Disclosures on capital adequacy of the Bank Pekao S.A. Capital Group as at 30 June, PDF Free Download

This document is a free translation of the Polish original. Terminology current in Anglo-Saxon countries has been used where practicable for the purposes of this translation in order to aid understanding. The binding Polish original should be referred to in matters of interpretation. Disclosures on capital adequacy of the Bank Pekao S.A. Capital Group Warsaw, August 2018

Table of content Introduction... 3 1. Own funds and prudential consolidation... 3 1.1. Outline of the differences in consolidation... 4 1.2. Own funds... 6 1.3. Common Equity Tier 1 capital... 12 1.4. Common Equity Tier 1 capital regulatory adjustments... 12 1.5. Tier 2 capital... 13 2. Capital adequacy assessment... 13 3. Macroprudential supervisory measures... 15 4. Information on risk... 20 4.1. Risk management objectives and strategies... 20 4.2. Credit risk, including counterparty risks... 20 4.3. Market risk, including interest rate risk... 32 4.4. Operational risk... 33 4.5. Liquidity risk... 33 4.6. Risk of excessive financial leverage... 35 4.7. Internal capital adequacy assessment... 37 5. Impact of IFRS 9 implementation on capital adequacy... 39 6. Declaration of the Management Board of Bank Pekao S.A.... 41 2

Introduction Capital adequacy is defined as an extent to which risks taken by Bank Pekao S.A. (hereinafter: Bank ) (measured through capital requirement) can be absorbed by risk coverage capital (measured by own funds) at given significance level (a risk appetite) and at given time horizon. The Bank plans and monitors capital adequacy at two levels: 1. Regulatory requirement (Pillar I) where regulatory capital requirement is compared with regulatory own funds (regulatory capital), 2. Internal models (Pillar II) where internal capital calculated using internal methods is compared with available financial resources specified by Bank. Information Policy of Bank Pekao S.A. (hereinafter: Information policy ) defines scope and principles of publishing information on capital adequacy specified in 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 and amending Regulation (EU) No. 648/2012, with further amendments as well as Commission Implementing and Delegated Regulations (EU) (hereinafter: CRR or Regulation 575/2013 ). The information policy introduced by a resolution of the Bank s Management Board and approved by the Supervisory Board, is published on the website of Bank. Bank is EU parent institution and according to Information policy disclosures information in this document according to requirements laid-down in Article 13 of Regulation 575/2013 on consolidated basis (prudential consolidation). Disclosures are published on the website of Bank at the time of the Bank Pekao S.A. Group s (hereinafter: Group ) financial statements publication and present information defined in Information policy. Disclosures reflects also the EBA/GL/2016/11 Guidelines on discloser requirements under Part Eight of Regulation (EU) No. 575/2013 (hereinafter: EBA/GL/2016/11 Guidelines ). This document includes information based on calculations made according to the law binding at 30 June 2018. The published information is verified by an auditor, then the information is approved by the Management Board of the Bank and acknowledged by the Supervisory Board. 1. Own funds and prudential consolidation Bank determines own funds in line with the law binding at 30 June 2018, particularly with Regulation 575/2013 and The Banking Law Act of 29 August 1997 with further amendments (hereinafter: Banking Act ). Bank disclose information about own funds according to Regulation 575/2013, requirements presented in Commission Implementing Regulation (EU) No. 1423/2013 of 20 December 2013 laying down implementing technical standards with regard to disclosure of own funds requirements for institutions according to Regulation 575/2013 (hereinafter: Regulation 1423/2013 ) and Guidelines EBA/GL/2018/01 on uniform disclosures under Article 473a of Regulation (EU) No 575/2013 as regards the transitional period for mitigating the impact of the introduction of IFRS 9 on own funds (hereinafter: Guidelines EBA/GL/2018/01 ) connected with application of transitional arrangements of introduction of IFRS 9. According to these regulations, own funds comprise of the following items: Common Equity Tier 1 capital which includes i.e.: capital instruments and related share premium, retained earnings, accumulated other comprehensive income, other reserves, funds for general banking risk, Additional Tier 1 capital which includes i.e.: capital instruments, where the conditions laid down in Article 52 of Regulation 575/2013 are met and the share premium related to these instruments, Tier 2 capital which includes i.e.: capital instruments and subordinated loans where the conditions laid down in Article 63 of Regulation 575/2013 are met, the share premium related to these capital instruments and subordinated loans, general credit risk adjustments. 3

All mentioned capitals are subject to deduction adjustments and application of prudential filters. Own funds consist of capital and funds raised by subsidiaries of the Group in line with the binding law. 1.1. Outline of the differences in consolidation Table no. 1 presents differences between accounting and regulatory scopes of consolidation. The carrying amounts disclosed in the statement of financial position in regulatory approach are different from the values presented in the statement of financial position presented in the Condensed Consolidated Interim Financial Statements of Bank Pekao S.A. Group for the period from 1 January 2018 to 30 June 2018 only due to the application of various consolidation rules. Table 1. Differences between accounting and regulatory scopes of consolidation (in PLN thousand). ITEM CARRYING VALUES AS REPORTED IN PUBLISHED FINANCIAL STATEMENTS CARRYING VALUES UNDER SCOPE OF REGULATORY CONSOLIDATION Assets A.1 Cash and due from Central Bank 8 014 221 8 014 221 A.2 Loans and advances to banks 3 480 658 3 480 658 A.3 Financial assets held for trading 1 327 945 1 327 945 A.4 Derivative financial instruments (held for trading) 1 236 083 1 236 083 A.5 Loans and advances to customers 117 839 500 117 842 032 A.6 Receivables from finance leases 4 671 461 4 671 508 A.7 Hedging instruments 144 476 144 476 A.8 Investments (placement) securities 41 712 770 41 712 770 A.9 Assets held for sale 48 207 48 207 A.10 Investments in subsidiaries - 69 489 A.11 Investments in associates - - A.12 Intangible assets 1 491 109 1 491 109 A.13 Property, plant and equipment 1 366 616 1 366 535 A.14 Investment properties 11 315 11 315 A.15 Income tax assets 1 139 269 1 140 426 A.15.1 Deferred tax assets that rely on future profitability excluding temporary differences assets 24 047 24 047 A.17 Other assets 1 019 869 1 025 395 TOTAL ASSETS 183 503 499 183 582 169 4

ITEM CARRYING VALUES AS REPORTED IN PUBLISHED FINANCIAL STATEMENTS CARRYING VALUES UNDER SCOPE OF REGULATORY CONSOLIDATION Liabilities L.1 Amounts due to Central Bank 6 028 6 028 L.2 Amounts due to other banks 5 458 120 5 457 722 L.3 Financial liabilities held for trading 425 903 425 903 L.4 Derivative financial instruments (held for trading) 1 450 668 1 450 668 L.5 Amounts due to customers 142 933 248 143 012 703 L.6 Hedging instruments 1 012 635 1 012 635 L.7 Debt securities issued 3 882 304 3 882 304 L.8 Subordinated liabilities 1 257 013 1 257 013 L.9 Income tax liabilities 161 946 161 921 L.9.1 Deferred tax liabilities on intangible assets 67 928 67 928 L.10 Provisions 659 685 659 670 L.11 Other liabilities 4 804 494 4 808 497 TOTAL LIABILITIES 162 052 044 162 135 064 Equity L.12 Share capital 262 470 262 470 L.13 Other capital and reserves 20 855 492 20 851 332 L.13.1 Share premium 9 137 221 9 137 221 L.13.2 Other reserve capital 9 543 322 9 539 162 L.13.3 General banking risk fund 1 982 459 1 982 459 L.13.4 Accumulated other comprehensive income 192 490 192 490 L.13.4.1 Revaluation of hedging financial instruments (11 561) (11 561) L.13.4.2 Unrealised gains/losses from revaluation of financial assets measured at fair value through other comprehensive income 276 734 276 734 L.13.4.3 Remeasurements of the defined benefit liabilities (72 683) (72 683) L.13.4.4 Foreign currency translation differences - - L.14 Profit from current year and previous years 322 483 322 293 L.14.1 Retained earnings from previous years (609 657) (605 129) L.14.2 Profit of the current year 932 140 927 422 L.15 Non - controlling interests 11 010 11 010 TOTAL EQUITY 21 451 455 21 447 105 TOTAL LIABILITIES AND EQUITY 183 503 499 183 582 169 5

1.2. Own funds Table no. 2, according to Regulation 1423/2013, presents information about own funds components used to calculate total capital ratio as at 30 June 2018. Given the clarity and value in use of the document for the readers, the disclosure in table no. 2 is limited to non-zero positions, while maintaining the numbering of the lines with the template presented in the Annex VI of the Regulation 1423/2013. Additionally in table no. 2 are presented references between positions of Group s own funds, as well as used filters and deductions on own funds and statement of financial position items in financial statement. Table 2. Own funds used to calculate consolidated capital ratios (in PLN thousand). 30.06.2018 AMOUNTS SUBJECT TO PRE-REGULATION 575/2013 TREATMENT OR PRESCRIBED RESIDUAL AMOUNT OF REGULATION 575/2013 REFERENCE COMMON EQUITY TIER 1 CAPITAL: INSTRUMENTS AND RESERVES 1 Capital instruments and the related share premium accounts 9 399 691 - Tab. 1 point L.12 and point L.13.1 2 Retained earnings (605 131) - Tab. 1 point L.14.1 3 Accumulated other comprehensive income (and other reserves) 9 731 652 - Tab. 1 point L.13.2 and point L.13.4 3a Funds for general banking risk 1 982 459 - Tab. 1 point L.13.3 6 Common Equity Tier 1 (CET1) capital before regulatory adjustments 20 508 671 - COMMON EQUITY TIER 1 (CET1) CAPITAL: REGULATORY ADJUSTMENTS 7 Additional value adjustments (negative amount) (44 820) - 8 Intangible assets (net of related tax liability) (negative amount) (1 423 181) - Tab. 1 point A.12 and L.9.1 10 Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability where the conditions in Article 38(3) are met) (24 047) - Tab. 1 point A.15.1 11 Fair value reserves related to gains or losses on cash flow hedges 11 561 - Tab. 1 point L.13.4.1 26b Adjustments regarding the mitigation of the impact of introduction IFRS 9 in the transition period 842 421-28 Total regulatory adjustment to Common Equity Tier 1 (CET1) (638 066) - 29 Common Equity Tier 1 (CET1) capital 19 870 605 - ADJUSTMENTS ADDITIONAL TIER 1 (AT1) CAPITAL: INSTRUMENTS 36 Additional Tier 1 (AT1) capital before regulatory adjustments - - ADDITIONAL TIER 1 (AT1) CAPITAL: REGULATORY ADJUSTMENTS 43 Total regulatory adjustments to Additional Tier 1 (AT1) capital - - 44 Additional Tier 1 (AT1) capital - - 45 Tier 1 capital (T1= CET1+AT1) 19 870 605 - ADJUSTMENTS TIER 2 (T2) CAPITAL: INSTRUMENTS AND PROVISIONS 46 Capital instruments and the related share premium accounts 1 250 000 - Tab. 1 point L.8 51 Tier 2 (T2) capital before regulatory adjustments 1 250 000 - TIER 2 (T2) CAPITAL: REGULATORY ADJUSTMENTS 57 Total regulatory adjustments to Tier 2 (T2) capital - - 58 Tier 2 (T2) capital 1 250 000-59 Total capital (TC=T1+T2) 21 120 605-60 Total risk weighted assets 121 646 622-6

30.06.2018 AMOUNTS SUBJECT TO PRE-REGULATION 575/2013 TREATMENT OR PRESCRIBED RESIDUAL AMOUNT OF REGULATION 575/2013 CAPITAL RATIOS AND BUFFERS 61 Common Equity Tier 1 (as a percentage of risk exposure amount) 16.33-62 Tier 1 (as a percentage of risk exposure amount) 16.33-63 Total capital (as a percentage of risk exposure amount) 17.36-64 Institution specific buffer requirement (CET1 requirement in accordance with Article 92(1)(a) plus capital conservation and countercyclical buffer requirements, plus systemic risk buffer, plus the systemically important institution buffer (G-SII or O-SII buffer), expressed as a percentage of risk exposure amount) 5.38-65 of which: capital conservation buffer requirements 1.88-66 of which: countercyclical buffer requirements 0.00-67 of which: systemic risk buffer requirements 3.00 67a of which: Global Systemically Important Institution (G-SII) or Other Systemically Important Institution (O-SII) buffer 0.50-68 Common Equity Tier 1 available to meet buffers (as a percentage of risk exposure amount 9.34 - AMOUNTS BELOW THE THRESHOLDS FOR DEDUCTION (BEFORE RISK WEIGHTING) Direct and indirect holdings of the capital of financial sector entities 72 where the institution does not have a significant investment in those entities (amount below 10% threshold and net of eligible short positions) 79 116-75 Deferred tax assets arising from temporary differences (amount below 10% threshold, net of related tax liability where the conditions in Article 38(3) are met) REFERENCE Tab. 1 point A.8, point A.10 and point A.11 1 116 055 - Tab. 1 point A.15 Detailed description of main characteristics of capital instruments are presented in table no. 3. 7

Table 3. Capital instruments main characteristics. SERIES A SERIES B SERIES C 1 Issuer Bank Pekao S.A. Bank Pekao S.A. Bank Pekao S.A. 2 Unique identifier (e.g. CUSIP, ISIN or Bloomberg identifier for private placement) ISIN: PLPEKAO00016 ISIN: PLPEKAO00016 ISIN: PLPEKAO00016 3 Governing law(s) of the instrument Polish law Polish law Polish law Regulatory treatment 4 Transitional CRR rules Tier 1 Tier 1 Tier 1 5 Post-transitional CRR rules Tier 1 Tier 1 Tier 1 6 Eligible at solo/(sub-)consolidated / solo & (sub-)consolidated Solo / Consolidated Solo / Consolidated Solo / Consolidated 7 Instrument type (types to be specified by each jurisdiction) Ordinary shares, Art. 50 CRR Ordinary shares, Art. 50 CRR Ordinary shares, Art. 50 CRR 8 Amount recognised in regulatory capital (currency in million, as of most recent reporting date) PLN 137 650 000 PLN 7 690 000 PLN 10 630 632 9 Nominal amount of instrument PLN 1.00 PLN 1.00 PLN 1.00 9a Issue price PLN 1.00 PLN 45.00 PLN 49.00 9b Redemption price - - - 10 Accounting classification Share capital Share capital Share capital 11 Original date of issuance 21.12.1997 6.10.1998 12.12.2000 12 Perpetual or dated Perpetual Perpetual Perpetual 13 Original maturity date Without maturity Without maturity Without maturity 14 Issuer call subject to prior supervisory approval - - - 15 Optional call date, contingent call dates and redemption amount - - - 16 Subsequent call dates, if applicable - - - Coupons / dividends - - - 17 Fixed or floating dividend/coupon Variable dividend Variable dividend Variable dividend 18 Coupon rate and any related index - - - 19 Existence of a dividend stopper No No No 20a Fully discretionary, partially discretionary or mandatory (in terms of timing) - - - 20b Fully discretionary, partially discretionary or mandatory (in terms of amount) - - - 21 Existence of step-up or other incentive to redeem No No No 22 Noncumulative or cumulative Not accumulated Not accumulated Not accumulated 23 Convertible or non-convertible Interchangeable Interchangeable Interchangeable 24 If convertible, conversion trigger(s) - - - 25 If convertible, fully or partially - - - 26 If convertible, conversion rate - - - 27 If convertible, mandatory or optional conversion - - - 28 If convertible, specify instrument type convertible into - - - 29 If convertible, specify issuer of instrument it converts into - - - 30 Write-down features No No No 31 If write-down, write-down trigger(s) - - - 32 If write-down, full or partial - - - 33 If write-down, permanent or temporary - - - 34 If temporary write-down, description of write-up mechanism - - - 35 Position in subordination hierarchy in liquidation (specify instrument type immediately senior to instrument) - - - 36 Non-compliant transitioned features No No No 37 If yes, specify non-compliant features - - - 8

SERIES D SERIES E SERIES F 1 Issuer Bank Pekao S.A. Bank Pekao S.A. Bank Pekao S.A. 2 Unique identifier (e.g. CUSIP, ISIN or Bloomberg identifier for private placement) ISIN: PLPEKAO00016 ISIN: PLPEKAO00016 ISIN: PLPEKAO00016 3 Governing law(s) of the instrument UK / US law Polish law Polish law Regulatory treatment 4 Transitional CRR rules Tier 1 Tier 1 Tier 1 5 Post-transitional CRR rules Tier 1 Tier 1 Tier 1 6 Eligible at solo/(sub-)consolidated / solo & (sub-)consolidated Solo / Consolidated Solo / Consolidated Solo / Consolidated 7 Instrument type (types to be specified by each jurisdiction) Ordinary shares, Art. 50 CRR Ordinary shares, Art. 50 CRR Ordinary shares, Art. 50 CRR 8 Amount recognised in regulatory capital (currency in million, as of most recent reporting date) PLN 9 777 571 PLN 373 644 PLN 621 411 9 Nominal amount of instrument PLN 1.00 PLN 1.00 PLN 1.00 9a Issue price PLN 49.00 PLN 55.00 PLN 108.37 9b Redemption price - - - 10 Accounting classification Share capital Share capital Share capital 11 Original date of issuance 12.12.2000 29.08.2003 9.03.2006-14.05.2007 12 Perpetual or dated Perpetual Perpetual Perpetual 13 Original maturity date Without maturity Without maturity Without maturity 14 Issuer call subject to prior supervisory approval - - - 15 Optional call date, contingent call dates and redemption amount - - - 16 Subsequent call dates, if applicable - - - Coupons / dividends - - - 17 Fixed or floating dividend/coupon Variable dividend Variable dividend Variable dividend 18 Coupon rate and any related index - - - 19 Existence of a dividend stopper No No No 20a Fully discretionary, partially discretionary or mandatory (in terms of timing) - - - 20b Fully discretionary, partially discretionary or mandatory (in terms of amount) - - - 21 Existence of step-up or other incentive to redeem No No No 22 Noncumulative or cumulative Not accumulated Not accumulated Not accumulated 23 Convertible or non-convertible Interchangeable Interchangeable Interchangeable 24 If convertible, conversion trigger(s) - - - 25 If convertible, fully or partially - - - 26 If convertible, conversion rate - - - 27 If convertible, mandatory or optional conversion - - - 28 If convertible, specify instrument type convertible into - - - 29 If convertible, specify issuer of instrument it converts into - - - 30 Write-down features No No No 31 If write-down, write-down trigger(s) - - - 32 If write-down, full or partial - - - 33 If write-down, permanent or temporary - - - 34 If temporary write-down, description of write-up mechanism - - - 35 Position in subordination hierarchy in liquidation (specify instrument type immediately senior to instrument) - - - 36 Non-compliant transitioned features No No No 37 If yes, specify non-compliant features - - - 9

SERIES G SERIES H SERIES I 1 Issuer Bank Pekao S.A. Bank Pekao S.A. Bank Pekao S.A. 2 Unique identifier (e.g. CUSIP, ISIN or Bloomberg identifier for private placement) ISIN: PLPEKAO00016 ISIN: PLPEKAO00016 ISIN: PLPEKAO00016 3 Governing law(s) of the instrument Polish law Polish law Polish law Regulatory treatment 4 Transitional CRR rules Tier 1 Tier 1 Tier 1 5 Post-transitional CRR rules Tier 1 Tier 1 Tier 1 6 Eligible at solo/(sub-)consolidated / solo & (sub-)consolidated Solo / Consolidated Solo / Consolidated Solo / Consolidated 7 Instrument type (types to be specified by each jurisdiction) Ordinary shares, Art. 50 CRR Ordinary shares, Art. 50 CRR Ordinary shares, Art. 50 CRR 8 Amount recognised in regulatory capital (currency in million, as of most recent reporting date) PLN 603 377 PLN 359 840 PLN 94 763 559 9 Nominal amount of instrument PLN 1.00 PLN 1.00 PLN 1.00 9a Issue price PLN 123.06 PLN 66.00 PLN 256.69 9b Redemption price - - - 10 Accounting classification Share capital Share capital Share capital 11 Original date of issuance 6.02.2008-24.01.2013 12.08.2004 29.11.2007 12 Perpetual or dated Perpetual Perpetual Perpetual 13 Original maturity date Without maturity Without maturity Without maturity 14 Issuer call subject to prior supervisory approval - - - 15 Optional call date, contingent call dates and redemption amount - - - 16 Subsequent call dates, if applicable - - - Coupons / dividends - - - 17 Fixed or floating dividend/coupon Variable dividend Variable dividend Variable dividend 18 Coupon rate and any related index - - - 19 Existence of a dividend stopper No No No 20a Fully discretionary, partially discretionary or mandatory (in terms of timing) - - - 20b Fully discretionary, partially discretionary or mandatory (in terms of amount) - - - 21 Existence of step-up or other incentive to redeem No No No 22 Noncumulative or cumulative Not accumulated Not accumulated Not accumulated 23 Convertible or non-convertible Interchangeable Interchangeable Interchangeable 24 If convertible, conversion trigger(s) - - - 25 If convertible, fully or partially - - - 26 If convertible, conversion rate - - - 27 If convertible, mandatory or optional conversion - - - 28 If convertible, specify instrument type convertible into - - - 29 If convertible, specify issuer of instrument it converts into - - - 30 Write-down features No No No 31 If write-down, write-down trigger(s) - - - 32 If write-down, full or partial - - - 33 If write-down, permanent or temporary - - - 34 If temporary write-down, description of write-up mechanism - - - 35 Position in subordination hierarchy in liquidation (specify instrument type immediately senior to instrument) - - - 36 Non-compliant transitioned features No No No 37 If yes, specify non-compliant features - - - 10

BONDS SERIES A 1 Issuer Bank Pekao S.A. 2 Unique identifier (e.g. CUSIP, ISIN or Bloomberg identifier for private placement) ISIN: PLPEKAO00289 3 Governing law(s) of the instrument Polish law Regulatory treatment 4 Transitional CRR rules Tier 2 5 Post-transitional CRR rules Tier 2 6 Eligible at solo/(sub-)consolidated / solo & (sub-)consolidated Solo / Consolidated 7 Instrument type (types to be specified by each jurisdiction) Subordinated bonds, Art. 62 CRR 8 Amount recognised in regulatory capital (currency in million, as of most recent reporting date) PLN 1 250 000 000 9 Nominal amount of instrument PLN 1 000.00 9a Issue price PLN 1 000.00 9b Redemption price PLN 1 000.00 10 Accounting classification Financial liabilities amortized cost 11 Original date of issuance 30.10.2017 12 Perpetual or dated Dated 13 Original maturity date 29.10.2027 14 Issuer call subject to prior supervisory approval Yes 15 Optional call date, contingent call dates and redemption amount 29.10.2022, PLN 1 250 000 000 16 Subsequent call dates, if applicable - Coupons / dividends - 17 Fixed or floating dividend/coupon Floating coupon 18 Coupon rate and any related index Wibor 6M + margin 19 Existence of a dividend stopper - 20a Fully discretionary, partially discretionary or mandatory (in terms of timing) Mandatory 20b Fully discretionary, partially discretionary or mandatory (in terms of amount) Mandatory 21 Existence of step-up or other incentive to redeem No 22 Noncumulative or cumulative Not accumulated 23 Convertible or non-convertible Interchangeable 24 If convertible, conversion trigger(s) - 25 If convertible, fully or partially - 26 If convertible, conversion rate - 27 If convertible, mandatory or optional conversion - 28 If convertible, specify instrument type convertible into - 29 If convertible, specify issuer of instrument it converts into - 30 Write-down features No 31 If write-down, write-down trigger(s) - 32 If write-down, full or partial - 33 If write-down, permanent or temporary - 34 If temporary write-down, description of write-up mechanism - 35 Position in subordination hierarchy in liquidation (specify instrument type immediately Gratification last in the event of the senior to instrument) Issuer's bankruptcy or its liquidation 36 Non-compliant transitioned features No 37 If yes, specify non-compliant features - In next chapters main positions of Common Equity Tier 1 capital and Tier 2 capital are described. The Group has no Additional Tier 1 capital. 11

1.3. Common Equity Tier 1 capital Capital instruments in Common Equity Tier 1 capital in amount of PLN 9 399 691 thousand apply only to Bank s share capital as parent undertaking and its value is shown according to statute and an entry in the register of entrepreneurs by nominal value. The number of shares is 262 470 034, all shares are ordinary bearer shares, entirely paid, with nominal value per one share equals PLN 1. Share premium related to these capital instruments arose with their issuance above their nominal value equals to PLN 9 137 221 thousand. Retained earnings defined as previous year retained earnings plus the eligible interim or year-end profits according to International Accounting Standards amount PLN (605 131) thousand and concern, among others introduction of IFRS 9. Current reporting period net profit verified by the statutory auditor, reduced by all foreseeable charges and dividend, can be included into Common Equity Tier 1 capital only with the permission of Polish Financial Supervision Authority (hereinafter: KNF ). At 30 June 2018, Bank s current profit for 2018 was not included into this position. Accumulated other comprehensive income defined according to International Accounting Standards, amounted to PLN 192 490 thousand are presented after deduction of any tax charge foreseeable at the moment of its calculation and before use of prudential filters. Other reserves defined as capital in the meaning of applicable accounting standards, are required to be disclosed under that applicable accounting standard, excluding any amounts already included in accumulated other comprehensive income or retained earnings. Other reserves are presented net of any tax charge foreseeable at the moment of the calculation and amount PLN 9 539 162 thousand. Funds for general banking risk in amount PLN 1 982 459 thousand is created from profit after tax according to Banking Act. 1.4. Common Equity Tier 1 capital regulatory adjustments Intangible assets (after reduction by the amount of associated deferred tax liabilities), which amount to PLN 1 423 181 thousand, decrease Common Equity Tier 1 capital. Reserves related to gains or losses on cash flow hedges of financial instruments that are not valued at fair value, including projected cash flows in amount of PLN 11 561 thousand are excluded from the accumulated other comprehensive income, according to Article 33(a) of Regulation 575/2013. Adjustments in transitional period in amount PLN 842 421 thousand resulting from introduction of IFRS9. Additional value adjustments due to prudential valuation are applied for every asset measured at fair value, according to Article 34 of Regulation 575/2013 and amount to PLN 44 820 thousand. Deferred tax assets that rely on future profitability and do not arise from temporary differences, decrease Common Equity Tier 1 capital according to Article 36 of Regulation 575/2013 in the amount of PLN 24 047 thousand. 12

1.5. Tier 2 capital Subordinated bonds series A were issued on 30 October 2017 and are included in the Tier 2 capital, according to the approval of the KNF of 21 December 2017. As at 30 June 2018 their value of PLN 1 250 000 thousand was recognized in own funds. 2. Capital adequacy assessment The objective of capital adequacy assessment according to regulatory requirement is to ensure that banks maintain minimum capital levels calculated using common framework. Capital requirements were calculated (for credit risk, market risk and operational risk) at consolidated level as at 30 June 2018, according to the Regulation 575/2013 using following approaches (in brackets particular articles of Regulation 575/2013 are presented): Standardised Approach for credit risk (Part III, Title II, Chapter 2), Financial Collateral Comprehensive Method for credit risk mitigation (Part III, Title II, Chapter 4), Mark-to-Market Method for counterparty credit risk (Part III, Title II, Chapter 6), Standardised Approach for specific risk and duration-based calculation for general risk of debt instruments (Part III, Title IV, Chapter 2, Section 2), Standardised Approach for general and specific risk of equity instruments (Part III, Title IV, Chapter 2, Section 3), Standardised Approach for pre-funded contributions to the default fund of a qualifying central counterparty (Part III, Title II, Chapter 6), Standardised Approach for foreign-exchange risk (Part III, Title IV, Chapter 3), Simplified Approach for commodities risk (Part III, Title IV, Chapter 4), Standardised Approach for credit risk valuation adjustment risk (Part III, Title VI), Advanced Measurement Approach for operational risk (Part III, Title III, Chapter 4) for the Bank and Standardised Approach (Part III, Title III, Chapter 3) for the subsidiaries of the Bank. According to law, Group is required to maintain minimal values of capital ratios resulting from Pillar I level resulting from art. 92 of Regulation 575/2013, capital requirement of Pillar II resulting from art. 138.1 point. 2a of The Banking Act and combined buffer requirement resulting from Act of 5 August 2015 on macroprudential supervision over the financial system and crisis management entered into force since 1 January 2016 in scope of capital buffers (hereinafter: Act on macroprudential supervision ). Pillar II buffer referred to above, results from recommendation of KNF to banks with significant CHF mortgage loans exposure to maintain additional capital requirements. Pekao Bank Hipoteczny S.A., which is subsidiary of Bank, on 21 November 2017 was recommended to maintain a buffer in order to hedge risk arising from mortgage loans denominated in foreign currency to households 0.59 p.p., which should consist at least 75% of Tier 1 capital (which corresponds to 0.44 p.p.). Due to the low exposure of mortgage loans denominated in foreign currency in total credit portfolio, Bank did not receive such recommendation from the KNF. The additional capital requirement imposed on Pekao Bank Hipoteczny S.A. effects on consolidated capital requirement by 0.01 p.p. for total capital ratio and 0.0075 p.p. for Tier 1 capital ratio. Details of the combined buffer requirement are presented in Chapter 3 of Disclosures. Minimum capital ratios required by law which Bank is required to maintain are: Common Equity Tier I ratio (CET 1) in amount of 9.88%. Capital Tier I ratio (T1) in amount of 11.38%, Total capital ratio (TCR) in amount of 13.38%, The risk weighted assets and the regulatory capital requirements for above-mentioned risks as at 30 June 2018 are presented in the table no. 4 (in accordance with the EU OV1 template shown in the EBA/GL/2016/11 Guidelines) and the chart no. 1. The values of the regulatory capital ratios are presented in the table no. 5. 13

Table 4. Risk weighted amounts and capital requirements (in PLN thousand). TITLE RISK WEIGHTED AMOUNTS MINIMUM CAPITAL REQUIREMENTS 30.06.2018 31.12.2017 30.06.2018 1 Credit risk (excluding CCR) 112 229 387 110 198 021 8 978 351 2 of which the standardised approach 112 229 387 110 198 021 8 978 351 3 of which the foundation IRB (FIRB) approach - - - 4 of which the advanced IRB (AIRB) approach - - - 5 of which equity IRB under the simple risk-weighted approach or the IMA - - - 6 CCR 1 916 734 1 969 018 153 339 7 of which mark to market 1 438 678 1 433 731 115 094 8 of which original exposure - - - 9 of which the standardised approach - - - 10 of which internal model method (IMM) - - - 11 of which risk exposure amount for contributions to the default fund of a CCP 1 141 991 91 12 of which CVA 476 915 534 295 38 153 13 Settlement risk - - - 14 Securitisation exposures in the banking book (after the cap) - - - 15 of which IRB approach - - - 16 of which IRB supervisory formula approach (SFA) - - - 17 of which internal assessment approach (IAA) - - - 18 of which standardised approach - - - 19 Market risk 448 690 601 922 35 895 20 of which the standardised approach 448 690 601 922 35 895 21 of which IMA - - - 22 Large exposures - - - 23 Operational risk 7 051 811 7 010 633 564 145 24 of which basic indicator approach - - - 25 of which standardised approach 1 422 240 1 385 492 113 780 26 of which advanced measurement approach (*) 5 629 571 5 625 141 450 366 27 Amounts below the thresholds for deduction (subject to 250% risk weight) 2 296 125 2 314 600 183 690 28 Floor adjustment - - - 29 Total 121 646 622 119 779 594 9 731 730 (*) The Bank has obtained an approval for the calculation of regulatory capital for operational risk using the advanced method AMA. According to the KNF decision, the regulatory requirement used for reporting purposes is the higher one of two values: the requirement calculated using the advanced method or 50% of the requirement calculated using the standardised method. Due to the fact that the value calculated using the advanced AMA method is lower, the presented value is 50% of the regulatory requirement calculated using the standardised method. Table 5. Capital ratios (in PLN thousand). 30.06.2018 Total amount of risk exposure 121 646 622 Common Equity Tier 1 (CET1) 19 870 605 Tier 2 (T2) capital 1 250 000 Total capital (TC=T1+T2) 21 120 605 CET1 ratio (%) 16.33 T1 ratio (%) 16.33 TCR (%) 17.36 14

Chart 1. Regulatory capital requirements. Credit risk Operational risk Market risk Counterparty credit risk 0.4% 1.6% 5.8% 92.2% 3. Macroprudential supervisory measures On 1 January 2016 entered into force since Act on macroprudential supervision. According to this act, on 30 June 2018 Group has following buffers: 1. Capital conservation buffer of 1.875% which is based on Article 84 of Act on macroprudential supervision, 2. Other Systemically Important Institution (O-SII) buffer of 0.5%, 3. Institution specific countercyclical capital buffer of 0%, 4. Systemic risk buffer in amount of 3%. On 19 December 2017 KNF, pursuant to Article 46 of Act on macroprudential supervision, has imposed on the Bank, on the individual and consolidated basis, the Other Systemically Important Institution (O-SII) buffer in the amount of 0.5% of the total risk exposure, calculated in accordance to Article 92(3) of Regulation 575/2013. Since 1 January 2016 countercyclical capital buffer amounts 0% for credit exposures in Poland. This rate is in force until minister competent for financial institutions will change it via regulation. On 30 June 2018 such regulation has not been published. Group calculates institution specific countercyclical capital buffer taking into account credit exposures in other countries and theirs buffer rates. According to Minister of Finance Regulation of 1 September 2017, regarding systemic risk buffer, systemic risk buffer in amount of 3% of the total risk exposure is calculated in accordance to Article 92(3) of Regulation 575/2013 and applies only for credit exposures in Poland. Systemic risk buffer applies since 1st January 2018. Table no. 6 presents information on geographical location of the relevant credit exposures, according to Commission Delegated Regulation (EU) 2015/1555 of 28 May 2015 supplementing Regulation No. 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for the disclosure of information in relation to the compliance of institutions with the requirement for a countercyclical capital buffer (art. 440 of Regulation 575/2013). 15

Table 6. Geographical distribution of credit exposures relevant for the calculation of the countercyclical capital buffer (in PLN thousand). GENERAL CREDIT TRADING BOOK SECURITISATION OWN FUNDS REQUIREMENTS 30.06.2018 VALUE FOR STANDARDISED APPROACH VALUE IRB SUM OF LONG AND SHORT POSITION OF TRADING BOOK VALUE OF TRADING BOOK FOR INTERNAL MODELS VALUE FOR STANDARDISED APPROACH VALUE IRB OF WHICH: GENERAL CREDIT OF WHICH: TRADING BOOK OF WHICH: SECURITISATION TOTAL OWN FUNDS REQUIRE- MENTS WEIGHTS COUNTERCYCLICAL CAPITAL BUFFER RATE (%) 010 020 030 040 050 060 070 080 090 100 110 120 010 Breakdown by country PL Poland 141 476 187-687 649 - - - 8 412 911 3 643-8 416 554 0.98 0.00 SE Sweden 403 509 - - - - - 32 387 - - 32 387 0.00 0.00 GB United Kingdom 185 889-3 500 000 - - - 14 189 - - 14 189 0.00 0.50 LU Luxembourg 220 170 - - - - - 17 614 - - 17 614 0.00 0.00 IT Italy 213 582 - - - - - 16 181 - - 16 181 0.00 0.00 DE Germany 160 092 - - - - - 12 867 - - 12 867 0.00 0.00 CH Switzerland 127 364 - - - - - 10 189 - - 10 189 0.00 0.00 UA Ukraine 107 234 - - - - - 8 519 - - 8 519 0.00 - US United States 97 872 - - - - - 7 818 - - 7 818 0.00 0.00 GR Greece 81 497 - - - - - 5 - - 5 0.00 - FR France 75 247 - - - - - 6 212 - - 6 212 0.00 0.00 TR Turkey 50 978 - - - - - 4 065 - - 4 065 0.00 0.00 BS Bahama Islands 46 619 - - - - - 3 730 - - 3 730 0.00 - CY Cyprus 46 025 - - - - - 3 676 - - 3 676 0.00 - SI Slovenia 26 013 - - - - - 2 013 - - 2 013 0.00 - NL Netherlands 24 237 - - - - - 3 678 - - 3 678 0.00 0.00 AT Austria 20 025 - - - - - 1 616 - - 1 616 0.00 0.00 SK Slovakia 17 339 - - - - - 273 - - 273 0.00 0.50 BE Belgium 10 427 - - - - - 835 - - 835 0.00 0.00 CZ Czech Republic 9 047 - - - - - 722 - - 722 0.00 1.25 LI Liechtenstein 9 005 - - - - - 772 - - 772 0.00 - IL Israel 4 435 - - - - - 181 - - 181 0.00 - NO Norway 3 259 - - - - - 220 - - 220 0.00 2.00 RU Russia 2 609 - - - - - 153 - - 153 0.00 0.00 16

GENERAL CREDIT TRADING BOOK SECURITISATION OWN FUNDS REQUIREMENTS 30.06.2018 VALUE FOR STANDARDISED APPROACH VALUE IRB SUM OF LONG AND SHORT POSITION OF TRADING BOOK VALUE OF TRADING BOOK FOR INTERNAL MODELS VALUE FOR STANDARDISED APPROACH VALUE IRB OF WHICH: GENERAL CREDIT OF WHICH: TRADING BOOK OF WHICH: SECURITISATION TOTAL OWN FUNDS REQUIRE- MENTS WEIGHTS COUNTERCYCLICAL CAPITAL BUFFER RATE (%) 010 020 030 040 050 060 070 080 090 100 110 120 FI Finland 2 473 - - - - - 35 - - 35 0.00 - EE Estonia 2 399 - - - - - 192 - - 192 0.00 - IE Ireland 2 240 - - - - - 6 662 - - 6 662 0.00 - BA Bosnia and Hercegovina 1 308 - - - - - 105 - - 105 0.00 - TH Thailand 1 288 - - - - - 103 - - 103 0.00 - TW Taiwan 1 179 - - - - - 94 - - 94 0.00 - KR South Korea 1 046 - - - - - 82 - - 82 0.00 0.00 ID Indonesia 747 - - - - - 60 - - 60 0.00 0.00 RO Romania 655 - - - - - 1 - - 1 0.00 - HR Croatia 651 - - - - - 21 - - 21 0.00 - ES Spain 623 - - - - - 37 - - 37 0.00 0.00 LT Lithuania 580 - - - - - 42 - - 42 0.00 - HU Hungary 500 - - - - - 82 - - 82 0.00 - CN China 481 - - - - - 38 - - 38 0.00 - TN Tunisia 466 - - - - - 37 - - 37 0.00 - DK Denmark 427 - - - - - 43 - - 43 0.00 0.00 PK Pakistan 364 - - - - - 29 - - 29 0.00 - CA Canada 234 - - - - - 24 - - 24 0.00 - BY Belarus 189 - - - - - 21 - - 21 0.00 - EC Ecuador 177 - - - - - 21 - - 21 0.00 - RS Serbia 140 - - - - - 11 - - 11 0.00 - IS Iceland 134 - - - - - 8 - - 8 0.00 1.25 ZA South African Republic 97 - - - - - 11 - - 11 0.00 0.00 IN India 86 - - - - - 10 - - 10 0.00 - PT Portugal 69 - - - - - 4 - - 4 0.00 - EG Egypt 65 - - - - - 5 - - 5 0.00-17

GENERAL CREDIT TRADING BOOK SECURITISATION OWN FUNDS REQUIREMENTS 30.06.2018 VALUE FOR STANDARDISED APPROACH VALUE IRB SUM OF LONG AND SHORT POSITION OF TRADING BOOK VALUE OF TRADING BOOK FOR INTERNAL MODELS VALUE FOR STANDARDISED APPROACH VALUE IRB OF WHICH: GENERAL CREDIT OF WHICH: TRADING BOOK OF WHICH: SECURITISATION TOTAL OWN FUNDS REQUIRE- MENTS WEIGHTS COUNTERCYCLICAL CAPITAL BUFFER RATE (%) 010 020 030 040 050 060 070 080 090 100 110 120 MT Malta 55 - - - - - 3 - - 3 0.00 - NG Nigeria 53 - - - - - 4 - - 4 0.00 - LV Latvia 49 - - - - - 19 - - 19 0.00 - VG British Virgin Islands 33 - - - - - 3 - - 3 0.00 - MC Monaco 30 - - - - - 2 - - 2 0.00 - AF Afghanistan 28 - - - - - 2 - - 2 0.00 - MD Moldova 13 - - - - - 1 - - 1 0.00 - AE United Arab Emirates 11 - - - - - 1 - - 1 0.00 - BZ Belize 10 - - - - - 1 - - 1 0.00 - AD Andorra 7 - - - - - - - - - 0.00 - GE Georgia 6 - - - - - - - - - 0.00 - NZ New Zealand 6 - - - - - - - - - 0.00 - SC Seychelles 5 - - - - - - - - - 0.00 - UZ Uzbekistan 5 - - - - - - - - - 0.00 - BR Brazil 3 - - - - - - - - - 0.00 0.00 CL Chile 3 - - - - - - - - - 0.00 - OM Oman 3 - - - - - - - - - 0.00 - AM Armenia 2 - - - - - - - - - 0.00 - BG Bulgaria 2 - - - - - - - - - 0.00 - AU Australia 1 - - - - - - - - - 0.00 - CM Cameroon 1 - - - - - - - - - 0.00 - DZ Algeria 1 - - - - - - - - - 0.00 - HK Hong Kong 1 - - - - - - - - - 0.00 1.875 18

Table no. 7 presents amount of institution-specific countercyclical capital buffer. Table 7. Amount of institution-specific countercyclical capital buffer (in PLN thousand). 30.06.2018 010 Total risk exposure amount 121 646 622 020 Institution specific countercyclical buffer rate (%) 0.00 030 Institution specific countercyclical buffer requirement - 4. Information on risk 4.1. Risk management objectives and strategies Risk management strategy determines main elements of the risk approach for the Bank and Group resulting from adopted business strategy. Risk management strategy covers objectives of risk management with accompanying key principles of risk treatment, target structure of risk connected with business activities and acceptable risk levels (risk appetite). The aim of risk management framework applied by the Bank and Group is to assure achievement of business goals while preserving stability of capital returns. In order to assure this, the Bank/Group hedges itself against the realization of risk by identifying, and where justifiable, avoiding, or where not taking and mitigating each risk influencing its activity. New products, business and projects are launched only after analysis of inherent risks. It is worth highlighting that the Bank/Group focuses its activities on lines of business where they possess considerable experience enabling to assess risks related to them. The risk management system, ensuing directly from the adopted risk management strategy, has been described in detail in the as at 31 December, 2017 and in the Condensed Consolidated Interim Financial Statements of Bank Pekao S.A. Group for the period from 1 January 2018 to 30 June 2018. 4.2. Credit risk, including counterparty risks Credit risk is the risk of an unexpected change in the borrower's creditworthiness, which could cause a change in the credit exposure to that borrower. The change in the exposure value may result from insolvency of the borrower or a decrease in the borrower's creditworthiness. Counterparty credit risk is the risk of insolvency of the of derivative transaction party. The main objective of credit risk and counterparty risk management is to ensure the Bank's sustainable growth while maintaining the quality of assets, compliant with the risk appetite. In connection with the implementation of IFRS 9, the credit risk and counterparty risk management process was adjusted to measure the impairment of financial assets. The changed model was described in the Financial Statements for the period from 1 January 2018 to 30 June 2018. For the remaining scope, no significant modifications were introduced compared to the solutions described in the Disclosures on capital adequacy of Bank Pekao S.A. Capital Group as of 31 December 2017. 20

The quantitative information Capital requirement standardized approach The Group uses only the standardized approach for calculation of the credit risk capital requirement. Tables no. 8 and 9 present detailed information on the use of standardized approach, in accordance with the templates of EU CR4 and EU CR5 presented in EBA/GL/2016/11 Guidelines. Table 8. Standardised approach credit risk exposure and CRM effects (in PLN thousand). CLASSES BEFORE CCF AND CRM POST CCF AND CRM RWA AND RWA DENSITY ON-BALANCE- SHEET AMOUNT OFF-BALANCE- SHEET AMOUNT ON-BALANCE- SHEET AMOUNT OFF-BALANCE- SHEET AMOUNT RWA RWA DENSITY 1 Central governments or central banks 35 771 432 1 240 36 691 930 22 802 2 638 785 7.19% 2 Regional governments or local authorities 9 381 716 671 384 10 760 811 170 717 2 186 238 20.00% 3 Public sector entities 927 906 268 100 483 004 75 265 250 380 44.85% 4 Multilateral development banks - - 343 744 318-0.00% 5 International organisations - - - - - - 6 Institutions 2 925 477 1 259 141 2 945 180 395 570 1 059 730 31.72% 7 Corporates 44 685 922 35 429 087 42 107 036 10 797 691 51 858 380 98.02% 8 Retail 34 416 077 6 365 181 33 750 655 1 293 046 25 401 212 72.48% 9 Secured by mortgages on immovable property 42 516 561 1 007 166 42 516 135 375 493 21 520 749 50.17% 10 Exposures in default 4 146 670 211 820 4 127 017 80 022 5 025 719 119.46% 11 Items associated with particularly high risk - - - - - - 12 Covered bonds - - - - - - 13 Claims on institutions and corporates with a short-term credit assessment - - - - - - 14 Collective investments undertakings - - - - - - 15 Equity exposures 379 212-379 212-379 212 100.00% 16 Other exposures 4 959 960 83 4 958 970 83 1 908 982 38.49% 17 Total 180 110 933 45 213 202 179 063 694 13 211 007 112 229 387 58.37% 21

CLASSES 1 2 Table 9. Standardised approach breakdown of credit risk exposure (post conversion factor and post risk mitigation techniques) by asset class and risk weight (in PLN thousand). Central governments or central banks Regional governments or local authorities RISK WEIGHT 0% 2% 4% 10% 20% 35% 50% 70% 75% 100% 150% 250% 370% 1250% OTHERS DEDUCTED 32 245 105-2 297 345 0 1 253 831 - - - - - - 918 450 - - - - 36 714 731 10 453 480 - - - - 10 931 529 - - - - - - - - - - - 10 931 529 10 931 529 3 Public sector entities - - - - 95 848-462 421 - - - - - - - - - 558 269 558 269 4 5 Multilateral development banks International organisations 344 062 - - - - - - - - - - - - - - - 344 062 344 062 - - - - - - - - - - - - - - - - - - 6 Institutions - - - - 2 086 294-1 219 240 - - 35 216 - - - - - - 3 340 750 1 478 787 7 Corporates - - - - - - 862 238 - - 52 042 469 17 - - - - - 52 904 724 52 248 144 8 Retail - - - - - - - - 35 043 701 - - - - - - - 35 043 701 35 043 701 9 Secured by mortgages on immovable property - - - - 0 35 051 434 - - - 4 774 801 3 065 393 - - - - - 42 891 628 42 891 628 10 Exposures in default - - - - - - - - - 2 569 679 1 637 360 - - - - - 4 207 039 4 207 039 11 Items associated with particularly high risk - - - - - - - - - - - - - - - - - - 12 Covered bonds - - - - - - - - - - - - - - - - - - 13 14 Claims on institutions and corporates with a short-term credit assessment Collective investments undertakings - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 15 Equity exposures - - - - - - - - - 379 212 - - - - - - 379 212 379 212 16 Other exposures 2 657 482 - - - 490 738 - - - - 1 810 834 - - - - - - 4 959 054 4 940 743 17 Total 35 246 649-2 297 345-14 858 240 35 051 434 2 543 899-35 043 701 61 612 211 4 702 770 918 450 - - - - 192 274 699 163 476 594 TOTAL OF WHICH UNRATED 22

Table no. 10 presents extents of the use of CRM techniques, in accordance with the EU CR3 template shown in the EBA/GL/2016/11 Guidelines. Table 10. CRM techniques overview (in PLN thousand). UNSECURED SECURED SECURED BY COLLATERAL SECURED BY FINANCIAL GUARANTEES SECURED BY CREDIT DERIVATIVES 1 Total loans 132 121 898 3 074 015 1 047 239 2 026 776-2 Total debt securities 40 151 993 1 267 109-1 267 109-3 Total exposures (*) 220 443 165 4 880 970 1 089 050 3 791 920-4 Of which defaulted 4 338 679 19 811 1 936 17 875 - (*) Item includes balance sheet and off-balance sheet exposure. Within the calculation of its own funds requirements for credit risk, the Group uses the credit assessments assigned by the external credit assessment institutions (ECAI). The process of carrying the issuer's and issue s rating to individual Group s exposures complies with the Regulation 575/2013 (Part III, Title II, Chapter 2). The Group's internal regulations govern the use of external ratings and define the names of external credit rating institutions whose ratings may be used. As at 30 June 2018, the Group used external ratings issued by Fitch Ratings. Credit quality of exposures In accordance with the EBA/GL/2016/11 Guidelines the following tables contain information on credit quality, past-due exposures, non-performing and forborne exposures. table no. 11 credit quality of on-balance-sheet and off-balance-sheet exposures (EU CR1-A template), table no. 12 credit quality of on-balance-sheet and off-balance-sheet exposures by industry (EU CR1-B template), table no. 13 credit quality of on-balance-sheet and off-balance-sheet exposures by geographical areas (EU CR1-C template), table no. 14 analysis of accounting on-balance-sheet past-due exposures regardless of their impairment status (EU CR1-D template), table no. 15 overview of non-performing and forborne exposures as per the Commission Implementing Regulation (EU) 680/2014 (EU CR1-E template), table no. 16 identify the changes in stock of general and specific credit risk adjustments held against loans and debt securities that are defaulted or impaired (EU CR2-A template), table no. 17 identify the changes in stock of defaulted loans and debt securities (EU CR2-B template). 23

Table 11. Credit quality of exposures by exposure class and instrument (in PLN thousand). DEFAULTED GROSS CARRYING VALUES OF NON-DEFAULTED SPECIFIC CREDIT RISK ADJUSTMENT GENERAL CREDIT RISK ADJUSTMENT ACCUMULATED WRITE-OFFS CREDIT RISK ADJUSTMENT CHARGES OF THE PERIOD (*) 1 2 3 4 5 6 NET VALUES (1+2-3-4) 1 Central governments or central banks - 35 772 823 151 38 35 772 672 2 Regional governments or local authorities - 10 060 761 7 661 (287) 10 053 100 3 Public sector entities - 1 202 296 6 290 118 1 196 006 4 Multilateral development banks - - - - - 5 International organisations - - - - - 6 Institutions - 4 186 765 2 147 (38) 4 184 618 7 Corporates - 80 462 539 347 530 2 439 80 115 009 8 of which: SMEs - 4 262 158 23 438-4 262 158 9 Retail - 41 322 446 541 189 6 473 40 781 257 10 of which: SMEs - 7 351 106 74 224-7 276 882 11 Secured by mortgages on immovable property - 43 655 086 131 358 1 922 43 523 728 12 of which: SMEs - 650 533 3 328-647 205 13 Exposures in default 8 841 507-4 483 017 4 767 4 358 490 14 Items associated with particularly high risk - - - - - 15 Covered bonds - - - - - 16 Claims on institutions and corporates with a short-term credit assessment - - - - - 17 Collective investments undertakings - - - - - 18 Equity exposures - 379 212 - - 379 212 20 Other exposures - 4 960 237 193-4 960 044 21 Total standardised approach 8 841 507 222 002 165 5 519 536 15 432 225 324 136 22 Total 8 841 507 222 002 165 5 519 536 9 941 717 15 432 225 324 136 23 of which: Loans 8 264 038 132 130 497 5 198 622 9 941 717 15 282 135 195 913 24 of which: Debt securities 76 610 41 430 078 87 586-150 41 419 102 25 of which: Off-balance-sheet exposures 291 306 45 146 535 224 640 - - 45 213 201 (*) Amount included in specific credit risk adjustment due to opening balance of expected credit losses determined in accordance with the IFRS 9 as at 1 January 2018, taking into account transitional period. 24

Disclosures on capital adequacy of the Bank Pekao S.A. Capital Group as at 30 June, 2018