Report No. 71/2014

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 and Paragraph 38 section 1 item 11 of the Ordinance of the Minister of Finance of 19 February 2009 on current and periodic information published by issuers of securities and on conditions under which such information may be recognised as being equivalent to information required by the regulations of law of a state which is not a member state.

The Report:

The Management Board of PKO Bank Polski S.A. (subsequently referred to as the ‘Bank’) hereby informs that on 2 October 2014 it adopted a resolution on the distribution of the net profit that PKO Bank Polski S.A. achieved in the period of 1 January 2014 to 30 June 2014.  As per this resolution the Bank’s Management Board resolved that in its recommendation on distribution of the net profit the Bank achieved in the year 2014 addressed to the Annual General Meeting approving the Bank’s financial statements for the year 2014, the net profit achieved in the period of 1 January 2014 to 30 June 2014 in an amount of PLN 1,679,300 thousand would be taken into account in a way that assumes allocation of an amount of PLN 675,000 thousand out of that net profit toward dividends to the shareholders. This allocated amount constitutes 40.2 % of the net profit the Bank achieved in the first half of the year 2014.

The adoption of the aforementioned resolution aims to include 59.8% of the net profit achieved in the period of 1 January 2014 to 30 June 2014, after deduction of the expected charges and dividends, in Common Equity Tier 1 of the Bank.

The aforementioned allocation of net profit will ensure maintenance of the capital adequacy measures at safe levels and provide for the Bank’s continued development.

Pursuant to Article 26(2) of the Regulation (EU) No. 575/2013 of The European Parliament and Council, inclusion of interim profit in Common Equity is possible only with the prior permission the Polish Financial Supervision Authority (subsequently referred to as “KNF”) and after verification of such profit by persons independent of the institution that are responsible for the auditing of the accounts of that institution.

The Bank obtained the aforementioned permission of KNF and indicates that accumulation of a certain part of the net profit of the year 2014 is required in order to ensure safe level of capital adequacy for its developing operations. The key factors determining this decision of the Bank included: the completed transaction of acquisition of the Nordea group assets, the changing regulatory framework and the process of establishing a mortgage bank (as the Bank’s subsidiary). 

The aforementioned level of dividends to be paid out of the net profit achieved in the period of 1 January 2014 to 30 June 2014 is solely a declaration to recommend a payment out of the net profit for the indicated period. The amount of the net profit achieved in the year 2014, which in Management Board’s opinion should be allocated as shareholders dividends, will be recommended to the Annual General Meeting approving the Bank’s financial statements for the year 2014, by the Bank’s Management Board in compliance with a relevant procedure prior to the convening of this Annual General Meeting; and the final amount of the dividends to be distributed to the shareholders will be determined by the General Meeting.