Disclosure of delayed inside information

UNOFFICIAL TRANSLATION

Report 18/2018: Disclosure of delayed inside information on the decision on commencement of merger negotiations with Alior Bank S.A.

07.08.2018

The Management Board of Bank Polska Kasa Opieki S.A., acting pursuant to Article 17(1) and (4) and Article 7 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council on market abuse and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ L 173, 2014, p. 1, as amended, further as the "MAR"), provides the following inside information concerning the decision dated 29 May 2018 on commencement of merger negotiations with Alior Bank S.A. The public disclosure of inside information was delayed on 29 May 2018 pursuant to Article 17(4) MAR.

Inside information delayed on 29 May 2018

"The Management Board of Bank Polska Kasa Opieki S.A. (the "Bank", "Pekao"), with reference to current report no. 57/2017 of 23 October 2017 concerning the execution of a letter of intent on commencement of preliminary discussions on cooperation with Alior Bank S.A. ("Alior Bank"), hereby informs that on 29 May 2018 the Management Board of the Bank adopted a resolution in which it considered that, among the variants of cooperation between the Bank and Alior Bank subject to analysis, the option of a merger with Alior Bank (including an issue of merger shares of the Bank to Alior Bank's shareholders) created the opportunity to generate potentially the highest added value for the shareholders of the Bank. Furthermore, the Management Board of the Bank decided in the aforementioned resolution to commence negotiations in order to set out the conditions of potential implementation of the above option of cooperation, that is the merger between the Bank and Alior Bank.

At the same time, the Management Board of the Bank emphasizes that the commencement of the aforementioned negotiations with Alior Bank does not mean that the merger between the Bank and Alior Bank will be completed.

At the same time the Bank informs that during the analyses of the variants of cooperation between the Bank and Alior Bank, the Bank became aware of the obligation of Powszechny Zakład Ubezpieczeń S.A. ("PZU") and Polski Fundusz Rozwoju S.A. ("PFR") to vote "against" the adoption of the resolution on the merger of Pekao with another entity and of the obligation of PZU and PFR not to adopt any resolution concerning the merger of Pekao with another entity or ordering that such a merger be carried out. The above obligation is a part of the agreement between PZU and PFR as the Bank's shareholders, of which PZU informed about in its current report no. 10/2017 of 23 January 2017. In the view of the Management Board of the Bank, there are no reasons for the above obligation not to be adequately amended by PZU and PFR in order for both PZU and PFR to be able to vote "for" the potential merger of the Bank with Alior Bank, if the terms and structure of the potential merger, negotiated by the banks, are deemed favourable by PZU and PFR.

In the view of the decision on the intention to commence negotiations with Alior Bank, the Bank recognised the information as material from the investors' point of view, hence it considered it appropriate to qualify it as part of this inside information."

In the opinion of the Management Board of the Bank, the delay of the publication of information on the decision to commence negotiations with Alior Bank was in the Bank's legitimate interest as its disclosure was likely to affect the outcome of those negotiations or their normal pattern. The decision to commence negotiations only showed the intention and the final success of those negotiations depended on many factors.

Legal basis: Article 17(4) in conjunction with Article 17(1) of the MAR - inside information