Powszechna Kasa Oszczednosci Bk Plski : Report No. 31/2018 – PFSA letter imposing on PKO Bank Polski S.A. the amount of an additional capital requirement for the Bank’s Group

Legal basis:

Article 17.1 MAR Regulation

Contents of the Report:

The Management Board of PKO Bank Polski S.A. ('Bank') reports that on 29 November 2018 received the letter from the Polish Financial Supervision Authority ('PFSA') concerning imposing on the Bank the amount of an additional capital requirement over the amount calculated in accordance with the appropriate legal provisions for the Bank's Group, in lower than previously established amount.

The PFSA imposed on the Bank the additional capital requirement covering the risk of the foreign currency mortgage loans for households at amount 0.42 p.p. for the Bank's Group, over the amount of total capital ratio. The amount of the required total capital ratio is described in the article 92 item 1 letter c of the regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions ('Regulation'). The additional capital requirement should be covered at least in 75% by Tier 1 funds, equivalent to own funds requirement of 0.31 p.p. over the amount of Tier 1 funds, calculated in accordance with article 92 item 1 letter b of the Regulation.

Until receiving the above-mentioned letter, the Bank was obliged by the PFSA to maintain own funds for the coverage of additional capital requirement covering the risk of the above-mentioned mortgage loans for the Bank's Group at the level of 0.61 p.p., which consisted of at least 75% of Tier 1 capital (equivalent to 0.46 p.p.). The Bank informed about this fact in the report No. 46/2017.

The Bank fulfills the PFSA requirement related to the minimum capital adequacy ratios on both the standalone and consolidated levels.