Hello everyone, welcome on Citi Handlowy Financial Disclosure for first quarter 2025. My name is Adam Piotrak, I'm the Head of Investor Relations. I'm with Maciej Krywoniuk, who is the Head of Strategy and Investor Relations Department. He will go through this presentation. The presentation you can see on the screen, also you can find on our website. Maciej?
Thank you very much, Adam, and welcome everyone. Thank you for joining the call where we will discuss the Q1 earnings for Bank Handlowy w Warszawie S.A. Before we start, I just wanted to share with you that we still are in the process of exiting consumer bank, and as it is with such projects and important milestones, we will be sharing with the market participants in the form of a report to the Warsaw Stock Exchange. Let me turn to the results. We have shared the presentation with you, it's also available on our webpage, so I am referring on page two, which probably you can see on the screen as well. It's my pleasure to share with you that it's been a good opening of the year.
We have recorded the balance sheet growth, which was driven primarily by the corporate lending volumes, and we have reached a record high level in the balance sheet size, so it's a landmark for us. On the financial results itself, the revenue exceeded the PLN 1 billion mark, so it was PLN 1.067 billion. The net profit, we have concluded the first quarter with the net profit of PLN 435 million, which translated into ROE of 20%. The balance sheet dynamics, I have mentioned the record levels, the lending grew by 12% year on year, the deposits portfolio grew by 9%, and the capital position of the bank remains very strong with the TLAC ratio at the level of 26.5%. Moving on to the segment performance, in the institutional banking, the top line was lower by 11% quarter on quarter.
It was partially a reflection of the base effect in the fourth quarter when treasury activity was very strong. On the other hand, let me draw your attention to the core revenues, i.e., the net interest income and fees and commission income. By the way, they represent around 90% of the revenue line. The core revenues, they grew by 2% quarter on quarter, primarily driven by the higher demand for financing among our clients. As you can see on the slide, the non-financial and financial clients' volumes increased by 8% quarter on quarter, and in fact, each of the segments positively contributed to the growth. The transactions, we have concluded similar transactions, I will be covering them on the following slides, but the new volumes, just a comment here, 76% is the share of the long-term loans.
The financial markets, it's been a quarter with slightly lower FX volumes, again the effect of the very strong performance in Q4, but on the other hand, our brokerage business achieved very, very strong performance and the turnover grew by 63% quarter on quarter. The transaction banking, the quarter was the one with the growth of average trade finance asset by 6%. All in all, strong client activity, which is reflected in the core revenues. On the consumer banking, stable revenues, ex-one-offs, we have recorded the positively contributing valuation of capital investments recently this quarter, and there was no such event, so ex-one-offs, it's stable revenue performance. The deposits growth, 1% quarter on quarter, and the FX in consumer grew by 16% quarter on quarter, good news here, and the wealth management with strong performance and investment product sale, which grew by 30% quarter over quarter.
Moving on to page three, which is a page describing the business volumes and the institutional banking segments, I have briefly commented in the beginning on the lending growth. When you look at the right-hand side of the slide, where you can see new lending to institutional clients, it's been three times versus the same period last year, so significant growth here. It's also reflected in the lending volumes that you can see on the left-hand side with strong dynamics, which are significantly above the sector with the bank's performance plus 8% quarter on quarter vis-à-vis the sector of 2% and year-on-year growth of 17%, so very significant growth here with the banking sector growing 6% year-on-year. The corporate clients represented most of the growth this quarter with 19% increase quarterly. The deposit volumes, both year-on-year and quarter on quarter, growing 12%.
The quarter-on-quarter growth was above the sector, slightly below the sector if you look at the year-on-year. There was strong inflow of deposits from the public sector clients, you can see that it almost doubled with 91% growth in volumes quarter on quarter. The transaction volumes, briefly commented on them in the beginning of the opening slide, across all of the areas, you can see that FX volumes were up 13% year-on-year. Transactional banking, not only the trade finance area, but also more transfer-related areas recorded growth, and custody, where we are the leading bank with number one position in the market, the market share increased by 4.5 percentage points in the first quarter. The page four is just showing you some of the key flagship transactions that we have concluded in the first quarter. It's a brief representation of what we have been doing.
In fact, it's my pleasure to share with you that these top transactions, they are not only covering the top segments of the corporate banking clients, they also include commercial banking segments, so it's the indication that also the commercial banking clients are active in the complex transactions where our relationship is very strong. These are just the public transactions that we can share with you, there were many more. Maybe drawing your attention to the EBRD on the left-hand side, it's one of the transactions supporting the energy sector transformation in Poland, which is a country priority, and at the same time, it's one of our strategic pillars for the next years. Moving on to the consumer banking, which is page five, it's been a quarter where investment and FX product areas were recognized with a strong performance.
Citi Kantor, which is our online tool for FX, recorded double-digit growth rates. When you look at the volumes, the lending volumes are flattish, 1% down. The banking sector was also flat with 0% quarter on quarter. Looking into more details, the cash loan sales were up 6%. It's been another quarter of growth here. However, we are looking forward to the lower rates following the rate cuts. Talking to the business, we hope that there will be some more demand for the lending in the coming quarters. The deposit volumes, the quarter was 1% up quarter on quarter with the banking sector plus 3%. There were some promotional offers, they served the purpose to acquire clients, especially the affluent clients.
What we usually do is, in the affluent segment, the deposits are the starting point of the relationship, and once we recognize the needs of the clients, we are cross-selling through investments. It's a model that proved to be working, and I think it's important to share that in the times of the turbulent environment, which was the case in the first quarter, we are very close to our clients, and the clients underline that relationship managers in the wealth management space are important partners for clients in such periods.
You can see that in the wealth management, which is under the private banking section on the right-hand side of the slide, the total relationship balance grew by 6%, the client portfolio grew by 6%, slight declines in the card space on the transaction value in the domestic transactions and cross-border, which is kind of seasonality, but also this year was slightly lower than last year, as indicated in the beginning with this turbulent environment and market volatility, significant growth rates on the FX volume side. Moving on to the next page, just to share with you, we are still active in the social impact space.
I'll be not going into the details, but it's just a reflection of the program that we have for the refugees from Ukraine, where we support through mentoring and support programs, and it's been executed with support of the Citi Foundation, some humanitarian actions both in Poland and Ukraine. Happy to share more details if you're interested. Coming back to the business side of things, page eight, going through the P&L, the total revenues, yet another quarter with revenue above the PLN 1 billion mark. It's been down quarter on quarter, so let me share some color on that. On the institutional banking side, the total revenue of the institutional banking was down 11%. It's been primarily impacted by financial instruments held for trading. However, if you look at the core revenues, they were up quarter on quarter.
Going into more detail on the client revenue, the growth here was 9% year-on-year. It's been driven by the demand for financing that we have discussed just while ago, and you see healthy growth rates, and it's a reflection of the solid client activity. On the consumer banking side, the total revenue was down 6% quarter on quarter. I mentioned the valuation of equity investment in the fourth quarter, so this is the impact that you see, and this is what's behind the decline. The core revenues are stable on the quarter-on-quarter performance. Moving on to net interest income, it's been stable quarter on quarter as well as year-on-year. Going through the segments, on the institutional banking side, the interest income was positively impacted by 17% growth of the lending portfolio.
The impact here was also linked to the maturity of bonds portfolio, so this is a combination of these two factors. The consumer banking, the net interest income was impacted by slightly lower interest income. That's the reflection of the product mix that was the case in the first quarter. On the interest expense, I have briefly discussed the attractive deposit products for affluent clients. This is where the higher interest expense is coming from. This is cross-sold to the investment products, and maybe just a comment here on the recent rate cuts. We got questions in the morning on the Polish call, what's the impact of the 25 basis points? The impact for the bank is PLN 4 million-PLN 5 million for each 25 basis points cut. It's also difficult to translate it one-on-one, just a headline number, but there is more detail behind it.
It will depend on the interest expense, the hedging situation, and market trends as well. Just broadly to give you a sense of what's the magnitude of the rate cuts and what's the impact size. On the fees and commission line, PLN 151 million in the first quarter. When you look at the trend, it's one of the record levels. It's driven primarily by the institutional banking. We have discussed loans, so loans positively impacted here. On the quarterly view, cards also contributed to the fees with 13% quarter-on-quarter growth. The fee revenue is also a reflection of the transactions that we have executed in the first quarter. In general, the strong client activity that was also visible, especially in the institutional banking segments in the first quarter, having in mind the market situation in a turbulent environment. Page 11, the treasury area.
The quarterly treasury result was PLN 773 million, 10% down quarter on quarter. The decline, as you can see on the graph on the left-hand side, is primarily driven by the trading results. We have recorded PLN 40 million of AFS gains, and the net interest income, which is also the reflection of the balance sheet, which is on the right-hand top side. Basically, there's a slight decrease of the share of the debt securities portfolio. We always underline that it's a high-quality debt securities portfolio, but the client portion of the balance sheet is growing, which is also a reflection of our business efforts and client demand. Positive sign of the revaluation reserve, it improved by PLN 40 million this quarter, which is also good news that we can share with you today. Page 11, expenses. We have been consistently recognized by the cost discipline.
This quarter, it has been not different. Both the quarter-on-quarter trend and the year-on-year trend is positive. Some details behind the numbers. The admin expenses, they are down both quarter on quarter and year-on-year. The main reason here and the driver of the decline is primarily the real estate expenses. We have finished the refurbishment of headquarters, so it's part of the positive impact here. On the other side, you see the growth in the staff expense line. There is a slight increase in the number of employees. In fact, there is no one area that's responsible for the headcount growth. It's across the bank, and there is definitely some wage pressure that we see, which translates into elevated staff expenses both quarter on quarter and year-on-year. We have also recorded the growth in regulatory expenses.
It's the green bar that you can see, and the growth here is from PLN 99 billion to PLN 109 billion. The regulatory expenses line, it's traditionally recognized in the first quarter, so more of a one-off event in terms of the calendar. It has been well accommodated, and all this achieved with inflation around 5%. The cost discipline was and will be one of our focus areas, definitely. Cost of risk, page 13. This quarter, we released provisions on the consumer banking side. That's driven by some positive trends in the portfolio quality and the credit cards area. Consumer banking positively impacted the P&L this quarter. You can see that with PLN 8 million cost of risk in Q1, it's more of a normalized trend in the institutional banking side, despite the growth rates.
Looking at the quality of the loan book, both the coverage ratio and share of stage three in our lending portfolio are better than the market and the sector. It is a reflection of our credit policy and the target market. Despite the growing portfolio, the growth that we record, we have not been expanding the target market. The growth is achieved in the segments that we have been active in so far. In a nutshell, that is the summary of Q1 performance, and it is a time when I am more than happy to take your questions. Okay. There are no questions, so thank you very much for joining. Please reach out to us if you need anything. You have got investor relations contact on our webpage. Thank you for joining and have a good rest of the day.