6. Operating segments
Data reported in the section stem from the application of the management model (‘Model’) in which the main criterion for segmentation is the classification of customers based on their profile and service model.
Reporting and monitoring of results, for managerial purposes, include all components of the income statement up to the gross profit level. Therefore, the income from the segment’s activities as well as operating costs related to those activities (including direct and allocated costs in line with the allocation model applied) and other components of income statement are attached to each segment.
The Group settles transactions between segments on an arm’s length basis by applying current market prices. Fund transfers between retail, private, corporate and investment banking segments, and the assets and liabilities management and other area are based on market prices applicable to the funds’ currency and maturity, including liquidity margins.
Operating segments
The operating segments of the Group are as follows:
- Retail banking – all banking activities related to retail customers (excluding private banking customers) and micro companies with annual turnover not exceeding PLN 5 million, as well as results of the subsidiaries, and shares in net profit of associates accounted for using the equity method, that are assigned to the retail banking activity,
- Private banking – all banking activities related to the most affluent individual customers,
- Corporate and Investment banking – all banking activities related to large companies and results of the subsidiaries that are assigned to the Corporate and Investment banking activity,
- Enterprise banking – all banking activities related to the companies with annual turnover from PLN 5 million to PLN 100 million and below 5 million in the case of companies conducting full accounting,
- Assets and Liabilities management and other – supervision and monitoring of fund transfers, interbank market, debt securities and other instruments, other activities centrally managed as well as the results of subsidiaries and share in net profit of associates accounted for using the equity method that are not assigned to other reported segments.
Operating segments reporting for the period from 1 January to 31 December 2022
| RETAIL BANKING | PRIVATE BANKING | CORPORATE AND INVESTMENT BANKING | ENTERPRISE BANKING | ASSETS & LIABILITIES MANAGEMENT AND OTHER | TOTAL | |
| External interest income | 4 494 171 | 12 486 | 3 871 568 | 1 472 216 | 1 264 935 | 11 115 376 |
| External interest expenses | -669 191 | -136 989 | -1 611 845 | -111 362 | -342 152 | -2 871 539 |
| Net external interest income | 3 824 980 | -124 503 | 2 259 723 | 1 360 854 | 922 783 | 8 243 837 |
| Internal interest income | 3 756 601 | 366 593 | 2 733 143 | 745 262 | -7 601 599 | – |
| Internal interest expenses | -4 458 284 | -14 246 | -3 437 064 | -1 108 000 | 9 017 594 | – |
| Net internal interest income | -701 683 | 352 347 | -703 921 | -362 738 | 1 415 995 | – |
| Total net interest income | 3 123 297 | 227 844 | 1 555 802 | 998 116 | 2 338 778 | 8 243 837 |
| Fee and commission income and expense | 1 081 055 | 139 939 | 713 055 | 727 032 | 146 094 | 2 807 175 |
| Other non-interest income | -453 015 | -1 179 | 173 996 | 56 775 | -66 281 | -289 704 |
| Operating income | 3 751 337 | 366 604 | 2 442 853 | 1 781 923 | 2 418 591 | 10 761 308 |
| Personnel expenses | -982 547 | -91 647 | -269 633 | -241 412 | -715 089 | -2 300 328 |
| General administrative expenses and depreciation (including allocation of operating costs) | -1 530 595 | -61 360 | -241 637 | -319 805 | 370 774 | -1 782 623 |
| Operating costs | -2 513 142 | -153 007 | -511 270 | -561 217 | -344 315 | -4 082 951 |
| Gross operating profit | 1 238 195 | 213 597 | 1 931 583 | 1 220 706 | 2 074 276 | 6 678 357 |
| Net allowances for expected credit losses | -1 599 063 | -2 404 | -193 147 | -179 514 | -41 776 | -2 015 904 |
| including: legal risk regarding foreign currency mortgage loans | -1 246 315 | – | – | – | – | -1 246 315 |
| Net operating profit | -360 868 | 211 193 | 1 738 436 | 1 041 192 | 2 032 500 | 4 662 453 |
| Contributions to the Bank Guarantee Fund | -304 040 | -721 | -211 912 | -90 439 | 339 893 | -267 219 |
| Fee paid for the Protection Scheme | – | – | – | – | -482 140 | -482 140 |
| Contributions to the Borrowers Support Fund | -169 382 | – | – | – | – | -169 382 |
| Tax on certain financial institutions | -351 767 | -1 323 | -258 919 | -106 678 | -147 503 | -866 190 |
| Gains on associates | 5 016 | 5 016 | ||||
| Profit before tax | -1 186 057 | 209 149 | 1 267 605 | 844 075 | 1 747 766 | 2 882 538 |
| Income tax expense | -1 163 047 | |||||
| Net profit | 1 719 491 | |||||
| Attributable to equity holders of the Bank | 1 717 570 | |||||
| Attributable to non-controlling interests | 1 921 | |||||
| Allocated assets | 76 177 321 | 256 961 | 75 923 362 | 25 190 441 | 75 382 572 | 252 930 657 |
| Unallocated assets | 28 208 375 | |||||
| Total Assets | 281 139 032 | |||||
| Allocated liabilities | 119 191 822 | 14 533 106 | 63 256 711 | 30 606 608 | 5 207 845 | 232 796 092 |
| Unallocated liabilities | 25 567 928 | |||||
| Total Liabilities | 258 364 020 |
Operating segments reporting for the period from 1 January to 31 December 2021
| RETAIL BANKING | PRIVATE BANKING | CORPORATE AND INVESTMENT BANKING | ENTERPRISE BANKING | ASSETS & LIABILITIES MANAGEMENT AND OTHER | TOTAL | |
| External interest income | 2 814 849 | 4 159 | 1 283 845 | 466 800 | 1 300 703 | 5 870 356 |
| External interest expenses | -47 337 | -9 806 | -82 630 | -3 673 | -66 149 | -209 595 |
| Net external interest income | 2 767 512 | -5 647 | 1 201 215 | 463 127 | 1 234 554 | 5 660 761 |
| Internal interest income | 2 519 421 | 269 708 | 775 401 | 475 682 | -4 040 212 | – |
| Internal interest expenses | -860 444 | -3 112 | -440 155 | -166 455 | 1 470 166 | – |
| Net internal interest income | 1 658 977 | 266 596 | 335 246 | 309 227 | -2 570 046 | – |
| Total net interest income | 4 426 489 | 260 949 | 1 536 461 | 772 354 | -1 335 492 | 5 660 761 |
| Fee and commission income and expense | 1 053 038 | 183 169 | 670 054 | 652 515 | 128 739 | 2 687 515 |
| Other non-interest income | -33 964 | -2 071 | 119 346 | 43 600 | 46 963 | 173 874 |
| Operating income | 5 445 563 | 442 047 | 2 325 861 | 1 468 469 | -1 159 790 | 8 522 150 |
| Personnel expenses | -891 649 | -80 331 | -223 752 | -195 318 | -765 006 | -2 156 056 |
| General administrative expenses and depreciation (including allocation of operating costs) | -1 402 837 | -59 755 | -207 095 | -289 132 | 375 845 | -1 582 974 |
| Operating costs | -2 294 486 | -140 086 | -430 847 | -484 450 | -389 161 | -3 739 030 |
| Gross operating profit | 3 151 077 | 301 961 | 1 895 014 | 984 019 | -1 548 951 | 4 783 120 |
| Net allowances for expected credit losses | -466 875 | 1 023 | -158 345 | -95 064 | -58 937 | -778 198 |
| including: legal risk regarding foreign currency mortgage loans | -152 256 | – | – | – | – | -152 256 |
| Net operating profit | 2 684 202 | 302 984 | 1 736 669 | 888 955 | -1 607 888 | 4 004 922 |
| Contributions to the Bank Guarantee Fund | -299 769 | -840 | -180 515 | -73 275 | 265 092 | -289 307 |
| Gains on associates and disposal of subsidiaries | -348 601 | -2 136 | -223 809 | -83 411 | -60 966 | -718 923 |
| Gains on associates and disposal of subsidiaries | 4 928 | 4 928 | ||||
| Profit before tax | 2 035 832 | 300 008 | 1 332 345 | 732 269 | -1 398 834 | 3 001 620 |
| Income tax expense | -825 062 | |||||
| Net profit | 2 176 558 | |||||
| Attributable to equity holders of the Bank | 2 174 897 | |||||
| Attributable to non-controlling interests | 1 661 | |||||
| Allocated assets | 82 028 162 | 270 870 | 71 000 254 | 21 743 576 | 56 085 191 | 231 128 053 |
| Unallocated assets | 19 438 552 | |||||
| Total Assets | 250 566 605 | |||||
| Allocated liabilities | 115 891 566 | 15 662 864 | 48 066 211 | 27 167 108 | 5 624 136 | 212 411 885 |
| Unallocated liabilities | 14 291 434 | |||||
| Total Liabilities | 226 703 319 |
Reconciliations of operating income for reportable segments
| 2022 | 2021 | |
|---|---|---|
| Net interest income | 8 243 837 | 5 660 761 |
| Net fee and commission income | 2 807 175 | 2 687 515 |
| Dividend income | 27 874 | 26 662 |
| Result on financial assets and liabilities measured at fair value through profit or loss and foreign exchange result | 187 213 | 129 845 |
| Result on fair value hedge accounting | 3 397 | 3 704 |
| Profit / loss from derecognition of financial assets and financial liabilities not at fair value through profit or loss | -3 566 | 29 863 |
| Operating income | 11 265 930 | 8 538 350 |
| Other operating income | 137 004 | 121 546 |
| Other operating expenses | -641 626 | -137 746 |
| Total operating income for reportable segments | 10 761 308 | 8 522 150 |