The segments
of activities

The PKO Bank Polski SA Group’s reporting scheme is primarily based on the criteria of groups of clients – recipients of products and services offered by the parent company and other entities of the PKO Bank Polski SA Group. Each operating business segment comprises activities of providing products and services that are characterised by similar risk and income – different from other business segments. The segment report below is recognised in an internal reporting system, i.e. the way of presenting data to the Management Board of PKO Bank Polski SA, used to assess achieved results and to allocate resources.

The segment report below presents an internal structure of the PKO Bank Polski SA Group. At present, the PKO Bank Polski SA Group comprises three basic segments: retail, corporate and investment segment:

  1. The retail segment comprises transactions of the parent company with retail clients, small and medium entities and housing market clients, as well as activities of the following subsidiaries: KREDOBANK SA, Finansowa Kompania ‘Prywatne Inwestycje’ Sp. z o.o., PKO BP BANKOWY Powszechne Towarzystwo Emerytalne SA, PKO Towarzystwo Funduszy Inwestycyjnych SA, Inteligo Financial Services SA, PKO BP Finat Sp. z o.o., Centrum Elektronicznych Usług Płatniczych eService SA, Qualia Development Sp. z o.o. Group and Fort Mokotów Inwestycje Sp. z o.o.

    This segment comprises, among others, the following products and services: current and saving accounts, deposits, private banking services, investment products, credit and debit cards, consumer and mortgage loans, corporate loans for small and medium enterprises and housing market customers.

  2. The corporate segment includes transactions of the parent company with large corporate clients, as well as activities of the Bankowy Fundusz Leasingowy SA Group and the Bankowe Towarzystwo Kapitałowe SA Group.

    This segment comprises, among others, the following products and services: current and saving accounts, deposits, depositary services, currency and derivative products, sell buy back and buy sell back transactions, corporate loans, leases and factoring. Within the segment, PKO Bank Polski SA also enters, individually or in a consortium with other banks, into loan agreements financing large investment projects.

  3. The investment segment comprises the Bank’s portfolio activity on its own account, i.e. investing and brokerage activities, interbank transactions, derivative instruments and debt securities transactions and activities of PKO Finance AB and Centrum Finansowe Puławska Sp. z .o.o. (own activities). In the net result of the segment, the net result of internal settlements (ALM) related to funds transfer pricing, the result on long-term sources of financing and the result on positions classified for hedge accounting is presented. Internal funds transfer is based on transfer pricing dependant on interest rates. The transactions between business segments are conducted on arm’s length. Long-term external financing includes the issuance of bonds, subordinated liabilities and funds under the EMTN programme issuance as well as amounts due to financial institutions.

The PKO Bank Polski SA Group typically settles inter-segment transactions as if they were concluded between unrelated parties, using internal settlement rates. The transactions between business segments are conducted on arm’s length.

Accounting policies applied in the segment report are consistent with accounting policies described in Note 2 of these financial statements.

Disclosed values of assets and liabilities are operating assets and liabilities applied by operating activities segment. Values of assets, liabilities, income and expenses of a particular segment are based on internal management information. To particular segments there have been assigned assets and liabilities as well as income and expense related to these assets and liabilities.



The current income tax expense was presented only on the Group level.

The tables below present data relating to income and results of individual business segments of the PKO Bank Polski SA Group for the 12-month period ended 31 December 2011 and 31 December 2010 and of selected assets and liabilities as at 31 December 2011 and as at 31 December 2010.

As an additional reporting scheme, the PKO Bank Polski SA Group applies information on segments by geographical areas. The PKO Bank Polski SA Group activity is also conducted in Ukraine – through KREDOBANK SA, Finansowa Kompania ‘Prywatne Inwestycje’ Sp. z o.o. and UKRPOLINWESTYCJE Sp. z o.o.

For the period from 1 January to 31 December 2011 Continuing operations
Retail
segment
Corporate segment Investment segment Total activity of the PKO Bank Polski SA Group
Own activities Transfer centre
Net interest income 5 524 147 707 871 151 339 1 225 759 7 609 116
Net fee and commission income 2 654 554 319 628 127 262 - 3 101 444
Other net income 301 703 110 322 196 253 (176 522) 431 756
Net result from financial operations 7 528 101 864 (63 370) (54 877)
Net foreign exchange gains 184 509 82 077 183 862 (113 152) 337 296
Dividend income - - 6 800 - 6 800
Net other operating income and expense 83 632 54 178 4 727 - 142 537
Income/expenses relating to internal customers 26 034 (26 034) - - -
Net impairment allowance and write-downs (1 516 117) (383 963) (30 367) - (1 930 447)
Administrative expenses, of which: (3 952 170) (304 113) (155 074) - (4 411 357)
Amortisation and depreciation (464 388) (36 834) (18 939) - (520 161)
Share of profit (loss) of associates and jointly controlled entities - - - - (19 652)
Segment gross profit 3 012 117 449 745 289 413 1 049 237 4 780 860
Income tax expense (tax burden) - - - - (976 115)
Profit (loss) attributable to non-controlling shareholders - - - - (2 450)
Net profit attributable to the parent company 3 012 117 449 745 289 413 1 049 237 3 807 195
As at 31 December 2011 Continuing operations
 Retail
segment
Corporate segment Investment segment Total activity of the PKO Bank Polski SA Group
Own activities Transfer centre
Assets  119 171 733 43 459 366 28 116 938 - 190 748 037
Liabilities  117 311 415 33 246 940 17 367 698 - 167 926 053
For the period from 1 January to 31 December 2010 Continuing operations*
Retail segment  Corporate segment Investment segment Total activity of the PKO Bank Polski SA Group
Own activities Transfer centre
Net interest income 5 170 877 637 047 280 911 427 331 6 516 166
Net fee and commission income 2 738 897 287 478 116 454 - 3 142 829
Other net income 241 202 76 058 219 850 1 446 538 556
Net result from financial operations (3 713) (293) 75 266 (60 781) 10 479
Net foreign exchange gains 93 444 58 328 132 763 62 227 346 762
Dividend income - - 5 663 - 5 663
Net other operating income and expense 125 447 44 047 6 158 - 175 652
Income/expenses relating to internal customers 26 024 (26 024) - - -
Net impairment allowance and write-downs (1 473 947) (328 488) (65 929) - (1 868 364)
Administrative expenses, of which: (3 836 090) (273 465) (139 581) - (4 249 136)
Amortisation and depreciation (459 838) (33 444) (19 037) - (512 319)
Share of profit (loss) of associates and jointly controlled entities - - - - (815)
Segment gross profit 2 840 939 398 630 411 705 428 777 4 079 236
Income tax expense (tax burden) - - - - (866 430)
Profit/loss attributable to non-controlling shareholders - - - - (4 077)
Net profit attributable to the parent company 2 840 939 398 630 411 705 428 777 3 216 883

*due to presentation changes in the segments result, data for 2010 has been brought to comparability.

As at 31 December 2010 Continuing operations*
Retail segment  Corporate segment Investment segment Total activity of the PKO Bank Polski SA Group
Own activities Transfer centre
Assets 112 010 210 34 963 122 22 687 169 - 169 660 501
Liabilities 109 307 500 27 721 094 11 272 339 - 148 300 933

*due to presentation changes in the segments result, data for 2010 has been brought to comparability.

As an additional reporting scheme, the PKO Bank Polski SA Group applies information on segments by geographical areas. The PKO Bank Polski SA Group activity is also conducted in Ukraine – through KREDOBANK SA, Finansowa Kompania ‘Prywatne Inwestycje’ Sp. z o.o. and UKRPOLINWESTYCJE Sp. z o.o.

For the period from 1 January to 31 December 2011 Continuing operations
Poland  Ukraine  Total
Net interest income 7 562 456 46 660 7 609 116
Net fee and commission income 3 062 740 38 704 3 101 444
Other net income 429 079 2 677 431 756
Administrative expenses (4 306 730) (104 627) (4 411 357)
Net impairment allowance and write-downs (1 865 152) (65 295) (1 930 447)
Share of profit (loss) of associates and jointly controlled entities - - (19 652)
Segment gross profit 4 882 393 (81 881) 4 780 860
Income tax expense (tax burden) - - (976 115)
Profit (loss) attributable to non-controlling shareholders - - (2 450)
Net profit (loss) attributable to the parent company 4 882 393 (81 881) 3 807 195
Assets of the segment 189 196 560 1 551 477 190 748 037
Liabilities of the segment 166 763 390 1 162 663 167 926 053
For the period from 1 January to 31 December 2010 Continuing operations

Poland

Ukraine Total
Net interest income 6 446 248 69 918 6 516 166
Net fee and commission income 3 102 281 40 548 3 142 829
Other net income 539 835 (1 279) 538 556
Administrative expenses (4 135 277) (113 859) (4 249 136)
Net impairment allowance and write-downs (1 858 988) (9 376) (1 868 364)
Share of profit (loss) of associates and jointly controlled entities

 

- (815)
Segment gross profit 4 094 099 (14 048) 4 079 236
Income tax expense (tax burden) - - (866 430)
Profit (loss) attributable to non-controlling shareholders - - (4 077)
Net profit (loss) attributable to the parent company 4 094 099 (14 048) 3 216 883
Assets of the segment 168 030 912 1 629 589 169 660 501
Liabilities of the segment 147 264 946 1 035 987 148 300 933