Termination of the negotiations with Alior Bank

UNOFFICIAL TRANSLATION

07.08.2018 - Report 19/2018: Termination of the negotiations with Alior Bank S.A.

With reference to the current reports of Bank Polska Kasa Opieki S.A. (the "Bank" or "Pekao"):

(i) No. 56/2017 dated 23 October 2017, in which the Bank announced the disclosure of delayed inside information regarding the actualization of the Bank's strategy as regards the review of potential investment opportunities including work aimed at examining the feasibility and profitability and assessing the opportunity and potential terms of a takeover of and/or merger with Alior Bank S.A. ("Alior" and together with Pekao - the "Banks");

(ii) No. 57/2017 dated 23 October 2017, in which the Bank announced information regarding the signing of a letter of intent with Alior in order to make it possible to carry out the feasibility analysis and assess various forms of potential cooperation or merger of both entities; and

(iii) No. 18/2018 dated 7 August 2018, in which the Bank announced the disclosure of delayed inside information regarding the recognition (as part of the analyses of the potential cooperation) of the option consisting in the merger with Alior (including an issue of the Bank's merger shares directed at Alior's shareholders) as providing an opportunity to generate potentially the highest added value for the Bank's shareholders and the commencement of negotiations in order to determine the terms of implementation of the said cooperation option, that is the merger of the Bank with Alior;

The Management Board of the Bank hereby announces that the Banks did not reach an agreement with regard to the terms of their merger, which in the opinion of the Management Board of Pekao would generate the highest added value for shareholders of Pekao.

Therefore, on 7 August 2018, the Management Board of the Bank withdrew from further negotiations with Alior concerning the merger of both Banks.

The Bank is continuing with the execution of its "Power of the Polish Bison" Strategy by the year 2020.

At the same time, the Bank maintains its receptiveness to the non-organic growth options aligned with execution of the Bank's current strategy, which can increase the value generated for the shareholders.

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