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Bank Pekao S.A Analysis


On 17th March 1929, Bank Pekao S. A. was established in Poland, with emigrants being the first bankers. The bank has its headquarters located in Poland’s capital Warsaw (Bank Pekao, 2022). From 1929 to 1939, Bank Pekao established various offices in countries such as Palestine, the United States of America, Argentina, and Germany to launch branches. In other countries, such as Brazil, the war outbreak brought a halt to further development(Global Data, 2022). However, Bank Pekao S. A. is still ranked second among national banks. The bank offers various services, including account banking services, insurance, mortgage, card, and services to businesses and investors(Bank Pekao, n.d.). Some of the direct competitors to Bank Pekao S. A include mBank SA, Bank Millenium SA, ING Bank Slaski SA and PKO Bank Polski (Bank Polska Kasa Opieki SA: Stock Performance Benchmark (PEO | POL | Banks) – Infront Analytics, 2022). The process of acquiring Bank Pekao S.A shares was completed on 7th June 2017, by Owszechny Zaklad and the Polish Development Fund.

In Appendix A, Table 1 shows the products and services; table 2 Personal Banking and Business Banking Products: table 3 Peer analysis; table 4. Competitor Comparison

Performance Analysis

A Uniform Financial Institution Rating system, also known as CAMEL( Capital Adequacy, Assets, Management, Earnings, Liquidity, Sensitivity) rating system, is one of the best tools to identify the financial strengths and weaknesses of a bank. It evaluates the overall financial situation of the institution, thus making it easy to take steps to correct(Gołosz, 2022). As mentioned earlier, the bank’s principal purpose after being started was to provide financial support to emigrants(Bank Pekao, n.d.). Through the bank’s help, its customers have had access to foreign currency accounts since 1971, indicating earnings stability and return on assets. Also, the fact that the bank has existed since 1929 shows the excellent management capability that has been demonstrated by the bank’s ability to the management team to identify financial stress. Bank Pekao SA has always stood as a pioneer in modern banking as it was the first bank to launch ATM banking systems, therefore, being the first bank to issue credit cards to its customers in Poland(Global Data, 2022). This has increased the bank’s capital adequacy by continually meeting the minimum capital reserve amount. Compared to its peers in Poland, Bank Pekao is uniquely placed as it launched a brokerage house and made practical biometrics technology in the banking industry, contributing heavily to the bank’s assets quality and investment policies. With Bank Pekao’s strategic plan to offer cross border solutions to its clients, it has set up International Clients Office that helps provide these services hence acting as one of its strengths in delivering liquid capital as it can meet the present and future cash flow. This is also an indication that the bank is not sensitive to market risks. Bank Pekao also offers comprehensive support to the Polish companies intending to expand into foreign markets and those already established in the international arena, hence increasing its market share(Global Data, 2022). Another Strength that Bank Pekao has majored in is its diversification of currencies, whereby the foreign transfers are capable of being executed in twenty different currencies, with services in internet banking being available in three different language versions increasing their market scope. Whereas some of its weaknesses include the state being biased, whereby it supported ING Bank Slaski, Bank Pekao’s competitor, by offering it pension assets (Kozar, Ł.J., 2022,p.338). Therefore, Bank Pekao S.A., on the CAMELS rating analysis, can be scaled at two, which means that it is financially sound and has moderate weaknesses. Bank Pekao has also set goals for digitization and efficiency in its 2021-2024 strategy, which is client-centric. It plans a digitalization rate of 100%, increasing its return on equity by 10%(Global Data, 2022).

Efficiency Ratios will indicate the bank’s internal resources performance. Bank Pakeo S.A. uses this to analyze how well its operations costs generate revenue. Most big banks have a low-efficiency ratio because they generate more non-interest income.

Efficiency Ratios

Banking Risk Analysis

As of September 2021, Bank Pekao S.A. Viability Rating was affirmed at ‘bbb+’which is highly attributed to downside risk, contributing to the institution’s overall credit profile(Bank Pekao, n.d.). With the pandemic, there has been a high level of uncertainty which has very little effect on the bank’s overall risk as it has strategically implemented the digitalization process. The bank is required to maintain the “P-1” short-term deposit rating and “A2” on the long-term one, as well as a stable outlook on the long-term deposits (Bank Pekao, 2022). The Bank’s Baseline Credit Assessment was also downgraded while the Adjusted Baseline Credit Assessment from “baa1” to “baa2” and the Bank’s Counterparty Risk Assessment was downgraded from “A1(cr)” to “A2(cr)”.

This rating is mainly formulated due to Bank Pekao’s acquisition of the certain liabilities and assets of Idea Bank S.A, which had a minimal effect on the institution’s credit profile. The acquisition provided a credit risk exposure within acceptable parameters and the organization’s effective asset-liability management, hence liquidity risk(Bank Pekao, n.d.). Due to the rapid increase of off-balance risk, innovation will undoubtedly bring an increment to the bank’s risk-taking. Therefore, the solution to the rigid payment problem is appropriate to minimize the risk taken by the bank when providing off-balance risk innovation (Bank Pekao, 2022).

Debt to equity ratio is used to assess the bank’s financial control. Its used to measure the degree to which the bank is financing its operations through debt. An increase in the debt to equity ratio is good since it implies the bank can efficiently service its debts. On the other hand, it could be a risk since it implies that the bank is financing a considerable amount of its growth through borrowing.

Appendix B: Table of ratios 2021, 2020, 2019

Bank strategy and Innovations

It is never early for parents to teach their children about financial education, and with this in mind, Bank Pekao S. A., in April 2021, launched the PeoPay KIDS app. This app is described as the perfect tool that enables children to learn the management of money and its fundamentals at a very young age(Bank Pekao, 2022). Children can take their first steps into the mobile finance world through this innovation. With regard to Bank Pekao’s performance, this innovation made the bank to be selected as Efma’s April 2021’s Banking Innovation winner. In addition to this innovation, Bank Pekao has also developed virtual coaches intending to provide guided hints, education, and messages on managing finances intelligently(Global Data, 2022). The app’s results have been impressive, with forty thousand users downloading it and rating above 4.7 on both App Store and Google Play. At the same time, a feature on the app known as the piggy bank has proven to be a significant success by generating PLN 33 million as children’s collection with the bank(Bank Pekao, n.d.). According to Bank Pekao S.A.’s 2021-2024 strategic plan, the bank is planning to focus on four primary goals, which include; being a first choice universal bank for its customers; developing customer service and remote distribution model; making the cost and process efficient; and lastly increasing their market share in the most profitable market share(Bank Pekao, 2022). The bank also plans to strategically grow its return on equity to 10% by 2024 from the 2020 4.5% and will be done while reducing the cost to income ratio to 42% in 2024 from 49% in 2020. While doing this, the bank plans to increase the number of mobile banking clients to 3.2 million in 2024 from 2020 one, which is 2 million customers. Strategically, the bank has put in place measures to ensure that the customer is at the center of all its activities to develop digital channels that are fast and convenient(Bank Pekao, n.d.).


With more clients choosing remote channels, digitalization has become a massive priority for Bank Pekao, with the pandemic accelerating this process. This transformation means that there will be a more efficient improvement in the banking sector, hence restoring profitability measured by return on equity.

Reference List

Bank Pekao (2022) Available at: (Accessed 21st April 2022).

Bank Pekao (n.d.) About the history of Bank Pekao. Available at:

Global Data (2022) Bank Pekao SA: Competitors. Available at: (Accessed 21st April 2022). 2022. Bank Polska Kasa Opieki SA: Stock Performance Benchmark (PEO | POL | Banks) – Infront Analytics. [online] Available at: <> [Accessed 26 April 2022].

Kozar, Ł.J., 2022. The Financial Sector and Sustainable Development-A Review of Selected Environmental Practices Implemented in Financial Institutions Operating in Poland Between 2016 and 2020. Finanse i Prawo Finansowe1(33), pp.143-157.


Table 1. Products and Services

Products Services
Cards –        Credit cards;

–        Debit cards.

–        Card application and delivery;

–        Transfers;

–        Cash withdrawals.

Loans –        Leasing;

–        Car loans;

–        Study loans;

–        Mortgage loans.

–        Loan application and payments;

–        Consultations.

Deposits –        Savings, salary, current accounts;

–        Time, variable interest deposits;

–        Accounts in other currencies;

–        Bank certificates.

–        Opening, closing accounts;

–        Cash withdrawals;

–        Buying or selling currencies;

–        Transfers;

–        Issuing checks.

Other –        Insurance;

–        Investments.

–        Money management;

–        Buying or selling stocks.

Table 2. Personal Banking and Business Banking Products.

Personal Banking Business Banking
Products -Deposits -Letter of Credit issue and confirmation
-Loans, Cash Credit, and Overdrafts -Buying and selling of bills of exchange
-Remittances -Bill of Lading
-Loans, Cash Credit, and Overdrafts -Business Operating Accounts
-Merchant services
-Business Loans
-Capital Expenditures – Commercial Mortgage, Equipment Financing and           Term  Loans

Table 3

International Peers – Bank Polska Kasa Opieki SA
Company Name Ctry Market
last (mUSD)
Price Change
(in local currency)
Bank Polska Kasa Opieki… POL 6 184 1.40 -16.2%
International Peers Median 1.26 -22.8%
Bank Millennium SA POL 1 557 1.80 -32.0%
Santander Bank Polska S… POL 6 391 1.26 -22.1%
Bank Handlowy w Warszaw… POL 1 734 0.89 -2.4%
mBank SA POL 3 121 1.32 -26.4%
ING Bank Slaski S.A. POL 6 176 0.91 -22.8%

Table 4. Competitor Comparison

Competitor Comparison
Key Parameters Bank Pekao SA PKO Bank Polski SA ING Bank Slaski SA mBank SA Bank Millennium SA
Headquarters Poland Poland Poland Poland Poland
City Warszawa Warszawa Katowice Warszawa Warszawa
No. of Employees 14,702 25,657 8,763 6,738 7,079
Entity Type Public Public Public Public Public

Appendix B

Table 5. Table of Ratios

Year 2021 2020 2019
Equity Ratio 9.53% 10.94% 11.51%
Debt -Equity Ratio 949.49% 814.35% 768.54%


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