Report No. 55/2024

Legal basis:

Article 17. 1 of the MAR Regulation

the Report:

The Management Board of PKO Bank Polski S.A. (“Bank”) hereby announces that on 24 October 2024 it approved the strategy of the PKO Bank Polski S.A. Group for years 2025-2027 “The Number 1, full stop” (the “Strategy”). The Strategy has been approved today by the Supervisory Board. Below, the Bank presents a description of the main points of the Strategy in terms of financial and business objectives contained therein.

Over the next three years, the main strategic objective will be to strengthen the position of the Bank's Group (the "Group") as the number one financial group in Poland, focused on growth and development.

Bank plans to achieve this by expanding the reach and scale of operations to existing and new customers based on a modified, diversified business model, strong capital position, effective risk management, as well as increasing operational efficiency.

The strategy assumes achievement of the following financial objectives:

1. ROE: target level above 18% in 2027, assuming the National Bank of Poland reference rate
   in 2027 at 3.5%.
2. The C/I ratio in 2027 below 35%.
3. Cost of risk in 2027 in the range of 0.70%-0.90%.
4. Ability to pay dividends or buy-back of own shares.

The Strategy is based on 7 business pillars, which, combined with the strength of the brand and the complementarity of services provided by the entire Group, will allow Bank to achieve ambitious business goals:

• Pillar 1. Number 1 for everyday customers’ needs. As a result of demographic changes and technological advances, customers' needs are changing dynamically, affecting a number of aspects of their personal and professional lives. In an increasingly complex reality, customers are looking for a reliable financial institution - a partner that will comprehensively meet their financial needs. PKO Bank Polski is the largest bank in Poland, and the brand is the most recognized among banks. According to research, its main differentiators are safety, stability and reliability. Thanks to these ones and to its’ digital service offerings that respond to customers' daily needs, the Bank expects to increase the number of individual customers from 11.4 million to 15 million in 2027.
• Pillar 2. Number 1 in ecosystems. The Bank plans to expand the range of its products and services to be able to operate in selected ecosystems – mobility, real estate, and everyday shopping. Ecosystems, including cooperation with online platforms and traditional retail chains, will allow for the creation of new distribution channels for financial and non-financial products and enable the acquisition of 2.5 million customers.
• Pillar 3. Number 1 for a better financial future of customers. Due to demographic trends, Polish society will have to face the challenge of long-term saving in order to secure its future. The Group's investment offer will allow customers to build their wealth in a convenient and individualized way. The aim of the Strategy is to increase Bank’s share in households savings to 27% during the next 3 years, mainly thanks to a comprehensive offer tailored to all customer segments - from school education, through additional pension savings, to the expansion of the offer for private banking customers. The achievement of this target will depend on regulatory requirements, e.g. supervisors’ approach to including long-term deposits in the long-term funding requirement (WFD). In addition, the Bank also intends to become a bancassurance leader by exploiting the scale of the Group's business.
• Pillar 4. Number 1 in accessibility for customers – in branches and digitally. More than half of customers in Poland still expect physical presence in the branch when making complex financial decisions, which shows that the role of branches as advisory and support centers is still very important. By 2027, the Bank intends to maintain the full branch availability, changing their role based on the current needs of customers and modern service standards. The digital channel will be equally important as the Bank plans to improve remote processes and offer its customers an even better experience. The aim of the Strategy is to increase the number of branches operating in a modern format up to a total of 600 in 2027 (out of the currently existing 881).
• Pillar 5. Number 1 as a partner for Polish business. The Polish economy is in the final stage of transformation towards a developed market. This is an opportunity for Polish companies. The Bank will become an increasingly strong partner of Polish business, providing a wide range of products and services, as well as delivering customer services based on strong The objective of the Strategy is to increase the share of financing for business customers from 16.5% to 18.0%.
• Pillar 6. Number 1 in energy transformation financing. Poland relies heavily on non-renewable energy sources. Bank recognizes the need to support the country's energy transition and intends to be a leader in financing over 20% of the total expenditures needed to implement this venture.
• Pillar 7. Number 1 as a Polish bank in Europe. The Group is currently present in four European countries other than Poland – in Germany, Czechia, Slovakia, and Ukraine. In the Strategy, further expansion to another nine European countries is planned.

Furthermore, it is our strategic priority to increase the effectiveness and the efficiency of the Group, in particular through:

• strengthening the PKO Bank Polski brand as the most recognizable and preferred banking brand;
• creating a new organizational culture supporting employee engagement;
• transforming in terms of sustainable development;
• effective risk management with the use of state-of-the-art technology;
• modern technology (including AI) supporting business;
• ensuring efficient internal processes and operations.

Description of the main assumptions of the Strategy along with their context, pillars, as well as business and financial objectives is included in the appendix to this report.

Legal Disclaimer

Presented materials include forward-looking statements. These forward-looking statements are based on current knowledge and opinions of the Bank’s Management Board and involve a number of known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Bank to be materially different from information contained herein.

Presented information should not be treated as a part of any invitation or offer to sell any securities, invest or deal in or a solicitation of an offer to purchase any securities or recommendation to conclude any transaction, in particular with respect to securities of the Bank.

Furthermore, the Bank hereby announces that these objectives and targets included in the Strategy are not a forecast or estimate of results, including financial results, and concern only the intended directions of the Bank’s activities in 2025-2027. Unless such reporting obligation arises under applicable laws, the Bank shall not publish any updates, modifications or revisions of the information, data or statements contained in the report or attached material, as well as the Bank shall not publish information on any change in the Strategy or intentions of the Bank, or occurrence of facts or events that affect the Bank’s Strategy or intentions.

The content of these materials does not constitute explicit or implicit representation, ensurance or warranty made by the Bank or its representatives. Likewise, neither the Bank nor any of its representatives shall be liable in any respect whatsoever for any loss or damage that may arise from the use of this information or of any information contained herein or otherwise arising in connection with this information.

Certain information contained in the attached material are derived from publicly available sources which the Bank believes are reliable, but the Bank does not make any representation as to their accuracy or completeness. Information contained in the attached material is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by the Bank. Information contained in this material has not been independently verified and is, in any case, subject to changes and modifications.

The attached material includes financial information or indicators that were not subject of an audit, a review or any other evaluation by any external auditor.