Letter from the Supervisory Board Chairman
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Letter from the Superviosry Board Chairman
Ladies and Gentlemen,
2021 was another year in which we had to face a pandemic. Despite the efforts of governments and the start of vaccination against Covid-19, we have not returned to the reality as we knew it before the pandemic. However, the Polish economy rebounded from the pandemic that occurred in 2020. According to the Central Statistical Office, Poland’s GDP in 2021 increased by 5.7 per cent. This is the highest growth in 14 years. Of course, the scale of the rebound in 2021 was largely due to the deep fall in GDP in 2020. Our GDP has changed in exactly the same way as in the US. Faster growth was recorded in Sweden, France and Italy. Poland’s GDP fell by 2.5 per cent in 2020. Overall, the level of GDP therefore increased by 3.1 percent in 2020 and 2021. Tensions in global supply chains, the energy crisis and rising commodity prices are some of the elements that have imposed clear inflationary pressures on the global economy, including Poland. The rise in inflation was a major and negative surprise last year. Inflation in Poland rose to 8.6% as at 2021 yearend. Throughout 2021, CPI inflation averaged 5.1 percent. December’s inflation is the highest reading in 21 years – such a high rate of price growth has not been recorded since November 2000. At that time, inflation was 9.3 percent.
Countries in our region have already started raising interest rates from mid-2021. In October 2021, the Monetary Policy Council, against the expectations of the market and analysts, decided to raise interest rates for the first time in nine years, from 0.1 percent to 0.5 percent. It increased the reference rate to 1.25% in November and to 1.75% in December.
The banking sector also had to face the challenge of an unstable economic situation and adapt its business model to market changes on an ongoing basis. The sector’s profitability has improved and this is despite an environment of record low interest rates. A significant factor was the measures taken by banks to optimise and digitise their operational processes, cut their own costs, and adapt their offers and operations to clients’ expectations. Further development of digital processes could be observed – above all the remote opening of accounts and the emphasis on electronic channels of contact with the bank.
Despite the changing economic and regulatory environment, the ING Bank Śląski S.A. Group consistently pursued its business strategy. Its constant goal is to increase the scale of its operations by winning new clients and offering convenient and modern solutions and products designed to meet the expectations of clients in all business segments. Last year, ING Bank Śląski Group’s consolidated net profit amounted to PLN 2,308.3 million, compared to PLN 1,337.6 million in 2020. The Group increased its loan and deposit portfolio while maintaining good asset quality and keeping a strong capital and liquidity position. The corporate segment’s market share of loans rose to 12.6 percent and the retail loan market share to 8.9 percent, meaning that compared to 2020 the value of loans increased by 16 percent to PLN 146.5 billion.
In 2021, the Group won 112,000 retail segment clients and 17,000 corporate segment clients. In total, by the end of 2021, the Group served 4.3 million retail clients and reached 503,000 companies in corporate banking.
As at 2021 yearend, the total capital ratio stood at a high and safe level of 15.08%.
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Letter from the Superviosry Board Chairman
The Group has consistently remained one of the most profitable banking groups in Poland.
The Bank Supervisory Board actively supported the Management Board by closely examining its activities and, in the case of key decisions, took part in their adoption. With particular attention, the Supervisory Board monitored the Bank’s risk management areas, including non-financial and compliance risks, liquidity and capital adequacy. The Board supervised the implementation of internal audit and compliance tasks. The other areas monitored covered the relationship with the external auditor, the HR and payroll area, the implementation of recommendations issued by supervisory authorities and Bank governance area. The Board was also involved in setting the Group’s priority development directions. Members of the Supervisory Board sat on the Audit Committee, the Risk Committee and the Remuneration and Nomination Committee.
I hope that the strategy of the ING Bank Śląski S.A. Group and the prudent actions of the Management Board, supported by the Supervisory Board, will enable continued sustainable development of the Group.
To conclude, I would like to thank, on behalf of the Supervisory Board, all the Employees and Management Board Members for another year, full of challenges, for your engagement and professionalism in scaling up business and fostering values of the Group, and the Shareholders and Clients for your trust which is the best incentive to continue effective work.
Sincerely yours,
Aleksander Galos
Chairman of the Supervisory Borad