Dear All,

We have delivered an excellent performance in 2021. Once again, we have proven ourselves as a reliable, stable and responsible partner for our customers, counterparties, and the Polish economy. The strong results have been achieved on the back of our well-designed growth strategy, operational flexibility, and – above all – people engagement.

We are invariably committed to delivering the highest quality of service and putting customer needs at the forefront of our thinking. This is why we are constantly striving to enhance customer experience by developing remote channels and simplifying our procedures and offering, among other things.

Our efforts yield tangible results. We observe a growth in customer satisfaction as evidenced by our NPS. Customers have recognised our proposition, service quality and social responsibility. We have been awarded in important rankings. We were number 1 in Forbes’ “Business-friendly bank” ranking, ranked in the top 3 banks according to Newsweek, and took the podium in the Golden Banker competition. Our Private Banking was hailed as the best in Poland by Euromoney. We also received the prestigious “Financing Provider of the Year” award from Eurobuild for our property finance proposition.

We actively support the Polish economy by being a responsible and compliant taxpayer (in 2021, Santander Bank Polska was among the 10 largest CIT payers in the country) and by making our infrastructure available for the distribution of public aid and family benefits. We also remain a committed partner in dialogue with our stakeholders, sharing our knowledge and market experience, which is particularly important in the period of recovery from the post-pandemic crisis.

The year ahead will be marked by challenges associated with transition to sustainable economy.

An effective response to the progressing climate change and increasing social inequalities requires consistency, flexibility and commitment from each of us. For this reason, we strengthened our Responsible Banking agenda in 2021. We were actively implementing ambitious environmental protection, social inclusion and corporate governance projects.

I am confident that in 2022 and onwards responsible management and ESG-compliant activities will be key to how most companies in the EU do business – both due to new regulations, and because of our responsibility towards future generations. These aspects are also increasingly important for our customers and communities we serve, which is why we are going to advocate those changes.

Macroeconomic environment – sharp recovery and price growth

In 2021, the economy made a robust recovery as pandemic-related restrictions were eased, Covid-19 vaccination rates increased, and the global economy revived. According to Statistics Poland (GUS), the GDP grew by 5.7%. All the key GDP components – consumption, investment, imports and exports – were increasing fast. Imports grew much faster than exports and the foreign trade surplus registered in 2020 turned into a deficit. The labour market was very good – unemployment remained low and wages rose at a solid pace. At the same time, some sectors continued to face global supply chain disruptions.

High demand and supply issues triggered a rapid rise in prices. CPI inflation accelerated from 2.6% YoY in January to 8.6% YoY in December. The NBP responded with interest rate increases initiated in October. The reference rate rose from 0.10% to 1.75% at the end of the year.

Thus, we are entering 2022 with growing interest rates and buoyant market. At the same time, we have concerns about how the pandemic will unfold. And central banks’ pivot toward tighter monetary policy may ultimately slow down economic growth in a few quarters from now.

Our business

In 2021, Santander Bank Polska posted net profit of PLN 915.9m.

We reported an increase in total income, notably net fee and commission income, and achieved satisfactory net interest income. Our liquidity and capital position is very solid.

In retail banking, we focused on improving customer experience and on expanding, digitising and streamlining our services. We sought to encourage customers’ digital activity – currently we have three million digital customers.

We introduced new solutions and functionalities. We facilitated everyday banking, providing access to new payment solutions and new non-banking services. New features on our offer include contactless BLIK payments, automatic motorway toll payments, and medical packages. We introduced payment cards made of biodegradable plastic – they represent more than 40% of all cards issued last year.

Our new My Goals service that facilitates savings became highly popular with customers. During the year, our customers set up 233k savings goals. So far, the service has attracted nearly 170k users.

Last year also saw outstanding results in mortgage sales, remote cash loan sales, as well as in insurance and leasing, particularly in the area of green assets finance. We can also boast strong performance in our brokerage and Private Banking business.

We are constantly expanding our proposition in the SME segment, where we introduced a loan available in the mobile application and services that facilitate business management: eHealth and eLeasing. Throughout 2021, we maintained our top position in terms of the value of working capital loans for sole traders. In order to help our customers through the difficult time, we made it possible for them to apply for and settle the government aid in our systems. More than 7.2k companies used the aid under the PFR Financial Shield 2.0.

Our corporate business also performed as expected. We are working on digitalisation and expansion of our offering to ensure easy and fast finance management for our business customers coupled with superior service quality.

In the Business and Corporate Banking segment, our priority was to provide solutions facilitating comprehensive financial operations. We expanded the iBiznes24 electronic banking platform and provided the GTS (One Trade Portal) for integration of international accounts in multiple currencies. The tool is one of the drivers of the digital transformation of Santander Group, being in line with the One Europe strategy and the Group-wide vision of business growth. On top of that, leveraging the Group’s global footprint, Santander Bank Polska supports foreign expansion of Polish exporters and companies with foreign capital doing business in Poland. We continued our sectoral approach strategy in business segments by sharing knowledge and insights about the market, trends and prospects with customers from selected industries.

The Corporate and Investment Banking Division participated in last year's largest Warsaw Stock Exchange debut of a retail sector client. We provided advice or intermediated in tender offers in the telecommunications, IT, construction & assembly, food, and renewable energy sectors. Particularly rewarding was our involvement in renewable energy transactions whereby we could contribute to the transformation of the Polish energy system. The transaction we arranged for a telecom company won us the prestigious Fiber Deal of the Year award from Project Finance International.

The Corporate and Investment Banking Division reaffirmed its position among the leaders of investment banking in Poland. In the capital market, we took second position in terms of the value of transactions and the value of bonds issued. In addition, we ranked third in the mergers and acquisitions area in terms of the volume of transactions.

ESG

The Responsible Banking agenda based on ESG metrics is one of the pillars of Santander Bank Polska's strategy. We are an active player in the green financing market: we support companies in the energy transformation, finance the development of renewable energy sources, and offer green solutions to personal customers.

In 2021, we supported our customers in the green transformation as we completed PLN 503.7m worth of deals in the area of renewable energy. We issued Poland’s first sustainable debt securities with a nominal value of PLN 750m. The proceeds from the issue will be used to finance or refinance eligible green assets or eligible social assets. 

We also participated in the issue of green bonds for customers from the property development and machinery sectors. In cooperation with Banco Santander, we arranged an ESG-linked credit facility for a client.

We also actively cooperate with local authorities, offering new solutions related to energy transformation and zero-emission public transport. Together with the state development bank BGK, we financed the purchase of electric buses for Poznań, thus contributing to improvement of air quality in the city. 

In 2021, together with Santander Group, we announced the Net Zero strategy, which embodies our ambition to become climate-neutral by 2050. To achieve this, as of 2030, Santander Bank Polska will stop financing energy companies that generate more than 10% of their revenues from the production of steam coal. By then, we will have also completely reduced our historical exposure to steam coal producers.

Last year, the Bank published, for the eight time, a report summarising the organisation’s social, economic and environmental impact, and launched its ESG website.

Our commitment to sustainability has been noted and recognised. For example, we received the Golden CSR Leaf, took second position in the Responsible Companies Ranking, and successfully passed the audit in the Diversity IN Check ranking.

 Moving forward, we are determined to maintain sharp focus on our ESG agenda. We are aware that our commitment to green financing and the transition to a low carbon future is both an economic necessity and a sign of responsibility for future generations.

Strategic philanthropy, education, and social responsibility

We attach great weight to ensuring that we have a positive impact on the communities we serve. For this reason, together with the Santander Foundation, we help those in need, support diversity and inclusion, and conduct educational activities.

In response to the challenges associated with mental health of children and adolescents, who were particularly affected by the pandemic, we organised for the second time the “We Will Double Your Impact” fundraiser. Together with more than 10k customers, we donated PLN 2m to 16 hospitals with mental health wards for young patients. We also helped hospitals with the “Flicker Club” (“Klub Płomyka”) project, under which we renovated and equipped rooms for children and their guardians at care and educational institutions and hospitals.

We are also engaged in sweeping educational activities. For example, we run our own economic education project – “Finansiaki”. Young adults can benefit from our Santander Universidades programme, which we have been implementing for 10 years in Poland, and for 25 years globally. During this time, together with Santander Group, we have donated EUR 2bn for education, financing 630k scholarships. Together with the best universities in the world, we support the development of digital, linguistic and soft skills. But our educational activities go far beyond financial support in the form of scholarships. We also want to share the practical experience of each of us and jointly engage in disseminating useful knowledge. This is the goal of the Santander Universidades Academy, a recurring initiative whose last year's edition was attended by 20 speakers from the Bank and over 1,000 people from more than 100 Polish universities.

Promoting equality and diversity is an important task and commitment for Santander Bank Polska. As a signatory of the Diversity Charter, we ensure equal treatment for all stakeholders. We are also engaged in numerous initiatives to support equality of opportunity and create favourable working conditions. We constantly focus on development of our people through training and mentoring projects. We are convinced that greater satisfaction and comfort of employees will have a positive influence on customer service quality, and thus on the efficiency of our organisation.

In 2021, we showed as a Bank that we are able to operate successfully even in difficult conditions. We see that our strategy – with focus on employees, customers, and partners, and commitment to the broadly understood social environment – is right, and will be pursued consistently.

Despite numerous challenges, it was a good year – thanks to our employees, clients, partners and friends. Thank you for all the new goals you set for us, for your engagement and support in our ambition to be the best bank for customers..

Michał Gajewski

President of the Management Board of Santander Bank Polska S.A.

The original Polish document is signed with a qualified electronic signature