Powszechna Kasa Oszczednosci Bank Stock

Good morning. I would like to welcome you. And the registration of the shareholders has already taken place. I have the confirmation. We have the list of the shareholders. So we can start the Extraordinary General Meeting of Shareholders of the company, PKO BP SA, which was convened today at 10 a.m. We start sharp. And traditionally, this General Meeting of Shareholders will be taken minutes of by [ a notary ].

And I am opening this General Meeting of Shareholders that is convened as of today and fulfilling all the formal requirements of the announcement was published on the company's website on the 10th of September 2026. So there are no objections to holding this meeting. And since we are after the formal opening, I would like to move to the next point, the last point for me, namely the appointment of the Chairman for today's Extraordinary General Meeting. So please put forward your candidates.

I would like to propose Leszek Koziorowski, Mr. Counsel, to chair today's meeting. So our bank always combines the tradition with the modernity. So we have 1 candidate for chairing this meeting proposed by the shareholder, the State Treasury. Are there any other candidates? No, I can't see.

So before we move to the secret vote, I would like to ask the representative of the company responsible for the voting system. This is the Unicomp company, which is servicing today's voting system, and now other rules for the vote. So you received the tablets, and you will use these tablets for casting your votes and for taking your decisions at today's meeting. And on the tablets, you can see 2 buttons. One button is your data. The second is the documents.

When you press the documents button, you have the documents for the specific meeting. And if you press your data, you have the information about your representation and how many shares you hold for the vote. As for the voting process, at the moment of ordering the vote on the tablet and also on the screen, you will see the title of the vote. And there will be also the decision keys shown. So you choose your decision. When you choose your decision, you move to the next screen on the tablet and then you confirm, and then this vote is counted in the system.

As for the secrecy of vote, of course, this system preserves the secrecy of the vote, and also it is possible to do the split voting. As I said, we will vote in secret mode, as I mentioned, for the appointment of the Chairman. If everything is clear from the technical point of view, I think we can proceed with the vote for the Chairman of today's meeting.

[Voting]

So ladies and gentlemen, the vote is complete, and I would like to inform you that the Chairman for today's meeting was appointed Mr. Leszek Koziorowski, the Counsel. And there were the votes for yes -- all the votes were yes for his appointment. 914,629,266 votes. There were no votes against. There were no objections. Therefore, I pass the floor to the appointed Chairman.

Ladies and gentlemen, good morning. Thank you very much for my nomination. And I would like to comment that I will, of course, fulfill your expectations in the same way as the phenomenal and modern bank fulfills the customers' expectations. So congratulations to the Management Board, and congratulations to you for your products and also for people working in the bank. So of course, congratulations.

And so the modernity fulfills the customers' expectations, and also the tradition fulfills these expectations as well. So I will move to point #3. There are some technical issues. In a moment, I will sign the attendance list, and then I will proceed to the further points on the agenda.

Ladies and gentlemen, so I can see kind of an echo. Okay. So under the point #3, confirming the correctness of calling the meeting, I am obliged to make 2 statements. First statement, I will start from the attendance list that I have already signed, which is in front of me. And if anyone wants to see it, of course, it is displayed on the desk, and it will be the attachment to the notarial protocol, which the notary will prepare after this meeting.

And the attendance list shows that as for the presence of the shareholders, so we have 914,629,266 votes and shares, which represents 73.17% of the share capital of the company.

The second statement is about the correctness of calling this meeting. And this meeting was convened by current report 33/2026 on the 10th of September 2026. On the same day, also the call for the meeting was published on the company's website under the tab General Meetings.

And since the form and the date of the publication, the general meeting was convened correctly because it fulfills the requirements of the Commercial Companies Code and also the statute of the bank. And taking the above into consideration, I would like to confirm that this meeting is convened properly and is capable of adopting binding resolutions that are stipulated on today's agenda.

As for the agenda, we have point #4 to be debated. Are there any comments about the changes to this point #4 that was proposed by the Management Board of the bank? So in the notice for the meeting, there was also the agenda. There were also the draft resolutions for today's meeting and also the technical remark that if we put a resolution under a vote, so then I will be putting under a vote all the draft resolutions that were displayed on the company's website as an attachment to the notice for calling the meeting.

There are no comments to the agenda. So I confirm that the agenda is adopted in the wording from the report 33/2026. We move to point #5 regarding the amendments to the Articles of the Association of Powszechna Kasa Oszczednosci Bank Polski Spolka Akcyjna.

So the draft resolution was published, available on the company's website with this title on the amendments to the Articles of Association, and it refers to the changes in Paragraph or Section 2 Item 4. After the letter LK is read, K letter is added. Are there any comments on such proposed amendment to the articles?

So ladies and gentlemen, I will put under vote the draft resolution proposed by the Management Board of the company. I would like to remind you that in order to change the statute of the bank, the Commercial Companies Code requires that the qualified majority is obtained, 3/4 of the votes, in order to amend the Articles of Association.

So could you please prepare the system for the vote, and I order the voting on this draft resolution. So please cast your votes.

[Voting]

Thank you very much. I understand that the vote is over. And in a moment, I will read the result of the vote. Thank you very much.

I would like to confirm that this resolution was adopted. For yes, 914,578,812. This is 99.99% of the share capital of the company against 50,454. There were no abstentions. So the resolution obtained the required majority.

And congratulations to the Management Board because this proposal was accepted by the General Meeting of Shareholders. At the same time, we realized point #5. And in this way, we realized all the points on the agenda.

And in this way, I would like to close today's meeting because there are no further points, but I would like to congratulate the bank and also the Management Board for adding new functionality to the bank's customers. Thank you very much. Goodbye. I declare this meeting closed.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good afternoon. I appreciate if you could mute as we hear some about this background. So again, let me welcome you at the follow-up call following our Q2 results. We have quite strong team on our side with Jakub Niesluchowski, who will take majority of questions and [indiscernible] answering our topics concerning macro. As usual, we suggest to go straight to Q&A session. We have the formal presentation 3 hours ago. So we are ready for your questions. Gabor please.

Can we confirm your messaging on net interest margin, please? What I gathered from your comments earlier was that it's in a positive trend and you see possible upside going forward, if you could confirm that and elaborate. And just on the Q2 dynamics, this 4 basis point expansion in the clean NIM, can you elaborate on what drove that? I noticed then a drop in your hedge derivative costs. But yes, any further color would be useful.

Jakub, if you could.

Yes, sure. Gabor. So just to confirm and maybe reiterate how we see the NIM going forward for this year because for this year, what also Piotr indicated, we assume that our NIM -- sorry, interest rates will be at 3.75%. And with this assumption, and we work with this assumption in the context of NIM that the NIM adjusted NIM for second quarter, as you saw, is slightly higher, this 4 bps higher than in the first quarter. For the next 2 quarters, we see that the NIM -- we are now in the stabilization phase or period of NIM in the context -- as I look in the context of next 2 quarters. So it might be slight changes of NIM.

I refer here to 43%, so these adjusted levels by a few bps. So not, I would say, very significant moves. So here, I will call maybe stabilization. And in this context, what we commented also management and Board commented, we expect that the NII will be flat with positive upside for the whole year of 2026 in comparison to 2025 due to stabilization of NIM and growth of our balance sheet.

So this how we see going forward for the third and fourth quarter, NIM around the level which we had -- adjusted level, which we had for the second quarter, maybe with some changes by a few bps. And in the context, what you mentioned and asked actually the change of NIM, adjusted NIM in the quarter. One is, of course, volume growth and further optimization of deposit base, as you also seen significant decrease of cost of hedging. And so these are, I would say, the main points which allow us or areas which allow us to increase the NIM, adjusted NIM quarter-to-quarter.

We have [indiscernible] sorry, [indiscernible], you were the first one, please?

First of all, congratulations to the results also for the volume growth. I have a couple of questions. Maybe I will ask them one by one, if that's not a problem. First one on volume. Again, I think this question has already been asked today, but very strong volumes, double-digit growth this year is almost certain. But the question is, what are your expectation for the next couple of quarters? I mean -- and how much do you think in terms of corporate lending, how much of this growth is related fully to the EU funds, safe funds and so on? And how long can it last? -- for how many years? I mean, what is the second round effects on, for example, smaller companies? Because I guess, a material part of the demand currently comes from larger companies. So general, volume growth over the next couple of quarters and drivers.

Here, maybe I will ask [indiscernible] first to comment on the general market perspective.

Yes. So we see growing demand in all the segments actually. And recently, at least in our books, there has been double-digit growth in all the segments as regards corporate lending. And we believe it may be continued going forward, and it is not related only to utilization of EU funds and growing crowding in effect instead of crowding out effect that was visible earlier. There are other factors driving investment activity in the Polish economy stronger other than utilization of EU funds. And we believe it will last maybe not only for the next few quarters, but even for years. And we also see cyclical recovery in Western Europe, in the euro area. Monthly data for the last few months from major European economies have been encouraging.

So we believe that key export markets for Poland will be doing better. So we also believe in cyclical recovery of investment activity in the private sector in Poland. So we see many reasons to expect continued solid, at least high single-digit growth of corporate loans in Poland over the next few -- next few quarters or even years. And we don't think it is related only or mostly to utilization of your funds. And please remember that the recovery fund for Poland, availability of the recovery fund for Poland will not end by the end of this year.

The loan part of the recovery fund will be still utilized beyond 2026, and there will be some additional funding needed for projects confounded by the loan part of the recovery fund. So we don't expect any sudden stop of the lending activity in the corporate segment. On the contrary, we think that even with somewhat lower annual growth rate for total investments in the Polish economy that we expect for the next year, for this year, 10% for the next year, around 2%. Even with such lower growth rate for total fixed investments, we believe corporate loans may be growing at least as strongly as this year.

Yes. And if you look also what [indiscernible] actually showed you during the conference at the Page #8 of our presentation, so the corporate lending for next year is projected for 6.5% in comparison to 6.8% for this year. So there is no, I would say, major change in this context. And if you look on our activities, so we crossed when we also showed 17% market share financing for corporate customers. And also in the context of our strategic goals, we have appetite for more. So for sure, this is also one of our priority, as we also indicated during our conference.

So we have -- we want to balance our activity between retail and corporate. So for sure, there's also attention and focus on the corporate to not stop. What is, of course, encouraging on our side, it's very high increase year-to-year of investment loans, which we also shown in the presentation. And for the large corps, not the biggest one, but large corps is 35% year-to-year. So it's very significant. And this also allowed us actually to have such significant growth of corporate lending year-to-year.

Yes. Second question is on net interest margin. Correct me if I'm wrong, but you have an assumption of interest rate in Poland next year at 3%. Is that right? That's correct.

So we assume that after the transitory increase of the inflation rate later this year and in the first 2 months of 2027, later on, inflation will quickly go back to the target of 2.5% and even below in the second half of 2025. And that's why we think that contrary to what the market is pricing in, if you look at FRA curve, the Polish Monetary Policy Council will not hike rates. later this year or in 2027, but will resume rate cuts in the course of 2027.

And we assume 3 rate cuts of 25 basis points each starting from May 2027. And we believe, again, contrary to market expectations that the risks to this scenario are tilted to the downside. And we do not expect that the Polish MPC could consider a rate cut, a single rate cut as soon as in September this year at the nearest meeting before the wave of inflation increase in later months of 2026. So that's our view on rates. Baseline scenario is free rate cuts by 75 basis points in total in the course of 2027, driving the reference rate to 3%.

Okay. And in that scenario, what will be your net interest margin at the end of the period? I mean what is your current sensitivity, whether this is higher or lower than it used to be, also given the fact that you quite significantly reduced the cost of deposits at the end of the quarter?

Yes. Okay. So first, in the context of our sensitivity, what we actually show and present a static one, meaning for 1-year horizon. So in the second quarter was [ EUR 488 million ], but please remember that it is static and shift by 100 basis points. And now we are starting the process of planning for the next year 2027.

And -- but assuming what [indiscernible] said that and forecast that we will go down from 375% to 3% -- of course, there are many variables here. On the one hand side, what will be positively worked is hedging because if you look from, I would say, nominal point of view, over 50% of our balance sheet is hedged, natural hedge in the form of mortgage loans, now even consumer loans, securities and also hedging with derivatives. So of course, it will roll positive. So for now, what I can say is if we'll have this 75 basis point guide in 2027, we still see the margin will be above 4% in 2027.

Yes. Understood. And last detailed questions on the second quarter results. First is on personnel costs. The headcount is up 2% year-over-year. Costs are -- HR costs are also 2% year-over-year, which means that basically the average salary is flat. So is it related to, I don't know, no hikes this year or some other bonuses assumptions? And what is the expectation for the second half of the year?

So what we actually from a few years, introduced to be from the -- also employees' point of view, more predictable from the management point of view, yearly revision of remuneration. Of course, always the scale depends on the many variables, but it's also perceived for this year. Actually, we are now in the middle of this process. So what you can expect starting from end of third quarter and then fourth quarter, increase of personnel expenses also due to the verification of remuneration of our employees.

And last question from my side is on provision releases in mortgages. It was the seventh consecutive quarter with releases here. So what is the outlook? Do you still have some kind of ammunition here to release the provisions?

Actually, it's hard to, I would say, now predict because it's not necessarily, I would say, plan that each quarter will release provisions provisioning there. It also will depend on the performance of the portfolio.

[indiscernible], please.

I have 3, and I think the last one would be pretty straightforward and simple one. So just starting with the corporate side of the business. Just trying to understand your loans are growing at a rapid pace. In last few quarters, your customer deposits aren't growing in the same vein. Is it part of optimization or that's also kind of helping the NIM? That's one. Second, just on the mortgages side, I understand in March and April, there was a huge influx of refinancing of loans, which the data was suggesting.

So in a sense, how -- what's the trend that you're seeing in terms of loan -- in terms of fixed versus variable rate, what you're seeing? And what's the margin trend in a sense, how are you seeing margins in that product? And lastly, just if you can confirm, I guess, on the call, a CFO at last was talking about cost guidance for this year. So if you could just repeat that, that would be pretty helpful.

Right. So going to the first question about the corporate lending versus deposits. So where is our focus? Our focus is on the one hand side, on the asset side, retail 2 main products, mortgages, consumer loans and also corporate book. And then on the liability side, looking also from the angle of our strategic goal, individual customer savings. So as you can see, we grew our market share predominantly on the liability side on the retail deposits, on the asset management business. So this is our focus. On the corporate side, we don't fight for deposits.

So you rightly spotted, we don't want in this segment, fight with price for the deposit because there is no need. If you look on our -- from our LCR point of view, loan-to-depo point of view, there is no need actually to increase the prices and fight for the deposit. And as a matter of fact, also you rightly spotted, it's positive from the NIM perspective. So we don't have just to end any fixed goal how much in the context of the market share we want to have on the corporate deposit side. It's rather kind of balancing volume, meaning if we need more, we are able to go to the market and gather more deposits if there is a need to do it.

Sure. Just one small follow-up before you go to the mortgage question. Just looking at the investments, like you had presented like -- thanks for presenting that investment loan Y-o-Y growth. Would that mean not -- I guess, just trying to look from the corporate deposit perspective, if those loans are growing faster, would that mean that deposit base for the corporate would not grow as fast as it has done in previous years? Or do you think it's -- those would not be related in some sense?

I would say it might be the case because it also depends how much our retail deposit base, which is actually largest share of our deposit base, at what pace will the deposit base grow -- retail deposit base will grow with these deposits are more sticky. So in this context, we prefer to have retail deposits than more, I would say, variable corporate deposits. So on the liquidity side, we are on the safe side, still having, I would say, a large buffer of liquidity, which we can also use for further lending next, of course, to our very, very good capital position. So -- but again, if there will be a need, we are able actually also to gather and increase levels and shares on the corporate side. Second question was, if I catch correctly, it was about fixed and floating loans in our loan book.

Yes, mortgage side, specifically on the mortgage side.

Okay. On the mortgage side, if you look end of second quarter on our loan book, we had 47.4% of loans, which are based on initial fixed rate for 5 years. In the context of sale in the second quarter, it was 63% new sales based on mortgages with initial 5-year fixed rate. Is that.

Yes, you've answered it. Just a follow-up was on the margin side, I think how we are looking at the margin spread on the product actually as a whole? Because on the call, I was hearing to CEO, CFO, and they were talking about you're not that keen on refinancing. You're looking at people -- your customers more rather than refinancing from the other banks. So just trying to understand the spread in a sense, like trying to look at broader picture on the ROE. So if you could briefly comment on that.

Sure. So we -- indeed, our refinancing level is lower than, I would say, market average and numbers also showed by part of our competitors, at least, they actually told what is the level of the refinancing. And here, we also, what is important, leverage of our presence, not only in big cities or bigger cities, but also outside big cities. So we can actually limit here, especially on the retail side, the pressure which are on the loan side, if we talk about the mortgages. Of course, there are banks which are now fighting for regaining market share. So for example, one of example is [ Millennium ]. They for a long time have their challenges with capital. Now they are back on the market, and we see that they are growing our market share, but also others like [indiscernible] like ING, and they actually, in some cases, propose customers very low margins.

So we are not there. we are not fighting. Of course, we are actually adjusting our pricing dynamically. However, it's more about, in our case, structure of the sale because we want to have more fixed rate loans, meaning initially fixed rate loans because it's natural hedging in the context of interest rate risk. So we're actually adjusting, I would say, margins between floating and fixed just to have the structure of the new sale, which we want rather than competing with extremely low margins sometimes proposed by our competitors.

And sorry, the last thing just on the cost, I think we should be very brief actually.

So it was actually told during also conference, looking at current dynamic, we see it's mid-single digit may be skewed towards slightly mid- high single digit. However, due to, for example, what I already mentioned, a revision of remuneration. So you can expect that the personnel costs will grow in next periods.

Yes, I can add here that we will continue initiatives connected with the development of the bank towards targets specified in the strategy. And of course, we keep high discipline in business as usual cost connected.

Gulnara please.

So I just wanted to follow up on the competition. So have you seen any material shifts when it comes to Q2 compared to Q1 and at the beginning of the Q3? Because some of your peers mentioned the spread compression on the corporate side. And when it comes to the competition, where do you see the greatest competitive intensity, how [indiscernible] is responding, especially when it comes to the corporate and household lending? And maybe a follow-up on the capital allocation. As the volume momentum continues to remain strong, how should we think about the capital allocation going forward? Should we expect the dividend payout to be towards more the lower end of your range, potentially closer to 50%? Or would we -- would it be fair to expect it to be somewhere in the middle at the full year results?

Okay. So maybe let's start with the second question first. So on the one hand side, we haven't -- for now, we don't change what we communicate that we see the payment levels between 50% and 75%. And each time, it's dependent on, first, Polish FSA dividend policy. So we actually receive it usually in December. So this year, for the next year, we'll receive the general policy in December and then individual policy most probably in February. So first -- and sometimes Polish FSA is changing, for example, the conditions for the payment of the dividends. However, we -- in our capital management, we want to be able to pay out the dividend. So this is actually our main goal.

So also in the context of capital buffers, we actually look not only on the minimum levels, but also on the dividend levels and we keep buffers over dividend levels. But maybe also comment in this respect. After increase of countercyclical buffer, which will take place by the end of September this year, the minimum regulatory levels will be the same as the dividend payment levels. So Polish FSA may be tempted actually to increase the dividend payment levels of TCR, Tier 1 ratio and CET1 to actually be higher than the minimum regulatory levels. However, we also work to be prepared for such scenario.

As you can see, we are actively managing our capital position. So we already actually included this information in our presentation that we printed Tier 2, our first inaugural Tier 2 in euro. And today, we received the information and approval for Polish FSA to include this instrument in our capital. which is good news and pretty short period as for Polish FSA for such approval, plus we did securitization. And also in this context, it's not our last word. We see securitization and also capital instrument issuance as our now regular tool of capital management. So in this context, actually, we, for sure, want to keep our capacity to finance our customers and economy and also pay out dividend and be able to pay out the payout dividend.

For now, it's too early to tell you and indicate if -- what will be the exact percentage, taking into account that we are still -- don't have a Polish FSA policy. Unfortunately, I would like to have it now. Plus, of course, now we are just starting planning for 2027. We'll see what will be the volume growth, how much we can and want to issue capital instruments if needed, do securitization. And then we'll see how much we have in the context of potential dividend payment. So for now, it's too early to tell you exact, I would say, percentage. But we still want to be within the range, 50%, 75%.

I believe Krzysztof would like to comment.

Yes. I can add only Gulnara, that, of course, finally, it's a voice of the shareholders, and you will decide finally what is the precise number. And even if we assume something between -- in the middle of the corridor, we have to be ready for maximum payout ratio, taking into account, as an example, the budget deficit and things like that for the next year forecasted by [indiscernible] of 6.7%. That's why even if we assume in the main scenario, something in the middle, we have to be ready for the maximum payout due to professional assessment of potential needs on our shareholders.

Gabor, I believe you have additional question.

And Jakub sorry, question about the competition.

Yes. Sure. So indeed, we see the competition, I would say, especially on the corporate side -- because from my perspective, the biggest competitive change in the last, I would say, quarters is that 2 banks actually are back on the market. Here, I mean Millennium and [indiscernible] after some years of working with their capital position, especially. And that's visible. So they are competing actually now, and it's predominantly also visible on the corporate side. There are banks actually who are entering new segments as, for example, local government segment. Historically, it was [ BGK ], so [ Polish Development Bank ], which has the biggest market share. But then it was us and [indiscernible], second biggest bank.

And now we see [ ING ], [ Millennium ], [indiscernible] for example, in this segment, offering low margins hauling volumes. So this is actually visible there, which, of course, impose some pressure. On the corporate side, we also see some pressure, but here, it's sometimes easier because we look on the whole relationship with the customers. So we are not looking only on the margin, but how much other business we can do with the customers as, for example, cash management, treasury products. And then we are looking from the ROE on the customer. With local governments is more difficult because usually it's a tender and you have only loan as a product, not without cross-sold.

So I already commented in the context of the consumer -- sorry, retail customers on the mortgages, we see that some banks are actually more active offering low margins. And as you can see from their statements, they are even refinanced in the context of new sale, refinancing is 40%, which is, in my opinion, not, I would say, healthy. It's better to focus on the financing new needs of the customers, not refinance the existing volumes, but it's my point of view. And there, we see also some pressure. But as I indicated, we don't want to take, I would say, part in this and go such low with the margins. We more balance the margins of the product between variable and fixed rate loans just to keep the part of the initial fixed rate mortgages at the level which we want in the context also of natural hedging. of our NII.

And can you follow up on the capital benefit? What type of benefit in terms of the size can you extract from securitization? And maybe just a follow-up, given you mentioned the budget deficit and the upcoming budget, what is your current outlook for the corporate income tax for Poland? Do you think they will stick to 26% for next year? Or do you think it will -- there is a risk of potentially remaining at the higher levels?

Okay. So in the context of first tax, so I believe -- so for now, our base case is that we stick to the -- what is already written in law. meaning that we actually will be on the path to 26% for the next year, 23%, 28% and onwards with parallel reduction of the banking tax starting next year. Of course, we see in the public domain voices about maybe increasing the tax, meaning go for 30% in 2027 and maybe onwards, but it's voices from the [indiscernible] coalition party. However, this is also kind of view which we have is that most probably President will not sign it due to, I would say, election period next year. And President, as you know, is from another or different political angle than current rolling coalition.

Of course, we cannot be sure. But for now, our base case is that we will go with the path of the tax changes, which is already written in law. Securitization. So for now, as you look, we did 2 transactions. So from the TCR point of view, the benefit of current securitization is around 30 basis points, so 27 out of the new transaction. And the original amount or benefit from the first transaction as a pilot transaction is it was 5 bps, but this transaction is amortizing. So also the benefit is also amortizing.

But now it's around 30 bps. As we look from the European market point of view, the average level, which we see it's around 50 bps, which European banks have out of SRT securitization. It's not, I would say, any hard limit for us. But I would say it's kind of indication, which we have. And on our side, we will plan securitization for also next year. The scale for now is hard to, I would say, determine, but we still have room for capital represent optimization at this angle, both on the corporate, but also on the retail portfolio side, as, for example, consumer loans.

Gabor.

A follow-up on capital. You mentioned various moving parts in the requirements. You've also been taking action. What do you view as your internal capital target at this stage? And in relation to that, what is your view on your level of capital surplus?

So how we manage the capital. We are looking actually on the dividend levels because we want to pay out dividend. And then our minimum buffer is 100 basis points over this level. But of course, if we plan for -- in the next we usually look on the -- of course, it's a financial plan is for 1 year, but we look at minimum in the horizon of 3 next years. We want to keep enough capital to be also able to finance in the context of capital allocation, of course, our volumes development plus any regulatory actions still to be and comply with dividend levels plus at least 100 basis points. Now we are in the situation, as I mentioned, that we don't know, unfortunately, if Polish FSA will increase the dividend levels after September, taking into account that the minimum regulatory levels will be at the level of dividend levels after increase of countercyclical buffer.

And that's why we are now using and developing on our side, capital management tools to be able to react pretty quickly if something will change on the -- also on the regulatory side and react on the volume -- in the context of volume growth to actually keep the buffer, which I mentioned.

Just to confirm the numbers here. So 14.4% is the total requirement right now? Yes. For the 75 you want at least 100 basis point buffer.

Yes.

15.4%. And on a pro forma basis, you're at around 17.8% is that roughly?

So currently looking from our levels point of view, we are now at the group -- we have it, 16.8% from TCR point of view. 14.4%, which you mentioned is the criteria for dividend payment. So we want to be minimum 100 basis points above this 14.4%. However, we expect that we -- or we, Polish FSA can increase this level, meaning the dividend payment level. And as you can see, for now, we have also a comfortable level of the surplus to accommodate it. However, in the context of new year, we, for sure, will plan another Tier 2 transaction and securitization transaction actually to keep capital buffer on our side.

Okay. So 15.4% as it stands, which may change. But on a pro forma basis, you are at 17.8%. So you have 340 basis points of buffer.

So adding securitization and Tier 2, then yes, you are right.

Okay. Right. And I mean, still a decent surplus.

Yes. But here it's also preparation for potential increase of the dividend levels on our side.

And please remember, Gabor, that we have a significant portion of bonds in the balance sheet and the valuation, the sensitivity of the valuation is reflected in the capital. Now we have a positive in the first quarter, negative. There is an extra -- of course, if we talk about long-term buffer, this 1% means that we should be over this 1%. But if we look from the perspective of time that we need time to add the capital from retained incomes or to go to -- with the issuance or securitization, it takes time. In practice, it means that this 100 bps is the threshold internal one, which is a signal for us to do actions, but we do not keep only 100 bps surplus because of the fluctuations and this time differences and the need of time to really reflect in the capital instruments.

But also, we are actively managing our -- what Krzysztof mentioned, the potential impact of that fixed income securities, which are from the accounting point of view, included in their valuation excluded through other comprehensive income. So if you look on our securities portfolio, around 23% now is valued through fair value also. Rest is valued according to amortized cost. So -- and we actually changing, including more instruments from the accounting point of view in the category held to collect and valued through amortized cost to limit the potential impact as we see it now of valuation through capital and as a matter of fact, then impacting own funds.

Mehmet, please?

If I may just come back to the cost point for a second. I think I heard mid-single-digit to high single-digit outlook earlier. Please correct me if I'm wrong. But -- and you mentioned the revision of remuneration -- staff remuneration and the continued initiatives within the strategy. Was this for 2027? And secondly, if so, how would you expect the second half of this year to look given the first half is running at just around 1% year-on-year?

So the outlook which we presented is for 2026. We haven't given outlook for 2027. But in general, I would say we are now in the period of normalization of cost dynamics. meaning after years of high inflation and double-digit growth of cost base. Now we are in the single-digit territory. Also as we look now in the context of 2027, how much is too early to say as we are ahead of our planning for 2027. So for 2026, we still see mid potentially to high single digit. As we mentioned, one is revision of personnel cost in the context of revision of remuneration of our employees.

Also what Krzysztof mentioned is that, of course, we are leading a number of strategic initiatives. on our end, and this is actually priority. So we are able to actually have slightly higher cost, but assuming we'll have benefits in the future in the context of our business. And of course, as you can see also, we are more active on the marketing side, which is also one of the pillars and supporting our volume growth. So this is also an area which we actually increased our cost, but in the context of benefit on the volumes and core revenue side.

Okay. Can I just confirm if there's a date typically for the staff cost remuneration changes? You mentioned you do this annually once.

There is no, I would say, an FX date, but usually it takes part in -- that takes place in the third quarter. So now we are, I would say, in the middle of this process.

Okay. That's very clear. And then secondly, just on the CHF provisions, which are now coming down nicely. Consensus currently has [ EUR 1.5 billion ] approximately for this year, and that would imply a little bit of an uptick in the second half from the second quarter number. I don't know if you can guide on this, but I was just wondering if you would see this as reasonable or if you think the second quarter run rate, which is close to [ EUR 300 million ] is what we should be working on as a base?

In the context of further provisioning and what I would say, kind of consensus is 1.5, I would say, on our side, it's data-driven. But if I look on this [ EUR 1.5 billion ], it's reasonable. But if it will be [ 1.2 ] or [ 1.5 ], for now, it's early -- too early to say because, again, it's data-driven on our side. But for sure, we want on our side, and we believe on our side that it's the last year of significant CHF provisioning.

I do not see any further questions. So thank you for your participation and hope to see you soon or in also probably somewhere in Europe or U.S. Thank you.

Thank you very much.

Thank you.

Good afternoon. Thank you for joining our follow-up call for First Quarter 2026 Results. We have with us Krzysztof Dresler, CFO; Piotr Mazur, Chief Risk Officer; Jakub Niesluchowski, Finance Director, and IR team.

And I already see Michal Konarski ready to ask the first question. Michal, floor is yours.

Congratulations on the results. Actually, I've got 2 questions maybe for the beginning. First one, I would like to ask about the M&A. Actually saw that one of the biggest Polish financial companies, PZU, recently announced that they are acquiring insurer in Ukraine. And of course, they've got business over there already, but there is also like the ambition of the state to acquire bank in Ukraine.

And you've got a small bank in Ukraine. And the question is if you would consider an acquisition, which would also be in line with expectation of the state. This is the first question.

And the second question may be about the fee income. I was wondering what should we expect in terms of the dynamics in fee income this year, but maybe also in future, I was wondering, you've presented recently a lot of nice initiatives. I mean, Allegro, Zabka. And's I was wondering what do you expect from these initiatives? When they should contribute? What would be the impact, let's say, in 2 years' time on your net income dynamics? So those 2 questions.

Let me answer the first question and maybe Jakub will start with the second one. Actually, as you know, we have on board a team who is dedicated to M&A transactions and analysis. Being the largest bank in this part of Europe, we have to analyze different options from different perspectives.

What if we acquire a financial institution, what if such institution is acquired by our competitor, what does it mean? What is the change of the landscape? We name the strategy #1 and full stop. From this perspective, we also analyze different initiatives. That's a general view on M&A. As far as Ukraine is concerned, we have a bank there and the first -- very first and the most important step for us is the peace over there and the quality of peace, in fact, not the peace itself.

And if the quality of this is accepted, we can participate in this rebuilding and reconstruction of Ukraine having what we have now. If we take into account the fact that all supranational projects or flows could be provided by us here and settled and clear by the KredoBank in Ukraine, that's one aspect.

We can leverage our current position, and we can scale this current position without M&A. Another aspect is connected with an appetite of our corporate clients here in Poland to take part in this rebuilding in Ukraine. We have limits, credit limits. We can assess properly the credit situation, and we can provide proceeds or limits here in Poland, even if they are going to extend abroad activity. And of course, the last probably perspective is Ukraine itself and potential consolidation. Of course, that's a closed country in terms of relations, financial trade, and we can promise that we will analyze everything. But we know what is the cumulative result of our presence in Ukraine is still negative.

And from this perspective, we have to be cautious because in an organic way, we can add to the balance sheet PLN 60 billion, what we did in the last 4 quarters. From this perspective, the first option still for us is organic growth and the capital adequacy or the capital surplus over the minimum dividend minimum or, let's say, capital adequacy ratio, which is dedicated for us is slowing down.

What means that we can utilize or deploy the excess capital in the best way, generating the value for shareholders in the best way we can. Still, we can do this.

And going to the question number 2, concerning fee income. So indeed, we had a very good quarter, but please remember that the first quarter, especially on the capital market side, is usually strong, resulting from -- on the one hand side, for example, the fee for accounts in our brokerage house, we are taking once in January. That's one point.

Second point, what was good from the business perspective, the trading volume was record high in the first quarter on our side. So -- but looking ahead, we expect indeed to further increase, especially our income on the side of the mutual funds and also capital markets on the one hand side, also gradually increase the fee income connected with the customer activity.

So if I -- for now, based on first quarter, looking into ahead, I would say we are talking about mid- to high single digit year-on-year for 2026. If nothing will happen because as you perfectly know, for example, in March, despite the fact we actually gained our market share in the first quarter -- sorry, year-on-year on the mutual funds side, we have other market participants, we have outflows which then translates to the fee which we have from mutual funds business. But for now, I would comment in this way, in connection to the initiatives which we are taking, as you mentioned, for example, Allegro, please remember that we are on the initial stage.

As we said today, we are before launching the second phase of the project with Allegro, in which then we will be actually acquiring Allegro customers. And then the level and translation of our results will depend how effective we will be on the cross-sell side, meaning how -- which products actually will be able to attract customers and then as okay, current account is an obvious one.

But then you have consumer loans, mortgage loans, investment products. So for this year, please do not expect any pickup in resulting from these cooperations. We have -- for now, it's, I would say, negligible, but if you look on the offer -- our cooperation with Allegro and the offer for the customer, we have the cash back for customers for purchasing on the Allegro and payment from our account. So it's kind of -- not kind of, but it's cost which we have for this...

What Jakub is mentioning, we have to first really check what is the clients' behavior because we don't know whether our clients will go for this cash back or not, it's a very small fraction of the total amount, probably partially, yes. But yes, the test we will have in the summertime and the autumn, and we will be much more experience than now.

So this year, we treat more as a kickoff and test and also on our side, what type of customers we'll be able to acquire and if we will be able to bank this customer.

Krishnendra, please.

I have 2. One on the NII. I guess just trying to understand the NII guide. I guess with Q4 results, you talked about flattish or like flattish NII. So when you talk about flattish NII, is it a range that you talk about, like minus 1% to plus 1% -- or how should I look at it? And just on that -- just staying on the NII, I guess, if I adjust for the days, NII for Q1 would be up slightly Q-on-Q.

If I adjust for the 2 less days, I think it's up. And in that regard, are we seeing the trough in the trough in your NIM margin? Just we have one rate cut, which happened in March. How should I think about margin going forward in the quarters? And should we expect NIM to broadly remain stable at this range or broadly closer to this range? That's the first question.

Second is on the cost actually. I think your cost performance was pretty good this quarter. Just trying to understand on the personnel expenses and on the overhead, are you running any program which has led to any efficiency? Because I believe there was an increase in wages in September. I believe that should have led to some increase in the personnel expenses, but that seems to have -- doesn't have any impact, I guess, in this quarter. So is there any efficiency thing that we should look at? And how should we think about cost guidance for the remainder of the year?

As far as net interest income is concerned, yes, we refer to deliver maybe not declare, but that's our effort, and we will try to deliver net interest income flattish. What means here that [scanning] shouldn't be too wide 1 or 2 percentage points rather than 5 or 10.

That's a plan to simply replace the lacking part of interest margin by interest income from new volumes from hedging and from the balance sheet management from the interest rate perspective. And interest margin, yes, we will see because it's a function of the market situation, the structure of assets, repricing long-term interest rates because we also have a bond portfolio and we replace partially.

And what we can do, we will continue the strategy to hedge our sensitivity of interest rates, that's not only due to stabilization of interest margin, but also to deliver and to be below the requirement, which is called soft NII supplier Supervisory Outlier Test, simply the test to stabilize the sensitivity of interest rates. Yes, flattish to flattish and the scanning grid should be narrow rather than the wider one.

From the margin point of view, if you look -- margin will be still under pressure of the rate cuts, which we had because not the whole portfolio has repriced already. That's one point. So looking from the whole year perspective, so as we look -- as I look from the margin, which we have for the 12 months, including first quarter of 2026, there is close to 4.6%. However, for the whole year, we expect that it will be lower. So still, there will be pressure on the margin.

The cost side. Yes, that's the personnel expenses. Actually, we will have adjustments year-over-year. It's connected with inflation. We just started the talks with unions. And I tried to explain during the conference that the first quarter is not a good proxy for the whole year. We have some part of costs which are connected with development initiatives and due to the specificity of the projects running -- we run in a bank, the second half of the year, we will see higher dynamics on cost side.

And yes, adjustments, we will see, but we created some reserves to cover extra bonuses, and that's why the situation in the first quarter is more flattish than it should be without that.

Just 2 small follow-ups. I think it should be pretty smaller. So just on the NII part, just trying to understand, you talked about hedges and investments. So do you disclose how much of the hedges or the investment is going to get replaced this year? Just trying to mechanically understand the NII or NIM movement. That's first.

And second is just on -- just staying on the cost. Like have you kind of in past provided a breakup of how much is your initiative or spend or future-proofing kind of a cost versus the regular cost kind of growth.

So if you kind of split it and break it down, that would be just helpful in trying to understand that trend. I know Q1 might not be a good proxy, but just in sense of what this was last year and maybe could it be similar compared to last year and this year?

Let me start with the second question, and then Jakub probably will explain better this hedging strategy. We prepared the breakdown of cost -- the dynamic, how we see. If we have 50-50, there's [BAU] cost connected and connected with development, that's more or less true.

From the hedging perspective. So if you look in the context of the hedges, so still around PLN 20 billion [lots] of hedges will mature this year, and we will replace if needed with the new transactions. Krzysztof already mentioned, we are also under regime of European risk measures as soft NII. So anyway, we'll have to comply with this regulation.

So it also triggers hedging, but predominantly, it's our, I would say, strategy to minimize the impact of the interest rates. But -- and from the securities portfolio point of view, which is another important part of our balance sheet also in the context of stabilization and hedging of the interest rate risk, we still for the remaining part of the year, expect around PLN 20 billion, slightly over PLN 20 billion of maturities of the securities.

Annual replacement.

I just had one more, but I guess I'll just wait if there's any other question. I'll rather -- I'll follow it up.

Go ahead.

Yes, sure. Sorry, just one on the cost of risk part, I guess cost of risk remains to be benign. And I just want to understand the consumer cost of risk that is -- I know it's not that big a part of your book. It tends to be going up and up. So is it because of the mix shift impact that you're seeing? Or is it pretty normal of it going up over the period?

I understand the inflation and other things and a lot of moving parts are around, but just trying to understand what's the driving force behind that part of risk. Cost of risk are they going up in the few -- in the few last few quarters actually.

That was explained by Piotr during the conference, but if you need some more, Piotr or me or...

I would say that we're forecasting that in the coming quarter, the cost of risk on the consumer loans will be rather flat. And this is what we see in the first quarter. This was an extra PLN 30 million what we provided due to the implementation of the new model. So you will not see this in the next quarter. So I'd rather predict that probably the second quarter, we will see the lower number in this line.

Simply, to be maybe more precise, cyclically, at least once a year, we have to revise the model for calculating provisions and based on refreshment on regulations, internal regulations, which are touching this segment of our business. we've made this adjustment of model that's a one-off. And then in next quarters, we shouldn't see higher level of that.

Do we have another questions? It looks like this will be one of the shortest I see Michal, please.

Maybe just one follow-up question. Regarding the capital position and looking at maybe what you are seeing internally, the demand for the corporate loans and capital needs, do you think you will be able to maintain the payout ratio of dividends in the upper range of the, let's say, requirements if they don't want to change or rather you see it as more becoming cautious going forward. Yes.

Our ambition -- let me -- Jakub answer this. Our ambition is simply to do our best in terms of providing proceeds to the economy, both families and corporates in Poland. We estimate the contribution from investment side to GDP double digit, almost 11%, and we are ready to provide credits and to support our clients.

And this is a natural way of utilization or deployment of the capital. From this perspective, if we can keep the pace of development of the loans, we cannot promise the higher level of corridor. We should be within the corridor, 75% to 50%.

We started securitization transactions to optimize better. We have another instrument, and we will, for sure, optimize the capital structure. But I can't -- if we are happy on the dynamic on the loan book, I can't guarantee the highest possible level for the dividend because we can deliver better to our shareholders from the credit channel. That's the feeling now.

Maybe I will add 2 points. Please remember that this year, the countercyclical buffer will go up by another 1 percentage point, which also means that if we take and look at the current Polish FSA dividend policy, then the minimum regulatory capital ratios will be equal to the dividend ones.

So we have some expectation that Polish FSA may increase the dividend payment criteria for TCR Tier 1 and CET1 ratio. Of course, the question mark is how much if they will do it. But next to what Krzysztof mentioned concerning securitization and other tools are Tier 2 transactions.

If you look back, we did Tier 2 transactions last year and in 2024. We also plan another Tier 2 transaction for this year. And still we have enough buffer for the lending. And please also take into account that if there will be a need in the context of volume development, business growth and also dividend payment, we have also AT1 instruments in hand. And additionally, please remember, we are not paying out 100% of our profit, 25% stays in our own funds.

Okay. Maybe one follow-up question. As we see from -- I think I don't know, like 2 or 3 years in a row, PKO BP is setting aside some capital to dividend capital. And the question is -- it doesn't seem like you plan to use it or maybe I'm wrong. Why to do so? Do you plan any extra dividends? Or is this some kind of strategy?

I would say, I don't know if Krzysztof if you want, Krzysztof you're muted, but, if you are answering the question you are muted.

Okay. I'm sorry, Jakub. We define the corridor in the strategy, and we keep this. That's not our decision. That's a decision on the side of our shareholders, and we are ready for different scenarios if we have to reengineer the capital structure. As Jakub mentioned, we are ready. We opened new markets. We decreased margins for MREL, credit bonds, and we extend the diversified geography to be ready for different options, and we will, for sure, continue that.

Even if we have to place Tier 1 capital, we will be also ready for that. But if you ask whether we have planned this year to do this, I do not have such a plan.

We like flexibility, let's put it this way. So it's not the first time when we actually allocate the part of the profit to the dividend capital. Please remember also that we have still PLN 9.4 billion on the solo level undivided or retained earnings. But as a matter of fact, it's without any immediate intention to pay out. We pay out 75% now. We only paid advanced dividend once when we were not able to pay out dividends out of 2022 profit. And then we were able to use this dividend capital.

It's more, I would say, in the context of flexibility, but I would say, not without immediate plan to utilize this capital.

The last chance for questions. I don't see. So thank you for participating in the call and hope to see you soon on one of the conferences.

Thank you...

Thank you, and bye-bye.

Thank you very much. Thank you.

Good morning, ladies and gentlemen. I'm happy to meet you and welcome you at the presentation of our bank financial results for 2025. I'm in charge of Investor Relations. We have with us CEO, Szymon Midera; CFO, Krzysztof Dresler; Chief Risk Officer, Piotr Mazur; and our Chief Economist, Piotr Bujak. This is to our CEO. Thank you very much.

Ladies and gentlemen, undoubtedly, 2025 was for us the strongest year in our history with the strongest, highest result, both for the bank and among other market players. 18 years ago, we set the bar very high with our bold and ambitious goals set in the new strategy. We wanted to deliver. We wanted to consistently pursue our business and financial goals. And we wanted to change the perception of the market as a whole, and we did it. The innovation, the competitiveness of our brand has changed or the perception has changed.

Ladies and gentlemen, we will try to go through quickly our presentation. Change in the number of customers, 327,000 more, 20.5 million in total. This translated into business increases, a 14% increase in customers savings, almost PLN 700 billion. Customers financing 11% year-to-year, customers financing amounting to PLN 327 billion. We have a double-digit growth in our loan portfolio, and we would like to sustain this dynamic. I will give you the details later. This translated into a double-digit growth in total assets up to PLN 583 billion with high equity and high CET1 15.57% and large room for dividend and supervision criteria.

You see here the net profit, PLN 10.7 billion with provisions for Swiss francs. Loans, ROE, 19.5%; net income margin, 4.76%; cost, 31.1%; cost of risk, 30 basis points, very high results on the Polish market. NPL, 3.34%. NPL is stable, and there is no pressure on the quality of our assets.

Let me move to the business activity part. I'd like to stress once again, very strong growth for both savings and financings in both retail and business segments. For savings, we've had -- we've registered a double-digit growth. And for investment fund units, we had PLN 24 billion last year, and there was 45% increase in assets, much higher than the market average, which was as we estimate at 35%. In total, our customers deposited for savings, covered bonds or investment funds, PLN 596 billion. It's a very high market share. Every [ PLN 4 ] is deposited at our bank.

For investment fund units, we have got 1.5% of additional market share. Now we have 25%. It's a major result, and congratulations to the whole capital group teams. For retail financing and retail customers, we had 21% for consumer loans. In this business line, we are a true leader, 25% share in consumer finance sale. We want to maintain this share and expand further, 1.5% of new market share. And we grew from around 20% in the late 2024 to 21% in the late 2025. It's a major success of PKO BP, and that's the way we want to go.

In new sales, we have around 35% of growth for loans, 50% for mortgage loans and 22% for consumer loans. Let me stop for a moment for mortgage. Loans, 30% last year. We kept this parameter. The data from the 2 last months show even higher results, and we keep the refinancing levels, and we stay positive in terms of customer retention. Last year, 50,000 families, households used our mortgage loan offer.

Now we move to corporate customers. And quarterly, we have an increase in our portfolio. 2 quarters ago, it was around 6%, then 7%, and now we are nearly at 9%. In some segments of corporate customers, we have a growth of nearly 20%. We are extremely satisfied with that. We take a general approach. We also consider corporate and municipal bonds, factoring and leasing as well are taken on board. That is why I can say that today, 30 basis points in the market share is retained, its aligned with our strategy, which sets out the goal of 18%.

Despite fierce competition in the corporate segment market, we strengthened and increased our market share. The largest transaction with corporate customers included everything that can be named or branded as quality and diversification. We are involved in energy transition. We are involved in defense investments and infrastructure projects.

That would be all for me. And now I move on to Piotr.

Macroeconomic outlook for the banking sector and for our bank was not negative. These record financial results were achieved under major uncertainties regarding macroeconomic conditions. We've been bombarded with news about the developments in the Middle East. However, last year, there were some other major risks as well, trade war triggered by the new U.S. administration, some earlier episodes of tensions in the Middle East. The Polish economy fared well and nearly as expected. We had 6.3% GDP growth, and there was a return to investment. After a slide, there was a rebound in 2025. We expect to have a true investment boom in 2026. However, the rebound was registered already in 2025.

The financial standing of household improved, and that created the appetite for both consumer and mortgage loans and more appetite in retail segment to the sound financing and also the sound financial situation of corporate customers, a stable macroeconomic environment and resilience of the Polish economy were positive drivers. On the negative side, we had an unpredictable trajectory of failing interest rates. The Monetary Policy Council introduced higher reductions in interest rates, totaling 170 points. We expected 100 points, and that created a major pressure on the net income margin. Considering that, we believe that we need to recognize the level of results achieved so far.

Polish economy as any economy around the world is exposed to developments, including the Middle East development as for energy mix, there is a perceptible share of supplies from the Middle East, both for oil and gas. Still, we are diversified, well diversified, and we do not expect that there will be some roadblock to the Polish economy due to that. There may be some price increases caused by the developments in the Middle East. And through interest rate trajectory, that may be of benefit for the banking sector in Poland.

Throughout 2026 (sic) [ 2025 ], we had an inflation rate below 2.5%. And this year, in the next months, we will have like 3.5%, so more and still within the range considered as normal by the National Bank of Poland. It may be expected that the Monetary Policy Council will adopt a more cautious approach. As our strategy states, there will be 4.5% reference rate and the next reduction will probably take place in the third quarter.

In 2025, there was a major decrease, a quick decrease. And these decreases took place more rapidly than we expected. This year, it will slow down. I don't think -- we don't think that the growth in lending activity will be hampered. There is no signs on the horizon that it will slow down. There will be a single-digit increase in lending activity in 3 key segments.

To sum up, the environment is sometimes unpredictable and challenging, but the Polish economy is resilient to any external turmoil. Goldilocks scenario will have a positive impact on the quality of assets, create positive conditions for the development of the banking sector.

Ladies and gentlemen, as for the financial results, we had a record year, PLN 10.7 billion of net profit with some extraordinary items, legal risks for Swiss franc loans. But these extraordinary items were PLN 0.5 billion less than in 2024. There were some repeated actions in the last quarter, we had to establish provisions for the protection of our customers, PLN 290 million, including sanctions imposed by the President of the Customer Protection Office regarding interest rate modifying clauses. We decided to address these risks ahead, and that is why we established the provisions.

In comparable conditions, we had almost 5% growth in profits. This is mainly the result of the increase of operating activity, and that compensated very much a very narrowing interest margin. As we signaled earlier, the bank took actions to stabilize annual interest margin and to replace that decrease to replace it by the new net interest margin by increase in volumes. We had great increases in volumes as regards to credit. So our clients, families, residents use our lending offer. And therefore, the quarterly interest income is at the level almost the same that was the same in quarter 4 and quarter 3, and that is all in this good environment and interest rates. And that is the effect of our precautionary measures like fixed term mortgage loans offered quite actively in '25 and '26. So actions taken as regards to the portfolio of debt bonds, I mean, duration and fixed coupon.

And the third thing here important, closing the gap like interest rates from the stability viewpoint and decreasing stability is sensitivity of interest income. Our activity on IRS market is really huge. So as for fees and commissions, we have had acceleration here because you may remember that the first 6 months of last year, especially quarter 1 then were burdened in a positive sense as regards commissions on cards. So we have some elements of historical settlements from '23, '24 included in 2025. Therefore, we are very happy with this dynamics, 0.4 quarter-to-quarter despite the seasonability. Quarter 3 is very good for commissions. That's the effect of increase in transactions, and we are very happy with it. And in this environment of falling interest rates, it is very important for us that customers use more and more our services because the growing share in fees and commissions is something that we would like to have, all of us. Although we are not slowing the speed as regards the interest income, and we would still have the same approach to have this compensation by these volumes.

As for the cost efficiency, please note that despite great investments and costs related to kick off of the new strategy and new strategy being implemented, Szymon discussed it as regards to this dynamic, 8% is not different, much different from what our competitors achieved in a more passive model [ last way ].

Quarterly, we are also maintaining the dynamics in these regimes. Quarter 4 has also specific features. So looking at cost to income at the level of 31% as regards to peer group and if you compare it to our banks from the comparative group, this is a satisfactory position of ours. We will continue to have offers as regards to investment and costs for development and also operating costs, we would intend support our activities, optimizing our cost basis we would include there more automation here, including tools based on AI.

As for our issuing activity, last year, we had 4 issues in total for EUR 750 million senior preferred, 2 issues; EUR 500 million, each senior loan preferred and 1 issued PLN 2 billion on the local market. This is for bonds of Tier 2. This is a very good year also as regards the ratings because already in February, our rating of our senior loan preferred bonds was increased by 1 notch from Ba3 to Ba2. And in September, rating was even improved further. So now it's Baa1. So we would continue that. We are always one step ahead. So we are secured. We are taking into account the changing conditions. Everybody got used to geopolitics and the people don't regard. But today, placing bonds would be more difficult than in January. Therefore, we have time to issue the next bond when our balance grows. And we will be looking for a convenient date for that, which will be, on average, once a quarter. We should be present on the market once a quarter. And there would be -- some [ bonds ] would be getting closer to maturity. Some bonds could be redeemed earlier.

So it is our constant work. We are expanding geography. You know it very well. The share of investors from Asia is growing, and we are very happy with it because here, diversification is growing. Thank you very much. Piotr, the floor is yours.

Good morning. A moment ago, we had a presentation from media, and we mentioned that slides about risks don't contain any kind of extraordinary news. Maybe they are even boring. But from your perspective, I think it's good. But we prepared one slide that we would like you to be interested in. This is not this slide. This is one of the boring ones because it shows that on the one hand, the colleagues show double-digit increases and the cost of risk is just at the same position and even provisions are smaller than a year ago. And that gives us a good basis for thinking about further increases.

And I'd like to also complement our colleagues from the marketing division. They did a great job indeed. And thanks to that, we have such effect because new production that the bank is now involved in is even slightly -- has slightly lower risk as compared to what we have now in portfolio. That's because we target good segments. The marketing is visible there, and we can see it on the risk side as well.

On the next slide, we see the confirmation of that. So [ it shows us ] in the stage as we are following in Stage 2. So this more risky part of portfolio is going down. And at the same time, we have provisions coverage. And what is more important, all 3 business segments are very good, I mean, as regards to risk.

And this is the slide I'd like you to concentrate on. When we say AI, everybody sees that -- well, it very often crops up in publications, investors discuss the topic. And if I ask AI, which expression is most often used now, AI said it is AI. But I ask AI how much Polish banks add thanks to using these various technologies. The answer was very long. But finally, it was mentioned that banks don't give such information, but we do give such information at the moment. We say that last year, we gave loans using machine learning models, very advanced one for over PLN 33 billion. These models enables us to increase acceptability of our decisions with risk unchanged. So we accepted more clients and not changing the risk. And this is PLN 1.5 billion, mainly in the segment of consumer loans. And this is 41,000 additional clients to whom we provide services, thanks to the technology. So PLN 1.5 billion. If you look at the maturity of these products and the margins obtained there, then in this period, the bank would earn, I guess, PLN 1.5 billion. So that's the use of the AI and advanced analytical methods.

On this slide, we are also showing you two additional elements. We are talking here about the analysis of graphs and deep learning. Analysis of graphs is the use of the scale of PKO BP. We see various relations between segments, various links. We see whole chains of supplies. And the analysis shows that there is value added from that so that we should not only analyze the company's financial results, but also the environment in which it functions. And therefore, these new technologies enable us to improve the rating or the assessment of our risk. Deep learning, it's a technology which enables us to come from digital analysis to picture analysis in a normal kind of process. We translate various features or events into digits. Digits are subject to algorithms and thus the models are created.

In this process, all these events are translated into the pictures and the picture is a subject of modeling. It's just like in medicine. You can examine the patient using simple methods like measurement, temperature or blood, nickel test, et cetera. But you may have also very advanced like magnetic resonance, which shows definitely much more. And that is the technology we are using. And I think the further development will enable us to maintain the low portfolio, good quality and to increase our market shares at the same time.

The next slide, because we've already told you that this year, we would like to finish the production of such slides. Next year, you won't see such slides anymore. But we see that the provisions have been created. They are quite a lot of them, although they are characterized by downward trend. We do believe that the downward trend would persist this year and will be even stronger. Why do we think so? Because we are increasing the number of our settlements in various court proceedings and those related to mediation, and we see a fall in the number of court cases. The level of provisions is quite -- is high, but we are convinced that slowly the risk would be getting lower and lower. And we are convinced that this is the last year that we show these slides.

And the last slide of ours is our capital surplus. It is still big, although we see some kind of further increase in credit portfolios. And that would require for us more effective approach and maybe some optimization as regards to capital requirements. Our colleagues from the financing section are working hard on that, but we have the first transaction as regards to securitization. And this enables us to some extent to effectively use the capital, and we are opening now the project towards increasing efficiency of our business with a view to the use of capital.

And finally, it's worthwhile to say that all our successes that we can boast here is the effect of work of our employees who I think have good relations with customers. They are able to sell things in a safe way. Thank you so much.

Thank you very much, Piotr. Now a few words about the strategic perspective of the outlook for the current year. So as for our financial objectives, after the full year of implementing the strategy, we see that we are in a very comfortable position above the objectives set. And in the context of return of capital, cost efficiency, cost of risk or capacity to pay dividends -- as for business objectives achievement within 7 pillars, we are on the path. We are growing much faster as regards to acquiring the number of clients, 330,000 new clients last year. We prepared together with Allegro and we launched the so-called ecosystem. And by the end of Q1 this year, it would bring about 150,000, our joint customers. And I may confirm that by the end of the year, we foresee 1 million of our joint clients under the ecosystem.

And we show other initiatives in this area. As for our share in savings of households, we are above 25%. We are going towards this strategic 27%. As for accessibility of our branches, we are now involved in deep remodeling and refurbishment of our branches. So we did it in 100 of planned locations last year. And now every week, we are really opening a new refurbished branch. So this year, it's 140 locations to be refurbished.

We are increasing our share in the corporate banking. It is a great success in PKO BP because as you know, we are bank more involved in retail activities. So our retail profile is very strong. So our really goal is to have this sustainable development of 2 strong banks. And we are very happy that last year, we increased our share in financing, giving loans to corporate clients by several thousand basis points. So now the level is 17%, and we are getting closer to 18%. So the consequence of that is PLN 12 billion invested in energy transition. So let me remind you that here, our objective is to participate in the level -- to have more -- no less than 20% in such projects on other markets.

We opened the branch in Romania last year, 2 agencies in Sweden. And then in Lithuania a week ago. We inaugurated a new agency in Vienna. We would like to have 5 more locations on the most mature and advanced Western European markets. Don't forget that along with strategic initiatives, we've been implementing a deep transformation process in new models. I've mentioned already Allegro. I would like to mention auto market, 60% of increase year-to-year, 9,000 vehicles sold. In terms of transaction and marketplace for vehicles, we have become a leader exceeding the previous market leader. We would like to become a massive open table board of offers. One of the initiatives proposed as part of the ecosystem that we have been implementing with consistency. We've been developing digital upskilling, customer onboarding and shifting PKO BP towards digital services and more advanced processes.

I'd like to go further and like to explain you our simple logic, the logic behind our model. Customer is at the heart of it, care, transaction levels, comfort, loyalty. The whole legacy of PKO BP was leveraged to enter the 3 top banks for NPS values. We maintained this position in quarter 3 and quarter 4. We are in the podium, and we do not want to leave it. That's our strategic goal. There is also an in-house staff involvement and staff satisfaction value. And we believe that with that, we will have a double-digit growth in business volumes.

We are extremely proud of it in every segment, in every business line, we managed to get some additional market share and PKO BP grows faster than the competitors. This increased value of the company translates into business outcomes and record capitalization, an increase of 43%, twofold more swift increase than in the sector, it's by PLN 32 billion.

What are the key objectives for this year? Well, further increase in market shares because the results are very optimistic. We'd like to expand our market share in both retail and corporate segments. And for retail in the midterm horizon, we would like to have 37%, it's flying altitude for us. In new sales, we have 30% for now -- and whether it's for cash loans, for mortgage loans or for investment funds units. So 37%, it shows the potential among retail customers.

We would like to further commercialize our ecosystem, mainly the partnership with Allegro. It's building partnerships. It's adding functionalities. It's deepening the integration in the media, the account could be open within this partnership at PKO BP. And this 1 million of customers gained acquired with Allegro should be scalable. We would like to grow in digital acquisition. Depending on line and on segment, we have from several thousand to 700,000 acquisitions, and this is the key element for our strategy and long-term perspective. We believe that with digital acquisitions, we will be able to speed up and build these competence from scratch.

Now financial aspirations for this year. Thank you very much.

We have left a very positive year behind. And now we are just in a year, we do hope it will be equally positive, if not better. We stay optimistic. Let's hope that the events will not escalate in an unpredictable way. We would like to leverage increases in market volumes. In loans, it will be higher this year than the previous year, and we would like to be active. In new sales, we have higher share than in outstanding balance, and we would like to sustain this dynamic. We stay flexible to some extent in terms of net income margin, it's overestimated and FRS market shows that there will be no further interest rate decreases on the horizon. So it's not bad news. The growth and the price should be combined, and we believe that the growth and the acceleration in terms of volumes counts more.

Fee and commission income. In the midterm, we would like to have an increase in core incomes. The fee and commission income increases that transactionally. The fourth quarter showed that we were able to generate that kind of growth even if the base of quarter 1, quarter 2 was founded on cards. In the third and fourth quarter, our customers would use more capital market instruments, and we will be extremely active here, definitely.

Operating costs, we will continue to finance strategic investments. It works well. We are on the trajectory of achieving our strategic goals. Trials are behind us. Commercialization is ahead of us. We've learned our lessons, and we know how to scale up these lessons. The investment spending will be shown in CapEx and in operating costs and the scale itself is bigger. We follow up market tendency and these cost dynamics will be high. However, on the one hand, we will keep the appetite for strategic investment. On the other hand, there will be some operating costs. We will have investment spending because that creates perspectives for the growth in future.

Credit risk provision. Provisions, Piotr mentioned that it has stabilized. And for new customers, it's even better. We have also an appetite for exploring some other ecosystems, whether it's retail or merchant segment. This is slightly less chartered waters. So there may be some credit risk provisions. However, the scale and the level will not be that much visible. For legal risk costs of foreign currencies loans, Piotr said it all, we want to have much lower provisions this year. It's calibrated on an ongoing basis. It's evidence-based, and there is some room for adjustments. And these slides will be shown throughout the year, but let's hope that the next year, there will be no legal risk costs slides shown.

This is also a new year of new income tax from 19% to 30%, an increase from 19% to 30% for corporate income tax. And in terms of return on equity, that needs to be addressed, and we will do it. We are cautiously optimistic. We will not slow down. Szymon mentioned that we have -- we want to have growth. We have appetite for new sales. We consolidate our business. There are some customers returning to us. It's not that we refinance other customers. We simply keep the new dynamics in sales. And with that, we are able to strengthen our market share. Thank you very much.

To sum up, it was a robust, a very strong year in the history of the PKO BP. That's not a one-off event. It's an acquisition machine that repeats itself every quarter. In corporate segment, there is a quarter-to-quarter systematic growth, phased and systematic growth. We are very happy with this double-digit growth. We are very happy that today, as the largest Polish bank, we have the fastest growth rate that we work at full speed and full swing. We have diagnosed a competence gap, whether it's processes, skills, products, technologies, [ backup ] office, and it has been compensated, and that's why we are ready and calm that this growth will be sustained throughout the year and that we will be able to deliver on our strategic goals.

Thank you very much. We are on time, and we are ready to answer your questions if there are any.

Santander Bank Polska. Congratulations about the results for this year and congratulations about your market increases. There are increases in many segments. We could see it first in cash loans, then in mortgage loans and then in corporate segment. So major increases. So my question is why? What are the root causes? Why cash loans grow, while there is less growth in corporate loans? And you have some ambitious goals for retail. And there, you already have a large market share and you still see the opportunity for growth. And what about corporate where you have 16%, 17%? So what are the drivers behind the growth? And why such assumptions regarding market shares?

That depends on the skills in specific segments. We are a retail bank, more than 12 million retail customers. That's easier for us to have quick wins where you can simply speed up this acquisition machine. In corporate loans and in investment funds units, we have a very strong 1.5% increase in market share. This is also about the potential that we have at hand. We have customers with a key account here receiving remuneration on that account. And among this group, this pool of customers, you have some who have decided to use new sources of financing, and we can reach out to them with this corporate products and that will help us to keep the credit risk at bay.

So when you work well in terms of products, and in terms of processes, together with the investment funds, together with the deposit savings and loan departments at bank. And this synergy has given us the position of the leading largest bank in Poland. The competence and possibility of generating fast effect determine the situation today. And that means that it's easier for us to acquire more or less 30% of new sales in retail, which doesn't mean, and I would like to emphasize it, that we don't invest in the corporate part. But there, we have stronger competitors and then we have a bigger gap there in terms of products and processes. We are working on elementary things such as CRM so that to better address the needs of our corporate clients.

We are deeply reorganizing the sales processes and the networks of sales. So naturally, it would be difficult -- more difficult for us there. But the goal is ambitious because please have a look, today, everybody, all big banks have very ambitious goals in the corporate sector. And we generated this increase at a level of 30 basis percentage points, and we are close to 17% of the market share in financing corporations. And I'm very happy that we have such a segment which -- corporate clients between PLN 30 million and PLN 60 million turnover. We have a 19 percentage growth in credit portfolio. So PKO is dependent on strategic clients. It's not dependent on one big transaction, which may change dynamic quarter-to-quarter, but it develops in a sustainable way in lower corporate segments. And here, we see what's going on, and we invest in people, technology, systems and in marketing as well.

Please note that last year, it was for the first time in the history of PKO BP, we launched professional marketing support in the framework of the marketing plan for this particular segment. So we do want [ each ] sector to be part of us, but it's really much more difficult for us to obtain higher increases in corporate sector.

One more question, if I may. So cooperation with Allegro, so I checked the calendar. So you announced such cooperation 4 months ago. And I know the goal for this year, 1 million. But can you say something more about the success here? What have you achieved so far?

So in real terms, we launched it in mid-January. So from the end of the last year, we've been doing tests, which were scaled on the internal base on our employees, that is PKO BP employees and Allegro employees. So we launched it on the 17th January. We had some minor technical problems related to connecting accounts. Another thing is maturity from the functional way from joint accounts. We achieved that by the end of February. So we've been fully functional for several last weeks. By the end of March, we will have almost 150,000 joint clients. And we see the trajectory is really accelerating.

So daily growth is higher and higher. So we are better now doing this funnel and doing this conversion within this funnel. And we are really very certain that we would have this goal that is 1.5 million joint clients. And probably in the beginning of July, we will have full functionality under this partnership. So not leaving the context of Allegro, you can open in a simple way the account with PKO BP.

And the other side of cooperation with Allegro is merchant finance. Everything goes according to the plan. We are now within the framework of MVP, which would define the parameters for Allegro merchants. And we are very happy with the first month of cooperation with Allegro and the cooperation started by the end of last year. And now we are working on conversion of applications, which, once again, you can submit in the context of Allegro. We have 3 minutes to take a decision so that the conversion should be as high as possible. And we are very happy here with it. As regards financing that big potential that is thousands of merchants operating on Allegro.

The last question. So here, CEOs, Mazur and Dresler has said that, well, there will still be slides about Swiss francs. Is there any surprise there?

No, there isn't. No surprise. They will remain. We don't know really when we give up all these slides. We would like, of course, to give up these slides. We don't know if we are able to do that this year. If everything goes well, we will. There are no surprises here. If there are some surprises, there are positive rather than negative.

[indiscernible] I'd like to ask about increase in loans this year because the last signals from the economy say that from consumers' economy, we are now shifting to the investment part. Then interest rates going down and the third companies did not invest in the development of technology significantly in Poland and a very low indicator. And it seems that all your guidelines like 7% growth in loans this year, which is not a big change compared to '25, but it seems quite low. And don't you see here a risk that, for example, the increase in loans could be even 2-digit growth? And how could it look? Do you see any argument against the stronger increase in loans, especially among corporations?

For a long time, we've been very cautious as regards the prospects for growth of the corporate market. So I think given the consistence, our forecast for corporate increases were quite conservative. They were below the consensus. Now we are quite sure that corporate loans may be growing stronger together with intensification of investment activities of companies. So definitely, we see here upside. So the balance of risk factors goes up and -- but a stronger growth is possible in the segment despite of what's going on in the external environment, I mean, here, the global economy events, et cetera.

As for the retail segment, that is mortgage loans and consumer loans, we were optimistic, and we showed a great potential here. We also said that we could achieve more. And we, all the time, think like that. The Polish economy, as we emphasized many times, is resilient to external turbulences at present. And although there is a bit higher interest rate path that we may expect as compared to the scenario from several weeks ago, but it will be just slightly higher. The cost of financing will remain low, much lower compared to previous years. And with a good economic situation, strong labor market, we even expect some improvement by the end of this year, some positive trends in the retail segment, in our opinion, will retain, especially as regards mortgage loans, we see the potential for a stronger growth.

As for consumer loans, we must bear in mind that the Polish market is very much saturated with it. It's very mature out of the 3 major segments. So in that segment, we are the closest to the EU average. So even given the favorable macro environment, it would be hard to get here 2-digit growth on the market. For such years [ as sales ], banks with competence with a strong capital position, good technology are able to grow more, and we have appetite for that. Appetite is much higher as compared to forecast of the market. But there is generally no upside here on the market for us. Generally, we agree that looking from the macro perspective, despite new risk factors, I mean, external, the loan market may behave better than in our basic scenario.

Now the second question concerning the guidance for this year, I mean, in terms of results. Because when you look at the strongest things that is -- I mean, volumes. Now would you be able to use volumes against decreases in interest rates? And would increase in results be higher than cost and with the fall in CHF, Swiss francs now, would it offset a higher tax? I doubt about it. But okay, assuming that the volumes would be higher, how would, in your opinion, will be the growth of results? What are your opinion offsetting, et cetera?

We are not focusing on the last line. We are closing our lines. Now, I mean, what I mean, we are concentrating on the speed of providing services to our clients in key segments and the source of strengthening our position that is our market share is new sales. If we maintained our share in new sales at a higher level than the market share, that means that we are doing something well. There is something unknown such as the development of prices, but we see positive tendencies. As you remember, last year, the cash loan was somehow driven by escape from the sanctions of free of charge loan. So a certain fragment of higher increase in new sales was related to the fact that we rolled agreement. We as a sector, but not only that. And that also shaped some prices in some banks, maybe that was too low.

But anyhow, we see positive tendencies in loans. And that reflection like that was in the banking sector. So it's not so that there is just pressure on prices from all the sites. Well, it does exist to some extent. We must be honest about it because in the corporate market, nothing has changed. All corporate banks are looking when you read the strategy, they are oriented at growth. Everybody wants to grow. But the issue is how to do it so that everybody would grow using the same, let's say, pie. So the element of price would definitely be important. What is important, we see by reading all the reports that the dynamic in investment loans is higher than in short-term loans, which confirms what Piotr said that the context of long-term investment is accelerating, and it's good news and the duration of portfolio impacts margins.

So I presented guidelines in the last but one slide, and we are able to just provide you with such information. But we do our best so that the interest income [ won't replace ] the following margins. And we would like to maintain positive tendencies and dynamics. And as for costs, we have operating costs, we take into account inflation plus some other aspects. And there's also the investment level, which we will not stop. And there is stabilization in the loan cost -- risk costs. So there is also an important issue related to CHF. There is a tax context. So we are cautiously optimistic as regards to this year.

Andrzej Powierza, Citi Handlowy. I would have a kind of 3-level questions about the credit market, maybe going beyond Q4, which is the major topic of this meeting. But well, I would like to ask about the situation today, the structure of your sales starting from mortgage loans, digital, normal, fixed interest rate or variable. Looking at the trends from last months at your own clients and other banks clients, in various dimensions. Could you tell me how mortgage sales look in your situation versus the market?

So well, the situation after January and February is very good. We have more than 30% in new sales. It was published by the NBB, so you can check it. So as for commercialization of the digital process because definitely, we have an advantage here on the market a level of 300%. We have objectives for covering new segments, new clients by the process. We would like to finish with the old process by the end of this year because it is a bit disorientating for our clients. So we have a clear objective. So the digital mortgage, which enable us to scale us in this business without increasing back office costs should be 100 -- introduced by the end of this year.

So we are also building the competencies of digital sales so that to use fully the process. So we should not use our traditional network and intermediaries. We are learning how to directly obtain the leads and work with the leads that is a conversion in the digital way by expanding this competence of virtual branch.

Fixed term to variable term ratio. Well, here, we have some negative patterns. We would like customers to accept fixed term loans just to avoid interest rate risks. The tendency has reversed until today, fixed terms were less attractive than variable rates. However, met with our reaction after more than 50% of customers accepted variable term loans. We believe that fixed term loans are more safe for customers. We have raised the issues many discussion platforms, and we'll do our best to make the customers safe, and we will encourage the fixed term loan.

Last year, we talked about this natural hedging. We were producing our balance sheet and out of balance sheet results. And actually, our net income margin goes down more slowly than the failing interest rates. That is why fixed term mortgage loans play a major role, and that was all about the trajectory variable higher, fixed lower. So the attractiveness was different for fixed term and variable term loans. From the beginning of this year, thanks to a more attractive offer, we've exceeded 50% of fixed term loans. However, we had some moments when this level of fixed term loans went down. It's a safety parameter. It's sort of a pillar.

Don't forget that variable term loans are exposed to uncertainty and the net income margin would be exposed to variability as well. In other words, more fixed-term loans means more stability for us and fixed-term bonds also play a role. And to fill in the gap, we will use the IRS transaction as a complement. And this will not change. We will become even more attractive in this respect.

As for customer retention, we've introduced a dedicated program. We refinanced the sector and the sector refinances us, and we are in the blue. So if we see that one of our customers moves for refinancing to another bank, we'll try to react. But we're still in the positive result for the refinancing. That is why we have this retention program to keep our customers to make them use or use the refinancing offer of our bank as the first choice. It would not be easy to offer fixed-term loans in the context of geopolitical developments until today. But with what we have right now, we believe that it would be much more stable and safer for customers. And we do hope that with this business case, we will be able to regain the previous market share.

From the perspective of the financial market and macroeconomic outlooks, how do you see that in the context of the developments in the Middle East, the interest rates published by the National Bank of Poland, unemployment rate, LIBOR and so on.

Well, all these factors impacted the attractiveness of the fixed term loan. And before customers would choose more variable term loans. Right now, they will switch again to fixed term loans.

Thank you very much. I would like to comment on consumer loans. There have been changes in the average amount of such customer loans. There is a major increase in this lending portfolio. And I'm just wondering what has changed.

Well, we mainly look at the customers' profile to see if we will need more provisions in the future. high business objectives did not translate into higher risks. We have like 80 thermometers to measure the risks for existing and new portfolios. And the new portfolio, I can say it is even safer than the existing one, basically because we sell to people we know to our established customers and simply consolidate what the obligations, the commitments they have with other banks. And we are quite quick and swift in that, and you can see it in the results. And add to that, marketing efforts. I see high correlations between marketing spending and the level of risks. So it works nicely, I believe.

And corporate loans. You said that there has been a higher growth in medium-sized enterprises. In terms of volume, what's the share for this segment of customers?

We will complement that. We don't have this data at hand. I mean, the volume of loans for medium-sized enterprises. You know that we work with strategic clients, the largest Polish companies. We do have skills and products to do that. What we want to add is more about SMEs. We do a resegmentation of companies and some went to corporate segments, some others would be classified as retail.

In terms of volumes -- 30 -- that's the categories we have for the largest, medium and small.

PLN 30 billion for the largest customer, between PLN 60 million and PLN 500 million for the medium ones.

Don't forget that you have PLN 35 billion for the small undertakings, and they do migrate from the retail to the corporate segment.

In SMEs or even in micro undertakings, we managed to achieve an additional 10,000 new customers per month. And this is a major acceleration due to changes in the value proposal in our processes. This value proposal has been equipped to compensate for existing gaps, for instance, in accounting. And there has been a new marketing plan for this segment, even for the retail customers, the micro and smaller companies, and that is why an increase is higher than it used to be.

Now we can move on to customers -- sorry, to investors attending online.

First question, net interest margin. You said that it's vulnerable and that it's 200 bps. Could you give us a figure for 100?

PLN 720 million.

Tier 1, how much of 2025 is already taken on board?

For consolidated, PLN 1.157 billion. For individual result, [ PLN 1,320 ].

It's about the number of disputes pending. We have not had major increases. It's -- we want to decrease the level of complaints made by the customers. We believe that we are effective in doing so over the last quarter, the tendency was downwards. We are using new technologies to identify any fraudulent transactions, and we also secure our customers against such fraudulent uses of money, and we see the result.

In 2026, do you see a room for further growth above the market average with the risk below the market average. You've mentioned IVM and cloud computing and graph analysis and practical examples of that.

Yes, there is a room for the growth dynamic. For the graph analysis now, we are the largest bank in Poland, and we are present in all the segments. So we have a wider perspective on the market, and we can analyze customer financially. And then we can place that individual customer into a broader, larger market perspective. And we used such modeling in 2025, and we've been testing it. So the results I showed you do not take that into account, IVM and cloud.

Well, what are the benefits of using the technologies? You've got cloud-based tools. And with these cloud-based tools, you are able to implement some solutions within weeks or even within days, so much faster. Moreover, new technologies can be used because before we had some computing capabilities restrictions.

I see no further questions. Thank you very much. Thank you for your attendance, and please feel invited for the next presentation, which will take place on the 14th of

Good afternoon. Let me welcome you at the follow-up call with CFO of PKO BP. We have our CFO, Krzysztof; Chief Economist, Piotr Bujak; Finance Division represented by [indiscernible] and IR team. As usual, I suggest. [Foreign Language]

Jovan please.

Yes. I hope you hear me right. I have just a minor question on -- I think you revised downwards a bit loan growth outlook for this year and next year for the sector, right? And I think it is related to mortgage revision downwards. If you may just give us a comment on that, please.

You mean the loans growth, I guess, right?

Yes. Exactly, exactly.

So even despite the most recent developments in the market are still quite promising. And the most recent data for September showed record strong introduction of mortgages in the market. As we are in the process of financial planning or preparing financial plan for the next year, we -- at this very moment, we try to be as conservative as possible. And that's why now we show in our baseline over 9% growth. So very high single-digit growth of PLN mortgages, but we stick to the view that there is a chance for even stronger developments in this segment of the market, and we definitely still do not exclude double-digit growth. And of course, our strategic ambition is still to grow over the market. So for us, definitely, for PKO Bank Polski, the target is double-digit growth in this segment, actually in other segments as well.

Okay. Perfect. If I may add another one. Your interest rate scenario is 3.5%, right, terminal rate next year?

Yes, it is. Yes, we assumed this when we were preparing the strategy for 2025, 2027. And we stick to this view that the terminal rate will be in the current cycle will be 3.5%. Some other major banks until recently, especially until the rate cut this week, were signaling that maybe or saying that it could be higher 4% or maybe even higher. We were on the conservative side, and we stick to this view that it will be 3.5%. Although one has to acknowledge that initially in the strategic cycle, we assumed that this level would be reached in early 2027. Now we think it will be somewhat more challenging for us as we think -- as we assume in our baseline scenario at the moment that this level will be reached before the middle of 2026 with 3 additional swift rate cuts in the first half of 2026, each by 25 basis points. That will drive the reference rate, the key policy rate in Poland to 3.5% from the current level of 4.25%.

Okay. And in this scenario, like what would be the low in margin in which quarter it would be reached?

So for now, as Piotr also already mentioned, we are in the planning process for 2026. So concerning NIM for the, I would say, more clear guidance, we'll give you most probably with the 4Q results. Now we can say that what we expect that the NII will be now on a rather stable level with some potential for growth, but it will depend on the volume growth. However, as Piotr also already mentioned, our appetite is to grow above the market. So we have potential to grow from, I would say, quarterly NII, but as a kind of base, we assume we will be at the stable level with some potential for growth. Of course, from the mathematical point of view, there will be a pressure on the NIM.

So you can expect in the fourth quarter, again, some slight drop, not at the scale which we have between second and the third quarter of the margin. And we should be -- for this year, we should be around 4.8%. However, the rate cuts are deeper than we expected for this year at the beginning of the year because we expected 100 basis points spread across the year. Now we have already 150. So we can say that we should be around this 4.8% plus/minus some bps. But -- and for the next year, of course, our NIM will be under pressure. So you expect again some drops, but we'll work on our side actually to have NIM to improve, I would say, NII. NIM, of course, will be under pressure.

I just wanted to clarify on net interest margin dynamic in the third quarter once again. So you had around 20 basis points decline on a quarterly basis, while effectively on average, I think policy rate was down around 50 basis points. So just wanted to clarify, it looks like that the sensitivity was higher than a theoretical one, which I think you mentioned something like implied 10 basis points, 10 to 15. So what was driving a higher sensitivity in this quarter? And maybe what are the key moving parts? And also on the hedging costs and benefits of hedging, could you give some additional color there?

Yes, I will try to describe the situation here. Actually, we have to take into account the moment of reset of interest incomes on asset side, the loan book and bond side. It is not -- we do not -- we have some peaks in time where we observe this reset. That's why the sensitivity of interest rates you observe based on third quarter results could be not in line with the theoretical we reported. That's one aspect. And again, what we -- our goal is simply to replace this lacking part of interest margin next quarters by rising interest income -- net interest income, which is, generally speaking, should be driven by volumes. And of course, temporary, again, we have to underline that we have a kind of a slight crowding out effect due to KPO funds and some activity on Polish Development Bank, who is also -- who is active on this curve -- part of curve, which should be dedicated rather to special banks. That's -- it is from my and our perspective, rather temporary and we should -- we still are waiting for this wave and this acceleration on investments, what should give additional boost of loan activity.

Yes. But just to add what Christoph underlined, please take into account that the, I would say, total rate cut this year was already higher, not the 50 basis points because we had rate cut in May, July, September and October and -- okay, October is not for the third quarter, but we have in total by the end of third quarter this year, 100 basis points rate cut. And we already had a rate cut in 2023 by 100 basis points. So in total, it was 200 basis points. And by the second -- sorry, first quarter of this year, we were actually growing our quarterly NIM. And then we have a slight decrease in the second quarter by 4 basis points.

And now, okay, it's around 21 -- so please take this into account that we are not talking about 50 in the quarter because there is -- what we see is also effect of rate cuts from -- also from May. And as we had, for example, our consumer loans, large part of our portfolio is repricing -- was repricing in July. So it consumes actually the rate cuts, which we had in May and also in July, the 75 basis points and a few other factors. So it's not, I would say, 21 versus 50 rate cuts. That's one comment.

You also asked about the hedging. So looking on the hedging numbers, which you also have in the financial statement. So from quarter-to-quarter, the cost of hedging was lower by around PLN 70 million. So meaning positive impact on -- from hedging from derivatives to be more precise.

And as you probably remember and to clarify how it works, this hedging IRS. We will report this negative difference between floating part and fixing part legs of IRS up to the maturity. From this perspective, if we see maturity of IRS old cohort originated in 2021, we will not see this negative next day. It is not an evaluation. It is based on this, let's say, amortized cost methodology where we simply reflect in PLN. The difference between coupons, fixed and floating, which for the old cohort is negative for us. But just after maturity, we do not see any more. That's why we expect next year, of course, with the assumption for CIRS who is to hedge our real activity, we shouldn't see a negative contribution from the old cohort or for the total portfolio anymore.

[indiscernible] I believe you were the next one, please.

Just 2 questions from our side, please. One is on a clarity question from the conference call this morning. I believe the translator mentioned something about you guys entering into the e-commerce market. Does it mean BNPL or if you can elaborate on that part? Second one is on the bank tax or corporate income tax. Just in light of that, do you see any upside on adjust your fee income from that front?

Answering the first question, publishing last year the strategy, we defined 7 pillars. One of them is this e-commerce activity, what, in fact, means that we should embed our financial services to e-commerce -- large e-commerce platforms, this buy now pay later channel to simply explore these clients and add to our wallet of clients and simply to adjust our portfolios. And we now are -- we made a first step. CEO announced this. And next week, we have a conference about that we signed an agreement and we start the first stage of mutual cooperation. But the general goal is simply to expand our services on different areas. This is a kind of development of the bank. We name the strategy growth and tenant in this ecosystem is this development part where we're going to explore and find, in fact, acquire new clients and add our functionality to this buy now pay later channels. But in the short run, we will not see huge volumes. That's probably the situation. But for us, the way is simply to check whether our services can be accepted in this new channel, and we hope that we will see both, interest income and fees in the future? That's the first question. The second one about the tax, I don't know, direct me.

So maybe I will take it. So we still stick to our view that the tax will be implemented. We think that the most likely scenario is the one in which it's approved by the parliament and signed by Mr. President. And we still stick also to the view that the drop in tax rate they propose in the loss from 30% to 26% next year -- sorry on the following year and 23% later on also will be delivered. From the impact on us, generally speaking, you all calculated it. We think this is quite straightforward. So we do not disagree with the numbers sell-side prepared between 15% to 20% impact on '26 depends on your number and high-single digit for '27. And if you look at the development till now, as you know, it went through the lower House of Parliament, we feel even more comfortable with our view that this will be implemented.

Thank you [indiscernible]. Krishnendra please.

Yes, sure. I think 3 very simple questions, I think, first, starting with the fees part actually. Just trying to understand your fee run rate is still below what you were initially guiding to. How should I think about that fee line? And lastly, insurance number last year, like in the revenue line looks slightly higher. Is there any one-off in that line of just a modeling question? And second one is around CET1 ratio. Just trying to understand what's the company policy? Do you fully kind of exclude the net profit from the CET1 calculation and add it back once the amount is kind of reflected like you have restated like 2024 number that I could see in the presentation? And last one is on M&A. I think a few days back, there was -- and in the morning as well you were discussing about the M&A plan. In accordance to that, what are your thoughts in terms of expanding? Is it -- are you looking at more a bolt-on or you're looking at other CE markets in which you would have rather major presence in that sense rather it's just bolt-on adding to your fee franchise or asset management or other parts?

Maybe I will take the CET1. So -- in the context of fees, okay, we are maybe slightly below our guidance, but please take into account that -- and we communicated that we had pretty substantial one-off in the credit card business, which is even amounting to PLN 145 million. So if we actually extract this one-off, which resulted from the settlement with the credit card companies, then we are in the area of mid-single-digit dynamic. So from this perspective, it's what we actually said. But again, it's predominantly due to the one-off, which we had last year. And it's not repeating this year, and we do not expect to repeat in 2026. This comment to the fees.

Concerning the insurance, yes, we had, I would say, 2 significant factors impacting the dynamic year-to-year. One is resulting from the change of construction of the insurance products due to implementation of so-called recommendation by the KNF. So for example, we left with the products as mortgages and also cash loans only life insurance without -- not life insurance due to the fact that the insurance for non-life part was profitable. However, does not meet the requirements of recommendation. That's one point. And secondly, this is what we also informed, we are converting also old portfolio of cash loans to a new agreement in the context of also a free sanction loans. And always, we also have to return the provisions, which we take for the insurance part of the provision. And these 2 factors actually impacted the dynamic year-on-year and was actually balanced significantly by our stand-alone products as we implemented for the home insurance, for car insurance, touristic insurance. So -- but these were actually 2 major change of products due to regulatory requirements or elimination of some products and returning of the part of the insurance fees to the customers in case of refinancing of existing cash loans, which were higher.

Concerning CET1. So CET1, our policy actually, okay, we want to pay dividend. So from this perspective, actually we want to keep our CET1 ratio, TCR ratio above the regulatory -- not only minimum regulatory levels, but also dividend levels. Currently, they are 1 percentage point higher, meaning the dividend levels than the minimum regulatory after implementation of countercyclical buffer starting 25th of September this year with, of course, buffer for further development, meaning volumes. So volumes regulatory development because we already have resolution of the Ministry of Finance increasing the countercyclical buffer in next 12 months by another percentage point. This was expected and dividend payment. So this is how we want to use the capital and where we want to be above dividend levels with some management buffer on our side. M&A question, Krzysztof, I will pass to you.

Thank you, Jakub. Again, we explained this during the conference that we, generally speaking, do not change our view. We can add to the balance sheet in 1 year, PLN 50 billion is what is roughly speaking, 10% of the balance sheet. That's a pace of dynamic we can develop organically the bank. That's why it's a natural option for us now. But as you know, we have a professional team who is analyzing everything what is on the market on the table and different options in different scenarios, what means a potential transaction if we buy, what it means with our competitor is buying and different alternatives. And we're analyzing on the group level some gaps versus normalized market for our group. We see some gaps and we can define the trajectory to fill the gap organically or we can add things to develop quicker. But of course, finally, we have to have a target and find the target and potentially meet the price and criteria. It's not easy. But what we can declare, we will analyze different options. And opportunistically speaking, we will also think about structuring the balance sheet and delivering the growth for shareholders in different ways. But formally speaking, we didn't change what we promised from the strategy perspective. But of course, this acceleration on M&A market, we observed, and we discussed this M&A potential options much more than last year. But finally, it is not easy. Yes, if we change something, we will, for sure, inform our shareholders and the market.

Sorry, just one small follow-up on the M&A bit. I guess you would have an internal -- I guess, you will be looking at IRR. So it's looking at how much are you going to reinvest in your business versus what you're generating. So anything -- any business that you're looking at would have to meet the internal -- and have you guided to that number? Like it's -- because I see you guide to more than 18% ROE. So I would suggest -- I would think anything that you're trying to buy would have to have a similar-ish or higher return?

The question is maybe the answer is much more complex because if we add something to the balance sheet or the group -- to the group, we do not -- for us, synergies are not theory because we can really leverage different companies who are providing different services, leasing companies or factoring companies much to become a much higher pace of development if there is an IT platform who we can embedded to our case. This ecosystems, it's not an M&A transaction. It's a kind of partnership. But of course, we can sign some entities on the market in Poland and abroad who can really leverage, especially now in this era of AI, we can really add value even if something is small. From this perspective, analyzing different potential targets, even theoretical, I see the rising part of this potential value, which is the function of adding something to the -- to big company. We are -- from this perspective, size matters. And it's not the situation that we are looking for buying a bank in local market to add EUR 10 billion, EUR 15 billion to our assets, but rather find a way to leverage our activities and services. But again, that's theoretically speaking, we can discuss everything. And if there is something on the market, we have to be in the game that we can promise, but it doesn't mean that we will completely reengineer our focus, and we will now discussing twice a week opportunities what to buy. The pace of development organic where we can gain cash loan market or mortgage market. Piotr explained during the conference that this acceleration we observed on mortgage book, corporate side, investment way, really, we are keen to explore this and execute this organic option, but we can't be in the position that we do not analyze things which are on the -- potentially on the market as we can promise, we are [indiscernible].

I do not see any other questions. So thank you for participation and hope to see you on the next event in 3 quarters. In the meantime, if you have any follow-up questions...

Maria please.

Congratulations on good results. I just wanted to check about the pricing of corporate loans. So we started hearing some messages about competitive -- competition increasing in that segment. So I'm just wondering to hear your color how this sector is rational or some players, smaller ones, bigger ones trying to somewhat undercut the pricing?

To some extent, it could be true. We are -- the distance between the largest bank in Poland to the second largest is PLN 200 billion. What means that PLN 1 billion in new assets for us is a different dynamic if we add this to the third or fifth bank on the market. If you declare the dynamic and you add something very cheap, the negative impact on interest margin is limited, especially in first quarters, but then you can wait up to this moment, what I just mentioned about this investment wave connected with energy transition. We observed a change of landscape. Again, we keep this scenario that to meet everything we should finance in 5, 10 years' time, we will, for sure, invite foreign investors to Poland because we are too small as a sector. That's one aspect. And that's why currently, we observe crowding out effect and some competition and this compression on margins. But of course, there is not the level playing field comparing.

Good morning, ladies and gentlemen. I'm happy to welcome you at the performance presentation of PKO Bank Polski after Q3 of 2025. The financial results will be presented by Szymon Midera, President, CEO [indiscernible]. Chairman, the floor is yours.

So we've accelerated, as you can see. So we are much ahead of the pack. And today, consistently step by step, we are achieving our objectives that we presented in the strategy a year ago. And I'm very happy to share all the information with you today.

So let's start from our most important assets from our clients for our customers. We accelerated also in this respect, and I want to draw your attention to the fact that in Q3, we have 127,000 of new customers acquired and what is really important, a lot of young customers. So the new acquisition translates into higher volumes. We have achieved PLN 660 billion of savings with over 7% dynamics year-on-year and PLN 315 billion of the loan balance with 10% year-on-year. That translates into the total balance of PLN 555 million and NPL, which is stable at the level of 3.36%. We have still 116.29 and the total asset ratio of 18%, much higher than the standard related to the dividend payment and the regulatory standards. So what is this -- how this scale and the collaboration in acquisition and acquisition of new banking volume translates into our performance.

After 3 quarters, we have PLN 8 billion of net profit with a high level of impairments, PLN 3 billion year-to-date. Our net profit is 2.8. This is the highest quarterly profit, the highest in our record in our history and the high dynamics of 16% year-on-year. Returns on equity 20% of the Q3 and 21% in Q1 only. That is evidence of the strength of our business model and of the potential of entire [indiscernible] of Bank Polski group. When it comes to the net interest income, it's a stable of the level of 4.86 in Q1, a slight decrease, but not adequately to interest rates. So we have 4.7% in Q3 only. We keep and it's a kind of stable trend for loans that we have high cost efficiency [indiscernible] after Q3, 30% and in Q3, only at the level of 28.8%. And the last element which is very important because the cost efficiency and credit risk management give us a good result for business volume affects our great financial results, the cost of risk at the level of 32 basis points after 3 quarters and 28 basis points in Q3 only. Thank you very much for this introduction.

And now over to Piotr, who will present the economic landscape and will explain the market and this good business cycle for the Polish economy and such.

The macroeconomic landscape is good and separable. PKO Bank Polski has accelerated together and along with the Polish economy. The economic increase has accelerated to almost 4%. What is really important. It's been visible during Q3, the breakthrough in stagnation in industry and the acceleration for the industrial sector, and the loan activity in the Corporate segment. At the same time, the situation of households is good despite reduction in the sector of enterprises, the unemployment rate is at a stable low level, the customer confidence is increasing. The household income has been increasing 4% to 5%. The actual rate is not known yet, of course, in nominal terms, it's enough for us to see a strong growth in consumption for households that fuels loan activity for households and in the household segment, and that translates into the number of housing loans and consumption loans.

So that allows us to increase our sales and to be successful with our savings facilities and investment facilities. Of course, this low unemployment rate and good situation and good condition of households that translates into higher activity in the segment of households. Another element that is not favorable for the banking sector and it's quite evident and that exercises negative pressure. This is the interest rate cuts that have been continued over Q3. We can see that this trend will continue in 2026, but it's visible and it's in line with our assumptions, that decrease of interest rates with better business cycle and not as it had been before that the fiscal policy has been eased. And together with economic slowdown, this situation leads to acceleration and improvement of the loan activity, it is quite visible in the housing loan segment when we can see that the interest -- we see higher activity of the lending -- the higher lending activity and new production of housing loans as a result.

According to our forecast this favorable situation in the Polish economy, we may say to use our lingual so-called goldilocks, the higher economic growth higher than inflation. So the ideal makes and decrease in -- of interest rates, which is favorable for lending activity and for upholding good quality of assets that will be upheld to 2026. So we stick to our assumption that the lending activity in all 3 segments will improve in all segments that will generate increases for the market. So with our ambitions to increase our market share that may give us more. We see a high potential in many segments, high potential for higher growth. So this is our base case scenario. But we think that in case of the housing loans and corporate loans, the actual development and the actual situation will be even better because we can see that the spread is asymmetrical, but in a positive way. That's all from my side. Thank you very much.

So let's benefit from this great business cycle. Let's accelerate even more and let's speed up. Not only we are happy with a higher number of customers that was visible, but we are able to maintain this increase and to get even more of that. Together with [Allegro], we will launch our project in a few days, but we see that this increase coincides with high quality and great customer experience. For the first time ever, the PKO Bank scheme is ranked as the second in terms of NPS that shows propensity to recommend our bank among our customers with such an increase with such an offensive, it's not easy to maintain high quality of customer service and customer acquisition. So we are doing everything to maintain this trend of high customer experience. We invest in marketing because marketing means customer and marketing means direct support of execution of our business objectives.

Not only to be the most renowned and the most famous bank on the Polish market because we are at top of the mind brand, but to be the preferred bank. We deeply believe that all emotions related to the bank translates into business decisions. And we are appreciated by our customers in terms of the scale of growth of deposits. Deposits in PKO Bank Polski, we are increasing this rate quarter-to-quarter, we are much above 8%, but thanks to education and implementation of new facilities, we shift deposits towards long-term deposits and investment facilities.

Just have a look at our dynamics is 40% in the accrual of investment assets. It's way above PLN 70 billion that allows us to strengthen our market position and to shift market share and to push market share towards 20%. So, something that makes us really proud and I'm very grateful for that to all our customers, to all employees of the group and employees of our branches. This is a dynamic increase in our balance. Just have a look that we have balance, which is higher by 1,000 percent. We are at the level of 20%, in new sales, we are at the level of 40%. So today, as PKO Bank Polski, we capture not only 40% of entire loan sales, but we are quite close to the same level in terms of cash flows without any easing of -- without an easement of our loan policy, without decreasing our prices.

So that's a great trend that strengthens our position in terms of key parameters retail banking. The share of PKO Bank Polski in the cash loan market has increased by 1.5 percentage points. And for mortgage loans, it has increased by a good 0.5 percentage points. And we stick to this trajectory. We're able to keep it. We are able to show that the strategy that is concentrated on the organic growth here and now translates into some actual and concrete results.

When it comes to corporate banking, we see that this market has become more lively. Now we are at the level of 8% of dynamics in Q1, it was 6%. In Q2, it was 8%. I don't know if you remember 5% dynamics over the last quarter. So we deeply believe that we are able to maintain this 2-digit dynamics. And hopefully, we will be able to stick to that because that's a good moment to finance all customer -- all corporate client segments. That causes that also in this area year-on-year, our market share has been increasing. And traditionally, as every quarter, we present the key transactions in corporate banking, not only to brag about them, but to show that we have a deeply diverse portfolio and high-quality clients also from the segment of energy transformation and defense. Now over to Krzysztof.

Thank you very much, Szymon. Very good robust net profit for Q3. And what we actually love very much at this bank is predictability. And I would say that the main dimension of our risk or related to risk is always volatility. We try to eliminate volatility by delivering results that are slightly above the consensus year-on-year. Our dynamic is around 15%, which makes us really happy, especially that we're operating in an environment of lower interest rates. Over the last 2 years, the Central Bank has lowered interest rates by 150 bps. So the result that we're looking at, it still has an impact of extraordinary items over PLN 3 billion this quarter, which means that we have certain write-offs dedicated to Swiss franc-denominated loans, but we're not changing our message. We're staying on message. We're going to try to make this year the last one where extraordinary items related to CHS will be encumbering us and our profitability.

When it comes to the very basic fundamental point of pride is our income, income growth from our core activity, it's around 7% or even more than 7% on a comparable basis year-on-year. We are again trying to eliminate volatility. So actually, the impact of all other parts of our business, it's less than 1%. So we are, of course, based on such drivers as commissions and interest and fees, of course. When it comes to interest, last year, we declared that we started taking action towards maintaining our interest margin for as long as possible. So we -- our net -- our interest margin has changed its trajectory. And it's happening. It's getting there. The peak in margins is over. It's behind us. But actually, the fall, the decrease of our margin is progressing much more slowly than the speed at which interest rates are dropping.

And this is a result of our action, action seeking to change our balance sheet structure, and we definitely focused on fixed interest mortgage loans. And we also we are also hedged by IRS transactions. When it comes to our fee and commission income, it is our ambition that the structure of our results on our core activity, well, that we still have that. We have those -- we have a good fee and commission index, and we're less dependent on our interest income. And even though Q3 is always the strongest typically, but we have seen very good dynamics quarter-to-quarter, like Q2 to Q3 as well as year-on-year. So we're talking about 5.4%, that's the dynamics. And just like we said, we're looking at this and we're looking at our financial results with pride, but we're also looking to see what's happening beneath.

And beneath, we have our customers and their activity because we're getting more fee and commission income on their accounts, on their cards, transactions, insurance as well, investment funds, just like the CEO mentioned, our brokerage. And it's a full comprehensive ecosystem. That's why we've been doing this. That's why we're perfecting and seeking to make our products excellent. We're automating services. We're introducing remote channels so that customers are doing more and more, so that customers perform more and more operations so that they use their cards more. Even currency exchange as well because if someone goes abroad and they choose to prefer to pay with our card compared to a card from another bank, that's always something that makes us happy and that's always something that increases our fee and commission income.

But of course, a good financial result would never be possible if not for our really tight cost discipline, [c2i] after 9 months at the level of around 30% cost to income, this is a very good local result. This is something that we represent in this country, and it's really big. If we compared ourselves to selected European banks, I would say we are. We are absolutely among top players. That's our -- I mean, we have slightly higher interest rates. That's why maybe we're getting even better performance because they have lower interest rates and they have lower margin. But still, we are simply well prepared. We are increasing our cost efficiencies and our cost effectiveness. We are very disciplined. And that's a key enabler for our strategy, the one that we adopted last year.

So my last slide is our issuance activity. As you know, ladies and gentlemen, well, in February, we already told you that Moody's increased our rating for our bonds. And actually, we issued Tier 2 debt, which, of course, increased our credit assessment. So actually, we have 2 increases of rating by Moody's, while operating in a difficult environment because in many cases, Moody's actually downgraded other companies ratings. And we are increasing our geographical expansion in terms of issuance. I know that the European market is quite competitive. But given our scale, we do have to be more and more present across Asia, for example, and we will continue to increase our presence.

We are now entering a point in time where we will start refinancing our historical issuances, and we will, of course, be dealing with a higher scale of our business operations. So we want to have a good asset structure that will make us feel comfortable about our ratings. So you can expect us to be pretty active in this area, and you can expect results from us. Right. When we're talking about risk, stability is always important, long-term stability, low write-offs and low impairment levels. And actually, for years, we've exhibited one of the lowest cost of risk and we can show you at the same time that we are increasing our market share, which is impressive. And I think that today, given this competitive environment, it's not so easy to experience growth. It's actually very difficult to experience growth and increase market share at the same time.

But I would say real mastery is to increase market share, keeping curbing your cost of risk. But actually, we are a case in point. And it's happening for us for 3 reasons. First of all, our customer base. We have good loyal customer base that is growing all the time. Secondly, our analytical capabilities, our technology, our data. Well, I wouldn't like to brag, but I think we're quite good in this area. And of course, thirdly, and most importantly, I guess, our colleagues in the corporate division, in the retail division because our employees, they know local markets. They know how to reach customers. They know how to attract customers to get very good customers who have very good credit, very good financial standing.

So it's happening for us and Stage 2 is dropping, Stage 3 receivables are dropping, which shows that our portfolio is really very, very decent. So now let's talk about CHF loans. I'm dreaming of a day where we present, and we don't have those slides anymore. And I do believe that next year, we'll have just one slide with CHF mortgage loans and you wouldn't even -- and you will not even pay much attention to it because I think that most of the difficulties, most of the challenges are actually behind us. We have provisions and we have 12,000 active cases that haven't been addressed otherwise. What makes us really happy is that it's the best quarter because the number of motions pending is dropping for the first time. And what's important, as we extend to international markets, we see that our scale, our strength really matters.

We can get into deals where smaller banks simply cannot make a move, and we are participants of those deals. And the surplus that we have really allows us to increase our lending. Thank you very much.

Ladies and gentlemen, right now, I can tell you that we are the most omnichannel bank there is. We have the largest sales structure, and we're investing, and we're talking about really historic investments, investments in technology, in conversion, in automation. We're trying to convert customers from offline to online. We have very strong digital channels that we are still boosting and bolstering. We have President Po with us, and he's very much focused on our digital know-how, our digital capabilities, competencies because we want to serve as many customers as possible in the digital world. And we are executing a project with the largest digital marketplace. We are the most stable and predictable bank in financial terms in terms of performance.

But at the same time, we're developing. We're growing the fastest in the market. Plus we have this additional engine that we have launched. And quarter-to-quarter, we are increasing both in terms of retail customers, in terms of corporate customers. And I could say it borders on boring that we're continuously demonstrating to you how good we are at increasing and fostering our market position. We're doing this with absolute consistency and absolute discipline. We've been showing you, as I said, consistently, how we are strengthening our position. We're investing in technology. We're investing in people. We're investing in marketing. I talked about it before. Marketing is really important because today, we are in a very elite top group of banks. that can communicate with the market, with customers, with all customer segments very effectively across all channels.

We have higher volumes. Our volumes grow faster than those of our competitors. At the same time, we're keeping control of our costs. We're keeping control of our credit risk, great results. This gives us great results, EUR 8 billion after 3 quarters, EUR 2.8 billion in just Q3, very high profitability, very high ROE, 20% and full control over our cost of risk and very, very high cost efficiency. And in the coming quarters, we will continue to be equally predictable and equally boring in the sense that we will continue to show you higher dynamics and increasing results. Thank you very much. And now we are ready to take your questions.

Santander Bank. My congratulations on your loans. I have 3 questions. First and foremost, I'd like to ask about the external growth and M&A. That is the most popular topic. I would like to ask how do you balance the 2 elements that potentially some assets can be acquired. But on the other hand, the bank is increasing its assets. Do you have appetite only for acquisition in Poland or also abroad? And the second question concerns the balance because year-on-year, deposits are going at the portfolio of bonds goes by PLN 24 billion and the loan portfolio by PLN 28 billion. So what about this over PLN 20 billion portfolio of bonds? Is it any problem? Or you would like to support the further increase in discussion of this portfolio?

When it comes to the strategy, we can see that the cost of risk is at the level of 70%, 70% or 80% cost to income. Here, the growth dynamic has decreased. I don't know if -- whether this 30-something process was not too cautionary but 15 million customers why not? And this 2-digit increase in loans. A year after the strategy was published. Would you like to review any of these strategic objectives or you're going to stick to all the strategic objectives and they will stay as they are?

Maybe let me be first. When it comes to the approach to M&A, we are indeed 1 year after the publication of our strategy after a few quarters, and we've been sharing information with you over this period. When it comes to the assumptions, nothing has changed. We are very opportunistic. But -- and the very fast growth in some segments, in some business lines. It amounts to 30% of new production of new volume and that encourage us to take a more active approach to potential M&A, not only in Poland but also within the region that would allow us to arrive at our goals even faster.

So we are still opportunistic, but we create a kind framework because we're encouraged by the results of our performance after 1 year after the publication of our strategy to actively pursue our objectives, our targets. And we're doing so. Anything above that would be a speculation so just give us a second, give us a while to be able to present the results of our higher activity in this respect. Szymon has presented the ads and so [indiscernible], you could reach on the slides, you can have it. And from the perspective of our bond portfolio. Yes, you can have it. [indiscernible]. So this is the natural reserve of our liquidity, this question. If you -- if we rephrased it, so whether we have the same appetite in every tenure, whether 10-year bonds will be at the same level as 2-year bonds that this answer would become more complex because we would need to manage that. This is the reservoir of our liquidity and the lending activity. As the lending activity accelerates, we will utilize that.

But from the perspective of collateral and of securing our net interest margin because if we take a look at our net interest income, the contribution from bonds is positive year-on-year. So we can see that it's a strong support, and this margin has been decreasing a bit slower also because we have as many interest rate bonds, 24, sorry, that was my mistake because we had PLN 28 billion more in loans and PLN 24 billion in loans. When it comes to the balance is no problem because you can pay -- you can have them. You can have the bonds. When it comes to our strategic objectives, cost-to-income ratio [c2i]. When it comes to [c2i], Naturally, in our strategy, we did not present that we want to arrive at 35%. We want to have less than 35%. That's our objective.

Of course, we can deep dive into whether this number is a result of cost or results of our revenue. For sure, we are entering into a market phase because of the interest rate landscape. We want to generate net interest income from new volumes and we will do everything to use the volume and to benefit from the volume dynamics. It's a long March as [indiscernible] has said that we don't function in space and that over 100 years old, and we have 3-year strategy. That is our time to translate decrease of net interest margin into net interest income.

But first, we also have competitors. We need to admit to that. Cost of risk, Piotr, would you like to refer to the topic?

In our strategy, we assumed that we are going to acquire a lot of new customers. For the time being, we are increasing in terms of our market share, but we mostly sell our loans to our loyal customers. Szymon has already announced our activity in e-commerce is something new for PKO Bank Polski, and we expect high number, maybe of smaller transactions, but with higher risk burden. So the cost of risk has increased, and we have that on mind all the time. It seems judging by the current performance that is -- we can arrive at a little bit lower level, but this new energy will shortly translate into increase. We support the growth we want to maintain it. We want to serve 15 million retail customers at the end of 2027.

And as you know, and as we see, we have increased our acquisition in the traditional model. It's over 120,000 new customers quarterly and a large component of a young customer. And soon, we'll launch a powerful offensive with regard to the most powerful financial ecosystem in this part of Europe, and we have committed to acquire -- we have committed to millions of other customers that we're going to acquire due to the new proposal that we have been preparing for the last year. That's not going to be easy because every large bank wants to grow dynamically organically, and they want to acquire new customers. But the difference is that we have many assets and other banks don't have the same assets.

And the second thing is that we are very much focused on benefits on the value proposal and on development of friendly favorite bank, PKO Bank Polski. That requires a lot of effort, people, that requires a lot of investment. It's about a new offer in terms of definition of processes, It's about digitization of our processes. And of course, communication. And hopefully, you have already seen our communication.

Let me congratulate you once again on this wonderful performance with regard to what was said that those competitors in corporate loans in certain competitors indicate PKO Bank Polski. The one who is supposed to offer low spreads in corporate in tenders with low possibility of cross-sell. Could you refer to that? And could you refer to the market's opinions. How do you perceive your competition, whether it's going to intensify it's activity or not so? Or not necessarily?

Of course, it's not a true information. I don't know which bank could -- I don't know which bank can offer lower spreads, but you can find it. It's not our strategy. We are observing that part of our customers they visit our clients and banks of better clients offering their facilities, their products. So not only in corporate banking, but also in the retail, we are consolidating products, which our customers have -- in our -- with our competition.

When it comes to the fixed rate, it won't be 10% all in all, but it doesn't add up. We consolidate some customers from the market. So we financed the flat rate more, we refinanced flat rate loans more than in the reverse direction. So we -- the balance is positive for us. It's not only about new sales, but the fact that we are stronger in consolidation. The question is, can we just give away our customers without fighting? No, we won't agree for that, never. And if you ask us whether we're dumping the prices, we dump the prices. No, what for? there is no motivation. There's no such motivation. We're not going to do so.

Everything we do in sense of the strategy, from all the strategies announced that every bank wants to grow. Of course, when it comes to legal risk in the retail segment, we see that the attention a shift in attention. We have the National Resilience Plan that is also affecting the situation and the development bank, they should fill the gap and they should fulfill the role and not to interfere with commercial banks. So in mid- and long perspective, we think that this way to be financed are high enough. So we see the challenge of compression ahead of us, but we expect it to disappear. So it's worth drawing attention to the factors that come to the Polish market don't -- they're not subject to the banking tax and they are real competition. So I think that this place is somewhere else. It's not in our strategy. We can see this pressure up on our margin. But in every segment, we try to give a comprehensive offer that touch from simple onboarding processes and fast track lending processes, loan processes.

We can talk about fast track implementations, we offer fast track loan up to PLN 5 million. We have a new onboarding procedure for new customers that have been acquired by our digital channel, 8,000 new micro businesses per month. This is our current results, and it's -- we're improving. So price competition is -- competing with price is not our strategy. And that is the strength of our capital group, that is our strength on the market.

And now detailed questions. The first one regarding net interest income and the components coming from hedging, this result on hedging has been decreasing, but it's still negative. When exactly do you expect it to turn into a positive result? And when it comes to hedging and net interest income, we see compensation of new IRS cohorts of IRS that were made last year when the fixed rate is higher. With regard to cohort, 21 interest rates were lower and fixed interest rate was much lower. So it's not because of the pricing. It's because of the coupon. So if you extinguish an instrument, it disappears. So you cannot accelerate through -- for us this year has been very important, and we expect that the next year, we will not be asked such complicated questions.

We need to remember that all issuances in expressed in euro are collateralized with swaps. So we switched euro to PLN, and we incur the cost of the conversion. It is a cost. And in this respect, this compensation is much more complex. But if you ask about pure IRS to secure the interest rate, I think that next year there will be no saturation.

My last question concerning, well, it may be even more detail. Could you more or less tell us what kind of your personnel or staff costs are cost of IT personnel?

Well you could get that information from me. It's low 2 digits, share, let's say. Right. This question sort of repeats or tends to repeat at our results conference. So, here you go.

If you have no more questions, we do have some -- if there are no questions from the room, we just have some from people watching us online. The first question is about the number of cases for authorized unauthorized transactions or possibly frontline transactions, 579 such cases pending value-wise is around PLN 29 million. Quarterly, we have a few to a dozen or so on a quarterly basis, the value around PLN 2 million. And there's no hiding that we are very invested in protecting our customers from fishing and similar fraud attempts.

And we do have a number of ideas together with the rest of the banking sector, how to tighten the system, how to make sure that our customers are protected. And in the coming months and quarters, we'll give you more about this. We'll give you more information.

I think we have discussed CHF loans. So let's talk about taxes. Right now, there are proposed changes to corporate income tax and deferred tax. What's the situation?

Well, our situation is quite complicated because we have an asset -- so they'll be -- we'll be working in, let's say, 2 directions. We're running our calculations. We're looking at different scenarios. That's it.

So what about refinancing of mortgaged loans or mortgages?

I think we've talked about it. So there's a matter of question about our -- the sensitivity of our margin because if interest rates from the Central Bank go down to 3.5%, how would it impact noninterest margin next year, for example, assuming that other things stay the same. Well, it's a very nice assumption that you'll assume that other things stay the same. Everyone who is an economist by training, you know that there is a world where one variable changes and everything stays the same, it simply nonexistence. So we have to look at things that our CEO started with. The fact that we have savings, it's not by coincidence. It's a deliberate policy. We are also increasing the number of long-term products. We are adding the long-term components to our savings portfolio. So bonds trying to diversify savings products and sort of abandoning or putting less focus on 3-month deposits. So of course, our interest costs will increase because we are adding more expensive instruments. But at the same time, we can still change certain things.

So far, we haven't fully transferred the effect of lower interest rates because we are getting more liquidity ready for potential increase in lending, which in the context of falling interest rates. It's something that's already visible. Szymon, Piotr talked about it. So from our point of view, we're not changing much. And as I told you, we want to increase our margin. We have to look at the competitive environment and match or adjust our prices accordingly. And we want to increase our interest performance. Interest margin could be a result of the existing situation in the margin market but it's an increment from existing current production. You can see that our competitors change certain things, tweaks certain things in cash loans, in mortgage level. So indeed, it may fluctuate. But if the macroeconomic landscape doesn't change drastically compared to our outlook I don't think we'll find ourselves in a very dramatic site over margin or interest results, I showed you that adjusting our margin.

And looking at what's happening with interest rates, you can see how much space we have because we have a decent hedging. So we have enough time to take any necessary action so that the contribution or share of our interest performance is getting higher and higher, better and better. Another question about costs in Q4. Can we expect costs to grow in Q4? Well, Q4 is very sort of seasonal as we speak. Projects sometimes come to an end, certain initiatives come to an end. And well costs may be higher. Let me quote. We are not doing it as a sprint, right? It's not like we're finishing this conference, and we're getting into Q4. No, we've been looking at it long term. We're looking at where we are political. So our cost discipline is not just about Q4, not just about Q3, not just about Q2. We're looking at drivers what drives cost, and that's what we're working with. So this pillar, when it comes to increased cost efficiency is something long term. We want to increase our cost efficiency long term. That's how we look at this reality.

And of course, Q4, whatever you do, whatever you want to look at it, costs are a little bit higher. But we don't want to have such a situation where next year, we see double-digit dynamics on costs. Hopefully, we will not explain ourselves on the defense and so on and so on. Now there is this inflation, there is a certain base level of inflation, there's core inflation and we have to respond, right? So I wouldn't like to be in a position where I explained myself to you next year, looking at 2-digit dynamics in terms of cost. I would consider it a failure. But on the other hand, we are growing, we are developing. So if we're looking at something that could allow us to grow, we will consider it.

Last question. Can we expect in 2026 write-offs related to your repayment of CHF capital? Could it be at the level of this year, maybe at a different level?

It was quite a complex question. It also depends on core verdicts and jurisprudence because depending on where it goes, such write-offs can exist or not. Of course, chose to continue their line, then those provisions may have to be maintained. As you noticed, we've done quite a lot to stop this increase. We've changed our processes, we've modified our processes accordingly. But on the other hand, customers, they fail to understand certain things because right now, we're expecting them to give us -- we expect for them to repay the capital when we give them back interest. So we do create write-offs and sometimes customers fail to understand certain things.

Great. These are all the questions. Thank you for your participation. Thank you for your attention and see you at our next conference early next year. Thank you very much.