The State Is a Customer TooNarrow moat

PKO Bank Polski (PKO) — moat facet

Seven voivodeship budgets, the state agencies and the Treasury bonds on the balance sheet — the largest shareholder is also a client.

PKO handles the budgets of seven voivodeships and is the market leader in servicing the largest local government units1.

The state as counterparty7voivodeshipbudgets held29,43%of the shares30%the tax rate it set75%the payoutit permittedShareholder, regulator, tax authority and client - one party, four roles
The least contestable deposits in the bank belong to the party that also sets its tax rate. EU procurement rules cap the relationship in both directions.

That is a customer relationship with the same institution that holds 29,43% of the bank2, sets its corporate income tax rate3 and supervises it. The three roles are separate in law and identical in origin.

Commercially it is excellent business. Public-sector deposits are large, stable and cheap; the mandates are long-lived; and the relationship extends naturally into financing the infrastructure and energy-transition projects PKO has targeted at above 20% market share4.

The exposure is that none of it is competitively won in the ordinary sense. European procurement rules govern how public entities select banks, which constrains the relationship in both directions — it cannot simply be awarded, and it cannot simply be assumed.

It is also the clearest example of why this bank's fortunes are not fully separable from the state's. PKO lends to the government, banks the government, is taxed by the government and is part-owned by it.

The deposits that come with those mandates are part of why the funding is so cheap. Public-sector balances are large, operationally sticky and rarely rate-shopped, and they sit inside the 460 722 million złoty of customer deposits5 that fund the bank at an interest margin of 4,76%6.

Grade this on the corporate segment's cost of risk rather than on the mandates. A book weighted toward public and state-linked borrowers should show lower credit losses than the group's 0,30%7, and PKO does not disclose the split — which is the gap worth pressing on.

Moat trajectory: Holding steady

Seven voivodeship budgets and the state agencies. A relationship that predates the listing and has not changed shape.

The number that tests this moat
Reported
Share of non-Treasury debt securities
35,4% at end-2025, from 29,3% in 2021

PKO is the main arranger of municipal bond issues, and this share is where its public-sector relationships show. A falling share would suggest the ties to local government are loosening.

Source: PKO Bank Polski Group Directors' Report for 2025 ↗
References
  1. ReportedPKO handles the budgets of seven voivodeships and is the market leader in servicing the largest local government units.
    PKO Bank Polski S.A. Group Directors' Report for 2025 - market position, distribution network and staff (PKO described as the largest commercial bank in Poland and the leading bank on its home market in terms of the scale of operations, with the most recognised brand among banks; 947 branches against 975, about 3 100 ATMs and 225 agencies, 26 252 employees against 25 657 and a seventh consecutive Top Employer certificate, the corporate network of 49 branches and 24 regional centres, seven voivodeship budgets, and the foreign branches and representative offices in Stockholm and Vilnius) — FY2025 · publ. 12 March 2026 · source ↗
  2. ReportedThat is a customer relationship with the same institution that holds 29,43% of the bank, sets its corporate income tax rate and supervises it.
    PKO Bank Polski S.A. Group Directors' Report for 2025 - capital, shareholders and levies (the State Treasury holding 367 918 980 shares or 29,43% of the capital and votes, Nationale Nederlanden at 7,32% and Allianz Polska at 6,01%, own funds of 50 122m złoty, a total capital ratio of 17,10%, the 75% dividend payout from the 2025 profit, and the 1 349m złoty tax on certain financial institutions) — FY2025 · publ. 12 March 2026 · source ↗
  3. ReportedThat is a customer relationship with the same institution that holds 29,43% of the bank, sets its corporate income tax rate and supervises it.
    PKO Bank Polski S.A. Group Directors' Report for 2025 - capital, shareholders and levies (the State Treasury holding 367 918 980 shares or 29,43% of the capital and votes, Nationale Nederlanden at 7,32% and Allianz Polska at 6,01%, own funds of 50 122m złoty, a total capital ratio of 17,10%, the 75% dividend payout from the 2025 profit, and the 1 349m złoty tax on certain financial institutions) — FY2025 · publ. 12 March 2026 · source ↗
  4. ReportedPublic-sector deposits are large, stable and cheap; the mandates are long-lived; and the relationship extends naturally into financing the infrastructure and energy-transition projects PKO has targeted at above 20% market share.
    PKO Bank Polski S.A. Group Directors' Report for 2025 - the balance sheet (total assets of 583 079m złoty against 418 086m in 2021, amounts due to customers of 460 722m, financing granted to customers of 315 953m, and total equity of 58 503m) — FY2025 · publ. 12 March 2026 · source ↗
  5. ReportedPublic-sector balances are large, operationally sticky and rarely rate-shopped, and they sit inside the 460 722 million złoty of customer deposits that fund the bank at an interest margin of 4,76%.
    PKO Bank Polski S.A. Group Directors' Report for 2025 - the efficiency and quality ratios (return on equity of 19,5%, return on assets of 1,9%, a cost-to-income ratio of 31,1%, net interest margin of 4,76%, cost of credit risk of 0,30% and impaired exposures at 3,34% of the portfolio) — FY2025 · publ. 12 March 2026 · source ↗
  6. ReportedPublic-sector balances are large, operationally sticky and rarely rate-shopped, and they sit inside the 460 722 million złoty of customer deposits that fund the bank at an interest margin of 4,76%.
    PKO Bank Polski S.A. Group Directors' Report for 2025 - the efficiency and quality ratios (return on equity of 19,5%, return on assets of 1,9%, a cost-to-income ratio of 31,1%, net interest margin of 4,76%, cost of credit risk of 0,30% and impaired exposures at 3,34% of the portfolio) — FY2025 · publ. 12 March 2026 · source ↗
  7. ReportedA book weighted toward public and state-linked borrowers should show lower credit losses than the group's 0,30%, and PKO does not disclose the split — which is the gap worth pressing on.
    PKO Bank Polski S.A. Group Directors' Report for 2025 - the efficiency and quality ratios (return on equity of 19,5%, return on assets of 1,9%, a cost-to-income ratio of 31,1%, net interest margin of 4,76%, cost of credit risk of 0,30% and impaired exposures at 3,34% of the portfolio) — FY2025 · publ. 12 March 2026 · source ↗
Sources
Generated September 24, 2026