Current report No. 10/2020

17.04.2020

Predictions of the impact of the epidemic on the Bank’s activities and financial results

In reference to the information submitted in current report No 7/2020 of 3 April 2020, and having regard to the current state of affairs, Getin Noble Bank S.A. (the “Bank”) hereby makes public the following information on the factors which, in its assessment, will have significant impact on the Bank’s financial performance in the following quarters of 2020.

In the Bank’s assessment, its financial result will be negatively affected by the decisions of the Monetary Policy Council of 17 March and 8 April 2020 to reduce the reference rate by 100 basis points in total. At present, on the basis of the business assumptions and calculations made, the Bank estimates that this impact on its interest result will be within the range of PLN 90–130 million in 2020. It should be emphasised that the actual impact will depend on a number of variables, including the shape of the yield curve and the achievement of business assumptions, inter alia as regards the activities undertaken by the Bank in the area of continuing the previously implemented reduction of the cost of financing, which has significant impact on improving the Bank’s financial performance. Both the estimates and the assumptions may subject to modification.

At the same time, the Bank informs that inclusion of the estimated effects of the coronavirus COVID-19 pandemic, based on the current knowledge, including, among others, weakening of PLN, as well as the expectations in terms of worsening financial condition of the Bank’s credit customers, are likely to be reflected in the quality of assets and will result in increased cost of credit risk.  

In addition, in the Bank’s view, deterioration of prospects for global and domestic economic situation may result in reduced customer activity and reduced sales of banking products, and consequently impact the Bank’s business and financial results.

The Bank notes that the above assessment of the impact of the coronavirus COVID-19 pandemic on business, the financial results and the Bank’s outlook was drawn up based on the Bank’s best knowledge as at the date of publication of this current report and assumptions made on this basis. Currently, it is not possible to precisely assess such impact, and its scale largely depends on external factors which are beyond the control of the Bank.

The Bank would like to emphasise that it is analysing the current economic situation on an ongoing basis and making decisions aimed primarily at protecting the interests of current customers of the Bank and its own undertaking. The Bank’s management Board is planning to adjust its measures in an active manner to the prevailing economic conditions, as well as to the requirements related to the Recovery Plan, and will take active steps to limit the negative impact of the above factors on the Bank’s financial position.

Updated information on the impact of the coronavirus COVID-19 pandemic on the Bank’s activities will be presented in the quarterly report for Q1 2020.

Legal basis: Article 17 paragraph 1 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 (MAR).