8. Fee and commission income and expense

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8. Fee and commission income and expense

Significant accounting policies

Fee and commission income is generated from financial services provided by the Bank and are measured based on the remuneration specified in the contract with the client. Fee and commission income includes, among others: fees for granting loans (without schedules), for committing to grant a loan, fees for issuing cards, for card transactions, for servicing and selling investment and insurance products, for servicing bank accounts, for cash deposits and withdrawals, for trustee services, for securities operations and margins obtained on currency exchange transactions.

Fee and commision income and expense directly attributable to financial asset or financial liability origination with specific repayment schedules are accounted for using the effective interest rate and recognized in the profit and loss account under the item of interest income or expense and have been described above. The accounting policies relating to such income and expenses are described in Note 7.

Fee and commission income related to financial assets without specific repayment schedules (mainly overdrafts, working capital loans, credit card loans) and from the issuance, extension of the deadline, increase in the amount of guarantees and letters of credit, are amortised using the straight-line method over the life of the product to which they relate and are recognized in the income statement in the item ‘Fee and commission income’.

Commissions and fees for committing to grant loans that are most likely to be granted are deferred and, when the financial assets are initially recognized, they are settled using the effective interest rate or on a straight-line basis, depending on the type of loan they concern.

In the case of other fees and commissions related to financial services offered by the Group, a five-stage revenue recognition model is applied, i.e.:

identyfying the contract,
indication of the elements (individual obligations) contained in the contract,
determinig the price,
allocating the price to individual element of the contract,
recognition of revenue after meeting the conditions related to individual elements of the contract.

The Group applies the above model each time and recognizes income from commissions and fees:

once (when a service has been performed and control over the service has been transferred to the other party to the contract),
over time, when the service is provided over a period of time

The above settlement model is used primarily for services such as: fees for issuing cards, for card transactions, for servicing and selling investment products, for servicing bank accounts, for cash deposits and withdrawals, for custody services, for securities operations and margins obtained on currency exchange transactions.

The accounting policies relating income and expenses from bancassurance are described in Note 7.

Financial data

Fee and commission income

	2023	2022
Accounts maintenance, payment orders and cash transactions	612	712
Payment cards	854	749
Loans and advances	504	440
Margin on foreign exchange transactions with clients	723	743
Service and sell investment and insurance products	448	396
Securities operations	171	129
Custody activity	68	69
Guarantees, letters of credit and similar transactions	91	89
Other	119	112
Total	3,590	3,439

Fee and commission expense

	2023	2022
Payment cards	(493)	(435)
Cash turnover	(98)	(97)
Money orders and transfers	(23)	(27)
Securities and derivatives operations	(61)	(58)
Acquisition services	(56)	(48)
Custody activity	(22)	(22)
Accounts maintenance	(6)	(6)
Investment funds management	(4)	(3)
Other	(41)	(33)
Total	(804)	(729)

The tables below show fee and commission income by main business lines

2023	RETAIL BANKING	PRIVATE BANKING	CORPORATE AND INVESTMENT BANKING	ENTERPRISE BANKING	Asset and Liability Management and OTHER	TOTAL
Accounts maintenance, payment orders and cash transactions	305	(1)	128	178	2	612
Payment cards	538	3	261	50	2	854
Margin on foreign exchange transactions with clients	240	10	175	297	1	723
Service and sell investment and insurance products	418	16	12	–	2	448
Securities operation, including custody activity	8	137	93	1	–	239
Other	58	1	38	21	1	119
Total fee and commission income from contracts with customers in the scope of IFRS 15	1,567	166	707	547	8	2,995
Loans and advances	51	–	257	192	4	504
Guarantees, letters of credit and similar transactions	(1)	–	52	33	7	91
Total fee and commission income as presented in the Operating Segment Note 6	1,617	166	1,016	772	19	3,590
Total fee and commission expenses	(440)	(17)	(317)	(69)	39	(804)
Net fee and commission income	1,177	149	699	703	58	2,786

2022	RETAIL BANKING	PRIVATE BANKING	CORPORATE AND INVESTMENT BANKING	ENTERPRISE BANKING	Asset and Liability Management and OTHER	TOTAL
Accounts maintenance, payment orders and cash transactions	337	1	162	209	3	712
Payment cards	479	3	215	48	4	749
Margin on foreign exchange transactions with clients	230	17	179	313	4	743
Service and sell investment and insurance products	328	47	21	1	–	396
Securities operation, including custody activity	7	88	102	1	–	198
Other	61	–	25	25	1	112
Total fee and commission income from contracts with customers in the scope of IFRS 15	1,442	156	704	597	11	2,910
Loans and advances	59	–	218	159	4	440
Guarantees, letters of credit and similar transactions	(1)	–	56	31	3	89
Total fee and commission income as presented in the Operating Segment No.6	1,500	156	978	787	18	3,439
Total fee and commission expenses	(423)	(21)	(290)	(67)	72	(729)
Net fee and commission income	1,077	135	688	720	90	2,710

7. Interest income and expense

9. Dividend income