BPKD.L Regulatory News (BPKD)

UNOFFICIAL TRANSLATION

07.01.2021 - Report 2/2021: Moody's Investor Service rating agency report with regards to Bank Pekao S.A. ratings

Bank Polska Kasa Opieki Spółka Akcyjna (the "Bank") informs that on the 7th of January 2021 rating agency Moody's Investors Service (the "Moody's") informed the Bank about maintaining the "A2" long term and "P-1" short term deposit ratings as well as stable outlook on the long term deposit ratings. Concurrently Moody's downgraded the Bank's Baseline Credit Assessment ("BCA") and Adjusted Baseline Credit Assessment ("Adjusted BCA") to "baa2" from "baa1"and its long term Counterparty Risk Ratings ("CRR") to "A2" from "A1". Banks's long term Counterparty Risk Assessment ("CRA") was also downgraded to "A2(cr)" from "A1(cr)". The short term CRR and CRA were affirmed at "P-1" and "P-1(cr)" respectively.

As a result of the review, the following rating actions were taken:

affirmed Long term deposit rating at "A2"; Outlook: "Stable";

affirmed Short term deposit rating at "P-1";

changed Baseline Credit Assessment (BCA) from "baa1" to "baa2";

changed Adjusted Baseline Credit Assessment (Adjusted BCA) from "baa1" to "baa2";

changed Long term Counterparty Risk Rating (CRR) from "A1" to "A2";

affirmed Short term Counterparty Risk Rating (CRR) at "P-1";

changed Long term Counterparty Risk Assessment (CRA) from "A1(cr)" to "A2(cr)";

affirmed Short term Counterparty Risk Assessment (CRA) at "P-1(cr)".

Ratings for the Bank after the review are as follows:

long term deposit rating: "A2"; Outlook: "Stable";

short term deposit rating: "P-1";

Baseline Credit Assessment (BCA): "baa2";

Adjusted Baseline Credit Assessment (Adjusted BCA): "baa2";

long term Counterparty Risk Rating (CRR): "A2";

short term Counterparty Risk Rating (CRR): "P-1";

long term Counterparty Risk Assessment (CRA): "A2(cr)";

short term Counterparty Risk Assessment (CRA): "P-1(cr)".

According to Moody's, the rating update is a consequence of the Bank's announcement of the acquisition of the certain assets and liabilities of Idea Bank S.A. as part of Idea's resolution under the legal framework of the Act of 10 June 2016 on the Bank Guarantee Fund, Deposit Guarantee Scheme and Resolution. Moody's stated that the transaction has a very limited impact on the Bank's credit profile and Moody's expectations on the Bank's financial fundamentals and performance are now more appropriately reflected in the BCA's of "baa2", which is a one-notch lower than before the assessment. At the same time, long-term deposit ratings were affirmed owing to rating uplift from the application of Moody's Advanced Loss Given Failure ("LGF") analysis and a moderate likelihood of support from the government of Poland in case of need.

The stable outlook for the ratings reflects the rating agency's expectation that the Bank will successfully execute the transaction within the set timelines, while maintaining its financial metrics broadly at current levels.

Legal basis: Article 17 (1) of MAR - inside information