45. Related party transactions
[Financial notes are presented in PLN thousand]
The transactions between the Bank and related parties are typical transactions arising from current operating activities conducted by the Bank. Such transactions mainly include loans, deposits, foreign currency transactions and guarantees.
The credit granting process applicable to the Bank’s management and entities related to the Bank
According to the Banking Act, credit transactions with Members of the Bank’s Management Board and Supervisory Board, persons holding managerial positions at the Bank, with the entities related financially or organizationally therewith, shall be effected according to Regulation adopted by the Supervisory Board of the Bank.
The Regulation provides detailed decision-making procedures, applicable to transactions with such persons and entities, also defining the decision-making levels authorized to take decisions. In particular, the transactions with the Members of the Bank’s Management Board or Supervisory Board or with an entity related therewith financially or organizationally, are subject to decisions taken by the Bank’s Management Board and Supervisory Board.
Members of the Bank’s Management Board and entities related therewith financially or organizationally may take advantage of credit products offered by the Bank on standard terms and conditions of the Bank. In particular, the Bank may not offer more advantageous credit interest rates to such persons or entities.
Credit risk assessment is performed using the methodology applied by the Bank, tailored to the client’s segment and type of transaction.
In case of entities related to the Bank, the standard credit procedures are applied, with transaction-related decisions taken exclusively at level of the Bank’s Head Office.
Related party transactions
Related party transactions as at 31 December 2022
| NAME OF ENTITY | RECEIVABLES FROM LOANS AND PLACEMENTS | SECURITIES | RECEIVABLES FROM REVALUATION OF DERIVATIVES | OTHER RECEIVABLES | LIABILITIES FROM LOANS AND DEPOSITS | LIABILITIES FROM REVALUATION OF DERIVATIVES | OTHER LIABILITIES |
| PZU S.A. – the Bank‘s parent entity | 8 | – | 3 991 | 4 389 | 185 051 | – | 5 247 |
| Entities of PZU S.A. Group excluding of Bank Pekao S.A. Group entities | 4 884 | – | 2 532 | 5 464 | 235 161 | 2 185 | 1 620 |
| Subsidiaries of Bank Pekao S.A Group entities | |||||||
| Krajowy Integrator Płatności S.A. | – | – | – | 11 | 36 624 | – | 34 |
| Key management personnel of the Bank Pekao S.A. | 1 065 | – | – | – | 8 566 | – | – |
| Total | 5 957 | – | 6 523 | 9 864 | 465 402 | 2 185 | 6 901 |
Related party transactions as at 31 December 2021
| NAME OF ENTITY | RECEIVABLES FROM LOANS AND PLACEMENTS | SECURITIES | RECEIVABLES FROM REVALUATION OF DERIVATIVES | OTHER RECEIVABLES | LIABILITIES FROM LOANS AND DEPOSITS | LIABILITIES FROM REVALUATION OF DERIVATIVES | OTHER LIABILITIES |
| PZU S.A. – the Bank‘s parent entity | 11 838 | – | 4 061 | 4 770 | 151 803 | – | 1 976 |
| Entities of PZU S.A. Group excluding of Bank Pekao S.A. Group entities | 618 | – | 209 | 9 455 | 181 649 | 802 | 996 |
| Subsidiaries of Bank Pekao S.A Group entities | |||||||
| Krajowy Integrator Płatności S.A | – | – | – | 7 | 50 743 | – | – |
| Key management personnel of the Bank Pekao S.A. | 654 | – | – | – | 2 508 | – | – |
| Total | 13 110 | – | 4 270 | 14 232 | 386 703 | 802 | 2 972 |
Income and expenses from transactions with related parties for the period from 1 January 2022 to 31 December 2022
| NAME OF ENTITY | INTEREST INCOME | INTERES EXPENSE | FEE AND COMMISSION INCOME | FEE AND COMMISSION EXPENSE | POSITIVE VALUATION OF DERIVATIVES AND OTHER INCOME | NEGATIVE VALUATION OF DERIVATIVES AND OTHER EXPENSES |
| PZU S.A. – the Bank ‘s parent entity | -1 820 | -9 485 | 45 878 | -371 | 216 | -3 953 |
| Entities of PZU S.A. Group excluding of Bank Pekao S.A. Group entities | 300 | -12 499 | 53 244 | -341 | 1 065 | -51 134 |
| Subsidiaries of Bank Pekao S.A Group entities | ||||||
| Krajowy Integrator Płatności S.A. | – | -46 | 337 | – | – | – |
| Key management personnel of the Bank Pekao S.A. | 46 | -128 | – | – | – | – |
| Total | -1 474 | -22 158 | 99 459 | -712 | 1 281 | -55 087 |
Income and expenses from transactions with related parties for the period from 1 January 2021 to 30 December 2021
| NAME OF ENTITY | INTEREST INCOME | INTERES EXPENSE | FEE AND COMMISSION INCOME | FEE AND COMMISSION EXPENSE | POSITIVE VALUATION OF DERIVATIVES AND OTHER INCOME | NEGATIVE VALUATION OF DERIVATIVES AND OTHER EXPENSES |
| PZU S.A. – the Bank ‘s parent entity | -1 796 | -96 | 51 258 | -668 | 2 858 | -659 |
| Entities of PZU S.A. Group excluding of Bank Pekao S.A. Group entities | 39 | -99 | 53 096 | -260 | 2 455 | -23 441 |
| Subsidiaries of Bank Pekao S.A Group entities | ||||||
| Krajowy Integrator Płatności S.A. | – | – | 175 | – | – | – |
| Key management personnel of the Bank Pekao S.A. | 39 | -1 | – | – | – | – |
| Total | -1 718 | -196 | 104 529 | -928 | 5 313 | -24 100 |
Off-balance sheet financial liabilities and guarantees as at 30 December 2022
| NAME OF ENTITY | GRANTED | RECEIVED | ||
|---|---|---|---|---|
| FINANCIAL | GUARANTEES | FINANCIAL | GUARANTEE | |
| PZU S.A. – the Bank‘s parent entity | 3 028 | 15 000 | – | – |
| Entities of PZU S.A. Group excluding of Bank Pekao S.A. Group entities | 9 566 | 10 046 | – | – |
| Subsidiaries of Bank Pekao S.A Group entities | ||||
| Key management personnel of the Bank Pekao S.A. | – | 1 500 | – | – |
| Kluczowy personel kierowniczy Banku Pekao S.A. | 1 382 | – | – | – |
| Total | 13 976 | 26 546 | – | – |
Off-balance sheet financial liabilities and guarantees as at 31 December 2021
| GRANTED | RECEIVED | |||
|---|---|---|---|---|
| NAME OF ENTITY | FINANCIAL | GUARANTEES | FINANCIAL | GUARANTEE |
| PZU S.A. – the Bank‘s parent entity | 2 735 | 107 148 | – | -528 931 |
| Entities of PZU S.A. Group excluding of Bank Pekao S.A. Group entities | 7 056 | 102 241 | – | – |
| Key management personnel of the Bank Pekao S.A. | 156 | – | – | – |
| Total | 9 947 | 209 389 | – | -528 931 |
Transactions with the State Treasury
The Bank’s transactions with the State Treasury were mostly related to treasury securities and banking services. These transactions are concluded and settled on terms obtainable by customers who are not related parties.
Remuneration expenses of the Bank’s Management Board and Supervisory Board Members
| VALUE OF BENEFITS | ||
|---|---|---|
| 2022 | 2021 | |
| Management Board of the Bank | ||
| Short-term employee benefits (*) | 13 628 | 12 430 |
| Post-employment benefits | – | 645 |
| Long-term benefits (**) | 974 | 980 |
| Share-based payments (***) | 3 914 | 4 936 |
| Total | 18 516 | 18 991 |
| Supervisory Board of the Bank | ||
| Short-term employee benefits (*) | 1 492 | 1 274 |
| Total | 1 492 | 1 274 |
(**) The item ‘Other long-term benefit’ includes: provisions for deferred bonus payments.
(***) The value of share-based payments is a part of Personnel Expenses, recognized according to IFRS 2 during the reporting period in the income statement, representing the settlement of fair value of shares, including phantom shares, granted to the Members of the Bank’s Management Board
The Bank’s Management Board and Supervisory Board Members did not receive any remuneration from subsidiaries and associates in 2022 and 2021.
Remuneration expenses of Supervisory Boards and Management Boards of subsidiaries
| VALUE OF BENEFITS | ||
|---|---|---|
| 2022 | 2021 | |
| Subsidiaries’ Management Boards | ||
| Short-term employee benefits | 16 339 | 12 672 |
| Post-employment benefits | 1 818 | 1 587 |
| Long-term benefits | 648 | 660 |
| Paid termination benefits | 156 | 241 |
| Total | 18 961 | 15 160 |
| Subsidiaries’ Supervisory Boards | ||
| Short-term employee benefits | 1 049 | 813 |
| Total | 1 049 | 813 |