Q2 2026 Powszechna Kasa Oszczednosci Bank Polski SA Earnings Call

Speaker #1: Corporate financing by almost 15% year to year, which translated to symbolic volume. The balance sheet more than 600 billion zlotys, and one hundred billion increase of balance sheet amount in recent year.

Szymon Midera: Corporate financing by almost 15% year-to-year, which translated to symbolic volume. The balance sheet is more than 600 billion złoty. A 100 billion złoty increase of balance sheet amount in recent year. It is the value of the average bank of the top 10 on the market. We have done it by ourselves in organic way, organic growth way. Capital equity ends at 15.5 and 15.55. That is CET1. This figure allows us to think about further growth. This coefficient has been increased thanks to including some of the profits from last year. Very good volumes and increases in business have translated to stable revenues and stable interest results. Two digits increase in margin profit, 5.3 billion złoty increase year-to-year by more than 3 percentage points. In Q2, net profit is 2.8 billion złoty, 8% increase quarter-to-quarter. Very good results.

[Company Representative 2]: Corporate financing by almost 15% year-to-year, which translated to symbolic volume. The balance sheet is more than PLN 600 billion. A PLN 100 billion increase of balance sheet amount in recent year. It is the value of the average bank of the top 10 on the market. We have done it by ourselves in organic way, organic growth way. Capital equity ends at 15.5% and 15.55%. That is CET1. This figure allows us to think about further growth. This coefficient has been increased thanks to including some of the profits from last year. Very good volumes and increases in business have translated to stable revenues and stable interest results. Two digits increase in margin profit, PLN 5.3 billion increase year-to-year by more than 3 percentage points. In Q2, net profit is PLN 2.8 billion, 8% increase quarter-to-quarter. Very good results.

Speaker #1: It's the value of the average bank of the top 10 on the market. We have done it ourselves in an organic way—an organic growth way.

Speaker #1: And capital equity at 15.5 and 15.55, that's CET, and this figure allows us to think about further growth. This coefficient has been increased thanks to including some of the profits from last year.

Speaker #1: And it's very good. It's very good volumes and increases in business have translated to stable revenues and stable interest results to digit increase in margin profit.

Speaker #1: 5.3 billion zlotys increase year to year by more than 3 percentage points in the second quarter. Net profit is 2.8 billion zlotys—an 8% increase quarter to quarter.

Speaker #1: Very good results, taking into account higher tax and lower ROE percentages. Highly above the strategic goal: 18.4 at the end of the first quarter, and 19.2 at the end of the second quarter.

Szymon Midera: Take into account higher taxes and lower percentages ROE. Highly and above the strategic goal, 18.4% at the end of Q1, 19.2% at the end of Q2. In Q1, we have got increased costs associated with this fee and margin. At 4.31% at the end of Q2, this result from two way. Well, it is calculating interest on margin and insurance. The margin in Q2 would be higher than the margin for Q1 if we eliminated this impact. Two very important things, very strong communicate concerning operational efficiency. We have got 21.6% after H1 and 28.7% after Q2. We are market leader if addition cost efficiency is concerned. In spite of such a dynamic increase in portfolio we have got lowest cost of risk.

[Company Representative 2]: Take into account higher taxes and lower percentages ROE. Highly and above the strategic goal, 18.4% at the end of Q1, 19.2% at the end of Q2. In Q1, we have got increased costs associated with this fee and margin. At 4.31% at the end of Q2, this result from two way. Well, it is calculating interest on margin and insurance. The margin in Q2 would be higher than the margin for Q1 if we eliminated this impact. Two very important things, very strong communicate concerning operational efficiency. We have got 21.6% after H1 and 28.7% after Q2. We are market leader if addition cost efficiency is concerned. In spite of such a dynamic increase in portfolio we have got lowest cost of risk.

Speaker #1: 19.2%. And in the first quarter, we have got increased cost associated with this fee and margin. 435 at the end of. And at 4.31% at the end of second quarter.

Speaker #1: And these results are from two sources: well, it's calculating interest on margin and then insurance, and the margin in the second quarter would be higher than the margin for the first quarter.

Speaker #1: If we eliminated this, this impact. And two very important things, very strong communicates concerning operational efficiency. We have got 21.6% after first half and 28.7% after second quarter.

Speaker #1: We are market leader if efficient, cost efficiency is concerned, and in spite of such a dynamic increase in portfolio, we have got lowest cost of risk.

Speaker #1: 30 BPs after 6 months and 29 BPs after second quarter. Thanks for our employees and thanks very much for customers and shareholders for confidence in trusting us.

Szymon Midera: 30 BPS after six months and 29 BPS after Q2. Thanks for our employees and thanks very much for customers and shareholders for confidence and trust in us. Since it has been half year time, just to summarize. You can see it in key business lines. We have attained our strategic goals in cash loans. We increased by 3.6 percentage points of market share in recent year. If you look at the sales of cash loans in PKO BP, it is larger than total amount of sales of all the banks in Poland quoted on stock exchange. Tomek will tell you about details, how we are able to achieve that. We are very proud of this result. We would like to maintain this high dynamics of more than 20% in quarters to come.

[Company Representative 2]: 30 basis points after six months and 29 basis points after Q2. Thanks for our employees and thanks very much for customers and shareholders for confidence and trust in us. Since it has been half year time, just to summarize. You can see it in key business lines. We have attained our strategic goals in cash loans. We increased by 3.6 percentage points of market share in recent year. If you look at the sales of cash loans in PKO BP, it is larger than total amount of sales of all the banks in Poland quoted on stock exchange. Tomek will tell you about details, how we are able to achieve that. We are very proud of this result. We would like to maintain this high dynamics of more than 20% in quarters to come.

Speaker #1: And since we have, it's been half a year's time, and just to summarize, you can see that in key business lines we have obtained our strategic goals in cash loans.

Speaker #1: We increased by 3.6 percent point of market share. In recent year. If you look at the sales of cash loans in PKO BP, this larger than total amount of sales of all the banks in Poland quoted on stock exchange.

Speaker #1: And Dominic, we'll tell you about details how we are able to achieve that. We are very proud of this result. We would like to maintain this.

Speaker #1: Dynamics of more than 20% in quarters, too. If Polish loans are concerned, it's above a 27% increase by 1.7 in the recent year, which also means implementation and attainment of the strategic goal in half of the year.

Szymon Midera: If mortgage loans are concerned, it is above 27%, increased by 1.7% in recent years, which also means implementation and attainment of strategic goal at the half of the year. We are very happy about the increase in business customer financing. In spite of very strong competition in this area, we exceed 17% at the moment in market share. Also household savings are increasing, investment portfolio and also investment funds sales dynamics is about 30%. We are also active in new proposals, new products. We are preparing to subsequent issuance in September. This is the area we are very proud of that. We show the increase of 780 million złoty at the end of H1, double and twice as high. Also insurance fee in strategic perspective after the end of next year.

[Company Representative 2]: If mortgage loans are concerned, it is above 27%, increased by 1.7% in recent years, which also means implementation and attainment of strategic goal at the half of the year. We are very happy about the increase in business customer financing. In spite of very strong competition in this area, we exceed 17% at the moment in market share. Also household savings are increasing, investment portfolio and also investment funds sales dynamics is about 30%. We are also active in new proposals, new products. We are preparing to subsequent issuance in September. This is the area we are very proud of that. We show the increase of 780 million złoty at the end of H1, double and twice as high. Also insurance fee in strategic perspective after the end of next year.

Speaker #1: And we are very happy about the increase in business customer financing, in spite of very strong competition in this area. We exceed 17% at the moment.

Speaker #1: In market share, but also household savings are increasing. The investment portfolio and investment funds sales dynamics is about 30%. We are also active in new proposals and new products, and we are preparing for a subsequent issuance in September.

Speaker #1: This is the area we are very, very proud of that. And we show the increase of 780 million zlotys at the end of the first half year, double and twice as high.

Speaker #1: And also, the insurance fee in a strategic perspective after the end of next year. Besides the regular business, we are creating a new model based on profound financing.

Szymon Midera: Beside the regular business, we create a new model based on profound financing basically. This integrated financing we started at the beginning of this year with a cooperation at Allegro. We have more than 350,000 joint customers who benefit from cheaper purchases and free of charge deliveries for 6 months in this combination, and there has been a breakthrough. There is a second phase, and I can say that the first accounts were established in the context of Allegro application. That's a unique process and unique value not only in Poland but also in the region. We hope that thanks to subsequent phase of cooperation and thanks to well-prepared communication, by the end of this year, we are able to attain 1 million common customers together with the largest Polish commerce.

[Company Representative 2]: Beside the regular business, we create a new model based on profound financing basically. This integrated financing we started at the beginning of this year with a cooperation at Allegro. We have more than 350,000 joint customers who benefit from cheaper purchases and free of charge deliveries for 6 months in this combination, and there has been a breakthrough. There is a second phase, and I can say that the first accounts were established in the context of Allegro application. That's a unique process and unique value not only in Poland but also in the region. We hope that thanks to subsequent phase of cooperation and thanks to well-prepared communication, by the end of this year, we are able to attain 1 million common customers together with the largest Polish commerce.

Speaker #1: This integrated financing, we started at the beginning of this year with a cooperation with Allegra. We have got more than 350,000 common joint customers who benefit from cheaper purchases and free-of-charge delivery for six months and combination, and there has been—there is a second phase. And I can say that the first accounts were established in the context of the Allegra application.

Speaker #1: That's unique. Focus and unique value not only in Poland, but also in the region. We hope that thanks to the subsequent set of cooperation, and thanks to well-prepared communication, by the end of this year we are able to obtain 1 million customers together with the largest Polish e-commerce.

Speaker #1: If Żabka is concerned, we have finance concluded test phase and by the end of the year we will be. Working fully operationally. And cooperation, it's with Żabka, it's the credit limits in application of Żabka.

Szymon Midera: If Żabka is concerned, we have final concluded test phase and by the end of the year we will be working fully operationally. The cooperation with Żabka is credit limits in application of Żabka. We also develop our own Automarket.pl for sales of new and used vehicles, cars. It's almost 30% year-to-year increase in financed vehicle sales, over 5.3 thousand vehicles in H1. As you can see, we are strengthening our market position. We develop at a faster pace than competition. We develop in a sustainable way, looking from the point of view of lowest risk factor. We are in the pace of two digits increase, and we would like to maintain this increase, and the economy is helping us. Piotr, tell us something about macroeconomic environment. Yes. Macro environment is helping us. We cannot complain about that.

[Company Representative 2]: If Żabka is concerned, we have final concluded test phase and by the end of the year we will be working fully operationally. The cooperation with Żabka is credit limits in application of Żabka. We also develop our own Automarket.pl for sales of new and used vehicles, cars. It's almost 30% year-to-year increase in financed vehicle sales, over 5.3 thousand vehicles in H1. As you can see, we are strengthening our market position. We develop at a faster pace than competition. We develop in a sustainable way, looking from the point of view of lowest risk factor. We are in the pace of two digits increase, and we would like to maintain this increase, and the economy is helping us. Piotr, tell us something about macroeconomic environment. Yes. Macro environment is helping us. We cannot complain about that.

Speaker #1: And we also develop our own auto market for sales of new and used vehicles, cars. It’s almost a 30% year-to-year increase in financed vehicle sales, with over 5,300 vehicles in the first half of the year.

Speaker #1: Yes, as you can see, we are strengthening our market position, and we have developed at a faster pace than the competition. We develop in a sustainable way, looking from the point of view of the lowest risk factor, and we are in the phase of double-digit increase. We would like to maintain this increase, and the economy is helping us.

Speaker #1: And Piotr, tell us something about macroeconomic environment. Yes. Macro environment is helping us. We cannot complain about that. It creates very good base for banking sector, very good basis for growth.

Speaker #1: For banks, especially those with a good equity position and operational capabilities, and a good offer for clients. And the second quarter was marked with an increase in economic growth.

Szymon Midera: It is very good base for banking sector, very good basis for growth for banks, especially for those with good equity position and operational capabilities and good offer for clients. Q2 was marked with increase of growth, economic growth in Poland. We have learned about official data. The GDP growth increased to 4%. Last year it was 3.3%. It indicates resilience of our company in spite of the war in Ukraine. Hard winter in this year had higher impact than what is happening in Persian Gulf. Recovery of investment activities is also worth mentioning and GDP general, but more detailed statistics, monthly statistics show that investment activities are increasing, which is associated with the need to change the business model for many companies faced with different challenges and energy transformations and recovery in the Eurozone which was visible in Q2 lowered interest rates.

[Company Representative 2]: It is very good base for banking sector, very good basis for growth for banks, especially for those with good equity position and operational capabilities and good offer for clients. Q2 was marked with increase of growth, economic growth in Poland. We have learned about official data. The GDP growth increased to 4%. Last year it was 3.3%. It indicates resilience of our company in spite of the war in Ukraine. Hard winter in this year had higher impact than what is happening in Persian Gulf. Recovery of investment activities is also worth mentioning and GDP general, but more detailed statistics, monthly statistics show that investment activities are increasing, which is associated with the need to change the business model for many companies faced with different challenges and energy transformations and recovery in the Eurozone which was visible in Q2 lowered interest rates.

Speaker #1: We have learned about official data. GDP growth increased to 4%. Last year it was 3.3%. It indicates the resilience of our company in spite of the war in Ukraine.

Speaker #1: And the hard winter this year had a higher impact than what is happening in the Persian Gulf. The recovery of investment activities is also worth mentioning.

Speaker #1: And GDP in general, but more detailed statistics monthly—26—show that investment activities are increasing, which is associated with the need to change the business model for many companies faced with different challenges and energy transformations, and recovery in the eurozone, which...

Speaker #1: Visible in the second quarter. Lowered interest rates. There are many, many elements which contribute to investment activities. In accordance with. Our predictions which we had before and each translates to increase of credit activities.

Szymon Midera: There are many elements which contributes to investment activities in accordance with our predictions, which we had before. It translates to increase of credit activities and also base of clients. Of course, dynamics of employment is at lowered pace. But trust of clients and real dynamics of growth is at around 3%, and which allows for loans for products and savings of households and financial assets of households are increasing. That was Q2 of the economy and interest rates with no changes. It's a probable scenario for H2, and cost pressure stemming from what is happening in the Persian Gulf. This pressure was limited and inflation did not go beyond control. It's going to be the case in the quarters to come. We believe that the Monetary Policy Council is not going to increase the interest rates.

[Company Representative 2]: There are many elements which contributes to investment activities in accordance with our predictions, which we had before. It translates to increase of credit activities and also base of clients. Of course, dynamics of employment is at lowered pace. But trust of clients and real dynamics of growth is at around 3%, and which allows for loans for products and savings of households and financial assets of households are increasing. That was Q2 of the economy and interest rates with no changes. It's a probable scenario for H2, and cost pressure stemming from what is happening in the Persian Gulf. This pressure was limited and inflation did not go beyond control. It's going to be the case in the quarters to come. We believe that the Monetary Policy Council is not going to increase the interest rates.

Speaker #1: And also base of clients and of course dynamics of employment. Is at lowered phase but trust of clients and real dynamics of growth is at around 3%.

Speaker #1: And, which sales for loans for products and savings of households and financial assets, households are increasing. That was the second quarter of the economy, and interest rates with no changes.

Speaker #1: It's the probable scenario for the second half of the year, and cost pressure stemming from what is happening in the Persian Gulf. This pressure was too limited, and inflation did not go beyond control.

Speaker #1: So it is, and it's going to be the case in the quarters to come. We believe that the Monetary Policy Council is not going to increase the interest rates, but as they have indicated recently, they will think about decreasing the interest rates.

Speaker #1: But it's not the nearest quarters, no. Not before the end of this year, but next year—probably. But the level has decreased by 200 basis points compared to the beginning of last year.

Szymon Midera: But as they have indicated recently, they will think about decreasing the interest rates. But it is not the nearest quarters, not before the end of this year, but next year probably. But level is decreased by 200 basis points compared to the beginning of last year. We expect subsequent lowering of interest rates by the end of next year, which combined with good position of economy and increased consumer demand means very good perspectives for development of loan activities in quarters to come. Good position of economy lowered and probably even more lower interest rates is good for. The macro situation is promoting improvement of quality of assets in banks.

[Company Representative 2]: But as they have indicated recently, they will think about decreasing the interest rates. But it is not the nearest quarters, not before the end of this year, but next year probably. But level is decreased by 200 basis points compared to the beginning of last year. We expect subsequent lowering of interest rates by the end of next year, which combined with good position of economy and increased consumer demand means very good perspectives for development of loan activities in quarters to come. Good position of economy lowered and probably even more lower interest rates is good for. The macro situation is promoting improvement of quality of assets in banks.

Speaker #1: And we expect subsequent lowering of interest rates by the end of next year, which, combined with the good position of the economy and increased...

Speaker #1: Consumer demand means very good perspectives for development of loan activities in Q2. Good position of the economy, lowered and probably even more lower interest rates.

Speaker #1: It's good for and the macro situation is promoting improvement of quality of assets in banks and if the forecast for the rest of this year and for the next year are very careful, optimistic standard in our style next year, the economy may be increasing at a slightly slower pace because of some slowdown of investment because it is not possible to having investments growing in two digits in a rate at two digits age continuously.

Szymon Midera: If the forecasts for the rest of this year and for the next year are very careful, optimistic or standard in our style next year, the economy may be increasing at a slightly slower pace because of some slowdown of investments. Because it is not possible to having investments growing in two digits rate continuously. It is going to be very high level anyway of investment activities, but it will be a later phase of investment cycle and it is going to generate high demand for corporate loans. So we envisage in a base case scenario and conservative scenario, we envisage at least one high digit increase in all the key sectors with a chance for slightly more if no risk factors come through in the macro economy of Poland. To summarize what is going in macro, our assumption is coming through for the year 2025, 2027.

[Company Representative 2]: If the forecasts for the rest of this year and for the next year are very careful, optimistic or standard in our style next year, the economy may be increasing at a slightly slower pace because of some slowdown of investments. Because it is not possible to having investments growing in two digits rate continuously. It is going to be very high level anyway of investment activities, but it will be a later phase of investment cycle and it is going to generate high demand for corporate loans. So we envisage in a base case scenario and conservative scenario, we envisage at least one high digit increase in all the key sectors with a chance for slightly more if no risk factors come through in the macro economy of Poland. To summarize what is going in macro, our assumption is coming through for the year 2025, 2027.

Speaker #1: But it's going to be very high-level anyway, in terms of investment activities. But it will be at a later phase of the investment cycle, and it's going to generate high demand for corporate loans.

Speaker #1: So we envisage in the base case scenario in conservative scenario, we envisage at least high one digit at least one high one digit increase in all the key sectors with a chance for slightly more if no risk factors come through in macroeconomy of Poland.

Speaker #1: So, to summarize what is going on macro-wise: our assumption is coming through for the years 2025 and 2027. We have presented that with the publication of financial results for 2024 in March.

Speaker #1: Last year, we said that there was a chance for positive trends between the economy and the banking sector, and we can observe this in the most recent quarters, especially in the last quarter of this year.

Szymon Midera: We have presented that with the publication of financial results for 2024 in March last year. We said that there was a chance for positive trends between economy and banking sector, and we can observe it in most recent quarters, especially in the most recent last quarter of this year. If no negative factors come through, like global shock, geopolitical or economical, any unfavorable legal or tax activities, this positive trend may continue in subsequent quarters. Thank you very much. Piotr has mentioned about favorable macroeconomic environment. It is very good environment for developing retail banking. Every day we try to translate it to being close to our clients. This is why we operate faster than the market. We observe that both in savings, in investments, in dynamically developing increasing number of clients.

[Company Representative 2]: We have presented that with the publication of financial results for 2024 in March last year. We said that there was a chance for positive trends between economy and banking sector, and we can observe it in most recent quarters, especially in the most recent last quarter of this year. If no negative factors come through, like global shock, geopolitical or economical, any unfavorable legal or tax activities, this positive trend may continue in subsequent quarters. Thank you very much. Piotr has mentioned about favorable macroeconomic environment. It is very good environment for developing retail banking. Every day we try to translate it to being close to our clients. This is why we operate faster than the market. We observe that both in savings, in investments, in dynamically developing increasing number of clients.

Speaker #1: And if no negative factors come through—like a global shock, geopolitical or economic issues, or any unfavorable legal or tax activities—this positive trend may continue in subsequent quarters.

Speaker #1: Thank you very much. Piotr has mentioned the favorable macroeconomic environment. It's a very good environment for developing retail banking, and every day we try to translate it to our activities.

Speaker #1: Also, our clients—and this is why we operate faster than the market—and we observe that both in savings and in investments, the number of clients is dynamically developing and increasing.

Speaker #1: When we look at the behaviors of clients, they are using PKO BP as a very good platform not only for savings, but also for investing.

Speaker #1: More than a 30% increase shows how dynamically we contact—how we transfer the funds from savings to investments. We will see 100 billion very soon, which is a very good, attainable goal, and looking at the dynamics, we are not far from that.

Szymon Midera: When we look at the behaviors of clients, they are using PKO BP as a very good platform, not only for savings but also for investing. More than 30% increase shows how dynamically we convert the funds from savings to investments. We will see 100 billion very soon, which is a very good goal, attainable goal. Looking at the dynamics, we are not far from that. Looking at expectations of clients, we can see that these processes are very simple and open. Answering to this needs, we invest in our digital channels and the product palettes. We have got very simple way of purchasing state treasury bonds. 15% of what is going in this product is done by digital channels. We have got issuances and after the second two issuances, we are preparing to third one.

[Company Representative 2]: When we look at the behaviors of clients, they are using PKO BP as a very good platform, not only for savings but also for investing. More than 30% increase shows how dynamically we convert the funds from savings to investments. We will see 100 billion very soon, which is a very good goal, attainable goal. Looking at the dynamics, we are not far from that. Looking at expectations of clients, we can see that these processes are very simple and open. Answering to this needs, we invest in our digital channels and the product palettes. We have got very simple way of purchasing state treasury bonds. 15% of what is going in this product is done by digital channels. We have got issuances and after the second two issuances, we are preparing to third one.

Speaker #1: And looking at expectations of clients, we can see that these processes are very simple. And openly answering to these needs, we invest in our digital channels and the product palette, and we have got a very simple way of purchasing state treasury bonds, 15%.

Speaker #1: What is going on in this product is done by digital channels. We have got shares, and after the second issuance, we are preparing to.

Speaker #1: To the third one, there is also the specificity of the increase in our customer portfolio. We are now paying more than 30% of clients via digital channels.

Speaker #1: It is twice as much as in a similar period last year, which reflects the scale of changes. We shortened the time by 60% for customers.

Szymon Midera: There is also a specificity of the increase in customer portfolio. We obtain more than 30% of clients via digital channels. It is twice as much as in similar period last year, which reflects the scale of changes. We shorten the time by 60% for customers. Being close to customers, it is not only digital channel, but we have also a huge network and our clients use it. We continue modernization and we are getting close to 150 modernized banking outlets and that modernization will be completed this year. We try to maintain the marketing offensive and also presence of the bank at different festivals and cultural events. This is our strategy to get reach of younger clients, which brings very good results.

[Company Representative 2]: There is also a specificity of the increase in customer portfolio. We obtain more than 30% of clients via digital channels. It is twice as much as in similar period last year, which reflects the scale of changes. We shorten the time by 60% for customers. Being close to customers, it is not only digital channel, but we have also a huge network and our clients use it. We continue modernization and we are getting close to 150 modernized banking outlets and that modernization will be completed this year. We try to maintain the marketing offensive and also presence of the bank at different festivals and cultural events. This is our strategy to get reach of younger clients, which brings very good results.

Speaker #1: And being close to customers—it's not only digital channels, but we also have a huge network, and our clients use it. We continue modernization, and we are getting close to 150 modernized banking outlets. Modernization will be completed this year.

Speaker #1: And we try to maintain the marketing offensive and also presence of the bank at different festivals and cultural events to show a strategy to get reach of younger clients, which brings very good results.

Speaker #1: When we look at the second quarter, more than 40% of clients we obtained are persons at the age of not older than 26 years of age.

Speaker #1: So we can see our portfolio, which is getting younger. And we mentioned the insurance line. It is the line which is increasing dynamically. We observe it by looking at the penetration in our client portfolio, but also assets, products, and equity products, and also insurance for children. And there will be new life insurance for rich customers, which helps us in exceeding the growth trajectory which we had assumed.

Szymon Midera: When we look at Q2, more than 40% of clients we obtained are persons at the age of not older than 26 years of age. So we can see our portfolio which is getting younger. We mentioned insurance line and it is the line which is increasing dynamically. We observe it by observing the penetration in our client portfolio, but also assets products and equity products and also insurance for children. There will be new life insurance for rich customers, which helps us in exceeding the growth trajectory which we had assumed. To the goal of PLN 2.4 billion in fee, insurance fees and we envisage. Qualities also. We are in the top three banks concerning this quality because the retail clients are very sensitive to quality and experience and expertise of the bank. One thing shows our strength. This is loans.

[Company Representative 2]: When we look at Q2, more than 40% of clients we obtained are persons at the age of not older than 26 years of age. So we can see our portfolio which is getting younger. We mentioned insurance line and it is the line which is increasing dynamically. We observe it by observing the penetration in our client portfolio, but also assets products and equity products and also insurance for children. There will be new life insurance for rich customers, which helps us in exceeding the growth trajectory which we had assumed. To the goal of PLN 2.4 billion in fee, insurance fees and we envisage. Qualities also. We are in the top three banks concerning this quality because the retail clients are very sensitive to quality and experience and expertise of the bank. One thing shows our strength. This is loans.

Speaker #1: To the goal of 2.4 billion in insurance fees, which we envisage. And in terms of quality, we are also in the top three banks concerning this quality, because retail clients are very sensitive to quality, experience, and expertise of the bank.

Speaker #1: And one thing shows our strength—this is loans. More and more clients choose PKO BP as their partner. We have set about growth levels of more than 15% in new sales—almost 40%.

Speaker #1: Forty percent is what allows us to exceed 25% in markets and share in customer loans. It is yet another quarter in sequence. We belong to the banks whose priority is to attain.

Szymon Midera: More and more clients choose PKO Bank Polski as their partner. We have said about growth levels more than 15%, new sales was almost 40%, what allows us to exceed 25% in market share in consumer loans. It is yet another quarter in a sequence. We belong to the banks whose priority is to attain this strategic goal, strategic assumptions. The issue of model we operate in, we created several unique solutions which allow us to select very well the customer needs after we discuss it with clients and we had more than 600,000 meetings with clients, which translated to more than 100,000 sales meetings. You can see the scale and how we create the relationships with clients, which translates to the increases.

[Company Representative 2]: More and more clients choose PKO Bank Polski as their partner. We have said about growth levels more than 15%, new sales was almost 40%, what allows us to exceed 25% in market share in consumer loans. It is yet another quarter in a sequence. We belong to the banks whose priority is to attain this strategic goal, strategic assumptions. The issue of model we operate in, we created several unique solutions which allow us to select very well the customer needs after we discuss it with clients and we had more than 600,000 meetings with clients, which translated to more than 100,000 sales meetings. You can see the scale and how we create the relationships with clients, which translates to the increases.

Speaker #1: Is the strategic goal strategic? Options and the issue of the model we operate in—we created several unique solutions which allow us to select very specifically the customer needs after we discuss it with clients, and we had got more than—

Speaker #1: 600,000 meetings with clients, which translated to more than 100,000 sales meetings. You can see the scale and how we create relationships with clients.

Speaker #1: Which translates to the increase. And concerning mortgage loans, we really want to provide loans for the real needs of our clients. Focus on refinancing, because refinancing was limited.

Speaker #1: About 15% of production, and it is 25% for the market. So you can see the difference and our attention, which we pay to the real needs of clients.

Szymon Midera: Concerning mortgage loans, we really want to provide loans for real needs of our clients, not to focus on refinancing, because refinancing was limited to about 15% of production, and it is 25% for the market. So you can see the difference and our attention, which we pay to the real needs of clients. The mortgages, 30% of mortgage loans of applications come to us in a digital form, which is a very significant increase. We would like to go beyond 80%, and we hope that these levels are very realistic. Our growth does not result from the scale, but from all the focus and commitment of all the employees to be close to the customers, to use all the possibilities and capacities to have it very well coordinated just to have these figures increase. Thank you very much, Tomek.

[Company Representative 2]: Concerning mortgage loans, we really want to provide loans for real needs of our clients, not to focus on refinancing, because refinancing was limited to about 15% of production, and it is 25% for the market. So you can see the difference and our attention, which we pay to the real needs of clients. The mortgages, 30% of mortgage loans of applications come to us in a digital form, which is a very significant increase. We would like to go beyond 80%, and we hope that these levels are very realistic. Our growth does not result from the scale, but from all the focus and commitment of all the employees to be close to the customers, to use all the possibilities and capacities to have it very well coordinated just to have these figures increase. Thank you very much, Tomek.

Speaker #1: And mortgages—30% of mortgage loan applications come to us in a digital form, which is a very significant, concrete increase. We would like to go beyond 80%, and we hope that these levels are very realistic.

Speaker #1: And our growth does not result from the scale, but from all the focus and commitment of all the employees to be close to the customers, to use all the possibilities and capacities, to have it very well coordinated, just to have this biggest increase.

Speaker #1: Thank you very much, Tomek. And about corporates. About corporates, we want to stand on two pillars and to develop also corporates' parts very dynamically.

Speaker #1: And after many quarters, we have attained very high increases in business, especially in financing. The first quarter of this year was the first moment when we attained a two-digit increase—11%. And now, on the whole portfolio within all the financing, 12.5%, but in corporate loans...

Szymon Midera: About corporate area, we want to stand on two pillars to develop corporate part very dynamically. After many quarters, we have attained very high increases in business, especially in financing. Q1 of this year was the first moment when we attained the two-digit increase, 11%. Now on the whole portfolio, within all the financing, 12.5%. In corporate loans, we attained almost 15% dynamics, of which we are very happy, which allows us to increase market share by more than 10 basis points. Not the figures per se are important, but the change of structure of financing. We share the data for the very first time. Please look at this slide. We show the increase in investment loans.

[Company Representative 2]: About corporate area, we want to stand on two pillars to develop corporate part very dynamically. After many quarters, we have attained very high increases in business, especially in financing. Q1 of this year was the first moment when we attained the two-digit increase, 11%. Now on the whole portfolio, within all the financing, 12.5%. In corporate loans, we attained almost 15% dynamics, of which we are very happy, which allows us to increase market share by more than 10 basis points. Not the figures per se are important, but the change of structure of financing. We share the data for the very first time. Please look at this slide. We show the increase in investment loans.

Speaker #1: We attained almost 15% dynamics, of which we are very happy, and which allows us to increase the market share by more than 10 basis points. But not the figures per se are important, but the change of structure of financing. We share the data for the very first time.

Speaker #1: Please look at this slide. We show the increase in investment loans. In all the key segments of corporate clients, we have got a high increase of investment loans, which we are very happy about because it means that the enterprises associated with—

Speaker #1: Start investing in their future. They believe in their future. They have presented their business plans, and they hope for profits—and 30%. Dynamics in investment loans in huge companies.

Szymon Midera: In all the key segments of corporate clients, we have got a high increase of investment loans, of which we are very happy because it means that the enterprises associated will start investing in their future. They believe in their future. They have presented their business plans, and they hope for profits. 30% dynamics in investment loans in huge companies of 11% in largest companies, almost 25% in budgetary sector, the units of local authorities. Every quarter, we show huge corporate transactions. I think that you can draw just one conclusion. It shows high quality of our customers and very profound diversification. We are a very active player if the key investment waves are concerned, starting with energy transformations. That much about business. Krzysztof, the floor is yours. Thank you very much.

[Company Representative 2]: In all the key segments of corporate clients, we have got a high increase of investment loans, of which we are very happy because it means that the enterprises associated will start investing in their future. They believe in their future. They have presented their business plans, and they hope for profits. 30% dynamics in investment loans in huge companies of 11% in largest companies, almost 25% in budgetary sector, the units of local authorities. Every quarter, we show huge corporate transactions. I think that you can draw just one conclusion. It shows high quality of our customers and very profound diversification. We are a very active player if the key investment waves are concerned, starting with energy transformations. That much about business. Krzysztof, the floor is yours. Thank you very much.

Speaker #1: Of 11% in largest companies, almost 25% in the budgetary sector—the units of local authorities. And every quarter, we show huge corporate transactions, and I think that you can draw just one conclusion.

Speaker #1: It shows the high quality of our customers and very profound diversification. We are a very active player as far as the key investment waves are concerned, starting with energy transformations, and that much about business.

Speaker #1: Krzysztof, the floor is yours. Thank you very much, Szymon. At the beginning of our term of office, we promised you predictability and repeatability of results. And with pleasure, we present the results, which are sustainable first and foremost.

Speaker #1: It is repeatable and healthy, very solid, and in this quarter it was 2 billion 770 million, which is 4% beyond year to year. And let us remember that this dynamics must be analyzed from the perspective of higher tax burden, and we are 30% CIT and other tax burdens—banking tax, which burdened in last year.

Szymon Midera: At the beginning of our term of office, we promised you predictability and repeatability of results. With pleasure, we present the result which is sustainable, first and foremost. It is repeatable and healthy, very solid. In this quarter, it was 2,770,000, which is 4% beyond year to year. Let us remember that this dynamics must be analyzed from the perspective of higher tax burden. We are 30% CIT and other tax burdens. Banking tax, which also burdened in last year, 53 basis points. This year it is 63 basis points. The higher rate of CIT translates to real burden with banking tax. In such conditions, we have been able to compensate the diminished net profit, which was deteriorated with drop in the margin. You can see that margin was lowered by less than percent. The decrease in interest rates, 200% year to year.

[Company Representative 2]: At the beginning of our term of office, we promised you predictability and repeatability of results. With pleasure, we present the result which is sustainable, first and foremost. It is repeatable and healthy, very solid. In this quarter, it was 2,770,000, which is 4% beyond year to year. Let us remember that this dynamics must be analyzed from the perspective of higher tax burden. We are 30% CIT and other tax burdens. Banking tax, which also burdened in last year, 53 basis points. This year it is 63 basis points. The higher rate of CIT translates to real burden with banking tax. In such conditions, we have been able to compensate the diminished net profit, which was deteriorated with drop in the margin. You can see that margin was lowered by less than percent. The decrease in interest rates, 200% year to year.

Speaker #1: 53 base points this year; it is 63 base points. So, a higher rate of CIT translates to a real burden with the banking tax, and in such conditions, we have been able to compensate the diminished net profit, which was deteriorated by the margin drop in the margin.

Speaker #1: You can see that margin, but margin was lowered by less than 1 percent. The decrease in interest rates was 200% year to year, almost. So we can observe the result of the increase of volumes—the loan volumes Tomasz has and Szymon have mentioned that.

Speaker #1: And also, liquidity is increasing and deposit volumes, and also in bonds, the profitability of bonds is also of importance. This contributes to good results.

Szymon Midera: Almost. We can observe the result of increase of volumes, the loan volumes. Tomasz and Szymon have mentioned that. Liquidity is increasing and deposit volumes and also in bonds. The profitability of bonds is also of importance. They contribute a good result. We are able to stabilize the results and also lower cost of risk associated with foreign currency loans. We have got very high cost discipline. All of these contributed to the Q1 ROE was the low 18%, but we got back to the strategic corridor of our level 18+. I would like to thank the banking team and our clients, of course, for the fact that the results are obtained jointly. What's very important is stable business income from business results, business activity.

[Company Representative 2]: Almost. We can observe the result of increase of volumes, the loan volumes. Tomasz and Szymon have mentioned that. Liquidity is increasing and deposit volumes and also in bonds. The profitability of bonds is also of importance. They contribute a good result. We are able to stabilize the results and also lower cost of risk associated with foreign currency loans. We have got very high cost discipline. All of these contributed to the Q1 ROE was the low 18%, but we got back to the strategic corridor of our level 18+. I would like to thank the banking team and our clients, of course, for the fact that the results are obtained jointly. What's very important is stable business income from business results, business activity.

Speaker #1: So, we are able to stabilize the results and also lower the cost of risk associated with foreign currency loans. We have got very high cost discipline, and also all of these contributed to the first quarter ROE being below 18%, but we got back to the strategic corridor of our level—our level 18 plus.

Speaker #1: So, I would like to thank the banking team and our clients, of course, for the fact that the results are obtained jointly. And that was very important.

Speaker #1: It's stable business income, from business results, business activity. When we look at corrections—single corrections—you can see that in the first quarter, the results of estimations of income impressed income from cost of loans.

Speaker #1: From SUE conclusion, and if it was not the SUE, well, the efficiency interest rate. But when we made corrections, we did it at one time.

Szymon Midera: When we look at corrections, single corrections, you can see that in Q1, the result of estimations of interest income from costs of loans from SOE conclusion. If it was not the SOE, well, they have efficient interest rate, but when we made corrections, we did it in one time. So we took the old percentages and the results for Q2. If we did not include that, the increase of margin would be very stable, and stable interest results. We need to emphasize that. If the second one-off is concerned, one-off event, it is not a unique situation for us because the events are associated with the protection of consumers. We are addressing that on an ongoing basis, and also last year we did that.

[Company Representative 2]: When we look at corrections, single corrections, you can see that in Q1, the result of estimations of interest income from costs of loans from SOE conclusion. If it was not the SOE, well, they have efficient interest rate, but when we made corrections, we did it in one time. So we took the old percentages and the results for Q2. If we did not include that, the increase of margin would be very stable, and stable interest results. We need to emphasize that. If the second one-off is concerned, one-off event, it is not a unique situation for us because the events are associated with the protection of consumers. We are addressing that on an ongoing basis, and also last year we did that.

Speaker #1: So, we took all the percentages and the results for the second quarter. If we did not include that, the increase of margin would be very, very stable, and stable interest results.

Speaker #1: We need to emphasize that. And if the second quarter is concerned, one-off events—it's not a unique situation for us, because the events associated with protection of consumers, we are addressing that on an ongoing basis, and also last year we did that.

Speaker #1: But we decided for the second quarter, 321 was the amount allocated to the reserve, for protection of clients and in case of potential risks.

Speaker #1: As regards the interest, please note that for the first two quarters without presenting this adjustment, as per the European Court verdict, it would grow by four basis points, which is quite a lot.

Szymon Midera: We decided for Q2, PLN 321 million that was the amount allocated to the reserve for protection of clients in case of potential risks.

[Company Representative 2]: We decided for Q2, PLN 321 million that was the amount allocated to the reserve for protection of clients in case of potential risks.

Speaker #1: Year on year, on the left-hand side, you can see a decline by a little more than 50 basis points, down to the adjusted level.

Krzysztof Dresler (PKO Bank Pol: As regards the interest results, please note the first two quarters. Without presenting this adjustment after the European Court of Justice verdict, it would grow by 4 basis points, which is quite a lot year on year. On the left-hand side, you can see a decline by little more than 50 basis points down to the adjusted levels. We had a greater decline in interest rates, which proves that this bank is pretty resilient to such changes. We have done a lot of measures in this field. Natural hedging was involved. The cash mortgage loans, the fixed interest rate portfolio and IRS and swaps. As regards the second main category of these core incomes as the commissions and charges, it is the high dynamics year on year. This dynamics in each line, it was positive.

[Company Representative 1]: As regards the interest results, please note the first two quarters. Without presenting this adjustment after the European Court of Justice verdict, it would grow by 4 basis points, which is quite a lot year on year. On the left-hand side, you can see a decline by little more than 50 basis points down to the adjusted levels. We had a greater decline in interest rates, which proves that this bank is pretty resilient to such changes. We have done a lot of measures in this field. Natural hedging was involved. The cash mortgage loans, the fixed interest rate portfolio and IRS and swaps. As regards the second main category of these core incomes as the commissions and charges, it is the high dynamics year on year. This dynamics in each line, it was positive.

Speaker #1: But we had a greater decline in interest rates, which proves that this bank is better resilient to such changes. We've done a lot of measures in this field; natural hedging was involved.

Speaker #1: The cash mortgage loans fixed interest rate portfolio, and higher, and swaps. As regards the second main category of this core income, it's the commissions and charges. It's high dynamics year on year.

Speaker #1: And this dynamic in each line was positive. Especially, we are glad to see that our customers are more and more using this income to secure their future.

Speaker #1: Brokerage investment funds gained for us 25% year on year. And each other line year on year we can see the transactional growth, which makes us happy, because apart from the interest results, the commissions are also significant. And we have to be prepared for the convergence of interest rates to those which are now seen in the EU. Next.

Krzysztof Dresler (PKO Bank Pol: Especially, we are glad to see that our customers are more and more using these incomes into securing their future. Brokerage investment funds, they gained us to about 25% year on year. In each other line year on year, we can see a transactional growth, which makes us happy because apart from the interest results, the commissions are also significant, and we have to be prepared for the convergence of interest rates to those which are now seen in the EU. Next year, it may go down, the central banks rate may go down very strongly. So we will continue to converge the interest margin. That has to be addressed somehow.

[Company Representative 1]: Especially, we are glad to see that our customers are more and more using these incomes into securing their future. Brokerage investment funds, they gained us to about 25% year on year. In each other line year on year, we can see a transactional growth, which makes us happy because apart from the interest results, the commissions are also significant, and we have to be prepared for the convergence of interest rates to those which are now seen in the EU. Next year, it may go down, the central banks rate may go down very strongly. So we will continue to converge the interest margin. That has to be addressed somehow.

Speaker #1: It may go down—the central bank's rate may go down very strongly. So we will continue to converge, converge the interest margin. So that has to be, has to be.

Speaker #1: Addressed somehow. As regards the results, well, we have already mentioned and we are continuing the dual policy, meaning the high discipline in the current cost control, but all the time we are also making.

Krzysztof Dresler (PKO Bank Pol: Well, we have already mentioned, and we are continuing the dual policy, meaning the high discipline in the cost control. Current cost control, but at the time we are also maintaining high costs on development, and we could maintain the dynamics of our operations. We stress that in this environment we have results. These are not so tell-telling for the whole year. We keep stressing that this mid-single digit dynamics is what we have, and a little bit over inflation. So I am happy to say that we have managed to keep the cost discipline owing to which the cost-income ratio is about 31.6% in the H1 of the year. This is the result of one of the effects of one-off costs related to the KNF decisions. So the cost income, where we are in the avant-garde of Polish and European banking.

Speaker #1: A high cost on development. And we could maintain the dynamics of our operations. We stress that in this environment, when we have the results.

[Company Representative 1]: Well, we have already mentioned, and we are continuing the dual policy, meaning the high discipline in the cost control. Current cost control, but at the time we are also maintaining high costs on development, and we could maintain the dynamics of our operations. We stress that in this environment we have results. These are not so tell-telling for the whole year. We keep stressing that this mid-single digit dynamics is what we have, and a little bit over inflation. So I am happy to say that we have managed to keep the cost discipline owing to which the cost-income ratio is about 31.6% in the H1 of the year. This is the result of one of the effects of one-off costs related to the KNF decisions. So the cost income, where we are in the avant-garde of Polish and European banking.

Speaker #1: These are not so telltale for the whole year. We keep stressing that this mid single digit dynamics is what we have and a little bit over inflation so I'm happy to say that we have managed to keep the cost discipline owing to which the cost income rate is about 31.6 in the first half of the year and this is the result of one of the effect of one of costs related to the KNF decisions.

Speaker #1: So, the cost-income ratio—well, we are in the avant-garde of Polish and European rankings. We are also continuing the very high activity in issuing, which is requiring, so we are trying also to diversify geographically. We started with European issues, but now we will have to think about some other currencies as well. Well, euro is converted into zlotys again at the end.

Krzysztof Dresler (PKO Bank Pol: We are also continuing the very high activity in issuing, as MREL is requiring. So we are trying also to diversify geographically. We started with European issuers. But now we will have to think about some other currencies as well, where euro is converted into zlotys again at the very end. So we could think if the market allows, we could think about that. These two diagrams, these graphs show about the dates of the early redemption. We are also active on buying up these bonds, which are usually call options. This work is not so visible, so noticeable. We meet all the criteria and requirements, and we will continue this. MREL is not only here to watch the capital requirements. But strategically, we have mentioned that we would like to utilize the capital surplus and convert it into the lending operations, and we have done that quite successfully.

[Company Representative 1]: We are also continuing the very high activity in issuing, as MREL is requiring. So we are trying also to diversify geographically. We started with European issuers. But now we will have to think about some other currencies as well, where euro is converted into zlotys again at the very end. So we could think if the market allows, we could think about that. These two diagrams, these graphs show about the dates of the early redemption. We are also active on buying up these bonds, which are usually call options. This work is not so visible, so noticeable. We meet all the criteria and requirements, and we will continue this. MREL is not only here to watch the capital requirements. But strategically, we have mentioned that we would like to utilize the capital surplus and convert it into the lending operations, and we have done that quite successfully.

Speaker #1: So, we could think—if market allows—we could think about these two diagrams, the graphs. Going over the dates of the early redemption, we are also active on buying out bonds, which are usually call options.

Speaker #1: It is also visible, so noticeable. We need only criterion requirements, and we will continue—this policy is not only here to watch the capital requirements, but we strategically have.

Speaker #1: And that we would like to utilize the capital surplus and convert it into the lending operations, and we have done that quite successfully, but we have to get ready for what happens in the future.

Speaker #1: Alignment, because with it, it will not necessarily be as friendly as it used to be. We have included in our plans also the transactions of securitization type. We had the pilot.

Speaker #1: Project last year, and it brought us quite a significant improvement. Now we've done a full-scale transaction, and it changed our results by 27 basis points.

Krzysztof Dresler (PKO Bank Pol: But we have to get ready for what happens in the environment because it will not necessarily be so friendly as it used to be. We have included in our plans also the transactions of securitization type. We had the pilot project last year, and it brought us quite a significant improvement. Now we have done a full-scale transaction, and it changed our results by 27 basis points. So the capital index is usually about 50. That would perhaps mean that we are about to be comparable with other banks, you would have to do twice as much of that securitization. So next year, our capital plan will include this operation. Tier 2 improved us about 75 basis points. It improves our capital adequacy, and as a company that keeps growing, we are also a dividend company, so we do not rule out.

[Company Representative 1]: But we have to get ready for what happens in the environment because it will not necessarily be so friendly as it used to be. We have included in our plans also the transactions of securitization type. We had the pilot project last year, and it brought us quite a significant improvement. Now we have done a full-scale transaction, and it changed our results by 27 basis points. So the capital index is usually about 50. That would perhaps mean that we are about to be comparable with other banks, you would have to do twice as much of that securitization. So next year, our capital plan will include this operation. Tier 2 improved us about 75 basis points. It improves our capital adequacy, and as a company that keeps growing, we are also a dividend company, so we do not rule out.

Speaker #1: So the capital index is usually about 50. That would perhaps mean that we are about to be. To be comparable with other banks, we will have to do twice.

Speaker #1: As much of that securitization. So next year our capital plan will include this operation. Then, Tier 2 improved us by about 75 basis points. It improved our capital adequacy, and as a company that keeps growing, we are also a dividend company.

Speaker #1: So we do not rule out. It's not yet been planned, but we do not rule out any activity on the 81 instruments. This is why our activity is so important—to build the appetite of investors, not only when we need it but also when we can do it.

Speaker #1: So that's all from me, Peter, please. We've been keeping the cost of risk at a stable level, and it's very low—very low—because PKO Bank Polski has shown.

Krzysztof Dresler (PKO Bank Pol: It is not yet been planned, but we do not rule out any activity on the AT1 instruments. So this is why our activity is so important to build the appetite of investors, not only when we need it, but also when we can do it. So that is all from me. Piotr, please. So we have been keeping the cost of risk at a stable level, and it is very low. Very low because PKO Bank Polski has shown its results where the risk cost is the lowest in the whole banking sector at the time when we have very active lending activities and growth in all business segments. The next slide shows that we are maintaining a very good portfolio quality, stable. Stage 2 goes down a little bit because of the higher risk there. There has been a slight growth in Stage 3.

[Company Representative 1]: It is not yet been planned, but we do not rule out any activity on the AT1 instruments. So this is why our activity is so important to build the appetite of investors, not only when we need it, but also when we can do it. So that is all from me. Piotr, please. So we have been keeping the cost of risk at a stable level, and it is very low. Very low because PKO Bank Polski has shown its results where the risk cost is the lowest in the whole banking sector at the time when we have very active lending activities and growth in all business segments. The next slide shows that we are maintaining a very good portfolio quality, stable. Stage 2 goes down a little bit because of the higher risk there. There has been a slight growth in Stage 3.

Speaker #1: Its results, with the risk cost being the lowest in the whole banking sector, came at a time when we had very active lending activities and growth in all business segments.

Speaker #1: The next slide shows that we are maintaining very good portfolio quality—stable. Stage two goes down a little bit because of the slightly higher risk there. There has been a slight growth in stage three; it is because of the identification of the renewable sources portfolio. Since it has been growing very dynamically in recent months, the value of the open projects has almost doubled.

Speaker #1: That dictates the average price. Regarding exclusions, we have identified one customer who was moved to stage three, and we've opened large write-downs for the portfolio.

Krzysztof Dresler (PKO Bank Pol: It is because of the identification of the renewable energy sources portfolio. Since it has been growing very dynamically in the recent months, the value of the open projects has doubled almost, and that dictates the average price and the exclusions. We have identified one customer who was moved to Stage 3, and we have opened large write-downs for the portfolio. The portfolio is less than 1% of the whole bank book. We are more committed to the wind farms, but here we are showing the photovoltaic farms. Our dynamic growth in cash loans is not connected with the higher risk at all. So the write-downs for the consumer loans went down. Well, there was a one-off effect here in both because we have changed our model. But at the next slide, you will see how our models have been reused, how this portfolio is growing.

[Company Representative 1]: It is because of the identification of the renewable energy sources portfolio. Since it has been growing very dynamically in the recent months, the value of the open projects has doubled almost, and that dictates the average price and the exclusions. We have identified one customer who was moved to Stage 3, and we have opened large write-downs for the portfolio. The portfolio is less than 1% of the whole bank book. We are more committed to the wind farms, but here we are showing the photovoltaic farms. Our dynamic growth in cash loans is not connected with the higher risk at all. So the write-downs for the consumer loans went down. Well, there was a one-off effect here in both because we have changed our model. But at the next slide, you will see how our models have been reused, how this portfolio is growing.

Speaker #1: The portfolio is less than 1% of the whole bank book. We are more committed to the wind farms, but here we are showing the photovoltaic farms.

Speaker #1: The dynamic growth in cash loans is not connected with higher risk at all, so the write-downs for consumer loans went down.

Speaker #1: Well, there was a one-off effect here involved because we've changed our model. But on the next slide you will see how our models have been used, how this portfolio is growing. On the right-hand side, you will see for the first time the vintage from certain years, which shows that the population of '20, '24, '26 is the population representing much lower risk than before.

Speaker #1: So, it is quite comfortable, if that doesn't change his mind. This portfolio will probably not generate any higher write-downs. I don't like the next two slides.

Krzysztof Dresler (PKO Bank Pol: On the right-hand side, you will see for the first time the vintage from certain years, which shows that the population of 2024, 2026 is the population representing much lower risk than before. So it is comfortable if Piotr doesn't change his mind, this portfolio will probably not generate any higher write-downs. I don't like the two next slides very much, but they show that the write-downs for the Swiss franc portfolios are going down, and this is probably the last year of the higher write-downs for the currency loans. This slide shows that we continue the trend of signing the agreements with the customers who have gone to the courts. The number of court procedures is going down consistently, so that's our goal to reach a zero level eventually. The last slide shows our capital position, very strong.

[Company Representative 1]: On the right-hand side, you will see for the first time the vintage from certain years, which shows that the population of 2024, 2026 is the population representing much lower risk than before. So it is comfortable if Piotr doesn't change his mind, this portfolio will probably not generate any higher write-downs. I don't like the two next slides very much, but they show that the write-downs for the Swiss franc portfolios are going down, and this is probably the last year of the higher write-downs for the currency loans. This slide shows that we continue the trend of signing the agreements with the customers who have gone to the courts. The number of court procedures is going down consistently, so that's our goal to reach a zero level eventually. The last slide shows our capital position, very strong.

Speaker #1: Very much. But they show that the write downs for the Swiss franc portfolios are going down and this is probably the last year of the higher write downs write downs for the currency currency credits.

Speaker #1: In this slide, it shows that we continue the trend of signing agreements with the customers who have gone to the ports. The number of port procedures is going down consistently.

Speaker #1: So, that's our goal—to reach a zero level. And the last slide shows our capital position is very strong. We have increased our positions in capital results.

Speaker #1: Despite the very dynamically growing lending activity, I want to give my great thanks to all the employees of our bank because it's the work which has...

Speaker #1: Allowed us to reach these results. As you can see, you are growing consistently and comprehensively in all lines, all segments, in a recurrent way.

Krzysztof Dresler (PKO Bank Pol: We have increased our position in capital results despite the very dynamically growing lending activity. Now, I want to give my great thanks to all the employees of our bank, because it's their work which has allowed us to reach these results. As you can see, we are growing consistently and comprehensively in all lines, all segments, in a recurrent way. It's not a one-off success. We have reached the highest growth dynamics on the market. We are growing very quickly, but in a very safe way. Our cost of risk is the lowest on the market. So we are spinning up the growth base. We are gaining thousands of new customers every year. Our credit portfolio is growing. We have two-digit dynamics in all segments, and that is what distinguishes us from the competition. Even more, 25% are in financing private customers.

[Company Representative 1]: We have increased our position in capital results despite the very dynamically growing lending activity. Now, I want to give my great thanks to all the employees of our bank, because it's their work which has allowed us to reach these results. As you can see, we are growing consistently and comprehensively in all lines, all segments, in a recurrent way. It's not a one-off success. We have reached the highest growth dynamics on the market. We are growing very quickly, but in a very safe way. Our cost of risk is the lowest on the market. So we are spinning up the growth base. We are gaining thousands of new customers every year. Our credit portfolio is growing. We have two-digit dynamics in all segments, and that is what distinguishes us from the competition. Even more, 25% are in financing private customers.

Speaker #1: It's not a one-off success. We have reached the highest growth dynamics in the market. We're growing very quickly but in a very safe way.

Speaker #1: Our cost of risk is the lowest on the market, so we are speeding up the growth pace. We are gaining thousands of new customers every year.

Speaker #1: Our credit portfolio is growing. We have double-digit dynamics in all segments, and that is what distinguishes us from the competition. Even more, 25% are in financing private customers.

Speaker #1: So, all that translates into a strong, solid stability of our financial results. We have a very stable financial position, and historically, the highest net profit despite corporate income tax growth and reference rates lower by 200 basis points.

Speaker #1: So, this is a very good forecast for the coming quarters. For the whole year, we do believe that this is going to be the strongest year in terms of the business in all our history.

Krzysztof Dresler (PKO Bank Pol: All that translates into a strong, solid stability of our financial results. We have a very stable financial position, and historically, the highest net profit, despite the corporate income tax growth and the reference rates lowered by 200 basis points. So this is a very good forecast for the coming quarters and the whole year. We do believe that this is going to be the strongest year in terms of the business and all our history. Thank you very much. Please ask your questions now.

[Company Representative 1]: All that translates into a strong, solid stability of our financial results. We have a very stable financial position, and historically, the highest net profit, despite the corporate income tax growth and the reference rates lowered by 200 basis points. So this is a very good forecast for the coming quarters and the whole year. We do believe that this is going to be the strongest year in terms of the business and all our history. Thank you very much. Please ask your questions now.

Speaker #1: Thank you very much. Please ask your questions now. Congratulations, first of all. Congratulations on this excellent result. Thank you very much for your detailed presentation.

Speaker #1: I just have one question about these 320 million. Because to protect the consumers, could you perhaps elaborate on what type of provisions you've made for what type of risks?

Speaker #1: We deliberately didn't specifically say, or that you know, what types of litigations and disputes customers are going on in every bank. The number of that has grown quite recently.

Szymon Midera: Andrzej Powierza, Citi Handlowy.

Andrzej Powierża: Andrzej Powierza, Citi Handlowy.

Andrzej Powierza: Andrzej Powierza, Citi Handlowy. Congratulations, first of all. Congratulations on this excellent result. Thank you very much for your detailed presentation. I just have one question about this 320 million cost to protect the consumers. Could you perhaps elaborate on that? What type of provisions you've made for what type of risks? We deliberately didn't specifically say on that. More types of litigations and disputes with customers are going on in every bank. The number of that has grown quite recently. We are definitely on the safe side here. In Poland, there is some revaluing of the approach to banking from just expecting, waiting for applications up to more active approach to the customer. We are not expecting the materialization on such a scale as the provisions made. After the European Court verdict, we've reflected those interest rates.

Andrzej Powierża: Andrzej Powierza, Citi Handlowy. Congratulations, first of all. Congratulations on this excellent result. Thank you very much for your detailed presentation. I just have one question about this 320 million cost to protect the consumers. Could you perhaps elaborate on that? What type of provisions you've made for what type of risks?

Speaker #1: We are definitely on the safe side here. In Poland, there is some revaluing of the approach to banking—from just expecting and waiting for applications, to a more active approach to the customer.

[Company Representative 1]: We deliberately didn't specifically say on that. More types of litigations and disputes with customers are going on in every bank. The number of that has grown quite recently. We are definitely on the safe side here. In Poland, there is some revaluing of the approach to banking from just expecting, waiting for applications up to more active approach to the customer. We are not expecting the materialization on such a scale as the provisions made. After the European Court verdict, we've reflected those interest rates.

Speaker #1: So we are not expecting the materialization in such on such a scale as the provisions made. We have after the European court verdict we've reflected those interest rates now we expect some homogeneous uniform position some legal framework to be provided in Poland.

Speaker #1: This is a process. Banks watch it. Other banks actively take part in this process. So, we also have some opinion on how these things should go on.

Speaker #1: But certainly, there can be many different developments involved. From the viewpoint of an auditor, the level of importance of that is much higher than the actual amount.

Krzysztof Dresler (PKO Bank Pol: Now we expect some homogeneous uniform position, some legal framework to be provided in Poland. This is a process. Banks watch it. Other banks actively take part in this process. We also have some opinion on how these things should go on. Certainly, there can be many different developments involved. From the viewpoint of an auditor, the level of importance of that is much higher than the actual amount. We've got a model. We are analyzing the numbers. We make provisions. That does not mean that we have exactly the same opinion on materialization of this risk equal to this amount. Two more questions. If I understand you well, this 173, it's just the interest on the future interest taken out all that we would earn on credited commissions.

[Company Representative 1]: Now we expect some homogeneous uniform position, some legal framework to be provided in Poland. This is a process. Banks watch it. Other banks actively take part in this process. We also have some opinion on how these things should go on. Certainly, there can be many different developments involved. From the viewpoint of an auditor, the level of importance of that is much higher than the actual amount. We've got a model. We are analyzing the numbers. We make provisions. That does not mean that we have exactly the same opinion on materialization of this risk equal to this amount. Two more questions. If I understand you well, this 173, it's just the interest on the future interest taken out all that we would earn on credited commissions.

Speaker #1: So we've got a model, we are analyzing the numbers, we make provisions, but that does not mean that we have exactly the same opinion on the materialization of this risk as equal to this amount.

Speaker #1: Two more questions. If I understand you well, this 170, 173—it's just interest on the future interest taken out, all that we would earn on credited commissions if we do not sell these loans for two years. Now, but there is some...

Speaker #1: Dialogue not more than 10% of this. Amount was just introduced as an adjustment. Just once have you made any provisions on potential complaints from the customers related to the interest? Interest?

Speaker #1: Once again, we are very closely watching and analyzing this European court's verdict. It said that you cannot take the interest, but you calculate that in a wrong way.

Krzysztof Dresler (PKO Bank Pol: We do not sell these loans for 2 years now, but there is some backlog, not more than 10%. This amount was just introduced as an adjustment just once. Have you made any provision for potential complaints from the customers related to the interest in future? Once again, we are very closely watching and analyzing this European Court's verdict. It's not that you cannot take the interest, but you calculate that in the wrong way. You can reach this level that we have reached so far, but you have to calculate it in another way. Simply speaking, because we've calculated this interest on all of the components of this amount, but we should do it separately and then divide it by the loan itself without other instruments involved.

[Company Representative 1]: We do not sell these loans for 2 years now, but there is some backlog, not more than 10%. This amount was just introduced as an adjustment just once.

Speaker #1: So you can reach this level that we have. The reach so far. But you have to calculate it in another way. It will simply speaking because this we calculated these interest on all of the components of this amount but we should do it separately again divide by the loan itself without other instruments involved.

Andrzej Powierża: Have you made any provision for potential complaints from the customers related to the interest in future?

[Company Representative 1]: Once again, we are very closely watching and analyzing this European Court's verdict. It's not that you cannot take the interest, but you calculate that in the wrong way. You can reach this level that we have reached so far, but you have to calculate it in another way. Simply speaking, because we've calculated this interest on all of the components of this amount, but we should do it separately and then divide it by the loan itself without other instruments involved.

Speaker #1: And, simply speaking, the interest rate on the loan would be a little bit higher in relation to what it is now. But the result for the customer would be zero, because the customer would pay exactly the same.

Speaker #1: So that is what, actually, the European court's verdict says. Of course, there are some attempts to interpret it in another way. Of course, we are living in a country with a higher legislation risk.

Speaker #1: We are prepared for that. We are paying much attention, and we allocate a lot of resources to build this shield that protects the customers.

Krzysztof Dresler (PKO Bank Pol: Simply speaking, the interest rate on the loan would be a little bit higher in relation to what it is now. But the result for the customer would be zero because the customer would pay exactly the same. That is what actually the European Court of Justice's verdict says. Of course, there are some attempts to interpret this in another way, but of course, we are living in a country of a higher legislation risk. We are prepared for that. We are paying much attention, and we allocate a lot of resources to build this shield that protects the customers. You may know this way of calculation. If you calculate back the provisions made for the Swiss franc loans, what would the margin have to be if we wanted to earn? We would then be at the level of one-digit numbers.

[Company Representative 1]: Simply speaking, the interest rate on the loan would be a little bit higher in relation to what it is now. But the result for the customer would be zero because the customer would pay exactly the same. That is what actually the European Court of Justice's verdict says. Of course, there are some attempts to interpret this in another way, but of course, we are living in a country of a higher legislation risk. We are prepared for that. We are paying much attention, and we allocate a lot of resources to build this shield that protects the customers. You may know this way of calculation. If you calculate back the provisions made for the Swiss franc loans, what would the margin have to be if we wanted to earn? We would then be at the level of one-digit numbers.

Speaker #1: You may know this way of calculation. If you calculate back the provisions made for the Swiss franc loans, what would the margin have to be if we wanted to earn?

Speaker #1: We would then be at the level of single-digit numbers. So, this is not that we are marching on and clearing the history every so often, but we have to realize that there is some type of proportionality, and some economic justification for what we do.

Speaker #1: And it is important where the legal framework will evolve for different businesses. But we are not doing it for ourselves; we do it for our customers.

Speaker #1: We give them financing not because we have plans, not because our customers have the plans. They take loans from our bank and we are here to give it to them.

Krzysztof Dresler (PKO Bank Pol: This is not that we are marching on and clear the history every some time. But we have to realize that there is some type of proportionality and some economic justification for that we do. It is important where the legal framework will evolve for different businesses. But we are not doing it for ourselves. We do it for our customers. We give them financing, not because we have plans, but because our customers have their plans, and they take loans from our bank, and we are here to give it to them. But we do not do it from our money. We use deposit money for that. Our task is to protect the deposits. This is the context of the whole situation. It is not just that we calculate some number, but we evaluate very closely and carefully every complaint.

[Company Representative 1]: This is not that we are marching on and clear the history every some time. But we have to realize that there is some type of proportionality and some economic justification for that we do. It is important where the legal framework will evolve for different businesses. But we are not doing it for ourselves. We do it for our customers. We give them financing, not because we have plans, but because our customers have their plans, and they take loans from our bank, and we are here to give it to them. But we do not do it from our money. We use deposit money for that. Our task is to protect the deposits. This is the context of the whole situation. It is not just that we calculate some number, but we evaluate very closely and carefully every complaint.

Speaker #1: But we don't do it with our own money. We use deposit money for that. So our task is to protect the deposits. This is the context of the whole situation.

Speaker #1: It's not just that we calculate some number, but we evaluate very closely and carefully every complaint. But it is important in which direction the sector will move.

Speaker #1: Congratulations on your results and volumes. Yes? What about the volumes now? For the first time in such a long time, you have the biggest bank that is driving certain trends in Poland.

Krzysztof Dresler (PKO Bank Pol: But it is important which direction all this sector will move.

[Company Representative 1]: But it is important which direction all this sector will move.

Speaker #1: So how do you look at the four to six quarters ahead? Can you keep this, and do you think that the whole sector may do the same and surprise you?

Szymon Midera: Sektora w konsekwencji, a także bezpieczeństwa i firm pierwszej linii.

[Company Representative 1]: Sektora w konsekwencji, a także bezpieczeństwa i firm pierwszej linii.

Piotr Wałek: Piotr Wałek, Insignis. Congratulations on your results and volumes.

Piotr Wałek: Piotr Wałek, Insignis. Congratulations on your results and volumes.

Speaker #1: Especially that the recent interest rate reductions have supported lending. Yes, we do hope it will be so. The dynamics are very close to 10. We are happy that we are the first bank in Poland to open the new cycle of market growth.

Piotr Wałek: Chciałbym się zapytać właśnie o te wolumeny.

Piotr Wałek: Chciałbym się zapytać właśnie o te wolumeny.

Szymon Midera: What about the volumes now? For the first time in such a long time you have the biggest bank. Just makes certain trends in Poland. How do you look at the 4, 6 quarters ahead? Can you keep this pace? Do you think that the whole sector may do the same and surprise you in the coming quarters? Especially that the interest rates reductions, recent ones, supported the lending. Yes, we do hope it will be so. The dynamics very close to 10. We are happy that we are the first bank in Poland to open the new cycle of market growth. A year and a half ago, we planned this strategy of such growth. Then we were followed by others. That is thanks to the very hard work at all levels and in all lines and marketing.

Piotr Wałek: What about the volumes now? For the first time in such a long time you have the biggest bank. Just makes certain trends in Poland. How do you look at the 4, 6 quarters ahead? Can you keep this pace? Do you think that the whole sector may do the same and surprise you in the coming quarters? Especially that the interest rates reductions, recent ones, supported the lending.

Speaker #1: A year and a half ago, we planned this strategy of such growth. We then were followed by others. That is thanks to the very hard work at all levels and in all lines. In marketing, we've started the first marketing operations for the corporate bank a year ago.

[Company Representative 1]: Yes, we do hope it will be so. The dynamics very close to 10. We are happy that we are the first bank in Poland to open the new cycle of market growth. A year and a half ago, we planned this strategy of such growth. Then we were followed by others. That is thanks to the very hard work at all levels and in all lines and marketing.

Speaker #1: Today, our marketing plan consists of a dozen or so components that we are using for all the marketing and sales operations. So, the market definitely helps us, but we are also doing a lot of organic work to keep developing faster than our rivals.

Speaker #1: For the first time, I'm glad to say that we have a higher dynamic of growth in credits than in deposits. Of course, we want to keep this dynamic.

Szymon Midera: We started the first marketing operations for the corporate banking a year ago. Today, our marketing plan consists of a dozen or so of components that we are trying to do all the marketing and sales operations. The market definitely helps us, but we are also doing a lot of organic work to keep developing faster than our rivals. For the first time, I am glad to say that we have a higher dynamics of growth in credits than in deposits. Of course, we want to keep this dynamic. In the coming quarters, the rest of the year, we are not worried. Our macro perspective, the lending action is one of the source of creation of money that is deposits. But there are two more elements here.

[Company Representative 1]: We started the first marketing operations for the corporate banking a year ago. Today, our marketing plan consists of a dozen or so of components that we are trying to do all the marketing and sales operations. The market definitely helps us, but we are also doing a lot of organic work to keep developing faster than our rivals. For the first time, I am glad to say that we have a higher dynamics of growth in credits than in deposits. Of course, we want to keep this dynamic. In the coming quarters, the rest of the year, we are not worried. Our macro perspective, the lending action is one of the source of creation of money that is deposits. But there are two more elements here.

Speaker #1: In the coming quarters, the rest of the year, we are not worried. The lending action is one of the sources of creation of money, that is, deposits.

Speaker #1: But two more elements here. So, when you look at them—all of them—the main three sources of creating money, we should not expect any rapid growth.

Speaker #1: In the relation between credits and deposits, we would rather expect stability, perhaps a slight growth. So there is certainly no limit to our lending action.

Speaker #1: Sixty-three percent. Down to the depot. Well, this is the case. What about the conservative prognosis? Is the upside focus two-digit volume growth for the next year?

Szymon Midera: When you look at them all of them, the main three sources of creating money, we should not expect any rapid growth of the relation in the credits and deposits. We rather expect the stability, perhaps a slight growth. There is certainly no limit to our lending action. Yes, 63% loan to deposit. Well, this is the case. What about the conservative prognosis? Is the upside forecast for two-digit volume growth for the next year? I didn't stress that so far. Our prognosis, macro and by volumes, especially the credits. Deposits are also. We consider it as lightly conservative, and we see the point when there is no materialization of the risk factors. If they do not materialize, then the growth, the economic growth, and even more the volume growth will be higher than it is now in our base scenario.

[Company Representative 1]: When you look at them all of them, the main three sources of creating money, we should not expect any rapid growth of the relation in the credits and deposits. We rather expect the stability, perhaps a slight growth. There is certainly no limit to our lending action. Yes, 63% loan to deposit. Well, this is the case.

Speaker #1: We didn’t stress that so far, our prognosis—macro and by volumes, especially the credits and deposits—we also consider it as rightly conservative.

Speaker #1: And we see the points when there is no materialization of the risk factors, but if they do not materialize, then the growth, the economic growth, and even more, the volume growth, will be higher than it is now in our base scenario.

Piotr Wałek: What about the conservative prognosis? Is the upside forecast for two-digit volume growth for the next year?

[Company Representative 1]: I didn't stress that so far. Our prognosis, macro and by volumes, especially the credits. Deposits are also. We consider it as lightly conservative, and we see the point when there is no materialization of the risk factors. If they do not materialize, then the growth, the economic growth, and even more the volume growth will be higher than it is now in our base scenario.

Speaker #1: So that's—we see this balance of the factors. Any potential goals that might change the results—we are not speculating on that much, but we definitely stress it in our communication that we do want to be more active, especially.

Speaker #1: Website Poland we can see that strong need to go by Europeans. Not that we will build new branches or representations, we follow our corporate strategy. So we would like to start building at least the first footholds in European countries, and also we'd like to consolidate the market.

Piotr Wałek: That's how we see this balance of the factors. Now, M&A in the region. Any potential goals that might change the results? We are not speculating on that much, but we definitely stress it in our communication that we do want to be more active, especially outside Poland. We can see a strong need to grow pan-European. We will build new branches, representations. We follow our corporate growth. We would like to start building at least the first footholds in European countries. Also we want to consolidate the market. You have to take care of that development. The market situation certainly is a good time for acquisitions. Do you think that you might perhaps do something about that in the south, perhaps? Are you interested in any acquisitions or you're not yet-

[Company Representative 1]: That's how we see this balance of the factors.

Piotr Wałek: Now, M&A in the region. Any potential goals that might change the results?

Speaker #1: You have to take care of that development. The market situations are such that this is a good time for decisions. Do you think that you might perhaps do something about that in the south, perhaps?

[Company Representative 1]: We are not speculating on that much, but we definitely stress it in our communication that we do want to be more active, especially outside Poland. We can see a strong need to grow pan-European. We will build new branches, representations. We follow our corporate growth. We would like to start building at least the first footholds in European countries. Also we want to consolidate the market. You have to take care of that development. The market situation certainly is a good time for acquisitions.

Speaker #1: Are you interested in any acquisitions, or not yet? We don't want to speculate in this area because it does not, you know, have a point, but it should be an integral part of strategy.

Speaker #1: It should support the development strategy, and it should not be implemented just for itself. So, provoked by this answer, I have got yet another question.

Speaker #1: So, should we understand that—how the bank would be interested in retail banking or corporate banking in their places abroad? Because the strategy can be understood, you know, because the retail sector is stronger within the country.

Piotr Wałek: Do you think that you might perhaps do something about that in the south, perhaps? Are you interested in any acquisitions or you're not yet-

Szymon Midera: We don't want to speculate in this area because it does not have a point. But it should be an integral part of strategy. It should support development strategy, and it should not be implemented just for itself. Prevailed by this answer, I have got yet another question. Should we understand that if the bank would be interested in retail banking or corporate banking in their places abroad? Because the strategy can be understood, because retail sector is stronger within the country. This is the basic DNA of PKO BP Bank. The concept of growing with Polish companies abroad. Yes, this is what we are doing because we have accelerated creating these transborder competencies, and we want to develop our branches outside. We will review our military forces.

[Company Representative 2]: We don't want to speculate in this area because it does not have a point. But it should be an integral part of strategy. It should support development strategy, and it should not be implemented just for itself. Prevailed by this answer, I have got yet another question. Should we understand that if the bank would be interested in retail banking or corporate banking in their places abroad? Because the strategy can be understood, because retail sector is stronger within the country. This is the basic DNA of PKO BP Bank. The concept of growing with Polish companies abroad. Yes, this is what we are doing because we have accelerated creating these transborder competencies, and we want to develop our branches outside. We will review our military forces.

Speaker #1: This is the basic DNA of PKO BP, but the concept is growing with Polish companies abroad. So yes, this is what we are doing, because we have accelerated creating these transborder competences, and we want to develop our branches outside.

Speaker #1: We will review our military forces. We have got a new member of the board for international banking, and we try to elaborate the diagnosis. And then build the structure for development—organic development—of our activities for corporates, for business clients, and we want to adjust business strategies to markets.

Speaker #1: We plan to enter, and Andre, it is top priority, whatever. Concerns about non-organic development are just mere speculation. We just focus on organic development.

Speaker #1: Well, and this is what we keep focusing on. It does not change. Being the largest institution in this part of Europe, we have got a team which professionally analyzes all types of scenarios, and we analyze the perspectives—what it means to us, what it means to our development and potential acceleration of our strategy, filling the gaps, and what it means if a prospective target is taken over by someone else, our competitor, for example.

Szymon Midera: We have got new member of the board for international banking, and we try to elaborate the diagnosis and then build the structure for organic development of our activities for corporates, for business clients as we want to adjust business strategies to markets we plan to enter. Andrzej, it is top priority. Whatever concerns non-organic development is just mere speculation. We just focus on organic development. Well, and this is what we keep focusing on. It does not change. Being the largest institution in this part of Europe, we have a team which professionally analyzes all types of scenarios. We analyze the perspectives, what it means to us, what it means to our development and potential acceleration of our strategy, filling the gaps. What does it mean if prospective target is taken over by somebody else, our competitor, for example.

[Company Representative 2]: We have got new member of the board for international banking, and we try to elaborate the diagnosis and then build the structure for organic development of our activities for corporates, for business clients as we want to adjust business strategies to markets we plan to enter. Andrzej, it is top priority. Whatever concerns non-organic development is just mere speculation. We just focus on organic development. Well, and this is what we keep focusing on. It does not change. Being the largest institution in this part of Europe, we have a team which professionally analyzes all types of scenarios. We analyze the perspectives, what it means to us, what it means to our development and potential acceleration of our strategy, filling the gaps. What does it mean if prospective target is taken over by somebody else, our competitor, for example.

Speaker #1: So, each scenario matters, and it is a continuous work. Another issue is that, of course, the bank refreshes the procedural framework. What it means, if we had to face prospective transactions.

Speaker #1: So to to look at all the internal to review all the internal decision making processes and. We to be proactive. We would like to avoid the situation in which we have got good idea and target but we have not examined on how to do that within the bank and which will take us three times as much time as as for our competitors.

Speaker #1: So, and there is a potential—the capacity, potentially, that's optioned to use. But Szymon mentioned that at the very beginning, and just, it should be set at the very end because we increased the amount of bankship of Alior in two years' time.

Krzysztof Dresler (PKO Bank Pol: Each scenario matters, and it is a continuous work. Another issue is that, of course, the bank refreshes the procedural framework. What it means if we have to face a prospective transaction, so to review all the internal decision-making processes and to be proactive. We would like to avoid the situation in which we have got good idea and target, but we have not examined on how to do that within the bank and which will take us three times as much time as for our competitors. There is a potential, the capacity potentially, that is option to use. But Szymon mentioned that at the very beginning, and it should be said at the very end, because we increased the amount of balance sheet of Alior Bank in 2 years' time. Until the foreign market gives us such potential, we are going to benefit from that.

[Company Representative 2]: Each scenario matters, and it is a continuous work. Another issue is that, of course, the bank refreshes the procedural framework. What it means if we have to face a prospective transaction, so to review all the internal decision-making processes and to be proactive. We would like to avoid the situation in which we have got good idea and target, but we have not examined on how to do that within the bank and which will take us three times as much time as for our competitors. There is a potential, the capacity potentially, that is option to use. But Szymon mentioned that at the very beginning, and it should be said at the very end, because we increased the amount of balance sheet of Alior Bank in 2 years' time. Until the foreign market gives us such potential, we are going to benefit from that.

Speaker #1: So until the foreign market gives us such potential, we are going to benefit from that, because our clients want that. We are for them, but we have got expertise, know-how, knowledge, and understanding of some deficit in diversification—like geographically, for example.

Speaker #1: So different instruments are possible here. In D&A as well, as you can see, we are moving towards 30% of the retail market and 20% of the corporate market.

Speaker #1: This is our top priority—to maintain this trajectory and to have this business perspective, not for subsequent six or eight quarters, but in a perspective of several years to come, to strengthen the position.

Speaker #1: Of PKO BP on the Polish market and concerning foreign branches and foreign markets. Well, as of today, we look not only at geography but also at types of business.

Szymon Midera: Because our clients want that, we are for them. But we have got exercise, know-how, knowledge, and understanding of some deficits in diversification, like geographically, for example. Different instruments are possible here in NII as well. As you can see, we are going in towards the 30% of retail market and 20% of corporate market. This is our top priority to maintain this trajectory and to have this business perspective, not for subsequent 6 or 8 quarters, but in a perspective of several years to come to strengthen the position of PKO BP on the Polish market. Concerning foreign branches, foreign markets, well, as of today, we look not only at geography but also at types of business models because the path of traditional growth have been exhausted and they are outside the reach of PKO Bank Polski.

[Company Representative 2]: Because our clients want that, we are for them. But we have got exercise, know-how, knowledge, and understanding of some deficits in diversification, like geographically, for example. Different instruments are possible here in NII as well. As you can see, we are going in towards the 30% of retail market and 20% of corporate market. This is our top priority to maintain this trajectory and to have this business perspective, not for subsequent 6 or 8 quarters, but in a perspective of several years to come to strengthen the position of PKO BP on the Polish market. Concerning foreign branches, foreign markets, well, as of today, we look not only at geography but also at types of business models because the path of traditional growth have been exhausted and they are outside the reach of PKO Bank Polski.

Speaker #1: Models, because in the past, traditional growth has been exhausted and they are outside the reach of PKO Bank Polski. It requires very profound analysis, not just receiving potential targets from the investment bankers.

Speaker #1: I've got several questions from internet viewers, looking more into the future. The first question concerns interest margin: do we see any place for further expansion in the second half of 2026?

Speaker #1: Well, we said that we want to market results as flat, of course, with plus trends, but we want to make it flat plus if the market allows that.

Krzysztof Dresler (PKO Bank Pol: It requires very profound analysis, not just receiving potential targets from the investment bankers. I have got several questions from internet viewers looking more into the future. The first question concerns interest margin. Do we see any place for further expansion in the H2 2026? Well, we said that we want to have market results flat, of course, with plus trends, but we want to make it flat plus if the market allows. As we have tried to show you, in the Q2, we would have the increase of quarterly margin if there was not just this one-off correction. There is a potential, of course, in the interest market, but we need to keep up with the guidance so the margin gets stabilized. So flat plus, but in a positive direction, positive trend.

[Company Representative 2]: It requires very profound analysis, not just receiving potential targets from the investment bankers. I have got several questions from internet viewers looking more into the future. The first question concerns interest margin. Do we see any place for further expansion in the H2 2026? Well, we said that we want to have market results flat, of course, with plus trends, but we want to make it flat plus if the market allows. As we have tried to show you, in the Q2, we would have the increase of quarterly margin if there was not just this one-off correction. There is a potential, of course, in the interest market, but we need to keep up with the guidance so the margin gets stabilized. So flat plus, but in a positive direction, positive trend.

Speaker #1: We have tried to show you that in the second quarter we would have an increase in the quarterly margin if it was not just this one-off correction.

Speaker #1: So there is a potential, of course, in the interest market. But we need to keep up to the guidance so the margin gets stabilized—so flat plus, but in a positive direction, positive trend.

Speaker #1: We will see what happens with interest rates in general, because there are also external factors like the price of crude oil. It's a difficult goal here—increase of pace of cost.

Speaker #1: Well, I mentioned that we gave guidance for this year, more conservative, and so zero to 10, inflation plus. For us, the priority is to continue developmental activities, and if there are some changes, we will have to decide whether to keep up to the internal parameter or to implement the initiative which will bring us value.

Speaker #1: So then we will be prone to to to implement the initiative so we have got many incentives concerning current costs but we have got appetites but it's it requires fuel but it is associated with costs and we have got enough courage so for that.

Krzysztof Dresler (PKO Bank Pol: We will see what happens with interest rates in Poland generally, because it is also external factors like price of crude oil. It is a significant role here. Increase of pace of cost. Well, I mentioned that we gave guidance for this year more conservative and so 0.10, so inflation plus. For us, the priority is to continue developmental activities and if there are some changes, we will have to decide on whether to keep up the internal parameter or to implement the initiative which will bring us value. So then we will be prone to implement the initiative. We have got many incentives concerning current costs, but we have got appetite. It requires fuel, but it is associated with cost. We have got enough courage for that.

[Company Representative 2]: We will see what happens with interest rates in Poland generally, because it is also external factors like price of crude oil. It is a significant role here. Increase of pace of cost. Well, I mentioned that we gave guidance for this year more conservative and so 0.10, so inflation plus. For us, the priority is to continue developmental activities and if there are some changes, we will have to decide on whether to keep up the internal parameter or to implement the initiative which will bring us value. So then we will be prone to implement the initiative. We have got many incentives concerning current costs, but we have got appetite. It requires fuel, but it is associated with cost. We have got enough courage for that.

Speaker #1: So we are going to continue that, and we will try to optimize or reconstruct the main processes with the use of the most state-of-the-art technologies.

Speaker #1: We have finalized the testing phase on the national field and, in recent weeks, we have implemented, you know, and we have got many agents who automate complaint processes, for example.

Speaker #1: We work within the regime of several tens of agents who operate, who will automate our work in this operational area. So, a lot is being done in this area with low increments—so there is a low increase of cost per bank.

Speaker #1: So subsequent question concerns customer protection. What's the probability of repeating the reserves or costs or other operating expenses or or well if interests are concerned we have explained that it was a one off problem so we addressed this problem and we and we have got certain models which indicate customer behaviors and we have been undertaken many many activities to protect customers.

Szymon Midera: We are going to continue that, and then we will try to optimize or reconstruct the main processes with the use of the most state-of-the-art technologies. We have finalized the testing phase on the national field and in recent weeks, we have implemented and we have got many agents who automate complaints processes, for example. We work within the regime of several tens of agents who make our work automated in this operational area. A lot is being done in this area. Low increments, low increase of cost for banks. A subsequent question concerns customer protection. What is the probability of repeating the reserves of costs or other operating expenses? Well, if interests are concerned, we have explained that it was a one-off problem.

[Company Representative 2]: We are going to continue that, and then we will try to optimize or reconstruct the main processes with the use of the most state-of-the-art technologies. We have finalized the testing phase on the national field and in recent weeks, we have implemented and we have got many agents who automate complaints processes, for example. We work within the regime of several tens of agents who make our work automated in this operational area. A lot is being done in this area. Low increments, low increase of cost for banks. A subsequent question concerns customer protection. What is the probability of repeating the reserves of costs or other operating expenses? Well, if interests are concerned, we have explained that it was a one-off problem.

Speaker #1: We have been doing it for many years. It's nothing new to us, but the conclusion of the European Court of Justice, for example, issues their decision.

Speaker #1: So we need to stick to that. We need to stabilize the legal conditions of operations in our country to continue. The main activities to all the parties and to the—.

Speaker #1: Consistently, we will reflect it, you know, step by step, you know, consistently. But we do not envisage any essential changes compared to what we have been doing until now.

Speaker #1: So, question concerning costs of loans: 30 bps—is this a repeatable level or, as of today, do we not see any basis to revise this level?

Szymon Midera: We addressed this problem, and we have got certain models which indicate customer behaviors, and we have undertaken many activities to protect customers. We have been doing it for many years. It is nothing new to us. But the conclusion of European Court of Justice, for example, issued their decision. We need to stick to that. We need to stabilize the legal conditions of operations in our country to continue with main activities to all the parties. Consistently, we will reflect it step by step, consistently. But we do not envisage any essential changes compared to what we have been doing until now. Question concerning costs of loans. 30 BPS, is this a repeatable level? As of today, we do not see any basis to revise this level of 30 BPS. We enter into new segments like Allegro, like Żabka.

[Company Representative 2]: We addressed this problem, and we have got certain models which indicate customer behaviors, and we have undertaken many activities to protect customers. We have been doing it for many years. It is nothing new to us. But the conclusion of European Court of Justice, for example, issued their decision. We need to stick to that. We need to stabilize the legal conditions of operations in our country to continue with main activities to all the parties. Consistently, we will reflect it step by step, consistently. But we do not envisage any essential changes compared to what we have been doing until now. Question concerning costs of loans. 30 BPS, is this a repeatable level? As of today, we do not see any basis to revise this level of 30 BPS. We enter into new segments like Allegro, like Żabka.

Speaker #1: Of 30 basis points, and we enter into new segments like Allegro and Żabka, but these are new clients to us. They are less risky than external clients who come to us with no information and relations prior. They will be burdened with slightly higher risk than our standard portfolio, but since the scale of business is not so essential as of today, we do not think that it will have an impact on this level.

Speaker #1: And last technical question: What is the loss of non-financial assets, 180 million, in the second quarter? Well, there are two basic main items.

Speaker #1: One is associated with reserves on equity and loans in Swiss francs, which have not been repaid by clients. It's about 30 million zlotys. The second item concerns the model for estimation of value.

Krzysztof Dresler (PKO Bank Pol: But these are new clients to us, less risky than external clients who come to us with no information and relations prior to. They will be burdened with slightly higher risk than our standard portfolio. But since the scale of business is so essential, as of today, we do not think that it will have impact on this level. The last technical question, what is the loss of non-financial assets, PLN 180 million in Q2? Well, there are two basic items, main items. One is associated with reserves on equity and loans in Swiss francs which have not been repaid by clients. It is about CHF 30 million. The second item concerns model of estimating of value in the risk areas. We created PLN 131 million as another one for that, for the release. That much about the questions which have not been addressed before.

[Company Representative 2]: But these are new clients to us, less risky than external clients who come to us with no information and relations prior to. They will be burdened with slightly higher risk than our standard portfolio. But since the scale of business is so essential, as of today, we do not think that it will have impact on this level. The last technical question, what is the loss of non-financial assets, PLN 180 million in Q2? Well, there are two basic items, main items. One is associated with reserves on equity and loans in Swiss francs which have not been repaid by clients. It is about CHF 30 million. The second item concerns model of estimating of value in the risk areas. We created PLN 131 million as another one for that, for the release. That much about the questions which have not been addressed before.

Speaker #1: Risk areas—we created 131, you know, as an allowance for that, for this and that, much about the questions which have not been addressed before.

Szymon Midera: Thank you very much, and I would like to invite you to subsequent presentations after Q3 in November. Thank you very much.

[Company Representative 2]: Thank you very much, and I would like to invite you to subsequent presentations after Q3 in November. Thank you very much.

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