I. Overview of activities of Santander Bank Polska S.A. and its Group in 2023
1. Introduction
Scope
Performance of Santander Bank Polska Group vs the commercial banking sector
2. Key achievements
3. Financial and business highlights of Santander Bank Polska Group for 2019–2023
4. Key external factors
5. Corporate events
II. Basic information about the Bank and Santander Bank Polska Group
1. History, ownership structure and profile
Ownership structure of share capital
Share capital
Majority shareholder
Legal form
Business profile of Santander Bank Polska Group
Value creation at Santander Bank Polska Group
Position of Santander Bank Polska S.A. and its Group in the Polish banking sector
Position in the peer group
Share in key market segments
2. Structure of Santander Bank Polska Group
Subsidiaries
Associates
III. Macroeconomic situation in 2023
Economic growth
Labour market
Inflation
Monetary policy
Loans and deposits
Financial market situation
Stock market
Legal environment of the banking sector
IV. Development strategy
1. Purpose, aim, values and strategic objectives
Strategy for 2024–2026
Strategic directions
Strategy for 2021–2023
2. Ambitions for 2021–2023 and delivery of the strategy
Strategic directions
Elements of the strategy related to sustainable development. Level of integration of sustainability objectives with other elements of the strategy
Due diligence in management, strategy and business model
Impact of stakeholders’ interests and opinions on the strategy and business model
Significant impacts, risks and opportunities and interaction with the strategy and business model
3. Corporate culture
4. Forecast of economic situation in 2024
Economic growth
Labour market
Inflation
Monetary policy
Loans and deposits
Financial markets
V. Relations with employees
1. Human capital
Employment
2. Remuneration policy and bonus schemes
Scope and perimeter of the remuneration policy
Changes to the remuneration policy
Fixed remuneration
Variable remuneration
Variable components of remuneration
Incentive Plan VII
Rules
Control of the Incentive Plan in 2023
Delivery of the Incentive Plan in 2023
Social and employee benefits
3. HR policy
Recruitment policy
Management of employee potential
Management by objectives
Changes arising from the amended Labour Code
Hybrid work
Other statutory changes
4. HR development directions
5. Training and development
Relations with customers
1. Service quality and customer experience management
2. Complaints management
3. Barrier-free banking and digital solutions
Barrier-free banking
Barrier-free branches
Barrier-free remote channels
Barrier-free communication
Differently Abled project
4. Customer relationship management solutions
VII. Investor relations
1. Investor relations at Santander Bank Polska S.A.
2. Share capital, ownership structure and share price
Ownership structure in 2023 and the majority shareholder
Majority shareholder
3. Share price of Santander Bank Polska S.A. vs the market
4. Dividend
Dividend policy and profit distribution in 2023
Dividend from the net profit for 2022
Decision of Santander Bank Polska S.A. Management Board on the payout of an interim dividend
Dividend in 2022
5. Rating of Santander Bank Polska S.A.
Ratings by Fitch Ratings
Ratings by Moody’s Investors Service
VIII. Relations with external environment
1. Responsible Banking/ ESG Strategy
2. Environmental impact of operations
Greenhouse gas emissions
3. Communication with stakeholders
Relations with stakeholders
ESG report
Marketing communication
Brand promise
Underlying message of marketing communication
Marketing campaigns
ATL brand campaigns
ATL product campaigns for personal and SME customers
Campaigns on the radio
Social media
4. Social responsibility
Key sponsorship projects in 2023
IX. Business development in 2023
1. Group’s business management structure
Operating structure
Segment reporting
2. Business development of Santander Bank Polska S.A. and non-banking subsidiaries
2.1. Retail Banking Division
Main development directions
Small and Medium Enterprises (SMEs)
2.2. Business and Corporate Banking Division
Main directions
2.3. Corporate and Investment Banking Division
Main directions
Transformation of corporate and investment banking
Business transformation
Green transactions
Performance of selected areas
3. Business development of Santander Consumer Bank Group
Strategic priorities
Development of selected business areas
Retail Banking
Segment
Business and Corporate Banking
Corporate and Investment Banking
Santander Consumer
Cash loans
Mortgage loans
Mortgage loans (cont.)
Personal accounts and bundled products, including:
Payment cards
Deposit and investment products, including:
Deposits
Investment funds
Santander Brokerage Poland
Bancassurance
Private Banking
X. Organisational and infrastructure development
1. Organisational changes in Santander Bank Polska S.A.
Hybrid work model
Optimisation of the organisational structure
Agile methodology at Santander Bank Polska S.A.
2. Organisational structure of Santander Consumer Bank S.A.
3. Changes in the structure of Santander Bank Polska Group
4. Changes in the equity investment portfolio
Selected investments in the investment securities portfolio
Conversion of series C preference shares of Visa Inc.
Selected agreements
Agreement with International Finance Corporation
Securitisation
5. Development of distribution channels of Santander Bank Polska S.A.
Traditional distribution channels
Intermediaries network
ATMs
Remote channels
E-commerce
Active digital customer base
6. Development of distribution channels of Santander Consumer Bank S.A.
7. IT development
Development of IT resources
Main IT development directions
Main projects
Continuation of digital transformation
Achievements in innovation and research and development
8. Capital expenditure
XI. Financial performance in 2023
1. Consolidated income statement
Structure of Santander Bank Polska Group’s profit before tax
Comparability of periods
Determinants of the Group’s profit for 2023
Profit before tax of Santander Bank Polska Group by contributing entities
Santander Bank Polska S.A. (parent entity of Santander Bank Polska Group)
Subsidiaries
SCB Group
Other subsidiaries
Structure of Santander Bank Polska Group’s profit before tax
Total income
Net interest income
Net fee and commission income
Non-interest and non-fee income
Expected credit loss allowances
Total costs
Staff expenses
General and administrative expenses
Tax and other charges
2. Consolidated statement of financial position
Consolidated assets
Structure of consolidated assets
Credit portfolio
Structure of consolidated equity and liabilities
Deposit base
Deposits by entities
Deposits by tenors
3. Selected financial ratios of Santander Bank Polska Group
4. Separate income statement
Comparability of periods
Structure of total income of Santander Bank Polska S.A.
Net interest income
Net fee and commission income
Other income
Structure of non-interest and non-fee income of Santander Bank Polska S.A.
Expected credit loss allowances
Staff, general and administrative expenses of Santander Bank Polska S.A.
5. Separate statement of financial position
Loans and advances to customers and deposits from customers
6. Selected ratios of Santander Bank Polska S.A.
7. Additional financial information about Santander Bank Polska S.A. and Santander Bank Polska Group
Transactions with related parties
Transactions with related parties
Intercompany transactions with the parent entity
Off-balance sheet items
Guarantees and derivatives
Description of guarantees issued
Pending court proceedings
Collateral
8. Factors affecting the financial performance in 2024
XII. Risk and capital management
1. Key risk management principles and structure in the Bank and in Santander Bank Polska Group
Key risk management principles
Risk management structure
2. Risk management priorities in 2023
War in Ukraine, conflict in the Middle East, macroeconomic situation and inflation
Cybersecurity
ESG risks
Ruling practice related to foreign currency mortgage loans
Interest rate benchmark reform
3. Material risk factors expected in the future
4. Credit risk management
Credit risk
Credit policy
Credit risk management process
Implementation of Recommendation R
Diversification of the credit portfolio
Credit portfolio quality
5. Market risk and liquidity risk management
Market risk
Market risk management
Identification and assessment of market risk
Financial instruments used for management of market and other risks
Liquidity risk
Liquidity risk management
Identification and assessment of liquidity risk
6. Operational risk management
7. ESG risk management
Climate-related risk
Physical risks
Transition risks
Responsibility for ESG risk management
8. Legal and compliance risk management
Legal risk management
Reputational risk management
9. Capital management
Introduction
Capital policy
Regulatory capital
Internal capital
Subordinated liabilities
XIII. Statement on corporate governance in 2023
1. Corporate governance at Santander Bank Polska S.A.
2. Issuer’s securities
3. Amendment of the Statutes of Santander Bank Polska S.A.
4. Governing bodies
5. Management of ESG issues (including ESG risk)
6. Remuneration policy
7. Other transactions with executives
8. Diversity Policy
9. Internal control and risk management systems for financial reporting
10. External auditor
Entity authorised to audit financial statements
Selection of external auditor
Permitted non-audit services
Remuneration of external auditor
XIV. Statement on non-financial information in 2023
1. Business model, strategy and key performance indicators
Business model
Value creation process
Development strategy
Santander Bank Polska Group strategy for 2024-2026
2. Responsible banking
Pillars of responsible banking at Santander Bank Polska
Our policies and key regulations for ESG areas
Key ESG achievements in 2023
3. Risk management system
Management of social, environmental and climate change risks
4. Environmental policies and their outcomes
Banco Santander Group’s climate strategy and Global Net Zero Strategy
Green finance
Disclosures related to Regulation 2020/852
Scope of Taxonomy disclosures
Key performance indicators for Taxonomy purposes
Templates presenting GAR calculation
Quantitative disclosures for two climate objectives
Rules for Taxonomy analysis for the purpose of GAR reporting for 2023
Identification of customers subject to the NFRD and general rules
Assessment of Taxonomy eligibility of exposures to customers subject to the NFRD
Assessment of Taxonomy alignment of exposures to customers subject to the NFRD
Assessment of Taxonomy eligibility and Taxonomy alignment of exposures to households
Local governments
Voluntary disclosures
Information about transactions with special purpose vehicles
Other qualitative disclosures related to EU Taxonomy
Nature and objectives of Taxonomy-aligned economic activities and the evolution of the Taxonomy-aligned economic activities over time
Compliance with Regulation (EU) 2020/852 in the financial undertaking’s business strategy, product design processes and engagement with clients and counterparties
Additional or complementary information in support of the financial undertaking’s strategies and the weight of the financing of Taxonomy-aligned economic activities in their overall activity
Environmental impact of operations
Greenhouse gas emissions
Other environmental indicators
5. Anti-corruption policies and their outcomes
Ethics
Conflicts of Interest
Prevention of corruption
6. Human rights policies and their outcomes
Human rights
Sustainable supply chain
7. Employee policies and their outcomes
Elements of the HR policy
Recruitment policy
Management by objectives
Remuneration policy and bonus schemes
The scope and application of the Remuneration Policy
Fixed remuneration
Variable components of remuneration
Social benefits and perks
Key HR initiatives in 2023
8. Diversity policy and its outcomes
Foundations of a diversity-promoting attitude
9. Customer experience management policy
10. Social policies and their outcomes
Key sponsorship projects in 2023
Santander Bank Polska Foundation
Foundation activities in 2023
Scholarship programmes
The Flame Club
We Will Double Your Impact
Social engagement of employees
Expenditures on social and other projects
XIV. Statement of the Management Board
True and fair presentation of the financial statements
Selection of auditor