Citi Handlowy’s net profit more than quadrupled to 747 million zlotys in 2021 from a year earlier, the highest level since 2014. Profit was driven by higher revenues resulting from, among other things, sales of the bond portfolio, net growth in income from fees and commissions and high income from foreign exchange transactions. Along with the rise in revenue, costs were brought under control and in fact the bank’s operating margin increased by 40% year-on-year, while the cost-income ratio fell to 50% from 59.
“The bank’s 2021 results reflect our expertise in managing the debt securities portfolio and the successful businesses of our clients, whom we have supported in mergers and acquisitions in Poland and abroad, among other transactions. During During this dynamic period, we participated in the largest IPOs of Polish companies.We are delighted that, given our good understanding of the local market and our access to global solutions, we can be a partner for our clients, wherever they operate, said the general manager Elżbieta Czetwertyńska.
Excellent results were also recorded in the fourth quarter, which was the second best period last year. Quarterly net income amounted to 186 million zlotys and doubled compared to the previous quarter. During this period, the bank’s revenues increased by 11% year-on-year and 25% quarter-on-quarter due to, among other factors, income from capital transactions with corporate clients (including, for example, IPO of Pracuj.pl group worth PLN 1.1 billion), interest income on debt securities and loans, due to rising interest rates.
“We are pleased that in the fourth quarter the bank delivered revenue growth across all segments of our business, reflecting the positive momentum in our clients’ performance,” noted Natalia BozekVice-Chairman of the Management Board for Finance. “We can see a growth trend across the market and the expectation of further interest rate hikes over the next few quarters is a good prognosis for the future of the banking sector. bear in mind that banks are facing many challenges, including high inflation, the already visible wage pressure and the level of Bank Guarantee Fund fees this year.”
Citi Handlowy continued to support the domestic and international expansion of its customers. In the fourth quarter, the bank participated as underwriter and initial lender in the syndicated financing of more than 300 million euros and 820 million zlotys granted to CVC Capital Partners for the takeover of Stock Spirits, a alcoholic beverages. The bank has also entered into cooperation with the KRUK group within the framework of the multi-currency revolving syndicated loan worth nearly 300 million euros.
The series of interest rate hikes in Poland had a positive impact on the performance of the bank’s retail activities. Revenue in this segment increased 45% year-on-year and 27% from the third quarter. The bank recorded excellent results in the wealth management segment – the number of affluent Citi private clients (people whose assets held in the bank are equal to or greater than 4 million zlotys) at the end of the year was 23% higher than the previous year.
As one of the few banks in Poland, in December, Citi Handlowy launched a virtual card to its offer, which can be used to make payments and purchases in case of card loss or waiting for a new physical card. The bank has also made the popular Blik application available to its customers.
Financial Highlights for the fourth quarter (annual):
Net profit of 186 million zlotys
Cost/revenue ratio of 50%
Loan to deposit ratio of 49%
Total capital ratio (TCR) of 20.1%