PKO Bank Posts Strong Q2 Growth as Corporate Lending Surges on EU Funds
Poland's largest bank reports double-digit loan growth and stable margins, with management projecting multi-year corporate lending momentum.
Corporate Lending Drives Growth
Powszechna Kasa Oszczednosci Bank Polski (PKO), Poland's largest bank with a market capitalization of approximately $37 billion, reported robust second-quarter results underpinned by double-digit loan growth across all segments, with management expressing confidence that the momentum could extend for years.
Executives attributed the surge in corporate lending to multiple factors beyond the deployment of European Union recovery funds. "We believe it may be continued going forward, and it is not related only to utilization of EU funds," said one executive on the call, noting that the bank has achieved a 17% market share in corporate financing (earnings call, 2026-08-13).
Investment loans to large corporates grew 35% year-over-year, a key driver of overall corporate book expansion. Management projects corporate lending growth of 6.5% for 2027, only marginally below this year's 6.8% pace, citing cyclical recovery in Western European export markets and continued availability of EU recovery fund loans beyond 2026.
Margin Stabilization Expected
Chief Financial Officer Jakub Niesluchowski confirmed that the bank's adjusted net interest margin (NIM) expanded by 4 basis points in the second quarter and is expected to "stabilize" in the third and fourth quarters around the Q2 level of approximately 4.3%, with possible fluctuations of just "a few bps" (earnings call, 2026-08-13).
The NIM improvement was driven by volume growth, deposit base optimization, and a significant decrease in hedging costs. Niesluchowski said the bank expects net interest income (NII) to be "flat with positive upside for the whole year of 2026" compared to 2025.
Looking ahead, the bank is working under an assumption that Poland's reference rate will decline from 3.75% currently to 3% by year-end 2027, following three 25-basis-point cuts beginning in May. "If we'll have this 75 basis point [decline] in 2027, we still see the margin will be above 4%," Niesluchowski said (earnings call, 2026-08-13).
Strategic Focus on Retail Deposits
Management emphasized a deliberate strategy to prioritize retail deposits over corporate deposits, despite rapid corporate loan growth. "We don't fight for deposits" in the corporate segment, Niesluchowski explained, noting that the bank's liquidity position remains strong and that retail deposits are "more sticky" (earnings call, 2026-08-13).
The bank has grown market share primarily in individual customer savings and asset management, with no fixed targets for corporate deposit market share.
Cost Outlook
Personnel costs remained flat year-over-year in the second quarter, but management indicated that its annual salary review process is underway. Executives said employees should expect to see increased personnel expenses starting in late third quarter and continuing through fourth quarter as salary adjustments take effect (earnings call, 2026-08-13).
The bank also reported its seventh consecutive quarter of provision releases in the mortgage portfolio, though management cautioned that future releases would depend on portfolio performance and are not guaranteed to continue.
This article was generated by MarginX from the earnings call on 2026-08-13. It is not investment advice.