Good morning, ladies and gentlemen. Welcome to yet another conference of our bank where we will summarize the results for Q4 of 2023 and, in fact, for the entire previous year. We are here in a standard composition. To my left, Mr. Piotr Konieczny, CFO and Deputy President of the Management Board. On my right, Wojciech Kembłowski, Vice President Chief Risk Officer, and Michał Dybuła, Chief Economist of BNP Paribas Group in Poland. We will be talking traditionally about our results. We will say a few words about macroeconomic prospects and outlook, and there will be also time for questions and answers. As you can see, the agenda just behind me. Those of you who joined us online can also see the slide. But we also have a few people here who decided to visit us here in person to see our very nice facilities and have a snack.
So let me start with the most important information about the bank and our last year's results. As you know from our communiqué, last year we achieved the net profit over PLN 1 billion, which is historically the highest level of profit that the bank has ever achieved. But what is also very important, we've achieved that result in spite of creating provisions for the risk related to Swiss franc at the level close to PLN 2 billion. This shows how serious the burden for our bank and for our banks that have the same issue are the provisions for Swiss franc loans. The ratio of coverage with provisions of our loan portfolio exceeded 100%, which also means that we are one of the best hedged banks. Last year, in this respect, last year there was a low demand for loans. That class of assets slightly declined last year.
But on a positive note, the moderate increase of deposits properly managed meant also that we had a slight improvement in net interest margin and net interest income 36% up without taking into account the credit holidays. But we are really happy with this dynamic. We could see, in fact, growth in every aspect of our activity. Costs slight increase year-over-year. Of course, again, taking into account the regulatory costs, that increase would be higher. But we, again, are still convinced that our costs are under control. In the environment of high inflation, particularly last year, we are very effective in managing our costs and expenses, and we plan to continue that. Return on equity 8.2%. If we, again, excluded the Swiss franc's effect here, we would have 22%. Again, a completely different level compared to what we report.
But we do hope that systematically the bank will be able to improve ROE. Let's go further. Here you can see the presentation showing our strategy or reflecting our strategy goal beyond that consists of four pillars. Up and positive on this slide. Just a few words to add to what you can see on the slide. On the right of the slide, you can see the level of realization of selected strategic goals that we've defined in our strategy. On the number of cases, we've managed to get better results than the strategy assumed. In some other aspects, we still have some work to do. But what makes us happy is the significant increase in processes available in remote channels. And this is the effect of a very intense digital transformation of our bank.
We do believe that the model in which both internal processes and solutions for customers are available in a digitalized manner is of key importance. But we also believe that direct contact with our customers, in-person contact via human channels, if you like, is and will still play an important role in the sector. A word about the pillar positive. As you know, issues related to ESG are of fundamental importance for us. This is something that is both part of our business strategy but also the DNA of our organization. Last year, we have improved our sustainability rating, which is awarded by Sustainalytics from 9 to 10.2, which is absolutely the best level in the sector, which corresponds to low ESG risk, which is very important for us.
It is also important for us that we systematically increase the share of sustainable financing in our total loan portfolio. Where we still have a lot of work to do, still, the share of sustainable assets in total assets under the bank's management, we are still far from our goal, but our result is the effect of the fact that last year we increased our results on investment and growth there was significant. Therefore, the sustainable assets simply couldn't chase up, couldn't keep up with the general increase in assets under management. Going further to our next two pillars. The pillar stronger, which reflects both the growth of the bank and the transformation transition issues, a number of very important implementations.
Last year, as an innovation, but also something that will help us effectively compete on the market, we implemented GOonline Biznes platform for SMEs and corporate customers, which is a very modern platform for finance management, which will help us to increase our transaction business. We've also mentioned mamGO platform, which is a platform where our customers can get a car together with an appropriate financial solution be it a loan or a lease. It's the first platform of this type, and that's something that makes us happy. And then pillar together, which is the pillar which is about people. The most important information here, of the two very important bits of information, and I'm really proud of both of them. First, I wanted to tell you that our authorities, our government, has become much more diversified as referred.
Regarding gender, in terms of gender, we have three female colleagues in our management board. We have five female members of our supervisory board. So our governance bodies show that we do believe in inclusivity and gender balance. Of course, I will never be fully content if the participation of women in the bank's governing bodies is not above 50%, because there are 50% of women. But the progress that we've managed to make really places us at the forefront of this issue. The other thing I wanted to tell you about is the systematic growth of Net Promoter Score, which measures both the level of engagement and satisfaction of our employees. It has been growing, it keeps growing, and it's grown since 2021 quite significantly.
What makes us proud is that this growth has happened during a very difficult time, pandemic, the outbreak of full-scale war in Ukraine, great uncertainty and high inflation. But in spite of this very stressful reality, our people, thanks to the culture we create, are more and more willing to recommend our bank as a workplace in their own environments. Let us now look at the parameters visualized here. Parameters concerning digital. So we can see an increase in the number of GOmobile users. We can see generally the growth in customers using remote channels. And the trend is clear. There are more and more clients who prefer mobile solutions. And the dynamic in using typical desktop computers or even laptops is much weaker. A huge increase in tokens, that is, tokenized cards located by our customers in their mobile devices, and increase in BLIK transactions.
Here I should really mention that from the strategic point of view, in 2023, we were focusing on increasing the level of transactionality of our customers and on cross-selling, which is probably the best way [Foreign language] , the best way to translate it into Polish. But that made those parameters better. But that was also reflected in lower dynamic as regards the number of new customers and acquisition of new customers, which I will talk about in a moment when talking about our future. Here you can see that the dynamic related to acquisition of new personal accounts was low last year, which again was the result of the strategy we adopted related to managing our client base. I haven't mentioned that one of the elements of the strategy was sort of cleaning this portfolio, putting it in order.
Whereas this year, we decided to focus more on acquiring new customers. We hope that thanks to new digital solutions, but also focusing on certain activities, the dynamic of new customers' acquisition will be better. Increasing investment products, plus almost 50%. That's very good news because that has a very positive impact on fees and commission income. The market has grown, but not that much. You can also see the parameter related to payments with GOmobile. Again, huge positive dynamic. We hope this will stay with us. As regards mortgage loans, as you know, we are very prudent and selective in our loan policy in this respect, which does not mean that we will do that forever. This is for now the effect of our conscious decisions resulting from the fact that mortgage loans are still burdened with significant legal risk and regulatory risk.
This risk at some point should stabilize, at least in the short term. I think we will be more active on this market. As regards corporate banking and SMEs, slight increase in active customers and quite robust growth in payments volume, which shows improvement of transactionality. We must remember that implementing of the GOonline Biznes platform happened in the second half of next year. So we should see more results of that, even clearer results. As for corporate banking of SME, our bank has implemented a number of major transactions. You can see a tiny sample of them here on this slide. Here, the core message is that we work both with retail clients, but also with the largest corporate clients for whom we have tailored, sophisticated solutions.
We can act quickly, creatively, but at the same time strategically, while keeping in mind sustainable development and executing a growing number of transactions of this type. I have already mentioned loans, a minor decrease, practically the micro decrease, I would say. We basically maintain our market share. As for deposits, they have grown to the level that we have considered correct. We improved NII. We talked about a number of customers a moment ago. Now, a brief look at the results. Let's start with the bottom left, or actually in your case it's bottom right. It shows the scale of Swiss franc provisions. Quarter four was quite burdened by these. We have not never created that many provisions. So as a result, the performance in first quarter was actually in the negative. At the same time, the revenues grew, so that was positive.
They grew on a year-to-year basis, and the costs remained under control. So the fact that the fourth quarter has a higher level of cost is a typical seasonality. We have improved our cost-to-income ratio, which of course is a reason for joy. The margin had a very positive trend. The cost of credit risk or loan risk was on a marginal level. If you remember, we talked for two quarters about the positive cost of risk. This of course is not permanent, and I've never encouraged anybody to get used to it. We do realize it cannot be permanent. However, despite the real cost of risk in the fourth quarter, the total for the year was very low. So this shows the quality of our portfolio, the quality of risk management.
Probably we will never be the bank with the highest loan dynamics, but we might be a bank that will have lowest or among the lowest cost of risk, which is one conscious philosophy of running our business. I have already mentioned the ROE, the return on equity, previously. The core business profitability, you can see clear improvement in reported values. We have already mentioned the regulatory burdens before. What is painful and disconcerting, and I will say a few words about that in the summary part, I will share my views on extending the loan vacations, which is a very hotly debated topic so far in government, soon in parliament. There are also many voices from the sector, but let us leave it for last. As you see, the level of encumbrance on the sector is very high, which of course translates into the cost of our bank.
So the net profit is lower than in previous years. Before we move on to the macroeconomic environment, I would like to say that it is the intent of this management board to pay dividend for 2023. We also intend to make sure that our bank is a dividend-paying bank permanently. Our shareholders have waited for the first dividend for a very long time, investing in developing the strength of our bank. So we hope that this year the dividend will be paid for the first time, and following years will be no worse, at least in percentage terms. Hopefully it would get better. Now I will ask Michał Dybuła to take over and discuss the macroeconomic environment.
Good morning, ladies and gentlemen. I would like to stay to start with the optimistic aspects.
After many months of stagnation, it would seem that the economy is entering the recovery phase. Those preliminary data for the fourth quarter 2023 were published by Statistics Poland yesterday. They do provide reasons for optimism because not only investments grew by 8%, but also exports were higher after many, many months of decline. So this gives us hope that the current year will be stronger in terms of economic conditions. In short term, it would seem that it won't be investments or export that will be the main engine for growth, the main growth driver. It would be household consumption. The income is growing fast. Nominal salaries are growing fast, be it in the corporate sector, be it in the public sector. We are also observing an increase in social transfers.
This will encourage households to become more active and more agile in spending that income, especially since, at least in the immediate future, there seems to be no significant threat of inflation. Most likely, in March, the inflation is going to get close to the target of the National Bank of Poland, which is 2.5%. Of course, this level will not be maintained in the long term. We have to remember that the wages pressure and the demand pressure in the country at some point will outweigh the positive base effect in terms of commodities getting cheaper. We are also looking... I mean, we are also looking forward to changes in indirect taxes, the VAT increase, the freezing of the prices of energy. This is slightly problematic because we don't know exactly when it is going to happen in case of VAT.
We also do not know the potential scale of increase of energy prices that the households will have to face starting from the second half of the year. I do believe that these changes should not have any kind of dramatic impact limiting the household consumptions in the second half of the year. Nonetheless, they do constitute a factor of uncertainty, especially with regard to a lasting decrease of inflation to the level of target. This, I believe, is one of the reasons why the central bank is not hurrying to reduce interest rates. According to the statements of both the president of the NBP and the other members of the Monetary Policy Council, it would seem that there is no major appetite to relax monetary policy in the next months.
A relatively restrictive monetary policy in the country, combined to possible reductions in USA and Eurozone, should strengthen the złoty. I mean, złoty remains very strong, which is consistent with the purely market factors as described, but also the fundamental factors. If we look at competitiveness of our foreign trade at this level, there is really nothing wrong going on. Last but not least, our own industry, the banking sector. The previous year was very difficult in the context that private sector loans volume was decreasing or, at the very least, stagnating, while deposits were growing fairly quickly. Probably those conditions of overliquidity of the banking sector are going to persist for some time. This is not to say that there are no signs of recovery in the sector.
Certain signs of recovery have emerged at the beginning of the year, especially in the household sector, but the economic recovery that is ongoing should also be soon reflected in better results in terms of the corporate segment. I would conclude here and turn over to President Konieczny. Thank you.
Thank you very much. Ladies and gentlemen, financial results. Many of those have been already stated, so to a certain extent, I will just try to highlight and supplement the information you already have. If we look at the financial year 2023, year to year, year on year, you can see that the bank has improved its financial results in most dimensions.
If I were to summarize the entire year in a sentence, it was a year in which, besides the positive elements such as changed structure of our balance sheet, the increase in deposits combined with a favorable macroeconomic environment, this had a significant impact on improved net interest margin, which of course contributed to the main source of the bank's income, which is interest income. In other aspects, the year was more difficult from the perspective of the economy. This was the year in which the demand for loans was not overly large. Our bank is a large universal bank. Therefore, the events and processes occurring in the real economy have a direct impact on the scale of our credit activity. So this was the first major event year on year.
The second important aspect was the fact that the consequences of change in the numbers related to the Swiss franc portfolio, our bank has decided to hedge that position by significantly increasing the value of provisions and write-offs, and thus achieving the portfolio coverage ratio on the level of 109.9%, I think. So it's over PLN 1 billion in net profit. The coverage of the Swiss franc portfolio was of course a necessary prerequisite. A dividend will be paid. So these are the highlights of 2023. Now, if we look at individual elements more in depth... Many things have already been mentioned, but I think it is worth emphasizing that despite a minor decrease in the portfolio value, the bank has maintained its market positions. In other words, we were not pushed out from the loan market. We have maintained our position.
As far as the structure is concerned, there are no major changes in the structure of our loan portfolio. The bank's loan portfolio is 55% of our assets, so that you get the idea of the scale of this category of assets. About Swiss francs, I've already mentioned two important events that took place in 2023. There was also the third one in Q4. The bank has also changed the accounting rules for recognition and treatment and booking of those provisions from Chapter 29, which meant that the adjusted value of the Swiss franc loan portfolio was decreased to PLN 860 million in the book value. And that was the result of the accounting rules change that we carried out last year. So that would be all about Swiss francs.
As regards to deposits, here, the bank was working in all client segments, customer segments, to make sure that we participated in a balanced manner in the increased liquidity in the sector. That can be seen in maintaining our market shares in the sector. That also allowed us to maximize operations on the margin, to build our deposit base in a manner that will not have a negative impact on the net interest margin. The structure of bank financing is like 50/50, really. 50% from the industry or company sector and also from retail banking and individual households. A lot has been already said about the increase in the investment portfolios. This is a very important element of our business model because we want to give our customers the possibility to use savings products.
But for some customers who look for other ways of saving, we also offer investment products. Last year, we had very good results in the sales dynamics and growth in this segment. Net interest income, I've already discussed. Here, the main motors or drivers have already been described. What makes us happy is the improvement in net interest margin to 3.27, mainly built on the liability side. Net fee and commission income. Here, if you look at the quarterly share, quarter by quarter, we have the very balanced volume of contribution of production. First quarters are usually seasonal in their effects. That means settlement with payment institutions. This is a very stable source of income for us. In terms of net trading and investment income, we have two phenomena here that are worth commenting on. The third and fourth quarter.
In Q3, as you remember, we had some one-off transactions that had significant impact on our result, reported result. Whereas in Q4, we have a situation where the volatility on the market goes down, złoty is strengthened, and as a result, the willingness of our customers to enter into hedging transaction is also going down. And that is visible. That change is visible in those figures. The costs and expenses. Two, again, bits of news. If we look at 2023, if we look at the entire year, the value of operating expenses compared to the previous year, the increase is not very big. But if we break it down into particular elements and take into account the fact that there was a huge difference in regulatory burdens between 2022 and 2023, other cost base increased by about 14%.
To a great extent, what impacted this increase of costs was the wage pressure, an increase in personnel costs, as well as the increase in general administrative costs. Because last year was also the year in which the inflationary phenomena are reflected and sort of translate into our cost base, which again is visible in those results and our operating expenses. Now, credit portfolio. To discuss this, I will hand over to Wojciech.
Good afternoon. The year 2023 was the year of the lowest level of cost of risk for the bank, 34 basis points. First of all, thanks to a very limited entries into stage two. In stage three, very good results in material recovery, as well as the sale of impaired portfolios. That happened twice during last year.
Every time, that was with the positive result for us, which confirms that the valuation of those assets in our balance sheet was at least prudent. In addition, in Q1, there were also two significant recoveries from corporate clients. And if we look at Q4 and the level of cost of risk of PLN 77 million, what impacted that most was one-off event shifting one client to Stage two, which meant PLN 40 million more of cost of risk. But in spite of all this, in Q4, the cost of risk was at the level of 33 basis points, which is still the result at the sort of lowest level on the Polish market. As regards to mortgage loans, and also looking from the perspective of possible extension of credit holidays, this portfolio is serviced in a very good manner.
The ability to pay back by our customers raises no issues here. Very low level as regards Stage two and Stage three loans. So I would say that if we look at the costs of loan risk, credit risk, not necessarily related to legal and regulatory risk, for this particular product, they are at the marginal level. The level of impaired loans, there was a point, there was a moment when the goal of the bank, or internal objective of the bank, was to achieve the level of PLN 3 billion. And it seemed that below that, the quality of managing restructuring and recovery would be very difficult to make any progress. We got to the level of PLN 2.6 billion. And it seems that this is the level from which it would be extremely difficult to go even further down. Because we've restructured everything that we could have restructured.
Any new entries will be very difficult to offset. One thing I wanted to draw your attention to in loans to institutional customers, significant drop in the impaired loans for farmers, agricultural loans for farmers, which is connected with an increase in working loans in this sector in connection with the government program for farmers and the 2% loans. We do not expect any increase of impaired loans here because the profile of customers that were acquired to that sector was even better than the profile of customers that we have today in our portfolio, in general. As regards to the quality of the portfolio, when division into stages and the coverage, here, the situation is very stable. Both when we talk about stages one, two, and three, the coverage ratios change quarter-on-quarter.
But this is only caused by the fact that we sell impaired loans twice a year. These are usually loans that are very highly provisioned. So if we sell PLN 3- PLN 500,000 of such loans, then the coverage goes down. But then we add additional provisions for such risk. So generally, we have the level between 60%-63%. Now, capital adequacy. I will hand over to Piotr.
As regards to capital adequacy, I think the most important news is that the bank meets all the regulatory and legally required standards. We have improved our capital adequacy to at the TCR level and Tier 1. Last year, some new events that took place in Q4, being a part of SPR, we did manage to get financing for MREL, which again meant that we were able to comply with all the requirements related to MREL indicators.
And the sort of summary of the situation related to our capital position was the fact that the bank meets all the requirements that are there to be able to pay dividend and to propose to the general meeting to allocate part of the profit to dividend payment. So that will be all as far as capital adequacy is concerned.
So we are coming to the end of the presentation, which some call the slideshow. Probably the more important part will be the Q&A part. But just taking the advantage, the opportunity of having this slide in front of us, let me share some thought with you. I really dream about a situation where we have many, many fewer threats to the banking sector other than those related to competition on the market and trying to satisfy our customers and trying to work out the satisfactory profit for our shareholders.
Because a lot of those threats are of external nature. First of all, is the Swiss francs saga. And it's not the end. The level of provisions we've created for that purpose in 2023 means they will not be as high as they used to be. But it's still not the end. And I still believe that it would be a very good thing to just pass a special Swiss franc law that would define all the parameters to conclude all the disputes related to Swiss francs loans, would stabilize the situation, and would make it possible to define any possible future costs of ending once and for all of this issue for the Polish banking sector and the Polish economy. Credit holidays. One of the bank presidents says that this is really disappropriation of bank.
And I do agree with that because I can't understand why the new government, with some track record of liberal and democratic origin, still believes that extending Credit Holidays is something that is needed, something that we need. Let's start with the fact that since the first Credit Holidays, the interest rates have been reduced and the wages in the economy have grown. Of course, that growth was fueled by inflation, but still, it was two-digit. So I dare say that the situation of a number of borrowers is now much better than it was in the situation when Credit Holidays were first introduced. So the question is, are they still needed? But there's also another issue. Applying a mechanism such as Credit Holidays is fundamentally wrong.
But even if it was much easier to maybe understand that that was introduced by the previous government, in the current political environment, it's hard to understand. As banks, we fully understand, we do understand the need to help those borrowers that are in need. And of course, nobody is going to shirk that. But why would we keep a mechanism that is not applied anywhere else? That is an ethical distortion, a mechanism which in itself brings a moral hazard. It does have a Polish translation, I forgot. So it may lead to excessive indebtedness. So, you know, people are tempted to think, okay, if something goes wrong, the government will bail me out to a certain level. That is not the point. In a good economy, the obligations are there to be kept.
If somebody has real problems that are beyond their control and for no fault of their own, I am all for helping them. The discussion about the loan vacation is not really about money. The whole point is to depart from this mechanism that is faulty on so many levels and instead focus on a mechanism that exists, that has been created specifically for this purpose and that will implement the social and political objectives just as well. Therefore, I do believe that continuing with a credit vacation is disconcerting, wrong, and I still hope, because of course hope springs eternal, that there will be some new thinking about that. But unfortunately, and that the liberal democratic government will understand our suggestions and together with us would relax the access conditions for the borrowers' support fund. And we are all for providing necessary financing for this fund.
There is still over PLN 1 billion of unused funds in that fund and nobody has applied for them. So how do we logically justify such a burning need to extend loan vacations? In this context, let us also remember that very soon Poland will start receiving the funds from the National Recovery Plan. Their objective is to stimulate investment. But every investment, besides the EU funds, will require own contribution and debt support. So we do need the banks that are well capitalized and ready to lend, so that these incoming funds can be used to their best advantage. So I still do not understand the point of extending the loan vacations. And please forgive me, but I really use every opportunity to voice what I think about and how I feel about it. Let us conclude this form of assistance once and forever.
Let us use a smart support and help structure to provide assistance to those who need it. Of course, the reform of reference indicators will be a challenge. It was initiated, in my opinion, for purely political reasons. It is ongoing; there are a lot of challenges involved. I would rather not get into these here and now. Although I do have certain hopes with regard to its further development. And I don't believe it should be stopped. The next item is energy transition. This, of course, also involves credit holidays, the NRP. This will require huge financing and I truly do hope that we will have an abundance of funds, both debt and equity. Because we have no choice. And if we do not transform Poland's economy towards renewable sources, Poland will lose competitiveness.
Not because the product will be more expensive, but nobody would be willing to buy products that are contaminated with such huge levels of CO2 contamination in the Polish manufacturing sector. Nobody will want to buy them. So this is it for 2023. I do believe the year was good and that things will get better. Today, during the management meeting, it came to my mind that the results for last year were up to our capabilities, but not up to our aspirations. Our capability is weighed by the Swiss franc portfolio and our aspirations are based on what we believe we can achieve on a continuous basis if we were not burdened with the Swiss franc problem. So looking at how our organization functions, what our drive is, and what our results would have been without the Swiss francs, I am an optimist looking into the future.
We keep doing our job: improve customer service, rational equity management, rational capital management, continued investment in IT infrastructure, new solutions, looking for innovative ideas from outside the box of traditional banking, cooperation with those who develop such solutions. Because not everything has to be produced in-house, sometimes you can absorb solutions that are developed by startups and fintechs. So solid, robust work on improving our results, on improving our parameters. And for our bank to be a deep-end bank. Thank you and we move on to the questions and answers session. I suggest we start with questions from the room. I mean, since you have taken the trouble to come here to talk to us, you will get priority. I will hand you the microphone. Please introduce yourselves.
It had to be turned on, simple as that. My name is Adam Soboń , ISBnews.
A few questions about Swiss francs. Have the recent CGU rulings changed anything? Are the clients more or less willing to litigate, or less willing to litigate, more willing to settle? What is the situation with Swiss francs today in terms of dynamics? If I remember the numbers well, there were over 12,000 settlement proposals, over 4,000 were accepted, 3,000 were signed. What about the remaining 8,000? Are those people thinking about it or have they already rejected the settlements? So this is my first question. It's about, you know, the difference between the number of proposals and number of acceptances. The second is your favorite topic: loan vacation. How do you estimate the cost based on the draft that was announced at the beginning of the year?
Well, let me answer together with President Konieczny.
Well, as for settlements, as you have very rightly noted, the numbers are working, the bank is still working on it, the process has not ended. It is an iterative process, which is to say that in terms of numbers that you have named, as in a case of every negotiations, there is a time for proposals to be presented. It is a very individualized process. Because we are not talking about any kind of a program or a broad scale, we are talking about a very individualized, case-by-case approach. So it is iterative, ongoing, and we are still hoping deeply that after a certain slowdown that we have witnessed in the fourth quarter would continue to contribute positively to resolution of the matter of Swiss franc loans. So this is it about the Swiss francs.
No, no, as for the European Court of Justice, no. There was no impact. I mean, from the perspective of the provisions, the decisions, and the rulings that were communicated did not generate any changes. As for loan vacation, I will not quote any numbers, although I know them, based on the draft, if for no other reason than because the draft keeps evolving. So, you know, for example, in an environment of lower interest rates, the cost will be much lower than it was during the first round of this most unfortunate solution.
I see, we have lots of questions from online sources, so I do invite you.
Kamil Stolarski, Santander Bank. Sometimes we compare the banks within the Santander Group. So when I say that BNP is a small bank, my colleagues rebel. I would rebel too, although we are smaller than Santander financially. You'd have to multiply us by 1.72 to get the total assets of Santander.
But, you know, there are two banks that are even bigger. But lots of banks that are much smaller. Well, yes, but as a stock market analyst, I look at it from the perspective of the stock market and the WIG. The shares worth several dozen thousand PLN have come onto the market. So I wanted to ask about the investor commitment. In the report, you say that you maintain the increase to 25%. So I'm asking when it is going to materialize and why it has not materialized at the time that was indicated in previous reports.
Well, I will use something that I have written down here to make sure that I don't say anything inappropriate.
In answering your question: According to information received from BNP Paribas SA, which is the main shareholder of the bank, BNP Paribas SA intends to increase the number of shares, free-floating shares, to up to at least 25% in the future. We both know that questions in this area should really be addressed to our colleagues in Paris. Because BNP Paribas SA is a party to that declaration, so, and you know, the potential executor as well.
So thank you. I have a second question about the dividend policy. Congratulations on the dividend. We were waiting for it and now we see it. But, you know, I should assume something in my Excel sheets for the following years.
So, given the capital surplus or equity surplus, is the assumption that you will pay the admissible maximum the right assumption, or would you come closer to Paribas Group levels? What is the policy today and what we should assume for the next years?
In our Go Beyond strategy, that will be valid until the end of next year, we have assumed that 50% of profit would be paid out as dividend. I would not get stuck on this level. But of course, the actual payments and actions will depend on our results and equity situation. We will never be the most aggressive bank in the world in terms of dividend payment, but I think 50% is not our last word.
Final question from me. On the first slide, with the cost of risk, there was a comment about the 33 basis points risk in the fourth quarter.
Is it a guidance for 2024 and following years or did I misunderstand?
Well, I believe that we do not provide an outlook of the cost of risk, no forecasts in that respect, but we will not maintain the level of four basis points as it is not possible. We will certainly be closer to market and definitely at the lower end of the market.
Thank you. So if there are no more questions here in the room... Okay, we've got one more.
Good afternoon, Marta Czajkowska, IPOPEMA. I wanted to ask about the sale of mortgage loans that you've mentioned in the presentation. The sale in 2023 was much below the potential of BNP. So the question now is: What has to change for BNP to get back to the right track as regards this sale of mortgage loans?
This year, we will increase our activity as regards the sale of mortgage loans. We will not increase it to the level that we saw before, because at some point we even had 10% share in the sale of new mortgage loans monthly. We don't have such plans to achieve that, but we do plan to achieve a significant increase in sales this year. I think the final resolution on the so-called Credit Holidays rightly referred to some as disappropriation of banks. If it gets finalized in this way or another, that will be a good situation for us. And now the question about the sensitivity of the net interest income, what your outlook would be for this result in the prospects of the stable interest rates.
As far as I remember, the analysis of the sensitivity of our NII to 100 basis points, it's about PLN 150 million or PLN 60 million. That's the sort of response. With the decline, reduction of rates, if there is stability, it may...the margin can even grow or it will at least remain stable.
Do we have any questions here in the room? If not, we can go to now questions asked online. 127 questions from our remote viewers. Łukasz Jańczak, Erste. What is the interest rate for MREL financing provided by the group in 2023? Is the bank planning for further issues of MREL in 2024?
I wanted to make a joke that it's an instrument based on the WIRON rate, but maybe it wouldn't be that funny. But okay, what can we say? T he parameters of this financing are market-based, and the fact whether we will continue to issue MREL will depend on our current capital needs.
Reuters. What part of the Swiss franc loan portfolio is covered by provisions? The coverage of the book value, gross book value of this portfolio before the adjustment resulting from the application of IFRS 9 is about close to 111%. And then further on, does that practically mean that the subsequent release of subsequent provisions will not be that high, or maybe, the issues or cases related to payment for capital can change that?
Now, that is not taken into account in our model. The fact that banks probably will never see this money will not affect the level of provisions.
But it seems that we will no longer have to create such significant provisions, but I do not think that we will be able to continue without some additional provisions in the long term.
Maciej Samczyk, Subiektywnie o Finansach. Let me just add one thing when I read... Because the Konrad Krasuski's question from Bloomberg was mentioned already. I think there is a lot more that could be said in answering that question. Okay. You still count write-offs for Swiss francs as regulatory burden. Is it right?
Because government has nothing to do with that. This dispute with customers, and in fact, it was the banks that rejected the resolution of that problem by an act. Let me just state it precisely. I don't believe that costs of those Swiss franc loans are regulatory burdens. They are legal burdens.
It's as regards the law itself, as far as I remember, the idea of resolving it by way of an act of law originated in 2015. The draft was sent to the Parliament. There were different things being done to that. Originally, the proposal was that the cost of currency conversion should be borne 50/50. Then it was reversed: 90% for banks, 10% for customers. And then the draft somewhere disappeared. Now we are nine years later. And as I said before, I believe that closing the Swiss franc issue with an act of the Parliament would be the right thing to do. If someone really insisted, could say that there is a regulatory element in the Swiss franc loans issue because of the neglect to resolve it legally. There were some initiatives, including the initiative of the KNF, Polish Financial Supervision Authority, to do that.
But until now, in previous government and in the current government, they did not. Current government has a number of different priorities. Which I respect. Still, that lets me still hope that something will happen to that. It is the legal risk, first of all. Okay, let's go back to the question. Go back to the question from Maciej Samczyk. Increase in demand for credit. Will mean that your bank decides not to just manage the level of deposit, but will be prepared to fight for those deposits on the market. So what should happen as regards the investment and credit boom for your sector to stop suffering from chronic overliquidity? Well, the question is interesting, but I won't be able to answer it with numbers. Let me give a more philosophical answer.
The industry, the sector is overliquid because the demand for new financing, new credit was marginal. This year, there are a lot of indicators showing that this may grow, may start rebound. And there is also a hope that the National Recovery Plan will also mobilize additional credit funding. And we hope that this overliquidity will gradually turn into loans, from current assets, that the present assets. And at the point when we start, sort of, notice the shortage of liquidity, then the banks will probably start sort of fighting for liquidity more. But this is still a remote perspective. I hope that this year, in terms of lending, will be significantly better than the previous year, but I will rather stop at that.
Robert Lipka, Bank Pekao. What is the share of debt securities in the assets of the bank and what is the share of credits for the non-financial sector? Do you see a chance to increase lending to the non-financial sector, including the smallest companies?
The share of debt securities in the assets, in total assets, was 27% at the end of last year. The share of the portfolio, 55%. The bank does have the appetite for financing. Yes, this is so. So I don't really know why, why such a question. We are a bank. Our core activity, core business, is to acquire deposits and to give out loans. If there is no demand for various reasons, we must remember that last year was the year of economic slowdown, of technical recession, general uncertainty, elections, change of government. There is, it's really not surprising that our entrepreneurs were very cautious as regards borrowing.
Growing inflation and the increase in wages also meant that customers, individual customers, were not so willing to borrow. Now we have a slightly different situation and we hope that the rebound on the credit market is probable. One thing I'd like to add as regards loans. The situation is that year-on-year, the level of loans that are in the banks' balance sheets are stable in some of the companies. But the non-balance sheet part increased to PLN 6 to PLN 7 to PLN 6 billion . So we did grant loans, we signed agreements, and now we almost have this split 50/50 between the balance sheet and non-balance sheet loans. But what is needed for all that is not just the willingness on the part of the bank to lend, but also the willingness of the others to borrow.
And the last question from Robert Lipka. Can you comment on the proposal of the Securities Commission that proposes that in the mortgage loans with variable interest rate, also the NBP, National Bank of Poland, interest rate should be, reference rate should be used?
Just frankly speaking, I haven't thought it through, to the extent which would allow me to share my opinion with you.
Do we have any other question with any world, virtual world or the real world here? One more question.
Konrad Krasuski, Bloomberg News. Is it possible to see a clear rebound in loans without the reduction of interest rates by the Monetary Policy Council?
I can see Michał getting ready to answer, but in my view, yes. I think we should see this rebound, maybe even in Q1, definitely in Q2. But in that time, we are not expecting the decrease of interest rates.
Wanted to add something? Well, about more about the market generally, especially in the corporate sector, because we are not only talking here about mortgage loans. The sensitivity of demand for credit to the level of interest rates or changes in interest rate is not very significant. What is much more important is the economic situation, investment needs, and co-financing of those investment needs by from different sources, including bank loans.
Okay, that seems to be all. If so, thank you very much for participating in our conference. And I already invite you to the next conference after the first quarter. I invite you to contact our investors' relations team, our corporate communication team. We are open to communicating with you. And all the best to you all. Thank you.