What is the condition of Bank Pekao SA?

Considering the ongoing pandemic and very low interest rates this year, we could say the results of Pekao SA are very good.

What is the reason behind it?

The recent two quarters have seen a dynamic growth in terms of the number of loans granted to enterprises, especially small and medium-sized ones, where the loan sales rose by as much as 30 per cent.

In addition, we also have mortgage loans, the sales of which has been going up by double-digits. These results stem from the growing optimism and increasing real estate prices, which prompts our clients to buy property.

Is the fact that mortgages are selling so well now not a reason for concern? There is a risk associated with interest rates. We could have the same problem in the future as currently with the franc debtors.

The entire banking sector is cooperating with the Polish Financial Supervision Authority, which is conducting a public campaign to raise awareness of the risks involved in interest rates. We are working on solutions to offer more widely available fixed-rate mortgages. Perhaps, this would not seem attractive to clients who are looking for cheap loans from the start with a low rate. In the short run this solution may be unattractive, but from a long-term perspective, it offsets the risk of changes in interest rate. We are talking to our clients to inform them about this risk, but we see that most of them are already aware of it.

When you look at the good results of the bank, what is also important is the low cost of risk. It was predicted that after the pandemic we will see a wave of bankruptcies, rising unemployment defaults on loans. Nothing like that has happened, though. Despite the pandemic and the economic turbulence, the bankruptcy rate has been very low. As a result, even this year the banking sector managed to record great results. We keep the reserves we have built up for the worst case scenarios that could happen. We can expect another wave of the pandemic, so we have to be prepared.

Apart from growing loan sales and a low cost of risk, what other factors have contributed to the bank's good results?

What is of crucial importance is a good macroeconomic situation, which allows us to assume that the businesses of our clients will grow and the increase in demand is sustainable. In the case of inflation, we have to take into account the issue of its sustainability, just as with economic recovery and growth. Experts are discussing whether the current situation and environment in which banks are operating in terms of investments is temporary or long-term. Entrepreneurs, who before the pandemic tended to delay investments due to fears of economic downswing, seeing rising wages and good export records, have become more optimistic. .

You have just announced the strategy of Bank Pekao SA. What are its key points?

The strategy assumes catching up with the leaders in digitalisation in the Polish banking sector. We want Bank Pekao to join their ranks and become increasingly modernised. We want to make our bank more profitable for the owners and increasingly better for our clients, who should be able to take advantage of our services in the most comfortable and convenient way. In addition, we are aiming to digitalise the bureaucratic duties of our employees. This is our goal. We have prepared the strategy in a comprehensive way to include employees from different divisions. We wanted to thoroughly discuss the objectives so as to implement the strategy in an organised way. There are many elements to it, but - in a nutshell - it is a digital transformation, the aim of which is to make us a leader in the banking sector in Poland in all areas.

Can you give us a hint of what visible changes can clients expect in connection with the digitisation?

The bank is aiming to digitise the loan process in a radical way, so as to make it significantly shorter for the client. Wherever possible, we will introduce mechanisms of automatic risk assessment through the use of automated models. This is crucial, as banks today are making money from lending, so this process must be automatic, fast and entirely remote, including sending information about the granting of the loan. We want to automate in this way all loan processes.

Banks are institutions that grant loans to clients they know well. Knowledge about its clients and good relations with them are the secret to the success of the bank. We need to invest in systems that will allow us to offer suitable products to our clients based on knowledge of their needs. Of course, this has to be done while maintaining complete anonymity and data secrecy.

The next step is the development of an application for the client. As I already mentioned, we want the clients to be able to do everything they need from the bank through the app. That is our goal for 2024.