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REPORT OF THE MANAGEMENT BOARD ON THE ACTIVITIES OF

THE BANK GOSPODARSTWA KRAJOWEGO GROUP

IN 2021

(comprising the report of the Management Board on the activities of Bank Gospodarstwa Krajowego)

 

 

 

 

The above report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021 (comprising the report of the Management Board on the activities of Bank Gospodarstwa Krajowego) is a translation from the original Polish version. In case of any discrepancies between the Polish and English version, the Polish version shall prevail.

14 April 2022



Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)



Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

1.          Summary of 2021. 55

1.1    Description of the BGK Group. 55

1.2    Major events in the BGK Group. 77

1.3    Important events for the BGK Group in 2021. 1010

1.4    Historical overview of the BGK Group. 1111

1.5    Key financial data of the BGK Group for 2021. 1111

1.6    Key financial data of BGK for 2021. 1212

2.          The economy in 2021. 1313

2.1    Domestic economy. 1313

2.2    Economy abroad. 1515

2.3    Impact of the situation in Belarus and Ukraine on the economy and the BGK Group 1515

3.          Changes in the regulatory environment. 1616

4.          Operations of Bank Gospodarstwa Krajowego and the BGK Group. 1717

4.1    Division of operations within the Bank Gospodarstwa Krajowego Group. 1717

4.2    Lending activity of BGK. 1818

4.3    Lending policy of BGK. 2222

4.4    Deposit activities of BGK. 2222

4.5    Electronic banking. 2323

4.6    BGK’s activity on the money market and the debt securities market. 2424

4.7    Share portfolio. 2525

4.8    Projects 2828

4.9    Sureties and guarantees provided by BGK under government programmes 3030

4.10  Cooperation with international public institutions 3434

4.11  Activities of BGK’s foreign representative offices 3838

4.12  Public finance consolidation management. 3939

4.13  European programmes 4040

4.14  Social rental housing (SRH) programmes 4545

4.15  Cash flow funds 4747

4.15.1        COVID-19 Response Fund. 4747

4.15.2        National Road Fund. 4848

4.15.3        Railway Fund. 5050

4.15.4        Inland Waterways Fund. 5151

4.15.5        Subsidy Fund. 5252

4.15.6        Thermal Modernisation and Refurbishment Fund. 5555

4.15.7        Student Loan Fund. 5656

4.15.8        Borrower Support Fund. 5757

4.15.9        Polish Science Fund. 5858

4.15.10      Tourist Refund Fund. 5858

4.15.11      Interest Subsidy Fund. 5959

4.15.12      National Guarantee Fund. 6060

4.15.13      Liquidity Guarantee Fund. 6161

4.15.14      Ecological Surety and Guarantee Fund. 6262

4.15.15      Government Housing Development Fund. 6363

4.15.16      Government Housing Fund. 6464

4.15.17      Medical Studies Loan Fund. 6464

4.16  Other programmes and delegated tasks 6464

4.17  Operations of the BGK Group entities 7070

4.18  Transactions with associates of BGK. 7373

5.          Strategy and development directions of BGK and the BGK Group. 7373

5.1    Strategy of BGK and the BGK Group. 7373

5.2    Development directions of the BGK Group. 7373

5.3    Business model 7676

5.4    BGK’s anti-crisis measures in connection with the COVID-19 pandemic. 8383

5.4.1 Aid package for micro, small and medium-sized enterprises 8383

5.4.2 Aid package for large companies 8787

5.4.3 COVID-19 aid package offered by KUKE S.A. 8787



Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

6.          Financial overview of the BGK Group and BGK. 8888

6.1    Financial performance of the BGK Group. 8888

6.2    The BGK Group’s statement of financial position. 9090

6.3    Financial performance of Bank Gospodarstwa Krajowego. 9191

6.4    Statement of financial position of Bank Gospodarstwa Krajowego. 9494

6.5    Rating of BGK. 9797

7.          Organisational structure of the Bank. 9797

8.          BGK’s CSR initiatives. 9898

9.          HR policy pursued by BGK. 9999

10.        Auditor of the financial statements. 103103

11.        Disclosures required under banking law subject to audit by an auditor. 103103

12.        Non-financial statement. 103103

13.        Statement of compliance with corporate governance rules. 103103

13.1  General rules 103103

13.2  Tasks, scope of business and organisation of BGK. 104104

13.3  Composition and rules of BGK’s governing bodies and committees, representation and powers vested in the President of the Management Board. 105105

13.4  Internal controls, risk and capital management and financial reporting at the Bank. 111111

14.        Managing and assessing credit, financial, operational and other risks. 113113

14.1  Organisation of the risk management process 113113

14.2  Organisation of the credit and concentration risk management process 114114

14.3  Overview of key credit and concentration risks 116116

14.4  Organisation of the financial risk management process 118118

14.5  Overview of key financial risks 118118

14.6  Organisation of the operational risk management process 121121

14.7  Overview of operational risk. 122122

14.8  Overview of business risk. 122122

14.9  Other risks 122122

14.10 Capital adequacy. 122122



Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

1.    Summary of 2021

1.1         Description of the BGK Group

Bank Gospodarstwa Krajowego (BGK) is a state development bank whose mission is to support sustainable social and economic development of Poland. BGK and the BGK Group entities initiate and participate in cooperation between business, public sector entities and financial institutions.

As at 31 December 2021, the Group consisted of the following Polish subsidiaries consolidated with the full method. The Group also includes equity-accounted associates.

Structure of the BGK Group as regards entities consolidated with the full method

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§  Bank Gospodarstwa Krajowego – The only state-owned bank, which is also a state development bank – the parent entity of the BGK Group,

§  Fundusz Ekspansji Zagranicznej FIZ AN (Foreign Expansion Closed-End Private Equity Investment Fund) – For more information see Section 4.17,

§  Vinci S.A. and Vinci S.A. Hitech ASI S.K.A. – For more information see Section 4.17.

In 2021, a change occurred in the Group’s structure: the sale of two housing funds was finalised, i.e. Fundusz Sektora Mieszkań dla Rozwoju FIZ AN and Fundusz Sektora Mieszkań na Wynajem FIZ AN. All investment certificates sold by the Bank were purchased by Polski Fundusz Rozwoju S.A.

Structure of entities consolidated by BGK using the equity method

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§  The Three Seas Initiative Investment Fund (Three Seas Initiative Investment Fund S.A. SICAV-RAIF) – For more information see Section 4.17.

§  Infrastructural funds whose management has been entrusted by BGK to PFR TFI S.A., i.e.:

§  Fundusz Inwestycji Polskich Przedsiębiorstw FIZ AN (Polish Enterprise Investments Closed-End Private Equity Investment Fund),

Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

§  Fundusz Inwestycji Infrastrukturalnych Kapitałowy FIZ AN (Equity Infrastructure Investment Closed-End Private Equity Investment Fund).

§  Surety funds established in cooperation with local government units,

§  Krajowa Grupa Poręczeniowa Sp. z o.o. (National Guarantee Group),

§  Korporacja Ubezpieczeń Kredytów Eksportowych S.A. (Export Credit Insurance Corporation),

§  Investments of Fundusz Ekspansji Zagranicznej FIZ AN.

For a detailed description and list of subsidiaries and associates see the consolidated financial statements.

Bank Gospodarstwa Krajowego and the BGK Group entities focus their activities in several main areas:

§  carrying out activities to support the economic growth of Poland by financing infrastructure projects and local government projects and by co-financing the foreign expansion of Polish companies and export projects. BGK offers surety and guarantee schemes in order to stimulate entrepreneurship and the development of micro, small, medium-sized, and large enterprises. The Bank and group entities also operate programmes intended to improve the situation on the housing market;

§  initiating and implementing countercyclical actions, in particular during the COVID-19 pandemic, aimed at supporting economic growth and enterprise development;

§  mobilising capital in the economy by participating in consortia and structuring transactions in the domestic and foreign markets. The Bank finances capital needs through cooperation with development institutions and the mobilisation of private capital through the development of guarantee and surety programmes;

§  supplementing the banking system by filling the market gap in key areas of the economy through programmes activating stagnant sectors and countercyclical initiatives. The Bank finances projects of significant importance to the market economy and supports economic growth in areas where the market is inefficient. The Bank cooperates with other financial institutions on a partnership basis, complementing their offerings;

§  consolidating public finances, management of European programmes and distribution of EU funds on a regional and national scale.

The Bank expands its product offer in the area of debt financing as well as surety and guarantee financing by investing in funds supporting the growth of Polish enterprises and infrastructure development.

The BGK Group’s activities have a multidimensional development context. The implementation of activities in one area, such as financing reindustrialisation, has a positive impact on other areas, i.e. on labour market development, reduction of the unemployment rate or increase in state budget revenue. The BGK Group’s infrastructure projects improve the quality and accessibility of services to the public and have a positive impact on the environment and the economy.

The Group carries out its activities in a responsible and sustainable manner, while maintaining a reasonable risk appetite. Planned projects are analysed in terms of risk and their impact on Poland’s sustainable economic growth. In 2021, the liquidity of BGK was at a safe level and its level of capital adequacy was monitored using capital adequacy ratios determined in line with the Banking Law and the CRR (Capital Requirements Regulation).

Financing of the housing industry

An important element of the Bank’s and BGK Group’s operations are activities related to co-creation and implementation of programmes supporting the development of the housing industry, including provision of debt financing to entities in the social rental housing sector, non-refundable financing in the rental housing construction sector, in particular to municipal entities, as well as supporting thermal modernisation and refurbishment of residential buildings.

Support for exports and foreign expansion

The Bank and the BGK Group actively support activities focused on exports. The Bank is a shareholder of Korporacja Ubezpieczeń Kredytów Eksportowych S.A. (KUKE S.A.). Apart from holding an equity interest, BGK is KUKE S.A.’s key partner in the implementation of the government export support programme, as part of which BGK grants export

Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

credits insured by KUKE S.A. In addition, BGK finances export projects that are partially implemented at ‘own risk’, with supplementary security provided by KUKE S.A.

Another BGK Group member which provided funding to actively support the foreign expansion of Polish businesses is Fundusz Ekspansji Zagranicznej FIZ AN (FEZ FIZ AN) managed by PFR TFI S.A. The Fund helps Polish entities co-finance their investment projects abroad by offering loans or acquiring minority shareholdings with a buyout option. The Fund may invest both in EU and non-EU member states, also in developing and high-risk countries, in almost all sectors, not only in manufacturing, but also in distribution and service companies.

As at the end of 2021, FEZ FIZ AN was a party to 13 active investment agreements with Polish partners on equity or debt financing. BGK is the sole certificate holder of the fund.

In addition, the Bank carries out management activities related to export credits under the DOKE Programme (system of subsidies from the state budget to interest on export credits). The DOKE Programme is a system designed to stabilise interest on export credits advanced to buyers by Polish or foreign banks or international financial organisations. The rules of the Programme are based on the OECD Arrangement on Officially Supported Export Credits.

1.2         Major events in the BGK Group

COVID-19 – Package of aid measures

In connection with the COVID-19 pandemic, the BGK Group has actively supported businesses with a wide range of products prepared in cooperation with the legislator, the European Commission, the banking sector regulators as well as commercial and cooperative banks.

The role of BGK as a bank supporting the socio-economic development of Poland has gained particular importance during the COVID-19 pandemic. BGK successfully fills the market gap and undertakes countercyclical initiatives that activate stagnant sectors. During the global pandemic, BGK has successfully supported the Polish economy and Polish enterprises by implementing measures as part of the Anti-Crisis Shield or supplementing the government’s actions in this area (see Section 5.4 of this report for more details). With the safety of its clients and employees in mind, the Group implemented many solutions, including hybrid work and electronic flow of documents.

In addition, as part of the aid package, together with the legislator the Bank also established new cash flow funds, described in more detail in Section 4.15 of this report.

As part of the aid programme, KUKE S.A. continued offering State Treasury-guaranteed insurance of short-term export receivables – KUKE GAP Ex and GAP Ex+ (described in more details in Section 5.4.3 of this report) to Polish businesses. The products were launched in 2020 in connection with the COVID-19 pandemic.

Three Seas Initiative Investment Fund

In 2019, on the initiative of BGK, the Three Seas Initiative Investment Fund was established (operating under the name Three Seas Initiative Investment Fund S.A. SICAV-RAIF) as an international investment fund supporting infrastructure projects which are significant growth drivers for countries located in Central and Eastern Europe between the Baltic Sea, the Black Sea and the Adriatic. The main objective of this financial vehicle is to fill in the infrastructure gap between western and eastern parts of the European Union by financing transport, energy and digital connections on the north-south axis in countries located in the Three Seas Region.

As at the end of 2021, the entity’s shareholders were 11 entities representing Poland, Romania, Hungary, Estonia, Latvia, Slovenia, Bulgaria, Croatia and Lithuania, including one private investor and an investment advisor of the Fund.

It is assumed that the target size of the Fund will be in the range of EUR 3–5 billion. The Fund is also open to international financial institutions and private investors.

For more information on the Fund’s activities see Section 4.10 and 4.17.

Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

3W initiative

In August 2021, Bank Gospodarstwa Krajowego announced the 3W initiative. 3W stands for the Polish names of three resources: water, hydrogen and carbon, understood as innovative carbon technologies, such as fullerenes, nanotubes and graphene. The initiative fits in with the Bank’s activities related to sustainable socio-economic development.

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The goal of the 3W project is to enhance the competitiveness of Polish economy in terms of water-hydrogen-carbon, and build social awareness of zero-carbon economy and sustainable water management. In effect, the 3W initiative is intended to create a better living environment for present and future generations.

Bank Gospodarstwa Krajowego coordinates the implementation of the 3W initiative. The report “3W Idea. Development perspectives” describes, among other things, which technologies in the 3W area may change the reality around us. (https://idea3w.org/).

As part of the 3W initiative, the Bank’s representatives have already held first meetings and workshops with the representatives of the world of science and business and with local government units. Their purpose is to build bridges between the world of science and entrepreneurs, so as to ensure that what scientists create in laboratories is commercialised quickly and effectively. The 3W initiative was also promoted during high-profile socio-economic events, such as Impact’21 and Vision for Development Forum.

ESG (Environmental, Social and Governance)

In 2021, the Bank continued the implementation of the Sustainable Development project, designed to meet regulatory requirements and include the three sustainable development aspects in the Bank’s Strategy and structure and in the cooperation with stakeholders and clients. The design work was carried out in seven streams: awareness building, strategic management, ESG scoring guidelines, risk management, sustainable financing, integrated reporting, and collection and reporting of ESG data. In 2021, a cycle of training sessions for employees on sustainable development was completed. ESG risks were included in the Risk Management Strategy, Credit Policy and regulations on operational, compliance and reputational risk. Assumptions and operating framework of the new ESG Risk Office were also developed. The office will be responsible for assessing clients and financing transactions in terms of ESG criteria.

In 2021, the Bank established cooperation with an advisory consortium employed by the European Commission in the project “Strengthening the sustainable finance framework of national promotional banks.” With the support of the advisor, the Bank develops a method for ESG scoring and transaction classification as well as sustainability proofing and climate and environmental tracking for financing from the InvestEU Fund. The advisor also prepares recommendations for priorities of BGK’s Business Model (read more in Section 5.3).

Government Polish Order Fund: Strategic Investment Programme

The pandemic of SARS-CoV-2 had an adverse effect on investment plans of local governments. Proceeds from personal income tax, which have a significant share in the budgets of local government units, dropped by 1.9%, which combined with a decline in investment surplus by more than 11%[1] greatly reduced investment appetite. About one-third of local authorities planned to scale down their development activities[2].


[1] 2020 vs. 2019.

[2] Source: Report “Financial condition of local government units after four quarters of 2020,” Research and Analyses Bureau, BGK, April 2021.

Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

To stimulate local public investments, the Government Polish Order Fund: Strategic Investment Programme was set up, which is at the disposal of the Prime Minister. The Programme is intended to co-finance investments pursued by local government units and their associations, covering even up to 98% of costs.

In 2021, the first pilot call for applications was held under the Programme (period of the call: 2 July – 15 August 2021). On 28 December 2021, two new calls for applications were launched (including one addressed to units where former State Agricultural Farms were run). For more details on the Strategic Investment Programme see Section 4.16.

VINCI Spółka Akcyjna

In 2021, the Bank established a subsidiary VINCI Spółka Akcyjna (a joint-stock company), which manages ASIs investing in innovative projects and the development of Polish technology. The company was entered in the register of ASI Managers in the second half of 2021. Vinci S.A. fills the gap in the financing of Polish businesses in the market of advanced technologies. The company’s objective is to retain innovative technologies and patents in Poland and ensure their commercialisation in Poland and abroad.

For more information on Vinci S.A. visit https://vincizasi.pl/.

The TeamEurope initiative   

The successful pillar assessment carried out by the European Commission enabled BGK to sign an agreement with the European Commission on 13 December 2021 on activities relating to delivery of COVID–19 vaccines to Eastern Partnership countries (Ukraine, the Republic of Moldova, Georgia, Armenia, Azerbaijan). The received grant of EUR 35 million will be used to finance and deliver from 2 to 10 million doses of COVID-19 vaccine to those countries. The project is implemented together with the Ministry of Foreign Affairs of the Republic of Poland and the European Commission’s Directorate-General for European Neighbourhood Policy and Enlargement Negotiations. The Ministry of Foreign Affairs coordinates EU’s efforts related to the provision of vaccines to Eastern Partnership countries, while BGK implements the grant, fulfilling all tasks related to the management of the funds received, and acts as the payment agent.

Changes regarding the support of the housing industry

In 2021, the Housing Package entered into force. It involves a comprehensive range of legislative amendments designed to improve the attractiveness of government housing support programmes in the sector of affordable housing, with particular focus on municipal and social housing. The amended acts introduced changes in: preferential loan granted as part of the support programme for social rental housing (SRH), non-repayable construction support from the Subsidy Fund (BSK), subsidies to apartment rents “Housing for a Start”, premiums from the Thermal Modernisation and Refurbishment Fund (TMRF).

In 2021, the Government Housing Development Fund was established under the management of the Bank. Its resources are used to provide support to municipalities to cover shares in new or existing Social Housing Initiatives or Social Housing Associations.

Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

1.3         Important events for the BGK Group in 2021

 

 

Key events in 2021

January

n

Receipt of Top Employer 2021 certificate.

 

 

February

n

The President of the Management Board of BGK received the Terra Mariana order of the President of the Republic of Estonia for strengthening friendly relations with Estonia.

n

Publication of the report “Outcomes of the Biznesmax subsidised guarantee scheme”.

n

BGK donated EUR 250 thousand of aid funds for victims of the earthquake in Croatia.

 

 

March

n

Entry into force of the Housing Package that extends BGK’s support of the housing industry.

 

 

April

n

Publication of the report “Outcomes of the de minimis guarantee scheme”.

n

Implementation of a new product as part of BGK’s aid package for businesses – Lease guarantees.

 

 

May

n

Execution of an agreement on loans to medium-sized cities with the European Investment Bank.

n

BGK implemented lease guarantees for micro, small and medium-sized enterprises.

 

 

June

n

Announcement of the Strategic Investment Programme as an element of the Government Polish Order Fund.

n

The President of the Management Board of BGK received the Polish Radio Economic Award for the Three Seas Initiative Investment Fund in the category “Breakthrough solution”.

n

Conference of the Three Seas Initiative Investment Fund in Zagreb.

n

BGK joined the Clean Air programme with its credit guarantee offer.

n

BGK distinguished in the 10th edition of CSR Leaves for its activities facilitating the achievement of Sustainable Development Goals for 2020.

 

 

 

July

n

Launch of the first call for applications to the Government Polish Order Fund: Strategic Investment Programme.

n

Participation of BGK’s delegation in the Three Seas summit in Sofia.

n

First international issue of bonds for the COVID-19 Response Fund.

 

 

August

n

Initiation of the 3W project: Water – Hydrogen – Carbon.

n

Tramwaje Śląskie obtained financing of nearly PLN 0.5 billion from BGK and Bank Pekao for the modernisation of the tram system in the cities of Silesia and the Zagłębie region.

 

 

September

n

Announcement of BGK’s Strategy for 2021–2025.

n

Mateusz Morawiecki, the President of the Council of Ministers, extended the mission of the Management

Board for the next term of office.

n

Signing a sector understanding on the development of offshore wind energy industry in Poland.

n

Publication of BGK’s CSR report for 2020.

 

 

October

n

Accession to the Polish hydrogen agreement.

n

Announcement of results of the first call for applications for the Government Polish Order Fund: Strategic Investment Programme.

n

Publication of the report “3W Idea. Development perspectives”.

n

BGK secured EUR 240 million from the EIB to finance the construction of the Tri-City bypass.

 

 

November

n

Conference of the Three Seas Initiative Investment Fund in Vilnius.

n

Publication of the report “Outcomes of De Minimis and COSME Guarantee Schemes”.

n

A study visit at BGK of development banks and institutions from the Central and Eastern Europe.

n

Signing an administrative agreement with the European Commission on the implementation of the Connecting Europe Facility, Alternative Fuel Infrastructure Facility (CEF AFIF).

 

 

December

n

Signing an agreement with the European Commission on the delivery of COVID-19 vaccines to Eastern Partnership countries.

n

BGK became a partner of the Polish-Arab Economic Forum on EXPO Dubai.

n

Launch of the second edition of the Government Polish Order Fund: Strategic Investment Programme.

 

 

 

Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

1.4         Historical overview of the BGK Group

Establishment of BGK

Bank Gospodarstwa Krajowego is the only state-owned development bank in Poland. It was established by an order of the President of the Republic of Poland in 1924. During the interwar period, BGK focused on supporting public and municipal institutions as well as armament manufacturers, in addition to managing industrial plants the control of which was assumed by the state. The Bank also administered government special purpose funds and provided significant financial support to the modernisation and development of the Polish economy of that period, including the Central Industrial District and the city and sea port of Gdynia. After WWII, the operations of BGK were suspended in 1948.

Resumed operation in 1989

The Bank was reactivated in 1989 as an institution specialising in the provision of services to the public sector. The operations of BGK are governed by the Act on Bank Gospodarstwa Krajowego of 14 March 2003, as amended, and the Regulation of the Minister of Development on the adoption of the Articles of Association of Bank Gospodarstwa Krajowego, dated 16 September 2016. Currently, BGK is the major institution supporting the State in the administration of socio-economic government programmes designed to promote entrepreneurship as well as infrastructure and residential investment at the national, regional and local level.

In 2020, BGK began the modernisation of its historical head office at Al. Jerozolimskie 7 in Warsaw. For the time of the refurbishment, the Bank moved to a temporary office in the Varso building at ul. Chmielna 73 in Warsaw.

1.5         Key financial data of the BGK Group for 2021

The BGK Group reported a net profit of PLN 874.6 million for 2021, up by PLN 508.0 million, or 138.6%, year on year. Improved performance was mainly attributable to a PLN 278.3 million higher share of profit and loss of associates resulting from the positive valuation of Fundusz Inwestycji Infrastrukturalnych Kapitałowy FIZ AN and the associates controlled by Fundusz Ekspansji Zagranicznej.

Administrative expenses grew slower than income from banking activities, which were up 4.4% and 7.3%, respectively.



Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

TABLE 1: Key financial parameters of the BGK Group’s operations

Item

2021

2020

2019

Change

2021/2020

Profitability

Income from banking activities1 (in PLN million)

1,565.6

1,459.3

1,368.2

7.3%

 

Administrative expenses (in PLN million)

-651.7

-624.1

-600.8

4.4%

 

Net impairment losses and provisions (in PLN million)

-332.3

-384.6

-231.4

-13.6%

 

Share of profit or loss of associates (in PLN million)

253.3

-25.0

-268.6

-

 

Profit before tax (in PLN million)

1,093.5

447.0

459.2

144.6%

 

Net profit (in PLN million)

874.6

366.6

390.2

138.6%

 

Scale of activity

 

Loans, bonds (municipal and commercial), gross (in PLN million)

45,886.2

45,964.0

44,049.4

-0.2%

 

Net equity investments

6,781.7

5,879.8

5,216.0

15.3%

 

Liabilities to customers (in PLN million)

150,804.1

116,138.1

59,701.4

29.8%

 

Total equity (in PLN million)

24,722.1

23,924.0

18,653.9

3.3%

 

Balance sheet total (in PLN million)

196,643.5

160,325.5

100,521.2

22.7%

 

Operating performance

 

C/I2 ratio on core activities

41.6%

42.8%

43.9%

-1.2

pp

C/I3 ratio including other income and expenses

35.7%

42.2%

38.5%

-6.5

pp

ROE (net profit / average total equity)

3.6%

1.7%

2.1%

1.9

pp

ROA (net profit / average assets)

0.4%

0.2%

0.3%

0.2

pp

Net interest margin (net interest income / average assets)

0.5%

0.6%

0.8%

-0.1

pp

1 Net interest (including net modification gain/loss) and commission income, net gain/loss on financial instruments at fair value through profit or loss and net exchange differences, net gain/loss on investments in financial assets and derecognition of assets

2 C/I = (administrative expenses) / (income from banking activities) 

3 C/I same as above, with the proviso that the denominator includes other income/expenses

In 2021, the BGK Group reported the balance sheet total of PLN 196,643.5 million, which grew year on year by PLN 36,318.0 million, or 22.7%. The increase was mainly attributable to a rise in liabilities to customers by PLN 34,666.0 million, which implied higher liquid assets and debt instruments.

ROE grew by 1.9 pp, to 3.6%. ROA was 0.2 pp higher than in 2020 and stood at 0.4%. The C/I ratio, including other operating expenses and income, dropped by 6.5 pp year on year, to 35.7%.

The C/I ratio on core activities fell from 42.8% in 2020 to 41.6% in 2021.

1.6         Key financial data of BGK for 2021

In 2021, the Bank reported a net profit of PLN 695.6 million, up by PLN 379.9 million as compared to the preceding year. Net profit grew mainly due to a PLN 163.8 million rise in net income on investments in financial assets, which grew by 115.6% from the end of 2020.

Key profitability ratios and performance indicators for 2021 were as follows: ROE climbed by 1.5 pp to 2.9%, ROA grew by 0.2 pp (to 0.4%), while the C/I ratio on core activities fell 4.7 pp, to 30.9%, over 2020.

Solvency ratio remained at a high and stable level of 28.5%. The strong capital position of the BGK Group at the end of 2021 improves the potential to achieve BGK’s mission in upcoming years and enables further intensification of activities supporting Poland’s economic growth.



Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

TABLE 2: Key financial parameters of BGK’s operations

Item

2021

2020

2019

Change

2021/2020

Profitability

Income from banking activities1 (in PLN million)

1,793.7

1,468.0

1,387.7

22.2%

 

Administrative expenses (in PLN million)

-537.4

-522.1

-475.9

2.9%

 

Net impairment losses and provisions (in PLN million)

-392.0

-521.6

-403.8

-24.8%

 

Profit before tax (in PLN million)

841.5

369.9

578.6

127.5%

 

Net profit (in PLN million)

695.6

315.7

511.2

120.3%

 

Scale of activity

 

Loans, bonds (municipal and commercial), gross (in PLN million)

45,830.1

45,935.0

44,024.0

-0.2%

 

Liabilities to customers (in PLN million)

150,810.7

116,257.7

59,821.3

29.7%

 

Net equity investments (in PLN million)

6,589.3

7,714.3

6,942.5

-14.6%

 

Total equity (in PLN million)

24,514.3

23,874.0

18,675.2

2.7%

 

Balance sheet total (in PLN million)

196,441.9

160,301.2

100,604.2

22.5%

 

Operating performance

 

C/I2 ratio on core activities

30.9%

35.6%

34.3%

-4.7

pp

C/I3 ratio including other income and expenses

30.3%

36.9%

32.6%

-6.6

pp

ROE (net profit / average total equity)

2.9%

1.4%

2.7%

1.5

pp

ROA (net profit / average assets)

0.4%

0.2%

0.4%

0.2

pp

Net interest margin (net interest income / average assets)

0.5%

0.6%

0.8%

-0.1

pp

Total capital ratio4

28.5%

33.9%

28.7%

-5.4

pp

1 Net interest (including net modification gain/loss) and commission income, net gain/loss on financial instruments at fair value through profit or loss and net exchange differences, net gain/loss on investments in financial assets and derecognition of assets

2 C/I = (administrative expenses) / (income from banking activities) 

3 C/I same as above, with the proviso that the denominator includes other income/expenses

4 Calculation excluding commissioned activities

 

In 2021, the Bank reported the balance sheet total of PLN 196,441.9 million, which grew year on year by PLN 36,140.7 million, or 22.5%.

The increase was mainly attributable to:

§  items related to liabilities to customers – up by PLN 34,553.0 million, or 29.7%, year on year,

§  increase in total equity by PLN 640.3 million, or 2.7%, year on year.

2.    The economy in 2021

2.1         Domestic economy

Rebound after the COVID-led recession

In 2021, a quick recovery followed the COVID-induced recession. The annual GDP grew by 5.7%, picking up pace at the end of the year (to 7.3% year on year NSA). The rise was driven by individual consumption and stock build-up, combined with strong investment performance. The strong domestic demand translated into rapid expansion of imports. In consequence, the international trade contribution was negative, even despite a significant increase in exports. Data showed accelerating year-on-year growth of added value in the industry, which well coped with the crisis caused by the pandemic. A gradual stabilisation was also observed in services, which were hit significantly during the first stage of the crisis (tourism, catering business), although not all activities managed to regain strength from before the crisis.



Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

TABLE 3: Changes in macroeconomic indicators year on year in real terms

Item

2021

Q1-Q4

Q1

Q2

Q3

Q4

Gross Domestic Product

5.7%

-0.8%

11.2%

5.3%

7.3%

Domestic demand

8.2%

0.3%

12.4%

8.6%

11.2%

Total consumption

4.8%

0.3%

10.3%

3.7%

5.3%

Individual consumption

6.2%

0.1%

13.1%

4.7%

7.9%

Gross capital formation

23.1%

0.4%

21.9%

33.8%

30.0%

Gross fixed capital formation

7.9%

1.7%

5.6%

9.3%

11.7%

Exports

12.0%

7.3%

29.2%

8.6%

6.0%

Imports

17.4%

10.3%

34.5%

15.2%

13.2%

Gross value added

5.3%

-1.2%

10.3%

5.1%

7.1%

Manufacturing

14.2%

7.5%

27.2%

10.4%

14.2%

Construction

1.2%

-14.9%

3.1%

5.2%

5.8%

Trade and repair of motor vehicles

5.9%

-0.2%

12.8%

4.5%

7.7%

Transport, storage

14.1%

2.2%

25.3%

13.4%

16.5%

Source: Statistics Poland.        

 

Anti-crisis shields facilitated the post-COVID recovery

A significant factor that contributed to the economic recovery were government programmes (so-called anti-crisis shields) operated in the first half of the previous year. They helped stabilise the labour market in the first half of the year and built a solid foundation for the growth of salaries and employment in the second half of the year. Ultimately, the unemployment rate fell to 5.4% in December 2021, from 6.3% in December 2020, employment growth increased by +0.5% year on year, from a year on year decline of -1.0%, and salary growth accelerated by +11.2%, from a year-on-year increase of +6.6%. After the GG deficit grew from 45.6% of GDP in 2019 to 57.5% for the entire 2020, after the first three quarters of the year data showed stabilisation of this indicator at 56.6% in 2021 vs. 56.5% in the previous year.

The economic recovery, a rebound in the credit market and an increase in interest rates resulted in higher net profit of the banking sector for 2021, which went up to PLN 8.9 billion (based on unaudited monthly data, updated as at 31 January 2022), from PLN -0.3 billion in 2020. ROE for the whole sector increased from -0.15% to 4.4%.

Rapid increase of interest rates

The strong economic rebound after the pandemic coupled with aggressive fiscal and monetary expansion on a global scale triggered an increase in prices of raw materials, including energy, and food. With the observed economic recovery in Poland, this resulted in a significant increase in consumer prices (8.6% year on year in December). In effect, in autumn the Monetary Policy Council resolved to start a cycle of interest rate increases. By the end of the year, the reference rate of NBP was increased by 165 bps, to 1.75%, and further increases were announced. Shortly before, NBP discontinued its monetary easing policy. It suspended the SOOR (structural open market operations) programme involving the purchase of Treasury bonds and bonds with a State Treasury guarantee on the secondary market. As a result, while markets discounted further interest rate increases, in 2022 yields and IRS/FRA and WIBOR rates grew significantly.

At the end of the year, consumer and business sentiment cooled, which in the face of the negative impact of higher prices and interest rates gave rise to fears that the economic growth would stall. In response, the government decided to cut certain indirect taxes in the first half of 2022. In addition, the government declared to provide direct support to households most affected by higher energy prices and announced a tax reduction for persons from lower income groups.



Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

2.2         Economy abroad

Global recovery

According to an estimate made by the International Monetary Fund in January, the growth rate of global GDP in 2021 was +5.9% year on year, compared with -3.1% year on year in 2020. The strong increase in activity was driven by the previously withdrawn demand for goods and services, significant fiscal expansion and continued monetary easing in the first half of the year in most economies. In consequence, combined with prolonged disruptions in supply chains, higher prices of energy resources, food and other key raw materials, this propelled global inflation. In reaction, interest rates were increased in some peripheral economies (including in our region) and more restrictive monetary policy measures were announced in the largest global economies.

Reversal in debt markets

The year 2021 saw a change in direction of valuation of Treasury securities. In most benchmark markets, at the beginning of the year a consistent rise in yields could be observed. Investors tried to price in the more and more evident reflation of raw materials. These changes grew stronger in the spring, as economies were opened after being locked down during winter and spring. In the summer months, a slowdown was observed, which was partially caused by a fading momentum of the industrial recovery, previously driven by delayed demand. The last quarter brought a dramatic rise in the prices of coal, natural gas, crude oil and agricultural raw materials. In combination with the communication by main central banks, which withdrew from the narrative that the inflation growth would be temporary, this again prompted a decline in prices of Treasury bonds. As a result, curves were pushed back to levels last recorded before the pre-pandemic 2019.

2.3         Impact of the situation in Belarus and Ukraine on the economy and the BGK Group

In 2021, a migration crisis unfolded on the Poland-Belarus border in connection with the inflow of illegal migrants and refugees from the Middle East. The crisis was fuelled by Belarusian authorities, which created migrant transfer channels. The activities were aimed at softening the EU’s sanctions policy towards Belarus enforced since the fraudulent elections staged in 2020. In consequence, the Polish government decided to introduce a state of emergency in the border areas between Poland and Belarus.

The military attack launched in Ukraine by Russia in late February of this year caused disruptions in supply chains between Poland, Ukraine, Russia, Belarus and other countries. They occurred as a result of blocking the logistics system linking Eastern Europe and Central Europe and sanctions imposed on Russia and Belarus.

According to preliminary estimates by the Bank’s economists, this will slow down GDP growth in 2022 to approximately 3.6% year on year. The GDP growth rate will be positively affected by increased private and public consumption resulting from accepting refugees. However, it will be weighed down by a slowdown in investment caused by depressed investment environment.

The Bank’s economists expect that the conflict will drive up food prices due to discontinued production in part of the Ukrainian agricultural sector and cutting off of Russia’s agriculture from global markets (an indirect consequence of financial sanctions and Russia’s restrictions on exports). Both countries are major global exporters of food. Moreover, food prices will be marked up by mounting production costs (crude oil and fertilizers). All these factors will indirectly lead to lower expenditure and crops in Polish and European agriculture and will put upward pressure on prices on local markets.

In this context, the Bank’s economists expect a significant increase of inflation (above 10% throughout most of the year), despite the anti-inflation shields introduced by the government (we expect them to be extended until the end of the year). According to the Bank’s economists this gives rise to the risk of interest rate increase near 5.0% and a prolonged depreciation of the Polish złoty.

Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

The entire Polish banking sector is well aware of digital threats. BGK, together with other financial institutions, has intensified efforts to ensure security of banking systems. The priority for the Bank is to ensure security of customer’s funds and continued efficient operation of its products and programmes.

BGK is a member of the crisis team at the Polish Financial Supervision Authority. The Bank has appointed a crisis management team whose role is to prepare the Bank’s response in case of a crisis situation and to minimise its impact on the Bank’s operations.

BGK continuously monitors IT systems and ensures cyber security based on procedures and mechanisms which give instructions on how to act in such situations.

On 3 March 2022, BGK made a PLN 30 million donation to Ukraine. Also, on behalf of the National Bank of Ukraine, it opened a special account to which funds may be transferred by individuals. The Bank also provides assistance through foundations and employee volunteerism. In cooperation with the European Commission and the Solidarity Fund PL, BGK engages in humanitarian relief operations in which aid is provided directly to beneficiaries in Ukraine. At the time of closing this report, the Bank’s experts were working on a range of solutions to support Polish businesses which lost their liquidity and markets as a result of the war in Ukraine.

3.    Changes in the regulatory environment

The operations of Bank Gospodarstwa Krajowego, whose mission is to support the state in the implementation of the social and economic growth policy, are subject to more Polish and EU regulations than the activities of other banking sector entities – the Banking Law, Recommendations of the PFSA, requirements of CRR and other regulations applicable to banks. In 2021, as a result of the pandemic many laws were passed to regulate activities related to fighting the COVID-19 pandemic and its social and economic consequences.

The most important amendments that affect BGK’s operations were made in the following laws and regulations:

§  consolidated text of the Act on Bank Gospodarstwa Krajowego, announced on 17 January 2022 (including the amendments made in 2021);

§  Regulation of the Minister of Development, Labour and Technology of 31 December 2020 amending the Regulation on the adoption of the Articles of Association of Bank Gospodarstwa Krajowego;

§  Acts Amending the Act on Specific Solutions Related to Preventing, Counteracting and Combating COVID-19 and Other Infectious Diseases and Crises They Caused, and Certain Other Acts;

§  Act of 21 January 2021 Amending the Act on Trading in Financial Instruments and Certain Other Acts;

§  amendment to the Act on Counteracting Money Laundering and Financing of Terrorism of 1 March 2018;

§  Act Amending Certain Acts Supporting the Housing Industry of 10 December 2020;

§  Regulation of the Minister of Finance, Funds and Regional Policy of 23 December 2020 amending the Regulation on the principles of creation of banking risk reserves;

§  Regulation of the Prime Minister of 31 December 2020 on the detailed procedure for acquiring or subscribing for shares by the State Treasury using the resources of the Capital Investment Fund;

§  Act of 25 February 2021 Amending the Banking Law and Certain Other Acts;

§  Regulation of the Minister of Finance, Funds and Regional Policy of 16 March 2021 on special accounting policies and reports on the activities of the Insurance Guarantee Fund;

§  Regulation of the Minister of Development, Labour and Technology of 23 March 2021 on model forms to be used by Bank Gospodarstwa Krajowego to submit information on the financial support provided and that may be provided from the Subsidy Fund;

§  Regulation of the Minister of Development, Labour and Technology of 25 March 2021 on the financial aid for the creation of apartments for rent, assisted accommodation units, lodging houses, houses for homeless, warming centres, temporary shelters, municipal technical infrastructure or social infrastructure;

§  Act of 15 April 2021 Amending the Act on Toll Motorways and the National Road Fund and Certain Other Acts;



Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

§  Regulation of the Minister of Finance, Funds and Regional Policy of 20 May 2021 on the state aid granted by Bank Gospodarstwa Krajowego in the form of lease guarantees in connection with the consequences of COVID-19;

§  Regulation of the Minister of Finance of 20 December 2021 amending the regulation on the state aid granted by Bank Gospodarstwa Krajowego in the form of lease guarantees in connection with the consequences of COVID-19;

§  Act of 28 May 2021 Amending the Act on Certain Forms of Support for Residential Construction and Certain Other Acts;

§  Regulation of the Minister of Finance, Funds and Regional Policy of 8 June 2021 on the risk management system, internal control system and remuneration policy in banks;

§  Act of 8 July 2021 Amending the Act on the Bank Guarantee Fund, Deposit Guarantee Scheme, and Compulsory Restructuring, and Certain Other Acts;

§  Regulation of the Minister of Finance, Funds and Regional Policy of 27 July 2021 on the list of domestic public positions and functions which are politically exposed positions;

§  Regulation of the Minister of Finance, Funds and Regional Policy of 27 July 2021 on detailed manner of estimating internal capital and performing reviews of strategies and procedures of estimation and permanent maintaining of internal capital by banks;

§  Act of 11 August 2021 Amending the Act on Public Finances and Certain Other Acts;

§  Act of 1 October 2021 on Guaranteed Housing Loan;

§  Act of 1 October 2021 Amending the Act on Trading in Financial Instruments and Certain Other Acts;

§  Act of 17 November 2021 Amending the Road Traffic Law and the Act on the Government Road Development Fund;

§  Act of 17 November 2021 Amending the Higher Education and Science Law and Certain Other Acts;

§  Regulation of the European Parliament and of the Council establishing the InvestEU Programme and amending Regulation (EU) 2015/2017;

§  Regulation (EU) 2019/876 of the European Parliament and of the Council of 20 May 2019 amending Regulation (EU) No 575/2013 as regards the leverage ratio, the net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures, reporting and disclosure requirements, and Regulation (EU) No 648/2012.

Apart from the above, a number of other generally applicable laws that govern the Bank’s operations to a varying degree were enacted in 2021.

4.    Operations of Bank Gospodarstwa Krajowego and the BGK Group

4.1         Division of operations within the Bank Gospodarstwa Krajowego Group

The operations of BGK Group are carried out by the Bank and a group of institutions with organisational links to the Bank. These include primarily financial institutions or auxiliary institutions with equity links to the Bank or linked to the Bank by the fact that it exercises supervision over them, as well as subsidiaries and associates which implement BGK’s mission. They supplement the Bank’s operations by carrying out growth-oriented investment activities based on equity financing and the best asset management practices.

The BGK Group’s operations include:

§  banking activity, in which a major role is played by lending and surety activities as well as maintenance of accounts and deposits,

§  commissioned activities related to supporting the State and managing government and EU programmes,

§  investment activities, carried out by the Group entities.



Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

Bank Gospodarstwa Krajowego as the Polish development bank is the key institution supporting the State in the administration of social and economic government programmes intended to promote entrepreneurship as well as infrastructure and housing projects at the national, regional and local level. In addition to conducting banking activities, BGK actively cooperates with ministries competent for specific areas of Poland’s growth and Polish development institutions. The Bank carries out government tasks on the basis of acts and agreements with ministries, including through cash flow funds established by, entrusted with or transferred to the Bank, for which, by virtue of law, BGK keeps separate accounting books and prepares separate financial statements.

The funds manage and administer cash flows which are not recognised in the Bank’s statement of financial position and the statement of profit or loss. Tasks falling within the remit of cash flow funds are implemented by the funds described in more detail in Section 4.15.

Through investment funds and cooperation with surety funds and KUKE S.A. BGK also supports the development of entrepreneurship by providing sureties and facilitates exports made by Polish businesses.

4.2         Lending activity of BGK

The gross value of the Bank’s credit exposures in 2021 reached PLN 45,830.1 million. The year-on-year drop was PLN 104.9 million and was related mainly to structured finance. The Bank engages in providing financing to bridge the gap in the banking sector, including by participating in syndicate loans.

The table below presents the portfolio of credit exposures by business line.

TABLE 4: Loans and bonds (municipal and commercial), gross (PLN million)

Item

2021

2020

yoy change

in nominal terms

%

Loans and bonds (municipal and commercial), gross1

45,830.1

45,935.0

-104.9

-0.2%

    Structured finance

20,540.2

21,180.5

-640.3

-3.0%

    Export and foreign expansion financing

3,812.0

3,274.1

537.9

16.4%

    Businesses and financial entities

2,317.6

2,431.6

-114.0

-4.7%

    Local government institutions and municipal companies

12,202.4

12,284.4

-82.0

-0.7%

    Central government entities

234.7

127.3

107.4

84.4%

    Healthcare entities

1,909.5

1,590.7

318.8

20.0%

    Financing of social housing

4,780.9

5,011.5

-230.6

-4.6%

    Other

32.8

34.8

-2.0

-5.7%

1 the item includes loans, municipal bonds and commercial bonds

The Bank achieved the strongest growth in the area of export and foreign expansion financing, up PLN 537.9 million, or 16.4%, relative to the previous year, and financing healthcare entities – a year-on-year rise of PLN 318.8 million, or 20.0%.



Report of the Management Board on the Activities of the Bank Gospodarstwa Krajowego Group in 2021

(incorporating the Report of the Management Board on the Activities of Bank Gospodarstwa Krajowego)

In the area of social housing, despite the progress of the social rental housing programme (SRH) and higher financing by PLN 119.4 million compared to the previous year, BGK recorded a decline in this category caused by repayments in the portfolio of the former National Housing Fund administered by BGK.

Loan portfolio statistics

The table below presents BGK’s portfolio of loans and commercial and municipal bonds by sector. Below are also presented the changes in lending activity by sector.

TABLE 5: Value and structure of the portfolio of loans and bonds (municipal and commercial), gross (in PLN million)

Item

31 Dec 2021

31 Dec 2020

yoy change

As at

Structure

As at

Structure

in nominal terms

%

Loans and bonds (municipal and commercial), gross1

45,830.1

100.0%

45,935.0

100.0%

-104.9

-0.2%

  financial sector entities

2,225.7

4.9%

1,545.9

3.4%

679.8

44.0%

  non-financial sector entities

30,302.7

66.1%

31,234.7

68.0%

-932.0

-3.0%

    individuals

31.8

0.1%

35.1

0.1%

-3.3

-9.4%

    corporates

30,270.9

66.1%

31,199.5

67.9%

-928.6

-3.0%

  public sector entities

13,301.7

29.0%

13,154.4

28.6%

147.3

1.1%

    central government entities

1,142.8

2.5%

732.4

1.6%

410.4

56.0%

    local government entities

12,158.9

26.5%

12,422.0

27.0%

-263.1

-2.1%

1 the item includes loans, municipal bonds and commercial bonds and reflects the valuation of the former KFM portfolio

TABLE 6: BGK’s share in the loan market

Item

31 Dec 2021

31 Dec 2020

yoy change

 pp

Loans

2.7%

2.9%

-0.2

     financial sector entities

3.2%

2.9%

0.3

     non-financial sector entities

2.0%

2.1%

-0.1

     public sector entities

26.4%

25.3%

1.1

 Source: NBP.

As at the end of 2021, exposures past due by more than 90 days fell by PLN 48.6 million, i.e. 17.7%, to PLN 225.8 million, and constituted less than 0.5% of the credit exposures portfolio.

As at the end of 2021, total debt subject to collection or restructuring was PLN 1,891.8 million (1,464 exposures), while recoveries in 2021 totalled PLN 187.1 million.

The Bank is not involved in any litigation where the unit amount of the claim represents at least 10% of its equity. The total value of claims also does not exceed that threshold.

TABLE 7: Amount and structure of receivables that were subject to enforcement (in PLN million)

Receivables by type

31 Dec 2021