Good afternoon. We'd like to welcome all of the participants of our remote earnings conference. You're somewhere out there in space. We don't see you. We hope that you can see us, and that you can hear us. In a few moments, we're going to talk about our performance in Q2 2021. We're going to do this as a team. I'm joined today by Jean-Charles Aranda, who is the CFO of the bank, Michał Dybuła, who's our Chief Economist, and then in a virtual way, we can see quite clearly, we have Wojciech Kembłowski, who's our CRO. We have a sophisticated form of communication. The difficulty is that I don't see you here.
I don't see your reactions. We don't have any type of visual contact, which doesn't make life any easier, but that's the way things are, and we're going to have to cope with that. I would propose that we go ahead to our presentation and start walking through the subject. The agenda's pretty traditional, straightforward. I don't think it requires any type of special explanation.
We're going to talk about our story in different roles. I'll begin, and then my colleagues will take over at the proper times. We can start with the key highlights. As you know, in Q2, we've delivered solid, robust business results. Our interest result, our commissions have grown. The number of customers is on the rise. The market conditions have improved to drive up loans. Our current expenses, OpEx, is under control. The results of the bank have been debited with a pretty big charge because of mortgage loans, because of CHF, so the Swiss franc loan.
We had a pretty big hit to the result as a result of that provision. The bank continues to watch and walk through its transformation process. We're augmenting our technological prowess. We're automating, simplifying our processes internally. You can see that on the numbers, that we're more and more of a digitalized bank. We're more and more modern. In terms of our business, we've mentioned that for the first time in the history of the bank, we have more than four million clients, which is a psychologically important threshold. The corporate business aspect, we've done a number of very big transactions, high-value transactions, attractive transactions. We can say that our digital banking is doing very well. We'll talk about that in just a couple moments.
Ladies and gentlemen, here you see some of the trends in terms of our sales activity with respect to customers in various quarters. You can see that in Q2, we were quite active in terms of acquiring personal accounts, payment cards. Cash loans are up strongly, as are mortgage loans. Some of these are very highly positive. Generally speaking, you can say that we're moving up quite strongly. Our customers are more active. In a natural way, that means that we have a higher number of payments. We have a sample of tombstones, where you can see our biggest transactions are the ones that were the most important for the results of the bank, and these are corporate transactions that we did as a bank.
If you look at our volumes, you can see that we've moved up quite strongly in terms of our retail customers as well as our corporate customers. This is a reversal of the trend, this is a pretty important moment, showing, in fact, that the bank was well-poised once the economy enters the phase of recovery, we believe that we're going to be able to continue that in subsequent quarters. Customer deposits are up in a controlled fashion. The bank is highly liquid, we're not actively seeking additional liquidity. The number of customers, as I've said, has exceeded four million watermark. We continue to pursue our strategy, our Fast Forward strategy. These are the last quarters of the validity of this strategy, this organizes our thinking in terms about where we're going.
Here you have some tangible examples and samples of the activities that we're engaging in, which underlines each one of the pillars. I'm not going to discuss these in detail, but I would like to draw your attention to a couple of them. In the most recent quarter, we have mojeID service that was rolled out. This is quite a big facility. Of course, this was done relatively late, but better late than never. We continue to grow quite nicely our mobile application for individual customers, which is called GOmobile. We are adding functionalities, and the numbers of clients are growing quite quickly. We've received a number of awards, so traditional awards for wealth management, and so it's probably the biggest in the market. Based on external assessments, the best on the market.
We're continuing the transformation of our branches in terms of safety, convenience, and modern approach. Above all, we're actually accessible to disabled persons. We've also won an annual voting competition in terms of responsible companies. It's the third time in a row, and in the overall standings. This shows basically that our activity in terms of sustainability, our care for the environment, diversity, inclusion, that these activities are authentic and basically done with integrity, and the experts highly regard this, and this gives us more energy. It's not only about our drive to generate and deliver good earnings, but also to make sure that we're doing things well. If we look at the transformation program, as I said, this is something that's being continued, and the bank will continue to do this for a long time, perhaps forever.
The world is changing, we want to be a front-runner. We want to change rapidly as we basically adapt to the evolving needs of our customers. As a result, we are steadily rolling out functionalities, new functionality services, different tools. Externally, we've gone through a process where we sign documents electronically using the Autenti platform. Additional processes are being digitalized, this means that the bank is making sure that the clients are well taken care of, that's why we're offering new solutions. The challenge that we're facing, at a pretty high priority in terms of our internal processes, we want to simplify, automate them, as well as augment our efficiency overall. Another very important subject is sustainable development, positive banking, also being a green institution. This is an oversimplification.
Basically, we can say our volumes of green financing have grown very strongly, up by some 72%. We've nearly tripled quarter on quarter. I hope this is a trend. This has quite a bit of importance for us in this area of operations. We're going to focus on this very strongly. We have nearly 6,800 installations, PV solar installations, which were basically set up because of the financing. We have large-scale projects, primarily in wind and photovoltaic energy. Each one of the sectors we're highly active in each one of these sectors in terms of delivering products that are ecological, environmentally friendly, that make it possible to care for the environment, rescue the environment, and operate in the field of energy. We have other positive changes, several initiatives which emphasize and underscore our commitment in terms of sustainable development, SDGs.
This is something that's been announced by the UN, and this is a trend that we're going to continue on an intensive, and strategic, and steady basis. Now we can say a little bit about our trends. Here's a simple graph that shows where we are in Q2. As you see, the profit is a little bit lower. As you remember, we have a big provision for the Swiss franc loans, and this basically dropped the profitability of the bank in this period. We can say that the net banking income was at the same level as in Q1. Costs are totally under control. Cost of risk are slightly higher than in Q1, but they continue to be at a very low level. The portfolio is healthy.
It's a robust portfolio, and we don't see any reasons to be concerned at the current point in time. If you look at some of our parameters, ROE, it's 4.9%. Of course, this is something that we're satisfied by in the longer term, but having in mind the current set of circumstances, the reality, it seems to be quite a robust result. If you look at the cost to income ratio, CI, it's at a stable level. We're doing this in a reasonable fashion. Of course, there's some room to improve our effectiveness, and this is something we're going to continue to do. I've mentioned the cost of risk, and we also see the provision for CHF loans in the Q2. This will not, of course, handle the entire problem related to Swiss franc portfolio.
It's relatively small compared to the big Swiss franc lenders, but it does have an impact on the profitability and the return on equity, and that's why this provision had to be set up. We're closely observing the development of the situation, and we'll react suitably in subsequent quarters. We have the macroeconomic environment. I'll go ahead and give the floor to Michał.
Thank you very much. I'd ask you to show the first slide. Tomorrow we'll see the preliminary estimates of GDP in Q2 of this year. The available data suggests that on a year-to-year basis, this is going to be a spectacular growth in excess of 10%, probably. Of course, we have a very low base effect, and this will play a crucial role. What I would like to draw attention to is that on a quarter-over-quarter basis, the economy is accelerating, and we can see this recovery, and it's becoming more evenly balanced or spread over the various sectors of the economy. All in all, there's a good chance that the annual average growth will be around 5%, perhaps we'll even be able to surpass that level. What's even more important, the optimism regarding upcoming quarters is quite justified.
If we look from the beginning of this year, we can say that investments have been picking up the pace, and this gives us the idea or portents that we could have a longer-term recovery. We can go to the next slide. What's important here in terms of the investment recovery is that we see demand for loans in the corporate segment is picking up. We hadn't seen that up until now in terms of the volumes, in terms of new productions of corporate loans. This is something that we see market growth here, is what I'd like to underline. We have this overall optimistic narrative about the macroeconomic environment, but we do have to mention probably the most important factor of risk. Basically, which is high inflation.
In July, the level of inflation was 5%, so it's twice the inflation target defined by the National Bank of Poland, and having in mind what we observe in terms of more expensive food, but energy and some of the other inflationary factors, this is not the highest level of inflation that we see at present and what we'll see in this year. High inflation coupled with a more and more robust recovery of the economy does, of course, drive up the expectations of the monetary policy being normalized. The market does see that in the next few months, 10, 12 months, we should see an increase in money rates, monetary rates, and then we can go on to a greater discretion of the financials. Thank you, Przemek.
Of the year, we delivered solid core financial result. Good news. Corporate loans started recovering as a result of the portfolio loan grew by 4% year-over-year. Net result decreased only by 11%, reaching the level of PLN 286 million, despite the additional booking of provision for Swiss franc portfolio. NBI decreased by 4% year-over-year, of which net interest income decreased by 5.2% year-over-year, mainly explained by the interest rate cut, MREL implementation, and low demand in corporate loans in the beginning of the year. A very good result in term of fees and commission, we grew by 22.1% year-over-year. Net trading income decreasing by 11.9% year-over-year due to the lack of one-off in 2021. Costs remain fully under control, we are keeping on changing our operating model. As a result, the cost decreased by 5% year-over-year.
Cost to income ratio reaching the level of 53.9%, slight decrease. As already discussed and share with you, additional provision in the CHF portfolio, PLN 259 million. I will share information with you later. The cost of risk remain very low, and the quality of portfolio is there. No significant comments in term of the ratio, all the ratio in the green zone. Overall, our loan portfolio grew by 3.6% quarter-over-quarter, 4% year-over-year. On one hand, individual portfolio grew by 3.4% quarter-over-quarter, 12.2% year-over-year. The positive trend is remaining with our good performance in term of mortgage loan. On the other hand, we reverse the trend in corporate loans. We start growing again, which is good news. We grew by 3.8% quarter-over-quarter, slight decrease year-over-year, 1.5%. Next slide.
As we guide the individual loans portfolio, the increase result mainly from the mortgage loan portfolio, very good level of sale again in Q2. We start growing again in term of cash loan. We grew by 1.9% quarter-to-quarter and very good performance in term of digital sales. As for the institutional loans portfolio, the trend has been reversed and very good performance in term of corporate loans and leasing as well. Next slide, please. As you get the CHF mortgage loan portfolio, As a result of a significant increase in the number of new court cases and also further deterioration in SHU parameters, we have increased our level of provisioning, and this is why we book additionally CHF 215 million in the first half of the year. Next slide.
After optimizing the level of deposit at the end of 2020, deposit grew by 1.4% quarter-over-quarter, 2.2% year-over-year. We are keeping the positive trend in terms of investment product. Volume grew quarter-over-quarter by 6.2%, 54.5% year-over-year. The trend is there, and it's giving a positive impact in term of fees as well. Next slide, please. No significant change in term of structure of deposit. Current account is representing now more than 90% of the total deposit, due to the low interest rate. We have stabilized the cost of deposit, so no significant change compared to Q1. Net banking income. Year-over-year, net banking income decreased by 4.1% as a result of the interest rate cut, lack of one-off, mainly. When we look at the evolution quarter-over-quarter, NBI remains stable compared to Q1.
Positive trend in net interest income, fees and commission, and NII and net trading income. We get a negative impact coming from the volatility of the valuation of the portfolio measured at the fair value. Next slide. Year-to-year, the margin decreased from 2.79% to 2.47% as a result of interest rate cut, mainly, and implementation of MREL. Quarter-to-quarter, significant increase coming from the growth of the loan portfolio, and also interest on derivatives. Next slide. Fees and commission. Very good news. The trend is very good. Year-to-year, plus 22.1%. All the components improve. Thanks to better activity with the customers, but with a change in our pricing. Quarter-to-quarter, positive dynamic as well, positive trend. Very good performance in term of asset under management and better penetration in term of insurance. The trend is there.
Net trading income year-to-year decreased by 11.9%. We have to keep in mind that last year we take the benefit of significant one-off. I am referring to the valuation of BGŻ entities, which did not occur this year. Quarter-to-quarter, positive trend with better activity with our customers, quarter-to-quarter increased by 9.9%. Net investment income, this is a part which is always volatile and linked to our professional portfolio, which is measured at the fair value. Year-to-year, we are increasing by 123%.
Quarter-to-quarter, slight decrease as in Q1, the valuation was positive compared to Q2, in which the valuation was negative. Cost. Costs remain fully under control. We are keeping on changing our operating model. Year-to-year, cost increased by 5.4%, excluding BGŻ impact, -1.6%. I think it's visible that gradually we are adapting our model. We are keeping on digitizing the bank, so we are adapting our cost base. quarter-to-quarter, no significant change. We stabilize cost of risk.
[Foreign language] Thank you very much. Now we can give the floor to our CRO, to Wojciech.
Good afternoon. I begin with a summary of the biggest impact of COVID-19 on our credit risk in the previous year and now. Generally speaking, we have support of PLN 6.1 billion. This was support as well as moratoriums. 97% of these moratoriums have already been completed, have ended, and we're back to the situation that was in existence prior to COVID. The performance of this portfolio is 95.8% of the customers have returned to normal payments, in normal amortization schedule. Our customers, as this testifies, did not need such extensive support, and they were able to navigate the waters on the market. If you look at Q1 2021, we can say that one aspect is quite important. We released some of the provisions because of the changes in the macroeconomic scenario for 2021.
Right now the scenarios are better than previously, but we've also identified some potential sensitivities in some of the industrial sectors where COVID-19 could have had an impact. As a result, we've set up some provisions, forward-looking provisions, with respect to all types of industries. That means in Q1 we have provisions of PLN 80 million. We have to have in mind that in 2020 we've had provisions of a certain amount, and we've had a status of that at the end of the year. In the first half of this year, we've added another PLN 80 million in provisions on top of the PLN 131 million that we had. We can go onto the next slide, where we have basically the uptake in 2021.
In addition to the non-recurring impact, we also had the multi-scenario approach. This was a recommendation that was given by our auditor. This was PLN 42 million. We had the opposite result where we had PLN 21 million, which is a new definition of defaults. The PLN 80 million that I mentioned in terms of the coronavirus impact, and then we have the positive impact because we sold one part of our NPL portfolio, and this had a positive impact on the risk cost of PLN 36 million. That means that we had a proper level of provision, and so perhaps even more than the market was suggesting, so we had very good prices.
What I would like to say, generally speaking, in the first half of the year, there is very few new defaults that came into the picture, which were in different segments, also in corporates. In the retail segment, we had very few new defaults. We were able to maintain the same level. In fact, we even increased the level of provisions of a forward-looking type. We had a very good amount of recoveries and the sales prices that we were able to command for these NPL loans we sold. That means that we have 36 basis points as the level of provisions in Q2. Around 33 basis points, if you were trying to average out the first half of the year. We can go on to the next slide where we can talk about the quality of the loan portfolio.
If we look at the overall bank, basically we have the lowest level we've ever had in a bank, down to 4.8%. On one hand, we owe this to the management of the NPL portfolio, but at the same time, we can see the growth of the working portfolio, performing portfolio, both in terms of percentages and in absolute terms. We have the lowest level in history. We can see that the loans, both retail loans and corporate loans, in each one of these segments, the quality has improved, has been enhanced, and it is at a very safe level.
Then I can ask you for the next slide. You can also see this if you look at the various phases of the portfolio. In the most recent quarter, we have more in phase I, phase II and phase III have a decline. That means that we're improving the quality. On the other hand, if you look at the coverage with provisions, especially in phase II, well, it's growing a little bit.
We've been able to maintain the level of coverage, and so this basically confirms the fact that the level of recoveries and of sales prices that we've been able to command on the marketplace are totally sufficient and are equivalent or matched to the level of provisions that we previously set up. To recap, in terms of the quality of the portfolio, we believe that the situation is highly stable, highly sound, and we can concentrate our efforts on development and growing the portfolio. Certainly, we don't have to think about remedying the portfolio at this stage in any way, shape, or form. Thank you. Then we have the capital adequacy.
The capital ratio. As a result of the increase of our loan portfolio, RWA increase and as a consequence, quarter-over-quarter capital ratio slightly decreased, reaching the level of 13.28% in term of Tier 1 ratio. However, the capital ratio remained in the safe position and significantly higher than the minimum requirement.
Ladies and gentlemen, we have the final slide prior to our Q&A session. What awaits us? Well, the economy has embarked on a growth phase, so we anticipate that GDP will grow substantially this year. We believe that we're well-poised to tap into the conducive macroeconomic environment in order to grow. We are a bank that's focused on growth and development, and we're thinking about organic growth. Of course, we're going to phase in additional technological solutions for our customers. We're going to be highly focused on our offering linked to sustainable development. If we look at sustainable development, we will adjust our position to ESG legal requirements. We're far along that path in doing that. I've mentioned some of the other processes. Well, this is a story that's going to last a long time.
We want to have the top-in-class, the fastest, the most convenient processes for our users, also our customers, internal users. As mentioned previously, I think that we're working on a new strategy to devise a new strategy for 2022 to 2025, the work is highly advanced. We're engaged in dialogue with the supervisory board members who are explaining some things. In the second half of this year, this is what I'm counting on, that we're going to be able to finalize the work on that strategy and communicate that strategy.
Of course, I can reveal a little bit of information, that this strategy will be a continuation of our growth strategy that the bank has had in the past. The bank and our shareholders has extensive ambitions in terms of being active and the scale of its operations, the magnitude of its operations, and its profitability. We want to be very clear on that, and we're going to manage things reasonably and prudently, especially in the cost side. I think that would be more or less it.
In terms of maybe as a matter of a recap, I would say one thing. Our results for Q2 are quite robust. The core income has grown. Risk is totally under control. Same is true of costs. The Swiss franc factor is something that we've talked about at the previous conference. I'd like to thank you very much for your active participant, perhaps your patience in this part of the presentation. Now we can move on to the Q&A session. I see some of the questions. I think we've responded to some of the questions in the course of our presentation. One second, please.
Perhaps I'll walk through the questions chronologically. The first question from Generali PTE. What percentage of the Swiss franc loan portfolio got a provision attached to it in Q2? If we look at the overall portfolio, it's 11.4%. If we look at that portion, which has client claims, well, then the provisioning is in excess of 90%. The second question from Santander. The costs of wages are at the same level, despite the decline in the number of FTEs by 9.5%. What sort of expectations do you have for upcoming quarters? Well, you're very well aware that there is, of course, across the market in the entire economy, in terms of the level of wages, we have inflationary pressures which are quite strong.
Our policy is that raises are done once under a process at the beginning of the year, in the first quarter of the year, the subsequent year, and that's going to be the same case here. I think the pool of raises will be close to the level of inflation. It should not exceed the level of inflation. Kamil Stolarski. Do you have some expectations about the ex Fortis Swiss franc loans? Well, we have some situations in the first instances that we've lost cases inherited from Fortis, and that's reflected by the growth in the provisions for legal risks. We have another question from the same person, Kamil Stolarski . The question's in English, I think the question is going to be for Jean-Charles Aranda probably.
For further fees and commissions growth. It was relatively flattish in the last four quarters.
The answer is yes. First, we have to keep in mind the impact of COVID-19 crisis. Meaning that the activity with our customers was affected, and we are starting recovering. There is no reason for not keeping on growing in fees and commission. We have some positive trend in many areas as well. I was referring at the beginning of the presentation about asset under management. The portfolio is continuously growing, so it might be affected in fees and commission. As you know, this topic, we had received it for a long time, and it's a never-ending story. The answer is yes.
[Foreign language]
Thank you very much. The next question is: How do you intend to encourage your customers to utilize remote access channels? Will you make available BLIK to the phone? This is a question for Mr. Marczyński. We continue to encourage customers to use remote channels. We're giving them new functionalities all the time. We're introducing or running CRM campaigns. We have web campaigns, and this is something that will continue. We can see the absorption of remote channels is very clear. The same is true in terms of the number of transactions executed through the BLIK functionality.
Now we have a question from an individual investor. In terms of the macro impact on the balance of provisions, how much of your provisions have been set up in 2020, and how much of that has been released in the first half of 2021? What amount of your provisions remains in the bank's balance sheet? What I'm thinking here is, how much of the provisions directly related to the pandemic, how much of what we've created has been released?
I think that the CRO is the best person to respond to that question. I can respond to this question. The balance of provisions at the end of 2020 was PLN 236 million. As I mentioned during the presentation, we have an additional amount of provisions of PLN 80 million. If we add it's a little bit more than PLN 300 million. That's the balance of provisions pertaining to the potential impact of COVID. Thank you very much. We have two questions that are identical about the sensitivity of the interest result to market interest results. This is from Trigon and from [inaudible].
This is from the PKO Bank Polski brokerage house. If we have an increase of still basis points, that would give us an additional PLN 200 million additional NBI in terms of the total bank result. We have a question from [inaudible] . What's going to happen with the Swiss franc settlement agreements? Is this a good way of solving the problem? If so, when will you phase them in? I think we've spoken previously many times about that subject. We're waiting at present for the rulings of the Civil Chamber of the Supreme Court. The plans are for that ruling to be handed down on the 2nd of September. I won't say anything more about our plans because we've talked about them in the past.
I don't see any more questions in this tool. I understand that questions can be posed orally, humans can pose the questions. I'd just ask you if you have any other questions, if you'd like to take the floor, ladies and gentlemen. I see there's one more question here, but I've just found it. Again, [inaudible] . Let's assume that the dividend policy of the Polish FSA will be the same as it's been up until now. When will the bank be able to pay a dividend, and when would the bank like to do that? Perhaps I'll ask Jean-Charles Aranda to respond to the question about the dividend policy, when we'd like to pay dividends.
[Foreign language] It is not the first time I get this question. I will keep my answer. We are doing our best to pay dividend as soon as possible, and this is one of our main goal. By principle, I am not going to give you a precise year for that, but we are working on it.
[Foreign language]
Thank you very much. Mr. Santander, from Santander. What's the pipeline of corporate loans? Do you anticipate higher growth? We don't give forward-looking projections when we talk about the pipeline. That's perhaps a little too specific of a question. We see recovery. We see greater activity amongst our customers. We see greater interest in investments, and that, of course, means that there's more demand for financing. Of course, it's our total intention to participate in that growth, and we want to actively satisfy that demand. I don't see any other questions. Are there any other questions which you would like to express verbally, out loud at this time? I don't hear anybody raising their voices to say anything. If there are no other questions, perhaps I'm going to count maybe to five.
If there are going to be no questions, then we're going to go ahead and say we'll wrap things up, essentially, if I don't hear any or get any more questions in the next four or five seconds. I haven't received any new questions. Nothing's flowing in. I'd like to thank you for your presence at today's remote earnings conference. I'd like to wish you a very good end of the summer, and it's my hope that we'll be able to see you in the near future directly in one quarter from today, more or less one quarter from now. Thank you very much for your attendance.