Report No. 26/2013

Legal basis:

Article 56 par. 1 pt. 1 of the Act on Public Offerings and the Conditions for Admitting Financial Instruments to the Organised System of Trading and on Public Companies of 29 July 2005 read together with Article 154 par.1 of the Act on Trading in Financial Instruments of 29 July 2005 and Clause 38 par. 1 pt. 11 of the Regulation of the Minister of Finance on Current and Periodic Information by Issuers of Securities and on the Conditions for Recognising Information as Equivalent to That Required by the Provisions of Law of a State Which is Not a Member State of 19 February 2009.

Content of the Report:

The Management Board of Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna (the “Bank”) announces that on 17 April 2013 it adopted a resolution and decided to submit a recommendation to the Ordinary General Meeting of the Bank on payment of a dividend for the year 2012 in the amount of PLN 2,250,000,000 (i.e. 61.12% of the sum of net profit for the year 2012 and unappropriated profits amounting 88,533,000 PLN) that is, PLN 1.80 per share.  The recommended dividend is to be paid in cash.

The Management Board proposed 19 September 2013 to be the dividend day and 4 October 2013 to be the dividend payment date.

The decision on the recommended distribution of profit for 2012 is in accordance with the Bank’s dividend policy published in the current report No. 22/2012 on 4 April 2012. A dividend payment in the recommended amount will guarantee that the capital adequacy ratio is maintained above 12 per cent and that the Tier 1 ratio is maintained above 9 per cent, while maintaining the necessary capital buffer. A dividend payment in the recommended amount will allow the Bank to maintain its good capital and liquidity position.

The proposed dividend level is in line with the statement of the Polish Financial Supervision Authority (“PFSA”) with regard to strengthening banks’ capital bases. In accordance with a letter from the PFSA dated 28 November 2012, a bank may recommend payment of a dividend if:

• it has a capital adequacy ratio above 12 per cent;
• its Tier 1 ratio is above 9 per cent;
• the capital adequacy ratio forecast for the end of 2013 in test scenarios of extreme conditions (base, shock I and shock II) is above 12%;
• the Tier 1 ratio forecast for the end of 2013 in test scenarios of extreme conditions (base, shock I and shock II) is above 9%;
• the SREP (BION) with respect to the level of capital is better than 2.5;
• the SREP (BION) with respect to capital adequacy is better than 2.5;
• the general SREP (BION) is better than2.5.

In addition, as a rule ensuring the banks’ cautious and stable operation, the PFSA assumed that the maximum level of the dividend paid for 2012 should not exceed 75 per cent of the profit.

The Bank meets all the above criteria such that the Management Board may recommend a payment of a dividend.

The Management Board’s recommendation on payment of a dividend was considered by and obtained a positive opinion of the Bank’s Supervisory Board in accordance with Clause 9 par. 2 of the Statute of the Bank. In accordance with Article 395 par. 5 pt. 2 of the Commercial Companies Code and Clause 34 of the Statute of the Bank, the recommendation will be submitted for consideration by the Bank’s Ordinary General Meeting approving the financial statements for the financial year ending on the 31 December 2012.