Information on factors affecting the Bank’s financial results and capital ratios

Getin Noble Bank S.A. (the “Bank”) informs that on 15 February 2021, the Management Board of the Bank decided to recognise an additional portfolio reserve for legal risk associated with mortgage and housing loan agreements indexed to CHF, in the amount of PLN 110 million, which will reduce the Bank’s result in Q4 2020 on a consolidated and individual basis.

The Bank points out that the above data will still undergo final verification by the auditor. Until the end of the audit, the financial statements for 2020 may be changed.

The above decision, accompanied by simultaneous reduction of own funds by another tranche of amortisation of the impact of IFRS 9 implementation in January this year, in the amount of PLN 222 million, as well as inclusion, in the preliminary financial result for January this year, of the estimated provision for contributions to the Bank Guarantee Fund (the provision for the annual contribution to the bank resolution fund and the provision for the quarterly contribution to the deposit guarantee scheme), resulted in lowering of the total capital ratio (TCR) as at 31 January 2021 to a level below 8%, i.e. below the threshold resulting from Article 92(1)(c) of the Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms (the “CRR”) (Pillar 1).

According to the preliminary data of the Bank, the total capital ratio (TCR) as at 12 February 2021 was 7.5%, i.e. 0.5 p.p. below the threshold specified in Article 92(1)(c) of the CRR. The above calculation was based on the best and most recent knowledge of the Bank.

The Bank points out that although the above elements were decisive for the reduction of the total capital ratio (TCR), external factors, independent of the operating activities, also had a significant impact on the Bank’s capital standing. These include the events which occurred throughout 2020, resulting from the deterioration of market conditions due to the spread of the COVID-19 coronavirus pandemic, including, in particular, interest rate reductions, which reduced the Bank’s income potential, as well as appreciation of the Swiss franc exchange rate, visible compared to the level in the analogous period of the previous year, which directly translated into an increase in the valuation of some risk-weighted assets held by the Bank.

The Bank emphasises that it monitors the current economic situation on an ongoing basis and makes decisions aimed to ensure the security and safety of all of its stakeholders, in particular its clients. The Bank takes active measures to adapt its functions to the changing environment as best as possible and warrants that it is going to implement any measures necessary to improve capital ratios.

Legal basis: Article 17 paragraph 1 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation)