SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
2
TABLE OF CONTENTS
SELECTED SEPARATE FINANCIAL DATA ........................................................................................................... 5
SEPARATE STATEMENT OF PROFIT OR LOSS .................................................................................................. 6
SEPARATE STATEMENT OF OTHER COMPREHENSIVE INCOME .................................................................... 7
SEPARATE STATEMENT OF FINANCIAL POSITION ........................................................................................... 8
SEPARATE STATEMENT OF CHANGES IN EQUITY ........................................................................................... 9
SEPARATE STATEMENT OF CASH FLOWS ...................................................................................................... 10
1. GENERAL INFORMATION ABOUT THE BANK ........................................................................................... 12
2. ACCOUNTING PRINCIPLES APPLIED FOR THE PURPOSE OF PREPARATION OF THE SEPARATE
FINANCIAL STATEMENTS ................................................................................................................................... 14
2.1. Basis for preparation of the separate financial statements .......................................................................................... 14
2.2. Going concern ............................................................................................................................................................. 14
2.3. Statement of compliance with IFRS ............................................................................................................................ 14
2.4. Recognition of transactions under common control ..................................................................................................... 18
2.5. Business combinations ................................................................................................................................................ 18
2.6. Changes in accounting policies and changes in presentation of financial data ........................................................... 18
2.7. Measurement of items denominated in foreign currencies .......................................................................................... 18
2.8. Interest income and expenses ..................................................................................................................................... 19
2.9. Net fee and commission income ................................................................................................................................. 19
2.10. Dividend income .......................................................................................................................................................... 20
2.11. Net trading income ...................................................................................................................................................... 21
2.12. Result on investment activities .................................................................................................................................... 21
2.13. Other operating income and expenses ........................................................................................................................ 21
2.14. Income tax expense .................................................................................................................................................... 21
2.15. Classification and measurement of financial assets and liabilities .............................................................................. 21
2.16. Fixed assets held for sale ............................................................................................................................................ 25
2.17. Investment properties .................................................................................................................................................. 25
2.18. Intangible assets.......................................................................................................................................................... 25
2.19. Property, plant and equipment .................................................................................................................................... 26
2.20. Hedge accounting........................................................................................................................................................ 26
2.21. Provisions .................................................................................................................................................................... 27
2.22. Leases ......................................................................................................................................................................... 27
2.23. Financial guarantees ................................................................................................................................................... 28
2.24. Employee benefits ....................................................................................................................................................... 28
2.25. Capital ......................................................................................................................................................................... 29
2.26. Custody operations...................................................................................................................................................... 30
2.27. Cash and cash equivalents ......................................................................................................................................... 30
3. ESTIMATES ................................................................................................................................................... 30
4. NET INTEREST INCOME .............................................................................................................................. 38
5. NET FEE AND COMMISSION INCOME ........................................................................................................ 39
6. DIVIDEND INCOME ....................................................................................................................................... 40
7. NET TRADING INCOME (INCLUDING RESULT ON FOREIGN EXCHANGE) ............................................. 40
8. RESULT ON INVESTMENT ACTIVITIES ...................................................................................................... 40
9. NET IMPAIRMENT ALLOWANCES ON FINANCIAL ASSETS AND PROVISION ON CONTINGENT
LIABILITIES ........................................................................................................................................................... 40
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
3
10. GENERAL ADMINISTRATIVE COSTS ......................................................................................................... 42
11. PERSONNEL EXPENSES ............................................................................................................................. 42
12. DEPRECIATION AND AMORTIZATION ....................................................................................................... 42
13. OTHER OPERATING INCOME ..................................................................................................................... 43
14. OTHER OPERATING EXPENSES ................................................................................................................ 43
15. INCOME TAX EXPENSE ............................................................................................................................... 44
16. EARNINGS PER SHARE ............................................................................................................................... 44
17. CASH AND CASH BALANCES AT CENTRAL BANK .................................................................................. 45
18. AMOUNTS DUE FROM OTHER BANKS ...................................................................................................... 45
19. DERIVATIVE FINANCIAL INSTRUMENTS ................................................................................................... 46
20. HEDGE ACCOUNTING.................................................................................................................................. 49
21. LOANS AND ADVANCES TO CUSTOMERS MEASURED AT AMORTISED COST ................................... 52
22. LOANS AND ADVANCES TO CUSTOMERS MEASURED AT FAIR VALUE THROUGH PROFIT OR
LOSS ..................................................................................................................................................................... 56
23. SECURITIES MEASURED AT AMORTISED COST...................................................................................... 57
24. SECURITIES MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS .............................................. 59
25. SECURITIES MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME ................ 59
26. INVESTMENTS IN SUBSIDIARIES ............................................................................................................... 60
27. INTANGIBLE ASSETS .................................................................................................................................. 61
28. PROPERTY, PLANT AND EQUIPMENT ....................................................................................................... 62
29. LEASES ......................................................................................................................................................... 66
30. OTHER ASSETS ............................................................................................................................................ 67
31. AMOUNTS DUE TO CENTRAL BANK .......................................................................................................... 67
32. AMOUNTS DUE TO OTHER BANKS ............................................................................................................ 68
33. AMOUNTS DUE TO CUSTOMERS ............................................................................................................... 68
34. SUBORDINATED LIABILITIES ..................................................................................................................... 69
35. OTHER LIABILITIES ..................................................................................................................................... 69
36. PROVISIONS ................................................................................................................................................. 69
37. DEFERRED INCOME TAX ............................................................................................................................ 71
38. DISCONTINUED OPERATIONS .................................................................................................................... 72
39. SHARE-BASED PAYMENTS ........................................................................................................................ 72
40. CONTINGENT LIABILITIES .......................................................................................................................... 75
41. COLLATERALS ............................................................................................................................................. 75
42. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES .......................................................................... 76
43. LOAN PORTFOLIO SALE ............................................................................................................................. 80
44. SECURITIZATION ......................................................................................................................................... 80
45. CUSTODY OPERATIONS ............................................................................................................................. 81
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
4
46. THE SHAREHOLDER’S STRUCTURE OF BNP PARIBAS BANK POLSKA S.A. ....................................... 81
47. SUPPLEMENTARY CAPITAL AND OTHER CAPITALS .............................................................................. 83
48. DIVIDENDS PAID .......................................................................................................................................... 84
49. DISTRIBUTION OF RETAINED EARNINGS ................................................................................................. 84
50. CASH AND CASH EQUIVALENTS ............................................................................................................... 84
51. ADDITIONAL INFORMATION REGARDING THE STATEMENT OF CASH FLOWS ................................... 84
52. RELATED PARTY TRANSACTIONS ............................................................................................................ 85
53. OPERATING SEGMENTS ............................................................................................................................. 88
54. LITIGATION AND CLAIMS ............................................................................................................................ 92
55. FINANCIAL RISK MANAGEMENT ................................................................................................................ 96
55.1. Financial instrument strategy ....................................................................................................................................... 96
55.2. Credit risk .................................................................................................................................................................... 96
55.3. Counterparty risk ....................................................................................................................................................... 108
55.4. Market risk (interest rate risk in the trading book and currency risk) ......................................................................... 108
55.5. Interest rate risk in the banking portfolio (ALM Treasury) .......................................................................................... 110
55.6. Liquidity risk ............................................................................................................................................................... 114
55.7. Operational risk ......................................................................................................................................................... 117
56. CAPITAL ADEQUACY MANAGEMENT ...................................................................................................... 119
57. MAJOR EVENTS IN BNP PARIBAS BANK POLSKA S.A. IN 2021 ........................................................... 121
58. SUBSEQUENT EVENTS ............................................................................................................................. 122
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
5
SELECTED SEPARATE FINANCIAL DATA
Selected separate financial data
in PLN’000
in EUR’000
Statement of profit or loss
Note
For the
period from
1.01.2021
to 31.12.2021
For the
period from
1.01.2020
to 31.12.2020
For the
period from
1.01.2021
to 31.12.2021
For the
period from
1.01.2020
to 31.12.2020
Net interest income
4
3,067,580
3,000,489
670,143
670,620
Net fee and commission income
5
1,002,050
876,048
218,908
195,800
Profit before tax
621,904
1,110,339
135,861
248,165
Profit after tax
184,526
731,060
40,312
163,395
Total comprehensive income
(667,068)
861,707
(145,728)
192,595
Statement of cash flows
-
For the
period from
1.01.2021
to 31.12.2021
For the
period from
1.01.2020
to 31.12.2020
For the
period from
1.01.2021
to 31.12.2021
For the
period from
1.01.2020
to 31.12.2020
Total net cash flows
1,666,345
(1,314,602)
364,029
(293,818)
Ratios
31.12.2021
31.12.2020
31.12.2021
31.12.2020
Number of shares (items)
46
147,518,782
147,418,918
147,518,782
147,418,918
Earnings per share
16
1.25
4.96
0.27
1.11
Statement of financial position
31.12.2021
31.12.2020
31.12.2021
31.12.2020
Total assets
126,361,260
115,668,150
27,473,423
25,064,607
Loans and advances to customers measured at
amortised cost
21
80,124,751
70,446,975
17,420,696
15,265,445
Loans and advances to customers measured at
fair value through profit or loss
22
1,219,027
1,539,848
265,040
333,676
Total liabilities
114,968,617
103,614,612
24,996,438
22,452,677
Amounts due to customers
33
101,823,600
91,466,551
22,138,453
19,820,263
Share capital
46
147,519
147,419
32,074
31,945
Total equity
11,392,643
12,053,538
2,476,985
2,611,931
Capital adequacy
31.12.2021
31.12.2020
31.12.2021
31.12.2020
Total own funds
15,528,874
15,788,897
3,376,283
3,421,361
Total risk exposure
87,410,438
81,145,805
19,004,748
17,583,818
Total capital ratio
17.77%
19.46%
17.77%
19.46%
Tier 1 capital ratio
12.96%
14.16%
12.96%
14.16%
For purposes of data conversion into EUR, the following exchange rates are used by the Bank:
For items of the statement of financial position, rates of the National Bank of Poland are applied:
- as at 31.12.2021 - EUR 1 = PLN 4.5994
- as at 31.12.2020 - EUR 1 = PLN 4.6148
For items of the statement of profit or loss and the statement of cash flows, the EUR exchange rate is calculated as the arithmetic
mean of the rates published by the National Bank of Poland as at the last day of each month in the period:
- for the period from 1.01.2021 to 31.12.2021 - EUR 1 = PLN 4.5775
- for the period from 1.01.2020 to 31.12.2020 - EUR 1 = PLN 4.4742
Calculation of earnings (loss) per share was described in Note 16.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
6
SEPARATE STATEMENT OF PROFIT OR LOSS
Note
12 months ended
31.12.2021
12 months ended
31.12.2020
Interest income
4
3,305,185
3,467,101
Interest income calculated with the use of effective
interest rate method
3,087,129
3,265,970
interest income on financial instruments measured at
amortised cost
2,896,476
3,073,841
interest income on financial instruments measured at
fair value through other comprehensive income
190,653
192,129
Income of a similar nature to interest on instruments
measured at fair value through profit or loss
218,056
201,131
Interest expense
4
(237,605)
(466,612)
Net interest income
3,067,580
3,000,489
Fee and commission income
5
1,245,346
1,098,017
Fee and commission expenses
5
(243,296)
(221,969)
Net fee and commission income
1,002,050
876,048
Dividend income
6
9,528
22,699
Net trading income (of which exchange result)
7
633,658
750,077
Result on investment activities
8
(8,741)
15,129
Result on hedge accounting
20
50,369
(11,077)
Net impairment losses on financial assets and contingent
liabilities
8
(236,963)
(582,625)
Result on provisions for legal risk related to foreign currency
loans
54
(1,045,304)
(168,156)
General administrative expenses
10
(2,044,754)
(2,049,690)
Depreciation and amortization
12
(398,319)
(366,159)
Other operating income
13
196,945
271,291
Other operating expenses
14
(266,035)
(328,778)
Operating result
960,014
1,429,248
Tax on financial institutions
(338,110)
(318,909)
Profit before tax
621,904
1,110,339
Income tax expenses
15
(437,378)
(379,279)
Net profit
184,526
731,060
attributable to equity holders of the Group
184,526
731,060
Earnings (loss) per share (in PLN per one share)
Basic
16
1.25
4.96
Diluted
16
1.25
4.95
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
7
SEPARATE STATEMENT OF OTHER COMPREHENSIVE
INCOME
12 months ended
31.12.2021
12 months ended
31.12.2020
Net profit for the period
184,526
731,060
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
upon fulfilment of certain conditions
(854,322)
132,361
Measurement of financial assets measured at fair value through
other comprehensive income, gross
(969,416)
163,408
Deferred income tax on the valuation of gross financial assets
measured through other comprehensive income
184,189
(31,047)
Measurement of cash flow hedge accounting derivatives
(85,303)
-
Deferred income tax on valuation of gross derivatives hedging
cash flows
16,208
-
Items that will not be reclassified to profit or loss
2,728
(1,714)
Actuary valuation of employee benefits
3,368
(2,116)
Deferred income tax on actuarial valuation of gross personnel
expenses
(640)
402
Other comprehensive income (net)
(851,594)
130,647
Total comprehensive income
(667,068)
861,707
attributable to equity holders of the Bank
(667,068)
861,707
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
8
SEPARATE STATEMENT OF FINANCIAL POSITION
ASSETS
Note
31.12.2021
31.12.2020
Cash and balances at Central Bank
17
4,631,410
3,421,866
Amounts due from banks
18
2,254,621
555,289
Derivative financial instruments
19
1,901,919
1,531,617
Differences from hedge accounting
20
65,465
531,793
Loans and advances to customers measured at amortised cost
21
80,124,751
70,446,975
Loans and advances to customers measured at fair value through profit or
loss
22
1,219,027
1,539,848
Securities measured at amortised cost
23
23,268,041
23,361,022
Securities measured at fair value through profit or loss
24
320,216
371,856
Securities measured at fair value through other comprehensive income
25
9,143,353
10,228,560
Investments in subsidiaries
26
122,033
140,765
Intangible assets
27
744,169
651,202
Property, plant and equipment
28
1,233,221
1,468,673
Deferred tax assets
37
719,650
613,553
Current tax assets
-
12,271
Other assets
30
613,384
792,860
Total assets
126,361,260
115,668,150
LIABILITIES
Note
31.12. 2021
31.12.2020
Amounts due to the Central Bank
31
-
84,675
Amounts due to other banks
32
2,621,155
2,831,538
Derivative financial instruments
19
1,918,032
1,521,148
Differences from hedge accounting
20
44,107
542,719
Amounts due to customers
33
101,823,600
91,466,551
Subordinated liabilities
34
4,334,572
4,306,539
Leasing liabilities
29
860,009
968,592
Other liabilities
35
1,504,486
1,234,157
Current tax liabilities
164,660
-
Provisions
36
1,697,996
658,693
Total liabilities
114,968,617
103,614,612
EQUITY
Share capital
46
147,519
147,419
Supplementary capital
47
9,110,976
9,110,976
Other reserve capital
47
2,946,115
2,208,982
Revaluation reserve
47
(595,707)
255,887
Retained earnings
(216,260)
330,274
retained profit
(400,786)
(400,786)
net profit for the period
184,526
731,060
Total equity
11,392,643
12,053,538
Total liabilities and equity
126,361,260
115,668,150
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing world
9
SEPARATE STATEMENT OF CHANGES IN EQUITY
Retained earnings
Share capital
Supplementary
capital
Other reserve
capital
Revaluation reserve
Retained profit
Net profit for the
period
Total
Balance as at 1 January 2021
147,419
9,110,976
2,208,982
255,887
(400,786)
731,060
12,053,538
Total comprehensive income for the
period
-
-
-
(851,594)
-
184,526
(667,068)
Net profit for the period
-
-
-
-
-
184,526
184,526
Other comprehensive income for the period
-
-
-
(851,594)
-
-
(851,594)
Distribution of retained earnings
-
-
731,060
-
-
(731,060)
-
Distribution of retained earnings intended
for capital
-
-
731,060
-
-
(731,060)
-
Share issue
100
-
-
-
-
-
100
Management stock options*
-
-
6,073
-
-
-
6,073
Balance as at 31 December 2021
147,519
9,110,976
2,946,115
(595,707)
(400,786)
184,526
11,392,643
* the management stock option programme is described in detail in Note 39
Retained earnings
Share capital
Supplementary
capital
Other reserve
capital
Revaluation reserve
Retained profit
Net profit for
the period
Total
Balance as at 1 January 2020
147,419
9,110,976
1,572,757
125,240
(400,786)
628,696
11,184,302
Total comprehensive income for the
period
-
-
-
130,647
-
731,060
861,707
Net profit for the period
-
-
-
-
-
731,060
731,060
Other comprehensive income for the period
-
-
-
130,647
-
-
130,647
Distribution of retained earnings
-
-
628,696
-
-
(628,696)
-
Distribution of retained earnings intended
for capital
-
-
628,696
-
-
(628,696)
-
Management stock options*
-
-
7,529
-
-
-
7,529
Balance as at 31 December 2020
147,419
9,110,976
2,208,982
255,887
(400,786)
731,060
12,053,538
* the management stock option programme is described in detail in Note 39
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
10
SEPARATE STATEMENT OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES:
Note
12 months ended
31.12.2021
12 months ended
31.12.2020
Net profit (loss)
184,526
731,060
Adjustments for:
1,801,018
3,308,619
Income tax expenses
437,378
379,279
Depreciation and amortization
398,319
366,159
Dividend income
(9,528)
(22,699)
Interest income
(3,305,185)
(3,467,101)
Interest expense
237,605
466,612
Change in provisions
1,042,671
126,041
Change in amounts due from banks
51
(1,243,712)
(105,680)
Change in assets due to derivative financial instruments
96,026
(1,034,404)
Change in loans and advances to customers measured at amortised cost
51
(9,778,564)
(1,483,779)
Change in loans and advances to customers measured at fair value
through profit or loss
320,821
434,548
Change in amounts due to banks
51
(291,168)
1,893,943
Change in liabilities due to derivative financial instruments
(187,031)
1,024,012
Change in amounts due to customers
51
10,366,786
3,076,428
Change in receivables due to current income tax
213,242
91,852
Change in other liabilities and provisions due to deferred tax
97,346
(827,453)
Other adjustments
51
188,499
(15,952)
Interest received
3,463,300
2,918,149
Interest paid
(244,516)
(516,527)
Leasing fees for short-term leases not included in the valuation of the
liability
(1,271)
5,192
Net cash flows from operating activities
1,985,544
4,039,679
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
11
CASH FLOWS FROM INVESTING ACTIVITIES:
12 months ended
31.12.2021
12 months ended
31.12.2020
Inflows
87,470,941
49,006,949
Sale of debt securities
87,414,933
48,850,962
Sale of intangible assets and property, plant and equipment
46,480
133,288
Dividends received and other inflows from investing activities
9,528
22,699
Outflows
(87,679,842)
(56,533,577)
Purchase of shares in subsidiaries
(1,000)
(2,200)
Purchase of debt securities
(87,320,963)
(56,160,854)
Purchase of intangible assets and property, plant and equipment
(357,879)
(370,523)
Net cash flows from investing activities
(208,901)
(7,526,628)
CASH FLOWS FROM FINANCING ACTIVITIES:
Inflows
16,224
2,300,000
Increase in subordinated debt
-
2,300,000
Net inflows from issuance of shares and return of capital contributions
16,224
-
Outflows
(126,522)
(127,654)
Repayment of leasing liabilities
(126,522)
(127,654)
Net cash flows from financing activities
(110,298)
2,172,346
TOTAL NET CASH AND CASH EQUIVALENTS
1,666,345
(1,314,602)
Cash and cash equivalents at the beginning of the period
3,485,875
4,800,477
Cash and cash equivalents at the end of the period
50
5,152,220
3,485,875
Effect of exchange rate fluctuations on cash and cash equivalents
23,247
57,021
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
12
EXPLANATORY NOTES TO THE SEPARATE
FINANCIAL STATEMENTS
1. GENERAL INFORMATION ABOUT THE BANK
BNP Paribas Bank Polska S.A. (the “Bank” or “BNP Paribas”) is the parent company in the Capital Group of BNP Paribas Bank
Polska S.A. (the “Group”).
The registered office of BNP Paribas Bank Polska S.A. is located at Kasprzaka 2, 01-211 Warsaw, Poland. The Bank is registered
in Poland, by the District Court for the capital city of Warsaw, 12th Commercial Division of the National Court Register, under
number KRS 0000011571. The duration of the parent entity and the entities from the Capital Group is unlimited.
Since 27 May 2011, pursuant to the decision of the Management Board of Warsaw Stock Exchange (WSE), the Bank's shares
have been listed on WSE and classified as finance - banking sector.
As at 31 December 2021, the headcount of the Bank amounted to 8,504.37 FTEs, as compared to 8,844.90 FTEs as at 31
December 2020.
BNP Paribas is a universal commercial bank offering a wide range of banking services provided to individual and institutional
clients in accordance with the scope of services specified in the Bank's Statute. The Bank operates both in Polish zlotys and in
foreign currencies and actively participates in trading on domestic and foreign financial markets. In addition, through its
subsidiaries, the Bank conducts brokerage and leasing activities and provides other financial services.
The Bank operates mainly in Poland.
Composition of the Bank’s Management Board as of 31 December 2021:
FULL NAME
FUNCTION HELD IN THE MANAGEMENT BOARD OF THE BANK
Przemysław Gdański
President of the Management Board
Jean-Charles Aranda
Vice-President of the Management Board
André Boulanger
Vice-President of the Management Board
Przemysław Furlepa
Vice-President of the Management Board
Wojciech Kembłowski
Vice-President of the Management Board
Kazimierz Łabno
Vice-President of the Management Board
Magdalena Nowicka
Vice-President of the Management Board
Volodymyr Radin
Vice-President of the Management Board
Agnieszka Wolska
Vice-President of the Management Board
Changes in the Bank’s Management Board in the period between 1 January and 31 December 2021:
On 8 March 2021, the Supervisory Board of the Bank appointed the above mentioned persons as Members of the Management
Board until the end of the current three-year joint term of office, beginning after the Ordinary General Meeting of the Bank. Mr.
Jerzy Śledziewski did not stand for election to the Management Board, as the Vice-President of the Management Board, of
the new term of office (he was the Vice-President of the Management Board before 8 March 2021).
On 12 May 2021, the Supervisory Board of the Bank appointed Mrs Agnieszka Wolska as Vice-President of the Management
Board as of 1 September 2021.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Composition of the Bank’s Supervisory Board as of 31 December 2021:
FULL NAME
OFFICE HELD IN THE SUPERVISORY BOARD OF THE BANK
Lucyna Stańczak-Wuczyńska*
Chairman of the Supervisory Board
Jean-Paul Sabet
Vice-Chairman of the Supervisory Board
Francois Benaroya
Vice-Chairman of the Supervisory Board
Jarosław Bauc
Independent Member of the Supervisory Board
Małgorzata Chruściak
Independent Member of the Supervisory Board
Géraldine Conti
Member of the Supervisory Board
Stefaan Decraene
Member of the Supervisory Board
Magdalena Dziewguć
Independent Member of the Supervisory Board
Vincent Metz
Member of the Supervisory Board
Piotr Mietkowski
Member of the Supervisory Board
Khatleen Pauwels
Member of the Supervisory Board
Mariusz Warych
Independent Member of the Supervisory Board
* Lucyna Stańczak-Wuczyńska was elected Chairman of the Supervisory Board from 1 July 2021 (following the resignation of
Józef Wancer)
Changes in the composition of the Supervisory Board in the period from 1 January to 31 December 2021:
On 24 March 2021, the Ordinary General Meeting of the Bank appointed the mentioned persons as Members of the
Supervisory Board until the end of the next five-year joint term of office: Mr Józef Wancer, Mrs Lucyna Stańczak-Wuczyńska,
Mr Jean-Paul Sabet, Mr Francois Benaroya, Mr Jarosław Bauc, Mr Stefaan Decraene, Mrs Magdalena Dziewguć, Mr Vincent
Metz, Mr Piotr Mietkowski, Mr Stéphane Vermeire and Mr Mariusz Warych. Mrs Sofia Merlo did not stand for election to the
Supervisory Board of the new term of office.
On 21 May 2021 Mr Stéphane Vermeire resigned from the position of a Member of the Supervisory Board as of 31 May
2021.
On 2 June 2021 Mr Józef Wancer resigned from the position of a Member of the Supervisory Board and the Chairman of the
Supervisory Board as of 30 June 2021.
On 17 June 2021, the Extraordinary General Meeting of the Bank appointed Mrs Małgorzata Chruściak as Member of the
Supervisory Board (independent member) as of 1 July 2021 until the end of the current five-year joint term of office.
On 17 June 2021, the Extraordinary General Meeting of the Bank appointed Mrs Geraldine Conti as Member of the
Supervisory Board as of 1 July 2021 until the end of the current five-year joint term of office.
On 17 June 2021, the Extraordinary General Meeting of the Bank appointed Mrs Khatleen Pauwels as Member of the
Supervisory Board as of 1 July 2021 until the end of the current five-year joint term of office.
Approval of the financial statements
The present separate financial statements have been prepared as at 31 December 2021 and approved for publication by
2the Management Board of the Bank on 2 March 2022.
Consolidated financial statements of BNP Paribas Bank Polska S.A. Capital Group have been prepared as at 31 December 2021
and approved for publication by the Management Board of the Bank on 2 March 2022.
Data included in the above mentioned financial statements are presented for the financial year ended 31 December 2021 with
comparative data for the financial year ended 31 December 2020.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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2. ACCOUNTING PRINCIPLES APPLIED FOR THE
PURPOSE OF PREPARATION OF THE SEPARATE
FINANCIAL STATEMENTS
2.1. Basis for preparation of the separate financial statements
The present separate financial statements have been prepared on the historical cost basis, with the exception of derivative
contracts and financial instruments held for trading, financial assets not meeting the SPPI test, financial assets assigned to the
business model, which does not entail holding them to obtain contractual cash flows, equity instruments measured at fair value
through profit or loss, and except for financial instruments measured at fair value through other comprehensive income and equity
instruments for which the fair value option has been applied for other comprehensive income.
2.2. Going concern
The present separate financial statements have been prepared assuming that the Bank will continue as a going concern in
substantially the same scope, in the foreseeable future, i.e. within at least 12 months from the date of the reporting period end.
2.3. Statement of compliance with IFRS
The present separate financial statements have been prepared in accordance with International Financial Reporting Standards as
endorsed by the European Union (“IFRS EU”).
The present separate financial statements have been prepared in accordance with the requirements specified in International
Accounting Standards (“IAS”) and International Financial Reporting Standards endorsed by the European Union (“IFRS EU”), as
well as the related interpretations, except for the standards and interpretations listed below, which are awaiting endorsement by
the European Union or have already been endorsed by the European Union but entered or will enter into force after the end of the
reporting period.
In the period included in these separate financial statements, the Bank did not early apply standards and interpretations endorsed
by the EU, which will enter into force after the balance sheet date.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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New standards, interpretations and amendments to these standards that have already been issued
by the International Accounting Standards Board (IASB) but not yet approved by the European
Union
Standards /
Interpretations
Date of
issue/
publication
Date of
entry into
force in EU
Approved by
the EU
Description of changes
IFRS 17 Insurance
Contracts: First
application of IFRS
17 and IFRS 9 –
comparative data
09.12.2021
01.01.2023
No
The amendments provide a transitional option for
comparative information on financial assets presented on
initial application of IFRS 17. The amendment is intended to
help entities avoid temporary accounting mismatches
between financial assets and insurance contract liabilities,
thereby improving the usefulness of comparative information
for users of financial statements.
The changes will not significantly affect the Bank’s financial
statements
Amendments to
IAS 1, Presentation
of financial
statements -
classification of
liabilities as short-
term and long-term
23.01.2020/
15.07.2020
01.01.2023
No
Amendments to IAS 1 affect the requirements for presenting
liabilities in the statement of financial position. In particular,
they explain the difference between classification of liabilities
as short-term or long-term ones – the classification shall be
based on the rights existing at the end of the reporting period.
The prospective approach will be applicable while introducing
these amendments.
The changes will not significantly affect the Bank’s financial
statements.
Amendments to IAS
8, Definition of
accounting estimates
12.02.2021
01.01.2023
No
In the amendment to IAS 8 Definition of Accounting
Estimates, the definition of change in accounting estimates
was replaced by the definition of accounting estimates.
According to the new definition, accounting estimates are
monetary amounts in financial statements that are subject to
measurement uncertainty. The Board also clarified the new
definition through additional guidance and examples of how
accounting policies and accounting estimates are related and
how a change in valuation technique constitutes a change in
accounting estimate. The introduction of the definition of
accounting estimates and other amendments to IAS 8 were
intended to help entities distinguish between changes in
accounting policies and changes in accounting estimates.
The change will not significantly affect the Bank’s financial
statements.
Amendments to IAS
1 and IFRS 2
Practice Statement
on Disclosure of
accounting policies
12.02.2021
01.01.2023
No
The amendments to IAS 1 and IFRS 2 Practice Statement are
intended to help preparers decide which accounting policies
to disclose in their financial statements. The amendments
introduce the requirement to disclose significant information
concerning accounting policies instead of significant
accounting policies. The amendments clarify that accounting
policy information may be material by its nature even if the
amounts are immaterial and users of financial statements
would need it to understand other material information in the
financial statements.
The changes will not significantly affect the Bank’s financial
statements.
Amendments to IAS
12 Deferred Tax
related to Assets and
Liabilities arising from
a Single Transaction
07.05.2021
01.01.2023
No
The changes aim to clarify how companies account for
deferred tax on transactions such as leases and
decommissioning obligations.
The changes will not significantly affect the Bank’s financial
statements.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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New standards, interpretations and amendments to the existing standards, that have been issued
by the International Accounting Standards Board (IASB), approved by the European Union but not
yet effective and have not been implemented by the Bank yet
Standards /
Interpretations
Date of
issue/
publication
Date of
entry into
force in EU
Date of
approval by
EU
Description of changes
IFRS 17 “Insurance
Contracts”,
amendments to IFRS
17
18.05.2017,
amendments
issued on
25.06.2020
amendments
published on
23.11.2021
01.01.2023
19.11.2021
IFRS 17 'Insurance Contracts' will replace the IFRS 4
'Insurance Contracts' standard, which allows insurance
contracts to continue to be accounted under the accounting
rules applicable in national standards and which
consequently implies a number of different solutions. IFRS 17
requires consistent recognition of all insurance contracts.
Liabilities arising from contracts will be recognised at present
values instead of historical cost. The standard is to be applied
based on a full retrospective approach (if inapplicable, an
entity should use the modified retrospective approach or the
fair value approach).
The amendments are intended to:
- reducing costs by simplifying certain requirements of the
standard;
- less complicated explanation of financial results; and
- facilitating the transition to the new standard by deferring the
effective date of the standard to 2023 and introducing
additional relief to facilitate the first-time implementation of
IFRS 17.
The changes will not significantly affect the Bank’s financial
statements.
Amendments to
IFRS 3 Business
combinations; IAS 16
Property, plant and
equipment; IAS 37
Provisions,
contingent liabilities
and contingent
assets; annual
improvements 2018-
2020
14.05.2021
1.01.2022
02.07.2021
Amendments to IFRS 3 "Business combinations" update the
reference to the Framework for Financial Reporting present
in IFRS 3 without changing the requirements for accounting
for business combinations.
Amendments to IAS 16 "Property, plant and equipment"
prohibit a company from deducting the amounts received
from the sale of items produced in the process of preparation
of the asset's to its intended use from the asset’s purchase
price or from the production cost of property, plant and
equipment. Instead, the company should recognise the sales
revenue and related costs in the statement of profit or loss.
Amendments to IAS 37 "Provisions, contingent liabilities and
contingent assets" determine which costs should be
considered when assessing whether the contract will result in
a loss. Annual improvements introduce minor changes to
IFRS 1 First-time adoption of IFRS, IFRS 9 Financial
instruments, IAS 41 Agriculture and the Illustrative Examples
accompanying IFRS 16 Leases.
The changes will not significantly affect the Bank’s financial
statements.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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New standards, interpretations and amendments to the existing standards, that have been issued
by the International Accounting Standards Board (IASB), approved by the European Union and are
effective and have been implemented by the Bank
Standards /
Interpretations
Date of
issue/
publication
Date of
entry into
force in EU
Date of
approval by
EU
Description of changes
Amendments to
IFRS 16: COVID-19-
Related Rent
Concessions beyond
30 June 2021
31.03.2021
1.04.2021
31.08.2021
The amendments increase the scope of changes introduced
to IFRS 16: Covid-19-Related Rent Concessions, which was
issued on 28 May 2020, provides a practical exception that
allows tenants not to assess whether rental concessions that
occur as a direct consequence of pandemic COVID-19 and
meet certain conditions are modifications to the lease
agreement and, instead, to recognise those rental
concessions as if they were not modifications to the
agreement. The amendment to IFRS 16 extends the
application period of the practical exception by 12 months
from 30 June 2021 to 30 June 2022.
The changes will not significantly affect the Bank’s financial
statements.
Amendments to
IFRS 9, IAS 39,
IFRS 7, IFRS 4 and
IFRS 15 - IBOR
reform - Phase II
27.08.2020
1.01.2021
15.01.2021
The provisions published under Phase II of the IBOR reform
relate to:
- contractual cash flow modifications - the addition of a
solution to IFRS 9 that will enable the recognition of
contractual cash flow modifications due to the IBOR reform
by updating the effective interest rate of the contract to
reflect the transition to an alternative reference rate (there
will be no obligation to cease recognising or adjusting the
balance sheet amount of financial instruments); a similar
solution applies to IFRS 16 for lessees' recognition of lease
modifications;
- hedge accounting - there will be no need to discontinue
hedge accounting simply because of the changes required
by the reform if the hedge meets the other criteria for hedge
accounting; and
- disclosures - companies will be required to disclose
information about new risks arising from the reform and
information on how it manages the transition to alternative
reference rates.
The impact of the reform is detailed in note 55.5 Interest rate
risk in the banking book (ALM Treasury).
Amendments to
IFRS 4 Insurance
Contracts - deferral
of IFRS 9
25.06.2020
1.01.2021
15.12.2020
The amendments provide two optional arrangements to
reduce the impact of different effective dates of IFRS 9 and
IFRS 17.
The changes will not significantly affect the Bank’s financial
statements.
Amendments to
IFRS 16 Leases -
Covid-19-related
Rent Concessions
beyond 30 June
2021
28.05.2020
1.06.2020
9.10.2020
The amendments provide an option for lessees not to treat
rent concessions as lease modifications if they are a direct
consequence of COVID-19 and meet certain conditions.
The changes will not significantly affect the Bank’s financial
statements.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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2.4. Recognition of transactions under common control
Business combinations under common control do not fall within the scope of IFRS regulations. In the absence of detailed IFRS
regulations in this regard, in line with the guidelines specified in IAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors, BNP Paribas Bank Polska S.A. adopted an accounting policy generally applied to any business combinations under
common control within the Bank’s Group, whereby such transactions are recognised at their book value.
In accordance with the adopted accounting principles, the acquirer recognizes the assets, liabilities and equity of the acquire at
their present book value adjusted only for purposes of harmonizing the accounting principles of the acquire with those of the
acquirer. Goodwill and negative goodwill are not recognised.
The difference between the book value of the acquired net assets and the fair value of the payment is recognised in the Bank’s
equity. A method based on book values is used, and therefore the comparative data are not restated.
If the business combination under common control involves acquisition of minority interests, the Bank recognizes them separately.
2.5. Business combinations
For the need of settling business combinations in which the Bank acts as the acquirer, the acquisition method is applied, in
accordance with the requirements of IFRS 3 "Business combinations".
For each business combination, the acquiring entity and the acquisition date are determined, and the acquisition date is the date
on which the entity acquired control over the acquired entity. In addition, the application of the acquisition method requires the
recognition and measurement of identifiable assets and liabilities acquired, and any non-controlling interest in the acquired entity,
as well as the recognition and measurement of goodwill or bargain purchase gain. The acquiring entity measures the identifiable
assets and liabilities acquired at their fair values as at the acquisition date.
If the net amount of the fair values of identifiable acquired assets and liabilities exceeds the fair value of the consideration
transferred, the Bank, as the acquiring entity, recognizes the gain from the bargain purchase in the profit or loss. Before recognizing
the gain from a bargain purchase, the Bank reassess whether all acquired assets and liabilities have been correctly identified and
all additional assets and liabilities have been included.
If the value of the consideration transferred, measured at fair value as at the acquisition date, exceeds the net value of fair values
of identifiable acquired assets and liabilities as at the acquisition date, the goodwill is recognised. The established goodwill is not
subject to amortization, but at the end of each financial year and, whenever there are indications that impairment may have
occurred, it is tested in terms of their impairment.
In accordance with the requirements of IFRS 3, the Bank performs a final settlement of the acquisition within a maximum of one
year from the date of taking control.
2.6. Changes in accounting policies and changes in presentation of
financial data
The Bank has not changed its accounting policies in the present separate financial statements.
2.7. Measurement of items denominated in foreign currencies
Functional and presentation currency
Items included in the financial statements are measured in the currency of the primary economic environment in which the Bank
operates ("functional currency"). The separate financial statements are presented in PLN thousands, which is the functional
currency of the Bank and the presentation currency of the Bank's financial statements.
Transactions and balances
Transactions expressed in foreign currencies are translated into the functional currency at the exchange rate applicable as at the
transaction date.
At the end of the reporting period, monetary assets and liabilities expressed in currencies other than Polish zloty are translated
into Polish zlotys using the average exchange rate for a given currency determined by the National Bank of Poland in force at the
end of the reporting period. Foreign exchange differences resulting from the translation are recognised as a net trading income or
in cases specified in the accounting principles (policy), capitalized in the value of assets. Non-monetary assets and liabilities
recognised at historical cost expressed in a foreign currency are disclosed at the historical exchange rate as at the transaction
date. Non-monetary assets and liabilities recognised at fair value expressed in a foreign currency are translated at the exchange
rate effective at the date of fair value measurement.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Basic currency rates used in the preparation of the present financial statements as at 31 December 2021 and 31 December 2020
are presented in the below table:
31.12.2021
31.12.2020
1 EUR
4.5994
4.6148
1 USD
4.0600
3.7584
1 GBP
5.4846
5.1327
1 CHF
4.4484
4.2641
2.8. Interest income and expenses
The profit or loss statement includes all interest income on financial instruments measured at amortised cost using the effective
interest rate, financial assets measured at fair value through other comprehensive income but also income with its characteristics
similar to interest income on financial assets and liabilities measured at fair value through profit or loss.
The effective interest rate is the rate used to estimate future payments or incomes throughout the expected life of financial assets
or financial liabilities, discounted to the gross balance sheet value of a financial asset or to the amortised cost of a financial liability.
The calculation of the effective interest rate includes all commissions paid and received by the parties, transaction costs and any
other premiums and discounts that are an integral part of the effective interest rate.
Interest income is calculated using the effective interest rate based on the balance sheet amount of financial assets except for
financial assets that are impaired due to credit risk or purchased or originated credit impaired financial assets ('POCI'). At the
moment of recognition of financial assets impairment (reclassification of a financial asset to Stage 3), interest income is accrued
on the net value of the financial asset and is recognised at the effective interest rate. In case of POCI, the Bank uses the credit
risk-adjusted effective interest rate to calculate interest income. Interest income is calculated based on net exposure (gross
exposure less impairment allowance).
2.9. Net fee and commission income
Fees and commissions, which are not accounted for using the effective interest rate method but in accordance with the straight-
line method or recognised on a one-off basis, are recognised in “Net fee and commission income”.
Income settled over time with straight-line method includes commissions on overdrafts, revolving loans and commitments
(guarantees and credit facilities).
Fees for the Bank's commitment to grant a loan or an advance (commissions from promises issued) are deferred and as soon as
financial assets are recognised they are accounted for as an element of the effective interest rate or on a straight-line basis.
Revenues from contracts with customers include both fees and commissions, which are settled over time using the straight-line
method (throughout the period of providing the service) as well as on a one-off basis. Revenues are presented as the amount of
the Bank’s remuneration specified in the contracts with customers and do not include amounts collected by the Bank on behalf of
third parties, which are then transferred to them (i.e., insurance premiums collected which the Bank transfers to insurance
companies). The Bank recognizes revenues when the performance obligation is met (or when it is being fulfilled) by transferring
the promised good or service (i.e. an asset) to the customer.
Loans and advances
In respect of loan agreements, the Bank generates, in particular, revenues for readiness to give the funding under the granted
credit limits, which are recognised in the statement of profit or loss on a straight-line basis over the period for which the limit was
granted. For contracts without a specified repayment schedule, in the case of revolving loans, fees for each instalment of a loan
tranche are recognised over the average expected repayment period. Under certain loan agreements, the Bank receives
commissions for readiness or commitment, the amount of which is calculated on the basis of loan balances at the specified moment
of the duration of the loan agreement. Despite the fact that they partially constitute remuneration for the provision of services, in
case of which the customers derive benefits in a continuous manner, due to significant uncertainty about the credit balance at a
specific point in the future, the Bank recognizes this type of income when the basis of its calculation is certain.
Debit and credit cards
Under debit card agreements with customers, the Bank recognizes revenues from various types of fees and commissions. In a
majority of cases, these are activities in which the Bank executes its obligation to provide services at a given moment of time, in
which the customer derives benefits from these services at once, the remuneration due is recognised by the Bank in revenues on
a one-off basis. An example may be the fee for issuing a card, for checking the account balance at an ATM, for withdrawing cash
at an ATM. In addition to one-off fees for banking operations, analogous to those described above for debit cards, the Bank receives
annual fees for the use of credit cards sold by the Bank together with separate services, including card insurance. The Bank
allocates remuneration to individual performance obligations and recognizes commissions throughout the service provision period.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Commitments to grant loans and advances
The Bank charges a commission for its readiness to grant a loan or advance, which constitutes a separate remuneration for
commissions received from the loans at the moment of their commissioning, such as preparation commissions. Despite the
provision of the service over time, the Bank recognizes the revenue on account of the commission at the moment of the decision
regarding the commissioning of the loan, because at the moment of collecting the provision it is not possible to estimate the period
by which the due remuneration should be spread.
Investment brokerage and asset management
The Bank acts as a broker in the sale of participation units of investment funds for BNP Paribas Towarzystwo Funduszy
Inwestycyjnych S.A. ("TFI"), and receives a part of the commission charged for sales from customers. The Bank recognizes
revenue monthly based on the sales volume for a given month. In addition, the Bank receives variable remuneration from TFI as
part of the commission for the management of assets created as a result of the sale of investment fund participation units, which
TFI collects from clients. The Bank's remuneration depends on the valuation of assets in the portfolio under management. The
Bank recognizes revenue at the end of the month based on its own estimates in the area of valuation of assets under management,
which do not imply a potential significant reversal of revenue when settling revenues from TFI.
Insurance brokerage
The Bank, acting as an agent in the sale of insurance for an insurance company, is entitled to participate in the distribution of the
company's profit for which it participates in the mediation. The Bank recognizes revenues on a quarterly basis based on the periodic
results of the insurance company in an amount that will not be subject to significant reversal in the future.
Recognition of bancassurance income and expenses
Direct relation of a bancassurance product and financial instrument occurs in particular if at least one of the following conditions is
met: the offered financial instrument is always accompanied by the bancassurance product, or the bancassurance product is
offered only accompanied by the financial instrument, i.e. the Bank does not offer any bancassurance products with identical legal
form, terms and economic contents without the accompanying financial instrument.
Recognition of bancassurance income for related transactions
For related transactions including bancassurance products and financial instruments, remuneration from sales
of the bancassurance products constitute an integral part of the fee for the offered financial instrument.
Fee for bancassurance products offered in related transactions with financial instruments measured at amortised cost is accounted
for using the effective interest rate method and recognised in interest income for one-off premium or in commission income on
a monthly basis for a monthly premium.
Fee for the brokerage services, whose value is determined based on their economic contents, is recognised in commission income
upon sale or renewal (if the renewal is significant) of a bancassurance product.
Recognition of bancassurance expenses for related transactions
Expenses directly related to the sale of bancassurance product are settled in accordance with the matching principle as an element
of amortised cost of a financial instrument if the total income related to the sale of the product is settled with the effective interest
rate method or, respectively, proportionally to the classification of the income as recognised within amortised cost calculation and
that recognised on a one-off basis or over time as the fee for the agency services, if such classification has been introduced.
Recognition of bancassurance income and expenses for transactions not classified as related
If a financial instrument and a bancassurance product are sold in two separate transactions, the Bank’s fee for the sale
of the bancassurance product is recognised separately from the fee for the financial instrument.
Fee for the sale of bancassurance products that do not require the Bank to provide any post-sale services is recognised as income
as at the effective/renewal date of the relevant insurance policy. The related income is recognised under commission income.
Fee for the services provided by the Bank over the whole life of a bancassurance product is deferred and recognised as income
based on the percentage of completion of the provided services. Application of the percentage of completion method as at
the balance sheet date is limited to cases when a result of a service transaction can be reliably estimated. If the Bank is unable to
precisely determine the number of activities performed within a given time range or a returns level, income from services or
activities performed in relation to a bancassurance product offered by the Bank is recognised on a straight-line basis over
the lifetime of the product, unless there is evidence that another method would be more representative of the stage of completion.
2.10. Dividend income
Dividend income is recognised in the statement of profit or loss once the Bank’s right to dividends has been determined.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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2.11. Net trading income
Net trading income includes all income and expenses resulting from the change in the fair value of financial assets and liabilities
classified as measured at fair value through profit or loss, and interest income and interest expenses on derivatives, except
derivative instruments in hedge accounting.
The item includes also gains and losses on translation of assets and liabilities denominated in foreign currencies (revaluation).
2.12. Result on investment activities
The result on investment activities includes, the income and expenses on financial assets classified as measured at fair value
through other comprehensive income and income and expenses on loans and advances to customers measured at fair value
through profit or loss, except for the interest.
2.13. Other operating income and expenses
In item Other operating income and expenses the Bank presents items that are not directly related to the core operating activities
of the entity.
The Bank includes in abovementioned item mainly: result on sale and liquidation of fixed assets, revaluation of investment
property, compensations received and paid, revenue and expenses arising from other services not related to the core business
of the Bank.
2.14. Income tax expense
Charge on gross financial profit/loss includes current tax payable and debit/credit arising from a value of change of the deferred
tax asset/liability.
Current tax liabilities and receivables for the current and prior periods are measured at projected amounts payable to tax authorities
(reimbursable) using tax rates and regulations valid in law or in fact as at the end of the reporting period.
2.15. Classification and measurement of financial assets and liabilities
Classification and measurement of financial assets
In accordance with IFRS 9, financial assets are qualified to the following categories of measurement at the moment of their initial
recognition:
- financial assets measured at amortised cost,
- financial assets measured at fair value through other comprehensive income,
- financial assets measured at fair value through profit or loss.
The classification of financial assets in accordance with IFRS 9 depends on:
- business model relating to financial asset management, and
- the characteristics of contractual cash flows, i.e., whether contractual cash flows represent solely payments of principal and
interest ("SPPI").
Irrespective of the above, there is an irrevocable option at the moment of initial recognition of the financial asset to classify it as
measured at fair value through profit or loss (if there was no such possibility, the asset would be classified as measured at amortised
cost or at fair value through other comprehensive income), if such approach leads to the more relevant information eliminating or
significantly reducing the inconsistency in the measurement or recognition of assets or liabilities or related gains and losses. The
Bank did not designate any financial assets to be measured at fair value through profit or loss at the moment of their initial
recognition.
Investments in equity instruments are measured at fair value through profit or loss. At initial recognition, an irrevocable option to
recognize them in other comprehensive income may be made regarding the recognition of subsequent changes in the fair value
of an investment in an equity instrument that is not held for trading or a contingent consideration recognised by the Bank as a
business combination in accordance with IFRS 3. If the option to measure the instrument at fair value through other comprehensive
income is exercised, only dividends resulting from this investment are recognised in the statement of profit or loss. Profit or loss
resulting from the measurement in other comprehensive income are not reclassified to the statement of profit or loss.
In the case of equity investments, the Bank did not use the option of fair value measurement through other comprehensive income.
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Business models
The Bank classifies its financial assets to three business models, taking into account the purpose of maintaining a financial
instrument:
Model 1: Receiving contractual cash flows.
Under Model 1, the main business goal is to collect contractual cash flows from the acquired or originated financial assets.
Model 2: Receiving contractual cash flows and sale of financial assets.
Under Model 2, both receiving contractual cash flows and sale of the acquired or originated financial assets are integral elements
of the portfolio's business objective.
Model 3: Other financial assets not classified to Model 1 nor Model 2
In a situation when specific groups of financial assets were not acquired or originated under Model 1 and Model 2, they should be
classified as Model 3. Most often, Model 3 refers to a strategy that assumes the realization of cash flows from the sale of financial
assets or portfolios that are managed based on their fair value.
Assets acquired or originated with impairment identified (POCI assets)
In addition, the Bank distinguishes categories of assets acquired or granted with credit impairment. POCI assets are financial
assets measured at amortised cost, which are impaired at the moment of initial recognition. At the moment of initial recognition,
POCI assets are recognised at their fair value. After initial recognition, POCI assets are measured at amortised cost using the
effective interest rate adjusted for credit risk to determine the amortised cost of the financial asset component and interest income
generated by these assets - the CEIR rate. In the case of POCI exposures, the change in expected credit losses - over the entire
lifetime - compared to those estimated at the date of their initial recognition is recognised in statement of profit or loss. Financial
assets that were classified as POCI at the moment of initial recognition should be treated as POCI in every subsequent period until
they are derecognised from the Bank’s statement of financial position.
SPPI test
For the purpose of classification and subsequent measurement of financial assets, the Bank verifies whether the cash flows from
a given instrument constitute solely the payment of principal and interest calculated on the principal.
For the needs of the assessment of cash flow characteristics, the principal is defined as the fair value of the financial asset at the
moment of initial recognition. Interests are defined as the reflection of the time value of money and credit risk related to the unpaid
part of the principal and other risks and costs associated with the standard loan agreement (e.g. liquidity risk or administrative
costs) and margin.
When assessing whether contractual cash flows constitute solely repayments of the principal and interest, the Bank analyses the
cash flows of the instrument resulting from the contract, i.e. whether the contract contains any provisions that could change the
date of contractual payments or their amount in such a way that, in economic terms, they will not constitute solely repayments of
the principal and interest on the unpaid principal part.
A financial asset is measured at amortised cost if both of the following conditions are met:
• an asset is held by the Bank in accordance with the business model whose purpose is to maintain assets to collect contractual
cash flows,
• contractual terms of the financial asset represent contractual cash flows that are solely payment of principal and interest.
A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:
• an asset is held by the Bank in accordance with the business model, which aims to both receive contractual cash flows and sell
assets,
• the contractual terms of the financial asset represent contractual cash flows that are solely payment of principal and interest.
Other financial assets are measured at fair value through profit or loss.
Modification of financial assets
If the terms of a financial asset agreement change, the Bank assesses whether the cash flows generated by the modified asset
differ significantly from those generated by this asset before the terms of its agreement are modified. If a significant difference is
identified, the original financial asset is derecognised from the statement of financial position, and the modified financial asset is
recognised as a "new" financial asset, which is recognised in its fair value and the new effective interest rate applied to the new
asset is calculated.
If the cash flows generated by the modified asset do not differ significantly from the original cash flows, the modification does not
result in derecognition of the financial asset from the statement of financial position. In such case, the Bank performs recalculation
of the gross book value of the financial asset using modified contractual cashflows discounted using original effective interest rate.
The assessment of whether a given modification of financial assets is significant depends on the fulfilment of qualitative criteria.
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If there is evidence that the modified financial asset is initially impaired due to credit risk, it is necessary to calculate the effective
interest rate adjusted for the credit risk of that financial asset.
Impairment of financial assets
The requirements of IFRS 9 relating to impairment are based on the model of expected credit loss.
The Bank applies a three-step approach to the measurement of expected credit losses from financial instruments measured at
amortised cost or at fair value through other comprehensive income, for which no impairment loss was recognised as at the
moment of initial recognition. As a result of changes in the credit quality since the initial recognition, financial assets are transferred
between the following three stages:
i) Stage 1: An allowance due to expected credit losses in 12-month horizon
If credit risk did not increase significantly from the date of the initial recognition, and the impairment of the loan was not identified
from the moment of its granting, the Bank recognizes an allowance for the expected credit loss related to the probability of default
within the next 12 months. Interest income on such assets is recognised based on the balance sheet amount (amortised cost
before the adjustment for impairment allowance) using the effective interest rate.
ii) Stage 2: An allowance due to expected credit losses for the entire lifetime – significant increase in the credit risk since the
moment of initial recognition and no impairment of a financial asset identified.
In the case of an exposure for which credit risk has increased significantly since the moment of its initial recognition, but no
impairment of the financial asset was identified, an impairment allowance is created for the expected credit loss for the entire
financing period. Interest income on such assets is recognised based on the gross balance sheet amount (amortised cost before
the adjustment for impairment allowance) using the effective interest rate.
iii) Stage 3: An allowance due to expected credit losses for the entire lifetime – impairment of a financial asset
Financial assets are subject to impairment due to the credit risk resulting from an event or events that occurred after the initial
recognition of a given asset. For financial assets, for which an impairment was identified, an allowance is created for the expected
credit loss for the entire financing period, while interest income is recognised based on the net balance sheet value (including the
impairment allowance) using the effective interest rate.
At each balance sheet date, the Bank assesses whether there has been a significant increase in credit risk for financial assets
since the moment of their initial recognition, by comparing the risk of loan default during the expected financing period as at the
balance sheet date and the initial recognition date, using, among others, the internal credit risk assessment system, external credit
ratings, information on delay in repayments and information from internal credit risk monitoring systems, such as warning letters
and information about restructuring.
The Bank assesses whether the credit risk has increased significantly on the basis of individual and group assessment. In order
to perform an impairment calculation on a group basis, financial assets are divided into homogeneous product groups based on
common credit risk characteristics, taking into account the type of instrument, credit risk rating, initial recognition date, remaining
maturity, industry branch, geographical location of the borrower and other relevant factors.
The value of expected credit loss is measured as the current value of all cash flow shortages in the expected life of a financial
asset weighted with probability, and discounted using the effective interest rate. The shortfall in cash flows is the difference between
all contractual cash flows due to the Bank and all cash flows that the Bank expects to collect. The value of the expected credit loss
is recognised in the statement of profit or loss in the impairment losses.
The Bank takes into account historical data on credit losses and adjusts them to current observable data. In addition, the Bank
uses reasonable and justified forecasts of the future economic situation, including its own judgment based on experience, with the
purpose of estimating the expected credit losses. IFRS 9 introduces an application of macroeconomic factors to the calculation of
impairment losses on financial assets. These factors include: unemployment rate, interest rates, gross domestic product, inflation,
commercial property prices, exchange rates, stock indices, and wage rates. IFRS 9 also requires an assessment of both the current
and the forecasted direction of the economic cycles. The inclusion of forecast information in the calculation of impairment losses
on financial assets increases the level of judgement to what extent these macroeconomic factors will affect the expected credit
losses. The methodology and assumptions, including all forecasts of the future economic situation, are regularly monitored.
If in the subsequent period the allowance for expected credit losses decreases, and the decrease can be objectively related to an
event occurring after the impairment was recognised, then the previously recognised impairment allowance is reversed by adjusting
the allowance for expected credit losses. The amount of the reversed impairment allowance is recognised in the statement of profit
or loss.
For debt instruments measured at fair value through other comprehensive income, the measurement of the expected credit loss
is based on a three-step approach, as in the case of financial assets measured at amortised cost. The Bank recognizes the amount
of the impairment loss in the statement of profit or loss, including the corresponding value recognised in other comprehensive
income, without reducing the balance sheet amount of assets (i.e. their fair value) in the statement of financial position.
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Classification and measurement of financial liabilities
Financial liabilities as at the date of their acquisition or establishment are classified into the following categories:
• financial liabilities measured at fair value through profit or loss,
• other financial liabilities (measured at amortised cost).
Financial instruments – other than liabilities measured at fair value through profit or loss – are measured after initial recognition at
amortised cost using the effective interest rate. If a cash flow schedule cannot be determined for a given financial liability and
therefore the effective interest rate cannot be reliably estimated, such liability is measured at amount due.
Compensation
Financial assets and liabilities are compensated and presented in the statement of financial position at net amount, if a valid and
exercisable netting-off right occurs and the Bank intends to settle a financial asset and a financial liability net or simultaneously
settle the amount due.
Securitization
In December 2017, the Bank performed a securitization transaction on the portfolio of cash and car loans of BGZ Poland ABS1
DAC (SPV) subsidiary. The transaction is a traditional and revolving securitization, involving the transfer of ownership of securitized
receivables to SPV.
The company issued, based on securitized assets, bonds secured by a registered pledge on the assets of SPV.
The Bank performed a comprehensive analysis of the transaction, considering that in the light of the provisions of IFRS 9, the
contractual terms of the securitization do not fulfil the conditions for derecognition of the securitized assets. As at the date of the
transaction, the Bank received the initial remuneration from the SPV irrevocably, corresponding to the total nominal value of the
securitized loan portfolio. The transaction uses the mechanism of deferred remuneration payable to the Bank by SPV. Deferred
remuneration corresponds to the SPV result after settling the financing costs and operating costs. Due to the applied deferred
remuneration mechanism, the Bank retains substantially all the risks and rewards associated with the transferred loans. The
deferred remuneration of the Bank, as expected, will be absorbing the entire volatility of cash flows from the portfolios of securitized
loans. The Bank bears this volatility risk as the payment of the deferred remuneration by SPV to the Bank is entirely subordinated
to the SPV's liabilities towards investors in respect of financing.
In connection with the above, the Bank recognizes a liability for cash flows from securitization that are measured with the use of
effective interest rate calculated on the basis of future SPV payments due to liabilities resulting from bonds issued. The
securitization transaction is described in Note 44 Securitization.
Repo and sell buy back transactions
Securities sold under repo and sell buy back transactions are not excluded from the statement of financial position. Liabilities to
counterparties are recognised as financial liabilities under "Liabilities arising from securities sold under repo and sell buy back
transactions". Securities purchased under reverse repo and buy sell back transactions are recognised under “Receivables arising
from securities purchased under reverse repo and buy sell back transactions”. The difference between the sale and repurchase
price is treated as interest and calculated using the effective interest method over the agreement term.
Investments in subsidiaries and associates
Investments in subsidiaries and associates are measured at the acquisition price less impairment allowance in the separate
financial statements of the Bank.
Principles for recognition and derecognition of financial assets and liabilities from the statement of financial position
The Bank recognizes a financial asset or liability when it becomes a party to the contract of such an instrument. Standardized
purchase and sale transactions of financial assets are recognised at the date of the transaction, which is the date when the Bank
is required to purchase or sell a given financial asset. Standardized transactions for the purchase or sale of financial assets are
transactions whose contractual terms require the delivery of an asset in the period resulting from the applicable regulations or
conventions adopted on a given market. Standardized purchase or sale transactions refer in particular to FX spot FX transactions,
the spot leg in FX swap transactions and securities purchase and sale transactions, where, normally, two business days pass
between the transaction date and the settlement date, except for repo transactions.
The Bank derecognizes a financial asset when :
− contractual rights to cash flows from a financial asset expire, or
− the Bank transfers contractual rights to receive cash flows from a financial asset.
Transfer takes place:
− in a transaction in which the Bank transfers substantially all risk and all benefits associated with the financial asset component,
or
− when the Bank keeps contractual rights to receive cash flows from a financial asset, but takes contractual obligation to transfer
cash flows from a financial asset to the entity outside the Bank.
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2.16. Fixed assets held for sale
Fixed assets (or held for sale groups) classified as held for sale are measured at the lower of the following values: carrying amount
or fair value less costs to sell.
Fixed assets and groups of assets are classified as held for sale, if their balance sheet amount will be recovered as a result of the
sale. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its
present condition. The classification as an asset held for sale assumes that the Bank’s Management intends to complete the sale
within one year from the date of reclassification.
A discontinued operation is a component of the Bank that either has been disposed of, or is classified as held for sale, and (a)
represents a separate major line of business or geographical area of operations, (b) is part of a single coordinated plan to dispose
of a separate major line of business or geographical area of operations or (c) is a subsidiary acquired exclusively with a view to
reselling.
Fixed assets held for sale include fixed assets repossessed for debt, meeting the requirements of IFRS 5 as described above.
2.17. Investment properties
Investment properties include properties treated as a source of revenue from lease and/or maintained due to a potential value
increase.
Investment property is recognised in assets when and only when:
- obtaining economic benefits from this property is probable, and
- its cost of acquisition or development can be reliably measured.
Upon initial recognition, investment properties are measured at the acquisition price including transaction costs.
The Bank adopted the principles of measuring investment properties at fair value as at subsequent balance sheet dates.
Gains resulting from changes in fair value of investment property are recognised in the statement of profit or loss as other operating
income in the period in which the change has occurred, while losses are charged to other operating expenses in the period in
which the change has occurred.
Real estate and land repossessed for debt are recognised as investment properties, unless they meet the criteria allowing their
classification as fixed assets held for sale.
2.18. Intangible assets
Intangible assets acquired in a separate transaction are initially measured at acquisition or development cost.
The Bank determines whether the useful life of intangible assets is defined or indefinite. Intangible assets with defined useful life
are amortised over their useful life and tested for impairment each time when an impairment trigger occurs, at least once a year.
The period and method of amortization for intangible assets with defined useful life are verified at the end of each financial year.
Changes in the expected useful life or the manner of consuming economic benefits arising from a given asset are recognised
through a change in the amortization period or method, respectively, and treated as changes in estimates. Amortization charges
on intangible assets with a defined useful life are recognised in the statement of profit or loss under “Amortization”.
Except for research and development works, internally generated intangible assets are not recognised as assets, and
expenditures on their generation are charged to the statement of profit or loss for the year in which they have been incurred.
Intangible assets with indefinite useful life and those not used are annually tested for impairment individually or on the level of
cash generating unit. Other intangible assets are subject to annual impairment tests.
Purchased software licenses are capitalized in the amount of costs incurred for the purchase of a given software and its adaptation
for use. Capitalized costs are amortised over an estimated useful life of the software. Software development or maintenance costs
are charged to expenses when incurred. Expenditure directly related to the production of identifiable and unique computer
programs controlled by the Bank, which will probably bring economic benefits exceeding the expenditure within a period exceeding
one year, is classified to intangible assets. Direct costs include personnel expenses related to software development and a
corresponding portion of general expenses. Costs related to software development, included in the initial value of assets, are
amortised over the estimated useful life of these assets.
Amortization of intangible assets is calculated using the straight-line method in order to spread out the initial asset value or its
amount revalued over the useful life, different for each intangible asset group:
licenses
14.0 – 50.0%
copyrights
20.0 – 50.0%
The useful lives of intangible assets are verified at the end of each reporting period and adjusted if necessary.
Amortised intangible assets are tested for impairment in each case when events or circumstances indicate that their balance sheet
amount may be irrecoverable. In such cases, the balance sheet amount is immediately reduced to the recoverable amount if the
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former exceeds the estimated level of the latter. The recoverable amount is equal to the fair value less the sell costs or the value
in use, whichever is higher.
Gain or loss from disposal of intangible assets is determined by comparison of sales proceeds with their balance sheet amount
and recognised in the statement of profit or loss in other operating income or expenses.
2.19. Property, plant and equipment
Property, plant and equipment are recognised at the acquisition price or development costs less depreciation charges and
impairment allowance. The initial amount of fixed assets includes their acquisition price increased by all costs directly related to
their purchase and adaptation for use. The cost includes also cost of replacement of parts of plant and machinery when incurred,
if the recognition criteria are met. Costs incurred after the date the fixed asset is transferred for utilization, such as costs
of maintenance and repair, are charged to profit or loss when incurred.
Upon acquisition, property, plant and equipment items are divided into components of material value to which separate useful life
may be assigned. Costs of overhauls are also a component.
Land is not depreciated. Depreciation of other fixed assets is calculated using the straight-line method in order to spread out
the initial asset value or its revalued amount less residual value over the useful life, different for each asset group:
buildings and leasehold improvements
2.5 – 20.0%
machines and equipment
10.0 – 20.0%
computer sets
20.0%
The residual value and useful lives of property, plant and equipment are verified at the end of each reporting period and adjusted
if necessary.
Depreciated property, plant and equipment are tested for impairment at least annually, in each case when events or circumstances
indicate that their balance sheet amount may be irrecoverable. In such cases, the balance sheet amount is immediately reduced
to the recoverable amount if the former exceeds the estimated level of the latter. The recoverable amount is equal to the fair value
less costs to sell or the value in use, whichever is higher.
If the recoverable amount is lower than the current balance sheet amount of an asset, an impairment allowance is charged to the
statement of profit or loss.
Gain or loss from disposal of property, plant and equipment is determined by comparison of sales proceeds with their balance
sheet amount and recognised in the statement of profit or loss in other operating income or expenses.
2.20. Hedge accounting
The Bank selected the accounting policy in the area of hedge accounting and decided to continue applying the hedge accounting
principles in accordance with IAS 39 "Financial Instruments: Recognition and Measurement" until the end of works of the
International Reporting Standards Board on the guidelines for macro hedge accounting (Macro hedging).
Hedge accounting recognizes the compensation effects of changes in the fair value measurement of hedging and hedged items
affecting the statement of profit or loss. Pursuant to the adopted hedge accounting principles, the Bank designates certain
derivatives as hedges of fair value and future cash flows of certain assets, provided the criteria determined in IAS 39 are met.
Hedge accounting is used to account for hedging relationships if all of the following conditions are met:
• at the inception of the hedge there is a formal designation and documentation of the hedging relationship and the Bank’s risk
management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging
instrument, the hedged item, the nature of the risk being hedged and how the Bank will assess the hedging instrument’s
effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk;
• the hedge is expected to be highly effective in offsetting changes in fair value or cash flows attributable to the hedged risk,
consistently with the originally documented risk management strategy for that particular hedging relationship;
• for cash flow hedges, a forecast transaction that will be hedged must be highly probable and must present an exposure to
variations in cash flows that could ultimately affect profit or loss;
• the effectiveness of the hedge can be reliably measured, i.e. the fair value or cash flows of the hedged item that are attributable
to the hedged risk and the fair value of the hedging instrument can be reliably measured;
• the hedge is assessed on an ongoing basis and determined actually to have been highly effective throughout the financial
reporting periods for which the hedge was designated.
Fair value hedge
Changes in the fair value measurement of financial instruments designated as hedged items are charged to the statement of profit
or loss in the portion arising from the risk subject to hedge. The remaining portion of the change in the balance sheet amount is
booked in accordance with general principles applicable to the particular class of financial instruments.
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Change in the fair value measurement of financial instruments designated as hedged items is presented in the statement of
financial position as Differences from hedge accounting for macro fair value hedge or as Differences from hedge accounting for
micro fair value hedge.
Changes in the fair value measurement of derivatives designated as hedging instruments under hedge accounting are entirely
recognised in the statement of profit or loss under the same item as results of changes in the value of the hedged items, i.e. in the
Result on hedge accounting.
Cash flow hedge
The effective part of changes in the fair value of derivative instruments designated and qualified as cash flow hedges is recognised
in other comprehensive income. The profit or loss relating to the ineffective part is presented in the statement of profit or loss for
the current period.
Amounts recognised in other comprehensive income are included in revenues or costs of the same period in which the hedged
item will affect the statement of profit or loss.
If the hedging instrument expired or was sold, or when the hedge no longer meets the hedge accounting criteria, any accumulated
profits or losses recognized at this moment in other comprehensive income remain in other comprehensive income until the
forecast transaction is recognised in the statement of profit or loss. If the forecasted transaction is no longer considered probable,
total gains and losses recognised in other comprehensive income are immediately transferred to the statement of profit or loss.
2.21. Provisions
Provisions are created when the Bank is subject to an obligation (legal or constructive) resulting from past events and it is probable
that the fulfilment of such obligation will create a liability and where a reliable estimate of the amount of that liability can be made.
If the Bank expects reimbursement of the expenditure required to settle the provision (for example, through insurance contracts),
the reimbursement is recognised as a separate asset, but only when it is virtually certain that reimbursement will be received. The
costs relating to the provision are recognised in the statement of profit or loss less any reimbursement amount. If the impact of
time value of money is material, the provision is determined by discounting projected future cash flows to the present value with a
gross discount rate that reflects current market assessment of time value of money and a possible risk pertaining to a liability. An
increase in provision over time is recognised as interest expense.
A provision for restructuring costs is recognised when general provision recognition criteria are met, as well as detailed ones
regarding the occurrence of an obligation to recognize a provision for restructuring costs determined in IAS 37. In particular, the
constructive obligation to perform a restructuring procedure occurs only when the Bank has a detailed, formal restructuring plan
and has raised justified expectations of parties involved in the plan that the restructuring would be performed in the form of initiating
its implementation or announcing its key elements to these parties.
A detailed restructuring plan determines at least the operations involved or their part, the key locations to be included, the place of
employment, positions and approximate number of employees to be compensated in exchange for termination of their employment,
the amount of outlays to be incurred and the plan implementation deadline.
A restructuring provision includes only direct outlays arising from the restructuring, which:
a) are an indispensable effect of the restructuring procedure and
b) at the same time are not related to current operations of the entity.
The restructuring provision does not cover costs such as:
a) training of remaining employees or reassignment of employees;
b) marketing; or
c) investment in new distribution systems and networks.
Restructuring provision does not include future operating expenses.
2.22. Leases
Bank as a lessee
On the commencement date of the lease, the Bank recognizes the lease liability (liability to make lease payments) and the asset
that constitutes the right to use the subject of the lease for the duration of the leasing contract (right to use an asset).
In determining the lease term, the Bank considers all relevant facts and events creating economic incentives to exercise the option
to renew or not to exercise an option to terminate. The Bank reassesses the length of the lease term in case of a significant event
or a significant change in circumstances that affects the assessment made previous
For contracts with indefinite duration relating to the Bank's branch offices, the Bank has adopted a lease term consistent with the
period of depreciation of the unamortised investments made in these properties at the date of implementation of the standard, or
in the absence of such investments, a 3-year period, taking into account the significant costs associated with changing the location
of the branches during their operation.
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The Bank applies the exemptions provided for in IFRS 16 and does not recognize the asset components due to the right of use in
the case of short-term leases and leases covering components of low-value assets. Short-term leases are defined as leases with
a period of no longer than 12 months as at the beginning date (including periods for which the lease can be extended, if it can be
assumed with reasonable assurance that the lessee will exercise that right) and do not include a call option. Low-value assets are
those which have a value of no more than EUR 5,000.
On the commencement date, the lessee measures the lease liability based on the current value of lease payments remaining to
be paid as at that date. Lease payments are discounted using the interest rate of the lease, if such a rate can be easily determined.
Otherwise, the lessee applies the marginal interest rate of the lessee. The lessee's marginal interest rate is the interest rate that
the lessee would have to pay to borrow the funds necessary to purchase a right-of-use asset of similar value for a similar term and
with similar collateral in a similar economic environment. The Bank determines the marginal interest rate for all contract types on
the basis of the average funding rate in the currency concerned.
The following elements are included in the measurement of leasing liabilities:
fixed payments, less any lease incentives receivable,
variable lease payments that depend on an index or a rate,
amounts expected to be payable by the lessee under residual value guarantees,
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option,
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.
Floating fees, which do not depend on the index or rate and do not have a certain minimum level, are not included in the value of
the lease liability. These fees are recognised in the statement of profit or loss in the period when the event that causes their maturity
occurred.
On the commencement date, the lessee measures an asset due to the right to use at its cost. The cost of an asset due to the right
of use should include:
the initial value of the lease liability,
leasing payments made at the time or before the conclusion of the contract less any incentives received,
all initial costs incurred by the lessee, and
estimated costs of dismantling and removing the underlying asset, that must be incurred by the Bank in connection with the
asset included in the agreement in order to restore the place in which the asset is located or the asset itself to the conditions
required under the leasing contract.
After the initial recognition, the right of use is reduced by depreciation and total impairment losses and adjusted in connection with
the revaluation of the lease liability due to changes in the lease, which do not require the recognition of a separate lease component.
Assets with to the right of use are amortised on a straight-line basis over the shorter of two periods: the leasing period or the useful
life of the underlying asset, unless the Bank has sufficient certainty that it will obtain ownership before the end of the leasing period
- then the right to use is depreciated from the day of commencement until the end of the asset's useful life.
Bank as a lessor
Lease contracts under which substantially all of the risks and gains incidental to the ownership of the asset are transferred to the
lessee are classified as financial lease agreements. In the statement of financial position the value of receivables in the amount
equal to the net investment in the lease is recognised. The recognition of revenues from financial leasing contracts is performed
in a manner reflecting the constant periodic rate of return on the net investment in the lease made by the Bank under finance lease.
The Bank does not offer operating lease products, i.e. such products in which all risks and rewards incidental to ownership of the
assets are transferred to the lessee.
2.23. Financial guarantees
On initial recognition, a financial guarantee contract is measured at fair value.
Financial guarantees after initial recognition are measured at the higher value of:
the amount of the impairment loss determined in accordance with the principles applicable to impairment losses for assets
measured at amortised cost in accordance with IFRS 9,
the amount initially recognised less the cumulative income recognised in accordance with the principles of IFRS 15.
For loan commitments and financial guarantee contracts, the date on which the Bank becomes a party to the irrevocable
commitment is considered as the date of initial recognition for the purpose of applying the impairment requirements.
2.24. Employee benefits
The Bank creates a provision for future liabilities due to retirement, disability and post-mortem benefits, unused annual holiday,
restructuring of employment and for incentive and retention programs. Provisions for retirement, disability and post-mortem benefits
are created using the actuarial method, as described in Note 3f and 11 hereof.
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Employees of the Bank are entitled to the following benefits:
Retirement, disability and post-mortem benefits
Retirement benefits classified as post-employment defined benefit plans are available upon retirement for pensioners or disability
pensioners. The term of employment includes all previously completed periods of employment based on an employment contract.
Liabilities due to unused annual holiday
Provisions for unused holiday leave are calculated as the product of the daily basic salary and the number of outstanding leave
days as at the end of the reporting period, including surcharges for Social Insurance Institution (ZUS) benefits. Provisions for
the unused holiday leave are presented in the separate financial statements under “Other liabilities”.
Benefits arising from the variable remuneration program
On 9 December 2021, the Supervisory Board of BNP Paribas Bank Polska S.A. approved an amended Remuneration Policy for
persons with a material impact on the risk profile of BNP Paribas Bank Polska S.A. (hereinafter: the Policy). The changes were
related, among others, to the need to adjust the Policy to the provisions of the Regulation of the Minister of Finance, Funds and
Regional Policy of 8 June 2021 on the risk management system and internal control system and remuneration policy in banks.
Performance evaluation of individuals included in the program underlies the calculation of the variable remuneration Policy.
Under the current remuneration scheme, the variable remuneration is divided into:
- a non-deferred and deferred part and a part granted in the form of a financial instrument, which is the Bank's shares (settled in
accordance with IFRS 2)
- a remaining deferred part granted in cash (settled in accordance with IAS 19 "Employee benefits").
The right to variable remuneration in the form of Bank shares is granted by issuing subscription warrants in a number corresponding
to the number of shares granted, one warrant entitles to acquire one share. Payment of the variable remuneration expressed in
the form of Bank shares, i.e. acquisition of Bank shares through exercise of rights from subscription warrants, takes place after the
expiry of the retention period.
The retention period is at least 5 years for Senior Management and a minimum of 4 years and a maximum of 5 years for staff other
than Senior Management. A maximum deferral period of 5 years is applied when Variable Remuneration is assigned in the amount
exceeding an amount considered as a particularly high amount. The deferred part of the variable remuneration is divided into equal
parts according to the number of years of the deferral period.
The cash payments under the programme are recognised in line with the projected unit credit method and settled over the vesting
period (i.e. both in the evaluation period understood as the year in service to which the benefit pertains and in the period
of deferring relevant portions of the benefit). The benefit value is recognised as a liability to employees in correspondence with
the statement of profit or loss.
Liabilities due to restructuring of employment
In connection with the implemented process of group layoffs at BNP Paribas Bank Polska S.A., the Bank paid a severance pay for
employees made redundant at the initiative of the employer and for employees covered by voluntary departure schemes.
Liabilities due to incentive – retention programs
The programmes have been completed by the reporting date, except for the deferred parts concerning individuals with significant
influence on the Bank's risk profile, in accordance with the Bank's policy in this respect.
2.25. Capital
Share capital
Registered share capital is disclosed at its nominal value, in accordance with the statute and the entry in the court register.
Own shares
If the Bank purchases its own shares, the amount paid reduces equity as treasury shares until their cancellation. Should these
shares be sold or re-allocated, the payment received is recognised in equity.
Supplementary capital from the sale of shares above their par value
The supplementary capital is created from the issue premium obtained from the issue of shares, reduced by the direct costs
incurred with the issue.
The costs directly related to the issue of new shares, after deduction of income tax, reduce the proceeds from the issue included
in the equity.
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Other capital
Other capital: spare capital, reserve capital and general risk funds are created from profit allocations and are designated for
purposes specified in the statute or other legal regulations.
Other capital items
Other equity items are created as a result of:
- valuation of financial assets at fair value through other comprehensive income,
- actuarial profits and losses related to post-employment benefits,
- valuation of derivatives as part of cash flow hedge accounting with reference to the effective part of the hedge.
2.26. Custody operations
BNP Paribas Bank Polska S.A. performs custody operations including maintaining securities accounts of its customers.
Assets managed under the custody services are not included in the present financial statements as they do not meet the definition
of Bank’s assets.
2.27. Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents include items that mature within three months from
their acquisition date, including cash in hand and non-restricted cash at the Central Bank (current account), statutory reserve
account and receivables from other banks (including nostro accounts).
3. ESTIMATES
The Bank makes estimates and assumptions which affect the value of its assets and liabilities in the subsequent period.
The estimates and assumptions, which are reviewed on an ongoing basis, are made based on prior experience and considering
other factors, including expectations as to future events, which appear reasonable in specific circumstances.
a. Impairment of financial assets
The assessment of impairment of financial assets in accordance with IFRS 9 requires estimates and assumptions, especially in
the areas of estimates of the value and timing of future cash flows, the value of collaterals established, or the assessment of a
significant increase in credit risk.
The assessment of impairment in accordance with IFRS 9 covers financial assets measured at amortised cost and financial assets
measured at fair value through other comprehensive income as well as loan commitments. The recognition of expected credit
losses depends on the change in the level of credit risk recorded since the moment of initial recognition of the financial asset.
Financial assets are subject to the assessment as to whether there are any events of default.
The requirements of IFRS 9 relating to impairment are based on the model of expected credit loss.
Financial instruments subject to the assessment in terms of impairment are classified into one of three stages based on the
assessment of changes in credit quality observed since initial recognition:
i. Stage 1: An allowance due to expected credit losses in 12-month horizon
If the credit risk did not increase significantly from the date of the initial recognition, and the event of default did not occur from the
moment of granting the financial instrument, the Bank recognizes an allowance for the expected credit loss within the next 12-
month horizon.
ii. Stage 2: An allowance due to expected credit losses for the entire lifetime – no event of default identified
In the case of financial instruments, whose credit risk has increased significantly since the moment of their initial recognition, but
no event of default occurred, an impairment allowance is created for the entire remaining financing period, considering the
probability of the occurrence of the event of default.
iii. Stage 3: An allowance due to expected credit losses for the entire lifetime – event of default
In the case of financial instruments for which the event of default occurred, an allowance for the expected credit loss is created
for the entire remaining financing period.
In order to assess whether there has been a significant increase in credit risk since the initial recognition of the financial instrument
(Stage 2), the Bank compares the risk of default during the expected period of financing granted as at the balance sheet date and
the date of initial recognition. For this purpose, the Bank applies an internal credit risk rating system, information on delay in
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repayments (over 30 days of delay) and information from internal credit risk monitoring systems, such as warning letters and
information about restructuring.
For exposures classified as Stage 2, if in subsequent periods the credit quality of the financial instrument improves and previous
conclusions regarding a significant increase in credit risk since initial recognition are reversed, the exposure is reclassified from
Stage 2 to Stage 1 and the allowance for expected credit losses for these financial instruments is calculated over a 12-month
horizon.
For the purpose of identifying exposures eligible for Stage 3, the Bank uses a single definition of defaulted exposures and a
definition of impaired exposures, and classification is based on the principles of the default triggers.
The principal event of default is a delay in repayment of more than 90 days (or more than 30 days for exposures with granted
facilities) of a material amount of a past due credit obligation. In addition, other indications are taken into account, including in
particular:
restructuring,
granting of a facility where the exposure is granted a facility or restructured,
granting of a facility without significant economic loss where at least one of the following conditions is met
o a large lump sum payment towards the end of the repayment schedule;
o irregular repayment schedule, with significantly lower payments at the beginning of the repayment schedule;
o significant grace period at the beginning of the repayment schedule;
o exposures to an obligor that are subject to distress restructuring on more than one occasion.
suspicion of fraud (including economic crime or any other criminal offence related to the credit exposure),
information has been received about the submission of an application for restructuring proceedings within the meaning of the
Act on Restructuring Law,
filing of an application for commencing enforcement proceedings by the Banks or becoming aware of the fact that enforcement
proceedings against the debtor are being conducted in the amount which, in the opinion of the Bank, may result in the loss of
creditworthiness,
becoming aware of the fact of filing of an application for declaring the debtor bankrupt (liquidation, consumer), putting the
debtor into liquidation, dissolution or cancellation of the company, appointment of a curator, appointment of a receiver over
the debtor's activity,
filing of an application for bankruptcy proceedings, a declaration of bankruptcy or becoming aware of the dismissal of the
bankruptcy application due to the fact that the debtor's assets are insufficient or sufficient only to meet the costs of the
bankruptcy proceedings,
termination of the credit agreement,
submission by the Bank of an application to initiate enforcement proceedings against the customer,
granting of a public moratorium,
customer disputing the on-balance sheet credit exposure through legal proceedings,
financial difficulties identified during the customer monitoring/review process or on the basis of information obtained from the
customer in the course of other activities,
significant deterioration in customer rating.
In determining the materiality level of a past due credit obligation, the Bank takes into account the thresholds contained in the
"Regulation of the Minister of Finance, Investment and Development dated 3 October 2019 on the materiality level of a past due
credit obligation".
A past due credit commitment is considered material when both materiality thresholds are exceeded together:
1) the amount of past due liabilities exceeds PLN 400 for retail exposures or PLN 2,000 for non-retail exposures, and
2) the share of past due liabilities in the exposure is greater than 1%.
Accordingly, the calculation of the number of overdue days for the purpose of determining a default event starts once both of the
aforementioned thresholds are exceeded.
While reclassifying the exposure from Stage 3 to Stage 2 or Stage 1, the Bank considers quarantine period, according to which a
credit exposure with recognised objective trigger of impairment may only be reclassified into Stage 2 or Stage 1 if the customer
has been servicing the receivable on time for a specified number of months. The required quarantine period differs depending on
the customer type. Its length is determined by the Bank on the basis of historical observations which allow for determining
the period after which the probability of default decreases to the level comparable to that of other exposures classified to
the portfolio with no indications of impairment.
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Description of the methods used to determine the allowance for expected credit losses
The individual valuation is performed by the Bank for individually significant financial assets, for which the event of default was
identified. It consists in the individual determination of the allowance for expected credit losses. During the individual valuation, the
Bank determines expected future cash flows and impairment allowance is calculated as the difference between the present value
(balance sheet amount) of a financial asset which is individually significant and the value of future cash flows generated by that
asset, discounted using the effective interest method. Cash flows from collateral are taken into account for purposes of estimating
future cash flows.
The following assets are measured collectively:
classified as individually insignificant;
classified as individually significant, for which the event of default was not identified.
The value of the impairment allowance for the expected credit losses depends on, among others, the type of credit exposure,
rating of the client, collateral type and value (for selected portfolios), which translate into the parameters such as the probability
of default (PD) parameter, loss given default (LGD) parameter and credit conversion factor (CCF).
The amount of collective impairment allowances is determined with the application of statistical methods for defined exposure
portfolios which are homogenous from the perspective of credit risk. Homogeneous exposure portfolios are defined based on,
among others, customer segment and type of credit products. The criteria applied by the Bank to define homogeneous portfolios
are aimed at grouping exposures so that the credit risk profile is reflected as accurately as practicable and, consequently, so as
to estimate the level of allowances for the expected credit losses on financial assets as objectively and adequately as possible.
In order to adequately reflect the impact of the COVID-19 situation in the valuation of the loan portfolio, the Bank monitors the
loan portfolio for risks related to the epidemiological situation. In particular, when determining impairment losses, the Bank takes
into account the impact of macroeconomic scenarios and the specific characteristics of the portfolio of customers particularly
exposed to the impact of the pandemic, including customers receiving public support and those operating in industries exposed
to the risk related to COVID-19.
In 2021 due to lower than anticipated negative impact of the COVID-19 pandemic, the Bank released PLN 27 093 thousand of
provisions.
The amount includes an impact of macroeconomic assumption resulting in a release of PLN 149 223 thousand and additional
COVID provisions created for particularly vulnerable segments of PLN 122 130 thousand.
Additional COVID provisions were created under the assumption, that materialization of negative COVID effects on the credit
quality will be delayed (amongst others due to public support, which improved the financial and liquidity situation of the clients).
The Bank increased the level of provisions related to this factor from PLN 78 000 thousand as of EOY 2020 to PLN 200 130
thousand as of 31 December 2021. Provisions for the corporate segment where estimated based on a simulation of decline in
income due to the COVID pandemic. For the Personal Finance portfolio, the provisions are based on applying shock changes to
PD parameters for clients employed in sectors which were impacted by the pandemic.
Regardless of the discussed above COVID provisions, considering new hazards which include high inflation and increase of energy
prices, the Bank created an additional PLN 44 800 thousand of provisions. The provisions were estimated based on simulation
analyses for portfolios particularly exposed to these risk factors.
In addition, in the fourth quarter of 2021, provisions of PLN 65,170 thousand were created in connection with amendments to the
Code of Civil Procedure affecting expected recovery levels on the portfolio of loans to individual farmers.
The Bank implemented rules and IT solutions in line with the EBA guidelines on the application of the definition of default as set
out in Article 178 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26.06.2013 on prudential
requirements for credit institutions and investment firms. A two-step approach was applied to align its operations with the
requirements of the new definition of default under the EBA Guidelines. In the first stage, i.e. as at 31 December 2020, the Bank
introduced relative and absolute thresholds for the determination of material past due, resulting from the Regulation of the Minister
of Finance, Investment and Development of 3 October 2019 on the level of materiality of past due credit liabilities. The absolute
threshold was set at PLN 400 for retail exposures and PLN 2,000 for non-retail exposures. The relative threshold was defined as
the share of past due liabilities in total exposure greater than 1%.
In the second stage, i.e. as of 1 January 2021, the Bank aligned its operations with the remaining requirements of the EBA
Guidelines. Significant changes introduced in connection with the implementation of the new definition of default include:
establishing the level of recognition of default and calculation of overdue liabilities (customer or exposure level depending on
the portfolio),
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changing the calculation of the number of past due days to a mechanism of continuous material past due (only repayment
decreasing the past due liability below one of the two materiality thresholds will result in discontinuation of the calculation of
past due days)
the introduction of a new default trigger based on NPV loss, and
the introduction of the concept of technical past due (not resulting in classification into default status).
As a result of the introduction of the amended rules, the change in classification and adequate recalculation of risk parameters
resulted in the released allowances in the amount of PLN 23,336 thousand on a separate basis.
Allowances for the expected credit losses on financial assets are back-tested on a regular basis. The models of risk parameters
used for purposes of estimating impairment allowances are covered by the model management process, which specifies
the principles of their development, approval and monitoring (including model back-testing). Additionally, there is a validation unit
in the Bank, which is independent of the owners and users of the models. The tasks of the unit include: annual validation of risk
parameters considered to be significant. The process of validation covers both qualitative and quantitative approach. The process
of estimating impairment allowances is subject to periodic functional control and verified independently by the Bank’s internal audit.
In order to calculate the sensitivity of the level of allowances related to the realisation of macroeconomic scenarios, the Bank used
the method of changing the weights of the pessimistic, baseline and optimistic scenarios in accordance with their application
consistent with IFRS 9.
The impact of particular scenarios is presented in the table below:
Analysis/scenario
The percentage change
in the amount of
allowance
Pessimistic scenario – considering pessimistic and baseline scenarios only
5%
Optimistic scenario – considering optimistic and baseline scenarios only
-3%
Baseline scenario – uniform distribution of optimistic and pessimistic scenarios
1%
The sensitivity of the level of allowances results directly from the counter-cyclical nature of the calculation of weights assigned to
individual macroeconomic scenarios. Counter-cyclicality is expressed in reducing the weight for the pessimistic scenario as the
recession deepens, and in reducing the impact of the optimistic scenario in the event of an "overheating" of the economy.
In addition, the impact of the estimated change in the level of allowances due to scenarios of changes in risk parameters is
presented below.
Analysis/scenario
The percentage change
in the amount of
allowance
PD decrease by 10%
-4%
PD increase by 10%
4%
LGD decrease by 10%
-10%
LGD increase by10%
9%
Climate issues
The European Securities and Markets Authority (ESMA) in its annual public statement, setting out the European common
supervisory priorities for annual financial reports for 2021, identified climate-related issues as one of the priorities. The International
Accounting Standards Board, in material published in November 2020, highlighted that certain IFRS standards require the impact
of climate-related issues to be taken into account if the impact is material. When considering the need to disclose climate-related
risks, the Bank takes into account the requirements for determining materiality of financial information in paragraph 7 of IAS 1.
According to these requirements, the Bank should consider both quantitative factors and qualitative factors, as well as the
interactions between the factors, when assessing whether or not the information is material.
In 2021, in response to the requirements of the EBA/GL/2020/06 Guideline of 29 May 2020 on lending and monitoring, the Bank
developed ESG assessment questionnaires, which were implemented in the lending process. According to the timetable for the
implementation of the Guidelines, in Phase I the assessment is carried out for Customers for whom new financing or an increase
in financing is being processed. The purpose of the assessment is to identify any risks related to ESG factors affecting the financial
position of the customers, as well as the impact of the customers' business activities on ESG factors (double materiality principle).
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Environmental risks are subject to special analysis by the Bank. They may materialise through:
1) physical risks related to environmental degradation, as well as climate change, including the occurrence of:
a) long-term climate change,
b) extreme weather events,
2) transition (transformation) risks resulting from the need to adapt the economy to gradual climate change, in particular to the
use of low-carbon and more environmentally sustainable solutions, including the occurrence of:
a) regulatory risk (changes in climate and environmental policies),
b) technological risks (a technology with a less damaging effect on the climate or the environment replaces a more damaging
technology, making it outdated),
c) changes in market sentiment and social norms,
3) liability risk arising from the Bank's exposure to counterparties that could potentially be held liable for the negative impact of
their activities on environmental, social and corporate governance factors.
The assessment of the impact of long-term climate change and extreme weather events on the activities carried out by customers,
is taken into account by the Bank, in the process of granting and monitoring loans, in accordance with the following systematics:
Long-term climate changes:
Extreme weather events:
impact of higher temperatures
impact of heat waves
impact of temperature shocks
impact of cold waves
impact of changing wind patterns
impact of fires
impact of changing rain/snow-fall patterns and types
impacts of storms, tornadoes, etc.
impact of sea level rise
impact of droughts
impact of water stress (reduced access to water)
impact of heavy rain/snow-falls
impact of soil and coastal erosion
impact of floods
impact of soil degradation
impact of landslides
In the Bank's view, the impact of climate and environmental risks does not materially affect the level of credit risk, so the Bank
does not isolate these risks in the calculation of expected credit losses.
However, the Bank recognises that climate and environmental risks may represent a material risk to businesses and a systemic
risk to the economy, so it is taking steps to collect relevant data on these risks.
b. Classification of financial instruments
When classifying financial instruments in accordance with IFRS 9, the Bank used the assessment of business models for
maintaining financial assets and assessing whether the contractual terms related to a financial asset resulted in cash flows that
were solely payment of principal and interest on the principal amount remaining to be repaid.
c. Fair value of derivative instruments
The fair value of derivative instruments which are not quoted on active markets is determined using measurement techniques (e.g.
models). Such methods are evaluated and verified periodically by qualified independent employees who have not participated in
their development. All models require approval before use as well as calibration to ensure that the results reflect actual data and
comparable market prices. The models used at present rely on the data obtained from Reuters and/or Bloomberg information
systems. Derivative instruments are measured on the basis of generally acceptable models. Linear instruments are measured
using the discounted cash flow method while plain vanilla options using the Black-Scholes model. Other options included in
structured deposits are measured either through decomposition into vanilla options or through Monte Carlo simulations.
Credit Valuation Adjustment / Debit Value Adjustment (CVA/DVA) is estimated for all derivatives which are active at a specific
date. The adjustment (counterparty credit risk exposure and default risk) is determined based on the projected future exposure
resulting from the instrument, counterparty rating and collateral provided/accepted.
d. Fair value of securities
Securities, for which no liquid market exists, are measured using the discounted cash flow model. As regards securities classified
to the level in the fair value hierarchy, the credit risk margin is a non-observable parameter corresponding to the market margin for
instruments with similar characteristics.
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e. Impairment of fixed assets
At the end of each reporting period, the Bank verifies whether there is any objective impairment trigger concerning its fixed assets.
If such triggers have been identified, the Bank estimates the recoverable amount. Determination of the value in use of a fixed asset
requires the Bank to make assumptions as to the estimated amounts, dates of future cash flows that may be generated by the
Bank on the fixed asset as well as other factors. When estimating the fair value less costs to sell, the Bank relies on available
market data or valuations of independent appraisers, which generally are also based on estimates.
f. Provisions for retirement, disability and post-mortem benefit obligations
The Bank creates provisions for retirement, disability and post-mortem severance pay ("severance"), in accordance with IAS 19.
The provisions are calculated for each employee separately, using the actuarial method of projected unit credit as at the date of
valuation. The calculations take a number of factors into account, including macroeconomic conditions, employee turnover, risk of
death and others. The basis for calculating the provision for employees is the anticipated value of severance pay which the Bank
is to pay pursuant from the Remuneration Regulations in force at the Bank. The anticipated severance pay is calculated as the
resultant of:
• the expected severance base, in accordance with the provisions of the Collective Bargaining Agreement,
• the expected increase in the severance base from the moment of valuation until the payment of severance,
• the recommended proportional dependence on seniority (in accordance with the provisions of the Collective Labour
Agreement),
• gradual rights to services, unique for each team and proportional to their seniority at the Bank.
The projected value is discounted actuarially at the end of each quarter. In accordance with the requirements of IAS 19, the financial
discount rate for calculating the current value of liabilities related to employee benefits is determined on the basis of market yields
on treasury bonds whose currency and maturity date are consistent with the currency and the estimated date of the benefit
obligations. The actuarial discount is the product of the financial discount, the probability of a person's continued employment at
the Bank until the severance is required, and the probability of the need for a particular benefit (e.g. the probability of acquiring a
disability). The value of annual write-offs and the probability are projected with the use of models which take the following three
risks into account:
• possibility of dismissal from work,
• risk of inability to work,
• risk of death.
The possibility of dismissal from work is estimated trough a probability distribution, based on the Bank's statistical data. The
likelihood of dismissal depends on the age of the employee and is constant throughout each year of work. The risks of death and
disability were estimated based on analyses of the latest statistical data on life expectancy in Poland (for men and women) as well
as historical data published by the Central Statistical Office and the Social Security Office.
Provisions resulting from actuarial valuation are updated quarterly.
Sensitivity analysis
The table below presents the impact of a 1 p.p. change in the relevant actuarial assumptions on liabilities due to retirement,
disability and post-mortem severance as at 31 December 2021 and 31 December 2020.
increase by
decrease by
1 p.p.
1 p.p.
31.12.2021
discount rate
(1,507)
1,776
wage growth rate
1,759
(1,521)
31.12.2020
discount rate
(2,020)
2,418
wage growth rate
2,378
(2,013)
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Reconciliation of present value of retirement, disability and post-mortem benefit
obligations
The table below presents the reconciliation from the beginning balances to the ending balances for present value liabilities due to
retirement, disability and post-mortem benefit obligations:
31.12.2021
31.12.2020
Opening balance
17,639
15,850
current employment costs
1,650
1,635
net interest on net liability
300
266
actuarial gain or loss
(3,368)
2,114
past employment costs
-
(1,201)
benefits paid
(870)
(1,025)
Closing balance
15,351
17,639
g. Restructuring provision
On 18 December 2020, the Bank finalized negotiations with trade union organizations operating in the Bank and concluded an
agreement on defining the rules with reference to the matters concerning employees in connection with the collective redundancies
process resulting from the adaptation of the Bank’s business model in relation to the change of business environment. In connection
with the agreement concluded in December 2020, the Bank created restructuring provision to cover the costs of employment
reduction. The negotiated collective redundancies programme was implemented on the beginning of 2021.
h. Asset and provision for deferred income tax
The provision for deferred income tax is recognised in the full amount using the balance sheet method, due to positive temporary
differences between the tax value of assets and liabilities, and their balance sheet value in the financial statements. Deferred tax
assets are recognised for all negative temporary differences, as well as unused tax credits and unused tax losses carried forward
to the subsequent years, in the amount in which it is probable that taxable income will be generated that will allow the use of the
above mentioned differences, assets and losses. Deferred income tax is determined using tax rates (and regulations) in force or
at the end of the reporting period, which are expected to be effective at the time of realization of the related assets due to deferred
income tax or settlement of liabilities due to deferred income tax.
If the temporary differences arose as a result of the recognition of an asset or liability resulting from a transaction that is not a
business combination and which at the time of the conclusion did not affect the tax or accounting result, the deferred tax is not
recognised. In addition, a deferred tax provision is created for positive temporary differences arising from investments in
subsidiaries or associates and investments in joint ventures - except the situations when the timing of temporary differences
reversal is subject to control by the entity and when it is probable that in the foreseeable future, temporary differences will not be
reversed Deferred tax assets in the event of negative temporary differences from investments in subsidiaries or associates and
investments in joint ventures, only to the extent that it is probable that in the foreseeable future the abovementioned temporary
differences will be reversed and taxable income allowing to offset any negative temporary differences will be generated.
The balance sheet amount of the deferred tax asset is reviewed at the end of each reporting period and is reduced accordingly,
and so far as it is no longer probable that taxable income sufficient for partial or total realization of the deferred tax asset will be
realized. An unrecognised deferred tax asset is subject to reassessment at the end of each reporting period and is recognised up
to an amount that reflects the probability of achieving future taxable income that will allow recovery of that asset. The Group offsets
deferred tax assets with deferred tax provisions if and only if it has an enforceable legal title to compensate corresponding
receivables and liabilities due to current tax and deferred income tax is related to the same taxpayer and the same tax authority.
Income tax related to the items recognised directly in equity is recognised in equity and in the statement of comprehensive income.
In 2021 and 2020, current income tax and deferred tax provision were calculated using the 19% rate.
i. Provision for the return of commission due to early repayment of the loan
On 11 September 2019, the CJEU issued a judgment in which it was stated that Article 16 paragraph 1 of the Directive
No. 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on consumer loan agreements which repealed
Council Directive No. 87/102/EEC should be interpreted in the following way: the consumer's right to reduce the total cost of a loan
in the event of earlier repayment includes all costs that have been imposed on the consumer. The CJEU pointed out that a
comparative analysis of the different language versions of Article 16 clause 1 of the Directive does not allow to clearly determine
the exact scope of the reduction of the total cost of a loan envisaged by this provision, because some language versions of this
provision suggest reducing the costs related to the remaining period of the contract, others suggest that the costs associated with
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this period constitute an indication for calculating the reduction, others still only refer to interest and costs due for the remaining
period of the contract.
The judgment was issued following a question referred for a preliminary ruling by the Lublin-Wschód District Court based in
Świdnik, which examined three disputes between the company Lexitor, which acquired the claims of three clients, and SKOK
Stefczyka, Santander Consumer Bank and mBank, regarding the reduction of the total cost of consumer loans due to their earlier
repayment. The Polish court had doubts about the interpretation of Article 16 paragraph 1 of Directive No. 2008/48/EC of the
European Parliament and of the Council of 23 April 2008, and therefore asked the CJEU whether this provision concerns all costs
or only those related to the duration of the contract.
As a result of the analysis concerning the impact of the judgment on the Bank’s revenues, in particular on relations expired before
the judgment was issued, in 2019 the Bank decided to create a provision for a proportional refund of commission in the event of
early repayment of the loan in the amount of PLN 48,750 thousand as at 31 December 2021 the provision amounted to PLN 19,156
thousand (as at 31 December 2020 the provision amounted to PLN 26,116 thousand). The provision was estimated based on the
estimation of the total amount of the provision for the early repaid loans and the expected percentage of customers who will claim
for a refund of the due part of the commission. Assuming that the percentage of customers would be 5 p.p. higher than the assumed
level, the amount of the provision would be higher by PLN 12.5 million.
Additionally, the Bank created in 2019 a provision of PLN 20,800 thousand to cover the partial reimbursements of loan commissions
in the event of their early repayment, for loans repaid after 31 December 2019. The estimate of the provision is based on the
difference between the value of commissions to be reimbursed and the balance of unsettled commissions as at the expected date
of early loan repayment. . Due to increased utilisation of the provision in 2021 (as compared to the estimate made in 2019), based
on complex portfolio analysis regarding the rate of early repayments, the required provision has been revalued. As of 31 December
2021 the provision amounted to PLN 11,542 thousand (as of 31 December 2020 the provision amounted to 6,161 thousand).
As a result of the CJEU judgment, the Bank has implemented a process whereby a provision for estimated refunds of fees charged
is made on an ongoing basis for newly originated loans. This provision is calculated as a percentage of commissions charged to
the customer, which reflects the expected average difference between the amounts of commissions to be refunded to customers
and the balance of outstanding commissions at the expected time of early repayment of the loan. This percentage is calculated
based on the estimated level of early repayments and the expected timing of repayment. In the event of early loan repayment, this
provision is released and for newly sold loans a provision will be created on an ongoing basis. As of 31 December 2021, the
provision amounted to PLN 18,709 thousand (PLN 1,500 thousand as of 31 December 2020). 5 p.p. increase in the level of early
repayments would result in a higher provision within a range from 8% to 13%, depending on the product.
The created provision level is based on estimates and may be changed.
Simultaneously, the Bank recognises its liability due to the proportional reimbursement of commissions in the event of their early
repayment in the period from the date of the judgment of the CJEU on 11 September 2019 to 31 December 2019. As of 31
December 2021, this liability amounted to PLN 2,363 thousand (PLN 2,434 thousand as of 31 December 2020).
The above provisions are presented by the Bank under Provisions: Provision for litigation, while the Bank presents the liability
under Other liabilities: Sundry creditors.
j. Provision for potential claims arising from legal proceedings related to loans in CHF
Provision for potential claims resulting from proceedings related to CHF loan agreements and model used by the Bank were
presented in Note 54 Litigation and claims.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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4. NET INTEREST INCOME
Interest income
12 months ended
31.12.2021
12 months ended
31.12.2020
Amounts due from banks
9,108
6,440
Loans and advances to customers measured at amortised cost, including:
2,295,847
2,531,705
non-banking financial institutions
11,389
12,715
retail customers
1,239,713
1,279,498
corporates
1,030,880
1,213,104
including retail farmers
285,509
354,127
public sector institutions
1,997
4,915
leasing receivables
11,868
21,473
Loans and advances to customers measured at amortised cost through
profit or loss
9,969
20,161
Debt instruments measured at amortised cost
591,247
535,678
Debt instruments measured at fair value through profit or loss
4,607
4,311
Debt instruments measured at fair value through other comprehensive
income
190,653
192,129
Derivative instruments as part of fair value hedge accounting
195,568
176,659
Derivative instruments as part of cash flow hedge accounting
7,912
-
Securities purchased under repurchase agreements
274
18
Total interest income
3,305,185
3,467,101
Interest expense
12 months ended
31.12.2021
12 months ended
31.12.2020
Amounts due to banks
(81,241)
(37,013)
Amounts due to customers, including:
(90,880)
(317,154)
non-banking financial institutions
(39,450)
(73,024)
retail customers
(34,019)
(179,273)
corporates
(16,216)
(60,199)
including retail farmers
(109)
(1,429)
public sector institutions
(1,195)
(4,658)
Lease liabilities
(4,545)
(6,671)
Derivative instruments as part of fair value hedge accounting
(53,031)
(99,538)
Derivatives under cash flow hedge accounting
(2,267)
-
Securities sold subject to repurchase agreements
(1,056)
(6,236)
Other related to financial assets
(4,585)
-
Total interest expense
(237,605)
(466,612)
Net interest income
3,067,580
3,000,489
The value of interest expenses calculated using the effective interest rate in relation to financial liabilities, which are measured at
amortised cost, amounted to PLN 177,722 thousand (PLN 367,074 thousand for the period of 12 months ended 31 December
2020).
Interest income includes interest on financial assets assessed individually and collectively, for which impairment was identified.
The amount of the above mentioned interest, which was recognised in the interest income for 2021, amounted to PLN
70,804 thousand, as compared to PLN 65,978 thousand for 2020.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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5. NET FEE AND COMMISSION INCOME
Fee and commission income
12 months ended
31.12.2021
12 months ended
31.12.2020
loans, advances and leases
295,995
302,469
account maintenance
254,632
212,692
cash service
32,875
31,491
cash transfers and e-banking
84,288
75,633
guarantees and documentary operations
50,555
50,320
asset management and brokerage operations
130,997
95,858
payment and credit cards
246,382
201,104
insurance mediation activity
113,322
91,455
product sale mediation and customer acquisition
16,984
12,937
other commissions
19,316
24,058
Total fee and commission income
1,245,346
1,098,017
Fee and commission expense
12 months ended
31.12.2021
12 months ended
31.12.2020
loans, advances and leases
(363)
(337)
account maintenance
(9,795)
(9,914)
cash service
(17,935)
(13,329)
cash transfers and e-banking
(2,699)
(2,354)
asset management and brokerage operations
(5,673)
(5,121)
payment and credit cards
(111,155)
(104,474)
insurance mediation activity
(19,271)
(20,007)
product sale mediation and customer acquisition
(30,341)
(27,099)
other commissions
(46,064)
(39,334)
Total fee and commission expense
(243,296)
(221,969)
Net fee and commission income
1,002,050
876,048
Net commission income for 2021 includes revenues from custody activities in the amount of PLN 130,997 thousand (PLN 95,858
thousand in 2020) and the amount of costs from custody activities in the amount of PLN 5,673 thousand (PLN 5,121 thousand in
2020).
Net commission income includes commission income that relate to assets and liabilities that are not measured at fair value with
the result of measurement recognised in the statement of profit or loss for 2021 in the amount of PLN 798,096 thousand, while for
2020 in the amount of PLN 726,677 thousand, and commission costs for 2021 in the amount of PLN 80,404 thousand, as compared
to PLN 73,040 thousand for 2020.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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6. DIVIDEND INCOME
Dividend income
12 months ended
31.12.2021
12 months ended
31.12.2020
Equity instruments measured at fair value through profit or loss
8,550
9,669
Shares in subsidiaries
978
13,030
Total dividend income
9,528
22,699
7. NET TRADING INCOME (INCLUDING RESULT ON
FOREIGN EXCHANGE)
Net trading income
12 months ended
31.12.2021
12 months ended
31.12.2020
Equity instruments measured at fair value through profit or loss
22,452
102,340
Debt instruments measured at fair value through profit or loss
(1,415)
7,253
Derivative instruments and result on foreign exchange transactions
612,621
640,484
Result on financial instruments measured at fair value through profit or loss
633,658
750,077
In 2020, the Bank recognised in Net trading income an increase in the valuation of shares in Krajowa Izba Rozliczeniowa S.A. and
Biuro Informacji Kredytowej S.A. in the total amount of PLN 45 million. The amounts are classified as measured at fair value
through profit or loss.
8. RESULT ON INVESTMENT ACTIVITIES
Result on investment activities
12 months ended
31.12.2021
12 months ended
31.12.2020
Equity instruments measured at fair value through other comprehensive income
(3,608)
(13,947)
Debt instruments measured at fair value through other comprehensive income
(2,276)
77,406
Loans and advances to customers measured at fair value through profit or loss
(2,857)
(48,330)
Total result on investment activities
(8,741)
15,129
During the year, the Bank has not reclassified any financial assets measured at amortised cost to financial assets measured at fair
value through other comprehensive income.
9. NET IMPAIRMENT ALLOWANCES ON FINANCIAL
ASSETS AND PROVISION ON CONTINGENT LIABILITIES
Net impairment allowances on financial assets and provisions
on contingent liabilities
12 months ended 31.12.2021
Stage 1
Stage 2
Stage 3
Total
POCI
Amounts due from other banks
(4,055)
-
-
(4,055)
-
Loans and advances to customers measured at amortised cost
(109,665)
95,395
(243,406)
(257,676)
(32,630)
Contingent commitments granted
38,513
19,094
1,605
59,212
750
Securities measured at amortised cost
293
128
(34,865)
(34,444)
(34,865)
Total net impairment allowances on financial assets and
provisions on contingent liabilities
(74,914)
114,617
(276,666)
(236,963)
(66,745)
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Change in impairment allowances on financial assets and provisions on contingent liabilities
12 months ended
31.12.2021
As at 1 January 2021
(3,322,490)
Increases due to acquisition or origination
(446,045)
Decreases due to derecognition
268,134
Net changes in credit risk
(268,049)
Changes arising from changes to the applied estimation method (net)
22,736
Use of allowances
705,199
Other changes (including foreign exchange differences)
(10,119)
As at 31 December 2021
(3,050,634)
Net impairment allowances on financial assets and provisions on contingent liabilities
12 months ended
31.12.2021
Change in impairment allowances on financial assets and provisions on contingent liabilities
(404,780)
Change in initial impairment on financial assets classified as POCI
21,521
Revenue from the sale and write-off of receivables and costs related to the write-off of receivables
146,296
(236,963)
Net impairment allowances on financial assets and provisions
on contingent liabilities
12 months ended 31.12.2020
Stage 1
Stage 2
Stage 3
Total
POCI
Amounts due from banks
(837)
-
-
(837)
-
Loans and advances to customers measured at amortised cost
(34,999)
(113,751)
(458,960)
(607,710)
18,218
Contingent commitments granted
(19,244)
27,483
14,186
22,425
-
Securities measured at amortised cost
325
3,172
-
3,497
(2,312)
Total net impairment allowances on financial assets and
provisions on contingent liabilities
(54,755)
(83,096)
(444,774)
(582,625)
15,906
Change in impairment allowances on financial assets and provisions on contingent liabilities
12 months ended
31.12.2020
As at 1 January 2020
(3,410,826)
Increases due to acquisition or origination
(402,572)
Decreases due to derecognition
278,229
Net changes in credit risk
(667,971)
Use of allowances
913,748
Other changes (including foreign exchange differences)
(33,098)
As at 31 December 2020
(3,322,490)
Net impairment allowances on financial assets and provisions on contingent liabilities
12 months ended
31.12.2020
Change in impairment allowances on financial assets and provisions on contingent liabilities
(758,385)
Change in initial impairment on financial assets classified as POCI
45,139
Revenue from the sale and write-off of receivables and costs related to the write-off of receivables
130,621
(582,625)
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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10. GENERAL ADMINISTRATIVE COSTS
General administrative costs
12 months ended
31.12.2021
12 months ended
31.12.2020
(data restated)
Personnel expenses
(1,153,529)
(1,156,113)
Marketing
(101,580)
(84,112)
IT and telecom expenses
(212,089)
(197,018)
Short-term leasing and operation
(63,867)
(74,535)
Other non-personnel expenses
(324,815)
(277,004)
Business travels
(6,723)
(8,496)
ATM and cash handling expenses
(22,746)
(25,410)
Costs of outsourcing services related to leasing operations
(2,915)
(3,402)
Bank Guarantee Fund fee
(143,352)
(213,185)
Cost of PFSA supervision
(13,138)
(10,415)
Total general administrative expenses
(2,044,754)
(2,049,690)
In the line Other non –personnel expenses are presented expenses related to legal services to court cases related to CHF loans
in the amount of PLN 82 016 thousand in2021 (2020 PLN 12 872 thousand).
11. PERSONNEL EXPENSES
Personnel expenses
12 months ended
31.12.2021
12 months ended
31.12.2020
(data restated)
Payroll expenses
(923,546)
(900,879)
Payroll charges
(163,211)
(167,046)
Employee benefits
(44,770)
(43,166)
Costs of restructuring provision
(341)
(22,314)
Costs of provision for future liabilities arising from unused annual leave and retirement
benefits
(7,749)
(6,756)
Appropriations to Social Benefits Fund
(13,191)
(14,380)
Other
(721)
(1,572)
Total personnel expenses
(1,153,529)
(1,156,113)
12. DEPRECIATION AND AMORTIZATION
Depreciation and amortization
12 months ended
31.12.2021
12 months ended
31.12.2020
Property, plant and equipment
(229,456)
(233,869)
Intangible assets
(168,863)
(132,290)
Total depreciation and amortization
(398,319)
(366,159)
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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13. OTHER OPERATING INCOME
Other operating income
12 months ended
31.12.2021
12 months ended
31.12.2020
Sale or liquidation of property, plant and equipment and intangible assets
51,799
131,445
Release of allowances on other receivables
9,604
10,908
Release of provisions for litigation and claims and other liabilities
42,962
51,540
Recovery of debt collection costs
23,923
23,981
Recovered indemnities
465
1,027
Income from leasing operations
19,048
13,385
Other operating income
49,144
39,005
Total other operating income
196,945
271,291
The comparison of income realised in the analysed periods was primarily affected by the settlement and accounting treatment of
the sale of the real estate of the Bank's Headquarters at Kasprzaka in Warsaw in the first quarter of 2020. The total gross result
on this operation amounted to PLN 43,564 thousand and was presented under Other operating income (under Sale or liquidation
of property, plant and equipment and intangible assets, in the amount of PLN 110,848 thousand) and under Other operating
expenses in 2020 (under items: Loss on sale or liquidation of property, plant and equipment and intangible assets, in the amount
of PLN 64,371 thousand and Other operating expenses, in the amount of PLN 2,914 thousand).
14. OTHER OPERATING EXPENSES
Other operating expenses
12 months ended
31.12.2021
12 months ended
31.12.2020
Loss on sale or liquidation of property, plant and equipment and intangible assets
(52,477)
(91,509)
Impairment allowances on other receivables
(13,510)
(12,528)
Provisions for litigation and claims and other liabilities
(62,998)
(101,742)
Debt collection
(44,899)
(50,932)
Donations made
(5,973)
(6,535)
Costs of leasing operations
(17,347)
(15,794)
Costs of compensations, penalties and fines
(10,819)
(13,667)
Other operating expenses
(58,012)
(36,071)
Total other operating expenses
(266,035)
(328,778)
Other operating expenses for 12 months of 2021 include:
• under Loss on sale or liquidation of property, plant and equipment and intangible assets in the amount of PLN 64,371 thousand,
representing a portion of the settlement of the sale of the real estate of the Bank's Headquarters at Kasprzaka in Warsaw in the
first quarter of 2020,
• under Other operating expenses - part of the settlement of the sale of the real estate of the Bank's Headquarters at Kasprzaka
in Warsaw in the amount of PLN 2,914 thousand.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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15. INCOME TAX EXPENSE
12 months ended
31.12.2021
12 months ended
31.12.2020
Current income tax
(343,718)
(179,430)
Deferred income tax
(93,660)
(199,849)
Total income tax expense
(437,378)
(379,279)
Profit before income tax
621,904
1,110,339
Statutory tax rate
19%
19%
Income taxes on gross profit
(118,162)
(210,965)
Receivables written-off
(20,298)
(18,369)
Representation expenses
(344)
(356)
PFRON
(1,589)
(1,672)
Prudential fee to the Bank Guarantee Fund
(27,237)
(40,505)
Tax on financial institutions
(64,241)
(60,593)
Research and development relief
6,780
9,816
Provision for claims related to CHF loans
(197,732)
(38,057)
Legal risk provisions
(4,296)
(8,267)
Other differences
(10,259)
(10,311)
Total income tax expense
(437,378)
(379,279)
16. EARNINGS PER SHARE
12 months ended
31.12.2021
12 months ended
31.12.2020
Basic
Net profit
184,526
731,060
Weighted average number of ordinary shares (units)
147,492,790
147,418,918
Basic earnings (loss) per share (in PLN per one share)
1.25
4.96
Diluted
Net profit used in determining diluted earnings per share
184,526
731,060
Weighted average number of ordinary shares (units)
147,492,790
147,418,918
Adjustments for:
- stock options
126,141
128,644
Weighted average number of ordinary shares for the diluted earnings per
share (units)
147,618,931
147,547,562
Diluted earnings (loss) per share (in PLN per one share)
1.25
4.95
In accordance with IAS 33 the Bank prepares the calculation of diluted net profit per share, taking into account the shares issued
conditionally under incentive schemes described in Note 39. The calculation does not take into account those elements of the
incentive schemes which had antidilutive effect in the presented reporting periods and which may potentially affect the dilution of
profit per share in the future.
The basic earnings per share is calculated by dividing the net profit by the weighted average number of ordinary shares during
the period.
The diluted earnings per share is calculated based on the ratio of net profit to the weighted average number of ordinary shares
adjusted as if all potential dilutive ordinary shares had been converted to shares. The Bank has one category of dilutive potential
ordinary shares: share options. Dilutive shares are calculated as the number of shares that would be issued if all share options
were exercised at the market price determined as the average annual closing price of the Bank's shares.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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17. CASH AND CASH BALANCES AT CENTRAL BANK
Cash and cash equivalents
31.12.2021
31.12.2020
Cash and other balances
3,049,540
3,403,693
Account in the National Bank of Poland
1,582,153
18,176
Gross cash and cash equivalents
4,631,693
3,421,869
Impairment allowances
(283)
(3)
Total cash and cash equivalents
4,631,410
3,421,866
Change of impairment allowances
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
(3)
(374)
Increases due to acquisition or origination
(3,067)
(1,576)
Decreases due to derecognition
3,120
1,491
Other changes (including foreign exchange differences)
(333)
456
Closing balance
(283)
(3)
During the day, the Bank may use cash on statutory reserve accounts for current cash settlements based on an order placed at
the National Bank of Poland. The Bank has to ensure that the average monthly balance matches the declared statutory reserve
amount.
The funds on the statutory reserve account bear interest. As at 31 December 2021 interest on statutory reserve accounts was
1.75% (0.1% as at 31 December 2020).
The balance of cash in hand and at Central Bank includes the statutory reserve maintained with the National Bank of Poland. The
basic reserve requirement at 31.12.2021 was 2% (at 31.12.20 it was 0.5%). The declared reserve level to be maintained since 31
December 2021 was PLN 2,079,746 thousand (as compared to PLN 484,302 thousand in December 2020).
18. AMOUNTS DUE FROM OTHER BANKS
Amounts due from other banks
31.12.2021
31.12.2020
Gross
balance sheet
value
Allowance
Net balance
sheet value
Gross
balance sheet
value
Allowance
Net balance
sheet value
Current accounts
183,362
(52)
183,310
57,257
(224)
57,033
Interbank deposits
416,652
(25)
416,627
-
-
-
Loans and advances
100,078
(5)
100,073
1,511
(2)
1,509
Other receivables
1,559,972
(5,361)
1,554,611
498,189
(1,442)
496,747
Total amounts due from other banks
2,260,064
(5,443)
2,254,621
556,957
(1,668)
555,289
Receivables from cash collateral in the amount of PLN 1,545,152 thousand were also presented under “Other receivables”.
The total balance of long-term amounts due from banks as at 31 December 2021 amounted to PLN 1,545,152 thousand
(PLN 330,838 thousand as at 31 December 2020).
Change in impairment allowance
12 months ended
31.12.2021
12 months ended
31.12.2020
Balance at the beginning of the period
(1,668)
(920)
Increases due to acquisition or origination
(4,865)
(7,760)
Decreases due to derecognition
4,224
5,874
Changes resulting from the change in credit risk (net)
(3,134)
217
Other changes (including foreign exchange differences)
-
921
Balance at the end of the period
(5,443)
(1,668)
As at 31 December 2021 and 31 December 2020, amounts due from other banks were classified as Stage 1.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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19. DERIVATIVE FINANCIAL INSTRUMENTS
Fair value of derivatives held by the Bank is presented in the below table:
Trading derivatives
Nominal value
Fair value
31.12.2021
Assets
Liabilities
Currency derivatives
Foreign Exchange Forward (FX Forward + NDF)
17,001,834
514,600
191,389
Currency Swap (FX Swap)
24,891,458
223,832
443,129
Currency Interest Rate Swaps (CIRS)
12,752,996
374,796
405,837
OTC currency options
3,073,655
79,587
62,336
Total currency derivatives
57,719,943
1,192,815
1,102,691
Interest rate derivatives:
Interest Rate Swap
45,520,032
642,406
749,207
OTC interest rate options
7,166,523
39,727
39,479
Total interest rate derivatives
52,686,555
682,133
788,686
Other derivatives
OTC options
716,368
26,971
26,655
Currency Spot (FX Spot)
1,313,499
-
-
Total other derivatives
2,029,867
26,971
26,655
Total trading derivatives
112,436,365
1,901,919
1,918,032
Including: measured using models
112,436,365
1,901,919
1,918,032
Trading derivatives
Nominal value
Fair value
31.12.2020
Assets
Liabilities
Currency derivatives
Foreign Exchange Forward (FX Forward + NDF)
14,782,276
184,587
113,239
Currency Swap (FX Swap)
18,367,382
178,217
213,453
Currency Interest Rate Swaps (CIRS)
13,428,351
167,205
268,192
OTC currency options
3,968,876
180,644
168,075
Total currency derivatives
50,546,885
710,653
762,959
Interest rate derivatives
Interest Rate Swap
45,872,723
810,474
743,456
Forward Rate Agreements (FRA)
3,300,000
-
7,451
OTC interest rate options
4,435,634
4,646
1,556
Total interest rate derivatives
53,608,357
815,120
752,463
Other derivatives
OTC commodity swaps
306,311
5,844
5,726
Currency Spot (FX Spot)
3,967,651
-
-
Total other derivatives
4,273,962
5,844
5,726
Total trading derivatives
108,429,204
1,531,617
1,521,148
including: measured using models
108,429,204
1,531,617
1,521,148
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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47
Fair value of derivatives by their maturity
Fair value of assets Fair value of liabilities
31 December 2021
Total
<= 1
month
> 1 month
<= 3
months
> 3 months
<= 12
months
> 1 year
<= 5 years
> 5 years
Total
<= 1
month
> 1 months
<= 3 months
> 3 months
<= 12
months
> 1 year
<= 5 years
> 5 years
Trading derivatives
Currency derivatives:
Foreign Exchange Forward
(FX Forward + NDF)
514,600
9,613
12,133
73,947
408,907
-
191,389
25,674
35,343
102,217
28,155
-
Currency Swap (FX Swap)
223,832
23,936
38,974
113,108
47,814
-
443,129
47,732
48,969
62,742
283,686
-
Currency Interest Rate
Swaps (CIRS)
374,796
-
486
38,218
155,189
180,903
405,837
4,644
8,463
24,196
130,812
237,722
OTC currency options
79,587
1,820
6,785
22,729
48,253
-
62,336
2,138
7,595
17,967
34,636
-
Total currency
derivatives:
Interest rate derivatives:
1,192,815
45,369
58,378
248,002
660,163
180,903
1,102,691
80,188
100,370
207,122
477,289
237,722
Interest Rate Swap
642,406
5,439
6,103
60,227
226,917
343,720
749,207
2,756
7,851
63,481
325,406
349,713
OTC interest rate options
39,727
-
1
1,074
21,946
16,706
39,479
-
3
868
21,928
16,680
Total interest rate
derivatives
682,133
5,439
6,104
61,301
248,863
360,426
788,686
2,756
7,854
64,349
347,334
366,393
Other derivatives
OTC commodity swaps
26,971
7,018
3,096
16,857
-
-
26,655
6,981
3,067
16,607
-
-
Total other derivatives:
26,971
7,018
3,096
16,857
-
-
26,655
6,981
3,067
16,607
-
-
Total trading derivatives
1,901,919
57,826
67,578
326,160
909,026
541,329
1,918,032
89,925
111,291
288,078
824,623
604,115
* Financial data have been rounded and presented in PLN ‘000, and therefore, in some cases, the totals may not correspond exactly to the total sum.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing world
48
Fair value of assets Fair value of liabilities
31 December 2020
Total
<= 1
month
> 1 month
<= 3
months
> 3 months
<= 12
months
> 1 year
<= 5 years
> 5 years
Total
<= 1
month
> 1 month
<= 3 months
> 3 months
<= 12
months
> 1 year
<= 5 years
> 5 years
Trading derivatives
Currency derivatives:
Foreign Exchange Forward
(FX Forward + NDF)
184,587
19,727
22,467
74,380
38,019
29,994
113,239
18,358
28,513
22,341
41,130
2,897
Currency Swap (FX Swap)
178,217
39,832
67,993
17,441
48,078
4,871
213,453
74,540
28,773
48,158
48,701
13,281
Currency Interest Rate
Swaps (CIRS)
167,205
2,401
-
1,389
90,912
72,502
268,192
-
3,603
-
84,832
179,757
OTC currency options
180,644
8,044
8,785
27,713
135,552
550
168,075
2,926
8,568
23,650
132,386
545
Total currency
derivatives:
710,653
70,004
99,245
120,924
312,562
107,917
762,959
95,824
69,457
94,149
307,049
196,480
Interest rate derivatives:
Interest Rate Swap
810,474
3,020
12,941
34,489
342,663
417,361
743,456
2,378
18,027
33,955
329,836
359,259
Forward Rate Agreements
(FRA)
-
-
-
-
-
-
7,451
-
-
2,509
4,942
-
OTC interest rate options
4,646
-
-
279
212
4,155
1,556
-
-
156
212
1,188
Total interest rate
derivatives:
815,120
3,020
12,941
34,768
342 875
421,516
752,463
2,378
18,027
36,620
334,991
360,447
Other derivatives
OTC commodity swaps
5,844
1,520
891
3,432
-
-
5,726
1,504
874
3,349
-
-
Total other derivatives:
5,844
1,520
891
3,432
-
-
5,726
1,504
874
3,349
-
-
Total trading derivatives
1,531,617
74,545
113,077
159,124
655,437
529,433
1,521,148
99,706
88,358
134,118
642,039
556,927
* Financial data have been rounded and presented in PLN ‘000, and therefore, in some cases, the totals may not correspond exactly to the total sum.
Maturity dates:
- for NDF, FX forward, FX swap, currency options and indexes, IRS, CIRS calculated as a difference in days between the transaction maturity date and the balance sheet date
- for FX spot, FRA, securities to be issued/received calculated as a difference in days between the transaction currency date and the balance sheet date
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
49
20. HEDGE ACCOUNTING
As at 31 December 2021, the Bank used fair value hedge (macro fair value hedge).
Hedging relationship description
The hedges are used against interest rate risk, specifically changes in the fair value
of fixed-rate assets and liabilities resulting from changes in a specific reference rate.
Hedged items
Fixed-rate PLN, EUR and USD current accounts are the hedged items.
Hedging instruments
Hedging instruments include standard IRS transactions, i.e. plain vanilla IRS in PLN,
EUR and USD, in which the Bank receives a fixed interest rate and pays a floating
rate based on WIBOR 3M, WIBOR 6M, EURIBOR 1M, EURIBOR 3M, EURIBOR
6M, USD LIBOR 3M, USD LIBOR 6M.
IRS
Nominal value
Fair value
Assets
Liabilities
31.12.2021
25,073,220
65,465
1,028,790
31.12.2020
17,260,690
531,793
-
Presentation of result on the hedged and
hedging transactions
The change in fair value of hedging instruments is recognised in the Result on hedge
accounting. Interest on IRS transactions and current accounts is recognised in
Interest income.
The liabilities in the item "Differences from hedge accounting" include the adjustment of the value of hedged instruments (deposits)
amounting to:
31.12.2021 PLN -1,083,866 thousand
31.12.2020 PLN 482,691 thousand
The below table presents derivative hedging instruments at their nominal value by residual maturity dates:
31.12.2021
Hedging derivatives
Fair value
Nominal value
positive
Negative
< 1 month
1-3
months
3 months-1
year
1-5 years
> 5 years
Total
Interest rate agreements
Swap (IRS)
65,465
1,028,790
500,000
545,994
6,189,910
14,700,739
3,136,577
25,073,220
Hedging derivatives - total
65,465
1,028,790
500,000
545,994
6,189,910
14,700,739
3,136,577
25,073,220
31.12.2020
Hedging derivatives
Fair value
Nominal value
positive
Negative
< 1 month
1-3
months
3 months-1
year
1-5 years
> 5 years
Total
Interest rate agreements
Swap (IRS)
531,793
-
13,844
-
806,376
14,347,698
2,092,772
17,260,690
Hedging derivatives - total
531,793
-
13,844
-
806,376
14,347,698
2,092,772
17,260,690
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
50
Additionally, as at 31 December 2021, the Bank applies fair value hedge accounting (micro fair value hedge).
Hedging relationship description
The hedges are used against interest rate risk, specifically changes in the fair value of
fixed-rate assets and liabilities resulting from changes in a specific reference rate.
Hedged items
The hedged items are: Fixed rate bond PS0422.
Hedging instruments
Hedging instruments are the standard IRS transactions, i.e. plain vanilla IRS,
denominated in PLN, in which the Bank receives a floating rate based on WIBOR 6M
and pays a fixed interest rate.
IRS
Nominal value
Fair value
Assets
Liabilities
31.12.2021
750,000
-
13,817
31.12.2020
1,750,000
-
60,027
Presentation of result on the hedged
and hedging transactions
The change in fair value of hedging transactions is recognised in the Result on hedge
accounting. Interest on IRS transactions and hedged items is recognised in Interest
income.
The below table presents derivative hedging instruments at their nominal value by residual maturity dates:
31.12.2021
Hedging derivatives
Fair value
Nominal value
positive
negative
< 1
month
1-3
months
3 months-
1 year
1-5 years
> 5
years
Total
Interest rate agreements
Swap (IRS)
-
13,817
-
-
750,000
-
-
750,000
Hedging derivatives - total
-
13,817
-
-
750,000
-
-
750,000
31.12.2020
Hedging derivatives
Fair value
Nominal value
positive
negative
< 1
month
1-3
months
3 months-
1 year
1-5 years
> 5
years
Total
Interest rate agreements
Swap (IRS)
-
60,027
-
-
-
950,000
800,000
1,750,000
Hedging derivatives - total
-
60,027
-
-
-
950,000
800,000
1,750,000
Amounts recognised in the profit or loss account under fair value hedge accounting:
Fair value
31.12.2021
31.12.2020
Net interest income on hedging derivative instruments
195,568
176,659
Net interest expense on derivative hedging instruments
(53,031)
(99,538)
Change in fair value of hedging transactions recognised in the Result on hedge accounting,
including:
50,369
(11,077)
change in fair value of hedging instruments
(1,472,733)
(246,040)
change in fair value of hedged instruments
1,523,101
234,963
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
51
Additionally, the Bank applies cash flow hedge accounting as of 31 December 2021. The cash flow hedge relationship was
established in March 2021, and therefore there were no balances relating to this type of hedge as at 31 December 2020.
Hedging relationship description
The hedges are used against interest rate risk, specifically no changes in the
interest cash flows on the hedged item, resulting from the changes in a specific
reference rate.
Hedged items
The hedged items are: Floating rate bond WZ1131.
Hedging instruments
Hedging instruments include standard IRS transactions, i.e. plain vanilla IRS in
which the Bank receives a fixed rate and pays a floating rate based on WIBOR
6M.
IRS
Nominal value
Fair value
Assets
Liabilities
31.12.2021
625,000
-
85,365
Presentation of result on hedging and
hedging transactions
The change in fair value of derivative hedging instruments designated as
hedging of cash flows is recognised directly in the Revaluation reserve in the
part constituting the effective part of the hedge. The ineffective part of the hedge
is recognised in the statement of profit or loss under Result on hedge accounting.
The below table presents derivative hedging instruments at their nominal value by residual maturity dates as of 31 December
2021.
31.12.2021
Hedging derivatives
Fair value
Nominal value
positive
negative
< 1 month
1-3
months
3
months-
1 year
1-5 years
> 5 years
Total
Interest rate agreements
Swap (IRS)
-
85,365
-
-
-
-
625,000
625,000
Hedging derivatives –
total
-
85,365
-
-
-
-
625,000
625,000
Cash flow hedges
31.12.2021
Interest income on hedging derivatives
7,912
Interest expense on hedging derivatives
(2,267)
Changes in revaluation reserve due to valuation of derivative hedging instruments in cash flow hedge accounting.
Interest rate risk
31.12.2021
Balance at the beginning of the period
-
Hedging gains or losses recognised in other comprehensive income during the reporting period
(85,303)
Balance at the end of the period
(85,303)
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
52
21. LOANS AND ADVANCES TO CUSTOMERS MEASURED
AT AMORTISED COST
31.12.2021
Loans and advances to customers measured at amortised
cost
Gross balance sheet
value
Allowance
Net balance
sheet value
Loans and advances for:
Non-banking financial entities
796,523
(2,075)
794,448
current account loans
729,316
(1,644)
727,672
investment loans
45,208
(287)
44,921
other loans
21,999
(144)
21,855
Retail customers
38,817,716
(935,977)
37,881,739
mortgage loans
26,710,997
(311,056)
26,399,941
other loans
12,106,719
(624,921)
11,481,798
Corporate customers
42,649,199
(1,831,067)
40,818,132
current account loans
21,240,683
(1,198,743)
20,041,940
investment loans
15,549,486
(449,945)
15,099,541
other loans
5,859,030
(182,379)
5,676,651
including retail farmers
7,755,784
(389,619)
7,366,165
current account loans
3,712,040
(191,153)
3,520,887
investment loans
4,032,732
(197,030)
3,835,702
other loans
11,012
(1,436)
9,576
Public sector institutions
84,487
(1,542)
82,945
current account loans
57,032
(1,240)
55,792
investment loans
27,118
(299)
26,819
other loans
337
(3)
334
Lease receivables
620,444
(72,957)
547,487
Total loans and advances to customers measured at
amortised cost
82,968,369
(2,843,618)
80,124,751
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
53
31.12.2020
Loans and advances to customers measured at amortised
cost
Gross balance sheet
value
Allowance
Net balance
sheet value
Loans and advances for:
Non-banking financial entities
608,417
(1,934)
606,483
current account loans
492,335
(1,577)
490,758
investment loans
96,141
(259)
95,882
other loans
19,941
(98)
19,843
Retail customers
33,802,097
(1,172,830)
32,629,267
mortgage loans
22,559,727
(363,664)
22,196,063
other loans
11,242,370
(809,166)
10,433,204
Corporate customers
38,108,119
(1,833,761)
36,274,358
current account loans
17,824,476
(1,135,775)
16,688,701
investment loans
13,921,875
(512,585)
13,409,290
other loans
6,361,768
(185,401)
6,176,367
including retail farmers
8,118,713
(453,098)
7,665,615
current account loans
3,979,679
(229,272)
3,750,407
investment loans
4,125,187
(222,105)
3,903,082
other loans
13,847
(1,721)
12,126
Public sector institutions
101,382
(2,268)
99,114
current account loans
70,300
(1,649)
68,651
investment loans
30,448
(611)
29,837
other loans
634
(8)
626
Lease receivables
920,944
(83,191)
837,753
Total loans and advances to customers measured at
amortised cost
73,540,959
(3,093,984)
70,446,975
Loans and advances to customers by Stages
31.12.2021
Stage 1
Stage 2
Stage 3
Total
POCI
Loans and advances for:
73,123,068
6,739,864
3,105,437
82,968,369
222,556
Non-banking financial entities
794,902
5
1,616
796,523
88
Retail customers
35,339,880
2,350,493
1,127,343
38,817,716
52,581
Corporate customers
36,608,797
4,201,177
1,839,225
42,649,199
169,887
including retail farmers
5,998,472
1,123,755
633,557
7,755,784
2
Public sector entities
83,411
1,076
-
84,487
-
Lease receivables
296,078
187,113
137,253
620,444
-
Impairment allowance on loans and
receivables for:
(575,547)
(486,754)
(1,781,317)
(2,843,618)
(70,908)
Non-banking financial entities
(752)
(1)
(1,322)
(2,075)
(72)
Retail customers
(107,829)
(206,279)
(621,869)
(935,977)
(4,485)
Corporate customers
(463,990)
(274,625)
(1,092,452)
(1,831,067)
(66,351)
including retail farmers
(33,289)
(76,937)
(279,393)
(389,619)
-
Public sector entities
(1,342)
(200)
-
(1,542)
-
Lease receivables
(1,634)
(5,649)
(65,674)
(72,957)
-
Net loans and advances to customers
measured at amortised cost
72,547,521
6,253,110
1,324,120
80,124,751
151,648
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
54
31.12.2020
Stage 1
Stage 2
Stage 3
Total
POCI
Loans and advances for:
62,569,000
6,903,685
4,068,274
73,540,959
324,756
Non-banking financial entities
606,759
33
1,625
608,417
80
Retail customers
30,416,993
1,940,388
1,444,716
33,802,097
71,872
Corporate customers
30,957,198
4,687,471
2,463,450
38,108,119
252,760
including retail farmers
6,069,509
1,259,809
789,395
8,118,713
2
Public sector entities
98,992
2,346
44
101,382
44
Lease receivables
489,058
273,447
158,439
920,944
-
Impairment allowance on loans and
receivables for:
(471,373)
(581,344)
(2,041,267)
(3,093,984)
(47,810)
Non-banking financial entities
(1,213)
(3)
(718)
(1,934)
(23)
Retail customers
(197,518)
(226,981)
(748,331)
(1,172,830)
(10,127)
Corporate customers
(267,172)
(345,003)
(1,221,586)
(1,833,761)
(37,648)
including retail farmers
(48,403)
116,224)
(288,471)
(453,098)
(1)
Public sector entities
(1,990)
(266)
(12)
(2,268)
(12)
Lease receivables
(3,480)
(9,091)
(70,620)
(83,191)
-
Net loans and advances to customers
measured at amortised cost
62,097,627
6,322,341
2,027,007
70,446,975
276,946
Impairment allowance of loans and advances to customers measured at amortised cost
Change in impairment allowances
Stage 1
Stage 2
Stage 3
Total
Opening balance as at 1 January 2021
(471,373)
(581,344)
(2,041,267)
(3,093,984)
Increase due to acquisition or origination
(255,362)
(39,322)
(27,001)
(321,685)
Decrease due to derecognition
53,907
27,882
123,587
205,376
Changes resulting from the change in credit risk (net)
120,191
76,664
(551,258)
(354,403)
Changes arising from updates to the method of
estimation used (net)
(28,870)
29,557
24,902
25,589
Use of allowances
6,230
523
698,447
705,200
Other changes (including foreign exchange
differences)
(270)
(714)
(8,727)
(9,711)
Closing balance as at 31 December 2021
(575,547)
(486,754)
(1,781,317)
(2,843,618)
Change in impairment allowances
Stage 1
Stage 2
Stage 3
Total
Opening balance as at 1 January 2021
(432,074)
(464,600)
(2,257,153)
(3,153,827)
Increase due to acquisition or origination
(201,656)
(16,109)
(79,056)
(296,821)
Decrease due to derecognition
55,378
21,739
110,796
187,913
Changes resulting from the change in credit risk (net)
111,218
(119 352)
(706,534)
(714,668)
Use of allowances
90
30
913,628
913,748
Other changes (including foreign exchange
differences)
(4,329)
(3,053)
(22,947)
(30,329)
Closing balance as at 31 December 2020
(471,373)
(581,344)
(2,041,267)
(3,093,984)
The total balance of long-term loans and advances due to customers as at 31 December 2021 amounted to PLN 72,293,179
thousand (PLN 61,312,757 thousand as at 31 December 2020).
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
55
Gross amount of foreign currency mortgage loans for retail customers (in PLN ‘000)
Loans by currency
31.12.2021
31.12.2020
CHF
4,531,564
4,822,478
EUR
36,388
47,606
PLN
22,141,389
17,687,284
USD
1,656
2,359
Total
26,710,997
22,559,727
31.12.2021
Value of CHF loan portfolio
Gross balance
sheet value
including CHF
exposures
Allowance
including CHF
exposures
Loans and advances for:
Non-banking financial entities
796,523
-
(2,075)
-
current account loans
729,316
-
(1,644)
-
investment loans
45,208
-
(287)
-
other loans
21,999
-
(144)
-
Retail customers
38,817,716
4,575,112
(935,977)
(230,270)
mortgage loans
26,710,997
4,531,564
(311,056)
(221,397)
other loans
12,106,719
43,548
(624,921)
(8,873)
Corporate customers
42,649,199
65,713
(1,831,067)
(10,781)
current account loans
21,240,683
56,263
(1,198,743)
(5,538)
investment loans
15,549,486
8,915
(449,945)
(5,243)
other loans
5,859,030
535
(182,379)
-
including retail farmers
7,755,784
1,284
(389,619)
(84)
current account loans
3,712,040
1,225
(191,153)
(84)
investment loans
4,032,732
59
(197,030)
-
other loans
11,012
-
(1,436)
-
Public sector institutions
84,487
-
(1,542)
-
current account loans
57,032
-
(1,240)
-
investment loans
27,118
-
(299)
-
other loans
337
-
(3)
-
Lease receivables
620,444
27,917
(72,957)
(7,274)
Total loans and advances
82,968,369
4,668,742
(2,843,618)
(248,325)
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
56
31.12.2020
Value of CHF loan portfolio
Gross balance
sheet value
including CHF
exposures
Allowance
including CHF
exposures
Loans and advances for:
Non-banking financial entities
608,417
-
(1,934)
-
current account loans
492,335
-
(1,577)
-
investment loans
96,141
-
(259)
-
other loans
19,941
-
(98)
-
Retail customers
33,802,097
4,876,681
(1,172,830)
(235,754)
mortgage loans
22,559,727
4,822,478
(363,664)
(223,878)
other loans
11,242,370
54,203
(809,166)
(11,876)
Corporate customers
38,108,119
148,909
(1,833,761)
(12,064)
current account loans
17,824,476
137,511
(1,135,775)
(7,502)
investment loans
13,921,875
10,068
(512,585)
(4,560)
other loans
6,361,768
1,330
(185,401)
(2)
including retail farmers
8,118,713
3,094
(453,098)
(493)
current account loans
3,979,679
2,998
(229,272)
(493)
investment loans
4,125,187
96
(222,105)
-
other loans
13 847
-
(1,721)
-
Public sector institutions
101,382
-
(2,268)
-
current account loans
70,300
-
(1,649)
-
investment loans
30,448
-
(611)
-
other loans
634
-
(8)
-
Lease receivables
920,944
38,940
(83,191)
(7,448)
Total loans and advances
73,540,959
5,064,530
(3,093,984)
(255,266)
22. LOANS AND ADVANCES TO CUSTOMERS MEASURED
AT FAIR VALUE THROUGH PROFIT OR LOSS
31.12.2021
31.12.2020
Subsidised loans
1,219,027
1,539,848
Total loans and advances to customers measured at fair value
through profit a loss
1,219,027
1,539,848
The table below presents a comparison of the fair value of subsidised loans with their gross balance sheet value, which would
have been recognised if the Bank - in accordance with the requirements of IFRS 9 - did not reclassify these portfolios to fair value
through profit or loss.
Gross balance sheet value
Fair value
31.12.2021
1,343,402
1,219,027
31.12.2020
1,715,680
1,539,848
Subsidised loans measured through fair value
Stage 1
Stage 2
Stage 3
Total
31.12.2021
897,554
244,754
76,719
1,219,027
31.12.2020
1,106,270
311,307
122,271
1,539,848
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
57
23. SECURITIES MEASURED AT AMORTISED COST
31.12.2021
Securities
Gross balance sheet
value
Allowance
Net balance sheet
value
issued by local banks – mortgage bonds
5,612
(82)
5,530
issued by local banks
3,834,998
-
3,834,998
issued by other financial institutions
584,844
-
584,844
issued by governments – Treasury bonds
18,642,064
(96)
18,641,968
issued by non-financial entities – bonds
167,813
(45,156)
122,657
issued by local governments – municipal bonds
78,362
(318)
78,044
Total securities measured at amortised cost
23,313,693
(45,652)
23,268,041
31.12.2020
Securities
Gross balance sheet
value
Allowance
Net balance sheet
value
issued by local banks – mortgage bonds
5,581
(89)
5,492
issued by local banks
3,836,125
-
3,836,125
issued by other financial institutions
588,445
-
588,445
issued by governments – Treasury bonds
18,640,800
(96)
18,640,704
issued by non-financial entities – bonds
213,573
(11,818)
201,755
issued by local governments – municipal bonds
88,890
(389)
88,501
Total securities measured at amortised cost
23,373,414
(12,392)
23,361,022
31.12.2021
Stage 1
Stage 2
Stage 3
Total
POCI
Securities
23,149,109
4,001
160,583
23,313,693
156,428
issued by local banks – mortgage bonds
5,612
-
-
5,612
-
issued by local banks
3,834,998
-
-
3,834,998
-
issued by other financial institutions
584,844
-
-
584,844
-
issued by governments – Treasury bonds
18,642,064
-
-
18,642,064
-
issued by non-financial entities – bonds
3,229
4,001
160,583
167,813
156,428
issued by local governments – municipal bonds
78,362
-
-
78,362
-
Impairment allowances on securities:
(530)
(318)
(44,804)
(45,652)
(40,648)
issued by local banks – mortgage bonds
(82)
-
-
(82)
-
issued by governments – Treasury bonds
(96)
-
-
(96)
-
issued by non-financial entities – bonds
(34)
(318)
(44,804)
(45,156)
(40,648)
issued by local governments – municipal bonds
(318)
-
-
(318)
-
Total net securities measured at amortised
cost
23,148,579
3,683
115,779
23,268,041
115,780
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
58
31.12.2020
Stage 1
Stage 2
Stage 3
Total
POCI
Securities
23,180,310
4,021
189,083
23,373,414
184,928
issued by local banks – mortgage bonds
5,581
-
-
5,581
-
issued by local banks
3,836,125
-
-
3,836,125
issued by other financial institutions
588,445
-
-
588,445
-
issued by governments – Treasury bonds
18,640,800
-
-
18,640,800
-
issued by non-financial entities – bonds
20,469
4,021
189 083
213,573
184,928
issued by local governments – municipal bonds
88,890
-
-
88,890
-
Impairment allowances on securities:
(823)
(446)
(11,123)
(12,392)
(6,968)
issued by local banks – mortgage bonds
(89)
-
-
(89)
-
issued by governments – Treasury bonds
(96)
-
-
(96)
-
issued by non-financial entities – bonds
(249)
(446)
(11,123)
(11,818)
(6,968)
issued by local governments – municipal bonds
(389)
-
-
(389)
-
Total net securities measured at amortised
cost
23,179,487
3,575
177,960
23,361,022
177,960
In accordance with the Banking Guarantee Fund (“BFG”) Act of 14 December 1994, as at 31 December 2021, BNP Paribas Bank
Polska S.A. held Treasury bonds recognised in the statement of financial position in the amount of PLN 336,429 thousand (with
the nominal value of PLN 340,000 thousand), securing the guaranteed funds under BFG (in 2020 in the amount of PLN 364,531
thousand, with the nominal value of PLN 370,000 thousand).
Change of securities measured at amortised cost based on the balance sheet value:
Change of securities measured at amortised cost based on the balance sheet
value:
12 months
ended
31.12.2021
12 months ended
31.12.2020
Opening balance
23,361,022
17,916,645
Purchase of securities
-
5,776,975
Sale/repurchase of securities
(56,116)
(507,612)
Change in impairment allowances
(33,258)
10,133
Change on the initial value adjustment
-
(6,576)
Change in interest due, foreign exchange differences, discounts and bonuses
(3,607)
171,457
Closing balance
23,268 041
23,361,022
Change in impairment allowances of securities measured at amortised cost
Change in impairment allowances of securities measured at amortised cost
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
(12,392)
(22,526)
Increases due to acquisition or origination
-
(1,678)
Decreases due to derecognition
259
5,241
Changes due to changes in credit risk (net)
(33,519)
6,571
Closing balance
(45,652)
(12,392)
The gross amount of long-term securities measured at amortised cost as at 31 December 2021 was PLN 23,257,519 thousand
(PLN 23,351,070 thousand as at 31 December 2020).
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
59
24. SECURITIES MEASURED AT FAIR VALUE THROUGH
PROFIT OR LOSS
Securities measured at fair value through profit or loss
31.12.2021
31.12.2020
Balance sheet value
Bonds issued by non-financial entities
41,286
54,228
Bonds convertible for non-financial entities bonds
51,121
57,292
Equity instruments
226,988
259,512
Certificates issued by non-financial entities
821
824
Total securities measured at fair value through profit or loss
320,216
371,856
Change in securities measured at fair value through profit or loss:
Change in securities measured at fair value through profit or loss
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
371,856
241,427
Purchase of securities
8,963
41,429
Sale of securities
(30,552)
(7,224)
Change in measurement at fair value through profit or loss
(32,741)
93,994
Change in interest due, foreign exchange differences, discounts and bonuses
2,690
2,230
Closing balance
320,216
371,856
The gross amount of long-term securities measured at fair value through profit or loss as at 31 December 2021 was PLN 71,945
thousand (PLN 106,786 thousand as at 31 December 2020).
The table below presents the amount of securities measured at fair value through profit or loss, divided into designated at fair value
through profit or loss and obligatorily measured at fair value through profit and loss.
12 months
ended
31.12.2021
12 months ended
31.12.2020
Classified as obligatory measured at fair value through profit or loss as at the moment
of initial recognition
93,228
112,343
Classified as measured at fair value through profit or loss as at the moment of initial
recognition
226,988
259,512
Total securities measured at fair value through profit or loss
320,216
371,856
25. SECURITIES MEASURED AT FAIR VALUE THROUGH
OTHER COMPREHENSIVE INCOME
Debt securities
31.12.2021
31.12.2020
Bonds issued by banks
2,608,513
4,319,718
Treasury bonds issued by central governments
4,101,875
4,685,483
Bonds issued by other financial institutions
2,432,965
1,223,359
Securities measured at fair value through other comprehensive income
9,143,353
10,228,560
The measurement of debt securities measured at fair value through other comprehensive income is based on the discounted cash
flow model using current market interest rates, taking into account the issuer's credit risk in the amount corresponding to the
parameters observed on the market for transactions with similar credit risk parameters and similar time horizon. The measurement
does not take into account assumptions that cannot be observed directly on the market.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
60
Change of securities measured at fair value through other comprehensive
income
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
10,228 560
7,953,358
Purchase of securities
87,312,000
50,342,450
Sale of securities
(87,328,265)
(48,329,550)
Change in measurement at fair value through other comprehensive income
(969,416)
163,408
Change in measurement at fair value through profit or loss
(44,296)
36,601
Change in interest due, foreign exchange differences, discounts and bonuses
(55,230)
62 293
Closing balance
9,143,353
10,228,560
The gross amount of securities measured at fair value through other comprehensive income as at 31 December 2021 was PLN
8,261,704 thousand (PLN 10,072,024 thousand as at 31 December 2020).
The table below presents gains and losses related to securities measured at fair value through other comprehensive income, which
in the given period were recognised directly in equity, and then were derecognised and recognised in profit or loss for a given
period of 12 months until 31 December 2021 and 31 December 2020.
Securities measured at fair value through other comprehensive income
12 months ended
31.12.2021
12 months ended
31.12.2020
Profits included directly in equity and then transferred from equity to the statement of
profit or loss
31,559
76,998
Losses included directly in equity and then transferred from equity to the statement of
profit or loss
(33,835)
(1,229)
Total securities measured at fair value through other comprehensive income
(2,276)
75,769
26. INVESTMENTS IN SUBSIDIARIES
31.12.2021
31.12.2020
Financial sector entities
66,451
70,059
Non-financial sector entities
55,582
70,706
Total investments in subsidiaries
122,033
140,765
Shares in subsidiaries as at 31 December 2021 and 31 December 2020
31.12.2021
Acquisition cost
of shares
Balance
sheet value
Interest held by
the Bank in the
entity’s equity
Entity’s name
BANKOWY FUNDUSZ NIERUCHOMOŚCIOWY ACTUS SP. Z O.O.
41,310
22,884
100%
BNP PARIBAS TOWARZYSTWO FUNDUSZY INWESTYCYJNYCH S.A.
37,196
31,934
100%
BNP PARIBAS LEASING SERVICES SP. Z O.O.
39,996
34,517
100%
BNP PARIBAS GROUP SERVICE CENTER S.A.
48,800
31,698
100%
CAMPUS LESZNO SP. Z O.O.
14,214
1,000
100%
BNP PARIBAS SOLUTIONS SPÓŁKA Z O.O.
3,608
-
100%
Total
185,124
122,033
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
61
31.12.2020
Acquisition cost
of shares
Balance
sheet value
Interest held by
the Bank in the
entity’s equity
Entity’s name
BANKOWY FUNDUSZ NIERUCHOMOŚCIOWY ACTUS SP. Z O.O.
57,434
39,008
100%
BNP PARIBAS TOWARZYSTWO FUNDUSZY INWESTYCYJNYCH S.A.
37,196
31,934
100%
BNP PARIBAS LEASING SERVICES SP. Z O.O.
39,996
34,517
100%
BNP PARIBAS GROUP SERVICE CENTER S.A.
48,800
31,698
100%
CAMPUS LESZNO SP. Z O.O.
13,214
-
100%
BNP PARIBAS SOLUTIONS SPÓŁKA Z O.O.
3,608
3,608
100%
Total
200,248
140,765
The decrease in the value of shares in Bankowy Fundusz Nieruchomościowy Actus sp. z o.o. is due to the return of a refundable
capital contribution of PLN 16,124 thousand.
27. INTANGIBLE ASSETS
Intangible assets
31.12.2021
31.12.2020
Licenses
533,325
420,102
Other intangible assets
17,221
7,872
Expenditure on intangible assets
193,623
223,228
Total intangible assets
744,169
651,202
Intangible assets
12 months ended 31.12.2021
Licenses
Other intangible
assets
Expenditure on
intangible assets
Total
Gross book value
As at 1 January
1,480,310
22,576
223,228
1,726 114
Increases:
284,573
14,133
277,106
575,812
reclassification from expenditure
268,487
13,977
-
282,464
purchase
15,968
156
277,106
293,230
other
118
-
-
118
Decreases:
(403,054)
(7,471)
(306,231)
(716,756)
reclassification from expenditure
-
-
(282,464)
(282,464)
sale, liquidation, donation, shortage
(401,883)
(7,471)
-
(409,354)
other
(1,171)
-
(23,767)
(24,938)
As at 31 December
1,361,829
29,238
194,103
1,585,170
Accumulated amortisation (-)
As at 1 January
1,060,209
14,704
-
1,074,913
Changes:
(231,705)
(2,687)
-
(234,392)
amortisation for the financial year
153,992
14,871
-
168,863
other
-
(11,065)
-
(11,065)
sale, liquidation, donation, shortage
(385,697)
(6,493)
-
(392,190)
As at 31 December
828,504
12,017
-
840,521
Impairment allowances (-)
As at 1 January
-
-
-
-
Balance changes:
-
-
480
480
impairment allowance recalculation
-
-
480
480
As at 31 December
-
-
480
480
Net book value
As at 1 January
420,102
7,872
223,228
651,202
As at 31 December
533,325
17,221
193,623
744,169
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
62
Intangible assets
12 months ended 31.12.2020
Licenses
Other intangible
assets
Expenditure on
intangible assets
Total
Gross book value
As at 1 January
1,312,190
19,255
233,655
1,565,100
Increases:
270,604
3,334
282,182
556,120
reclassification from expenditure
264,313
3,198
-
267,512
purchase
6,159
42
249,357
255,559
other
131
93
32,825
33,049
Decreases:
(102,484)
(13)
(292,609)
(395,106)
reclassification from expenditure
-
-
(267,512)
(267,512)
sale, liquidation, donation, shortage
(102,484)
(13)
(3,636)
(106,133)
other
-
-
(21,461)
(21,461)
As at 31 December
1,480,310
22,576
223,228
1,726,114
Accumulated amortisation (-)
As at 1 January
1,032,738
11,509
-
1,044,247
Changes:
27,471
3,195
-
30,666
amortisation for the financial year
124,323
7,967
-
132,290
other
-
(4,760)
-
(4,760)
sale, liquidation, donation, shortage
(96,852)
(12)
-
(96,864)
As at 31 December
1,060,209
14,704
-
1,074,913
Impairment allowances (-)
As at 1 January
-
46
1,685
1,731
Balance changes:
-
(46)
(1,685)
(1,731)
impairment allowance recalculation
-
(46)
(1,685)
(1,731)
As at 31 December
-
-
-
-
Net book value
As at 1 January
279,452
7,701
231,971
519,124
As at 31 December
420,102
7,872
223,228
651,202
The Bank identifies impairment triggers for intangible assets which are not transferred to utilisation yet, i.e. those under
development, on an ongoing basis.
As at 31 December 2021, the Bank had significant contractual obligations incurred in connection with the acquisition of intangible
assets in the amount of PLN 3,505 thousand (PLN 1,394 as of 31 December 2020).
28. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment
31.12.2021
31.12.2020
Fixed assets, including:
445,055
496,744
land and buildings
94,987
119,466
IT equipment
145,573
161,881
office equipment
52,004
51,411
other, including leasehold improvements
152,491
163,986
Fixed assets under construction
22,945
47,438
Right of use, including:
765,221
924,491
land and buildings
743,564
907,828
motor vehicles
21,529
16,570
other, including leasehold improvements
128
93
Total property, plant and equipment
1,233 221
1,468,673
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
63
Changes in property, plant and equipment in 2021 and 2020 were presented below:
Property, plant and equipment and fixed assets under construction
12 months ended 31.12.2021
Land and
buildings
Property, plant
and equipment
Fixed assets
under
construction
Total
Gross book value
As at 1 January
255,847
1,212,979
47,479
1,516,305
Increases:
1,110
84,955
47,663
133,728
reclassification from fixed assets under
construction
1,109
57,108
-
58,217
purchase
1
20,488
44,160
64,649
other
-
7,359
3,503
10,862
Decreases:
(46,514)
(257,002)
(72,193)
(375,709)
reclassification from fixed assets under
construction
-
-
(58,217)
(58,217)
sale, liquidation, donation, shortage, theft
(46,514)
(250,365)
-
(296,879)
other
-
(6,637)
(13,976)
(20,613)
As at 31 December
210,443
1,040,932
22,949
1,274,324
Accumulated depreciation (-)
As at 1 January
123,215
834,337
-
957,552
Balance changes:
(18,632)
(145,680)
-
(164,312)
depreciation for the financial year
5,522
97,051
-
102,573
sale, liquidation, donation, shortage
(24,154)
(242,731)
-
(266,885)
As at 31 December
104,583
688,657
-
793,240
Impairment allowances (-)
As at 1 January
13,166
1,364
41
14,571
Balance changes:
(2,293)
843
(37)
(1,487)
impairment allowance recalculation
(2,293)
843
(37)
(1,487)
As at 31 December
10,873
2,207
4
13,084
Net book value
As at 1 January
119,466
377,278
47,438
544,182
As at 31 December
94,987
350,068
22,945
468,000
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
64
Property, plant and equipment and fixed assets under construction
12 months ended 31.12.2020
Land and buildings
Property, plant
and equipment
Fixed assets
under
construction
Total
Gross book value
As at 1 January
401,841
1,254,732
94,231
1,750,804
Increases:
9,750
166,843
108,051
284,644
reclassification from fixed assets under
construction
9,750
135,907
-
145,657
purchase
-
20,779
94,185
114,964
other
-
10,157
13,866
24,023
Decreases:
(155,744)
(208,596)
(154,803)
(519,143)
reclassification from fixed assets under
construction
-
-
(145,657)
(145,657)
sale, liquidation, donation, shortage, theft
(155,630)
(192,469)
-
(348,099)
other
(114)
(16,127)
(9,146)
(25,387)
As at 31 December
255,847
1,212,979
47,479
1,516,305
Accumulated depreciation (-)
As at 1 January
199,512
914,452
-
1,113,964
Balance changes:
(76,297)
(80,115)
-
(156,412)
depreciation for the financial year
6,631
100,973
-
107,604
sale, liquidation, donation, shortage
(82,928)
(181,088)
-
(264,016)
As at 31 December
123,215
834,337
-
957,552
Impairment allowances (-)
As at 1 January
10,471
924
76
11,471
Balance changes:
2,695
440
(35)
3,100
impairment allowance recalculation
2,695
440
(35)
3,100
As at 31 December
13,166
1,364
41
14,571
Net book value
As at 1 January
191,858
339,356
94,155
625,369
As at 31 December
119,466
377,278
47,438
544,182
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Right of use
12 months ended 31.12.2021
Land and buildings
Motor vehicles
Other, including
leasehold
improvements
Total
Gross book value
As at 1 January
1,116,120
27,343
280
1,143,743
Increases:
79,948
14,384
145
94,477
Decreases:
(140,127)
(5,413)
(280)
(145,820)
As at 31 December
1,055,941
36,314
145
1,092,400
Accumulated depreciation (-)
As at 1 January
202,379
10,773
187
213,339
Balance changes:
93,778
4,012
(170)
97,620
depreciation for the financial year
118,121
8,651
111
126,883
other
(24,343)
(4,639)
(281)
(29,263)
As at 31 December
296,157
14,785
17
310,959
Impairment allowances (-)
As at 1 January
5,914
-
-
5,914
Balance changes:
10,306
-
-
10,306
recognition of impairment allowance
13,250
-
-
13,250
reversal of impairment allowance
(2,944)
-
-
(2,944)
As at 31 December
16,220
-
-
16,220
Net book value
As at 1 January
907,827
16,570
93
924,490
As at 31 December
743,564
21,529
128
765,221
Right of use
12 months ended 31.12.2020
Land and
buildings
Motor vehicles
IT equipment
Other, including
leasehold
improvements
Total
Gross book value
As at 1 January
689,280
18,334
6,556
280
714,450
Increases:
503,318
11,482
-
-
514,800
Decreases:
(76,478)
(2,473)
(6,556)
-
(85,507)
As at 31 December
1,116,120
27,343
(0)
280
1,143,743
Accumulated depreciation (-)
As at 1 January
110,583
5,073
2,452
93
118,201
Balance changes:
91,796
5,700
(2,452)
94
95,138
depreciation for the financial year
117,688
7,776
707
94
126,265
other
(25,892)
(2,076)
(3,159)
-
(31,127)
As at 31 December
202,379
10,773
-
187
213,339
Impairment allowances (-)
As at 1 January
7 185
7,185
Balance changes:
(1,271)
-
-
-
(1,271)
recognition of impairment loss
2,731
-
-
-
2,731
reversal of impairment loss
(4,002)
-
-
-
(4,002)
As at 31 December
5,914
-
-
-
5,914
Net book value
As at 1 January
571,512
13,261
4,104
187
589,064
As at 31 December
907,828
16,570
-
93
924,491
As at 31 December 2021, the Bank had significant contractual obligations incurred in connection with the acquisition of property,
plant and equipment in the amount of PLN 391 thousand (PLN 1,165 thousand as of 31 December 2020).
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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29. LEASES
Bank as a lessee
Bank is a contractual party of leasing agreements related to such base assets as:
property,
vehicles,
land, including perpetual usufruct right to land,
cash deposit machines,
equipment,
IT equipment.
The leasing period of vehicles equals 1 to 5 years. Leasing agreements contain extension options. In respect of vehicles, the Bank
also concludes leaseback agreements.
The Bank is also a party to real estate leasing agreements. The contracts are concluded for both a definite period of 1 to 30 years
and indefinite period. In the case of contracts concluded for an indefinite period, the Bank determines the leasing period based on
the notice period. The agreements provide for variable leasing fees depending on the index (e.g. CSO, HICP).
The Bank has also land lease agreements concluded for an indefinite period, and perpetual usufruct rights for land received for
the period of 40 to 100 years. Lease payments are indexed in accordance with the land management act.
31.12.2021
31.12.2020
Costs of leasing recognised in profit and loss account
(133,903)
(138,406)
cost of interest from leasing liabilities
(4,545)
(6,671)
cost of amortization of assets due to the right of use
(126,883)
(126,265)
costs related to short-term leases (recognised as administrative costs)
(2,475)
(5,470)
Undiscounted lease payments by maturity
31.12.2021
31.12.2020
up to 1 year
127,331
125,907
from 1 year to 5 years
461,560
491,604
over 5 years
312,047
397,459
Total
900,938
1,014,970
31.12.2021
31.12.2020
Book value of liabilities due to discounted lease
860,009
968,592
Bank as a lessor
Lease contracts under which substantially all the risk and rewards of ownership are transferred to the lessee are classified as
finance leases. The statement of financial position includes the value of receivables equal to the net leasing investment. The
revenue recognition from finance lease agreements reflects the constant periodic rate of return on the net leasing investment made
by the Bank under finance leases.
The Bank does not offer operational leasing products, i.e. those in which substantially all the risks and rewards of ownership are
not transferred to the lessee.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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67
Finance lease receivables
31.12.2021
31.12.2020
Gross receivables due to finance lease
698,154
1,062,012
Unrealized financial income
(77,710)
(141,068)
Present value of minimum lease payments
620,444
920,944
Impairment allowance
(72,957)
(83,191)
Total finance lease receivables
547,487
837,753
Gross finance lease receivables by maturity
31.12.2021
31.12.2020
up to 1 year
227,252
332,524
from 1 year to 5 years
432,169
653,224
over 5 years
38,733
76,264
Total gross finance lease receivables
698,154
1,062,012
30. OTHER ASSETS
Other assets:
31.12.2021
31.12.2020
Receivables from contracts with customers:
sundry debtors
244,059
192,538
accrued income
104,559
94,498
payment card settlements
16,194
31,254
social insurance settlements
6,623
5,562
Other:
settlements with securitization company
44,797
67,093
interbank and intersystem settlements
121,977
293,842
deferred expenses
46,429
31,567
tax and other regulatory receivables
10,135
18,877
other lease receivables
3,067
5,799
other
74,110
87,909
Total other assets (gross)
671,950
828,939
Impairment allowances on other receivables from other debtors
(58,566)
(36,079)
Total other assets (net)
613,384
792,860
31. AMOUNTS DUE TO CENTRAL BANK
Amounts due to Central Bank
31.12.2021
31.12.2020
Current account overdraft
-
84,675
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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32. AMOUNTS DUE TO OTHER BANKS
Amounts due to other banks
31.12.2021
31.12.2020
Current accounts
518,982
809,090
Interbank deposits
1,967,290
1,615,771
Loans and advances received
-
160,807
Other liabilities
134,883
245,870
Total amounts due to other banks
2,621,155
2,831,538
Under "Other liabilities" as at 31.12.2021, there are liabilities due to securities sold as a repo transactions in the amount of PLN
92,809 thousand.
There were no breaches of contractual provisions and covenants related to the financial situation of the Bank and disclosure
obligations in 2021 and 2020.
The amount of long-term liabilities due to other banks as at 31 December 2021 equals PLN 26,924 thousand (PLN 393,429
thousand as at 31 December 2020).
33. AMOUNTS DUE TO CUSTOMERS
Amounts due to customers
31.12.2021
31.12.2020
OTHER FINANCIAL INSTITUTIONS
2,160,265
2,965,519
Current accounts
1,282,267
1,381,302
Term deposits
11,420
184,356
Loans and advances received
101,666
-
Settlements of securitization transaction
762,318
1,390,551
Other liabilities
2,594
9,310
RETAIL CUSTOMERS
44,771,344
43,578,012
Current accounts
38,430,796
35,826,600
Term deposits
5,880,637
7,327,267
Other liabilities
459,911
424,145
CORPORATE CUSTOMERS
53,305,156
43,657,049
Current accounts
47,234,325
40,270,559
Term deposits
5,428,183
2,723,760
Other liabilities
642,648
662,730
including RETAIL FARMERS
2,717,618
2,464,474
Current accounts
2,658,847
2,388,764
Term deposits
41,112
60,296
Other liabilities
17,659
15,414
PUBLIC SECTOR INSTITUTIONS
1,586,835
1,265,971
Current accounts
1,487,523
1,111,576
Term deposits
78,654
148,718
Other liabilities
20,658
5,677
Total amounts due to customers
101,823,600
91,466,551
The amount of long-term amounts due to customers as at 31 December 2021 equals PLN 474,970 thousand (PLN 378,908
thousand as at 31 December 2020).
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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34. SUBORDINATED LIABILITIES
31.12.2021
31.12.2020
Subordinated liabilities
4,334,572
4,306,539
Change in the balance of subordinated liabilities
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
4,306,539
1,882,064
Loans received
-
2,300,000
Change in the balance of interest
6,716
1,795
Exchange differences
21,317
122,680
Closing balance
4,334,572
4,306,539
35. OTHER LIABILITIES
Other liabilities
31.12.2021
31.12.2020
Liabilities due to contracts with customers
Sundry creditors
205,750
222,088
Payment card settlements
158,617
128,516
Deferred income
86,995
90,039
Escrow account liabilities
581
3,431
Social insurance settlements
30,320
26,379
Other liabilities
Interbank and intersystem settlements
284,944
29,961
Provisions for non-personnel expenses
331,223
335,187
Provisions for other employees-related liabilities
244,926
213,511
Provision for unused annual holidays
41,201
41,254
Other regulatory liabilities
52,909
47,395
Other lease liabilities
3,267
3,775
Other
63,753
92,621
Total other liabilities
1,504,486
1,234,157
36. PROVISIONS
31.12.2021
31.12.2020
Provision for restructuring
55,530
82,918
Provision for retirement benefits and similar obligations
15,351
17,639
Provision for contingent financial liabilities and guarantees granted
155,638
214,443
Provisions for litigation and claims
1,463,248
335,461
Other provisions
8,229
8,232
Total provisions
1,697,996
658,693
Provisions for restructuring
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
82,918
113,049
Provisions recognition
4,167
48,590
Provisions utilization
(31,177)
(59,882)
Provisions release
(378)
(18,839)
Closing balance
55,530
82,918
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Provision for retirement benefits and similar obligations
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
17,639
15,850
Provisions recognition
2,431
4,324
Provisions utilization
(870)
(1,025)
Provisions release
(3,849)
(1,510)
Closing balance
15,351
17,639
Provisions for financial liabilities and guarantees granted
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
214,443
233,179
Provisions recognition
116,428
96,415
Provisions utilization
(55,414)
(82,951)
Changes resulting from changes in credit risk (net)
(123,080)
(35,887)
Changes arising from updates to the method of estimation used (net)
2 853
-
Other changes
408
3,687
Closing balance
155,638
214,443
Provisions for litigation and similar liabilities
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
335,461
165,983
Provisions recognition
1,125,761
218,858
Provisions utilization
(32,231)
(38,092)
Provisions release
(16,359)
(11,288)
Other changes, including foreign exchange differences
50,616
-
Closing balance
1,463,248
335 461
Other provisions
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
8,232
2,476
Provisions recognition
16
4,644
Provisions utilization
(17)
(25)
Provisions release
(2)
(738)
Other changes
-
1,875
Closing balance
8,229
8,232
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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37. DEFERRED INCOME TAX
Changes in deferred income tax in the financial year:
Deferred tax assets
Deferred tax basis
as at
31 December 2021
Deferred tax basis
as at
31 December 2020
Charge arising
from changes in
asset
in 2021
Outstanding interest accrued on liabilities, including CD interest
and discount
374,981
346,212
5,466
Fair value measurement of derivative instruments and securities*
2,102,832
1,069,542
196,325
Unrealized liabilities due to hedged items and hedging
instruments
39,302
482,691
(84,244)
Impairment allowances on financial assets and provisions for
contingent liabilities (non-deductible), which are probable to
occur
2,899,861
3,397,655
(94,581)
Revenue collected in advance and measured at amortised cost
including the effective interest rate
220,296
347,087
(24,090)
Provision for retirement benefits and provision for restructuring
72,467
92,933
(3,889)
Other provisions for personnel costs
290,320
252,209
7,241
Provisions for non-personnel expenses
334,480
329,291
986
Impairment allowance on fixed and intangible assets
13,564
14,669
(210)
Impairment of subsidiaries and associates
64,983
61,375
686
Compensations paid
8,800
2,896
1,122
Impairment allowance on lease receivables
7,282
12,570
(1,005)
Impairment allowance on available for sale assets related to
leasing operations
65,674
70,620
(940)
Surplus of the tax value of leased fixed assets over the book
value of receivables
87,945
110,869
(4,356)
Lease down-payments
-
7
-
Deferred income from leasing operations
7,827
6,764
202
Lease liabilities
869,192
958,280
(16,927)
Impairment allowances on other assets
39,061
8,451
5,816
Valuation of securities measured through other comprehensive
income
753,102
41,612
135,183
Other negative deductible temporary differences
14,599
32,414
(3,385)
Total:
8,266,568
7,638,146
119,400
Basis for assets recognised in profit or loss (in the current and
preceding years) and charge arising from changes in asset
7,513,466
7,596,534
(15,782)
Basis for assets recognised in correspondence with revaluation
reserve and charge arising from changes in asset
753,102
41,612
135,182
Unrecognised deferred tax asset is related to impairment allowances on loans and advances whose non-recoverability will not
become probable in the future. The related unrecognised temporary differences amounted to PLN 26,767 thousand as at 31
December 2021 as compared to PLN 33,219 thousand as at 31 December 2020.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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world
72
Deferred tax liability
Deferred tax basis
as at 31 December
2021
Deferred tax basis
as at 31 December
2020
Charge arising from
changes in asset
in 2021
Accrued revenue from interest on amounts due
(1,070,459)
(1,092,559)
4,199
Fair value measurement of derivative instruments and
securities
(1,046,552)
(1,713,544)
126,728
Valuation of securities measured through other
comprehensive income
(17,661)
(353,222)
63,757
Difference between accounting and tax depreciation of the
Bank’s own fixed assets
(358,069)
(301,596)
(10,730)
Net value of right of use (RoU)
(781,441)
(930,406)
28,303
R&D expenses
(34,525)
(4,178)
(5,766)
Subleasing agreements
(34,026)
-
(6,465)
Unrealized liabilities related to hedged items and hedging
instruments
(1,123,168)
-
(213,402)
Deferred costs of leasing operations
(12,956)
(9,011)
(750)
Other positive taxable temporary differences
(79)
(4,402)
821
Total:
(4,478,936)
(4,408,918)
(13,305)
Basis for the provision recognised in profit or loss (in the
current and preceding years) and chargé arising from
changes in the provision
(4,461,275)
(4,051,395)
(77,877)
Basis for the provision charged to revaluation reserve and
chargé arising from changes in the provision
(17,661)
(357,523)
64,572
Deferred tax assets
1,570,648
1,451,247
Deferred tax liability
(850,998)
(837,694)
Net deferred tax asset
719,650
613,553
38. DISCONTINUED OPERATIONS
The Bank did not discontinue any operations in 2021 or 2020.
39. SHARE-BASED PAYMENTS
The Bank has adopted the “Remuneration policy for individuals with a material impact on the risk profile of BNP Paribas S.A.".
The principles and assumptions contained in the Policy guarantee the existence of a rational, balanced and controllable
remuneration policy, consistent with the accepted risk level, standards and values of BNP Paribas S.A. and relevant laws and
regulations, in particular the Minister of Finance, Funds and Regional Policy Regulation dated 8 June 2021 on the risk management
system, internal control system and remuneration policy in banks and recommendations included in the CRD5 Directive.
Pursuant to the Remuneration policy for Individuals with a significant impact on the Bank's risk profile approved 31 December
2019, from 2020 (excluding persons who have terminated their cooperation with the Bank) the applicable financial instrument in
which part of the variable remuneration is paid is ordinary shares (change from phantom shares).
The 2020 variable remuneration convertible into a financial instrument was granted in actual shares of the Bank.
On 9 December 2021, the Supervisory Board approved a modified Remuneration Policy for persons with material impact on the
risk profile of BNP Paribas Bank S.A. The changes consisted mainly in adjusting the provisions of the Policy to the Ordinance of
the Minister of Finance, Funds and Regional Policy of 8 June 2021 on the risk management system and internal control system
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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and remuneration policy in banks and the guidelines contained in the CRD5 Directive and consisted, among others, in extending
the deferral period.
Phantom share-based programme
As at 31 December 2019, there was a variable remuneration scheme in force, granted in the form of a financial instrument -
phantom shares, which will be settled in subsequent periods.
The variable remuneration granted in form of phantom shares is paid as cash equivalent with a value corresponding to the number
of shares granted. The payment shall be made after the expiry of the retention period.
Financial instruments (phantom shares) - programme amendments in 2021 and 2020.
In 2021, payments in the amount of PLN 5,581 thousand were made due to exercising rights to deferred phantom shares (under
the programme for 2016, 2017 and 2018).
The table below presents the terms of the Stock Purchase Plan in 2021.
Transaction type in line with IFRS 2
Share-based payments settled in cash
Plan issued on
21 June 2012 - the Resolution of the Supervisory Board approving the
Remuneration Policy
The commencement date for granting phantom shares
8 March 2021
The end date for granting phantom shares
9 March 2021
Programme based on the Bank's shares
There is variable remuneration scheme in place for the Bank's employees with a significant impact on risk profile under the Bank's
share-based programme. The variable remuneration is divided into a part granted in the form of a financial instrument (Bank
shares) and the remaining part granted in cash.
The right to variable remuneration expressed in the form of the Bank's shares is granted by issuing subscription warrants in a
number corresponding to the number of shares granted, one warrant entitles to acquire one share. The payment of the variable
remuneration expressed in the form of the Bank's shares, i.e. taking up the Bank's shares through the exercise of rights from
subscription warrants, takes place after the expiry of the retention period.
The Bank will grant the participants of the Incentive Scheme subscription warrants, which will result in the right to acquire a new
Series M shares issued by the Bank under the conditional share capital increase. The number of Series M shares shall not exceed
576,000. The rights to acquire Series M shares shall be granted taking into account the principles of dividing the variable
remuneration into the non-deferred and deferred portions, as defined in the Remuneration Policy and the regulations adopted on
its basis. Series M shares will constitute a component of variable remuneration for persons having a significant impact on the
Bank's risk profile within the meaning of the Regulation of the Minister of Finance, Funds and Regional Policy of 8 June 2021.
In order to implement the Incentive Programme, the Extraordinary General Meeting of the Bank also adopted resolutions on the
issue of subscription warrants and conditional increase of the share capital through the issue of Series M shares, depriving the
existing shareholders of the subscription right to warrants and to Series M shares, amending the Bank's Articles of Association
and dematerialising and applying for the admission of Series M shares to trading on a regulated market.
On 24 April 2020, the Bank obtained a decision of the Polish Financial Supervision Authority on the amendments to the Articles of
Association resulting from this Resolution, and on 14 May 2020 the conditional share capital increase was registered by the Court.
The amount and the division into the non-deferred and deferred portions of variable remuneration for employees identified as MRT
is determined in accordance with the Bank's Remuneration Policy and regulations adopted on its basis. The regulations contain
information on the annual bonus levels assigned to particular appraisals:
1. the part constituting at least 50% is assigned in the form of the Bank's shares (which will be acquired by exercising rights from
subscription warrants);
31.12.2021
31.12.2020
Financial instrument
Financial instrument
units
value (PLN ‘000)
units
value (PLN ‘000)
Opening balance
220,298
11,455
294,738
15,628
granted in the period
-
-
13,586
928
executed during the period
(98,748)
(5,581)
(88,026)
(5,101)
expired
(3,780)
(258)
-
-
Closing balance
117,770
5,616
220,298
11,455
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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2. the part of variable remuneration not less than 40% of that remuneration is deferred. The deferral period is at least 5 years for
Senior Management and a minimum of 4 years and a maximum of 5 years for employees other than Senior Management.
The maximum deferral period of 5 years is applied in the case of an assignment of Variable Remuneration that exceeds a
particularly high amount.
In order to ensure uniform and lawful conditions for the acquisition of the right to remuneration and its payment, remuneration shall
be paid to persons having a material impact on the risk profile of the Bank taking into account the principles of suitability,
proportionality and non-discrimination.
The Bank's rules include the possibility to withhold or limit the payment of variable remuneration where the Bank does not meet
the combined buffer requirement:
1. The Bank shall be prohibited from paying assigned variable remuneration in excess of the maximum amount to be paid (the
so-called MDA) in a situation where the Bank does not meet the combined buffer requirement within the meaning and under
the rules set out in Articles 55 and 56 of the Act on macro-prudential supervision.
2. In the event when the Bank does not meet the combined buffer requirement, then before the MDA is calculated, the Bank:
does not undertake commitments to pay variable remuneration or discretionary pension benefits;
does not make variable remuneration payments if the obligation to pay them arose during the period in which the Bank did
not meet the combined buffer requirement.
If the legal relationship between the Bank and a given person having a material impact on the Bank's risk profile ceases to exist or
if the position is excluded from the list, the remuneration is paid provided that the requirements specified in the Remuneration
Policy for persons having a material impact on the risk profile of BNP Paribas Bank Polska S.A. are met.
A person is entitled to variable remuneration, provided that he/she has not been charged and is not subject to criminal or disciplinary
sanctions.
The number of shares granted in April 2021 under the non-deferred portion of variable remuneration was 99,864 pieces.
In 2021, for the variable remuneration granted for 2019 and 2020 and in connection with the forecast of the variable remuneration
for 2021, which will be granted in 2022, in the part concerning shares to be issued in the future, the Bank has recognized in the
capitals an amount of PLN 6,073 thousand. At the same time, an amount of PLN 7,528 thousand (recognised in the previous year)
is presented in capital. The actuarial value of the shares issued in 2021 in the amount of PLN 4,742 thousand is included in the
mentioned amounts.
Financial instruments (shares - deferred portion) changes in 2021 and 2020 determined in relation to the deferred part of the
variable remuneration for 2019 and 2020.
31.12.2021
31.12.2020
Financial instrument
Financial instrument
units
value (PLN ‘000)
units
value (PLN
‘000)
Opening balance
68,910
4,638
-
-
granted in the period
39,941
2,765
68,910
4,638
Closing balance
108,851
7,403
68,910
4,638
The table below presents the terms and conditions of the Share/Warrants Purchase Plan for 2021
Type of transaction under IFRS 2
Share-based payments
Program announcement date
31 January 2020 – the Resolution of the Supervisory Board
approving the Remuneration Policy.
The commencement date for granting of shares
1 April 2021
The end date for granting shares
6 April 2021
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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40. CONTINGENT LIABILITIES
The following table presents the value of liabilities granted and received by the Bank.
Contingent liabilities
31.12.2021
31.12.2020
Contingent commitments granted
43,018,775
37,794,803
Financial commitments
32,755,485
29,961,150
Guarantees
10,263,290
7,833,653
Contingent commitments received
27,524,546
21,879,108
Financial commitments
13,592,590
13,005,690
Guarantees
13,931,956
8,873,418
The amount of contingent liabilities granted as at 31 December 2021 equals PLN 18,813,999 thousand (PLN 15,903,598 thousand
as at 31 December 2020), while the amount of contingent liabilities received by the Bank as at 31 December 2021 equals PLN
24,046,996 thousand (PLN 20,249,636 thousand as at 31 December 2020).
41. COLLATERALS
The Bank had the following assets pledged as collaterals for payment of its own and third-party liabilities.
Assets of the Bank pledged as collaterals
The table below presents the balance sheet value of financial assets that have been established as collateral for contracted
liabilities or contingent liabilities.
Assets pledged as collaterals
31.12.2021
31.12.2020
Guaranteed amount protection fund – Bank Guarantee Fund (BFG)
nominal value of collateral
340,000
370,000
type of collateral
Treasury bonds
maturity
2026-07-25
2026-07-25
balance sheet value of collateral
336,429
364,531
Collateral of BM BGŻ BNP Paribas S.A. transactions in securities deposited with the national depository for securities
(KDPW) as part of the stock exchange guarantee fund
cash
-
3,265
Collateral for derivative transaction settlement
nominal value of collateral
1,558,124
344,005
type of collateral
call deposits (amounts due from other banks)
Collateral of SPV settlements for securitization
nominal value of collateral
761,924
1,318,022
type of collateral
receivables that are the subject to a
securitization transaction
Collateral due to repo transactions
Balance sheet value
92,809
-
fair value
90,629
-
Assets of the customer pledged as collaterals
The Bank has not established collateral on customer assets that may be sold or pledged.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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42. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
Based on the methods used to determine fair value, the Bank classifies particular assets and liabilities into the following categories:
Level 1
Assets and liabilities measured on the basis of market quotations available on active markets for identical instruments.
Level 2
Assets and liabilities measured using valuation techniques based on directly or indirectly observed market quotations or other
information based on market quotations.
Level 3
Assets and liabilities measured using valuation techniques where input data is not based on observable market data.
The Bank periodically (at least quarterly) assigns individual assets and liabilities to particular levels of the fair value hierarchy. The
basis for classification to particular levels of the valuation hierarchy is the input data used for the valuation, i.e. market quotes or
other information. The lowest level of input data used for the valuation, having a significant impact on determining the fair value,
determines the classification of an asset or liability to a particular hierarchy level.
If the input data is changed to data classified to another level, e.g. as a result of changes in the valuation methodology or changes
in market data sources, the Bank transfers the asset or liability to the appropriate level of measurement in the reporting period in
which the change occurred.
In 2021, the Bank did not make any changes in the method of fair value measurement that would result in the transfer of financial
assets and liabilities between levels.
On 31 December 2021, particular instruments were included in the following valuation levels:
1. the first level: Treasury bonds and bonds issued by European Investment Bank (fair value is determined directly by reference
to published active market quotations), shares listed on stock exchanges;
2. the second level: interest rate options in EUR, USD and GBP, FX options, base interest rate and FX swaps maturing within
10 years, FRA maturing within 1 year, FX Forward, NDF and FX swaps maturing within 1 year, commodity swaps maturing
within 1 year, interest rate swaps maturing within 10 years, structured instruments (whose fair value determined using
measurement techniques which are based on available, verifiable market data);
3. the third level: interest rate options in PLN, FX options maturing over 1 year, FX Forward, NDF and FX swaps maturing over
1 year, base interest rate and FX swaps maturing over 10 years, commodity swaps maturing over 1 year, interest rate swaps
with residual maturity exceeding 10 years, structured instruments (whose fair value determined using measurement
techniques (models) which are not based on available, verifiable market data), derivatives for which significant Fair Value
Correction or Credit Value Adjustment was created and corporate bonds other than CATALYST-listed ones, shares which
are not listed on the WSE and other stock exchanges, subsidized loans (fair value determined using measurement techniques
(models) which are not based on available, verifiable market data, i.e. in cases other than those described in 1 and 2).
The table below presents classification of assets and liabilities re-measured to fair value in the separate financial statements into
three categories:
31.12.2021
Level 1
Level 2
Level 3
Total
Assets measured at fair value:
9,143,353
1,412,875
2,093,752
12,649,980
Derivative financial instruments
-
1,347,410
554,509
1,901,919
Hedging instruments
-
65,465
-
65,465
Securities measured at fair value through other comprehensive
income
9,143,353
-
-
9,143,353
Securities measured at fair value through profit or loss
-
-
320,216
320,216
Loans and advances to customers measured at fair value through
profit or loss
-
-
1,219,027
1,219,027
Liabilities measured at fair value:
-
2,440,495
520,144
2,960,639
Derivative financial instruments
-
1,458,287
459,745
1,918,032
Hedging instruments
-
982,208
60,399
1,042,607
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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31.12.2020
Level 1
Level 2
Level 3
Total
Assets measured at fair value:
10,228,560
1,681,443
2,293,671
14,203,674
Derivative financial instruments
-
1,244,523
287,094
1,531,617
Hedging instruments
-
436,920
94,873
531,793
Securities measured at fair value through other comprehensive
income
10,228,560
-
-
10,228 560
Securities measured at fair value through profit or loss
-
-
371,856
371,856
Loans and advances to customers measured at fair value through
profit or loss
-
-
1,539,848
1,539,848
Liabilities measured at fair value:
-
1,233,070
348,105
1,581,175
Derivative financial instruments
-
1,173,043
348,105
1,521,148
Hedging instruments
-
60,027
-
60,027
In the case of some derivatives there was a change of valuation level from 3 to 2 due to reduction of time to maturity. Four of the
transactions migrated from valuation level 2 to level 3 due to the increased CVA/DVA adjustment. There was also a transfer of
Visa shares and Mastercard shares from level 1 to level 2 (due to the application of a liquidity discount) and a transfer of PFR
bonds from level 1 to level 2 (the price comes from the market, but a reduction in liquidity was observed).
The fair value of level 2 and 3 financial instruments is determined using the measurement techniques (e.g. models).
The input data used for purposes of valuation of level 2 and 3 instruments include foreign exchange rates, yield curves, reference
rates, changes in foreign exchange rates, reference rates, stock market indices and stock prices, swap points, basis spreads,
stock market index values and futures prices.
In the case of derivative financial instruments classified to level 3, the unobservable parameters are correlations between stock
exchange indices, correlations between exchange rates and stock exchange indices and implied volatilities of shares listed on the
WSE and the WIG20 index.
As regards level 3 municipal bonds, the credit risk margin is a non-observable parameter which is replaceable with the market
margin for instruments within similar characteristics. The effect of changes in the credit margin on changes in the fair value is
considered immaterial.
The table below presents the changes in the measurement of level 3 assets and liabilities as well as amounts charged to profit or
loss and statement of comprehensive income.
31.12.2021
Derivative
financial
instruments
– assets
Hedging
instruments -
assets
Financial assets
measured at fair
value
Derivative
financial
instruments
– liabilities
Hedging
instruments -
liabilities
Opening balance
287,094
94,873
1,911,704
(348,105)
-
Total gains/losses recognised in:
267,414
(94,873)
18,719
(111,640)
(60,399)
statement of profit or loss
267,414
(94,873)
18,719
(111,640)
(60,339)
Statement of comprehensive income
-
-
-
-
-
Purchase
-
-
3,431
-
-
Sale
-
-
(786)
-
-
Settlement/expiry
-
-
(393,825)
-
-
Closing balance
554,509
-
1,539,243
(459,745)
(60,399)
Unrealized gains/losses recognised in profit or loss related to assets and liabilities at the end of the period
267,414
(94,873)
18,719
(111,640)
(60,339)
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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31.12.2020
Derivative
financial
instruments
– assets
Hedging
instruments -
assets
Financial assets
measured at fair
value
Derivative
financial
instruments
– liabilities
Hedging
instruments -
liabilities
Opening balance
300,814
90,992
2,215,823
(306,055)
(1,626)
Total gains/losses recognised in:
(13,720)
3,881
60,332
42,050
1,626
statement of profit or loss
(13,720)
3,881
60,332
42,050
1,626
Purchase
-
-
31,428
-
-
Sale
-
-
(7,224)
-
-
Settlement/expiry
-
-
(417,728)
-
-
Transfer
-
-
29,072
-
-
Closing balance
287,094
94,873
1,911,704
(348,105)
-
Unrealized gains/losses recognised in profit or loss related to assets and liabilities at the end of the period
(13,720)
3,881
60,332
42,050
1,626
The Bank measures the fair value by discounting all contractual cash flows related to transactions, with the use of yield curves
characteristic of each transaction group. Where no repayment schedule is agreed for a product, it is assumed that the fair value is
equal to the carrying amount of the transaction, or, in case of revolving products, the curves derived from the liquidity profile of
these products and the expected behavioural duration of these exposures are used.
The yield curve used for fair value measurement of liabilities (such as customer and interbank deposits) and receivables (such as
loans to customers and interbank deposits) comprises:
- the credit risk free yield curve;
- the cost of obtaining financing above the credit risk free yield curve;
- the market margin that reflects credit risk for receivables.
The yield curve for fair value measurement of loans is constructed through classification of loans into sub-portfolios depending on
the product type and currency as well as customer segmentation. A margin is determined for each sub-portfolio taking into account
credit risk. The margin may be determined in two ways: by reference to margins used for each type of loan granted over the past
six months or with the use of credit risk parameters of a given customer determined in the process of calculating the impairment
of financial instruments.
When using the first approach for foreign currency mortgage loans, the margin for the entire portfolio of a specific type of mortgage
loans serves as the basis for determination of a margin reflecting credit risk as no new transactions are concluded. In the case of
insufficient amount of loans, which makes it impossible to reliably determine the amount of margin, the average market margin for
products of a given type is used.
The following table presents the book and fair values of those financial assets and liabilities which have not been presented in the
Bank’s statement of financial position at fair value, along with the measurement classification level. The current credit risk margin
and the current liquidity margin, the values of which are not quoted on an active market, are the non-observable parameters for all
the categories.
31.12.2021
Book value
Fair value
Level
Financial assets
Cash and balances at Central Bank
4,631,410
4,631,410
3
Amounts due from other banks
2,254,621
2,081,712
3
Loans and advances to customers measured at amortised cost
80,124,751
79,041,234
3
Securities measured at amortised cost
23,268,041
21,612,237
1,3
Other financial assets
378,151
378,151
3
Investments in subsidiaries
122,033
122,033
3
Financial liabilities
Amounts due to other banks
2,621,155
2,575,044
3
Amounts due to customers
101,823,600
101,060,771
3
Subordinated liabilities
4,334,572
4,591,245
3
Lease liabilities
860,009
860,009
3
Other financial liabilities
683,479
683,479
3
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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31.12.2020
Book value
Fair value
Level
Financial assets
Cash and balances at Central Bank
3,421,866
3,421,866
3
Amounts due from other banks
555,289
524,805
3
Loans and advances to customers measured at amortised cost
70,446,975
69,156,222
3
Securities measured at amortised cost
23,361,022
25,276,195
1,3
Other financial assets
560,009
560,009
3
Investments in subsidiaries
140,765
140,765
3
Financial liabilities
Amounts due to the Central Bank
84,675
84,675
3
Amounts due to other banks
2,831,538
2,828,332
3
Amounts due to customers
91,466,551
91,479,396
3
Subordinated liabilities
4,306,539
4,847,359
3
Lease liabilities
968,592
968,592
3
Other financial liabilities
414,150
414,150
3
a) Amounts due from banks and amounts due to banks
Amounts due from banks and amounts due to banks include interbank deposits and interbank settlements. The fair value of fixed
and floating rate deposits/placements is based on discounted cash flows determined by reference to money market interest rates
for items with similar credit risk and residual maturity.
b) Loans and advances to customers
The estimated fair value of loans and advances is the discounted value of future cash flows to be received, using the current
market rates adjusted by financing cost and by actual or estimated credit risk margins.
c) Securities measured at amortised cost
The fair value of securities measured at amortised cost was determined by reference to the published quoted prices in an active
market for quoted securities (first level of measurement). However, for unquoted securities, fair value was determined using
valuation techniques not based on available market data (third level of measurement).
d) Investments in subsidiaries and associates
The fair value of investments in subsidiaries and associates amounts to their balance sheet value.
e) Liabilities due to subordinated loan
Liabilities include subordinated loans. The fair value of the floating rate loan is based on discounted cash flows determined by
reference to money market interest rates for items with similar credit risk and residual maturity.
f) Liabilities due to customers
The fair value of fixed and floating rate deposits is based on discounted cash flows determined by reference to money market
interest rates adjusted by the actual cost of securing funds over the past three months. For demand deposits, it is assumed that
the fair value is equal to their carrying amount.
g) Lease liabilities
The fair value of lease liabilities was determined as equal to their balance sheet value.
Compensation of financial assets and liabilities
31.12.2021
Gross value
presented in
financial
assets/liabilities
Net value presented
in financial
assets/liabilities
Offsetting value under
concluded contracts
Cash collateral
value
Net value
Financial assets
Trading and hedging
derivatives
1,967,384
1,967,384
(1,283,175)
(46,407)
637,801
Total
1,967,384
1,967,384
(1,283,175)
(46,407)
637,801
Financial liabilities
Trading and hedging
derivatives
3,046,005
3,046,005
(1,283,175)
(1,552,559)
210,271
Total
3,046,005
3,046,005
(1,283,175)
(1,552,559)
210,271
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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31.12.2020
Gross value
presented in
financial
assets/liabilities
Net value presented
in financial
assets/liabilities
Offsetting value under
concluded contracts
Cash collateral
value
Net value
Financial assets
Trading and hedging
derivatives
2,063,410
2,063,410
(1,244,829)
(342,436)
476,146
Total
2,063,410
2,063,410
(1,244,829)
(342,436)
476,146
Financial liabilities
Trading and hedging
derivatives
1,581,175
1,581,175
(1,244,829)
(260,442)
75,905
Total
1,581,175
1,581,175
(1,244,829)
(260,442)
75,905
The possibility to compensate receivables and liabilities which are not due as well as settlement in the net amount in case of early
settlement of the contract, result from the provisions of framework agreements / ISDA concluded with the customers.
43. LOAN PORTFOLIO SALE
In 2021 the Bank concluded agreements regarding the sale of individual loans from SME, corporate and retail loan portfolio.
The gross book value of the portfolio sold measured at amortised cost amounted to PLN 711,954 thousand, while the amount of
created impairment allowances was PLN 638,727 thousand.
The contractual price for the sale of these portfolios has been set at PLN 158,147 thousand. The net effect on the Bank's results
from the sale of portfolios which amounted to PLN 84,920 thousand is presented in Net impairment allowances on financial assets
and provisions on contingent liabilities.
44. SECURITIZATION
In December 2017, the Bank performed a securitization transaction on the portfolio of cash and car loans, using the BGZ Poland
ABS1 DAC (SPV) subsidiary. The transaction is a traditional securitization involving the transfer of ownership of the securitized
receivables to SPV (BGŻ Poland ABS1 DAC based in Ireland). The revolving period was 24 months and ended in December 2019.
From January 2020, the transaction is amortised.
As a result of the securitization the Group obtained financing for its operations in exchange for giving away rights to future flows
resulting from the securitized loan portfolio in the amount of PLN 2,300,471 thousand as of 22 November 2017 (the so-called cut-
off date). The maximum term of the full redemption of bonds and loan repayment is 27 April 2032.
SPV issued bonds with a total value of PLN 2,180,850 thousand on the basis of securitized assets and received a loan of PLN
119,621 thousand, which was secured by a registered pledge on the rights to cash flows from securitized assets. At the end of
December 2021, the value of bonds and loan amounted to PLN 761,924 thousand.
The main benefit of the performed transaction is a positive impact on capital adequacy ratios and improvement of liquidity and
diversification of financing sources.
In the light of the provisions of IFRS 9, the contractual terms of the securitization do not fulfil the conditions for derecognition of
securitized assets. In connection with the above, the Group recognises securitized assets in “Loans and advances to customers”
as of 31 December 2021 at net value of PLN 775,591 thousand.
The Bank acts as a servicing entity in the transaction.
Balance sheet values and fair values of financial assets covered by securitization and related liabilities:
Balance sheet amount
Fair value
31.12.2021
31.12.2020
31.12.2021
31.12.2020
Assets
775,591
1,393,049
706,029
1,293,509
Liabilities
761,924
1,390,318
761,924
1,390,318
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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45. CUSTODY OPERATIONS
The Bank conducts custody operations consisting in maintaining assets or client transactions settlement. These assets have not
been disclosed in the financial statements as they do not belong to the Bank.
As at 31 December 2021, the Custody Services Office conducted 245 securities accounts for the clients. The fair value of the
financial instruments of the customers of the Custody Services Office for this date was PLN 19,773,638 thousand.
In the reporting period, securities in public trading and securities in material form as well as securities traded abroad were stored
by the Bank. As part of providing custody services to the clients, the Bank cooperated with several brokerage offices. The Bank
acts as a depository for domestic investment funds.
46. THE SHAREHOLDER’S STRUCTURE OF BNP PARIBAS
BANK POLSKA S.A.
As at 31 December 2021, the structure of the shareholders of BNP Paribas Bank Polska S.A., including those holding at least 5%
of the total number of votes at the General Shareholders’ Meeting was as follows:
Shareholders
Number of shares
Percentage
interest in
share capital
Number of
votes at the
General
Shareholders’
Meeting
Percentage
share in the
total number
of votes at the
General
Shareholders’
Meeting
BNP Paribas, in total:
128,991,553
87.44%
128,991,553
87.44%
BNP Paribas directly
93,501,327
63.38%
93,501,327
63.38%
BNP Paribas Fortis SA/NV directly
35,490,226
24.06%
35,490,226
24.06%
Other shareholders
18,527,229
12.56%
18,527,229
12.56%
Total
147,518 782
100.00%
147,518,782
100.00%
The Bank’s share capital as at 31 December 2021 was PLN 147,519 thousand.
The share capital is divided into 147,418,918 shares with the par value of PLN 1,00, including: 15,088,100 A series shares,
7,807,300 B series shares, 247,329 C series shares, 3,220,932 D series shares, 10,640,643 E series shares, 6 132,460 F series
shares, 8,000,000 G series shares, 5,002,000 H series shares, 28,099,554 I series shares, 2,500,000 series J shares and
49,880,600 series L shares, 99,864 series M shares.
The Bank’s shares are ordinary bearer and registered shares. As at 31 December 2021, there were 67 005,515 registered shares,
including 4 shares from B series. No special control rights are attached to the ordinary bearer shares.
Four B series registered shares in the Bank are preference shares with respect to payment of the full par value per share in the
event of the Bank’s liquidation, once the creditors’ claims have been satisfied, with priority over payments per ordinary shares,
which, after the rights attached to the preference shares have been exercised, may be insufficient to cover the total par value of
those shares.
The Bank’s Statute does not impose any limitations as to exercising the voting rights or set forth any provisions whereby the equity
rights attached to securities would be separated from the holding itself. One right to vote at the General Shareholders’ Meeting of
the Bank is attached to each share. The Bank’s Statute does not impose any limitations as to transferring the title to the securities
issued by the Bank.
Changes in the shareholding structure in 2021
On 6 April 2021, on the basis of settlement orders referred to in § 6 of the Detailed Rules of Operation of the National Depository
for Securities, 99,864 series M ordinary bearer shares of the Bank, with nominal value of PLN 1 each (hereinafter: Series M
Shares), were registered with the National Depository for Securities and admitted to trading by the Warsaw Stock Exchange, and
Series M Shares were recorded in the securities accounts of the eligible persons.
Series M shares were issued under a conditional increase of the Bank's share capital pursuant to Resolution No. 5 of the
Extraordinary General Meeting of the Bank dated 31 January 2020, as amended by Resolution No. 37 of the Ordinary General
Meeting of the Bank dated 29 June 2020. Series M shares were subscribed in exercise of the rights attached to series A registered
subscription warrants, each of which gave the right to subscribe for one Series M share.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Pursuant to of Article 451 §2 the second sentence of the Commercial Companies Code, the allocation of Series M Shares became
effective at the moment of their entry in the securities accounts of authorised persons.
Therefore, pursuant to Art. 451 §2 in conjunction with Art. 452 §1 of the Commercial Companies Code, the rights attached to
99,864 Series M Shares of the total nominal value of PLN 99,864 were purchased, and the share capital of the Bank was increased
from PLN 147,418,918 to PLN 147,518,782.
The total number of votes resulting from all the shares of the Bank is 147,518,782. The number of votes resulting from the allocated
Series M Shares is 99,864 votes.
The amount of the conditional share capital increase after the Series M Shares issue is PLN 476,136.
On 2 June 2021, a notice from two shareholders of the Bank, BNP Paribas S.A. and Rabobank International Holding B.V.
(hereinafter: Shareholders), in which the Shareholders announced the completion of the accelerated book building process
(hereinafter: ABB) aimed at the sale by the Shareholders of not more than 7,472,786 ordinary bearer shares in the Bank,
representing in total not more than 5.07% of the Bank's share capital and representing not more than 5.07% of the total number of
votes in the Bank (hereinafter: Sold Shares).
According to the Notice, as a result of the ABB process, the total number of Sold Shares has been determined at 7,472,786,
representing 5.07% of shares in the Bank's share capital and in the total number of votes in the Bank, of which:
BNP Paribas S.A. will sell 1,858,911 Sale Shares, which represent 1.26% of shares in the Bank's share capital and in the
total number of votes in the Bank, and
Rabobank International Holding B.V. will sell 5,613,875 Sale Shares, which constitute 3.81% of shares in the Bank's share
capital and in the total number of votes in the Bank.
Following the settlement of the sale of the Sold Shares under the ABB process:
BNP Paribas S.A. directly holds 93,501,327 shares in the Bank representing 63.38% of the total number of shares and
votes at the Bank, and together with other entities of the BNP Paribas S.A. Capital Group controls jointly 128,991,553
shares in the Bank representing 87.44% of the total number of shares and votes at the Bank,
Rabobank International Holding B.V. does not hold any shares of the Bank.
BNP Paribas Bank Polska shares held by the members of the Supervisory Board and Management Board
Summary of the holdings of Bank shares and share entitlements by members of the Bank's Management Board and Supervisory
Board as at the date of publication of the report for the 3 quarters of 2021 (9 November 2021) and the report for 2021 (3 March
2022) is presented below.
The holdings of the individual members of the Management Board of the Bank's shares and share entitlements have not changed
since the publication date of the previous report, i.e. 9 November 2021.
MEMBER OF THE BANK'S
MANAGEMENT BOARD
SHARES*
SUBSCRIPTION
WARRANTS
SHARES
SUBSCRIPTION
WARRANTS**
9.11.2021
9.11.2021
3.03.2022
3.03.2022
Przemysław Gdański
7,989
9,148
7,989
9,148
Jean-Charles Aranda
-
2,338
-
2,338
André Boulanger
-
3,129
-
3,129
Przemysław Furlepa
-
2,722
-
2,722
Wojciech Kembłowski
-
3,195
-
3,195
Kazimierz Łabno
-
1,862
-
1,862
Magdalena Nowicka
-
-
-
-
Volodymyr Radin
-
895
-
895
Agnieszka Wolska
-
-
-
-
* M series shares subscribed on 6 April 2021 in exercise of the rights attached to A1 series subscription warrants (A1 series registered subscription
warrants were subscribed on 8 March 2021; one warrant entitled to subscribe for one M series ordinary bearer share of BNP Paribas Bank Polska
S.A., with the issue price of PLN 1.00 per share); in the case of Mr Przemysław Gdański, the number of M series shares subscribed was 7,489,
the number of shares purchased on the WSE share market was 500
** A2 series subscription warrants taken up on 25.03.2021 - one A2 series warrant entitles to acquire one M series ordinary bearer share of BNP
Paribas Bank Polska S.A., at the issue price of PLN 1.00 per share
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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The members of the Bank's Supervisory Board did not declare their ownership of the Bank's shares/privileges as at 31 December
2021 and as at the date of publication of this annual report, i.e. 3 March 2022, which has not changed since the publication of the
report for the 3 quarters of 2021, i.e. 9 November 2021.
Investor commitment of BNP Paribas regarding the liquidity of the Bank's shares
In accordance with the commitment made by BNP Paribas S.A. - the Bank's main shareholder - to the Financial Supervision
Authority, submitted on 14 September 2018, the number of the Bank's free float shares should be increased to at least 25% plus
one share by the end of 2023 at the latest.
47. SUPPLEMENTARY CAPITAL AND OTHER CAPITALS
The following tables present changes in supplementary capital and other reserve capitals:
Supplementary capital
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
9,110,976
9,110,976
Issue costs
-
-
Closing balance
9,110,976
9,110,976
Other reserve capital
12 months ended
31.12.2021
12 months ended
31.12.2020
General banking risk fund
627,154
627,154
Revaluation reserve
(595,707)
255,887
Other reserve capital
2,318,961
1,581,828
Total
2,350 408
2,464,869
General banking risk fund created from net profit
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
627,154
627,154
Distribution of retained earnings
-
-
Closing balance
627,154
627,154
Revaluation reserve
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
255,887
125,240
Gain/loss on changes in fair value of financial assets measured through other
comprehensive income
(969 416)
163,408
Net gain/loss on change in fair value of gross cash flow hedging derivatives
(85,303)
-
Actuarial valuation of employee benefits
3,368
(2,116)
Deferred income tax
199,757
(30,645)
Closing balance
(595,707)
255,887
Other reserve capital
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
1,581,828
945,603
Distribution of retained earnings
731,060
628,696
Management stock options
6,073
7,528
Closing balance
2,318,961
1,581,828
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Retained earnings
12 months ended
31.12.2021
12 months ended
31.12.2020
Opening balance
(400,786)
(400,786)
Distribution of the current period profit
-
-
Closing balance
(400,786)
(400,786)
Change in revaluation reserve on financial assets
measured through other comprehensive income
2021
2020
Gross value
Deferred tax
Gross value
Deferred tax
Opening balance
311,612
(59,206)
148,204
(28,159)
gains/losses on financial assets measured at fair value
through other comprehensive income recognised in
equity
(1,052,443)
199,965
87,639
(16,651)
reclassification to financial result due to sale of financial
assets measured at fair value through other
comprehensive income
(2,276)
432
75,769
(14,396)
Closing balance
(743,108)
141,191
311,612
(59,206)
48. DIVIDENDS PAID
The Bank did not pay any dividends for 2020. The Management Board of the Bank will not recommend dividend payment for 2021.
49. DISTRIBUTION OF RETAINED EARNINGS
Pursuant to the Resolution No. 6 of the General Shareholders’ Meeting of BNP Paribas Bank Polska S.A. of 24 March 2021 the
net profit for 2020, in the amount of PLN 731,060 thousand, was allocated to the reserve capital.
50. CASH AND CASH EQUIVALENTS
For the purpose of preparation of the statement of cash flows, the balance of cash and cash equivalents comprises the following
balances with maturity shorter than three months.
Cash and cash equivalents
31.12.2021
31.12.2020
Cash and balances at Central Bank (Note 19)
4,631,410
3,421,869
Current accounts of banks and other receivables
183,310
57,257
Interbank deposits
337,500
-
Loans and advances
-
6 749
Total cash and cash equivalents
5,152,220
3,485,875
51. ADDITIONAL INFORMATION REGARDING THE
STATEMENT OF CASH FLOWS
Differences between balance sheet changes of the value of items and changes in the balance of these items presented in operating
activities.
Change in amounts due from other banks
31.12.2021
31.12.2020
Change arising from the balance sheet
(2,908,876)
1,207,583
Elimination of a change in cash and cash equivalents
1,666,345
(1,314,602)
Change in balance arising from interest
(1,180)
1,339
Total change in amounts due from banks
(1,243,712)
(105,680)
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Change in amounts due from customers measured at amortised cost
31.12.2021
31.12.2020
Change arising from the balance sheet
(9,677,776)
(1,795,413)
Change in balance arising from interest
(100,788)
311,634
Total change in amounts due from customers measured at amortised
cost
(9,778,564)
(1,483,779)
Change in amounts due to other banks
31.12.2021
31.12.2020
Change arising from the balance sheet
(210,383)
1,812,762
Change in balance arising from interest
(80,785)
81,181
Total change in amounts due to other banks
(291,168)
1,893,943
Change in amounts due to customers
31.12.2021
31.12.2020
Change arising from the balance sheet
10,357,049
3,021,224
Change in balance arising from interest
9,737
55,204
Total change in amounts due to customers
10,366,786
3,076,428
Cash flows from operating activities – other adjustments
12 months ended
31.12.2021
12 months ended
31.12.2020
FX differences from subordinated loans
21,317
122,680
Valuation of securities recognized in the statement of profit or loss
77,036
(130,615)
Allowance for securities
33,258
(10,133)
Other adjustments
56,888
2,116
Cash flows from operating activities – total other adjustments
188,499
(15,952)
52. RELATED PARTY TRANSACTIONS
BNP Paribas Bank Polska S.A. operates within the BNP Paribas Bank Polska S.A. Capital Group.
BNP Paribas Bank Polska S.A. is the parent in the BNP Paribas Bank Polska S.A. Capital Group.
The ultimate parent company is BNP Paribas S.A., based in Paris.
As of 30 December 2021, the Capital Group of BNP Paribas Bank Polska S.A. comprised BNP Paribas Bank Polska S.A. as the
parent company, and its subsidiaries:
1. BANKOWY FUNDUSZ NIERUCHOMOŚCIOWY ACTUS SP. Z O.O. („ACTUS”).
2. BNP PARIBAS TOWARZYSTWO FUNDUSZY INWESTYCYJNYCH S.A. („TFI”).
3. BNP PARIBAS LEASING SERVICES SP. Z O.O. („LEASING”).
4. BNP PARIBAS GROUP SERVICE CENTER S.A. („GSC”).
5. CAMPUS LESZNO SP. Z O.O.
6. BNP PARIBAS SOLUTIONS SPÓŁKA Z O.O.
7. BGZ POLAND ABS1 DAC („SPV”).
All transactions between the Bank and its related parties were entered into as part of daily operations and included mainly loans,
deposits, transactions with reference to derivative instruments as well as income and expenses related to advisory and financial
intermediation services.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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86
Transactions with shareholders of BNP Paribas Bank Polska S.A. and related parties
31.12.2021
BNP Paribas
S.A. located in
Paris
BNP
Paribas
Fortis
S.A.
Other
entities from
the Capital
Group of
BNP Paribas
S.A.
Key
personnel
Subsidiaries
Total
Assets
2,583,416
4,264
35,489
841
5,745
2,629 755
Receivables on current accounts, loans
and deposits
1,585,212
4,264
34,536
811
4,013
1,628,836
Derivative financial instruments
932,697
-
-
-
-
932,697
Derivative hedging instruments
65,465
-
-
-
-
65,465
Other assets
42
-
953
30
1,732
2,757
Liabilities
8,203,374
29,944
1 038,097
2,684
102,758
9,376,857
Current accounts and deposits
1,978,727
29,944
761,579
2,684
102,623
2,875,557
Subordinated liabilities
4,058,054
-
276,518
-
-
4,334,572
Derivative financial instruments
1,038,620
-
-
-
-
1,038,620
Derivative hedging instruments
1,127,973
-
-
-
-
1,127,973
Lease liabilities
-
-
-
-
135
135
Contingent liabilities
Financial commitments granted
-
-
295,448
633
1,051,000
1,347,081
Guarantees granted
105,365
200,134
1,448,341
-
965,874
2,719,714
Commitments received
812,994
304,155
1,774,204
-
-
2,891,353
Derivative financial instruments (nominal
value)
60,082,978
-
-
-
-
60,082,978
Derivative hedging instruments (nominal
value)
26,448,220
-
-
-
-
26,448,220
Statement of profit or loss
(1,535 516)
53
(11,550)
10
50,513
(1,496 490)
12 months ended 31.12.2021
Interest income
-
6
102
10
85
203
Interest expense
(78,832)
(42)
(5,353)
-
(1)
(84,228)
Fee and commission income
591
89
4,817
-
1,111
6,608
Fee and commission expense
-
-
(49)
-
(35)
(84)
Net trading income
(1,372,390)
-
-
-
-
(1,372,390)
Other operating income
-
-
-
-
47,779
47,779
General administrative costs
(84,885)
-
(11,067)
-
1,574
(94,378)
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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31.12.2020
BNP Paribas
S.A. located in
Paris
BNP
Paribas
Fortis S.A.
Other entities from
the Capital Group
of
BNP Paribas S.A.
Key
personnel
Subsidiaries
Total
Assets
1,368,942
3,326
35,437
4
15,814
1,423,523
Receivables on current accounts, loans and
deposits
201,866
2,859
31,592
-
14,154
250,471
Derivative financial instruments
635,475
-
-
-
-
635,475
Derivative hedging instruments
531,326
467
-
-
-
531,793
Other assets
275
-
3,845
4
1,660
5,784
Liabilities
7,004,895
32,066
950,208
6,409
95,221
8,088,799
Current accounts and deposits
1,964,027
32,066
670,210
6,409
94,733
2,767,445
Subordinated liabilities
4,029,098
-
277,441
-
-
4,306,539
Derivative financial instruments
951,742
-
-
-
-
951,742
Derivative hedging instruments
60,027
-
-
-
-
60,027
Lease liabilities
-
-
2,552
-
-
2,552
Other liabilities
-
-
5
-
488
493
Contingent liabilities
Financial commitments granted
-
-
765,987
105
38,169
804,261
Guarantees granted
114,658
198,268
778,875
-
-
1,091,801
Commitments received
990,111
130,455
938,840
-
-
2,059,406
Derivative financial instruments (nominal
value)
63,199,300
-
-
-
-
63,199,300
Derivative hedging instruments (nominal
value)
18,996,846
13,844
-
-
-
19,010,690
Statement of profit or loss
80,729
6,914
(10,330)
(25)
16,869
94,157
12 months ended 31.12.2020
12 months ended 31.12.2020
44
200
1,144
-
48
1,436
Interest income
(105,990)
(65)
(5,780)
(25)
(80)
(111,940)
Interest expense
450
203
24,765
-
486
25,904
Fee and commission income
-
-
(6,256)
-
(38)
(6,294)
Fee and commission expense
240,889
6,576
(11)
-
-
247,454
Other operating income
-
-
-
-
18,890
18,890
General administrative costs
(54,664)
-
(24,192)
-
(2,437)
(81,293)
Remuneration of the Management Board and Supervisory Board
Management Board
31.12.2021
31.12.2020
Short-term employee benefits
14,856
16,364
Long-term benefits
4,638
4,561
Benefits due to termination of employment
973
1,846
Post-employment benefits
-
522
Share-based payments*
4,340
3,983
Shares issued**
1,513
-
Total
26,320
27,276
*includes a provision for deferred phantom shares and an amount in the Bank's capital linked to the Bank's shares taken up in the
future (in accordance with the variable remuneration policy)
**value of shares issued based on actuarial valuation
Supervisory Board
31.12.2021
31.12.2020
Short-term employee benefits
1,457
1,380
Total
1,457
1,380
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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53. OPERATING SEGMENTS
Segment reporting
The Bank divided its activities and applied the identification of income and expenses as well as assets and liabilities to the following
reporting operating segments: Retail and Business Banking, Banking of Small and Medium Enterprises (SME), Corporate Banking,
Corporate and Institutional Banking (CIB) and Other Operations, including ALM division and the Corporate Centre. Additionally,
performance related to Agro customers, i.e. individual farmers and agro-food sector enterprises, as well as the Personal Finance
Segment has been presented. Although the aforesaid segment performance overlaps with that of the basic operating segments, it
is additionally monitored separately for purposes of the Bank’s management reporting. The abovementioned segmentation reflects
the principles of customer classification to each segment in line with the business model adopted by the Bank, which are based
on such criteria as the entity, finances and type of business activity.
The Bank’s management performance is monitored by considering all items of the statement of profit or loss of the particular
segment, to the level of gross profit, i.e. for each segment revenue, expenses and net impairment losses are reported. Management
revenue takes into account cash flows between customers segments and the asset liability management unit, measured by
reference to internal transfer prices of funds based on market prices and liquidity margins for each maturity and currency.
Management expenses of the segments include direct operating expenses and expenses allocated using the allocation model
adopted by the Bank. Additionally, the management performance of the segments may take into account amounts due to each
business line for services between such lines.
The Bank’s operations are conducted in Poland only. As no considerable differences in the risks, which might be affected by the
geographical location of the Bank’s branches, can be identified, no geographical disclosures have been presented.
The Bank applies consistent, detailed principles to all identified segments. As regards the revenue, in addition to standard items,
components of the net interest income of the segments have been identified, to include external and internal revenue and
expenses. As regards operating expenses, the Bank’s indirect expenses are allocated to each segment in the Expense allocation
(internal) item. Considering the profile of the Bank’s business, no material seasonal or cyclical phenomena are identified. The Bank
provides financial services, the demand for which is stable, and the effect of seasonality is immaterial.
Description of operating segments
The Retail and Business Banking Segment offers comprehensive services to retail customers, including private banking
customers as well as business clients (microenterprises), including:
• entrepreneurs whose annual net income for the preceding financial year is below PLN 4 million, conducting full financial
reporting,
• entrepreneurs conducting simplified financial reporting,
• cooperatives and housing communities as well as property managers,
• non-profit organizations,
• individual farmers irrespective of production size, if the credit exposure is less than PLN 3 million, individual farmers irrespective
of production size, if the credit exposure is between PLN 3 million and less than PLN 4 million and the collateral on agricultural
land covers at least 50% of the credit exposure.
The scope of financial services offered by the Retail and Business Banking Segment includes maintenance of current and deposit
accounts, acceptance of term deposits, granting mortgage loans, cash loans, mortgage advances, overdrafts, loans to
microenterprises, issuing debit and credit cards, cross-border cash transfers, foreign exchange transactions, sale of insurance
products as well as other services of lesser importance to the Bank’s income. Additionally, the performance of the Retail and
Business Banking Segment includes: balances and performance of direct banking Optima, performance of brokerage services and
distribution and storage of investment fund units.
The Retail and Business Banking customers are served by the Bank’s Branches and alternative channels, i.e. online banking,
mobile banking and telephone banking, direct banking channel Optima and Premium banking channel as well as Wealth
Management (respectively investing assets above PLN 100 thousand and in the amount of minimum PLN 1 million). Selected
products are also sold by financial intermediaries active at the country and local level.
Personal Finance is responsible for development of product offering and management of financial services provided to
consumers, with the major products: cash loans, car loans, instalment loans and credit cards. The aforesaid products are
distributed through the Retail and Business Banking branch network as well as external distribution channels.
SME Banking provides services to:
• Agro clients preparing full financial reporting in relation to net sales revenue for the previous financial year in the range between
PLN 4 million and PLN 60 million and credit exposure below 18 million, agricultural producers with a credit exposure to the Bank
not exceeding PLN 40 million and Agro customers belonging to the group of affiliated entities, with a net sales revenue between
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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89
PLN 4 million and PLN 80 million, and a credit exposure not exceeding PLN 40 million, as well as - irrespective of the level of the
Bank's revenues and the level of involvement of the Bank - groups of agricultural producers and organizational units of the state-
owned National Forest Holding,
• non-Agro clients - a sub-segment to which entities preparing full financial reporting are qualified, with net sales revenues for the
previous financial year from PLN 4 million to PLN 60 million and with the credit exposure below PLN 18 million, as well as public
finance units with a budget of up to PLN 100 million and a credit exposure not exceeding 18 million,
• farmers (i.e. business entities conducting agricultural activity) preparing full financial reporting, with net revenues for the
previous financial year and with credit exposure below PLN 40 million, as well as individual farmers, if their credit exposure is in
the range from PLN 4 million to PLN 40 million and between PLN 3 million and PLN 4 million, if the collateral on arable lands
covers less than 50% of the credit exposure.
Corporate Banking offers a wide variety of financial services to large and medium-sized enterprises as well as local government
entities and entities operating in multinational capital groups.
Clients of Corporate Banking are divided into 5 groups:
• international clients (entity belonging to international groups through capital or personal links),
• Polish entities (or groups of Polish related entities) with net sales revenues exceeding or equal to PLN 60 million or with credit
exposure exceeding PLN 18 million (in case of Farmers with credit exposure exceeding PLN 40 million),
• the largest Polish corporations, i.e. Polish entities (or groups of Polish related entities) with annual sales revenues exceeding
EUR 150 million, large Polish corporations with annual revenues below EUR 150 million or characterised by one of the following
features: stock exchange status, cross-selling potential, business growth exceeding 50% in the last 3 years,
• institutional investors, e.g.: insurance institutions, investment funds, national payment institutions,
• public sector entities.
Distribution network for Corporate Banking is based on Regional Corporate Banking Centres located in Warsaw, Łódź, Gdańsk,
Poznań, Wrocław, Katowice, Kraków and Lublin. As part of the Regional Corporate Banking Centers, there are Corporate Banking
Centers located in the largest business centres in Poland, ensuring a wide geographical and sector coverage. After-sales service
for the clients of the Corporate Banking segment is also carried out by the Telephone Business Service Center and in the online
banking system.
The basic products and services provided to Corporate Customers include cash management and global trade finance services –
comprehensive services related to import and export LCs, bank guarantees and documentary collection, supply chain and exports
financing, acceptance of deposits (from overnight to term deposits), corporate finance services which involve provision of overdraft
facilities, revolving and investment loans as well as agro-business loans), financial market products, to include foreign exchange
and derivative transactions for the account of customers, lease and factoring products as well as specialised services such as
financing real estate, structured finance services to mid-caps and investment banking and services related to public sector entities:
organisation of municipal bond issues, forfaiting, dedicated cash management solutions.
The Corporate and Institutional Banking (CIB) Segment supports sales of products of the Bank, dedicated to the largest Polish
enterprises including services provided to key clients.
Other Banking Operations are performed mainly through the ALM Treasury, the main objective of which is ensuring an
appropriate and stable level of funding to guarantee the security of the Bank’s operations and compliance with the standards
defined in the applicable laws.
The ALM Treasury assumes responsibility for liquidity management at the Bank, setting internal and external reference prices,
management of the interest rate risk inherent in the Bank’s statement of financial position as well as the operational and structural
currency risk. The ALM Treasury focuses on both prudential (compliance with external and internal regulations) and optimisation
aspects (financing cost management and generating profit on management of the Bank’s items from the statement of financial
position).
The Other Operations segment includes also direct costs of the support functions, which have been allocated to segments in the
Expense allocation (internal) item, as well as results that may not be assigned to any of the aforementioned segments (to include
equity investment, gains/losses on own accounts and customer accounts not allocated to a specific segment).
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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90
Retail and
Business
Banking
SME Banking
Corporate
Banking
CIB
Other
Operations
Total
including
Agro
customers
including
Personal
Finance
Statement of profit or loss for the period of 12 months ended
31.12.2021*
Net interest income
1,702,741
232,542
538,422
52,213
541,661
3,067,580
383,000
593,924
external interest income
1,621,109
166,866
420,375
88,860
1,007,976
3,305,185
394,141
768,840
external interest expenses
(35,520)
(4,845)
(11,234)
(123)
(185,883)
(237,605)
(5,410)
-
internal interest income
638,985
130,002
268,613
(101)
(1,037,498)
-
110,151
-
internal interest expenses
(521,832)
(59,481)
(139,332)
(36,422)
757,067
-
(115,883)
(174,916)
Net fee and commission income
514,602
127,978
318,257
54,150
(12,937)
1,002,050
146,019
101,305
Dividend income
978
-
2,894
-
5,656
9,528
255
-
Net trading income
99,160
82,928
282,817
188,600
(19,846)
633,658
59,662
110
Result on investment activities
-
-
-
-
(8,740)
(8,741)
-
-
Result on hedge accounting
-
-
-
-
50,369
50,369
-
-
Other operating income and expenses
(17,484)
(4,452)
(7,208)
135
(40,081)
(69,090)
(1,529)
(20,964)
Net impairment allowance on financial assets and contingent
liabilities
(128,315)
(38,216)
(71,815)
2,250
(866)
(236,963)
(82,224)
(41,601)
Result on provisions for legal risk related to foreign currency
loans
(1,045,304)
-
-
-
-
(1,045,304)
-
-
General administrative expenses
(980,225)
(112,077)
(225,234)
(82,856)
(644,361)
(2,044,754)
(17,326)
(244,152)
Depreciation and amortization
(102,866)
(2,904)
(27,851)
(8,806)
(255,892)
(398,319)
(563)
(19,593)
Expense allocation (internal)
(580,917)
(175,598)
(119,088)
8,147
867,455
-
-
(106,639)
Operating result
(537,630)
110,201
691,194
213,833
482,418
960,014
487,294
262,390
Tax on financial institutions
(171,619)
(26,771)
(83,591)
(17,160)
(38,970)
(338,110)
-
(41,517)
Gross profit
(709,249)
83,430
607,603
196,673
443,448
621,904
487,294
220,873
Income tax expenses
-
-
-
-
-
(437,378)
-
-
Net profit
-
-
-
-
-
184,526
487,294
220,873
Statement of financial position as at 31.12.2021*
Segment assets
47,348,129
6,841,953
23,046,527
4,599,816
44,524,835
126,361,260
13,672,778
11,570,453
Segment liabilities
57,053,058
12,957,356
31,951,823
-
13,006,378
114,968,617
10,287,839
-
*As the figures have been rounded and presented in PLN ‘000, in some cases their total may not correspond to the exact grand total.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Retail and
Business
Banking
SME Banking
Corporate
Banking
CIB
Other
Operations
Total
including
Agro
customers
including
Personal
Finance
Statement of profit or loss for the period of 12 months ended 31.12.2020*
Net interest income
1,674,234
257,815
556,773
38,187
473,481
3,000,489
413,618
584,986
external interest income
1,704,286
231,643
526,040
69,642
935,491
3,467,101
511,413
750,378
external interest expenses
(189,007)
(16,720)
(44,798)
(81)
(216,006)
(466,612)
(14,804)
-
internal interest income
817,698
146,211
302,089
(204)
(1,265,795)
-
112,355
-
internal interest expenses
(658,744)
(103,319)
(226,559)
(31,170)
1,019,791
-
(195,346)
(165,392)
Net fee and commission income
431,291
111,454
283,935
64,158
(14,791)
876,048
149,185
91,453
Dividend income
13,030
-
3,140
-
6,530
22,699
160
12,714
Net trading income
90,802
70,369
240,458
204,072
144,376
750,077
51,688
239
Result on investment activities
-
-
-
-
15,129
15,129
(332)
-
Result on hedge accounting
-
-
-
-
(11,077)
(11,077)
-
-
Other operating income and expenses
(48,756)
(3,198)
(7,422)
(3,475)
5,365
(57,487)
(4,754)
(22,674)
Net impairment allowance on financial assets and contingent
liabilities
(498,282)
(14,847)
(65,492)
(1,773)
(2,230)
(582,625)
(125,870)
(192,299)
Result on provisions for legal risk related to foreign currency
loans
(168,156)
-
-
-
-
(168,156)
-
-
General administrative expenses
(1,060,609)
(122,025)
(230,140)
(69,628)
(567,289)
(2,049,690)
(15,586)
(256,741)
Depreciation and amortization
(99,912)
(3,287)
(18,872)
(6,277)
(237,811)
(366,159)
(468)
(15,250)
Expense allocation (internal)
(483,811)
(150,494)
(124,395)
(10,484)
769,184
-
-
(101,927)
Operating result
(150,169)
145,787
637,985
214,780
580,867
1,429,248
467,641
100,501
Tax on financial institutions
(165,753)
(35,574)
(95,832)
(7,442)
(14,308)
(318,909)
-
(44,560)
Gross profit
(315,922)
110,213
542,153
207,338
566,559
1,110,339
467,641
55,941
Income tax expenses
(379,279)
Net profit
731,060
Statement of financial position as at 31.12.2021*
Segment assets
42,177,335
6,673,999
20,824,777
2,614,541
43,377,499
115,668,150
13,824,047
10,487,628
Segment liabilities
54,435,830
12,278,212
23,255,675
-
13,644,894
103,614,612
7,881,453
-
*As the figures have been rounded and presented in PLN ‘000, in some cases their total may not correspond to the exact grand total.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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54. LITIGATION AND CLAIMS
Legal risk
As of 31 December 2021, there were no proceedings in the court, arbitration tribunal or state administration authorities regarding
liabilities or receivables of the Bank, the value of which would exceed 10% of the Bank's equity.
Court decision regarding calculation of the interchange fee
On 6 October 2015, the Court of Appeals issued a decision regarding calculation of the interchange fee by banks acting in
agreement. Thus, the decision of the 1st instance (Regional) Court of 2013 was changed by dismissing the banks’ appeals in
whole, while upholding the appeal brought by the Office of Competition and Consumer Protection (UOKiK), which had questioned
a considerable reduction in the fines by the 1st instance court. This denotes that the penalty imposed under the first decision of
the President of UOKiK of 29 December 2006 was upheld. It involved a fine levied on 20 banks, including Bank BGŻ S.A. and
Fortis Bank Polska S.A., for practices limiting competition by calculating interchange fees on Visa and MasterCard transactions in
Poland in agreement.
The total fine levied on Bank BGŻ BNP Paribas S.A. (presently BNP Paribas Bank Polska S.A.) amounted to PLN 12.54 million
and included: i) a fine for the practice of Bank Gospodarki Żywnościowej in the amount of PLN 9.65 million; and ii) a fine for the
practice of Fortis Bank Polska S.A. (FBP) in the amount of PLN 2.89 million. The penalty was paid by the Bank on 19 October
2015. The Bank prepared a last resort appeal against the aforesaid court decision and brought it on 25 April 2016. On 25 October
2017, the Supreme Court overruled the judgment of the Court of Appeal and remitted the case. Acquisition of the core business of
RBPL did not change the situation of the Bank as RBPL was not a party to this claim.
On 23 November 2020, the Court of Appeal quashed the judgment of the first instance court and remitted the case for re-
examination.
Corporate claims against the Bank (interchange fee)
Until 31 December 2021 the Bank received:
33 requests for settlement from companies (merchants), due to interchange fees paid in relation to the use of payment cards,
(two from companies which submitted their requests twice and, one from the company which submitted its request three times
and one from a company which submitted two requests for different payment methods). The total amount of these claims was
PLN 1,028.02 million, including PLN 1,018.05 million where the Bank had joint responsibility with other banks.
4 requests for mediation before the PFSA. The requests were sent to the Bank by the same entrepreneurs who had previously
submitted requests for a settlement attempt. The total value of claims arising from the above applications amounts to
PLN 40.29million, of which PLN 37.79 million relates to joint liability with other banks.
Proceedings regarding recognizing a standard contract as prohibited
On 22 September 2020, the Bank received a decision of the President of the Office of Competition and Consumer Protection
(UOKiK) No. DZOIK 14/2020, in which the President of UOKiK:
found certain provisions of the standard contract (the so-called anti-spreading annex) concerning the principles of determining
currency exchange rates illegal and prohibited their application;
obligated the Bank to inform all customers who are parties to the annex about the decision and its consequences and to post
information about the decision and its content on its website;
imposed a fine on the Bank in the amount of PLN 26,626 thousand payable to the Financial Education Fund.
The Bank appealed against the decision within the statutory deadline. The Bank has established a provision for the above penalty
in full amount. As of the date of the present report, a court date has not yet been set for this case.
Litigation concerning CHF credit agreements in the banking sector
More than a year after the judgment of the Court of Justice of the European Union in the CHF-indexed mortgage case (C-260/18),
the number of lawsuits related to CHF mortgages against banks is gradually increasing. According to the Association of Polish
Banks (ZBP), the number of pending lawsuits related to CHF loan agreements at the end of September 2021 reached almost
77 thousand compared to 39 thousand at the end of 2020. This resulted in a significant increase in provisions for these proceedings
created in 2020 and in the third quarter of 2021 by banks having CHF mortgage loan portfolios. The amount of these provisions
created by listed banks in 2020 amounted to approximately PLN 10 billion, while in the third quarter 2021 it was approximately
PLN 3.68 billion contributing to the total value of provisions created for this purpose in the amount of PLN 11.7 billion at the end of
2020 and over PLN 14.55 billion at the end of the third quarter of 2021.
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Proceedings instigated by the Bank’s customers being parties to CHF denominated loan agreements
The gross balance sheet value of mortgage and housing loans granted to individual customers in CHF as of 31 December 2021
amounted to PLN 4.53 billion, compared to PLN 4.82 billion at the end of 2020.
As of 31 December 2021 the Bank was the defendant in 2,120 (1,505 new cases in 2021 of which, in the fourth quarter of 2021,
350 and 20 cases closed with final judgement) pending court proceedings (including validly closed cases, clients brought a total
of 2,170 actions against the Bank), in which the Bank's customers demanded the annulment of mortgage loan agreements
regarding foreign currency loans or loans denominated in CHF, or declaration that the contract is permanently ineffective on the
ground that it contains abusive clauses which cause the contract cannot be remained in force, or determining that the Bank granted
a loan in PLN without denomination to foreign currency. The Bank is not a party to any collective claim regarding these loans. The
total value of claims pursued in the currently pending cases as of 31 December 2021 was PLN 858.03 million (as of 31 December
2020 was PLN 217.82 million), and in legally binding cases PLN 41.36 million (34.96 million as of 31 December 2020).
The following judgments have been made in the 50 finalised proceedings to date: in 16 cases the claims against the Bank were
dismissed, in 6 cases the proceedings were discontinued, in 3 of them due to the conclusion of a settlement agreement by the
parties; in 1 case the court rejected the claim; in 26 cases the court found the agreement invalid, in 1 case only the claim under
the low own contribution insurance was judged, in the remaining cases the court dismissed the claim..
The Bank creates provisions on an ongoing basis for pending litigation involving denominated or foreign currency loans, taking
into account the current status of judgments in cases against the Bank and the developing line of case law.
The total amount of provisions created as at 31 December 2021 was PLN 1,290.4 million (as at 31 December 2020 it was PLN
200.3 million), with an impact on the Bank's income statement of PLN 1,045.3 million (PLN 168.2 million in 2020).
In the fourth quarter of 2021, the balance of provisions made by the Bank for risks relating to CHF loans increased by PLN 613.8
million (in 2020 by PLN 168.2 million). The increase in the provision in the fourth quarter of 2021 was mainly due to an increase in
the scale of legal uncertainty, an increase in the number of new lawsuits (new lawsuits in the fourth quarter of 2021 numbered 350,
of which 214 related to denominated loans and 136 to foreign currency loans), an update of the assumptions and parameters of
the model used by the Bank, through a more conservative estimation of them by, inter alia, increasing the expected number of
lawsuits the Bank may receive over the next 4 years or extending the average time to complete the proceedings.
The provision is created in accordance with IAS 37 ‘Provisions, contingent liabilities and contingent assets’. Provision for pending
cases is calculated on an individual basis, for future cases using the portfolio method. While calculating the provision, the Bank
takes into account, inter alia, the number of certificates downloaded by clients for trial purposes, the estimated probability of clients
filing cases, the estimated number of future claims, the number of claims filed, the probability of losing the case, and the Bank's
expected loss in the event of an unfavourable judgment. In addition, the Bank has included in its provisioning model the estimated
number of settlements to be made with customers. The amount of the provision for estimated settlements was PLN 171.2 million
from the total balance of provisions.
The Bank, in estimating the number of future cases and settlements with borrowers, assumed that approximately 39% of borrowers
with active CHF loans have filed or will file a lawsuit against the Bank or will enter into a settlement with the Bank.
The Bank estimates the probability of losing a case based on historical judgments, separately for the foreign currency and
denominated loan portfolios. Due to the observed volatility in case law, the Bank, when estimating the probability of an adverse
judgment, takes into account judgments made after the CJEU judgment of 3 October 2019.
In estimating the loss in the event of a judgment declaring the loan invalid, the Bank assumes that the customer is obliged to return
the principal paid without taking into account the remuneration for the use of the principal, the Bank is obliged to return the sum of
the principal and interest instalments paid by the client using the historical rate and the Bank writes down the loan exposure.
Should the assumed average loss change by +/- 5%, with all other significant assumptions unchanged, the amount of the provision
would change by +/- PLN 60 million.
The Bank conducted a sensitivity analysis of the model used to estimate the number of lawsuits lost. A change in this estimate
would have the following impact on the estimated loss due to legal risk related to CHF loans.
Parameter
Scenario
Impact on Bank’s loss due to legal risk
Percentage of lawsuits lost
+5 p.p.
+PLN 62 million
-5 p.p.
-PLN 62 million
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The Bank conducted a sensitivity analysis of the model used to estimate the number of lawsuits lost. A change in this estimate
would have the following impact on the estimated loss due to legal risk related to CHF loans.
Parametr
Scenario
Impact on Bank’s loss due to legal risk
Percentage of lawsuits lost
+20%
+ PLN 110 million
-20%
- PLN 110 million
Additionally, if 1% of customers with CHF loans filed a lawsuit against the Bank, the loss due to legal risk would increase by approx.
PLN 33 million.
When calculating the expected loss on legal risk related to CHF loans, the Bank used simplifications resulting from the short
horizon of available historical data and a relatively small number of cases ended with courts’ rulings. The Bank will monitor the
number of collected certificates and the changing number of lawsuits, and will update the provision estimate accordingly.
At the same time, the Bank points to the fact that there is a significant discrepancy in both facts (in particular different contractual
provisions and scope of information provided to the clients) as well as rulings passed in Poland regarding indexed, denominated
and currency loans, which significantly impedes a precise estimation of risk. The Bank monitors the courts’ rulings on an ongoing
basis and will adjust the level of reserves to the emerging case-law.
Significant case law of CJEU and of the Supreme Court on loans in CHF
On 29 April 2021, the Court of Justice of the European Union handed down its judgment in case C-19/20, in which it confirmed,
inter alia, that the aim of Directive 93/13 is not to invalidate all contracts containing provisions which are not permitted, and that
preference should be given to legal solutions upholding contracts. At the same time the Bank pointed out that key issues such as
whether a given clause is prohibited, the remedies available in the event that a clause is found to be abusive and the manner in
which limitation periods are calculated are a matter of national law, and thus the need to analyse the above issues should arise in
each individual case. The Bank will analyse the impact of the CJEU ruling on judgments of domestic courts on an ongoing basis
and will take into account the changes in the case law in the calculation of provisions.
On 7 May 2021, the Civil Chamber of the Supreme Court in a composition of 7 judges issued a resolution having the force of law
in the case ref. III CZP 6/21. In the ruling responding to a legal issue presented by the Financial Ombudsman, the Supreme Court
indicated by reasoning the grounds that:
(1) the borrower may agree to the continued validity of terms which may be unfair, in which case they take effect from the date of
conclusion of the contract,
(2) if the contract falls due to the unfair terms contained therein, each party has a claim for repayment of the performance made
by that party (the so-called two-condition theory) ,
(3) the limitation period for the Bank's claims for reimbursement of the principal begins to run only from the moment when the
agreement has become definitively ineffective (the basis for the performance has been lost).
(4) the agreement becomes permanently ineffective from the moment when the borrower, having been informed of all the
consequences of the failure of the agreement, including the possible specific negative consequences of such a failure, makes
a declaration to not keep the agreement in force. The borrower should be informed of the consequences of the failure of the
agreement by the court in the course of the proceedings.
On 10 June 2021, the Court of Justice of the European Union issued a summary judgment in Case C-198/20, which confirmed
that consumer protection is available to any consumer and not only to the "reasonably well-informed and reasonably observant
and circumspect average” recipient of the resolution.
The meeting of the full bench of the Civil Chamber of the Supreme Court, at which a resolution was to be adopted on the legal
issues presented on 29 January 2021 by the First President of the Supreme Court, scheduled for 2 September 2021, was
postponed without a date, following the Supreme Court's formulation of preliminary questions to the CJEU. The preliminary
questions are aimed to establish whether the Civil Chamber in its current composition can be regarded as an independent court
and thus whether it has the capacity to pass a resolution on the legal questions posed at all..
The First President of the Supreme Court requested a resolution of the Civil Chamber on the following issues:
1. If it is concluded that a provision in an index-linked or denominated loan agreement, which relates to the method of determining
the exchange rate of the foreign currency, constitutes an illicit contractual term and is not binding on the consumer, may it be
assumed that that provision is replaced by another method of determining the exchange rate of the foreign currency which results
from legal or customary rules?
If the answer to the above question is negative:
2. If it is not possible to establish a foreign currency exchange rate binding on the parties in a loan agreement indexed to such a
currency, can the agreement be binding on the parties in its remaining scope?
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3. If it is not possible to establish a foreign currency exchange rate in a loan agreement denominated in a foreign currency, can
the parties remain bound by the agreement?
Irrespective of the answers to questions 1 to 3:
4. If a loan agreement is invalid or ineffective, and as a result of such agreement the Bank has disbursed to the borrower the whole
or part of the amount of the loan and the borrower has made repayments on the loan, do separate claims for wrongful performance
arise in favour of each of the parties, or does only one claim arise, equal to the difference in performance, in favour of the party
whose total performance was higher?
5. If a loan agreement is invalid or ineffective as a result of the unlawful nature of certain of its terms, does the limitation period for
the Bank's claim for repayment of the amount paid under the loan start to run from the moment at which those sums were paid?
6. If, in the case of the invalidity or ineffectiveness of a loan agreement, either party has a claim for repayment of the performance
made under such agreement, may that party also claim remuneration for the use of its funds by the other party?
If the CJEU confirms the ability of the Civil Chamber of the Supreme Court to rule and the Supreme Court passes a resolution, the
Bank will analyse the content of the resolution after its publication, including its impact on further case law and the value of the
parameters used to determine the value of legal risk provisions. At this moment it is not possible to predict whether the resolution
will be adopted and even more its impact on the provisions estimation. In determining the value of the provision, the Bank considers
the whole information available at the date of signing the Financial Statements.
On 2 September 2021, the Court of Justice of the European Union handed down its judgment in Case C-932/19, in which it
unequivocally indicated that national courts, when deciding on customers' claims based on a challenge to certain contract terms,
may not rely solely on the potentially favourable annulment of the contract for the consumer. It is not permissible for the situation
of one of the parties to be regarded by the national courts as the decisive criterion as to the future fate of the contract. The Court
reiterates that the fundamental objective of Directive 93/13 is to restore the balance of the parties, including by means of the
national provisions in force.
On 18 November 2021, the Court of Justice of the European Union handed down its judgment in Case C-212/20, in which it
indicated that the wording of an indexation clause in a credit agreement between a trader and a consumer must, on the basis of
clear and comprehensible criteria, enable a sufficiently well-informed, reasonably observant and prudent consumer to understand
how the exchange rate applicable to the calculation of instalments is determined, in such a way that the consumer is able at any
time to calculate for himself the exchange rate applied by the trader.
Proposal by the Chairman of the PFSA
As a consequence of the growing number of lawsuits and the value of provisions created by banks, in December 2020, the
Chairman of the Polish Financial Supervision Authority - Jacek Jastrzębski - presented a proposal for a sectoral solution to the
CHF loans problem. In simple terms, the Bank would treat a loan in CHF as if it had been granted in PLN and bears interest at the
appropriate WIBOR rate plus a margin, which would be historically applied to this type of a loan.
Adopting such an approach would impose a very heavy burden on the sector, although its scale is difficult to estimate precisely at
the moment. The costs would depend on a number of variables, such as the date the loan is granted, the exchange rate table of
the specific bank, or the fee and commission policy.
The Management Board of the National Bank of Poland stated in its communication of 9 February 2021 that it may consider its
possible involvement in the process of conversion of residential foreign-currency loans into PLN, on market terms and at market
rates, provided that banks meet certain boundary conditions.
At the beginning of 2021, the Bank has joined a working group that is analysing the solution proposed by the Chairman of the
PFSA. The cost estimate of a potential conversion in line with the assumptions of the PFSA Chairman's proposal is PLN 1.6 billion
assuming that the proposal covers the whole CHF loan portfolio (denominated and foreign currency loans). The change in the
amount of the estimate in relation to the disclosure in the 2020 report is due to the change in the CHF/PLN exchange rate and the
revision of the assumptions used in the calculation, and may also be subject to fluctuations in the future for the same reasons. The
potential cost was estimated as the difference between the current balance sheet value of foreign currency or CHF-denominated
loans and the balance sheet value of hypothetical PLN loans. The amount of the estimated cost of a potential conversion is not a
component and does not affect the amount of risk provisions created by the Bank for CHF loans. At the moment of publication of
the present Report, the Bank has not decided to offer settlements to customers in the form suggested by the Chairman of the
PFSA.
Individual settlements offered by the Bank
The Bank has conducted a survey among its customers, which showed preliminary interest of customers in the settlements, and
conducted a pilot campaign on offering settlements on terms individually agreed with borrowers.
In December 2021, the Bank completed a pilot campaign to propose settlements on terms individually offered and negotiated with
borrowers, resulting in the conversion of a loan granted in a currency into a loan in Polish zloty and the cancellation of part of the
loan balance or the complete cancellation of the loan. The Management Board positively assessed the results of the pilot and
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decided to expand the scope of these individual negotiations. The Bank took this parameter into account when creating the
provision. As at 25 February 2022 the Bank presented individual settlement proposals 1917 Customers and 373 Customers
accepted the terms of the presented proposals
55. FINANCIAL RISK MANAGEMENT
55.1. Financial instrument strategy
The Bank’s core business focuses on financial products offered to customers: retail customers, entrepreneurs and enterprises,
public sector and budget institutions as well as non-banking financial institutions. Short-term fixed rate deposits as well as current
and savings accounts are the key items of the Bank’s liabilities. On the other hand, the Bank’s assets comprise such credit
products as mortgage loans, cash loans, credit cards, overdrafts, investment and revolving loans, subsidized loans, factoring
facilities, leasing, guarantees, international trade finance transactions (e.g. letters of credit), the majority of which are medium- and
long-term instruments bearing interest based on short-term market rates.
The Bank uses financial market instruments in the first place to manage the liquidity, interest rate and currency risk inherent in its
core business, considering the internal risk appetite as well as market trends in the medium and long term.
Additionally, the Bank offers access to financial market instruments to its customers for purposes of hedging market (currency,
interest rate or commodity) risk inherent with their core business.
55.2. Credit risk
Credit risk is inherent in the core financial operations of the Bank, the scope of which includes both lending and providing funding
with the use of capital market products. Consequently, credit risk is identified as the risk with the highest potential to affect the
present and future profits and equity of BNP Paribas. Proof of the key nature of credit risk is its 78% share in the total economic
capital estimated by the Bank for purposes of covering major risks involved in the Bank’s operations, in addition to its 89% share
in the total value of regulatory capital.
Credit risk management is primarily aimed at implementation of the Bank’s strategy through a harmonious increase in the loan
portfolio, accompanied by maintenance of the credit risk appetite at an acceptable level.
Credit risk management principles adopted by the Bank include:
each credit transaction requires comprehensive credit risk assessment expressed in internal rating or scoring;
in-depth and careful financial analysis serves as the basis for regarding the customer’s financial information and collateral-
related data as reliable; prudential analyses performed by the Bank always take into account a safety margin;
as a rule, financing is provided based on the customer’s ability to generate cash flows that ensure payment of liabilities to the
Bank;
credit risk assessment is additionally verified by credit risk assessment personnel, independent of the business;
pricing terms of a credit transaction have to take account of the risk involved in such a transaction;
credit risk is diversified with regard to geographical regions, industries, products and customers;
credit decisions may only be taken by competent employees;
the Bank enters credit transactions only with known customers and long-term relationships are the basis for cooperation with
customers;
the customer and the transactions made with the customer are monitored transparently from the perspective of the customer,
in a manner strengthening the relationship between the Bank and the customer.
Concentration risk is the Bank’s risk inherent to its statutory operations, which is appropriately defined and managed.
The Management Board assesses the concentration risk policy in terms of its application. In particular, it analyses the efficiency
and adequacy of the principles applied in the context of the current and planned operations and risk management strategy.
The adequacy of the concentration risk management is reviewed if any material changes are observed in the Bank’s environment
or if the risk management strategy is modified.
The appropriate assessment of the concentration risk of the Bank is highly dependent on correct identification of all key
concentration risks. In justified cases, the Bank identifies concentration risk when planning its new activities involving
the development and launch of new products, services, expansion to new markets, considerable alterations of products and
services or market changes.
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Credit portfolio diversification is one of the key credit risk management tools. The Banks avoids excessive credit concentration, as
it increases the risk. Possible losses pose a considerable threat, and therefore the concentration level should be monitored,
controlled and reported to the Bank’s management. Key concentration risk mitigation tools include risk identification and
measurement mechanisms and exposure limits in individual Bank portfolio segments and in subsidiaries. These tools enable
internal differentiation of the loan portfolio and mitigation of negative effects of adverse changes in the economy.
A significant concentration area (aspect) is the one whose share in the Bank’s balance sheet total is equal or higher than 10% or
5% of the net profit planned for a given year. In such cases, a given concentration area (aspect) is subject to analyses, reporting
and management under the concentration risk management process.
High concentration of the Bank’s credit exposures to each entity or group of entities with equity or organizational relationships is
one of the potential sources of credit risk. For purposes of its reduction, the Regulation No. 575/2013 specifies the Bank’s maximum
exposure limit. Under Article 395 of the Regulation No. 575/2013: the institution does not assume any exposure to the client or
related clients, the value of which, taking into account the effect of limiting credit risk in accordance with Articles 399-403, exceeds
25% of the value of its Tier 1 capital. If a client is an institution or if a group of related clients include at least one institution, the
value does not exceed 25% of its Tier 1 capital or of the amount of EUR 150 million, depending on which one of these two amounts
is higher, provided that the sum of the exposure to all related non-institutional customers, after taking into account the effect of
credit risk mitigation under Articles 399-403, does not exceed 25% of the value of the institution's Tier 1 capital.
The Bank’s concentration limits are monitored in accordance with Article 387 of the Regulation No. 575/2013. The limits, defined
in Article 395 of the Regulation No. 575/2013, had not been exceeded as at the end of 2021. As at the end of 2021, the Bank’s
exposure to customers/groups of customers with equity or organizational relationships had not exceeded the concentration limit.
The Bank's largest exposure represented 20.08% of Tier 1 capital.
Concentration risk tolerance in the Bank is determined by a system of internal limits, including both assumed development
directions and speed of the Bank’s business, an acceptable level of credit risk and liquidity, as well as external conditions,
macroeconomic and sectoral perspective. Among others, internal limits for credit concentration risk are determined for:
selected sectors / industries;
exposures denominated in foreign currencies;
customer segments (intra-bank customer segmentation);
loans secured with a given type of collateral;
geographical regions;
average probability of default;
exposures with a specified rating (the Bank’s internal rating scale);
exposures with a specified debt-to-income ratio;
exposures with a specified loan-to-value ratio.
Activities that limit Bank’s exposure to concentration risk may include systemic measures and one-off / specific decision and
transactions. Systemic measures that limit concentration risk include:
reduction of the scope of crediting of determined customer types through credit policy adjustment;
reduction of limits charged with concentration risk;
diversification of asset types on the level of the Bank’s statement of financial position;
change of business strategy to ensure prevention of excessive concentration;
diversification of accepted collateral types.
Systemic measures that limit concentration risk include:
reduction of further transactions with a given customer or a group of related customers;
sale of selected assets/loan portfolios;
securitization of assets;
establishing of new collateral types (e.g. credit derivatives, guarantees, sub-participation, and insurance contracts) for existing
or new credit exposures.
A concentration analysis by industry, conducted by the Bank, focuses on all credit exposures of the Bank to institutional customers.
The Bank defines industries based on Polish statistical classification of economic activities (NACE/PKD 2007). The Bank’s
exposure to industries analysed at the end of 2021 (presented based on the classification of industries in NACE/PKD), similarly as
at the end of December 2020, is concentrated in the following industries: Agriculture, Forestry, Hunting and Fishing, manufacturing.
As at the end of December 2021, the share of manufacturing increased by 3 p.p. to the level of 24% as compared to the end of
2020, while the share of agriculture, forestry and fishing decreased by 4 p.p. as compared to the end of 2020 to the level of 22%
of industrial exposure.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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The table below presents a comparison of the share of impaired loans in industries (gross balance sheet value) as at 31 December
2021 and 2020.
Exposure*
Share of impaired loans
Industry
31.12.2021
31.12.2020
31.12.2021
31.12.2020
AGRICULTURE, FORESTRY AND FISHING
10,008,679
10,756,142
7.7%
9.2%
MINING AND QUARRYING
25,111
36,341
11.1%
9.5%
MANUFACTURING
10,760,109
8,772,763
3.1%
5.5%
ELECTRICITY, GAS, STEAM AND AIR CONDITIONING
SUPPLY
1,621,826
648,737
0.3%
0.8%
WATER SUPPLY; SEWERAGE, WASTE MANAGEMENT AND
REMEDIATION ACTIVITIES
83,977
166,344
3.9%
6.6%
CONSTRUCTION
2,389,043
2,540,629
7.2%
8.5%
WHOLESALE AND RETAIL TRADE; REPAIR OF MOTOR
VEHICLES AND MOTORCYCLES
6,612,763
5,725,092
5.2%
7.5%
TRANSPORTATION AND STORAGE
1,587,329
1,216,516
3.3%
6.9%
ACCOMMODATION AND FOOD SERVICE ACTIVITIES
243,428
273,257
20.2%
20.5%
INFORMATION AND COMMUNICATION ACTIVITIES
1,003,200
1,439,082
1.3%
3.4%
FINANCIAL AND INSURANCE ACTIVITIES
947,307
891,461
7.7%
11.5%
REAL ESTATE ACTIVITIES
5,032,112
4,657,921
2.3%
3.0%
PROFESSIONAL, SCIENTIFIC AND TECHNICAL ACTIVITIES
3,065,019
2,368,361
1.3%
2.4%
ADMINISTRATIVE AND SUPPORT SERVICE ACTIVITIES
912,769
767,882
5.0%
9.7%
PUBLIC ADMINISTRATION AND DEFENCE, COMPULSORY
SOCIAL SECURITY
82,654
96,875
0.0%
0.0%
EDUCATION
78,082
87,763
10.5%
12.0%
HUMAN HEALTH AND SOCIAL WORK ACTIVITIES
695,139
652,849
2.6%
3.5%
ARTS, ENTERTAINMENT AND RECREATION ACTIVITIES
15,037
16,257
21.3%
21.0%
OTHER ACTIVITIES
93,916
88,598
5.0%
7.6%
Total
45,257,500
41,202,870
4.5%
6.7%
*Financial data have been rounded and presented in PLN ‘000, and therefore, in some cases, the totals may not correspond exactly to the total
sum.
The Bank manages the risk of collateral concentration. For this purpose, the Bank introduced limits for the involvement of particular
types of collateral, ensuring their appropriate diversification. As at the end of 2021, as well as at the end of 2020, the limits were
not exceeded.
In the case of an individually assessed exposures as at 31 December 2021, the Bank expects to recover, due to established
collaterals, the amount of PLN 325,251 thousand, which is 29% of the total exposure assessed individually with recognised
impairment (PLN 446,091 thousand and 30% as at 31 December 2020).
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Maximum exposure on credit risk
The table below presents the Bank's maximum exposure to credit risk for financial instruments both recognised and not recognised
in the financial statements. The maximum exposure was presented in its gross value, before considering the impact of collateral
and other credit quality improvement instruments.
31.12.2021
Assets
Maximum exposure on
credit risk – no
collaterals included
Maximum exposure on credit
risk – collaterals included
Cash and balances at Central Bank
4,631,693
4,631,410
Amounts due from other banks
2,260,064
2,254,621
Derivative financial instruments
1,901,919
1,901,919
Adjustment of the hedged item fair value
65,465
65,465
Loans and advances to customers measured at amortised cost
82,968,369
80,124,751
Loans and advances to customers measured at fair value through
profit or loss
1,219,027
1,219,027
Securities measured at amortised cost
23,313,693
23,268,041
Securities measured at fair value through profit or loss
320,216
320,216
Securities measured at fair value through other comprehensive
income
9,143,353
9,143,353
Deferred tax assets
719,650
719,650
Other financial assets
378,151
378,151
Total assets
126,921,600
124,026,604
Total contingent liabilities
8,692,582
8,692,582
Total exposure on credit risk
135,614,182
132,719,186
31.12.2020
Assets
Maximum exposure on
credit risk – no
collaterals included
Maximum exposure on credit
risk – collaterals included
Cash and balances at Central Bank
3,421,866
3,421,866
Amounts due from other banks
556,957
555,289
Derivative financial instruments
1,531,617
1,531,617
Adjustment of the hedging item fair value
531,793
531,793
Loans and advances to customers measured at amortised cost
73,540,959
70,446,975
Loans and advances to customers measured at fair value through
profit or loss
1,539,848
1,539,848
Securities measured at amortised cost
23,373,414
23,361,022
Securities measured at fair value through profit or loss
371,856
371,856
Securities measured at fair value through other comprehensive
income
10,228,560
10,228,560
Deferred tax assets
613,553
613,553
Other assets
560,009
560,009
Total assets
116,270,432
113,162,388
Total contingent liabilities
4,889,575
4,889,575
Total exposure on credit risk
121,160,007
118,051,963
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Exposure to credit risk by credit quality ratings
The table below presents significant credit risk exposures to which the expected credit loss model was applied. The breakdown
was based on the rating scale presented below:
31.12.2021
Gross loans and advances measured at amortised cost, for which impairment allowance is estimated as*:
Rating
12-month
expected credit
loss - exposures
without
impairment
Expected credit loss
during the exposure
period - exposures
without impairment
Expected credit loss
during the exposure
period - exposures with
impairment
Expected credit
loss during the
exposure period -
POCI exposures
Gross
portfolio
value for a
given rating
category
Net portfolio
value for a
given rating
category
1
-
-
-
-
-
-
2
98,886
1
-
-
98,887
98,885
3
1,461,345
4
-
-
1,461,350
1,461,101
4
2,132,459
6,304
-
-
2,138,764
2,138,091
5
6,818,671
157,526
-
-
6,976,186
6,966,437
6
14,090,040
551,295
9,536
2,685
14,653,566
14,577,861
7
11,174,622
925,306
14,693
3,751
12,118,177
11,950,818
8
1,787,901
1,473,872
8,119
8,754
3,278,619
3,162,806
9
74,578
668,710
31,611
3,488
778,379
701,852
10
22,888
462,700
420,250
11,388
917,176
615,748
11 to 12
17
8,450
1,149,275
133,959
1,291,659
603,895
Total
37,661,407
4,254,168
1,633,484
164,025
43,712,763
42,277,494
31.12.2020
Gross loans and advances measured at amortised cost, for which impairment allowance is estimated as*:
Rating
12-month
expected credit
loss - exposures
without
impairment
Expected credit loss
during the exposure
period - exposures
without impairment
Expected credit loss
during the exposure
period - exposures with
impairment
Expected credit
loss during the
exposure period -
POCI exposures
Gross
portfolio
value for a
given rating
category
Net portfolio
value for a
given rating
category
1
-
-
-
-
-
-
2
110,426
-
-
-
110,426
110,417
3
328,569
1
-
-
328,570
328,549
4
1,410,325
1,903
-
-
1,412,228
1,411,838
5
5,115,679
119,986
2,409
62
5,238,136
5,222,742
6
11,460,511
402,767
14,543
2,089
11,879,911
11,754,303
7
11,109,515
1,508,637
25,392
20,144
12,663,688
12,407,731
8
2,314,620
1,305,760
42,898
2,300
3,665,577
3,554,550
9
99,949
767,603
64,280
4,803
936,636
853,083
10
36,500
646,662
691,891
15,440
1,390,492
1,000,344
11 to12
37
4,350
1,482,387
205,669
1,692,443
799,813
Total
31,986,131
4,757,669
2,323,800
250,507
39,318,107
37,443,370
*Financial data have been rounded and presented in PLN ‘000, and therefore, in some cases, the totals may not correspond exactly to the total
sum.
For large enterprises and clients from the SME segment that prepare full financial reporting, the Bank determines internal rating
classes in accordance with the adopted credit policy. The rating classes are based on the risk model dedicated to this part of the
loan portfolio and are the basis for estimating the amount of the provision in accordance with IFRS 9. The Bank's customers are
assigned ratings from 1 (clients for whom the Bank identifies the lowest credit risk) to 12 (clients for whom the Bank identifies the
highest credit risk). In order to assign ratings, the annual financial data provided by the client and the general quality assessment
of its market situation are used.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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The structure of overdue receivables
The purpose of repayment overdue analysis is to indicate the level of potential credit loss (in respect of receivables without
impairment). The higher delinquency in repayment, the more likely it is to identify an objective impairment trigger in the future. An
increase in the delay in repayment above zero days increases the chance of identifying impairment trigger, but does not itself
constitute grounds for giving this trigger. In the case of exposures overdue below 91 days, the impairment trigger may, however,
be identified based on additional information about the economic and financial situation of the client.
The structure of the loan portfolio (measured at amortised cost and measured at fair value through profit or loss) divided into
impaired exposures and not impaired exposures along with the level of arrears in repayment are presented in the tables below.
31.12.2021
Structure of overdue loan
portfolio (net balance sheet
value)
not impaired
impaired
Total
0 days
1-30 days
31-60 days
61-90
days
Mortgage loans and advances
26,290,199
22,813
5,965
782
269,685
26,589,444
Cash loans
8,497,311
60,781
9,149
3,176
175,663
8,746,080
Car loans
1,736,309
4,433
1,650
442
12,836
1,755,670
Credit cards
1,005,430
8,466
1,560
438
22,489
1,038,383
Investment loans
20,942,964
312,572
10,756
655
374,149
21,641,096
Limits in current accounts
10,398,990
73,858
6,663
1,068
160,716
10,641,295
Corporate revolving loans
9,783,352
88,918
5,106
1,459
308,431
10,187,266
Leases
470,759
5,028
154
22
67,350
543,313
Other
185,434
6,277
-
-
9,520
201,231
Total
79,310,748
583,146
41,003
8,042
1,400,839
81,343,778
31.12.2020
Structure of overdue loan portfolio
(net balance sheet value)
not impaired
impaired
Total
0 days
1-30 days
31-60 days
61-90
days
Mortgage loans and advances
21,967,158
7,477
3,829
4,382
448,995
22,431,841
Cash loans
7,413,543
49,281
16,476
5,322
206,064
7,690,686
Car loans
1,569,276
4,343
1,598
511
14,699
1,590,427
Credit cards
1,124,625
7,942
1,737
1,007
30,137
1,165,448
Investment loans
19,864,473
40,268
17,491
1,191
684,423
20,607,846
Limits in current accounts
7,941,707
31,014
6,878
1,642
259,558
8,240,799
Corporate revolving loans
8,087,622
51,799
6,654
2,017
398,504
8,546,596
Leases
740,339
7,279
2,314
-
87,819
837,751
Other
856,255
94
-
-
19,079
875,428
Total
69,564,999
199,497
56,977
16,072
2,149,278
71,986,823
* Financial data have been rounded and presented in PLN ‘000, and therefore, in some cases, the totals may not correspond exactly to the total
sum.
Impairment allowances
Impairment allowances reflect the expected credit loss calculated using the three-step approach required by IFRS 9, as described
in Note 3.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Collaterals
Description of collateral held or other mechanisms that improve the credit quality
The Bank assesses the creditworthiness of each client on an individual basis. The value of collateral obtained, if it is deemed
necessary by the Bank due to the granting of a loan, is subject to valuation by the Bank. The Bank accepts various forms of
collateral for loans, while the main categories include:
- real estate mortgage;
- insurance of real estate being the subject of a mortgage;
- life insurance of the borrower;
- registered pledge.
Impact of collaterals on the valuation of exposure with impairment identified (loans measured at amortised cost and at fair value
through profit or loss)*:
31.12.2021
Gross value with
impairment
Collateral value
Net value with impairment
Loans and advances to:
Other financial institutions
1,616
-
294
Retail customers
1,127,360
594,143
505,491
Corporate customers
1,915,927
1,424,520
823,475
including retail farmers
702,602
636,185
423,209
Public sector entities
-
-
-
Lease receivables
137,253
-
71,579
Total gross loans and advances
3,182,156
2,018,663
1,400,839
Allowances (negative value)
(1,781,317)
Total net loans and advances
1,400,839
31.12.2020
Gross value with
impairment
Collateral value
Net value with impairment
Loans and advances to:
Other financial institutions
1,625
4
907
Retail customers
1,444,716
762,882
696,385
Corporate customers
2,585,721
1,886,370
1,364,135
including retail farmers
898,771
805,607
610,300
Public sector entities
44
-
32
Lease receivables
158,439
-
87,819
Total gross loans and advances
4,190,545
2,649,256
2,149,278
Allowances (negative value)
(2,041,267)
Total net loans and advances
2,149,278
* Financial data have been rounded and presented in PLN ‘000, and therefore, in some cases, the totals may not correspond exactly to the total
sum.
In the period covered by the present financial statements, there were no significant changes in the quality of collateral as a result
of deterioration or changes in the Bank's collateral policy.
Mortgage loans denominated in foreign currencies
Mortgage loans to individual customers account for ca. 33% of the loan portfolio of non-financial sector of the Bank (gross carrying
amount), with 17% being loans in foreign currencies a major part of which (99%) are denominated in CHF (the Swiss franc). The
total gross carrying amount of mortgage loans in foreign currencies is PLN 4,569,608 thousand.
The Bank performs revaluation of the residential property pledged as collateral for loans on an annual basis, on the following
assumptions:
where the debt is below PLN 12 million at the revaluation date – the property is revalued using a statistical method;
where the debt is more than PLN 12 million at the revaluation date – the property is revalued on a case-by-case basis.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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The revalued amount is the basis for calculation of the current LTV for a single exposure and the average LTV for the entire
portfolio as the average weighted by the gross carrying amount of individual LTVs.
The total on-balance sheet exposure and the average LTVs for mortgage loans in foreign currencies considering impairment and
delinquency in days is presented below.
days past due
gross balance sheet value
average LTV weighted with
gross balance sheet value
0-30 days
4,346,117
80.85%
31-60 days
4,718
80.91%
61-90 days
1,429
130.64%
over 90 days
217,344
113.34%
Total
4,569,608
82.40%
impairment identified
gross balance sheet value
average LTV weighted with
gross book value
NO
4,214,400
79.88%
YES
355,208
112.33%
Total
4,569,608
82.40%
The average current LTV for the entire foreign currency mortgage loan portfolio was at the level of 81%, while the average current
LTV for mortgage loans in the Polish currency was 69%.
Exposure structure and average current LTV by loan granting year (mortgage loans in foreign currencies) are presented in the
table below:
date of agreement
number of loans granted
gross balance
sheet value
average LTV
weighted with gross
book value
gross balance sheet
value*
2005 and before
2,268
292,768
42.43%
278,109
2006
4,687
1,027,224
58.15%
975,424
2007
4,349
1,415,941
88.22%
1,318,215
2008
5,348
1,587,940
100.39%
1,442,844
2009
612
131,127
67.06%
123,973
2010 and beyond
293
114,608
97.62%
75,834
Total
17,557
4,569,608
82.40%
4,214,399
*non-impaired loans
Forbearance practices
The Bank treats its exposures as forborne if the obligor is provided with a forbearance due to economic reasons (financial
difficulties), including any forbearance granted for exposures with identified impairment triggers. In case the forbearance is granted
for a customer with a material economic loss, the Bank classifies such a customer as default.
A facility is understood as the occurrence of at least one of the following events:
a change to the repayment schedule, especially extending the loan maturity date;
cancellation of overdue amounts (e.g. capitalization of an overdue amount, which can be repaid at a later date);
redemption of principal, interest or fees;
consolidation of loans into one new product, if the amounts of payments of the consolidated loan are lower than the sum of
payments of these loans separately before the consolidation occurred;
decrease of the base interest rate or margin;
originating a new loan to repay the existing debt;
conversion of an existing credit,
amendment or waiver of significant provisions of the agreement (e.g. a condition of the agreement that was breached as a result
of financial difficulties),
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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104
additional collateral presented by the Borrower (if present together with another event meeting the definition of a facility) or sale
of the collateral agreed with the Bank, with the proceeds from the repayment of the collateral being used to repay the Bank's
loan obligation.
Only in the period of customer’s financial difficulties or, in the period when, due to changes on the market, such difficulties may
occur, i.e.:
the exposure is subject to debt collection; or
the exposure is not subject to debt collection but there is evidence (provided by the customer or obtained in the decision-making
process) that the customer is facing financial difficulties or may be facing them in the near future.
A material economic loss is defined by the Bank as the drop of present value of expected cash flows, resulting from forbearance
granted, equal or higher than 1%
1
. The drop of the present value is calculated in accordance with the below formula:
𝑁𝑃𝑉
0
− 𝑁𝑃𝑉
1
𝑁𝑃𝑉
0
where:
NPV0 – the present value of expected cash flows (including interest and fees / commissions) prior to the introduction of changes
in loan terms, discounted with the original effective interest rate ,
NPV1 – the present value of expected cash flows (including interest and fees / commissions), after the introduction of changes in
the loan terms, discounted using the original effective interest rate. In the case of consolidation of many loans for the original
interest rate for the purpose of assessing the significance of economic loss, the average EIR weighted with the gross balance
sheet exposure at the moment of granting the facility is assumed.
The change in the present value of expected cash flows shall be calculated at the level of single exposure.
In justified cases resulting from complex restructuring measures for a given client (e.g. priority repayment of loans with a collateral
of a low value), it is permissible to calculate NPV at the level of a client.
The “forborne” status is no longer assigned if the following conditions have been satisfied:
• exposure reclassified to performing portfolio as a result of the analysis of financial situation (in case of corporate portfolio), which
proved that the customer does not meet the criteria for being classified to the impaired portfolio;
• the exposure has not been considered impaired for 24 months in a row;
• none of the exposures to the customer are past due by more than 30 days;
• the obligor has been making regular and considerable payments for at least a half of the trial period.
31.12.2021
Forborne exposures
Total portfolio
including
forbearance
exposures
including
change of terms
including
refinancing
Loans and advances for:
84,187,396
1,467,746
1,404,311
63,435
Non-banking financial institutions
796,523
-
-
-
Retail customers
38,820,173
569,119
551,405
17,714
Corporate customers
43,865,769
869,455
823,734
45,721
including retail farmers
8,823,433
383,741
380,732
3,009
Public sector institutions
84,487
-
-
-
Lease receivables
620,444
29,172
29,172
-
Impairment allowances on loans and advances
(2,843,618)
(438,438)
(420,751)
(17,687)
Non-banking financial institutions
(2,075)
-
-
-
Retail customers
(935,977)
(188,839)
(184,177)
(4,662)
Corporate customers
(1,831,067)
(238,627)
(225,602)
(13,025)
including retail farmers
(389,619)
(59,306)
(58,948)
(358)
Public sector institutions
(1,542)
-
-
-
Lease receivables
(72,957)
(10,972)
(10,972)
-
Total loans and advances (net)
81,343,778
1,029,308
983,560
45,748
1
change from 5% to 1% since 11.01.2021
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
105
31.12.2020
Forborne exposures
Total portfolio
including
forbearance
exposures
including change
of terms
including
refinancing
Loans and advances for:
75,080,807
1,448,966
1,380,968
67,998
Non-banking financial institutions
608,417
-
-
-
Retail customers
33,802,097
414,718
387,464
27,254
Corporate customers
39,647,967
999,526
958,782
40,744
including retail farmers
9,462,022
401,262
394,387
6,875
Public sector institutions
101,382
-
-
-
Lease receivables
920,944
34,722
34,722
-
Impairment allowances on loans and advances
(3,093,984)
(396,096)
(377,340)
(18,756)
Non-banking financial institutions
(1,934)
-
-
-
Retail customers
(1,172,830)
(145,977)
(139,637)
(6,340)
Corporate customers
(1,833,761)
(237,774)
(225,358)
(12,416)
including retail farmers
(453,098)
(50,380)
(49,648)
(732)
Public sector institutions
(2,268)
-
-
-
Lease receivables
(83,191)
(12,345)
(12,345)
-
Total loans and advances (net)
71,986,823
1,052,870
1,003,628
49,242
In connection with the continuation of the COVID-19 pandemic, the Bank continued a number of actions during the year 2021
regarding, including:
review of the loan portfolio with focus on industries, particularly affected by and sensitive to the consequences of the COVID- 19
pandemic;
The Bank also actively participates in the works of the banking sector, regulators and organizers of government support addressed
to entrepreneurs, has launched a number of solutions allowing customers to submit application to the Bank electronically and
online as well as to use support programs related to the effects of a pandemic and has been conducting ongoing monitoring of
the number of clients and credit exposures affected by the pandemic, including ongoing decisions on individual clients regarding
the type and structure of client financing adequate to his current situation and government support programs.
The Bank continued cooperation with BGK in relation to PLG-FGP liquidity guarantees offered to the Bank's clients, other liquidity
guarantees and loan interest rate subsidy programs.
An electronic and simplified process of applying for postponement of principal and interest instalments on investment loans was
introduced.
As a partner of the PFR program, the Bank provided its clients with technical possibilities to apply for funding from these programs
using electronic banking.
In the period between 18 February and 31 March 2021, the Bank was focusing on the use of available assistance programs for
clients, including temporary postponement of instalments, examining clients' applications in this respect on an ongoing basis.
After 31 March 2021, clients’ applications to postpone loan instalments could have been submitted and examined in a mode
analogous to the situation before the COVID-19 pandemic.
The data in the tables below are based on balance sheet value and present the amounts recognized in the Bank’s books as at 31
December 2021 and 31 December 2020.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
106
31.12.2021
Loans and advances to customers subject to
a moratorium
Number of clients
granted with
moratoriums
Value of loans
and advances
covered by
ongoing and
expired
moratoriums
including
regulatory
moratorium
including ongoing
moratorium
not
impaired
impaired
Gross balance sheet value
34,532
5,385,081
255,747
126
12,704
Retail customers
28,547
2,960,346
255,374
126
12,486
Corporate clients
5,888
2,175,882
373
-
218
including retail farmers
1,411
460,274
218
-
218
Public sector institutions
2
1,041
-
-
-
Lease receivables
95
247,812
-
-
-
Allowance
x
(381,290)
(71,923)
(10)
(3,666)
Retail customers
x
(207,870)
(71,904)
(10)
(3,647)
Corporate clients
x
(149,628)
(19)
-
(19)
including retail farmers
x
(35,025)
(19)
-
(19)
Public sector institutions
x
(201)
-
-
-
Lease receivables
x
(23,591)
-
-
-
Total net loans and advances to customers
subject to the moratorium
34,532
5,003,791
183,824
116
9,038
31.12.2020
Loans and advances to customers subject to
a moratorium
Number of clients
granted with
moratoriums
Value of loans
and advances
covered by
ongoing and
expired
moratoriums
including
regulatory
moratorium
including ongoing
moratorium
not
impaired
impaired
Gross balance sheet value
40,149
6,759,992
135,935
165,618
129,650
Non-banking financial institutions
1
33
-
-
-
Retail customers
33,257
3,374,952
135,848
45,132
94,051
Corporate clients
6,679
3,039,839
87
119,181
35,599
including retail farmers:
1,492
523,060
87
40,981
4,465
Public sector institutions
2
1,121
-
886
-
Lease receivables
210
344,047
-
419
-
Allowance
x
(361,159)
(32,988)
(5,143)
(32,806)
Non-banking financial institutions
x
(3)
-
-
-
Retail customers
x
(201,320)
(32,987)
(2,136)
(26,281)
Corporate clients
x
(134,426)
(1)
(2,770)
(6,525)
including retail farmers
x
(39,932)
(1)
(696)
(1,011)
Public sector institutions
x
(238)
-
(233)
-
Lease receivables
x
(25,172)
-
(4)
-
Total net loans and advances to customers
subject to the moratorium
40,149
6,398,833
102,947
160,475
96,844
31.12.2021
Residual maturity of the ongoing moratoria
Gross balance sheet value
Total
up to 3 months
3 – 6
months
Retail customers
12,612
12,612
-
Corporate clients
218
218
-
including retail farmers
218
218
-
Total gross loans and advances to customers subject to the moratorium
12,830
12,830
-
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
world
107
31.12.2020
Residual maturity of the ongoing moratoria
Gross balance sheet value
Total
up to 3 months
3 – 6
months
Retail customers
139,183
136,262
2,921
Corporate clients:
154,780
139,303
15,477
including retail farmers
45,446
39,401
6,045
Public sector institutions
886
886
-
Lease receivables
419
419
-
Total gross loans and advances to customers subject to the moratorium
295,268
276,870
18,398
31.12.2021
Newly granted loans and advances to
customers covered by public
guarantee programs
Number of
clients who
have used
the public
guarantee
Including: residual maturity of the public guarantee
Value
up to 6
months
from 6 to 12
months
from 1 to 2
years
from 2 to 5
years
over 5
years
Gross balance sheet value
5,306
2,519,663
173,596
997,446
997,298
150,263
201,060
Corporate clients:
5,306
2,519,663
173,596
997,446
997,298
150,263
201,060
including retail farmers
245
60,173
216
1,508
8,040
50,409
-
Allowance
x
(24,226)
(1,329)
(9,160)
(7,869)
(2,372)
(3,496)
Corporate clients:
x
(24,226)
(1,329)
(9,160)
(7,869)
(2,372)
(3,496)
including retail farmers:
x
(260)
(10)
(1)
(144)
(105)
-
Total net newly granted loans and
advances to customers covered by
public guarantee programs
5,306
2,495,437
172,267
988,286
989,429
147,891
197,564
31.12.2020
Newly granted loans and advances to
customers covered by public
guarantee programs
Number of
clients who
have used
the public
guarantee
Including: residual maturity of the public guarantee
Value
up to 6
months
from 6 to 12
months
from 1 to 2
years
from 2 to 5
years
over 5
years
Gross balance sheet value
3,034
1,298,960
20,314
334,725
693,771
234,531
15,619
Corporate clients:
3,034
1,298,960
20,314
334,725
693,771
234,531
15,619
including retail farmers:
103
23,631
-
600
6,437
16,594
-
Allowance
x
(9,931)
(147)
(1,825)
(3,644)
(3,933)
(382)
Corporate clients:
x
(9,931)
(147)
(1,825)
(3,644)
(3,933)
(382)
including retail farmers:
x
(75)
-
-
(3)
(72)
-
Total net newly granted loans and
advances to customers covered by
public guarantee programs
3,034
1,289,029
20,167
332,900
690,127
230,598
15,237
As at 31 December 2021 the value of expired moratoriums amounted to PLN 5,372,251 thousand (PLN 6,464,724 thousand as
at 31 December 2020).
As part of its response to the situation related to COVID-19 pandemic during the year, the Bank has continued changes to the
process of recognition of material increases in risk. The Bank monitors the behaviour of exposures subject to moratorium, both
statutory and non-statutory. From the second quarter of 2021, the Bank did not offer non-statutory moratoria.
Exposures covered by statutory credit vacations are transferred to Stage 3. In case of exposures covered by non-statutory credit
vacations, the Bank applied stricter criteria and these are classified to Stage 2. For these exposures, more than 30 days overdue
within 3 months after the end of moratorium is an indication of a significant increase of credit risk (Stage 2), which results in
calculation of allowances within the exposure life horizon.
Country risk
Within credit risk, the Bank additionally distinguishes country risk, which covers all risks related to conclusion of financial
agreements with foreign parties, assuming that it is possible that economic, social or political events will have an adverse effect
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
The bank
for a changing
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108
on creditworthiness of the Bank’s obligors in that country or where intervention of a foreign government could prevent the obligor
(which could also be the government itself) from discharging his liabilities.
The Bank’s policy concerning country risk has been conservative. Country limits have been reviewed periodically and the limit level
modified to precisely match the anticipated business needs and risk appetite of the Bank.
As at the end of 2021, 63% of the Bank's exposure to countries other than Poland were transactions related to the Bank's foreign
lending activities, treasury transactions (including placement and derivative transactions) accounted for 14% while the remaining
part, i.e. 23% was related to foreign trade transactions (letters of credit and guarantees). France accounted for 43%, Luxembourg
for 22%, the Netherlands for 9%, Austria for 6%, and Belgium for 5% of the exposure. The remaining exposure was concentrated
in Germany, Italy, the Great Britain and Switzerland.
55.3. Counterparty risk
Counterparty risk is the credit risk concerning the counterparty transactions in case of which the amount of liability may change in
time depending on market parameters. Therefore, the counterparty risk is related to transactions on instruments whose value may
change over time depending on such factors as interest rates or foreign exchange rates. The varying exposure may affect
the customer’s solvency and is of crucial importance to the customer’s ability to discharge its liabilities when the transaction is
settled. The Bank’s customers may enter into financial market transactions. The exposure is determined by the Bank on the basis
of the current measurement of contracts as well as the potential future changes in the exposure, depending on the transaction
type, customer type and the settlement dates.
At the end of December 2021, the counterparty risk was calculated for the following types of transactions: foreign exchange
transactions, interest rate swap transactions, FX options, interest rate options and commodity derivatives.
Counterparty credit risk, for transactions which generate counterparty risk, is assessed using the same methodology as the one
applied to loans. This denotes that in the credit process, these transactions are subject to limits, the value of which results directly
from assessment of customer creditworthiness. However, the assessment also takes into account the specific nature of
transactions, in particular their changing value in time or direct dependence on market parameters.
The principles applicable to foreign exchange transactions, derivative transactions as well as credit limit granting, use and
monitoring for transactions subject to counterparty risk limits have been laid down in dedicated procedures. According to the policy
in place at the Bank, all transactions are entered into considering individual limits and knowledge of the customer. The Bank
diversifies availability of products, which are offered to customers depending on their knowledge and experience. The Bank has
transparent rules applicable to hedging the counterparty credit risk exposure in place.
At the end of December 2021, the Bank's exposure to the counterparty risk due to concluded derivative transactions was PLN
2.6 billion. Corporate and financial clients constituted 78% of the exposure, while the remaining 22% were banks.
In connection with COVID-19 pandemic, the Bank observes increased volatility in market risk parameters, which translates into
fluctuations in counterparty risk exposure. The Bank assesses counterparty risk on an ongoing basis by conducting reviews of the
portfolio of clients in case of whom this risk exists.
The Bank maintains the application of its basic principle of "Know Your Customer". Due to the non-standard situation, some clients
may be asked for additional information related to the change in business conditions in the context of the COVID-19 pandemic
situation. The Bank also takes into account the higher volatility of the above parameters in risk assessment when entering into
new transactions.
The Bank currently does not observe significant changes in the materialisation of counterparty risk.
55.4. Market risk (interest rate risk in the trading book and currency risk)
Market risk management organization
The operations of BNP Paribas Bank Polska S.A. are recorded in the trading and in the banking book. In relation to market risk,
covering interest risk in the trading book and the currency risk, the Bank is sensitive for changes in market interest rates, foreign
exchange rates, security prices and implied volatility of option instruments leading to changes in the result on measurement of the
financial instruments present value. The risk of adverse changes in the value, driven by the aforesaid factors, is recognised by the
Bank as market risk. The risk is monitored and managed with the use of the defined and specially designed tools and measures.
In order to reflect the characteristics of financial market transactions appropriately, i.e. the intentions of the parties entering into
the transactions, the major risks and the accounting treatment, the Bank allocates all on- and off-balance sheet items to
the banking or trading book. Detailed allocation criteria are established in the documents (“policies” and “methodologies”) adopted
by resolutions of the Management Board of the Bank and defining the purpose of keeping each book, the profile and types of risks
assumed by the Bank, the measurement and mitigation methods as well as the authorizations and place of each organizational
unit of the Bank in the risk generation, measurement, mitigation and reporting process.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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109
The process of concluding transactions and their recording, as well as risk level supervision and adoption of risk limits is performed
by independent units. In line with the long-term strategy adopted by the Bank, as well as with its financial plan, the Supervisory
Board determines the Bank’s risk tolerance, i.e. an acceptable risk level and profile, which is subsequently allocated by the Risk
Management Committee. The Financial Markets Division takes responsibility for daily operational management of the risk inherent
in trading book in line with the defined market risk limits, including limits related to interest rate in the trading book and the currency
risk, which is managed at a centralized level for the entire Bank. The Financial and Counterparty Risk Department are in charge
of measuring and reporting risk and limit overrides. Additionally, the Financial and Counterparty Risk Department ensures that
financial instruments are measured properly. The management result is calculated by the Financial Market Transactions
Monitoring Unit, while transactions are recorded and settled by the Financial Market Transactions Processing Department.
The system of limit override acceptance is hierarchical. It depends on the period of such override and its scale, and is managed
by the Division head or Members of the Bank’s Management Board exercising supervision of the Risk Function and the function
responsible for the risk override. Irrespective of the process, all limit overrides are reported immediately after they occur and
discussed at monthly Risk Management Committee meetings.
Interest rate risk in the trading book
The Bank’s trading activities are supplementary, as they support sales of financial products to corporate customers, non-banking
financial customers (directly) and retail customers (through structured products, which are officially classified into the banking
book). The Bank opens its own positions, thus generating income on short-term changes in price parameters (foreign currency
rates or interest rates), while maintaining the exposure within the adopted risk limits. The Bank offers commodity instruments but
does not maintain open position in commodity market.
As part of the interest rate risk exposure, which is the key exposure in the trading portfolio, the Bank could enter into IRS, OIS,
CIRS, FRA and basis swap transactions and purchase and sale of foreign currency options on interest options. The interest rate
risk was also determined by positions resulting from FX swap and FX Forward transactions. In 2021, as part of internal risk limits,
the Bank maintained an open option position in order to optimize the result, i.e. generate additional benefits due to the lack of
immediate closing of customer positions by reverse transactions on the interbank market. The priority of the Bank is to hedge the
interest rate risk and currency risk.
Sensitivity of items to shifts in the yield curve and the value at risk (VaR – which is a measure that estimates the potential loss
arising from a change in the market value of a portfolio under specified assumptions about market parameters, over a specified
period of time and with specified probability) are the key measures of the interest rate risk in the trading portfolio. Additionally, the
Bank conducts sensitivity analyses, where the changes in interest rates are more considerable than those typically observed
(stress tests).
In 2021, the interest rate risk for PLN items, measured by sensitivity to shifts in the yield curve in the trading portfolio, was lower
(PLN 25 thousand on average) than in 2020 (PLN 54 thousand).
The following table presents the interest rate risk in the trading book based on BPV (Basis Point Value, in PLN ‘000):
* a measure of the sensitivity of instrument measurement to a shift in interest rate curves by 1 basis point
Interest rate risk exposure in the trading book measured by sensitivity to a 1 basis point movement in interest rate curves and
currency risk in 2021 was maintained at a relatively low level as a result of the crisis situation triggered by COVID-19 pandemic
and increasing uncertainty about future market behaviour. In contrast, the exposure measured with the use of the external VaR
limit decreased as compared to the previous year and averaged 13% of the granted limit (compared to 24% a year earlier). The
risk was mainly due to the open interest rate position, with an average utilization of the VaR for this risk was at the level of 17% of
the granted limit.
Currency risk
The Bank, while measuring the currency risk, limits the maximum allowable open currency position at the individual currency level
and for all currencies combined, and applies the value at risk method (VaR). For purposes of currency risk monitoring, it is assumed
that VaR is determined with a 99% confidence level and that a position is maintained for one day. The VaR methodology is validated
on an annual basis by means of an analysis which involves a comparison of the forecast figures and those determined on the
31.12.2021
31.12.2020
BPV
*
PLN
EUR
PLN
EUR
31.12.
10
(14)
89
(42)
average
25
(38)
54
(32)
max
107
209
110
24
min
(40)
(87)
(20)
(84)
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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110
basis of actual changes in foreign exchange rates, assuming that the currency position is maintained (back-testing). The
comparative period covers the last 250 business days. The VaR model was back-tested in 2021 and the verification results indicate
that there is no necessity to make any adjustments.
Foreign currency transactions used for management of the Bank’s currency position were characterized by a stable exposure and
a low risk. The risk resulting from foreign currency transactions with customers was offset on the inter-bank market. The level of
risk exposure was maintained at a low level, i.e. around 14% of the utilisation of the available VaR limit and, as in the previous
year, this risk did not make a significant contribution to the overall risk level. The Bank maintained a small open position in foreign
exchange options to ensure the serviceability of customer transactions, for which the exposure was limited through a set of
additional dedicated limits for the Greek gamma and vega ratios.
The following table presents currency risk of the Bank expressed as FX VaR (in PLN ’000):
* The Bank uses a historical exponential method which assumes the confidence level 99% and that positions are held for 1 day
The table below presents the currency structure of assets and liabilities in their balance sheet value expressed in PLN ‘000:
31.12.2021
31.12.2020
Currency position items
Assets
Liabilities
Assets
Liabilities
USD
682,208
4,168,325
752,765
4,060,703
GBP
104,101
353,606
116,948
345,761
CHF
4,441,889
2,160,495
4,852,870
858,992
EUR
11,539,478
16,057,536
11,832,543
14,549,259
Other convertible currencies
99,144
270,020
135,230
254,164
PLN
109,494,440
103,351,278
97,977,794
95,599,271
Total
126,361,260
126,361,260
115,668,150
115,668,150
55.5. Interest rate risk in the banking portfolio (ALM Treasury)
The banking book of BNP Paribas Bank Polska S.A. is composed of two parts: the first one is the ALM portfolio as part of which
structural interest rate, currency and liquidity risks resulting from the structure of the statement of financial position determined by
the core lending, deposit and investing operations of the Bank, are managed. On the other hand, the Treasury portfolio is subject
to daily and short-term liquidity management. It is also used by the Bank for purposes of performing its investing activities as well
as concluding hedging transactions on the financial market.
The ALM portfolio comprises accounts, deposits and loans, strategic items (long-term investments, own debt issues and long-term
loans), financial market transactions hedging the portfolio (derivative instruments) and zero-interest items (to include equity,
tangible assets, intangible assets, taxes and provisions and profit for the period), transferred under management of ALM Treasury
through the Fund Transfer Pricing (FTP) system.
The Treasury portfolio includes liquid securities (liquidity buffer), interbank deposits and placements, nostro and loro accounts as
well as financial market transactions hedging the market risk of the portfolio (derivative instruments).
The Bank’s policy in respect of the banking book – ALM and Treasury portfolios managed collectively – is to earn additional, stable
revenue in excess of the product margin, without any threat to the stability of funds deposited by customers, equity and profit.
The above mentioned objective is accomplished by the Bank by maintaining or matching its natural exposure generated by the core
lending and deposit operations, in line with the adopted risk limits which guarantee limited sensitivity of the Bank’s profit to changes
in market factors, in addition to bringing the exposure into line with financial market trends forecast in the medium and long term.
Competitive conditions of the local financial market and customer expectations are the main factors shaping the Bank's product
policy, in particular the application of variable interest rates for medium- and long-term credit products, and financing of these
assets with short deposits and interest-free accounts.
31.12.2021
31.12.2020
FX VaR
*
average
354
276
max
1,725
3,916
min
71
71
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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111
The real interest rate gap, net interest income sensitivity and economic capital sensitivity are the key measures of the market risk
in the banking book, which comprises the ALM portfolio and the Treasury portfolio.
The major assumptions adopted for measurement of interest rate risk in banking book are as follows:
a) individual assets, liabilities and off-balance sheet transactions are analysed at their nominal value which is used as the basis
for calculation of interest;
b) items and transactions based on floating reference rates, such as WIBOR, LIBOR, EURIBOR, NBP rediscount rate etc. are
taken into account for purposes of determining the gap at the nearest repricing date for a given contract;
c) items based on floating reference rates scaled with a multiplier are taken into account for purposes of determining the gap at
the nearest repricing date for a given contract at nominal value scaled with a multiplier and the nominal amount scaled with a value
(1 – multiplier) is considered at the maturity date or proportionally at the principal payment dates;
d) fixed rate items and transactions are taken into account for purposes of determining the gap at the principal payment dates, at
the amounts of the principal paid at a given date or at the full amount at the maturity date for items in case of which the principal
is not repaid (e.g. term deposits). Items and transactions with unspecified maturity, repricing date or non-interest bearing are taken
into account in line with the profile determined as a result of modelling, which is aimed to ensure the best possible reflection of
the changes in interest and principal cash flows resulting from customer behaviours and in response to external factors, in particular
the market interest rates.
e) for the portfolio of impaired loans - for net values (decreased by the created reserves) - the average contractual maturity for
unimpaired exposures (IFRS stage 1 and 2) increased by two years is applied,
f) economic capital is calculated based on positions at internal prices.
As part of interest rate risk management in the banking portfolio, the Bank distinguishes structural elements consisting of interest-
free current accounts and the Bank's capital as well as other commercial items. In terms of structural elements, the Bank secures
a significant portion of them by long-term positions (bonds, interest rate exchange transactions). Regarding other commercial
items, the Bank plans to reduce interest rate risk.
For interest rate risk models, the Bank uses the provisions of the 'W' recommendation regarding verification of the model's
operation, qualitative criteria, minimum model acceptance criteria and ongoing control of the model's accuracy.
Replication portfolio models for accounts with no specific maturity dates are behavioural models built on the basis of the historical
variability of deposit account balances and the analysis of the closing ratios for the modelled position. As part of modelling, the
portfolio is divided into the stable parts and a variable part, which is assigned the symbol ON in interest rate analyses. The stable
part is divided into a part that is insensitive to interest rate changes (the structural part) and a part sensitive to interest rate changes
(the unstructured part). A long-term interest rate repricing profile is determined for the structural part, while for the non-structural
part it depends on the current macroeconomic situation and forecasts of the behaviour of interest rates for individual currencies.
As regards loans with a fixed interest rate, prepayment ratios determined in accordance with the applicable models at the Bank
are used. Prepayments are analysed separately for individual types of loans (cash, car), due to the different characteristics of
these products. Factors included in the prepayment analysis: loan age, seasonality, financial incentive for the customer to prepay
the loan.
The following tables present the Bank’s real interest rate gap as at 31 December 2021 and 31 December 2020 (PLN ‘000)* on a
separate basis:
31.12.2021
Interest rate gap
Up to 1 month
1-3 months
3-12 months
1-5 years
Over 5 years
Total
Cash and balances at Central
Bank
4,631,410
-
-
-
-
4,631,410
Amounts due from other banks
2,175,621
69,000
10,000
-
-
2,254,621
Loans and advances to customers
29,346,300
35,600,673
9,778,615
5,751,559
1,129,680
81,606,828
Investment securities
1,550,400
77,990
1,607,950
10,891,497
18,397,040
32,524,878
Other assets
1,244,065
52,216
234,971
1,253,181
626,590
3,411,024
Total assets
38,947,796
35,799,880
11,631,537
17,896,237
20,153,310
124,428,760
Amounts due to banks
(3,064,819)
(3,382,743)
(415,356)
-
-
(6,862,918)
Amounts due to customers
(31,573,451)
(7,305,519)
(20,312,153)
(29,683,473)
(11,975,070)
(100,849,666)
Other amounts due
(415,356)
(178,675)
(30,790)
-
(137,103)
(761,924)
Capital
(259,987)
(268,257)
(1,207,156)
(6,438,163)
(3,219,081)
(11,392,644)
Other liabilities
(4,391,074)
-
-
-
-
(4,391,074)
Total liabilities:
(39,704,687)
(11,135,193)
(21,965,455)
(36,121,636)
(15,331,254)
(124,258,225)
Net off-balance sheet liabilities
(6,146,153)
(6,107,753)
(7,079,780)
15,151,152
4,050,232
(132,303)
Interest rate gap
(6,903,044)
18,556,934
(17,413,698)
(3,074,248)
8,872,288
38,231
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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31.12.2020
Interest rate gap
Up to 1 month
1-3 months
3-12 months
1-5 years
Over 5 years
Total
Cash and balances at Central
Bank
3,421,866
-
-
-
-
3,421,866
Amounts due from other banks
555,289
-
-
-
-
555,289
Loans and advances to customers
22,527,677
34,462,548
9,237,729
5,228,124
981,957
72,438,035
Investment securities
1,550,400
40,300
358,900
9,258,791
21,355,807
32,564,198
Other assets
1,782,885
47,058
211,762
1,129,398
564,699
3,735,802
Total assets
29,838,116
34,549,907
9,808,391
15,616,312
22,902,463
112,715,189
Amounts due to banks
(3,356,032)
(3,398,269)
(383,769)
-
-
(7,138,070)
Amounts due to customers
(23,448,977)
(7,363,264)
(16,071,703)
(31,384,257)
(11,719,149)
(89,987,350)
Other amounts due
(408,337)
(317,896)
(395,421)
(131,562)
(137,103)
(1,390,318)
Capital
(1,119,890)
(263,461)
(1,185,576)
(6,323,074)
(3,161,537)
(12,053,539)
Other liabilities
(2,901,942)
-
-
-
-
(2,901,942)
Total liabilities:
(31,235,179)
(11,342,890)
(18,036,469)
(37,838,892)
(15,017,789)
(113,471,219)
Net off-balance sheet liabilities
(6,269,225)
(3,089,479)
(6,286,176)
13,976,760
1,579,875
(88,245)
Interest rate gap
(7,666,288)
20,117,537
(14,514,254)
(8,245,820)
9,464,550
(844,274)
* Financial data have been rounded and presented in PLN ‘000, and therefore, in some cases, the totals may not correspond exactly to the total
sum.
Estimated decreases or increases in the net interest income for the banking portfolio between 1 and 3 years, resulting from changes
in market interest rates, are the measure of its sensitivity. For management and risk control purposes, the Bank calculates
sensitivity to a number of different market parameter change scenarios: immediate shifts and shifts in time, parallel and non-parallel
shifts, in normal and stress conditions, varying depending on the currency, market and instrument.
Annual net interest income sensitivity to an immediate shift of market rates by 100 bps (in PLN ’000) assuming the most probable
change in the product structure, especially in the corporate segment, is presented in the below tables:
Immediate shift in market rates by 100 bps:
31.12.2021
31.12.2020
increase
202,614
286,523
decrease
(195,403)
(154,405)
Sensitivity of interest result by currency:
Immediate shift in market rates by 100 bps:
PLN
EUR
USD
CHF
increase
190,734
(621)
14,772
(2,383)
decrease
(184,308)
3,328
(14,772)
461
In case of the significant decrease in net interest rates, the decrease in interest income has been hedged with fee income from
current accounts of corporate clients resulting from negative interest rates in both foreign currencies and PLN.
The most probable cumulative impact of the interest rate rises (from October 2021 to February 2022, a total increase by 215 bs)
on the Bank’s financial results has been estimated at the level of PLN 520-580 million.
The economic sensitivity of capital to a sudden parallel shift of market rates by +/- 200 basis points in PLN ‘000 and as percentage
of own funds:
Immediate shift in interest rates:
In PLN thousand
%
increase by 200 bps
(428,468)
-2.76%
decrease by 200 bps
45,005
0.29%
In terms of base risk, the Bank analyses positions based on different types of rates with the same interest rate repricing date. The
largest potential change in the Bank's net interest income may result from a change in the spread between Wibor 1M rates and
the NBP reference rate.
If the market rate changes by 50 bps compared to the reference rate, the change in the result will be PLN 4,930 thousand.
The COVID-19 pandemic did not fundamentally affect the method of managing the interest rate risk in the banking portfolio.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Impact of IBOR Reform on BNP Paribas Bank Polska S.A.
BNP Paribas Bank Polska S.A. (the "Bank") conducted a project related to the Regulation (EU) 2016/1011 of the European
Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to
measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No
596/2014 (the "BMR Regulation"). The project not only aimed to bring financial contracts within the meaning of the BMR Regulation
into line with the requirements under Article 28(2) of the BMR Regulation, but also included the application of an identical approach
to the Bank's customer relations with respect to products and contracts other than such financial contracts.
On 5 March 2021, Financial Conduct Authority - FCA - (British financial regulator) announced the liquidation of LIBOR rates for
EUR, GBP, CHF, JPY and USD (ON, SW, 2M, 1Y) at the end of 2021 and LIBOR USD (1M, 3M, 6M) on 30.06.2023. At the
beginning of April 2021, the Bank informed its customers about this fact through the Bank's website as well as through electronic
banking channels. The Bank identified balance sheet and off-balance sheet items based on CHF LIBOR, GBP LIBOR, USD LIBOR
indices. Until the liquidation of the aforementioned indices, the resulting cash flows continue to be exchanged between
counterparties under existing rules.
As at 31.12.2021. The Bank holds:
- USD LIBOR-based financial assets of USD 84.7 million, of which USD 5.8 million maturing beyond 30.06.2023,
- USD LIBOR based financial liabilities of USD 0.01 million maturing in full before 30.06.2023,
- CHF LIBOR-based financial assets of CHF 999.3 million,
- CHF LIBOR-based financial liabilities of CHF 150.0 million,
- GBP LIBOR-based financial assets of GBP 1.4 million.
As at 31 December 2021 the Bank also had interest rate swaps (IRS) under fair value hedge accounting based on USD LIBOR
for USD 70.0 million, of which USD 55.0 million matures beyond 30.06.2023.
The Bank has no hedging relationships based on CHF LIBOR and GBP LIBOR.
As at 31 December 2021 the Bank does not have any currency interest rate swaps (CIRS) that require LIBOR to be swapped for
alternative rates.
At present, it is not possible to identify any rationale for discontinuation of the publication of the WIBOR and EURIBOR indices.
Thus, the flows resulting from these indices will continue to be exchanged between counterparties under existing rules.
For the EONIA rate, which also expires at the end of 2021, the Bank has no established relationship as at 31 December 2021.
Due to contractual provisions (extended periods of stabilisation of billing rates, i.e. application of a single rate for subsequent billing
periods), LIBOR CHF, LIBOR GBP and LIBOR USD rates may be applied to the settlements occurring after the date of the
announced cessation for these indices. These indices to be replaced: LIBOR CHF by SARON (Swiss Averaged Rate Overnight)
administered by SIX Swiss Exchange, LIBOR GBP by SONIA (Sterling Overnight Index Average) administered by the Bank of
England and LIBOR USD by SOFR (Secured Overnight Financing Rate) administered by the Federal Reserve Bank of New York.
Application of new indices in financial contracts may involve the use of a composite rate or other method depending on the market
standard adopted or the standard adopted by the administrator for the calculation of a given index.
As part of the project concerning the IBOR reform implementation, the Bank focused, inter alia, on establishing or updating the
content of the so-called fallback clauses regulating how to establish substitute (alternative) indices to those which are currently in
use; confirming the method of implementation of these clauses; developing changes to the Bank's IT systems that will allow for
the practical application of substitute indices in the event the development of a given reference index is discontinued. It should be
pointed out that, starting from mid-2018, the Bank has introduced fallback clauses in mortgage loan agreements.
It should be emphasised that the IT systems at 31 December 2021 allow for a multivariate use of overnight rates in banking
products depending on the usage standards for these indicators that may take shape in the future. The Bank is prepared to use
hedging instruments for these indicators.
In the case of hedging instruments, the Bank, as recommended by the PFSA, has joined the ISDA IBOR Fallbacks Supplement
and Protocol and is actively working with its counterparties to introduce the rules in line with this methodology.
It should also be noted that under Article 23 b of the BMR Regulation, the European Commission has been given the power to set
a substitute index. On this basis, Commission Implementing Regulation (EU) 2021/1847 of 14 October 2021 on the designation of
a statutory replacement for certain settings of CHF LIBOR was published on 22 October 2021. The Regulation applies to contracts
(including credit agreements) and financial instruments that use CHF LIBOR rates and which did not have appropriate fallback
clauses as at the date when the Regulation entered into force. According to the Regulation, as of 1 January 2022, a substitute -
SARON Compound (SARON Compound Rate) will be used by law in place of LIBOR CHF with an appropriate adjustment. As a
consequence, the continuity of agreements, including loan agreements in which LIBOR CHF was an element of the calculation of
the loan interest rate, will be preserved, without the need to amend them individually. The Bank will convert LIBOR rates to SARON
Compound rates in accordance with the individual interest payment schedule for each loan. The Bank has informed customers of
this change using various communication channels. There is a risk that the legality of the Implementing Regulation may be
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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challenged, due to an action for annulment filed under Article 263 of the Treaty on the Functioning of the European Union
(T- 725/21). At the date of publication of the Financial Statements, the reasons for the action have not been published and,
consequently, it is not possible to assess the materiality of this risk.
The Bank assesses that the introduction of fallback clauses in customer documentation in the form of annexes and amendments
to regulations, the use of Term Rates for selected indices, the entry into force of the Commission's Implementing Regulation and
the accession to the ISDA IBOR Fallbacks Supplement and Protocol significantly reduce uncertainty about the timing and amounts
of cash flows for the SOFR, SONIA and SARON indices.
As at 31 December 2021, the Bank has confirmed its operational and systemic readiness for the swap of the liquidated LIBOR
rates and has thus completed the tasks that were planned under the dedicated project.
55.6. Liquidity risk
Risk management organization
The Bank’s comprehensive liquidity management system covers both immediate (intraday) and future (current, short-term as well
as structural medium- and long-term) liquidity. Risk is managed by the Bank by building the statement of financial position and the
financing structure reflected in the Bank’s financial statements including both balance and off-balance sheet items to ensure
liquidity at any time, taking into consideration the profile of the Bank’s business, customer characteristics and behaviours as well
as needs that may arise as a result of changes in the financial market. Additionally, the risk identification and measurement
methods used by the Bank enable it to forecast future liquidity levels, also in stress conditions.
The Bank ensures separation and independence of its operations, risk management, control and reporting functions. In particular,
transactions with contracting parties and customers are entered into by the business, confirmed and processed by Operations,
immediate (intraday) and future liquidity is managed by ALM Treasury, daily supervision of the risk level and compliance with risk
limits is the responsibility of the Risk Function, while supervisory liquidity measures are reported independently by the Finance
Division
The liquidity risk limits adopted by the Bank reduce its exposure to this type of risk. Risk is monitored and controlled based on
documents adopted by resolutions of the Bank’s Management Board (risk measurement and monitoring policy and methodologies),
developed in compliance with the guidelines formulated in Recommendation P of the Polish Financial Supervision Authority, the
provisions of PFSA’s Resolution No. 386/2008 and European Commission Delegated Regulation 2018/60 of 13 July 2018
amending Commission Delegated Regulation (EU) 2015/61 of 10 October 2014. The Bank has an internal transfer pricing system
in place, which reflects accurately the real financing cost for each asset and liability type, and the transfer pricing structure
stimulates optimization of the statement of financial position, including diversification of the sources of funding, from the perspective
of liquidity risk. LTD limits for each business line are an important additional component of that system, as they facilitate
maintenance of a secure level of assets relative to liabilities, which is appropriate considering the characteristics of each line.
The level of liquidity risk appetite is determined by the Supervisory Board of the Bank and the risk management policy based on
that appetite, including definition of general liquidity risk measures, is approved by the Management Board, whereas specific risk
limits and their monitoring are the responsibility of ALCO. The Bank’s Management Board and Supervisory Board supervise
the effectiveness of the liquidity risk management process based on periodic information and current reports.
In compliance with the requirements of PFSA’s Recommendation P, the Bank conducts numerous analyses verifying its ability to
maintain liquidity in crisis situations. Stress tests cover comprehensive scenarios considering internal and system factors and
combining different variants with possible interactions. Stress test results are taken into account in determining liquidity limits.
The Bank has a comprehensive emergency plan in place. It comprises various scenarios along with action plans for liquidity crisis
situations in the Bank and in the banking system as a whole. Stress test results are correlated with the emergency plan and
reaching defined warning levels triggers the emergency plan.
Risk measures
The Bank uses external and internal risk measures. The internal measures include, among others: an analysis of trends and
volatility of each source of funding relative to the loan portfolio (LTD), the contractual liquidity gap and the liquidity gap realigned
based on behavioural factors along with mismatch structure limits defined on its basis, an analysis of surplus liquidity and
the available sources of funding, an analysis of stability and concentration of the deposit base as well as a review of the structure
of funds placed with the Bank by the major depositors by volume and maturity. Additionally, sales plans (covering loans and
deposits) are monitored, by each business line, and simulation analyses are performed. Furthermore, the Bank analyses the costs
of the deposit base with a view to optimizing the liquidity buffer and the use of such tools as the liquidity margin or pricing policy.
The external measures include supervisory long-term liquidity ratios introduced by PFSA’s Resolution No. 386/2008, which was in
force before 30 June 2021, as well as liquidity coverage ratio (LCR), as defined in European Commission Delegated Regulation
2018/60 of 13 July 2018 amending Commission Delegated Regulation (EU) 2015/61 of 10 October 2014, and the net stable funding
ratio (NSFR) determined in the Regulation No. 2019/876 of 20 May 2019 amending the Regulation (EU) No. 575/2013 of
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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the European Parliament and of the Council and developed in line with the Commission Implementing Regulation (EU)
No. 680/2014 and the Basel document on the NSFR.
The on-going supervision includes early warning tools, such as monthly reviews of additional liquidity requirements defined in the
Commission Implementing Regulation (EU) No. 2016/313. In addition, the Bank conducts daily analyses of various liquidity
indicators with warning levels defined in the Emergency Liquidity Plan. Theses allow, when warning levels are reached, to introduce
remedial actions and restore the Bank's safety in terms of liquidity.
Liquidity risk profile
In 2021, the Bank’s financial liquidity was maintained at a safe level. The Bank’s funds were sufficient for payment of all its liabilities
upon maturity. The portfolio of the most liquid securities was maintained at a level, which was sufficient to offset a potential outflow
of funds placed with the Bank by the major depositors in whole.
The year 2021 was a year of continuation of the COVID-19 pandemic situation. The activities of the ALMT Division focused on
continuing the special monitoring of the Bank's liquidity situation and ensuring the smooth management of settlements, clients'
access to cash. The Bank maintained on its portfolio the purchase of government bond issues and those issued by Bank
Gospodarstwa Krajowego in support of pandemic control activities. Internal models and internal transfer prices were adjusted on
an ongoing basis. The ALMT division coordinated with the business lines through regularly held meetings and consultations
concerning the liquidity situation and customer behaviour.
As at the end of 2021 the Bank’s surplus liquidity was at the level of PLN 29.811 billion:
31.12.2021
31.12.2020
Cash at Central Bank (over the reserve requirement)
(491,888)
(424,506)
Cash at other banks
2,078,986
401,261
Highly-liquid securities
28,223,645
29,982,133
Surplus liquidity up to 30 days
29,810,743
29,958,888
The liquidity surplus decreased compared to the end of 2020 mainly due to the reduction in the portfolio of liquid assets, which
were sufficient to ensure that the Bank's regulatory ratios were safe and well above the required level.
Throughout 2021, in particular as at 31 December 2021, the Bank complied with the requirements applicable to the supervisory
measures.
31.12.2021
31.12.2020
M3
Not required
7.86
M4
Not required
1.26
limit
1.00
31.12.2021
31.12.2020
limit
Liquidity Coverage Ratio
143%
181%
100%
In 2021, the Bank continued to optimize its financing sources, which aims to reduce unnecessary, and at the same time costly and
unstable, excess funding. In 2021, the Bank maintained the level of medium- and long-term loans from the BNPP Group and its
subsidiaries, including a subordinated loan from BNP Group in order to meet the MREL requirement.
The Bank’s sources of funding remained highly stable throughout 2021 at a similar level as in the previous year:
31.12.2021
31.12.2020
balance
stable (%)
balance
stable (%)
long-term loans from the Group
4 327 140
100%
4,306,539
100%
other long-term loans
101,501
100%
160,736
100%
securitization liabilities
761,925
100%
1,390,318
100%
retail
56 293,236
93%
53,982,138
87%
corporates
44 556,433
82%
38,337,062
79%
banks and other unstable sources
2 598,201
0%
2,715,259
0%
Total
108 638,436
86.6%
100,892,052
82.2%
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Inflows and outflows – expected under the agreements concluded by the Bank is presented as contractual liquidity gap*:
31.12.2021
Contractual liquidity gap
Up to 1 month
1-3 months
3-12 months
1-5 years
Over 5 years
Total
Assets
Loans and advances to
customers
13,801,511
2,263,839
9,551,957
29,757,435
26,232,084
81,606,826
Debt securities
-
-
880,150
12,622,687
19,022,040
32,524,877
Interbank deposits
2,078,986
69,000
10,000
-
-
2,157,986
Cash and balances at
Central Bank
2,584,646
-
-
-
2,079,746
4,664,392
Fixed assets
-
-
-
-
2,446,968
2,446,968
Other assets
1,010,509
-
-
-
269,983
1,280,492
Off-balance sheet liabilities,
including: derivatives
12,804,974
7,603,928
11,549,988
22,210,695
2,104,088
56,273,673
Liabilities
Retail deposits
52,989,326
1,930,056
1,321,014
52,787
53
56,293,236
Corporate deposits
42,985,027
778,536
532,831
243,898
16,141
44,556,433
Interbank deposits
2,563,201
20,000
15,000
-
-
2,598,201
Loans from financial
institutions
103,913
82,539
297,780
378,832
362
863,426
Equity and subordinated
liabilities
577,946
-
-
899,940
14,783,875
16,261,761
Other equity and liabilities
5,100,123
-
-
-
-
5,100,123
Off-balance sheet liabilities,
including: derivatives
12,873,870
7,664,647
11,533,690
22,235,755
2,116,816
56,424,778
Total receivables
32,280,626
9,936,767
21,992,095
64,590,817
52,154,909
180,955,215
Total liabilities
117,193,405
10,475,778
13,700,314
23,811,212
16,917,246
182,097,958
Liquidity gap
(84,912,784)
(539,011)
8,291,781
40,779,605
35,237,663
(1,142,743)
Compared to 2020, the contractual gap up to 1m increased, which is due on the one hand to the persistence of a very large portfolio
of amounts due to customers in products such as current and savings accounts. However, the stability of customer funds is still
very high (88% of the total balance, which is higher than in the previous year) with an average maturity of the stable parts of more
than five years. At the end of 2021, off-balance sheet liabilities excluding derivatives amounted to PLN 45,204 trillion.
31.12.2020
Contractual liquidity gap
Up to 1 month
1-3 months
3-12 months
1-5 years
Over 5 years
Total
Assets
Loans and advances to
customers
12,188,841
2,279,148
9,858,407
26,497,990
22,865,167
73,689,553
Debt securities
24,334
-
343,950
10,637,606
21,556,807
32,562,697
Interbank deposits
401,261
-
-
-
-
401,261
Cash and balances at Central
Bank
2,997,364
-
-
-
484,302
3,481,666
Fixed assets
-
-
-
-
2,553,563
2,553,563
Other assets
735,117
-
-
-
303,741
1,038,858
Off-balance sheet liabilities,
including: derivatives
12,802,413
6,676,789
15,729,727
66,734,306
11,848,411
113,791,646
Liabilities
Retail deposits
48,840,356
2,464,997
2,548,526
128,054
204
53,982,137
Corporate deposits
34,283,223
811,015
453,448
79,318
201
35,627,205
Interbank deposits
2,715,259
-
-
-
-
2,715,259
Loans from financial institutions
146,318
129,463
479,318
791,279
-
1,546,378
Equity and subordinated liabilities
659,391
-
-
-
15,616,904
16,276,295
Other equity and liabilities
3,388,669
-
-
-
-
3,388,669
Off-balance sheet liabilities,
including: derivatives
12,866,220
6,657,014
15,744,740
69,383,577
11,951,839
116,600,890
Total receivables
29,149,330
8,955,937
25,932,084
103,869,902
59,611,991
227,519,244
Total liabilities
102,899,436
10,062,489
19,226,032
70,382,228
27,569,148
230,136,833
Liquidity gap
(73,750,106)
(1,106,552)
6,706,052
33,487,674
32,042,843
(2,617,589)
* Financial data have been rounded and presented in PLN ‘000, and therefore, in some cases, the totals may not correspond exactly to the total
sum.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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The Bank's liquidity position continued to improve throughout the year. Due to the Covid-19 pandemic, interest in loans increased
slightly during the summer months of 2021, but the reluctance to commit continued. In addition, the reduction in lending towards
the end of the year was caused by rising inflation, interest rate increases (3 increases since September 2021) totalling 2.15% of
increase in case of the reference rate. This also caused a slowdown in mortgage production towards the end of the year. Inflationary
concerns, wage pressures as well as the planned significant increases in energy prices from 2022 also caused a slowed down
loan production in the corporate segment.
Funds obtained from non-banking customers continue to be the primary source of financing.
55.7. Operational risk
The Bank’s operational risk is defined in accordance with the requirements of the Polish Financial Supervision Authority included
in Recommendation M as the risk of incurring a loss through the fault of inappropriate or unreliable internal processes, people,
technical systems or as a result of external factors. It comprises legal but not strategic risk. Operational risk as such is inherent in
any banking operations. The Bank identifies the risk as permanently significant.
Operational risk is managed with a view to reducing the losses and costs resulting from the aforesaid risk, ensuring top quality of
the services provided by the Bank in addition to security and compliance of the Bank’s operations with the applicable laws and
standards.
Procedures
Operational risk management consists in employment of measures aimed at operational risk identification, analysis, monitoring,
control, reporting and mitigating. Such measures take into account the structures, processes, resources and scopes of
responsibilities for the said processes at various organizational levels. The operational risk management strategy has been
described in the Operational Risk Management Strategy of BNP Paribas Bank Polska S.A., which was approved by
the Management Board of the Bank and accepted by the Supervisory Board. The Operational Risk Policy of BNP Paribas Bank
Polska S.A., adopted by the Management Board of the Bank, constitutes organizational framework and standards for operational
risk management. It addresses all aspects of the Bank’s operations in addition to defining the Bank’s objectives and the methods
of their achievement as regards the quality of operational risk management as well as compliance with legal requirements set out
in the recommendations and resolutions issued by national financial supervision authorities. The Bank’s operational risk
management objectives include, in particular, compliance with high operational risk management that guarantee security of
customer deposits, the Bank’s equity, stability of its financial performance as well as maintenance of the operational risk level
within the range of the operational risk appetite and tolerance defined by the Bank. When developing the operational risk
management system, the Bank complies with the applicable legal requirements, in particular, with the recommendations and
resolutions of the national financial supervision authorities and the standards adopted by the BNP Paribas Group.
In accordance with the Policy, the Bank’s operational risk management instruments include:
identification and assessment of operational risk, including through gathering information on operational events, assessment
of the risk in processes and products and determination of key risk indicators;
setting the operational risk appetite and limits at the level of the whole Bank and individual business areas; analysing
operational risk, its monitoring and ongoing control;
counteracting an elevated level of operational risk, to include risk transfer.
Compliance with the operational risk policy is verified by the Bank’s Management Board periodically and, if necessary, the required
adjustments are made in order to improve the system. To this end, the Management Board of the Bank is regularly provided with
information concerning the scale and types of operational risk to which the Bank is exposed, its effects and methods of operational
risk management. In particular, both the Bank's Management Board and Supervisory Board are informed on a regular basis of the
development of the operational risk appetite measures set out in the Operational Risk Management Strategy.
Internal environment
The Bank precisely defines the roles and responsibilities in the operational risk management process, considering its
organizational structure. The Operational Risk Department, operating within the risk management area, has comprehensive
oversight of the organisation of operational risk management standards and methods within the second line of defense.
Development and implementation of the Bank’s strategy with respect to insurance as a risk mitigation technique is the responsibility
of the Real Estate and Administration Department, while the Security and Management of Business Continuity Division is in charge
of business continuity management.
As part of the legal risk management process, the Legal Division monitors, identifies and performs analyses of changes to laws of
general application and their effect on the Bank’s operations, in addition to court and administrative proceedings which affect
the Bank. The Compliance Monitoring Department is responsible for daily non-compliance risk analysis in addition to development
of appropriate risk controls and their improvement.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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Considering the elevated level of external and internal risks related to fraud and offense against the assets of the Bank and its
customers, the Bank has been extending the scope of and improved its processes aimed at counteracting, detecting and examining
such cases. The Fraud Prevention Department, as the second line of defense, supervises the activities carried out in this area.
The Bank's Management Board and the Risk Committee of the Supervisory Board are informed about the effectiveness of solutions
implemented by the Bank in this respect.
Risk management
The Bank places a strong focus on identification and assessment of the factors that trigger its present exposure to operational
risk in relation to banking products. It is the Bank’s objective to reduce the operational risk level through improvement of its internal
processes as well as mitigating the risk inherent in the process of launching new products and services and outsourcing operations
to third parties.
In accordance with the Operational Risk Management Policy of BNP Paribas Bank Polska S.A., the operational risk analysis is
aimed at acquiring an understanding of the interdependence between the risk generating factors and operational event types, and
it is performed primarily with the objective to define the operational risk profile.
The operational risk profile is an assessment of the level of significance of this risk, understood as the scale and structure of
operational risk exposures, determining the exposure levels to this risk (i.e. operational losses), expressed in the structural
dimensions selected by the Bank and the scale dimensions. Periodic assessment and review of the Bank's operational risk profile
is based on an analysis of the Bank's current risk parameters, changes and risks occurring in the Bank's environment,
implementation of the business strategy, as well as the adequacy of the organizational structure and the effectiveness of the risk
management and internal control system.
Internal control system
The purpose of internal control is effective risk control, including risk prevention or early detection. The role of the internal control
system is to achieve general and specific objectives of the internal control system, which should be considered at the design stage
of control mechanisms. The principles of the internal control system are described in the "Policy on internal control at BNP Paribas
Bank Polska S.A." document, approved by the Bank's Management Board. This document describes the main principles,
organizational framework and standards for the functioning of the control environment at the Bank, complying with the PFSA
requirements provided in Recommendation H and the Regulation of the Minister of Finance, Funds and Regional Policy of 8 June
2021 on the risk management system and the internal control system, the remuneration policy in banks. Detailed internal
regulations concerning specific areas of the Bank's activity are adapted to the specifics of the Bank's operations. The appropriate
organizational units of the Bank, in accordance with the scope of the tasks assigned to them, are responsible for developing
detailed regulations relating to the area of internal control.
The internal control system at the Bank is based on the 3 defense lines model, which consists of:
1st defense line, which consists of organizational units from particular areas of banking and support areas,
2nd defense line, which consists of organizational units responsible for risk management, regardless of the risk management
related to the first line defense, and the compliance unit,
3rd defense line, which is independent and objective internal audit unit.
The Bank ensures internal control through independent monitoring of compliance with control mechanisms, including on-going
verification and testing.
Monitoring and reporting
The Bank periodically monitors the efficiency of the operational risk management system and its appropriateness for its current
risk profile. The organization of the operational risk management system is reviewed as part of periodic control exercised by the
Internal Audit Division, which is not directly involved in the operational risk management process but provides professional and
unbiased opinions supporting achievement of the Bank’s objectives. The operational risk management system is overseen, and
its appropriateness and efficiency are assessed by the Supervisory Board.
Capital requirements due to operational risk
The Bank estimates its regulatory capital necessary to cover operational risk in accordance with the applicable regulations. The
said calculation is performed using the standard approach (STA). Requirements regarding Bank’s subsidiaries, to be disclosed in
the consolidated financial statements, are determined in accordance with the base indicator method (BIA).
Pandemic-related risks
As part of operational risk management, the Bank conducts activities in the area of ongoing risk analysis related to the pandemic
of the COVID-19 pandemic, and undertakes appropriate measures to ensure the safety of employees and clients of the Bank and
to ensure uninterrupted implementation of processes related to the conducted business activities.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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56. CAPITAL ADEQUACY MANAGEMENT
Own funds and capital ratios
Capital adequacy management is aimed to ensure the Bank’s and the Capital Group’s compliance with macro-prudential
regulations defining capital requirements related to the risks incurred by the Bank, quantified in the form of the capital ratio.
Since 1 January 2014, banks have been subject to new principles applicable to calculation of capital ratios, following the
implementation of Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on macro-prudential
requirements for credit institutions and investment firms, as amended by Regulation (EU) 2019/876 of the European Parliament
and of the Council of 20 May 2019 (CRR2) in relation to leverage ratio, net stable funding ratio, own funds and eligible liabilities
requirements, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment
undertakings, large exposures, reporting and disclosure requirements.
On 27 June 2020, Regulation (EU) 2020/873 of the European Parliament and of the Council of 24 June 2020, amending
Regulations (EU) No 272/2013 and (EU) 2019/876 as regards certain adjustments in response to the COVID-19 pandemic, entered
into force, allowing, inter alia, for a reduction of risk weights for some SME loans, the temporary partial exclusion from the
calculation of common equity Tier of the amount of unrealised gains or losses at fair value through other comprehensive income
in relation to the COVID-19 pandemic.
As at 31 December 2021, the adjustment related to the temporary partial exclusion from the calculation of common equity Tier 1
of the amount of unrealised gains or losses measured at fair value through other comprehensive income in relation to pandemic
COVID-19 amounted to PLN 367,167 thousand.
On 23 December 2020, Commission Delegated Regulation (EU) 2020/2176 of 12 November 2020, amending Delegated
Regulations (EU) No 241/2014 as regards the deduction of software assets from Common Equity Tier 1 items, entered into force.
As at 31 December 2021, the adjustment in Tier 1 capital related to other intangible assets amounted to PLN 378,273 thousand.
Capital ratios, capital requirements and equity have been calculated in accordance with the aforesaid Regulation with the use of
national options.
Pursuant to the Act of 5 August 2015 on macroprudential supervision of the financial system and crisis management in the financial
sector (Journal of Laws 2015, item 1513, as amended), an additional buffer of 2.5% was introduced starting from 1 January 2019.
At the same time, the Ordinance of the Minister of Development and Finance of 1 September 2017 on the systemic risk buffer
(Journal of Laws 2017, item 1776) determined that a systemic risk buffer of 3% is introduced as of 1 January 2019.
The Financial Supervision Authority, in a release dated 8 November 2021, announced that, based on the provisions of the Act of
5 August 2015 on macroprudential supervision of the financial system and crisis management in the financial system and after
taking into account the opinion of the Financial Stability Committee, has confirmed the identification of ten banks as other
systemically important institutions (O-SIIs).
As a result of the review, the Commission concluded that there are no reasons justifying the repeal or amendment of its previous
decision of 4 October 2016, as amended by the Commission decision of 19 December 2017, concerning imposition of a buffer for
another systemically important institution on the Bank (on a consolidated and separate basis) in the amount of 0.25% of the total
risk exposure amount, calculated in accordance with Article 92(3) of Regulation (EU) No 575/2013.
On 19 March 2020, the Regulation of the Minister of Finance (Journal of Laws of 2020, item 473) of 18 March 2020 repealing the
regulation on the systemic risk buffer came into force. The regulation repealed the Regulation of the Minister of Development and
Finance of 1 September 2017 regarding the systemic risk buffer (Journal of Laws of 2017, item 1776), which pursuant to art. 1
paragraph 1 introduced the systemic risk buffer rate of 3% of the total risk exposure calculated in accordance with art. 92 paragraph
3 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on macro-prudential
requirements for credit institutions and investment firms and amending Regulation No. 648/2012. (Official Journal of the EU L 176
of 27 June 2013, p. 1, as amended 2), on a separate and consolidated basis
The level of Tier I capital ratio (Tier I) and the total capital ratio (TCR) on a separate level, were above the requirements for the
Bank as at 31 December 2021.
At the same time, the Bank meets the legal requirements under the Act of 5 August 2015 on macro-prudential supervision of the
financial system and crisis management in the financial sector.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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31.12.2021
The minimum supervisory
separate solvency ratios of the
Bank
Separate capital adequacy
ratios of the Bank
CET I
7.25%
12.96%
Tier I
8.75%
12.96%
Total Capital Ratio
10.75%
17.77%
31.12.2020
CET I
7.25%
14.16%
Tier I
8.75%
14.16%
Total Capital Ratio
10.75%
19.46%
Requirement of a minimum level of own funds and eligible liabilities (MREL)
On 22 November 2121 the Bank received an announcement from the Bank Guarantee Fund ("BFG") regarding the joint decision
of the resolution authorities, i.e. the Single Resolution Board (“SRB”), Central Bank of Hungary, Finanstilsynet, Bank of England
and BFG, on the minimum level of own funds and eligible liabilities ("MREL").
The joint decision indicates that the Group's restructuring plan envisages a Single Point of Entry (SPE) strategy for the mandatory
restructuring. The Group's preferred tool for mandatory restructuring is the open bank bail-in tool.
The MREL requirement set by the Fund, in consultation with the SRB, for BNP Paribas Bank Polska S.A. is:
15.90% of TREA, the total risk exposure amount (TREA) calculated in accordance with Article 92(3) and (4) of Regulation
(EU) No 575/2013 (hereinafter MREL-TREA), and
5.91% of TEM, the total exposure measure (TEM) calculated in accordance with Articles 429 and 429a of Regulation (EU)
No 575/2013 (hereinafter MREL-TEM)
at the individual level. The Bank is required to meet the MREL requirement by 31 December 2023.
The Fund, in consultation with the SRB, has set interim targets for the Bank to meet by the end of each calendar year during the
period of reaching the MREL target:
in relation to TREA: 11.95% at the end of 2021 and 13.92% at the end of 2022,
in relation to TEM: 3.00% at the end of 2021 and 4.46% at the end of 2022.
The entire MREL requirement should be met in the form of own funds and liabilities meeting the criteria set out in Article 98 of the
Act on the BGF, which transposes Article 45f(2) of the BRRD2. According to the decision, the part of MREL corresponding to the
recapitalisation amount ( RCA) will be met in the form of AT1, T2 instruments and other subordinated eligible liabilities acquired
directly or indirectly by the parent company.
The Bank definitely complies with the defined MREL-TREA and MREL-TEM requirements as at 31 December 2021.
31.12.2021
Minimum separate supervisory
MREL requirements for the Bank
Bank's separate MREL
requirements
MREL-TREA
11.95%
17.91%
MREL-TEM
3.00%
11.19%
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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57. MAJOR EVENTS IN BNP PARIBAS BANK POLSKA S.A.
IN 2021
19.01.2021
Recommendation of the Polish Financial Supervision Authority from 15.01.2021 regarding the
suspension of dividend payments by BNP Paribas Bank Polska S.A. in the first half of 2021
8.03.2021
Appointment of the Management Board of BNP Paribas Bank Polska S.A. for a new term of office
24.03.2021
Annual General Meeting of BNP Paribas Bank Polska S.A.
• Consideration and approval of:
- The financial statements for 2020 and the Management Report on activities in 2020.
- CSR and Sustainability Report presenting non-financial information of the Bank and the Group in 2020.
- Report on the activities of the Bank's Supervisory Board and its committees in 2020.
- Adoption of a resolution on the distribution of the Bank's profit for the financial year 2020
- Adoption of resolutions on granting discharge to the members of the Bank's Management Board and
Supervisory Board for the performance of their duties in 2020
• Passing resolutions on appointing members of the Bank's Supervisory Board for a new term of office
31.03.2021
Declaration of the Central Securities Depository of Poland on the conditional registration of series M
shares of BNP Paribas Bank Polska S.A.
31.03.2021
Warsaw Stock Exchange information on the admission and introduction to trading of series M shares
of BNP Paribas Bank Polska S.A.
6.04.2021
Series M shares issue within the conditional share capital increase and change of the value of share
capital of BNP Paribas Bank Polska S.A.
The Bank's share capital was increased from PLN 147,418,918 to PLN 147,518,782
19.04.2021
Determination by the Bank Guarantee Fund (BFG) the amount of annual contribution to the banks'
forced restructuring fund for 2021 for BNP Paribas Bank Polska S.A. in the amount of PLN 90,147
thousand.
The total contributions to the BFG booked by the Bank as expenses in the first quarter of 2021 amount to
PLN 103,716 thousand (i.e. the abovementioned contribution plus the contribution to the banks' guarantee
fund due for the first quarter of 2021 in the amount of PLN 13,569 thousand)
12.05.2021
Commencement of the share buy-back programme addressed to the participants of the incentive
programme
20.05.2021
Entry of amendments to the Bank’s Statute into the National Court Register. The amendments resulted
from the increase of the share capital of the Bank to the amount of PLN 147,518,782 due to the acquisition
of series M shares by eligible persons
31.05.2021
Notice from two shareholders of the Bank (BNP Paribas SA and Rabobank International Holding B.V.) on the
commencement of sale regarding the part of their BNP Paribas Bank Polska S.A.’s shares within the
accelerated book building process (“ABB”)*
2.06.2021
Notice from two shareholders of the Bank (BNP Paribas SA and Rabobank International Holding B.V.) on the
completion of sale regarding the part of their BNP Paribas Bank Polska S.A.’s shares within the accelerated
book building process (“ABB”)*
17.06.2021
Extraordinary General Meeting of BNP Paribas Bank Polska S.A. - adoption of the following resolutions:
• determination of remuneration for the Bank’s Supervisory Board members,
• the approval of the Remuneration Policy for the Supervisory Board Members of BNP Paribas Bank Polska
S.A. and the Remuneration Policy for Executives who have a significant impact on the risk profile of BNP
Paribas Bank Polska S.A. (including the members of the Bank's Management Board),
• determination of the target number of Supervisory Board members for the new term of office,
• amendments to the Bank's Statute and the Regulations of the General Meeting.
5.10.2021
Entry in the National Court Register of some amendments to the Statute of BNP Paribas Bank Polska
S.A. adopted by the Extraordinary General Meeting of the Bank on 17 June 2021 (Resolution no. 11)
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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15.10.2021
Entry in the National Court Register of some amendments to the Statute of BNP Paribas Bank Polska
S.A. adopted by the Extraordinary General Meeting of the Bank on 17 June 2021 (Resolution no. 11)
19.11.2021
Entry in the National Court Register of some amendments to the Statute of BNP Paribas Bank Polska
S.A. adopted by the Extraordinary General Meeting of the Bank on 17 June 2021 (Resolution no. 11)
23.11.2021
Letter from the BFG dated 22.11.2021 on the minimum level of own funds and eligible liabilities
("MREL") for BNP Paribas Bank Polska S.A.
The MREL requirement for the Bank has been set at an individual level at 15.90% of the total risk exposure
amount ("TREA") and 5.91% of the total exposure measure ("TEM"). This requirement should be achieved
by 31 December 2023.
In addition, the BFG has set interim MREL targets which:
- in relation to TREA are: 11.95% at the end of 2021 and 13.92% at the end of 2022, and
- in relation to TEM are: 3.00% at the end of 2021 and 4.46% at the end of 2022.
* details regarding the process of sale by BNP Paribas SA and Rabobank International Holding B.V. of part of their shares of BNP Paribas
Bank Polska S.A. are described in Note 46 The shareholder’s structure of BNP Paribas Bank Polska S.A. of the present Report
58. SUBSEQUENT EVENTS
4.01.2022
Extraordinary General Shareholders Meeting - adoption of resolutions, inter alia, on
• adoption for application by the Bank of the rules contained in "Code of Best Practice for WSE Listed
Companies 2021”,
• adoption of the Policy for appointing and dismissing members of the Bank's Supervisory Board and the
Policy for assessing the adequacy of the Bank's Supervisory Board members,
• amendments to the Bank's Statutes and adoption of the Regulations of the General Meeting.
18.01.2022
Rating of the Bank by Fitch Ratings
• Long-Term Issuer Default Rating (IDR) at „A+” with a stable outlook,
• Viability Rating (VR) at „bbb-”,
• Shareholder Support Rating (SSR) at „a+”.
28.01.2022
Liquidation of subsidiary BFN ACTUS Sp. z o.o.
On 28 January 2022 the Extraordinary Shareholders' Meeting of BFN ACTUS Sp. z o.o. adopted a resolution
to dissolve the company by way of liquidation. As of 1 February 2022, the company changed its name to
Bankowy Fundusz Nieruchomościowy Actus Sp. z o.o. in liquidation.
11.02.2022
Additional capital charge imposed by the Financial Supervision Authority under Pillar II (P2G)
PFSA recommended the Bank to maintain at the separate and consolidated level own funds to cover the
additional capital charge (P2G) of 0.61 p.p. in order to absorb potential losses resulting from stress events.
01.03.2022
Liquidation of BNP Paribas Solution Sp. z o.o. subsidiary
On 1 March 2022, the Extraordinary Meeting of Shareholders of BNP Paribas Solutions sp. z o.o. adopted a
resolution to start the liquidation process of the Company.
Due to the political and economic situation in Ukraine, the Management Board of the Bank monitors the impact of the conflict on
the Bank's operations and its financial results on an ongoing basis. In the Bank's opinion, this event had no impact on the Bank's
financial statements for the year ended December 31, 2021. The analysis covers the risk of further escalation of the dispute and
the possible introduction of further economic sanctions. As at the date of publication of this report, the scale of the impact of the
events in Ukraine on the global economy and Poland is not known, therefore it is not possible to assess the potential impact on
the Bank's operations and results in subsequent periods.
SEPARATE FINANCIAL STATEMENTS OF BNP PARIBAS BANK POLSKA S.A. for the year ended 31 December 2021
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02.03.2022
Przemysław Gdański
President of the Management Board
qualified electronic signature
02.03.2022
Jean-Charles Aranda
Vice-President of the Management
Board
qualified electronic signature
02.03.2022
André Boulanger
Vice-President of the Management
Board
qualified electronic signature
02.03.2022
Przemysław Furlepa
Vice-President of the Management
Board
qualified electronic signature
02.03.2022
Wojciech Kembłowski
Vice-President of the Management
Board
qualified electronic signature
02.03.2022
Kazimierz Łabno
Vice-President of the Management
Board
qualified electronic signature
02.03.2022
Magdalena Nowicka
Vice-President of the Management
Board
qualified electronic signature
02.03.2022
Volodymyr Radin
Vice-President of the Management
Board
qualified electronic signature
02.03.2022
Agnieszka Wolska
Vice-President of the Management
Board
qualified electronic signature
Warsaw, 2 March 2022