Good morning, ladies and gentlemen. I have the pleasure to welcome you at the presentation of PKO BP's Q1 Financial Results. My name is Dariusz Choryło, I'm responsible for investors relations of the bank. The presentation will be done by Vice Presidents of the board, Dariusz Szwed, Marcin Eckert, and Piotr Mazur. Good morning once again. I'm really glad to be representing PKO BP. It's a great challenge for me to be here for the first time to present those results, especially that I will have good news for you for Q1 for the activity of the bank. I've been working for the bank for quite a short period of time, I do hope that I will be able to efficiently present our results. We are very satisfied with those results.
It's a very good start since the beginning of the year. I've been working for the bank for a month now. That's why I would like to share my opinions and feelings, although I do realize that it may not be so interesting for our investors. I would like to thank all my people because those results are a result of their effort regarding all this external pressure and the international situation. We've implemented our strategy. Our strategy is a very good one for these times. Here, I would like to stress the importance of the effort of our people, and thanks to them, we are here in these very good circumstances, and we are glad to present the results. As I said, a very solid results, PLN 1.5 billion net profit for Q1.
As in the communication, we have provisions for CHF allowance. There will be questions about it. We will deal with it later on. I would like to stress that the result is at very good level. We are very satisfied with it. We know that ahead of us is a very important thing. On the 24th of June, there will be a decision issued by the European Court of Justice. We are prepared for that. Our bank has very good standing, a very good revenue, 25, core revenues at the level of 25%.
This proves that our effort is very good, very good interest margin for 32, and quarter-to-quarter, a very good growth, a very good cost-to-income ratio at the level of 35.8%. For 2021, it's supposed to be less than 33. We are far lower below the objective 16% the ROE ratio. This has a symbolic importance, but due to our provisions for CHF as compared to that, it's a very positive result. Also, the cost of risk is at a historical low level, which is a very good thing, something which is unprecedented. We are very proud of it, which proves that our risk is under control.
We are very well managed as a bank. There are no discrepancies as towards our goals. As regards other values, it needs to be stressed that, we have a four-digit number as regards our assets. 5% growth year on year, this is a very good thing. We should be proud of it, this needs to be stressed. We will be talking about it. We keep financing our clients. It's been growing. I'm talking here about corporate clients. What we like here is, are the circumstances we are working in. There has been a economic slowdown, looking at the data presented by the media and for Q4 investment growth at the level of 5%, an unprecedented value, which has given us a good perspective.
We are very glad that we can also help our entrepreneurs. Here I'm talking about different categories of businesses, growth in the number of customers, at 12 million customers. We are very glad that our customers trust us, and we really hope that they will appreciate our bank as a partner. Our strategy addresses all that because we want to develop organically, but there is still a lot to be done as regards addressing some points of our strategy. This will allow us, of course, to raise people satisfaction, 1,742, another indicator which is at a very safe level considering all the scenarios that we take into account.
For example, regarding the decision of the Court of Justice on the level of provisions, I think we will deal with it very well. PLN 480 billion of savings growth quarter-on-quarter. We can see that Poles trust us and really appreciate our offering, and we are glad of it because the level of ratios. Everything is at a very good level. The share of deposits is at the level of 25.1, which means that every fourth Polish zlotys is deposited with our bank. We'll be maintaining our offering, we'll be developing it, and we have also some things which will be new as regards, for example, deposits.
Also 3.74 NPL, this is also a very good level. What we've managed to achieve in Q1 just briefly, because this is something I would like to thank our people for, because they are in touch with our customers, but also it's thanks to them that we get new clients. As I said, we have 12 million customers. Quarter on quarter, 200,000 new customers. As you can see on the slide, this curve is growing every quarter, stable number of new clients acquired. We are at a very good and satisfactory level. I was talking about investment growth, and that we are observing that the market is more dynamic. A 2-digit growth, 2.6 points.
This is really important from the analysis point of view. Quarter on quarter, year on year, it was 4.9%. A huge growth. Mortgage loans, this is also important not only from the CHF point of view. We have the markets rebounding. We have a good sales growth here. We are a leader as regards those products, and we have a significant share in this part of the market. As regards savings, I've been talking about them, but I would like to add something. As I said, when building our offer, we would like to suggest that we would like to also have new conditions for our clients. I will get back to that on another slide.
There's also huge social responsibility which relies on us and, as a leader in the banking sector in Poland, a lot depends on us in this area. ESG is one of our main pillars, and we've been very active in this pillar. I'm not talking about the regulatory requirements here, but we would like to take a step forward. A lot of new achievements. I think I do hope that I will be able to talk about them during subsequent conferences, more and more financing of green products. We want to be active on this field. We want to become a leader in this field. We are aware that energy transformation is the future of our economy. There is no way back.
As a country, we have to transit from traditional energy sources into renewable energy sources, SMRs, small reactors. Here we want to be very active in this field. A lot of will depend on us, in fact. What needs to be stressed is also that the number of clients in the IKO application has been growing. This is well seen. We have on this slide 7.4 million IKO application clients, and the growth is at a significant level, 200,000 new clients quarter on quarter. The application is quite new. A lot of novelties. There is also this deferred payment functionality within the IKO application. Pay Later, want to be leader in this field.
There's also a very attractive package of insurance package, PKO Moto car insurance. This is very important in terms of the synergy in our group which want to achieve, because without having insurance packages, it would be really hard to achieve our results. PKO BP can propose these kind of things. You know very well our mortgage package, but also car insurance policies will be added to our offering. Another important thing in the IKO application is everything that's related to cybersecurity. The VR option, which is here to protect our clients from some fake identities and fraud. There is such a functionality and a lot of opportunities when it comes to analyzing expenses.
There is also a possibility to analyze expenses from a credit card. I would also like to refer to IKO and make a link with savings because it's something which is like a one-off character here. We want to prepare a special deposit offer for our special clients. I think that in the following days, I will present to you more details about it. This is what is ahead of us. Just briefly, because it may not be so interesting to you, we've been proud of it. We have already 200 million tasks performed by bots, we are aware that the robotization and botization is the future as AI.
As it's in the case of the AI, it's a very trendy thing, and we are a leader as a bank here because more than 20 million calls have been performed by bots. More than 240 automated processes were performed, and we will keep growing in this segment. Now, I would like to give the floor to my colleagues, first, to Marcin Eckert for financial results. Thank you very much. Before moving on to the details of our financial results, I would like to point out the fact that as of the first of January, 2023, we implemented the MSSF 17 accounting standard, and this concerns the Q1 financial results. It is now comparable to those standards.
The application of these standards did not have a huge impact on our results, but we have some shifts. We shifted some interest income into a new line called results from insurance activity because it is in line with the standard number 17. Moving on to the presentation of the result, I would like to start with the net profit. In Q1, it was at the level of PLN 1.5 billion. As President Szwed said, it was heavily impacted by risk related to CHF loans.
We informed, provisions were at the level of PLN 970 million. This had an impact on lowering the result by PLN 830 million. ROE was at the level of 15.3%. On the next slide, our revenue, income, it was at the level of PLN 5 million, PLN 5.5 billion, which is a significant growth, and it's a stable situation as compared to last year. Previously, it was fueled by core revenue.
Which increased year-on-year by 25% and 1% quarterly due to the strategic importance of insurance activity for our group. Income on insurance is still regarded as part of our core business. As for a net margin income, it increased 35% year-on-year, and in the Q1 is PLN 4.2 billion. That is due to improvement of interest margin. The margin was 432.30%, and it still increased compared to previous quarter. As we mentioned earlier, our loan portfolio has more competitors on the credit, which has lower pace of adjusting price to WIBOR, which had a negative impact on margin and interest income. Now it has a supporting effect on us.
We also see a bigger impact of a lower interest increase of treasury bonds and securitization used. Similarly to our competitors, we've been observing a slowdown in the increase of financing costs, which improved interest margin in quarter one, 4.32%. By analyzing the impact of volume on the new credit, we see more sales. Thanks to that, we are optimistic. Quarterly increase was almost 8%. It was mainly driven by 16% increase of mortgage loans provided. This improvement enabled a stabilization of our credit volume. We maintained it at a higher level than our natural market because the market share of mortgage loans was almost 35%. We've seen an acceleration of deposits and investment funds. Deposits increased by 4.6% and funds by 5%.
Also, on the retail deposit market, we improved our market share significantly. As President Szwed mentioned, we are very happy with the increase in the corporate segment. We saw acceleration of credit action in Q1. Financing provided to clients increased by 8%, which definitely was above the dynamics that we achieved in previous quarters. We've seen an increased interest in green financing. Our corporate segment, both, I mean, strategic clients as well as corporate clients are really very well implement our strategies because one of our pillars is that we want to be the leader of green transformation, of financing energy transformation, and we achieved objective in quarter two. The deposit base of corporate clients stabilized at the level of the previous quarter. It's the same as in the previous year.
This is because of our now bigger attention to retail deposits. Now fee and commission income stabilized after dynamic increases last year. In annual basis, dynamics was about 10% in credit and credit card income, which compensated for drop in capital markets and foreign exchange. As regards to foreign currencies, we saw a double digit increase from the capital market, which was also thanks to the brokerage house in the Warsaw Stock Exchange. This is still number one, brokerage number one. As we mentioned earlier, as regards economic downturn, we see therefore an decrease in the activity of our clients. As for operating costs, they were under control. They were increasing by 8.6% annually and quarterly.
The total cost increased by 14.7%, but that was caused by seasonal increase in regulatory costs, in particular recognition in the quarter one on costs related to the so-called BFG provision costs. Excluding regulatory costs, the dynamics was just 2.8%, but it doesn't change the fact that the cost will remain under the high inflationary pressure because of the pressure on the part of suppliers and the necessity of maintaining competitive salaries for our employees. Cost effectiveness, COE was very good, 35.8% in Q1. Now I will give the floor to President Mazur, who will discuss further cost of risk. Good morning, ladies and gentlemen. Normally the head responsible for risk likes calculating everything.
I didn't calculate this how many times we used a word increase. That was several dozen or so times. That's very good because business is growing. In Q1, all credit segments, we had increases in market shares. I'd like to say something about some drops, which are healthy, good and safe. That is a drop in the cost of risk. As you see, for 3 Q's now, cost of risk have been going down. That is because of the hard work of our employees who indeed invested a lot as President, quite a lot of men talked about AI, artificial intelligence. If the President agrees, in the next Q presentation, we could discuss more how AI operates in the area of risk.
Thanks to that, these boring slides could be more lively because then you would see what is the potential in the business increase and also in risk management and control risk in AI. PKO Bank Polski has been successfully using these techniques for some time now. We would boast about it later on, but now we have quite low costs of risk. What is most important, on the next slide, we can boast of the decreases in NPLs. As I remember, historically, this is the lowest level of NPLs, one of the lowest in the sector. Not to speak about drops only, I must say that we are happy that our growth in coverage by provisions is growing. We have a safe portfolio, a very good one.
I guess it's a good sign for the future that we should really keep these low cost of risk. Now, if we have a look at the next slide, I can brag here some intensive increases in the number of settlements signed. Please note that almost half of our portfolio has been covered already by the contract with a client with whom we already had a relationship, and we discussed with them settlements and the level of transfer, I mean, of this impact on settlements signed is very high, 76%. Now we have over 27 settlements concluded. In Q1, it was a record increase, almost 10,000 settlements signed. This seems to be the best solution for the whole banking sector as regards CHF credits.
We would like this history of Swiss franc credits be ended in more settlements signed and in closing the risk, which is a very significant sectoral risk in Poland. Now, let me show you the next slide, here we can boast of one of the strongest capital positions in the banking sector in Poland. It's been growing all the time, now we have a surplus of regulatory ratios over PLN 15 billion, which shows that PKO Bank Polski is very well capitalized. To sum up, a very good business results, loans and also most market shares are growing. What is the most important, we have one of the lowest level of the cost of risk, one of the lowest level of non-performing loans, a very high coverage by provisions, one of the highest capital ratios in Poland.
Thank you so much. Thank you. Gentlemen, now a few words of a summary. What has been the most important things? Now, I'd like to mention them. Thanks to my employees to all employees of the PKO BP Group. Without you, it would not be possible. Almost PLN 1.5 billion net profit despite its legal provisions for CHF, ROE 5.7%. Income margin and interest margin was growing, very good indicator of cost to income more than 36%, much higher as compared to the strategy for the next years. As President Mazur mentioned, once again, we emphasize very good effects of risk management through the cost of risk and NPL view, very solid capital base as President Mazur mentioned that.
Tier 1 at the level of 17.2, the growing trend and what is important here and what we all know, provisions for CHF at the level of PLN 1 billion, and we still have the solid base for our operations. Let's not forget that on the 15th June, we may see here a new aspect which will make it necessary to verify all these guidelines. We've already had many carried out tests. Even the most extreme shows that PKO BP will be able to cope with it. We are optimistic, but we are really taking care of that all the time so that the growth is foreseeable so that nothing wrong happens in the bank. Thank you so much. Now, we will have a Q&A session. Please ask questions.
There are several questions from our viewers. I will try to aggregate them so that to avoid repetition. First group of questions about our interest income and margin income. First of all, that pertains to the expected trajectory of the margin and interest income in the remaining quarters. Is it already the peak of the interest and margin income, or is it still ahead of us? Our interest margin was 4.32% in Q1, and it seems it is the peak in Q1. We should stabilize in the future reporting period. We do expect some plateau of interest margin in 2023 generally. As I've said, it's stable, and it should maintain at this level. Now discussing income interest.
We have also a question about income interest costs. They were twice flat in area, and there was PLN 13 billion increase in retail term deposits. What was the cause of such, let's say, flat interest costs? Interest costs have been growing all the time in the reporting period, but we had lower costs of securitization, therefore, the result was like that due to lower costs of hedging. Now the next questions, they are about the insurance income, where in Q1 we had a drop. The question is, the new sales dropped by 10% and the result by 17%. What is the reason for that? In insurance, yes, this is about insurance.
I don't have the detailed data, but it may be my colleague Kuba will have some data and could try answer the question concerning insurance. Good morning. Okay. On one hand it is related to the income on insurance, but on the other hand, we've had better result in Q4 2022 because in our insurance company itself, there was a drop here Q to Q. This is an additional element which causes the dynamics to be negative quarter-to-quarter, quarter-on-quarter. The next group of questions pertains to the expected verdict of the European Court of Justice. The questions concern our expected response as regards timing and the scale of possible provisions to be established. All the time we are controlling what's going on on the market.
We've been analyzing what could be the possible verdicts. Historically, as you can see, the opinion and verdicts could be made soon. We are waiting what would be the final verdict. Our analysis and scenarios you're going to be asking about take into account even extreme scenarios, in none of them PKO BP is under such a strong pressure. Nothing really is a threat to stability of the bank. This is in line with the scenario that the Polish supervision authority expected. I would not discuss the numbers today, the figures today, because the verdict of the court is unknown, so that would be speculation and that would be very risky. I could make a big error here. That's it. We are waiting patiently, and we'll see what will happen.
The level of provisions if to be increased, we will do it according to the recommendations binding in that respect.
The question what changes will be introduced? Are there any strategic areas where corrections are needed? As I said, the strategy which was implemented
For the years 2023, 2025 in December, 2022. It's hard to correct it now because we've just launched it. Looking at the assumptions of the strategy, I think it's well tailor-made to adapted to our needs. We are not interested now into changing our strategy. Considering the future dynamics of the market and the changes that may take place from the political point of view, will make us verify the strategy. As regards strategic areas, that's true that now we are at the stage of development where we are very stable as a bank. We have a good standing. We are a leader in different fields. That's why we would like to strengthen our position where we are not leaders yet. We would like to become such leaders.
Looking from the perspective of our capital group, it needs to be mentioned that this huge group of clients, almost 12 million clients who trusted us, can use everything that is available to them. The vice president talked about insurance. This is a very important aspect. We also have a very big leasing company, a big TFI, which is also ready to provide a wide range of services for our clients. We would also have this KredoBank, which has been operating in Ukraine, regardless of war conditions. We are there, we are still there because we do believe that there is a huge potential there. The fact that we are there already is a competitive edge, competitive advantage that we would like to use as a bank.
KredoBank is part of our group. I do hope that it will be a milestone in building our success as PKO BP, because we can, thanks to that, create investment hub. Through KredoBank, investments can be handled and our expansion can be thus made possible. Another question, what kind of remuneration level growth can be expected till May, and if there has been already such a growth, such an increase? It's a very up-to-date question, and it needs to be answered, of course. We will give you a decent answer. We are analyzing what is going on on the market, and we are ready to react to the increase of pay.
We know that since the beginning of the year, the inflation has been decreasing and according to our forecast, it will continue decreasing. Where it's needed, we react. There is a plan, of course, for some increases at the level of the board, but no declarations so far. Another question concerning settlements. Why such a big increase in applications for settlements in January and February? Did you come to another group customers? Not really. According to Monetary Policy Council's recommendations, we gave people the opportunity to apply for settlements, and we reached a huge number of our customers and proposed them a very attractive flexible offer, which gives room for mediation. For example, some numbers which I didn't mention.
Average mediation time with a CHF client is 38 days. In this period of time it's possible to negotiate, mediate. This is free of charge, of course, for the client. It's not related or binding. It's not related to any decision. Client may always refrain from that. But the number of settlements concluded has shown that people have appreciated this procedure. We want this procedure to have a very large scope. We are improving this procedure, and it's sometimes better to take into account this offer instead of suing the bank because it will last so much time and the procedure will be costly.
Those savings can be saved in order to decrease the loan faster. We will be open to clients. We will propose them our offer. As I said, it's free of charge. I think it's the last question concerning the sensitivity of the interest income on the reduction of interest rates. PLN 108 million, this is the level of this sensitivity rate. It is also included in our financial statement as far as I remember. Sorry. Another question concerning the increase of corporate loans. What's the reason for that? Is it more a working capital loan or are those investment loans?
Ladies and gentlemen, it's related especially to the fact that our strategic and corporate segment have been working very well. They've implemented their task in a satisfactory way. We can compare our activity to competitors, and we see that as regards credit activity, other banks who compete with us don't have the same credit opportunities to finance some investments. The majority of them stick to those working capital loans. There is also a huge portfolio related to new investments. We are ready to finance new investments, and we have a proper capital base in order to develop this field. We are optimistic. Our dynamics has shown that we've been very well prepared for that. Another question about the number of claims from clients who paid off their credits.
In Q1 it was 30%. 13. 1.13%. That's all as regards the questions for Q&A session. Thank you very much. See you at the next presentation of financial results. Thank you very much.