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ING Bank Śląski S.A. Group has compiled the annual report in line with the best global practices of integrated reporting. To help readers use the interactive tools, we prepared a user guide with key features. We encourage you to watch a short animated video before reading the report.

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Integrated Annual Report
of ING Bank Śląski S.A. 2019

Business risk

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Business risk encompasses the following risks:

  • macroeconomic risk,
  • risk of FX mortgage portfolio.

Macroeconomic risk

Macroeconomic risk is the risk due to macroeconomic factors and their impact on the levels of minimum capital requirements. The Bank manages the risk by regular holding of internal stress tests to support ongoing monitoring of sensitivity or minimum capital requirements to macroeconomic factors. In 2019 the Bank carried out full capital tests twice: as at Q4 of 2018 and Q2 of 2019.

On the basis of results of internal stress tests for a mild recession scenario, the Bank's Group estimates an additional capital requirement to safeguard against the materialisation effect of the scenario. The results of the stress tests show that should a mild recession materialise, the Bank's capital adequacy will not drop below the required level.

Risk of FX mortgage portfolio

As regards ICAAP, during the risk materiality assessment workshops which were held in Q1 2019, FX mortgage portfolio risk was defined the risk of financial losses connected with FX mortgage loans conversion into PLN mortgage loans. Throughout 2019, following the CJEU judgement (C-260/18) and, consequently, the growing risk of material increase in the number of disputes in the banking sector, the risk profile and the approach to estimating and presenting provisions for legal risk were changed.

As at the end of 2019, the Group held PLN 45.0 million worth of provision for CHF mortgage loans portfolio, which represented 4.80 percent of that portfolio in gross terms (including PLN 9.7 million worth of provision for disputes concerning repaid exposures and PLN 35.3 million as an impairment charge for expected credit losses under Stage 2 loans, for existing and future disputes concerning balance sheet exposures). Furthermore, the Bank has PLN 4.6 million worth of impairment charge for expected credit losses in relation to stage 2 loans due to classification of all CHF mortgage loans as stage 2 loans.

For more information on that topic please read the Annual Consolidated Financial Statements of ING Bank Śląski S.A. Group for 2019.

In parallel, the Bank maintains additional economic capital for that risk in pillar II.

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