Integrated Report 2021

Statement of financial position

Assets

The Bank's total assets as at the end of 2021 amounted to PLN 126,361,260 thousand and were higher by PLN 10,693,110 thousand, or 9.2%, compared to the end of 2020.

The most important change in the Bank’s asset structure compared to the end of 2020 was a decrease in the share of the securities portfolio (-3.5 p.p.) with a simultaneous increase in the share of the loan portfolio (sum of portfolios measured at amortised cost and at fair value), which increased by 2.1 p.p. The shares of receivables from banks also increased by 1.3 p.p. and cash and balances with the Central Bank by 0.7 p.p. 

The asset structure was dominated by loans and advances to customers (sum of portfolios measured at amortized cost and at fair value), which accounted for 64.4% of total assets at the end of 2021 compared to 62.2% at the end of 2020. The increase in the net volume of loans and advances amounted to PLN 9,356,955 thousand (+13.0%) and concerned both the individual customers portfolio (+16.1%) and the corporate customers portfolio (+10.4%). The increase in the value of the portfolio was influenced, among other things, by an increase in loan sales and a decrease in the balance of impairment losses.  

The second largest asset item was securities, which accounted for 25.9% of total assets at the end of 2021 (end of 2020: 29.4%). In 2021, their value decreased by PLN 1,229,828 thousand (i.e. by 3.6%) compared to the end of 2020. The decrease in the portfolio mainly concerned securities measured at fair value through other comprehensive income, including bonds issued by banks and central government institutions. 

Simultaneously with the above changes, there was an increase in the share of receivables from banks from 0.5% to 1.8% (in value terms PLN 1,699,332 thousand i.e. by 306.0%) and an increase in the share of cash and balances with the Central Bank from 3.0% to 3.7% (in value terms PLN 1,209,544 thousand i.e. by 35.3%). 

XLS
in PLN’000  31.12.2021 31.12.2020 change 
PLN’000 		change 
%
Cash and balances at Central Bank 4,631,410 3,421,866 1,209,544 35.3%
Amounts due from banks  2,254,621 555,289 1,699,332 306.0%
Derivative financial instruments 1,901,919 1,531,617 370,302 24.2%
Fair value adjustment of hedged item 65,465 531,793 (466,328) (87.7%)
Loans and advances to customers measured at amortised cost  80,124,751 70,446,975 9,677,776 13.7%
Loans and advances to customers measured at fair value through profit or loss 1,219,027 1,539,848 (320,821) (20.8%)
Debt securities measured at amortised cost  23,268,041 23,361,022 (92,981) (0.4%)
Financial instruments measured at fair value through profit or loss  320,216 371,856 (51,640) (13.9%)
Debt securities measured at fair value through other comprehensive income  9,143,353 10,228,560 (1,085,207) (10.6%)
Investments in subsidiaries  122,033 140,765 (18,732) (13.3%)
Intangible assets 744,169 651,202 92,967 14.3%
Property, plant and equipment 1,233,221 1,468,673 (235,452) (16.0%)
Deferred tax assets 719,650 613,553 106,097 17.3%
Current tax assets – 12,271 – –
Other assets 613,384 792,860 (179,476) (22.6%)
Total assets  126,361,260 115,668,150 10,693,110 9.2%

Loan portfolio

Structure and quality of loan portfolio

At the end of 2021, gross loans and advances to customers (the sum of portfolios measured at amortised cost and measured at fair value) amounted to PLN 84,311,771 thousand and increased by PLN 9,055,132 thousand or 12.0% compared to the end of 2020.  

The gross portfolio of loans and advances at amortised cost in the period under review amounted to PLN 82,968,369 thousand and increased by PLN o 9,427,410 thousand or 12.8% compared to the end of 2020. 

XLS
PLN’000 31.12.2021 31.12.2020
PLN’000 share % PLN’000 share %
Business entities with the exception of farmers  34,893,415 42.1% 29,989,406 40.8%
Farmers 7,755,784 9.3% 8,118,713 11.0%
Retail customers 38,817,716 46.8% 33,802,097 46.0%
– mortgage loans 26,710,997 32.2% 22,559,727 30.7%
 in PLN 22,141,389 26.7% 17,687,284 24.1%
in foreign currencies 4,569,608 5.5% 4,872,443 6.6%
– cash loans 7,701,994 9.3% 7,312,444 9.9%
– other retail loans 4,404,725 5.3% 3,929,926 5.3%
Lease receivables  620,444 0.7% 920,944 1.3%
Public sector  84,487 0.1% 101,382 0.1%
Other financial entities  796,523 1.0% 608,417 0.8%
Gross loans and advances  82,968,369 100.0% 73,540,959 100.0%

to retail customers, at the end of 2021 amounted to PLN 38,817,716 thousand (up by PLN 5,015,619 thousand or 14.8% compared to the end of 2020). Their share in the loan portfolio measured at amortised cost in the analysed period was 46.8% (+0.8 p.p. compared to the end of 2020). Over two-thirds (68.8%) of credit exposure of individual customers are mortgage loans, which at the end of 2021 amounted to PLN 26,710,997 thousand. In the structure of mortgage loans, 82.9% are loans granted in PLN, while 17.0% are loans granted in CHF (compared to the end of last year, the share of CHF dropped by 4.4 p.p.).  

and advances to business entities (excluding farmers) amounted to PLN 34,893,415 thousand (an increase by PLN 4,904,009 thousand or 16.4% as compared to the end of 2020). Their share in the analysed loan portfolio at the end of 2021 amounted to 42.1% (+1.3 p.p. compared to the end of 2020). The half of this portfolio (50.2%) are current account loans.

to individual farmers at the end of 2021 amounted to PLN 7,755,784 thousand, registering a 4.5% decrease compared to December 2020. 

amounted to PLN 620,444 thousand (an increase of 32.6% compared to the end of 2020). Their share in the loan portfolio measured at amortised cost in the analysed period amounted to 0.7% (compared to 1.3% at the end of 2020). 

to non-banking financial entities and budget sector institutions totalled PLN 881,010 thousand, registering a 24.1% increase compared to December 2020.    

XLS
PLN’000 31.12.2021 31.12.2020 change 
PLN’000 		change 
%
Total gross loans and advances to customers 82,968,369 73,540,959 9,427,410 12.8%
Impairment allowances  (2,843,618) (3,093,984) 250,366 (8.1%)
Total net loans and advances to customers  80,124,751 70,446,975 9,677,776 13.7%
Exposures without impairment triggers 
Gross carrying value  79,862,932 69,472,685 10,390,247 15.0%
Impairment allowance (1,062,301) (1,052,717) (9,584) 0.9%
Net balance sheet exposure  78,800,631 68,419,968 10,380,663 15.2%
Impaired exposures (stage 3) 
Gross carrying value  3,105,437 4,068,274 (962,837) (23.7%)
Impairment allowance (1,781,317) (2,041,267) 259,950 (12.7%)
Net balance sheet exposure 1,324,120 2,027,007 (702,887) (34.7%)
 
Ratios 
Share of impaired exposures in gross portfolio 3.7% 5.5% (1.8 p.p.)
Coverage with impairment allowances  57.4% 50.2% 7.2 p.p.

The ratio of impaired exposures to gross loans and advances to customers and measured at amortized cost was 3.7% at year-end 2021, down 1.8 p.p. compared to year-end 2020.

XLS
PLN’000 31.12.2021 31.12.2020
Gross total  of which: impaired share % Gross total  of which: impaired share %
Business entities with the exception of farmers  35,774,425 1,207,284 3.4% 30,699,205 1,675,724 5.5%
Farmers  7,755,784 633,557 8.2% 8,118,713 789,395 9.7%
Retail customers  38,817,716 1,127,343 2.9% 33,802,097 1,444,716 4.3%
– mortgage loans 26,710,997 522,335 2.0% 22,559,727 672,458 3.0%
 in PLN 22,141,389 167,127 0.8% 17,687,284 275,967 1.6%
in foreign currencies 4,569,608 355,208 7.8% 4,872,443 396,490 8.1%
– cash loans 7,701,994 489,948 6.4% 7,312,444 595,880 8.1%
– other retail loans 4,404,725 115,060 2.6% 3,929,926 176,378 4.5%
Lease receivables 620,444 137,253 22.1% 920,944 158,439 17.2%
Gross loans and advances 82,968,369 3,105,437 3.7% 73,540,959 4,068,274 5.5%

As at the end of 2021, the value of collateral held for customers’ loans amounted to PLN 2,018,663 thousand. Detailed information on collateral held is included in Note 55.2. of the Separate Financial Statements of BNP Paribas Bank Polska S.A. for the 12-month period ended 31 December 2021. 

Securitization transaction of the portfolio

In December 2017, the Bank performed a securitization transaction of the portfolio of cash and car loans. The transaction is a traditional securitization involving the transfer of ownership of the securitized receivables to SPV (BGŻ Poland ABS1 DAC based in Ireland). The revolving period was 24 months and ended in December 2019. Transaction is subject to amortisation since January 2020. 

As a result of securitization, the Bank obtained financing in exchange for the transfer of rights to future cash flows resulting from the securitized loan portfolio in a value of PLN 2,300,471 thousand as of 22 November 2017 (the cut-off date). The maximum deadline for full redemption of bonds and repayment of the loan is 27 April 2032. 

SPV issued bonds with a total value of PLN 2,180,850 thousand on the basis of securitized assets, and received a loan of PLN 119,621 thousand, which were secured by a registered pledge on the rights to cash flows from securitized assets. As at the end of December 2021, the value of bonds and loans amounted to PLN 761,924 thousand. 

The main benefit of the performed transaction is a positive impact on capital adequacy ratios and improvement of liquidity and diversification of financing sources. 

In the light of the provisions of IFRS 9, the contractual terms of the securitization do not fulfil the conditions for derecognition of securitized assets. In connection with the above, the Bank recognizes securitized assets in “Loans and advances to customers” as at 31 December 2021 at net value of PLN 775,591 thousand. 

The Bank acts as a servicer in the transaction.

Liabilities and equity

As at 31 December 2021, the Bank’s total liabilities amounted to PLN 114,968,617 thousand and were PLN 11,354,005 thousand or 11.0% higher than at the end of 2020. The share of liabilities in the Bank’s total liabilities and equity was 91.0% in the analysed period (+1.4 p.p. compared to the end of 2020).  

There are no significant changes in the structure of liabilities in 2021. The structure is dominated by liabilities to customers. Their share at the end of 2021 amounted to 88.6% and increased compared to the end of 2020 by 0.3 p.p. In terms of value, the volume of these liabilities increased by PLN 10,357,049 thousand, i.e. by 11.3% compared to December 2020 and amounted to PLN 101,823,600 thousand. 

XLS
PLN’000 31.12.2021 31.12.2020 change
PLN’000 		change
%
Amounts due to Central Bank 0 84,675 (84,675) (100.0%)
Amounts due to banks 2,621,155 2,831,538 (210,383) (7.4%)
Derivative financial instruments  1,918,032 1,521,148 39,884 26.1%
Fair value adjustment of hedging instruments and hedged items  44,107 542,719 (498,612) (91.9%)
Amounts due to customers   101,823,600 91,466,551 10,357,049 11.3%
Subordinated liabilities 4,334,572 4,306,539 28,033 0.7%
Lease liabilities  860,009 968,592 (108,583) (11.2%)
Other liabilities 1,504,486 1,234,157 270,329 21.9%
Current income tax liabilities 164,660 0 164,660 x
Provisions 1,697,996 658,693 1,039,303 157.8%
Total liabilites  114,968,617 103,614,612 11,354,005 11.0%
Share capital  147,519 147,419 100 0.1%
Supplementary capital  9,110,976 9,110,976 0 0.0%
Other reserve capital 2,946,115 2,208,982 737,133 33.4%
Revaluation reserve (595,707) 255,887 (851,594) (332.8%)
Retained earnings  (216,260) 330,274 (546,534) (165.5%)
– previous years result (400,786) (400,786) 0 0.0%
– net profit for the period 184,526 731,060 (546,534) (74.8%)
Total equity 11,392,643 12,053,538 (660,895) (5.5%)
Total liabilites and equity 126,361,260 115,668,150 10,693,110 9.2%

Equity as at 31 December 2021 amounted to PLN 11,392,643 thousand and decreased by 5.5% or PLN 660,895 thousand compared to 31 December 2010. The share of total equity in the Bank’s total liabilities and equity was at the end of 2020 9.0% (against to 10.4% at the end of last year). 

Amounts due to customers

At the end of 2021, amounts due to customers amounted to PLN 101,823,600 thousand and were higher by PLN 10,357,049  thousand, i.e. by 11.3% compared to the end of 2020.   

By entity, the increase was mainly in amounts due to business entities (balance at the end of 2021: PLN 53,305,156 thousand), the volume of which increased by PLN 9,648,107 thousand, or 22.1% compared to the balance at the end of 2020 (including mainly in current deposits, up by PLN 6,963,766 thousand, i.e. by 17.3%, with a simultaneous increase in term deposits by PLN 2,704,423 thousand, i.e. by 99.3%). The share of this segment in the structure of total amounts due to customers increased to 52.4% compared to 47.7% at the end of December 2020.  

An increase in volumes was also recorded in the case of retail customer deposits, which amounted to PLN 44,771,344 thousand at the end of 2021, up by PLN 1,193,322 thousand, or 2.7%, compared to the balance at the end of 2020. At the same time, the share of retail customer deposits in the structure of amounts due to customers decreased to 44.0% compared to 47.6% at the end of 2020. 

A decrease was recorded in the case of deposits of non-banking financial entities (at the end of 2021 they amounted to PLN 2,160,265 thousand, i.e. by PLN 805,254 thousand or 27.2% less than at the end of 2020). 

The volume of deposits of public sector institutions increased by PLN 320,864 thousand (i.e. by 25.3%), to PLN 1,586,835 thousand at the end of 2021. 

in the structure of total amounts due to customers was at the end of 2021 86.9%, recording an increase of 0.9 p.p. compared to the end of 2020. Funds deposited in current accounts amounted to PLN 88,434,911 thousand and increased by PLN 9,844,874 thousand, or 12.5%. This increase concerned all customer groups: business entities (+ PLN 6,963,766 thousand, i.e. by 17.3%), and individual customers (PLN +2,604,196 thousand, i.e. by 7.3%).

in the structure of amounts due to customers in the analysed period amounted to 11.2% and decreased by 0.2 p.p. compared to the end of 2020. In value terms, term deposits increased by PLN 1,014,793 thousand or 9.8% compared to December 2020 and reached PLN 11,398,894 thousand. This changes was mainly related to business entities and individual customers (an increase by PLN 2,704,423 thousand, i.e. by 99.3%) and individual customers (a decrease by PLN 1,445,630 thousand, i.e. by 19.7%). 

in the structure of liabilities to customers was 1.2% (unchanged compared to December 2020). Their volume amounted to PLN 1,125,811 thousand. 

XLS
31.12.2021 31.12.2020
PLN’000 share % PLN’000 share %
Current accounts 88,434,911 86.9% 78,590,037 85.9%
Term deposits 11,398,894 11.2% 10,384,101 11,4%
Loans and advances received  101,666 0.1% – –
Securitisation settlements liabilities  762,318 0.7% 1,390,551 1.5%
Other liabilities  1,125,811 1.1% 1,101,862 1.2%
Total amounts due to customers  101,823,600 100.0% 91,466,551 100.0%
 Including deposits 101,721,934 99.9% 91,466,551 100.0%

Equity

As at the end of 2021, the Bank’s equity amounted to PLN 11,392,643 thousand and was by PLN 660,895 thousand or 5.5% higher than at the end of 2020.  

Pursuant to the Resolution of the Ordinary General Shareholders’ Meeting of BNP Paribas Bank Polska S.A. of 24 March 2021, the entire profit of the Bank for 2020, in the amount of PLN 731,060 thousand, was allocated to reserve capital. In addition, the increase in equity was influenced by the change in the revaluation reserve (decrease by PLN 851,594 thousand compared to the end of 2020). In 2021, the share capital balance also increased as a result of the issuance of series M shares (increase of PLN 100 thousand or 1.0%). 

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