TRANSLATORS’ EXPLANATORY NOTE

The English content of this report is a free translation of the registered auditor’s report of the below- mentioned Polish Company. In Poland statutory accounts as well as the auditor’s report should be prepared and presented in Polish and in accordance with Polish legislation and the accounting principles and practices generally adopted in Poland.

The accompanying translation has not been reclassified or adjusted in any way to conform to the accounting principles generally accepted in countries other than Poland, but certain terminology current in Anglo-Saxon countries has been adopted to the extent practicable. In the event of any discrepancies in interpreting the terminology, the Polish language version is binding.

PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp. k. , ul. Polna 11, 00-633 Warsaw, Poland, T: +48 (22) 746 4000, F:+48 (22) 742 4040 ,

www.pwc.pl

PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp. k. is entered into the National Court Register maintained by the District Court for the Capital City of Warsaw, under KRS number 0000741448, NIP 113-23-99-979. The seat of the Company is in Warsaw at Polna 11.

Independent Registered Auditor’s Report

To the General Shareholders’ Meeting and the Supervisory Board of Santander Bank Polska S.A.

Report on the audit of consolidated financial statements

Our opinion

In our opinion the accompanying annual consolidated financial statements:

• give a true and fair view of the consolidated financial position of the Santander Bank Polska S.A.

(the “Parent Company”) and its subsidiaries (together the “Group”) as at 31 December 2023 and

the Group’s consolidated financial performance and the consolidated cash flows for the year then

ended in accordance with the applicable International Financial Reporting Standards as adopted

by the European Union and the adopted accounting policies;

• comply in terms of form and content with the laws applicable to the Group and the Parent

Company’s Articles of Association.

Our opinion is consistent with our additional report to the Audit Committee issued on the date of this

report.

What we have audited

We have audited the annual consolidated financial statements of the Santander Bank Polska S.A.

Group which comprise:

• the consolidated statement of financial position as at 31 December 2023;

and the following prepared for the financial year then ended:

• the consolidated income statement;

• the consolidated statement of comprehensive income;

• the consolidated statement of changes in equity;

• the consolidated statement of cash flows, and

• the additional notes to consolidated financial statements, comprising material accounting policy

information and other explanatory information.

Basis for opinion

We conducted our audit in accordance with the National Standards on Auditing as adopted by the

resolution of the National Council of Statutory Auditors and the resolution of the Council of the Polish

Audit Supervision Agency (“NSA”) and pursuant to the Law of 11 May 2017 on Registered Auditors,

Registered Audit Companies and Public Oversight (the “Law on Registered Auditors”) and the

Regulation (EU) No. 537/2014 of 16 April 2014 on specific requirements regarding the statutory audit

of public-interest entities (the “EU Regulation”). Our responsibilities under NSA are further described in

the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the International Code of Ethics for Professional

Accountants (including International Independence Standards) issued by the International Ethics

Standards Board for Accountants (IESBA Code) as adopted by resolution of the National Council of

Statutory Auditors and other ethical requirements that are relevant to our audit of the consolidated

financial statements in Poland. We have fulfilled our other ethical responsibilities in accordance with

these requirements and the IESBA Code. During the audit, the key registered auditor and the

registered audit firm remained independent of the Group in accordance with the independence

requirements set out in the Act on Registered Auditors and in the EU Regulation.

Our audit approach

Overview

• The overall materiality threshold adopted for the

purposes of our audit was set at PLN 336,910 thousand. We adopted overall materiality based on the value of approximately 5% of the profit before tax adjusted for tax on financial institutions. For reasons of prudence, we have adjusted the overall materiality so that it does not exceed approximately 1% of the Group's net assets.

• We have audited the financial statements of the Parent Company and consolidation packages of subsidiaries that have a significant impact on the consolidated financial statements.

• The scope of our audit covered 90% of the Group’s revenue and 95% of the absolute value of its profit or loss and 90% of total assets of all the consolidated Group companies before consolidation eliminations.

• Estimating the allowances for expected credit losses for loans and advances to customers

• Estimating the cost of legal risk related to the portfolio of mortgage loans in CHF

Materiality

Group scoping

Key audit matters

As part of designing our audit, we determined materiality and assessed the risks of mat erial

misstatement in the consolidated financial statements. In particular, we considered where the Parent

Company’s Management Board made subjective judgements; for example, in respect of significant

accounting estimates that involved making assumptions and considering future events that are

inherently uncertain. As in all of our audits we also addressed the risk of management override of

internal controls, including among other matters, consideration of whether there was evidence of bias

that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an

opinion on the consolidated financial statements as a whole, taking into account the structure of the

Group, the accounting processes and controls, and the industry in which the Group operates.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the consolidated financial statements as a whole, as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, if any, both individually and in aggregate on the consolidated financial statements as a whole.

Overall Group materiality

PLN 336,910 thousand

How we determined it

Approximately 5% of the profit before tax adjusted for the tax on financial institutions. For reasons of prudence, we adjusted the overall materiality so that it does not exceed approximately 1% of the Group's net assets.

Rationale for the materiality benchmark applied

We chose profit before tax as the benchmark because, in our view, it is the benchmark against which the performance of the Group is most commonly measured by users, and is a generally accepted benchmark. We adjusted this value by the tax on financial institutions, which has the nature of a special tax burden.

In order to calculate the materiality as above, we adopted the levels of 5% (of profit before tax adjusted for tax on financial institutions) and 1% (of net assets), respectively, because based on our professional judgement they are within the range of acceptable quantitative materiality thresholds.

We agreed with the Audit Committee of the Parent Company that we would report to them

misstatements of the consolidated financial statements identified during our audit above PLN 16,845.5

thousand, as well as misstatements below that amount that, in our view, warranted repo rting for qualitative reasons.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our

audit of the consolidated financial statements of the current period. They include the most significant

identified risks of material misstatements, including the identified risks of material misstatement resulting

from fraud. These matters were addressed in the context of our audit of the consolidated financial

statements as a whole, and in forming our opinion thereon. We do not provide a separate opinion on

these matters.

Key audit matter

How our audit addressed the key audit matter

Estimating the allowances for expected credit losses for loans and advances to customers

In accordance with the provisions of International Financial Reporting Standard 9, Financial Instruments, (“IFRS 9”) the Management is required to determine expected credit loss (“ECL”) that may occur over either a 12 month period or the remaining life of a financial asset, depending on the classification of individual assets into risk categories ("stages"), taking into account the impact of future macroeconomic conditions on the level of credit risk allowances.

The Group’s loan portfolio consists of exposures assessed for expected credit losses:

• on an individual basis for individually significant credit exposures; and

• with the use of statistical models which

estimate allowances for credit losses for each of the homogenous portfolios identified by the Group.

Expe cted credit losses as at 31 December 2023

amounted to PLN 5,691,862 thousand in the

portfolio of loans and advances to customers

with a gross book value of PLN 165,211,869

thous and.

The Management Board monitors the correct functioning of the models, among others by comparing the results estimated by the models to actual credit losses (backtesting procedures) and performing periodic quantitative validation of the models.

As part of the procedures performed, we updated our understanding of the Group’s policies and procedures related to the estimation of allowances for expected credit losses, especially the changes applied to address the uncertainties resulting from changes observed in the economic environment.

We tested the effectiveness of controls applied by the management related to the recognition and measurement of credit losses including, among others, controls over:

• the completeness and accuracy of input data

used;

• verification of the models of probability of

default (PD), loss given default (LGD) and

other parameters;

• the application of future macroeconomic

scenarios, forecasted macroeconomic

variables and the probabilit ies applied for particular scenarios.

As part of the work on statistical models, we performed the following procedures, for which we engaged our internal credit risk modelling specialists:

• assessment whether the Group’s methodology related to the estimation of expected credit losses is in line with the requirements of IFRS 9, in particular assessment of the Group’s approach to applying the criteria to identify significant increase in credit risk, default definition, PD and LGD parameters and

In the models of expected credit losses, the Group uses large amounts of data, therefore the completeness and reliability of data may significantly affect the accuracy of allowances for credit losses.

We considered allowances for expected credit losses for loans and advances portfolio as a key audit matter due to:

• high degree of uncertainty related to the

estimation of the allowance for expected

credit losses due to dynamic changes in the

economic environment, which affect the

credit risk parameters used in the models for

estimating expected credit losses;

• judgement used by the Management Board

in modelling future scenarios and

forecasting macroeconomic variables;

• the complexity of the audit procedures and

the audit evidence obtained due to the

complexity of the calculations and the

amount of data used to estimate the allowances for expected credit losses.

Note 2.6 Use of estimates , Note 2.8 Material

accounting policy information , Note 4 Risk

management and Note 22 Loans and advances

to customers in the consolidated financial statements provide information on the methods and models used and the level of allowances for the expected credit losses in the portfolio of loans and advances to customers.

including forward-looking information when calculating expected credit losses;

• critical analysis of key judgments and

assumptions, including macroeconomic

scenarios and the probability-weightings

assigned to particular scenarios;

• independent tests of the credit risk parameters.

In the area of the individually assessed exposures, we performed the following procedures:

• we selected a sample taking into account

various risk criteria based on our professional

judgement,

• for selected loans and advances we checked

the correct stage classification as at the

balance sheet date;

• for selected impaired loans and advances

(stage 3) we tested the assumptions used in

the expected credit loss allowances’

calculation , particularly expected scenarios and probabilities assigned to them and the timing and amount of expected cash flows, including cash flows from repayments and realisation of collaterals.

Moreover, we performed the following procedures:

• we reconciled selected input data used for

determining default parameters and estimating

expected credit losses;

• in relation to individual portfolios, we verified,

on the sample basis, the assignment of

exposures to appropriate stages based on

selected quantitative parameters;

• we performed a recalculation of expected

credit losses for selected loan portfolios;

• we performed analytical procedures over

provision coverage of the credit portfolio, its

changes in 2023 and transfers between

stages in 2023;

• we analysed the results of the management's

sensitivity analysis of the level of allowances

for expected credit losses due to deterioration

or improvement of risk parameters.

Additionally, we verified adequacy and completeness of disclosures in the consolidated financial statements in accordance with applicable accounting standards.

Estimating the cost of legal risk related to the portfolio of mortgage loans in CHF

As at the balance sheet date, the Group had a portfolio of mortgage loans denominated in and indexed to foreign currencies, mainly to the Swiss franc (CHF), in the total gross book value

of PL N 6,270,419 th ousand before taking into account the adjustment for the reduction of contractual cash flows due to legal risk in the

amount of PLN 4,085,686 t housand and a portfolio of mortgage loans in PLN that were previously mortgage loans denominated or indexed to CHF in the amount of PLN 343,699 thousand before taking into account the adjustment for the reduction of contractual cash flows due to legal risk in the amount of PLN

141,284 thousand. As described in the Not e 48

Legal risk connected with CHF mortgage lo ans in the consolidated financial statements, the loan agreements based on which these loans were granted, contain clauses questioned by customers in courts due to abusiveness. At the moment, the jurisprudence of courts is not uniform, however, there is a negative trend for banks in relation to court judgments (with the dominant line of jurisprudence declaring the invalidity of loan agreements), which also affects the increase in the number of court cases brought by banks’ clients. At the same time, banks decide to offer settlements to convert foreign currency loans into PLN loans to their customers, as proposed by the Chairman of the Polish Financial Supervision Authority, or launch other settlement programs resulting in the conversion of a CHF loan into a PLN loan with the simultaneous cancellation of a part of the

loan balance. The Group developed settlement

proposals for clients and presented them to particular groups of clients, which was also taken into account in the applied model for estimating the costs of legal risk.

The Group estimated the impact of this situation on the recoverability of the assumed cash flows resulting from the concluded agreements for the active portfolio of mortgage loans in CHF based on paragraph B5.4.6 of IFRS 9 by adjusting the gross carrying amount of the portfolio by reducing contractual cash flows from mortgage loans denominated or indexed to CHF and recognized a provision for the legal risk of the CHF loan portfolio in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent

As part of our audit procedures, we assessed whether the accounting approach applied by the Group is in line with the International Financial

Reporting Standards as adopted by the European

Union (“IFRS”). Our audit procedures were mainly aimed at assessing the model and the particular assumptions adopted by the Management Board that had a significant impact on the level of estimated provisions. In particular, we carried out the following procedures:

• we discussed with the Management Board

and specialists involved in estimating the

provision, including the Group's external legal

experts, the assumptions made, taking into

account historical observations, including

information on court judgments, completed

court cases and the current number of new

claims and settlements, as well as the existing

and possible legal decisions, in particular the

decisions of the CJEU;

• we assessed the scenarios adopted by the

Group in terms of the expected number of

lawsuits against the Group, prepared, among

others, based on the number of currently filed

lawsuits against the Group based on the built

statistical model (so-called behavioural

model). In cooperation with our internal

valuation specialists, we conducted an

assessment of the assumptions made in the

behavioural model;

• we assessed the assumptions adopted by the

Group based on historical data to estimate the

likelihood of future settlements and the level of

losses incurred due to them;

• we obtained directly from the Group’s external

legal experts their assessment of the expected scenarios of the resolution of court cases together with an assessment of the probability of these scenarios broken down into homogeneous portfolios identified by the Group, grouped on the basis of individual clauses in contracts;

• in cooperation with our internal legal experts,

we analysed the documentation and legal

opinions received directly from the Group's

external legal experts for the purposes of

assessing the risk of losing the court

proceedings, as well as the probabilities of

Assets for fully repaid loans and when the gross carrying amount of the active loan was lower than the value of the identified risk. The level of deduction of the gross carrying amount of the active portfolio estimated as at 31 December

2023 a nd the level of provisions created

amounted to PLN 4,226,970 thousand and PLN

803,385 thousand, respectively, and the costs of

legal risk recognized in the consolidated income

statement amounted to PLN 2,592,326

thousand.

Estimation of the cost of legal risk related to the portfolio of mortgage loans in CHF is complex and requires a significant degree of judgement due to the high degree of uncertainty of the assumptions made by the Management Board in the model to calculate the costs of legal risk, including forecasted number of lawsuits in the future, as well as possible court settlement scenarios and estimated levels of expected losses on their basis.

Due to the uncertainty as to the assumptions described above, as well as the significant value of the portfolio of loans denominated and indexed to CHF and significant impact of the cost of legal risk on the Group’s financial result, we considered this area to be the key audit matter.

Note 48 Legal risk related to mortgage loans in

CHF i n the consolidated financial statements contains detailed information on the assumptions adopted in the model to calculate the costs of legal risk related to the portfolio of mortgage loans in CHF and possible alternative results presented in as part of the estimation sensitivity analysis as well as current and possible legal decisions, including decisions of the Court of Justice of the European Union (“CJEU”).

particular scenarios of the court verdicts and

settlements;

• we analysed the method of calculating the

value of probable losses for each scenario

assumed by the Group based on the historical

data;

• we assessed the adequacy of the model used

by the Group to estimate the costs of legal risk

(including checking the correctness and

completeness of the data constituting the basis for the calculation and confirming the mathematical correctness of the calculation).

We also assessed the adequacy and completeness of the disclosures in the consolidated financial statements in accordance with the applicable accounting standards.

Responsibility of the Management and Supervisory Board for the consolidated

financial statements

The Management Board of the Parent Company is responsible for the preparation of the annual

consolidated financial statements that give a true and fair view of the Group’s financial position and

results of operations, in accordance with International Financial Reporting Standards as adopted by

the European Union, the adopted accounting policies, the applicable laws and the Parent Company’s

Articles of Association, and for such internal control as the Management Board determines is

necessary to enable the preparation of consolidated financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Parent Company’s Management Board is

responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable,

matters related to going concern and using the going concern basis of accounting unless the

Management Board either intends to liquidate the Group or to cease operations, or has no realistic

alternative but to do so.

The Parent Company’s Management Board and members of the Supervisory Board are obliged to

ensure that the consolidated financial statements comply with the requirements specified in the

Accounting Act of 29 September 1994 (“the Accounting Law”). Members of the Supervisory Board are

responsible for overseeing the financial reporting process.

Auditor’s responsibility for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial

statements as a whole are free from material misstatement, whether due to fraud or error, and to issue

an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is

not a guarantee that an audit conducted in accordance with the NSA will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered material

if, individually or in aggregate, they could reasonably be expected to influence economic decisions of

users taken on the basis of these consolidated financial statements.

The scope of the audit does not include an assurance on the Company’s Group’s future profitability

nor the efficiency and effectiveness of the Parent Company’s Management Board conducting its

affairs, now or in future.

As part of an audit in accordance with NSA, we exercise professional judgement and maintain

professional scepticism throughout the audit. We also:

• identify and assess the risks of material misstatement of the consolidated financial statements,

whether due to fraud or error, design and perform audit procedures responsive to those risks, and

obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk

of not detecting a material misstatement resulting from fraud is higher than for one resulting from

error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the

override of internal control;

• obtain an understanding of internal control relevant to the audit in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the Group’s internal control;

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by the Parent Company’s Management Board;

• conclude on the appropriateness of the Parent Company’s Management Board’s use of the going

concern basis of accounting and, based on the audit evidence obtained, whether a material

uncertainty exists related to events or conditions that may cast significant doubt on the Group’s

ability to continue as a going concern. If we conclude that a material uncertainty exists, we are

required to draw attention in our auditor’s report to the related disclosures in the consolidated

financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions

are based on the audit evidence obtained up to the date of our auditor’s report. However, future

events or conditions may cause the Group to cease to continue as a going concern;

• evaluate the overall presentation, structure and content of the consolidated financial statements,

including the disclosures, and whether the consolidated financial statements represent the

underlying transactions and events in a manner that achieves fair presentation;

• obtain sufficient appropriate audit evidence regarding the financial information of the entities or

business activities within the Group to express an opinion on the consolidated financial

statements. We are responsible for the direction, supervision and performance of the Group audit.

We remain solely responsible for our audit opinion.

We communicate with the Audit Committee regarding, among other matters, the planned scope and

timing of the audit and significant audit findings, including any significant deficiencies in internal control

that we identify during our audit.

We also provide the Audit Committee with a statement that we have complied with relevant ethical

requirements regarding independence, and to communicate with them all relationships and other

matters that may reasonably be thought to bear on our independence, and where applicable, actions

taken to eliminate threats or safeguards applied.

From the matters communicated to the Audit Committee, we determine those matters that were of

most significance in the audit of the consolidated financial statements of the current period and are

therefore the key audit matters. We describe these matters in our auditor’s report unless law or

regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we

determine that a matter should not be communicated in our report because the adverse

consequences of doing so would reasonably be expected to outweigh the public interest benefits of

such communication.

Other information, including the report on the operations

Other information

Other information comprises:

• a Management Board Report on Santander Bank Polska Group Performance in 2023 including

Report on Santander Bank Polska Performance (“the Report on the operation s”) and the corporate

governance statement and the statement on non-financial information referred to in Article 55(2b)

of the Accounting Act which are separate parts of the Report on the operations,

• other documents comprising the Annual Report for the financial year ended 31 December 2023

(“the Annual Report”),

(together “Other Information”).

Other information does not include the consolidated financial statements and our auditor’s report thereon.

Responsibility of the Manageme nt and Supervisory Board

The Management Board of the Parent Company is responsible for the preparation of the Other

Information in accordance with the law.

The Parent Company’s Management Board and the members of the Supervisory Board are obliged to

ensure that the Report on the operations including its separate parts complies with the requirements of

the Accounting Law.

Registered auditor’s responsibility

Our opinion on the consolidated financial statements does not cover the Other Information.

In connection with our audit of the consolidated financial statements, our responsibility under NSA is to

read the Other Information and, in doing so, consider whether the Other Information is materially

inconsistent with the information in the consolidated financial statements, our knowledge obtained in

our audit, or otherwise appears to be materially misstated. If, based on the work performed, we