Bank Polski (PKO) Q4 2025 (Q&A) earnings summary

Executive summary

• Q4 2025 saw increased consumer protection charges, with PLN 79 million in fines and additional reserves for pending proceedings, reflecting a conservative approach to provisioning.

• Achieved PLN 10.7 bn net profit for 2025, up 14.8% year-over-year, including PLN 4.4 bn in CHF legal risk provisions.

• Double-digit growth in both customer financing (+11.1% y/y) and customer savings (+14.4% y/y).

• ROE reached 19.5% for 2025, with a cost/income ratio of 31.1% and cost of risk at 30 bps.

• Maintained a strong capital base with CET1 at 15.57%, exceeding regulatory and dividend criteria.

Financial highlights

• Net interest income grew by 8.3% y/y on a comparable basis; net interest margin at 4.76% for the year, declining to 4.52% in Q4 due to rate cuts.

• Fee and commission income increased by 2.4% y/y, with Q4 growth accelerating to 8.5% y/y.

• Operating expenses rose 11.2% y/y, supporting business growth; cost/income ratio at 31.1%.

• Asset quality improved: NPL ratio decreased to 3.34% at year-end.

• Customer savings reached PLN 690.8 bn (+14.4% y/y), and gross customer financing hit PLN 327.1 bn (+11.1% y/y).

Outlook and guidance

• NII guidance for 2026 is stable, supported by volume growth and hedging strategies, though corporate lending margins are under pressure due to competition.

• ROE target above 18% for 2027 is maintained, assuming a 26% CIT rate and no significant CHF provisioning.

• Cost growth in 2026 is expected to be lower than the previous year, with ongoing cost discipline and optimization initiatives.

• Resolution fund fees will be the only BFG contribution in 2026, positively impacting the cost base.

• Expect further acceleration in market volume growth and investment in 2026, with Poland projected to remain a European growth leader.