Annual Report 2023

6. Operating segments

  • 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 500 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 2023

RETAIL
BANKING		 PRIVATE BANKING CORPORATE AND INVESTMENT BANKING ENTERPRISE BANKING ASSETS & LIABILITIES MANAGEMENT and OTHER TOTAL
External interest income 7,468 11 5,223 1,941 3,442 18,085
External interest expenses (2,172) (456) (2,696) (369) (469) (6,162)
Net external interest income 5,296 (445) 2,527 1,572 2,973 11,923
Internal interest income 7,605 795 4,651 1,834 (14,885) –
Internal interest expenses (5,572) (10) (4,941) (1,558) 12,081 –
Net internal interest income 2,033 785 (290) 276 (2,804) –
Total net interest income 7,329 340 2,237 1,848 169 11,923
Fee and commission income and expense 1,177 149 699 703 58 2,786
Pozostałe dochody pozaodsetkowe (477) (1) 249 46 207 24
including: legal risk regarding foreign currency mortgage loans (497) – – – – (497)
Operating income of reportable segments 8,029 488 3,185 2,597 434 14,733
Personnel expenses (1,133) (106) (319) (281) (913) (2,752)
General administrative expenses and depreciation (including allocation of operating costs) (1,916) (76) (303) (390) 806 (1,879)
Operating costs (3,049) (182) (622) (671) (107) (4,631)
Gross operating profit 4,980 306 2,563 1,926 327 10,102
Net allowances for expected credit losses (269) 4 (307) 2 11 (559)
including: legal risk regarding foreign currency mortgage loans 91 – – – – 91
Net operating profit 4,711 310 2,256 1,928 338 9,543
Contributions to the Bank Guarantee Fund (133) – (96) (44) 83 (190)
Tax on certain financial institutions (331) – (189) (113) (246) (879)
Gains on associates – – – – 6 6
Profit before tax 4,247 310 1,971 1,771 181 8,480
Income tax expense (1,900)
Net profit 6,580
Attributable to equity holders of the Bank 6,578
Attributable to non-controlling interests 2
Allocated assets 77,013 253 80,698 25,324 99,488 282,776
Unallocated assets 22,947
Total Assets 305,723
Allocated liabilities 132,443 14,850 60,710 37,274 9,515 254,792
Unallocated liabilities 20,590
Total Liabilities 275,382

 

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 4,433 9 3,833 1,471 1,365 11,111
External interest expenses (666) (140) (1,456) (111) (495) (2,868)
Net external interest income 3,767 (131) 2,377 1,360 870 8,243
Internal interest income 6,169 666 2,951 1,090 (10,876) –
Internal interest expenses (4,476) (8) (3,403) (1,115) 9,002 –
Net internal interest income 1,693 658 (452) (25) (1,874) –
Total net interest income 5,460 527 1,925 1,335 (1,004) 8,243
Fee and commission income and expense 1,077 135 688 720 90 2,710
Other non-interest income (454) (1) 173 54 (61) (289)
including: legal risk regarding foreign currency mortgage loans (352) – – – – (352)
Operating income of reportable segments 6,083 661 2,786 2,109 (975) 10,664
Personnel expenses (983) (92) (270) (241) (714) (2,300)
General administrative expenses and depreciation (including allocation of operating costs) (1,531) (61) (242) (320) 467 (1,687)
Operating costs (2,514) (153) (512) (561) (247) (3,987)
Gross operating profit 3,569 508 2,274 1,548 (1,222) 6,677
Net allowances for expected credit losses (1,599) (2) (194) (180) (41) (2,016)
including: legal risk regarding foreign currency mortgage loans (1,246) – – – – (1,246)
Net operating profit 1,970 506 2,080 1,368 (1,263) 4,661
Contributions to the Bank Guarantee Fund (141) – (96) (42) 12 (267)
Fee paid for the Protection Scheme – – – – (482) (482)
Contributions to the Borrowers Support Fund (169) – – – – (169)
Tax on certain financial institutions (352) (1) (258) (107) (148) (866)
Gains on associates – – – – 5 5
Profit before tax 1,308 505 1,726 1,219 (1,876) 2,882
Podatek dochodowy (1,163)
Net profit 1,719
Attributable to equity holders of the Bank 1,717
Attributable to non-controlling interests 2
Allocated assets 74,568 246 75,809 25,170 77,138 252,931
Unallocated assets 28,208
Total Assets 281,139
Allocated liabilities 118,890 14,481 58,317 30,685 10,423 232,796
Unallocated liabilities 25,568
Total Liabilities 258,364

Reconciliations of operating income for reportable segments

2023 2022
Net interest income 11,923 8,243
Net fee and commission income 2,786 2,710
Dividend income 30 28
Result on financial assets and liabilities measured at fair value through profit or loss and foreign exchange result 492 188
Result on fair value hedge accounting – 3
Profit / loss from derecognition of financial assets and financial liabilities not at fair value through profit or loss 15 (4)
Other operating income 119 137
Other operating expenses (632) (641)
Total operating income for reportable segments 14,733 10,664
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