Bank Pekao SA to continue conservative credit risk management

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Date: 2009-08-04 14:21

The prudent policy of developing credit segment of Bank Pekao SA and the cautious managing on the credit risk will not change in H2/2009, Pekao SA announced in its report for H1/2009. The bank also said that recorded the rise of the mortgages loans - which is extends only in PLN - by 25% y/y at that time.

"In the second half of 2009, the bank will continue its efforts and focus to sustain selected growth keeping credit risk at adequate and safe level through prudent policy of credit portfolio development", the company said in its report for the group's activity in H1/2009.

"Prudent and conservative standards in credit risk management stay unchanged with particular attention to potential threats coming from deterioration of macroeconomic pillars and their effects on portfolio performance with timely actions undertaken along a strict monitoring of borrowers' risk profile", the release reads.

In H1/2009, the bank continued the policy of extending mortgage credits, denominated in zlotys. "The residual stock of mortgage loans denominated in foreign currencies, almost entirely acquired as a result of the merger of the spun-off part of Bank BPH SA, constitutes 7.6% of total loans," the lender said.

"The mortgage loan offer has been well received by the clients, which resulted in a 25% increase in sales of PLN mortgage loans by value in the first half of 2009, compared to the first half of 2008", the release also reads.

The bank is continuously participating in the sale of the preferential loan - a loan with premium as part of the "Family on Its Own" programme. The market share in sales of these loans in H1/2009, according to value, stood at around 40%.

The volume of the bank's clients loans at the end of June 2009 amounted to PLN 76.889.1mn, and was lower by PLN 704.9mn (0.9%) vs. the end of 2008. At the end of June 2009, the total volume of retail loans amounted to PLN 26.992.4mn and volume of corporate loans amounted to PLN 49.896.7mn.

At the end of June, 2009, the ratio of impaired receivables to total receivables amounted to 6.7% vs. 5.5% at the end of 2008.

The total volume of liabilities to the bank's customers (including customer deposits, structured certificates of deposits, repo and sell-buy-back transactions) amounted to PLN 93.140.3mn and was by PLN 1.674.5mn (1.8%) higher than at the end of 2008.

In H1/2009, the net profit attributable to equity holders, amounted to PLN 1.179.5mn and was lower by 27.0% vs. results in H1/ 2008 (excluding the sale result in H1/2008, of part of enterprise of CDM conducting corporate brokerage and investment banking services ).

The return on equity ratio ( ROE) fell to 14.5% from 24.1% in this period, while costs-to-income ratio ( C/I) rose to 53.5% from 48.5%. At the same time the interest maring deteriorated to 3.4% from 4.1% a year earlier.

"The strength of the capital and liquidity structure of the Bank Pekao S.A. Group is reflected by a capital adequacy ratio at the level of 14.5% and loans to deposits ratio at the level 88.2% at the end of June 2009. It allows further sound and stable development of the Group's activity", the bank concluded.