Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna (PKO) Earnings Call Transcript & Summary

Good morning, everyone. Dariusz Chorylo. I have the pleasure to be accountable for Investor Relations at PKO BP. I would like to welcome everyone and present members of the Board who are going to deliver today's presentation. Iwona Duda, President of the Board; Piotr Mazur, Deputy President; Bartosz Drabikowski; Marcin Eckert and Maks Kraczkowski.

Thank you very much. Hello, and welcome, everyone. This is yet another conference that highlights our performance. And this time, we are presenting you our annual results. We are the first bank to present overall performance for 2021. And of course, we are going to announce our performance for Q4. As you should probably know very well, we are meeting in very peculiar social and geographic circumstances. Our bank enjoys a very stable position in the sector. We are the leader in the banking sector. And we are undoubtedly enjoying very safe capital and financial situation. So getting on with performance. Performance also reflects our safe position and the safety we provide to our clients. In terms of net profit generated in 2021, it's a record-breaking figure, PLN 4.9 billion. I would like to draw your attention to the fact that it's the best performance in the history of the bank, which spans more than 100 years. So you should keep it in mind. It's PLN 4.9 billion. And of course, this translates into excellent indicators such as profitability: ROE for 2021 fetched 12.1%. We have also declared an increased scale of our operations. Currently, our assets totaled PLN 418 billion. We provide services to more than 11 million customers. And like I said, we benefit from excellent capital base. It's a robust capital base. TCR stands at 18.2%. CET (sic) [ CET1 ] is 17%. So of course, this is the aftereffect of growing income, which in 2021 went up by 3.9% year-to-year. What makes us very glad that income on our core activities are going up. And this is also aftereffect of cost control and discipline. We have introduced an expenditure, which translated at C&E (sic) [ C/I ] of 40.6%. And of course, cost effectiveness in our activities is all important, which is why I would like to draw your attention to this indicator which is excellent market-wide. The cost of risk is normalizing. It stands at 55 base points; NPL totaled 3.98%, what means that the quality of our loan portfolio is excellent and the risk management portfolio is yielding excellent results. Of course, we are the leading bank in the sector. And hence, we undertake a number of activities to ensure efficiency of the bank itself. But in those times, one of our priorities is cybersecurity. You know very well that we are launching new solutions meant to serve our customers to give them a peace of mind and a sense of security in the digital world, because most activities are -- in line with the market trends, more and more services are going digital. 2021 was also a year that witnessed many business successes. In loans, we have an increase by more than PLN 248 million billion. Funding provided to customers was PLN 322 billion. In the second half of 2021, we had an increase by 7.8% in demand for consumer loans. Trust of our consumers is reflected by growth in deposits by more than PLN 40 billion; PLN 320 billion (sic) [ PLN 322 billion, ] this is the value of deposits. Retail funds have grown to PLN 36 billion (sic) [ PLN 36.7 billion ] all -- year-to-year by several dozen percent. So across all segments, and I keep on reiterating it, so we have rise or decline where they should be decline where we are reducing our cost. One of our assets is innovation and digitization, the growing share of digital customers. We have more than 6 million IKO applications. So year-to-year, this marked an increase by 8%. In Q4, the level of transactions supported by apps is PLN 140 million (sic) [ 138 million ] or more than 50% more year-to-year. Development of new technologies is supporting our business. We see a growing share of remote channels in product sales, and it also supports our internal operations at the bank. The number of bots supporting customer service is going up, and we are using more and more solutions driven by artificial intelligence. It's also important to stress that we have launched a settlement scheme. We were first player in the market to propose to the Chairman of the Polish Financial Supervision Authority to make settlements with mortgage customers who have mortgages in Swiss francs. More than 20% of customers have applied to make a settlement during the first 3 months of the program. Good performance obviously translates into execution of our strategy, and it's fair to say that this strategy which identifies goals by the end of this year, has been largely executed. So let me repeat, ROE was supposed to be 12%. We have delivered 12.1% so far. C/I was meant to be 40.6%. We are going ahead, it's 40.9%. So we are outperforming our goals that we have identified in late 2021. The risk of credit risk was meant to stand at 0.55%. Right now, we are outperforming it again. And net profit identified was PLN 5 billion, but as you can see, it's not a lot, and we hope -- we are convinced in the fact that we are going to outperform on this objective as well. Capital, very robust level. TCR and TIFR (sic) [ Tier 1 ] at a very good level. Capital surplus is high, profitability is high, and we are very efficiently making settlements. So it's fair to say that our bank is meeting requirements for payment of dividend. And this is our capital group at a glance. We are a very robust capital group. I would like to draw your attention to the middle segment, the position of the capital group and its market share. TFI accounts for 20% of market share in terms of asset management for natural persons. So we are ranking first. We have the podium. So excellent performance in lease -- 20 point -- 12.7% of market. Our brokerage service is 12.3% of the market share, and factoring another element which impacts the overall performance of the group, our market share stands at 6.2%. Capitalization, we are the most valuable and the best capitalized listed market bank in Poland. So right now, I would like to give the floor to my colleagues who will give you more information about our business operations. Maks, over to you.

Let's start with retail. Thank you very much. I would like to draw your attention to the fact that the bank is delivering on its business objectives and understands its customers, of course, because we are collaborating with the retail market. I would like to give you some facts and figures to illustrate. New loan sales year-to-year, we have record-breaking performance up by 3% year-to-year. I would like to draw your attention to the fact that excellent Q3 where mortgages accounted for PLN 5 billion. In Q4, good pace of communication with the mortgage customers was maintained and year-to-year sales stood at PLN 6.3 billion (sic) [ PLN 4.3 billion ] only in mortgage loans. So from the perspective of retail customers and the bank strategy, it's a valuable piece of information and very valuable customer relationship. In terms of volume, this slide presents figures in the bottom field. We have mortgage volumes is coming close to PLN 100 billions. Mortgage volumes are truly impressive, and it's fair to say that it's a great retail success. Deposits, the title of this slide points out to growth in sales and it also stresses the fact that regardless of interest rates, our customers put trust in us and deposit their money with us. Growing interest rates will be generating profits for us. Madam President has presented our performance in asset management. In fund management, assets have gone up by PLN 30 billions, and year-to-year they are up by 14% year-to-year. Well, this slide illustrates that we are a digital bank. And what is important market wise, this is execution of omnichannel strategy at PKO. To date, it has delivered great performance in terms of customer collaboration. We are the largest bank in terms of active customers benefiting from our app. 66 is the figure that we outperformed the second leading bank in Poland. It's excellent performance, which demonstrates how much we outperformed the entire market as part of strategic initiatives aimed at development of digital solutions for retail customers. The number of active users of mobile banking, more than 6 million apps dedicated for retail customers. And on this slide, the most interesting information is in the number of deals in Q4. Transactions supported by digital channel, 138 million transactions. You can see that app are not only installed, but customers are working with us using this channel. So this makes us a truly digital bank. The number of customers looking to IKO app, and that's the last diagram on this slide. We have very high digitization rate, reaching 75% of total customers from the retail market. Okay. Now let's just take a slide on how we build longer-term relations or the strategy of relations with customers based on the omnichannel model, while taking advantage of the digital solutions. And here, we can see what kind of direction was adopted and what the digital scenario implementation is. The digitalization of processes and also we have exceeded 507,000 connections per month via digital tools, including the bots. It gives us an excellent sense of providing good services to customers, including this particular channel. Madam Chairman has been talking about franc-based conciliations. 85% of all the franc refinancing agreements are handled online, whereas the only thing that you need to do face-to-face is to sign the agreement. We also have the investment or the machine investment to -- you can actually make your investment, capital or equity investments with the use of a digital tool. I believe that from the point of view of the bank, it is a promise of excellent profit for the future based on an omnichannel connection. Now with regard to the cash loans and other related tools, we have no doubt as to where we are going as a bank. Thank you.

Good morning, ladies and gentlemen. Ladies and gentlemen, 2021 was a year of growth in the corporate segment, specifically the second part of the year, the second half of the year wherein, thanks to amazing work, we managed to perform outstandingly. The financing of corporate clients grew by nearly 8%, which translated over to over PLN 74 billion in loans. At the same time, the deposits year-on-year grew by more than 38%. This is also a record PLN 63 billion -- that is what our clients deposited in absolute numbers. This was possible because we have managed to deliver very ambitious transactions of what you can see here are transactions that we are very proud of. Transactions, focusing among others, on renewable energy sources, the financing of assorted credit instruments and measures -- for example, CVC took over Stock -- and not to mention the issues and crediting for Echo Investment. Other measures include the consortium loans for lotus -- LOTOS, for LOTOS Group. We have also taken over the entire cash pool of ORLEN PK and ORLEN. We are also -- moreover, municipal bonds have been launched in great numbers as well. The next slide, please. And now in terms of our product lines, factoring have recorded amazing growth. Leasing, 4% year-on-year; factoring over 60% -- 86%. So that is, I believe, ample proof of how we intend to proceed. Now we want to be as close to our clients as possible. Our national nation-wide sales network meets the challenges we are facing. We have excellent tools, thanks to which our loan approval tool is very attractive to all our customers. Thanks to the Automarket platform, we have acquired over 3,000 cars, 82% of these transactions were carried out with funding provided by our group. Treasury operations were also growing. This is something that we are very happy to see, growth of over 60% in terms of commodities, interest rate hedging, thanks to which our customers could operate under the variable conditions provided to us by the macroeconomics. We have also reached a record-breaking level of treasury bonds sold. Last year, we sold over PLN 43 billion in T bonds. As Madam Chairman had already said, our brokerage house was -- recorded a growth of over 75%. We had a number of IPOs and derivative transactions, PLN 85 billion. Our brokerage house was also a leader on the secondary market, reaching a market share of over 12%. That translated into general transactions of over PLN 81 million (sic) [ PLN 81 billion ]. All these factors have translated into an increase of our market share in terms of funding nonfinancial institutions in 2021. Contrary to market tendencies, we have also increased our share on the market of these particular loans. Now in terms of our approach to ESG, I would like to ask that for the next slide. 2021 was another year when we were implementing long-term objectives, designed to adapt our bank to ESG targets. We have approached the performance of our hothouse gas emissions abatement by 2025. Hothouse gas emissions were to be abated to 60% whereas as of 2021, we have reached 61.8%. We have been reducing our impact on the mining sector. And as promised to our markets, we have performed in terms of that objective in 2021, close to the ultimate target set. We have also promised markets that our so-called green financing, i.e., [ RES ] will be 3x as high as the funding of energy from so-called conventional sources. This financing rate has reached a 3.5 multiple in terms of green to brown, translating into PLN 2 billion of funding in absolute numbers provided by the bank for purposes of renewable energy sources. Now in terms of components associated with the social or public side of the story. We are an excellent employer. As an employer, we take great care of our employees. And our employees are rewarding us with their loyalty and commitment. Ultimately, yet another year we have preserved our top employer rank. Our coefficient in terms of the share of women in management positions have exceeded our plans, including top management positions. The in-staff rotation ratios have also exceeded our plans. Now with regard to voluntary employee resignation rate, we are also close to the performance assigned. Now we are obviously meeting associated objectives as connected to ESG. We are on a great path, to be able to report to you that the bank has changed in that measure. Ultimately, rating agencies, Sustainalytics and E & V (sic) [ V.E ] and others have improved our 2021 ratings in the field. And we do believe that this is a trend we will be upkeeping during the years to come. Thank you very much.

Ladies and gentlemen, all these actions taken on the business side have obviously reflected in statistics and outperformance. Bartosz, could you please care to comment on our financials?

Thank you very much. A very warm welcome to you all. It is with great satisfaction that we are going to be providing you with our financials. Very, very solid performance of PKO Bank Polski. We are now summarizing an entire year of our work. We have been breaking records every quarter. We have taken on a strategic perspective as presented by Madam Chairman here. We have also been focusing on the largest -- 2 of our largest business areas. Now if I may, I'd like to comment on finances. The fundamental question from the viewpoint of our analyst -- of our stakeholders and analysts was how we haven't managed to provide our stakeholders -- shareholders with PLN 5 billion. It is a slightly provocative question. Nonetheless on the right-hand side of the graph, we can see a recurrent performance. We do not have an effect of interest rates here, more than PLN 1.2 billion per quarter. I believe that this is what makes this quarter distinctive. The bank has been generating great performance and has -- is prepared to generate higher interest rate environment and credit volumes. Now year-on-year, let us take a look at the left-hand side graph. Well, obviously, we were presenting for franc agreement conciliation, leading to a loss in 2020. Nonetheless, that would be slightly misleading. Let us look at 2019. This was when we recorded PLN 4.31 billion (sic) [ 4.031 billion ], also a record. And that, we had not been affected by the pandemic at that point or by circumstances difficult for the economies of many countries. This is -- we have recorded an improvement without the interest rate effect, 21% all in all. That is definitely the scale of our success. This -- it measures the scale of success of our bank. That is not all. We have appetite for more, and we are absolutely certain that we will be able to break these records this year. Now let us just take a look at the next slide. Core income growth acceleration, nearly 4% year-on-year in general, whereas fundamental income in terms of interest rate or interest and commission-related performance, more than 6% in the final quarter. Notably, we should pay attention to the structure of this growth. On the left-hand side, the interest performance is negative -- is in the negative year-on-year. We are definitely suffering or we have begun suffering or have begun recording or noting the interest rate effect. Nonetheless, this shows an amazing business success in terms of a very high commission performance, 13% year-on-year. That is definitely the voice of our customers. Now I will proceed to that -- to the interest rate performance shortly. Now this slide definitely shows a very strong rebound in the fourth quarter, 7%, excuse me, not year-on-year, quarter-on-quarter. Year-on-year, we are still recording a negative dynamic. This increase has been produced by 2 fundamental factors: a growth in credit volumes as discussed by Maks and Marcin. Very dynamic sales statistics have afforded us a certain comfort in what is going to be transpiring in the future. As of all said, in the fourth quarter, the interest rate effect has been quite moderate, PLN 140 million, and that is definitely going to be growing over the next quarter. I do believe that one of the fundamental questions I'm trying to respond to and the question that you might well understand involves our sensitivity to interest rates. And the rate of the mirroring higher interest rates in our interest performance. Our estimates have been listed in the -- at the bottom of the slide for purposes of the [ share -- ] and by 2022, those increases 265 basis points, we assume shall translate into an extra interest rate performance from PLN 2.5 billion to PLN 3.1 billion. Quite an amount, isn't it? Now we have estimated a 600 million shift the deposit market will respond as well. And thus, we are assuming a gradual moderate adaptation of prices as shown by the offers of selected banks. Their deposits have already been adapted to meet the higher interest rates. Let's just look at the [ stars. ] So this is probably the best summary of efforts of the group, which we plan to carry on this year, because if you look on the left-hand side, we have a diagram year-to-year, 13%, but double-digit dynamics is impressive because there is no price impacts -- portfolios of our customers have -- who have decided to increase the number of loan transactions with the bank. More insurance, more capital market transactions, et cetera, et cetera, have contributed to this result. And what I find most impressive, each line has double-digit dynamics. It's not a golden shot because there was a fantastic boom on the market or one line managed to overperform. It's not the case. Across all lines, the bank has delivered excellent results. And you can see results in the summary of our results. So the baseline effect is also important, but we definitely want to follow up on it, 5.1%. This is quarterly dynamics. All figures are going up. And it should be stressed -- the cost of operations, Madam President has stressed our strategic goals have been delivered basically a year earlier and cost discipline is important for us. We know how to invest, we know how to grow the bank, and we know how to keep costs in check. Overall costs have gone up by a little more than 3%. It's not bad. We also feel the inflation and payroll pressure like everyone on the market. Payroll costs are important. We want to be competitive on the market, 7.6%. So it's probably market average. And there were 2 sides to it. First of all, we need to retain, and we are determined to remain competitive on the market and on the other bonuses and premiums related to our [ bumper ] performance. So this is another thing that should be appreciated. And of course -- the dynamics of course, is just one indicator. Far more important for us is cost to income. And we have improved cost to income despite inflation and payroll pressure, and cost income again is 40.6% year-to-year. By quarters, it's 39%. It's lower. Madam President, over to you again.

Okay. So right now, we are switching to the cost of risk, like I said, just like in many other areas, our bank is enjoying excellent results. So Piotr, over to you.

Well, my colleagues have declared growth, and I'll be talking about declines. And my colleagues have rightly been taking pride in increases, and it's also safe what I'm going to discuss in a minute. What you can see on this slide, the cost of risk has gone down 39% year-to-year. And we are going back to a level which is natural for our bank. It's definitely below our strategic prices. And even more importantly, you might ask why Q4 is slightly higher than other quarters? What we've said last quarter that Q3 and 4, there will be one-off provisions. In Q4, we have set up PLN 300 million worth of additional provisions, which reflect our conservative approach to estimating provisions. And we don't see a rise in overdue payments in our portfolio, if you are afraid this might be the case. And I hope that this year, 55 baseline points, this will be the level we'll be able to retain this year. So to recap, the cost of risk. We don't see any negative signals so far. Increase in interest rate has not been triggering problems for our customers because of buffers we were using today and increases, highlighted by my colleagues, are on good level in terms of risk. On the next slide, we have a reason to be proud in -- take pride in historic success. The share of nonworking credits has gone down below 4%. I remember when it used to reach 9%. It's below 4% right now. It's an excellent performance. And we have managed to do that because of several factors. Well, first of all, we don't see new defaults. So the level is even lower than the level we've had historically. So customers are paying back loans on time and we don't have Stage 3 loans. In Q4, we sold our debt portfolio. And this shows that this level is additionally improved by disposal of our portfolio -- nonworking credits were also written off. And as a result, we are able to declare such robust performance, and this trend will be followed on. I've mentioned provisions. Provisions were created because some loans were reclassified as Stage 2, what you can also see on this slide. And our capital standing. Performance is excellent, and this translates into our equity. And I hope that we'll be able to share this great news with you shortly, and hopefully, we'll be able to deliver much higher ROE level. We have equity surplus which is very high and will be able to translate it into dividend. The settlement scheme. Madam President has communicated that our bank is well poised to embrace this process. We're anxious initially if settlements will not cause any issues, if waiting time will not be too long. It's not the case. Customers are satisfied. And as we can see, we have 23 submitted applications, applications for mediation. Many applications lead to a settlement. So we have many more settlements right now than litigation. So it seems to be a good solution for our customers and the bank alike and its shareholders. Obviously, everyone should be happy that we are making settlement. So this is all in terms of risk. Thank you very much.

Okay. So let me recap our presentation. So information in the nutshell, we are going to highlight key elements of our performance. Record breaking PLN 4.9 billion of net profit in 2021: Record-breaking for the bank and record-breaking for the entire banking market in Poland. ROE totaling 12.1%, something that we take pride in. Our income on core activity has rebounded. Great NII and F&C and trends are very promising, what of course translates into excellent outlooks 2022. We have stressed our cost effectiveness. The cost of risk, which is on a very good level, further improvement of the quality of assets. We have one of the lowest indicators on the market, robust capital base. And of course, 23 submitted applications for settlements regarding mortgage loans in Swiss francs, 78% mediations led to settlement. And obviously, we want to follow up on development of our technological development. What is our massive advantage, we'll be launching new functionality. And we assume that our customers will be embracing new technologies. I would like to mention one more thing because obviously, we are distinguished for our innovations for our products, but something that is all important is the fact that we receive awards, and we are recognized as an institution, which has the biggest public trust and is most reliable. And last but not least, a very important announcement, yesterday, we have received the position of the Polish Financial Supervision Authority. We are going to pay out 50% of net profit for 2021 as dividend. And this means that PLN 2.2875 billion will be paid, what translates into PLN 1.83 per share. Dividend rate stands at 4.23%. I think it's a good time to do that. We have excellent performance, and we can share our profits with our shareholders, what makes us proud.

Okay. So thank you very much for your attention. It's time for Q&A. We have a handful of questions from investors. So I'll try to cluster questions thematically. We don't have many questions so far. What is hardly surprising, everyone is focused on Ukraine. And could you quantify risk related to operations of the bank in Ukraine? And what write-offs can we expect in the worst-case scenario? What are the possible consequences of the conflict on our performance?

Like I said at the beginning of this conference, we are witnessing a very unique moment in time. It's a very unique geopolitical setup. Developments in Ukraine, we are keeping an eye on them for a long time from the perspective of our company, KREDOBANK. That's our operation in Ukraine. And also from the perspective of headquarters based in Poland of PKO Bank Polski. We have introduced active monitoring. We have launched all procedures which are normally launched in such circumstances to safeguard our assets, property and people, who are all important. KREDOBANK, I would like to ask Maks to provide us with additional information.

Thank you very much. Well, we've said it before, KREDOBANK is a major asset of our bank, and we are fully aware that the situation is serious, the Management Board and the Supervisory Board, because we were aware of military threats to Ukraine. We have put together different scenarios, which I'm not going to disclose right now. Those scenarios are meant to safeguard deposits of our customers, of KREDOBANK, to retain the loan portfolio. There are different scenarios -- partial occupation or occupation of large parts of Ukraine. The management of KREDOBANK keeps in touch with the National Bank of Ukraine and the Supervisory Board in Poland. And I can assure you that both in terms of readiness of our operation to work with customers, readiness to pursue retail and corporate banking goals, we are ready in Ukraine to keep business as usual to an extent to which it is possible. Obviously, we are being posted about limits introduced by the National Bank of Ukraine for clients from the banking sector, and recent update has been received an hour ago. Limits have been imposed on cash withdrawals only. So to recap, KREDOBANK is doing business as usual, to an extent to which it is possible. It is contacting its customers. It is resilient to cyber attacks. It has got highest resilience out of all banks that have been attacked in Ukraine recently. And we are not acting on latest information. 3 months ago, the Supervisory Board have asked experts to draw different scenarios for protection of assets and deposits. So we are following our scenario, not the motions. Thank you very much.

I would like to offer a couple of words or comments. Yes, these emotions are very important. And yes, such circumstances require us to approach the situation with calm, with great calm. Our Management Board in Ukraine is a team that has been managing our company for a long time. Immediately after the Crimean annexation, they have been put in place. So they have been really trained to operate under such strenuous conditions. From the viewpoint of PKO Bank Polski, we definitely have to be prepared for assorted scenarios. We have also actually considered a variety of scenarios.

You do see the -- you can check the slides, PLN 283 million is our exposure. Nonetheless, we have to understand that the PKO Bank Polski is prepared for a variety of scenarios that we have drafted and considered during our Management Board meeting, including black scenarios. And even under those black scenarios, the PKO Bank Polski exposure is relatively low. In other words, PKO Bank Polski will not be recording major changes in terms of equity coefficients or ratio. We are meeting all regulatory limits. So I believe that the exposure of the bank, which has been developing well, has also led to good financial performance. Nonetheless, we will in all probability have to account for additional write-offs. Nonetheless, as of this day, it is difficult for us to assess it in general.

Ladies and gentlemen, in order to respond to the anticipated question, we have prepared a slide showing the KREDOBANK share of the group. On Slide 43, please -- excuse me, 39 on 45 -- 39, please. Yes, indeed, could we please have it displayed?

That side addresses the topic we have just been discussing, which is -- our analysis obviously did not begin to be drafted yesterday. That is the effect of a scenario-based approach, excuse me. the potential scale to our -- the potential scale of influence you are obviously after has been imaged in the slide. PLN 2.6 billion in credits equivalent; assets totaled PLN 5 billion; just under [ PLN 500 million ] in net profit. Yes. So the bank, given the difficult situation in Ukraine, the bank generated EUR 114 million in profit. It is obviously -- it obviously helps that the bank is located in Lviv, in Western Ukraine. And it goes without saying that the business has been developing very, very well. So from our viewpoint, it is definitely a loss of potential. Yes, indeed, over a short term, hopefully perspective, the circumstances will definitely affect the bank's operation. Now with regards to shares of percentages, we are talking 1% or 2% here. The overall exposure, net exposure totals PLN 278 million, such is our exposure in Ukraine. Not huge. Nonetheless, we do bear in mind that we have staff there. We have clients there. We are definitely going to be supporting both our stakeholder groups to the extent possible. Thank you.

The next question concerns the sensitivity of our interest income by 100 bps of interest rate increases. Our forecast is now higher than most recently produced. Where's the difference?

I believe that this is a more complex question. But in all probability, we cannot simply bring down -- bring it down to a specific amount in terms of 100 bps. It goes without saying that we are all responding in a nonlinear way to interest rate changes, and it is primarily a derivative of deposit pricing. At this point in time, we have not yet been observing any changes to deposit pricing. It goes without saying that offers are now coming in, 1%, 2% or even over 2%. That ladies and gentlemen, is a relatively selective offer which affect a relatively low deposit base. Nonetheless, I do believe that the trend is going to continue and it is definitely going to increase the interest cost across the board, including at our bank. So I believe that then each batch of 100 basis points, each increase will definitely affect us to a greater extent. The first 100 -- batches of 100 basis point batches, 1 billion, 1.2 billion that was the effect. In all probability, we are going to react at a level below 1 billion. Now we have 265. And in all probability, once the increase exceeds 300 basis points, in all probability, we're going to be closer to the overall measurement scale. Nonetheless, we also have to understand in what kind of performance reporting we are talking about. Now the interest rate increase will not kick in as of the moment of the WIBOR increase or the decision of the monetary policy council. 70% of assets in Poland are repriced over 3 to 6 months. This is exactly why I said that even in the fourth quarter, we have been recording a quite a low effect, 140 million, yes, such has been the increase in terms of the 7% dynamic. Nonetheless, that does not mean that this growth will not be recorded. Even more so, the growth will be even higher. The 6 months time window means that we are going to be -- basing on 6-month WIBORs, which obviously have a positive spread in comparison to the 3 months WIBOR, which ultimately means that we are going to be contributing very strongly to the interest-related performance in the years 2022 and 2023. We are going to be observing a very complex volume effect, 20%, 30% dynamics year-on-year in retail and the corporate. There is a major opportunity for preserving such a portfolio growth rate. Nonetheless, it will take time before or until we are going to respond to it in our portfolio. Marcin is obviously ready to respond. Our corporate customers have been signalizing that they do have an appetite for related measures. Now as of today, what we can tell you is PLN 2.5 billion to PLN 3.1 billion, a major potential impact on the basis of what we have already seen in terms of the increase -- [ 65% ] of the basis points as a result of the monetary policy council. So nonetheless, obviously -- and obviously, the WIBOR-related effect through 2022. Any further increases will most definitely also impact the positive interest rate income this year. As Madam Chairman have told us in the course of her interviews, we have a double-digit dynamic, and this is exactly what we can expect in terms of the interest rate performance.

We also have a number of technical questions. What was the write off -- what was the effect of write-offs on the interest rate income?

PLN 180 million. So we have not definitely exceeded the plan. PLN 183 million to be specific.

How's PKO changed the -- its price list for fees and commissions?

The tarification change is part of regular banking activity. We are obviously monitoring the way we interact with clients, in terms of services and others -- in terms of different services. We have not yet prepared a customer proposition in terms of an increased -- of any increased fees that -- or commissions that might cause our clients discomfort. Thank you very much.

With regards to the commissions on mortgage loans, where are you basing? On the Zloty portfolio or Swiss franc portfolio?

Both. Nonetheless, the French franc (sic) [ Swiss franc ] portfolio has a higher risk cost. And this is why the commissions are higher.

And last question -- and our last question. Will the bank attempt another dividend of undistributed profit for the past years?

Well, ladies and gentlemen, we conveyed to you the decision of the management, the Board, and the Supervisory Council. This is an excellent communication or message -- excellent news to our shareholders. This is all we are willing to say at this point. I must say that the dividend is exceptional. I hope you agree. So I think that this is an excellent move in terms of what we -- in terms of willing to share our good fortune and profit with our shareholders.

That is all in terms of questions.

So I would like to thank our audience for their presence for joining us, and please join us next quarter. Thank you very, very much. I hope that we will have only good news to convey. Thank you very much, and goodbye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]