Management Board Report

on Performance of mBank S.A. Group

in 2024

(including Management Board Report on Performance of mBank S.A.)

This document is a translation from the original Polish version. In case of any discrepancies between the Polish and English versions, the Polish version shall prevail.

Management Board Report on Performance of mBank S.A. Group in 2024

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1. About mBank Group ..................................................................................... 7

1.1. Business model and history of mBank Group .................................................................................... 7

1.2. Composition of mBank Group ................................................................................................................ 10

1.3. mBank Group geographical presence ................................................................................................. 13

1.4. Information for investors ......................................................................................................................... 13

1.5. Credit ratings of mBank and mBank Hipoteczny ............................................................................ 17

1.6. ESG ratings and indices of mBank ....................................................................................................... 19

1.7. Key events and projects of mBank Group in 2024 ........................................................................ 20

1.8. Awards and distinctions ........................................................................................................................... 29

2. mBank Group’s environment ....................................................................... 32

2.1. Macroeconomic environment ................................................................................................................. 32

2.2. Market and regulatory environment ................................................................................................... 39

2.3. mBank Group’s market position of segments .................................................................................. 47

2.4. Outlook for the banking sector and mBank for 2025 ................................................................... 48

3. Strategy of mBank Group ............................................................................ 50

3.1. From an icon of mobility, to an icon of possibility - strategy for 2021-2025 ...................... 50

3.2. Vision for mBank Group, pillars of the strategy and main directions of development .... 51

3.3. Strategic financial targets of mBank Group for 2025 ................................................................... 56

4. Financial position of mBank Group and mBank in 2024 .................................... 58

4.1. Financial position of mBank Group ...................................................................................................... 58

4.2. Changes in the consolidated statement of financial position of mBank Group ................... 64

4.3. Financial position of mBank in 2024 ................................................................................................... 69

4.4. Changes in the statement of financial position of mBank .......................................................... 73

5. mBank Group capital and funding ................................................................. 76

5.1. mBank Group capital base ...................................................................................................................... 76

5.2. mBank Group funding ............................................................................................................................... 78

6. Retail Banking Area .................................................................................... 80

6.1. Financial results .......................................................................................................................................... 81

6.2. Activity of Retail Banking Area in numbers ...................................................................................... 82

6.3. Retail Banking of mBank in Poland ...................................................................................................... 83

6.4. Retail Banking in the Czech Republic and Slovakia ....................................................................... 89

7. Corporate and Investment Banking Area ....................................................... 91

7.1. Financial results .......................................................................................................................................... 92

7.2. Activity of Corporate and Investment Banking Area in numbers ............................................. 93

7.3. Corporate and Investment Banking of mBank ................................................................................ 93

8. Activities of subsidiaries of mBank Group ..................................................... 100

8.1. Summary of financial results of mBank Group subsidiaries ..................................................... 100

8.2. Business activity of selected subsidiaries ........................................................................................ 100

9. Risk management .................................................................................... 103

9.1. Risk management foundations ............................................................................................................ 103

9.2. Main risks of mBank Group’s business ............................................................................................. 104

9.3. Capital adequacy ...................................................................................................................................... 115

10. Sustainability statement of mBank Group for 2024 ....................................... 118

10.1. General information (ESRS 2) ............................................................................................................. 118

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10.2. Environmental information (ESRS E1 and EU Taxonomy, E4) ................................................ 163

10.3. Social Issues Information (ESRS S1, S4) ....................................................................................... 261

10.4. Information about business activities (ESRS G1) ........................................................................ 300

10.5. Additional information ............................................................................................................................ 317

11. Statement of mBank on application of corporate governance principles in 2024 .. 325

11.1. Application of corporate governance principles at mBank ........................................................ 325

11.2. Internal control and risk management systems in the process of preparing financial statements of mBank .......................................................................................................................................... 334

11.3. Significant blocks of shares .................................................................................................................. 336

11.4. Principles of appointing and dismissing Management Board members ............................... 337

11.5. Rules for amending the company’s By-laws .................................................................................. 338

11.6. Procedures and powers of the General Meeting ........................................................................... 338

11.7. Composition, competences and procedures of the Management Board and the Supervisory Board ................................................................................................................................................ 341

11.8. Application of the Diversity Policy of mBank S.A. to the Management Board and Supervisory Board ................................................................................................................................................ 362

Responsible Banking Progress Statement: Summary .......................................... 364

Glossary ....................................................................................................... 367

Statements of the Management Board .............................................................. 370

Management Board Report on Performance of mBank S.A. Group in 2024

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Management Board Report on Performance of mBank S.A. Group in 2024

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■ Excellent financial results driven by high profitability of the Core Business

□ Highest net profit in the history of mBank Group at the level of PLN 2,243.2, despite high costs of legal risk related to foreign currency loans which amounted to PLN 4,307.0 million

□ Net profit of the Core Business (mBank Group excluding FX Mortgage Loans segment ) at PLN 5,637.9 million

□ Net ROE of the Core Business at 39.7%

■ High dynamics of loans and increase of market share driven by growth of new sales of retail and corporate loan

□ Net loans and advances increased by 7.1% year on year

□ Positive dynamics of retail lending at the level of 6.7% year to year, due to record high volume of sales of mortgage and non-mortgage loans, at the level of PLN 10.6 billion and PLN 11.3 billion respectively

□ Corporate loan portfolio up by 6.8% year on year, driven by increase of loan sales by 21% compared with 2023.

■ Strengthening of the capital position in order to pave the way for growth

□ Consolidated Tier 1 ratio at 14.52% and Total Capital Ratio at 15.85%

□ Material surplus over the PFSA capital requirements: 5.4 p.p. over the Tier 1 capital ratio and 4.8 p.p. over the Total Capital Ratio

□ Inaugural Additional Tier 1 bond issuance executed by mBank allowed to obtain PLN 1.5 billion and improve capital ratios by 1.5 p.p.

□ Synthetic securitisation transaction for a portfolio of PLN 5.2 billion, improving TCR of mBank Group by approximately 0.4 p.p. at the end of the year

□ Decision to retain profit earned in 2024 and 2025

□ MREL TREA at the level of 23.51%, MREL TEM at the level of 9.10%, above the requirements

■ Effective management of the CHF loan portfolio to further decrease balance sheet risk

□ Under the settlement program rolled out in Q4 2022, mBank singed over 22,900 settlements with clients by the end of 2024

□ The number of active credit agreements has been reduced by 80.8% compared to the initial number of contracts

■ Total income at the highest level in history

□ Record high total income of PLN 12,006.9 million generated by growth in both segments of mBank clients

□ Net interest income at highest level in history driven by favourable monetary policy, rising volumes and lower deposit costs despite the negative impact of the “credit holidays”

□ Significant improvement of net interest margin to 4.4%

■ Excellent efficiency despite increase of total overhead costs

□ Normalised cost to income ratio at 28.3%

□ Increase in total overhead costs (including depreciation) by 10.2% due to inflationary pressure, growth of volumes and scale of operations and investments in future growth

■ Prudent risk management reflected in a high quality portfolio – cost of risk at 49 bps, NPL ratio at 4.1%

■ Constant focus on providing clients with convenient and useful solutions which improve their financial health

□ mOkazje zakupy program, a new feature co-created with mBank partner Morele.net, which allows clients to easily order products directly from mBank mobile application

□ Implementation of new functionalities in the finance manager (PFM), which, among others, support clients in planning their retirement

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Core Business – results of mBank Group excluding the FX Mortgage Loans segment.

Total income - calculated as the sum of net interest income, net fee and commission income, dividend income, net trading income, other income, other operating income and other operating expenses.

Net impairment losses and fair value change on loans and advances - the sum of impairment or reversal of impairment on financial assets not measured at fair value through profit or loss and gains or losses from non-trading loans and advances mandatorily measured at fair value through profit or loss.

Net interest margin – calculated by dividing net interest income by average interest earning assets. Net interest income calculated for the purpose of net interest margin excludes gains or losses on modification. Gains or losses on modification includes co sts of credit holidays. Interest earning assets are a sum of cash and balances with the Central Bank, loans and advances to banks, debt securities (in all valuation methods) and loans and advances to customers (net; in all valuation methods). The average interest earning assets are calculated on the basis of the balances as at the end of each month. Net interest income is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).

Cost/Income ratio – calculated by dividing overhead costs and depreciation by total income (excluding tax on Group’s balance sheet items).

ROE net – calculated by dividing net profit/loss attributable to Owners of the Bank by the average equity attributable to Owners of the Bank, net of the year’s results. The average equity is calculated on the basis of the balances as at the end of each month. Net profit/loss attributable to Owners of the Bank is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).

ROA net - calculated by dividing net profit/loss attributable to Owners of the Bank by the average total assets. The average total assets are calculated on the basis of the balances as at the end of each month. Net profit/loss attributable to Owners of the Bank is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).

In order to present the genuine and undistorted performance of mBank Group, the non-core part, comprising of foreign currency mortgage loans, is shown separately from the total business. Non-core assets are defined as all residential mortgage loans granted to individual customers in Poland that at any point in time were in another currency than PLN. In addition to the FX mortgage loan portfolio, associated provisions for legal risk arising from these contracts are also allocated to the segment .

The capital allocated to the non-core unit amounted to PLN 657 million as of December 31, 2024. It is calculated primarily based on:

■ total risk exposure amount of the segment and minimum Tier 1 capital ratio required by PFSA,

■ economic capital for operational risk.

From the managerial perspective, growth of mBank’s core business is effectively based on lower capital due to its portion being set aside for FX Mortgage Loans segment.

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1.1. Business model and history of mBank Group

mBank Group conducts business based on the universal banking model, specialising in servicing all client groups. The offer includes retail, SME, corporate and investment banking as well as other financial products and services such as leasing, factoring, brokerage, wealth management, investment funds, insurance, payment gateway and corporate finance. Services provided under mBank logo are marked with different colours, depending on the target group of the offer.

The bank was established in 1986 as Bank Rozwoju Eksportu (BRE Bank) , initially focusing on corporate clients. We have been operating in the segment of individual clients since 2000, i.e. from the moment of launching mBank, a fully online bank. In 2001, we established MultiBank, which complemented the bank’s business model with servicing clients in the outlet network in the largest Polish cities. Since the very beginning, mBank has relied on organic growth, which means that the current scale of its business has been achieved without takeovers of other banks and financial institutions. mBank is the only bank in Poland with successful track record of rolling out its online retail banking model into foreign markets. Since 2007, we have been operating in the Czech Republic and Slovakia. In 2013, we unified our brand under mBank name, which was most powerful of our brands.

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mBank’s widely recognised operational excellence is based on the state-of-the-art user interface for online banking, next-generation mobile application, video banking, as well as real-time, event-driven customer relationship management (CRM) based on client behaviour patterns. The whole product offer is centred around the current account with a broad spectrum of financial services accessible in just “one click”, as the strategic aim of mBank is to be the most convenient transactional bank on the market. Our internet platform available to clients is modern, convenient, easy-to-access and user-friendly. We have also been systematically expanding our mobile application to provide customers with the possibility of managing their finances wherever they are.

Giving priority to users’ comfort, mBank regularly improves its offer and thus remains at the forefront of institutions introducing new solutions, such as Personal Finance Manager (PFM) for retail clients or further development of Paynow payment gateway for e-commerce. mBank has been accompanying its retail customers in their everyday lives for 23 years, providing a wide range of additional services based on online or mobile banking. These involve, among others, the possibility to access public administration services from mBank’s transactional platform and the possibility to submit an application for benefit programs such as the “ Family 500+ ” benefit in mBank’s mobile application. Further benefits include additional services, such as mOkazje zakupy (mDiscounts e- commerce market place) and possibility to pay for car parks in several dozen Polish cities using mBank’s application.

mBank’s offer includes products and services tailored to various customers’ needs, including loans, savings, investment and insurance products as well as other solutions dedicated to enterprises and businesses. The comprehensive offer makes it possible to more effectively address specific requirements of particular groups of customers. At the same time, the coherent business model in all of the mentioned areas enables clients’ to easily move between segments, which allows mBank to support their professional and personal development at all stages.

mBank Group aims to build a partnership with corporate customers, which is based on good relations and comprehensive advisory. Drawing on the BRE Bank S.A. experiences and competencies, we know how important it is to take individual approach to a customer and to adequately understand the specifics of their business. We support entrepreneurs from the very beginning of their professional path, enabling them to launch their business with mBank online or in the bank’s branch and offering them a package of kick-off services such as financing, accounting and currency services or terminals. We introduce new products to our offer on a regular basis and pay special attention to providing remote access to our services. Large enterprises and international corporations successfully use the integrated range of commercial banking solutions, with particular focus on the advanced platform of transactional banking and mobile application. This comprehensive product offer is complemented by investment banking services, such as equity capital markets (ECM), debt capital markets (DCM) and mergers & acquisitions (M&A) advisory services.

mBank’s distribution concept combines the most technologically advanced solutions, which meet the market challenges and set new trends in the Polish banking sector. Internet and mobile-based tools as well as the extensive network of distribution outlets and call centre build a comprehensive contact platform for mBank’s customers. The IT platform architecture allows the bank to develop and introduce new products, services and sales channels efficiently and with a low operational risk. Thanks to such a flexible infrastructure, mBank is able to effectively manage its business expansion strategy.

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Net loans (Net loans and advances to customers) – the sum of loans and advances to customers measured at amortised cost, non-trading loans and advances mandatorily measured at fair value through profit or loss, and loans and advances classified as trading assets.

Total income - calculated as the sum of net interest income, net fee and commission income, dividend income, net trading income, other income, other operating income and other operating expenses.

Total costs (Total overhead costs (including deprecation)) - calculated as the sum of total overhead costs and depreciation.

Loan loss provisions (Net impairment losses and fair value change on loans and advances) – the sum of impairment or reversal of impairment on financial assets not measured at fair value through profit or loss and gains or losses from non-trading loans and advances mandatorily measured at fair value through profit or loss.

Net interest margin - calculated by dividing net interest income by average interest earning assets. Net interest income calculated for the purpose of net interest margin excludes gains or losses on modification. Gains or losses on modification includes c osts of credit holidays. Interest earning assets are a sum of cash and balances with the Central Bank, loans and advances to banks, debt securities (in all valuation methods) and loans and advances to customers (net; in all valuation methods). The average interest earning assets are calculated on the basis of the balances as at the end of each month. Net interest income is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).

Cost/Income ratio - calculated by dividing overhead costs and depreciation by total income (excluding tax on Group’s balance sheet items).

Return on Equity (ROE) (Net ROE) - calculated by dividing net profit/loss attributable to Owners of the Bank by the average equity attributable to Owners of the Bank, net of the year’s results. The average equity is calculated on the basis of the balances as at the end of each month. Net profit/loss attributable to Owners of the Bank is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).

Return on Assets (ROA) (Net ROA) - calculated by dividing net profit/loss attributable to Owners of the Bank by the average total assets. The average total assets are calculated on the basis of the balances as at the end of each month. Net profit/loss attributable to Owners of the Bank is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).

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Composition of mBank Group and main areas of its activity

The subsidiaries of mBank Group offer a complex service for the customers and allow for processes optimisation and achieving various business targets. The structure of mBank Group from the perspective of segments and business areas as of end of 2024, is presented below:

1 mBank owns 100% shares in Asekum Sp. z o.o. and LeaseLink Sp. z o.o. indirectly, through mLeasing Sp. z o.o.

2 mBank owns 100% shares in mFinanse CZ s.r.o. and mFinanse SK s.r.o. indirectly, through mFinanse S.A.

At the beginning of 2021, we have separated FX Mortgage Loans segment from Retail Banking segment. This change aimed to present separately results related to the product, which has been withdrawn from the offer for individual customers, and at the same time is significant from the point of view of the assigned assets and the impact on the Group's results. As a result a more accurate and undistorted image of mBank Group is presented. Additionally, we separated the Treasury and Other segment from the core business.

mAccelerator (Future Tech FIZ) is the investment fund supporting the development and commercialization of new technologies. It was equipped with a budget of EUR 51 million (over PLN 220 million). The fund invests in minority shares in technology startups, and independently, as a venture builder, establishes and develops technological companies.

mBank Group (including consolidated subsidiaries) as at the end of 2024 was composed as presen ted below.

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Management Board Report on Performance of mBank S.A. Group in 2024

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Supervisory Board of mBank

On January 1, 2024, Bernhard Spalt has begun his tenure as a Member of the Supervisory Board of mBank S.A. He replaced Marcus Chromik, who announced his resignation from his position as a Member of the Supervisory Board of mBank to the Chairwoman of the Supervisory Board of mBank on October 20, 2023, with effect on December 31, 2023.

On October 14, 2024, Bettina Orlopp resigned from her position as a Member of the Supervisory Board of mBank. She will remain a Member of the Supervisory Board until February 27, 2025. The Remuneration and Nomination Committee of the Supervisory Board recommended Carsten Schmitt as a candidate for the vacant position. His appointment to the Supervisory Board of mBank is subject to a positive assessment of suitability. On November 21, 2024, Carsten Schmitt was appointed to the position of Chief Financial Officer (CFO) to the Board of Managing Directors of Commerzbank AG, subject to regulatory approvals. Due to Bettina Orlopp's resignation from her position as a Member of the Supervisory Board of mBank, the Supervisory Board appointed Bernhard Spalt as Deputy Chairperson of the Supervisory Board of mBank, effective December 13, 2024.

As of December 31, 2024, the composition of the Supervisory Board of mBank S.A. was as follows:

1. Agnieszka Słomka-Gołębiowska – Chairwoman of the Supervisory Board

2. Bernhard Spalt – Deputy Chairperson of the Supervisory Board

3. Hans-Georg Beyer – Member of the Supervisory Board

4. Tomasz Bieske - Member of the Supervisory Board

5. Mirosław Godlewski - Member of the Supervisory Board

6. Aleksandra Gren - Member of the Supervisory Board

7. Bettina Orlopp – Member of the Supervisory Board

8. Thomas Schaufler - Member of the Supervisory Board

There are four independent members in the Supervisory Board:

1. Agnieszka Słomka-Gołębiowska

2. Tomasz Bieske

3. Mirosław Godlewski

4. Aleksandra Gren

Four committees operate within the Supervisory Board: Risk Committee, Audit Committee, Remuneration and Nomination Committee and IT Committee. The composition and tasks of each committee is described in chapter 11. “Statement of mBank on application of corporate governance principles in 2024”.

Management Board of mBank

On March 27, 2024, the Supervisory Board of mBank elected members to the Management Board o f mBank for the term of office starting on March 28, 2024. On July 4, 2024 Cezary Stypułkowski handed in his resignation as President of the Management Board of mBank with immediate effect. His resignation was submitted following consultations with the Supervisory Board and is an integral part o f the succession process. The process, which was conducted in line with the best practices, was transparent and organised.

On 5 June 2024 Cezary Kocik was conditionally appointed as President of the Managemen t Board of mBank. On October 11, 2024, the Polish Financial Supervision Authority consented to the app ointment of Cezary Kocik as the President of the Management Board of mBank. As a result, Cezary Kocik has f ully assumed the position of President of the Management Board. Moreover, on July 25, 2024, the Supervisory Board of mBank S.A. a ppointed Krzysztof Bratos to the Management Board of mBank S.A. as Vice-president o f the Management Board, Head of Retail Banking, replacing Cezary Kocik, effective July 26, 2024.

Cezary Stypułowski took the helm at mBank in October 2010. Since then the bank has strengthened its position as the most technologically advanced and customer-friendly online banking platform.

As of December 31, 2024, the composition of the Management Board was as follows:

1. Cezary Kocik – President of the Management Board

2. Krzysztof Bratos – Vice-president of the Management Board, Head of Retail Banking

3. Krzysztof Dąbrowski – Vice-president of the Management Board, Head of Operations and Information Technology

4. Marek Lusztyn – Vice-president of the Management Board, Chief Risk Officer

5. Julia Nusser - Vice-president of the Management Board, Chief People & Regulatory Officer

6. Adam Pers - Vice-president of the Management Board, Head of Corpo rate and Investment Banking

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7. Pascal Ruhland - Vice-president of the Management Board, Chief Financial Officer

For more information on the Management Board and Supervisory Board of mBank, see chapter 11. “Statement of mBank on application of corporate governance principles in 2024”.

1.3. mBank Group geographical presence

mBank offers its services not only in Poland, but also in the Czech Republic and Slovakia. The leading role of mobile and internet banking provider is supplemented by comprehensive service in the branches. In Poland, retail branches network covers 305 outlets whereas corporate network comprises 43 points of service, additionally supplemented by branches of mBank Group subsidiaries. In 2024 the number of branches in Poland decreased by 2, while in Czech Republic and Slovakia it decreased by 4. When contacting the consultants in the branches, clients can not only use products and services of mBank Group, but also install and learn how to use mobile and internet banking.

Retail network in Poland:

▪ 82 mBank branches

▪ 29 light branches

▪ 15 advisory centres

▪ 139 mKiosks

▪ 40 Financial centres and agency service points of mFinanse

Czech Republic

▪ 13 financial centres and light branches

▪ 17 mKiosks

Slovakia:

▪ 6 financial centres and light branches

▪ 7 mKiosks

Corporate branches:

▪ 29 corporate branches

▪ 14 corporate offices

Depending on their needs, our clients can take advantage of full product offering and cash services in traditional mBank branches. Comprehensive portfolio of more sophisticated financial products, such as mortgage loans and corporate funding, is available also in financial centres and agency service points of mFinanse. In the advisory centres, both individual and corporate clients are served, who can also use the services of mBank Group’s subsidiaries. The light branches are dedicated to distribute basic financial products and provide clients with cash services up to defined limits. mKiosks, located in the shopping malls, allow clients to familiarize with mBank’s offer, open an account and obtain a non-mortgage loan.

1.4. Information for investors

Information on mBank shares and shareholders

mBank shares have been listed on the Warsaw Stock Exchange (WSE) since 1992.

As at December 31, 2024, mBank’s registered share capital amounted to PLN 169,987,892 and was divided into 42,496,973 shares, including 42,485,973 ordinary bearer shares and 11,000 ordinary registered shares with a nominal value of PLN 4 each. Each share carries one voting right at the General Meeting.

In 2024, the total number of shares increased by 31,806. The new shares were issued pursuant to Resolution No. 38 of the 31st Annual General Meeting of mBank S.A. dated May 9, 2018 on issuing subscription warrants, a conditional increase of the share capital with exclusion of the pre-emptive right of the existing shareholders to take up subscription warrants and shares , a change of the Company’s by-laws and on applying for admission of shares to trading on the regulated market, and on dematerialisation of the shares.

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mBank shareholders and share price on the WSE

mBank shareholders

Commerzbank AG has been the strategic shareholder of mBank since 1994. Its stake increased gradually from 21.0% in 1995 to 50.0% in 2000 and 72.2% in 2003. Starting from 2005, Commerzbank’s stake has been gradually declining due to the implementation of the managerial options programs.

As at December 31, 2022, Commerzbank AG held 69.07% of shares and votes at the General Meeting of mBank. Commerzbank AG is the majority shareholder. The remaining shares, which are in free float, are held by financial investors, in particular Polish pension funds and Polish and foreign investment funds. The only shareholder that has exceeded the 5% threshold of shares and votes at the general meeting at the end of 2024 was Nationale-Nederlanden Otwarty Fundusz Emerytalny.

For more information about mBank’s shareholders read the Statement of mBank on Application of Corporate Governance Principles in 2024, chapter 11.3 “Significant blocks of shares”.

Performance of mBank shares on the WSE in 2024

The Polish stock market in 2024 was characterized by significant volatility. Structural factors such as improved corporate profits, the release of EU funds, and the prospect of significant investments in the energy transformation had a positive impact on investor demand. On the other hand, investor sentiment was affected by uncertainty on the markets. It resulted, among other things, from concerns about economic growth in the world's largest economies, geopolitical tensions, expectations about the results of the US elections and their subsequent consequences.

In the first half of 2024, the Warsaw Stock Exchange indices broke through multi-year highs. Positive trends on the WSE were supported by improving macroeconomic situation with falling inflation and a high real increase in wages, as well as good financial results reported by companies from various sectors, including in particular the banking sector and the construction industry.

The demand for bank shares, in addition to good financial results generated especially by the net interest income, was impacted by the postponement of the prospect of interest rate cuts, the consent of the Polish Financial Supervision Authority to pay dividends from 2023 profits and the chances for dividends in the longer term. The increased demand for shares of Polish banks from abroad resulted from the improvement in investment sentiment in Poland after the political change resulting from the elections in October 2023. In the first quarter, mBank shares were a particular beneficiary of the positive sentiment on the WSE. On March 26, 2024, mBank's quotations reached a historic high, after which some investors started to take profits.

Stronger turbulence was recorded at the turn of July and August under the impact of foreign markets. The expected rise in unemployment in the US, the increase in interest rates in Japan and the growing tensions

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The chart below shows relative changes in mBank share prices and stock market indices (left axis) and the volume of trading in mBank shares in 2024 (right axis).

In 2024, WIG increased by 1.4% and the WIG20 index declined by 6.4% compared to the levels at the end of 2023. Bank stocks performed significantly better than the major indices. The WIG-Banks index increased by 11.6% in 2024 compared to the level recorded at the end of December 2023. The level of the WIG-Banks index was significantly influenced by the strong growth in PKO BP share quotations, which have the largest share in the index portfolio.

The closing price of mBank share at the last trading session in 2024 (December 30) stood at PLN 547.20, up by 2.3% compared with the last trading day of 2023. The relatively low free float of mBank (30.9%) compared to other banks listed on the WSE had a negative impact on the value of turnover in mBank shares on the WSE. The average daily turnover in mBank shares in 2024 amounted to PLN 16.2 million (i.e. 0.06% of market capitalization).

mBank’s capitalisation amounted to PLN 23.3 billion (EUR 5.4 billion) as at December 31, 2024, which represents an increase from PLN 22.7 billion (EUR 5.2 billion) reported at the end of 2023. P/BV (price/book value) ratio of mBank Group stood at 1.4 compared with 1.7 a year before.

The chart below shows the relative changes in mBank’s share price and stock market indices over the last five years.

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From among the bank analysts and brokers actively monitoring mBank’s financial performance and issuing recommendations on mBank shares, seven analysts advised investors to buy shares of mBank and two issued “hold” recommendations. For comparison, a year before, six analysts recommended buying mBank’s shares, four issued a "hold" recommendation, and one analyst recommended selling the shares.

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Investor Relations at mBank

The Investor Relations team, acting in cooperation with the Management Board and other organisational units, provides analysts and investors with reliable and complete information about mBank Group.

When communicating with investors, the media and clients, mBank applies the Information Policy, which is based on the principles of open and transparent communication, taking into account the needs of all stakeholders. We provide them with universal and equal access to information in accordance with the highest market standards and applicable laws. We spare no effort to ensure that the information provided by us is up to date, reliable, useful, coherent, and comparable with information provided by other banks.

We have been actively communicating with capital market participants, which includes addressing our activities to the information needs of individual groups, in accordance with the best market standards and practices.

Similar to other issuers worldwide, we have adopted a hybrid approach to the IR activities, which combines the advantages of face-to-face shareholder meetings with remote communication.

Information provided via e-mail and the regularly updated content published on the official mBank’s website play a significant role in communications with stakeholders.

Investor Relations website ( https://www.mbank.pl/en/investor-relations/ ) features information divided into categories, including: periodic reports, financial results and selected business data, presentations and video recordings of earnings conferences, data on shareholders and share price of mBank on the WSE, consensus of forecast results of the Group, compendium of knowledge for new investors, current reports, information on general meetings, ratings and debt instruments. The website gives investors access to historic results of the Group and the bank (periodic reports, presentations and video recordings of earnings conferences) and to an archive of general meetings.

In addition, the Responsible Bank website contains information on various aspects of our activities related to sustainable development. Materials published there include our integrated/ESG reports and information about our ESG strategy and activities, sustainable development standards (i.e. primarily policies and procedures applicable at the bank), declarations regarding our ESG goals, as well as ratings, indices and awards related to this area.

Analysts and mBank’s investors are kept informed about major developments in mBank Group via a monthly Newsletter and ad-hoc messages sent by email.

In 2024, investors and stock market analysts participated in four earnings conferences . All meetings with the Management Board accompanying the announcement of quarterly figures were posted on the bank’s website. Our relations with analysts, shareholders and potential investors are also strengthened through meetings at conferences organised by Polish and foreign brokerage houses . In 2024, mBank participated in six conferences, two roadshows (in London as well in MENA and Asia) and meetings organised in connection with the issuance of bonds under the EMTN Program and Additional Tier 1 bonds.

In 2024, the Management Board representatives also held meetings with analysts from rating agencies . In addition, the bank has been in regular contact with rating agencies through teleconferences and emails.

1.5. Credit ratings of mBank and mBank Hipoteczny

mBank's credit ratings assigned on request

mBank has solicited ratings assigned by S&P Global Ratings (S&P) and Fitch Ratings (Fitch).

S&P Global Ratings

On May 17, 2024, S&P Global Ratings affirmed mBank’s ”BBB” long-term issuer credit rating, its ”A2” short-term rating and the rating of senior unsecured bonds issued by mBank: Senior Preferred Debt at ”BBB” and Senior Non-Preferred Debt at ”BB+”. At the same time the rating agency improved the outlook of the long-term rating from stable to positive. The positive outlook reflects S&P’s view that mBank is taking significant steps to derisk FX mortgage loans. S&P expects that legal costs related to its CHF loan portfolio will remain substantial, but gradually recede over the next two years.

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On June 28, 2024, Fitch affirmed mBank’s Long term Issuer Default Rating at “BBB-”, Viability Rating at “bbb-” and the stable outlook of the long-term rating.

Fitch reiterated its opinion that legal risks related to FX mortgage loans constrain mBank’s ratings. At the same time, according to Fitch, mBank has well-established domestic franchise, conservative risk appetite, adequate capitalisation, and good funding and liquidity profile.

Changes in mBank's solicited long-term ratings are presented in the diagram below.

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Rating of mBank and mBank Hipoteczny assigned by Moody’s Investors Service

Moody's Investors Service (Moody's) evaluates mBank's creditworthiness based on publicly available information. Moody's assigned solicited rating to mBank Hipoteczny and mortgage covered bonds issued by mBank Hipoteczny.

On April 26, 2024, Moody’s affirmed mBank’s Baa1/P-2 long-term and short-term deposit ratings and revised the rating outlook to positive from negative. The reasons is that Moody’s expects that the legal risks stemming from CHF mortgages will decline over the next 12-18 months and it will lead to enhancement of mBank’s profitability and restoration of its organic capital generation.

1) Ra tings based solely on publicly available information

Capital Intelligence Ratings

On April 3, 2024 Capital Intelligence Ratings affirmed mBank's long-term foreign currency rating at ”BBB” and short-term foreign currency rating at ”A2”. The rating outlook remains stable.

Summary of ratings for Poland, mBank and Commerzbank

The table below compares long-term ratings (foreign currency) for mBank, Commerzbank and Poland assigned by S&P, Fitch and Moody’s as of December 31, 2024.

1) Long-term deposit rating. For mBank based on publicly available information. LT ICR of Commerzbank by Moody’s is A2 (positive).

Rating outlook in parentheses.

1.6. ESG ratings and indices of mBank

Rating of mBank assigned by Sustainalytics

On December 19, 2024, Morningstar Sustainalytics conducted the annual full review of the ESG risk assessment of mBank Group. After taking into account all documents, on January 9, 2025, the ESG Risk Rating of mBank Group was slightly increased to 13.4 from 12.8 (the result of the rating update after a methodology change in May 2024). According to the scale used by the agency, the Group is exposed to

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In no case can the ESG Risk Rating Report be interpreted as investment advice or an expert opinion within the meaning of applicable law.

The Morningstar Sustainalytics ESG Risk Rating measures a company's exposure to significant industry- specific ESG risks and how well the company manages those risks. This multidimensional way of measuring ESG risk combines management and exposure concepts to obtain an ESG risk rating. It is a quantitative measure of unmanaged ESG risk (ESG risk score or ESG Risk Rating), which is comparable across all industries. The ESG risk rating from Sustainalytics distinguishes five levels of risk: negligible, low, medium, high, and severe. More information about ESG risk ratings can be found on the website: www.sustainalytics.com/corporate-solutions/esg-solutions/esg-risk-ratings .

The latest Sustainalytics ESG Risk Rating report along with the legal notice is published at: https://www.mbank.pl/en/investor-relations/ratings-debt-instruments/ratings/ . It should be noted that the rating may change during the year due to the impact of various ESG factors on the assessment. The current rating can be obtained by investors from Sustainalytics. Legal notice: https://www.sustainalytics.com/legal-disclaimers .

More information about mBank's activities in the ESG area is presented on our website: https://www.mbank.pl/en/about-us/corporate-social-responsibility/main-page/ .

Rating of mBank assigned by MSCI

On November 8, 2024, MSCI ESG Ratings upgraded mBank's rating to AA (on a scale from AAA to CCC). The previous rating published on October 26, 2023, was at level A.

The report indicates that the upgrade was due to the expansion of mBank's consumer protection practices, which are now on par with comparable banks and include debt collection policies. In terms of corporate governance, mBank applies leading practices compared to its peer group.

The MSCI ESG Rating measures a company's resilience to long-term ESG risks. Companies are rated on a scale from AAA (leader) to CCC (laggard) based on their exposure to sector-specific risks and their ability to manage those risks compared to their peer group. The MSCI ESG Rating for mBank along with the legal notice is available on our website: https://www.mbank.pl/en/investor-relations/ratings-debt- instruments/ratings/ . It should be emphasized that the rating may change during the year due to the impact of various ESG factors. Investors can download the company's current rating from MSCI.

FTSE4Good Index Series

FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that mBank S.A. has been independently assessed according to the FTSE4Good criteria, and has satisfied the requirements to become a constituent of the FTSE4Good Index Series. Created by the global index provider FTSE Russell, the FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. The FTSE4Good indices are used by a wide variety of market participants to create and assess responsible investment funds and other products. More information on the index can be found on the website: https://www.ftserussell.com/products/indices/ftse4good/

Bloomberg Gender-Equality Index 2023

mBank has been included in the elite group of companies listed in the Bloomberg Gender-Equality Index 2023, which actively support equal opportunities in the workplace. The publication of the index was completed on October 21, 2024.

The Bloomberg Gender-Equality Index analyzes the performance of public companies with a market capitalization of over $1 billion in terms of gender equality in the workplace, measured in five areas: female leadership and talent development, equal pay and gender pay parity, inclusive work culture, anti- sexual harassment policies, and pro-women brand. Only companies that have achieved a score exceeding the globally defined threshold qualify for the index.

1.7. Key events and projects of mBank Group in 2024

Settlement program for mBank’s clients with mortgages in CHF

In the fourth quarter of 2022, following completion of the pilot phase, mBank launche d an attractive settlement program for customers with CHF loans. mBank has signed o ver 22,9 thousand settlements with clients until end of 2024. mBank has presented the settlement offer to all clients and regularly renews it. The offer consists in converting the loan into PLN as if it had been take n out and repaid in the Polish

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First issuance of AT1 bonds in Poland by commercial bank

mBank as the first commercial bank in Poland offered AT1 (Additional Tier 1) bonds to a wide range of institutional investors. In the pioneering issuance of bonds, mBank raised PLN 1.5 billion, which was the maximum planned nominal of bonds to be issued, whereby with investor demand amounting to PLN 1.76 billion.

The transaction was settled on December 6, 2024. The bonds are the first of their kind publicly issued by a Polish bank. AT1 bonds are perpetual securities, entitling the holder to receive interest indefinitely, with the provision that mBank may redeem them after 5 years, subject to KNF approval.

The interest rate on AT1 bonds is fixed for five years, then set for subsequent five-year periods as the sum of the current PLN Swap 5Y rate and a fixed margin of 6.00 percentage points. The interest rate for the first five-year period is 10.63% per annum. Interest is paid semi-annually.

According to the KNF decision of December 30, 2024, AT1 bonds were classified as additional Tier I capital instruments, thereby increasing own funds and improving capital ratios at both the individual and consolidated levels. This issuance will enable mBank to more dynamically grow the volume of loans granted to individual and corporate clients.

The issuance of AT1 bonds by mBank also represents a significant contribution and impetus for the development of the Polish capital market. The bonds are listed in the alternative trading system on the Warsaw Stock Exchange (WSE).

mBank conducted a green preferred senior transaction worth EUR 500 million

In September 2024, mBank placed a green issuance of preferred senior bonds worth EUR 500 million with 6-year tenor and call option after 5 years (6NC5) on the international market under the EMTN program. The transaction attracted significant interest from investors, having the largest order book and the highest number of investors in the history of mBank's issuances.

The transaction aims to support fulfillment of MREL requirements. The bonds have a fixed coupon of 4.034% per annum for the first five years, and in the sixth year, the coupon becomes variable, set as the sum of the EURIBOR 3M rate and a fixed margin of 1.75 percentage points per annum. The bonds were admitted to trading on the Luxembourg Stock Exchange.

The transaction was the third mBank’s benchmark issuance denominated in euro and structured in a green format according to the Green Bond Framework. To date, mBank has raised a total of EUR 1.75 billion from green bond issuances. The proceeds will be used to finance and refinance retail mortgage loans for energy-efficient residential buildings and onshore wind and photovoltaic projects. These assets are selected according to the criteria established in the Green Bond Framework and verified for compliance with the Climate Bonds Initiative requirements by an independent reviewer, Sustainalytics. Climate Bonds Initiative certificates, pre-issuance and post-issuance opinions issued by Sustainalytics, and allocation and impact reports are available on the bank's website.

Synthetic securitization of corporate loan portfolio

On November 6, 2024, mBank concluded a synthetic securitization transaction on corporate loans portfolio with total nominal value of PLN 5,237 million. This is a fourth securitization transaction carried out by mBank. As part of the transaction, the bank transferred a significant portion of the credit risk to the investor, while the loan portfolio subject to securitization remains on mBank's balance sheet. The transaction positively impacts capital ratios and MREL, both at the individual and consolidated levels.

The transfer of risk of the securitized portfolio is conducted through the issuance of credit linked notes (CLN). CLN with a nominal value of PLN 560 million were issued on November 6, 2024. On the issuance date, the bonds were paid in the amount of approximately PLN 419 million. mBank has the option to increase the securitized portfolio to a maximum of PLN 7.0 billion, subject to investor approval (ramp-up option). After exercising the ramp-up option, the paid amount of CLN will increase to PLN 560 million.

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Updated mBank’s Group Strategy for capital management

On July 24, 2024, the Management Board decided to update the „Capital management strategy of mBank Group”. It assumes that no dividend will be paid out from the profit earned by the bank in 2024. On July 25, 2024, the Supervisory Board approved the updated „Capital management strategy of mBank Group”.

mBank plans to use the retained profit for dynamic lending growth and further business development while maintaining the capital buffers above regulatory requirements. It will also ensure maintaining the Tier 1 ratio at a level of at least 2.5 p.p. above the minimum requirements at the end of the year, in line with mBank Group’s Strategy for 2021-2025. The long-term dividend strategy of the bank for subsequent years assumes dividend pay-out at the level of 50% of net profit.

mOkazje zakupy is a new shopping platform available to mBank clients

“mOkazje zakupy” is an mBank project that makes it even easier for customers to shop online, directly from their bank app. Both purchase and payment take place without leaving the app. A pilot of the “mOkazje zakupy” project was launched in June 2024. In the first phase of the project, 50,000 mBank clients were given the opportunity to buy on the Morele platform directly in the bank's mobile application. One product per day was offered at a unique, attractive price.

The implementation of “mOkazje zakupy” was divided into several phases. In August 2024, another 450,000 customers received an invitation to use “mOkazje zakupy”. The number of products offered through the service (from categories such as electronics, gaming, small appliances, home and garden, sports, tourism) also increased to more than 100. The pilot ended in the fourth quarter of 2024. Since mid-December 2024, “mOkazje zakupy” is available to all mBank clients, and they can choose from about a million of offers segregated in two thousand categories. The functionality includes all essential eCommerce tools such as a search engine, filtering, various delivery methods for orders, transaction history, and instant payments.

On the Morele platform, clients will also find personalized offers in many categories, promotions and daily deals. The store reaches over 1 million recipients daily via its own media and fulfills orders on 13 foreign markets, which gives merchants and brands simple and quick access to many European markets.

mBank, in its development strategy for 2021-2025, announced an increase in its share in the e- commerce market. Entering into cooperation with the Morele purchasing platform is a key action that will help achieve this goal. In the future, mBank also wants to invite its corporate clients to join the platform. mBank estimates that over 50,000 e-shop owners use its service (which constitutes 1/3 of all e-shops in Poland). In 2023, mBank’s clients made 240 million transactions in e-shops and spent nearly PLN 27 billion in them. It means that every fourth zloty which appeared on the e-commerce market at that time came from mBank’s account (calculations based on the bank’s data and PMR “Handel Internetowy w Polsce 2022”, Strategy & „Perspektywy rozwoju rynku e-commerce w Polsce 2018-2027”).

New, innovative methods of payment

mBank has expanded its offer of mobile wallets. Now clients can pay for purchases with a ring or watch strap equipped with Fidesmo Pay or Digiseq Pay software. Thus, mBank has become a leader among banks that enable customers to use modern forms of mobile payments.

Wearable accessories, among their numerous functions, also allow users to pay. It works similarly to smartphones or watches connected to a mobile wallet, e.g. Apple Pay or Garmin Pay. A client has to only bring such a gadget close to the terminal.

The software which allows clients to pay with a ring or a special watch strap is called Fidesmo Pay (available for Visa and Mastercard cards) or Digiseq Pay (for Mastercard cards). The devices can be purchased on the website of both software manufacturers. The device comes with instructions that explain step by step how to connect a payment card to it.

mBank clients have long been able to use Apple Pay, Google Pay, Garmin Pay, Fitbit Pay, Xiaomi Pay and Swatch Pay mobile wallets. Now more methods have been added: Fidesmo Pay, Digiseq Pay, Tappy Pay and Zepp Pay.

Deferred payments in Paynow

Paynow is an advanced technological payment gat eway offered to mBank clients. The gateway is based on cloud solutions, enabling it to seamlessly handle hundreds of transactions per second. Over 20,000 clients have already used Paynow, including the largest online stores in Polish e-commerce. Its development is

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Deferred payments, commonly referred to as BNPL (Buy Now, Pay Later), is a service that allows customers to purchase goods and pay for them at a later date, usually within 30 days. According to the "Global Payments Trends" forecast, by 2025, 12% of all e-commerce transactions will be completed using this payment method. Paynow charges a commission of 1.2% of the transaction amount for using deferred payments. Data from PayPo shows that customers who use deferred payments are more likely and quicker to make purchase decisions, which leads to increased sales for the store.

New version of mBank CompanyMobile, mobile application for corporations

mBank has launched a new version of CompanyMobile mobile application for corporations, offering many attractive features that facilitate daily financial management for businesses. One of these features is the expansion of the app to include previously unavailable card management functions, allowing users to easily manage their cards directly from their phones.

The app allows users to add all or selected cards to the card widget. With the introduction of a clear list, using the cards in the app has become more intuitive and user-friendly. If a user has more than one card, they can simply click the card widget to navigate to the list screen. All cards assigned to the user are displayed there, organized and grouped by the contexts to which they have been assigned. Additionally, the app offers a realistic representation of the cards' appearance – the graphics reflect their actual design. This allows users to quickly and easily identify their cards within the app. This is another enhancement that makes financial management in CompanyMobile even more convenient and modern.

The new strategy of mLeasing and expanded payment options

At the beginning of 2024, the Management Board of mLeasing ado pted new strategy. The adopted strate gy is a response to the dynamically changing market environment and growing impact of climate change on business challenges. Strategy assumes the support of clients and partners in the co ming transformation of the automotive market, including fleet owners and individual car users. The new GreenHub introdu ced by the strategy is a comprehensive solution to facilitate the implementation of decarbonization a nd emission reduction plans for mLeasing customers. The distribution strategy focuses on diversifying a nd strengthening its own sales channels, mainly the mAuto platform and digital shopping channels.

LeaseLink, a fintech owned by mLeasing, has introduced deferred payments for businesses. It has become the only entity on the market offering such a broad payment ecosystem aimed at businesses, which includes leasing, installment payments, and BNPL (buy now, pay later). Small and medium-sized enterprises also have access to the Paynow payment gateway, allowing them to finance company purchases without cash. Furthermore, in the third quarter of 2024, LeaseLink launched equipment rental services and merchant finance, creating a comprehensive financing offer – LeaseLink 360°.

mLeasing is a leader in electromobility and support in the energy transformation

mLeasing actively supports clients and partners in the transformation of the automotive market. The subsidiary registered 1,349 new battery electric vehicles (BEV) this year, making it the leader among companies financing and leasing new cars.

According to the latest data from CEPIK, mLeasing registered one of the h ighest number of BEVs on the market in the 2024 — fully electric vehicles that are leading the way in reducing the carbon footprint. Th is is the result of the subsidiary's consistent efforts in the field of electromobility. For fleet owners, mLeasing o ffers a full range of services, from helping with car selection to financing and facilitating everyday use. With ca r users in mind, the subsidiary is piloting a comprehensive fleet decarbonization program.

In October 2024, mLeasing launched a new online platform called " Green Transformation " (in Polish). The platform will support small and medium-sized businesses in reducing energy costs and lowering CO2 emissions. Entrepreneurs will receive assistance at every stage of goal implementation. They will gain essential knowledge about environmental protection, as well as a comprehensive set of products and services for sustainable business development. Through the platform, entrepreneurs will conduct an energy audit and estimate their carbon emissions. These values form the basis for reducing operating costs, developing a decarbonization plan, and limiting the negative environmental impact.

mBank increases the limit for financing sustainable energy

In July 2024, mBank once again increased its financing limit for renewable energy sources (RES) to PLN 6.4 billion. We finance the construction of wind and solar farms through bilateral and syndicated loans with the participation of other commercial banks and the European Bank for Reconstruction and Development. In consortium loans mBank serves as the credit agent or collateral agent.

mBank Group's Strategy for 2021-2025 aims to support sustainable investments totaling PLN 10 billion. The funds will be directed towards areas such as energy transformation, the circular economy,

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More information about the sustainable financing at mBank is available in chapter 10.2 “Environmental information (ESRS E1,E4)”.

mBank and KUKE jointly support entrepreneurs in implementing green investments

mBank, in cooperation with KUKE, introduces an innovative guarantee program for entrepreneurs undertaking green energy investments. The offer enables attractive financing for projects related to renewable energy sources and improving energy efficiency. As a result, mBank clients can execute their investment plans more quickly and easily, contributing to environmental protection. Thanks to the guarantees, companies can obtain loans for green investments that cover up to 80% of the required financing. The repayment period for such loans can exceed 20 years, with a minimum loan amount of PLN 10 million.

mBank has been cooperating with KUKE since June 2023, when the institutions signed their first cooperation agreement. This agreement enabled companies to access attractive investment loans secured by payment guarantees for the purpose of developing their export potential.

Co-organizing the issuance of green bonds

mBank became a co-organizer, dealer, and structuring agent for Polenergia's green bond issuance. The issuance is part of the strategy to support the transformation of the Polish energy sector. Polenergia, the largest private energy group in Poland, issued green bonds for the first time. mBank was one of three institutions involved in organizing the issuance. Polenergia will use the proceeds to finance or refinance the development, acquisition, construction, and operation of green projects in the renewable energy sector, including offshore wind farms, as well as energy efficiency projects. The debt securities issued under this framework meet the Green Bond Principles established by the International Capital Market Association.

The issuance of 5-year bonds worth PLN 750 million was met with tremendous interest from investors, confirming the growing awareness of the importance of investing in renewable energy projects.

50% of clients to be financially resilient

mBank, as the first bank in Poland, signed the Commitment to Financial Health and Inclusion and Principles for Responsible Banking, as part of the United Nations Environment Program Financial Initiative (UNEP-FI). In June 2024, mBank announced the first goal that it will implement as part of this activity. The goal is to increase and maintain financial resilience and financial well-being of Poles, through support in managing expenses and building a financial cushion.

mBank's goal set together with UNEP-FI is to increase the percentage of clients who believe they are financially resilient to at least 50%. In 2024, we achieved this goal at a level of 54%. This means that more than half of our clients consider themselves financially resilient. We will continue to pursue this goal by encouraging clients to actively use the Finance Manager, a personal finance management tool (PFM).

The Finance Manager is designed to help clients manage their current and future finances wisely. Its role also includes supporting clients in preparing for life-cycle events (e.g. retirement). By the end of 2024, 1.92 million users were utilizing the PFM tool.

The bank will even better help its clients to plan their finances, avoid unnecessary debt and improve risk management skills. Finance manager is a tool available in the mBank mobile application and the website. By transparently presenting current inflows and outflows, categorizing them and comparing them over time, it allows clients to efficiently analyze and manage their finances on an ongoing basis.

Education on cybersecurity, saving and safely investing for retirement

mBank conducts regular educational activities related to safety. In 2024, as part of the "Self-Defense Online" campaign, we highlighted ways to protect against common online scams. The campaign included TV and radio spots, as well as online initiatives. Additionally, we promoted mBank's solution: identity confirmation via mobile authorization, on the internet and radio. This feature allows clients to verify whether a caller claiming to represent the bank is truly one of our employees or a fraudster impersonating them. In the second half of the year, we launched a broad communication campaign encouraging audiences to listen to the audio series “Clamor – Stories” (“Jazgot – Historie”), an mBank production, that illustrates the methods used by fraudsters and shares stories of individuals subjected to psychological manipulation. This was the second season of the audio series, which received highly positive feedback from both the industry and listeners. The audio series was made available on the most popular podcast platforms. This unconventional form of communication allowed us to expand the reach of our efforts and draw attention to the complex issue of social engineering tactics used by fraudsters to gain their victims' trust.

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mBank manages the largest number of brokerage retirement accounts, including IKE and IKZE, in Poland. To encourage Poles to save, from September 2024, mBank stopped charging deposit fees on foreign securities held in these accounts. For all clients, mBank has created a special educational website, " Invest for Your Retirement on Your Own " (in Polish). Additionally, within the mobile app, as part of the financial manager tool, mBank has introduced a retirement calculator. This tool helps mBank clients determine how much money they need to save for retirement and plan regular savings.

ETF funds are one of the most popular financial instruments in Poland. Seven out of ten people who invest in foreign markets have this type of instrument in their portfolio. To help new investors, mBank launched an educational project "Akcja Edukacja" (Action Education). It consists of several videos and articles where mBank explains what ETF funds are and how to invest passively. mBank's specialists explain the benefits and risks associated with such investments. In eMakler, the brokerage service integrated with mBank accounts, mBank offers an advanced ETF search engine. This tool allows users to access key information and conveniently choose from over 400 funds available at mBank.

With Polish women in mind, mBank launched the campaign "Women Live Longer... Also in Retirement." A study conducted by Maison & Partners in May 2024 revealed that only one in three women in Poland takes actions that could increase their pension. Just 6% invest in financial markets. mBank's campaign was inaugurated with a meeting attended by financial educators and journalists. The campaign produced podcasts, interviews, and reports to highlight the issue. Online, advertising spots based on memes "That's why women live longer than men" were published. The goal is to humorously draw attention to the serious problem and encourage action. The spots direct viewers to a specially prepared website where women can find tips on how to start securing their financial future.

Operations of mBank Foundation

We have been implementing the M for Mathematics (m jak matematyka) strategy since 2013. We strongly believe that mathematics provides the foundation for logical thinking and is vital to understanding the world around us. Knowing mathematics helps to take informed financial decisions and encourages interest in science. mBank believes that mathematics contributes to both personal professional success and the development of Poland’s economy. In 2024, the mFoundation allocated over PLN 3,600,000 to statutory activities connected with mathematics education.

As part of our initiatives, we support children, teenagers and their parents and teachers, as well as university students and young scientists. In 2024, grants for educational projects were awarded to 270 entities, including public schools and kindergartens, non-governmental organisations, higher education institutions and libraries.

First edition of the grant program “mFactorial”

On March 14, mFactorial (mSilnia) program has begun. It is a new program for elementary schools students. The mFactorial has replaced mPower (mPotęga) after 10 years. The main goal of the program is to develop mathematical thinking. mFactorial also promotes practical approach to teaching mathematics and encourages cooperation between teachers of different subjects. The new program consists of two categories: an educational project competition - for schools and a lesson scenario competition - for educators. Public elementary schools, teacher training centers, universities, libraries and NGOs took part in the first competition. In the second competition, methodologists, teachers, educators and popularizers of mathematics could took part and submit their scenario. In the first edition of mFactorial, mBank has awarded grants to 65 projects from all over Poland and 8 original scenarios for the total amount of PLN 857,000.

Contest “A Step in the Future” for the best student thesis in mathematics

On March 30, the birthday of the great Polish mathematician Stefan Banach, the mFoundation announced the results of its annual competition “A Step into the Future” (“Krok w przyszłość”). The jury of the competition, chaired by Professor Paweł Strzelecki from the Faculty of Mathematics, Informatics and Mechanics of the University of Warsaw, selected the best papers in mathematics written by students that

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„Rethinking Maths: Recipes for Effective Maths Education”

In June 2024 mFoundation organized conference „Rethinking Maths: Recipes for Effective Ma ths Education”. Over 100 teachers from all over Poland took part in this event. The main goal of this event w as to find universal solutions, which would help to improve mathematical education and a llow to teach math more efficiently. The key element of the conference was a debate featuring Polish and Eston ian experts. It focused on the need for systemic changes pertaining to teacher autonomy, communication between teachers teaching different subjects and at different levels, and maths education based on problem solving. mBank F oundation forwarded the conclusions from the debate to the Ministry of National Education.

Fourth edition of “Growing with Maths” grant program for kindergartens

In September, mFoundation started accepting applications for the fourth edition of the Growing with Maths (Rosnę z matematyką) program. The program was available to kindergartens, schools with kindergartens and non-governmental organisations from all over Poland. This year’s edition gathered 446 ideas for educational math activities for children aged 3–7. The jury of the contest selected 127 projects and awarded grants totaling PLN 860,000. The money will fund hundreds of hours of creative maths classes for the youngest school children.

Grant program „Pragmatic dimension of geometry”

Since 2022 mBank has launched a number of new themed grant programs. Once a year in autumn, mFoundation announces the main theme for the next 12 months. From October 2022 to September 2023, the foundation awarded grants to projects that combined math education with ecology. Since October 2023, the main theme has been geometry. The program “Pragmatic dimension of geometry” (“Praktyczny wymiar geometrii”) supports ideas proving that geometry is an interesting, inspiring field that can be much more than just a boring school subject. It can be taught as part of competitions, special courses, extracurricular classes, meetings and workshops. In 2024, mFoundation awarded grants totaling PLN 643,000 to 85 projects.

Other activities

mFoundation has been organising educational events for many years. In 2023 it held the 9th Maths Picnic in the Copernicus Science Centre and the 9th Festival of Mathematics organised jointly with Gazeta Wyborcza daily. We also support maths Olympians as part of the Masters of Mathematics (Mistrzowie matematyki) project. In 2024, in cooperation with the Association for Mathematics Education, we provided scholarships to 29 winners of the Mathematics Olympiad and Junior Mathematics Olympiad. The total amount of scholarships was PLN 44,000. Additionally, the mFoundation offers free publications promoting maths, which can be downloaded at www.mjakmatematyka.pl . These include:

▪ Matematyka jest wszędzie (Maths is Everywhere), Dziecinnie prosta matematyka (Child’s Play Maths) and Matematyka na zielono (Green Mathematics) dedicated to families with children aged 0–13,

▪ Wielcy polscy matematycy znani i nieznani (Known and Unknown: Great Polish Mathematicians) and Środek do celu (Means to an End) dedicated to teachers who want to learn how to make maths lessons more interesting.

Implementation and financial reports on the foundation’s operations are available at www.mfundacja.pl .

Support for promoting culture – a summer full of concerts

The M for mBank’s Art Collection (“m jak malarstwo”) project is one of mBank’s social responsibility projects. Thanks to our special fund established in 2022, we are creating a collection of artworks authored by the most interesting and promising young Polish artists. The artworks are selected on behalf of mBank by a committee composed of renowned representatives of the art market and a representative of the fund. When selecting individual works, the committee responsible for art purchases is guided by both their artistic worth and prospective valuation in the longer term. This may include both single artworks from individual artists and larger collections. Between 2020 and 2024, mBank bought 152 artworks authored by 96 contemporary Polish painters. mBank’s initiative revitalises the Polish art market and supports the most talented young artists. We expect that in the future mBank’s collection will pave the way for a new generation of artists, and the M for mBank’s Art Collection fund will operate like a perpetual motion machine supporting artists.

In July 2024, mBank became the strategic partner and main stage sponsor of Łódź Summer Festival for the second time. This is the largest urban festival in Poland. The event took place from July 26 to 28, and all concerts were free of charge. The festival featured a unicorn – the unofficial symbol of the revitalized

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In August, mBank became the patron of the Academy of Fine Arts for the 7th time during the Pol’and’Rock Festival. The festival took place from August 1 to 3. mBank prepared many attractions for the 30th anniversary edition of the event. Among them were workshops on cybersecurity, a commemorative payment card in both physical and mobile versions, and gifts for festival participants. mBank has been a partner of the Pol’and’Rock Festival since 2018 as the patron of the Academy of Finest Arts – a place for important meetings and discussions.

In September, mBank returned to Łódź for the Great September Festival. The third edition of this unique showcase festival, combining the characteristics of a public event with a meeting for the music industry, took place from September 12 to 14. mBank and Mastercard were patrons of the event. Just like last year, mBank prepared a limited-edition payment card, designed to match the festival's visual identity, which offers a 50% discount on festival merchandise.

mBank is eager to engage in interesting cultural events, especially those that are appealing from the perspective of its customers. The bank has many clients in Łódź, as analysis shows that over 40% of the city's adult residents hold an account with mBank. The retail banking division of mBank also has its roots in Łódź, where it was established over 20 years ago. mBank is also one of the largest employers in the region, employing around 3,000 people.

mBank plays together with the Great Orchestra of Christmas Charity

The Great Orchestra of Christmas Charity (WOŚP) played for the 32nd time in 2024. For mBank, it was the seventh anniversary of its cooperation with the foundation as strategic partner and sponsor. The 32nd WOŚP finale took place on January 28, 2024. This time, the foundation raised money for equipment to treat lung diseases. In addition to the gifts prepared every year and the functions made available in the application, mBank also enabled support for the Foundation's goals through the "heart" icon in the transaction service. In 2024, for the first time, the bank offered payment cards with commemorative WOŚP design and blind notch that makes the use of the card easier for visually impaired people. The youngest clients who opened an eKonto Junior received special pins with motifs associated with the Orchestra for their new payment cards. Companies served by mBank’s corporate and investment banking could make a contribution to the collection organised by the Great Orchestra of Christmas Charity. mBank donated the equivalent of six months’ fees for accounts opened by companies from January to the end of June 2024 to the foundation's account.

The 33rd Great Orchestra of Christmas Charity (WOŚP) finale took place on January 26, 2025. This year, the WOŚP foundation raised money to support and equip pediatric oncology and hematology departments. Once again, mBank participated in the event and supported its organization – in total, about 1,000 employees were involved in various activities. As a result of the joint effort of mBank employees and its clients, nearly PLN 140 million has been raised for WOŚP over the past 8 years. mBank itself donated PLN 19.5 million during this time. This year, clients could also use a special „heart” icon in the mobile application to donate to the foundation. To every click on the icon, PLN 1 was added by mBank. In parallel, mBank offered traditional and digital payment cards with WOŚP motifs designed by Jurek Owsiak, the Charity’s founder, and with a built-in notch for blind people. For corporate clients, mBank prepared another edition of the "In the Rhythm of WOŚP" promotion.

New features of mBank’s online banking and app

In 2024 we focused on improving the functionalities of our online banking and mobile app. The most important changes made in this period include:

■ Budget and summary in the Financial Manager (PFM) – In the budget management tool in our mobile application, we added new features: budget planning and personalized summaries of income and expenses on a monthly and annual cycle. Their goal is to help clients better understand the flow of funds in their accounts, and consequently gain fuller control over their finances - taking care of so-called financial health. mBank is the first among Polish banks to join the global trend of presenting annual data in a visually intriguing way. In just the first 6 days after making this functionality available, over 485,000 clients viewed their summary.

■ Retirement calculator - In our mobile application, we have provided our clients with a calculator that allows them to create their own savings plan for retirement. Clients simply need to answer a few questions about their current income, accumulated funds, and the lifestyle they want to lead in retirement. Based on this and data from ZUS, the calculator estimates the amount the client will have available for retirement. If it is not sufficient for the intended goal – the chosen lifestyle – it suggests

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how much needs to be saved monthly to accumulate the missing amount. Making your own retirement calculation does not involve purchasing any product. The plan can be saved and edited in the future. Our goal in creating the retirement calculator was to encourage clients to think about their finances in the long term.

■ mOkazje zakupy - At the end of the year, with the new version of the mobile application, all mBank clients gained access to mOkazje zakupy. The entire purchasing process is quick, safe, and intuitive: a search engine with filtering and sorting options helps find the right product. Address data is automatically filled in, and finalizing the order only requires entering the app PIN or confirming the transaction with Face ID. Payment is also instantaneous, as it occurs without any external redirects.

■ Investment management section expansion - We continue to develop the investment managemen t area in the mobile application. Currently, this section provides more information about t he composition of funds in the portfolio. We have added investment visualization and simplified naviga tion.

■ New loans tab - Now, clients can find all loans in one place in the mobile application, with intuitive filters. The new tab meets the WCAG (Web Content Accessibility Guidelines) requirements.

■ Downloading transfer confirmation before session - We have enabled clients to download the transfer confirmation immediately after placing the order and before the settlement session. This highly anticipated feature was used 110,000 times in the mobile application and 106,000 times in the transactional service in the first month.

■ Mobile onboarding with biometrics - At the end of 2024, we introduced biometric verification in the remote account opening process. This improvement enhances the client experience and shortens the time to open an account through the mobile application. Biometrics also increase the security of our clients when opening an account remotely.

■ Managing payment card tokens - In the mobile application, clients can easily check the list of all available tokens associated with the payment card, such as a smart band or smartwatch. By removing a single token, they can quickly disable payments with a given device if needed.

■ Changing BLIK limits and phone number in the mobile application - Last year, we added the ability to manage BLIK limits for payments and transactions and update the contact phone number in the mobile application. Clients can now make changes easily while maintaining all security principles.

■ Personalizing the application dashboard - The mBank application dashboard now allows for the customization of products, shortcuts, and widgets, speeding up and simplifying the use of the application. In 2024, we expanded the dashboard with a new element. Individu al clients gained access to another widget, visible immediately after logging in. Clients with access to the Shopping section w ill find current promotions in it. To make the application even safer, we added the opt ion to hide the account balance on the main screen o f the mobile application in the dashboard view personalization opt ions.

■ New microanimations communication formats - To effectively reach our clients with communication and reduce the effect of the so-called banner blindness, we introduced the first improvements in this area in 2024. From the fourth quarter, our clients can see a communication microanimation on the dashboard, which appears briefly after logging into the application. As a result, clients more frequently open messages about financial health, online dangers, and offers tailored to the client's situation.

■ New chat search engine - We implemented a search engine for the most popular topics to help our clients quickly and independently solve problems they encounter in the chat. The new search engine is available after entering the chat from the transactional service and the mBank mobile application. The main advantages of the tool are an intuitive interface designed with the participation of our clients, simplicity and ease of searching for help topics. If the client does not find an answer to their question, they can always write to our employee in the chat.

■ New video contact path with the bank - Currently, the client can schedule a meeting with a bank employee via video channel. In the first stage, we provide this contact path for discussions about investment products, where we know clients need additional support in handling such products. Clients receive notifications about the scheduled meeting in the message box in the transactional

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service and via a "push" message in the mobile application in advance. Additionally, it is easy to cancel the meeting by responding to the meeting notification.

Thanks to regular changes, we increased the number and involvement of app users in 2024. Our mobile app had 3.8 million users in December 2024 in Poland, Czech Republic and Slovakia (+5.1% YoY). Moreover, the number of Monthly Active Users (MAU) amounted to 3.5 million.

1.8. Awards and distinctions

mBank wins award for best portfolio management and remains best domestic bank - Euromoney Global Private Banking Awards

At the end of March, mBank was honored with two awards during the Euromoney Global Private Banking Awards gala. An international Jury recognized mBank with the award for the best domestic private banking and the award for the best portfolio management. This year, the panel of experts highlighted a significant number of new initiatives which supported the development of mBank's operations. mBank was also distinguished for digital solutions for clients in online banking.

Four awards in the World’s Best Corporate Digital Bank 2024 contest

In the Global Finance World’s Best Corporate Digital Bank 2024 competition, mBank won 4 accomplishments. The awards were handed for: Best Corporate Mobile Banking in Central and Eastern Europe, Best Corporate Digital Bank in Poland, Best Mobile Banking App in Poland and Best in Innovation in Poland. Once again, mBank received the title of the best digital bank in Poland. The mBank CompanyMobile application received the title of the best corporate mobile banking application in Poland for the second year in a row, but for the first time it was recognized as the best in CEE. For the first time, the jury indicated mBank as the best example of an innovative bank in Poland.

Award for mBank’s Wealth management for outstanding offering to private clients

During the international Global Private Banking Innovation Awards gala, mBank's private banking received an award for the best Wealth Management for portfolios worth from PLN 100,000 up to 250,000 US dollars. The Global Private Banker magazine also recognized mBank for investment facilitation solutions, which give private banking clients ongoing access to their portfolio, results and all statistics from the transaction service. The gala is organized by Global Private Banker magazine.

Honorable mention for best digital private banking at Wealth Tech Awards

In the Wealth Tech Awards 2024 competition, mBank won in the Best Digital Private Banking in Central and Eastern Europe category. The competition was organized by PWM Financial Times. This year, the competition jury appreciated the digital development of mBank's private banking. The award covered all our activities in the digitization of private banking.

Recognition of mBank’s digital offer – second place at highly prestigious Mobile Trends Awards

mBank received a special award in the Mobile Trends Awards competition. Thanks to the votes received in the online poll, mBank took second place in the "Mobile application development" category. More information on new features that appeared in the application last year are included in chapter 1.7 “Key events and projects of mBank Group in 2024”. For 12 years, the awards have been granted to companies which have successfully used mobile technologies in their projects.

Diamond award for the most creative mobile campaign presented to mBank’s mobile onboarding process

During the Performance Marketing Diamonds competition gala, mBank received the ma in prize "Diamond" in the category of the most creative mobile campaign. The competition jury appreciated the acquisition campaign in the mobile onboarding process, i.e. directly within the application. The competition is organized by the Chamber of Electronic Commerce. The event has an international charact er and is a day dedicated to marketers who specialize in performance marketing, affiliation, preparing content and e-commerce strategies.

mBank won the first place at Quorus-Infosys Finacle Banking Innovation Awards 2024

mBank was awarded the first place at international contest Quorus-Infosys Finacle Banking Innovation Awards 2024 in Operational Excellence category. mBank’s project “Unique way to activate mBank’s mobile app”, was selected among 400 solutions from 177 institutions across 57 countries. mBank’s team had introduced innovative method to activate mobile app, which only takes one minute. This method uses NFC technology. A physical card (active) is required to connect with an account. This solution vastly improves user experience and cybersecurity.

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mBank’s Operation Department for the second time in a row was awarded in the prestigious, international contest ActiveOps Awards. mBank was nominated in two categories: OPS Excellence and OPS Team of the Year. Capacity conference, organized by ActiveOps in UK, USA and Australia, offers a unique opportunity to look at the future of operations. During the event, various companies are awarded for introducing innovations in their operations departments, which stand out from the competition.

„Financing Bank of the Year”, the Polish Private Equity & Venture Capital Association

mBank won another award from Polish Private Equity & Venture Capital Association (PSIK) in the Financing Bank of the Year category. The contest promotes the highest standards in the private equity/venture capital sector and PE/VC investor contribution to the development of Polish companies and the society. The award is even more valuable to mBank as it is provided by PSIK members representing the market. This year, mBank received widespread recognition from private equity and venture capital funds.

Laures in „Diamenty Zielonego Przemysłu” (Diamonds of green industry) contest

mBank was awarded in „Diamenty Zielonego Przemysłu” (Diamonds of Green Industry) contest, in category “Leader of Green Financing”. This contest is aimed to honor companies and entre preneurs, that stand out from the competition, and implement sustainable development goa ls in their strategy. The statuettes are awarded to companies that introduce innovative products and solution s, as well as make investments with the highest environmental standards in mind. The competition is organized by the Executive Club.

Paynow awarded with third place at the Reinvention Awards

Paynow’s mechanisms for increasing sales conversion were awarded third place in the Operational Efficiency category in the Qorus Reinvention Awards – Europe competition. Paynow is created by mBank and mElements. Conversion-increasing mechanisms are functions which give a payer buying from an online shop with Paynow implemented the best chance of successfully completing a transaction.

The Best Annual Report

mBank's annual report for 2023 received the title of "The Best of the Best" from the Institute o f Accounting and Taxes. mBank was distinguished in the category of financial institutions for the t welfth time in a row. Every year, mBank's reports are appreciated by market commentators, who confirm the h igh utility value of the reports for shareholders and investors. The competition aims to create stand ards for preparing annual reports in accordance with International Financial Reporting Standards and Inte rnational Accounting Standards, recognized by the market, and to promote publications with the highe st utility value.

Two silvers at the Effie Gala for mBank's cybersecurity efforts

At the 25th Effie Gala, mBank received two silver awards. Honorable mentions went t o mBank's campaigns: self- defense on the net and the criminal audio series Jazgot. mBank has b een building awareness of online threats and showing how to protect against them on a large scale for 9 years. The Effie Gala is one of the most recognizable events at which the most important Polish marketing awards are presen ted.

Honors for mBank’s diversity and inclusion strategy with top position in nationwide ranking

This year, mBank was also among the most advanced employers in the field of diversity and inclusion management in Poland. The Diversity IN Check ranking is based on a study conducted by the Responsible Business Forum. It assesses the level of advancement of Polish companies in managing diversity and inclusion. mBank achieved one of the highest results in the study: over 80%.

Golden awards for customer experience and recruitment campaign

During the Next Generation Contact Center & CX Best Practice conference, mBa nk received golden awards in two categories: Best Contact Center and Best Recruitment Campa ign. The international jury appreciated the presentation of our “CC Premium” strategy and the recruitment process during the presentation at the conference. The “CC Premium” strategy was deemed by the competition jury to b e the best and worth imitating by companies that want to provide customers with the highest quality expe riences.

HR development programs distinguished by main prize

mBank received an award in the Power of Attraction (Siła Przyciągania) competition organized by Puls Biznesu Magazine. In the category “Support for employee development - new competences in a new reality”, mBank received the main prize. The jury appreciated the "Future Skills" project and the "Mission Innovation" conference of mBank which aims to develop future competences.

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mBank's "Fridays with Development" program won the first place in the 9th edition of HR Dream Team in the category of talent development in the organization. "Fridays with development" is a series of workshops, consultations, remote trainings and webinars held every Friday. Employees can choose topics according to their interests and needs. HR Dream Team is the culmination of the most interesting, boldest and most effective projects implemented by HR teams in organizations.

Multiple prizes for mBank at this year’s Employer Branding Excellence Awards competition

mBank won the main prize in the Employer Branding Strategy category in the Employer Branding Excellence Awards 2024 competition. The jury of the competition appreciated mBank's campaign "We are distinguished by people", which presents the organizational culture and values of mBank. In addition, mBank received distinctions in two other categories: External Campaign (for the "Technologies that matter" project) and Employee Advocacy (for the "Diversity Ambassadors" project). The main idea of the competition organized by the HRM Institute is to reward and present the best employer branding practices in Poland.

mBank’s press office recognized as the best by jounalists

The mBank press office was once again recognized as a leader in the banking sector. At the same time, opinion leaders indicated mBank as the most recommendable to individual customers in a study by ARC Rynek i Opinia Sp. z p.p., market research. PR specialists won first places in the following categories: speed of response, knowledge of the specificity of journalists' work, professionalism and knowledge. They are also best at building relationships with media representatives and presenting topics in an interesting way.

Gold for Contact Center and Best Recruitment Campaign

mBank received gold in the category of Best Contact Center and Best Recruitment Campaign. The awards were granted by an international jury during the Next Generation Contact Center & CX Best Practice conference organized by Contact Center World. mBank's CC Premium strategy was recognized as the best and considered an example to be followed by companies which intend to provide customers with the highest quality experience.

A Series of Awards for mBank's Audio Series "Jazgot," including in a competition for the best podcast

The crime audio series "Jazgot" (“Clamor”), coproduced by mBank and the Voice House studio, has been appreciated once again. This time, its communication and entertainment values, and above all, its beneficent work for the society, which the recording applies by educating recipients in the field of cybersecurity, were appreciated by the jury in the competition organized by Klub Twórców Reklamy. The series received two silver and one bronze awards, and since its publication it has won a total of seven awards. "Jazgot" is very popular.

On the other hand, in the Podcast of the Year contest, “Jazgot” received an award in the “Brand Sponsoring a Podcast” category, as well as an Audioteka award for a well-told story. Podcast of the Year is a competition aimed at promoting the quality, originality and culture of transmission of various audio forms in digital media.

The radio show “Jazgot” also received the top prize in the PR Wings competition organized by the Association of Public Relations Agencies in the “Protection from Misinformation” category. “Jazgot” enjoys great popularity. The second season of the series premiered in October 2024.

More information on awards and distinctions can be found on the Bank’s website in the “Press Centre” section: https://en.media.mbank.pl/ .

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2.1. Macroeconomic environment

Economy and the banking sector in Poland

Source: Statistics Poland (GUS), Eurostat, Polish Financial Supervision Authority

1 Data as at the end of 2023

2 Data as at December 2024 (as released on February 18, 2025)

3 Data as at September 30, 2024

Summary of developments

GDP growth in 2024 was significantly better than in the previous year. As a result, final growth is likely to be close to 3%. Consumption proved to be the main driver of growth last year. The change in inventories (future consumption) also had a slightly positive impact. The contribution on the investment side is likely to be close to neutral. On the other hand, weak external demand combined with relatively strong imports resulted in a negative contribution from foreign trade. While we expect foreign trade to remain under pressure in 2025, we see a more pronounced acceleration for investment. It is worth noting that the Polish economy performed significantly better than the Czech Republic or Hungary last year.

Depth of recession and pace of upswing in the region (Q4 2019 = 100)

Source: Own calculations based on Macrobond

Inflation has followed a rather uneven path over the past year. In the first half of the year, the annual CPI fell as low as 2%, partly due to base effects. The second half of the year was characterised by much higher figures in the vicinity of 5%. However, the growth was not another wave of inflation caused by strong demand or supply constraints. The reason why inflation accelerated so sharply from July onwards was the government's decision to raise the fixed tariff for the sale of electricity.

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Source: Own calculations based on GUS

Over the past year, yields on government bonds have risen, although the increase has varied depending on the maturity of the note. The longer duration, the greater the rise in yields. At the same time, the Monetary Policy Council decided not to change interest rates. As a result, the NBP reference rate remained at 5.75%. During the year, however, the MPC's communication changed quite significantly, which had an impact on the high volatility of the expected path of interest rates. In 2025 a record level of borrowing needs to be financed, which in gross terms we expect to exceed PLN 550 billion. However, such a large supply should find adequate demand given the expected growth in deposits, continued interest in government bonds from foreign investors, relatively attractive valuations and the Ministry of Finance's ability to issue treasury bills.

Polish Treasury bond yields

Source: Bloomberg

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Source: Bloomberg

Banking sector

Poland: Household loans and deposits (excl. FX effect)

Source: Own calculations based on NBP data

Household deposits continued their strong growth in 2024, although the change turned to a downward trend. At the same time, loans, including mortgages, were gradually rebounding. In the corporate sector, the rate of deposit growth has been declining, supported by the lagged effect of wage growth combined with weaker demand for offered goods and services. It is worth noting, however, that demand for corporate loans has been improving.

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Source: Own calculations based on NBP data

Economy and the banking sector in the Czech Republic

Source: Eurostat, Česká národní banka (CNB), Český statistický úřad

1 Data as of end of 2023

2 Cumulative data for 9 months (as at September 30, 2024)

GDP, inflation, interest rates and FX rates

The Czech economy was characterised by modest GDP growth in 2024. The relative weakness can be attributed to exposure to the automotive market, which is associated with a significant dependence on economic activity in Germany. The details of GDP growth show a clearly negative contribution from inventories and a slight increase in investment. At the same time, foreign trade has recently had a positive impact on growth. However, it is not a more pronounced recovery on the export side, but the weakness of domestic demand and the resulting decline in imports.

Inflationary processes in the Czech economy have stabilised in recent quarters. As a result, CPI inflation is recorded within the 2-3% range. Core inflation has also followed a similar trend. The economic weakness combined with the stabilisation of inflationary processes has led to an aggressive monetary easing cycle. As a result, the central bank's key interest rate has been cut from 6.75% to 4%. The central bank's current communication suggests greater caution about the size of future moves.

As a result of the much larger rate cuts in the Czech Republic than in the euro area, t he interest rate differential has widened to the detriment of the Czech currency. As a result, the Czech koruna depreciated by around 2% against the single currency. In terms of government bond yields, the Czech Republic followed a similar trend to o ther economies, with yields on government bonds with longer maturities rising.

Banking sector

The Czech banking sector in 2024 continued its stable and favourable deve lopment. Despite interest rate cuts, it maintained high profitability, with return on equity (ROE) marginally exceeding 15%. It was backed by broadly stable net interest income, accompanied by some cont raction of margin. Cost of deposits started

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Asset quality in the Czech Republic remained very resilient as evidenced by the NPL ratio of 1.7% at the end of 2024, which is the second lowest level compared to other countries in the CEE region. Funding and liquidity profiles continued to be solid with the sector’s loan-to-deposit ratio of 64%. Czech banks have also been very well-capitalized. A small decline in the aggregate risk weight coupled with a growth of own funds offsetting an increase in total risk exposure amount contributed to their robust position. At its meeting on financial stability issues in April 2024, the Board of ČNB decided to lower the countercyclical capital buffer rate from 2.0% to 1.75%. On the basis of an assessment of cyclical systemic risks, it was reduced further to 1.25% in mid-2024.

The dynamics of total loans to households in the Czech Republic has been mainly shaped by mortgage segment. Over the last three years, credit activity was markedly influenced by interest rate cycle and development of residential property prices, determining affordability of housing. As a result, the growth of retail exposure declined to below 5% at the end of 2022 and maintained close to this level until recent revival of mortgage lending, which translated into un upward trend in H2 2024. Further to an assessment of systemic risks associated with mortgage lending and the real estate market, the Czech National Bank decided to leave the upper limit on the LTV ratio (loan-to-value) unchanged at 80% (or 90% for applicants under 36 years purchasing owner-occupied housing). The upper limit on the DTI ratio (debt- to-income) was deactivated from January 2024. The portfolio of non-mortgage loans was rising faster in 2024, with the annual pace approaching to 9%. No deterioration of asset quality in the retail segment was observed in 2024 and the share of non-performing loans in the total volume of loans to households remained unchanged in annual perspective at 1.3%. Rising expenditures, driven by post-pandemic reopening of the economy and high inflation, caused the growth of retail deposits to slow down visibly in 2022. Then, the trend reverted and annual dynamics accelerated to 7.5% at the end of 2023 and continued at the similar level over 2024. Development of term deposits turned to negative territory at the end of the year and their share edged down to 24% of total base.

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Having passed the contraction phase in H1 2021, corporate loans in the Czech Republic started rebounding and reached the growth pace exceeding 10% in Q3 2022. Their development in 2023 was volatile, with dynamics averaging at mid-single digit, followed by an uptick in H1 2024 and return to around 5% in the final quarter of the year. The share of non-performing loans in the total volume of loans to non-financial corporations was constantly declining from the end of 2021. It went down to historically low level of 2.5% in December 2023 and did not diverge materially from that in 2024. Companies kept solid liquidity, reflected in growth of corporate deposits staying above 5%, with an exception of June 2024 affected by base effects.

Economy and the banking sector in Slovakia

Source: Eurostat, Národná banka Slovenska (NBS)

1 Data as of end of 2023 2 Cumulative data for 9 months (as at September 30, 2024)

GDP, inflation and interest rates

The Slovak economy is expected to have reached average annual GDP growth of close to 2% last year. This will be an improvement compared to 1.4% growth in 2023. In the course of last year, private consumption, which had been in recession the year before, recovered markedly. At the same time, public consumption grew quite strongly. Despite the excellent investment performance in 2023, the previous year was also quite strong in this respect. The recovery in domestic demand was reflected on the import side, where growth rates exceeded those of exports.

Inflation in the Slovak economy has recently stabilised in the 2-3% range. Core inflation has slowed even more. As in other economies, inflation in Slovakia is relatively high for services and quite low for goods. The European Central Bank has cut the deposit rate from 4% to 3%. At the same time, the central bank decided to narrow the interest rate corridor. Looking ahead, we expect monetary easing to continue due to the weakness in economic activity and the expected slowdown in wage growth.

Banking sector

After many years when it was weaker than in other countries of the CEE region , the profitability of Slovak banking sector improved significantly in 2023. However, with an effect starting from Janu ary 2024, the local government approved a new tax on banks as part of a set o f measures aimed at consolidating public finances

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The NPL ratio for Slovakia is among lowest in the CEE region, reaching 1.6% at the end of 2024, and maintaining at the same level as a year earlier. Stable asset quality was supported by a reduction of non- performing receivables in corporate segment. The overall loan-to-deposit ratio continued to be above 100% in 2024, but including covered bonds and other issued debt securities, which are commonly used source of funding for Slovak banks, it would amount to around 90%. The sector’s total capital ratio was further supported by a growth of own funds due to a partial retention of 2023 earnings counterbalancing an increase in risk-weighted assets, strengthening the resilience against potential unfavourable developments. Národná banka Slovenska increased the countercyclical capital buffer (CCyB) rate by 0.5 percentage point to 1.5% with effect from August 2023 and saw no reasons to adjust it in the course of 2024.

Due to high interest rates, total loans to households were on a downward trend in 2023. The development of portfolio was predominantly driven by mortgages, taking into account some time lag related to the changes in their origination. A monetary policy easing in the Eurozone implied signs of a recovery in the Slovak housing loan market. A rise in new sales observed from Spring 2024, and particularly in the final quarter of the year, translated into a slight acceleration of annual growth rate for the outstanding volume at the end of 2024. Shift in buyer sentiment and higher demand, amid expectations of falling interest rates, stopped a downward trend in prices of residential real estate which began in mid-2022 and continued in 2023 in all regions of the country. Consumer credit returned to positive development from a shrinking phase in H2 2022. Its annual growth reached the highest level since the outbreak of Covid-19 pandemic, and continued at steady pace of 7-8% in 2024. After improvement recorded in preceding years, the share of non-performing loans in the total volume of loans to households remained broadly stable during 2023 and 2024, oscillating around 1.8%. For both mortgage and consumer credit, the indicators marked the historical lows. The post-pandemic surge in consumer spending and subsequent period of high inflation dampened the inflow of new retail funds. Growth of household deposits dropped from 10% observed in Q2 2021 to a negative territory. A one-year period of contraction ended in Q4 2023, followed by a rebuilding of savings reflected in an increasing dynamics, which stabilised at 6-7% in H2 2024.

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Development of corporate credit volume in Slovakia rebounded co nsiderably during 2022, picking in September with a year-on-year growth of 13%. In 2023, a constant slowdown of loan dynamics was observed, driven mainly by industry sector and commercial real estate, which dropped markedly afte r a significant expansion in a preceding year. Uncertain economic outlook, worse business sentiment and a d ecline in order book levels in some sectors resulted in a weak demand for financing for fixed investment and falling need for working ca pital financing, what led to a contraction of corporate loans, with negative dynamics persisting f rom Q2 2024. After a slight deterioration of credit quality indicators in 2023, the share of non-performing loans in the total volume of loans t o non-financial corporations decreased to 2.7% at the end of 2024 from 2.8% a year earlier. The annual growth of corporate d eposits accelerated from close-to-zero level in December 2021 to above 20% in Q1 2023 owed to post-pandemic cash inflows. Then, the dynamic started gradually normalizing and ultimately slowed down to aroun d 5% at end of 2024.

2.2. Market and regulatory environment

mBank Group is an active participant and often a leader of changes introduced in anticipation of and in response to developments in its environment, including the area of regulations and technology. The employees of mBank Group spare no effort in proactively adjusting the offer and principles of operation to new challenges, always with an eye on building top quality relationships with stakeholders. Some of the requirements imposed on mBank and the Group subsidiaries do not affect clients directly, but still involve a heavy workload connected with adjusting internal processes. Below we discuss selected key developments significantly affecting mBank Group observed in 2024 or anticipated in the nearest future. Capital requirements as well as regulations on accounting and reporting standards have been addressed in following, dedicated sections of this report.

Regulation (EU) 2024/1183 of the European Parliament and of the Council establishing the European Digital Identity Framework

On May 20, 2024, Regulation (EU) 2024/1183 of the European Parliament and of the Council establishing the European Digital Identity Framework (eIDAS 2.0 Regulation) entered into force. It aims to improve the effectiveness of Regulation (EU) 920/2014, extend its benefits to the private sector and promote trusted digital identities.

The regulation introduces the European Digital Identity Wallet (EDIW) to the eIDAS Regulation, which is the first electronic identification means harmonised at the European level. Natural and legal persons will use it to identify themselves and to provide authentication of their identity when accessing public and private services across the European Union. The sectors obliged to recognise the EDIW include banking and financial services. Institutions will be obliged to start recognising the EDIW not later than 36 months from the date of entry into force of the implementing acts, which will be adopted by the European Commission by November 21, 2024, exclusively upon the voluntary request of the user.

Resolution of the Supreme Court in case no. III CZP 25/22

On April 25, 2024, the Supreme Court adopted a resolution resolving legal issues relating to loans indexed to or denominated in a foreign currency. The issues were presented by the First President of the Supreme Court in view of the discrepancies in the interpretation of law in the rulings of the Supreme Court and the common courts. The Supreme Court resolved that:

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■ If it is impossible to determine the exchange rate of a currency binding on the parties under a loan agreement indexed to or denominated in this currency, the remaining scope of the agreement is not binding on the parties either.

■ If, in the performance of a loan agreement which is not binding due to unlawful nature of its provisions, the bank disbursed to the borrower the whole or part of the loan amount and the borrower made loan repayments, separate claims for recovery of sums paid but not due arise for each party.

■ If a loan agreement is not binding due to unlawful nature of its provisions, the limitation period for the bank’s claim for recovery of sums disbursed under the loan begins, in principle, from the day following the day on which the borrower challenged the bank about the binding nature of the agreement.

■ If a loan agreement is not binding due to unlawful nature of its provisions, none of the parties has legal grounds to demand interest or other consideration for the use of its funds in the period between the time when the undue payment was made and the time when recovery of that payment became delayed.

Moreover, on April 25, 2024, the Polish Bank Association (ZBP) published an announcement in connection with this resolution, which is available at https://zbp.pl/Aktualnosci/Wydarzenia/CZP-25-22 .

Act extending the loan payment holidays into 2024

On May 7, 2024, the Act of April 12, 2024 Amending the Act on Assistance to Home Loan Borrowers in a Difficult Financial Situation and the Act on Crowdfunding of Business Undertakings and Support for Borrowers was promulgated. In accordance with the act, consumers are entitled to suspend their loan repayments:

■ for two months from June 1, 2024 to August 31, 2024,

■ for two months from September 1, 2024 to December 31, 2024.

The suspension of loan repayments depends on the borrower meeting certain conditions connected with, among others, the loan amount, the instalment-to-income ratio and the number of children.

Act on Ensuring Compliance of Economic Operators with Accessibility Requirements for Certain Products and Services

On May 15, 2024, the Act on Ensuring Compliance of Economic Operators with Accessibility Requirements for Certain Products and Services was published. The act sets out, among others, accessibility requirements for products and services and obliges economic operators to ensure compliance with these requirements. This pertains, among others, to automated teller machines and cash deposit machines as well as to retail banking services provided to consumers, such as credit agreements for consumers and mortgage agreements, etc. The requirements laid down in the act aim to facilitate access for persons with disabilities. The act stipulates fines for service providers offering services that do not meet the accessibility requirements. The act enters into force on June 28, 2024, with the exceptions provided for in the act.

Amendments to Recommendation G of the Polish Financial Supervision Authority (KNF) on interest rate risk management at banks

On February 26, 2024, the Polish Financial Supervision Authority adopted the amended Recommendation G on interest rate risk management at banks. The new Recommendation G is a set of good practices for managing interest rate risk at banks and keeping the interest rate risk-sensitive volatility of the financial result and measures of economic value within limits that do not compromise the security of banks. The recommendation takes into account the current conditions for products generating interest rate risk and techniques used to manage this risk. The final wording of the new Recommendation G was determined by both domestic regulations and the recently adopted package of EU regulations on interest rate risk management. The amended Recommendation G specifies and supplements these regulations, in particular in the scope of interest rate risk management (also in the trading portfolio) at banks. The KNF

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Regulation on instant credit transfers in euro

On March 13, 2024, Regulation (EU) 2024/886 of the European Parliament and of the Council amending Regulations (EU) No 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and (EU) 2015/2366 as regards instant credit transfers in euro was adopted. The regulation governs instant credit transfer transactions. It obliges payment service providers to offer the service of sending and receiving instant credit transfers and ensure verification of payees.

Act on Amending Certain Acts to Mitigate Certain Consequences of Identity Theft

The act introduces an obligation to check whether the person to whom certain services are provided has blocked their personal identification number (PESEL) in the newly created register of blocked PESEL numbers. The act obliges banks to make this check, among others, before concluding the following agreements with a consumer: a savings account agreement; a savings and settlement account agreement; an agreement on the provision of the payment service referred to in Article 3 (1) (4) of the Act of August 19, 2011 on Payment Services if the agreement provides for an option to conclude a loan agreement; a loan for any purpose agreement; or a lease agreement.

EU AML Package

On June 19, 2024, the following three legal acts were published in the Official Journal of the EU (the AML Package):

■ Regulation (EU) 2024/1624 of the European Parliament and of the Council of 31 May 2024 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (“AML Regulation”);

■ Directive (EU) 2024/1640 of the European Parliament and of the Council of 31 May 2024 on the mechanisms to be put in place by Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Directive (EU) 2019/1937, and amending and repealing Directive (EU) 2015/849 (“AML IV Directive”); and

■ Regulation (EU) 2024/1620 of the European Parliament and of the Council of 31 May 2024 establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism and amending Regulations (EU) No 1093/2010, (EU) No 1094/2010 and (EU) No 1095/2010 (“AMLA Regulation”).

Act of December 6, 2024 on Amending the Accounting Act, the Act on Statutory Auditors, Audit Firms and Public Oversight, and Certain Other Acts

The purpose of the act is to implement into the national legislation the EU Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 – CSRD). Pursuant to Article 35, the act enters into force 14 days after its promulgation (i.e. January 1, 2025), except for: 1) Article 3, which enters into force on April 1, 2025, 2) Article 13, which enters into force on June 22, 2025, 3) Article 10, which enters into force on July 1, 2025. Moreover, the act introduces the size criteria for micro, small, medium-sized and large undertakings and large corporate groups in line with Commission Delegated Directive (EU) 2023/2775 of 17 October 2023 amending Directive 2013/34/EU of the European Parliament and of the Council as regards the adjustments of the size criteria for micro, small, medium-sized and large undertakings or groups (OJ L 2023/2775, 21.12.2023), which will make it possible for a larger number of undertakings to apply simplified accounting principles.

Directive (EU) 2024/790 of the European Parliament and of the Council – markets in financial instruments (MiFID III)

Like its predecessors, MiFID III aims to ensure integrity and stability of financial markets, better transparency of actions taken by market participants and protection of investors, especially retail investors. MiFID III regulates position limits and position management controls in commodity derivatives and derivatives of emission allowances and refers to Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC. The EU member states must implement the new provisions of MiFID III into their national legislations by September 29, 2025.

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On May 14, 2024, ESMA published the final report containing guidelines on funds’ names using ESG or sustainability-related terms. The purpose of the guidelines is to ensure investor protection against unjustified or exaggerated use of sustainability-related terms in funds’ names and provide asset managers with clear and measurable criteria to assess their eligibility to use ESG or sustainability-related terms in funds’ names. The guidelines stipulate that these terms can be used in the case of investments with a minimum proportion of at least 80% of funds used to meet the environmental or social characteristics or sustainable investment objectives. The guidelines have been in force since November 21, 2024. However, the transition period for making changes in existing investment funds’ names will last until May 21, 2025.

Directive (EU) 2024/1760 of the European Parliament and of the Council – corporate sustainability due diligence (Corporate Sustainability Due Diligence Directive – CSDDD)

The CSDDD imposes the due diligence obligations on specified groups of companies to prevent negative impacts of business operations in the field of human rights and environmental protection. Under the directive, companies are obliged to, among others, conduct the due diligence process in the scope of human rights and environmental protection, integrate the due diligence policy into the corporate policy (and update it on an annual basis), establish a complaints procedure, monitor the effectiveness of their due diligence policy and publish the monitoring results, and designate a CSDDD representative. The directive must be implemented into national legislations within the period of two years.

Regulation (EU) 2024/3005 of the European Parliament and of the Council – the transparency and integrity of Environmental, Social and Governance (ESG) rating activities

The regulation aims to enhance the reliability, transparency and comparability of ESG ratings and boost investor confidence in sustainable financial products. In line with the regulation, ESG ratings will be prepared by institutions that have been granted authorisation and are supervised by the European Securities and Markets Authority (ESMA). Rating agencies providing ESG ratings will have to implement adequate organisational and structural solutions ensuring their independence and accuracy. Ratings will be subject to requirements concerning the transparency of their provision, especially in terms of the methodology and information sources. The regulation entered into force on January 2, 2025, and will become effective as of July 2, 2026.

Regulation (EU) 2024/1623 of the European Parliament and of the Council – requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor (CRR III) and Directive (EU) 2024/1619 of the European Parliament and of the Council – supervisory powers, sanctions, third- country branches, and environmental, social and governance risks (CRD VI)

The CRR III and CRD VI package contains new ESG requirements for banks, including ESG disclosures, e.g. GAR (Green Assets Ratio) and BTAR (Banking Book Taxonomy Alignment Ratio), and introduces requirements for ESG risk management (including stress testing under ICAAP). As regards ESG, the new laws require banks to build/verify relevant strategies and processes, assess their capital needs and manage risk over the short, medium and long term. The risk management system should cover processes for the identification, measurement, management and monitoring of ESG risks (understood as the non-compliance of the bank’s business model and strategy with the EU strategy for sustainable growth) with a time horizon of at least 10 years.

Directive (EU) 2024/825 of the European Parliament and of the Council – empowering consumers for the green transition through better protection against unfair practices and through better information

The directive aims to tackle unfair commercial practices that prevent consume rs from making sustainable consumption choices. The directive provides for solutions addressing the u se of terms that mislead consumers through non-transparent and non-credible sustainability labels or information t ools. Moreover, the directive supports the achievement of circular economy goals. It envisages, among oth ers, the introduction of the reparability score for a good as provided by the producer in line with the EU law s so as to allow consumers to make an informed transactional decision and choose goods tha t are easier to repair.

Directive (EU) 2024/1275 of the European Parliament and of the Council – the energy performance of buildings (Energy Performance of Buildings Directive - EPBD)

The purpose of the directive is to improve the energy performance of buildings and reduce the greenhouse gas emissions from buildings within the Union, with a view to achieving a zero-emission building stock by 2050. The directive introduces requirements relating to, among others, minimum energy performance requirements for new buildings and existing buildings that are undergoing a major renovation, the calculation and disclosure of the life-cycle global warming potential of buildings, solar energy in buildings, technical building systems and sustainable mobility infrastructure and regular inspection of technical systems in buildings. The directive requires the member states to introduce a

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Act of June 14, 2024 on the Protection of Whistleblowers

The act sets forth the conditions for the protection of whistleblowers reporting or publicly disclosing information about legal violations as well as the protection measures for whistleblowers reporting or publicly disclosing information about legal violations. The act introduces rules for: establishing an internal procedure for reporting information on legal violations and taking follow-up measures, reporting information on legal violations to a public authority, publicly disclosing information on legal violations,

and sets out the tasks of public authorities related to reporting information on legal violations and taking follow-up measures.

Directive (EU) 2022/2381 of the European Parliament and of the Council – improving the gender balance among directors of listed companies and related measures

The directive aims to ensure a balanced representation of women and men among the directors of listed companies. Pursuant to the directive, listed companies are to reach either of the following objectives by June 30, 2026:

a) members of the underrepresented sex hold at least 40% of non-executive director positions;

b) members of the underrepresented sex hold at least 33 % of all director positions, including both executive and non-executive directors.

On September 20, 2024, the Government Legislation Centre published on its website a Draft Act on A mending the Act on Public Offering and Conditions for Introducing Financial Instrume nts to Organised Trading and on Public Companies and the Act on Introducing Certain EU Provisions o n Equal Treatment. As at December 31, 2024, the process of implementing the directive into the Polish legislation was not complet ed.

Directive (EU) 2023/970 of the European Parliament and of the Council – to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms

The directive lays down minimum requirements to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women. The directive must be implemented by June 7, 2026.

Commission Delegated Regulation (EU) 2024/2795 – the own funds requirements for market risk

The regulation defers the obligation to start app lying the provisions in Regulation (EU) 2024/1623 concerning the calculation of own funds requirements for market risk by 1 year, i.e. until January 1, 2026.

Regulation (EU) 2024/1623 introduces into Regulation (EU) No 575/2013 specific disclosure requirements for market risk, tailored to the requirements laid down in the Fundamental Review of the Trading Book (FRTB) standards for the calculation of own funds requirements for market risk. Due to delays to the implementation of the FRTB standards in other jurisdictions, a decision has been made to defer the obligation to implement the standards in the EU to ensure an international level playing field.

Regulation (EU) 2024/2847 of the European Parliament and of the Council – cybersecurity requirements for products with digital elements

Regulation (EU) 2024/2847 of the European Parliament and of the Council (CRA) is yet another act introduced with a view to achieving the EU’s cybersecurity objectives. It pertains to the making available on the market of products with digital elements. The CRA contains requirements in the scope of the making available on the market of products with digital elements, i.e. software and hardware and their integrated remote data processing solutions. Under the regulation, economic operators that make such products available on the EU single market (manufacturers, importers, distributors) must, among others, ensure that their products meet the CRA requirements and have appropriate documentation. The member states are obliged to designate a market surveillance authority that will verify the compliance of the products.

Regulation of the Minister of Finance of October 28, 2024 – on the granting of de minimis aid by Bank Gospodarstwa Krajowego in the form of loan repayment guarantees as part of the Strategic Plan for Common Agricultural Policy for years 2023–2027

The regulation specifies detailed conditions and procedure for the granting of de minimis aid by Bank Gospodarstwa Krajowego (BGK) in the form of loan repayment guarantees, under the government’s guarantee program, as part of the Strategic Plan for Common Agricultural Policy for years 2023–2027.

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Regulation of the Minister of Finance of September 18, 2024 on the countercyclical buffer rate

The regulation stipulates that the countercyclical buffer rate accounts for 1% of the total risk exposure amount of institutions that hold credit exposures on the territory of the Republic of Poland, calculated in line with Article 92 (3) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012. The regulation entered into force on September 24, 2024.

Regulation of the Minister of Finance of September 24, 2024 on the Detailed Technical and Organisational Conditions for Investment Firms, State Banks Providing Brokerage Services, Banks Referred to in Article 70 (2) of the Act on Trading in Financial Instruments, and Custodian Banks

The regulation specifies the detailed technical and organisational conditions required for investment firms, state banks providing brokerage services and banks referred to in Article 70 (2) of the Act of July 29, 2005 on Trading in Financial Instruments to conduct business activity, and for the maintenance of securities accounts, derivatives accounts and omnibus accounts by custodian banks, including among others:

■ manner of and detailed conditions for safekeeping, registering and safeguarding financial instruments and funds of clients, including detailed conditions for using financial instruments and funds of clients, in particular, for the purpose of collateral establishment, and the categories of entities with which clients’ funds can be deposited;

■ detailed criteria regarding employees’ compliance with the requirement to have relevant knowledge, competences and experience;

■ detailed criteria regarding management board members’ and supervisory board members’ compliance with the requirement to have good repute, relevant knowledge, competences and experience;

■ procedure and conditions applicable to the assessment and verification of compliance of the above- mentioned persons with the relevant requirements binding on them regarding relevant knowledge and competences, good repute and experience, and the procedure and conditions for maintaining and improving knowledge and competences of these persons;

■ whistleblowing procedure;

■ method and detailed conditions for registering the concluded transactions and storing and archiving documents and other information carriers drawn up in connection with business activity.

The regulation entered into force on September 28, 2024.

Regulation (EU) 2024/1689 of the European Parliament and of the Council laying down harmonised rules on artificial intelligence and amending selected regulations

It is the first comprehensive regulation governing the use of artificial intelligence systems (AI systems) in the European Union. The regulation governs AI systems in line with a risk-based approach, categorising them as prohibited systems or high-risk AI systems, among others. Such systems include, e.g. AI systems used for:

■ processing certain biometric data;

■ evaluating creditworthiness; or

■ risk assessment and pricing in relation to natural persons for health and life insurance.

The essential obligations of entities applying high-risk AI systems include:

■ ensuring they use these systems in accordance with the instructions of use;

■ human oversight over AI systems by way of designating dedicated employees; and

■ in the case of certain systems, including those used for the purposes of creditworthiness evaluation, conducting the fundamental rights impact assessment for the high-risk AI systems.

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The regulation entered into force on August 1, 2024.

Commission Delegated Regulation (EU) 2024/1085 – regulatory technical standards on the assessment methodology under which competent authorities verify an institution’s compliance with the requirements to use internal models for market risk

The Delegated Regulation stipulates, among other things, that when verifying an institution’s compliance with the requirements to use internal models for market risk, competent authorities assess:

■ the governance aspects;

■ aspects relating to the internal risk-measurement model used to compute the expected shortfall measure and the stress scenario risk measure;

■ aspects relating to the internal default risk model used to compute the additional own funds requirement for default risk.

The regulation entered into force on July 7, 2024.

Commission Delegated Regulation (EU) 2024/1772 – regulatory technical standards specifying the criteria for the classification of ICT-related incidents and cyber threats, setting out materiality thresholds and specifying the details of reports of major incidents

The delegated regulation specifies, among others:

■ criteria for the classification of clients, financial counterparts and transactions;

■ rules for determining the reputational impact of incidents;

■ rules for determining the duration of an incident and service downtime and the geographical spread with regard to the areas affected by an incident;

■ rules for determining the criticality of the services affected by an incident and its economic impact;

■ rules for classifying an incident as major and materiality thresholds for determining major incidents;

■ rules for determining significant cyber threats.

The regulation entered into force on July 15, 2024.

Commission Delegated Regulation (EU) 2024/1773 – regulatory technical standards specifying the detailed content of the policy regarding contractual arrangements on the use of ICT services supporting critical or important functions provided by ICT third-party service providers

The delegated regulation sets out requirements for the policy regarding the use of ICT services supporting critical or important functions provided by ICT third-party service providers, including, among others:

■ the size and the overall risk profile of a financial entity, and the nature, scale and elements of increased or reduced complexity of its services, activities and operations;

■ rules for reviewing and updating the policy;

■ requirements, including the rules, the responsibilities and the processes, for each main phase of the lifecycle of a contractual arrangement;

■ requirements to define the business needs of a financial entity before a contractual arrangement is concluded (risk assessment);

■ rules regarding due diligence in the process for selecting and assessing the prospective ICT third- party service providers;

■ rules on conflicts of interest.

The regulation entered into force on July 15, 2024.

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Commission Implementing Regulation (EU) 2024/1872 – mapping tables specifying the correspondence between the credit risk assessments of external credit assessment institutions and the credit quality steps

The regulation aims to specify the correspondence bet ween the relevant credit assessments issued by external credit assessment institutions (ECAI) and the credit quality steps set out in Regulation (EU) No 575/2013 on prudential requirements for credit institutions. The regulation entered into force on July 25, 2024.

Regulation of the Minister of Finance of July 10, 2024 on Information on Banks’ Operations Related to Structured Deposits

The regulation aims to specify the detailed scope of the information concerning the commencement, restriction and cessation of these operations, material breaches of the provisions related to these operations and structured deposits offered or concluded, including the form, timing and manner of their communication to the Polish Financial Supervision Authority (KNF). Banks that recommend, offer, conclude or enable the conclusion of structured deposit agreements on the territory of the Republic of Poland or perform these activities on the territory of another country are bound by disclosure obligations. The regulation entered into force on August 2, 2024.

Commission Delegated Regulation (EU) 2024/1700 – regulatory technical standards specifying, for simple, transparent and standardised non-ABCP traditional securitisation, and for simple, transparent and standardised on-balance-sheet securitisation, the content, methodologies and presentation of information related to the principal adverse impacts of the assets financed by the underlying exposures on sustainability factors

The delegated regulation specifies:

■ the rules for preparing and for the content of the statement on principal adverse impacts on sustainability factors of the assets financed by underlying exposures of the securitisation;

■ general rules for the presentation of information. Moreover, annexed to the delegated regulation is a template principal adverse sustainability impacts statement.

The regulation entered into force on July 8, 2024.

Regulation (EU) 2024/1781 of the European Parliament and of the Council (CRR III) – establishment of a framework for the setting of ecodesign requirements for sustainable products

The regulation establishes a framework for the setting of ecodesign requirements that products have to comply with to be placed on the market or put into service, with the aim of improving the environmental sustainability of products in order to make sustainable products the norm and to reduce the overall carbon footprint and environmental footprint of products over their life cycle, and of ensuring the free movement of sustainable products within the internal market. The regulation also establishes a digital product passport, provides for the setting of mandatory green public procurement requirements and creates a framework to prevent unsold consumer products from being destroyed. In the scope of the financing of ecodesigns, the regulation may also have an indirect impact on financial institutions. The regulation entered into force on July 18, 2024.

Regulation (EU) 2024/1624 of the European Parliament and of the Council – prevention of the use of the financial system for the purposes of money laundering or terrorist financing

The regulation is part of a comprehensive package that aims to strengthen the Union’s framework for anti-money laundering and countering the financing of terrorism. The regulation contains provisions addressed to obliged entities, which were hitherto included, among others, in Directive (EU) 2015/849 of the European Parliament and of the Council, and provides for their complete harmonisation. This will result in uniform rules and obligations binding on obliged entities across the European Union.

The regulation lays down rules concerning:

■ the measures to be applied by obliged entities to prevent money laundering and terrorist financing;

■ beneficial ownership transparency requirements for legal entities, express trusts and similar legal arrangements;

■ measures to limit the misuse of anonymous instruments.

The regulation entered into force on July 9, 2024.

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