Navigation Map

Download our best practices
Interactive navigation is a tool that goes beyond the standard navigation of the integrated content (available in the report drop-down bar). New approach allowed to navigate in the two additional business dimensions of the PZU Group, i.e .:
  • strategy (insurance, health, investments, finances);
  • sustainable development (sales, employees, social responsibility, natural environment and ethics).
The above-mentioned areas were additionally supplemented with related GRI indicators, within each selected issue.
Human capital
Financial capital
Intellectual capital
Natural capital
Social capital

In the Chapter


In the Chapter


In the Chapter


In the Chapter


In the Chapter

Operating model


58. Other information

Facebook Twitter All
Best Pratices in PZU
Integrated Navigation

58.1 Audit fee payable to the audit firm auditing the financial statements

The table below presents the amounts due to the PZU Group’s audit firm (KPMG Audyt sp. z ograniczoną odpowiedzialnością sp. k., “KPMG Audyt”, and members of the KPMG network) for the audit of financial statements of the consolidated PZU Group companies performed by KPMG, paid or payable for the period, plus VAT, determined in accordance with the accrual principle.

Item 1 January – 31 December 2020
(PLN thousand)
1 January – 31 December 2019
(PLN thousand)
Audit of the financial statements 8,698 8,371
Other assurance services 4,901 5,148
Total 13,599 13,519

On 18 February 2014, the PZU Supervisory Board selected KPMG Audyt with its registered office in Warsaw, ul. Inflancka 4A, 00-189 Warsaw, entered by the National Chamber of Statutory Auditors in the list of audit firms under no. 3546 as an entity auditing financial statements for the years 2014-2016, and on 27 April 2017, the PZU Supervisory Board exercised the option of extending this cooperation to include the years 2017-2018. On 23 May 2019, after KNF gave a permit to PZU to extend for another two years the maximum period for the engagement for KPMG Audyt to audit PZU’s standalone and consolidated financial statements, the PZU Supervisory Board made the decision to select KPMG Audyt again as the audit firm to audit the 2019-2020 financial statements.

In connection with Article 49 of the Act of 31 March 2020 amending the Act on special solutions connected with preventing, counteracting and combating COVID-19, other infectious diseases and crises caused by them and certain other acts (“Act”), which extended the maximum period of uninterrupted engagement to carry out statutory audit to ten years by abolishing the limit set forth in Article 134 sec. 1 of the Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Supervision, on 28 May 2020, the PZU Supervisory Board gave its consent to renew the engagement for KPMG Audyt for reviews and audits of the standalone financial statements of PZU and the consolidated financial statements of the PZU Group for years 2021-2022 with an extension option to 2023.

To enable performance of the work described above, relevant annexes to the previously signed agreements were concluded.

The existing cooperation with KPMG Audyt, pertaining to the reviews and audits of the standalone financial statements of PZU and consolidated financial statements of the PZU Group has continued without interruption since 2014.

58.2 Granting of sureties or guarantees for loans or borrowings by PZU or its subsidiaries

In 2020 neither PZU nor its subsidiaries granted any sureties for a loan or borrowing or guarantees to any single entity or any subsidiary of such an entity where the total amount of outstanding sureties or guarantees would be significant, with the exception of the question described below.

On 2 November 2020 PZU entered into Annex no. 1 to the Mandate Agreement to Provide Unfunded Credit Protection from Time to Time with Alior Bank. In addition, PZU entered into Annex no. 1 to the Master Agreement to Provide Counter Guarantees from Time to Time.

Annex no. 1 to the Mandate Agreement to Provide Unfunded Credit Protection from Time to Time defines the rules for PZU to issue insurance guarantees for unfunded credit protection within an exposure limit under instructions from, and in favor of, Alior Bank. The maximum exposure limit for the guarantees issued pursuant to Annex no. 1 to the Mandate Agreement to Provide Unfunded Credit Protection from Time to Time is PLN 4,000 million. The limit is in force for a period of 3 years and is a revolving limit, meaning that the expiry of a guarantee makes the “freed up” amount available within the limit minus any possible disbursements under a guarantee.

The fee for extending the guarantee will depend, among other things, on portfolio amortization and the premium for a counter guarantee. At present, it is not possible to state the amount of the fee for a guarantee since it will depend on the amount of the guaranteed sum and the quality of the portfolio collateralizing the guarantee. The issuance of every guarantee will be preceded by an application from Alior Bank and an evaluation and valuation of the portfolio presented for that guarantee. Alior Bank will present a declaration of voluntary submission to enforcement in the form of a notary deed to collateralize the payment of the fee for a guarantee under the executed Annex no. 1 to the Mandate Agreement to Provide Unfunded Credit Protection from Time to Time.

The maximum term of the guarantees issued under Annex no. 1 to the Mandate Agreement to Provide Unfunded Credit Protection from Time to Time is 5 years. Alior Bank’s share of the due and payable receivables by virtue of the accounts receivable is 10%.

Annex no. 1 to the Mandate Agreement to Provide Unfunded Credit Protection from Time to Time contemplates contractual penalties that may be due to PZU from Alior Bank if Alior Bank breaches certain obligations stemming from Annex no. 1 to the Agreement. The total maximum amount of contractual penalties cannot exceed PLN 3 million. Annex no. 1 to the Agreement does not rule out the possibility of pursuing damages exceeding the sum total of the contractual penalties.

Annex no. 1 to the Master Agreement to Provide Counter Guarantees from Time to Time defines the rules for the Counterparty to provide counter guarantees under instructions from PZU issued in favor of Alior Bank. The available counter guarantee limit is PLN 2,600 million. The available limit will be reduced each time when each counter-guarantee is extended, by the guaranteed amount specified in the counter-guarantee; the available counter-guarantee limit is renewable, which means that the limit is renewed when a counter-guarantee expires.

No guarantee was issued under this agreement in 2020.

58.3 KNF Office inspections in PZU and PZU Życie

58.3.1. PZU

During the period from 27 July to 25 September 2020 KNF conducted an inspection of PZU’s operations and assets in the claims handling area. On 7 January 2021, PZU received a recommendation to refrain from breaching the interests of parties entitled to indemnification under motor TPL insurance, consisting in applying in the calculation of the indemnification using the cost estimate method out-of-date, unreliable data on the man-hour rates in the car repair market that do not match the actual repair costs from the place of residence, seat or the injured party or the place of repair of the vehicle. On 19 February 2021, PZU informed KNF about implementing the recommendations and, on 19 March 2021 provided KNF, on its request, with additional documents and explanations pertaining to the implementation of the recommendation.

58.3.2. PZU Życie

In the period from 7 to 25 January 2019 KNF conducted an inspection into PZU Życie’s adherence to the obligations stemming from the act on counteracting money laundering and financing of terrorism. On 8 April 2019 KNF issued 5 post-inspection recommendations with execution deadlines of 30 June 2019, 31 December 2019 and 31 January 2020. On 12 July 2019, PZU Życie informed the regulatory authority that it has carried out the recommendations for which the implementation deadline expired on 30 June 2019, and on 10 January 2020 the company reported that it has carried out the recommendation for which the implementation deadline expired on 31 December 2019. In its letter of 15 October 2019, at the request of PZU Życie, KNF agreed to postpone the time limit for the implementation of two of its recommendations, of 31 December 2019 and 31 January 2020 to 30 April 2020 and 31 May 2020, respectively.

On 28 May 2020, PZU Życie announced that all recommendations had been implemented. On 1 September 2020 PZU Życie transmitted additional explanations and documents to KNF in connection with KNF’s inquiry of 31 August 2020.

In the period from 9 January to 8 February 2019 KNF conducted a supervisory visit to PZU Życie with respect to the fulfillment of the requirements concerning the risk management system in terms of underwriting insurance risk. On 2 May 2019 PZU Życie received a written summary of the supervisory visit in which the regulatory authority identified an infringement of Article 21 of the Insurance Activity Act. On 16 May, 19 June and 5 July 2019, PZU Życie conveyed to KNF its position and information regarding the actions taken to ensure that the insurance undertaking’s business is conducted in accordance with the law. On 25 July 2019, KNF provided recommendations to be implemented by 30 September and 30 November 2019 and 31 March 2020. On 7 October 2019 and 9 December 2019, PZU Życie informed the regulatory authority of its implementation of the recommendations for which the execution deadline expired on 30 September 2019 and 30 November 2019, respectively. On 7 April 2020, PZU Życie notified the regulatory authority of the implementation of all of the recommendations and, on 29 May and 5 June 2020, it provided additional explanations and evidence of their implementation.

In the period from 1 October to 30 November 2019, KNF carried out an inspection of PZU Życie’s asset standing in the context of the company’s investment policy.

On 27 February 2020, PZU Życie received a recommendation to adjust its operations to the provisions of Article 267(1) of Commission Delegated Regulation (EU) 2015/35 of 10 October 2014, supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II), as amended. The recommendations pertained to ensuring effective control systems and mechanisms allowing for a reliable and adequate measurement of assets and liabilities (options) where estimates are an important part. On 6 October 2020, PZU Życie announced the timely implementation of the recommendation.

During the period from 10 September to 9 November 2020 KNF conducted an inspection pertaining to PZU Życie’s technical provisions for the purposes of solvency. On 16 December 2020, PZU Życie received an inspection report and submitted additional clarifications to the report.

On 11 December 2020, PZU Życie received recommendations following an analysis carried out by KNF in the period from July to November 2020 pertaining to performance of selected obligations following from the act on combating money laundering and financing of terrorism, as regards adaptation of the internal procedures to the contents of the provisions of law and verification of the client’s identification data, with a deadline set for 30 June 2021.

The Management Board of PZU believes that the results of the audit have not exerted any impact on the consolidated financial statements.

58.4 Approval of the base prospectus for Alior Bank’s bond offering program

On 4 May 2020, KNF approved Alior Bank’s base prospectus prepared in connection with:

  • the program, to be offered in the Republic of Poland, of unsecured bearer bonds with a par value of at least PLN 100 each, up to a total maximum par value of PLN 1,500 million, established by Alior Bank within the framework of its multi-annual bond issue program, up to a total maximum par value of PLN 5,000 million; and
  • its intention to apply for admission and floating of each series of bonds on a regulated market (main or parallel market) for debt securities operated by the Warsaw Stock Exchange or a regulated market for debt securities operated by BondSpot SA.

58.5 Approval of the prospectus for the program to issue banking securities

On 31 December 2020, KNF approved Alior Bank’s prospectus prepared in connection with the public offering and intention to apply for admission to trading on the regulated market of banking securities issued under the Second Program to Issue Banking Securities with the total par value of up to PLN 5,000 million.

58.6 Cases involving Alior Leasing sp. z o.o.

In December 2020 Alior Bank and Alior Leasing sp. z o.o. received from the former members of the Alior Leasing sp. z o.o. management board summons to an ad hoc arbitration court by the National Chamber of Commerce in Warsaw on account of the management plan. As at the date of publication of the consolidated financial statements Alior Bank and Alior Leasing sp. z o.o. did not receive a statement of claim under the said arbitration proceedings. In the opinion of Alior Bank and Alior Leasing sp. z o.o., the likelihood of obtaining an effective ruling obligating the defendants to pay compensation to the plaintiffs on account of the management plan is low. Accordingly, these circumstances justify the decision not to include relevant provision in the consolidated financial statements.

Alior Leasing sp. z o.o. has identified the risk of possible claims against Alior Leasing sp. z o.o. filed by third parties, which may result from actions of some employees and associates of Alior Leasing sp. z o.o. As at the date or preparing the consolidated financial statements, no claims were filed on this account. The PZU Group believes that there are no circumstances justifying recognition of a provision on this account.

The PZU Group will not disclose any further information regarding the possible third party claims mentioned above, to avoid the weakening of its status and position in the potential proceedings.

58.6.1. Lease agreement for the building of PZU’s new Head Office 

On 4 February 2020 the PZU Management Board adopted a resolution to select an offer in the proceeding to lease headquarters for the PZU Head Office and sign a letter of intent with Bitra Enterprise 1 sp. z o.o., a company belonging to the Skanska Group. According to the resolution in question, the PZU Management Board accepted a scenario on how to proceed in the selection of headquarters for the PZU Head Office involving the conclusion of a lease agreement for office and storage space and parking spaces with Bitra Enterprise 1 sp. z o.o., with its registered office at Al. Solidarności 173, 00-877 Warsaw (“Lessor”) and approved the selection of building “Y”; it is under construction in the Generation Park complex situated at Rondo Daszyńskiego 4 in Warsaw (“Building”) as the new headquarters of the PZU Head Office.

On 30 June 2020, the PZU Management Board adopted a resolution on the execution of a lease agreement for the PZU Head Office with the Lessor. On the same date, an agreement was signed to lease office space, commercial and service space, storage space and parking spaces in the Building (“Lease Agreement”). The lease agreement contains clauses contemplating contractual penalties regarding the Lessor’s liability for delays in handing over the leased facility, hindrances and impediments to usage of the leased area and violations of the non-compete clause.

The total estimated gross value of the Lease Agreement to lease the Building over the 10 years of its duration is approximately PLN 787 million, while the gross incremental costs related to relocation are approximately PLN 65 million. The amounts stated above may vary as a result of specific arrangements concerning the final layout, the final scope of adaptation work, the costs of fit-out and the date of translating some of the costs and financial incentives between EUR and PLN. The total value of the Lease Agreement as at 31 December 2020 should not change by more than 5% of the specified amount.

58.7 Subsequent events

58.7.1. Acquisition of Idea Bank

On 30 December 2020, BFG made a decision to apply the resolution instrument to Idea Bank due to satisfaction of the following premises:

  • threat of the Idea Bank’s bankruptcy,
  • lack of premises indicating that possible regulator measures or Idea Bank’s efforts will eliminate the threat of bankruptcy in due time,
  • initiation of the resolution against Idea Bank was necessary to protect the public interest, understood as stability of the financial sector.

The resolution instrument applied by the Bank Guarantee Fund against Idea Bank involved the take-over as of 3 January 2021 by Pekao, with the effect specified in Article 176 sec. 1 of the BFG Act, of Idea Bank’s enterprise, comprising its overall rights and liabilities as at 31 December 2020 (“Transaction”), excluding specific property rights and liabilities specified in the BFG decision, comprising among others:

  • property rights and liabilities associated with actual, legal and prohibited acts in connection with:
    • trading in financial instruments and other acts pertaining to:
      • financial instruments issued by GetBack SA and GetBack SA’s related parties,
      • investment certificates, in particular investment certificates issued by Lartiq (formerly Trigon) [Profit XXII NS FIZ, Profit XXIII, NS FIZ, Profit XXIV NS FIZ] represented by Lartiq TFI SA (formerly Trigon TFI SA), Universe NS FIZ, Universe 2 NS FIZ and other mutual funds represented by Altus TFI SA,
    • providing insurance cover, performing insurance intermediation activities or distribution of unit-linked life insurance (also life insurance in which the benefit is determined on the basis of specified indices or other underlying values),
    • provision of services as an agent of an investment firm,
    • activity of Idea Bank S.A. which is not covered by Pekao’s articles of association, 

and claims arising from such rights and liabilities, including those subject to civil and administrative proceedings, regardless of the date of incurring them;

  • shares in Idea Bank’s subsidiaries and associates;
  • corporate bonds issued by GetBack SA;

hereinafter: “Acquired Business”.

Execution of the acquisition of the Acquired Business does not have any material impact on Pekao’s financial profile, including in particular its capital and liquidity parameters.

Idea Bank was commercial bank offering banking services provided to individual and institutional clients, such as, among others, acceptance of cash deposits payable on demand or upon maturity and keeping accounts for such deposits, granting loans, granting bank guarantees, issuing securities. Idea Bank’s capital adequacy according to the latest available financial statements prepared as at 30 September 2020 was 2.51% (relative to 10.5% required by the law) and was significantly below the regulatory requirements.

The initiation of the resolution process made it possible to reduce the effects of the risk of bankruptcy of Idea Bank and, as a consequence, the resulting negative effects for the banking sector.

The acquisition of Idea Bank did not entail any payment from Pekao. As a result of the Transaction the PZU Group acquired Idea Bank’s assets and liabilities whose total estimate fair value was negative.

Considering the foregoing, on 8 January 2021 Pekao received from BFG support in the form of a subsidy of PLN 193 million to cover the difference between the value of the acquired liabilities and the value of the acquired property rights of Idea Bank.

As an inseparable element of the Transaction, Pekao also received from BFG a guarantee to cover the losses resulting from the risk associated with property rights or liabilities of the entity in restructuring referred to in Article 112 sec. 3 item 1 of the BFG Act (“Loss Cover Guarantee”) which includes a guarantee to cover losses resulting from credit risk associated with credit assets (“CRM Guarantee”) and a guarantee to cover losses (other than losses resulting from credit risk) associated with the Acquired Business (“Other Risk Guarantee”).

The acquisition is associated with the takeover of credit assets in the Acquired Business and could result in an increase in the amount of risk-weighted exposures (it is calculated by multiplying the exposure amounts and the risk weight following from the provisions of CRR Regulation). An increase in such risk-weighted exposure amounts could impact Pekao’s capital requirements.

In connection with the above, the CRM Guarantee will be used by Pekao as “recognized unfunded credit protection” within the meaning of the CRR Regulation. As regards to credit risk, this will make it possible to assign to the acquired exposures a risk weight appropriate for the entity providing the protection – BFG, classified as a public sector entity in accordance with the KNF opinion referred to in Article 116(4) of the CRR Regulation. As a consequence of obtaining the opinion referred to in Article 116(4) of the CRR Regulation and after the CRM Guarantee satisfies the remaining premises for the “recognized unfunded credit protection”, the exposures covered by the Loss Cover Guarantee can be treated as exposures to central government, resulting in a significant reduction of the capital requirement on account of credit risk on the part of Pekao.

List of Idea Bank’s assets and liabilities at 31 December 2020 by carrying amount, i.e. without adjustments applied for the needs of settlement of the Transaction:

Statement of financial position item 31 December 2020
Intangible assets 144
Other assets 16
Property, plant and equipment 36
Assets held for sale 1
Loan receivables from clients 12,049
Financial derivatives 9
Investment financial assets 748
Measured at amortized cost 271
Measured at fair value through other comprehensive income 477
Receivables 286
Cash and cash equivalents 1,107
Total assets 14,396
Liabilities to banks 126
Liabilities to clients under deposits 13,514
Financial derivatives 155
Other liabilities 342
Provisions 8
Total liabilities 14,145

The total estimate fair value of the above assets and liabilities calculated by Pekao for the needs of submission of a binding offer to purchase the Acquired Business was negative and ranged from PLN -110 million to PLN -276 million.

Pekao will settle the Transaction applying the principles following from IFRS 3 Business combinations on the basis of the financial data pertaining to the Acquired Business as at 31 December 2020.

Application of IFRS 3 requires, among others, carrying out a process of identification and measurement of the acquired assets and liabilities at fair value as at the date of recognizing and measuring goodwill or a gain from a bargain purchase.

The above process requires collecting and analyzing huge volumes of data and carrying out a number of calculations on their basis, to determine the fair value of individual assets and liabilities in a reliable and trustworthy manner.

Considering the fact that the Transaction took place on 3 January 2021, the PZU Group started this process but did not have the possibility of settling the acquisition or provisional settlement of the acquisition between the date of obtaining control and the date of publication of the consolidated financial statements.

58.7.2. Group layoff program in Pekao

On 3 March 2021 Pekao, in accordance with the provisions of the Act of 13 March 2003 on the Special Rules for Terminating Employment Relationships with Employees for Reasons Not Attributable to Employees (consolidated text in the Journal of Laws of 2018, item 1969), it adopted a resolution concerning the intention of conducting group layoffs and commencing the consultation procedure on group layoffs.

Pekao’s intention is to definitively terminate employment contracts with no more than 1,110 employees and change the terms of employment of no more than 1,250 employees, which is approx. 8% and 9% of all Pekao employees as at 1 March 2021, respectively. Pekao expects that the group layoffs will start in the last week of March 2021 and will end by 30 June 2021.

On 3 March 2021 Pekao notified the trade union organizations active in Pekao and the Workers Council of the reasons for the planned group layoff and requested that the trade union organizations and the Workers Council engage in consultation. Moreover, Pekao will notify the labor office of its intention to conduct group layoffs.

The group layoff process is a derivative of the long-term changes in the banking sector accelerated by the Covid-19 pandemic and an element of the reorganization of Pekao’s outlet network and structures aimed at adapting the bank better to the current market situation and client preferences.