Ladies and gentlemen, my name is Agnieszka Dowżycka, I'm Investor Relations Director at Erste Bank Polska. I want to welcome you all to the presentation of Erste Bank Polska earnings after the first half of 2026.

This presentation will be led by Michał Gajewski, CEO, Maciej Reluga, board member in charge of strategy and investor relations, and Bernhard Leder, board member in charge of Finance and Accounting Division as CFO. Bernhard Leder joined our board in June 2026.

Before we start, throughout this call, you can ask your question using the link available online. You can send me your questions directly to my email.

You can follow the presentation on our website.

Good morning. Thank you, Agnieszka.

Just like Agnieszka said, Bernhard is our new CFO. I have an immense pleasure of welcoming him.

Let's start the presentation. We have just completed our first full quarter operating entirely as Erste Bank Polska.

It has been a very intensive period of introducing our customers to our new brand and for ourselves, because we're positioning the new brand on the Polish market. In my opinion, and I will tell you why I think so, the both customers and the wider market welcomed this change.

I have evidence for that. Brand awareness ratios keep growing steadily.

After just eight weeks of marketing campaign, we achieved double-digit brand awareness for Erste among Polish consumers. At the moment, one in three Poles recognizes the Erste brand.

Let me remind you, in January at the outset, spontaneous market brand awareness was 1%. We have, through investment that we already communicated in the first quarter, we have delivered an impressive 31 percentage point increase in this very short period of time.

Our focus now is on continuing to build both brand awareness for the brand and consideration for Erste to fully leverage the acquisition potential. We see after the results of the second quarter the acquisition is going up.

Our ambition remains the same: we want to be the best bank for both customers and shareholders. Already today, in terms of market cap in WIG20 index, we're number one privately owned bank listed on the Warsaw Stock Exchange, we're number two among all listed banks, and number three in the WIG20 index.

This reflects that the market's appreciation of our business model and the quality of our customer service. We built our competitive advantage on solid foundations, above all on efficiency, security, stability, and excellent experience of our customers.

We further reinforced that with the strength and values of the Erste Group. We were named the Best Bank in Poland for customer experience by Euromoney, and this is very important.

It drives us forward. It drives our acquisition, but also the loyalty of our customers.

This is an earnings call, let me move to our earnings, starting with the net profit in the first half of the year, 2.2 billion. This result was affected by the CIT, which increased by 49% year-on-year.

In the second quarter alone, net profit amounted to 1 billion 173 million, up 14%. Now let's move to slide number four.

We now serve more than 6.1 million customers. Our digital customer base has grown to 4.1 million, up 5.7% year-on-year.

3.5 million customers actively use our mobile banking app. This is an increase of almost 10% year-on-year.

In the first half of the year, we acquired over 300,000 customers. I will elaborate on that further throughout the call.

At the end of June, customer deposits stood at 246 billion, up 11%. Total customer funds reached 279 billion, an increase of 13%.

Gross loans up 8% year-on-year to 177 billion. Total assets up 3% to 323 billion.

Quarter-on-quarter, that's an increase of 6%. Slide five, key financial results.

As already mentioned, 2.2 billion the net profit after the first half, in the second quarter alone 1 billion 173 million. Net interest income, 6 billion 164 million, of which 3 billion 102 million was generated in the second quarter.

Net fee income after six months was 1 billion 539 million, up 5% year-on-year. In quarter two, the net fee income was 768 million.

This is 5% better than in quarter two 2025. Now quarter-on-quarter, net fee income in quarter two was slightly lower than in quarter one, and that's because quarter one was record-breaking in this line.

I will talk about the reasons for this comparison. Now total income amounted to 8 billion 52 million, up 1% year-on-year despite a two percentage point decline in interest rates over the past 12 months.

In the second quarter, total income amounted to 4 billion 57 million, which is broadly in line with the level recorded last year. We have a strong capital position, return on equity 19%.

Of course, we are absorbing the one-off integration and rebranding expenses, but this is a very good investment and we remain among the sector leaders in terms of efficiency. LCR at the end of June was 195.5%.

Now some business data for segments starting from slide six. We're pleased to see continued growth in digital payments.

In the first half of the year, they increased by 18... 17% year-on-year.

Now in the first half of the year, the number of newly acquired retail customers increased by 17%, number of Platinum customers by 15%—this is our affluent segment—and SME customers by 11%. This is a very important segment for us where we have a very good customer proposition that is fully digital.

Now retail customers, well we have 4.9 million accounts for individual customers in PLN, that is up by more than 2% year-on-year. During the first half of the year, we opened 256,000 accounts.

By the end of June, we had originated 8.7 billion cash loans, up 35% year-on-year. In the second quarter alone, it was 4.2 billion.

You can find more comparative data on slide 26. Mortgage lending amounted to 6.7 billion in the first half of the year; in the second quarter alone, that was 4.2 billion.

Now retail investment funds totaled 32 billion złoty, very solid growth, 24% year-on-year, and we see the first effects of our new customer proposition, the new solutions we're now offering to our customers after we rebranded. The market share is now almost 10%.

In SME, we opened almost 60,000 new business accounts. In the second quarter alone, that was 37.3 thousand accounts.

At present, we have 690, over 690,000 customers in the SME segment. We provided 3.3 billion in loans, and that was 22% more than a year ago.

We're still enhancing our digital processes for SME customers, and they're very much appreciated by this segment. In terms of loan growth, fivefold, the volume of loans granted fully online through a fully self-service process increased by more than fivefold.

Business and Corporate Banking, we have an increase in credit limits, loan volumes, and we're happy to see increased activity in remote channels, very good feedback regarding our online solutions for corporate customers. CIB, they was very happy to receive Euromoney's award for Best Investment Bank.

This confirms our number one position. We see impressive growth in that line, in lending, the most robust growth, 20% year-on-year and 10% quarter-on-quarter.

Very good growth for investment banking. Now balance sheet, slide nine, starting with gross loans.

Just like I said, gross loans amounted to 177 billion, up 8% year-on-year and 3% compared to the previous quarter. This is driven by new loan originations, mortgage lending, cash loans, twofold growth, digit growth.

Now SME portfolio, including leasing and factoring, strongest performance, as I said, in the largest corporates segment. The portfolio's structure, as you can see on the slide, is well-diversified.

Mortgages accounted for 32%, corporate loans 29%, CIB 15%, other retail loans 13%, and SME for 11%. It's a well-diversified portfolio.

It is very important to us that this is a profitable portfolio. We grow dynamically in a profitable manner.

Slide 10, customer funds. Dynamic growth of the deposit base.

Total deposits exceeded 246 billion after the first quarter, that is up 11% year-on-year and 8% quarter-on-quarter. This, of course, impacted our total assets.

The retail client deposits increased by 4% year-on-year and by 1% in the second quarter, within that current account balances grew by 4% and term deposits declined by 8% quarter-on-quarter. The strong growth in the second quarter was driven by corporate deposits, up 21% year-on-year.

I'm talking about current deposits and term deposits here. I also mention the strong growth in investment funds, 24% year-on-year, 7% quarter-on-quarter.

Slide 11, net interest income. Net interest income, let me start with that, 6.2 billion, 3% lower year-on-year.

In the quarter two alone, it increased by 1%. Of course, year-on-year we had that 3% lower on a half-yearly basis.

There was a number of factors to that. The block trends were affected as in the negative adjustment of the NII by 71.2 million, primarily due to the European Court of Justice judgment on non-interest cost financed from a loan.

The net interest margin in quarter two was 4.39%. Like-for-like, excluding the European Court of Justice judgment, it has not changed compared to the previous quarter.

Now slide number 12. Net fee and commission income, that's always been our strength.

In the first half of the year, it totaled 1.5 billion złoty, which is 5% more year-on-year. In quarter two, the net fee income was stable, yet impacted by temporary factors.

Let me explain why it was slightly lower compared to quarter one. We had a special offer addressed to the SME segment.

Without the impact of that, we would have seen another record high quarter. In quarter two alone, we acquired nearly 40,000 new customers and accounts.

As I've said, we have more than 600,000 customers in this very profitable segment, what I mean is SME. The net fee income was first of all driven primarily by credit fees, which increased by 22%, asset management fees, which increased by 33%, insurance fees, which increased nicely by 13%, and FX fees, which increased by 6%.

You can see the quarterly recurrence in our performance, and that's been sustained. That is why we have a predictable bottom line, and this is very important, especially given the interest rate cuts cycle.

This is an important element of our income diversification. Slide 13, income.

For the eighth consecutive quarter, our income totals roughly 4 billion złoty. We're pleased that despite major interest rate cuts, our income remains high.

In the first half year, we exceeded 8 billion in total income. This is 1% better year-on-year and 2% quarter-on-quarter.

I've mentioned how interest income and non-interest income impact our position. Income from other operations also showed a very strong performance thanks to higher gains on financial operations and dividends.

Trading income and revaluation nearly doubled, growing up to 254 million, which reflects our operations in the FX and derivatives markets. Now let's talk about costs, slide number 14.

Total costs were 3 billion in the first half of the year. Of course, there were a few factors impacting that.

The main driver were the costs of integration and rebranding that we communicated before, but they also give us good acquisition effects. This was also driven by higher contributions to the Bank Guarantee Fund.

Rebranding costs in the first six months totaled 175 million, of which 67 million in quarter one and 108 million in quarter two. Integration costs: 107 million in the first half year, 25 million of which in quarter one and 83 million in quarter two.

We sustain our declaration when it comes to costs across the year. Quarter-on-quarter, excluding those additional costs, all total costs were lower than in the previous quarter.

Our cost-to-income ratio on a like-for-like basis, it was 28.7%, excluding integration, rebranding, and Bank Guarantee Fund costs that we saw in the first half year. Slide number 15, credit cost provisions and the quality of our portfolio.

On a consolidated basis, the net balance of provision for expected credit losses was 250 million; in quarter one alone, it was 105 million. The cost of risk was around 35 basis points.

The quality of the portfolio with NPLs at 3.6%, and that's improvement compared to the previous year when it was 3.9%. We have good performance of loan portfolios.

We also can see the good results of the sale of NPL portfolios. In quarter two, we sold the portfolio worth nearly 180 million, which gave us the gross gain of 65 million złoty.

Slide number 16 is the summary. In my view, we disclose strong performance.

As you can see, we have not been focusing only on rebranding and integration, even though it takes some of our attention, of course. We continue to grow, we are active in business, we acquire new customers, we implement new solutions when it comes to products and services.

We do not put our investments on hold. We keep our cost discipline, and we have the capacity to absorb the additional costs while growing.

The quarter two alone was stronger. We have the gross profit of 1.9 billion, which is 5% higher quarter-on-quarter.

The net profit totaled 1.2 billion, which is 14% higher. I keep talking about the impact of corporate income tax at each conference, but you have to be aware that last year it cost us 1 billion in corporate income tax.

In this half year, it was 1 billion and 480 million. The effective tax rate was 39.7% in this quarter, and in the corresponding period it was 24.5%.

Total income was higher than a year ago thanks to robust interest and non-interest income despite the pressure on NII. Costs were mostly driven by the cost of integration and rebranding, but this was well-invested money, while the cost of risk stayed low.

In my opinion, we had really good business activity when it comes to the acquisition of new customers. In the first six months, we acquired more retail customers in a higher number by 17%, and we also increased the number of Platinum customers and SME customers numbers.

We keep working on delivering our ambition, which is to be the best bank for customers, employees, and shareholders. We built our new brand on strong foundations and the strength of Erste Group.

We are looking forward to the future, to the coming quarters. That concludes my presentation, and now the floor is yours.

Maciej has prepared the questions.

We have received a lot of questions and I'm trying to put them into categories. The questions we've had so far, they actually touch on all the aspects of the P&L and different aspects relating to the balance sheet.

There are also some questions about regulatory and legal issues. We of course encourage you to ask more questions, but we'll try to address the ones we've received already.

If you want to specify something, let us know in the communication. We have a question, Michał, that's for you: your impressions of working with the group after the first quarter, and do you see any new areas for growth?

As I said, we've completed the first quarter operating entirely as Erste Bank Polska, and the first impressions is that this is a financial group that really understands this part of Europe, that understands the market, that has huge ambition for growth and supports us in the growth. I feel fully supported.

I appreciate the quick decisions. I appreciate this cooperation.

I have very good impression. They are very good at identifying further growth opportunities.

We have very good cooperation with the other countries within the group. We've been having some very inspiring conversation regarding building our new strategy.

I can assure you that my first impression is very, very good. We see that also this is reflected in our financial performance, but also not only financial performance, but also if you look at the customer acquisition, we don't only concentrate on the integration project or on our internal agenda, but as you see on the presentation, we still invest heavily in the future, in the acquisition of new customers.

We do what we've always been doing. We want to generate profitable growth.

We don't want to only focus on enhancing the market share. Thanks very much.

Second question is also related to the rebranding. In terms of the costs of rebranding, can you tell us the proportion of the costs that was a one-off and which will become a fixture in your cost base?

In terms of the investment, it was very specific before in the earnings call. We mentioned 250 million for rebranding for 2026, and we followed the plan.

The distribution by quarters is very similar to what we've already communicated. This is a one-off for 2026, because this amount included the physical rebranding of branches.

Anything else you'd like to add, Michał?

I think this is a very good investment, and the results of this investment, they are well beyond my expectations. We are very data-driven.

Not very much data-driven, we measure awareness, consideration. We have very specific measures for that and we see growth here.

The marketing strategy is elaborated together. We have lessons learned from other markets in the Central and Eastern Europe.

It is, of course, very much focused on building brand awareness and not solely on product campaigns. The brand values: ethical business, responsible banking.

This is very much the heart of the group and the strategy. The four pillars related to financial health: regular saving, cost management, building investment capital, and insurance cover for our customers.

These are new elements that are very inspiring to us that we're developing together with the group, and we're very much using the experience the group has in the remaining countries of the group, especially in Czechia. We see the first very good results, especially in asset management, our new offer related to regular investment.

Let me just remind you that we made a leap to democratizing the investment services. The market response exceeded our expectations.

Customers can start investing with as little as 10 złoty, and over 1,000 customers per day start investing. Over 50% of transactions are to an amount above 100 złoty.

This low threshold to start investment, it proved to be a very good idea. To make reference to your first question about my impressions, was very much inspired by the group and the implementation of the strategy in the Polish market brings very good results.

Another question is about loans, first in terms of volumes and then credit margin. Credit dynamics: what sort of dynamics are you expecting further in 2026 and then in 2027?

We expect the same, relatively dynamic as we've observed now. If I were to say our forecast for loan growth, this and next year about 7%, 7 odd, 8%, 2027 slightly lower.

This is due to the investment path, the investment peak will be at the turn of the year and then the dynamic will be slightly lower. We are optimistic about the structure of growth in 2026 and 2027.

I think the macro environment will still be supporting this. We'll come back to this when we talk about the risk charge.

Now credit margins. For you, Michał: two other Polish banks commented—I'm not going to comment on what the other banks commented—but they said the pressure on credit margin is fading out.

Do you experience that? You mean the competitive pressure, right?

What is this? Is this the observation other banks made or what is this remark?

We'll have to ask the author of the question.

For us, we're always consistent in terms of credit margin, and we remain consistent. Some banks, maybe their shareholders actually commented it wasn't the right way to go.

In the second quarter, we saw that the credit margin pressure was there. It will be about the second half of the year.

We have another question from someone who followed the earnings call of other banks: "One other bank commented that it's expected NIM to improve in the second half of the year. Are you as optimistic as they are?"

Bernhard, could you answer this question, please?

Of course. Also hello from my side and thank you, Agnieszka, for welcoming me on this call.

Generally, you saw that the net interest income started to reverse and develop positively in quarter two, we saw an increase in net interest income. This despite of the charge of the European Court of Justice ruling, which amounted to around 71 million Polish złoty.

On the NIM specifically, we saw also this European Court of Justice ruling amounted to 10 bps charge on the NIM, but generally without that, we were about flattish, and this also reflects the stopping of the decrease of the interest rate environment in general. This is one factor playing on the NIM.

On the other hand, Michał already mentioned in presentation, we saw a very good volume growth on both sides of the balance sheet, which of course was then supportive to NIM development. Then if you go a step deeper in the structure of the interest rate blocks in the balance sheet, saw further increase of our investment books due to the very strong growth of deposits.

This contributed positively on the NII and NIM, and where there also was a slight increase in the duration of the whole group collect book, which also contributed it positively. To sum it up, yes, there is a reversal of the trend on the NIM to be observed.

Thank you, Bernhard. Another question once again is addressed to you, Bernhard.

The question is about the outlook for fees, net fees, and this is a specific question: "What was the reason for a weaker performance when it comes to fees in quarter two?" I think that's already been addressed by our CEO in his speech, and we were talking about the special offer for the SME that is having impact.

Bernhard, over to you.

Right. I only can confirm.

Generally, I would say fee is the strong suit of Erste Bank Polska, but the bit weaker second quarter in that respect, but I want to remind you that we're still on a positive growth path year-on-year, was due to the already mentioned promotions on the SME and micro segment, which is a segment where we unanimously believe it's really worthwhile the investment. Generally fees are a focus point of ourselves, continue to be a focus point, and if I want to point your attention to still some quite impressive growth figures, fees on asset management are up 30% year-on-year, guarantee fees up 32%, credit fees and brokerage fees also solid double-digit growth year-on-year, and foreign exchange fees around mid single digits up year-on-year.

I think general trend very positive, little dip attributable to the investment we made into future earnings.

Thank you very much. The next question refers to asset management.

Michał, and Erste Group indicates asset management as one of the growth areas post-acquisition. Have you taken any specific steps?

There was also a question about the change in the business model of TFI. In the communication, you increase that the takeover of the control by an entity from Erste Group is to enhance the implementation of the new model.

What will be the specific changes and how is it to impact the sales and fee income? Is the new distribution model means that the remuneration for Erste Group will change for the sales of investment funds and should it actually drive the growth in fee income?

We keep working on that model, of course. We have the goal we can compare to other countries in the CEE, especially compared to the Czech Republic, we can see that the performance might really grow.

We have the huge knowledge on the part of Erste Group, and we have the huge knowledge of our neighbors, how to do this business. The first action in this area that we've taken, which I've already mentioned, are those actions related to democratization of investments, and we already can see the first effects, tangible ones.

In the long term, this is related to four pillars of financial resilience or financial health, which are the element of the overall group strategy. It's not only about regular savings, but also regular gradual building of investment equity.

There is a huge potential, and the group can actually contribute a lot of new solutions which will also have a positive impact on our financial performance. That's the assumption that we were having in mind.

All those actions are to lead to the growth in our business and profits from that business.

Thank you. Maybe when it comes to the last part of that question, does it mean the change that bank is remunerated for the sales of investment funds and whether the share of fee income should grow, I would say yes, would give you a positive answer to the both questions, but that will come at a later stage.

Let me highlight what we've reported in the current report: because of this reason, TFI will cease to be consolidated on a full basis, it will be just an associated entity, we will not really see the impact. I think that this is quite clear in the context of our communication.

All this will happen once the transaction is concluded. Costs.

Bernhard, I will ask you to respond to this question: "Do you sustain your outlook for costs, that is 250 million of costs of integration and rebranding, and the organic growth in costs of 4 to 5%?" That's the first question.

Thank you for the question. With regards to the 250 million total cost of integration and rebranding for this year, yes, we are on a very good path, I think also very consequent in what we guided on when we will spend these amounts during the year.

Yes, generally, it's the maximum cap for this year and our message here is still valid. Generally, outlook for the second half, I think we have and exert a very strong cost discipline, business as usual costs very well under control, and I think we're very positive that we will come out at the figures we guided.

Thank you. There is an additional question about the allocation of costs within Erste Group: "Could you present us the target model of settlements with Erste Group for central services like IT, marketing, and so on?"

I think generally we continue to be part of the group, sorry, it's just a different group— Chciałem tylko powiedzieć, że jesteś— Przepraszam. Sorry, should I continue, Agnieszka?

Bernhard, Maciej was still reading the question.

All right, sorry, I couldn't hear. Okay.

Please give me a sign when I should continue.

Please continue.

Thank you. We continue to be a part of a group, it's just a different group, we're now part of Erste Group.

There will be a typical cost allocation principle, which I think is not different to many other groups. With regards to the next year, it's maybe a bit too early to make a forecast what the concrete cost blocks will be.

We're definitely further concentrating on digitalization and automating our processes, one might expect that IT cost could increase, whilst we are at the same time, and Michał was referring to it, further strengthening and developing new Erste brand in the country, we will be only in our second year of the new brand, this might have an effect on cost. Of course, but this is common to everybody in the market, we will also take a close look on labor market situation and benchmarks, and definitely will make adequate decision regarding staff costs.

Of course, cost will correlate with the income side, and we are strongly determined to continue to deliver very strong cost of income efficiency and performance.

Thank you. Another question refers to the cost of risk, which actually performed better than guidance, is 40 to 50 basis points.

Is it a recurring level? Yes, of course, the macroeconomic landscape has been very uncertain, especially at the beginning of the year.

For the time being, the macro landscape is actually developing very nicely. After the quarter one, quarter two has been really good.

The second half of the year seems to be solid. If we rounded up our 37 basis points, 35, we would be close to the guidance.

If the macro landscape continues to be good, we could be within the levels we've witnessed in recent quarters. As our CEO said, there is nothing worrying happening, even if we have a one-off case slipping down, and then, yes, our portfolio standings across the different segments has been good and is stable.

We do not envisage any major changes, whether it's roughly a little bit below 40 or a little bit above 30 bps, we see no real threat. Now there is a question about regulatory things, Michał.

There are a few. We will address them in blocks.

Let's start with the UOKiK, the Anti-Monopoly Office, and the proceedings related to unauthorized transactions. Have we actually created any provisions for that?

No. Other banks have provisions of 90, 100 million of provisions in retail banking.

If we planned to create provisions, we would have done it. Maybe a comment on that, please.

At the moment, the bank is talking to the UOKiK, to the Anti-Monopoly Office, Anti-Competition Office, and on potential decisions that they might take. We've been analyzing the expectations of UOKiK, and we are waiting for the proposals.

For the time being, we have not created any provisions. We will see eventually how it will be finalized.

Some banks before decided to create. These are adequate decisions.

The differences between banks result from this reason.

The other thing is with the European Court of Justice judgment, and there are quite a few questions, but the first one: apart from the adjustment of the interest income, have we created any special provisions for customer complaints? The second question: have we created the provisions related to the sanction of the free credit sanction?

No. What is the risk of claims, litigations?

Have you seen the growth in the number of claims? What might be the case law that would trigger the creation of provisions, how the case law change?

Please answer.

In 2024, we have not been charging interest on the non-interest costs. Long before the judgment of the European Court of Justice, we stopped to charge the interest.

It's not because we had a crystal ball and we predicted this particular judgment. The provisions of the Polish law said that, well, and the consumer credit act, the position of UOKiK that was released in an opinion or the opinion of the Polish regulator, the KNF, the European Court of Justice judgment was not consistent with those positions, but still we stopped to charge those.

We now have 374, 742 cases after the judgment of the European Court of Justice. 80% are in favor of the bank.

Those verdicts given well where we lose are actually given in one court where probably the judges apply the recent ruling of the European Court of Justice. That particular ruling did not apply the free credit sanction.

It only related to not charging interest on the non-interest cost of the loan. We see increased activity in companies that buy claims for customers.

We don't have data that would indicate to a dramatic increase in the number of complaints or lawsuits. I don't want to speculate whether legal offices are preparing for that, but there is one more opinion according to which this judgment cannot be applied retrospectively.

Also, according to a Polish regulation, we were actually allowed to charge interest. Summing up, we think that the provision level is adequate and this was actually agreed on with our external auditor.

Now the market share in cash loans where you apply interest on the cost of insurance, that's 25%. This is in line with what Michał said, we haven't been charging that for two years.

We have two last questions: "Does the board anticipate Santander to sell the remaining part of the shares? Does the group anticipate Santander to sell?"

You need to ask Santander about this. "Does the group plan to implement individual investment accounts?"

Yes, definitely we are. We think highly of this product.

Agnieszka, we don't have any more questions unless you received any in the meantime. No, I have no more new questions.

Thank you very much. We've managed to do the call in 60 minutes.

Have a good day, and hear you later. Thank you.

Bye-bye.