Summary of the year

PKO Bank Polski S.A. continued offering settlements to its retail customers who had active loans in Swiss Francs (CHF), which were intended for satisfying their own housing needs.

For information on settlements and the cost of legal risk, see Section 8.1 „Support for borrowers”.

On 8 August 2022, the Management Board of the Bank approved the establishment of a programme for the issue of Eurobonds by the Bank as the issuer (the Euro Medium Term Notes Programme – the “EMTN Programme”) of up to EUR 4 billion. Under the EMTN Programme, it will be possible to issue unsecured Eurobonds in any currency, including those in respect of which obligations may be classified as eligible liabilities or as the Bank’s own funds. Bonds issued under the EMTN Programme will be registered with the international central securities depository (ICSD) operated by Euroclear Bank SA/NV or Clearstream Banking société anonyme.

On 16 December 2022, the Moody’s Investors Service rating agency assigned a (P)Baa3 rating to the EMTN Programme, for the unsecured bonds designated as Senior Non Preferred.

On 20 December 2022, the Prospectus for the EMTN Programme was approved by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. On 20 January 2023, the CSSF approved the first Supplement to the prospectus for the EMTN Programme.

On 1 February 2023, the Bank, as part of its inaugural EMTN issue allowing it to cover the senior portion of the requirement (being the difference between the MREL requirements denominated on a consolidated basis and the MREL on a stand-alone basis), issued 3-year Senior Preferred Notes with a total value of EUR 750 million, with the possibility of early redemption two years after the issue. The coupon of the issue is fixed, at 5.625%, payable annually until the early redemption date, and variable thereafter, with quarterly payments. Moody’s Investors Service has assigned a rating of A3 to the issue. The bonds were admitted to trading on a regulated market on the Luxembourg Stock Exchange and the Warsaw Stock Exchange (WSE) (in April 2023).

Since the third quarter of 2020, the PKO Bank Polski S.A. Group, starting with the reform of LIBOR benchmarks, has been running an inter-disciplinary project supervised by members of the Management Board of the Bank with the participation of subsidiaries’ representatives from PKO Bank Hipoteczny, PKO Leasing S.A. and PKO Faktoring S.A. related to the adjustment of the Bank and its subsidiaries to changes introduced as part of the benchmark reform. The work is being carried out by the National Working Group for Benchmark Reform (NWG), appointed by the Office of the Polish Financial Supervision Authority (PFSA Office). In 2023, the Steering Committee of the NWG (NWG SC) endorsed the following recommendations:

• on the standard OIS transaction based on WIRON;
• on the application of the WIRON index in issues of floating-rate debt securities;
• on the rules and methods of applying the WIRON benchmark (or benchmarks from the WIRON Compound Indices Family) when entering into new contracts for benchmark-based products in PLN offered by financial market entities;
• on the rules and methods of applying the WIRON interest rate index (or indices from the WIRON Compound Indices Family) when entering into new contracts in PLN for factoring products (excluding discounting products) for benchmark-based products in PLN offered by financial market entities;
• on the methods of applying the WIRON interest rate index (or indices from the WIRON Compound Indices Family) when entering into new agreements in PLN for leasing products for interest rate benchmark-based products in PLN offered by financial market entities;
• on the use of a replacement rate for the WIBOR benchmark in interest rate derivatives;
• on the rules and methods of conversion of existing issues of debt securities where WIBOR is used.

In January 2023, PKO Bank Polski S.A. and ING Bank Śląski S.A. executed the first transaction in the Polish financial market for which the WIRON interest rate index has been applied. The financial instrument being traded was an interest-rate derivative contract – Overnight Index Swap (OIS). With the transaction, the banks have tested the operational and technological capacity for applying WIRON in financial instruments.

On 13 February 2023, the PFSA Office announced that WIRON had become an interest rate benchmark. Banks may apply the WIRON benchmark to determine interest rate on consumer loans or mortgage loans.

On 25 October 2023, the NWG SC decided to revise the deadlines for the Road Map for the process of replacing the WIBOR and WIBID benchmarks indicating a final conversion date of the end of 2027. The NWG SC announced that neither the directions of the interest rate benchmark reform in Poland nor the scopes of measures planned to date in the Roadmap are changing.

On 31 October 2023, PKO Bank Polski S.A. decided to withdraw from the investment process relating to the potential acquisition by the Bank from Poczta Polska S.A. of the block of shares in Bank Pocztowy S.A. held by Poczta Polska S.A. i.e. 75% – 10 shares of Bank Pocztowy S.A. (the “Transaction”), and decided to discontinue any work relating to the Transaction (Current report No 22/2023).

PKO Bank Polski S.A. participated in another edition of the European stress tests conducted in 2023 by the European Banking Authority with the involvement of the Polish Financial Supervision Authority, the European Central Bank and the European Systemic Risk Board. The test was attended by 70 banks from 16 European Union (EU) and European Economic Area countries, covering 75% of the EU banking sector assets.

The pan-European stress tests carried out in 2023 do not have a passing threshold, but can serve as an important source of information for the supervisory review and evaluation process (SERP) and can assist competent authorities in assessing the Bank’s ability to meet prudential requirements under stress scenarios.

According to the findings of the pan-European stress tests in 2023, the Bank’s consolidated Common Equity Tier 1 (CET1) capital ratio would be 22.27% in 2025 in the baseline scenario and 13.26% in the stress scenario (the consolidated CET1 at the end of 2022 would be 17.67%). Without the application of the transition periods, the Bank’s consolidated Common Equity Tier 1 (CET1) ratio would remain unchanged at the end of 2025 (it would be 16.48% at the end of 2022). The results of the tests reflect the Bank’s prudential approach to simulations carried out for European and national supervisory purposes.

The most significant factor affecting the reduction in consolidated capital ratios at the end of 2025 in the stress scenario was the recognition of the effects of the cost of legal risk associated with mortgage loans denominated in and indexed to CHF on the Bank’s projected performance in 2023-2025.

The account is designed for people aged between 13 and 45 who do not hold title to a property. One person can have one Account. The maximum duration of the account is 10 years (the account may not be maintained until 31 March of the year following the expiry of 10 years counted from 31 December of the year in which the account agreement was signed). The Account is offered free of charge, but requires regular payments of between PLN 500 and PLN 2,000 per month. The customer can use one month a year for a „holiday from saving” without any consequences – he will still be entitled to the bonus and tax exemption. Until 31 December 2023, the Account offered a promotional interest rate of 5.35% per annum. A promotional interest rate of 4.00% per annum applies in the period from 1 January 2024 to 31 March 2024.

If the Account is held for at least 3 full calendar years and the customer fails to meet the regular deposit condition or withdraws part of the funds accumulated, or if the maximum term of the Account expires, it will be converted into a Housing Deposit. The deposit will bear interest at no less than 75% of the interest rate on a 12-month savings term deposit account or, if the Bank does not offer one, at no less than 50% of the WIRON index. The condition for entitlement to the housing bonus and income tax exemption is that the Account must be maintained for a minimum of 3 years and that the funds accumulated in the Account must be used for a housing purpose. The funds can also be used for any purpose, but this entails a loss of benefits. Between 10 August and 31 December 2023, 2,772 Accounts were opened and credited with a total of more than PLN 11.5 million by the Bank’s customers.

In July 2023, the Bank launched the 2% Safe Loan. Under the Safe 2% Loan programme, customers can receive subsidies for loan instalments and financing of up to 100% of the expenditures related to the purchase or construction of their first property. The loan can be used, for example, to purchase an apartment or a house, construct and finish a house, and even purchase a plot along with the construction of a house.

According to the programme, loan instalments for 10 years will be reduced by contributions of the Government Housing Fund. Loans up to PLN 500 thousand for a single and/or PLN 600 thousand for marriage and a couple or single with a child will be covered by additional payments. The maximum amount of the own contribution may not exceed PLN 200 thousand, unless the own contribution consists solely of an undeveloped plot of land.

During the subsidised instalment period, the loan will bear interest at a fixed rate to be determined by the Bank once every 5 years. This programme does not have a limit on the price per 1 sqm. A loan may be sought by persons who did not have an apartment or a house, who have not reached 45 years of age and are creditworthy. Part of the financed amount may be covered by a BGK guarantee. The programme will run until the end of 2027.

In 2023, 64.3 thousand applications were submitted and the number of signed agreements was 29 thousand as at 31 December 2023.

Since September 2022, PKO Bank Polski S.A. has been offering a housing loan with family repayment. If, during the repayment of the loan, the family grows with a second or subsequent child, BGK will pay PLN 20 thousand (for the second child) or PLN 60 thousand (for the third and subsequent child) towards the loan repayment. The loan, granted under the terms of the „Housing without own contribution” program, allows financing of up to 100% of expenses related to the acquisition or construction of a property. Individuals who are creditworthy but do not have sufficient savings for own contribution can apply for the loan. A part of the amount financed is guaranteed by BGK.

Since the launch of the programme, 324 of the Bank’s customers have taken advantage of the offering, and the total value of housing loans with family repayment granted to natural persons as at 31 December 2023 reached PLN 112 million, with 282 loans for PLN 99.4 million in 2023 alone.

The Bank’s Group continues to provide the so-called statutory loan holidays, i.e. it allows the suspension of repayment of mortgage loans or advances used to meet one’s own housing needs, if the agreement was concluded in PLN before 1 July 2022 and the term of the loan ends after 31 December 2022 – one agreement per customer.

The Act of 7 July 2022 on the crowdfunding of business ventures and on assistance for borrowers enabled the suspension of loans for one month per quarter in 2023.

The option to suspend repayment could also be used by customers who have reached settlements for loans in CHF and the current currency of the loan is PLN. Customers of PKO Bank Polski S.A. and PKO Bank Hipoteczny S.A. could apply through the iPKO website, the Bank’s branches or by mail.

By the end December of 2023, 298.5 thousand customers of the Group applied for a suspension of their mortgage loan or advance repayment, and the total number of suspended instalments amounted to 2,108 thousand.

In the fourth quarter of 2023, the Bank Group estimated the actual level of the credit holiday loss, taking into account, among other things, empirical data on the participation rate of customers’ use of loan holidays and early repayments made by customers throughout the period of the statutory loan holiday programme. Based on the outcome of the aforementioned analysis, the Bank’s Group has partially reversed the loan holiday loss and reduced, proportionally, the amortisation of this loss in the amount of PLN 131 million. This translated into an increase in net interest income and a decrease in the adjustment of the gross carrying amount of loans. The realised loss on statutory loan holidays, excluding the effect of amortisation, was, in the opinion of the Group, PLN 2,980 million compared to PLN 3,111 million recognised in July 2022.

For details of the level of credit holiday loss in 2023, see the Bank Group’s financial statements for 2023, Note 35 “Loans and advances to customers”.

In 2023, PKO Bank Polski S.A. offered settlements to its retail customers who had active mortgage-backed loans in CHF. The settlement involves converting CHF loans into PLN loans as if it had been a PLN loan from the start subject to interest rate at the WIBOR reference rate increased by the margin historically applied to such loans. The settlements are offered during mediation proceedings conducted by the Mediation Centre of the PFSA. The bank also offers settlements on a large scale for loans subject to litigation.

PKO Bank Polski S.A. settlement programme meets its assumptions, i.e. it is a real aid for people repaying mortgage loans in CHF. The mediation formula is free of charge. The customer can come to an agreement with the Bank and/or terminate the mediation proceedings without consequences without reaching an understanding. The programme completely eliminates the materialised and future foreign exchange risk of customers and is a convenient and certain alternative to long-term and costly litigation. According to the assumptions, the Bank bears all the financial consequences of restoring to the consumer the actual and legal status in which the consumer would find themselves if they did not enter into a Swiss Franc loan agreement with the Bank. In the opinion of the Bank, this action fully implements the requirements of Directive 93/13 (Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts) and complies with previous case law of the Court of Justice of the European Union (CJEU).

In order to mitigate the interest rate risk borne by the customer, since the implementation of the programme, the Bank has offered borrowers the possibility to choose a fixed rate option for 5 years. If the period of loan repayment remaining after concluding the settlement is shorter than 5 years, the fixed interest rate will apply until the end of the term of the agreement. Fixed-rate loans are more and more popular – this option was selected in the settlement process in the second half of 2023 by 81% of customers who continue to repay the loan after signing the settlement, and a total of 78% of customers who sign a settlement agreement providing for continuing the loan since the beginning of offering settlements.

By 31 December 2023, 57 thousand mediation applications were registered, 37,195 mediations concluded with a positive outcome, 13,096 mediations concluded with a negative outcome. The total number of settlements concluded as at 31 December 2023 was 36,822, of which 35,154 were concluded in mediation proceedings and 1668 in court proceedings.

In its ruling of 15 June 2023 in Case C-520/21, the CJEU ruled that if a loan agreement containing unfair terms is declared invalid, Directive 93/13: (i) does not preclude a judicial construction of national law whereby a consumer is entitled to claim compensation from a credit institution that goes beyond reimbursement of the monthly instalments and fees paid for performance of that agreement and beyond payment of the statutory interest for late payment from the date of the call for payment, provided that the objectives of Directive 93/13 and the principle of proportionality are complied with, and that (ii) precludes a judicial construction of national law whereby a credit institution is entitled to demand compensation from a consumer that goes beyond the reimbursement of the principal paid for the performance of that agreement and beyond the payment of statutory default interest from the date of the call for payment.

In the Bank’s opinion, on the grounds of national legislation and the principle of proportionality, the customers cannot make additional claims against the Bank, primarily because they have not provided the Bank with a financial service consisting in the provision of capital. Nor is it reasonable to conclude that the Bank has enriched itself at the expense of the customer and the consumer has been impoverished. With the funds obtained, the customer met its housing needs and the Bank bore the costs of raising the funds, making them available and servicing the loan over the years. Even if it were to be considered that there were legal grounds for the customers’ claims, the customer’s claims would not necessarily be upheld and the courts may exercise their jurisdiction to dismiss the action when it constitutes an abuse of rights. At present, there is no case law on such customer claims.

With regard to the banks’ ability to pursue claims beyond the reimbursement of the capital paid in nominal terms, the CJEU also expressed its position in two orders issued at the end of 2023 and the beginning of 2024. In an order of 11 December 2023, the CJEU ruled that a banking institution is not entitled to demand from a consumer the reimbursement of amounts other than the capital paid for the performance of that agreement and statutory default interest from the time of the demand for payment. In this ruling, the CJEU, as in judgment C-520/21, did not explicitly rule out valorisation, leaving the possibility for banks to pursue this claim open. However, by another decision, issued in case C-488/23 of 12 January 2024, the CJEU definitively determined that Banks are not able to claim valorisation from customers if the invalidity of the agreement is a consequence of the removal of abusive clauses from the agreement. The CJEU thus ruled that banks may not demand compensation from consumers consisting of a judicial valorisation of the payment corresponding to that capital, in the event of a substantial change in the purchasing power of the currency concerned after the transfer of that capital to the consumer.

In 2023, the PKO Bank Polski S.A. Group increased the write-downs on legal risk related to mortgage loans denominated and indexed to CHF by PLN 5,430 million. The increase in the cost of risk resulted from updating the parameters of the legal risk assessment model for these loans, taking into account, among other things, the expected effects of the CJEU judgment of 15 June 2023 in case C-520/21 on the future case-law of the Polish courts, the impact of the CJEU decision of 12 January 2024 in case C-488/23, concerning the question of the admissibility of a demand for compensation from the consumer consisting in a judicial valorisation of the capital paid out in the event that the loan agreement is declared invalid, and also taking into account the CJEU decisions of December 2023 in the cases: C-140/22 of 7 December 2023, C-756/21 of 11 December 2023, C-28/22 of 14 December 2023, concerning the issue of calls for payment and the statutory default interest charged thereon. In addition, the Bank took into account the costs of the settlement programme, the number of settlements and estimates of the inflow of new lawsuits and their expected resolutions.

Detailed information on the write-downs for the legal risk in 2023 was presented in the Financial Statements of the Bank’s Group for 2023, Note 26 „Cost of legal risk of mortgage loans in convertible currencies”.

PKO Bank Polski S.A. did not purchase or sell any own shares on its own account during the period covered by the report.

The above summary includes data of PKO Bank Polski S.A. and subsidiaries included in consolidation within the meaning of Article 4(1)(48) of the European Parliament and Council Regulation No 575/2013 (i.e. in prudential consolidation). Prudential consolidation, unlike consolidation in accordance with the International Financial Reporting Standards, covers only subsidiaries which meet the definition of an institution, a financial institution or an ancillary service undertaking.

PKO Bank Polski S.A. and subsidiaries of the Bank which are included in the prudential consolidation have their registered offices in the territory of Poland (where they mainly conduct the following activities: banking, asset management, investment and pension fund management, leasing and factoring, and provide brokerage and transfer agent services as well as provide technological solutions), Ukraine (banking and debt collection activities), Sweden (leasing and raising funds from bond issues) and Ireland (securitization of lease receivables). PKO Bank Polski S.A. also provides services through its branches in the Czech Republic, Germany, and Slovakia.

The presented values are the sum total of items in the separate financial statements of these entities (according to the data as at the date of the summary).

In 2022, PKO Bank Polski S.A. did not sign any agreements mentioned in Article 141t (1) of the Banking Law, i.e. financial support agreements with entities that are subject to consolidated supervision, which operate within the same holding, or with closely related entities.

Rates of return on assets of the Bank’s Group and the Bank are presented in table No 1 and table No 5, respectively.

PKO Bank Polski SA did not publish forecasts of financial performance for 2023. In current reports, the Bank communicated information on significant events that affected the Bank’s and the Bank’s Group’s results.

No employee share plan is in place at PKO Bank Polski S.A.

PKO Bank Polski S.A. is obliged to inform in the current reports about all agreements meeting the definition of confidential information provided in Regulation (EU) No 596/2014 of the European Parliament and of the Council on market abuse.

In 2023, The Bank has entered into and published information about a guarantee agreement entered into on 27 February 2023, which provides unfunded credit protection in respect of the Bank’s portfolio of selected corporate credit receivables, in accordance with the CRR. The total value of the Bank’s debt portfolio covered by this guarantee is over PLN 12,292 million, and the portfolio consists of the bond portfolio of PLN 1,515 million (“Portfolio A”) and the portfolio of other receivables of PLN 10,777 million (“Portfolio B”). The coverage ratio is 100% for Portfolio A and 80% for Portfolio B, therefore the total Guarantee amount is PLN 10,137 million. The maximum time of coverage under the Guarantee is 60 months, however the Bank is entitled to terminate the Guarantee prior to the expiry of this period.

In March 2023, PKO Bank Polski S.A signed an agreement with the National Bank of Poland for the Bank’s participation in the Target-NBP system for euro-denominated payments.

Subsidiaries of PKO Bank Polski S.A. did not conclude any material agreements with the central bank or with the supervisory authorities.

On 1 February 2023, PKO Bank Polski S.A. issued 3-year Senior Preferred Notes with a total value of EUR 750 million. For details, see chapter 1.3.2. “Issue of Eurobonds to cover the minimum level of own funds and eligible liabilities (MREL) requirement”.

On 30 August 2017, PKO Bank Hipoteczny S.A. concluded an agreement with PKO Bank Polski S.A. amending the agreement signed in 2015 on the National Mortgage Covered Bond Issue Programme. In accordance with the amending agreement, Brokerage Office of PKO Bank Polski S.A. had the role of underwriter (until August 2017, mortgage covered bonds were offered as standard issue bonds). In 2023, PKO Bank Hipoteczny S.A. did not issue any mortgage covered bonds under the aforesaid agreement. The aggregate nominal value of issued and outstanding mortgage covered bonds issued as part of firm commitment underwriting was PLN 1,990 million as at 31 December 2023. The Brokerage Office’s portfolio as at the end of 2023 contained mortgage-covered bonds with a total nominal value of PLN 20.0 million.

As at 31 December 2023, issues of bonds of PKO Bank Hipoteczny S.A. under the Bond Issue Programme were governed by the Agreement on the Bond Issue Programme of 30 September 2015, with subsequent annexes, signed with PKO Bank Polski S.A., pursuant to which the maximum value of bonds issued and not redeemed based on the programme is PLN 6 billion, and the Guarantee Agreement of 30 September 2015, with subsequent amendments, pursuant to which PKO Bank Polski S.A. undertakes to be the underwriter of the bonds issue up to a total value of PLN 1 billion. At the same time, on the basis of separate agreements, PKO Bank Hipoteczny S.A. authorized the Bank’s Brokerage Office to act as Issue Agent and PKO Bank Polski S.A. to act as Dealer.

The liability of PKO Bank Hipoteczny S.A. in respect of the bonds issued as part of the aforesaid programme as at the end of December 2023 (in nominal value) amounted to PLN 2.0 billion. As at 31 December 2023, PKO Bank Polski S.A. held no bonds issued by the company.

In 2023, PKO Bank Polski S.A. issued, with regard to activities of its subsidiaries:

• two tender guarantees with a total value of PLN 1 million (up to April 2024);
• one guarantee for the repayment of loans with an aggregate value of EUR 115 million (up to December 2030);
• five guarantees for repayment of liabilities arising from the rental of office space and parking lots with a total value of PLN 1.1 million and EUR 6.8 thousand (up to March 2028).
• one guarantee to secure recourse factoring and reverse factoring agreements concluded in the event of nonpayment for financed receivables (Risk Sharing) with a limit of up to PLN 100 million up to 24 November 2025. As at 31 December 2023, the guarantee had been called in the amount of PLN 13 million.

Taking into consideration the value of and an increase in the number of court proceedings, PKO Bank Polski S.A. considered as material the court proceedings relating to mortgage loans in convertible currencies. As at 31 December 2023, 30,498 on court proceedings were pending against the Bank (as at 31 December 2022: 19,522) relating to mortgage loans granted in previous years in foreign currency with a total value in dispute of PLN 11,948 million (as at 31 December 2022: PLN 7,725 million), including one group proceeding with 72 loan agreements. The subject matter of the Bank’s customers’ actions are mainly claims for declaration of invalidity of an agreement or for payment of amounts paid by the customer to the Bank in performance of an invalid agreement. Customers allege abusive provisions and/or that the agreements are contrary to the law. None of the clauses used by the Bank in the agreements was entered in the register of prohibited contractual clauses.

Information on the value of all legal proceedings of the Bank and Bank’s Group, as well as a description of the main disputes, including those relating to mortgage loans in convertible currencies, is presented in the financial statements of the Bank’s Group and the Bank for 2023 – in Notes 47 “Legal claims” and 29 “Income taxes”, respectively.

In 2023, the Bank’s Group did not incur any loans or advances, and did not receive any guarantees or sureties that would not be related to operating activities.

As at 31 December 2023, net financial and guarantee liabilities of the Bank’s Group amounted to PLN 95.2 billion, of which 87.1% were financial liabilities. Overall, the growth rate of financial and guarantee commitments granted was 11.1% y/y, mainly as a result of an increase in financial commitments for real estate credit lines and limits and for factoring, and a decrease in financial commitments for finance lease credit lines and limits.

Description of guarantees and sureties granted by the Bank

PKO Bank Polski S.A., including foreign branches of the Bank, grant guarantees to secure liabilities resulting from the current activities of customers. These are mainly guarantees for: payment, due performance of contract (performance bond), statutory warranty (rękojmia), tenders (bid bond)), return of advance payment, loan repayment and customs duty guarantee. The Bank also grants counter guarantees and opens standby letters of credit. The guarantees are issued both on paper and in an electronic form.

The guarantees are granted based on the provisions of the Banking Law and Civil Code. Guarantees issued in international trading can be subject to the Uniform Rules for Demand Guarantees (if the parties so decide) or the provisions of a foreign law (if the guarantee is subject to such jurisdiction).

When granting a guarantee, the process of customer evaluation and the scope of information required is analogous to the one applicable to loans. The Bank uses the same approach to the evaluation of the credit risk as in the case of balance sheet exposures.

At the end of 2023, the value of collateral set up on accounts or assets of the borrowers as part of the PKO Bank Polski S.A. Group was PLN 497 billion. The aforementioned amount concerns loan agreements, leases and loans.

PKO Bank Polski S.A. is a universal bank, which provides services on the whole territory of Poland, and thus its activities are exposed to seasonal fluctuations similar to those affecting the entire Polish economy. The operations of the other PKO Bank Polski S.A. Group companies do not show any material traits of seasonality or cyclicality either.

1. On 20 February 2024, the Management Board of PKO Bank Polski S.A. informed that it had decided to issue senior non preferred bonds („Bonds”) within the framework of the Programme for the issue of own bonds on the domestic market, the establishment of which was announced by the Bank in report No 32/2011 („Programme”). The Programme has been modified in order to allow the Bonds to be recognised as eligible liabilities of the Bank pursuant to Article 97a(1)(2) of the Act of 10 June 2016 on the Bank Guarantee Fund, the deposit guarantee scheme and compulsory restructuring.
   On 23 February 2024 the Bank completed the subscription of 5-year bonds „senior non preferred” of total nominal value PLN 1 bilion made on the domestic market, under the PLN 5 billion Own Bond Issue Programme. The interest rate on the bonds is variable, being the sum of the WIBOR 6M reference rate and the margin of 159 bps. The Bank may be entitled to early redemption of the Bonds, after obtaining the consent of the Bank Guarantee Fund. The issue date is set for 28 February 2024. The bonds will be classified as eligible liabilities of the Bank within the meaning of Article 97a(1)(2) of the Act of 10 June 2016 on the Bank Guarantee Fund, the deposit guarantee scheme and compulsory restructuring.
2. On 21 February 2024, the Bank received the individual recommendation from the Polish Financial Supervision Authority („PFSA”) in which the PFSA confirmed that the Bank fulfils the criteria for the payment of dividend up to 75% of the profit for 2023, whereby the maximum amount of payment may not exceed the amount of the annual profit less the profit generated in 2023 already counted as own funds. The Bank has included in its own funds the net profit, achieved in the first half of 2023, in the amount of PLN 1,624,430,283 at standalone level and PLN 1,697,253,857 at consolidated level.
   On 26 February 2024, the Bank received an extra explanation from the PFSA, in which the PFSA states that the amount of the interim dividend paid, derived from the part of the profit generated in 2022, allocated to the reserve capital for the payment of dividends (including interim dividends), may not reduce the amount indicated in the PFSA’s position, about which the Bank informed above.