Report No. 64/2015

Legal basis:

Article 56.1.1. of the Act of 29 July 2005 on Public Offering and the Conditions of Introduction of Financial Instrument to an Organized Trading System and on Public Companies, in connection with Article 154 of the Act of 29 July 2005 on Trading in Financial Instruments

Content of the report:

The Management Board of PKO Bank Polski SA (“PKO Bank Polski” or “Bank”) hereby reports that on 23 October 2015, the Management Board of the Bank received a recommendation from the Polish Financial Supervision Authority (“PFSA”) concerning the amount of an additional shareholders’ equity requirement.

PFSA recommends maintaining the Bank's equity to cover the additional capital requirement at  0.76 p.p. in order to hedge mortgage FX loan risk, which should be composed in at least 75% of Tier1 (equivalent of 0.57 p.p.)

It means that:

• the minimum capital ratios of the Bank, taking into account the additional  capital requirement recommended by the PFSA are:

         ü       T1=9+0.57=9.57 %

         ü       TCR=12+0.76=12.76 %

• Bank’s capital ratios taking into account the additional capital requirement recommended by PFSA  in relation to dividend policy are:

             ü    criteria to payment up to  50% of 2014 profit:

• CET1= 12+0.57= 12.57 %
• TCR= 12.5+0.76= 13.26%

             ü    criteria to payment up to  100% of 2014 profit:

• CET1= 12+0.57= 12.57 %
• TCR= 15.5+0.76= 16.26%

The abovementioned recommendation should be complied with by the Bank from the date of receipt until further notice, i.e. until the PFSA determines, based on the analysis and supervisory assessment, that the risks associated with mortgage FX loans, being the reason for imposing the additional capital requirement on the Bank, has significantly changed.

Moreover PFSA recommended to keep by the Bank at least 50% of the profit generated during the period from 1 January 2014 to 31 December 2014.

Furthermore banks have been informed (by separate letter) about the  recommendation to keep – starting from 1 of January 2016 – the capital requirements at the level at least: 

T1= 10.25%

TCR=13.25%.

 

In the Bank’s view, after the consideration of the additional  capital requirement the Bank has the strong capital position.