Report No. 26/2016

Legal basis:

Art. 56 section 1 point 1 of the Act of 29 July 2005 on the Public Offering, the Conditions Governing the Introduction of Financial Instruments to Organised Trading, and on Public Companies in connection with Article 154 of the Act on Trading in Financial Instruments of 29 July 2005

Content of the report:

The Management Board of PKO Bank Polski SA  (hereafter “Bank”) hereby reports that the Bank received an information from the Polish Financial Supervision Authority (hereafter “PFSA”) (in accordance with the conditions set  in the PFSA position banks’ dividend policy in 2016) that the Bank meets the eligibility criteria for the dividend payment from the profit earned by the Bank in 2015, because aside from other conditions determined by the PFSA, the total capital ratio of the Bank, both in terms of individual and consolidated basis,  is higher than level of 13.25% plus 100% of the additional capital requirement to offset the risk of foreign currency loans. Bank also received a recommendation to increase total own funds by retaining at least 50% of the profit of the period from 1 January to 31 December 2015.

Moreover, the PFSA recommends to maintain (in terms of the Bank’s Capital Group) total own funds to cover the additional capital requirement in order to hedge risk arising from foreign currency mortgage loans for households on the level 0.74 p.p. (previously 0.76 pp), which should be composed in at least 75% of Tier1, which corresponds to 0.56 pp (previously 0.57 p.p.).

Additionally, the Bank was informed of the recommendation to maintain in 2016 capital ratios, taking into account the additional capital requirement and the capital conservation buffer, at not less than:

T1 [individual] = 10.82%,

T1[consolidated] = 10.81%,

TCR [individual] =14.01%,

TCR [consolidated] =13.99%.

The PFSA expects the statement of the Bank’s Management Board and Supervisory Board position in relation to this recommendation. The decided positions will be published by the Bank in separate reports.

Moreover, the Bank informs that this recommendation does not mean the Bank’s decision on the recommended distribution of the profit for 2015 and the amount of the dividend from the profit earned in 2015, which will be announced in the separate report after the Management Board’s decision in this matter.