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Report: Pekao's new CEO pledges to pursue 12.5% ROE target

Bank Pekao SA will launch its new strategy in 2020 and plans to reach its return on equity target of 12.5% in the shortest time possible, news agency PAP reported, citing the lender's acting head Marek Lusztyn.

The bank initially planned to reach a ROE ratio of 12.5% under its current strategy, which ends in 2020, but it revised the target to 11.5% plus or minus 0.5 percentage point shortly before its CEO Michał Krupiński stepped down earlier in December.

Lusztyn, who has been with Pekao for almost 20 years and will officially take over as the lender's CEO after his appointment gets regulatory approvals, believes the bank has significant potential for further growth.

"We have avoided problems with Swiss franc loans, and we will only be marginally affected by the ECJ's ruling on consumer loans and other minor problems currently faced by the competition. We also have a very large capital surplus, which we can use to develop the bank and the Polish economy," he said.

Lusztyn also maintained Pekao's current strategy targets, including the cost-to-income ratio of 40% in 2020, as well as the lender's medium-term dividend policy, under which it plans to pay out to shareholders 60% to 80% of its 2019 profit and 50% to 75% of its 2020 earnings.

The executive said organic growth remains the baseline development scenario for Pekao, but he confirmed the lender's interest in Commerzbank AG unit mBank SA.