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Pocztowy Bank Ends Corrective Actions on Capital Adequacy, Expects Strong Growth

COMPANIESPocztowy Bank Ends Corrective Actions on Capital Adequacy, Expects Strong Growth

The Management Board of Pocztowy Bank made a decision to end corrective actions on capital adequacy. The mechanisms implemented in 2022-2023 allowed the capital measures to be increased safely. Thanks to the bank’s activities enhancing profitability, sales initiatives, low risk costs, accumulation of profits, as well as changes in the structure and partial reversal of negative valuations of debt securities in the bank’s portfolio, this was possible without needing to recapitalize Pocztowy Bank by its shareholders. At the same time, the previously introduced mechanisms facilitated the implementation of a new strategy for 2023-2026, assuming that Pocztowy Bank would achieve high net profits – more than PLN 100 million each year. This will allow it to dynamically increase its own funds, leading to their nearly fourfold growth in the perspective of the strategy – over PLN 1.2 billion by the end of 2026.

On February 25, 2022, due to a decrease in the financial leverage ratio and recognizing the risk of exceeding the limit levels of capital measures within three months, Pocztowy Bank launched an emergency capital plan and subsequently, on April 12, 2022, a capitalization plan. Ultimately, shareholders decided not to recapitalize the bank.

“Before deciding on potential capitalization, we focused on the implementation of a comprehensive and innovative action plan, which ultimately had an impact on improving the safety of the capital,” said Jakub Słupiński, CEO of Bank Pocztowy. “Thanks to a significant raise of the capital measures, which remained at the safe level of the recovery plan since August 2023, and to their further increase in the following months, there were sufficient conditions to make a decision on ending the corrective action related to capital adequacy.”

By the end of 2023, Pocztowy Bank’s capital measures were above the regulatory minima:

– The TCR index value was at 23.56% with a regulatory level of 11.55% including all applicable buffers.
– The Tier 1 index value was at 21.73% with a regulatory level of 9.55%.
– The level of financial leverage was at 8.05% with a regulatory level of 3.0% and a safe level at 6.0%.

Moreover, Pocztowy Bank has a very positive wealth management track record and one of the best risk management results on the market in terms of provision level or decrease dynamics of the non-performing loan portfolio. On December 31, 2023, the bank recorded a risk cost of +0.07%.

It is worth reminding that the new strategy implemented until 2026 is based on six priorities. It focuses, among other things, on consumer financing of retail customers, the introduction of a new credit process, and entering the e-commerce market. By following this strategy, Pocztowy Bank plans to generate steady high net profits and rapidly increase its equity, leading to a nearly fourfold increase, i.e., PLN 1.2 billion by 2026. Simultaneously, the Tier I index will almost double during this time.

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