ING Bank Slaski

Good morning, ladies and gentlemen. Good morning. Today we'll shed light on the results of Q3. Q3 featured large uncertainties and question marks due to geopolitical situations. Nevertheless, there are also positive changes in the Polish economy. Consumption is slightly slowing down, but investment is growing. and gathering momentum. We see it in our bank looking at the projects involving defence and infrastructure. More and more focus will be switched into the boosting of a Polish economy and not In the meantime, in Q2, we obtained more than 100,000 new retail clients to the tune of 4.5 million of clients altogether. Also new companies, 680, which is very important year on year because we only acquired 133,000 of retail customers as compared to 168 and in companies it was 21,000 whereas now it is 24,000 so in the first three quarters of this year we acquired as many new clients as throughout the previous year entirely which is very important in line of in the bit of life strategy. And hand in hand with the growing clients, the deposits are growing by 15% year on year, by 18% for retail and retail. by 10% for corporate clients. The investment product's value was 86 billion zloty, including 74 billion funds and 12 billion brokers' accounts. The volumes of investment funds that are growing translate into growth of our market share At the end of Q3, the value of loans in total was by 9% higher than in the previous year. the financing of corporate clients was also to the tune of 9% whereas mortgage loans grew by 8% and this given very intense competition and high intensity of refinancing of loans which were refinanced at lower margins and with lower interest rates that it was the case 3-4 years ago higher growth to 14% was featured in cash loans. In conclusion, What makes us particularly happy is the increase in acquisition of new clients. We attracted more and more of new clients in the beat of life strategy provided that we should get 7.5 million new clients altogether in 2035 and we are very well on track and after the first three quarters of this year we generate the volumes of clients that will be in proportion to the final objective for 2035. What is also important is that loan products for corporate clients are in the pipeline and will be visible in incoming quotas. We are very happy about it because in the previous quarters we complained that there was no appetite for investment and now there is. so it makes us very happy and this happens with very good profitability features and Bożena will tell you about it in a moment yes indeed good morning so about financial results after Q3 what is noteworthy is that our growth result in Q3 was 1.7 billion Whereas our growth result cumulated, it is to the tune of 5 billion zlotys, 17% growth year on year. Our growth and net result is above market expectation, which is noteworthy as well. the growth in financial results in those volatility conditions that we see are a result of our consistent turn to commercial activity and thanks to the positive proportions in the financial statement and especially the fact that our total revenue grew by 7% year-on-year as compared to the growth of costs of 6% year-on-year, operating costs 6% year-on-year. So the proportion is positive. Also, costs of risk servicing. have been beneficially reduced, they are 50% lower than it was the case a year ago. That's why, as Micha was saying, in Q3 we saw high volatility on the one hand and changes in financial markets on the one hand, which will of course have bearing on balance sheet results and results and there is also strong competition. Nevertheless, looking at our results, we have reasons to be optimistic. Our profitability accounted on net capital that is adjusted by macro cash flow hedge is 14.7% and very often this is above what it has been provided for in the beach of life strategy. As for the interest rate result, it is 2.45% year-on-year improvement, 11% year-on-year improvement. Volumes of commercial loans are growing and this translates into better revenues and better net interest results. We also better manage the interest rate risk which is seen in our improved margin performance and interest margin performance. The improvement of our quarterly interest margin by six percentage point Q on Q, six or seven base points, well two base points is the impact coming from the adjustment of 12 million zloty that was imposed in Q2 because of the ruling of the Court of Justice about consumer loans and three base points are resulted from the quarter three length which is by one day longer. We have also stable financing cost to the tune of 1.62 and what is very important and should be repeated over and over again and we can hear it also in many market comments is that we function in highly competitive Sector we see margin pressure especially in generation of new products. This is felt and this net interest result is quite positive as a result of commercial growth our L2D ratio reduced by 40 base points that is 72.5% so consistently we've been reducing this proportion but what is important and what must be mentioned in our balance sheet management that this L2D proportion is below the average on the market which was to the tune of 67%. in Q3. As for fees and commissions results, 692 million, 2% improvement Q on Q, 16% growth year on year, and if we look at the tendencies of the cumulative 9 months at present we have 2 billion of commissions which is a 12% growth and as you can see these are very positive results of full consolidation of our TFI which contributes very positively to the Commission's income but what is also important is that we have various commissions and fee sources as illustrated on this slide and we have 5% growth in terms of operating accounts and 4% growth concerns new loans, new generated loans, 7% growth on insurance products. So you can see that the sources of commissions are quite diversified. This is what we wanted to achieve. At the end of the day we have 21% growth and this is one of the highest in the banking sector in the country. Operational cost including banking tax was 1.3%. is stable on Q and cumulatively they increased by 6% for the first nine months and what is important is to retain good proportion between growing revenues and growing costs to be serviced. Importantly, as you can see on the slide, the main driver here is HR costs. They increased by 11% after the first nine months, year on year, and this is a result of The salary pressure, we had higher salaries and we also have full consolidation of TFI which translates into more costs to be served and as a result our cost to income ratio without banking tax improved by 47 BPS and achieved 37% result. The cost of risk in Q3, the cost of risk was 73 million zloty and as you can see on the slide, this is the second quarter in a row where the cost of risk is clearly lower as it was one year ago. They are by 71% lower in Q3 and 50% lower year on year after the first nine months of this year. As it was the case in the previous quarter, this quarter we also can see the positive impact of microeconomic projections.

As a result of macroeconomic factors, we released 23 million provisions in this quarter and the corporate segment. On the other hand, as you can clearly see, there are very stable and low costs of risk in the retail segment, which is also a result of our risk profile and the a very robust payoff of retail dues, especially mortgages. What's really striking is both in Q2 and Q3, we saw decreasing influx of new exposures to stage three. But we are still very cautious and we will be in the oncoming months when it comes to behaviours of corporate clients because there is high volatility and it highly correlates with macroeconomic volatility. So the question remains What about the next quarters and their influence on macroeconomic data and the pay off of corporate loans? All in all, aggregated cost of risk amounted to 24 bps, and that's still very low, very distant from our long-term strategic average, which is set at 60 bps, because that was the

long-term average.