Bank in2021

Corporate Banking

The Corporate Banking Division covers corporate segments, significant capital groups (the so-called Large Corporations), public sector clients, financial institutions as well as commercial real estate and specialized financing. Given the specialist knowledge, safe and effective processes and a strong liquidity position we arrange and co-finance the most complex and biggest investment projects on the Polish market. A wide range of products and services, innovative solutions, customised approach and the comprehensive financial services for enterprises, institutions and public sector units strengthen our position as a market leader in the area of corporate services.

We provide both the comprehensive services of a universal bank and the services from such areas as leasing, factoring, investment advisory services, advisory in M&A as well as highly advanced treasury and capital market products. We also prepare comprehensive offers of short- and long-term financing of international activities, supporting the expansion of Polish enterprises both on the European and developing markets. As part of developed transactions, we have cooperated, inter alia, with KUKE and we have developed a set of unique products and services on the market in the area of export structured finance, offering our clients a financing structure that is optimal for the conducted business activity and implemented projects.

We continue our cooperation with the UniCredit Group which allows to support Polish customers in conducting business in the countries where the UniCredit Group operates. The agreement also strengthens the role of the Bank as an expert in crossborder solutions for international clients and positions Bank Pekao S.A. as a Polish bank with a European reach. This allows to expand the geographic area of the serviced markets and develop further the business with international companies.

We increase our cooperation with PZU S.A. extending it to new areas and jointly arranging, inter alia, refinancing of the company’s debt in the course of preparation for its debut at the London Stock Exchange.

Strategy

We plan to maintain the leadership position in corporate banking and maintain a high market share in revenues at least at the level from 2020, potentially increasing it, through effective volume growth, using competitive advantages such as: indepth sector expertise, specialist financing knowledge as well as the growing digitalization of processes.

We consistently develop digitalization, automate processes and optimize the work of our relationship managers, as a result of which clients receive a wide range of digital solutions enabling self-service, and relationship managers have more time and better tools to reach the most demanding enterprises with specialist knowledge.

In our strategy, we have defined the most important areas for the Corporate Banking Division:

focus on supporting actively economic recovery and climate transformation programs,
responsible capital management, inter alia, through a unique corporate and investment banking product offer, DCM competences, targeted product x-sell and an increased selection of clients and transactions based on sector expertise,
strengthening the position in the area of investment banking, taking into account the specificity of customer segments and groups, based on strong competences and a unique product offer,
development of international banking by actively supporting foreign expansion of corporate clients (M&A, trade finance, export structured finance, correspondent banking, custody),
further development of Corporate Banking competence centres supporting the whole Bank.

The Bank, as a leading institution cooperating with the largest corporate clients, in addition to supporting the substantive, operational and financial development of clients, will remain a partner for public development programs, socially responsible ESG projects, and will consistently engage in the development and modernization of the Polish economy, supporting the service and use of state and EU programs.

Pursuing the adopted strategy of sustainable development (ESG) we are even more involved in the energy and ecological transformation of Poland as well as environmental protection, in accordance with the principles of the European Green Deal.

We actively participate in building the renewable energy sources (RES) sector in Poland, offering and arranging the issues of sustainable development bonds. We were the first bank to take part in the largest and most complex ESG projects in Poland and we participated in all the most important benchmark bond issues for State Treasury Companies.

We also co-arranged the first issues of green local government bonds in Poland. As part of the signed agreement, the City of Łódź obtained PLN 418 mln, of which PLN 50 mln will be the green bonds.

In order to maintain a leading role and consistently provide the highest quality services, we are constantly developing our level of digitalization. We continuously increase the efficiency of internal processes and for this purpose we are working on development and implementation of a sales support and customer relationship management system of the CRM class (CRM One). Our goal is to make it the best solution of that type on the Polish market of corporate and business banking. Therefore, the tool which is being developed is based on the latest technologies (including cloud solutions).

In the area of direct relationship with clients, thanks to the automation and digitalization of processes, we provide solutions which give more and more opportunities for the simple and safe use of corporate banking services in remote channels (e.g. we have implemented a new tool for cash service in companies – Pekao CashCard for corporate clients). We also make sure that a significant part of the Bank’s specialist knowledge is available in remote channels. Therefore we are continuously expanding the range of generally available materials prepared by Pekao S.A. analysts.

The high quality of products and services we offer, innovative solutions, a customised approach as well as comprehensive and professional service of corporations, financial institutions and public sector entities are appreciated by our clients and decide about the strength of corporate banking of Bank Pekao S.A. At the end of 2021, the Corporate Banking Division serviced more than 6,2 ths. entities being large corporations, public sector clients, financial institutions as well as commercial real estate projects and projects involving specialised financing.

We cooperate with 11 out of 12 Polish metropolises (92% market share) and provide ongoing budget support for every third metropolis (33%). We cooperate with every fourth municipality in Poland (25% market share). We also maintain business relationships with 92% of towns with county rights and provide ongoing services to every fifth of them (21%). We also cooperate with every third county (37%) and with almost all provinces (94%). We are also a major partner for state universities.

As part of correspondent banking, as at 31.12.2021, the Bank maintained 73 nostro accounts with 45 banks in 26 countries; it ran 221 loro accounts for 201 foreign clients (banks and other financial institutions) from 48 countries and 47 current accounts for 41 foreign financial institutions.

The Bank also intermediated in the execution of transactions for clients of other domestic banks, running 35 loro accounts for 14 Polish banks and maintaining 5 nostro accounts with 1 Polish bank.

Transactional banking

In 2021 we processed:

over 462 mln Elixir domestic transactions – which is an increase of the number of outgoing domestic transfers by 7.2% and incoming domestic transfers by 4.5%; over 130 thousand ExpressElixir outgoing transactions sent via PekaoBiznes24, which is an increase of 350% as compared to the data for 2020, and an increase of 293% in terms of volume of processed transactions (PLN 2,039,289,576),
880 thousand outgoing and incoming foreign transactions with the total volume of PLN 340 billion, which, as compared to 2020, marks an increase of 35% in terms of the number of outgoing transactions and 11% in terms of the volume of such transactions,
over 167 million transactions as part of the Pekao Collect service with a total volume of over PLN 226 billion, which is an increase of 3.9% of the number of transactions and 19.5% of the volume of such transactions as compared to 2020,
over 6.3 million Direct Debit transactions with a total volume of more than PLN 2 billion – an increase of 1.01% in terms of the number of processed transactions and 19.87% in terms of the volume of such transactions as compared to 2021.

We introduced new functionalities and products as part of development of transactional banking.

ordering and importing BLIK MP2P phone transfers – we were the first bank in Poland to introduce this functionality,
on-line tracking of the current status of a foreign payment order sent by SWIFT with the use of SWIFT GPI statuses,
downloading a duplicate of the source message about the performed operation: SWIFT , TARGET2, SEPA, SORBNET, ELIXIR,
making new product applications available in the self-service zone, such as: application for account closure – enabling to close a single current account, auxiliary account, VAT account, and application for bank opinion,
submitting instructions concerning cards with a credit limit, such as: application for a card duplicate, PIN duplicate, 3DS service (changing the phone number, disabling the service), changing the proximity function, changing the limits for transactions made without physical use of the card, issuing the card in place of the reserved card,
viewing the information about the debit card holders and processing electronic applications for: issuing a card duplicate, PIN duplicate, 3DS service (changing the phone number, disabling the service), changing the proximity function, changing the limits for transactions made without physical use of the card, issuing the card in place of the reserved card,

In addition, the Bank’s most important achievements in the area of transactional banking included:

a file exchange solution for clients with their own SWIFT address,

to clients holding a Mastercard card and Visa Business debit card

or Visa corporate cards available to clients holding Visa business cards with a credit limit.

in POS terminals in Poland and in the world (iPhone, Apple Watch), payments in iOS mobile applications (iPhone, iPad), payments made via websites (on the Safari browser)

only for making deposits. The new card allows the company’s employees to deposit cash directly to the company’s account using the network of Pekao ATMs with deposit function all over Poland,

taking into account the legal changes defined in the provisions of the Act of 28 November 2020 amending the Corporate Income Tax Act and certain other acts. As a result, we enabled our clients to accumulate funds set aside for investment purposes, referred to in Art. 15 sec. 1hb point 2 of the Corporate Income Tax Act,

a new type of debt limit. As a result of this service, the participant of the Cash Pool system will not exceed the amount of permitted debt towards the Leader in the longer time perspective than one day. The service is addressed to the Bank’s strategic clients which use the Cash Pool service, in the option without redistribution of balances. The online reports on CIL parameters and the functions that allow clients to change the CIL value – depending on their current needs – were made available in the PekaoBiznes24 internet banking system,

a new type of capital company combining the features of a joint stock company, limited liability company and partnerships. The P.S.A. was introduced by the Act of 19 July 2019 amending the Code of Commercial Companies Act and certain other acts. The new form of running business activity is particularly attractive to small enterprises with high development potential, operating as start-ups or conducting an innovative activity. P.S.A. Agreement may be concluded in the form of a notary act or online within 24 hours on the S24 portal operated by the Ministry of Justice,

a solution where the value of the surplus of deposits above each interest rate threshold is calculated separately for a given threshold of deposits volume according to the interest rate defined for the given threshold. Additionally, daily/monthly reports dedicated to clients have been adjusted.

Trade finance

The amounts of documentary transactions and guarantees serviced by the Bank increased considerably in 2021. The value of granted guarantees and sureties rose by 51%, whereas the exposure to granted guarantees increased by 20%. The Bank recorded a two-digit growth dynamics in the area of documentary products – the amount of new transactions was higher by 31% in comparison with 2020, and exposure resulting from active documentary transactions as at the end of 2021 was higher by 41%.

In 2021, as part of the Open Financing Platform (OFP), the Bank financed the invoices whose value was by over PLN 900 million higher than in 2020, whereas the number of invoices bought out increased by 121%.

We are continuously developing a supplier financing program for one of the key clients operating in the retail industry. The client has selected over 200 suppliers for the program – the vast majority of them are foreign suppliers from Southeast Europe and Asia. The program is extended with new functionalities – e.g. an integral service supporting the circulation of commercial documents, which will allow to include the suppliers from other countries in this program

We continue to support clients’ operations in the conditions of the pending COVID-19 pandemic. We are consistently developing trade finance products by increasing automation and remote processes as well as maintaining the solutions developed in cooperation with Bank Gospodarstwa Krajowego.

System and operational integration with ex Idea Bank made it possible to make the offer of trade financing products available to entities that became our clients as a result of the merger of both banks.

The Bank’s achievements in the area of trade finance were recognized by the Global Finance Magazine which awarded Bank Pekao S.A. the title of the “The Best Trade Finance Provider in Poland for 2021”.

Cooperation with international clients

The Bank supports the export plans of Polish companies present on foreign markets or planning international expansion. The Bank’s clients can benefit from a package of the most advantageous financial solutions tailored to the business model. An attractive product offer for financing foreign contracts is a key element of support and at the same time a condition for strengthening the presence of domestic entities on foreign markets.

We granted loans and prepared comprehensive offers for short and long-term financing of international transactions, supporting the expansion of Polish enterprises on both European markets and in developing countries. When carrying out transactions, the Bank cooperated, among others, with KUKE (Export Credit Insurance Corporation), taking advantage of the concluded framework agreement.

We expanded our cooperation with KUKE by signing an agreement aimed at implementing new insurance and guarantee products under the new export support system. This will translate into a wider range of possibilities for financing development of exports. The offer, supported by KUKE’s hedging products, will include loans for financing domestic investments generating exports, credit products to be used for financing the supply chain or debt financing instruments for purchase of foreign assets.

We also continued the cooperation with the UniCredit Group which provides for servicing UniCredit clients on the Polish market and Polish clients on foreign markets. The agreement allows supporting Polish clients in conducting business in the countries where the UniCredit Group operates. The agreement also strengthens the role of the Bank as an expert in cross-border solutions for international clients and it positions Bank Pekao S.A. as a Polish European bank.

Investment finance, structured finance and commercial real estates

We support the development of enterprises and infrastructure through long-term financing of investments in various segments of the economy. We offer our clients the services in the field of investment banking, structured finance and financing of commercial real estate projects, including financing the construction of warehouses.

participation in a syndicated loan consisting of two term tranches for a total amount of EUR 190 million for a leading company processing wood for the furniture and construction industry (Pekao as the MLA),
acting as the lead arranger and bookrunner for financing granted by the international consortium of banks to refinance the debt of a leading company operating in the retail industry and to finance its general corporate needs, including further development. Bank Pekao was in a small group of international financial institutions with the biggest share in new financing amounting to EUR 90 million,
financing the construction of a logistics centre for a leading company from the clothing industry, implemented by a top developer of warehouses. The amount of financing amonted to EUR 35.6 million,
global coordinator and bookrunner of the loan related to post-IPO financing for the leader in logistics industry in the amount of PLN 2.75 billion,
financing that comprised the investment loan and working capital loan for a restaurant network operator (Pekao was the Arranger, Loan Agent and Collateral Agent) for a total amount of about PLN 2.4 billion,
financing the acquisition of a leading producer of spirits in Central and Eastern Europe. The amount of financing exceeded PLN 2 billion,
arranger of a syndicated loan for the champion of Polish economy, a leading company from the chemical industry for the amount of PLN 2 billion,
participation as the ”original lender” in a syndicated loan in total amount of PLN 2.1 billion for the largest chemical company in Poland,
granting a guarantee to IRGIT in a total amount of PLN 1.88 billion,
financing that comprised the investment loan and working capital loan for a company operating in the automobile industry (Pekao was the Loan Agent) for the total amount of about PLN 1.65 billion,
financing comprising the investment loan and working capital loan for a manufacturer of interior design elements (Pekao was the Loan Agent and Collateral Agent) for the amount of PLN 1.1 billion,
participation in syndicated financing consisting of a term loan and a working capital loan for the companies operating in the fuel industry for a total amount of PLN 600 million,
granting factoring limits in the amount of PLN 500 million for the leading companies from chemical industry,
granting factoring limits for one of the leading companies from the energy industry in the amount of PLN 410 million,
finansowanie nowoczesnego kompleksu biurowców w Kwota finansowania wyniosła ponad 400 mln zł,
financing a modern office building complex in Katowice. The amount of financing amounted to over PLN 400 million,
financing another stage of development of a wind farm in the amount of PLN 370 million,
the loan for construction of a wind farm for a leader in energy industry in Poland. The amount of financing amounted to PLN 180 million.

Issuance of debt securities

Taking into account the outstanding debt as at 30 Novemebr 2021, Bank Pekao S.A. had over 31% market share (1st place) in the area of arrangement and service of non-treasury debt securities (above 365 days), including:

nearly 39% market share in arrangement of corporate bond issues (1st place),
nerly 25% market share in arrangement of banks’ debt securities (3rd place),
nearly 22% market share in arrangement of municipal bond issues (2nd place).

In 2021, the Bank was active in carrying out bond issues guaranteed by the State Treasury to finance aid programs related to the prevention of the COVID-19 pandemic effects. The bonds were issued for a total amount of over PLN 42 billion with maturities ranging from 7 to 20 years.

In 2021, the Bank participated in issuance of non-treasury debt securities on the Polish market and on foreign markets (except for the above-mentioned bonds guaranteed by the State Treasury) for the total amount of nearly PLN 25.2 billion, EUR 2.8 billion and USD 0.4 billion, of which the following transactions deserve special attention:

Transactions concluded on the Polish market:
Transactions concluded on foreign markets:

the issue of three series of bonds for a company belonging to a global manufacturer of vehicles with investment rating, for a total amount of PLN 1.75 billion, with maturities of 1 year and 2 years, in which the Bank acted as the sole arranger and dealer,
the issue of 6-year bonds for a company holding a leadership position on the market of courier services for the amount of PLN 500 million, in which the Bank acted as the arranger and dealer,
the issue of 10-year green and sustainable development bonds bearing a fixed interest rate based on the ESG rating (a measure of sustainable development covering environmental responsibility, social responsibility and implemented corporate governance) for the amount of PLN 1 billion for a leading fuel and energy company in Poland, in which the Bank acted as the sole arranger and dealer, and the issue of 5-year green bonds for the amount of PLN 400 million for a technological holding providing solutions, among others, to energy industry,
the bond issues for developers operating in construction industry, including three series of bonds for a company belonging to an international developer group for a total amount of PLN 365 million, the issue of 5-lyear bonds for a leading housing developer on the Polish market for the amount of PLN 150 million and the issue of 2.5-year bonds for a developer of warehouses for the amount of EUR 20 million,
the bond issues for leasing companies in which the Bank acted as the dealer and/or coordinator, including three series of 2-year bonds for a company belonging to an international financial group for a total amount of PLN 400 million; the issue of 3-year bonds for a leasing company belonging to an international financial group for the amount of PLN 160 million and the issue of two series of bonds for a leasing company belonging to a global automobile group (with one of the highest credit ratings), for a total amount of PLN 300 million with maturity of 3 years,
the issue of two series of bonds for a leading debt collection company on the Polish market for a total amount of PLN 400 million,
the bond issues for companies from the Group, including the issue of 7 series of mortgage pledge letters for the total amount of PLN 1,235 billion for the Group mortgage bank, the issue of 19 series of bonds in EUR and PLN for the leasing company for the total amount being the equivalent of about PLN 7.4 billion and the issue of 26 series of bonds in PLN and EUR for the factoring company with maturity up to 1 year for the total amount being the equivalent of about PLN 10.1 billion.

the issue of 7-year green Eurobonds for a leading company operating in the fuel-energy industry in Poland for the amount of PLN 500 million, in which the Bank was the global coordinator and bookrunner,
the issue of 7-year Eurobonds for a company from the chemical industry for the amount of PLN 600 million, in which the Bank was the global coordinator and bookrunner,
the issue of 6-year Eurobonds for a company from the logistics industry for the amount of PLN 490 million, in which the Bank was the global coordinator and bookrunner,
the issue of 10-year Eurobonds for a Polish bank for the amount of EUR 500 million, in which the Bank acted as the cocoordinator and dealer and 4-year Eurobonds for the amount of USD 400 million, in which the Bank was the sole arranger,
the issue of Eurobonds for a multilateral financial institution with the highest credit rating for the amount of PLN 750 million, in which the Bank was the sole arranger and dealer

In addition, in 2021, the Bank arranged bond issues for municipal units for the total amount of over PLN 992 million.

Comprehensive service of public sector finances

One of the elements of the strategy we adopted for the years 2021-2024 is to support the sustainable development of the economy, society and environmental protection. Financing the public sector and municipal projects fits in with activities aimed at co-creating and developing Polish infrastructure. Our long experience ensures a comprehensive offer and effectiveness both in cooperation with metropolises, smaller municipalities and municipal companies.

In 2021, we provided municipal units with financing for development projects in total amount of PLN 3.8 billion.

Particularly noteworthy is the green bond issue program agreement for the amount of PLN 400 million concluded with Miejskie Przedsiębiorstwo Oczyszczania – Łódź Sp. z o.o. The subject of financing is the implementation of the Łódź Recycling Centre which will consist of installations for the processing of municipal waste. The Bank also co-arranged the issue of municipal bonds of the city of Łódź for the amount of PLN 418 million, of which PLN 50 million are also green bonds. It is the first green bond issue in Poland launched by a self-government unit. The funds will be used to finance projects related to low-emission urban transport and waste management.

In addition, we arranged and co-arranged other largest bond issue programs such as:

issue of bonds for the amount of PLN 491 million for the implementation of the investment program improving the standard of public transport in Wrocław,
finalized transaction with Tramwaje Śląskie S.A. concerning the issue of bonds for the amount of PLN 496 million to be used for modernization and construction of track infrastructure in the Silesian Agglomeration and for the purchase of tram rolling stock and specialized rail vehicles.

Additionally, we were involved in activities in the field of Public-Private Partnership, both in the institutional and regulatory sphere as well as in co-participation in arranging financing structures for these projects. In 2021, we signed agreements with the special purpose vehicles of the Mota Engil Group providing financing for the projects related to building parking lots that are implemented in the PPP formula in Warsaw and in Łódź for a total amount of PLN 146 million. We will act as a lender and collateral agent, and the second external source of finances for the investment will be funds from the issue of bonds taken up by the Polish Development Fund.

In 2021, the Bank extended the agreements for servicing budgets of the cities of Bydgoszcz, Gdańsk and Lublin. Acquiring the city of Łódź, together with its 368 units, for service was a great success.