Financial statement of the PZU Group (Q2 2022)

Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group

Condensed interim consolidated financial statements for the 6 months ended 30 June 2022

Table of contents

Interim consolidated profit and loss account....................................................................................

3

Interim consolidated statement of comprehensive income.............................................................

4

Interim consolidated statement of financial position.......................................................................

5

Interim consolidated statement of changes in equity ......................................................................

6

Interim consolidated cash flow statement ........................................................................................

9

Notes to the condensed interim consolidated financial statements .............................................

11

1.

Introduction ..............................................................................................................................................................

11

2.

Information on PZU and the PZU Group ..................................................................................................................

14

3.

Composition of the Management Board, Supervisory Board and PZU Group Directors........................................

24

4.

Key accounting policies, key estimates and judgments..........................................................................................

26

5.

Information about major events that materially influence the structure of financial statement items ...............

37

6.

Corrections of errors from previous years ...............................................................................................................

37

7.

Material events after the end of the reporting period .............................................................................................

37

8.

Supplementary notes to the condensed interim consolidated financial statements............................................

39

9.

Assets securing receivables, liabilities and contingent liabilities ...........................................................................

80

10.

Contingent assets and liabilities ..............................................................................................................................

80

11.

Equity management .................................................................................................................................................

81

12.

Segment reporting....................................................................................................................................................

82

13.

Information on the changes in the economic situation and business conditions exerting a material effect on the

fair value of financial assets and liabilities. .............................................................................................................

92

14.

Issues, redemptions and repayments of debt securities and equity securities......................................................

92

15.

Default or breach of material provisions of loan agreements.................................................................................

92

16.

Disputes.....................................................................................................................................................................

93

17.

Related party transactions .......................................................................................................................................

96

18.

Other information .....................................................................................................................................................

97

1 April -

1 January -

1 April -

1 January -

Consolidated profit and loss account

Note

30 June 2021

30 June 2021

30 June 2022

30 June 2022

(restated) 1)

(restated) 1)

Gross written premiums

8.1

6,394

12,647

6,194

12,342

Reinsurers' share in gross written premium

(346)

(477)

(293)

(446)

Net written premiums

6,048

12,170

5,901

11,896

Movement in net provision for unearned

(125)

(487)

(70)

(379)

premiums

Net earned premium

5,923

11,683

5,831

11,517

Revenue from commissions and fees

8.2

1,326

2,549

1,161

2,226

Interest income calculated using the effective

8.3

4,854

8,434

2,315

4,675

interest rate

Other net investment income

8.4

(207)

(196)

286

254

Result on derecognition of financial

8.5

(119)

(227)

14

526

instruments and investments

Movement in allowances for expected credit

losses and impairment losses on financial

8.6

(882)

(1,276)

(445)

(883)

instruments

Net movement in fair value of assets and

8.7

(122)

(43)

250

380

liabilities measured at fair value

Other operating income

8.8

428

837

379

752

Claims, benefits and movement in technical

(3,528)

(7,392)

(4,170)

(8,186)

provisions

Reinsurers' share in claims, benefits and

102

276

26

116

movement in technical provisions

Net insurance claims and benefits

8.9

(3,426)

(7,116)

(4,144)

(8,070)

Fee and commission expenses

8.10

(359)

(663)

(283)

(539)

Interest expenses

8.11

(883)

(1,251)

(71)

(197)

Acquisition expenses

8.12

(959)

(1,876)

(867)

(1,704)

Administrative expenses

8.12

(1,938)

(3,719)

(1,732)

(3,412)

Other operating expenses

8.13

(1,757)

(3,048)

(940)

(2,156)

Operating profit

1,879

4,088

1,754

3,369

Share of the net financial results of entities

(6)

(17)

(2)

(8)

measured by the equity method

Profit before tax

1,873

4,071

1,752

3,361

Income tax

8.14

(615)

(1,203)

(419)

(874)

Net profit, including:

1,258

2,868

1,333

2,487

- profit attributable to the equity holders of the

722

1,480

754

1,634

Parent Company

- profit (loss) attributed to holders of non-

536

1,388

579

853

controlling interest

Weighted average basic and diluted number of

8.15

863,390,985

863,384,065

863,339,389

863,341,671

common shares

Basic and diluted profit (loss) per common

8.15

0.84

1.71

0.87

1.89

share (in PLN)

Consolidated statement of comprehensive

1 April -

1 January -

1 April -

1 January -

Note

30 June 2021

30 June 2021

income

30 June 2022

30 June 2022

(restated)

1)

(restated) 1)

Net profit

1,258

2,868

1,333

2,487

Other comprehensive income

8.14

(2,420)

(4,657)

(542)

(1,273)

Subject to subsequent transfer to profit or

(2,372)

(4,672)

(591)

(1,371)

loss

Valuation of debt instruments

(881)

(1,991)

(335)

(699)

Measurement of loan receivables from

(3)

(4)

(32)

(36)

clients

Foreign exchange translation differences

9

27

(54)

(28)

Cash flow hedging

(1,497)

(2,704)

(170)

(608)

Not to be transferred to profit or loss in the

(48)

15

49

98

future

Valuation of equity instruments

(62)

1

49

98

Actuarial gains and losses related to

14

14

-

-

provisions for employee benefits

Total net comprehensive income

(1,162)

(1,789)

791

1,214

- comprehensive income attributable to equity

(324)

(437)

547

1,128

holders of the Parent Company

- comprehensive income attributable to holders

(838)

(1,352)

244

86

of non-controlling interest

Assets

Note

30 June

31 December

2022

2021

Goodwill

8.16

2,800

2,778

Intangible assets

8.17

3,138

3,403

Deferred tax assets

3,352

3,058

Other assets

8.18

833

633

Deferred acquisition costs

1,678

1,573

Reinsurers' share in technical provisions

8.32

2,515

2,540

Property, plant and equipment

8.19

4,235

4,144

Investment property

2,930

2,773

Entities measured by the equity method

8.20

79

93

Assets securing liabilities

8.24

8,485

1,336

Assets held for sale

8.21

665

643

Loan receivables from clients

8.22

217,502

215,008

Financial derivatives

8.23

19,363

8,328

Investment financial assets

8.25

129,065

136,954

Measured at amortized cost

83,575

82,893

Measured at fair value through other comprehensive income

37,316

44,896

Measured at fair value through profit or loss

8,174

9,165

Receivables

8.26

13,328

9,418

Cash and cash equivalents

19,968

9,447

Total assets

429,936

402,129

Equity and liabilities

Note

30 June

31 December

2022

2021

Equity

Equity attributable to equity holders of the parent

14,969

17,080

Share capital

8.31

86

86

Other capital

13,897

14,343

Retained earnings

986

2,651

Retained profit or loss

(494)

(685)

Net profit

1,480

3,336

Non-controlling interest

20,659

22,914

Total equity

35,628

39,994

Liabilities

Technical provisions

8.32

50,090

50,173

Subordinated liabilities

8.33

6,135

6,274

Liabilities on the issue of own debt securities

8.34

7,940

5,940

Liabilities to banks

8.35

7,758

7,470

Liabilities to clients under deposits

8.36

268,729

265,155

Financial derivatives

8.23

25,851

11,880

Other liabilities

8.37

25,810

13,203

Provisions

8.38

1,297

1,206

Deferred tax liability

668

806

Liabilities related directly to assets classified as held for sale

8.21

30

28

Total liabilities

394,308

362,135

Total equity and liabilities

429,936

402,129