Poll

Treasury operations

1,842 (in PLN million)
financial assets
As at 31.12.2013

Treasury operations of Bank Pocztowy S.A. focused on two areas of the Treasury Department: managing interest rate risk, current liquidity risk and currency risk under the Banking Book and managing trade products and customer service under the Trading Book. The Bank’s Assets and Liabilities Committee (ALCO) in the Finance Function is responsible for managing non-current liquidity risk, including development of an internal transfer pricing policy and the policy of issuing debt securities by the Bank.

1. Banking Book

The Banking Book is used in particular to manage current liquidity, interest rate risk and currency risk of the Bank.

In 2013 the Bank concluded mainly sale and purchase transactions in securities and deposited or borrowed funds in the interbank market as a part of managing the requirement reserve level. Moreover, it entered into sell-buy-back and buy-sell-back transactions and derivative transactions such as FRA, IRS or SWAP.

Transfer payments of Poczta Polska managed in individual accounts are an important element of the Bank’s liquidity management policy. In 2013 the average balance of such deposits reached PLN 426.0 million, while at the end of 2013 it was PLN 897.2 million versus PLN 1,008.1 million at the end of 2012.

At the end of 2013 the total financial assets of the Bank reached PLN 1,842.0 million, i.e. by PLN 388.0 million (26.7%) more than at the end of 2012. Government bonds accounted for 52.0% of the Bank’s financial assets and constituted their key element. In December 2013 the face value of Government Bonds was PLN 957.5 million and was by PLN 267.6 million (i.e. by 21.8%) lower than at the end of 2012. Debt instruments issued by the National Bank of Poland also constituted a high share (45.6%) in the total financial assets of the Bank. As at 31 December 2013 their value reached PLN 839.8 million and was by PLN 699.9 million higher than at the end of 2012.

Securities available for sale with the total nominal value of PLN 1,445.0 million constituted 79.0% of the debt instrument portfolio and the remaining 21.0% were bonds held to maturity with the total face value of PLN 387.0 million.

Investments in finacial assets

  31.12.2013 31.12.2012 Change 2013/2012
 PLN '000  %
Investments in financial assets  1,842,036  1,453,987  388,049  26.7 %
available for sale, including:  1,455,018  1,061,225  393,793  37.1 %
Treasury bonds  585,445  832,374  (246,929)  (29.7)%
Treasury bills  -  49,855  (49,855)  (100.0)%
Bank bonds and certificates of deposits  29,740  9,068  20,672  227.9 %
Shares  8  8  -  0.0%
Debt instruments issued by the National Bank of Poland  839,825  169,920  669,905  394.2%
held to maturity, including:  387,018  392,762  (5,744)  (1.5)%
Treasury bonds  372,080  392,762  (20,682)  (5.3)%
Bank bonds and certificates of deposit  14,938  -  14,938  -

 

In its securities portfolio the Bank also holds bonds held to maturity issued by other banks and classified to receivables from other banks. In 2013 the value of bonds reached PLN 36.3 million, i.e. by 21.8% more than in December 2012.

In 2013 interest revenue due to financial instruments and receivables from other banks amounted to PLN 68.3 million and was by 16.5% lower than in 2012. The decrease resulted from reduced market interest rates. Like in the previous year, 88.1% of interest revenue due to financial instruments and bank receivables (PLN 60.2 million) was generated from the securities portfolio.

Gain on transactions in available-for-sale securities was highly affected by internal changes in the portfolio structure aimed at maintaining interest rate risk under the limits awarded.

2. Trading Book

In 2013 the gain/loss on financial instruments and gain/loss on foreign exchange transactions amounted to PLN 1.2 million versus PLN 3.5 million reported in 2012. The Bank generated a lower gain on trade transactions, debt instruments mainly. The lower gain resulted from significant changes in interest rates in the second half of 2013 related to a gradual decrease in risk appetite in global markets, which, in turn, stemmed from the expected gradual limitation of QE3 by the US Federal Reserve, hence the risk materialized at the end of the year. The Bank generated the total gain on own and client transactions under individually negotiated currency transactions of PLN 1.8 million versus PLN 2.4 million in 2012. In 2013 the Bank’s trade transactions in the currency and interest rate market (trading in treasury bonds) remained insignificant.

At the end of 2013, the Bank concluded transactions denominated in 10 foreign currencies, i.e. the euro, American dollar, fund sterling, Swiss franc, Japanese yen, Canadian dollar, Czech koruna, Swedish krone, Danish krone and Norwegian krone.

The Bank also traded in interest rate financial instruments, mainly in treasury debt securities.

 

Annual Report 2013 - Bank Pocztowy