H1 2022 saw an increase in technical provisions for older versions of individually continued products, recognizing the expected effect of higher indexations of PLN 203 million gross. This expectation is based on the high level of the observed and expected inflation rate.
In addition, the PZU Group’s result in 2022 was burdened by non-recurring effects related to banking activities including
- costs associated with the accession of Pekao and Alior Bank to the Bank Protection System in the gross amount of PLN 482 million and PLN 214 million, respectively;
- updating the provision for legal risk related to foreign currency mortgage loans at Pekao in the gross amount of PLN 1,598 million (out of which PLN 352 million burdened other operating expenses, and PLN 1,246 million was reported as a movement in allowances for expected credit losses and impairment losses on financial instruments);
- costs related to the modification of agreements for PLN mortgage loans granted to consumers due to their suspension of loan repayments (the so-called credit vacations), in the gross amount of PLN 1,958 million at Pekao and PLN 502 million at Alior Bank.
In addition, due to the Russian Federation’s invasion of Ukraine on 24 February 2022, PZU’s Management Board assessed the impact of this event on the PZU Group’s operations, business continuity, financial position and going concern. As a result of this analysis and due to the downgrading of Ukraine’s rating, the PZU Group decided to recognize write-downs in the consolidated income statement for H1 2022, mainly for financial assets and receivables. The impact of these write-downs on the PZU Group’s consolidated net result reached PLN 94 million.
In the corresponding period of 2021, a higher result on investing activity was recorded owing to the IPO of a logistics company held in the portfolio of a mutual fund managed by TFI PZU. The increase in revenue driven by this event was PLN 485,3 million in the 12-month period ended 31 December 2021.