Table Of ContentINTERIM REPORT 2018
OF BANK ZACHODNI WBK GROUP
2018
FINANCIAL HIGHLIGHTS PLN k EUR k
01.01.2018- 01.01.2017- 01.01.2018- 01.01.2017-
30.06.2018 30.06.2017 30.06.2018 30.06.2017
Consolidated financial statements of Bank Zachodni WBK Group
I Net interest income 2 786 033 2 556 483 657 161 601 894
II Net fee and commission income 1 044 874 970 835 246 462 228 572
III Profit before tax 1 608 111 1 674 024 379 316 394 129
IV Net profit attributable to owners of BZ WBK S.A. 1 073 686 1 104 155 253 258 259 960
V Total net cash flows 2 063 616 (5 846 912) 486 759 (1 376 586)
VI Profit of the period attributable to non-controlling interests 181 256 157 320 42 754 37 039
VII Profit per share in PLN/EUR 10,81 11,13 2,55 2,62
VIII Diluted earnings per share in PLN/EUR 10,80 11,11 2,55 2,62
Financial statements of Bank Zachodni WBK
I Net interest income 1 968 169 1 838 919 464 246 432 952
II Net fee and commission income 802 361 831 348 189 258 195 731
III Profit before tax 1 415 731 1 348 716 333 938 317 539
IV Profit for the period 1 163 689 1 039 729 274 487 244 792
V Total net cash flows 1 993 362 (5 736 774) 470 188 (1 350 655)
VI Profit per share in PLN/EUR 11,71 10,48 2,76 2,47
VII Diluted earnings per share in PLN/EUR 11,70 10,47 2,76 2,47
FINANCIAL HIGHLIGHTS PLN k EUR k
30.06.2018 31.12.2017 30.06.2018 31.12.2017
Consolidated financial statements of Bank Zachodni WBK Group
I Total assets 168 517 212 152 674 444 38 636 558 36 604 676
II Deposits from banks 3 252 586 2 783 083 745 732 667 262
III Deposits from customers 122 024 315 111 481 135 27 976 961 26 728 316
IV Total liabilities 144 528 772 129 330 815 33 136 641 31 007 892
V Total equity 23 988 440 23 343 629 5 499 917 5 596 785
VI Non-controlling interests in equity 1 411 000 1 436 409 323 505 344 388
VII Number of shares 99 333 481 99 333 481
VIII Net book value per share in PLN/EUR 241,49 235,00 55,37 56,34
IX Capital ratio 17,78% 16,69%
X Declared or paid dividend per share in PLN/EUR* 3,10 5,40 0,73 1,27
Financial statements of Bank Zachodni WBK
I Total assets 147 610 558 132 863 268 33 843 213 31 854 820
II Deposits from banks 1 646 744 1 414 448 377 555 339 123
III Deposits from customers 112 142 543 102 155 522 25 711 331 2 4 492 441
IV Total liabilities 125 989 162 112 024 431 28 885 996 26 858 575
V Total equity 21 621 396 20 838 837 4 957 217 4 996 245
VI Number of shares 99 333 481 99 333 481
VII Net book value per share in PLN/EUR 217,66 209,79 49,90 50,30
VIII Capital ratio 20,48% 18,95%
IX Declared or paid dividend per share in PLN/EUR* 3,10 5,40 0,73 1,27
* Detailed information are described in Note 46.
The following rates were applied to determine the key EUR amounts for selected financials:
• for balance sheet items – average NBP exchange rate as at 29.06.2018: EUR 1 = PLN 4.3616 and as at 29.12.2017:
EUR 1 = PLN 4.1709
• for profit and loss items – as at 30.06.2018 - the rate is calculated as the average of NBP exchange rates prevailing as at
the last day of each month in H1 2018: EUR 1 = PLN 4.2395; as at 30.06.2017 - the rate is calculated as the average of
NBP exchange rates prevailing as at the last day of each month in H1 2017: EUR 1 = PLN 4.2474.
As at 30.06.2018, FX denominated balance sheet positions were converted into PLN in line with the NBP FX table no.
125/A/NBP/2018 dd. 29.06.2018.
CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENT OF
BANK ZACHODNI WBK GROUP
FOR THE 6-MONTH PERIOD
ENDED 30 JUNE 2018
2018
Condensed interim consolidated financial statement of BZ WBK Group for the 6-month period ended 30 June 2018 4
TABLE OF CONTENTS
Condensed consolidated income statement ............................................................................................................. 6
Condensed consolidated statement of comprehensive income ................................................................................ 7
Condensed consolidated statement of financial position .......................................................................................... 8
Condensed consolidated statement of changes in equity ......................................................................................... 9
Condensed consolidated statement of cash flows .................................................................................................. 10
Additional notes to condensed interim consolidated financial statement ............................................................... 11
1. General information about issuer ......................................................................................................................... 11
2. Basis of preparation of condensed interim consolidated financial statement .......................................................... 13
3. Operating segments reporting ............................................................................................................................. 50
4. Risk management ............................................................................................................................................... 56
5. Capital management ........................................................................................................................................... 58
6. Net interest income ............................................................................................................................................. 59
7. Net fee and commission income ......................................................................................................................... 60
8. Net trading income and revaluation...................................................................................................................... 61
9. Gains (losses) from other financial securities ...................................................................................................... 61
10.Other operating income ....................................................................................................................................... 61
11.Impairment losses on loans and advances .......................................................................................................... 62
12.Employee costs .................................................................................................................................................. 62
13.General and administrative expenses ................................................................................................................... 63
14.Other operating expenses .................................................................................................................................... 63
15.Corporate income tax .......................................................................................................................................... 63
16.Cash and balances with central banks ................................................................................................................. 64
17.Loans and advances to banks ............................................................................................................................. 64
18.Financial assets and liabilities held for trading ...................................................................................................... 65
19.Hedging derivatives ............................................................................................................................................ 65
20.Loans and advances to customers ...................................................................................................................... 65
21.Investment securities .......................................................................................................................................... 67
22.Investments in associates ................................................................................................................................... 68
23.Assets classified as held for sale......................................................................................................................... 68
24.Deposits from banks ........................................................................................................................................... 68
25.Deposits from customers .................................................................................................................................... 69
26.Subordinated liabilities ........................................................................................................................................ 69
27.Debt securities in issue ....................................................................................................................................... 70
28.Provisions for off balance sheet credit facilities .................................................................................................... 70
29.Other provisions ................................................................................................................................................. 71
30.Other liabilities .................................................................................................................................................... 71
31.Fair value ........................................................................................................................................................... 72
32.Contingent liabilities ............................................................................................................................................ 75
33.Shareholders with min. 5% voting power ............................................................................................................. 76
34.Related parties ................................................................................................................................................... 76
35.Acquisitions, disposals and liquidation of investments in subsidiaries and associates ........................................... 78
36.Agreement on the acquisition of a carve-out of Deutsche Bank Polska by Bank Zachodni WBK ............................. 79
37.Changes in the business or economic circumstances that affect the fair value of the entity’s financial assets and
financial liabilities, whether those assets or liabilities are recognized at fair value or amortised costs ..................... 80
38.Any loan default or breach of a loan agreement that has not been remedied on or before the end of the reporting
period ................................................................................................................................................................ 80
39.Transfers between levels of the fair value hierarchy used in measuring the fair value of financial instruments......... 80
40.Changes in the classification of financial assets as a result of a change in the purpose or use of those assets ....... 80
41.Comments concerning the seasonal or cyclical character of the interim activity .................................................... 81
42.Character and amounts of items which are extraordinary due to their nature, volume or occurrence ...................... 81
43.Information concerning issuing loan and guarantees by an issuer or its subsidiary................................................ 81
Condensed interim consolidated financial statement of BZ WBK Group for the 6-month period ended 30 June 2018 5
44.Creation and reversal of impairment charges for financial assets, tangible fixed assets, intangible fixed assets
and other assets ................................................................................................................................................. 81
45.Material purchases or sales of tangible fixed assets and material obligations arising from the purchase of
tangible fixed assets ........................................................................................................................................... 81
46.Dividend per share .............................................................................................................................................. 81
47.Share based payments ....................................................................................................................................... 82
48.Events which occurred subsequently to the end of the interim period ................................................................... 83
Condensed interim consolidated financial statement of BZ WBK Group for the 6-month period ended 30 June 2018 6
w In thousands of PLN
Condensed consolidated income statement
01.04.2018- 01.01.2018- 01.04.2017- 01.01.2017-
for reporting period:
30.06.2018 30.06.2018 30.06.2017 30.06.2017
Interest income 1 736 743 3 425 244 1 620 968 3 180 770
Interest income on financial assets measured at amortised cost 1 506 838 3 025 737 - -
Interest income on financial assets measured at fair value through other
comprehensive income 174 832 338 071 - -
Income similar to interest - financial assets measured at fair value through profit
or loss 55 073 61 436 - -
Interest expense ( 340 536) ( 639 211) ( 318 481) ( 624 287)
Net interest income Note 6 1 396 207 2 786 033 1 302 487 2 556 483
Fee and commission income 664 660 1 282 385 620 824 1 203 400
Fee and commission expense ( 134 900) ( 237 511) ( 125 182) ( 232 565)
Net fee and commission income Note 7 529 760 1 044 874 495 642 970 835
Dividend income 98 323 98 508 75 579 75 924
Net gains/(losses) on subordinated entities - ( 65) - 3 757
Net trading income and revaluation Note 8 53 749 73 822 36 228 92 086
Gains (losses) from other financial securities Note 9 6 153 5 853 10 770 27 947
Other operating income Note 10 76 421 153 869 32 204 74 544
Impairment losses on loans and advances Note 11 ( 251 792) ( 474 758) ( 100 366) ( 245 878)
Operating expenses incl.: ( 915 827) (1 886 978) ( 828 582) (1 694 554)
-Bank's staff, operating expenses and management costs Note 12,13 ( 751 413) (1 613 867) ( 734 087) (1 497 797)
-Depreciation/amortisation ( 79 866) ( 162 402) ( 77 840) ( 152 109)
-Other operating expenses Note 14 ( 84 548) ( 110 709) ( 16 655) ( 44 648)
Share in net profits (loss) of entities accounted for by the equity method 14 504 25 502 15 157 23 812
Tax on financial institutions ( 112 071) ( 218 549) ( 105 123) ( 210 932)
Profit before tax 895 427 1 608 111 933 996 1 674 024
Corporate income tax Note 15 ( 172 690) ( 353 169) ( 199 737) ( 412 549)
Consolidated profit for the period 722 737 1 254 942 734 259 1 261 475
of which:
-attributable to owners of BZ WBK S.A. 634 952 1 073 686 651 111 1 104 155
-attributable to non-controlling interests 87 785 181 256 83 148 157 320
Net earnings per share (PLN/share)
Basic earnings per share 6,39 10,81 6,56 11,13
Diluted earnings per share 6,39 10,80 6,55 11,11
Notes presented on pages 11 – 83 constitute an integral part of these financial statements.
Condensed interim consolidated financial statement of BZ WBK Group for the 6-month period ended 30 June 2018 7
w In thousands of PLN
Condensed consolidated statement of comprehensive income
01.04.2018- 01.01.2018- 01.04.2017- 01.01.2017-
for reporting period:
30.06.2018 30.06.2018 30.06.2017 30.06.2017
Consolidated profit for the period 722 737 1 254 942 734 259 1 261 475
Other comprehensive income which can be transferred to the profit
and loss account: (40 968) 97 268 140 364 258 780
Available-for sale financial assets valuation, gross - - 181 366 344 816
Deferred tax - - (34 459) (65 515)
Cash flow hedges valuation, gross 33 034 21 730 (8 077) (25 334)
Deferred tax (6 277) (4 129) 1 534 4 813
Debt securities measured at fair value through other comprehensive
income (83 611) 98 354 - -
Deferred tax 15 886 (18 687) - -
Other comprehensive income which can't be transferred to the profit
and loss account 52 266 53 770 - ( 4)
Equity securities measured at fair value through other comprehensive
income 51 132 52 906 - -
Deferred tax (9 713) (10 052) - -
Profit on sale of equity securities measured at fair value through other
comprehensive income - 86 - -
Current tax ( 14) ( 31) - -
Provision for retirement allowances – actuarial gains/losses, gross 13 409 13 409 - ( 5)
Deferred tax (2 548) (2 548) - 1
Other comprehensive income for the period, net of income tax 11 298 151 038 140 364 258 776
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 734 035 1 405 980 874 623 1 520 251
Attributable to:
owners of BZ WBK S.A. 647 224 1 224 886 798 389 1 359 533
non-controlling interests 86 811 181 094 76 234 160 718
Notes presented on pages 11 – 83 constitute an integral part of these financial statements.
Condensed interim consolidated financial statement of BZ WBK Group for the 6-month period ended 30 June 2018 8
w In thousands of PLN
Condensed consolidated statement of financial position
as at: 30.06.2018 31.12.2017
ASSETS
Cash and balances with central banks Note 16 4 681 443 4 146 222
Loans and advances to banks Note 17 1 704 535 2 136 474
Financial assets held for trading Note 18 6 087 648 3 416 108
Hedging derivatives Note 19 90 621 218 061
Loans and advances to customers incl.: Note 20 114 176 972 107 839 897
- measured at amortised cost 112 674 986 -
- measured at fair value through profit or loss 1 501 986 -
Buy-sell-back transactions 60 756 -
Financial assets available for sale - 28 415 812
Investment securities incl.: Note 21 34 865 845 -
- debt securities measured at fair value through other comprehensive
income 33 903 526 -
- equity securities measured at fair value through other comprehensive
income 959 963 -
- other investment securities measured at fair value through profit or
loss 2 356 -
Investments in associates Note 22 855 457 889 372
Intangible assets 495 572 490 327
Goodwill 1 712 056 1 712 056
Property, plant and equipment 900 490 930 717
Net deferred tax assets 1 534 620 1 414 227
Assets classified as held for sale Note 23 12 860 103
Other assets 1 338 337 1 065 068
Total assets 168 517 212 152 674 444
LIABILITIES AND EQUITY
Deposits from banks Note 24 3 252 586 2 783 083
Hedging derivatives Note 19 951 207 578 798
Financial liabilities held for trading Note 18 1 254 699 1 237 704
Deposits from customers Note 25 122 024 315 111 481 135
Sell-buy-back transactions 5 376 727 2 650 846
Subordinated liabilities Note 26 2 665 741 1 488 602
Debt securities in issue Note 27 6 068 808 5 895 814
Current income tax liabilities 114 479 192 925
Provisions for off balance sheet credit facilities Note 28 64 295 50 652
Other provisions Note 29 152 034 102 482
Other liabilities Note 30 2 603 881 2 868 774
Total liabilities 144 528 772 129 330 815
Equity
Equity attributable to owners of BZ WBK S.A. 22 577 440 21 907 220
Share capital 993 335 993 335
Other reserve capital 17 959 061 16 920 129
Revaluation reserve 840 282 714 466
Retained earnings 1 711 076 1 066 236
Profit for the current period 1 073 686 2 213 054
Non-controlling interests in equity 1 411 000 1 436 409
Total equity 23 988 440 23 343 629
Total liabilities and equity 168 517 212 152 674 444
Notes presented on pages 11 – 83 constitute an integral part of these financial statements.
Condensed interim consolidated financial statement of BZ WBK Group for the 6-month period ended 30 June 2018 9
w In thousands of PLN
Condensed consolidated statement of changes in equity
Equity attributable to equity holders of BZ WBK SA
Retained earnings
Other reserve Revaluation and profit for the Non-controlling
Consolidated statement of changes in equity Share capital capital reserve period Total interests in equity Total equity
Balance as at 31.12.2017 993 335 16 920 129 714 466 3 279 290 21 907 220 1 436 409 23 343 629
Impact of the implementation of IFRS 9 - - ( 25 329) ( 229 125) ( 254 454) - ( 254 454)
Balance as at 01.01.2018 (restated) 993 335 16 920 129 689 137 3 050 165 21 652 766 1 436 409 23 089 175
Coverage of negative impact of IFRS 9 implementation* - - - 222 905 222 905 - 222 905
Total comprehensive income - - 151 200 1 073 686 1 224 886 181 094 1 405 980
Consolidated profit for the period - - - 1 073 686 1 073 686 181 256 1 254 942
Other comprehensive income - - 151 200 - 151 200 ( 162) 151 038
Profit on sale of equity securities measured at fair value through other
comprehensive income - - ( 55) 55 - - -
Profit allocation to other reserve capital - 1 032 851 - (1 032 851) - - -
Profit allocation to dividends - - - ( 307 627) ( 307 627) ( 206 503) ( 514 130)
Profit allocation to cover negative impact of IFRS 9 implementation* - - - ( 222 905) ( 222 905) - ( 222 905)
Share scheme charge - 6 315 - - 6 315 - 6 315
Equity adjustment due to merger and liquidation of subsidiaries and
controlling stake at the subsidiaries - ( 234) - 1 334 1 100 - 1 100
As at 30.06.2018 993 335 17 959 061 840 282 2 784 762 22 577 440 1 411 000 23 988 440
*General Meeting of Bank Zachodni WBK and BZ WBK Faktor Sp. z o.o. decided to allocate part of the retained earnings to cover the
negative impact of the implementation of IFRS 9 respectively in the amount PLN 218,466 k and PLN 4,439 k.
As at the end of the period revaluation reserve in the amount of PLN 840,282 k comprises of debt securities and equity shares
classified as available for sale of PLN 324,879 k and PLN 574,831 k respectively and additionally cash flow hedge activities of PLN
(70,785) k and accumulated actuarial gains - provision for retirement allowances of PLN 11,357 k.
Equity attributable to equity holders of BZ WBK SA
Retained earnings
Other reserve Revaluation and profit for the Non-controlling
Consolidated statement of changes in equity Share capital capital reserve period Total interests in equity Total equity
Balance as at 31.12.2016 992 345 15 791 555 276 093 2 720 834 19 780 827 1 237 649 2 1 018 476
Total comprehensive income - - 255 378 1 104 155 1 359 533 160 718 1 520 251
Consolidated profit for the period - - - 1 104 155 1 104 155 157 320 1 261 475
Other comprehensive income - - 255 378 - 255 378 3 398 258 776
Profit allocation to other reserve capital - 1 117 265 - (1 117 265) - - -
Profit allocation to dividends - - - ( 535 866) ( 535 866) ( 110 962) ( 646 828)
Equity adjustment due to merger and liquidation of subsidiaries and
controlling stake at the subsidiaries - 7 589 - 3 025 10 614 ( 2 007) 8 607
As at 30.06.2017 992 345 16 916 409 531 471 2 174 883 20 615 108 1 285 398 21 900 506
As at the end of the period revaluation reserve in the amount of PLN 531,471 k comprises of debt securities and equity shares
classified as available for sale of PLN 120,467 k and PLN 531,669 k respectively and additionally cash flow hedge activities of
PLN (128,683) k and accumulated actuarial gains - provision for retirement allowances of PLN 8,018 k.
Notes presented on pages 11 – 83 constitute an integral part of these financial statements.
Condensed interim consolidated financial statement of BZ WBK Group for the 6-month period ended 30 June 2018 10
w In thousands of PLN
Condensed consolidated statement of cash flows
01.01.2018- 01.01.2017-
for the period
30.06.2018 30.06.2017
Profit before tax 1 608 111 1 674 024
Total adjustments:
Share in net profits of entities accounted for by the equity method ( 25 502) ( 23 812)
Depreciation/amortisation 162 402 152 109
Impairment losses ( 75) ( 19)
Profit from investing activities ( 49 195) ( 29 253)
1 695 741 1 773 049
Changes:
Provisions 63 195 8 659
Trading portfolio financial instruments (2 654 545) (3 444 470)
Hedging derivatives 499 849 ( 858 802)
Loans and advances to banks 113 ( 39)
Loans and advances to customers (6 337 075) (1 985 189)
Deposits from banks 558 266 28 832
Deposits from customers 10 143 211 (3 086 852)
Buy-sell/ Sell-buy-back transactions 2 725 822 2 535 683
Other assets and liabilities ( 719 354) ( 329 785)
4 279 482 (7 131 963)
Interest accrued excluded from operating activities ( 195 564) ( 232 356)
Dividend ( 98 482) ( 75 763)
Paid income tax ( 528 676) ( 361 808)
Net cash flows from operating activities 5 152 501 (6 028 841)
Inflows 1 673 739 2 433 800
Sale/maturity of financial assets available for sale - 2 213 770
Sale/maturity of investment securities 1 414 225 -
Sale of intangible assets and property, plant and equipment 68 152 10 648
Dividend received 2 329 26 267
Interest received 189 033 183 115
Outflows (5 705 772) ( 2 123 895)
Purchase of financial assets available for sale - (2 033 054)
Purchase of investment securities (5 531 049) -
Purchase of intangible assets and property, plant and equipment ( 174 723) ( 90 841)
Net cash flows from investing activities (4 032 033) 309 905
Inflows 4 094 374 1 839 349
Debt securities in issue 3 300 999 1 238 789
Drawing of loans 793 375 600 560
Outflows (3 151 226) ( 1 967 325)
Debt securities buy out ( 2 125 000) ( 285 000)
Repayment of loans ( 383 686) ( 923 270)
Dividends and other payments to shareholders ( 514 130) ( 646 828)
Interest paid ( 128 410) ( 112 227)
Net cash flows from financing activities 943 148 ( 127 976)
Total net cash flows 2 063 616 ( 5 846 912)
Cash and cash equivalents at the beginning of the accounting period 7 662 368 1 1 838 799
Cash and cash equivalents at the end of the accounting period 9 725 984 5 991 887
Notes presented on pages 11 – 83 constitute an integral part of these financial statements.
Description:333 938. 317 539. IV Profit for the period. 1 163 689. 1 039 729. 274 487 11,70. 10,47. 2,76. 2,47. Consolidated financial statements of Bank
