The State Treasury has control over the parent company of the Group as it holds a 31.39% interest in the Bank’s share capital. The Bank’s shareholding structure is described in detail in the note 39 ‘Equity and shareholding structure of the Bank’ to these financial statements.
Receivables, securities and liabilities arising from transactions conducted with the State Treasury and other state budgetary agencies are disclosed in the Group’s statement of financial position. In accordance with the 30 November 1995 Act in relation to State support in the repayment of certain housing loans, reimbursement of guarantee premium paid and amendments of several acts (Journal of Laws, 2013, item 763 with subsequent amendments) PKO Bank Polski SA receives payments from the State budget in respect of interest receivable on housing loans.
| 2014 | 2013 | |
|---|---|---|
| Income due to temporary redemption by the State budget of interest on housing loans from the ‘old’ portfolio recognised for this period | 82,007 | 109,478 |
| Income due to temporary redemption by the State budget of interest on housing loans from the ‘old’ portfolio received in cash | 44,714 | 64,701 |
| Difference between income recognised for this period and income received in cash – the position ‘Loans and advances to customers’ | 37,293 | 44,777 |
The Act on the coverage of repayment of certain housing loans by State Treasury (Journal of Laws, 2000, No. 122, item 1310 with subsequent amendments) guarantees was passed on 29 November 2000 and came into force on 1 January 2001. In execution of the provisions of the Act, on 3 August 2001 PKO Bank Polski SA signed an agreement with the Minister of Finance acting on behalf of the State Treasury under which the Bank was granted a pledge of repayment of debt arising from housing loans in the so-called ‘old’ portfolio. On 29 December 2011, the validity period of the agreement (originally until 31 December 2011) was extended until 31 December 2017. The coverage of the so-called ‘old’ portfolio housing loan receivables by the guarantees of the State Treasury results in the neutralisation of the default risk on these loans. The State Treasury guarantees are realised when a borrower fails to repay the loan on the dates specified in the loan agreement. The responsibility of the State Treasury is of an auxiliary nature and is effective if the recovery of the unpaid part of principal and interest which the Bank is obliged to commence, before the Bank lays claims to the State Treasury, becomes ineffective. The above-mentioned law covers 90% of unpaid loans taken out by housing cooperatives. As a consequence of the realisation of the State Treasury’s responsibilities as guarantor, the State Treasury itself enters into the rights of the satisfied creditor (the Bank) and thus becomes a creditor towards the borrower, in line with the concept of guarantee. PKO Bank Polski SA receives commission for settlements relating to redemption of interest by the State Treasury on housing loans.
| 2014 | 2013 | |
|---|---|---|
| Fee and commission income | 3,226 | 4,103 |
Since 1 January 1996 the Bank became the general distributor of value marks and receives commissions in this respect from the State Treasury.
| 2014 | 2013 | |
|---|---|---|
| Fee and commission income | 9,613 | 20,927 |
The Brokerage House of PKO Bank Polski SA performs the role of an agent for the issue of retail Treasury bonds under the agreement signed with the Ministry of Finance on 11 February 2003. Under this agreement, the Brokerage House of PKO Bank Polski SA receives a fee for providing the services of an agent for the issue of bonds.
| 2014 | 2013 | |
|---|---|---|
| Fee and commission income | 20,037 | 29,022 |
Significant transactions of the PKO Bank Polski SA Group with the State Treasury’s related entities
The transactions were concluded on arm’s length. The margins on credit transactions are in the range of 0.25% -4.2%.
| Entity | 31.12.2014 | 2014 | ||||
|---|---|---|---|---|---|---|
| Total receivables | Total liabilities | Off-balance sheet liabilities granted – guarantee and financial | Interest and similar income | Fee and commission income | Interest expense and similar charges | |
| Entity 1 | - | - | 2,080,000 | - | - | - |
| Entity 2 | 184,925 | 1,001,114 | 647,423 | 3,095 | 903 | (7,633) |
| Entity 3 | - | 1,099 | 1,368,860 | - | 35 | (264) |
| Entity 4 | - | 9,190 | 1,201,440 | 48 | 1,060 | (396) |
| Entity 5 | - | 1,177,873 | - | - | 2 | (13,860) |
| Entity 6 | 285,955 | 283,174 | 422,752 | 4,335 | 522 | (4,302) |
| Entity 7 | - | 160,250 | 701,786 | 4 | 302 | (4,790) |
| Entity 8 | - | 98,728 | 500,000 | - | 1 | (23,708) |
| Entity 9 | - | 582,771 | - | 26 | 1,519 | (2,555) |
| Entity 10 | 386,306 | 16,294 | 151,587 | 13,274 | 204 | (46) |
| Entity 11 | 113,481 | 18,235 | 396,474 | 7,045 | 5 | (509) |
| Entity 12 | - | 109,604 | 400,000 | - | 12 | (245) |
| Entity 13 | 113,422 | 80,540 | 61,819 | 5,120 | 1,107 | (1,216) |
| Entity 14 | 67,704 | 14,487 | 157,659 | 3,880 | 217 | (110) |
| Entity 15 | 62,901 | 1,984 | 150,000 | 2,872 | 44 | (90) |
| Other entities | 259,499 | 637,143 | 165,524 | 16,228 | 3,771 | (12,300) |
| Total | 1,474,193 | 4,192,486 | 8,405,324 | 55,927 | 9,704 | (72,024) |
| Entity | 31.12.2014 | 2014 | ||||
|---|---|---|---|---|---|---|
| Total receivables | Total liabilities | Off-balance sheet liabilities granted – guarantee and financial | Interest and similar income | Fee and commission income | Interest expense and similar charges | |
| Entity 8 | - | 1,749 | 1,198,324 | - | 33 | (623) |
| Entity 2 | 211,048 | 242,088 | 333,258 | 3,139 | 507 | (1,242) |
| Entity 7 | 223,340 | 126,268 | 176,660 | 10,543 | 429 | (527) |
| Entity 21* | 446,352 | 65 | 71,214 | 12,387 | 1,161 | (573) |
| Entity 3 | - | - | 600,000 | - | - | - |
| Entity 12 | - | 19,299 | 500,000 | - | 3 | (10,651) |
| Entity 6 | - | 14,093 | 500,000 | 1 | 2 | (247) |
| Entity 16 | - | 574 | 500,000 | 5,327 | 270 | (5,681) |
| Entity 5 | 16,683 | 2,178 | 474,003 | 45 | 3 | (171) |
| Entity 9 | 10,130 | 84,104 | 359,382 | 2,390 | 15 | (1,581) |
| Entity 20 | 241,279 | 17,556 | 175,722 | 9,187 | 131 | (1,055) |
| Entity 14 | - | 36,096 | 401,786 | - | 329 | (408) |
| Entity 13 | 145,798 | 46,904 | 117,590 | 4,891 | 235 | (126) |
| Entity 22* | 109,174 | 50,249 | 143,331 | 7,570 | 1,510 | (1,445) |
| Other entities | 346,488 | 536,068 | 511,244 | 17,099 | 4,549 | (14,907) |
| Total | 1,750,292 | 1,177,291 | 8,142,514 | 72,579 | 9,177 | (39,237) |
*The entities do not figure in 2014.
As at 31 December 2014 and 31 December 2013 respectively, no significant impairment allowances were recognised for the above-mentioned receivables.