Impact through offered products and initiatives

Innovative products and initiatives supporting innovation

PKO Bank Polski SA supports the development of innovativeness of the Polish economy and is the leader of innovation in the financial sector

• PKO Bank Polski SA is open to cooperation with young, innovative companies. It is an initiator and partner of programmes such as MIT Enterprise Forum Poland, Bridge to Mass Challenge Warsaw, The Heart Warsaw and ScaleUP (implemented by the Ministry of Development). It provides participants with mentoring and technical support in the form of test environments, which is a unique opportunity to verify the ideas presented and assess the value for both individual customers and for business. The support offered by the Bank has frequently been the starting point for the future successes of young companies.

• PKO Bank Polski SA meets the expectations of customers related to changes taking place in the external environment, including the digitization of social life. An example of an innovative solution proposed by the Bank is the IKO application on the basis of which the Blik mobile payments system was created. The cooperation between PKO Bank Polski SA and other banks in Poland has meant that Blik has become a market standard for mobile payments in Poland, appreciated by specialists from around the world.

  The Blik system is popular among customers, which is evidenced by the rapidly increasing number of transactions in this system.

Number of transactions in the Blik system (million)

Source: Polski Standard Płatności

• PKO Bank Polski uses innovative solutions. An example is biometrics – a technology that enables the quick identification of the customer based on an analysis of its individual physical features. The project, conducted in cooperation with the Gdańsk University of Technology, is being tested in 60 of the Bank’s branches, in which 100 biometric stations have already been installed. By the end of 2017, biometric data of approximately 8,000 customers had been scanned and almost 200,000 samples have been taken. Considering the amount of data collected, this is one of the largest biometric research experiments in the world.
• As a leader in modern banking, PKO Bank Polski is constantly developing the iPKO electronic website as well as the functionality of the IKO mobile application, which is becoming increasingly popular – over 2 million users used it in 2017.

PKO Bank Polski SA is a pioneer in providing public administration services

As a technological leader in the banking sector, PKO Bank Polski SA has been initiating projects integrating the environment of the financial sector for years, including facilitating customer access to mobile and internet services – not only related to banking.

• The Bank participates in the “Od papierowej do cyfrowej Polski” [From a paper to a digital Poland] programme, which is a part of the government’s Responsible Development Strategy. The first project within the framework of the cooperation involved enabling customers to submit applications for the 500+ benefit from the level of the Bank’s websites; the next project was based on enabling logging in to the ZUS Electronic Services Platform (PUE ZUS) via this route.
• In 2016, PKO Bank Polski SA was the first bank in Poland that enabled its customers to set up a Trusted Profile (eGO) via online banking. This was a breakthrough in the dissemination of e-administration services,
  by making it easier for citizens and firms to use the services of government offices via the Internet.
• The Bank introduced another e-administration service into its offering at the beginning of 2018, this time for entrepreneurs who are able to register their firms in the Central Records and Information on Business Activity (CEIDG) through the transaction site.
• The Bank enables the taxpayer to file an application to conduct settlement under PIT with the tax office.

Products and initiatives of a social nature

The PKO Bank Polski SA Group finances the housing needs of Poles

• In 2017, PKO Bank Polski SA and PKO Bank Hipoteczny SA granted private individuals housing loans of PLN 12.9 billion (29.6% share of new sales of mortgage loans in 2017).
• The Bank has been participating in an initiative supporting the satisfaction of the housing needs of Poles the “Mieszkanie dla Młodych” [Housing for the Young] programme since 2014. The program enables customers to obtain co-financing for the down-payment and support in the form of repayment of a part of the loan from the state budget. In 2017, the Bank granted 4.8k loans in the MdM programme.
• PKO Bank Polski SA has been involved in a nationwide initiative supporting large families since 2014. The Bank introduced a special offer to holders of a Large Family Card, under which it reduced the commission on the Własny Kąt Hipoteczny [My Own Place Mortgage] housing loan (in 2017 – by half).

PKO Bank Polski SA supports borrowers with a mortgage loan

PKO Bank Polski SA treats responsibility for its business as an integral part of its business strategy. It supports customers whenever they have problems with the punctual repayment of their liabilities. In such situations, the Bank adjusts its actions to the customer’s situation.

In 2017, the Bank applied conveniences for customers with mortgage loans in CHF, including, inter alia:

• it applied a 1% spread when servicing mortgage loans in that currency;
• it enabled the extension of the loan repayment term within the maximum lending period without charging a fee;
• it took into account the negative LIBOR CHF rate in the cost of the mortgage loan;
• it enabled customers to change the collateral on a loan granted in CHF to enable the sale of the property which is secured by the mortgage and to establish a mortgage on a newly purchased property.

The PKO Bank Polski SA Group supports customers who are victims of fortuitous events

PKO Bank Polski SA and PKO Bank Hipoteczny SA enabled borrowers who suffered during the August storms in 2017 to suspend the repayment of loan and interest instalments for 12 months from the date of conclusion of the annex to the loan agreement. In addition, in the case of a compensation of up to PLN 5,000, the insurer transferred funds to repair the damage directly to the injured customers with property insurance on mortgage loans and an assignment to the Bank

PKO Bank Polski SA improves the opportunities for youth education

PKO Bank Polski SA increases the opportunity to educate young people, offering student and doctoral students preferential loans with low interest rates. The Bank allows for the forgiveness of a part of the loan for the best graduates. At the end of 2017, the value of preferential student loans was PLN 847 million.

PKO Bank Polski SA counteracts financial exclusion

• PKO Bank Polski SA has the largest network of branches and agencies among the banks in Poland (1192 branches and 745 agencies at the end of 2017). The coverage of the Bank’s distribution network also enables access to banking services to people living in towns where the Bank’s main competitors do not have branches. Electronic banking is an important supplement to the distribution network of banking products and services.
• The Contact Centre is of particular importance in servicing the segment of retail customers, whose objective is not only to provide customers with banking products and services, but also to increase the security of transactions ordered by the Bank’s customers.
• A very important element in counteracting financial exclusion is the support of disabled customers, which is discussed separately in sub-chapter 12.2.

The PKO Bank Polski SA Group implements long-term saving initiatives

Since the beginning of its existence, PKO Bank Polski SA has been teaching Poles how to save.

• In 2017, the Bank encouraged customers to systematically save by providing them with, among other things, the “Program Budowania Kapitału” [Capital Building Programme].
• The Bank effectively responds to the needs of customers looking for valuable capital investment options, including:
• it enabled retail and private banking customers to invest money in investment funds within the cooperation with PKO Towarzystwo Funduszy Inwestycyjnych SA;
• it is the only bank in Poland which has enabled customers to invest in treasury bonds, including long-term treasuries.

PKO Bank Polski SA educates and builds consumer awareness

• PKO Bank Polski SA is one of the few institutions in the country that conducts consistent and multi-level financial education. The Bank’s broad education is addressed to various groups of customers. Its main goal is to reduce financial exclusion, build consumer awareness and act in the field of cyber security.
• The Bank educates customers by showing them the capabilities and functions of modern products, giving them access to practical economic knowledge and providing tools facilitating the management of personal and company budgets.
• An important role in the Bank’s financial education is played by publishing houses and the generally accessible Bankomania.pkobp.pl portal, where both private individuals and entrepreneurs will find practical information. Even for them, within the framework of the “Good morning business” programme, the Bank organizes and conducts regular training meetings for its customers, including for entrepreneurs running small- and medium-sized enterprises.
• The bank has a modern offering of bank accounts. In joining the government’s 500+ programme, the Bank enabled the programme’s beneficiaries to open a Konto za Zero Rodzina 500+ [Account for Nothing 500+ Programme] account.
• The continuation of children’s education by PKO Bank Polski SA is of major public significance. Its objective is to teach good habits in the area of saving, budget management and the use of banking services. The Bank offers educational products for children aged under 13 and their parents through the PKO Junior offering. 
• The PKO Junior offering includes: PKO Konto Dziecka [PKO Child’s Account], ROR Rodzica [Parent’s Savings and Settlements Account], Pierwsze Konto Oszczędnościowe [First Savings Account] and the junior.pkobp.pl and junior.inteligo.pl sites. At the end of 2017, there were 294k PKO Konto Dziecka accounts. The “Brawo Bank” [Bravo Bank] economic guide for children plays an important role in education. The children’s magazine is available in paper, electronic, mobile and AR (“Augmented Reality”) versions.
• The Bank takes care of the financial education of pupils as part of the Szkolne Kasy Oszczędnościowe [School Savings Accounts] programme. This is the oldest, largest and most modern financial education programme for pupils in Poland. The SKO offering includes www.sko.pkobp.pl, SKO Konto dla Ucznia [SKO Pupil’s Account] and a platform for school pupils from the SKO: SzkolneBlogi.pl. At the end of 2017, there were 152k SKO Konto dla Ucznia accounts.
• Technological progress and the digitization of banking services mean that cyber security not only applies to large companies, but also to individual customers. The Bank regularly warns its customers about online threats and handles extensive educational activities in this area. One of the objectives of the activities is to popularize knowledge about the principles of security in electronic and mobile banking, as well as the use of payment cards (more in the subchapter 7.3).
• The Bank was also the first in Poland to start working with the Police to prevent the so-called “grandchild” scams.

Products supporting SMEs and micro enterprises

The PKO Bank Polski SA Group supports the development of small- and medium-sized enterprises and people starting their own businesses

The PKO Bank Polski SA Group provides financing for current and investment needs of small- and medium-sized enterprises, through a large and flexible product offering.

• The Bank has been providing support to enterprises in the form of BGK de minimis guarantees since 2013. 
• At the end of 2017, the Bank was the largest lender from among twenty-one banks granting loans with de minimis guarantees (the market share of de minimis guarantees was 20.5%).
• The Bank has been providing guarantees with a counter-guarantee granted by the European Investment Fund under the COSME programme since 2015. The value of loans granted under the “Portfelowa Linia Gwarancyjna COSME” [COSME Portfolio Guarantee Line] at the end of 2017 was PLN 254 million.
• Within the Group’s offering, customers from the SME sector are able to benefit from lease products and services, which constitute the second (other than loans) main source of financing business activity. 
• The acquisition of Raiffeisen-Leasing Polska in 2016 meant that the Group has assured enterprises an offering of financing which is even more customized to their needs.
• In 2017, the Bank supported small- and medium-sized enterprises not only as their financial adviser. 
• It organized free “Dzień Dobry Biznes” [Good Morning Business] training in 12 cities, the objective of which was to enable entrepreneurs to establish new business relations, increase competence in company management and exchange of knowledge and experience on building responsible business. More than 470 participants took part in the training. The next cycle of the training will start in the first quarter of 2018.
• In 2017, the Bank was the first Polish financial institution to invest in a fintech start-up, i.e. in ZenCard Sp. z o.o., which joined the Group soon afterwards. ZenCard has built a platform that makes it easier for companies to run loyalty programs and reduces the costs of implementing such activities. 
• This transaction has meant that the Bank provides a modern tool to entrepreneurs that facilitates taking advantage of the opportunities offered by the progressing digitization, including measuring customer activity and accurately assessing their needs.
• Since December 2017, the Bank has been enabling entities starting business to take out a Pożyczka na Start [Loan for the Start], which has features that are particularly appreciated by young entrepreneurs: ease and speed of obtaining funds, flexibility of the product in repayment and the method of spending – entrepreneurs can use it for any purpose related to their business, independently deciding on the form of repayment and, during the term of the agreement, they can benefit from, inter alia, a suspension of the loan repayments for one month each year.         
• The Bank’s subsidiary, PKO Leasing, has also launched facilitations for young entrepreneurs, offering customers Leasing na Start [Lease for the Start]. It enables them to obtain financing of up to PLN 120,000 on a new and used vehicle or delivery vehicle of up to 3.5t. The use of leasing without an initial fee is available to companies operating for 3 months.

Products supporting Public Sector Entities

The PKO Bank Polski SA Group supports the development of public sector entities

For many years, the Bank Polski SA Group and especially PKO Bank Polski SA and PKO Leasing SA, has been actively involved in working with public sector entities (which, in the aspect of serving LAUs, has been described in more detail in subchapter 13.2). This cooperation also includes loan support of their activities, for instance, with regard to the expansion and renovation of schools, hospitals, road projects and environmental protection. The Bank has also financed other entities from the sector (1) public administration and national defence; obligatory social security, as well as entities from other sectors of a social nature; (2) healthcare and social welfare; and (3) activities related to culture, entertainment and recreation. At the end of 2017, loans to sectors (1)–(3) represented almost 10% of the loan portfolio to the sector of business and public entities at the Bank. In the Group, this share was 9%.

Loans granted to business and public entities from selected sections of the Polish NACE codes at the Group, including the Bank (31/12/2017)

Revenue from public procurement

Scope of servicing the public sector

The Bank has been financing and providing banking services to public entities for many years, including:

• the Social Insurance Institution;
• local authority units (LAUs);
• companies in which local authority units have a stake;
• entities for which the local authority is the founding body;
• public sector related units;
• General Directorate of the State Forests and its organizational units.

Contracts for banking services are concluded within the framework provided for by the “Public Procurement Law” (including taking into account any possible statutory exclusions regarding the subject matter and the entity).

The Bank is gradually strengthening its position as a leader in servicing LAUs and underwriting issues of municipal bonds. The extensive network of the Bank’s branches is conducive to reaching the local authority customer throughout Poland, whereas, the high technological level of services offered means that, in the vast majority of cases, the Bank satisfies the proposal requirements set by LAUs. As a result, the Bank’s share of serving LAUs is significant. At the end of 2017, the Bank served:

• 50% of the voivodships (8 out of 16);
• 35% of cities with the rights of counties (23 out of 66);
• 19% of counties (60 out of 314);
• 18% of urban municipalities (43 out of 237);
• 12% of urban-rural municipalities (75 out of 616);
• 3% of rural municipalities (49 out of 1559).

The bank plays an important role in serving large LAUs, in particular. At the end of 2017, it served 22% of local authorities with incomes of over PLN 100 million per year (78 out of 351). In value terms, this share was even larger: 33% (PLN 44.5 billion of budget revenues generated by a group of 351 large LAUs passed through the Bank’s accounts).

The Bank’s share of financing of local authorities with loans is more than 19%, while its share of municipal bond issues is over 40%.

According to the management data the public (budget) segment accounted for 1.8% of the result on the Bank’s business activities in 2017 (14.2% of the result of the corporate segment, i.e. business and public entities jointly).
The revenues of the Group’s entities from participation in public procurement were negligible: 1.14% of the result on business activities the process of the bank tendering to public sector entities.

The process of the Bank tendering to public sector entities

The tendering process at the Bank in the public procurement rigour is divided into four stages:

• Obtaining information – the Public Procurement Law provides that access to public information is public and every entity has an equal right of access to the information provided by the contracting authority in the public procurement procedure. The Bank most frequently obtains information from the tender databases and the Public Information Bureau websites of local authorities / public sector customers.
• Analysis – whether the Bank is able to submit a tender is analysed during this process.
• Depending on the product to which the order applies, specialized dedicated units at the Bank conduct the analysis in accordance with the banking procedures (e.g. credit analysis, the ability to satisfy the conditions of the ToR, the possibility of issuing bonds).
• Decision-making – decisions are made in accordance with the responsibilities at the level from the Adviser to the Regional Corporate Centre to the Bank’s Management Board, depending on the level specified by the bank’s internal procedures.
• Submission of a tender – after a positive decision is made to submit a tender, it is submitted in the manner and at the time specified in the order.