25.09.2020

Idea Bank: another quarter in the black

  • In Q2 2020, Idea Bank continued its recovery programme and again recorded a profit at consolidated level (PLN 1 million) and at individual level (PLN 5.7 million)
  • In total, since Q3 2019, Idea Bank’s positive result at consolidated level is PLN 49.1 million
  • The Bank has built up a healthy foundation to achieve sustainable profitability: interest income, risk management, cost restructuring and modernisation (digital transformation)
  • Idea Bank has flexibly adapted its credit risk management policy to current market conditions – a plan initiated in March to support customers by offering them credit moratoria covered almost 7.5 thousand customers for an amount exceeding PLN 1 billion, and over 4,700 customers benefited from Polish Development Fund subsidies of a total of over PLN 350 million.
  • LCR at the end of Q2 2012 was 129%.
  • The Bank is working intensively on a new Recovery Plan 

Rebuilding capital ratios continues to be the strategic goal of Idea Bank. To achieve this goal, an action plan to improve them quickly was prepared and presented to the market. Due to the fact that the Bank's Administrator (i.e. the Bank Guarantee Fund) has opposed some of these projects twice in recent weeks, the Bank is currently working on solutions to improve its equity situation. They will be included in the new Recovery Plan, which will be presented to the Polish Financial Supervision Authority in mid-October this year, in line with the PFSA’s expectations.

A good example of the measures taken by the Bank as part of the Recovery Plan being prepared is the information published in Current Report no. 93/2020 of 22 September 2020 on the suspension of the open issue of Series O Shares in a public offering with pre-emptive rights for existing shareholders and the announcement of the issue of Series O Shares in a closed offering addressed to designated investors instead (Current Report no. 94/2020 of 22 September 2020). In the Bank's view, raising equity through a private placement issue is currently a much more effective method of strengthening the equity base, and its implementation will have a positive impact on the value of capital ratios.

Idea Bank’s results in Q2 2020 prove that, in accordance with previously published declarations, the Bank is ready to fully absorb the interest rate cuts introduced by the National Bank of Poland. Importantly, Idea Bank still has high potential for a further reduction of costs and consequently for full compensation of lost income from its loan portfolio.

“Thanks to radical decisions to structurally reduce the Bank’s costs, we entered the lockdown period lean and flexible, which can be seen in the Bank’s positive results, giving us a confident position on the market at this extremely difficult time for the banking sector too." says Jerzy Pruski, President of Idea Bank.

 

Q2 2020 is a period of further digitisation of the offer and services and cost optimisation. Idea Bank is focusing on developing full mobile banking for SMEs and automating processes, combined with their migration from branches to online channels. In recent months, Idea Bank has made its mobile application available to Huawei telephone users and introduced the option to make Google Pay contactless payments. At the same time, Idea Bank is very well prepared to function in the so-called new normality, i.e. where a significant percentage of activity has had to be transferred online. Idea Bank employees have adapted splendidly to remote working, with about 90% of head office employees and about 80% of employees across the entire Bank working from home, which is key given the expected second wave of the COVID-19 epidemic.    

 

“The cost and technological transformation initiated earlier enabled us to transition smoothly from office to remote working. Significantly, the solutions implemented have brought about an increase in productivity in several areas, and the employees themselves feel safer working from home. We are ready to implement a new business formula and our key objective – digitisation of systems and services.” says Piotr Miałkowski, Idea Bank Vice-President for Financial Affairs.

 

“We are operating normally, despite recent media reports about our Bank and its Main Shareholder, and the decisions of certain state bodies. Our most important objectives are to care for the welfare of our clients and shareholders and to strengthen the bank's equity. We are consistently pursuing a policy to restore our credibility and our clients appreciate it.” stresses Idea Bank’s President.