Corporate and investment segment

In 2014, PKO Bank Polski SA enhanced the image of a partner of Polish entrepreneurship by financing both the firms’ current operations, as well as their future projects. At the same time, the Bank actively supported the implementation of investment and optimisation projects in the local government sector. The main focuses were mainly the following: building stable relationships with customers, as a consequence of providing high-quality services, cooperation principles based on partnership and the specialised qualifications of the sales network.

The Bank analysed market expectations systematically and, in order to meet customer expectations, tailored its current product and service offer so as to cope with increasing competitive pressure. As a result, a broad range of transaction products and products mitigating financial risks (liquidity, settlement, interest rate, currency and commodity price risks) were being developed consistently, and financing structure needs were addressed in a flexible manner.

Lending activity and structured financing

As at 31 December 2014, gross corporate loans amounted to PLN 46.3 billion and their balance increased by PLN 7.3 billion since the beginning of the year. The total financing provided to corporate customers, including bonds issued exceeded PLN 59 billion, which means an increase by PLN 14.1 billion (i.e. by 31.1%) from the beginning of the year. The total financing provided to corporate segment customers in the amount of approx. PLN 7.6 billion was acquired as a result of the legal merger.

Financing of the corporate clients

The highest loan transactions concluded by the Bank in 2014 included financing in the form of investment and working capital loans granted to entities from the energy, telecommunications, financial sectors and to public finance sector entities. The unit values of the highest transactions ranged from PLN 75 million to PLN 300 million. Introducing the safe financing structure, the Bank granted excecutive guarantees in two largest investments in the energy sector in Poland, enabling their effective and timely undertaking.

Products associated with financing large investment projects such as consortium loans or issues of non-Treasury debt securities are a fixed component of PKO Bank Polski SA’s offer dedicated to corporate customers. For many years the Bank has been a leader in the organisation of municipal bonds issue and an important participant on corporate bond market. In 2014, the Bank’s share in market in respect of total amount of debt amounted to 25.6%¹ in corporate bond segment and 43.2%²  in municipal bond segment.

In 2014, the Bank took part in 14 banking consortiums, under which financing in the total amount of PLN 25 billion, of which the Banks’ share amounted to PLN 3.2 billion was granted. In 2014 the Bank concluded 132 agreements to issue municipal bonds in the total amount of PLN 538.6 million. Moreover, it concluded 16 agreements to issue corporate bonds without the guarantee to close issue in the total amount of PLN 8.5 billion, 5 agreements to issue corporate bonds with the guarantee to close the issue in the form of a bank consortium totalling PLN 14.1 billion, in which the Bank’s share amounted to PLN 2.2 billion and 2 anexes to agreements of bond issue programme in the form of a bank consortium concluded previously, amending the terms of an issue for a total amount of PLN 5.5 billion, in which the Bank’s share amounted to PLN 2.6 billion.

¹ Data source: NBP reporting system – WEBIS.
² Data source: NBP reporting system – WEBIS.

Deposit activities and transaction banking

The volume of corporate customers deposits as at the end of 2014 amounted to PLN 30.9 billion and was higher by PLN 9.6 billion than in the corresponding period of the previous year. The legal merger (the acquisition of corporate segment deposits portfolio in the amount of approx. PLN 4.1 billion) as well as the Bank’s strong position as regards the offer of transaction products contributing to a consistent increase in the transaction (current) deposits volume had the impact on the increase in the deposit base.

Deposits of the corporate clients (in PLN million)

PKO Bank Polski SA continues to improve the quality of the services provided in respect of transaction banking. In 2014, the services addressed to entities with a complex organisational structure (e.g. capital groups), enabling its customers to use various kinds of products and services which make it easier to settle transactions with foreign partners were developed. At the same time the Bank introduced a loyalty programme targeted at a numerous group of Clients using the transaction banking products. Under the programme, customers may adjust specialised banking services to their needs and optimise servicing costs. In implementing a number of system improvements, the Bank offered its customers the possibility of managing sublimits for the ‘Rachunek Skonsolidowany’ and ‘Cash Pooling’ services.

Within providing electronic services, the electronic banking system– iPKO biznes - is the leading product. In 2014, the iPKO biznes application was expanded to include new functionalities which make it more convenient to use, including, i.a. simplifying and re-design of key operations made in the service, so that to make them even more user-friendly and intuitive. At present, the iPKO biznes application allows customers to monitor and manage accounts, payment cards and loans, and to place orders for all types of transfers.

Financial institutions

As part of the international settlement system, the Bank cooperates with financial institutions in 109 countries throughout the world and is one of the leading Polish banks in terms of the number of foreign payments cleared and sent to Polish beneficiaries. As regard correspondence banking, after the completion of the legal merger there was an increase in loro accounts. Last year measures were taken to implement a new foreign exchange intermediation model. As part of its current operating activities, the Bank attracted new customers and concluded new agreements with domestic and foreign financial institutions other than banks. Based on these agreements the Bank offered attractive products supporting funds management as well as settlement, investment, Treasury, and risk hedging products.

Activities of the Brokerage House of PKO Bank Polski SA

The Brokerage House of PKO Bank Polski SA is one of the foremost leaders among the brokerage houses operating on the domestic financial market. It offers its customers both an expansive sales network and a competitive product offer. The activities of the Brokerage House are highly praised by Investors. According to a ranking by the FORBES monthly, the Brokerage House of PKO Bank Polski SA was ranked 1st by individual Investors (it scored the most points for: the quality of direct services, employees’ professionalism, functionality of the online platform, access to information and quotations, quality of analyses and recommendations, and educational offer) and 2nd by institutional Investors (FORBES No. 10/2014).

In 2014, the share of the Brokerage House of PKO Bank Polski SA in transactions on the secondary share market amounted to 10.5% and was slightly (approx. 1%) higher than the volume of transactions carried out in 2013. As a result of the increase in the transaction volume, the Brokerage House went up to number two in the ranking of brokerage houses from number three in 2013.

The Brokerage House of PKO Bank Polski SA’s high place as the market maker on the NewConnect market is worth noting – as at the end of last year, the Brokerage House of PKO Bank Polski SA performed this function for 47 companies, which puts it in 2nd place on the market, as well as the high level of its activity in the segment of trading in Treasury bonds – a 50.5% market share puts the Brokerage House of PKO Bank Polski SA in 1st place.
In 2014, the Brokerage House of PKO Bank Polski SA participated in carrying out significant transactions on the primary market: PKP Cargo SA (the value of the issue – PLN 583.5 million), Torpol SA (PLN 183.7 million), Alumetal SA, PGE (the value of the issue – PLN 1.3 billion) and the LOTOS SA Group (the value of the issue – PLN 995.5 million). Moreover, the Brokerage House participated in organising a public offering of the bonds of PKN Orlen SA and ECHO Investment SA.

As at the end of 2014, the Brokerage House of PKO Bank Polski SA maintained 182.6 thousand securities and cash accounts and had 173.5 thousand active registration accounts, which puts it in 2nd place among 42 participants.

Share of the Brokerage House of PKO Bank Polski SA in trading on the secondary stock market

Treasury products

The Bank has a wide offer of forex, interest rate and commodity market instruments, which effectively support customers in their day-to-day operations and allow them to prepare effective financial risk management strategies. SPOT forex transactions have the largest share in sales of treasury products. Good results are achieved by the Bank as regards sales of derivative instruments, such as forwards, options, IRS, CIRS or commodity. In 2014 a number of SPOT transactions was higher by about 15% and about 5% in respect of FORWARD transactions. The highest growth rate in terms of a number of transactions was achieved via Internet channel.

In December 2014, the Bank finished working on the implementation of a new autodealing system linking its branch network to the Bank’s Head Office. A new transaction console for dealers, branch and Private Banking applications, and the iPKO dealer platform were launched. The new online platform, iPKO dealer, was given not only a new look, but first of all, the possibility of concluding new transactions, and new functionalities. At present, the Bank’s customers may use the iPKO dealer platform to conduct: foreign exchange spot transactions with different settlement dates (today, tomorrow, spot), Forward foreign exchange transactions, FX SWAP transactions, accelerated and deferred settlement of FORWARD and FX SWAP transactions, complete and partial closure of concluded transactions, and to negotiate deposit interest rates. In addition, a possibility was given to submit text message alerts about the expected levels of exchange rates and transactions to be settled on a given date. The transaction history records were also expanded. The new iPKO dealer platform provides customers with current market analyses and charts. In 2015, there are plans to continue developing the autodealing system and to launch new functionalities such as: placing orders, mobile access, multiFX transactions or online access to market news.

Fiduciary services

The Bank operates securities accounts and handles transactions on the domestic and the foreign markets, as well as provides fiduciary services and acts as a depositary for pension and investment funds As at the end of 2014, the value of customers’ assets held on fiduciary accounts amounted to PLN 62.8 billion and was higher by approximately 6% than the amount obtained as at the end of 2013. Simultaneously the number of securities accounts serviced amounted to 1.8 thousand units.

Sales network

The sales network of the corporate and investment segment includes seven Corporate Macro-Regions including 37 Regional Corporate Centres. The Bank successfully continued implementing a strategic programme of corporate sale development, based on modern mechanisms of planning the development of relationships with the customers, cooperation in building financial strategies and services.

In 2014 the changes in the organisational structure of sales network were made in the corporate and investment segment - the optimalisation of network functioning in connection with the acquisition of new Regional Corporate Centres, under the merger. By adjusting in 2014 the organisation of its sales network and the model of its functioning to the existing market needs, the Bank improved the cooperation with all groups of corporate customers. These changes helped the Bank to maintain a high level of satisfaction with the services provided, which is reflected, i.a. things, in the growing number of customers.

Operational data in the corporate segment