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1. Company Snapshot

1.a. Company Description

Bank Polska Kasa Opieki S.A., a commercial bank, provides a range of banking products and services to retail and corporate clients in Poland and internationally.It operates through Retail Banking, Private Banking, Corporate and Investment Banking, Enterprise banking, and Assets and Liabilities Management and Other segments.The company accepts current accounts, saving accounts, and term deposits.


Its loan products include mortgage, operating, investment, cash, and consumer loans; loans for corporates, and small and medium enterprises; and commercial real estate financing.The company also provides insurance, asset management, pension funds, brokerage, transactional advisory, leasing, factoring, business consulting, transferable agent, call-center, real estate development, and online banking services.As of December 31, 2021, it operates 650 outlets and 1,475 ATMs. Bank Polska Kasa Opieki S.A. was incorporated in 1929 and is headquartered in Warsaw, Poland.

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1.b. Last Insights on PEO

Bank Polska Kasa Opieki S.A. faced headwinds over the past three months, primarily due to unfavorable regulatory developments. The Polish finance ministry's plan to increase the corporate income tax rate paid by lenders, announced on August 22, 2025, likely impacted the bank's prospects. This move aims to bolster the country's budget but may weigh on the bank's profitability. Additionally, the European economic landscape, characterized by tentative optimism around EU-U.S. trade agreements and steady interest rates, presented a mixed backdrop for the bank's operations.

1.c. Company Highlights

2. Pekao S.A. Delivers Robust 9M 2025 Results

Pekao S.A. Group reported a net profit of PLN 5.2 billion for the 9 months of 2025, representing a 10% year-on-year increase. The bank's revenue growth was driven by a growing loan portfolio, with total loans up 8% year-on-year. The net interest income increased by 8% year-on-year, and the interest margin rose by 2 basis points. The actual EPS came out at 7.26, beating estimates of 7.19. The bank's cost-to-income ratio was 34.5%, and the return on equity (ROE) was 21.5%, indicating a strong capital position.

Publication Date: Nov -03

📋 Highlights
  • Robust Profit Growth:: Net profit reached PLN 5.2 billion for 9M2025, a 10% YoY increase driven by 8% loan portfolio growth and a 2 bps rise in interest margin.
  • Strong Lending Momentum:: Corporate loans surged 19% YoY, while cash loans saw over 90% sales via digital channels, reflecting digital channel dominance.
  • Capital Strength & Cost Efficiency:: Maintained surplus in C1 and total capital ratios, with a 34.5% cost-to-income ratio and 21.5% ROE, highlighting operational efficiency.
  • Rate Sensitivity Management:: NIM changed by 15 bps in 9M2025, with sensitivity to rate cuts at 15-20 bps per 100 bps cut, though reduced by 5 bps due to deposit-side adjustments.

Business Performance Highlights

The bank's lending activity was strong, with corporate loans growing 19% year-on-year and cash loans growing significantly through digital channels, with over 90% of sales coming from remote channels. The bank also saw a 9% growth in fees and commissions, driven by capital market commissions, asset management, and brokerage services. According to the bank's Chief Economist, Ernest Pytlarczyk, the economy is expected to grow by 4% next year, with a major acceleration in investments and a conducive environment for the banking business.

Outlook and Strategy

The bank expects a 2-digit growth in lending, especially in corporate loans, and a stable cost of risk. The bank's strategy focuses on digital penetration, customer acquisition, and improving its market position in corporate and retail banking. The bank's CFO, Dagmara Wojnar, highlighted that the bank maintains a strong capital position, with surplus in both C1 and total capital ratio, and plans to be an active issuer in the upcoming periods to meet its requirements.

Valuation and Dividend Yield

With a P/B Ratio of 1.61 and a Dividend Yield of 9.62%, Pekao S.A.'s valuation appears attractive. The bank's ROE of 21.07% is also a positive indicator of its profitability. Analysts estimate next year's revenue growth at -0.4%, but the bank's strong capital position and growth prospects in lending activity could support its profitability.

Interest Rate Sensitivity and Swiss Franc-Denominated Mortgages

The bank's Net Interest Margin (NIM) is sensitive to interest rate cuts, with a 15-20 basis point change per 100 basis point cut. The bank has been actively managing its deposit side to offset the impact of interest rate cuts, but deeper cuts will leave less room to maneuver. Regarding Swiss franc-denominated mortgages, the bank's settlement program is progressing well, but it's too early to say if provisions and the mortgage story have ended.

3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.71%)

6. Segments

Retail Banking

Expected Growth: 2.0%

Bank Polska Kasa Opieki S.A.'s 2.0% retail banking growth is driven by increasing demand for digital banking services, expansion of branch network in rural areas, and strategic partnerships with e-commerce platforms. Additionally, the bank's focus on customer experience, competitive interest rates, and innovative product offerings have contributed to the growth.

Corporate and Investment Banking

Expected Growth: 1.5%

The 1.5% growth in Corporate and Investment Banking at Bank Polska Kasa Opieki S.A. is driven by increasing demand for debt capital markets, expansion in transaction banking services, and growth in mergers and acquisitions advisory. Additionally, the bank's strong relationships with Polish corporates and improving economic conditions in Poland contribute to the segment's growth.

Enterprise Banking

Expected Growth: 1.2%

The 1.2% growth in Enterprise Banking from Bank Polska Kasa Opieki S.A. is driven by increasing demand for cash management and trade finance services from large corporations, expansion into new markets, and investments in digitalization, resulting in improved operational efficiency and enhanced customer experience.

Private Banking

Expected Growth: 1.8%

The 1.8% growth in Private Banking from Bank Polska Kasa Opieki S.A. is driven by increasing high net worth individuals in Poland, growing demand for wealth management services, and the bank's strategic expansion into affluent segments. Additionally, the bank's digital transformation and personalized services have enhanced customer experience, attracting more clients and driving growth.

Assets & Liabilities Management and Other

Expected Growth: 0.8%

Bank Polska Kasa Opieki S.A.'s 0.8 growth in Assets & Liabilities Management is driven by effective risk management, diversified loan portfolio, and strategic investments. In Other segment, growth is fueled by increasing fee income, cost optimization, and expanding digital channels. These drivers enable the bank to maintain a stable financial position and drive growth.

7. Detailed Products

Current Accounts

Bank Pekao's current accounts provide customers with a convenient and secure way to manage their daily finances, with features such as online banking, mobile banking, and debit cards.

Savings Accounts

Bank Pekao's savings accounts offer customers a safe and profitable way to save money, with competitive interest rates and flexible access to funds.

Credit Cards

Bank Pekao's credit cards provide customers with a convenient and flexible way to make purchases, with features such as cashback, rewards, and travel insurance.

Personal Loans

Bank Pekao's personal loans offer customers a flexible and affordable way to borrow money for various purposes, such as debt consolidation, home improvement, or unexpected expenses.

Mortgage Loans

Bank Pekao's mortgage loans provide customers with a range of options to finance their dream home, with competitive interest rates and flexible repayment terms.

Investment Products

Bank Pekao's investment products offer customers a range of options to grow their wealth, including mutual funds, stocks, and bonds.

Insurance Products

Bank Pekao's insurance products provide customers with protection against various risks, including life insurance, health insurance, and property insurance.

Business Banking

Bank Pekao's business banking services provide businesses with a range of financial solutions, including cash management, trade finance, and lending.

8. Bank Polska Kasa Opieki S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Bank Polska Kasa Opieki S.A. is medium due to the presence of alternative financial institutions and digital payment systems.

Bargaining Power Of Customers

The bargaining power of customers is high due to the high level of competition in the banking industry, giving customers the power to choose from a range of financial institutions.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the bank's strong financial position and ability to negotiate with suppliers.

Threat Of New Entrants

The threat of new entrants is medium due to the regulatory barriers to entry in the banking industry, but the increasing trend of fintech companies entering the market.

Intensity Of Rivalry

The intensity of rivalry is high due to the high level of competition in the banking industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 46.88%
Debt Cost 8.86%
Equity Weight 53.12%
Equity Cost 8.86%
WACC 8.86%
Leverage 88.27%

11. Quality Control: Bank Polska Kasa Opieki S.A. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

203.3$

Current Price

203.3$

Potential

-0.00%

Expected Cash-Flows