BGK cares for sustainable development and responds to economic challenges. It generated PLN 335 billion of support for the economy in 2022

Support for the economy affected by the war in Ukraine, social commitment, implementation of programmes influencing sustainable development of the country – in 2022, Bank Gospodarstwa Krajowego (BGK), i.e. Polish development bank pursued its business strategy and actively responded to strategic challenges. Due to the bank’s commitment, almost PLN 335 billion was injected to the economy, this amount comprises own and commissioned financing as well as mobilized private capital. BGK sums up its activity in 2022. For the first time it does so in the form of an integrated report that explains how the bank creates value for stakeholders using available capitals.

We are the only development bank in Poland, our mission is to support sustainable social and economic growth. We carry it out through our business strategy and business model that is our way of interaction with the market and response to its needs. In 2022, by implementing our strategy we contributed to reaching most of the UN Sustainable Development Goals. 84 per cent of the amount of support for the economy generated last year by our financing supported the achievement of 11 out of 17 UN SDGs – Beata Daszyńska-Muzyczka, president of BGK, says.

The year of strategic challenges

In 2022, Polish economy was still affected by Cocid-19 pandemic, Russian aggression in Ukraine brought further challenges – high inflation, problem with access to energy materials and increase in their prices.

Bank Gospodarstwa Krajowego has been actively supporting Ukraine since the first days of Russian invasion. In cooperation with the operator of BLIK system and National Bank of Ukraine, it opened a special account and donated PLN 30 million for necessary humanitarian and military expenses. The account is open for everyone and you can still transfer money onto it. The employees of the bank were actively involved in voluntary help supporting the refugees in Warsaw reception point at Torwar arena, among others. BGK was also the originator of VDOMA programme that helps people who had to flee their homes because of war in finding a job in Poland.

Last year we also responded to the challenges regarding the strategic security of Poland. We were involved in organizing the financing of the purchases to bolster national defense capabilities. We financially supported activities aimed at ensuring Poland’s energy security following the reduction and ultimately complete cessation of imports of energy carriers from Russia. We financed the necessary emergency purchases and investments at both the national and local level. We also provided financial support to companies that were forced to look for new export markets due to the military activities. - Beata Daszyńska-Muzyczka, president of BGK, says.

Support for the economy under BGK “Strategic security” business model programme amounted to over PLN 109 billion in 2022.

BGK is an important partner for Polish entrepreneurs. Ensuring access to liquidity financing in connection with the economic effects of the pandemic and the war was of crucial importance last year. BGK provided both liquidity financing and financing of investment and development. Under the “Entrepreneurship development” business model programme, the bank generated over PLN 84 billion of the support for the economy.

Sustainable development

Bank Gospodarstwa Krajowego whose mission is to support sustainable social and economic development of the country, in its activity contributes to the achievement of UN Sustainable Development Goals. 84 per cent of the amount of support for the economy generated by the bank supported the implementation of 11 of the 17 UN SDGs. Majority – 74 per cent of the support, achieved the 4 goals:

• Goal no 8 – Decent work and economic growth (24 per cent)
• Goal no 9 – Industry, innovation and infrastructure (22 per cent)
• Goal no 7 – Affordable and clean energy (20 per cent)
• Goal no 11 – Sustainable cities and communities (8 per cent)

With activities other than provided financing, the bank contributes to the achievement of the other SDGs, among others, goal no 3 Good health and well-being, goal no 4 Quality education, goal no 8 Decent work and economic growth, goal no 10 Reduced inequalities, goal no 13 Climate action.

Last year BGK continued the project “Sustainable development”. Within the project, it worked out, among others, new processes for collecting and reporting ESG data, ESG risk management rules, methodology for client assessment, financing and internal projects, and also ESG Committee was established.

The operations conducted by the bank are reflected in the ratings of international agencies. In January this year, the international agency Sustainable Fitch assigned BGK a rating of 2 on a scale from one to five, where one is the best outcome and five is the worst. The rating reflects the focus of BGK’s operations and strategy on the sustainable development of Poland, implementation of internal ESG risk management rules, and efficient social and corporate governance activities.

In August 2022, the Fitch rating agency upheld the national long-term rating of BGK at AAA(pol) with a stable outlook, and the international long-term rating at A-, also with a stable outlook. The agency also confirmed the short-term foreign currency rating at F1, domestic short-term rating at F1+(pol), and long-term national currency rating at A- (stable outlook). These ratings are the highest in Polish Fitch domestic rating scale, and stable outlook for long-term rating of the bank reflects the perspective of Poland.

BGK is involved in financing energy transformation, first and foremost supporting investment in renewable energy sources (RES) and modern heating systems. In particular, examples include loans advanced to power companies for wind power projects (offshore and onshore), photovoltaics, development of low-carbon hydrogen technologies and the modernisation of existing power plants and the power grid.

One of the RES projects in 2022 was BGK’s financing of the construction of onshore wind farms in Kazimierz Biskupi with a total capacity of 17.5 MW.

BGK implements TERMO government programme the goal of which is to improve energy efficiency of multifamily buildings. In 2022, the bank awarded more than 1,000 bonuses amounting to more than PLN 100 million from the Thermo-modernisation and Renovation Fund. Thus more than 77,000 MWh of energy was saved and the emission of 18,000 tons of CO2 was prevented, an amount absorbed by more than 2.5 million trees in a year.

Polish development bank continues the activity of 3W Idea – its unique project in which scientists, entrepreneurs and public sector leaders join forces to build a better, modern and sustainable future based on the key living resources of water, hydrogen and carbon. In 2022 almost 100 new entities joined 3W Idea. BGK, together with key Polish universities, established 3W Interdisciplinary Innovations Center that cares for strengthening the cooperation of business and scientific world and also supports scientific environment in commercialisation of innovation.

BGK implements programmes that enable access to housing for people of low or middle income. The effects of the non-repayable construction support programme in 2022 are: the launch of over 470 undertakings as a result of which there will be over 11 thousand housing units and bed places. The bank also runs Social Rental Housing (SRH) programme in which PLN 1.2 billion worth of loans have been granted for building of over 9 thousand flats since 2016.

In Government Strategic Investment Programme, BGK supports public investments run by local governments and influences the improvement of the citizens’ quality of life.

In times of great economic challenges, we focus our efforts on investments. As confirmed by analyses carried out by the International Monetary Fund, 1 per cent of GDP allocated to investment can produce up to 2.5 per cent of generated GDP in the medium to long-term perspective. In 2022, under the Government Strategic Investment Programme, the funding was awarded for nearly 5,000 investment projects totalling PLN 24.6 billion - Beata Daszyńska-Muzyczka, president of BGK – Polish development bank, says.

The Bank is active not only in Poland. It supports export and foreign expansion of domestic companies on 85 markets. The total amount of support for export and foreign expansion that was provided by BGK in 2022 (under the Government Programme Financial Support for Exports) amounted to PLN 3.3 billion. The bank supported 130 foreign projects of Polish enterprises.

BGK is the initiator, co-founder and main investor of the Three Seas Fund which is the economic dimension of the Three Seas Initiative. At the end of December 2022, the Fund’s portfolio included 4 investments. Net asset value of the fund was PLN 2.5 billion at the end of 2022.

Polish development bank cares for the development of social capital basing on the assumption that the development of the economy must go hand-in-hand with sustainable social development. BGK is the founder of foundations that act for education, social activation, culture, monument restoration.

Financial performance

In 2022 BGK reported a net profit of PLN 2 178 million, i.e. PLN 1 482 million more than the previous year. The increase in net profit was primarily attributable to a sharp rise in income from banking activities (PLN 1 933 million more, i.e. 107.7 per cent), including mainly net interest income (up PLN 1,935 million, i.e. 189.3 per cent) driven by high interest rates.

The increase in the balance sheet total was attributable to:

• support for the economy through loans, bonds (municipal and commercial) – an increase of PLN 4,621 million, i.e. 10.1 per cent, year on year.
• increase in total equity by PLN 5,934 million, or 24.2 per cent, year on year.

The report is published on the Integrated report website.