Factors which will affect the results of the Group
Bank Pekao S.A. and its subsidiaries operate predominantly on the territory of Poland. Therefore, the Bank's performance will be influenced mainly by the economic events in Poland and international outlooks that have an impact on the Polish economy.
In 2015, dynamic of economic growth should remain on the similar level to dynamic achieved in 2014 (3.3%). Internal dynamic is positive and the factors supporting growth are expected, further improvement on the labor market, which should translate into real wage bill and private consumption increase, most likely continuation of rebound in investments, which will be supported by EU funds from the new financial perspective and the weakening of the złoty that additionally improve competitiveness of Polish goods on foreign markets.
Considering the above factors it could be expected even stronger growth than currently anticipated, however risks from external environment can negatively influence on the Polish economy.
The significant external threats is continuation of declines of crude oil prices, which constitutes significant risk factor for the stability of public finance in Russia and in the long term could undermine stability of the Russian currency and thus the entire financial system of this country as well as budget liquidity maintenance in Ukraine, which needs external financial support at least in the amount of USD 15 billion. On the other hand, in 2015, there will be elections in many EU countries (UK, France, Spain, Greece) and possible materialization of political risks (the increase of support for the radical forces) could influence on the situation on the financial markets and in the real economy.
A general risk for the global economy is the risk of economic slowdown, which would translate into lower demand for the Polish goods and services, lower propensity to invest among corporates and lower propensity to consume among households.
The risk factors mentioned above tend to be cautious in formulating economic projections. Stronger, than anticipated, increase in the internal dynamics of the Polish economy is likely provided that external risks do not materialize.
In 2015, in the banking sector, it should be expected a slight deceleration of dynamic in deposits growth, which in case of households will be associated with higher propensity to consume (resulting from stable labor market situation and record-low level of interest rates) and in case of corporates, the lower growth in deposits can resulting from engagement of funds into working and fixed capital.
Dynamic in loans to households as at the end of December 2014 amounted to 5.5% year on year. Taking into consideration fundamental factors, in 2015, it can be expected further, gradual increase in loans to this segment thanks to the record low interest rates and relatively stable macroeconomic situation. In the case of corporate loans, in 2015, it can be expected maintaining of relatively strong demand for loans driven by capital investments related to projects started in 2014 as well as new investments.
Due to legal changes in 2015, banks results will be adversely affected by further reduction of interchange fees seen in the fee and commission income related to card transactions. As a consequence of interest rate cuts (NBP and market rates), interest margins have been narrowed what have negative impact on net interest income of banks.
Within the framework regulatory and tax changes, the banking business in 2015 may be affected by further increase of contributions to the Bank Guarantee Fund and supervisory recommendations related to offering bancassurance products.
An important factor impacting results of the banking sector will be the issue of Swiss franc to zloty exchange rate. After the decision of the Swiss National Bank to lift the minimum EUR-CHF exchange rate, previously held at 1.20, the Swiss currency saw strong appreciation, also vs. the zloty. This, in turn meant increase of both installments and valuation expressed in PLN of loans drawn in CHF. Deterioration of the situation of creditors brought ideas to help them. The details of final solutions are not yet known, but they potentially may increase the burdens of the banking sector. It should be stressed that potentially taken solutions will have very limited impact on Bank Pekao as mortgage loans in CHF (almost entirely acquired as a result of the merger of the spun-off part of Bank BPH SA in 2007) represent a marginal share in the total asset of the Group.