⚠ Three Point Four Percent Would Be Poor in StockholmModerate threat

PKO Bank Polski (PKO) — threat to the moat

The same ratio that looks excellent in Warsaw would be an embarrassment in Scandinavia.

PKO's impaired exposures fell to 3,34%1, which is a good number for a Polish bank and would be an alarming one at a Nordic or Dutch institution, where the equivalent figures run below 1%.

What 3,34% means, by marketPKO impaired share3,34%Typical Nordic bank~0,6%Polish sector average~4,5%Nordic and sector figures are indicative; PKO's is reported
The same ratio that reads as excellent in Warsaw would be an embarrassment in Stockholm. This measures a good bank in a mid-risk market.

The gap is structural rather than a criticism of PKO. Polish banks lend into an economy with a shorter credit history, more small-business lending and a legal system in which recovery takes longer, so the stock of impaired lending sits higher across the whole sector.

It matters for two reasons. It means PKO's balance sheet carries more latent loss than the headline cost of risk of 0,30%2 implies, and it means the bank's capital ratios — a total capital ratio of 17,10%3 — are doing more work than they would at a western European peer.

The direction is unambiguously right: 3,98%, 3,79%, 3,44%, 3,59%, 3,34% across five years4.

The improvement was achieved while the book grew, which is the harder version: financing granted rose 27,6% to 315 953 million złoty in the same year the impaired share fell to 3,34%5. That is not a ratio flattered by shrinking the denominator.

The measure is the level rather than the change, once the trend flattens. A bank that improves from 4% to 3,3% has repaired its book; one that stops at 3,3% while European peers sit near 1% has a structurally riskier balance sheet, and prices its equity accordingly.

References
  1. ReportedPKO's impaired exposures fell to 3,34%, which is a good number for a Polish bank and would be an alarming one at a Nordic or Dutch institution, where the equivalent figures run below 1%.
    PKO Bank Polski S.A. Group Directors' Report for 2025 - the efficiency and quality ratios (return on equity of 19,5%, return on assets of 1,9%, a cost-to-income ratio of 31,1%, net interest margin of 4,76%, cost of credit risk of 0,30% and impaired exposures at 3,34% of the portfolio) — FY2025 · publ. 12 March 2026 · source ↗
  2. ReportedIt means PKO's balance sheet carries more latent loss than the headline cost of risk of 0,30% implies, and it means the bank's capital ratios — a total capital ratio of 17,10% — are doing more work than they would at a western European...
    PKO Bank Polski S.A. Group Directors' Report for 2025 - capital, shareholders and levies (the State Treasury holding 367 918 980 shares or 29,43% of the capital and votes, Nationale Nederlanden at 7,32% and Allianz Polska at 6,01%, own funds of 50 122m złoty, a total capital ratio of 17,10%, the 75% dividend payout from the 2025 profit, and the 1 349m złoty tax on certain financial institutions) — FY2025 · publ. 12 March 2026 · source ↗
  3. ReportedIt means PKO's balance sheet carries more latent loss than the headline cost of risk of 0,30% implies, and it means the bank's capital ratios — a total capital ratio of 17,10% — are doing more work than they would at a western European...
    PKO Bank Polski S.A. Group Directors' Report for 2025 - capital, shareholders and levies (the State Treasury holding 367 918 980 shares or 29,43% of the capital and votes, Nationale Nederlanden at 7,32% and Allianz Polska at 6,01%, own funds of 50 122m złoty, a total capital ratio of 17,10%, the 75% dividend payout from the 2025 profit, and the 1 349m złoty tax on certain financial institutions) — FY2025 · publ. 12 March 2026 · source ↗
  4. ReportedThe direction is unambiguously right: 3,98%, 3,79%, 3,44%, 3,59%, 3,34% across five years.
    PKO Bank Polski S.A. Group Directors' Report for 2025 - the efficiency and quality ratios (return on equity of 19,5%, return on assets of 1,9%, a cost-to-income ratio of 31,1%, net interest margin of 4,76%, cost of credit risk of 0,30% and impaired exposures at 3,34% of the portfolio) — FY2025 · publ. 12 March 2026 · source ↗
  5. ReportedThe improvement was achieved while the book grew, which is the harder version: financing granted rose 27,6% to 315 953 million złoty in the same year the impaired share fell to 3,34%.
    PKO Bank Polski S.A. Group Directors' Report for 2025 - the efficiency and quality ratios (return on equity of 19,5%, return on assets of 1,9%, a cost-to-income ratio of 31,1%, net interest margin of 4,76%, cost of credit risk of 0,30% and impaired exposures at 3,34% of the portfolio) — FY2025 · publ. 12 March 2026 · source ↗
Sources
Generated September 24, 2026