2022-07-15

Legal basis:

Article 17. 1 of the MAR Regulation – confidential information

The Report:

The Management Board of PKO Bank Polski S.A. ("Bank") informs that following the Act on crowdfunding for business ventures and assistance to borrowers ("Act") entering into force, and as a result of a change in the market environment conditions, affecting the amount of losses due to legal risk of the portfolio of mortgage loans denominated and indexed to CHF, as well as results of the Bank’s decision to participate in the creation of the protection scheme referred to in Article 4.1.9a of the Banking Law Act, Banks’s Management Board estimates that the following items will be recognized in the Bank’s Group results in the second quarter and second half of 2022: 

  • An adjustment to the gross value of PLN mortgage loans by estimated amount of about PLN 3 billion as a result of the entry into force of the Act enabling customers to suspend the repayment of a mortgage loan granted in PLN for two months per quarter in the period from 1 August 2022 to 30 September 2022 and from 1 October 2022 to 31 December 2022 and in the amount of one month per quarter in the period from 1 January 2023 to 31 December 2023 ("credit holidays"). Following the adoption of such a legal arrangement, the Bank is obliged to change the estimates of future cash flows concerning loan agreements. The loss estimation is based on the assumption that about 63% of customers with a mortgage granted in PLN will decide to participate in the credit holidays. Assuming that 100% of customers will participate in the credit holidays, the amount of loss would have been PLN 4.8 billion. The final value of the loss will depend, inter alia, on the number of customers who decided to benefit from credit holidays.

The loss will be recognized in the Bank’s results of the third quarter of 2022.

  • Increased costs of the legal risk related to mortgage loans denominated and indexed to CHF by PLN 1,176 million. The decision is dictated by a significant change in the market environment conditions, affecting the estimated number of lawsuits and the estimated number of settlements.

The additional costs will be recognized in the Bank’s results of the second quarter of 2022.

  • Costs related to the contribution to the aid fund of the protection system (IPS) referred to in the Article 4.1.9a of the Banking Law Act in order to provide resources for the financing the IPS, as reported by the Bank in the current report 15/2022 published on June 7, 2022, which amounts PLN 872 million.

Costs related to the contributions to the fund will be recognized in the Bank’s results of the second quarter of 2022.

  • Costs related to additional contributions to Borrowers’ Support Fund estimated in amount of PLN 340 million. The final amount of the contribution will be determined by the Board of the Borrowers’ Support Fund, which will be reported by the Bank in a separate report.

The costs of additional contribution to the fund will be recognized in the Bank’s results of the second half of 2022.