2.4 Non-controlling interest
2.4.1. Accounting policy
Non-controlling interests constitute that part of capital in a subsidiary that is not directly or indirectly attributable to the parent company. As at the date of obtaining control, non-controlling interests are measured at the at the non-controlling interest’s proportionate share in the fair value of the subsidiary’s identifiable net assets. As at the subsequent balance sheet dates, the value of non-controlling interests is updated by the value of comprehensive income attributable to non-controlling interests.
2.4.2. Quantitative data
The table below presents subsidiaries with certain non-controlling interest (at present or in the past):
| Name of the entity | 31 December 2020 | 31 December 2019 |
| Pekao1 | 79.98% | 79.98% |
| Alior Bank2 | 68.07% | 68.07% |
| Przedsiębiorstwo Usług Medycznych PROELMED sp. z o.o. | 43.00% | 43.00% |
| Sanatorium Uzdrowiskowe „Krystynka” sp. z o.o. | 0.91% | 0.91% |
| UAB PZU Lietuva Gyvybes Draudimas | 0.66% | 0.66% |
| AAS Balta | 0.01% | 0.01% |
| Centrum Medyczne Gamma sp. z o.o.3 | 0.00% | 39.54% |
1 As a result, PZU also holds non-controlling interests in Pekao’s subsidiaries listed in the table in section 2.2.
2 As a result, PZU also holds non-controlling interests in Alior Bank’s subsidiaries listed in the table in section 2.2.
3 On 30 October 2020 PZU Zdrowie SA acquired the remaining shares in Centrum Medyczne Gamma sp. z o.o. and as of that date the PZU Group’s equity stake and share of votes at the shareholder meeting is 100%.
| Carrying amount of non-controlling interests | 31 December 2020 | 31 December 2019 |
| Pekao Group | 20,329 | 18,683 |
| Alior Bank Group | 4,296 | 4,430 |
| Other | 1 | 6 |
| Total | 24,626 | 23,119 |
Both Pekao and Alior Bank conduct operations primarily in the territory of Poland. Presented below is condensed financial information for the Pekao Group and the Alior Bank Group included in the consolidated financial statements (without consolidation eliminations). The data of the Pekao Group and the Alior Bank Group incorporate the effect of adjustments resulting from the measurement of assets and liabilities to fair value as at the date control was acquired and their subsequent amortization over time.
|
Assets
|
Pekao Group | Alior Bank Group | ||
| 31 December 2020 | 31 December 2019 | 31 December 2020 | 31 December 2019 | |
| Goodwill | 692 | 692 | - | - |
| Intangible assets | 1,938 | 1,683 | 424 | 644 |
| Deferred tax assets | 1,251 | 1,087 | 1,217 | 1,178 |
| Other assets | 53 | 45 | 44 | 35 |
| Property, plant and equipment | 2,098 | 2,112 | 702 | 764 |
| Entities carried by the equity method | - | - | 5 | 10 |
| Assets held for sale | 53 | 16 | - | - |
| Loan receivables from clients | 141,332 | 139,464 | 55,783 | 55,368 |
| Financial derivatives | 5,591 | 2,457 | 717 | 508 |
| Investment financial assets | 73,116 | 48,338 | 16,037 | 15,996 |
| Measured at amortized cost | 28,569 | 15,743 | 8,753 | 5,387 |
| Measured at fair value through other comprehensive income | 43,069 | 31,167 | 7,072 | 10,438 |
| Measured at fair value through profit or loss | 1,478 | 1,428 | 212 | 171 |
| Receivables | 2,305 | 1,956 | 1,106 | 667 |
| Cash and cash equivalents | 4,727 | 5,463 | 2,359 | 1,319 |
| Total assets | 233,156 | 203,313 | 78,394 | 76,489 |
| Equity and liabilities | Pekao Group | Alior Bank Group | ||
| 31 December 2020 | 31 December 2019 | 31 December 2020 | 31 December 2019 | |
| Equity | ||||
| Equity attributable to equity holders of the parent | 25,417 | 23,360 | 6,311 | 6,508 |
| Share capital | 262 | 262 | 1,306 | 1,306 |
| Other capital | 22,092 | 20,510 | 5,776 | 5,637 |
| Retained earnings | 3,063 | 2,588 | (771) | (435) |
| Non-controlling interest | 11 | 12 | - | - |
| Total equity | 25,428 | 23,372 | 6,311 | 6,508 |
| Liabilities | ||||
| Subordinated liabilities | 2,758 | 2,764 | 1,793 | 1,794 |
| Liabilities on the issue of own debt securities | 6,152 | 6,322 | 1,380 | 2,951 |
| Liabilities to banks | 9,165 | 6,097 | 619 | 437 |
| Liabilities to clients under deposits | 177,006 | 156,688 | 65,680 | 62,433 |
| Derivatives | 5,690 | 2,649 | 479 | 369 |
| Other liabilities | 5,908 | 4,687 | 1,794 | 1,638 |
| Provisions | 938 | 704 | 337 | 358 |
| Deferred tax liability | 28 | 30 | 1 | 1 |
| Liabilities related directly to assets classified as held for sale | 83 | - | - | - |
| Total liabilities | 207,728 | 179,941 | 72,083 | 69,981 |
| Total equity and liabilities | 233,156 | 203,313 | 78,394 | 76,489 |
| Consolidated profit and loss account for the period from 1 January to 31 December 2020 | PZU Group | Elimination of Pekao’s data | Elimination of Alior Bank’s data | Elimination of consolidation adjustments | PZU Group without Pekao and Alior Bank |
| Gross written premium | 23,866 | - | - | 24 | 23,890 |
| Reinsurers’ share in gross written insurance premium | (1,016) | - | - | - | (1,016) |
| Net written premiums | 22,850 | - | - | 24 | 22,874 |
| Movement in net provision for unearned premiums | 174 | - | - | 1 | 175 |
| Net earned premium | 23,024 | - | - | 25 | 23,049 |
| Fee and commission income | 4,197 | (2,884) | (1,160) | 97 | 250 |
| Interest income calculated using the effective interest rate | 10,262 | (5,761) | (3,201) | 78 | 1,378 |
| Other net investment income | 586 | (234) | (133) | 5 | 224 |
| Result on derecognition of financial instruments and investments | 111 | (124) | (80) | - | (93) |
| Movement in allowances for expected credit losses and impairment losses on financial instruments | (3,342) | 1,620 | 1,736 | - | 14 |
| Net change in the fair value of assets and liabilities carried at fair value | 869 | (133) | (63) | - | 673 |
| Other operating income | 1,395 | (175) | (166) | 59 | 1,113 |
| Claims and movement in technical provisions | (16,105) | - | - | (9) | (16,114) |
| Claims and movement in insurance liabilities ceded to re-insurers | 525 | - | - | - | 525 |
| Net insurance claims and benefits paid | (15,580) | - | - | (9) | (15,589) |
| Fee and commission expense | (1,031) | 481 | 555 | (5) | - |
| Interest expenses | (1,134) | 638 | 427 | (17) | (86) |
| Acquisition costs | (3,317) | - | - | (136) | (3,453) |
| Administrative expenses | (6,597) | 3,288 | 1,508 | (36) | (1,837) |
| Other operating expenses | (5,385) | 1,616 | 827 | 1,240 | (1,702) |
| Operating profit (loss) | 4,058 | (1,668) | 250 | 1,301 | 3,941 |
| Share of the net financial results of entities measured by the equity method | - | - | - | - | - |
| Profit (loss) before tax | 4,058 | (1,668) | 250 | 1,301 | 3,941 |
| Income tax | (1,528) | 612 | 81 | - | (835) |
| Net profit (loss) | 2,530 | (1,056) | 331 | 1,301 | 3,106 |
| Consolidated profit and loss account for the period from 1 January to 31 December 2019 (restated) |
PZU Group | Elimination of Pekao’s data | Elimination of Alior Bank’s data | Elimination of consolidation adjustments | PZU Group without Pekao and Alior Bank |
| Gross written premium | 24,191 | - | - | 25 | 24,216 |
| Reinsurers’ share in gross written insurance premium | (1,012) | - | - | - | (1,012) |
| Net written premiums | 23,179 | - | - | 25 | 23,204 |
| Movement in net provision for unearned premiums | (89) | - | - | (12) | (101) |
| Net earned premium | 23,090 | - | - | 13 | 23,103 |
| Fee and commission income | 4,139 | (2,857) | (1,151) | 107 | 238 |
| Interest income calculated using the effective interest rate | 12,015 | (6,672) | (3,959) | 34 | 1,418 |
| Other net investment income | 376 | (229) | 52 | (7) | 192 |
| Result on derecognition of financial instruments and investments | 278 | (154) | (78) | - | 46 |
| Movement in allowances for expected credit losses and impairment losses on financial instruments | (2,208) | 740 | 1,468 | - | - |
| Net change in the fair value of assets and liabilities carried at fair value | 837 | (127) | (219) | 3 | 494 |
| Other operating income | 1,203 | (211) | (167) | 42 | 867 |
| Claims and movement in technical provisions | (16,085) | - | - | - | (16,085) |
| Claims and movement in insurance liabilities ceded to re-insurers | 390 | - | - | - | 390 |
| Net insurance claims and benefits paid | -15 695 | - | - | - | (15,695) |
| Fee and commission expense | (860) | 388 | 473 | (3) | (2) |
| Interest expenses | (2,129) | 1,215 | 789 | (19) | (144) |
| Acquisition costs | (3,363) | - | - | (60) | (3,423) |
| Administrative expenses | (6,606) | 3,389 | 1,478 | (34) | (1,773) |
| Other operating expenses | -3 993 | 1,567 | 787 | (76) | (1,715) |
| Operating profit (loss) | 7,084 | (2,951) | (527) | - | 3,606 |
| Share of the net financial results of entities measured by the equity method | (4) | - | (1) | - | (5) |
| Profit (loss) before tax | 7,080 | (2,951) | (528) | - | 3,601 |
| Income tax | -1 895 | 825 | 249 | - | (821) |
| Net profit (loss) | 5,185 | (2,126) | (279) | - | 2,780 |
| Statement of comprehensive income | Pekao Group | Alior Bank Group | ||
| 1 January – 31 December 2020 | 1 January – 31 December 2019 (restated) |
1 January – 31 December 2020 | 1 January – 31 December 2019 (restated) |
|
| Net profit | 1,056 | 2,126 | (331) | 279 |
| Other comprehensive income | 1,001 | 146 | 139 | 22 |
| To be reclassified to profit or loss in the future | 939 | 154 | 135 | 38 |
| Valuation of debt instruments | 550 | 63 | 20 | 23 |
| Measurement of loan receivables from clients | 17 | 18 | - | - |
| Net cash flow hedges | 372 | 73 | 115 | 15 |
| Not to be transferred to profit or loss in the future | 62 | (8) | 4 | (16) |
| Valuation of equity instruments measured at fair value through other comprehensive income | 71 | (6) | 6 | (17) |
| Actuarial gains and losses related to employee provisions | (9) | (2) | (2) | 1 |
| Total net comprehensive income | 2,057 | 2,272 | (192) | 301 |
| Cash flow statement | Pekao Group | Alior Bank Group | ||
| 1 January – 31 December 2020 | 1 January – 31 December 2019 | 1 January – 31 December 2020 | 1 January – 31 December 2019 | |
| Net cash flows from operating activities | 23,573 | (1,388) | 2,776 | 53 |
| Net cash flows from investing activities | (25,025) | (7,506) | (71) | (335) |
| Net cash flows from financing activities | 624 | 1,140 | (1,691) | (475) |
| Total net cash flows | (828) | (7,754) | 1,014 | (757) |
| Dividend-related information | Pekao Group | Alior Bank Group | ||
| 1 January – 31 December 2020 | 1 January – 31 December 2019 | 1 January – 31 December 2020 | 1 January – 31 December 2019 | |
| Date of ratifying the dividend | - | 26 June 2019 | - | - |
| Record date | - | 10 July 2019 | - | - |
| Dividend payment date | - | 30 July 2019 | - | - |
| Dividend per share (PLN) | - | 6.6 | - | - |
| Dividend due to the PZU Group | - | 347 | - | - |
| Dividend due to non-controlling shareholders | - | 1,385 | - | - |