⚠ Deposits Are Only Cheap While Rates Are HighHigh threat

PKO Bank Polski (PKO) — threat to the moat

The 4,76 percent margin is a gift from the rate cycle, and the margin already fell to 4,47 in the first half of 2026.

PKO's interest margin was 4,76% in 2025 and 4,47% in the first half of 2026 — down 44 basis points year on year1 — because the National Bank of Poland began cutting.

Net interest margin2,7%20213,79%20224,15%20234,91%20244,76%20254,47%H1 2026The margin peaked in 2024 and has fallen in every period since
The 4,76% margin was a gift from the rate cycle. It is already 4,47%, and interest income fell 1 213m złoty in the first half of 2026.

That is the mechanical vulnerability of a deposit franchise, and it works in one direction. Transactional balances pay close to nothing whatever the policy rate, so when rates are high the spread between what PKO pays and what it earns is enormous; when rates fall, the asset side reprices downward and the liability side has nowhere to follow. The margin went 2,70% in 2021 to 4,80% in 20242 as rates rose, and the same mechanism now runs backwards.

The bank is covering it with volume. Financing grew 13,9% and savings 12,9% in the first half3, which is why net profit still rose — but interest income itself fell 1 213 million złoty4, so the growth is offsetting a decline rather than adding to one.

There is a floor to this and PKO's own strategy names it: the 2027 target of a return on equity above 18% assumes a National Bank of Poland reference rate near 3%5. Management has done the arithmetic in public.

The falsifier is net interest income, not the margin. A margin falling while net interest income still grows means volume is winning. Both falling together is the quarter the deposit franchise stops paying for the branches.

References
  1. ReportedPKO's interest margin was 4,76% in 2025 and 4,47% in the first half of 2026 — down 44 basis points year on year — because the National Bank of Poland began cutting.
    PKO Bank Polski S.A. Group Directors' Report for the six months ended 30 June 2026, published with reviewed financial statements (profit before tax of 8 319m złoty up 19,9%, income tax of 3 029m up 67,4%, net profit of 5 290m up 3,1%, return on equity of 19,3%, cost-to-income of 31,4%, interest margin of 4,47% against 4,91%, cost of risk of 0,29%, total assets past 608 448m, 12,6 million customers, common equity tier 1 of 15,55%, and a further 685m złoty of convertible-currency legal risk) — H1 2026 · publ. 13 August 2026 · source ↗
  2. ReportedThe margin went 2,70% in 2021 to 4,80% in 2024 as rates rose, and the same mechanism now runs backwards.
    PKO Bank Polski S.A. Group Directors' Report for 2025 - the five-year record 2021-2025 (net profit from 4 874m złoty to 10 682m, return on equity from 12,1% through a 9,6% trough to 19,5%, cost-to-income from 40,4% and a 45,0% peak to 31,1%, interest margin from 2,70% to 4,76%, total assets from 418 086m to 583 079m and the year-end stock exchange capitalisations) — FY2021-FY2025 · publ. 12 March 2026 · source ↗
  3. ReportedFinancing grew 13,9% and savings 12,9% in the first half, which is why net profit still rose — but interest income itself fell 1 213 million złoty, so the growth is offsetting a decline rather than adding to one.
    PKO Bank Polski S.A. Group Directors' Report for the six months ended 30 June 2026, published with reviewed financial statements (profit before tax of 8 319m złoty up 19,9%, income tax of 3 029m up 67,4%, net profit of 5 290m up 3,1%, return on equity of 19,3%, cost-to-income of 31,4%, interest margin of 4,47% against 4,91%, cost of risk of 0,29%, total assets past 608 448m, 12,6 million customers, common equity tier 1 of 15,55%, and a further 685m złoty of convertible-currency legal risk) — H1 2026 · publ. 13 August 2026 · source ↗
  4. ReportedFinancing grew 13,9% and savings 12,9% in the first half, which is why net profit still rose — but interest income itself fell 1 213 million złoty, so the growth is offsetting a decline rather than adding to one.
    PKO Bank Polski S.A. Group Directors' Report for the six months ended 30 June 2026, published with reviewed financial statements (profit before tax of 8 319m złoty up 19,9%, income tax of 3 029m up 67,4%, net profit of 5 290m up 3,1%, return on equity of 19,3%, cost-to-income of 31,4%, interest margin of 4,47% against 4,91%, cost of risk of 0,29%, total assets past 608 448m, 12,6 million customers, common equity tier 1 of 15,55%, and a further 685m złoty of convertible-currency legal risk) — H1 2026 · publ. 13 August 2026 · source ↗
  5. ReportedThere is a floor to this and PKO's own strategy names it: the 2027 target of a return on equity above 18% assumes a National Bank of Poland reference rate near 3%.
    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