MBank S A : The individual recommendation of the Polish Financial Supervision Authority regarding the...

With reference to the current report No 26/2021 dated July 1, 2021, the Management Board of mBank S.A. ('Bank') informs that on July 15, 2021, the Bank received from the Polish Financial Supervision Authority ('PFSA') a letter dated July 15, 2021, in which the PFSA recommends to mitigate the risk of the Bank's operations by not paying the dividend from the net profit generated between January 1 and December 31, 2020, as well as refraining from undertaking, without prior consultation with the supervisory authority, other actions, in particular those outside the scope of current business and operating activities, which may result in a reduction of the capital base, including possible dividend payments from retained earnings from previous years (i.e. from 2019 and earlier) and buybacks of own shares.

In its recommendation, the PFSA confirmed that as of March 31, 2021 (Bank's quarterly data on own funds) and May 31, 2021 (Bank's monthly data on receivables portfolio), in terms of the basic criteria of the dividend policy of commercial banks, the Bank met the requirements for dividend payment in the amount up to 75% of the net profit generated between January 1 and December 31, 2020. After applying additional criteria related to a significant portfolio of foreign currency housing loans for households held by the Bank, the dividend payout ratio was adjusted by 90 p.p. Consequently, the dividend payout ratio after application of the additional criteria amounts to 0%.