The Bank’s return on equity (ROE), calculated excluding the impact of integration costs, amounted to 6.2% and was 2.6 p.p. lower than in 2019. The return on assets (ROA) calculated in the same way was 0.6% and decreased by 0.3 p.p. compared to 2019. The ratios calculated on the basis of reported volumes were 6.3% and 0.6% respectively (increase by 0.5 p.p. and unchanged y/y). The decrease in the levels of the return ratios is mainly the result of a significant increase in the cost of risk associated with the negative impact of the coronavirus pandemic on the economic situation and the prospects of the Bank’s Customers.
The Cost / Income ratio (excluding integration costs) amounted to 52.8%, lower by 2.0 p.p. compared to 2019. The ratio calculated on a reported volumes basis was 52.6% (a level 11.3 p.p. lower compared to 2019, due to the significant integration costs incurred in 2019).
The presentation of ratios calculated on the basis of income statement categories excluding integration costs (understood as additional costs related to bank merger processes) is intended to provide additional information allowing a more adequate assessment of the evolution of the Bank’s financial situation.
The net interest margin calculated in relation to average assets was 2.7%, 0.3 p.p. lower than the level calculated for 2019. The deterioration in the realised interest margin is the result of the significant reduction in interest rates at the end of Q1 and in Q2 2020.
Changes in the values of the ratios representing the ratio of net and gross loans to deposits and funding sources reflect the improvement in the liquidity situation observed in 2020
|Return on equity(1)
|Return on assets(2)
|Net interest margin(3)
|Cost / Income(4)
|Cost of credit risk(5)
|Net loans and advances / deposits(6)
|Gross loans and advances / Total sources of funding(7)
*Normalised values calculated excluding: integration costs (2020: positive value of PLN 15,336 thousand, 2019 - PLN 414,537 thousand, 2018 - PLN 265,804 thousand), allowance for expected credit losses in connection with the acquisition of RBPL's Core Business (2018 - PLN 238,897 thousand) and gain on bargain purchase of RBPL's Core Business (2018 - PLN 291,706 thousand). The impact of integration costs on net profit was estimated using an income tax rate of 19%. In the case of the "costs" category, the amount visible in the financial statements was reduced by the amount of integration costs recorded within general administrative expenses and depreciation. In the case of the "income" category, the income statement figures comprising the result on banking activities were adjusted by the integration costs recorded within other operating expenses. From 2020 onwards, provisions for proceedings relating to CHF mortgage loans are presented as a separate line apart from income, this change has been taken into account for 2019 and 2018.
(1)Net profit in relation to average equity, calculated based on quarter-end balances.
(2)Net profit in relation to average assets, calculated based on quarter-end balances.
(3)Net interest income in relation to average assets, calculated based on quarter-end balances. Due to the significant increase in total assets as at 31.10.2018 and the prospective recognition of the interest income of the acquired RBPL Core Business for the last two months of 2018 in the Bank's interest income - a weighted average number of days was used for the fourth quarter of 2018.
(4)Total general administrative expenses, amortization and depreciation in relation to total net banking income, calculated as the total of net interest income, net fee and commission income, dividend income, net trading income, net investment income, result on hedge accounting and other operating income and expenses.
(5)Net impairment allowances on loans and advances and provisions for contingent liabilities in relation to the average balance of net loans and advances to customers measured at amortised cost, calculated based on quarter-end balances.
(6)Net loans and advances to customers in relation to customer deposits, balance at the end of the period
(7)Gross loans and advances to customers in relation to total liabilities to customers, debt securities issued, loans from other banks and subordinated liabilities, balance at the end of the period.