Table of contents
1. Letter from the Supervisory Board Chair
2. Letter from the President of the Management Board
5. Financial results, capital adequacy and financial instruments
6. Development lines and operations of ING Bank Hipoteczny S.A.
7. Internal business conditions
8. Organisational framework and authorities of ING Bank Hipoteczny S.A.
9. Corporate governance and information for investors
10. ING Bank Hipoteczny S.A. Management Board statement
Dear Sirs/Madams
The year 2024 was full of events that affected the economic situation in Poland. We faced challenges related to inflation and monetary policy, geopolitical tensions and changes in the political scene in many States, as well as the devastating flooding in the south of our country. The ongoing armed conflict across our eastern border has affected the economic condition of our country and is a source of higher uncertainty. Increased inflation and high interest rates have kept pressure on household budgets and businesses. Poland's GDP growth, which stood at 2.9 per cent in 2024, was affected by the weak economic situation in the euro area and low levels of investment. Inflation remained lower last year than in 2023, averaging 3.6% compared to 11.4% in 2023. The National Bank of Poland's interest rates, reduced by the Monetary Policy Council in 2023, remained at unchanged levels throughout 2024.
The past year was a period of change and new challenges for the banking sector in Poland. The sector faced legal and regulatory challenges, including the implementation of the DORA regulation or the CRR 3 / CRD6 package, as well as legal disputes over CHF-based loans and extended credit moratoria.
Despite unfavourable external factors and a volatile regulatory environment, the Bank consistently pursued its business strategy, continuing to rebuild its loan portfolio by acquiring high-quality mortgage-backed debt claims from ING Bank Śląski in 2024. In addition, the Bank successfully placed a second series of covered bonds on the Polish market in the autumn.
The Bank shows a very good liquidity and capital position, exceeding the required regulatory levels by far. At the end of 2024, the total capital ratio stood at 20.28%. The covered bonds issued by the Bank are characterised by a high level of safety, reflected in a rating of Aa1. The Bank's business activities were reflected in a financial result of PLN 31.5 million.
Last year, the Supervisory Board exercised constant supervision over the Bank's activities, monitoring both the financial situation and the activities carried out by the Management Board. The Supervisory Board decided also to appoint the Bank's Management Board for another term. The Audit and Risk Committee, composed of the members of the Supervisory Board, provided support in the aforementioned activities.
In the period from 1 January 2024 to 31 December 2024, there were 6 onsite meetings of the Supervisory Board and 5 onsite meetings of the Audit and Risk Committee. The Bank Supervisory Board, fulfilling its statutory duties and those arising from the law, resolutions and recommendations of the financial supervisory authority, conducted ongoing monitoring of the Bank's risk management areas, including compliance risk, market risk, liquidity risk, capital adequacy risk, as well as supervised the performance of internal audit tasks.
On behalf of the Supervisory Board, I would like to thank all Employees and Management Board Members for another challenging year and for their commitment to building the value of ING Bank Śląski Group.
Yours sincerely,
Bożena Graczyk
Chair of the Supervisory Board
Dear Sirs/Madams
On behalf of myself and the entire Management Board of ING Bank Hipoteczny S.A., I am handing you the Bank's Annual Report for the financial year 2024.
I am pleased to present the Bank's results, which remained at a high level despite the implementation of the law extending the 'credit holidays' under the new rules. After taking into account the negative impact of the ‘credit holidays’ on interest income of PLN 8.1 million, the Bank achieved a net result of PLN 31.5 million at the end of the reporting year.
During the reporting period, the Bank pursued its strategy by continuing, among other things, the process of transferring high-quality mortgage-backed receivables from ING Bank Śląski as a collateral for covered bond issues. In 2024, under the Debt Transfer Agreement, the Bank acquired a total portfolio of the aforementioned debt claims from ING Bank Śląski S.A. for a total amount of approximately PLN 1.2 billion, thereby increasing the potential to issue covered bonds.
In 2024, the Bank carried out another issue of covered bonds. As at 31 December 2024, the nominal value of the Bank's issued and outstanding covered bonds was PLN 500 million, after taking into account the repayment of the previous issue of PLN 400 million.
The Bank's covered bonds are listed on both the Luxembourg Stock Exchange and the parallel market of the Warsaw Stock Exchange.
According to the rating agency Moody's, the rating for the Bank's covered bonds issued by the Bank remains at the highest achievable level for an issuer from Poland, 'Aa1', which confirms the high quality of the portfolio of mortgages used as collateral for the covered bonds issued. The Bank's loan portfolio has one of the best NPL levels in the entire banking sector (approximately 0.06%).
In 2024, the Bank continued to operate on the basis of the strategic cooperation model with ING Bank Śląski, maintaining consistent solutions for our customers across the ING Bank Śląski Group. Among other things, as part of the aforementioned standards, the Bank made available to our customers the borrower support programmes implemented by the Legislator.
At the same time, the Bank kept under review the risks associated with the level of customers' use of 'credit holidays' and the potential increase in delays in loan repayments in an environment of continued relatively high interest rates. The impact of the effects of the flood experienced in south-western Poland in 2024 was also monitored.
Management also kept an eye on the ability of suppliers to perform services entrusted to them. Work also continued on further automation of the internal processes in place to support the Bank's day-to-day operations.
Within the pillars of its strategy, the Bank maintains a safe level of risk, which is reflected in the reported ratios of both liquidity and capital adequacy well above the required regulatory thresholds.
Operating as part of the ING Bank Śląski S.A. Group (ING BSK), the Bank also falls into the energy transition and climate change challenges. ESG risks are included in the Bank's business strategy based on the ING BSK Group's ESG strategy. In supporting sustainability, we are continuously moving towards building the future potential of issuing "green" covered bonds.
One of the Bank's valuable assets is its people, their expertise and knowledge embedded in many years of work and the standards of operation developed within the ING BSK Group. I would like to sincerely thank all the Bank's employees for their commitment and professionalism, our shareholder for their cooperation and our investors for their trust.
I would like to encourage you to read the annual report.
Yours faithfully,
Jacek Frejlich
President of the Management Board
ING Bank Hipoteczny S.A. (the Bank) was established on 26 February 2018, upon obtaining a permit issued by the Polish Financial Supervision Authority on 16 January 2018.
ING Bank Hipoteczny was established as part of the ING Bank Śląski S.A. Group (Group). ING Bank Hipoteczny S.A. is a subsidiary of ING Bank Śląski S.A., which held 100% of the share capital of ING Bank Hipoteczny S.A. as at 31 December 2024.
As at 31 December 2024, the share capital of the Bank amounted to PLN 380,000,000 and was fully taken up by ING Bank Śląski S.A. ING Bank Hipoteczny S.A.’s shares were paid in cash.
The Bank's strategic objective is to acquire and then increase the share of long-term funding in the Bank's balance sheet through the issue of covered bonds, secured by high-grade mortgage debt claims purchased from ING Bank Śląski S.A. The Bank's operating model is based on close, strategic cooperation with ING Bank Śląski S.A.
Gross Domestic Product
According to a preliminary estimate by the Central Statistical Office (CSO), the growth rate of the Gross Domestic Product (GDP) in 2024 accelerated to 2.9%, compared to growth of just 0.1% in 2023. The marked recovery in household consumption (3.1%) went hand in hand with low growth in investment (1.3%), a small positive contribution from inventory change (0.5 p.p.) and a negative contribution from net exports (-1.0 p.p.), associated with slower growth in exports than imports.
The recovery in 2024 was uneven. In the first half of the year, the pace of growth was constrained by continued inventory adjustments and low business investment activity in a high interest rate environment. The increase in investment recorded during this period was largely due to public defence spending. Private consumption dynamics, on the other hand, were stimulated by high growth in real disposable income, driven by increases in the minimum wage and social benefits. In 3Q2024, there was a strong deceleration in consumption and an increase in inventories. In 4Q2024, the growth structure was again consumption-led. The negative contribution of net exports to GDP in 2024 was due to unfavourable conditions in the main export markets, limiting exports, and robust domestic demand, stimulating imports.
According to estimates by economists at the ING Bank Śląski S.A. Group, GDP growth in 4Q2024 was around 3.5% y/y. Household consumption increased by around 3.4% y/y and gross outlays for non-current assets were not significantly changed on an annual basis. GDP was supported by the change in inventories, while net exports had a negative impact on the annual change in GDP.
According to the banks' economists, 2025 should bring further growth in consumption and a rebound in investment linked, among other things, to the implementation of projects financed using funds from the National Recovery Plan (NRP) and EU funds under the 2021-2027 financial perspective.
Restrictive monetary policy with expansionary fiscal policy
The beginning of 2024 was marked with the decline in inflation, resulting from the extinction of the energy shock caused by the Russian aggression against Ukraine. The normalisation of commodity prices allowed inflation to fall to 2.0% y/y in March 2024. The following months, however, brought a renewed increase in inflation, including due to decisions on taxes and regulated prices. VAT on food was reintroduced from April 2024, and the vast majority of protective measures on electricity and natural gas prices for households were withdrawn in July. Core inflation, which excludes food and energy prices, remained elevated throughout last year. This was due to high service price dynamics, driven by strongly rising labour costs. At the end of 2024, consumer inflation stood at 4.7% y/y.
In the environment of the above described inflation trends, the Monetary Policy Council (MPC) held interest rates steady throughout 2024. Thus, the reference rate at the end of 2024 was 5.75%. Throughout 2024, the MPC was attentive to inflationary pressures associated with dynamic wage growth and expansionary fiscal policy. According to the autumn fiscal notification and estimates by ING Bank Śląski economists, the general government deficit could be close to 6% of GDP in 2024.
A change in the communication of the National Bank of Poland (NBP) has been observed recently. The NBP has sharply tightened its rhetoric, emphasising the risks of higher inflation, including the potential increase in energy prices following the planned reinstatement of the power fee and the withdrawal of the maximum price for electricity in 4Q2025. In the NBP's view, this justifies the postponement of the start of discussions on interest rate cuts, although the Energy Regulatory Authority's planned update of energy tariffs in the middle of this year may negate the energy price increase scenario in 4Q2025. At the beginning of 2025, the MPC remains divided in opinion as to the optimal time to start discussions on monetary easing.
Inflation
ING Bank Śląski economists forecast that in 2025, average annual price growth will reach 4.5%, compared to 3.6% in 2024. The course of inflation, on the other hand, will be the opposite to that of 2024. At the beginning of 2025, inflation will exceed 5%, while the second half of the year will see a decline towards the upper limit of permissible deviations from the NBP target (2.5%, +/- 1 p.p.) due to the expiry of the base effect associated with regulated energy prices. In July, the power fee will be reinstated, which will bump up the average household electricity bill by around 7-8% and imply an additional 0.3-0.4 p.p. increase in CPI inflation. On the other hand, the planned abolition of the maximum price for electricity (PLN 500/MWh net) from October will not translate into a significant increase in electricity prices for households, according to ING Bank Śląski economists, as the Energy Regulatory Authority (URE) will ask energy distributors to submit new tariff proposals. Given the wholesale electricity prices on the Energy Commodity Exchange (TGE), the probability that the new tariffs will result in an increase in electricity prices is low.
Core inflation will decline somewhat more slowly than CPI. In this case, slowing wage dynamics and a disinflationary external environment should be conducive to a general decline in price pressures, especially in the context of the NBP keeping interest rates high for a long time.
Monetary policy
ING Bank Śląski economists expect the MPC to keep interest rates unchanged in the first months of 2025 due to rising inflation. However, over the course of the year, the market conditions should become more conducive to a cycle of interest rate cuts. In autumn 2024, a consensus built up in the MPC that the discussion on cuts should begin in March 2025, when the next NBP macroeconomic projection is presented. In late 2024 and early 2025, however, the central bank tightened its rhetoric and indicated that the discussion on monetary easing would move to the second half of 2025. The MPC is divided in its views on the scale of potential interest rate cuts in 2025, with MPC statements suggesting room for a 25-100 bps reduction in NBP rates.
At the end of 2024, NBP interest rates were:
o deposit interest rate - 5.25%,
o benchmark - 5.75%,
o bill discount rate - 5.85%,
o bill rediscount rate - 5.80%,
o lombard rate – 6.25%.
ING Bank Śląski economists' forecasts indicate that inflation will decline markedly in the second half of 2025, supported by a more favourable reference base after the impact of the partial unfreezing of energy prices expires in mid-2024, as well as a reduction in electricity tariffs and a slowdown in wage growth. A rebound in the supply constraints of the Polish economy, especially in terms of labour availability, may have a pro-inflationary impact.
|
Macroeconomic projections |
|||||
|
|
2022 |
2023 |
2024P |
2025P |
2026P |
|
GDP growth (%) |
5.3 |
0.1 |
2.9 |
3.5 |
3.4 |
|
General government debt as per the EU methodology (% of GDP) |
44.8 |
49.7 |
55.7 |
59.0 |
60.5 |
|
Average annual inflation (CPI) (%) |
14.4 |
11.4 |
3.6 |
3.7 |
2.6 |
|
Registered unemployment rate (%; Central Statistical Office) |
5.2 |
5.1 |
5.1 |
5.1 |
5.2 |
|
USD/PLN exchange rate (yearend) |
4.40 |
3.94 |
4.10 |
3.94 |
3.86 |
|
EUR/PLN exchange rate (yearend) |
4.69 |
4.35 |
4.27 |
4.25 |
4.25 |
|
3M WIBOR (yearend) |
7.0 |
5.9 |
5.8 |
4.8 |
4.4 |
Sustainable financing and ESG
Sustainable transformation is one of the most important challenges for the global economy. The role of the financial sector is and will continue to be crucial in this process. An increased commitment to sustainability by financial institutions and corporations is evident: they are increasingly committing to sustainability goals and integrating ESG issues into their business strategies. This trend is driven by, among other things, the regulator, investor pressure and the recognition that sustainable practices can lead to long-term value creation.
In response to market expectations, including ESG regulatory requirements, banks are increasingly changing their policies, processes and business strategies, which will consequently lead to a gradual allocation of capital towards sustainable assets.
Property prices in 2024 remained on an upward trend in most markets, but the rate of increase was considerably slower than in past years.
The year-on-year upward trend was evident in both the primary and secondary markets. According to data from the National Bank of Poland, price increases at the end of 4Q2024, compared to the same period last year, remained in double digits in most provincial cities.
According to reports by the Polish Economic Institute and AMRON-SARFiN, in the second half of 2024, a slowdown in housing price increases in Poland was evident, due to several factors, including declining demand associated with the end of the 2% Safe Loan programme, as well as limited access to housing loans due to persistently high interest rates.
In mid-September 2024, flooding took place in the south-western part of Poland, causing the government's efforts to introduce a new programme to support the purchase of first homes to be put on hold and the possible chances of launching a government programme to do so to be significantly reduced.
Primary market
According to a report by Jones Lang LaSalle (JLL), a decline in flat sales was observed in 2024. In the six largest markets in Poland (Warsaw, Krakow, Wrocław, Poznań, Łódź and the Tri-City), more than 31% fewer flats were sold than in 2023.
According to the National Bank of Poland's (NBP) data on the prices of flats in 4Q2024, the average price per m2 of a flat in the 7 largest markets (Gdańsk, Gdynia, Krakow, Łódź, Poznań, Warsaw and Wrocław) was PLN 14,265, compared to 4Q2023, an increase of around 12%. Of the cities mentioned, the largest increase was recorded in Poznań (+16%). Kraków came second with a 15% year-on-year increase. The average prices in individual cities differ significantly, with the most expensive flats being in Warsaw, where an average of PLN 16,600 was paid per m2. In Krakow, the average price per m2 was PLN 15,500. The last place on the podium was occupied by Łódź, with a price of approximately PLN 10,000.
According to data from the National Bank of Poland, in 4Q2024, compared to the previous quarter, prices in most provincial cities remained stable and unchanged. On the primary market, quarter-on-quarter price increases amounted to more than 3% in 8 cities. The largest price increase was observed in Rzeszów (+14%). In the remaining provincial cities, flat prices remained at a level similar to the previous quarter or decreased slightly.
source: own elaboration based on NBP data
Secondary market
According to data from the National Bank of Poland, increases in transaction prices were also visible in the secondary market. The average increase in 4Q2024 in the transaction prices of flats in the seven largest markets was around 13% compared to 4Q2023.
The largest increase was in the Krakow residential market, where one had to pay around 21% more per square metre compared to the same period of the previous year. The smallest price increase among the seven surveyed cities was in Łódź, with the average transaction price per square metre at the level of PLN 7,600 (an increase of over 8% y/y).
According to data from the National Bank of Poland, in the secondary market in 4Q2024, compared to the previous quarter 2024, prices in 9 provincial cities remained stable at a level similar to the previous quarter. In 6 provincial cities, a slight decrease in prices was observed. Only Szczecin and Warsaw showed price decreases of approximately 6-7%.
source: own elaboration based on NBP data
Supply and demand in the residential property market
The latest data published by the Central Statistical Office for the residential construction sector for 1Q2024-4Q2024 shows an increase in investors’ activity. According to the total housing construction results, the number of construction starts in 2024 increased by around 23.7%, compared to the previous year, while the number of building permits issued was around 20.3% higher than the previous year.
Forecasts for the housing market
According to reports by Emmerson Evaluation, due to the very high price levels in large cities, which are unattainable for some potential buyers, the strengthening of suburban zones and development of the housing market on the outskirts of cities is observed. There are usually lower property prices in areas neighbouring larger agglomerations, which is an interesting alternative for some buyers.
In 2025, the key drivers of increased demand in the housing market could be the easing of monetary policy and thus increased mortgage availability, as well as the potential introduction of a new government programme for home buyers.
The property market will be more and more affected by the need to comply with ESG requirements, in particular the regulatory aspects of the obligation to retrofit property indicated in the Energy Performance of Buildings Directive (EPBD). In the longer term, we can expect property prices in high carbon buildings to fall and, on the other hand, prices in buildings designed in accordance with the new ESG standards to rise.
As of 31 December 2024, banks' housing loan receivables from households in Poland amounted to PLN 469.2bn, up by 5% y/y, according to data published by the NBP. The balance of loans granted in PLN increased by 8.5% y/y to PLN 444.3bn.
Number and value of loans granted.
According to the AMRON-SARFiN report, in 2024 banks in Poland concluded 202,661 loan agreements for a total amount of PLN 85.18 billion. Compared to 2023, this represents a 24.8% increase in the number of loans granted and a 35.7% increase in their value. In the first quarter of 2024, banks were still finalising loan applications under the 2% Safe Loan programme and these applications had a significant impact on lending, but subsequent quarters proved to be very stable despite the persistently high interest rates.
Source: AMRON-SARFiN reports (Nationwide report on housing loans and real estate transaction prices)
Source: AMRON-SARFiN reports (Nationwide report on housing loans and real estate transaction prices)
Increase in average loan value
In line with the increase in the number of loans granted, the average value of a home loan applied for also increased and in December 2024 stood at PLN 426,900, which means that it was 4.66 per cent higher than in 4Q2023. This increase is a result of rising property prices and higher borrowers' creditworthiness.
2% Safe Loan Programme
In 2023, there was great interest in the 2% Safe Loan Programme, which was even more evident in the number of contracts finalised in 1Q2024. Thanks to the government's guarantees and own contribution support, the programme supported young families and people under the age of 45 who were purchasing their first apartments. Following the programme's expiry, there has been a decline in demand for housing loans, suggesting that Poles are more willing to take out commitments with government support.
Despite the challenges and lack of new support programmes, the mortgage market is showing signs of stabilisation. An increase in the average value of housing loans granted and continued demand for real property suggest that the sector has the potential for further growth in the years ahead.
ING Bank Hipoteczny S.A. is acquiring mortgage-backed debt claims from ING Bank Śląski S.A., which, despite its non-participation in the 2% Safe Loan Programme, at the end of December 2024 ranked second in the market in terms of new sales and third in terms of the size of its mortgage portfolio in PLN.
As at the end of December 2024, there were five mortgage banks in Poland: In addition to ING Bank Hipoteczny S.A., these are:
o PKO Bank Hipoteczny S.A.,
o mBank Hipoteczny S.A.,
o Pekao Bank Hipoteczny S.A.,
o Millennium Bank Hipoteczny S.A.
The Polish market of covered bonds is small when compared with developed EU economies where covered bonds are an important source of mortgage lending funding. Polish issuers place covered bonds both in the Polish market and abroad. Public issues predominate - in Poland on a floating interest rate and foreign on a fixed rate. In 2024, Polish mortgage banks did not issue covered bonds in foreign currencies. In 2024, more than a dozen covered bond issues were carried out on the domestic market with a total amount of PLN 5.68 billion. All issues conducted in 2024 were based on a floating interest rate. The most active issuer in 2024 was PKO Bank Hipoteczny S.A. ING carried out a PLN 500 million covered bond issue in 2024. This was the Bank's second issue
List of covered bond issues carried out by Banks on the Polish market in 2024:
|
Name of the Bank |
ISIN |
Issue date |
Redemption date |
Amount |
Currency |
Interest rate |
|
mBank Hipoteczny |
PLL042600063 |
2024-03-05 |
2029-09-05 |
500 |
PLN |
prospectus-exempt offering |
|
Pekao Bank Hipoteczny |
PLL100600039 |
2024-03-19 |
2028-11-15 |
180 |
PLN |
WIBOR 6M + 71 bps |
|
PKO Bank Hipoteczny |
XS2787873541 |
2024-03-22 |
2028-03-22 |
1,000 |
PLN |
WIBOR 3M + 55 bps |
|
mBank Hipoteczny |
PLL042600071 |
2024-06-10 |
2026-09-21 |
200 |
PLN |
prospectus-exempt offering |
|
Millenium Bank Hipoteczny |
PLMLNBH00014 |
2024-06-12 |
2027-06-11 |
300 |
PLN |
WIBOR 3M + 57 bps |
|
PKO Bank Hipoteczny |
XS2854926701 |
2024-07-05 |
2028-07-04 |
500 |
PLN |
WIBOR 3M + 55 bps |
|
ING Bank Hipoteczny |
XS2895060809 |
2024-09-11 |
2028-09-11 |
500 |
PLN |
WIBOR 6M + 55 bps |
|
mBank Hipoteczny |
PLL042600089 |
2024-09-13 |
2029-06-13 |
500 |
PLN |
prospectus-exempt offering |
|
PKO Bank Hipoteczny |
PLL219200010 |
2024-10-24 |
2028-10-24 |
500 |
PLN |
WIBOR 3M + 70 bps |
|
Pekao Bank Hipoteczny |
PLBPHHP00358 |
2024-10-30 |
2028-03-15 |
200 |
PLN |
WIBOR 3M + 70 bps |
|
Pekao Bank Hipoteczny |
PLBPHHP00366 |
2024-10-30 |
2030-07-25 |
300 |
PLN |
WIBOR 3M + 90 bps |
|
Millenium Bank Hipoteczny |
PLMLNBH00022 |
2024-11-05 |
2029-11-05 |
500 |
PLN |
WIBOR 3M + 80 bps |
|
PKO Bank Hipoteczny |
PLL219200028 |
2024-12-27 |
2028-10-24 |
500 |
PLN |
WIBOR 3M + 70 bps |
|
Total |
5,680 |
|
||||
At the end of the fourth quarter of 2024, the total value of covered bonds in trading in Poland was approximately PLN 17.1 billion, or were down by PLN 1.4 billion compared to December 2023. For the time being, PKO Bank Hipoteczny is the largest issuer of covered bonds in Poland. The ratio of mortgage loans funding with covered bonds still remains low. One important element limiting the scale of covered bond issuance is the high overliquidity recorded in the banking sector.
The Polish Financial Supervision Authority, with a view to mitigating the risks associated with the current mortgage financing structure in the Polish banking sector, introduced the LTF Recommendation on the Long-Term Financing Ratio on 15 July 2024. The Recommendation is intended to ensure that the funding of long-term mortgages is increased primarily with long-term debt instruments that cannot be redeemed in at least one year. Secure long-term instruments such as covered bonds can play a special role in increasing the share of this long-term financing in the balance sheet structure of banks. The expected level of LTF of at least 40% indicated by the PFSA in the issued Recommendation applies to banks for which both of the following conditions are met:
a. assets amount to more than PLN 2 billion,
b. share of the asset portfolio of loans to households secured by residential property is above 10%.
This indicator will come into force at the end of 2026 and may contribute to the development of the covered bond market in Poland.
Significant changes in the legal and regulatory landscape in 2024, which affected the Bank's operations, refer in particular to:
1. An amendment to the Act governing credit holidays in 2024,
2. Amendment to Recommendation S on best practices regarding management of mortgage-backed credit exposures,
3. Entry into force of the European Commission's delegated regulation on sustainability reporting standards,
4. Amendment of Recommendation G on interest rate risk management in banks,
5. Entry into force of Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) as supplementary regulations to the DORA Regulation,
6. Issuance by the PFSA of a recommendation on the Long-term Funding Ratio “LTF",
7. Entry into force of legislation amending EU Regulation No. 575/2013 and Directive 2013/36/EU (CRR 3 and CRD 6 package),
8. In May 2024, the legislation comprising the AML/CFT Package was enacted.
1. Amendment of the Act regulating credit holidays
On 15 May 2024, the Act of 12 April 2024 amending the Act on support for borrowers who have taken out a housing loan and are in a difficult financial situation and the Act on crowdfunding for business ventures and assistance to borrowers took effect (Journal of Laws 2024 item 696). The amendment extended the credit holiday mechanism for the year 2024 in the amount of two months from 1 June 2024 to 31 August 2024 and in the amount of two months from 1 September 2024 to 31 December 2024. The suspension of the loan repayment is granted to the consumer if the amount of the granted loan does not exceed PLN 1,200,000 and the arithmetic mean of the ItI (Installment to Income) ratio within the meaning of the Act of 9 October 2015 on support for borrowers who have taken out a housing loan and are in a difficult financial situation, for the period of the last three months preceding the month of submission of the application will exceed 30% or the consumer has at least three dependent children as at the date of submission of the application.
2. Amendment to Recommendation S
The Polish Financial Supervision Authority on 19 June 2023 unanimously adopted an amendment to Recommendation S concerning best practices related to mortgage-secured credit exposures. The adoption of the amendment was dictated by the need to adapt Recommendation S to changing legislation and to implement the regulatory and supervisory policy of the Polish Financial Supervision Authority. The changes introduced in Recommendation S concern:
a) the inclusion in Recommendation S of a guaranteed housing loan covered by a government programme;
b) the inclusion in Recommendation S of a housing loan covered by the government's interest rate subsidy programme;
c) a buffer against rising interest rates, which is taken into account in determining a customer's creditworthiness;
d) the introduction of new expectations regarding the inclusion of models estimating the risk of early repayment of loans (prepayment models);
e) the introduction of new expectations regarding the information on mortgage risks that should be provided to customers.
Implementation of the assumptions of the changes in Recommendation S took place at the Bank by 1 July 2024.
3. ESG reporting standards (reporting principles)
On 1 January 2024, Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU of the European Parliament and of the Council as regards sustainability reporting standards (OJ L No. 2023/2772, 22.12.2023) entered into force. Directive 2013/34/EU as amended by Directive (EU) 2022/2464 of the European Parliament and of the Council (EU) (CSRD) requires large entities, small and medium-sized entities whose securities are admitted to trading on an EU regulated market, and parent undertakings of large groups to include in a separate section of their management report or consolidated management report the information necessary to understand the company's impact on sustainability issues and the information necessary to understand the impact of sustainability issues on the company's development, performance and position. Entities are to prepare this information in accordance with the sustainability reporting standards starting from the financial year indicated in Article 5(2) of Directive (EU) 2022/2464 for each category of entity. For large and medium-sized undertakings, reporting according to the new rules should by and large take place for 2025 (report to be published in 2026) and 2026 (report to be published in 2027), respectively. Accordingly, the Delegated Regulation set out common sustainability reporting standards. The detailed standards, together with definitions, are contained in the annexes to the regulation. ING Bank Hipoteczny S.A. will - as a small and non-complex institution - be obliged to comply with the sustainability reporting requirements as of the financial year starting in 2026 (thus reporting in 2027), and for this reason apply the simplified sustainability reporting standards.
4. Amendment of recommendation G on interest rate risk management in banks
On 26 February 2024, the Polish Financial Supervision Authority unanimously adopted an amendment to Recommendation G on interest rate risk management in banks. It was adopted due to changes in generally applicable regulations and the current market situation. The new Recommendation G is a set of best practices for managing interest rate risk in banks and keeping the risk-sensitive volatility of the financial result and measures of economic value within limits that do not threaten the security of the bank. The Recommendation takes into account the current context of products generating interest rate risk and techniques for managing this risk. The final form of the new Recommendation G was influenced by both the regulations contained in national legislation and the recently developed package of EU regulations on interest rate risk management. The revised Recommendation G contains provisions clarifying and supplementing these regulations, in particular with regard to the management of interest rate risk in banks also in the trading book.
It was the Commission's expectation that banks would bring their operations in line with the revised Recommendation G by 31 December 2024. Until then, banks were applying the 2002 Recommendation G.
5. Entry into force of the RTS and ITS as supplementary regulations to the DORA Regulation
The RTSs (Regulatory Technical Standards) and ITSs (Implementing Technical Standards) issued by the European Commission aim to clarify technical aspects and provide detailed guidance to financial actors on the requirements under the DORA Regulation. The Implementing Technical Standards aim to establish standard templates, forms and procedures for financial entities, especially in the context of major incident reporting. RTS focus on specific technical requirements and are more prescriptive. ITS are procedural in nature and seek to harmonise implementation processes across the EU.
In 2024, the following regulations came into force:
a) Commission Delegated Regulation (EU) 2024/1774 of 13 March 2024 - supplementing Regulation (EU) 2022/2554 of the European Parliament and of the Council with regard to regulatory technical standards specifying ICT risk management tools, methods, processes and policies and a simplified ICT risk management framework. Effective date: 15 July 2024
b) Commission Delegated Regulation (EU) 2024/1773 of 13 March 2024 - supplementing Regulation (EU) 2022/2554 of the European Parliament and of the Council in with regard to regulatory technical standards further specifying the detailed content of the policy on contractual arrangements for the use of ICT services in support of critical or essential functions provided by external ICT service providers. Effective date: 15 July 2024
c) Commission Delegated Regulation (EU) 2024/1772 of 13 March 2024 - supplementing Regulation (EU) 2022/2554 of the European Parliament and of the Council with regard to regulatory technical standards specifying criteria for the classification of ICT and cyber incidents, materiality thresholds and details of major incident reporting. Effective date: 15 July 2024
d) Commission Delegated Regulation (EU) 2024/1502 of 22 February 2024 - supplementing Regulation (EU) 2022/2554 of the European Parliament and of the Council by specifying criteria for the designation of external ICT service providers as being of critical importance to financial entities. Effective date: 19 June 2024, with certain provisions effective from 16 January 2025.
e) Commission Delegated Regulation (EU) 2024/1505 of 22 February 2024 - supplementing Regulation (EU) 2022/2554 of the European Parliament and of the Council by specifying the amount of supervisory fees charged by the lead supervisory authority to key external ICT service providers and the manner of payment of such fees. Effective date: 19 June 2024
6. Entry into force of the LTF recommendation adopted by the PFSA
On 15 July 2024, the Polish Financial Supervision Authority adopted a resolution to issue a Recommendation on the Long-Term Funding Ratio (“LTF Recommendation"), which will be mandatory from 2026 onwards. The aim of the introduction of the LTF Recommendation is to reduce the risks associated with the current structure of mortgage finance and to change this structure by increasing the share of long-term debt instruments in banks' liabilities in relation to the value of mortgage loans granted. The development of the LTF Recommendation is part of the Polish Financial Supervision Authority's broader efforts to reduce the liquidity and interest rate risks borne by banks, as well as to make banks' offer of fixed-rate mortgages, which relieve borrowers from bearing the interest rate risk of their loan obligations, more attractive. According to the PFSA, the current funding model for long-term mortgages - through short-term retail deposits - may give rise to the risk of unstable funding, particularly in stressed conditions. In such a situation, there may be a sudden outflow of deposits (even those considered to be the most stable under normal conditions), which the bank may not be able to stop by raising their interest rate. Therefore, covering a significant part of the mortgage portfolio with stable long-term funding will increase the banking sector's resilience to shock crises, which may lead to a massive and sudden withdrawal of short-term deposits.
The LTF recommendation came into effect on 18 July 2024.
7. Enactment of legislation amending EU Regulation 575/2013 and Directive 2013/36/EU (CRR 3 and CRD 6 package).
In 2024, the Bank was taking steps to prepare the Bank's operations for the changes introduced by EU Regulation 575/2013 and Directive 2013/36/EU, under the so-called CRR3 and CRD6 Package. The package includes:
a. Regulation (EU) 2024/1623 of the European Parliament and of the Council of 31 May 2024 amending Regulation (EU) No 575/2013 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the minimum capital threshold (CRR3 Regulation),
b. Directive (EU) 2024/1619 of the European Parliament and of the Council of 31 May 2024 amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches and environmental, social and corporate governance risks (CRD6 Directive).
The most important changes introduced by the CRR3 Regulation will concern:
o methods and scope of prudential consolidation,
o detailed rules on deductions from own funds items and the calculation of consolidated own funds,
o calculation of the total risk exposure amount (TREA) - amendments to Article 92 and transitional arrangements set out in Article 465,
o requirements for the establishment of the trading book,
o how currency risk hedging is recognised in relation to capital ratios,
o methods for the estimation of credit risk, including principles for determining exposure values, types of exposure, risk weights and other details of the application of the different methods related to credit risk requirements,
o own funds requirement for operational risk - the regulation introduces new content for Title III in Part Three of the CRR,
o detailed methodologies for calculating own funds requirements for market risk, including the simplified standardised approach, the alternative standardised approach, the alternative internal models approach,
o own funds requirements for risks related to credit valuation adjustments, including detailed methods for calculating those requirements
o provisions on large exposures, including information provided by institutions to competent supervisory authorities,
o detailed reporting requirements on stable funding, as well as the leverage ratio,
o reporting requirements (Article 430 et seq.). Among others, elements related to exposures to ESG risks have been added. The amendments also include detailed aggregated data on the domestic real estate market, as well as reporting requirements for market risk,
o the scope of disclosure by institutions (Articles 449a and 449b on ESG risks and aggregate exposure to shadow banking entities were added).
In turn, the amendments to CRD6 in relation to supervisory powers, sanctions, third-country branches and environmental, social and corporate governance (ESG) risks aim to further harmonise the banking supervisory framework and, ultimately, deepen the internal banking market. Changes related to supervision include, inter alia, grounds for withdrawal of authorisation, obligations related to the acquisition or disposal of a qualifying holding as well as the transfer of assets and liabilities of significant value, rules on mergers and divisions, as well as applicable sanctions (including the power to impose periodic fines) and other supervisory measures. The Directive also covers changes to the risk management and internal control system, including reference to ESG risk management. The Directive also addresses the governance system by, inter alia, mandating that institutions draw up, maintain and update individual statements setting out the roles and responsibilities of all members of the governing body performing management functions, senior management and key functions and the allocation of tasks, including details of reporting lines and responsibilities. Provisions on the assessment of the suitability of members of the management body and persons performing key functions have also been extended.
The CRR3 is directly applicable in all Member States - most of the provisions will come into force from 1 January 2025. The CRD6, on the other hand, requires implementation into national law - the deadline for the application of the implemented provisions falls, in principle, on 11 January 2026.
8. Adoption of the so-called AML/CFT package
June 2024 saw the publication of the legal acts comprising the AML/CFT Package. The overall AML/CFT Package comprises three pieces of legislation designed to strengthen the EU's AML/CFT framework.
1. Regulation (EU) 2024/1620 of the European Parliament and of the Council of 31 May 2024 establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism and amending Regulations (EU) No 1093/2010, (EU) No 1094/2010 and (EU) No 1095/2010:
o enters into force on 26 June 2024 and generally applies from 1 July 2025;
o Legislation establishing the Anti-Money Laundering and Countering the Financing of Terrorism Authority' ('AMLA');
o Ensuring employees' knowledge of AML/CFT requirements and assessing their integrity;
o Adaptation to stricter supervisory standards, including oversight of the implementation of financial sanctions requirements;
o Investment in data management and reporting;
o The need to ensure that policies and procedures comply with the new AML/CFT legislation and the technical standards that will be prepared by the AMLA;
o The expected impact on ING depends on the inclusion of the ING Group under the AMLA’s supervision.
2. Regulation (EU) 2024/1624 of the European Parliament and of the Council of 31 May 2024 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing:
o entered into force on 9 July 2024 and will apply from 10 July 2027;
o Harmonised set of AML/CFT rules on measures to be applied by obliged entities to prevent money laundering and terrorist financing and transparency requirements on the ownership structure of legal entities;
o Changes are being made to the determination of politically exposed persons;
o The rules on reporting suspicious transactions and suspicious activity are being clarified;
o Harmonised customer due diligence measures;
o Harmonised rules for the determination of the beneficial owner;
o EU-wide limit on large cash payments for goods or services;
o The impact on ING is assessed by the Group as high.
3. Directive (EU) 2024/1640 of the European Parliament and of the Council of 31 May 2024 on the mechanisms to be put in place by Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Directive (EU) 2019/1937 and amending and repealing Directive (EU) 2015/849:
o will become effective on 9 July 2024, but the deadline for its transposition by Member States is 10 July 2027;
o The AML Directive lays down provisions relating to, inter alia: the identification of money laundering and terrorist financing risks at EU and Member State level; the establishment of central registers of beneficial owners, registers of bank accounts and electronic data retrieval systems and access to the information held in these registers; and access points for real estate information;
o Verification of information in the central registers of beneficial owners;
o Regulated access to central registers of beneficial owners;
o The expected impact on ING is assessed to be medium (dependent on the implementation of the directive by local legislation).
The year 2024 was the sixth year of operations for ING Bank Hipoteczny S.A.. As part of its strategy, in 2024 the Bank acquired a mortgage portfolio from ING Bank Śląski in the amount of PLN 1.2 billion, thanks to which at the end of the reporting period it had a portfolio of mortgage loans worth PLN 4.3 billion, constituting the bulk of the potential collateral for future covered bond issues. In 2024, the Bank carried out another covered bond issue of PLN 500 million and redeemed the first issue in the amount of PLN 400 million. The above events were the primary drivers of the financial results of the Bank. An additional significant element affecting the Bank's results in 2024 was the introduction of statutory credit holidays giving the Bank's customers, under the terms of the Act, the opportunity to suspend four mortgage loan instalments per year - two instalments from 1 June 2024 to 31 August 2024 and two more instalments from 1 September 2024 to 31 December 2024.
Below, the key financial data of the Bank for the period from 1 January 2024 to 31 December 2024 are presented.
|
|
|
|
|
|
as at |
as at |
|
ROA - return on assets |
0.82% |
1.20% |
|
ROE - return on equity |
7.26% |
9.62% |
|
DR - total debt ratio |
89.95% |
88.33% |
|
TCR - total capital ratio* |
20.28% |
23.58% |
|
LR - leverage ratio* |
9.33% |
10.84% |
|
LCR - liquidity coverage ratio |
2391.90% |
1348.48% |
ROA - return on assets - the ratio of net profit from 4 consecutive quarters to average assets from 5 consecutive quarters.
ROE - return on equity - the ratio of net profit for 4 consecutive quarters to the average shareholders' equity for 5 consecutive quarters.
DR – total debt ratio – liabilities of ING Bank Hipoteczny S.A. to assets as at 31 December 2024.
TCR – total capital ratio – own funds of ING Bank Hipoteczny S.A. to risk-weighted assets as at 31 December 2024.
LR – leverage ratio – Tier 1 capital to leverage ratio exposure as at 31 December 2024.
LCR - liquidity coverage ratio – liquid assets to net outflows as at 31 December 2024.
* In accordance with supervisory recommendations, the ratios as at 31 December 2023 are recalculated after the profit distribution is approved by the General Meeting of ING Bank Hipoteczny S.A., and then they are reported to the supervisor. Prior to the approval of the 2023 profit distribution, the ratios published in the financial statements for the period from 1 January 2023 to 31 December 2023 stood at: TCR 23.31%; LR 10.57%
|
|
|
|
|
|
|
|
|
|
|
|
Note in the financial statements |
as at |
as at |
|
31.12.2024 |
31.12.2023 |
||
|
Amounts due from banks |
6.8 |
14,267.9 |
26,143.2 |
|
Debt securities measured at fair value through other comprehensive income |
6.9 |
99,664.8 |
86,293.0 |
|
Loans and advances granted to customers |
6.10 |
4,269,917.2 |
3,660,051.8 |
|
Property, plant and equipment |
6.11 |
1,370.4 |
1,413.5 |
|
Current income tax assets |
|
771.6 |
416.8 |
|
Deferred tax assets |
|
0.0 |
839.7 |
|
Other assets |
6.13 |
1,399.1 |
2,084.4 |
|
Total assets |
|
4,387,391.0 |
3,777,242.4 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities to banks |
6.14 |
3,428,726.5 |
2,920,927.6 |
|
Liabilities under issue of covered bonds |
6.15 |
508,565.9 |
405,303.0 |
|
Provisions |
6.16 |
673.0 |
641.0 |
|
Deferred income tax provision |
|
133.9 |
0.0 |
|
Other liabilities |
6.17 |
8,430.5 |
9,748.4 |
|
Total liabilities |
|
3,946,529.8 |
3,336,620.0 |
|
Share capital |
1.3 |
380,000.0 |
380,000.0 |
|
Supplementary capital - share premium |
|
15,997.4 |
15,997.4 |
|
Accumulated other income |
6.19 |
-212.7 |
73.5 |
|
Retained earnings |
6.20 |
45,076.5 |
44,551.5 |
|
Total equity |
|
440,861.2 |
440,622.4 |
|
Total equity and liabilities |
|
4,387,391.0 |
3,777,242.4 |
|
|
|
|
|
|
Carrying amount |
|
440,861.2 |
440,622.4 |
|
Number of shares |
|
380,000 |
380,000 |
|
Carrying amount per share (in PLN) |
|
1,160.16 |
1,159.53 |
|
|
|
|
|
The Statement of Financial Position should be read in conjunction with the notes to the financial statements being the integral part thereof. All values are rounded to the nearest thousand PLN with one decimal place.
For details of the statement of Bank’s financial position, refer to notes 6.8 through 6.20 of the Financial Statements.
|
The Income Statement should be read in conjunction with the notes to the financial statements being the integral part thereof. All values are rounded to the nearest thousand PLN with one decimal place.
|
For detailed notes to the Income Statement items, refer to the Financial Statements – notes 6.1 through 6.6.
In keeping with the CRR, the Bank computes own funds requirements for the following risks:
o for credit risk – using the standardised approach,
o for the CVA risk – using the standardised approach,
o for delivery and settlement risk – using the standardised approach,
o for operational risk – using the basic indicator approach (BIA),
o for market risk (FX risk) using the standardised approach.
As at 31 December 2024, the Bank reports zero values for the own funds requirements for the CVA risk, delivery and settlement risk, and market risk. Having regard to the above, as at the report date, the total requirement for own funds consisted of the credit risk and operational risk requirements.
|
Own funds requirements |
31.12.2024 |
31.12.2023 |
|
Credit risk (PLN million) |
151.15 |
128.11 |
|
Operational risk (PLN million) |
9.80 |
9.80 |
|
Total requirement for own funds (PLN million) |
160.95 |
137.91 |
|
Common Equity Tier 1 ratio (CET1) |
20.28% |
23.58% |
|
Tier 1 ratio (T1) |
20.28% |
23.58% |
|
Total capital ratio (TCR) |
20.28% |
23.58% |
Pillar 1 has been discussed in detail under item 6.31 of the Financial Statements of ING Bank Hipoteczny S.A. concerning capital adequacy disclosures.
The Bank maintains own funds at the level not lower that the higher of the below values:
a. capital requirement,
b. internal capital
On 1 January 2025, the provisions amending EU Regulation 575/2013 and Directive 2013/36/EU (CRR 3 and CRD 6 package) came into force, about which more information is provided in section 4.5 Regulatory and legal environment. According to the Bank's analysis, the amendments in question will have a positive impact on the capital adequacy ratios reported by the Bank.
At the same time, it should be pointed out that, for the needs of monitoring the regulatory capital requirement, the Resolution of the Financial Stability Committee (FSC) on the recommendation for setting the countercyclical capital buffer ratio for banks (CCyB) adopted in 2024 will have an impact.
This Committee Recommendation will be implemented in two stages. The first stage is the introduced Regulation of the Minister of Finance of 18 September 2024 on the countercyclical buffer rate, according to which the level of this rate is 1% of the total amount of risk exposure of institutions that have credit exposures in the territory of the Republic of Poland, calculated in accordance with Article 92(3) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions. This ratio shall apply from the first day after 12 months from the date of publication of the regulation, i.e. from 25 September 2025. This will be followed, after 12 months, by a second stage of raising the countercyclical buffer rate to a target of 2 per cent. The countercyclical buffer is a macroprudential instrument that aims to mitigate cyclical fluctuations in the level of credit in the economy and their consequences.
The Bank reports high levels of capital adequacy ratios hence the changes in question will not materially affect the Bank, which has a stable and secure capital base well in excess of the regulatory requirements needed to cover risks.
Capital management
The process of capital management is carried out in the Bank based on the implemented Capital Management Policy at ING Bank Hipoteczny S.A. that was developed on the basis of applicable regulations.
Capital management at ING Bank Hipoteczny S.A. is to make possible and facilitate development of the Bank in accordance with the accepted strategy and business model, while keeping, on an ongoing basis, its own funds on the level adequate to the scale and profile of risk inherent in the Bank’s operations, taking into account supervisory requirements. Furthermore, it makes it possible to manage the capital actively, keeping in mind volume and dynamics of current and future changes.
The main objective of this process is to have sufficient and effective capitalisation of the Bank to effect its business strategy and development plans specified in the financial plans, while meeting at the same time all internal and external capital requirements. It stands for financial flexibility in the present and future landscape in order to adjust to the changing market and regulatory conditions. To this end, the capital management activities apply any available capital instruments and transactions both in the baseline scenario as well as in the adverse scenario.
External regulations regulate keeping a proper level of capital adequacy. The main capital constraints result from internal resistance to risk that is assessed, among others, in stress tests, in Supervisory Review and Evaluation Process (SREP), regulatory minimum levels of capital and leverage ratios and internal risk appetite.
This management includes:
o Pillar 1: minimum capital requirements provided for in the regulations,
o Pillar 2: internal capital, determined with the Bank’s own models, for the risks deemed to be material and permanently material,
o Pillar III: disclosures on risk profile and capitalisation level in the financial statements.
Under capital management, the Bank:
a. identifies and assesses materiality of the risk types inherent to its operations;
b. takes actions in order to assess and monitor internal capital, capital requirement and own funds;
c. monitors potential threats to capital adequacy;
d. allocates internal capital;
e. sets internal limits in order to curtail the generated capital requirements and internal capital;
f. pursues dividend policy resulting from a long-term capital objective and preferred capital structure;
g. plans internal capital and capital requirement as well as own funds;
h. develops capital contingency plans which define the procedure for the risk of capital adequacy deterioration below the “inadmissible” levels;
i. analyses the impact of the macroeconomic factors on capital adequacy in line with the “Stress Testing Policy at ING Bank Hipoteczny S.A.”
As at 31 December 2024, the total capital ratio of the Bank was 20.28%.
In keeping with the binding laws, internal capital is defined as the amount estimated by the bank which is indispensable for covering all identified material risks occurring in the Bank’s business and changes in the business environment, considering the envisaged risk level.
The Bank estimates internal capital. The internal capital estimation process is an integral element of the capital management and Bank governance system. It warrants proper identification, measurement, monitoring and aggregation of the risk taken. At the same time, it enables the Bank to maintain the requisite own funds and manage risk and capital in an effective but cautious manner.
The above process covers:
a. Identification and assessment of materiality of the risks impacting the Bank’s operations,
b. risk measurement and control,
c. internal capital estimation and aggregation with the use of the tools and methodologies approved by the Management Board or competent committees,
d. internal capital monitoring,
e. internal capital allocation, planning and reporting.
o credit risk,
o market risk,
o business risk,
o funding and liquidity risk,
o operational risk
The total internal capital is the total of internal capital indispensable for covering all material and permanently material risks of the Bank. The Bank applies a prudent approach to estimating the internal capital and does not use the diversification effect.
|
Internal capital structure |
31.12.2024 |
31.12.2023 |
|
For credit risk |
43.0% |
48.5% |
|
For market risk |
43.9% |
34.5% |
|
For business risk |
0% |
0% |
|
For funding and liquidity risk |
0% |
0% |
|
For operational risk |
13.1% |
17.0% |
|
Total |
100.0% |
100.0% |
A review of the internal capital adequacy assessment process (ICAAP) is carried out once a year and a report on the review is submitted to the Bank Management Board and Supervisory Board. In addition, the Internal Audit Position periodically conducts an independent audit of the ICAAP process.
Taking into account the scale and specifics of the Bank’s operations, the Bank discloses selected information on capital adequacy in the financial statements. The information refers in particular to:
o risk management goals and strategy,
o own funds for the needs of capital adequacy,
o capital requirements,
o capital buffers,
o financial leverage,
o operational risk, in accordance with the requirements provided for in Recommendation M,
o liquidity risk management system and liquidity position, in accordance with Recommendation P,
o requirements referred to in Article 111a of the Banking Law and in Recommendation H,
o remuneration policy concerning persons whose professional activities are considered to have a material impact on the risk profile of the Bank (risk takers).
Information on the conflict of interest management policy adopted by the Bank, including information on how to manage material conflicts and conflicts that could arise due to the fact that the Bank is a group member or concludes transactions with other entities in the group are described in the “Conflict of Interest Policy”. This information is made public by posting it on the website.
Each time, the Bank assesses adequacy of the disclosed information in terms of providing the market participants with complex information about the risk profile of the Bank. If the assessment shows that the qualitative and quantitative disclosures do not provide market participants with a comprehensive view of the risk profile, the Bank shall make public other necessary information. Any change in the scope or deviation from the disclosure shall be each time subject to the approval of the Chief Accountant of the Bank.
The Bank, being a part of the ING Bank Śląski S.A. Group, provides the information also to the parent company in order to include it in the consolidated data.
Specific information about the scope of disclosed information, method of its verification and publication is presented in the document called: “Policy of Disclosure of Qualitative and Quantitative Information About Capital Adequacy and Other Information to be Disclosed at ING Bank Hipoteczny S.A.”
Between 1 January and 31 December 2024, the Bank placed its temporary surplus funds on short-term deposit accounts at ING Bank Śląski S.A. For details, refer to note 6.8 of the Financial Statements of ING Bank Hipoteczny S.A. During the reporting period, the Bank also entered into securities transactions. For details, refer to note 6.9 of the Financial Statements of ING Bank Hipoteczny S.A. The Bank did not apply hedge accounting in 2024.
As a target, credit debt acquisition from ING Bank Śląski S.A. will be funded from the issue of covered bonds. The Bank adhered to the norms defined in the Act on covered bonds and mortgage banks concerning the admissible amount of liabilities due to loans and credit facilities (including the liabilities due to acquired debt) and issued bonds to own funds of the Bank. In 2024, the Bank issued series 2 covered bonds. The average interest rate for the Bank's mortgage loans at the end of 2024 was 7.67% (including an average margin of 1.84%).
The Bank Management Board is of the opinion that as at 31 December 2024 there were no conditions which could indicate presence of default risk for the liabilities assumed by the Bank.
The strategic objective of Bank Hipoteczny S.A. is to acquire and then to increase the share of long-term financing in the Bank’s balance sheet through the issue of covered bonds.
The objective will be delivered by:
o strengthening the funding stability within the ING Bank Śląski S.A. Group,
o diversification of funding sources for the current portfolio of retail mortgage loans,
o matching the maturities of assets and liabilities in the balance sheet of the ING Bank Śląski S.A. Group.
The main element of the business pursued by ING Bank Hipoteczny S.A. is acquisition of portfolios of debt claims attributable to mortgage-backed residential loan contracts with a view to issuing covered bonds. The Bank acquires debt only from ING Bank Śląski S.A. This is done on the basis of the Framework agreement for the transfer of debt claims for the purpose of issuing covered bonds concluded in 2019, which includes the transfer of debt claims of a total nominal value of PLN 12,000,000,000.
In 2024 the Bank purchased from ING Bank Śląski S.A. two mortgage-backed housing loans debt claims portfolios under the Debt Transfer Contract to effect the issue of covered bonds Nos. 15 and 16 for the total amount of PLN 1,194,690,300. In the debt acquisition process, ING Bank Hipoteczny S.A. satisfies the criteria of the Act on covered bonds and mortgage banks, and also sets additional conditions to be met by the debt acquired. The main criteria were presented in the table below:
|
Criterion |
Value |
|
Amount of debt purchased/ mortgage lending value of the real estate |
Max. 100% |
|
Credit collateral |
Established first ranking mortgage |
|
Loan currency |
PLN |
|
Loan purpose |
Residential goals |
|
Title to real estate |
Ownership or perpetual usufruct |
|
Repayment arrears or impairment conditions |
None |
LtV-based lending portfolio structure – 31.12.2024:
|
LTV (as per mortgage lending value of the real estate) |
Structure % |
|
(0-50> |
42.1% |
|
(50-60> |
20.8% |
|
(60-70> |
16.9% |
|
(70-75> |
6.2% |
|
(75-80> |
4.8% |
|
(80-100> |
9.2% |
|
Total |
100.0% |
|
Mark-to-market LTV at the time of acquisition |
Structure % |
|
(0-50> |
53.5% |
|
(50-60> |
23.5% |
|
(60-70> |
18.3% |
|
(70-75> |
4.3% |
|
(75-80> |
0.4% |
|
(80-100> |
0.0% |
|
Total |
100.0% |
The average capital-weighted LtV based on mortgage lending value was 53.93%, while the average market LtV at the time of acquisition was 47.46%.
As at 31 December 2024, the carrying value of the portfolio of debt under the mortgage-backed loan agreements was PLN 4,232.2 million. Debt claims under the acquired loan agreements are mostly based on the variable interest rate WIBOR 6M. From 30 June 2021, in accordance with the requirements of Recommendation S of the PFSA, the Bank made it possible for the borrowers to change the interest rate formula from a variable rate to a fixed rate one for a period of time. As at 31 December 2024, the value of the portfolio based on a periodically fixed interest rate was PLN 49.2 million, representing 1.16% of the total portfolio.
In 2024, the Law extending the Law of 7 July 2022 on crowdfunding for business ventures and assistance to borrowers, under which the so-called 'credit holiday' was extended, came into force.
In 2024, customers were able to benefit from a suspension of instalment payments for a total of four months, with two months falling between 1 June 2024 and 31 August 2024 and a further two months between 1 September 2024 and 31 December 2024.
The suspension of at least one instalment covered 1,755 active loans with a total principal amount of PLN 470.7 million at the end of 2024.
The Bank monitored on an ongoing basis the number and volume of loans with suspended loan repayments.
In 2024, the Bank carried out an issue of series 2 covered bonds. As at 31 December 2024, the nominal value of the covered bonds in trading that were issued by the Bank increased from the end of 2023 and totalled PLN 500 million. In October 2024, the first series of covered bonds in the amount of PLN 400 million matured.
The covered bonds of the Bank are quoted on the Stock Exchange in Luxemburg and placed in the parallel market of the Warsaw Stock Exchange.
The updated rating of ING Bank Hipoteczny S.A. and its covered bonds is as follows:
|
Moody’s Investor Services |
|
|
Rating of covered bonds |
Aa1 |
|
LT Issuer Rating |
A3 |
|
ST Issuer Rating |
P-2 |
|
LT Counterparty Risk |
A1 |
|
ST Counterparty Risk |
P-1 |
|
Outlook |
Stable |
|
CR Assessment |
A1 (cr) / P-1 (cr) |
In its last communication, the Moody’s Agency emphasised there that the rating of the Bank reflected:
o the fact that the Bank was owned in 100% by ING Bank Śląski S.A. and that it had a stable growth outlook,
o the Bank's significant strategic importance and its operational integration within the ING Bank Śląski S.A. Group structures,
o ING Bank Śląski S.A.’s commitment to support the capital and liability position of ING Bank Hipoteczny S.A. to satisfy the regulatory requirements.
ING Bank Hipoteczny's business formula is based on strategic cooperation with ING Bank Śląski and exploiting synergies between the Bank and its main outsourcing partner, in particular through:
o outsourcing of activities admitted by law to ING Bank Śląski S.A. as far as justified from the viewpoint of the Bank’s business effectiveness, based on the existing solutions hammered out by the ING Bank Śląski S.A. Group,
o sharing of IT infrastructure and systems used by the ING Bank Śląski S.A. Group,
o shaping of the organisational framework of ING Bank Hipoteczny in the manner ensuring effective control of the services entrusted to ING Bank Śląski S.A. and performance by the Bank of activities required by law, like taking risk management-related decisions or performing risk management processes,
o mirroring current loan service processes of ING Bank Śląski S.A., considering the indispensable modifications, including those resulting from the legal order.
Therefore, the outsourcing agreement is the key vehicle governing the cooperation of the two entities. Its key elements are:
o ensuring that ING Bank Hipoteczny S.A. performs the activities required by law; they include but are not limited to: decisions or risk management processes, and for automated or partly automated processes – their set-up using the terms and conditions defined by the Bank,
o entrusting ING Bank Śląski S.A. with: (i) intermediation in some banking activities offered by the Bank, in particular as regards administration and post-sale service of mortgage-backed loan debt acquired by the Bank and (ii) factual activities connected with the bank business of the Bank,
o ensuring that any further commissioning of activities by ING Bank Śląski S.A. to third parties satisfies the requirements of Articles 6a(7) and 7a of the Banking Law Act,
o development and update – both by ING Bank Śląski S.A. and the Bank – of business plans ensuring continuous and undisrupted conduct of business covered by the outsourcing agreement,
o ensuring for the Bank the tools to effectively monitor and control performance of the agreement by ING Bank Śląski S.A.
On 29 September 2023, the Act of 16 August 2023 amending certain acts in connection with ensuring the development of the financial market and the protection of investors in that market, amending the regulations of the Banking Law Act regarding outsourcing, entered into force. Accordingly, the outsourcing rules applicable to mortgage banks were liberalised by allowing, in the relationship between a mortgage bank and a parent bank holding 100 per cent of the mortgage bank's shares, the possibility to outsource bank management activities, which was previously prohibited. At the same time, the possibility of creating a multi-entity chain of subcontractors and further subcontractors of outsourced activities was allowed.
In connection with the possibility of changing the model of cooperation with the parent bank holding 100% of the shares in the mortgage bank, and admitting other entities to subcontracted activities, the Bank is considering analysing the model of cooperation with ING Bank Śląski and updating the provisions of the Agreement linking the Banks to this aim.
For the client whose mortgage loan will be transferred as part of transfers of receivables to ING Bank Hipoteczny, both the loan service process and the credit and credit-related costs will remain the same.
The terms and scope of cooperation of ING Bank Hipoteczny with ING Bank Śląski S.A. have been detailed in the Cooperation Agreement.
I. Internal control system objectives
The internal audit system serves to ensure:
1) operational efficiency and effectiveness of the Bank;
2) reliable financial reporting;
3) compliance with the risk management principles at the Bank;
4) compliance of the Bank with the law, regulatory requirements, internal regulations and market standards.
As part of general objective accomplishment process, the internal control system further ensures:
1) examination of compliance of the Bank’s business and business activities performed by related persons with the regulations of the markets the Bank is active in, the regulations of the Central Securities Depository of Poland, clearing and settlement chambers referred to in Article 68a of the Act on Trading in Financial Instruments and stock exchange clearing chambers referred to in Article 2.4 of the Act on Commodity Exchanges which the Bank is the member of,
2) proper organisation and safe business pursuit,
3) functioning of appropriate administrative and booking procedures,
4) effectiveness of internal acts concerning circulation of confidential and privileged information and such information access protection,
5) reliability of non-financial reports,
6) effectiveness of internal acts concerning review of client complaints and requests and maintenance of complaint records,
7) effectiveness of internal acts concerning counteracting money laundering and terrorist financing,
8) investing by the Bank in compliance with the requirements and standards and in the manner adequate to the risk of such investments.
As part of their functions connected with monitoring of and supervision over the internal control system, as laid down in the Bank Charter and the ING Bank Hipoteczny S.A. Supervisory Board Bylaw, following the recommendation of the Audit and Risk Committee, the Supervisory Board:
1) approve the Policy – ING Bank Hipoteczny S.A. Internal Control System,
2) approve the criteria for assessment of adequacy and effectiveness of the internal control system, as proposed by the Management Board,
3) supervise introduction and functioning of adequate and effective internal control system,
4) monitor effectiveness of the internal control system, based on the information provided by the Management Board, the Audit and Risk Committee, the Compliance Cell and the Internal Audit Position,
5) annually assess the adequacy and effectiveness of the internal control system, including the adequacy and assessment of the control function performed by the first and second lines of defence, the Compliance Cell and the Internal Audit Position, as well as the compliance of the Bank Management Board with the obligations referred to in part B of Recommendation H,
6) approve the categorisation principles for the irregularities detected by the internal control system, covering at least high and critical irregularities,
7) as part of ensuring that the internal control system complies with laws, internal regulations and market standards, the Supervisory Board:
o oversee the performance of the Management Board’s duties concerning compliance risk management,
o approve the ING Bank Hipoteczny S.A. Compliance Policy,
o assess, at least once a year, the effectiveness of the compliance risk management by the Bank.
As part of the Bank governance process, the Bank Management Board:
1) design, introduce and ensure functioning of adequate and effective internal control system,
2) take action to ensure internal control system continuity,
3) set the criteria for assessment of adequacy and effectiveness of the internal control system,
4) define the actions to be taken to eliminate irregularities detected by the internal control system, including remedies and disciplinary measures,
5) accept the categorisation principles for the irregularities detected by the internal control system, covering at least high and critical irregularities,
6) approve the criteria for selection of material processes and their list along with their correlation with general and specific goals,
7) ensure regular review of all Bank processes for materiality,
8) accept the Policy – ING Bank Hipoteczny S.A. Internal Control System, ensure its periodical review and update and present the review deliverables to the Audit and Risk Committee and the Supervisory Board,
9) ensure that the Compliance Officer, the Internal Audit function and the Operational Risk function, as well as the other units coordinating the achievement of the general objectives, have access to the necessary source documents, those containing legally protected information included, in connection with the performance of their duties,
10) set the principles of control design, approval and implementation in all Bank processes and define the role of organisational units responsible for control design, approval and implementation,
11) are responsible for ensuring adequacy and effectiveness of controls in Bank processes,
12) as part of ensuring that the internal control system complies with laws, internal regulations and market standards, the Bank Management Board are responsible for developing the compliance policy, ensuring compliance and reporting to the Audit and Risk Committee and to the Supervisory Board on compliance risk management,
13) set the adequate scope of and criteria for independent monitoring of observance of controls, covering ongoing verification and testing,
14) ensure functioning of the control function matrix along with allocation of tasks connected with ensuring its functioning,
15) set the reporting rules, at least for the effectiveness of key controls and vertical testing deliverables,
16) advise the Supervisory Board, at least once year, on the manner of performance of internal control system tasks, considering in particular:
a) the adequacy and effectiveness of the internal control system in ensuring accomplishment of all the internal control system goals,
b) the scale and nature of significant and critical irregularities as well as most important actions taken to eliminate the same, including remedies and disciplinary measures,
c) the need to ensure the independence of the Compliance Cell and the Internal Audit Position,
d) the need to ensure adequate staffing as indispensable for effective task performance and the funds necessary for regular upgrade of qualifications, experience gathering and skills learning by the employees of the Compliance Cell and the Internal Audit Position.
III. Three-lines-of-defence model within the Bank’s organisational framework
|
The first line of defence |
|
The second line of defence |
|
The third line of defence |
|
Business and organisational units of the Bank which provide operational and technological support to the Business area, including: IT, Operations, HR, Legal Counsel, Finance, Procurement |
|
All teams and units in the Risk Area (reporting to the CRO) Compliance risk |
|
Internal Audit position |
It is an element of the control function.
This line of defence is in charge of:
o developing, implementing and performing controls designed to ensure that general and specific goals of internal control system are achieved,
o acting in compliance with the principles resulting from the approved policies, regulations, manuals and procedures,
o analysis, control and management of the risks in the processes, including in relation to outsourced activities,
o independent monitoring of compliance with controls by ongoing verification and/or horizontal testing,
o ensuring that action is taken on audit and non-audit recommendations.
The tasks of the first line of defence are performed by senior management and by the organisational units overseen by them which deliver business objectives and which provide direct support thereto. The first line of defence consists of Bank organisational units not specified in the second and third lines of defence.
As part of their testing tasks (in the 1LoD area), these units have the right of access to the information covered by the testing.
The second line of defence performs the tasks stemming from its function and supports the first line of defence in order to achieve the goals of the internal control system.
It is responsible for:
o issuing regulations (including analysis of compliance with external regulations) and providing methods and tools within the internal control system,
o approving the decisions made by the first line of defence as to implementation, modification or removal of controls,
o verifying the application of internal control system regulations by the first line of defence,
o monitoring horizontally the compliance with controls by the second line of defence,
o monitoring vertically the first line of defence as to compliance with controls.
The second line of defence units have the power to escalate problems to a higher level of management (to the Bank Management Board and Supervisory Board), presenting their opinions on business decisions bearing unacceptable risks.
The units reporting to the Vice President responsible for the Risk Area and the Compliance Unit, in the areas monitored by them and in a manner that does not violate the independence of certain units in the Bank (e.g. Internal Audit Position) provided for by legal regulations, are authorised to recommend recovery actions concerning controls and risk control mechanisms to all Bank units.
The roles, powers, scope and nature of work plus the accountability of IA position and the terms of cooperation of Bank organisational units with the IA position are laid down in the Policy – Internal Audit Charter of ING Bank Hipoteczny S.A. (Audit Charter).
Within the control function, the processes which are material to the Bank were isolated and key control function controls were assigned thereto.
V. Principles of assessment of adequacy and effectiveness of the internal control system
o The results of the audits from the completed annual audit plan, including the proportion of positive opinions in the population, together with the critical and high risks identified during the year, in particular those open at the date of the assessment of the internal control system and their concentration;
o Recommendations of supervisors and the external auditor, open at the date of issuing the assessment of the internal control system taking into account their concentration;
Timely implementation and progress in the implementation of risk mitigants.
o assessment of the Internal Audit position,
o information from the Management Board on the manner of performance of internal control system tasks,
o periodical reports of the Compliance Cell,
o information material to the adequacy and effectiveness of the internal control system, information from the parent entity;
o findings of the statutory auditor or external auditor,
o findings from supervisory activities performed by authorised institutions (like the Polish Financial Supervision Authority or the Office of Competition and Consumer Protection),
o assessments and opinions material to the adequacy and effectiveness of the internal control system, provided by third parties, if made.
On 14 March 2025, the Supervisory Board approved the effectiveness and adequacy of the Bank's internal control system in 2024.
Risk management at ING Bank Hipoteczny S.A. serves to ensure effective risk control and limitation within the risk appetite accepted by the Bank in volatile legal and macroeconomic conditions and considering the pre-set business targets. The assumed risk level is an important factor of the planning process.
Risk management at ING Bank Hipoteczny S.A. is based in particular on the following rules:
o risk management process, including the lending process is defined and governed by strategies, policies and procedures adopted by the Management Board and/or Supervisory Board of ING Bank Hipoteczny S.A. respectively,
o The Bank manages all identified bank risks and carries out the ICAAP (the Internal Capital Adequacy Assessment Process), where:
o risk management matches the scale of business and the materiality, scale and complexity of a given risk and where it is tailored to new risk factors and drivers on an ongoing basis,
o risk management methods, risk measurement models and systems and their assumptions match the scale and complexity of risk and are periodically verified and validated,
o the organisational structure of risk management guarantees independence of the risk area, including independence of real estate appraisal and credit decisions taken from business activity,
o the risk management process is integrated into the planning and controlling processes and it supports delivery of the Bank’s strategy, while staying compliant with the risk management strategy, especially as far as the risk appetite is concerned,
o the risk management process is consistent with the risk management principles of the ING Bank Śląski S.A. Group, tailored to the specific operations of ING Bank Hipoteczny S.A. and approved by the competent authorities of ING Bank Hipoteczny S.A.,
o reporting of risk sources and factors as well as reporting of risk level measurement and its costs make it possible to take appropriate preventive and remedy measures.
The risk management process is supervised by the Bank Supervisory Board which regularly receive information about the risk profile at ING Bank Hipoteczny S.A. and key actions taken to manage risk.
The Bank Management Board are responsible for risk management, including but not limited to, overseeing and monitoring of actions undertaken by the Bank in this respect. The Bank Management Board take the most important decisions affecting risk level of the Bank and resolve on internal regulations concerning risk management.
Risk is managed through three independent lines of defence.
The objectives, principles and organisation of risk management, as well as the specific management of individual risk categories are described in the financial statements of ING Bank Hipoteczny S.A.
ING Bank Hipoteczny S.A. performs the credit collateralization tasks based on the following external and internal regulations:
o the Act on Covered Bonds and Mortgage Banks,
o the Act on Land and Mortgage Registers and on Mortgage,
o the Banking Law Act,
o Instructions and recommendations of the Polish Financial Supervision Authority, including in particular Recommendations F, S and J,
o Provisions of internal banking regulations, and notably the General Terms and Conditions of Determination of the Mortgage Lending Value of Real Estate.
The Bank has in place and applies the General Terms and Conditions of Determination of the Mortgage Lending Value of Real Estate, approved on 4 January 2019 by the Polish Financial Supervision Authority. The General Terms and Conditions provide for the guidelines listed in Recommendation F and concerning the basic criteria applied by the Polish Financial Supervision Authority to approve the general terms and conditions of determination of the mortgage lending value of real estate made by mortgage banks.
The mortgage lending value of the real estate is the value set using an expert method, in line with the Act on covered bonds and mortgage banks, which in the opinion of the Bank mirrors the risk of the real estate forming the collateral for the loans acquired by the Bank.
The mortgage lending value of the real estate is set using an expert method in order to enable the Bank to take a decision whether or not to acquire the given debt. The mortgage lending value of the real estate is set in a prudent manner, considering long-term parameters.
ING Bank Hipoteczny S.A. sets the mortgage lending value of the real estate based on the real estate value expertise. The mortgage lending value expertise is made with due diligence and prudence. It factors in only those real estate parameters which are of long-term nature and which can be obtained by any real estate owner, when the estate is rationally used. It factors in all risks which because of the experience held and analyses made can adversely impact on the mortgage lending value of the real estate. The expertise which is developed at a certain date, evidences the assumptions and parameters used in the analysis, the process of the mortgage lending value of the real estate determination and the resultant mortgage lending value of the real estate proposal.
The expertise factors in the analyses and projections of the typical real estate parameters which considerably impact the assessment of the credit risk of real estate acceptance as collateral. It also takes into account general factors, including, economic cycles, changes to the purchasing power of money, demography, unemployment rate or local zoning plans.
At the Bank, the mortgage lending value of the real estate determination process is performed by a dedicated team from the Risk Management Area which is independent from the business functions of the Bank.
For the debt acquisition operation, the mortgage lending value of the real estate determination process is constructed into four stages:
|
Verification of the legal status of the real estate |
ING Bank Śląski S.A. under the Outsourcing Agreement |
|
Carrying out an inspection, on-site property inspection and local market research included. |
Estate Appraiser who holds adequate experience and ability to estimate banking risk for residential loan collateralization |
|
Mortgage lending value of the real estate expertise compilation |
Dedicated organisational cell of the Bank – Valuation and Credit Decisions Team |
|
Verification of mortgage lending value of the real estate expertise and determination of the mortgage lending value of the real estate |
Dedicated organisational cell of the Bank – Valuation and Credit Decisions Team |
The processes of the mortgage lending value of the real estate expertise compilation and mortgage lending value of the real estate determination as described above are performed by two different persons.
The Bank has aligned the process of monitoring of the mortgage lending value of the real estate with the requirements of 648/2012 CRR (annual frequency). The above change affected the possibility of preferential treatment of covered bonds issued by the Bank (pursuant to Article 129 of the CRR).
ING Bank Hipoteczny S.A. keeps and maintains the cover register (the Register). The Register is maintained in compliance with the requirements set out in the following documents:
o The Act of 29 August 1997 on covered bonds and mortgage banks (Journal of Laws of 2023, item 110),
o Minister for Finance Regulation of 21 June 2022 on the mortgage cover calculation and the coverage balance testing and the liquidity test (Journal of Laws 2022, item 1412),
o Recommendation K of the Polish Financial Supervision Authority of 9 February 2016 on the terms of maintenance of the cover register by mortgage banks.
The Bank shall enter in the Register the acquired receivables from mortgage-backed housing loan contracts and the rights and funds that may be the basis for the issue of covered bonds (pursuant to Article 18(3) and (4)), as well as the funds constituting the surplus, in an amount not lower than the maximum cumulative net liquidity outflow over the next 180 days (pursuant to Article 18(3a)). Covered bonds are secured with Bank debt secured with the first ranking mortgage.
As at 31 December 2024, the mortgage-backed debt and other funds referred to in the Act on covered bonds and mortgage banks closed with PLN 2,569,095,700 (core assets including substitute assets).
As at the date, the structure of the Register was as follows (data in PLN mio):
The State Treasury Bonds registered in the Register provide security for the payment of interest on the issued covered bonds over a period of 180 days. The total value of the mortgage-backed claims and substitute collateral (in the part not used to cover the payment of interest on covered bonds) was reflected in the overall level of collateralisation of covered bonds, which was 513.82%.
Since mortgage-backed debt and issued covered bonds match in terms of currency and interest rate, there were no hedging transactions in the Register as at 2024 yearned.
Pursuant to the 2022 amendment to the Act on Covered Bonds and Mortgage Banks, the Bank shall, no later than the end of each quarter, as at the last day of the preceding quarter, make available on its website information on the security of covered bonds.
Register maintenance is overseen by the Cover Pool Monitor on an ongoing basis.
For the key register data as at 31 December 2024, refer to the table below:
|
|
31.12.2024 |
|
Cover register |
|
|
Mortgage-backed debt (PLN million) |
2,539.1 |
|
T-bonds (PLN million) |
30 |
|
Amount of surplus in accordance with Article 18(3a) of the Act (PLN thousand) |
0 |
|
Number of (active) loans |
15,592 |
|
Average loan amount (PLN thousand) |
163 |
|
Average maturity (in months) |
214 |
|
Average LtV (lloan value to the mark-to-market value of the real estate at the time of acquisition) |
47.68% |
|
Average LtV (loan value to the mortgage lending value of the real estate) |
56.20% |
In keeping with the Act on covered bonds and mortgage banks (Act), for each mortgage bank a Cover Pool Monitor and at least one Deputy Cover Pool Monitor are appointed. The Cover Pool Monitor shall be responsible for verifying whether:
o the liabilities attributable to the covered bonds in trading are secured by the mortgage bank in compliance with the Act,
o the mortgage lending value of the real estate taken by the Bank was set in compliance with the bylaw,
o the mortgage bank complies with the requirements of Article 18 of the Act,
o the coverage balance test and liquidity test confirm that the mortgage bank’s debt as well as the rights and funds entered into the cover register suffice to fully satisfy the holders of covered bonds.
o the manner of the cover register maintenance by the mortgage bank satisfies the terms and conditions of the Act,
o the mortgage bank ensures – under the Act – the collateral for the planned issue of covered bonds and control of whether adequate provisions were entered into the cover register.
In addition, in accordance with the amendment to the Act, the Cover Pool Monitor shall annually, no later than 31 March, submit to the Polish Financial Supervision Authority a report for the previous year on the mortgage bank's activities with respect to the Cover Pool Monitor's tasks.
Having considered the application of the Supervisory Board of ING Bank Hipoteczny S.A., on 26 November 2024 the Polish Financial Supervision Authority appointed Ms Grażyna Zielińska as the Cover Pool Monitor of ING Bank Hipoteczny S.A. and Mr Krzysztof Brejdak as the Deputy Cover Pool Monitor for a period of the next 6-years.
The Bank shall keep and maintain a cover register, in which the Bank's claims and the rights and funds underlying the issue of the covered bonds are entered under separate headings, as well as funds in surplus in an amount not lower than the maximum cumulative net liquidity outflow over a consecutive period of 180 days.
Register maintenance is overseen by the Cover Pool Monitor and Deputy Cover Pool Monitor on an ongoing basis.
Acting in accordance with the Act on covered bonds and mortgage banks, ING Bank Hipoteczny S.A monitors the applicable business limits.
As at 31 December 2024, the statutory limits and their utilisation were the following:
|
No. |
Statutory limit |
Statutory limit value |
Limit utilisation |
Legal grounds |
|
|
1. |
% of debt for which the ratio of a single mortgage-backed loan to the mortgage lending value of the real estate is over 100% at the acquisition date |
0% |
Fulfilled |
|
Article 13.2 of the Act on covered bonds and mortgage banks |
|
2. |
Coverage of covered bonds with assets up to 80% of the mortgage lending value (maximum ratio of refinancing of the acquired debt (in part up to 80% of the mortgage lending value) with funds obtained from the issue of covered bonds) |
100% of the Bank's total debt claims up to 80% of the mortgage lending value (calculated in relation to each debt claim) |
11.91% |
|
Article 14 of the Act on covered bonds and mortgage banks |
|
3. |
Maximum volume of acquired and taken-up shares or holdings in other entities vis-à-vis own funds of the mortgage bank |
10% of own funds of the mortgage bank |
0% |
|
Article 15.1.5 of the Act on covered bonds and mortgage banks |
|
4. |
Maximum multiple of the total of drawn loans and credit facilities, issued bonds vis-à-vis own funds of the mortgage bank |
ten times own funds of the Bank; |
8.41 |
|
Article 15.2.1 of the Act on covered bonds and mortgage banks |
|
5. |
Maximum multiple of the total amount of nominal amounts of covered bonds traded by the mortgage bank to own funds of the mortgage bank |
40 times |
1.23 |
|
Article 17.1 of the Act on covered bonds and mortgage banks |
|
6. |
Minimum overcollateralisation of the issue of covered bonds with mortgage-backed debt and other funds (bonds, cash, cash with the National Bank of Poland, hedging instruments) |
105% |
513.82% |
|
Article 18.1 of the Act on covered bonds and mortgage banks |
|
7. |
Minimum overcollateralisation of the issue of covered bonds with mortgage-backed debt |
85% |
507.82% |
|
Article 18.1 of the Act on covered bonds and mortgage banks |
|
8. |
Minimum ratio of income of the mortgage bank under the mortgage-backed claims and other funds (bonds, cash, cash with the National Bank of Poland, financial hedging instruments) vis-à-vis costs of interest on the traded covered bonds |
100% |
611.72% |
|
Article 18.2 of the Act on covered bonds and mortgage banks |
|
9. |
Coverage of the maximum cumulative net liquidity outflow with the funds specified in paragraph 3 c of Article 18 of the Act on Covered Bonds and Mortgage Banks over the next 180 days |
|
fulfilled |
|
Article 18.3a of the Act on covered bonds and mortgage banks |
|
10. |
Maximum ratio of debt backed with mortgages established during the construction investment project to the total amount of the mortgage-backed debt used to issue covered bonds. |
10% |
0% |
|
Article 23.1 of the Act on covered bonds and mortgage banks |
|
11. |
Maximum ratio of debt backed with mortgages on real estates earmarked for development as per the zoning plan to the total amount of the mortgage-backed debt used to issue covered bonds. |
1% |
0% |
|
Article 23.2 of the Act on covered bonds and mortgage banks |
Additionally to monitoring of the statutory limits, the Bank - in accordance with the Act on Covered Bonds and Mortgage Banks - makes a mortgage cover calculation for each business day. The coverage balance test is performed at least every 6 months and the liquidity test at least every 3 months.
Keeping in mind the prudential approach to management, the Bank carries out coverage and liquidity balance tests, if possible for each business day.
Throughout the reporting period, ING Bank Hipoteczny S.A. did not exceed any of the limits indicated in the table and the outcome of the mortgage cover calculation and coverage balance and liquidity tests was positive.
ING Bank Hipoteczny S.A. governance is underpinned by the organisational framework presented on the diagram below and the segregation of duties among the Bank bodies discussed further on.
Organisational framework of ING Bank Hipoteczny S.A. in functional areas
The authority of individual Bank bodies has been laid down in the Banking Law, the Commercial Companies and Partnerships Code and other laws and provisions of the Bank Charter as well as in their individual bylaws.
The authority of the Bank General Meeting is the following:
o review and approval of the Management Bank Report on Bank Operations and the financial statements for the past financial year and acknowledgment of fulfilment of duties by the members of the Bank bodies,
o appointment and recall of Supervisory Board members,
o passing resolutions on the determination of principles of remuneration of the Supervisory Board members and other matters foreseen by the law, Charter or those submitted by the Supervisory Board, Management Board or eligible shareholders,
o passing resolutions on damage claims, for the damages caused upon Bank establishment or exercise of management or supervision,
o determination of the mode of shares redemption and of the fee for the shares redeemed as well as consent to the acquisition of Bank’s shares for redemption purposes,
o passing resolutions on liquidation, disposal or lease of the Bank enterprise or its organised part and establishing limited right in property thereon.
The authority of the Bank Supervisory Board is the following in particular:
o assessment of the Management Board Report and financial statements for the past financial year as to their compliance with the ledgers, documents and the actual state of affairs.
o assessment of Management Board motions regarding profit distribution or loss coverage,
o submission of an annual written report to the General Meeting on the results of these evaluations, and a written report on the Supervisory Board Operations for the previous financial year (Supervisory Board Report),
o revision of the Bank’s property and financial control,
o approval of the rules of prudent and stable Bank management and the Bank strategy developed by the Management Board as well as periodical review and verification of its delivery, and also approval of many-year development plans of the Bank and annual budgets of the Bank as developed by the Management Board,
o approval of accepted risk levels in the Bank’s business areas,
o approval of Management Board motions regarding formation or liquidation of Bank’s organisational units abroad,
o consent to acquisition or disposal by the Bank of shares and share rights or holdings of other legal persons, provided the amount of assets covered by one such operation exceeds the PLN equivalent of EUR 1,000,000 or the said operation concerns the assets accounting for at least 50% of the share capital of another legal person; the Supervisory Board’s consent is not required for the Bank’s exposure under debt conversion, liquidation of the collateral accepted by the Bank,
o appointing and recalling Members of the Management Board, subject to Article 28 of the Charter,
o conclusion of agreements with Management Board Members on performance of their duties and determination of remuneration thereunder, as well as consent to receive other considerations by Management Board Members from the Bank or related entities,
o approval of the Management Board Bylaw, Organisational Bylaw and internal control system of the Bank,
o selection of the entity authorised to audit the financial statements of the Bank, based on the recommendation of the Audit and Risk Committee of the Supervisory Board and provision of advice as to establishment of cooperation with that entity,
o consent to conclusion of transactions by the Bank with its shareholders or related entities or members of Bank authorities, provided the amount of the transaction exceeds EUR 1,000,000, save for typical and routine transactions made on an arm's length basis whose nature and terms arise from the daily business of the Bank or transactions foreseen in the annual budget of the Bank as approved by the Supervisory Board,
o consent to assuming a liability by the Bank or making an administrative decision whose amount in such one-off operation or on an aggregate basis for one entity or a few entities related to the entity exceeds 10% of own funds of the Bank, save for provisions of Article 26 section 1 items 4) and 11) of the Bank Charter; the consent is not required for the entities referred to in Article 26 section 1 item 9) of the Bank Charter,
o consent to acquisition, disposal or encumbering by the Bank of property, plant and equipment item whose amount exceeds the PLN equivalent of EUR 1,000,000; save for provisions of Article 26 section 1 item 10) of the Bank Charter, the consent of the Board is not required when the property, plant and equipment item is acquired through transfer of such item by the Bank as the creditor due to the Bank’s debt recovery procedure,
o consent to acquisition, disposal or encumbrance by the Bank of real estate or an interest in real estate or the right of perpetual usufruct whose value exceeds the Polish zloty equivalent of EUR 1,000,000,
o submission to the Ordinary General Meeting of reports and assessments laid down in the regulations, recommendations of the regulator and other laws of the Bank,
o suspension – for important reasons – of the Bank Management Board Members in their capacity and delegation – for the period of up to 3 months – of Supervisory Board Members to temporarily act in the capacity of the Management Board Members incapable of discharging their duties,
o approval of the Bank’s compliance risk policy,
o approval of the rules for the processes of internal capital estimation, capital management and capital planning,
o approval of the bylaw used to determine the mortgage lending value of the real estate; the bylaw takes effect upon approval by the Polish Financial Supervision Authority,
o approval of cooperation agreements with ING Bank Śląski S.A.,
o submission of a request to the Polish Financial Supervision Authority for appointment of the Cover Pool Monitor and his/her deputy,
o approval of model risk management rules,
o approval of the code of ethics and conflict of interest management rules.
o The Supervisory Board's approval is not required to conclude a transaction with the parent company, the value of which, when aggregated with the value of transactions concluded with that company during the financial year, exceeds 10% of the Bank's total assets within the meaning of the accounting regulations, as determined on the basis of the company's last approved financial statements.
Resolutions of the Supervisory Board may concern in particular:
o formulation of conclusions and recommendations under the supervision and control activities conducted,
o granting consents and permissions,
o approving strategies, policies and other documents if it is provided for in the Bank Charter or specific regulations,
o rendering advice,
o reports and assessments submitted by the Board to the General Meeting and in particular:
o the annual report of the Supervisory Board for the previous financial year, including at least:
o the results of assessment of the financial statements and Management Board reports on Bank operations in the financial year, and also the Management Board motion on the distribution of the profit or coverage of loss of the Bank,
o assessment of the Bank's situation, including an assessment of the adequacy and effectiveness of the internal control, risk management, compliance and internal audit,
o assessment of the implementation by the Management Board of their information obligations towards the Supervisory Board,
o information on the total remuneration payable by the Bank for all audits commissioned by the Supervisory Board during the financial year pursuant to §37,
o a summary of the activities of the Supervisory Board and its committees during the financial year, together with information on the composition of the Supervisory Board and its committees, including an assessment of the adequacy of the internal regulations governing the functioning of the Supervisory Board.
o evaluation reports on the functioning of the Bank's remuneration policy, drawn up in the course of the ongoing supervision, monitoring and evaluation of the Bank's remuneration policy in force,
o assessment of application by the Bank of the principles of corporate governance for supervised institutions,
o assessment of the adequacy and effectiveness of internal governance principles adopted by the Bank,
o other matters within the Supervisory Board's powers.
The authority of the Supervisory Board Audit and Risk Committee is the following in particular:
o supporting the Supervisory Board in monitoring and supervising the financial reporting, the internal and external audit and the governance system of the Bank, and in particular as to adequacy and effectiveness of the internal control system and risk management system and the relation between the Bank and the firm auditing the financial statements of the Bank.
o supporting the Supervisory Board in monitoring and supervising the risk management process, including the operational risk, credit risk, market risk and compliance risk, and also the internal capital estimation process, capital planning and management as well as the model risk and capital adequacy.
The authority of the Bank Management Board is the following in particular:
o representing the Bank before the authorities and third parties as well as administration and management of the property and interests of the Bank. The Management Board take action for all the matters not resting with other Bank bodies,
o issue of resolutions which under the universally effective laws and provisions of the Bank Charter require decisions by other statutory Bank bodies,
o formulation of Bank’s policies, including but not limited to the lending policy, risk management policy and remuneration policy,
o determination of acquisition principles for funds from other financial institutions and the principles of their utilisation as well as determination of principles for investing funds with banks,
o formulation of principles for setting interest for the products offered by the Bank, including but not limited to the interest for loans and credit facilities or penalty interest,
o reviewing motions regarding recognition of extraordinary losses and establishment of provisions beyond the amounts otherwise set by the Management Board,
o passing investment plans and setting investing principles,
o resolving on the matters pertaining to the acquisition, encumbering, disposal of lease of real estates and other property rights – for operations going beyond the amounts otherwise set by the Management Board,
o resolving on acquisition and disposal by the Bank of shares and holdings of other legal persons – for operations going beyond the amounts otherwise set by the Management Board,
o determination of principles of granting and revoking powers of attorney to perform certain acts or take certain actions,
o the matters going beyond the ordinary course of business, including but not limited to the matters going beyond the powers of individual Management Board members or Committees established by the Management Board,
o other matters for which decisions rest with the Management Board under other resolutions adopted by the Management Board and other matters submitted by the President of the Management Board or another Management Board Member.
The Bank Management Board established the following standing committees: the list of standing committees forms Enclosure No. 4 with the Organisational Bylaw of ING Bank Hipoteczny S.A.:
o Assets and Liabilities Committee (ALCO),
o Credit Policy Committee (CPC),
o Non-financial Risk Committee,
o Green Covered Bonds Committee.
The Assets and Liabilities Committee supervise and take decisions on:
o market risk management at ING Bank Hipoteczny,
o funding and liquidity risk management at ING Bank Hipoteczny,
o management of the Bank’s balance sheet (assets and liabilities), including the transfer pricing system methods,
o structure of ING Bank Hipoteczny’s ledgers,
o capital and capital adequacy management,
o valuation of financial instruments and calculation of valuation adjustments, considering the factors not accounted for in the valuation in the Bank’s systems.
The Committee monitor the model risk level. They approve the validation reports and the results of monitoring of the market risk, liquidity and funding risk and valuation models.
Credit Policy Committee
The scope of activities covers the following areas:
o Credit risk appetite as to specific risk appetite limits and concentration limits, within which:
o Define limit types,
o Sets and changes limit levels.
o Credit Policy under which:
o the Credit Policy Committee take decisions on the regulations concerning the implementation of the ING Bank Hipoteczny S.A. Credit Risk Management Policy,
o the Credit Policy Committee define and modify the principles of risk, identification, assessment and control, including:
o credit risk assessment principles,
o credit analysis standards,
o credit competence,
o rating process flow,
o principles of client and credit exposure monitoring,
o principles for restructuring and recovery,
o collateral establishment and monitoring principles,
o impairment and provisioning principles,
o rules for credit risk processes involving ESG risk,
o counterparty risk assessment principles.
o Credit risk models under which:
o the Credit Policy Committee approve regulations on development, maintenance and use of risk models, including, but not limited to:
o principles of the credit risk models management,
o methodology for building and monitoring models,
o definitions of the credit risk models,
o the scope of use of the credit risk models,
o evaluation of the correctness of the process of examining the quality of functioning of the models,
o the bank's approach to the extent of use of external models,
o introduction and withdrawal of models as well as changes to models,
o the manner in which appropriate remedial or corrective action is implemented, its monitoring, and the amount of capital add-ons to be introduced for it.
o The CPC monitors the status of the remodelling and monitoring plan for credit risk models,
o The CPC approves the principles and standards for the validation of credit risk models and reports on the results of the validation of credit risk models,
o The CPC approves the reports with the results of the credit risk model monitoring.
o The Credit Policy Committee monitors credit risk, ensures compliance with laws, supervisory regulations and ING Group’s standards as well as discusses and approves any other credit- and settlement risk-related matters.
o CPC do not make decisions on:
o individual client transactions,
o ratings for individual clients or exposures,
o the amount of write-downs/reserves at client or individual exposure level.
Non-financial Risk Committee
The Committee – following the requirements of the universally applicable laws, regulator’s requirements, internal regulations of the Bank and best practices of the ING Bank Śląski S.A. Group and internal regulations of the Bank, cover, among others, the following issues/areas:
o Initiating and recommending the changes and new solutions for the non-financial risk area.
o Performing the tasks resulting from the use of outsourcing as described in the ING Bank Hipoteczny S.A. Outsourcing Policy and the ING Bank Hipoteczny S.A. Outsourcing Manual.
o Approving, advising on and recommending plans, projects and programmes as well as control standards for non-financial risk management.
o Approval of, inter alia:
o operational risk management objectives for the calendar year in question,
o waivers and deviations for the non-financial risks area,
o annual plans and test results for key controls,
o annual Risk Identification and Assessment Plan and the results of this process when unacceptable risks are identified, crisis management plan as well as the outcome of the Business Environment Assessment,
o lists of controls identified for independent testing by the 2nd line of defence,
o a schedule of tasks and a report on the monitoring of the 2nd Line of Defence as part of the testing of key controls (including in the IT area), as well as the results of independent tests,
o non-financial risk reports (NFRD included) and recommendation to the Bank Management Board of decisions for material non-financial risk issues (including the unacceptable risks attributable to product-related changes), new Critical and High Risk recommendations identified by the first and second line of defence and changes in dates in case of implementation of recommendations or acceptance of high risk,
o non-financial risk reports (NFRD included) and recommendation to the Bank Management Board of decisions for material non-financial risk issues,
o a list of obligatory training courses in non-financial risk,
o periodical results of Bank’s organisational framework reviews for compliance with the operational risk management rules,
o methodologies for determining internal capital for operational risk,
o results of measurement of economic and regulatory capitals for operational risk, including quarterly monitoring of the capital required for operational risk and capital change drivers,
o mitigating actions.
o Monitoring of:
o the processes of NFR identification, assessment, monitoring and mitigation, including, most notably, in the outsourcing and fraud area,
o the quality assurance process for the non-financial risk management processes,
o the status of mitigation and enhancement activities related to programmes and projects in the Bank (non-financial risk projects included),
o the status of implementation of control standards,
o risk factors arising from the Business Environment Assessment,
o reports related to reputational risk, customer complaints and issues relating to conduct risk and compliance risk, reports/documents on non-financial risk events, including lessons learned,
o non-financial risks, with regard to significant changes in the Bank's management structure and significant elements of outsourcing processes.
The Green Covered Bonds Committee is responsible for all green aspects of covered bonds.
Responsibilities:
o Initiation and recommendation of changes and new solutions for green covered bonds.
o Approval of:
o amendments to the ING Bank Hipoteczny S.A. Green Covered Bond Framework,
o changes to technical conditions enabling qualification of a credit debt to the portfolio of green assets,
o allocation reporting and impact reporting,
o periodical reports delivered to the Climate Bonds Initiative.
o Supervision of:
o processes relating to operational implementation of changes arising from the ING Bank Hipoteczny S.A. Green Covered Bond Framework,
o processes relating to operational implementation of changes to technical conditions enabling qualification of a credit debt to the portfolio of green assets,
o the process of utilisation of funds acquired from the issue of green covered bonds, considering the potential alternative investment projects laid down in the ING Bank Hipoteczny S.A. Green Covered Bond Framework,
o the process of green assets portfolio building,
o collaboration with third parties involved in the green covered bonds-related processes,
o quality assurance for the green covered bonds-related processes,
o reporting process to ING Group.
In the period from 1 January 2024 to 31 December 2024, the Management Board of ING Bank Hipoteczny S.A. worked in the following composition:
|
|
Position in the Management Board |
Term of office in connection with the end of the previous term of office |
Date of appointment for the current term of office |
|
Jacek Frejlich |
President of the Management Board |
from 28.10.2022 |
09.05.2024
|
|
Marek Byczek |
Vice-President of the Management Board |
from 01.10.2022 |
09.05.2024
|
|
Katarzyna Majchrzak |
Vice-President of the Management Board |
from 01.09.2023 |
09.05.2024 |
On 9 May 2024, the Supervisory Board appointed the existing members of the Management Board of ING Bank Hipoteczny S.A. for a new term.
Segregation of key authorities within the Bank Management Board:
|
Jacek Frejlich (since 28.10.2022) |
President of the Management Board responsible for the Management Area |
|
Marek Byczek (since 01.10.2022)
|
Vice-President of the Management Board responsible for the Finance, Treasury, Operations and IT Areas |
|
Katarzyna Majchrzak (since 01.09.2023) |
Chief Risk Officer |
|
|
|
Other management functions of Management Board members:
|
|
Function |
Function Holding Time |
|
Jacek Frejlich |
Did not hold any additional functions of the Management Board or Supervisory Board member. |
Throughout the reporting period. |
|
Marek Byczek |
Did not hold any additional functions of the Management Board or Supervisory Board member. |
Throughout the reporting period. |
|
Katarzyna Majchrzak |
Did not hold any additional functions of the Management Board or Supervisory Board member. |
Throughout the reporting period. |
The composition, responsibilities of and segregation of duties among the Management Board Members did not change.
Recruitment policy – selection and evaluation of Management Board Members
All the appointed members of the ING Bank Hipoteczny S.A. Management Board satisfy the requirements of Article 22aa of the Banking Law Act and underwent a suitability assessment before appointment as per EBA guidelines.
Management Board Members are appointed and recalled, considering the requirements of the Banking Law Act.
The Supervisory Board appoints the members of the Management Board from among candidates selected on the basis of succession plans and, if necessary, from among external candidates who have passed the suitability assessment procedure and received a positive recommendation.
The President of the Management Board and the Vice-President supervising the management of the risk material to the Bank’s business are appointed upon the approval of the Polish Financial Supervision Authority. The earlier appointed Management Board Member may be entrusted with the capacity of the Vice-President referred to hereinabove only upon approval of the Polish Financial Supervision Authority.
The process of selecting and assessing candidates for Members of the ING Bank Hipoteczny S.A. Management Board is based on the principles set out in the ING Bank Hipoteczny S.A. Management Board Members Appointing, Onboarding and Recalling Policy and the Policy for the Assessment of the Suitability of Supervisory Board Members, Management Board Members and Key Function Holders.
If a search for candidates for a position on the Management Board needs to be triggered, the Supervisory Board prepares a list of candidates based on the Succession Database. In the absence of internal candidates satisfying the requisite criteria, external recruitment process is initiated. The Supervisory Board select one candidate from the list and commission a suitability assessment process in accordance with the applicable Suitability Assessment Policy for Supervisory Board Members, Management Board Members and Key Function Holders at ING Bank Hipoteczny S.A. In exceptional cases (e.g. an urgent need to replace a member of the Management Board), the suitability assessment of candidates may be carried out up to 4 weeks after the position is taken up.
The following terms of selection, nomination and succession planning apply to Management Board members:
o management Board Members are appointed and recalled in the secret ballot, considering the requirements of the Banking Law Act.
o The Bank Management Board consists of at least three members, inclusive of the President and Vice-Presidents. Upon the request of the President of the Management Board, the Supervisory Board may entrust the role of I Vice-President to one of the Vice-Presidents.
o The number of the Management Board Members is determined by the Supervisory Board. At least half of the Members of the Management Board are the citizens of the Republic of Poland.
o the Management Board Members are appointed for a common term of office that starts from the date of appointment and runs for three full consecutive financial years.
o The President of the Management Board and the Vice-President supervising the management of the risk material to the Bank’s business are appointed by the Supervisory Board upon the approval of the Polish Financial Supervision Authority. The earlier appointed Management Board Member may be entrusted with the capacity of the Vice-President referred to hereinabove only upon approval of the Polish Financial Supervision Authority.
Diversity Policy
The ING Bank Hipoteczny S.A. has the Diversity Policy for ING Bank Hipoteczny S.A. Management Board and Supervisory Board Members.
The Policy seeks to achieve a broad scope of competence upon appointment of the Supervisory Board and Management Board members so as to acquire various opinions and experience and enable individual bodies to issue independent opinions and reasonable decisions as well as to ensure top quality of duties performance by the managing bodies.
The Bank perceives diversity as one of the attributes of the corporate culture. As regards business-related criteria, the strategy of diversity ensures selection of persons with diverse knowledge, skills and experience, suitable for positions held by them and duties entrusted to them, who complement each other at the level of all the Management Board and Supervisory Board Members.
The criteria are verified in the suitability assessment process described in the Suitability assessment policy for Supervisory Board and Management Board Members and the persons holding key functions at ING Bank Hipoteczny S.A. Further, the Diversity Policy covers and employs the differences which besides knowledge and professional experience are driven by sex and age to accomplish top results.
Principles of remuneration of Bank Management Board Members
In December 2024, the Supervisory Board – by way of Resolution No. 62/11/2024 – approved the update of the Remuneration Bylaw for Members of the ING Bank Hipoteczny S.A. Management Board. The Bylaw provides for the primary terms and conditions of remuneration for members of the ING Bank Hipoteczny S.A. Management Board. The Bylaw remains in concordance with the values and long-term interests of ING Bank Śląski S.A. Group, whereby it fosters effective risk management by the Group. The principles of remuneration of Bank Management Board Members are set using the market data. They factor in the knowledge and skills as well as the accountability of and the risk taken by a given function. Each Bank Management Board member made an employment contract with the Bank. The contract reads inter alia the terms and conditions of remuneration and the competition ban.
The By-law:
1. is in line with the Bank's strategy, values and risk appetite and therefore also supports the Bank's short-, medium- and long-term interests,
2. promotes and supports an effective risk management process to maintain and protect the Bank's secure capital base,
3. does not encourage taking excessive risk beyond the risk appetite accepted by the Bank Supervisory Board,
4. is based on performance management, which is a key business process that links individual objectives with long-term business strategy and ensures stable growth,
5. is gender neutral, which means that it does not create conditions for any gender to be favoured in an unjustified manner with regard to employment, career development, promotions, as well as awarding and paying remuneration.
6. The average annual gross total remuneration of individual Management Board Members shall not exceed 40 times the average annual gross total remuneration of other employees. The ratio shall be reviewed annually as part of the review of the remuneration policy.
Remuneration of Management Board Members
Remuneration due and paid in 2024
Below are the values of the remuneration due and paid by the Bank to Management Board Members in 2024.
|
Management Board |
|||||
|
2024 |
|||||
|
Emoluments due to ING Bank Hipoteczny S.A. Management Board Members in 2024 |
|||||
|
|
|
remuneration |
awards* |
other benefits** |
Total |
|
TOTAL |
01.01.2024-31.12.2024 |
1,596,600.00 |
0.00 |
127,069.86 |
1,723,669.86 |
|
*Emoluments of the ING Bank Hipoteczny S.A. Management Board Members for 2024 under the Variable Remuneration Programme have not yet been awarded. In line with the remuneration system of the Bank, Bank Management Board Members may be eligible for a 2024 bonus. The bonus will be paid out in 2025-2031. For that purpose, provisions were formed for the 2024 bonus for Management Board Members. As at 31 December 2024, they totalled PLN 957,960.03. The Bank Supervisory Board will take the final decision on the bonus amount. |
|||||
|
**other benefits include: Employee Pension Scheme, healthcare and a company car |
|||||
|
Management Board |
|||||||
|
2024 |
|||||||
|
Emoluments paid out to ING Bank Hipoteczny S.A. Management Board Members in 2024 |
|||||||
|
|
|
remuneration |
awards* |
other benefits** |
Total |
||
|
TOTAL |
01.01.2024-31.12.2024 |
1,596,600.00 |
285,255.94 |
127,069.86 |
2,008,925.80 |
||
|
*Bonus under the Variable Remuneration Programme for 2023 non-deferred cash, for 2022 the first tranche of deferred cash, for 2021 the second tranche of deferred cash, for 2019 the third tranche of deferred cash, and HTM financial instruments for 2022, for 2020 and 2021 the first tranche of deferred instruments, for 2019 the second tranche of deferred instruments, for 2018 the third tranche of deferred instruments. |
|||||||
|
**other benefits include: Employee Pension Scheme, healthcare and a company car |
|||||||
In the period from 1 January 2024 to 31 December 2024, the Supervisory Board of ING Bank Hipoteczny S.A. worked in the following composition:
|
|
Function on the Bank Supervisory Board |
Appointment date
|
Appointment date for the new term of office |
Independent Member* |
Audit and Risk Committee |
|
Bożena Graczyk |
Member Chair |
26.02.2018 15.06.2021 |
09.05.2024 |
|
M |
|
Brunon Bartkiewicz |
Member Chair |
26.02.2018 26.02.2018** |
09.05.2024 |
|
|
|
Joanna Erdman |
Member
|
26.02.2018 |
09.05.2024 |
|
|
|
Marcin Giżycki |
Deputy Chair |
26.02.2018 |
09.05.2024 |
|
|
|
Krzysztof Gmur |
Member |
26.02.2018 |
09.05.2024 |
|
Ch |
|
Jacek Michalski |
Secretary |
11.09.2018 |
09.05.2024 |
|
M |
Ch – Committee Chairman, M – Committee Member
*/ as defined in the Act on Statutory Auditors, Auditing Firms and Public Oversight of 11 May 2017.
**/ On 14 June 2021, Mr Brunon Bartkiewicz resigned from his position as Chairman of the Supervisory Board, remaining a Member of the Supervisory Board.
The composition of the Supervisory Board did not change in 2024. On 9 May 2024, the Ordinary General Meeting of ING Bank Hipoteczny S.A. appointed the existing members of the Supervisory Board for a new term.
In the reporting period, the Supervisory Board had 6 onsite meetings and the Audit and Risk Committee had 5 such meetings. The meetings of the Bank bodies are held by means of distance communication.
As per Article 395.2.3 of the Commercial Companies and Partnerships Code, once a year, the general meeting acknowledge fulfilment of duties by each Supervisory Board member. Acknowledgement is the assessment of the Supervisory Board members, regardless of the review of the Supervisory Board report on operations made by the general meeting.
On 9 April 2024, the Ordinary General Meeting of ING Bank Hipoteczny S.A. was held concerning the period from 1 January 2023 to 31 December 2023, at which the Annual General Meeting of ING Bank Hipoteczny S.A. passed resolutions on:
o Consideration and approval of the financial statements of ING Bank Hipoteczny S.A. for 2023;
o Review and approval of the Management Board Report on Operations of ING Bank Hipoteczny S.A. for 2023 including the Management Board Report on observance of the Principles of corporate governance;
o Acceptance of the report of the Supervisory Board of ING Bank Hipoteczny S.A. for 2023, assessment of the functioning of the Remuneration Policy of ING Bank Hipoteczny S.A. in 2023, and assessment of the adequacy of the internal regulations concerning the functioning of the Supervisory Board of ING Bank Hipoteczny S.A. and its effectiveness;
o Acknowledgement of the fulfilment of duties by the members of the Supervisory Board of ING Bank Hipoteczny S.A. in 2023;
o Acknowledgement of the fulfilment of duties by the members of the Management Board of ING Bank Hipoteczny S.A. in 2023;
o Method of profit distribution for 2023;
o 2023 dividend payout;
o election of Trigon Dom Maklerski S.A., based in Kraków, as the entity maintaining the shareholders register of ING Bank Hipoteczny S.A.,
o assessment whether the existing members of the Supervisory Board meet the requirements referred to in Article 22aa of the Banking Act (suitability assessment);
o determination of the number of the Supervisory Board Members;
o appointment of the Supervisory Board Members for the new term of office, together with an assessment of their suitability;
o amendments to the ING Bank Hipoteczny S.A. Supervisory Board and Management Board Members Remuneration Policy;
o amendments to the ING Bank Hipoteczny S.A. Supervisory Board Members Appointing, Onboarding and Recalling Policy;
o Acceptance of the information regarding the adopted amendment to the Bylaw of the Supervisory Board of ING Bank Hipoteczny S.A.;
o Acceptance of the amendment of the Statement on the application of the “Principles of Corporate Governance for Supervised Institutions” at ING Bank Hipoteczny S.A.
Remuneration of Supervisory Board Members
In 2024, total remuneration (defined as for the Management Board Members) due and paid out by the Bank to the Supervisory Board Members reached PLN 136,400.
|
Supervisory Board |
|||||
|
2024 |
|||||
|
Emoluments due and paid out to ING Bank Hipoteczny S.A. Supervisory Board members |
|||||
|
|
|
remuneration |
Awards |
other benefits |
Total |
|
TOTAL |
|
136,368.00 |
0.00 |
0.00 |
136,368.00 |
|
Supervisory Board |
|||||
|
2023 |
|||||
|
Emoluments due and paid out to ING Bank Hipoteczny S.A. Supervisory Board members |
|||||
|
|
|
remuneration |
Awards |
other benefits |
Total |
|
TOTAL |
|
132,000.00 |
0.00 |
0.00 |
132,000.00 |
|
|
|||||
Headcount
As at 31 December 2024, ING Bank Hipoteczny S.A. had 32 employees (31.75 FTEs). This signifies headcount decrease by 4 persons (4.125 FTEs) from 31 December 2023.
Remuneration policy
The ING Bank Hipoteczny S.A. Remuneration Policy takes into account the ING Bank Śląski S.A. Group Remuneration Policy and defines the key assumptions for the remuneration policy used to attract and retain employees by ensuring a market competitive remuneration and defines the component parts of the remuneration.
The Policy includes stipulations concerning:
o gender neutrality - which means that it does not create conditions for any gender to be favoured in an unjustified manner with regard to employment, career development, promotions, as well as awarding and paying remuneration.
o the relation of the remuneration of the members of the Management Board to the remuneration of the employees - the average annual gross total remuneration of individual Management Board Members shall not exceed 40 times the average annual gross total remuneration of other employees. The ratio shall be reviewed annually as part of the review of the remuneration policy,
o monitoring of the gender pay ratio - as part of its annual remuneration review, the Bank monitors the gender pay ratio and takes appropriate action to address any gender imbalance in this respect.
The Bank identifies social and environmental risks diagnosed as part of its sustainability strategy.
The Remuneration Policy is consistent with the introduction of ESG risks into the Bank's operations, understood as environmental, social or governance events and conditions that could have a material negative financial impact on the Bank or its customers. In particular, the Remuneration Policy:
1) ensures transparent remuneration principles and their link to the Bank's risk management strategy and corporate social responsibility, as reflected in the objectives set for employees for the year;
2) creates conditions so that the remuneration of the Bank's executive staff, in particular Identified Staff, is linked to the material ESG risks identified in the Bank's risk management strategy in all key management processes, including risk management, strategic planning, innovation, capital investment and employee management,
3) implies differentiating staff remuneration on the basis of quantitative and qualitative criteria, taking into account the actual contribution of the work to maintaining customer satisfaction, not encouraging excessive risks, including ESG risks, ensuring that the activities carried out comply with regulatory requirements and internal regulations.
At the same time, the Policy does not promote actions that are against sustainable growth.
The remuneration policy is designed to ensure that remuneration-related conflicts of interest are identified and adequately limited. Adequate risk mitigation measures, that is, a layered approval process, clear and transparent performance appraisal principles which are communicated to all employees, are part of the variable remuneration process.
ING Bank Hipoteczny S.A. does not provide for any form of remuneration that might encourage employees to favour their own interests or those of the Bank while acting to the detriment of clients.
The Bank communicates the Remuneration Policy to the competent authorities and to the public in accordance with generally applicable legislation.
The principles of remunerating persons acting on behalf of the Bank do not constitute an incentive to take excessive risk of misselling.
The primary internal regulation governing the remuneration policy is the Employee Remuneration Bylaw of ING Bank Hipoteczny S.A. The Bylaw is revised on an ongoing basis, in response to the changing conditions and regulations of the ING Bank Śląski S.A. Group. Amendments to the Bylaw are introduced by a resolution of the Bank Management Board.
As per the bylaw, the total remuneration of Bank employees comprises of the fixed and variable remuneration.
Fixed remuneration covers:
a. base salary;
b. benefits awarded under the universally applicable laws and internal remunerations of the Bank, and in particular additional remuneration for overtime work, cash equivalent for holidays, reimbursement of the costs of the employee’s private car use for business purposes;
a) Health - the employer cares about the health of its employees, in particular by providing access to medical care, including the family and dental packages, and by offering access to programmes promoting preventive health checks, cancer prevention and seasonal health promotion campaigns;
b) Energy - the employer offers a range of dedicated initiatives to support mental health and provides employees with a mental health platform;
c) Activity - the employer keeps employees active and provides a dedicated platform to promote a healthy lifestyle and organises sports challenges and tournaments;
d) Finance - the employer cares about the financial education of employees, secures the financial future of employees and offers additional benefits including:
o employee pension programme - organised on the basis of the Employee Pension Programmes Act, through which the employer enables employees to voluntarily accumulate additional funds for retirement,
o life insurance - the Bank provides a sponsored package of insurance which covers: death of the employee, death of the employee due to an accident and serious illness,
o benefits granted under the Regulations of the Cafeteria Plan General Terms and Conditions;
o remote work / office allowance in accordance with the Employee Remuneration Bylaw of ING Bank Hipoteczny S.A. and Regulations in force in ING Bank Śląski S.A. Group companies;
o company car - allocated on the basis of position in the organisational structure, in accordance with ING Bank Hipoteczny S.A.'s Company Car Policy.
d. fixed severance payments, that is:
o severance pay for the employees dismissed for other than employee-related reasons;
o cash payment due to employee becoming a pensioner or retiree;
o death gratuity.
Variable remuneration covers:
o annual bonus on the terms laid down in the ING Bank Hipoteczny S.A. Employee Evaluation Bylaw
o or the bonus set on the terms laid down in the ING Bank Hipoteczny S.A. Identified Staff Evaluation Bylaw.
The variable remuneration is in proper relation to fixed remuneration. The level of fixed remuneration in relation to variable remuneration should constitute a sufficiently large proportion to encourage the long-term and stable development of the Bank. The ratio of fixed to variable remuneration is set at 1 to a maximum of 1.
Base salary
The primary assumption of the base salary system is to ensure consistent and fair remuneration at ING. This can be done through a regular analysis of many aspects, financial and economic ones included. We ensure that the remuneration offered is in line with the market through its revaluation made using detailed market information. By ensuring fair and competitive remuneration, the remuneration policy seeks to win over and keep the employees contributing to the development of our company.
The Bank uses pay grades resulting from a job evaluation process carried out on the basis of an independent objective point-based job valuation method. Each position from the ING Group Global Tariff is assigned to: job family group, job family, job profile and global career path level. The Bank verifies the adequacy of base salaries through an annual comparison with regular benchmarks performed by an external entity.
Variable remuneration
The main element of variable remuneration is the bonus. It is an extra remuneration which an employee can obtain by performing his or her STEP UP tasks stemming from the business strategy and ING values.
Tasks are set and evaluated in line with:
- the ING Bank Hipoteczny S.A. Employee Evaluation Bylaw, and
- the ING Bank Hipoteczny S.A. Identified Staff Evaluation Bylaw.
The primary goal of the Step Up evaluation is to ensure that employees have adequate competences. This is achieved by providing employees with motivating feedback, setting adequate goals for them, checking their performance in a reliable manner and building their engagement to deliver business goals and keep the competitive position of ING Bank Hipoteczny S.A.
For persons having a material impact on risk profile of ING Bank Hipoteczny S.A., the Bank regulates the process of awarding variable remuneration in the ING Bank Hipoteczny S.A. Identified Staff Evaluation Bylaw. In case of Management Board members the bonus rules are provided for in the Remuneration Bylaw for Members of the ING Bank Hipoteczny S.A. Management Board.
In accordance with the ING Bank Hipoteczny S.A. Capital Management Policy, the Bank tests capital to ensure that the total remuneration pool of all employees does not limit its capacity to maintain adequate capital base. Should a limitation occur, a decision can be taken to freeze the variable remuneration pool.
For the Management Board Members and the Chief Accountant, the variable remuneration rules for Identified Staff apply in full, namely
o cash payment (not more than 50%),
o financial instruments (minimum 50%).
The above division applies to both the remuneration paid out directly after the end of the evaluation period and the deferred one.
The deferral period is five years from the variable remuneration determination by the Management Board or Supervisory Board.
For other Identified Staff, a limited variable remuneration policy applies, namely:
o the variable remuneration is payable entirely in cash.
o the deferral rule does not apply to variable remuneration.
Besides the bonus award system, the Bank has an employee rewarding system, formed of a reward fund. The fund is used to reward individual employees on a discretionary basis for their outstanding performance or accomplishments translating into important deliverables for the Bank.
Principles of remuneration of Bank Management Board Members
On 6 December 2024, the Bank Supervisory Board – by way of Resolution No. 62/11/2024 – approved amendments to the Remuneration Bylaw for Members of the ING Bank Hipoteczny S.A. Management Board. The Bylaw contains the primary terms and conditions of remuneration for members of the ING Bank Hipoteczny S.A. Management Board. The Bylaw remains in concordance with the values and long-term interests of ING Bank Śląski S.A. Group, whereby it fosters effective risk management by the Group. It is also in line with the Bank's strategy, values and risk appetite and therefore also supports the Bank's short-, medium- and long-term interests, The By-law promotes and supports an effective risk management process to maintain and protect the Bank's secure capital base.
Its stipulations do not encourage taking excessive risk beyond the risk appetite accepted by the Bank Supervisory Board.
The By-law is based on performance management, which is a key business process that links individual objectives with long-term business strategy and ensures stable growth,
The principles of remuneration of Bank Management Board Members are set using the market data. They factor in the knowledge and skills as well as the accountability of and the risk taken by a given function.
The remuneration package of the Management Board Member covers:
a. fixed remuneration, composed of the base salary and the following additional benefits: Life insurance, Employee Pension Programme (hereinafter referred to as EPP), medical care, company car, allowance for remote work/office work granted in accordance with the Labour Bylaw of ING Bank Hipoteczny S.A., benefits related to the termination of the contract of employment, other benefits granted on the basis of a decision of the Supervisory Board.
b. variable remuneration which covers the annual bonus in line with the ING Bank Hipoteczny S.A. Variable Remuneration Policy for Identified Staff including Management Board Members.
The elements of remuneration and other benefits for Bank Management Board Members in the reporting period were described in the financial statements of ING Bank Hipoteczny S.A. for the period from 1 January 2024 to 31 December 2024.
Variable elements of remuneration of Management Board members and Identified Staff
As required by:
a. The Banking Law Act of 29 August 1997 (Journal of Laws 2023 item 2488),
b. Regulation of the Minister of Finance, Funds and Regional Policy of 8 June 2021 on the risk management system and internal control system and remuneration policy in banks, hereinafter referred to as the Regulation of Finance, Funds and Regional Policy,
c. The guidelines of the European Banking Authority of 2 July 2021 on sound remuneration policies,
d. Commission Delegated Regulation (EU) 2021/923 of 25 March 2021 supplementing Directive 2013/36/EU of the European Parliament and of the Council with regard to regulatory technical standards setting out the criteria to define managerial responsibility, control functions, material business units and a significant impact on a material business unit’s risk profile, and setting out criteria for identifying staff members or categories of staff whose professional activities have an impact on the institution’s risk profile that is comparably as material as that of staff members or categories of staff referred to in Article 92(3) of that Directive.
The Bank applies the following variable regulation determination-oriented regulations:
a. Variable Remuneration Policy for Identified Staff,
b. List of Identified Staff,
c. ING Bank Hipoteczny S.A. Identified Staff Evaluation Bylaw.
As at 31 December 2024, the Variable Remuneration Policy for Identified Staff applied to 6 Supervisory Board Members, 3 Management Board Members and 7 jobs included in the List of Identified Staff.
The List of Identified Staff – the list of Bank employees identified as persons having a material impact on the risk profile of ING Bank Hipoteczny S.A. based on the quantitative and qualitative criteria listed in Enclosure No. 1 with the Variable Remuneration Policy for Identified Staff, as per the effective provisions of the Regulation of the Minister for Development and Finance and RTS Regulation.
The List of Identified Staff is updated on an ongoing basis by the President of the Management Board of ING Bank Hipoteczny S.A.
Based on the criteria, the following persons fall into the Identified Staff category:
o Supervisory Board and Management Board members,
o senior management staff,
o staff members accountable to the management body for the control function activities,
o employees who have managerial responsibilities with respect to:
a. legal issues;
b. security of accounting rules and procedures;
c. finance, including taxation and budgeting; carrying out economic analysis;
d. prevention of money laundering and terrorist financing;
e. human resources;
f. development or implementation of the remuneration policy;
g. information technology;
h. information security;
i. the management of arrangements for the outsourcing of critical or important functions as referred to in Article 30(1) of Commission Delegated Regulation (EU) 2017/565.
o the staff members who have managerial responsibilities for any of the risk categories set out in Articles 79 to 87 of Directive 2013/36/EU or members with voting rights in the management committee of any of the risk categories set out in those Articles,
o the remuneration of the employee is at least EUR 500,000 and at least the average remuneration granted to members of the management body and senior management of the institution,
o the staff member who is within the 0.3 % of the number of staff, rounded up to the next integer, who have been awarded the highest total remuneration in the preceding financial year.
Moreover, the following criteria are taken into account to determine whether a given job/ person has a material impact on the Bank’s risk profile and whether s/he should be included in the List of Identified Staff:
a. a person in a given job holds the powers, whereby s/he can take decisions or make binding opinions of material impact on the Bank’s risk profile,
b. a person in a given job is responsible for control functions at the Bank, including the responsibility for or participation in development of risk management systems and creation or implementation of significant risk mitigation procedures at the Bank.
Another element of the analysis of impact on the Bank’s risk profile is specification of key Bank committees whose decisions impact the Bank’s risk profile and inclusion in the List of Identified Staff their members with voting rights holding the right of veto or the casting vote.
The Supervisory Board approve the Variable Remuneration Policy and oversee compliance therewith.
The variable remuneration is in proper relation to fixed remuneration. The ratio of fixed remuneration to variable remuneration is 1 to max. 1.
Variable remuneration is set based on the performance assessment. The variable remuneration consists of:
o cash payment (not more than 50%),
o financial instruments (minimum 50%).
The above division applies to both the remuneration paid out directly after the end of the evaluation period and the deferred one.
In 2024, the Bank applied the principle of deferral of variable remuneration, subject to the amount of variable remuneration that was not subject to deferral, i.e. up to PLN 40,000 or 10% of the annual total remuneration of an employee who is an Identified Staff.
The variable remuneration awarded in financial instruments is subject to a retention period. The period is one year from the award date.
The financial instruments awarded as variable remuneration are an instrument within the meaning of the Act on Trading in Financial Instruments. Their underlying instrument is the amount of net assets of ING Bank Hipoteczny S.A.
Deferred variable remuneration can be decreased or not paid out based on:
o verification of performance assessment or
o ex post risk adjustment and capital test.
By verifying performance assessment, one may determine whether there occurred some conditions necessitating performance re- assessment, considering the results of given Identified Staff – and, accordingly, the conditions providing for variable remuneration decrease or freeze. This applies in particular to the situation where employee behaviour results in a considerable adjustment of annual financial statements of the Bank or reputation loss by the Bank.
Based on risk adjustment ex post, the Bank has the right to reduce or not pay out the variable remuneration under the following circumstances:
a. the occurrence of events that result in the Bank's breach, or threaten the Bank's breach, of the standards set out in Article 142 Section 1 of the Banking Law so that it is necessary to implement the Recovery Plan,
b. payout of variable remuneration on the basis of untrue data,
c. failure to satisfy by Identified Staff of applicable competition- and reputation-related standards,
d. occurrence of a conflict of interest due to payout of variable remuneration in financial instruments, because of non-compliance with the confidential data usage rules and other actions which may impact the amount of assets of ING Bank Hipoteczny S.A. in the short term.
An employee does not acquire the right to an annual bonus (including the unpaid deferred portion) in the event of employment contract termination:
a. under Article 52 of the Labour Code,
b. upon the employer’s initiative due to the termination reasons attributable to an employee.
Identified Staff are required not to apply their own hedging strategies or insurance for remuneration or responsibility, save for the mandatory insurance as required under special regulations, which would neutralise the measures taken in respect of them as part of Policy implementation. Identified Staff are required to submit to the employer – by 31 January of each function holding year – their statement on non-application of any hedging strategies or insurance.
The Bank does not award individual pension benefits understood as a portion of the variable remuneration package.
The Bank does not apply any variable remuneration award or payout solutions which would entail non-compliance with the Policy.
Once a year, by 31 January, ING Bank Hipoteczny S.A submits to the Polish Financial Supervision Authority the data on the number of Bank employees wherefor the total remuneration of each of them individually in the previous year went over EUR 1 million (one million) at the average rate of the National Bank of Poland from the last business day of the year for which data are submitted, along with the information on the job of the employee and the amount of the main remuneration elements, awarded bonuses and long-term rewards plus withheld pension contributions. In the settlement period, no employee of ING Bank Hipoteczny S.A. earned the remuneration of at least EUR 1 million.
ING Bank Hipoteczny S.A renders into the public domain the information on the Policy as far as required by the Polish Financial Supervision Authority for the disclosure of qualitative and quantitative information about the capital adequacy and other information to be disclosed.
The primary condition of annual bonus payout to Management Board members is delivery by the Bank of at least 80% of the budget, incrementally during the year, in the year for which variable remuneration is computed.
In accordance with the ING Bank Hipoteczny S.A. Capital Management Policy, ING Bank Hipoteczny S.A tests capital to ensure that the total variable remuneration pool of all employees does not limit the Group’s capacity to maintain adequate capital base. Should a limitation occur, a decision can be taken to freeze the variable remuneration pool.
The amount of variable remuneration elements can be decreased and their payout can be frozen when the Bank sustains a balance sheet loss.
In the event of employment contract termination by the Bank, the Management Board member is eligible for a severance pay in the amount of a three-month base salary for the last three months preceding employment relationship termination.
Management Board members and Identified Staff are covered with non-competition agreements which provide for damages payment for refraining from employment at a competition after employment with the Bank.
Agreements between the Bank and managers
In accordance with Article 2.1.30a. of the Minister of Finance Regulation of 29 February 2018 on current and interim information published by issuers of securities and the conditions for recognizing as equivalent information required by the law of a non-member state, Management Board members are Bank managers.
Each Bank Management Board member made an employment contract with the Bank. The contract reads inter alia the terms and conditions of remuneration and the competition ban.
https://www.knf.gov.pl/knf/en/komponenty/img/principles_of_corporate_governance_39736.pdf
with the following decisions of Bank bodies:
o Management Board Resolution No. 29/10/19 of 11 March 2019 – regarding the content of the report on observance by ING Bank Hipoteczny S.A. of the Principles of corporate governance for supervised institutions, adopted by the Polish Financial Supervision Authority, including the principles concerning the competence and responsibilities of the Management Board, i.e. managing the Bank affairs and representing the Bank, in accordance with the universally effective laws and the Bank Charter,
o Supervisory Board Resolution No. 20/3/2019 of 22 March 2019 – regarding the content of the report on observance by ING Bank Hipoteczny S.A. of the Principles of corporate governance for supervised institutions, adopted by the Polish Financial Supervision Authority, including the principles concerning the competence and responsibilities of the Supervisory Board, i.e. supervising management of the Bank affairs in accordance with the universally effective laws and the Bank Charter,
o General Meeting Resolution No. 18 of 3 April 2019 – regarding adoption of the report on observance by ING Bank Hipoteczny S.A. of the Principles of corporate governance for supervised institutions, adopted by the Polish Financial Supervision Authority, including the principles concerning the competence of the General Meeting,
o Management Board Resolution No. 34/15/19 of 15 April 2019 – regarding implementation of the Principles of corporate governance for supervised institutions, adopted by the Polish Financial Supervision Authority.
o The Principles introduced under Article 8.4 and Article 9.6 do not apply since 100% of ING Bank Hipoteczny S.A.’s shares were taken up by one Shareholder – ING Bank Śląski S.A. The number of shareholders does not justify the application of the said principles.
o The principles introduced under Article 32.1 through Article 34 and Articles 36.1 and 36.2 do not apply since the business model adopted by ING Bank Hipoteczny S.A. does not provide for client acquisition (including via advertising), but only for the purchase of existing mortgage-backed debt from ING Bank Śląski S.A.
o The principles introduced under Article 49.4 and Article 52.2 do not apply since ING Bank Hipoteczny S.A. has an internal audit and compliance cells.
o The principles listed in Chapter 9 of the “Principles” – Execution of Rights Resulting from Assets Acquired at Client's Risk – the principles are not applied by ING Bank Hipoteczny S.A., because the Bank cannot pursue the business discussed in that Chapter.
ING Bank Hipoteczny S.A. limited application of the following Principles:
o The principles introduced under Article 9.1 – the principles are used to a limited degree only, because the Bank has one shareholder whose representatives are members of the supervisory body of the Bank.
o The principles introduced under Article 29.1 through 29.2 – the principles are used to a limited degree only, as they apply to independent members of the supervision body only.
o The principles introduced under Articles 35, 37 and 38.1 through 38.2 – the principles are used to a limited degree only, in respect of post-sale service of mortgage-backed debt, due to the business model adopted by ING Bank Hipoteczny S.A.
In 2Q2024, the Supervisory Board assessed the application of the Principles by the Bank – as required under Article 27 of the Principles.
The assessment result is available on the Bank’s website.
Upon the implementation of the Principles of 15 April 2019 by the Bank, a gap analysis was performed to identify any areas requiring adaptive measures. Furthermore, the application of the Principles by the Bank is independently reviewed by the Compliance function. The review conducted in March 2024 (for 2023) found out that the actions identified in the 2023 review had been implemented. In 2023, no cases of non-compliance with the Principles were identified. As a result of the assessment of the application of the individual Principles, the qualification of the application of the Principles was changed:
o § 28.3. The supervisory authority prepares and presents to the governing body once a year an evaluation report on the functioning of the remuneration policy at the regulated institution.
o § 28.4. The governing body shall assess whether the established remuneration policy is conducive to the development and safe operation of the regulated institution.
o § 36.1. A regulated institution should endeavour to ensure that the financial products or services offered are appropriate to the needs of the customers to whom they are directed.
o § 36.2. At the stage of presenting the nature and design of a recommended financial product or service, regulated institutions and entities cooperating with them should take into account the needs referred to in paragraph 1, in particular as regards the individual situation of the customer, including knowledge and experience in the financial market, and where justified, the desired duration of the investment and the level of risk acceptance.
The assessment concluded that, according to the current interpretation, they are applicable to the Bank's activities. For all principles indicated, the Bank fulfils the requirements indicated in the description and there are no gaps.
ING Bank Hipoteczny S.A. Employee Business Ethics Standards
The Bank implemented the ING Bank Hipoteczny S.A. Employee Business Ethics Standards that provide an overview of key principles of conduct for Bank employees. They promote corporate culture which is based on knowledge and observance of the law, internal regulations and market standards. The rules stipulated therein apply to any and all employee activities related to performance of their professional duties. Some of the said rules may apply to the private activities of employees which may negatively affect Bank’s reputation or give rise to a conflict of interest. In connection with the implementation of Recommendation Z of the Polish Financial Supervision Authority in the Bank, the Regulations were updated by including the principles of risk culture, as well as the annual assessment of employees' compliance with the business ethics standards. The assessment of compliance with the Principles of Ethics for 2024 was conducted in February 2025 with a very high score (to be presented to the Management Board and the Supervisory Board for approval). The previous assessment of the Principles of Ethics was conducted in April 2024 also achieving a very high score. The Regulations were also subject to review and update in September 2024. The next review of the Regulations is scheduled for 2Q2025.
Orange Code
The principles defined in the so-called Orange Code are the key element shaping the corporate culture of the Bank which is based on the values promoted by the ING Group. Orange Code is a set of norms applicable to all Bank employees. Their observance is factored in during the annual employee appraisal process. The Orange Code is composed of two parts:
ING Values being the promise made to our external stakeholders:
o We are honest,
o We are prudent,
o We are responsible.
ING Behaviours which define employees’ conduct. These are the commitments the employees make towards one another and standards enabling assessment of their actions:
o You take it on and make it happen,
o You help others to be successful,
o You are always a step ahead.
ING Bank Hipoteczny S.A. Disclosure Policy
Being a public trust organisation, the Bank pursues disclosure policy which consists in keeping an open and transparent line of communication with its shareholders, investors, clients, the media and all stakeholders. In implementing its disclosure policy, the Bank is guided by the principles of corporate governance, in compliance with applicable laws, including the requirements of the Banking Law, the Commercial Companies and Partnerships Code, the Act on Public Offering and the Act on Trading in Financial Instruments as well as their implementing acts, the MAR Regulation, and the Act on the National Cybersecurity System. Most notably, the Bank adheres to the principles of bank secrecy and the principles of preventing the use and disclosure of confidential information, as well as complying with legal requirements concerning the confidentiality and security of information, the issuer's disclosure obligations, in particular:
o the relevant Luxembourg law applicable to the issuer,
o the regulations of the companies operating the regulated market applicable to the Bank.
In implementing its disclosure policy, ING Bank Hipoteczny S.A. ensures that shareholders, investors, rating agencies, the media and all stakeholders have adequate access to the Bank's information. The full text of the Disclosure Policy is available on the Bank website.
Risk control and management system in the financial reporting process
The process of preparing financial statements is among the key elements ensuring compliance with the norms and standards. The primary element enabling process performance is the Accounting Policy adopted by the Bank Management Board. The Policy provides for the main principles of recording business events at the Bank. Events recorded are reflected in the Bank ledgers which are later used to draw up the financial statements.
The Bank identified the following key risks in the financial statements development process:
o risk of regulatory fines, litigation losses, reputational damage due to incomplete, inaccurate and/or delayed reporting caused by non-compliance with regulatory reporting requirements and IFRS accounting principles to present a fair picture, including appropriate disclosure;
o Risk of financial loss, regulatory fines, reputational damage as a result of false reporting due to failure to implement controls to prevent deliberate misstatement in regulatory and financial reporting;
o the risk of financial loss, regulatory sanctions and/or reputation loss due to: (1) non-compliance of internal fiscal laws and regulations, including the regulations on transfer prices, with the universally effective law; (2) non-observance of principles of the ING Group guidelines on tax issues and (3) material errors in the financial statements and/or tax returns, caused by: being unaware of changes to fiscal laws and regulations or incorrect interpretation of fiscal laws and regulations or failure to report transactions in dedicated financial systems of ING BH S.A. (incorrect application of transfer pricing regulations, for example).
Risk mitigating controls were set for all the risks identified.
The controls mitigating the processing risk include but are not limited to verification that the data generated by applications are correct and four-eye control of tax reports/returns sent by the Bank. Financial statements are accepted by the Bank Management Board, endorsed by the Audit and Risk Committee and assessed by the Bank Supervisory Board.
To limit the IT risk, the Bank implemented data access management controls. They are the mechanisms limiting unauthorised access or application role matrixes which are based on the principle of least privilege and absence of toxic combinations, and the tool to grant access and role in which the requirement of request acceptance by the superior was embedded, for example.
The compliance risk mitigating controls encompass inter alia: annual participation of the accounting and tax area employees in training and external meetings concerning fiscal, accounting and reporting regulations as well as verification of the annual and semi-annual financial statements by an independent external auditor.
The Chief Accountant of the Bank – is responsible for ensuring the application of financial reporting controls. The Internal Auditor verifies from time to time and independently assesses inter alia the adequacy and effectiveness of controls in the process of financial statements development as well as assesses risk management in that process (as part of the approved audit plans).
Shareholders directly or indirectly holding substantial stakes and the number of resultant shares and votes.
The share capital of ING Bank Hipoteczny S.A. amounts to PLN 380,000,000 and is divided into 380,000 ordinary registered shares of nominal value of PLN 1,000.00 each. The share capital has been fully covered with pecuniary contributions. Each ordinary share entitles its holder to dividend and one vote during the general meeting.
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Structure of the share capital |
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|
|
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|
Series |
Type of share |
Number of shares |
Nominal value of one share (in PLN) |
Series nominal value (in PLN) |
Date on which a resolution was passed by AGM |
Issue date |
Date of registration in the National Court Register (KRS) |
|
A |
ordinary |
120,000 |
1,000.00 |
120,000,000 |
not applicable* |
26.02.2018 |
20.03.2018 |
|
B |
ordinary |
90,000 |
1,000.00 |
90,000,000 |
03.01.2019 |
03.01.2019 |
06.02.2019 |
|
C |
ordinary |
170,000 |
1,000.00 |
170,000,000 |
11.12.2019 |
11.12.2019 |
09.01.2020 |
|
* Issue of shares of series A stems from the Deed of Incorporation of 26 February 2018. |
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There are no restrictions on the transferability of the Bank's securities mentioned above. The Bank's shares do not confer special control rights on their holder, nor do they impose restrictions on the exercise of voting rights.
Selection of the auditing firm
Selection of an audit firm to audit the separate and consolidated financial statements for 2023-2025 and to review the Bank's financial statements for 2024-2025.
The Bank has the Policy for selection of the auditing firm, assessment of its independence and provision of other permitted services to ING Bank Hipoteczny S.A. The Policy covers the policy for the selection of the auditing firm and the policy for provision of additional non-audit services, including the services provisionally exempted from the ban on their provision by the auditing firm, to the Bank by the auditing firm or its related entity, or a member of its network.
The independent chartered auditor of financial statements is selected by the Bank Supervisory Board on the basis of the recommendation provided by the Audit and Risk Committee.
The main assumptions of the developed Policy on selection of the auditing firm to audit the financial statements, assessment of its independence and provision of other permitted services at ING Bank Hipoteczny S.A.:
The Audit and Risk Committee take a decision as regards granting consent to hire a statutory auditor (auditing firm carrying out the audit, an entity related thereto and by a member of the auditing firm network) to provide the permitted services, other than the audit, by them,
the permitted services may be provided only within the scope other than the tax policy of the bank, after the Audit and Risk Committee assess the threats to and safeguards for independence of the statutory auditor and auditing firm,
independence of the statutory auditor or of the auditing firm is verified and monitored throughout the process of selection of the auditing firm to carry out the audit of the financial statements,
Making the final decision on selection of the auditing firm, or preparing the recommendations, the Supervisory Board or the Audit and Risk Committee, respectively, bear in mind the following transparent and non-discriminating selection criteria that are applied by the bank to appraise the tenders submitted by the auditing firms:
assessment of independence of the auditing firm to carry out the audit already at the selection stage,
potential to provide all the services specified by the bank (audit of the separate financial statements, reviews, etc.),
track record of the auditing firm as regards audit of financial statements of the entities of the business profile similar to the bank’s,
track record of the auditing firm as regards audit of financial statements of the public interest entities from the banking sector,
professional qualifications, experience adequate for performance of auditing activities, and the number of persons directly involved in the audit carried out at the bank,
audit pricing conditions offered by the auditing firm,
commitment to ensuring the quality of the audit as required by the relevant professional standards.
On 11 January 2024, the Bank Supervisory Board selected Mazars Audyt Spółka z ograniczoną odpowiedzialnością, based in Warsaw, as the entity authorised to audit the Bank's financial statements for the years 2023 -2025 and to review the Bank's financial statements for the years 2024-2025.
The contract for the audit of the financial statements for 2023-2025 and the review of the Bank's financial statements for 2024-2025, between the bank and Mazars Audyt Spółka z ograniczoną odpowiedzialnością (currently Forvis Mazars Audyt Spółka z ograniczoną odpowiedzialnością), was signed on 15 January 2024.
According to the statement provided, the auditing firm Forvis Mazars Audyt Spółka z ograniczoną odpowiedzialnością and members of the auditing team met the prerequisites to issue an impartial and independent audit report from the audit of the annual financial statements in line with the applicable regulations as well as professional and business ethics standards.
The auditor of the consolidated financial statements for the years 2023-2025 of the parent company ING Bank Śląski S.A. is Forvis Mazars Audyt Spółka z ograniczoną odpowiedzialnością, while that of the ultimate parent company (ING Groep N.V.) is KPMG Accountants N.V.
The Bank complies with the laws on the rotation of the auditing firm and the lead statutory auditor as well as the mandatory grace periods. Under current law, the maximum continuous period of employment of the same auditing firm may not exceed 10 years.
Remuneration of the auditing firm (gross)
|
|
|
data in PLN thousand |
|
|
period |
period |
|
|
from 01.01.2024 |
from 01.01.2023 |
|
|
to 31.12.2024 |
to 31.12.2023 |
|
Audit of annual financial statements |
216.51) |
194.31) |
|
Review of interim financial statements |
87.71) |
49.22) |
|
TOTAL |
304.2 |
243.5 |
1)Remuneration to Forvis Mazars Audyt Spółka z ograniczoną odpowiedzialnością (remuneration does not include: supervision fee (in the amount resulting from the Act on Statutory Auditors, Auditing Firms and Public Supervision), and reimbursement of additional costs related to the performance of services - a limit of 3% of the remuneration for the audit of the annual financial statements)
2) Remuneration to BDO Spółka z ograniczoną odpowiedzialnością Sp. komandytowa
In 2024, the auditing firm Forvis Mazars Audyt Spółka z ograniczoną odpowiedzialnością, which audits the Bank's financial statements, did not provide non-audit services.
Bank Charter Amendment Procedure
The current Charter of ING Bank Hipoteczny S.A. can be found on the Bank’s website.
An amendment to the Bank Charter requires resolution of the General Meeting as well as registration in the entrepreneurs register of the National Court Register (KRS). Further, an amendment to the Charter has to be always approved by the Polish Financial Supervision Authority.
In 2024, no amendments were made to the Bank Charter.
Factors to impact the financial statements in the period of at least one quarter
The following factors will affect the financial statements within at least one quarter:
o Transfers of credit debt from the strategic partner – ING Bank Śląski S.A.,
o Development of the local and foreign markets of covered bonds in terms of demand and returns expected by investors,
o Development of the residential market in Poland,
o Development of the mortgage lending market in Poland,
o Regulatory landscape development,
o Development of the macroeconomic environment.
Changes to ING Bank Hipoteczny S.A. shareholding and shareholding rights on the part of managing and supervising persons
In the period between 1 January 2024 and 31 December 2024, there occurred no changes to ING Bank Hipoteczny S.A. shareholding and shareholding rights on the part of managing and supervising persons.
Significant agreements with the Central Bank or regulators
In the reporting period, the Bank did not enter into agreements with the Central Bank or regulators.
Granted financial commitments and guarantees
In the reporting period, the Bank did not grant any guarantees and had no financial liabilities under the loans awarded but not disbursed.
Financial liabilities granted to related entities
In the reporting period, the Bank did not grant any off-balance sheet liabilities to related entities.
Loans, credit facilities, guarantees or sureties not related to the Bank’s business.
In the reporting period, the Bank did not make use of any loans, credit facilities, guarantees or sureties not related to the Bank’s business.
Underwriting agreements and guarantees granted to subsidiaries
The Bank neither entered into underwriting agreements nor granted guarantees to its subsidiary.
Proceedings pending in court, before arbitration bodies or public administration bodies
In 2024 as well as in 2023, the Bank was not involved in any proceedings pending before a court, a competent authority for arbitration proceedings or a public administration body, the value of which represents at least 10% of the Bank's equity.
There were no significant cases both brought by and against the Bank. The Bank also made no provisions for pending litigation.
As at 31 December 2024, a total of 12 court proceedings were pending against the Bank (1 proceeding as at 31 December 2023). In 11 cases, customers are challenging the basing of the mortgage loan agreement on the variable interest rate structure and the rules for determining the WIBOR reference rate. The Bank disputes the validity of the claims raised in these cases, as the use of the WIBOR index is in accordance with the law. The WIBOR reference rate is set by an entity independent of the bank - the administrator - and supervised by the Polish Financial Supervision Authority. In 1 case, the court proceedings concern the sanction of a free-of-charge loan.
As at 31 December 2024, litigation was still ongoing for all cases.
Loan and credit facility agreements made and terminated in the financial year
On 5 December 2024, the Bank signed a further annex (No. 10) to Loan Agreement 1 dated 31 January 2019 with ING Bank Śląski S.A. The amendment concerns the update of interest periods.
On 5 December 2024, the Bank signed further annexes with ING Bank Śląski S.A. to Loan Agreement 3 and to the Framework Agreement (Guarantee) both dated 14 December 2020. The amendment concerned the setting of the Availability Period to 14 December 2025 and the update of interest periods.
The Bank used the amount of PLN 3.417 billion under the limits awarded.
Conclusion by the issuer or its subsidiary of one or more transactions with related entities, if they are material and were concluded otherwise than on an arm's length basis
ING Bank Hipoteczny S.A did not enter into any material transactions with related entities other than on an arm's length basis.
Changes to the fundamental principles of Bank enterprise management
In the reporting period, there were not changes to the fundamental principles of Bank enterprise management.
Financial support agreements
ING Bank Hipoteczny S.A did not enter into any financial support agreements with other consolidated entities operating within the same holding or closely related entities.
Deposits and guarantees and sureties extended
ING Bank Hipoteczny S.A neither accepts deposits nor extends guarantees or sureties.
Significant events after the reporting period
On 13 March 2025, the Bank received a letter from the Polish Financial Supervision Authority (PFSA), in which the PFSA indicated that the Bank meets the requirements to pay dividends at a level of up to 75% of the net profit for 2024, with the maximum payment amount not exceeding the amount of the annual profit less the profit earned in 2024 already included into own funds. The Bank did not count profits during 2024 as own funds, and therefore the maximum dividend amount from 2024 profit for the Bank is 75%. At the same time, the PFSA recommended mitigating the inherent risk of the Bank by not taking, without prior consultation with the supervisory authority, other actions, in particular those outside the scope of current business and operational activities, which could lead to lowering the Bank’s own funds, including possible dividend payout from undivided profit from previous years and repurchase or buy-back of own shares.
Entry into force of legislation amending EU Regulation 575/2013 and Directive 2013/36/EU (CRR 3 and CRD 6 package)
On 1 January 2025, the regulations amending EU Regulation 575/2013 and Directive 2013/36/EU (CRR 3 and CRD 6 package ) came into force. According to the Bank's analysis, the amendments in question will have a positive impact on the capital adequacy ratios reported by the Bank.
The changes introduced as part of the CRRIII/CRDVI package that had the strongest impact on the decrease in the Bank's capital requirement were:
o a change in the LTV threshold determining when a credit exposure or part of it is recognised by the Bank as fully and completely secured on residential property (from 80% to 55%), together with a change in the risk weight for a credit exposure recognised by the Bank as fully and completely secured on residential property (from 35% to 20%); the estimated impact on RWA was approximately PLN - 330 million;
o a change in the value of the property used in determining the RW based on mortgage lending value to the Value of the property as determined by mortgage lending value expert report (or the value of the six-year average); the estimated impact on RWA was approximately - PLN 150 million;
o a change in the methodology for determining the capital requirement for operational risk. The Bank used the BIA methodology to determine the regulatory and internal capital requirement for operational risk in 2024. On the other hand, from 1 January 2025, in accordance with the CRR3 regulation, for the determination of internal capital for operational risk it uses the standardised operational risk (business indicator) methodology. In addition, taking into account the scale of its operations and the specific nature of the Bank related to the uniform product base, the catalogue of financing sources used and the simple and flat organisational structure, the Bank also applies the above methodology for determining regulatory capital for operational risk.
At the same time, it should be pointed out that, for the needs of monitoring the regulatory capital requirement, the Resolution of the Financial Stability Committee (FSC) on the recommendation for setting the countercyclical capital buffer ratio for banks (CCyB) adopted in 2024 will have an impact.
This Committee Recommendation will be implemented in two stages. The first stage is the introduced Regulation of the Minister of Finance of 18 September 2024 on the countercyclical buffer rate, according to which the level of this rate is 1% of the total amount of risk exposure of institutions that have credit exposures in the territory of the Republic of Poland, calculated in accordance with Article 92(3) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions. This ratio shall apply from the first day after 12 months from the date of publication of the regulation, i.e. from 25 September 2025. This will be followed, after 12 months, by a second stage of raising the countercyclical buffer rate to a target of 2 per cent. The countercyclical buffer is a macroprudential instrument that aims to mitigate cyclical fluctuations in the level of credit in the economy and their consequences.
The Bank reports high levels of capital adequacy ratios hence the changes in question will not materially affect the Bank, which has a stable and secure capital base well in excess of the regulatory requirements needed to cover risks.
The Management Board of ING Bank Hipoteczny S.A. represent that to their best knowledge:
o the financial statements of ING Bank Hipoteczny S.A. for the period from 1 January 2024 to 31 December 2024, taking into account the comparable data, were developed in accordance with applicable accounting principles, and give a true and fair view of the assets and the financial standing of ING Bank Hipoteczny S.A. and the financial result of the Bank,
o the Management Board Report on Operations of ING Bank Hipoteczny S.A. for the period from 1 January 2024 to 31 December 2024 included herein is the true presentation of the development, achievements and situation of ING Bank Hipoteczny S.A. (including the description of the key risks and threats).
The Management Board of ING Bank Hipoteczny S.A. represent that the auditing firm auditing the financial statements of ING Bank Hipoteczny S.A. for the period from 1 January 2024 to 31 December 2024 was selected in compliance with the law and that the entity and the statutory auditor performing the audit satisfied the terms and conditions to issue an unbiased and independent report from the audit of the financial statements, in adherence to the applicable laws and professional standards.
Signatures of all Management Board members
|
15.04.2025 |
Jacek Frejlich |
President of the Management Board |
The original Polish document is signed with a qualified electronic signature |
|
15.04.2025 |
Marek Byczek |
Vice-President of the Management Board |
The original Polish document is signed with a qualified electronic signature |
|
15.04.2025 |
Katarzyna Majchrzak |
Vice-President of the Management Board |
The original Polish document is signed with a qualified electronic signature |