Good morning, very warm welcome to another presentation of results after Q1 2026. We are in a typical composition, so I'm not going to introduce the participants on the bank side. Let's get to the agenda. It's no surprise, so I think we can now present key highlights. This was the first quarter of the implementation of our new strategy, Accelerate 2030, which we launched in December last year. As you remember, it contains a significant growth component, and I'm happy to say that a number of elements that we have anticipated to be conducive to growth, we have accomplished in Q1. We have increased the number of customers. I'll get back to it. We have increased the volume of loans; more about it later. It was a pretty solid speed of growth.
We have maintained the net interest margin in a world of falling interest rates. About other elements, we put emphasis on balanced loans. We have a target, a clear target for the five years of the current strategy. In Q1 2026, the bank arrived at a net profit of PLN 375 million. Contributing factors were interest rates. CIT increased to 30%, which is a fact, unfortunately. BFG, Bank Guarantee Fund costs in Q1, as you know, we paid to the restructuring fund. It was accounted for in Q1 this year. Another important element a very low volatility in January and February in financial markets.
It improved in terms of transactions in March, but the geopolitical situation contributed to the volatility, specifically the one related to the situation between the USA, Israel, and Iran. The consequence of our results is an expected drop in ROTE and a certain worsening of the CI ratio. A recap of three important targets, strategic objectives, in fact. I'm happy to say that we have 55,000 clients in retail. Also in corporate, in the sub-segments that are strategically important, the number of clients went up. We have sold PLN 1.8 billion of balanced funding. As a result, the volume is PLN 14.6 at the end of Q1. I'd like to emphasize two things.
First of all, our key partnerships with the key players on the home appliance and electronics market have been launched, and they are working, which contributes to the acquisition of new retail customers and our volumes in the consumer finance section. We have also reviewed our credit policies for retail customers and for SMEs. We have adjusted the policies to the current market situation with a very positive outlook on the dynamics of Polish GDP, the strength of the Polish economy, and growth perspectives. We have adjusted these policies to these components and to the fact that our loan portfolio is very, very safe and of high quality. Moving on. Q1 shows a clear growth in the sales of individual accounts, personal accounts, which is linked to our strategic objective.
The market continues to be overfluent , with too much liquidity. We're happy to see growth in investment products. In investment products, there is clear growth. In terms of mortgages, we did less well in Q1, mainly due to huge pressure on margin from the market and the fact that more and more customers are interested in mortgages based on a variable rate. We did not have this offering in Q1. We are launching this offering soon, in the next few days, literally. In corporate banking, the number of customers has not changed nominally, but in international customers, the number of customers has gone up. We have completed a number of interesting transactions in this area, and I'm optimistic about the future. The pipeline, to use jargon, is very promising.
In terms of payments and transactions, here we see seasonality after a very stormy Q4, as is usually the case with the fourth quarter. Looking at volumes, as you can see in loans, we have grown, the bank as a whole and individual elements as well, more significantly in the corporate part. This is loans to institutional clients. 3%, almost, we have increased the market share to 5.8%. In terms of deposits, the drop is seasonal. It focused on liabilities in our bank. It went to current accounts, and they left the bank in line with expectations in Q1. The number of customers. I wanted to emphasize the reversal of a trend.
All of 2025, as you remember, we were cleaning the portfolio of customers in retail banking and business banking. The number of our customers was systematically dropping, and you can see that on this graph. In Q1 of this year, the trend has been reversed. The number of customers started going up, and this is something that we will put a strategic emphasis. Net banking income, you've seen some of the information on slide one. I'm not going to discuss it. What deserves to be mentioned is our cost management and expenses management. If you exclude PLN 239 million of Bank Guarantee Fund, well, the costs are flat.
Growth by 1.4% year-over-year in the reality in which we're in, I think, is a very good achievement for the bank. I think that we have built a culture of cost discipline, but we are still very balanced and rational. We're planning to maintain the cost dynamics in terms of legal cost and legal risk cost for foreign exchange-denominated mortgages. It continues to be similar. The situation is improving. We decided a long time ago to build provisions for this risk. Other banks had a different approach, but this is our one. The cost of credit risk is 27, 0.27% low. We have the provisions related to the situation in the Middle East.
I wanted to emphasize again that we have maintained the net interest margin on assets, even though in Q1 we were operating in conditions of lowered interest rates. In ROE and ROTE, the drop is a result of the elements I have already discussed. That's it for starters from me. Over to Michał Dybuła, who will talk about the macroeconomic environment.
Thank you, Przemek. Good morning. The war in Iran in March and the blockade of the Hormuz Strait did not impact the data related to economic activity in Q1. March has brought good news from the industry and from the retail trade sector. A lot suggests that the data that we have, in Q1, the actual economic growth of GDP was close to 4%, maybe slightly below 4%.
In terms of inflation, the fuel price hikes have impacted inflation. It rose to 3%. It continues in April. It went above 3% in April. Looking at futures for oil and gas, current inflation at the end of the year, for a moment, may exceed the top threshold around the inflation target of the National Bank of Poland. The uncertainty related to the situation in the Gulf, specifically in the Hormuz Strait, may continue to impact economic development this year. There's a number of scenarios that one can imagine.
In our graphs, at the bottom of the slide, we are showing our take on an energy price shock if it went on for a quarter, if it finished this month, and then if it went on for a year, or if it were a permanent shock and the high prices of oil and gas were to stay for a long time. As you can see, the impact of energy prices on GDP and inflation is very different, and it all boils down to how long the crisis in the Gulf is going to last. I think that yesterday and today, the hopes for de-escalation, for unblocking the Hormuz Strait, have gone up.
Hopefully, this is the beginning of a more lasting improvement of the situation in terms of energy, raw materials, and prices. I think we also need to mention one other element, which is independent of the geopolitical situation. This is something that will support Poland this year, and by this, I mean at least EUR 40 billion from EU funds. These funds will go into the economy, supporting the speed of investment outlays, first and foremost, and I think this needs to be emphasized.
I think we should take that into account while thinking whether we are in danger of recession or a huge increase in oil prices, at least this year. I personally don't see such a risk. Monetary policy, inflation, and the financial market in Poland. The inflation has accelerated, as I have already said. The forecasts for the months to come are quite uncertain. A lot depends on the fact how oil and gas prices are shaped. I think one more thing should be stressed. Probably the potential of the second-round effects. I mean, high energy prices exerting pressure on wages on the salaries, which will accelerate , which means that inflation will be intensified. I think that risk is much slower than in the years 2022 and 2023, when we had to face substantial raises in the minimum wages.
I think this factor is not so important right now. Monetary policy, as far as we know, the Monetary Policy Council decreased the interest rates in spite of the conflict in Iran having already started. I think we just have to wait and see. Well, thinking about inflation in the months to come, I think that the prospects for cutting interest rates will no longer be there. At the same time, I think at least for now, thinking about raising interest rates, I think that risk is also relatively small, at least for now.
I think another quite a surprising issue, at least for some observers of the market, it could be the fact that in spite of an extreme surge in international uncertainty and the pressure on oil and gas prices, we know that Poland is a net importer of oil and gas. The exchange rate of the Polish zloty has not really responded. I think there are a few elements. On the one hand, a robust base of the economy, and the inflow of EU funds. This is a factor that at least indirectly stabilizes the foreign exchange market, and it should continue to do so in the near months. Last but not least, the banking sector demand for loans and deposit dynamics. The deposits are growing in the private sector, still faster than the growth of the volume of loans.
I think that the factors are quite well-known. On the one hand, there is a growth of foreign assets, net foreign assets, because of the EU funds, amongst others. On the other hand, there is quite a high deficit of the public finance sector, which is financed by the Polish banks, which means it also increases deposits. Thinking about loans, the situation after Q1 is quite optimistic. Looking at the expectations of institutions, financial institutions, and corporate entities, I think that the demand for consumer credit, corporate credit, and mortgage loans is going to remain quite high, especially in terms of corporate loans for all key segments in the near future. Thank you very much. Now I will hand it over to Mr. Konieczny.
Good morning. The Q1 means a growth in our activity. We had a growth of the credit portfolio of more than 6% year-on-year. And on the side of liabilities, we also had a growth of the deposit base in various products, by almost 8%. The capital base has been strengthened. Our equity has grown by a bit more than 10%. The first quarter is also a quarter where in the new environment of lower interest rates and with high pressure on the part of the competition, we have quite good results, very good results in terms of the net interest margin and interest income in general. Nominally, they have gone down. However, in the new environment, they remain at a satisfactory level in my opinion.
What is worth underscoring is it is yet another quarter where the policy pursued by the bank, the policy of cost management, brings fruit. The operational costs are in tight control. There has been a banking guarantee, a one-off, substantial premium, which has impacted the results of the bank in the first quarter. Let me draw your attention to the net interest margin. When we met in previous quarters, last year, we were facing cuts in interest rates, so we were losing 10 percentage points a quarter. Right now, we are losing much less, twice as less, which means that the strategy of the bank has been pursued in such a way that it defends the net interest margin. If we take a look at the loan portfolio, as I said before, the loan portfolio was mainly supported by corporate banking.
Here, both turnover loans and investment loans contributed to that growth. This is yet another quarter where we are seeing good growth in consumer loans. As we said before, due to competition activities, it was a weaker quarter in terms of mortgage loans. We think that in the coming quarters, we will go back to the expected growth of mortgage loans. If we zoom in on the Swiss franc portfolio, since this is a risk that all the participants in the market know very much about, we basically take a perspective of changes in the number of new claims. You see, in the first quarter of 2026, there were 282 new lawsuits. In the first quarter, 281. We see that the write-offs are quite similar to Q4.
This is related to the dynamics. As I have repeatedly mentioned, we think that the Swiss franc loan issues are on a downward trend. However, this kind of risk is long-term in its nature and is going to accompany us in the following quarters. This is directly related to the number of claims that we receive in a quarter. No other events worth mentioning. Now, about customer deposits. It's quite an interesting quarter. After quite a dynamic growth of the deposit base at the turn of the year, it was a quarter where the deposits from institutional and corporate customers seasonally decreased. What we are very happy about, it's the fact that it was a quarter of systemic growth in the retail sector in a structure that is wished for.
The deposit area is very important for us in terms of shaping the net interest margin. It is an area where despite strong competition in the market, allows us to stabilize the margin in the future periods. The first quarter is also a quarter where we are seeing a systematic growth of sales and distribution of investment products. We are encouraging our customers to invest in the product group, especially looking for attractive return of investment. It was a quarter where we have seen a lot of interest in debt funds in particular. On the interest margin, interest income, a lot has already been said. It is a quarter where we see one clear thing. We are working in an environment where falling interest rates, the fall of interest rates has flattened. We see a strong pressure on the margin.
We see this in the net interest income and the net interest result. The volume effect is helping us to stabilize the margin. We are moderately optimistic looking out into the future and thinking about the interest result. The fee and commission income, it was a quarter where things were more or less normal, comparable to Q4, both in terms of structure and nominal values. What is important, it was a quarter without any one-off events or M&A transactions. This did impact the dynamics. If we compare it to last year, we had such transactions present last year. However, it was quite a robust quarter. Thinking about the income we have generated. One more comment perhaps about the previous slide. The increased sales of investment products also contributes to commission income.
This is an important component of fee and commission income that is on the rise. Now, about the net trading income, there are two things we should pay attention to. The client transaction result is something that is pursued in quite a stable market situation. The variability is very low, which means we are very happy about the income in the first quarter. It's comparable with the fourth quarter of last year, despite the fact that, as I said before, January was very quiet. February and March were a little bit better. Generally speaking, this result is considered to be solid.
On the other hand, there are changing expectations on interest rates, which was also mentioned before, and which does impact the valuations of the treasury, because the interest rates did grow over a long-term perspective, which did impact the valuations. However, to recap, we have a satisfactory net trading income in Q1. Costs, expenses. I've already said two things. A follow-up cost discipline in the bank and a one-off event this year, I mean, the Bank Guarantee Fund fee. As you know, the bank took the decision to mobilize funds from the banking sector for resolution purposes and not for deposit purposes. There is a different accounting mechanism. The full amount of the fee has been written off in the first quarter, which did impact the expense dynamics.
Okay. Costs of risk in Q1 were at a low, stable level of 0.20, of 27 basis points. It was even lower in current production. PLN 62 million results from portfolio provisions that we have opened after reviewing all our customers who are potentially exposed to the Gulf conflict and in the Strait of Hormuz. We have created a provision of PLN 47 million, and we'll be watching whether the risk will materialize, whether we may lower it, or we need to increase it. This is our current estimate, and this is our current assessment of the situation.
In terms of quality of the loan portfolio, 2.7% for loans. We are in a situation where the portfolio grew by 6% and the loans with loss of value are PLN 2.5 billion. In leasing, we had a one-off situation with bigger exposure, but payments are made regularly, and they are in a pretty short time horizon. The indicator for leasing is much lower now. Portfolios in all segments are correct. Cost of risks are limited, and we are maintaining the level of loans with loss of value at a right level. We are going to sell these loans in Q2. It's going to materialize, and we do it as well in Q4.
All goes well, we will have a big restructuring in the chemical sector, which may impact the level of loans with loss of value, but not write-offs, because they are already allocated right now. You look further at individual stages one, two, or three, and they are at a very stable level of coverage. Was a bit lower in Q4 because we were selling loans with loss of value, but now they are higher after Q2. When we sell these loans, they have high coverage. It may fall by one, 2%, and then we will rebuild this. Concluding, I think we are driving at a situation which is most desired by the bank, a situation where working loans are increasing.
Those with loss of value are going down. They have the right coverage, and the cost of risks is limited. Thank you very much. In capital management, two things to be mentioned. This was a quarter when we were implementing decisions made earlier on the payment of dividends. On May 11th, the dividend will finally be disbursed. That's one message, the other one is what I mentioned at the beginning. This was a quarter when we were systematically increasing the capital base. We're maintaining it at an adequate level to our strategic objectives. From the point of view of financial resources needed for growth, the bank has sufficient capital, and the commercial activity is fluent.
We can focus on the coming quarters on further growth of the scale of the business. That is almost the end of the presentation part of the conference. Now, outlook. For us, it's the consistent implementation of the 2030 Accelerate 2030 strategy. We've already completed 5% of the period for which the strategy has been defined. We want to achieve our strategic objectives, operating in an unpredictable and volatile environment, but that's nothing new for banks in Poland. We've had surprises. We've been having surprises for years. There's a lot of volatility and, as you can see, we were able to deal with all sorts of situations. What is very clear in the market is a high level of competition, over liquidity, which is increasing.
Banks are putting emphasis on fees, commissions, and margins, and you have to be vigorously involved in this competitive rivalry and be successful. Of course, there are also legal and regulatory risks related to protecting the interests of the consumer, but it's also linked to the situation of the budget of this country. I hope that the trajectory of dropping CIT in line with promises made last year will materialize and that there will be no surprises in this area.
On the other hand, we know that life brings surprises. We're doing our thing with enthusiasm, with prudence. We want to grow, but also manage costs and expenses. We want to be more efficient while maintaining excellent performance. We are optimistic. I'm always an optimist. I'm optimistic about the coming quarters of 2026. This is where we close the presentation part. Let's now move on to the Q&A session. Thank you very much. Do we have questions in the room? In row 24, someone wanted to take the floor. Andrzej Powierża, Citi Handlowy.
Good morning. I have two questions that refer to what you've been saying during the presentation. Number one is about changes in the approach to appetite for risk. There was a slide where you were discussing the approach to SMEs in retail and consumer finance. It is about loosening. If you could expand on this a bit more. President Kembłowski will eagerly reply. I was vigilant. I did not use the word loosening.
I would use the term better or more selective approach rather than loosening. We talk about relativity. Everything needs to be done to make sure that growth is there, but the NPL loans or losses related to loans in general need to be lower. NPL loans and losses will happen, but what it's all about it's about opening to these conditions that allow the bank to grow faster. Of course, this will mean a nominal increase in NPL loans because we will be granting more loans, and it will involve additional costs of risk, but proportionately lower than the growth. All in all, for the bank, this should make the bank more profitable. That's how it's done. It's more about a sectoral approach, or are you improving your models?
I can give you one example. We're looking for consumer loans. If we're checking the triggers that lead to us refusing to grant a loan to a customer, the customer then went and got a loan from a different bank. We can check it, we can see how the loan behaves in the other bank, and for what reasons NPL loans can be generated. We can see whether there was a loss of value in the vintage of 12 or 24 months of 2% or 15%. It's 2%, you can easily grant this loan, and that's correct, and it's profitable. If we're dealing with 15% loss, it's hard to make money on this loan. That's why we apply this approach to different segments.
Thank you very much. Second question about words again, maybe, and terminology. You said that you are moderately optimistic, I don't recall the exact words, about the net interest margin in the coming quarters. If you could elaborate, please, what do you define as moderate optimism?
Well, it's a pretty relative term. Everyone can define this level of optimism differently. Well, we're going to implement the plans in line with our strategy. For the NIM, we will focus on volumes. We'll be increasing the scale. We wanted to follow the routes that we have defined in the strategy so that we can grow our loan portfolios. Wojtek talked about this, and that's the reason for optimism related to net interest margin.
I also commented on the liabilities and the funding. We can see that the bank has room to work on this, to work on the structure , the scale, and the price in terms of sources of funding. This is also a source of r optimism. At the same time, we're working in a highly competitive environment. If I were sure that everything was going to work, I would be very confident, because the ingredients are there. As the CEO said, the market is highly competitive. The fact that you have a good plan, that you're taking the right actions, is very important, but it's not enough for it all to pan out as desired.
However, we have a deep conviction and belief, and we have demonstrated so far that we know what to do. If a given recipe doesn't work, we'll take other action to meet our goals. I promised two questions. Since I have the microphone, let me ask a third one about products, about the pilot project related to the conversion of installment loans for current account holders. What stage are you in this process? How do you see the situation? Well, I will have to disappoint you here because this is a pilot project, and we agreed that we're not going to talk about the details at this stage. We want to draw on positive experiences for us to be more certain as to the results. Another quarter of patience, please. Kamil Stolarski, Santander Bank Polska.
To refer to what Andrzej was asking about, the change in the loan policies. What hopes do you associate with it? Is it about increasing sales, the higher selectivity, or how do you see the situation? When has it happened? It's already in production.
We are now watching the results. It will depend to a large extent on how many applications we receive. Because it's not that we just make a change, but become more selective. We also need to have the right resources, in order to process the applications that will increase the production, the number of applications. To give you a more specific answer, we are expecting a growth in sales of those loans and the balances of those loans. What about a mortgage with variable rates? Any comment on that? Are you following the customer, or did you plan that before, to go back to the variable rate mortgage loans?
Let me put it this way. There was a clear demand for variable rates. This is following the customer in a way. Some banks have already responded to it. They are selling both fixed-rate and variable-rate mortgage loans. After a discussion, we decided to meet the customer halfway and to do it. We were able to do it. Well, we will be able to do it in a couple of days.
The structure of deposits, my last question, and the share of deposits more than 30%. Is this a result of a high share of corporate deposits? When I look at other banks, I see you've got more term deposits than the rest of the banks.
Yes, this is true. As you have rightly noticed, we have such a proportion of deposits. However, in the first quarter, we introduced a change in the structure. Please remember that a time deposit is a set of advertising tools. It is used actively as a client acquisition mechanism. The base of our corporate base is wide-ranging, which only supports the results. However, to come back to what I've said before, this means we are changing the structure. We are acquiring customers by attracting them to deposit products. It's nothing unique.
Many financial institutions work that way. We are going to do the same. We are doing the same, actually. Please bear in mind that we are very active in the wealth management area due to customer preferences. This also contributes to the structure. Thank you. Now, questions online. Which part of new mortgage loans are related to refinancing? Perhaps I shall answer that. In Q1, about 50%. Thank you.
Which customer profile prevails in the group of newly acquired customers? If we take a perspective of segments or sub-segments, what makes us happy is the fact that all of them are growing, starting from wealth management through affluent clients, through mass clients, as well as business customers, and micro business customers. About the channels of acquisitions, all of them are used in an intensive manner, starting from partnerships in mobility channels through the subsidiary network. We have reached out with interesting offers and are ending with micro customers that we have quite a successful campaign going on . These are all questions that were asked online. If there are no more questions from the room, we'd like to thank you very much. I don't see any questions in the room. I don't see any more questions online.
I think everything is clear because there were so few questions. Thank you very much for participating both here in the room. You're always warmly welcome to come, as well as online. Hoping to see you after Q2. Have a nice summer. See you again.