Financial statement of the PZU Group (Q2 2023)

Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group

Condensed interim consolidated financial statements for the 6 months ended 30 June 2023

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

7

Interim consolidated cash flow statement

9

Notes to the condensed interim consolidated financial statements

11

1.

Introduction

11

2.

Information on PZU and PZU Group

15

3.

Shareholding structure

26

4.

Key management personnel - Management Board of the parent company and Directors of PZU Group

27

5.

Supervisory Board of the parent company

28

6.

Key accounting policies, key estimates and judgments

29

7.

Major events that have a significant impact on the structure of items of the financial statements

53

8.

Correction of errors from previous years

53

9.

Significant events after the end of the reporting period

53

10.

Notes to the condensed interim consolidated financial statements

54

11.

Financial assets pledged as collateral for liabilities and contingent liabilities

95

12.

Contingent assets and liabilities

96

13.

Equity management

96

14.

Segment reporting

97

15.

Information on changes in economic circumstances and business conditions which have a material impact

on the fair value of financial assets and liabilities

108

16.

Issue, redemption and repayment of debt and equity securities

109

17.

Payment default or violation of material regulations of the loan agreement

109

18.

Distribution of the parent company's profit and dividends

109

19.

Disputes

109

20.

Related party transactions

112

21.

Other information

113

1 April -

1 January -

1 April -

1 January -

Consolidated profit and loss account

Note

30 June 2022

30 June 2022

30 June 2023

30 June 2023

(restated) 1

(restated) 1

Insurance service result before reinsurance

1,425

1,300

1,186

2,161

Insurance revenue

10.1.1

6,601

13,002

6,046

12,045

10.1.3

Insurance service expenses

10.1.3

(5,176)

(11,702)

(4,860)

(9,884)

Income or expenses from reinsurance contracts

(304)

675

(144)

(260)

held

Allocation of reinsurance premiums

10.1.2

(360)

(726)

(289)

(537)

Amounts recoverable from reinsurers

10.1.4

57

1,402

145

277

Change in the risk of non-performance by the

(1)

(1)

-

-

reinsurer

Insurance service result

1,121

1,975

1,042

1,901

Insurance finance income or expenses

(400)

(875)

273

231

Reinsurance finance income or expenses

(1)

13

8

18

Interest income calculated using the effective

10.2

6,958

13,526

4,822

8,482

interest rate

Other net investment income

10.3

116

289

(184)

(262)

Result on derecognition of financial instruments

10.4

196

367

(84)

(175)

and investments

Movement in allowances for expected credit losses

10.5

(448)

(797)

(859)

(1,234)

and impairment losses on financial instruments

Net movement in fair value of assets and liabilities

10.6

159

319

(122)

(43)

measured at fair value

Fee and commission result

10.7

945

1,854

967

1,886

Operating costs of banks

10.8

(1,606)

(3,095)

(1,427)

(2,693)

Interest expenses

10.9

(2,290)

(4,486)

(883)

(1,251)

Other operating income and expenses

10.10

(586)

(1,516)

(1,380)

(2,310)

Operating profit

4,164

7,574

2,173

4,550

Share of the net financial profit or loss of entities

2

4

(6)

(17)

accounted for using the equity method

Profit before tax

4,166

7,578

2,167

4,533

Income tax

10.11

(907)

(1,742)

(682)

(1,312)

Net profit, of which:

3,259

5,836

1,485

3,221

- profit attributable to the equity holders of the

1,545

2,700

949

1,833

Parent Company

- profit (loss) attributable to holders of non-

1,714

3,136

536

1,388

controlling interests

Weighted average basic and diluted number of

10.12

863,387,662

863,389,067

863,390,985

863,384,065

common shares

Basic and diluted profit (loss) per common share (in

10.12

1.79

3.13

1.10

2.12

PLN)

Consolidated statement of comprehensive

1 April -

1 January -

1 April -

1 January -

Note

30 June 2022

30 June 2022

income

30 June 2023

30 June 2023

(restated) 1

(restated) 1

Net profit

3,259

5,836

1,485

3,221

Gross other comprehensive income

778

1,899

(1,087)

(1,598)

Subject to subsequent reclassification to profit or

783

1,972

(1,027)

(1,616)

loss

Valuation of debt instruments

299

1,137

(1,080)

(2,444)

Measurement of loan receivables from clients

5

4

(4)

(5)

Insurance finance income or expenses

(335)

(1,069)

1,947

4,261

Reinsurance finance income or expenses

(7)

(19)

(51)

(117)

Foreign exchange translation differences

(85)

(91)

9

27

Cash flow hedging

906

2,010

(1,848)

(3,338)

Not subject to subsequent reclassification to

(5)

(73)

(60)

18

profit or loss

Valuation of equity instruments

22

(53)

(77)

1

Reclassification of real property from property,

(1)

6

-

-

plant and equipment to investment property

Actuarial gains and losses related to provisions

(26)

(26)

17

17

for employee benefits

Tax recognised in other comprehensive income

10.11

(165)

(376)

211

310

Total net comprehensive income

3,872

7,359

609

1,933

- comprehensive income attributable to equity

1,542

2,610

1,447

3,285

holders of the Parent Company

- comprehensive income attributable to holders of

2,330

4,749

(838)

(1,352)

non-controlling interests

Assets

Note

30 June 2023

31 December 2022

1 January 2022

(restated) 1)

(restated) 1

Goodwill

10.13

2,814

2,808

2,778

Intangible assets

10.14

3,271

3,282

3,403

Deferred tax assets

2,628

3,098

3,077

Insurance contract assets

10.1.3

98

68

59

Reinsurance contract assets

10.1.4

3,593

2,327

1,539

Other assets

10.15

552

462

331

Property, plant and equipment

10.16

4,257

4,304

4,144

Investment property

3,095

3,021

2,773

Entities accounted for using the equity method

10.17

56

52

93

Assets pledged as collateral for liabilities

10.21

1,376

972

1,336

Assets held for sale

10.18

631

654

643

Loan receivables from clients

10.19

212,510

212,693

215,008

Financial derivatives

10.20

13,201

16,197

8,328

Investment financial assets

10.22

173,227

153,861

136,954

Measured at amortized cost

123,016

106,013

82,893

Measured at fair value through other comprehensive income

40,622

39,725

44,896

Measured at fair value through profit or loss

9,589

8,123

9,165

Receivables

10.23

6,068

9,419

6,782

Cash and cash equivalents

14,152

15,960

9,447

Total assets

441,529

429,178

396,695