Bank Polska Kasa Opieki (PEO) Q4 2023 earnings summary

Executive summary

• 2023 net profit reached PLN 6.578bn, up 283.1% YoY, driven by higher income, no payment moratoria and lower CHF mortgage provisions.

• Record results combined with 24.7% ROE, 32.7% cost/income ratio including BGF and IPS, and continued growth in lending, customer activity and digital use.

Financial highlights

• Operating income rose 38.2% YoY to PLN 14.733bn; operating costs increased 16.2% to PLN 4.631bn; operating profit grew 51.3% to PLN 10.102bn.

• Net interest income increased 44.6% to PLN 11.923bn; net fee and commission income rose 2.8% to PLN 2.786bn.

• Net profit increased from PLN 1.717bn in 2022 to PLN 6.578bn in 2023; 2022 results included payment moratoria and higher CHF portfolio provisions.

Outlook and guidance

• Strategy targets for 2024 include ROE of ~10% assuming a 0.1% NBP reference rate, cost/income of 42%, 3.2m active mobile users and digitisation near 100%.

• Poland GDP growth forecasts are 3% for 2024 and 4.3% for 2025; recovery is expected to be moderate, with household consumption supporting growth.

• Mortgage sales in 2024 are expected at a level similar to 2023, with a weak first half and government support stimulating the second half; credit and savings markets are expected to grow.

• The NBP reference rate is expected to remain unchanged in 2024; CPI is forecast to fall to ~3% in March and rebound to 4.5–5% by year-end as regulated prices rise.