Powszechny Zaklad Ubezpiecze? Spólka Akcyjna : 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

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

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Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group

Condensed interim consolidated financial statements for the 6 months ended 30 June 2023 (in PLN million)

Interim consolidated profit and loss account

					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)

1. The restatement of the comparative data resulting from the first application of IFRS 17 is described in section 6.1, while the restatement of data resulting from the change of presentation of interest income from hedge derivatives - in section 6.2.

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Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group

Condensed interim consolidated financial statements for the 6 months ended 30 June 2023 (in PLN million)

Interim consolidated statement of comprehensive income

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

1. The restatement of the comparative data resulting from the first application of IFRS17 is described in section 6.1.

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Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group

Condensed interim consolidated financial statements for the 6 months ended 30 June 2023 (in PLN million)

Interim consolidated statement of financial position

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

1) The restatement of the comparative data resulting from the first application of IFRS17 is described in section 6.1.

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