Current Report no. 23 (2023)

5 may 2023

Letter from the Bank Guarantee Fund regarding the minimum requirement for own funds and eligible liabilities (MREL) for Santander Bank Polska Group.

The Management Board of Santander Bank Polska S.A. (the "Bank") hereby advises that on 5 May 2023 it received a letter from the Bank Guarantee Fund ("Fund") with information about the joint decision taken together with the resolution college of Santander Group set up by the Single Resolution Board ("SRB") on the minimum requirement for own funds and eligible liabilities ("MREL") for the Bank's Group, which is 15.39% of the total risk exposure amount ("TREA") calculated in line with Article 29(3)-(4) of Regulation (EU) 575/2013, and 5.91% of total exposure measure ("TEM") calculated in line with Article 429 and 429a of Regulation (EU) 575/2013.

The MREL requirement was defined at the consolidated level and should be met by 31 December 2023.

The Bank is also obliged to meet the minimum MREL subordination requirement of 14.24% of TREA and 5.91% of TEM by 31 December 2023.

The Banking Guarantee Fund in agreement with the SRB defined the mid-term targets that the Bank should meet by the end of each calendar year pending achievement of the ultimate target. These targets in relation to TREA are 11.70% as at the time the Bank is notified of the joint decision agreed in respect of MREL and 15.39% to be met by 31 December 2023. The minimum mid-term targets for the subordination requirement in relation to TREA are 11.13% as at the time the Bank is notified of the joint decision agreed in respect of MREL and 14.24% by 31 December 2023.

The mid-term targets in relation to TEM are 4.46% as at the time the Bank is notified of the joint decision agreed in respect of MREL and 5.91% by 31 December 2023.

At the same time, in accordance with Article 19(2)(3), Article 21(3)(3), Article 42(3) and Article 48(3) of the Act on macro-prudential supervision, which transposes Article 128 of the CRD, CET1 instruments held by the Bank for the purpose of the combined buffer requirement are not eligible to the MREL requirement expressed as a percentage of the total risk exposure. This rule does not apply to the MREL requirement expressed as a percentage of the total exposure measure (MRELTEM)

The mid-term MREL targets remain uninfluenced and do not breach the requirements defined in Article 92a and Article 494 of the CRR.

Each calendar year the Fund will analyse the target MREL requirement together with the subordination level, adjusting it to the Bank's changing capital requirements, adopted resolution strategy and assessment of its viability.