the near future—the nearest quarters or years—are abundant. Certainly, political aspects are factors that one should always keep in mind.

Przemysław Gdański: Political aspects are the factor that one should always keep in mind. However, looking at the information and data concerning domestic economy and orders in the industry, we should be cautiously optimistic with regards to the economic upturn in the coming months and quarters. In Q2, despite increased prices of energy carriers, inflation did not stifle the economy. We know that reducing the intermediate taxes and imposing a maximum price cap on fuels allowed maintaining inflation close to the NBP target. There were other factors as well, reduced price of food and not much pay and demand pressure. While the purely local factors should not increase inflation in the coming months either, it should be noted that the external effect, the externalities, not only the price of energy carriers, but also agricultural produce, may cause an increase in inflation in the H2 of the year.

Michał Dybuła: Political aspects are the factor that one should always keep in mind. However, looking at the information and data concerning domestic economy and orders in the industry, we should be cautiously optimistic with regards to the economic upturn in the coming months and quarters. In Q2, despite increased prices of energy carriers, inflation did not stifle the economy. We know that reducing the intermediate taxes and imposing a maximum price cap on fuels allowed maintaining inflation close to the NBP target. There were other factors as well, reduced price of food and not much pay and demand pressure. While the purely local factors should not increase inflation in the coming months either, it should be noted that the external effect, the externalities, not only the price of energy carriers, but also agricultural produce, may cause an increase in inflation in the H2 of the year.

Speaker #1: However, looking at the information and data concerning the domestic economy and orders in the industry, we should be cautiously optimistic with regard to the economic upturn in the coming months and quarters.

Speaker #1: In the second quarter, despite increased prices of energy carriers, inflation did not stifle the economy. We know that reducing the intermediate taxes and imposing a maximum price cap on fuels allowed maintaining inflation close to the NBP target.

Speaker #1: But there were other factors as well—reduced prices of food and not much pay and demand pressure. So, while the purely local factors should not increase inflation in the coming months either, it should be noted that the external effect—the externalities, not only the price of energy carriers but also agricultural produce—may cause an increase in inflation in the second half of the year.

Speaker #1: I do believe it is important from the perspective of future decisions regarding interest rates. Chairman Glapiński surprised us. He was surprisingly lenient during the June meeting.

Przemysław Gdański: I do believe it is important from the perspective of future decisions regarding interest rates. Chairman Adam surprised us. He was surprisingly lenient during the June meeting. Nonetheless, the growing prices of raw materials worldwide, given the last month, it is quite improbable that interest rates would be reduced during the next meeting, especially since the economy does not really require this kind of monetary stimulation. The economic climate remains strong. As for the banking sector, we definitely expect the previous trends to continue. Quick growth of demand for loans in all the main segments, be it consumer loans, be it mortgage loans, be it other types of loans. All the types of loans have been growing rather quickly.

Michał Dybuła: I do believe it is important from the perspective of future decisions regarding interest rates. Chairman Adam surprised us. He was surprisingly lenient during the June meeting. Nonetheless, the growing prices of raw materials worldwide, given the last month, it is quite improbable that interest rates would be reduced during the next meeting, especially since the economy does not really require this kind of monetary stimulation. The economic climate remains strong. As for the banking sector, we definitely expect the previous trends to continue. Quick growth of demand for loans in all the main segments, be it consumer loans, be it mortgage loans, be it other types of loans. All the types of loans have been growing rather quickly.

Speaker #1: Nonetheless, the growing prices of raw materials worldwide in the last months make it quite improbable that interest rates would be reduced during the next meeting.

Speaker #1: Especially since the economy does not really require this kind of monetary stimulation, the economic climate remains strong. And as for the banking sector, we definitely expect the previous trends to continue.

Speaker #1: Quick growth of demand for loans in all the main segments, be it consumer loans, be it mortgage loans, be it other types of loans.

Speaker #1: All types of loans have been growing rather quickly. We are entering a period with a slightly larger base from the previous year, so possibly the dynamics in the coming months will be a little smaller, a little lower.

Przemysław Gdański: We are entering the period of a slightly larger base from the previous year, so possibly the dynamic in the coming months will be a little smaller or a little lower. There are no indications that the loan demand would diminish. This is it from me, and it is over to President Konieczny. Thank you.

Michał Dybuła: We are entering the period of a slightly larger base from the previous year, so possibly the dynamic in the coming months will be a little smaller or a little lower. There are no indications that the loan demand would diminish. This is it from me, and it is over to President Konieczny.

Speaker #1: But there are no indications that the loan demand would diminish. This is it from me, and it's over to President Konieczny. Thank you.

Piotr Konieczny: Thank you.

Speaker #2: Dzień dobry.

Piotr Konieczny: Good morning. Ladies and gentlemen, let us take a look at the financial results that you already know. Let me attempt to give some comments to some of the lines. Q2 is growth in scale of operations. You can see higher loan volumes, we already heard about it, and the continuation of the balance sheet sum, plus a stronger capital position. That is a very important element in the bank balance sheet, because it allows us to restructure the revenues of the bank. With the changes of interest rates, the whole sector needs to restructure the revenues. To a larger and larger extent, it is based on growing loan volumes and strong work on protecting the net interest margin that we heard about. In Q2, we managed to maintain at the same level compared to Q1. Q2 is also very good in terms of interest and commissions.

Speaker #3: Good morning, ladies and gentlemen. Let's take a look at the financial results that you already know, but let me attempt to give some comments on some of the lines.

Speaker #3: Q2 is growth in the scale of operations. You can see higher loan volumes—we already heard about it—and the continuation of the balance sheet sum.

Speaker #3: Plus a stronger capital position. That is a very important element in the bank's balance sheet, because it allows us to restructure the revenues of the bank with the changes in interest rates.

Speaker #3: The whole sector needs to restructure the revenues. To a larger and larger extent, it's based on growing loan volumes and strong work on protecting the net interest margin.

Speaker #3: That we heard about in Q2. We managed to maintain at the same level compared to Q1. Q2 is also very good in terms of interest and commissions.

Speaker #3: Apart from the regular flow in this category, this was also a quarter marked by one-off events—two big transactions that influenced the value of the reported result.

Piotr Konieczny: Apart from regular flow in this category, this was also a quarter marked by one-off events, two big transactions that influenced the value of reported result. In terms of costs, this is yet another quarter of financial discipline. In Q1, we have had one-off payments for the Bank Guarantee Fund. In Q2, we are maintaining a disciplined dynamic, and it shows that we are looking after increasing costs. It does not mean that we are not spending and not investing. It just means that we are looking at the profitability of these investments, the return on the costs that we have to incur. Moving on to the bottom of the table, I would like to point out, this is something that has already been mentioned, but let me reiterate. If you look at gross profit year-on-year, the cost discipline and the rebuilding, the restructuring works at the level of gross profit.

Speaker #3: In terms of costs, this is yet another quarter of financial discipline. In Q1, we've had one-off payments for the bank guarantee fund. In Q2, we are maintaining a disciplined dynamic, and it shows that we are looking after increasing costs.

Speaker #3: It does not mean that we're not spending and not investing. It just means that we are looking at the profitability of these investments—the return on the costs that we have to incur.

Piotr Konieczny: It does not mean that we are not spending and not investing. It just means that we are looking at the profitability of these investments, the return on the costs that we have to incur. Moving on to the bottom of the table, I would like to point out, this is something that has already been mentioned, but let me reiterate. If you look at gross profit year-on-year, the cost discipline and the rebuilding, the restructuring works at the level of gross profit.

Speaker #3: Moving on to the bottom of the table, I'd like to point out—this is something that has already been mentioned—but let me reiterate.

Speaker #3: If you look at gross profit year on year, the cost discipline and the rebuilding, the restructuring works at the level of gross profit, the process is ongoing.

Piotr Konieczny: The process is ongoing. This is not the end of the process. This is an ongoing process, but the direction is good, and the difference on the net profit demonstrates that the bank is working in a situation of higher tax rates and the impact of these tax rates on the bank's operations. Now let us take a look at the loan portfolio, both on the corporate and retail side, particularly in this quarter, in the retail part, we have had dynamic growth in retail banking. This was a result of a very good quarter in terms of selling mortgages, but also a high momentum of sales of broadly defined consumption funding. I mentioned that we are very happy with very good results, but we also see that we have to run faster because the market is very fast.

Speaker #3: This is not the end of the process; this is an ongoing process. But the direction is good, and the difference on the net profit demonstrates that the Bank is working in a situation of higher tax rates and the impact of these tax rates on the Bank's operations.

Speaker #3: Now let's take a look at the loan portfolio, both on the corporate and retail side. Particularly in this quarter, in the retail part, we've had dynamic growth in retail banking.

Speaker #3: This was a result of a very good quarter in terms of selling mortgages, but also a high momentum of sales of broadly defined consumption funding.

Speaker #3: I mentioned that we are very happy with very good results, but we also see that we have to run faster because the market is very fast.

Speaker #3: So the good results that we have recorded in Q2 allowed us to maintain our market shares; however, this is something that we're focusing on.

Piotr Konieczny: The good results that we have recorded in Q2 allowed us to maintain our market shares. However, this is something that we are focusing on. We want to grow the market share. The CHF mortgage loan portfolio. For some quarters now we have had a similar trend. In Q1, we have seen stabilization. Now we have a lower number of claims against the bank. That is one of the characteristics of the quarter. Another thing is that we are looking at the parameters of the models that describe and are applied to the transformation of developments in the actual situation in terms of court cases and all the work going on in relation to CHF mortgages and the impact on the financial results. We altered one of the parameters of the model. This is the unit value of loss on a closed case of a CHF mortgage.

Speaker #3: We want to grow the market share. The CHF mortgage loan portfolio, for some quarters now, we've had a similar trend as in Q1. We've seen stabilization, and now we have a lower number of claims against the bank.

Speaker #3: That's one of the characteristics of the quarter. And another thing is that we're looking at the parameters of the models that describe and are applied to the transformation of developments in the actual situation, in terms of court cases and all the work going on in relation to CHF mortgages.

Speaker #3: And the impact on the financial results: we altered one of the parameters of the model. This is the unit value of loss on a closed case of a CHF mortgage.

Piotr Konieczny: History shows that the loss compared to real costs incurred by the bank is lower as it turns out. So we decided to alter this parameter. We introduced this change into the CHF model. Considering these two issues, less cases in real terms. So we have less CHF claims against the bank that is growing, and we have revised the parameters of the model, and as a result, the value of write-offs was lower. In terms of customer deposits, this is a very interesting area of the operation of the bank. This is where the bank is working very hard, focusing on three elements. Let me repeat it again. A large element of the revenues is the net interest margin, and this is where it happens on the deposit side. So this was where we were focusing on margins, volumes, and the calibration of the two elements.

Speaker #3: History shows that the loss, compared to the real costs incurred by the bank, is lower as it turns out. So we decided to alter this parameter.

Speaker #3: We introduced this change into the CHF model. Considering these two issues—fewer cases, in real terms, we have fewer CHF claims against the bank.

Speaker #3: That is growing. And we have revised the parameters of the model, and as a result, the value of write-offs was lower. In terms of customer deposits, this is a very interesting area of the bank’s operations.

Speaker #3: This is where the bank is working very hard, focusing on three elements. Let me repeat it again: a large element of the revenues is the net interest margin.

Speaker #3: And this is where it happens: on the deposit side. So this was where we were focusing on margins, volumes, and the calibration of the two elements.

Speaker #3: And also, it was about working on the transformation of a part of these resources. You cannot see it here, but we wanted to focus on customer investments.

Piotr Konieczny: Also it was about working on the transformation of a part of these resources. You cannot see it here, but we wanted to focus on customer investments. We know that this was growing in this period because we want our customers to find the best place for their savings, be it the bank or services and products sold by our asset manager. So a very good quarter in terms of margins. In terms of volume, we maintained a similar level to the previous quarter. I mentioned investment products, a very good quarter in terms of the assets that we manage. Another quarter of growth, where you have to look at the situation in tandem with deposit management policy.

Speaker #3: We know that this was growing in this period because we want our customers to find the best place for their savings, be it the bank or services and products sold by our asset manager.

Speaker #3: So, a very good quarter in terms of margins. In terms of volume, we maintained a similar level to the previous quarter. I mentioned investment products.

Speaker #3: It was a very good quarter. In terms of the assets that we manage, it was another quarter of growth. You have to look at the situation in tandem with deposit management policy.

Speaker #3: It's one of the investment products that we offer to customers, so that customers have choice, and they can allocate some resources to the instruments that offer the highest return on their investments.

Piotr Konieczny: It is one of the investment products that we offer to customers so that customers have choice, and they can allocate some resources to the instruments that offer the highest return on their investments. This is something that the bank is not willing to pay at this moment. Net interest income. Three factors have contributed to the result in this quarter. Lower interest rates. We have the volume effect that we mentioned. We have the margin effect that we already talked about. Another important element, the judgment of 23 April. The bank complied, and it re-estimated future interest income related to consumer loans. It was PLN 30.6 million. That was the part of the footprint that influenced the interest income of the bank. Well, there are two aspects here.

Speaker #3: And this is something that the bank is not willing to pay at this interest income. Three factors have contributed to the result in this quarter.

Speaker #3: Lower interest rates. We have the volume effect that we mentioned. We have the margin effect that we already talked about. And another important element: the judgment of 23rd of April.

Speaker #3: The bank complied, and it re-estimated future interest income related to consumer loans. It was 30.6 million zlotys. That was the part of the footprint that influenced the interest income of the bank.

Speaker #3: Well, there are two aspects here: complying with the judgment, and another thing is that it basically shows that, were it not for the judgment, our net interest income would be even higher and our margin would be even higher.

Piotr Konieczny: Complying with the judgment and another thing that it basically shows that were it not for the judgment, our net interest income would be even higher, our margin would be even higher. The result of fee and commission income, a very good quarter, year-on-year and quarter-to-quarter. Here, two streams of our operations mattered. One is organic work on transactions with our customers, the operations carried out by our customers, supported in this quarter by one-off events related to what was happening in CIB. Net trading income. It was a normalized quarter, pretty stable, no one-off events this time. So a quarter directly linked to low volatility in the market environment, higher competition, and higher volume of operations. So these are the three factors that contributed to this result.

Speaker #3: The result of fee and commission income: a very good quarter, year on year and quarter to quarter. Here, two streams of our operations mattered.

Speaker #3: One is organic work on transactions with our customers—the operations carried out by our customers—supported in this quarter by one-off events related to what was happening in CIB.

Speaker #3: Net trading income: it was a normalized quarter, pretty stable, with no one-off events this time, so a quarter directly linked to low volatility in the market environment.

Speaker #3: Higher competition and higher volumes of operations. So, these are the three factors that contributed to this result. Let me remind you that, just like in the part of results that we are reporting in terms of fees and commissions, from time to time we see one-off events.

Piotr Konieczny: Let me remind you that just like in the part of results that we are reporting in terms of fees and commissions, from time to time, we see one-off events, one-off transactions, and this is what happened in the similar period of last year. So the dynamics year-on-year have been impacted by the fact that last year in the same period, we had good one-off transactions in CIB, which influenced the reported dynamics. In terms of costs, I think the key takeaway is that we are further working on our costs for yet another quarter. We announced our strategy, and we keep reiterating that the bank is very prudently managing its investment resources and operating resources, directing funding streams into the areas of operations which offer the biggest opportunity for desired change. That is how we are shaping the cost base.

Speaker #3: One-off transactions. And this is what happened in the similar period last year. So, the dynamics year on year have been impacted by the fact that last year, in the same period, we had good one-off transactions in CIB.

Speaker #3: Which influenced the reported dynamics. In terms of costs, I think the key takeaway is that we are further working on our costs for yet another quarter.

Speaker #3: We announced our strategy, and we keep reiterating that the bank is very prudently managing its investment resources and operating resources, directing funding streams into the areas of operations which offer the biggest opportunity for desired change.

Speaker #3: And that's how we are shaping the cost base, mindful of the discipline. It does not mean that we are going to reduce these costs significantly.

Piotr Konieczny: Mindful of the discipline, it does not mean that we are going to reduce these costs significantly. They will be rising. This is the impact of the market, but we are taking action to lower the dynamics of the growth. One of the things we are doing is the continuation of our work on the optimization of employment structure. This is yet another quarter, where we are slowly, systemically optimizing. These are not big changes, but we are optimizing this cost item on the balance sheet.

Speaker #3: They will be rising. This is the impact of the market. But we're taking action to lower the dynamics of the growth. One of the things we're doing is the continuation of our work on the optimization of the employment structure.

Speaker #3: This is yet another quarter where we're slowly, systemically optimizing. These are not big changes, but we are optimizing this cost item on the balance sheet.

Speaker #1: Super.

Speaker #2: So, I believe this is it from me. Good morning, ladies and gentlemen. The cost of risk in the second quarter is at the level of 34 basis points.

Przemysław Gdański: I believe this is it from me. Good morning, ladies and gentlemen. The cost of risk in Q2 at the level of 34 cumulatively, 30 basis points for H1. Other segments have very limited cost of risk. Over half of those costs in Q2 stem from changes in macroeconomic scenarios or additional provisions for unmaterialized risk for selected companies. We have selected those companies that could potentially feel the impact of the situation in the Middle East. It is a total of PLN 46 million out of PLN 81 million. We did not have any one-off events, any major loans that would be moved into the third basket in the corporate part. On this side, the situation is very stable. You can see it in impaired loans or NPLs level. Nominally, it is only PLN 2.5 billion now, 2.6%.

Piotr Konieczny: I believe this is it from me.

Przemysław Gdański: Good morning, ladies and gentlemen. The cost of risk in Q2 at the level of 34 cumulatively, 30 basis points for H1. Other segments have very limited cost of risk. Over half of those costs in Q2 stem from changes in macroeconomic scenarios or additional provisions for unmaterialized risk for selected companies. We have selected those companies that could potentially feel the impact of the situation in the Middle East. It is a total of PLN 46 million out of PLN 81 million. We did not have any one-off events, any major loans that would be moved into the third basket in the corporate part. On this side, the situation is very stable. You can see it in impaired loans or NPLs level. Nominally, it is only PLN 2.5 billion now, 2.6%.

Speaker #2: 30 cumulatively, 30 basis points for the first half of the year. All the segments have very limited cost of risk, and over half of those costs in the second quarter stem from changes in macroeconomic scenarios or additional provisions for unmaterialized risk for selected companies.

Speaker #2: We have selected those companies that could potentially feel the impact of the situation in the Middle East. It is a total of 46 million out of 81.

Speaker #2: We did not have any one-off events or any major loans that would be moved into the third basket in the corporate part. So, on this side, the situation is very stable.

Speaker #2: You can see it in impaired loans or NPLs. The level, nominally, is only PLN 2.5 billion now, or 2.6%. So, the same quality is maintained across segments.

Przemysław Gdański: Same quality is maintained across segments. There is no volatility. There is no change, major differences between segments or within any segment over H1. The situation is stable in all the phases. The only thing that requires explanation is increase in loans in phase 2. This stems from the fact that as we categorize the clients and prepare additional provisions for the potential loss in the future, we have shifted those potential clients from basket 1 to basket 2. Coverage is very stable. We plan to sell some NPLs. In Q2, we sold some, and we plan further sales in Q4 of this year. Again, we do not expect any increase greater than what we have seen in Q2, and we will proceed with the same quality portfolio in H2. Well, in context of equity.

Speaker #2: There is no volatility. There are no major differences between segments or within any segment in the first half of the year. The situation is stable in all the phases.

Speaker #2: The only thing that requires explanation is the increase in loans in phase two. This stems from the fact that, as we categorize the clients and prepare additional provisions for the potential loss in the future, we have shifted those potential clients from basket one to basket two.

Speaker #2: Coverage is very stable. We plan to sell some NPLs in the second quarter. We sold some, and we plan further sales in Q4 of this year.

Speaker #2: Again, we do not expect any increase greater than what we've seen in Q2, and we will proceed with the same quality portfolio in the second half of the year.

Speaker #2: Now, equity. Well, in context of equity, I do believe there is two information that is worth mentioning. Second quarter is historically the quarter when dividend policy of the bank is realized.

Przemysław Gdański: I do believe there is two information that is worth mentioning. Q2 is historically the quarter when dividend policy of the bank is realized. The bank has paid the dividend, and on the other hand, we have strengthened our equity position by increasing our capital ratios, as you can see on the diagram. In general, our activities in the area of capital strengthen the bank and make it ready to absorb the planned, announced, declared, and realized increase in loan volumes. I think I will stop here. Very well then. Inevitably, we are approaching the end of the presentation part. Ladies and gentlemen, a few considerations, a few reflections regarding the future. We will continue focusing on implementing our strategy. We have a very precise trajectory planned that will lead us to realizing the objectives announced in the strategy Accelerate 2030.

Speaker #2: So, the bank has paid the dividend, and on the other hand, we have strengthened our equity position by increasing our capital ratios, as you can see on the diagram.

Speaker #2: In general, our activities in the area of capital strengthened the bank and make it ready to absorb the planned, announced, declared, and—well, realized—increase in loan volumes.

Speaker #2: I think that I will stop here. Very well, then. Inevitably, we are approaching the end of the presentation part. Ladies and gentlemen, a few considerations—a few reflections regarding the future.

Speaker #2: We will continue focusing on implementing our strategy. We have a very precise trajectory planned that will lead us to realizing the objectives announced in the Strategy Acceleration 2030.

Speaker #2: The main tenet is growth while maintaining strict cost discipline. I do expect that in the current favorable macroeconomic conditions, we are going to grow, increase the scale of our activity, the scale of our business, and move forward.

Przemysław Gdański: The main tenet is growth while maintaining strict cost discipline. I do expect that in current favorable macroeconomic conditions, we are going to grow, increase the scale of our activity, the scale of our business, and move forwards. Having said that, the world is unpredictable. We know that the geopolitical situation is uncertain. So far, Polish economy has not felt any major impacts of current geopolitical realities. Nonetheless, we cannot exclude the possibility that something is going to happen in the future. Macro perspectives are very optimistic, as you have seen, and the area that requires vigilance and focus and mindfulness are regulatory issues and legal risks related to protection of consumer interest.

Speaker #2: Having said that, the world is unpredictable. We know that the geopolitical situation is uncertain. So far, the Polish economy has not felt any major impacts from current geopolitical realities.

Speaker #2: Nonetheless, we cannot exclude the possibility that something is going to happen in the future. Macro perspectives are very optimistic, as you have seen. The area that requires vigilance, focus, and mindfulness is regulatory issues and legal risks related to the protection of consumer interest.

Speaker #2: Here, of course, we all know the story of the most recent—or maybe not the most recent, but famous—judgment by the European Court of Justice from September, which is very far from logic in its provisions.

Przemysław Gdański: Here, of course, we all know the story of the most recent, or maybe not most recent, but famous judgment by Court of Justice of the European Union from September, which is very far from logic in its provisions, and which was surprising to the banking sector. One can also be concerned about political risks that stem from the budget situation and elections perspective. The extended election campaign for parliamentary elections 2027 are likely to start even in the autumn of this year. As you know, elections usually carry very populist promises. One such promise was already announced in a public sphere. Nonetheless, I remain hopeful that our politicians will maintain common sense and remember that our sector is already burdened by the highest CIT tax. For other industries, it is 19%. For us, it is 30% this year.

Speaker #2: And which was surprising to the banking sector. One can also be concerned about political risks that stem from the budget situation and the elections perspective.

Speaker #2: The extended election campaign for the 2027 parliamentary elections is likely to start even in the autumn of this year. As you know, elections usually carry very populist promises.

Speaker #2: One such promise was already announced in the public sphere. Nonetheless, I remain hopeful that our politicians will maintain common sense and remember that our sector is already burdened by the highest CIT tax among other industries.

Speaker #2: It is 19% for us. It is 30% this year. So again, this is the area that requires mindfulness, vigilance, and, hopefully, a dialogue with the authors of this idea if such opportunities arise.

Andrzej Powierża: This is the area that requires mindfulness, vigilance, and possibly a dialogue with the authors of this idea if such opportunities arise. In summary, economy is good. We are growing. We want to continue to grow, increase the scale of our operation, and we want to look into the future with reasonable optimism. Thank you. Very well then. Thank you very much. Let's move on to questions. Do we have any questions from those present in the room? Good morning. Andrzej Powierża, Citi Handlowy. Good morning. I'm from Citi Handlowy. I have four questions from four areas. The first is about the ECJ that you have mentioned. What was the financial impact on the financial results on Q2? You said 36, but I think the report presents a larger total amount. Could you please clarify?

Przemysław Gdański: This is the area that requires mindfulness, vigilance, and possibly a dialogue with the authors of this idea if such opportunities arise. In summary, economy is good. We are growing. We want to continue to grow, increase the scale of our operation, and we want to look into the future with reasonable optimism. Thank you. Very well then. Thank you very much. Let's move on to questions. Do we have any questions from those present in the room?

Speaker #2: So, in summary, the economy is good. We are growing. We want to continue to grow, increase the scale of our operation, and we want to look into the future with reasonable optimism.

Speaker #2: Thank you.

Speaker #1: W takim razie dziękujemy. Możemy.

Speaker #2: Very well then. Thank you very much. Let's move on to questions. Do we have any questions from those present in the room?

Andrzej Powierża: Good morning. Andrzej Powierża, Citi Handlowy. Good morning. I'm from Citi Handlowy. I have four questions from four areas. The first is about the ECJ that you have mentioned. What was the financial impact on the financial results on Q2? You said 36, but I think the report presents a larger total amount. Could you please clarify?

Speaker #3: Dzień dobry. Andrzej Powierza, Citi Handlowy.

Speaker #2: Good morning. I'm from Citi Handlowy. I have four questions from four areas. The first is about the ECJ that you mentioned. What was the financial impact on the financial results in the second quarter?

Speaker #2: You said 36, but I think the report presents a larger total amount. Could you please clarify? Well, the impact estimated by the bank is 42 million, if I remember correctly.

Przemysław Gdański: Well, the impact estimated by the bank is PLN 42 million, if I remember correctly. It is comprised of two items. First is the one that has the greatest impact on interest income, is PLN 30.6 million. It is the amount that stems from changes in repayment schedules for clients and implementation of the judgment of 23rd of April. The other amount is provisions for any potential disputes, and that is 47. This is about estimates related to the past. Excellent. Thank you very much. My second question is about more technical aspects and growing with the market. What did you expect in the future? That you would accelerate, that the market would slow down? Will you overtake the market at any point? Well, this is a question that is somewhat strategic and somewhat philosophical.

Speaker #2: And it is comprised of two items. First is the one that has the greatest impact on income—interest income—which is 30.6 million Polish złoty.

Speaker #2: And it is the amount that stems from changes in repayment schedules for clients and implementation of the judgment from April 23rd. The other amount is provisions for any potential disputes, and that is 47.

Speaker #2: This is about estimates related to the past. Excellent. Thank you very much. My second question is about more technical aspects and growing with the market.

Andrzej Powierża: Excellent. Thank you very much. My second question is about more technical aspects and growing with the market. What did you expect in the future? That you would accelerate, that the market would slow down? Will you overtake the market at any point?

Speaker #2: What did you expect in the future that you would accelerate, that the market would slow down? Will you overtake the market at any point?

Speaker #2: Well, this is a question that is somewhat strategic and somewhat philosophical. The market is very competitive, and the level of competition translates into both the margins and other fees and charges related to loans.

Przemysław Gdański: Well, this is a question that is somewhat strategic and somewhat philosophical.

Przemysław Gdański: The market is very competitive, and the level of competition translates into both the margins and other fees and charges related to loans, but also to approach the financing structures offered to clients. While we are and will remain flexible with regard to prices, we are not just a single market creator. We do not intend to accept excessive risk or risk that we see as excessive, be it business risk, be it risk stemming from financing structure that should be adequate to what this financing is and what risk it entails. We do remain faithful to our DNA, which is rather conservative, and we watch the market where we can see significant flexibility in terms of risk acceptance from certain market participants. We are not going to challenge and race them in that regard.

Speaker #2: But also to approach the financing structures offered to clients. And while we are, and will remain, flexible with regard to prices, we are not just a single market creator.

Speaker #2: We do not intend to accept excessive risk, or risk that we see as excessive—be it business risk, or risk stemming from a financing structure, which should be adequate to what this financing is and what risk it entails.

Speaker #2: So, we do remain faithful to our DNA, which is rather conservative. And we watch the market, where we can see significant flexibility in terms of risk acceptance from certain market participants.

Speaker #2: We are not going to challenge and erase them in that regard. As we look at our pipeline and perspective, I do assume our growth is going to accelerate in terms of assets, but we are focusing on maintaining the high quality of assets and adequate returns.

Przemysław Gdański: As we look at a pipeline and a perspective, I do assume our growth is going to accelerate in terms of assets, but we are focusing on maintaining the high quality of assets and adequate returns. Excellent. Thank you very much. My third question concerns investment products. I have seen your slide with investment assets, and the numbers were growing. If I remember correctly, previously, during your favorite graphical illustration, there were some negatives on sale of investment products. Could you please elaborate a little bit on what was happening with sales? As you have very rightly noted, these two slides put together show a certain shift in the bank's focus. In internal management processes, the bank is now focusing more on building volume of assets, and following that, retention and reduced repayments and amortizations. We focus on that rather than selling new funds.

Speaker #2: Excellent. Thank you very much. My third question concerns investment products. I have seen your slide with investment assets and the numbers were growing, but, if I remember correctly, previously during your favorite graphical illustration there were some negatives on the sale of investment products.

Andrzej Powierża: Excellent. Thank you very much. My third question concerns investment products. I have seen your slide with investment assets, and the numbers were growing. If I remember correctly, previously, during your favorite graphical illustration, there were some negatives on sale of investment products. Could you please elaborate a little bit on what was happening with sales?

Speaker #2: Could you please elaborate a little bit on what was happening with sales? As you have very rightly noted, these two slides put together show a certain shift in the bank's focus.

Przemysław Gdański: As you have very rightly noted, these two slides put together show a certain shift in the bank's focus. In internal management processes, the bank is now focusing more on building volume of assets, and following that, retention and reduced repayments and amortizations. We focus on that rather than selling new funds.

Speaker #2: In internal management processes, the bank is now focusing more on building the volume of assets and, following that, on retention and reduced repayments and amortizations. We focus on that rather than selling new funds.

Speaker #2: This is related to the fact that we really are reconstructing the revenue structure, because our profits are related mostly to revenue, not so much distribution.

Przemysław Gdański: This is related to the fact that we really are reconstructing the revenue structure because our profits are related mostly to revenue, not so much distribution. When you look at these two diagrams together, you will see the change in focus. Thank you very much. My final question is about costs. On one hand, the level of costs should not be surprising given the general stability of the quarter. If we look at annual dynamics or year-on-year dynamics, we can see that it is significantly above inflation. I understand that part of it is investments that you have already mentioned, but could we ask for a few more details about the areas where you invest and when are you expecting any returns of those investments? Thank you. Well, we could answer in a following manner.

Speaker #2: So, when you look at these two diagrams together, you will see the change in focus. Thank you very much. And my final question is about costs.

Andrzej Powierża: Thank you very much. My final question is about costs. On one hand, the level of costs should not be surprising given the general stability of the quarter. If we look at annual dynamics or year-on-year dynamics, we can see that it is significantly above inflation. I understand that part of it is investments that you have already mentioned, but could we ask for a few more details about the areas where you invest and when are you expecting any returns of those investments? Thank you.

Speaker #2: On one hand, the level of cost should not be surprising given the general stability of the quarter, but if we look at annual dynamics or year-on-year dynamics, we can see that it is significantly above inflation.

Speaker #2: I understand that part of it is investments, which you have already mentioned. But could we ask for a few more details about the areas where you invest, and when you are expecting any returns from those investments?

Speaker #2: Thank you. Well, we could answer in the following manner: the vast majority of the bank's funds are invested in the areas that were declared when the strategy was communicated.

Przemysław Gdański: Well, we could answer in a following manner.

Przemysław Gdański: The vast majority of the bank's funds are invested in the areas that were declared when the strategy was communicated. Back then, we have declared that the bank will allocate every year a similar amount to investment activity supporting the strategy implementation. We also said that in the first phase, we will predominantly invest in internal processes and customer-facing processes to support implementation of product sales. This includes actions related to building partnerships that we perceive as very important, especially from the perspective of what we said today about the growing customer numbers. Also building product and process-related solutions related to the retail strategy declared in Q2, the Gen Z banking. Those are the areas we directly invest in right now. A large portion of the investment funds is allocated to meeting the growing regulatory requirements, increasing regulatory requirements.

Speaker #2: Back then, we declared that the bank would allocate, every year, a similar amount to investment activity supporting the strategy implementation. We also said that, in the first phase, we would predominantly invest in internal processes and customer-facing processes to support the implementation of product sales.

Speaker #2: This includes actions related to building partnerships that we perceive as very important, especially from the perspective of what we said today about the growing customer numbers.

Speaker #2: Also, we are building product and process-related solutions linked to the retail strategy declared in the second quarter. The Z generation banking—those are the areas we are directly investing in right now.

Speaker #2: A large portion of the investment funds is allocated to meeting the growing regulatory requirements—so, besides direct investments into the area of customer-facing work, quite a large chunk of funds is invested into the bank, which is a public trust institution, to maintain compliance in terms of technologies, processes, and products.

Przemysław Gdański: Besides direct investments into the area of customer-facing work, quite a large chunk of funds is invested into the bank, which is a public trust institution, maintains compliance in terms of technologies, processes, and products. This is the investment part. In summarizing, in order to combine these two streams in the most clear and comprehensible way, the best example was launching, expanding, and modifying processes related to our acquisitions relationships, partnership-based acquisitions. Funds were allocated. They are being depreciated now, and we see a net growth of the number of clients of the bank. These activities are interrelated, interconnected, and in future quarters, we will talk about further allocations and further changes in products or processes. At the end of the day, the cost structure would mostly reflect the cost related to technology, because this is the cost type that is most important here.

Speaker #2: So, this is the investment part. In summarizing, in order to combine these two streams in the most clear and comprehensible way, the best example was launching, expanding, and modifying processes related to our acquisitions, relationships, and partnership-based acquisitions. Funds were allocated.

Speaker #2: They are being depreciated now, and we see a net growth in the number of clients of the bank. So these activities are interrelated and interconnected, and in future quarters we will talk about further allocations and further changes in products or processes.

Speaker #2: At the end of the day, the cost structure would mostly reflect the costs related to technology, because this is the cost type that is most important here.

Speaker #2: As for cost dynamics, as I've tried to tell you, after operating costs, the growth in business means more cost. If we have more clients, they need more queries to BIK, and we have to print more cards for the clients.

Przemysław Gdański: As for cost dynamics, as I've tried to tell you after operating costs, that growth in business means more cost. If we have more clients, they need more queries to be IT. We have to print more cards for the clients. We have to prepare more services stemming from the growth in scale.

Speaker #2: We have to prepare more services stemming from the growth in scale.

Speaker #1: You also mentioned the inflation element that contributes, and the third element—well, there are two things happening here. The cost base of the bank to a large extent is the cost of human capital, human work, and here the dynamics of rising cost of work is above inflation if you look at the situation in the last 12 months or longer.

Jacek Ramotowski: You also mentioned the inflation element that contributes. The third element, well, there are two things happening here. The cost base of the bank, to a large extent, is the cost of human capital, human work, and here the dynamics of rising cost of work is above inflation. If you look at the situation in the last 12 months or longer. So on the one hand, the bank responds by investing in human resources. On the other hand, and I mentioned that when talking about costs, we are continuously optimizing the cost. So there are many elements. I would not like you to just remember that the costs are going to go down. They will continue to grow and above inflation because of the elements that I mentioned. Do we have any more questions in the room? Yes. Good morning. Jacek Ramotowski.

Przemysław Gdański: You also mentioned the inflation element that contributes. The third element, well, there are two things happening here. The cost base of the bank, to a large extent, is the cost of human capital, human work, and here the dynamics of rising cost of work is above inflation. If you look at the situation in the last 12 months or longer. So on the one hand, the bank responds by investing in human resources. On the other hand, and I mentioned that when talking about costs, we are continuously optimizing the cost. So there are many elements. I would not like you to just remember that the costs are going to go down. They will continue to grow and above inflation because of the elements that I mentioned. Do we have any more questions in the room?

Speaker #1: So, on the one hand, the bank responds by investing in human resources; on the other hand, and I mentioned that when talking about costs, we are continuously optimizing the cost.

Speaker #1: So there are many elements. I would not like you to just remember that the costs are going to go down. They will continue to grow and remain above inflation.

Speaker #1: Because of the elements that I mentioned. Do we have any more questions in the room? Yes. Good morning. I have a question about the interest margin. You talked about liabilities being the focus. What is the situation on the side of assets?

Jacek Ramotowski: Yes. Good morning. Jacek Ramotowski.

Piotr Konieczny: I have a question about the interest margin. You talked about liabilities being the focus. What is the situation on the side of assets? Are there any opportunities for improvement in terms of maintaining the interest margin? Well, to be very blunt, the market is extremely competitive in every asset category. So maintaining our margin, not reacting to the market would not be supportive of our growth plans. This is a task that is very difficult with this dynamic and competitive market. Thank you very much. For some time, you are withdrawing or less focusing on the mortgage markets. Now, do you see any remaining legal risk related to mortgages? Why would banks, after finishing granting loans based on WIBOR rate, why would the banks like to use the reference rate of the NBP rather than the POLSTR indicator? What would be the advantage of this for banks?

Jacek Ramotowski: I have a question about the interest margin. You talked about liabilities being the focus. What is the situation on the side of assets? Are there any opportunities for improvement in terms of maintaining the interest margin?

Speaker #1: Are there any opportunities for improvement in terms of maintaining the interest margin? Well, to be very blunt, the market is extremely competitive in every asset category, so maintaining our margin and not reacting to the market would not be supportive of our growth plans. So, this is a task that is very difficult with this dynamic and competitive market.

Piotr Konieczny: Well, to be very blunt, the market is extremely competitive in every asset category. So maintaining our margin, not reacting to the market would not be supportive of our growth plans. This is a task that is very difficult with this dynamic and competitive market.

Speaker #1: Thank you very much. For some time you have been withdrawing or focusing less on the mortgage market. Now, do you see any remaining legal risk related to mortgages?

Jacek Ramotowski: Thank you very much. For some time, you are withdrawing or less focusing on the mortgage markets. Now, do you see any remaining legal risk related to mortgages? Why would banks, after finishing granting loans based on WIBOR rate, why would the banks like to use the reference rate of the NBP rather than the POLSTR indicator? What would be the advantage of this for banks?

Speaker #1: And why would banks, after finishing granting loans based on the WIBOR rate, want to use the reference rate of the NBP rather than the posture indicator?

Speaker #1: What would be the advantage of this for banks? And another thing—the dynamics of provisions for CHF mortgages. What about euro mortgages, or Japanese yen perhaps? I heard about such loans existing.

Piotr Konieczny: Well, another thing, the dynamics of provisions for CHF mortgages. What about euro mortgages or Japanese yen perhaps? I heard about such loans existing. Well, let me start from the latter part. We do not have any loans in yen. We do not have euro loans either. FX loans includes everything, but mainly CHF, or almost exclusively CHF. The first part of your question. Well, the situation is that we have dramatically limited our mortgage operation when we had so-called loan holidays that invaded the market. We thought that this development was wrong and unnecessary. The interest rates have fallen since. There are no more holidays, so a risk of a repeat situation, according to analysts, is very low. Of course, there is some probability because some decisions are unpredictable, but we have decided that the lack of activity in this area compared to possible risk would be wrong.

Jacek Ramotowski: Well, another thing, the dynamics of provisions for CHF mortgages. What about euro mortgages or Japanese yen perhaps? I heard about such loans existing.

Speaker #1: Let me start from the latter part. We do not have any loans in yen—we don't have euro loans either. So, FX loans include everything, but mainly CHF.

Piotr Konieczny: Well, let me start from the latter part. We do not have any loans in yen. We do not have euro loans either. FX loans includes everything, but mainly CHF, or almost exclusively CHF. The first part of your question. Well, the situation is that we have dramatically limited our mortgage operation when we had so-called loan holidays that invaded the market. We thought that this development was wrong and unnecessary. The interest rates have fallen since. There are no more holidays, so a risk of a repeat situation, according to analysts, is very low. Of course, there is some probability because some decisions are unpredictable, but we have decided that the lack of activity in this area compared to possible risk would be wrong.

Speaker #1: We're almost exclusively CHF. To the first part of your question, well, the situation is that we have dramatically limited our mortgage operation when we had so-called loan holidays that invaded the market.

Speaker #1: We thought that this development was wrong and unnecessary. The interest rates have fallen since there are no more holidays, so the risk of a repeat situation, according to analysts, is very low.

Speaker #1: Of course, there is some probability because some decisions are unpredictable, but we have decided that the lack of activity in this area, compared to the possible risk, would be wrong.

Speaker #1: So, we have returned, and with some momentum, as is reflected in our results. In terms of the NBP rates, I think it would be good for the customer to be able to select the indicator used.

Piotr Konieczny: We have returned, and with some momentum, as is reflected in our results. In terms of the NBP rates, I think it would be good for the customer to be able to select the indicator used. The central bank interest rate, in my opinion, carries a lower legal risk. It would be difficult to question its integrity or legality, unlike it is with other indicators. We know the situation with WIBOR, for example. Fortunately, the ECJ judgment confirmed the integrity and reliability of WIBOR, but we do not know what is going to happen in the future. Sometime in the future, someone may question the new reference rate. That is a big question mark. But the likelihood of someone questioning the central bank rate is much lower. Can we have a mic, please? I have four questions, like Andrzej.

Speaker #1: The central bank interest rate, in my opinion, carries a lower legal risk. It would be difficult to question its integrity or legality, unlike with some other indicators.

Speaker #1: We know the situation with WIBOR, for example. Fortunately, the ECJ judgment confirmed the integrity and reliability of WIBOR. But we don't know what's going to happen in the future.

Speaker #1: Sometime in the future, someone may question the new reference rate. That is a big question mark. But the likelihood of someone questioning the central bank rate is much lower.

Speaker #1: Can we have a mic, please? I have four questions, like Andrej. The first one is about the larger number of consumer loan customers who are transformed into your full customers.

Jacek Ramotowski: Can we have a mic, please? I have four questions, like Andrzej.

Jacek Ramotowski: The first one is about the bigger number of consumer loan customers who are transformed into your full customers, 122,000 new customers in the 6 months. This is the net addition. So one-fifth starts with a consumer loan, 13%. That is one-sixth rather than one-fifth. How do you quantify, Mr. President, the reasons behind this offensive and the effectiveness? These are loans that are granted to people who want to buy a TV rather than are looking for a bank account. So it is pretty difficult to turn these customers into your full customers. What are you doing? Well, I am not going to reply to this question. Professional secret, right? Well, this is a new approach mixed with elements of technology, which means that someone who bought a TV in the past starts wondering whether they will use the bank's offering to a larger extent.

Speaker #1: 122,000 new customers in the six months. This is the net addition. So, one fifth starts with a consumer loan: 13%. That's one sixth, rather than one fifth.

Speaker #1: How do you quantify, Mr. President, the reasons behind this offensive and its effectiveness? I mean, these are loans that are granted to people who want to buy a TV, rather than those who are looking for a bank account.

Speaker #1: So it's pretty difficult to turn these customers into your full customers. What are you doing? Well, I'm not going to reply to this question—professional secret, right.

Piotr Konieczny: Well, I am not going to reply to this question. Professional secret, right? Well, this is a new approach mixed with elements of technology, which means that someone who bought a TV in the past starts wondering whether they will use the bank's offering to a larger extent.

Speaker #1: Well, this is a new approach mixed with elements of technology, which means that someone who bought a TV in the past starts wondering whether they will use the bank's offering to a larger extent.

Speaker #1: Basically, this is a foot in the door. This is the lever that gets us started, and then we take action to increase the conversion of those customers into full customers.

Piotr Konieczny: Basically, this is a foot in the door, this TV, that gets us started, and then we take action to increase the conversion of those customers into full customers. But I do not want to go into the details. Right. Second difficult question about investment products, new products. This is something that Andrzej asked about. If you have customers whom you would like to move from the deposit part to the investment part, improving your balance sheet, and adding income from commissions, you need products that are friendly to people who do not know what an ETF or an investment fund is. So can you elaborate on what you are going to do to convince customers to change their savings account to an investment product, some form of an investment service? Several banks have a number of big projects that are focused on exactly this.

Speaker #1: But I don't want to go into the details, right? Second, a difficult question about investment products—new products. This is something that Andrej asked about.

Jacek Ramotowski: Right. Second difficult question about investment products, new products. This is something that Andrzej asked about. If you have customers whom you would like to move from the deposit part to the investment part, improving your balance sheet, and adding income from commissions, you need products that are friendly to people who do not know what an ETF or an investment fund is. So can you elaborate on what you are going to do to convince customers to change their savings account to an investment product, some form of an investment service? Several banks have a number of big projects that are focused on exactly this.

Speaker #1: If you have customers whom you'd like to move from the deposit part to the investment part, improving your balance sheet and adding income from commissions, you need products that are friendly to people who don't know what an ETF or an investment fund is.

Speaker #1: So, can you elaborate on what you're going to do to convince customers to change their savings account to an investment product—some form of an investment service?

Speaker #1: Several banks have a number of big projects that are focused on exactly this. Well, there are a number of things happening here. One thing is what you are talking about—the bigger number of products that we offer.

Piotr Konieczny: Well, there are a number of things happening here. One thing is what you are talking about, the bigger number of products that we offer. We are not offering anything that is extraordinary. The whole sector is offering a similar scope of products. But what matters is the profile of our customers. Our customers tend to opt for loan products, and here our offering is embraced by customers. This is products that are bought by our investors. Where we are developing is in two areas. We are focusing on education. We want to educate, encourage, dispel doubts related to products with a different investment profile, and this is a big chunk of the work that we are doing. Secondly, we are working on investment products, the structuring of these products. Is it about savings, deposits, structured? This is not about unique products per se that is driving.

Speaker #1: We're not offering anything that is extraordinary; the whole sector is offering a similar scope of products. But what matters is the profile of our customers.

Speaker #1: Our customers tend to opt for loan products, and here our offering is embraced by customers. These are products that are bought by our investors.

Speaker #1: Where we are developing is in two areas. We're focusing on education. We want to educate, encourage, and dispel doubts related to products with a different investment profile.

Speaker #1: And this is a big chunk of the work that we are doing. Secondly, we're working on investment products. The structuring of these products—is it about savings deposits structured?

Speaker #1: This is not about unique products per se; that is driving. So, the dynamic right now is powered by debt products. Customers understand what interest rates are about.

Piotr Konieczny: The dynamic right now is powered by debt products. Customers understand what interest rates are about. They know how they work, and they are looking for such products. This is not sufficient, so we are putting a lot of work into education and raising awareness and achieving conversion to other products. Well, you said in a number of parts of your presentation about changing the balance sheet structure. I understand that you want to change the relation between interest rate and commission income, maybe treasury bonds come into this equation. What is the target structure of the balance sheet? Which part of your results on banking activity should be from interest rates and which part from commissions in the perspective of several years? Well, let me start because I may have worded my message incorrectly.

Speaker #1: They know how their products work. This is not sufficient. So we're putting a lot of work into education, raising awareness, and achieving conversion to other products.

Speaker #1: Well, you said in a number of parts of your presentation that you want to change the balance sheet structure. I understand that you want to change the relationship between interest rate and commission income.

Jacek Ramotowski: Well, you said in a number of parts of your presentation about changing the balance sheet structure. I understand that you want to change the relation between interest rate and commission income, maybe treasury bonds come into this equation. What is the target structure of the balance sheet? Which part of your results on banking activity should be from interest rates and which part from commissions in the perspective of several years?

Speaker #1: Maybe treasury bonds come into this equation. What is the target structure of the balance sheet? Which part of your results on banking activity should be from interest rates, and which part from commissions, in the perspective of several years?

Speaker #1: Let me start, because I may have worded my message incorrectly. While focusing on interest rate results in the previous quarters, we were using the nominal value of interest rates.

Piotr Konieczny: Well, let me start because I may have worded my message incorrectly.

Piotr Konieczny: Well, focusing on interest rate results in the previous quarters, we were using the nominal value of interest rates. Once the interest rates have fallen, what we are doing and other banks are doing, we are rebuilding net interest rate income, increasing volume with lower margin, because the margin is falling for everyone. We are subjected to the margin pressure like other market participants. To respond to your question in terms of the structure of revenues. In the Polish model, if you look at different banks, 70-plus income is interest rates, 70-plus. So if you look to our strategy presentation in the strategy period, we do not assume that there would be a revolution in the business model of the bank in terms of revenue structures. The bank's revenues come, and this is not a very intellectually unclear element.

Speaker #1: Once the interest rates have fallen, what we're doing, and what other banks are doing, is rebuilding net interest income—increasing volume with a lower margin, because the margin is falling for everyone.

Speaker #1: We are subjected to margin pressure like other market participants. To respond to your question in terms of the structure of revenues in the Polish model, if you look at different banks, 70-plus percent of income is interest rates.

Speaker #1: Seventy plus. So, if you look at our strategy presentation, in the strategy period we do not assume that there would be a revolution in the business model of the bank in terms of revenue structures.

Speaker #1: The bank's revenues come— and this is not a particularly intellectually unclear element— they come from three areas, and the dominating factor here is linked to the mission of the bank.

Piotr Konieczny: They come from three areas and the dominating factor, this is linked to the mission of the bank. We basically act as an intermediary between those who have money and those who would like to have money. So this is an element where I do not expect a strong change that would blur the picture. One other question, perhaps to Marcin. The macroeconomic outlook is optimistic, but the payroll rises 5.5% per annum may be of concern. What is the reason? That is question number one. Secondly, can that be a threat to the capabilities of the Polish consumer?

Speaker #1: We basically act as an intermediary between those who have money and those who would like to have money. So this is an element where I do not expect a strong change that would blur the picture.

Jacek Ramotowski: One other question, perhaps to Marcin. The macroeconomic outlook is optimistic, but the payroll rises 5.5% per annum may be of concern. What is the reason? That is question number one. Secondly, can that be a threat to the capabilities of the Polish consumer?

Speaker #1: One other question, perhaps to Martin: the macroeconomic outlook is optimistic, but the payroll rises 5.5 percent per annum, which may be of concern. What is the reason? That's question number one.

Speaker #1: And secondly, can that be a threat to the capabilities of the Polish consumer?

Przemysław Gdański: Well, it would seem that not so far. The slowed down increase in pay is probably not surprising to anybody, except for the enterprise sector, where, of course, remuneration policy is under the influence of competitive pressure and ability to generate revenues. We are facing a relatively small growth of salaries in the public sector and a significant growth in the scale of raises of minimum pay. This will probably stay in place, and it means that in the next year, the pay growth rate will be closer to 5% rather than 6%, unless, of course, anything exceptional happens along the way. As we compare it to inflation and revenues that do not stem directly from pay, the real disposable income should continue to grow at the rate of approximately 2.53%, and that is probably the target realistic growth rate for consumer spending.

Michał Dybuła: Well, it would seem that not so far. The slowed down increase in pay is probably not surprising to anybody, except for the enterprise sector, where, of course, remuneration policy is under the influence of competitive pressure and ability to generate revenues. We are facing a relatively small growth of salaries in the public sector and a significant growth in the scale of raises of minimum pay. This will probably stay in place, and it means that in the next year, the pay growth rate will be closer to 5% rather than 6%, unless, of course, anything exceptional happens along the way. As we compare it to inflation and revenues that do not stem directly from pay, the real disposable income should continue to grow at the rate of approximately 2.53%, and that is probably the target realistic growth rate for consumer spending.

Speaker #2: Well, it would seem that not so far. The slowed-down increase in pay is probably not surprising to anybody, except for the enterprise sector, where, of course, remuneration policy is under the influence of competitive pressure and the ability to achieve revenues.

Speaker #2: To generate revenues. So we are facing a relatively small growth of salaries in the public sector and a significant growth in the scale of raises of minimum pay.

Speaker #2: This means that this will probably stay in place, and it also means that in the next year the pay growth rate will be closer to 5 percent rather than 6 percent.

Speaker #2: Unless, of course, anything exceptional happens along the way. Now, as we compare it to inflation and revenues that do not stem directly from pay, the real disposable income should continue to grow at the rate of approximately 2.53 percent, and that is probably the target realistic growth rate for consumer spending.

Speaker #2: And that's probably how it's going to remain. What is certainly a major support for consumers today—and we see that, too, as we watch the dynamic of consumer loan growth—is the lower interest rates' results.

Jacek Ramotowski: That is probably how it is going to remain. What is certainly a major support for consumer today, and we see that, too, as we watch the dynamic of consumer loan growth, is the lower interest rates results, and also the result of reducing this savings buffer that has been built by households in previous periods. The real consumption is growing a little bit faster than real disposable income, but of course, it is not possible to maintain in the longer term. One more question then. I would like to ask about the Personal Investment Accounts, because more and more institutions present their plans in that area. The first question is, are you preparing for that? Are you also optimistic that it is something that could truly result in an investment boom? I mean investment boom in terms of clients' propensity to invest.

Michał Dybuła: That is probably how it is going to remain. What is certainly a major support for consumer today, and we see that, too, as we watch the dynamic of consumer loan growth, is the lower interest rates results, and also the result of reducing this savings buffer that has been built by households in previous periods. The real consumption is growing a little bit faster than real disposable income, but of course, it is not possible to maintain in the longer term.

Speaker #2: And also the result of reducing this savings buffer that has been built by households in previous periods. Real consumption is growing a little bit faster than real disposable income.

Speaker #2: But of course, it is not possible to maintain in the longer term. One more question, then—I would like to ask about the personal investment accounts, because more and more institutions present their plans in that area. So the first question is: are you preparing for that?

Jacek Ramotowski: One more question then. I would like to ask about the Personal Investment Accounts, because more and more institutions present their plans in that area. The first question is, are you preparing for that? Are you also optimistic that it is something that could truly result in an investment boom? I mean investment boom in terms of clients' propensity to invest.

Speaker #2: Are you also optimistic that it is something that could truly result in an investment boom? And, well, I mean investment boom in terms of clients’ propensity to invest.

Speaker #2: So, can it be the mechanism to acquire new clients, or would it be meant for the existing clients mostly? Well, to answer your first question, as every bank, we answer yes, the bank is preparing to offer this product—those investment products.

Przemysław Gdański: Can it be the mechanism to acquire new clients or would it be meant for the existing clients mostly? Well, to answer your first question, as every bank, we answer, yes, the bank is preparing to offer those investment products. The question is, will it result a quantum leap in the client's propensity to invest? It will certainly help. I would not say quantum leap or dramatic, but it will help. The investment products, what I said about the investment products previously, it should be combined with a very broad approach to continued education in terms of financial markets, understanding of financial markets. Such stimulation is necessary, and the example of other countries shows that this stimulation works as far as increasing investment activity is concerned. Will it be an element that will allow us to acquire new clients?

Jacek Ramotowski: Can it be the mechanism to acquire new clients or would it be meant for the existing clients mostly?

Przemysław Gdański: Well, to answer your first question, as every bank, we answer, yes, the bank is preparing to offer those investment products. The question is, will it result a quantum leap in the client's propensity to invest? It will certainly help. I would not say quantum leap or dramatic, but it will help. The investment products, what I said about the investment products previously, it should be combined with a very broad approach to continued education in terms of financial markets, understanding of financial markets. Such stimulation is necessary, and the example of other countries shows that this stimulation works as far as increasing investment activity is concerned. Will it be an element that will allow us to acquire new clients?

Speaker #2: The question is, will it result in a quantum leap in the client's propensity to invest? It will certainly help. I would not say a quantum leap or dramatic, but it will help.

Speaker #2: The investment products—what I said about the investment products previously—should be combined with a very broad approach to continued education in terms of financial markets, understanding of financial markets.

Speaker #2: Such stimulation is necessary, and the example of other countries shows that this stimulation works as far as increasing investment activity is concerned. Will it be an element that will allow us to acquire new clients?

Speaker #2: Well, every banking product, every banking service—be it individually or bundled—is an acquisition instrument. I mean, we operate in a very competitive market where there are practically no areas of activity that would be exempt from competition.

Przemysław Gdański: Well, every banking product, every banking service, be it individually, be it bundled, is an acquisition instrument. We operate in a very competitive market where there are practically no areas of activity that would be exempt from competition. Do we have any more questions from the room? I wanted to ask about the standard loan agreement for mortgage loans that you are planning and refinancing. How painful is refinancing mortgages for the bank? Because for a few years, the client repays fairly large interest, and then they move to another bank, and there they pay large interest yet. You get the principal back. It is refinanced by another bank, so you only get a portion of the interest. Is it painful for the bank in any way? That other clients are basically sucking out your clients by offering a better rate.

Speaker #2: Do we have any more questions from the room? I wanted to ask about the standard loan agreement for mortgage loans that you are planning and refinancing.

[Analyst]: I wanted to ask about the standard loan agreement for mortgage loans that you are planning and refinancing. How painful is refinancing mortgages for the bank? Because for a few years, the client repays fairly large interest, and then they move to another bank, and there they pay large interest yet. You get the principal back. It is refinanced by another bank, so you only get a portion of the interest. Is it painful for the bank in any way? That other clients are basically sucking out your clients by offering a better rate.

Speaker #2: How painful is refinancing mortgages for the bank? Because, you know, for a few years the client repays, you know, fairly large interest, and then they move to another bank and there they pay large interest as well.

Speaker #2: So you get the principal back. It is refinanced by another bank, so you only get a portion of the interest. Is it painful for the bank in any way?

Speaker #2: That you know other clients are basically sucking out your clients by offering a better rate. Well, a standard mortgage loan agreement is a very good idea.

Przemysław Gdański: Well, a standard mortgage loan agreement is a very good idea. Again, it is focused on limiting legal risks. As for the practice that recently has been present in the market, which is refinancing mortgage loans by other banks, I do believe it is onerous mostly for the clients and onerous for the banks. Because in reality, the client goes once again through the entire loan process in another bank, even though they had to undergo this process in the primary bank 2 or 3 years ago. That is what is happening in the market. I believe this trend will subside, that the banks will be more active in renegotiating the prices of mortgage loans in order to prevent the client from leaving and to not expose the client to complications to another creditworthiness assessment. Do we have any more questions from the room? If not, we move on to questions online.

Speaker #2: Again, it is focused on limiting legal risks. As for the practice that has recently been present in the market, which is refinancing mortgage loans by other banks, I do believe it is onerous, mostly for the clients, and onerous for the banks.

Speaker #2: Because, in reality, the client goes once again through the entire loan process in another bank, even though they had already undergone this process in the primary bank two or three years ago.

Speaker #2: That's what's happening in the market. I believe this trend will subside; that the banks will be more active in renegotiating the prices of mortgage loans in order to prevent the client from leaving, and to not expose the client to, you know, complications of another creditworthiness assessment.

Przemysław Gdański: I believe this trend will subside, that the banks will be more active in renegotiating the prices of mortgage loans in order to prevent the client from leaving and to not expose the client to complications to another creditworthiness assessment. Do we have any more questions from the room? If not, we move on to questions online.

Speaker #2: Do we have any more questions from the room? If not, we will move on to questions online. A few more words about the ECJ ruling—Conrad Krasuski.

Konrad Krasuski: A few more words about ECJ ruling. Konrad Krasuski. Could you please elaborate on the risk in consumer loans? The PLN 42 million write-off is a one-off, but is there a risk that a similar level of write-offs may occur in the coming quarters given the growing scale of claims and complaints? The second question from Trigon. What is the portion or the percentage of consumer loans that feel the impact of the ECJ ruling? Well, there is a lot to unpack in those questions. Let me start with a more holistic view. That judgment is strange, but it happened. It does include an important element that is rarely mentioned. The ECJ itself mentioned or pointed that if the banks were taking higher interest from the client by imposing higher interest, that would in amount equalize the cost of loan. Everything would be okay.

Przemysław Gdański: A few more words about ECJ ruling. Konrad Krasuski. Could you please elaborate on the risk in consumer loans? The PLN 42 million write-off is a one-off, but is there a risk that a similar level of write-offs may occur in the coming quarters given the growing scale of claims and complaints? The second question from Trigon. What is the portion or the percentage of consumer loans that feel the impact of the ECJ ruling? Well, there is a lot to unpack in those questions. Let me start with a more holistic view. That judgment is strange, but it happened. It does include an important element that is rarely mentioned. The ECJ itself mentioned or pointed that if the banks were taking higher interest from the client by imposing higher interest, that would in amount equalize the cost of loan. Everything would be okay.

Speaker #2: Could you please elaborate on the risk in consumer loans? The 42 million write-off is a one-off, but is there a risk that a similar level of write-offs may occur in the coming quarters, given the growing scale of claims and complaints?

Speaker #2: The second question from Trigon: What is the portion or percentage of consumer loans that feel the impact of the ECJ ruling? Well, there is a lot to unpack in those questions.

Speaker #2: Let me start with a more holistic view. That judgment is strange, but it happened. It does include an important element that is rarely mentioned.

Speaker #2: The ECJ itself mentioned or pointed out that if the banks were taking higher interest from the client by imposing higher interest, that would in amount equalize the cost of the loan.

Speaker #2: Everything would be okay. So, it's not the economic aspect but the formula in which the banks calculated the interest. But, well, what has happened has happened.

Przemysław Gdański: It is not the economic aspect, but the formula in which the banks calculated the interest. But well, what has happened has happened. The bank cannot take interest on the cost of loan or insurance premiums. We have discontinued those practices for consumer loans starting from the beginning of 2024, and for a few months, we took interest on the cost of insurance in case of automotive loans. But in mid-2024, we have abandoned that practice as well. The nature of the question was whether the write-offs that we have made are a one-off or is there a risk that they would be recurring? Well, the higher of the 2 amounts, PLN 30.6 million, is the precise calculation of reduction of income from interest resulting from modified schedule of repayment of existing loans. Nothing is going to happen here.

Speaker #2: The bank cannot take interest on the cost of loans or insurance premiums. We have discontinued those practices for consumer loans starting from the beginning of 2024, and for a few months we took interest on the cost of insurance in the case of automotive loans.

Speaker #2: But in mid-2024, we have abandoned that practice as well. The nature of the question was whether the write-offs that we have made are a one-off, or if there is a risk that they could be recurring.

Speaker #2: Well, the higher of the two amounts, 30.6 million, is that precise calculation of reduction of income from interest resulting from the modified schedule of repayment of existing loans.

Speaker #2: Nothing is going to happen here. The second, smaller component—the $12 million—is about clearing in the future. It is based on our estimates of how high the cost can be.

Robert Litke: The second smaller component, the PLN 12 million, is about clearing in the future. It is based on our estimates of how high the cost can be. Of course, in reality, it may be lower or higher. The next question, Robert Litke from Bank PL. How do you see the requirements, oh, it has been already mentioned. What do you think about the demands to exempt the defense loans from the bank tax? Well, the banking community has been talking about the bank tax for a long time, and it is pretty unanimous that it is poorly structured and that it is bad, in short. But any requirements to reduce it or to calculate it differently, not on assets but on liabilities, those requests were clearly not heard nor implemented in any way.

Przemysław Gdański: The second smaller component, the PLN 12 million, is about clearing in the future. It is based on our estimates of how high the cost can be. Of course, in reality, it may be lower or higher. The next question, Robert Litke from Bank PL. How do you see the requirements, oh, it has been already mentioned. What do you think about the demands to exempt the defense loans from the bank tax? Well, the banking community has been talking about the bank tax for a long time, and it is pretty unanimous that it is poorly structured and that it is bad, in short. But any requirements to reduce it or to calculate it differently, not on assets but on liabilities, those requests were clearly not heard nor implemented in any way.

Speaker #2: Of course it the reality may in reality it may be a lower or higher. The next question. Robert Liedke from Bank PL. How do you see the requirements?

Speaker #2: Oh, it's been already mentioned. How do you—what do you think about the demands to exempt the defense loans from the bank tax? Well, the banking community has been talking about the bank tax for a long time and it's pretty unanimous that it is poorly structured and that it is bad, in short.

Speaker #2: But any requirements to reduce it, or to calculate it differently—not on assets, but on liabilities—those requests were clearly not heard nor implemented in any way.

Speaker #2: Any request to forgo the bank tax, which is actually a tax on loans for any type of assets, is of course beneficial for the banks, and in this case, for the entities from the defense sector that it would pertain to.

Przemysław Gdański: Any request to forgo the bank tax, which is actually a tax on loans for any type of assets, is of course beneficial for the banks and in this case, for the entities from the defense sector that it would pertain to. So in my personal opinion, however I like that suggestion, I do believe it has very small chances to succeed. The next question. What will be the consequence of increasing the tax on sector that was suggested by Minister Nałęcz? How would it impact dividend policy and capital management? I would rather avoid answering this question because Madam Minister's suggestion, a suggestion that I found a rather strange idea. I mean, a moment ago, the CIT tax on the sector was increased by 11 percentage points, and it's difficult for me to imagine the justifiability of further increasing that tax or introducing any other tax for our industry.

Speaker #2: So, in my personal opinion—however, I like that suggestion—I do believe it has very small chances to succeed. The next question: what will be the consequence of increasing the tax on the sector that was suggested by Minister Nauwaj?

Speaker #2: How would it impact dividend policy and capital management? I would rather avoid answering this question, because Madam Minister's suggestion—a suggestion that I found a rather strange idea. I mean, a moment ago, the CIT tax on the sector was increased by 11 percentage points, and it's difficult for me to imagine the justifiability of further increasing that tax or introducing any other tax for our industry.

Speaker #2: The importance of our industry to the economy is invaluable, and we are still the most encumbered banking sector in Europe. I mean, so this was one idea; somebody else may present another idea. They are both so remote, and let's hope they would never be implemented.

Kamil Solarski: The importance of our industry to the economy is invaluable, and we are still the most encumbered banking sector in Europe. So this was one idea. Somebody else may present another idea. They are both so remote and let's hope they would never be implemented. Calculating impact would be very tedious and not entirely productive work. Okay. Moving on. Kamil Solarski from PKO. Why does the bank transfer part of funds from deposits to investments? Wouldn't it reduce your profitability? Well, let me answer briefly. First, we should offer a broader array of savings and investment products to our clients than just term deposits, more than just deposits. This is our gesture towards our clients, just transformation of revenues. Rafał Nowak from Reuters. How does the bank perceive a long-term risk related to a growing number of claims concerning the so-called sanction on free loans?

Przemysław Gdański: The importance of our industry to the economy is invaluable, and we are still the most encumbered banking sector in Europe. So this was one idea. Somebody else may present another idea. They are both so remote and let's hope they would never be implemented. Calculating impact would be very tedious and not entirely productive work. Okay. Moving on. Kamil Solarski from PKO. Why does the bank transfer part of funds from deposits to investments? Wouldn't it reduce your profitability? Well, let me answer briefly. First, we should offer a broader array of savings and investment products to our clients than just term deposits, more than just deposits. This is our gesture towards our clients, just transformation of revenues. Rafał Nowak from Reuters. How does the bank perceive a long-term risk related to a growing number of claims concerning the so-called sanction on free loans?

Speaker #2: Calculating impact would be very tedious and not entirely productive work. Okay, moving on. Kamil Staralski from PKO: Why does the bank transfer part of the funds from deposits to investments?

Speaker #2: Wouldn't it reduce your profitability? Well, let me answer briefly. First, we should offer a broader array of savings and investment products to our clients than just term deposits.

Speaker #2: More than just deposits, this is our gesture towards our clients—just transformation of revenues. Rafał Nowak from Reuters: How does the bank perceive long-term risk related to the growing number of claims concerning the so-called sanction on free loans?

Speaker #2: Sanctions on free loans, or free loan sanction, is nothing new. These claims exist. The court cases are ongoing. Today, the bank is coming out on top in 90 percent of those cases.

Przemysław Gdański: Sanctions on free loan or free loan sanction is nothing new. These claims exist. The court cases are ongoing. Today, the bank is coming up on top in 90% of those cases. The ECJ judgment from April did not result in an influx of new cases, a rush of new cases. We will continue to live with it. So far, and let's hope it stays that way, there are no indications that court rulings would be negative from the perspective of the sector or social justice. The free loan sanction is something that does not exist in other legal systems. It is our Polish specialty. There is no gradation of this sanction with regard to any potential deficiencies of agreement provisions. It's either free loan or nothing. We do believe this needs modifying. We will monitor this risk.

Speaker #2: The ECJ judgment from April did not result in an influx of new cases—a rush of new cases. We will continue to live with it.

Speaker #2: So far, and let's hope it stays that way, nothing indicates—there are no indications—that court rulings would be negative from the perspective of the sector or social justice.

Speaker #2: The free loan sanction is something that does not exist in other legal systems. It is our Polish specialty. There is no gradation of this sanction with regard to any potential deficiencies of agreement provisions.

Speaker #2: It's either a free loan or nothing. We do believe this needs modifying. We will monitor this risk. We will manage this risk. So far, I think it is under control.

Przemysław Gdański: We will manage this risk. So far, I think it is under control. The last question online: which of your competitors have the greatest appetite for risk, domestic or foreign entities? Well, it is not our role to exactly pinpoint which of our competitors has what risk appetite, because that is the role of management of individual banks. But I do believe that if we look at the strategy of the banks across the sector and how the market is growing, the question is: is the market big enough so that everybody could meet their objectives? If we are talking about loans, very often we have a situation that, for example, for corporate clients with very good risk profiles who generate very high surpluses and are able to repay their loans, there is a competition in terms of evaluation, structure of transactions, repayment profiles, and so on.

Speaker #2: And the last question online: which of your competitors have the greatest appetite for risk—domestic or foreign entities? Well, it is not our role to exactly pinpoint which of our competitors has what risk appetite, because that is the role of management of individual banks.

Speaker #2: But I do believe that if we look at the strategy of the banks across the sector and how the market is growing, the question is, is the market big enough so that everybody could meet their objectives?

Speaker #2: If we are talking about loans, very often we have a situation that, for example, for corporate clients with very good risk profiles, who generate very high surpluses and are able to repay their loans, there is competition in terms of evaluation structure of transactions, repayment profiles, and so on.

Speaker #2: With commercial real estate, very often we have a discussion about balloon repayment, the repayment period, and so forth. But sometimes we find ourselves in a situation when something is being restructured and refinanced by other banks.

Przemysław Gdański: With commercial real estate, very often we have a discussion about balloon repayment, the repayment period, and so forth. Sometimes we find ourselves in a situation when something is being restructured and refinanced by other banks. We have to remember that it is not like all the companies that are being restructured end up in bankruptcy, because some companies recover, they get back on track, and after a while, they become good, healthy enterprises that generate healthy margins. They may have temporary financial problems. Thank you.

Speaker #2: So we have to remember that it's not like all the companies that are being restructured end up in bankruptcy, because some companies recover, they get back on track, and after a while they become good, healthy enterprises that generate healthy margins.

Speaker #2: But they may have temporary financial problems. Thank you.

Piotr Konieczny: Thank you very much. If there are no more questions, this is the end of the Q&A session. Thank you very much. Thank you for your presence, for your questions. Enjoy the summer and see you next quarter.

Speaker #1: Thank you very much. If there are no more questions, this is the end of the Q&A session, and thank you very much. Thank you for your presence and for your questions.

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Half Year 2026 BNP Paribas Bank Polska SA Earnings Call

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