Erste Bank Polska Sa

Good morning, everyone. I'm responsible for investor relations in Santander Bank Poland. I'd like to welcome you at the presentation of financial results of Santander Bank Poland for the first half of 2022. Today with me there are the CEO, Michał Gajewski, the CFO Maciej Rylga and Wojciech Skalski, responsible for financial accounting area. Before I hand over to the CEO, let me tell you that during the presentation, you can send your questions to my email or ask them through the link available online. So now I would like to hand over to the CEO. Hello, everyone. Welcome at the summary of the first half of the year. As always, we have been pursuing our mission to help people and businesses prosper with great engagement and now our mission becomes even more important because there are difficult quarters ahead for the polish economy our product proposal and value we bring to our customers and translates into a good financial result and we can see that in our profit and loss account and balance sheet however our profitability has been affected by many burdens and costs that impacted our results materially. If it were not for those external extraordinary risk factors, that the scale of impact could not be foreseen we might be more optimistic today but during the first half of the year the entire banking sector faced extreme challenges first of all there was the russian aggression invasion of ukraine with all of its consequences at the geopolitical social and economic level secondly Tax inflation is coming. Economic growth slows down significantly. Inflation stays at an elevated level. We had a series of interest rate hikes. And on the fiscal side, some measures have been taken that do not help combat inflation. And thirdly, we have additional burdens for banks connected with the borrowers' support plans. In the first half of the year, we recorded the gross profit of 2,470,000,000 zlotys. At the same time, the tax burden for the group was 1.1 billion, including 732 million of corporate income tax and 368 million zlotys of the banking tax. Moreover, we paid regulatory costs for the Bank Guarantee Fund, the KNF and the Central Securities Depository of Poland and for IPS. All of this totaled 692 million slots. So the total burden on our performance in the first half was 1.8 billion slots. And this is about 200 million more than our net profit for the first half of the year, which totaled 1.6 billion. At the same time, we know that our performance in quarter three will be burdened because of payment holidays. which we estimated preliminary at $1.34 billion, assuming that 50% of our borrowers would use the program. We are also waiting for the charge for the borrower support fund. According to our estimates, this can be another $165 million, which will also drive down our performance in the second half of the year. Despite all those charges, We will be still pursuing our mission of supporting our customers.

So now let's move on to slide number seven.

We provide services to over 7.3 million customers as a group out of which 3.5 million are digital customers. The bank itself has 5.6 million customers, 3.2 million digital customers. The number of digital customers grew by 11% year-on-year. Customer deposits totaled 184 billion zlotys and grew by 6% year-on-year. The gross loans portfolio grew by 8% year-on-year to over 158 billion.