ING Bank Slaski SA (FRA:6GF) Q3 2026 Earnings Call Highlights: Record Client Growth and 17% ...

Negative Points

• ING Bank Slaski SA ( FRA:6GF ) faces margin pressure due to intense competition in the banking sector, particularly in new product generation, which impacts net interest income.

• The cost of risk is expected to rise from the current low level of 24 basis points towards the long-term average of 60 basis points, potentially affecting future profitability.

• HR costs increased by 11% year-on-year due to salary pressure and full consolidation of TFI, contributing to overall operating cost growth.

• The share of loans in Stage 3 increased slightly to 3.96%, and although primarily due to mathematical effects, it indicates a marginal deterioration in portfolio quality.

• The transition from WIBOR to POLSTR may cause temporary operational challenges and lengthen loan processing times, with no POLSTR-based loans started in Q3 2026.

Q & A Highlights

Q: What is the outlook for corporate lending momentum, and is ING involved in major projects like CPK or nuclear? A: CEO Michal Boleslawski said investment momentum is broadening beyond large corporates into SMEs, which is encouraging after years of weak appetite. Large transactions, especially nuclear-related refinancing, are in the pipeline, while CPK remains at an early stage. He cautioned that public procurement-to-loan timelines can take months, so tangible credit effects will not appear this year, though the bank stands ready with ample liquidity (L/D around 71%).

Q: What drove the Q3 financial results, and how sustainable is profitability? A: CFO Bozena Graczyk reported Q3 gross profit of PLN1.7 billion and cumulative gross profit of PLN5 billion, up 17% year-on-year and above market expectations. Revenue grew 7% versus 6% cost growth, cost of risk fell 50% year-on-year, and RoE adjusted for macro cash flow hedge reached 14.7%, above the strategic target. She attributed this to consistent focus on commercial activity despite market volatility and intense competition.

Q: What is the sensitivity of net interest income to a 100 bps rate change? A: CFO Bozena Graczyk said a 100 bps rate increase would boost net interest income by slightly above PLN200 million, while a 100 bps cut would reduce it by slightly above PLN300 million. She noted sensitivity depends on repricing periods and should be viewed alongside hedging instruments.

Q: How is the transition from WIBOR to POLSTR progressing, and do clients show a preference? A: CFO Bozena Graczyk said POLSTR-based mortgage applications began September 28, with WIBOR applications accepted only until year-end and no new WIBOR-based variable-rate generation after January 1, 2027. Variable-rate loans were 39% of the book in Q3, and no POLSTR loans had yet started on balance sheet. CEO Michal Boleslawski added that clients show little preference between benchmarks, as the reform should be neutral, though converting a WIBOR application to POLSTR lengthens processing.

Q: Have you booked provisions for consumer protection and legal risk in consumer loans? A: CFO Bozena Graczyk said the bank set up PLN13 million of legal risk provisions in Q3, fully covering the risk related to so-called modification clauses after prior-quarter provisions. She noted the bank will challenge the antitrust office's decision, and that the provisions do not change the financial result.

Q: How did hedging affect interest income in Q3? A: CFO Bozena Graczyk said rising interest rates made the revaluation reserve more negative, increasing the macro cash flow hedge's negative contribution to net interest income quarter-on-quarter. The delta between Q2 and Q3 was just a few basis points. She stressed that hedging should be viewed together with net interest income on the balance sheet, as fixed-rate bonds and derivatives act as a natural hedge.

Q: Do you plan securitization to support capital ratios, and is the leverage ratio safe? A: CFO Bozena Graczyk said there is no short-term need for securitization, though the bank monitors the space and weighs capital gains against costs. She confirmed the leverage ratio is safely above 5.5% and closely monitored.

Q: Has margin compression in new lending reached a bottom? A: CEO Michal Boleslawski said there is no clear floor, as individual banks continue to undercut with very low offers. He hopes margins are nearing a more stable level, and noted the new POLSTR benchmark will influence margin levels.

Q: How is the bank managing AI-related costs? A: CEO Michal Boleslawski said AI costs are tracked under a dedicated position but remain insignificant and well managed, covering token and other incurred costs. He said AI will be used where it makes economic sense rather than as a fad, and CFO Bozena Graczyk added that AI is expected to decrease costs more than support revenues.

Q: Why did short-term corporate lending decline quarter-on-quarter, and what is the outlook for corporate deposits? A: CEO Michal Boleslawski attributed the drop to large corporates refinancing and consolidating exposures to prepare for investment and major tenders, while SME lending actually grew. On deposits, he said Q4 typically brings balance sheet clean-up and a shift from short-term loans to deposits, with deposits expected to rise but managed for productive lending rather than year-end parking.

Q: What are the risks around the mortgage bank's covered bond financing amid changing interest rates? A: CFO Bozena Graczyk said the mortgage bank's covered bond pool has an adequate security buffer, and the bank will act to maintain proper cover ratios if they deteriorate. CEO Michal Boleslawski noted that in Poland fixed and variable rates are virtually equivalent for clients, who can terminate fixed-rate contracts without fees, an unusual feature in Europe that is negative for banks.

Q: What is the mark-to-market position versus amortized cost on the securities portfolio? A: CFO Bozena Graczyk said about PLN49 billion of securities are held at amortized cost, valued PLN1.4 billion below book value as of September 30, with details in the quarterly report. She noted held-to-maturity securities must be kept to maturity and act as a natural interest rate hedge, so negative valuation should be viewed alongside the growing net interest margin.

Q: How is the bank preparing for the new employee pension scheme (PPK/OKE)? A: CFO Bozena Graczyk said the bank will communicate soon and will be ready with all pension products once the framework matures. She said the launch will be important for client expansion, with each bank preparing for the scheme starting early next year.

Q: Which SME sectors show the strongest lending appetite, and how long until large investment projects translate into credit? A: CEO Michal Boleslawski said the Polish economy is diversified with no single dominant sector; energy-intensive industries and automotive may lag while less energy-intensive industries and services develop well. On large projects, he said public procurement announcements can take many months

For the complete transcript of the earnings call, please refer to the full earnings call transcript .