The results are really very good. The consolidated net profit in the third quarter reached PLN745.3 billion, up by 21.5% versus the third quarter of 2006. The net profit for the first three quarters of the year exceeded PLN2 billion, which represented an increase of 29.5% compared to the corresponding period of the previous year.
The handsome profit earned in the nine months to September is largely attributable to the bank’s high commercial activity. Profits from interest and commission alone rose respectively by 18% and 19.6% year on year.
The bank has the largest deposit base on the market: at the end of September the value of deposits on its clients’ accounts exceeded PLN103 billion, of which PLN16.3 billion were assets managed by the PKO TFI investment fund company. Owing to increased interest in investing in PKO TFI units, retail deposits fell by PLN1.9 billion. In the nine months to September the value of assets managed by PKO TFI almost doubled: they rose by 91.7%. PKO TFI is now the fourth largest investment fund company on the Polish market, as measured by the value of assets.
Despite fierce competition, PKO BP managed to maintain its leading position on the mortgage market. In the third quarter the value of mortgages granted by PKO BP amounted to PLN3.8 billion. But due to the rising costs involved in acquiring money for loans and the growing risk of non-repayment, the bank is going to tighten its lending policy and raise margins for new clients.
The bank’s good results and stable development allow it to implement the PKO BP Development Strategy for 2007-2012, which is the bank’s most important goal now. The strategy, dubbed New Opening, is the bank’s response to future market challenges and the need to change its operation model.
PKO BP has an ambition to create the future and keep its position as the leader of the banking sector in Poland and the region. The bank has to base its success not only on its long presence on the market but also on new innovative solutions and attractive services. Hence the bank is changing its image to become more modern and dynamic.
Main elements of the new strategy:
– to grow faster than the market, which will allow the bank to keep the leading position,
– to improve client profitability, which will be translated into a major increase in the bank’s income,
– to exploit unique competitive advantages (loyal clients, the largest retail network on the market, stable managerial staff, strong brand),
– to focus on return on capital, which will allow the bank to maintain its position as the leader in terms of market share and profitability.
To strengthen its leading position in retail banking, PKO BP will develop new forms of cooperation with clients, focus on rapidly growing segments of the market, improve service quality and introduce new sales models to serve small and medium businesses and retail clients. As regards corporate banking, PKO BP wants to be a leading partner for Polish businesses and the public sector. It will also be an active player on the expanding retail banking markets in Central and Eastern Europe and offer its services to expatriate Poles.