Legal basis:

Article 17. 1 of the MAR Regulation


Report content:

Based on Article. 17 clause 1 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse, the Management Board of PKO Bank Polski S.A. ("Bank") hereby informs about the impact of the spread of the coronavirus, the announcement of the state of epidemic in the territory of the Republic of Poland and the decisions of the Monetary Policy Council and the Ministry of Finance on the activities of the Issuer and the Capital Group (“Group”).

The Group maintains operational continuity, also in the area of customer service in the branch network and remote channels. The Group notes the increased use of remote channels by customers. A significant proportion of the Group's employees perform their duties remotely.

The Group maintains a good liquidity and capital position. The Bank estimates that the activities of the National Bank of Poland in the area of purchasing Treasury bonds, promissory note loan and repo operations will additionally strengthen Group’s liquidity position.

Due to the negative impact of coronavirus on business activity, the Bank expects a reduced customer activity, deterioration in financial standing and lower sales of financial products. The Group alleviates the situation of some clients, including through a suspension offer for 3-6 months for debt service. The Bank expects increased risk costs, the scale of which is currently difficult to estimate reliably.

The decision of the Monetary Policy Council to lower interest rates and change in the minimum reserve requirement will have a negative impact on the Group's net result at the level of PLN 75 - 100 million quarterly. This impact will materialize gradually in the following quarters. In turn, the decision of the Ministry of Finance to reset the systemic risk buffer results in a 2.9 p.p. reduction of capital requirements at the consolidated level.

The weakening of the zloty may negatively affect the cost of legal risk of currency housing loans, while the scale of this impact is currently difficult to estimate reliably.

PKO Bank Polski will update the above information in the report for the first quarter of 2020.