43. Equity

Equity is comprised of the capital and funds created by the companies of the Group in accordance with the binding legal regulations and the appropriate laws and Articles of Association. Equity also includes retained earnings. Subsidiaries’ equity line items, other that share capital, are added to the relevant equity line items of the parent company, in the proportion of the Group’s interest.

The equity of the Group includes only those parts of the subsidiaries’ equity which were created after the date of purchase of shares or stocks by the parent entity.

The Group equity consists of the following:

• share capital – applies only to the capital of the Bank as the parent entity and is presented at nominal value specified in the Articles of Association and in the entry in the Enterprises Registry,
• ‘issue premium’ – surplus generated during share issues over the nominal value of such issues, remaining after the issue costs are covered. Moreover, this item also includes a change in the value of minority shares, ensuing from an increase of the share of the Parent entity in Bank’s share capital,
• the general banking risk fund is established at Bank Pekao S.A. in keeping with the Banking Act dated 29 August 1997 from profit after tax,
• other reserve capital utilized for the purposes defined in the Statute is created from appropriations of profits,
• revaluation reserve includes the impact of revaluation of debt financial instruments measured at fair value through other comprehensive income, revaluation or sale of investments in equity instruments designated at fair value through other comprehensive income, revaluation of derivative instruments hedging cash flows, remeasurements of the defined benefit liabilities and the value of deferred tax for items classified as temporary differences, recognized as valuation allowance. In the statement of financial position, the valuation allowance is presented as net value,
• other capital:
  • other supplementary capital, established in keeping with provisions under the Articles of Association of companies from profit appropriations,
  • bonds convertible to shares – includes the fair value of financial instruments issued as part of transactions settled in equity instruments,
  • brokerage activity fund for stock broking operations, carried out by Bank Pekao S.A.,
  • retained earnings from prior periods includes undistributed profit and uncovered losses generated/incurred in prior periods by subsidiaries consolidated full method,
  • net profit/loss which constitutes profit/loss presented in the income statement for the relevant period. Net profit is after accounting for income tax.

Shareholding structure

Change in the number of shares (pcs)

The table below presents the structure of the Group’s equity attributable to equity holders of the Bank

The net profit of the Bank for 2020 in the amount of PLN 1,126,424 thousand was distributed in the following way:
PLN 842,529 thousand was allocated to the payment of dividends, and the remaining part of the net profit in the amount of PLN 283,895 thousand was allocated to reserve capital.