Return on assets (ROA) calculated in a similar manner was 0.1% and decreased by 0.5 p.p. compared to 2020. The impact of integration costs on both measures was insignificant in the periods compared. The decrease in the levels of return ratios is a result of a significant increase in the cost of risk provisions related to litigation related to CHF mortgage loans.
The Group’s ROE calculated excluding the impact of provisions related to CHF loans and integration costs would be 9.9% and would be 2.3 p.p. higher compared to the similarly calculated ratio for 2020 (7,6%). In the case of return on assets (ROA), the ratio would be 1.0%, i.e. 0.5 p.p. higher than in 2020.
The Cost/Income ratio calculated on the basis of reported volumes was 52.9% (0.4 p.p. lower than in 2020). The difference to the normalized ratio is due to the small positive impact of integration costs in 2020).
The presentation of the ratios calculated on the basis of the income statement categories excluding integration costs (understood as additional costs related to the bank merger processes) and the impact of provisions for risk related to court cases concerning mortgage loans in CHF is intended to provide additional information allowing for a more adequate assessment of the changes in the Group’s financial situation in the long term.
Net interest margin calculated in relation to average assets amounted to 2.5% and was lower by 0.1 p.p. compared to the level calculated for 2020. Deterioration of the realized interest margin is a result of significant decrease of interest rates in the first half of 2020, partially neutralized by the impact of rate increases in the fourth quarter of 2021.
Changes in ratios representing the ratio of net and gross loans to deposits and funding sources reflect the good liquidity position observed in 2020 and 2021.
Return on equity (1)
Return on equity – normalized (*)
Return on assets (2)
Return on assets – normalized (*)
Net interest margin (3)
Cost / Income (4)
Cost / Income – normalized(*)
Cost of credit risk (5)
Cost of credit risk – normalized (*)
Net loans and advances / deposits (6)
Gross loans and advances / Total sources of funding (7)
(1) Net profit in relation to average equity, calculated based on quarter-end balances.
(2) Net profit in relation to average assets, calculated based on quarter-end balances.
(3) Net interest income in relation to average assets, calculated based on quarter-end balances. Annualization of net interest income considering the actual number of days.
(4) Total general administrative expenses, amortization and depreciation in relation to total net banking income, calculated as the total of net interest income, net fee and commission income, dividend income, net trading income, net investment income, result on hedge accounting and other operating income and expenses.
(5) Net impairment allowances on loans and advances and provisions for contingent liabilities in relation to the average balance of net loans and advances to customers measured at amortised cost, calculated based on quarter-end balances.
(6) Net loans and advances to customers in relation to customer deposits, balance at the end of the period.
(7) Gross loans and advances to customers in relation to total liabilities to customers, debt securities issued, loans from other banks and subordinated liabilities, balance at the end of the period.
* Normalized values calculated excluding integration costs (2021 no integration costs, 2020 positive value PLN 15,336 thousand, 2019: PLN 414,537 thousand) and the impact of provisions for risk related to litigation related to CHF mortgage loans (2021: PLN 1,045,304 thousand, 2020: PLN 168,156 thousand, 2019: PLN 32,113 thousand). The impact of integration costs on net profit was estimated using an income tax rate of 19%.
The ROE and ROA are calculated taking into account the appropriate adjustments of the average equity and average assets.
In the case of the "costs" category, the amount visible in the financial statements was reduced by the amount of integration costs recorded under general administrative expenses and depreciation. For the "income" category, the income statement figures comprising the result from banking activities were adjusted by the integration costs recorded within other operating expenses. As of 2020, provisions for proceedings related to CHF housing loans are presented as a separate line, in addition to income, this change was also taken into account for 2019.
In the case of the normalized cost of risk ratio - the calculation made eliminating the impact of the result from provisions related to COVID-19 (in 2021: +33,724 thousand, in 2020: -236,498 thousand) and the impact of the sale of non-performing loan portfolios (in 2021: +84,920 thousand, in 2020: PLN +42,368 thousand and in 2019: PLN +25,414 thousand).