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.

Annual Financial Report

of the Bank Millennium S.A.

for the 12-month period

ending 31

December 2025

Financial Highlights

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Financial Highlights

Amount ‘000 PLN

Amount ‘000 EUR

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

Interest income and other of similar nature

8 849 034

8 658 943

2 088 415

2 011 743

Fee and commission income

915 424

917 834

216 045

213 241

Profit (loss) before income tax

1 506 637

770 548

355 574

179 022

Profit (loss) after taxes

1 117 313

643 103

263 691

149 413

Total comprehensive income of the period

1 567 427

671 150

369 920

155 929

Net cash flows from operating activities

15 376 840

11 059 441

3 629 010

2 569 453

Net cash flows from investing activities

(13 786 611)

(13 839 790)

(3 253 708)

(3 215 415)

Net cash flows from financing activities

(784 523)

1 443 385

(185 151)

335 343

Net cash flows, total

805 706

(1 336 964)

190 151

(310 619)

31.12.2025

31.12.2024

31.12.2025

31.12.2024

Total Assets

152 544 160

137 412 697

36 090 605

32 158 366

Liabilities to banks and other monetary institutions

105 702

210 931

25 008

49 364

Liabilities to customers

131 199 422

117 642 600

31 040 628

27 531 617

Equity

8 763 347

7 195 920

2 073 331

1 684 044

Share capital

1 213 117

287 013

283 903

Number of shares (pcs.)

1 213 116 777

Book value per share (in PLN/EUR)

7,22

5.93

1.71

1.39

Diluted book value per share (in PLN/EUR)

7,22

5.93

1.71

1.39

Total Capital Ratio (TCR)

16.04%

17.96%

16.04%

17.96%

Pledged or paid dividend per share (in PLN/EUR)

Exchange rates accepted to convert selected financial data into EUR

for items as at the balance sheet date

4.2267

4.2730

for items for the period covered by the report

(exchange rate calculated as the average of exchange rates

at the end of individual months of the period)

4.2372

4.3042

Financial Highlights

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Financial information - quarterly

STATEMENT OF PROFIT AND LOSS

Amount ‘000 PLN

1.01.2025 -

31.12.2025

1.10.2025 -

31.12.2025*

1.01.2024 -

31.12.2024

restated data

1.10.2024 -

31.12.2024*

restated data

Net interest income

5 611 667

1 397 444

5 420 645

1 467 184

Interest income and other of similar nature

8 849 034

2 194 966

8 658 943

2 278 000

Income calculated using the effective interest method

8 731 781

2 166 582

8 513 609

2 247 582

Interest income from Financial assets at amortised

cost, of which:

6 375 710

1 583 665

6 380 835

1 773 307

- the impact of the adjustment to the gross

carrying amount of loans due to credit holidays

(106 788)

38 558

Interest income from Financial assets at fair value

through other comprehensive income

2 356 071

582 917

2 132 774

474 275

Result of similar nature to interest from Financial assets

at fair value through profit or loss

117 253

28 384

145 334

30 418

Interest expenses

(3 237 367)

(797 522)

(3 238 298)

(810 816)

Net fee and commission income

653 828

165 477

668 157

160 215

Fee and commission income

915 424

238 263

917 834

221 206

Fee and commission expenses

(261 596)

(72 786)

(249 677)

(60 991)

Dividend income

41 156

5 395

38 741

3 687

Result on derecognition of financial assets and liabilities

not measured at fair value through profit or loss

(518)

(4 921)

(10 753)

(11 072)

Results on financial assets and liabilities held for trading

24 187

6 299

(6 566)

(2 445)

Result on non-trading financial assets mandatorily at fair

value through profit or loss

92 492

37 569

18 125

13 152

Result on hedge accounting

289

(2 560)

1 544

1 343

Result on exchange differences

220 292

54 278

224 004

55 049

Other operating income

365 122

82 793

318 501

76 994

Other operating expenses

(295 351)

(38 998)

(364 899)

(115 535)

Administrative expenses

(2 252 591)

(579 557)

(1 954 321)

(516 707)

Impairment losses on financial assets

(201 149)

(49 261)

(270 866)

6 731

Impairment losses on non-financial assets

(18 821)

(6 718)

(4 274)

Legal risk expenses connected with FX mortgage loans,

of which:

(2 104 218)

(534 222)

(2 850 230)

(719 707)

Provisions for legal risk

(2 037 431)

(534 222)

(2 179 070)

(522 680)

Result on modification

(3 139)

(396)

(2 179)

(296)

Depreciation

(221 322)

(56 717)

(222 662)

(58 310)

Banking tax

(405 287)

(104 675)

(232 419)

(98 907)

Profit before income taxes

1 506 637

371 230

770 548

261 455

Corporate income tax

(389 324)

(59 829)

(127 445)

(126 496)

Profit after taxes

1 117 313

311 401

643 103

134 959

* quarterly financial information has not been audited by an independent auditor

Financial Highlights

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

STATEMENT OF TOTAL COMPREHENSIVE INCOME

Amount ‘000 PLN

1.01.2025 -

31.12.2025

1.10.2025 -

31.12.2025*

1.01.2024 -

31.12.2024

1.10.2024 -

31.12.2024*

Profit after taxes

1 117 313

311 401

643 103

134 959

Other comprehensive income items that may be (or were)

reclassified to profit or loss

601 511

259 749

25 448

(73 434)

Result on debt securities at fair value through other

comprehensive income

306 041

99 603

156 112

(69 426)

Result on credit portfolio at fair value through other

comprehensive income

273 398

154 858

(160 097)

(7 717)

Hedge accounting

22 072

5 288

29 433

3 709

Other comprehensive income items that will not be reclassified

to profit or loss

(13 738)

9 178

Actuarial gains (losses)

(17 771)

1 331

Result on equity instruments at fair value through other

comprehensive income

4 033

7 847

Total comprehensive income items before taxes

587 773

246 011

34 626

(64 256)

Corporate income tax on other comprehensive income items

that may be (or were) reclassified to profit or loss

(139 380)

(74 445)

(4 835)

13 952

Corporate income tax on other comprehensive income items

that will not be reclassified to profit or loss

1 721

(1 744)

Total comprehensive income items after taxes

450 114

173 287

28 047

(52 047)

Total comprehensive income for the period

1 567 427

484 688

671 150

82 912

* quarterly financial information has not been audited by an independent auditor

 
 
 
 
 
 
 
  
 
 
 
 
 
5 
This document is a translation of a document originally issued in Polish. 
The only binding version is the original Polish version. 
Annual Financial Statements 
of the Bank Millennium S.A.  
for the 12-month period ending 31
st
 December 2025 
ANNUAL FINANCIAL STATEMENTS OF THE BANK MILLENNIUM S.A.  
FOR THE 12-MONTH PERIOD ENDING 31
ST
 DECEMBER 2025 
 
TABLE OF CONTENT 
1.  PROFIT AND LOSS ACCOUNT ............................................................................................. 7 
2.  STATEMENT OF TOTAL COMPREHENSIVE INCOME ........................................................ 8 
3.  STATEMENT OF FINANCIAL POSITION .............................................................................. 9 
4.  STATEMENT OF CHANGES IN EQUITY ............................................................................. 11 
5.  CASH FLOW STATEMENT .................................................................................................. 12 
NOTES TO THE FINANCIAL STATEMENTS ...................................................................................... 14 
6.  GENERAL INFORMATION ABOUT ISSUER ....................................................................... 14 
7.  ACCOUNTING POLICY ........................................................................................................ 15 
7.1.  STATEMENT OF COMPLIANCE WITH THE INTERNATIONAL FINANCIAL REPORTING STANDARDS ....... 15 
7.2.  OPENING BALANCE ADJUSTMENT AND CHANGE IN THE PRESENTATION OF DATA IMPLEMENTED IN 
2025 AND THE RESTATEMENT OF COMPARATIVE DATA ................................................................ 15 
7.3.  STANDARDS AND INTERPRETATIONS APPLIED IN 2025 AND THOSE NOT BINDING AT THE BALANCE 
SHEET DATE ............................................................................................................................. 25 
7.4.  ADOPTED ACCOUNTING PRINCIPLES ........................................................................................... 26 
8.  FINANCIAL RISK MANAGEMENT ....................................................................................... 54 
8.1.  RISK MANAGEMENT .................................................................................................................. 54 
8.2.  CAPITAL MANAGEMENT ............................................................................................................. 58 
8.3.  CREDIT RISK ............................................................................................................................ 63 
8.4.  MARKET RISK AND INTEREST RATE RISK ................................................................................... 89 
8.5.  LIQUIDITY RISK ......................................................................................................................... 96 
8.6.  OPERATIONAL RISK ................................................................................................................ 100 
8.7.  ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) RISK FACTORS .......................................... 101 
9.  TRANSACTIONS WITH RELATED ENTITIES ................................................................... 102 
9.1.  TRANSACTIONS WITH THE SUBSIDIARIES AND PARENT’S GROUP ................................................ 102 
9.2.  TRANSACTIONS WITH THE MANAGING AND SUPERVISING PERSONS ........................................... 105 
9.3.  INFORMATION ON COMPENSATIONS AND BENEFITS OF THE PERSONS SUPERVISING AND MANAGING 
THE BANK .............................................................................................................................. 105 
10.  FAIR VALUE ........................................................................................................................ 107 
11.  CONTINGENT LIABILITIES AND ASSETS ....................................................................... 113 
11.1.  LAWSUITS AND SIGNIFICANT PROCEEDINGS .............................................................................. 113 
11.2.  OFF-BALANCE ITEMS .............................................................................................................. 120 
12.  LEGAL RISK RELATED TO FOREIGN CURRENCY MORTGAGE LOANS .................... 122 
13.  ADDITIONAL EXPLANATORY NOTES ............................................................................. 128 
1.  INTEREST INCOME AND OTHER OF SIMILAR NATURE ................................................................... 128 
2.  INTEREST EXPENSE ................................................................................................................ 128 
3.  FEE AND COMMISSION INCOME AND EXPENSE ........................................................................... 129 
4.  DIVIDEND INCOME ................................................................................................................... 129 
5.  RESULT ON DERECOGNITION OF FINANCIAL ASSETS AND LIABILITIES NOT MEASURED AT FAIR VALUE 
THROUGH PROFIT OR LOSS ...................................................................................................... 130 
6.  RESULTS ON FINANCIAL ASSETS AND LIABILITIES HELD FOR TRADING ......................................... 130 
7.  RESULTS ON NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR 
LOSS ...................................................................................................................................... 130 

 
 
 
 
 
  
 
 

Annual Financial Statements 
of the Bank Millennium S.A.  
for the 12-month period ending 31
st
 December 2025 
This document is a translation of a document originally issued in Polish. 
The only binding version is the original Polish version. 
 RESULT ON HEDGE ACCOUNTING ............................................................................................. 130 
 OTHER OPERATING INCOME .................................................................................................... 131 
 OTHER OPERATING EXPENSE .................................................................................................. 131 
 ADMINISTRATIVE EXPENSES .................................................................................................... 132 
 IMPAIRMENT LOSSES ON FINANCIAL ASSETS ............................................................................. 132 
 IMPAIRMENT LOSSES ON NON-FINANCIAL ASSETS ...................................................................... 133 
 PROVISIONS FOR LEGAL RISK CONNECTED WITH FX MORTGAGE LOANS ..................................... 133 
 DEPRECIATION AND AMORTIZATION.......................................................................................... 134 
 CORPORATE INCOME TAX ........................................................................................................ 134 
 EARNINGS PER SHARE ............................................................................................................ 136 
 CASH, BALANCES AT THE CENTRAL BANK ................................................................................. 136 
 FINANCIAL ASSETS HELD FOR TRADING .................................................................................... 137 
 NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR LOSS, OTHER 
THAN LOANS AND ADVANCES TO CUSTOMERS ........................................................................... 139 
 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME .......................... 139 
 LOANS AND ADVANCES TO CUSTOMERS ................................................................................... 140 
 FINANCIAL ASSETS AT AMORTISED COST OTHER THAN LOANS AND ADVANCES TO CUSTOMERS .... 148 
 DERIVATIVES – HEDGE ACCOUNTING ....................................................................................... 150 
 INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES ........................................... 155 
 TANGIBLE FIXED ASSETS ......................................................................................................... 158 
 INTANGIBLE FIXED ASSETS ...................................................................................................... 161 
 DEFERRED INCOME TAX  ASSETS ............................................................................................. 164 
 OTHER ASSETS ...................................................................................................................... 166 
 NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE ......................... 166 
 FINANCIAL LIABILITIES HELD FOR TRADING ................................................................................ 166 
 LIABILITIES TO BANKS AND OTHER MONETARY INSTITUTIONS ...................................................... 167 
 LIABILITIES TO CUSTOMERS ..................................................................................................... 168 
 SALE AND REPURCHASE AGREEMENTS ..................................................................................... 169 
 DEBT SECURITIES ISSUED ....................................................................................................... 169 
 SUBORDINATED DEBT ............................................................................................................. 170 
 PROVISIONS ........................................................................................................................... 171 
 OTHER LIABILITIES .................................................................................................................. 172 
 EQUITY .................................................................................................................................. 174 
 FINANCIAL LIABILITIES BY CONTRACTUAL MATURITY .................................................................. 178 
 SUPPLEMENTARY INFORMATION .................................................................................. 179 
1.  2024 DIVIDEND ....................................................................................................................... 179 
2.  DATA ABOUT ASSETS, WHICH SECURE LIABILITIES ..................................................................... 179 
3.  SECURITIES COVERED BY TRANSACTIONS WITH A BUY-BACK CLAUSE (SBB)............................... 180 
4.  OFFSETTING OF ASSETS AND LIABILITIES .................................................................................. 181 
5.  ADDITIONAL EXPLANATIONS TO THE CASH FLOW STATEMENT ..................................................... 182 
6.  INFORMATION ON CUSTODY ACTIVITY ....................................................................................... 183 
7.  INCENTIVE PROGRAM BASED ON SHARES FOR RISK TAKERS IN THE BANK MILLENNIUM S.A. GROUP
 ............................................................................................................................................. 184 
8.  ADDITIONAL INFORMATION AND OTHER ESSENTIAL EVENTS THAT OCCURRED AFTER THE DATE ON 
WHICH THE FINANCIAL STATEMENTS WERE PREPARED............................................................... 185 
 
   

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

1. Profit and Loss Account

Amount ‘000 PLN

Note

1.01.2025 -

31.12.2025

1.10.2024 -

31.12.2024

restated data

Net interest income

5 611 667

5 420 645

Interest income and other of similar nature

8 849 034

8 658 943

Income calculated using the effective interest method

8 731 781

8 513 609

Interest income from Financial assets at amortised cost, of which:

6 375 710

6 380 835

- the impact of the adjustment to the gross carrying amount of loans due to

credit holidays

(106 788)

Interest income from Financial assets at fair value through other comprehensive

income

2 356 071

2 132 774

Result of similar nature to interest from Financial assets at fair value through profit

or loss

117 253

145 334

Interest expenses

(3 237 367)

(3 238 298)

Net fee and commission income

653 828

668 157

Fee and commission income

915 424

917 834

Fee and commission expenses

(261 596)

(249 677)

Dividend income

41 156

38 741

Result on derecognition of financial assets and liabilities not measured at fair value

through profit or loss

(518)

(10 753)

Results on financial assets and liabilities held for trading

24 187

(6 566)

Result on non-trading financial assets mandatorily at fair value through profit or loss

92 492

18 125

Result on hedge accounting

289

1 544

Result on exchange differences

220 292

224 004

Other operating income

365 122

318 501

Other operating expenses

(295 351)

(364 899)

Administrative expenses

(2 252 591)

(1 954 321)

Impairment losses on financial assets

(201 149)

(270 866)

Impairment losses on non-financial assets

(18 821)

(4 274)

Legal risk expenses connected with FX mortgage loans, of which:

(2 104 218)

(2 850 230)

Provisions for legal risk

(2 037 431)

(2 179 070)

Result on modification

(3 139)

(2 179)

Depreciation

(221 322)

(222 662)

Banking tax

(405 287)

(232 419)

Profit before income taxes

1 506 637

770 548

Corporate income tax

(389 324)

(127 445)

Profit after taxes

1 117 313

643 103

Notes on pages 14-188 are integral part of these financial statements.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

2. Statement of Total Comprehensive Income

Amount ‘000 PLN

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

Profit after taxes

1 117 313

643 103

Other comprehensive income items that may be (or were) reclassified to profit or loss

601 511

25 448

Result on debt securities at fair value through other comprehensive income

306 041

156 112

Result on credit portfolio at fair value through other comprehensive income

273 398

(160 097)

Hedge accounting

22 072

29 433

Other comprehensive income items that will not be reclassified to profit or loss

(13 738)

9 178

Actuarial gains (losses)

(17 771)

1 331

Result on equity instruments at fair value through other comprehensive income

4 033

7 847

Other comprehensive income items before taxes

587 773

34 626

Corporate income tax on other comprehensive income items that may be (or were) reclassified

to profit or loss

(139 380)

(4 835)

Corporate income tax on other comprehensive income items that will not be reclassified to

profit or loss

1 721

(1 744)

Other comprehensive income items after taxes

450 114

28 047

Total comprehensive income for the period

1 567 427

671 150

Notes on pages 14-188 are integral part of these financial statements.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

3. Statement of Financial Position

ASSETS

Amount ‘000 PLN

Note

31.12.2025

31.12.2024

restated data

01.01.2024

restated data

Cash, cash balances at central banks

4 360 464

5 178 984

5 094 984

Financial assets held for trading

1 020 936

1 006 791

620 814

Derivatives

156 827

257 094

498 577

Equity instruments

252

115

121

Debt securities, of which:

824 911

555 364

110 554

Debt instruments serving as collateral for repurchase

transactions

194 088

Repurchase agreements

38 946

194 218

11 562

Non-trading financial assets mandatorily at fair value through

profit or loss, other than Loans and advances to customers

176 307

118 399

147 623

Equity instruments

155 652

66 609

Debt securities

20 655

51 790

81 014

Financial assets at fair value through other comprehensive

income

42 267 387

29 023 647

21 924 652

Equity instruments

40 939

36 708

28 789

Debt securities

42 226 448

28 986 939

21 895 863

Loans and advances to customers

71 902 435

71 820 327

72 266 997

Mandatorily at fair value through profit or loss

745

1 825

19 349

Valued at fair value through other comprehensive income

9 438 459

11 135 416

11 799 748

Valued at amortised cost

62 463 231

60 683 086

60 447 900

Financial assets at amortised cost other than Loans and advances

to customers

28 800 580

26 438 453

21 458 148

Debt securities

26 659 465

24 059 861

18 439 780

Deposits, loans and advances to banks and other monetary

institutions

2 081 137

2 378 592

1 866 688

Repurchase agreements

59 978

1 151 680

Derivatives – Hedge accounting

15 069

Investments in subsidiaries, joint ventures and associates

626 996

517 214

399 223

Tangible fixed assets

548 561

518 145

517 333

Intangible fixed assets

610 643

537 425

464 922

Income tax assets

377 145

632 371

389 271

Current income tax assets

18 953

Deferred income tax assets

358 192

632 371

389 271

Other assets

1 852 706

1 620 941

1 360 160

Non-current assets and disposal groups classified as held for sale

Total assets

152 544 160

137 412 697

124 659 196

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

LIABILITIES AND EQUITY

Amount ‘000 PLN

Note

31.12.2025

31.12.2024

restated data

01.01.2024

restated data

LIABILITIES

Financial liabilities held for trading

246 428

417 518

579 331

Derivatives

208 640

226 749

576 611

Liabilities from short sale of securities

37 788

190 769

2 720

Financial liabilities measured at amortised cost

137 665 763

124 640 250

112 604 873

Liabilities to banks and other monetary institutions

105 702

210 931

506 240

Liabilities to customers

131 199 422

117 642 600

107 505 636

Repurchase agreements

194 223

Debt securities issued

4 802 952

5 030 166

3 027 952

Subordinated debt

1 557 687

1 562 330

1 565 045

Derivatives – Hedge accounting

24 735

101 539

165 700

Provisions

3 742 558

2 947 927

1 489 400

Legal issues

3 566 379

2 846 010

1 401 798

Commitments and guarantees given

105 528

53 605

42 375

Retirement benefits

70 651

48 312

45 227

Income tax liabilities

215 590

460 456

Current income tax liabilities

215 590

460 456

Deferred income tax liabilities

Other liabilities

2 101 329

1 893 953

2 834 666

Total Liabilities

143 780 813

130 216 777

118 134 426

EQUITY

Share capital

1 213 117

Own shares

(21)

Share premium

1 147 241

Accumulated other comprehensive income

338 819

(111 295)

(139 342)

Retained earnings, including:

6 064 191

4 946 878

4 303 775

- current net result

1 117 313

643 103

510 259

- other

4 946 878

4 303 775

3 793 516

Total equity

8 763 347

7 195 920

6 524 770

Total equity and total liabilities

152 544 160

137 412 697

124 659 196

Notes on pages 14-188 are integral part of these financial statements.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

4. Statement of Changes in Equity

Amount ‘000 PLN

Total

equity

capital

Own

premium

Accumulated

other

comprehensive

income

Retained earnings

Unappropriated

result

Other

reserves

01.01.2025 – 31.12.2025

Equity at the beginning

of the period

7 195 920

1 213 117

(21)

1 147 241

(111 295)

553 610

4 393 268

Total comprehensive

income for 2025 (net)

1 567 427

450 114

1 117 313

current profit /loss

1 117 313

other comprehensive

income items after taxes

450 114

Appropriation of profit

(643 103)

643 103

Equity at the end of the

period

8 763 347

1 213 117

(21)

1 147 241

338 819

1 027 820

5 036 371

Amount ‘000 PLN

Total

equity

capital

Own

premium

Accumulated

other

comprehensive

income

Retained earnings

Unappropriated

result

Other

reserves

01.01.2024 – 31.12.2024

Equity at 31.12.2023

6 614 263

1 213 117

(21)

1 147 241

(139 342)

510 259

3 883 009

opening balance

adjustment

(89 493)

Adjusted Equity as at

01.01.2024

6 524 770

1 213 117

(21)

1 147 241

(139 342)

420 766

3 883 009

Total comprehensive

income for 2024 (net)

671 150

28 047

643 103

current profit /loss

643 103

other comprehensive

income items after taxes

28 047

Appropriation of profit

(510 259)

510 259

Equity at the end of the

period

7 195 920

1 213 117

(21)

1 147 241

(111 295)

553 610

4 393 268

Detailed information concerning changes in different equity items are presented in the note (39).

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

5. Cash Flow Statement

A. Cash flows from operating activities

Amount ‘000 PLN

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

restated data

Profit (loss) after taxes

1 117 313

643 103

Total adjustments:

14 259 527

10 416 338

Interest income/expense result (from the Profit and loss statement)

(5 611 667)

(5 420 645)

Interest received

8 515 125

8 467 334

Interest paid

(2 764 514)

(2 772 057)

Depreciation and amortization

221 322

222 662

Foreign exchange (gains)/ losses

(44 680)

(32 701)

Dividends

(41 156)

(38 741)

Changes in provisions

776 860

1 459 858

Result on sale and liquidation of investing activity assets

(31 174)

(3 843)

Change in financial assets held for trading

(200 747)

(125 630)

Change in loans and advances to banks

225 792

(836 892)

Change in loans and advances to customers

178 861

359 499

Change in receivables from securities bought with sell-back clause (loans and

advances)

95 294

969 024

Change in financial liabilities valued at fair value through profit and loss (held

for trading)

(247 894)

(225 974)

Change in deposits from banks

(104 827)

(293 935)

Change in deposits from customers

13 625 108

10 176 162

Change in liabilities from securities sold with buy-back clause

(194 222)

194 224

Change in debt securities issued

(33 455)

3 158

Income tax (from the Profit and loss statement)

389 324

127 445

Income tax paid

(487 347)

(621 990)

Change in other assets and liabilities

(6 475)

(1 190 620)

Net cash flows from operating activities

15 376 840

11 059 441

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

B. Cash flows from investing activities

Amount ‘000 PLN

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

restated data

Inflows:

591 030 606

556 431 334

Proceeds from sale of property, plant and equipment and

intangible assets

46 147

7 722

Proceeds from sale of shares in related entities

5 737

1 000

Proceeds from sale/redemption of investment financial assets

590 937 566

556 383 871

Other

41 156

38 741

Outflows:

(604 817 217)

(570 271 124)

Acquisition of property, plant and equipment and intangible

assets

(270 310)

(217 336)

Acquisition of shares in related entities

(112 500)

(120 000)

Acquisition of investment financial assets

(604 434 407)

(569 933 788)

Other

Net cash flows from investing activities

(13 786 611)

(13 839 790)

C. Cash flows from financing activities

Amount ‘000 PLN

1.01.2025 -

30.09.2025

1.01.2024 -

30.09.2024

restated data

Inflows from financing activities:

2 131 700

Long-term bank loans

Issue of debt securities

2 131 700

Increase in subordinated debt

Net proceeds from issues of shares and additional capital paid-

Other inflows from financing activities

Outflows from financing activities:

(784 523)

(688 315)

Repayment of long-term bank loans

Redemption of debt securities

(144 000)

(128 731)

Decrease in subordinated debt

Issue of shares expenses

Redemption of shares

Dividends paid and other payments to owners

Payments of lease liabilities

(89 260)

(92 530)

Other outflows from financing activities

(551 263)

(467 054)

Net cash flows from financing activities

(784 523)

1 443 385

D. Net cash flows. Total (A + B + C)

805 706

(1 336 964)

- of which change resulting from FX differences

3 261

(343)

E. Cash and cash equivalents at the beginning of the

reporting period

14 064 629

15 401 593

F. Cash and cash equivalents at the end of the reporting

period (D + E)

14 870 335

14 064 629

Additional information regarding cash flows statement is presented in point 5) of chapter 14.

“Supplementary information”. Information on liabilities classified as financing activities is presented

in points 32), 35), 36) of chapter 13. “Notes to the Financial Statements”.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

NOTES TO THE FINANCIAL STATEMENTS

6. General Information about Issuer

Bank Millennium S.A. (the Bank) is a universal bank that operates in Poland, offering its services to all

market segments via a network of branches, corporate centers, individual advisors and mobile and

electronic banking.

The Bank, entered under the number KRS 0000010186 in the National Court Register kept by the Local

Court for the Capital City of Warsaw (Poland), 13th Business Department of the National Court Register,

with its registered office in Warsaw, ul. Stanisława Żaryna 2A, 02-593 Warsaw, Poland.

The Bank is listed on the Warsaw Stock Exchange since 1992, first Bank ever to float its shares on the

WSE.

The Bank is a parent company of a Bank Millennium Capital Group (the Group) with over 6,900

employees with core business comprising banking, leasing, factoring, brokerage, capital operations,

investment fund management, web portals activity and insurance activity.

Supervisory Board and Management Board of Bank Millennium S.A. as at 31 December 2025

Composition of the Supervisory Board as at 31 December 2025 was as follows:

▪ Olga Grygier-Siddons - Chairman of the Supervisory Board,

▪ Nuno Manuel da Silva Amado – Deputy Chairman of the Supervisory Board,

▪ Katarzyna Sułkowska – Secretary of the Supervisory Board,

▪ Małgorzata Bonikowska – Member of the Supervisory Board,

▪ Miguel de Campos Pereira de Bragança – Member of the Supervisory Board,

▪ Agnieszka Kłos-Siddiqui – Member of the Supervisory Board,

▪ Anna Mankiewicz-Rębkowska – Member of the Supervisory Board,

▪ Alojzy Nowak – Member of the Supervisory Board,

▪ Izabela Olszewska – Member of the Supervisory Board,

▪ Jose Miguel Bensliman Schorcht da Silva Pessanha – Member of the Supervisory Board,

▪ Miguel Maya Dias Pinheiro – Member of the Supervisory Board,

▪ Lingjiang Xu – Member of the Supervisory Board.

Composition of the Management Board as at 31 December 2025 was as follows:

▪ Joao Nuno Lima Bras Jorge – Chairman of the Management Board,

▪ Fernando Maria Cardoso Rodrigues Bicho – Deputy Chairman of the Management Board,

▪ Wojciech Haase – Member of the Management Board,

▪ Jarosław Hermann – Member of the Management Board,

▪ Halina Karpińska – Member of the Management Board,

▪ Antonio Ferreira Pinto Junior – Member of the Management Board,

▪ Magdalena Zmitrowicz – Member of the Management Board.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

7. Accounting Policy

7.1. STATEMENT OF COMPLIANCE WITH THE INTERNATIONAL

FINANCIAL REPORTING STANDARDS

These financial statements of the Bank have been prepared in accordance with International Financial

Reporting Standards (‘IFRS’), as adopted by the European Union and with respect to matters not

regulated by the above standards, in accordance with the accounting principles as set out in the

Accounting Act dated 29 September 1994 (unified text - Official Journal from 2023, item 120) and the

respective bylaws and regulations and the requirements for issuers of securities admitted or sought to

be admitted to trading on an official stock-exchange listing market. These financial statements meet the

reporting requirements described in the Regulation of the Minister of Finance of March 29, 2018

regarding current and periodic information published by issuers of securities and conditions for

recognizing as equivalent information required by the laws of a non-member state (Journal of Laws of

2018, item 757).

This financial report was approved for publication by the Management Board on 27 February 2026.

7.2. OPENING BALANCE ADJUSTMENT AND CHANGE IN THE

PRESENTATION OF DATA IMPLEMENTED IN 2025 AND THE

RESTATEMENT OF COMPARATIVE DATA

Change in the approach to effective interest rate calculation algorithm

In the financial year ended 31 December 2025, the Bank introduced a change in the approach to

calculating the effective interest rate (EIR) applied to the valuation of mortgage loans with periodically

fixed interest rates.

In 2021, the Bank started to offer mortgage loans with a periodically fixed interest rate (5 years). In

accordance with the agreement, after this period the loan is converted into a variable‑rate loan or in

case of client decision can be prolonged at a new fixed rate for next period.

IFRS do not specify in detail the method of calculating EIR for variable rate loans. Before making the

change, Bank when calculating interest income was using effective interest rate based on expected

cash flows (CF) from the loan including CF during temporary fixed rate period and CF after this period -

calculating interest based on current WIBOR plus margin.

In the fourth quarter of 2025, the Bank changed its approach to determining the EIR – after the change,

the EIR is calculated solely on the basis of the currently applicable interest rate.

The purpose of the introduced change was to ensure a better reflection of the economic substance of

the transactions and to enhance consistency between the accounting approach and the interest rate

risk management framework, as well as the methodologies applied within the BCP Group.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Impact of the change the effective interest rate calculation algorithm

In accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, any

changes requiring retrospective application should be reflected through full retrospective restatement of

comparative information, to the extent that such application is practicable.

Accordingly, the Bank performed the recalculations of historical and carried out a retrospective

restatement of the comparative information, including an adjustment to the opening balance sheet as at

1 January 2024 (i.e., the opening balance sheet for 2024 determined as at 31 December 2023). Due to

the immaterial impact of the change, no adjustment was made to the 2024 income statement.

The change has been presented in tabular form as amendment 2(a) to the Statement of Financial

Position

Changes in the presentation of data

In this annual financial statement for the year 2025, compared to the annual financial statement for 2024,

the Bank has introduced below presented changes in the presentation of selected financial data in order

to enhance the transparency of disclosures, better reflect the economic substance of the transactions

concluded, and align with observed changes in market practice. The changes introduced had no impact

on the net result for the 12-month periods ended December 31, 2024, nor on the value of equity as of

December 31, 2024.

Restatement of comparative data

The changes in the presentation of data and the adjustment of the opening balance resulting from the

change in the approach to calculating the effective interest rate are described below and presented in

tabular form as amendment 2(a) to the Statement of Financial Position.

1) Changes to the Income Statement:

a) A dedicated line item “Legal risk costs related to foreign currency mortgage loans” has been

introduced. This item includes not only the costs of provisions previously presented under ‘Provisions

for legal risk related to foreign currency mortgage loans’ and included amounts related to the recognized

adjustment of the gross carrying amount of foreign currency loans as well as amounts recorded under

the 'Provisions' line item, but also period costs related to settlements concluded on the Bank’s terms

(previously included in ‘Net trading income’), costs of settlements concluded under KNF terms

(previously presented as ‘Modification result’), as well as legal representation costs and statutory interest

(previously included in ‘Other operating expenses’);

b) The modification result related to non-significant modifications of exposures with recognized

impairment has been reclassified to ‘Impairment losses on financial assets’, previously, this result was

presented under ‘Modification result’;

c) Interest related to the receivables from repurchase agreement transactions, for which a change in

presentation was made to trading assets (as described in Note 2f), was transferred from the item

‘Interest income from Financial assets at amortised cost' to the item ‘Result of similar nature to interest

from Financial assets at fair value through profit or loss’.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

2) Changes to the Statement of Financial Position:

a) Change in the approach to calculating the effective interest rate (adjustment of the opening balance

described above);

b) Within individual portfolios of financial assets, a separate line item ‘Assets pledged as collateral’ has

been introduced. This item presents assets that may be pledged or sold by the collateral taker. This new

item includes debt securities sold with a repurchase agreement clause under repo or sell-buy-back

transactions;

c) Provisions for retirement benefits have been reclassified from “Other liabilities” to a separate line

within the ‘Provisions’ section;

d) The values of variation margin deposits securing derivative transactions concluded via clearing

houses have been offset against the valuation of derivatives;

e) Items ‘Property, plant and equipment' and 'Intangible assets' were reduced by the amount of future

expenditures, with a corresponding entry under 'Other liabilities' – costs payable;

f) A change in presentation was made for a part of receivables from repurchase transactions involving

debt securities from the trading portfolio, from assets measured at amortised cost to financial assets

held for trading.

3) Changes to the Statement of Cash Flows:

a) The definition of cash equivalents has been revised in the case of securities issued by the State

Treasury or the Central Bank. Previously, all such securities with a maturity of up to 3 months as at the

balance sheet date were classified as cash equivalents. Now, only those securities that had a maturity

of up to 3 months at the time of acquisition and were acquired for the purpose of covering short-term

financial liabilities, are included;

b) A separate line item “Interest income/expense result (from the Profit and loss statement) has been

introduced in the Cash flows from operating activities section. Previously, interest accrued during the

reporting period was presented within changes in individual balance sheet items;

c) A separate line item ‘Income tax (from the Profit and loss statement)’ has been introduced and the

amount presented under the line item 'Income tax paid' was adjusted accordingly;

d) Payments related to lease liabilities (principal portion) were presented under the line item 'Lease

liability payments' in the Cash Flows from Financing Activities section; previously, these cash flows were

presented under 'Change in amounts due to customers' in the Cash Flows from Operating Activities

section;

e) Cash flows related to the issuance and repayment/redemption of financial liabilities arising from the

issuance of debt securities were presented under Cash Flows from Financing Activities; previously,

these cash flows were presented under Cash Flows from Operating Activities in the line item 'Change

in liabilities from the issuance of debt securities'.

Comparative data presented in this Bank’s financial statement have been restated, as shown below in

tabular form.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Changes to the Statement of Profit or Loss:

Amount ‘000 PLN

01.01.2024 -

31.12.2024 data

previously

published

Change 1a)

Change 1b)

Change 1c)

01.01.2024 -

31.12.2024

restated data

Net interest income

5 420 645

Interest income and other of similar nature

8 658 943

Income calculated using the effective interest

method

8 557 972

(44 363)

8 513 609

Interest income from Financial assets at

amortised cost, of which:

6 425 198

(44 363)

6 380 835

- the impact of the adjustment to the gross

carrying amount of loans due to credit

holidays

(106 788)

Interest income from Financial assets at fair

value through other comprehensive income

2 132 774

Result of similar nature to interest from Financial

assets at fair value through profit or loss

100 971

44 363

145 334

Interest expenses

(3 238 298)

Net fee and commission income

668 157

Fee and commission income

917 834

Fee and commission expenses

(249 677)

Dividend income

38 741

Result on derecognition of financial assets and

liabilities not measured at fair value through profit or

loss

(10 753)

Results on financial assets and liabilities held for

trading

(6 566)

Result on non-trading financial assets mandatorily at

fair value through profit or loss

18 125

Result on hedge accounting

1 544

Result on exchange differences

(179 401)

403 405

224 004

Other operating income

318 501

Other operating expenses

(486 039)

121 140

(364 899)

Administrative expenses

(1 954 321)

Impairment losses on financial assets

(237 422)

(33 444)

(270 866)

Impairment losses on non-financial assets

(4 274)

Legal risk expenses connected with FX mortgage

loans, of which:

(2 179 070)

(671 160)

(2 850 230)

Provisions for legal risk

(2 179 070)

Result on modification

(182 238)

146 615

33 444

(2 179)

Depreciation

(222 662)

Banking tax

(232 419)

Profit before income taxes

770 548

Corporate income tax

(127 445)

Profit after taxes

643 103

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Changes to the Statement of Financial Position:

ASSETS

Amount ‘000 PLN

2024-12-31

data previously

published

Change

2a)

Change

2b)

Change

2c)

Change

2d)

Change

2e)

Change

2f)

2024-12-31

restated data

Cash, cash balances at central

banks

5 178 984

Financial assets held for trading

812 573

194 218

1 006 791

Derivatives

257 094

Equity instruments

115

Debt securities, of which:

555 364

Debt instruments serving as

collateral for repurchase

transactions

194 088

Repurchase agreements

194 218

Non-trading financial assets

mandatorily at fair value through

profit or loss, other than Loans and

advances to customers

118 399

Equity instruments

66 609

Debt securities

51 790

Financial assets at fair value

through other comprehensive

income

29 023 647

Equity instruments

36 708

Debt securities

28 986 939

Loans and advances to customers

71 936 712

(110 485)

(5 900)

71 820 327

Mandatorily at fair value through

profit or loss

1 825

Valued at fair value through other

comprehensive income

11 135 416

Valued at amortised cost

60 799 471

(110 485)

(5 900)

60 683 086

Financial assets at amortised cost

other than Loans and advances to

customers

26 632 671

(194 218)

26 438 453

Debt securities

24 059 861

Deposits, loans and advances to

banks and other monetary

institutions

2 378 592

Repurchase agreements

194 218

(194 218)

Derivatives – Hedge accounting

112 365

(112 365)

Investments in subsidiaries, joint

ventures and associates

517 214

Tangible fixed assets

574 660

(56 515)

518 145

Intangible fixed assets

560 317

(22 892)

537 425

Income tax assets

611 379

20 992

632 371

Current income tax assets

Deferred income tax assets

611 379

20 992

632 371

Other assets

1 620 941

Total assets

137 699 862

(89 493)

(118 265)

(79 407)

137 412 697

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

LIABILITIES AND EQUITY

Amount ‘000 PLN

2024-12-31 data

previously

published

Change

2a)

Change

2b)

Change

2c)

Change

2d)

Change

2e)

Change

2f)

2024-12-31

restated data

LIABILITIES

Financial liabilities held for trading

417 518

Derivatives

226 749

Liabilities from short sale of securities

190 769

Financial liabilities measured at

amortised cost

124 752 615

(112 365)

124 640 250

Liabilities to banks and other monetary

institutions

323 296

(112 365)

210 931

Liabilities to customers

117 642 600

Repurchase agreements

194 223

Debt securities issued

5 030 166

Subordinated debt

1 562 330

Derivatives – Hedge accounting

107 439

(5 900)

101 539

Provisions

2 899 615

48 312

2 947 927

Pending legal issues

2 846 010

Commitments and guarantees given

53 605

Retirement benefits

48 312

Income tax liabilities

215 590

Current income tax liabilities

215 590

Deferred income tax liabilities

Other liabilities

2 021 672

(48 312)

(79 407)

1 893 953

Total Liabilities

130 414 449

(118 265)

(79 407)

130 216 777

EQUITY

Share capital

1 213 117

Own shares

(21)

Share premium

1 147 241

Accumulated other comprehensive

income

(111 295)

Retained earnings

5 036 371

(89 493)

4 946 878

Total equity

7 285 413

(89 493)

7 195 920

Total equity and total liabilities

137 699 862

(89 493)

(118 265)

(79 407)

137 412 697

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

ASSETS

Amount ‘000 PLN

2023-12-31

data previously

published

Change

2a)

Change

2b)

Change

2c)

Change

2d)

Change

2e)

Change

2f)

2023-12-31

restated data

Cash, cash balances at central

banks

5 094 984

Financial assets held for trading

609 252

11 562

620 814

Derivatives

498 577

Equity instruments

121

Debt securities, of which:

110 554

Debt instruments serving as

collateral for repurchase

transactions

Repurchase agreements

11 562

Non-trading financial assets

mandatorily at fair value through

profit or loss, other than Loans and

advances to customers

147 623

Equity instruments

66 609

Debt securities

81 014

Financial assets at fair value

through other comprehensive

income

21 924 652

Equity instruments

28 789

Debt securities

21 895 863

Loans and advances to customers

72 405 446

(110 485)

(27 964)

72 266 997

Mandatorily at fair value through

profit or loss

19 349

Valued at fair value through other

comprehensive income

11 799 748

Valued at amortised cost

60 586 349

(110 485)

(27 964)

60 447 900

Financial assets at amortised cost

other than Loans and advances to

customers

21 469 710

(11 562)

21 458 148

Debt securities

18 439 780

Deposits, loans and advances to

banks and other monetary

institutions

1 866 688

Repurchase agreements

1 163 242

(11 562)

1 151 680

Derivatives – Hedge accounting

74 213

(59 144)

15 069

Investments in subsidiaries, joint

ventures and associates

399 223

Tangible fixed assets

553 087

(35 754)

517 333

Intangible fixed assets

481 128

(16 206)

464 922

Income tax assets

368 279

20 992

389 271

Current income tax assets

Deferred income tax assets

368 279

20 992

389 271

Other assets

1 360 160

Total assets

124 887 757

(89 493)

(87 108)

(51 960)

124 659 196

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

LIABILITIES AND EQUITY

Amount ‘000 PLN

2023-12-31

data previously

published

Change

2a)

Change

2b)

Change

2c)

Change

2d)

Change

2e)

Change

2f)

2023-12-31

restated data

LIABILITIES

Financial liabilities held for trading

579 331

Derivatives

576 611

Liabilities from short sale of securities

2 720

Financial liabilities measured at

amortised cost

112 664 017

(59 144)

112 604 873

Liabilities to banks and other monetary

institutions

565 384

(59 144)

506 240

Liabilities to customers

107 505 636

Repurchase agreements

Debt securities issued

3 027 952

Subordinated debt

1 565 045

Derivatives – Hedge accounting

193 664

(27 964)

165 700

Provisions

1 444 173

45 227

1 489 400

Pending legal issues

1 401 798

Commitments and guarantees given

42 375

Retirement benefits

45 227

Income tax liabilities

460 456

Current income tax liabilities

460 456

Deferred income tax liabilities

Other liabilities

2 931 853

(45 227)

(51 960)

2 834 666

Total Liabilities

118 273 494

(87 108)

(51 960)

118 134 426

EQUITY

Share capital

1 213 117

Own shares

(21)

Share premium

1 147 241

Accumulated other comprehensive

income

(139 342)

Retained earnings

4 393 268

(89 493)

4 303 775

Total equity

6 614 263

(89 493)

6 524 770

Total equity and total liabilities

124 887 757

(89 493)

(87 108)

(51 960)

124 659 196

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Changes to the Statement of Cash Flows

A. CASH FLOWS FROM OPERATING ACTIVITIES

Amount ‘000 PLN

1.01.2024 -

31.12.2024

data previously

published

Change 3a)

Change 3b)

Change 3c)

Change 3d)

Change 3e)

Adjustments

resulting from

changes in the

statement of

financial

position

1.01.2024 -

31.12.2024

restated data

Profit (loss) after taxes

643 103

Total adjustments:

12 543 951

2 790

(2 324 217)

92 530

128 731

(27 447)

10 416 338

Interest income/expense result

(from the Profit and loss statement)

(5 420 645)

Interest received

8 244 034

223 300

8 467 334

Interest paid

(2 772 057)

Depreciation and amortization

222 662

Foreign exchange (gains)/ losses

(32 701)

Dividends

(38 741)

Changes in provisions

1 455 442

4 416

1 459 858

Result on sale and liquidation of

investing activity assets

(3 843)

Change in financial assets held for

trading

(265 642)

2 790

84 001

53 221

(125 630)

Change in loans and advances to

banks

(950 688)

113 796

(836 892)

Change in loans and advances to

customers

(5 474 017)

5 855 580

(22 064)

359 499

Change in receivables from

securities bought with sell-back

clause (loans and advances)

924 661

44 363

969 024

Change in financial liabilities valued

at fair value through profit and loss

(held for trading)

(248 038)

22 064

(225 974)

Change in deposits from banks

(226 321)

(14 393)

(53 221)

(293 935)

Change in deposits from customers

12 855 742

(2 679 580)

10 176 162

Change in liabilities from securities

sold with buy-back clause

231 736

(37 512)

194 224

Change in debt securities issued

209 296

(367 570)

161 432

3 158

Change in the balance of income

tax-related receivables and

payables

(275 220)

275 220

Income tax (from the Profit and loss

statement)

127 445

Income tax paid

(219 325)

(402 665)

(621 990)

Change in the balance of other

assets and liabilities

(1 252 277)

990

92 530

(31 863)

(1 190 620)

Change in other items

126 547

(125 557)

(990)

Net cash flows from operating

activities

13 187 054

2 790

(2 324 217)

92 530

128 731

(27 447)

11 059 441

B. CASH FLOWS FROM INVESTING ACTIVITIES

Amount ‘000 PLN

1.01.2024 -

31.12.2024

data previously

published

Change 3a)

Change 3b)

Change 3c)

Change 3d)

Change 3e)

Adjustments

resulting from

changes in the

statement of

financial

position

1.01.2024 -

31.12.2024

restated data

Inflows:

556 431 334

Proceeds from sale of property, plant

and equipment and intangible assets

7 722

Proceeds from sale of shares in

related entities

1 000

Proceeds from sale of investment

financial assets

556 383 871

Other

38 741

Outflows:

(575 614 818)

2 992 030

2 324 217

27 447

(570 271 124)

Acquisition of property, plant and

equipment and intangible assets

(244 783)

27 447

(217 336)

Acquisition of shares in related

entities

(120 000)

Acquisition of investment financial

assets

(575 250 035)

2 992 030

2 324 217

(569 933 788)

Other

Net cash flows from investing

activities

(19 183 484)

2 992 030

2 324 217

27 447

(13 839 790)

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

C. CASH FLOWS FROM FINANCING ACTIVITIES

Amount ‘000 PLN

1.01.2024 -

31.12.2024

data previously

published

Change 3a)

Change 3b)

Change 3c)

Change 3d)

Change 3e)

Adjustments

resulting from

changes in the

statement of

financial

position

1.01.2024 -

31.12.2024

restated data

Inflows from financing activities:

2 131 700

Long-term bank loans

Issue of debt securities

2 131 700

Increase in subordinated debt

Net proceeds from issues of shares

and additional capital paid-in

Other inflows from financing

activities

Outflows from financing activities:

(467 054)

(92 530)

(128 731)

(688 315)

Repayment of long-term bank loans

Redemption of debt securities

(128 731)

Decrease in subordinated debt

Issue of shares expenses

Redemption of shares

Dividends paid and other payments

to owners

Payments of lease liabilities

(92 530)

Other outflows from financing

activities

(467 054)

Net cash flows from financing

activities

1 664 646

(92 530)

(128 731)

1 443 385

D. Net cash flows. Total (A + B + C)

(4 331 784)

2 994 820

(1 336 964)

- of which change resulting from

FX differences

(343)

E. Cash and cash equivalents at the

beginning of the reporting period

18 396 413

(2 994 820)

15 401 593

F. Cash and cash equivalents at the

end of the reporting period (D + E)

14 064 629

(0)

14 064 629

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

7.3. STANDARDS AND INTERPRETATIONS APPLIED IN 2025 AND

THOSE NOT BINDING AT THE BALANCE SHEET DATE

In these solo financial statements, the Bank has applied the following amendments to standards and

interpretations that were endorsed by the European Union with an effective date for annual periods

beginning on 1 January 2025:

change

impact on the Bank’s financial statements

Amendments to IAS 21 The Effects of Changes in

Foreign Exchange Rates: Lack of Exchangeability

The amendment did not have a material impact

on the financial statements

The following standards have been endorsed by the European Union with an effective date for annual

periods beginning on 1 January 2026:

change

impact on the Bank’s financial statements

Contracts Referencing Nature-dependent

Electricity: Amendments to IFRS 9 and IFRS 7

The Bank estimates that the amendment will not

have a material impact on the financial

statements.

Amendments to the Classification and

Measurement of Financial Instruments:

Amendments to IFRS 9 and IFRS 7

The Bank estimates that the amendment will not

have a material impact on the financial

statements.

Annual Improvements – Volume 11; technical

amendments to IFRS 1, 7, 9, 10 and IAS 7

The Bank estimates that the amendment will not

have a material impact on the financial

statements.

The following standards have been issued for application from 1 January 2027 but have not yet been

endorsed by the European Union as at the date of preparation of the financial statements:

change

impact on the Bank’s financial statements

IFRS 19 – Subsidiaries without Public

Accountability; simplified disclosures for

subsidiaries

The Bank estimates that the amendment will not

have a material impact on the financial

statements.

IFRS 18 – Presentation and Disclosure; a new

structure of the statement of profit or loss

The Bank has not yet assessed the impact of the

standard on the financial statements

MSSF 21 – The Effects of Changes in Foreign

Exchange Rates; translation of financial

statements into the presentation currency of a

hyperinflationary economy

The Bank estimates that the amendment will not

have a material impact on the financial

statements.

MSSF 19 – Subsidiaries without Public

Accountability; reduced disclosure requirements

for selected standards and amendments issued

between February 2021 and May 2024

The Bank has not yet assessed the impact of the

standard on the financial statements

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

7.4. ADOPTED ACCOUNTING PRINCIPLES

Going concern

These financial statements have been prepared on the assumption that the Group will continue as a

going concern in the foreseeable future, i.e., for at least 12 months after the balance sheet date.

Between July / August 2022 and May / June 2024 the Bank executed a Recovery Plan and a Capital

Protection Plan in order to improve its capital ratios that had been impacted by the significant costs of

the so-called credit holidays for PLN mortgage borrowers in addition to the significant costs that were

being incurred related to FX mortgage legal risk.

All key assumptions of both plans were achieved, including all defined indicators reached mandatory

levels, and the Group's profitability and financial results were improved. In the area of capital

management, capital ratios have been restored to levels exceeding minimum regulatory requirements

and the Bank and the Group also met MREL requirements, including the combined buffer requirements.

As of 31 December 2025, the Tier 1 ratio was 459 bps (Bank) and 390 bps (Group) above the minimum

requirement, and the Total Capital Ratio (TCR) was 416 bps (Bank) and 333 bps (Group) above the

minimum requirement.

In terms of MRELtrea and MRELtem requirements, the Group presents a surplus compared to the

minimum required levels (including the Combined Buffer Requirement) as of 31 December 2025

(MRELtrea surplus was 542 bps and MRELtem surplus 236 bps). Assuming no extraordinary factors,

the Group plans to maintain both MREL ratios above the minimum required levels with a safe surplus.

The liquidity position of Bank Millennium Group remained strong in 4Q 2025; LCR ratio reached the

level of 402% at the end of December 2025, loan-to-deposit ratio remained low at 58% and the share

of liquid debt securities in the Group’s total assets remains significant at 45%.

The Bank monitors, on the current basis, the financial situation in particular, the Bank is aware of the

risks associated with further possible negative developments regarding the legal risk of FX mortgage

loans that could imply the need to increase the level of provisions for such risk beyond the provisions

that were recognized based on the best estimates as at the end of 2025. In the Bank’s assessment, the

materialisation of these events would have a negative impact on the Bank’s/Group’s results in

subsequent years, but would not pose a threat to its ability to continue as a going concern nor to its

capacity to execute its strategy and generate results that would mitigate the effects of such events.

Taking the above factors into account, and based on the information available regarding future

profitability, capital requirements and sources of funding, the Management Board of the Group/Bank

considered it appropriate to prepare the financial statements on a going concern basis.

Basis of Financial Statements Preparation

Financial statements of the Bank are prepared for the financial year from 1 January 2025 to 31

December 2025.

The financial statements have been prepared in PLN, and all values, unless otherwise indicated, are

given in PLN rounded to one thousand.

The financial statements, have been prepared based on the fair value principle for financial assets and

liabilities recognised at FVTPL including derivative instruments, and financial assets classified as

FVTOCI. Other items of financial assets and liabilities (including loans and advances) are presented at

amortized cost with effective interest rate applied less impairment charges (except loans which failed

SPPI test), or at their purchase price less impairment charges.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The preparation of financial statements in accordance with IFRS, as adopted by the EU, requires from

the management the use of estimates and assumptions that affect applied accounting principles and

the amounts (assets, liabilities, incomes and costs) reported in the financial statements and notes

thereto. The respective unit of the Bank is responsible for selection, application, development, and

verification of adopted estimations; the assumptions are then subject to approval by the Bank’s

management.

Estimations and assumptions applied to the presentation of value of assets, liabilities, revenues and

costs, are made on basis of historical data available and other factors considered to be relevant in given

circumstances. Applied assumptions related to the future and available data sources are the base for

making estimations regarding carrying value of assets and liabilities, which cannot be determined

explicitly on basis of other sources. The actual results may differ from those estimates.

The conformity between actual results and adopted estimations and assumptions is verified on regular

basis. Adjustments to estimates are recognized in the period when the estimation was changed,

provided that the adjustment applies to this period alone, or in the period when the estimation was

changed and in the following periods, should the adjustment impact both the current and future periods.

The below-presented accounting principles have been applied to all reporting periods presented in the

financial statements.

Functional currency and presentation currency

The items contained in the financial statements of the Bank are presented in the currency of their basic

economic environment, in which a given entity operates (‘the functional currency’). The financial

statements are presented in Polish zlotys, being the functional currency and the presentation currency

for the Bank.

Transactions and balances

Transactions expressed in foreign currency are translated into the functional currency by applying the

exchange rate at the date of the transaction. Exchange rate profits and losses due to settlements of

these transactions and to the balance sheet valuation of assets and monetary commitments expressed

in foreign currency are accounted for in the profit and loss account.

Exchange rate differences on monetary items, both those valued at fair value through the profit and loss

account or valued at fair value through other comprehensive income are disclosed in the profit and loss

account.

Exchange rate differences on non-monetary items valued at fair value through the profit and loss, are

accounted in the profit and loss account. Exchange rate differences due to items, such as equity

instruments valued at fair value through other comprehensive income, are included in Other

comprehensive income.

Mergers under joint control

In the case of mergers of the Capital Group companies (transaction under joint control), the Bank adopts

the accounting principle consisting in the application of the "predecessor accounting" method. In the

separate financial statements, the Bank recognizes the carrying amounts of the assets and liabilities of

the acquiree that is a subsidiary according to the values included in the consolidated financial statements

of the Capital Group in relation to this subsidiary, including also goodwill arising on the acquisition of

this subsidiary.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

A possible difference between the carrying amount of the net assets acquired after the adjustments

referred to above and the value of investments in a subsidiary disclosed in the separate financial

statements of the Bank is recognized in equity as "Retained earnings".

The net financial result achieved by the company being acquired up to the day preceding the date of

merger is disclosed in the Bank's financial statements under equity as "Retained earnings".

Application of estimates in connection with Accounting Policies

The preparation of financial statements in accordance with IFRS requires from the Bank the use of

estimates and assumptions that affect the amounts reported in the financial statements.

The estimates and assumptions, revised by the Bank management on a regular basis, are made on

basis of historical experience and other factors, including expectations concerning future events,

considered being relevant in given circumstances.

Despite the fact, that such estimates are based on best knowledge about current conditions and

activities undertaken by the Bank, the actual results may differ from the estimates. The major areas for

which the Bank makes estimates are presented below:

▪ Impairment of loans and advances

Impairment estimation model within the Bank has been based on the concept of “expected credit loss”,

(hereinafter: ECL). In result impairment charges are calculated based on expected credit losses and

forecasts of expected future economic conditions have to be taken into account when conducting

evaluation of credit risk of an exposure.

The methodology and assumptions adopted for determining credit impairments are regularly reviewed

in order to reduce discrepancies between the estimated and actual losses. In order to assess the

adequacy of the impairment determined both in individual analysis and collective analysis a historical

verification (backtesting) is conducted from time to time (at least once a year), which results will be taken

into account in order to improve the quality of the process.

Further details are presented in Chapter 8. “Financial Risk Management”.

▪ Fair value of financial instruments

Fair value of financial instruments not quoted on active markets is determined with use of measurement

techniques. With respect to non-option derivatives and debt securities use is made of models based on

discounted cash flows. Option pricing models are applied to option instruments. All models are approved

prior to use and also calibrated to ensure that attained results reflect the actual fair value of the measured

instruments. If possible, only observable data from the active market are used in the models.

In case of lack of measurement parameters coming from the active market, fair value is determined on

the basis of application of measurement techniques using estimated input parameters.

The Bank measures financial instruments using the measurement methods below in the following

hierarchical order:

▪ Prices quoted on the active market for identical instruments for following financial instruments:

Treasury fixed-coupon, zero-coupon debt securities and floating interest debt securities;

▪ Techniques of measurement based on parameters coming from the market for following financial

instruments:

Treasury floating interest debt securities,

Derivatives:

▪ FRA, IRS, CIRS,

▪ FX Swap, FX Forward,

▪ Embedded derivatives,

Bills issued by the Central Bank;

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

▪ Techniques of measurement with use of significant parameters not coming from the market:

Debt securities of other issuers (e.g. municipalities),

Shares of VISA Incorporation,

Loans and advances mandatorily at fair value through profit or loss,

Derivatives:

▪ FX Options acquired by the Bank,

▪ Indexes options acquired/placed by the Bank.

In order to determine the fair value of VISA preferred shares, the time value of money and the time

line for conversion of preferred stock in common stock of VISA were taken into account.

To estimate the fair value of loans, due to the lack of availability of the market value, an internal

valuation model was used, taking into account the assumption that at the time of granting the loan

the fair value is equal to transaction price.

The fair value of loans without recognized impairment is equal to the sum of future expected cash

flows discounted at the balance sheet date. The discounting rate is the sum of: the cost of risk, the

cost of financing, the value of the expected return.

The fair value of impaired loans is equal to the sum of future expected recoveries discounted using

the effective interest rate, recognizing that the average expected recoveries fully take into account

the element of credit risk.

For derivative financial instruments valuation the Bank applies the component of credit risk taking

into account both: counterparty risk (credit value adjustment – CVA) and own Bank’s risk (debit value

adjustment - DVA). The Bank assesses that unobservable inputs related to applying this component

used for fair value measurement are not significant.

▪ Impairment of other non-current assets

The Bank assesses the existence of any indications that a non-current asset may be impaired at each

balance sheet date. If such indications exist, the Bank performs an estimation of recoverable amount.

The recoverable amount of a fixed asset is the higher of its fair value less costs of disposal and its value

in use – that is, the present value of the future cash flows expected to arise from the continued use of

the asset and from its disposal at the end of its useful life. Estimation of value-in-use of a non-current

asset (or cash generating units) requires assumptions to be adopted, regarding, among others, amounts

and timing of future cash flows, which the Bank may obtain from the given non-current asset (or cash

generating unit). The Bank performs an estimation of the fair value less costs to sell on the basis of

available market data regarding this subject or estimations made by external parties.

▪ Impact of legal risk connected with FX mortgage loans

The Bank estimated the impact of legal risk on the recoverability of the expected cash flows resulting

from concluded contracts for the active portfolio of mortgage loans in CHF, adjusting, in accordance with

point B5.4.6 of IFRS 9, the gross carrying amount of the portfolio by reducing the expected cash flows

from mortgage loan contracts denominated or indexed to CHF, and recognized a provision in

accordance with International Accounting Standard 37 Provisions, Contingent Liabilities and Contingent

Assets (“IAS 37”) for fully repaid loans, statutory interest costs and in a situation where the gross carrying

amount of the loan was lower than the value of the assessed risk.

A detailed description of the adopted valuation methodology is presented in Chapter 12 "Legal risk

related to foreign currency mortgage loans".

• Adjustment due to credit holidays

The way the impact of credit holidays has been recognised is presented later in this Chapter.

• Valuation of the portfolio of loans dedicated to pooling to Mortgage Bank

In the case of the portfolio of mortgage loans in PLN, which will be subject to sale (pooling) to Mortgage

Bank in the future, it is measured at fair value through other comprehensive income.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The fair value of the loans is calculated as the sum of discounted cash flows from principal repayments

and interest payments on individual accounts.

Key assumptions:

i) for loans, the starting point for determining the projected cash flows (interest and principal

installments) are the schedules of principal and interest

ii) the calculation of the discount rate adopted to estimate the value of cash flows takes into account:

the WIBOR reference rate, the calibration margin determined on the basis of the latest production

of the mortgage loan portfolio analogous to the valued portfolio, the cost of risk of the valued

portfolio and the percentage of prepayment adjustment.

▪ Provisions for potential returns of costs associated with loans in case of early repayment

Taking into consideration The Court of Justice of the European Union verdict, in which it stated that

consumer has rights to demand the reduction of the total loan cost corresponding to interest and costs

for the remaining term of the agreement in case of early repayment of loan, Bank creates a provision

for potential returns to the clients. The provision is estimated based on the maximum amount of potential

returns and the probability of payment being made.

▪ Other Estimate Values

Retirement provision is calculated using an actuarial method by an independent actuary as the present

value of future liabilities of the Bank due to employees based on headcount and remuneration as of the

date of the update. The estimation of the provision is made on the basis of several assumptions,

regarding macroeconomic conditions and employee turnover, mortality risk and other.

With regard to employee benefits, such as bonuses granted to directors and key management

personnel, bonuses for employees, the Management Board makes assumptions and estimates

regarding the amount of benefits as at the balance sheet date. The final amount of bonuses granted is

established by Personnel Committee of the Management Board or Personnel Committee of the

Supervisory Board.

Financial assets and liabilities

Classification

In accordance with the IFRS 9 requirements financial assets are classified at the moment of their initial

recognition into one of three categories:

1) Financial assets valued at amortised cost (herein from „AC” – Amortised Cost),

2) Financial assets valued at fair value through profit & loss (herein from „FVTPL),

3) Financial assets valued at fair value through other comprehensive income (herein from „FVTOCI”).

The classification of financial instruments into one of the above categories is performed based on:

1) The business model of managing financial assets,

The assessment of the business model is aimed at determining whether the financial asset is held:

▪ to collect contractual cash flows resulting from the contract,

▪ both in order to collect contractual cash flows arising from the contract and the sale of a

financial asset or

▪ for other business purposes.

2) Test of contractual cash flow characteristics connected with financial assets (herein from „SPPI test”).

The purpose of the SPPI test (Solely Payment of Principal and Interest) is to assess the

characteristics of contract cash flows in order to verify if:

▪ The contractual terms trigger, at specific dates, certain cash flows which constitute solely

a payment of principal and interest on such principal,

▪ The principal constitutes the fair value of a loan at the moment of its recognition,

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

▪ The interest reflects the value of money over time and credit risk, liquidity risk, the Bank’s

margin and other administrative costs connected with the value of the principal outstanding

at any given moment.

Financial instruments are classified at the moment of recognition or significant modification of the

instrument. A change in the classification of financial assets is caused by a change in the business

model. Reclassification is made prospectively, i.e. it does not affect fair value measurements, write-

downs or accrued interests recorded to the date of reclassification.

Business Models of the Bank

In accordance with IFRS 9 the manner of assets management may be assigned to the following models:

1) Held To Collect (herein from „HTC”),

2) Both Held to Collect and for Sale (herein from “HTC&FS”),

3) Other models, e.g. trading activity, management of assets based on fair value fluctuations,

maximising cash flows through sales.

Held To Collect Model (HTC)

Model characteristics:

1) The objective of the model is to hold financial assets in order to collect their contractual cash flows,

2) Sales are infrequent,

3) In principle, lower levels of sales compared to other models (in terms of frequency and volume).

Conditions allowing sale in the HTC model:

1) Low frequency,

2) Low volume,

3) Sale connected with credit risk (sale caused by the deterioration of the credit quality of a given

financial asset to a level at which it no longer meets the investment policy requirements).

A sale having at least one of the above features does not preclude qualifying a group of assets in the

HTC module.

Impact on classification and valuation:

Instruments assigned to the HTC model are classified as valued at amortised cost (AC) on condition

that the criteria of the SPPI Test are met. The value of instruments is calculated based on effective

interest rate which is applied to determine interest income and then adjusted for impairment allowances

reflecting expected credit losses. Consequently, subject to valuation at amortised cost is the Bank’s

credit portfolio (except loans not meeting the SPPI test) and debt securities issued by local government

units (municipal bonds portfolio), because these instruments in principle are held by the Bank in order

to collect contract cash flows, while sales transactions occur infrequently.

Both Held to Collect and for Sale Model (HTC&FS)

Model characteristics:

1) The integral objectives of the business model are both to collect contractual cash flows and sell

assets (in particular the model meets the assumptions of HTC&FS, if its objective is to manage

current liquidity needs, maintaining the assumed profitability profile, and/or matching the duration of

financial assets and liabilities),

2) The levels of sales are usually higher than in the HTC model.

Impact on classification and valuation:

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

In accordance with IFRS 9 instruments assigned to the HTC&FS model are classified as valued at fair

value through other comprehensive income (FVTOCI) on condition that the contractual terms of these

instruments trigger at particular moments cash flows constituting solely a payment of principal and

interest on such principal (the SPPI test is met). These instruments are measured at fair value net of

impairment allowances, the fair value result is recognised in other comprehensive income until financial

assets is derecognised.

The HTC&FS model is applied mainly to the portfolio of debt government securities and money bills of

the National Bank of Poland in particular the liquidity and investment portfolio as well as to the portfolio

of mortgage loans dedicated to pooling to Bank Hipoteczny.

Equity instruments (with the exception of related entities) are classified as valued at fair value through

profit & loss (FVTPL), provided that entities which manage them do not intend to hold them as a strategic

investment, or at fair value through other comprehensive income (FVTOCI) for instruments which are

not held for trading purposes. The decision to use the option to value capital instruments at fair value

through other comprehensive income is taken by the Bank on the day of the initial recognition of the

instrument and constitute an irrevocable designation (even at the moment of selling, the profit/loss on

the transaction shall not be recognised in the Profit and Loss Account).

Other models

Model characteristics:

1) The business model does not meet the assumptions of the HTC and HTC&FS models.

2) The collecting of cash flows on interest and principal is not the main objective of the business model

(the SPPI test is not satisfied),

This category should include in particular:

1) Portfolios managed in order to collect cash flows from the sale of assets, in particular „held for

trading”,

2) Portfolios whose management results are evaluated at fair value.

A financial asset should be considered as held for trading, if:

1) It was purchased mainly for the purpose of selling in a very short term,

2) At the moment of initial recognition it is part of a portfolio of financial instruments managed jointly

for which there is evidence confirming a regularity that they have recently actually generated short-

term profits, or

3) Is a derivative instrument, with the exclusion of derivative instruments included in hedge accounting

and being effective hedging instruments.

The term “trading” means active and frequent purchases and sales of instruments. However, these

features do not constitute a necessary condition in order to classify a financial instrument as held for

trading.

Impact on classification and valuation:

Financial assets kept under models other than HTC or HTC&FS are valued at fair value through profit

& loss (FVTPL).

A business model other than HTC or HTC&FS shall apply to portfolios of the following financial assets:

1) Derivative instruments,

2) Debt securities held for trading,

3) Capital instruments not appointed to be a strategic investment,

4) Financial assets irrevocably designated at initial recognition to be valued at fair value through profit

& loss (even in case the asset does not meet criteria to be FVTPL) in order to eliminate or

significantly mitigate accounting mismatch if would appear in case such designation is not made.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Test of characteristics of contractual cash flows (SPPI test)

The evaluation of the fulfilment of the SPPI Test is carried out in the following cases:

▪ granting a debt instrument;

▪ purchase of debt instrument;

▪ renegotiation of contractual terms.

The subject of the SPPI Test are the contractual terms of debt instruments recognised in the balance

sheet, whereas the off-balance sheet products are not analyzed.

The SPPI test is carried out at the design stage of the product/loan agreement, which allows making

approvals with taking into account the future method of exposure valuation.

As part of the SPPI Test, the impact of the modified element on the cash flows resulting from the

concluded contract is assessed. Contract characteristics introducing volatility or cash flow risk not

directly related to interest and capital interest payments may be assessed as having no impact on the

classification (fulfilment of SPPI criteria) if they are defined as having negligible classification impact

(existence of a "de minimis" characteristic) or such impact is not negligible (no “de minimis” character)

but can only occur in extremely rare cases (existence of the “not genuine” attribute).

In cases where there is a modification of the time value of money, eg in case where a period of interest

rate mismatch with the base rate tenor, in order to verify the fulfilment of the SPPI Test, the Bank

performs an assessment based on the Benchmark Test, ie a comparison of the instrument resulting

from the contract with the base instrument (which has the same contractual features as the instrument

under analysis, with the exception of the time value of money element).

Non-recourse assets (products for which the Bank’s claim is limited to certain debtor's assets or cash

flows from specific assets), in particular "project finance" and "object finance" products (products in

which the borrower, most often a special purpose vehicle is characterized by the minimum level of equity,

and the only component of its assets is the credited asset), are assessed by comparing the value of the

collateral in relation to the principal amount of the loan. Identification of the appropriate buffer to cover

the risk of changes in the value of the collateral satisfies the SPPI Test conditions.

The negative result of the SPPI Test implies the valuation of the debt at FVTPL, causing a departure

from the valuation at amortized cost or FVTOCI.

Modifications to the terms of the loan agreement

Modifications to the terms of the loan agreement during the loan period include:

▪ changing the dates of repayment of all or part of the receivables,

▪ changes in the amount of the repayment instalments,

▪ changing the interest or stop charging interest,

▪ capitalization of arrears or current interest,

▪ currency conversion (unless such a possibility results from the original contract),

▪ establishing, amending or abolishing the existing security for receivables.

Any mentioned above modification may result in the need to exclude from the balance sheet and re-

classify the financial asset taking into account the SPPI test.

If the contractual terms of the loan are modified, the Bank performs a qualitative and quantitative

assessment to determine whether a given modification should be considered significant and,

consequently, derecognize the original financial asset from the balance sheet and recognize it as a new

(modified) asset at fair value. A significant modification takes place if the following conditions are met:

▪ quantitative criteria:

- increase in the debtor's exposure, understood as an increase in the capital of each single credit

exposure above 10% compared to the capital before the increase. If the quantitative criterion

exceeds 10%, the modification is considered significant, while the occurrence of the quantitative

criterion up to 10% results in the modification being considered insignificant.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

- extending the financing period, understood as extending the maturity date of the current

agreement. The modification is considered significant if the financing period is extended by: 8 years

for mortgage loans, 5 years for other credit exposures in the retail segment, 3 years for exposures

in the corporate segment.

▪ qualitative criteria: conversion of the exposure to another currency (unless the possibility of

conversion was included in the original agreement), change of SPPI test result, change of debtor,

change of legal form or type of financial instrument. The occurrence of a qualitative criterion results

in recognizing the modification as significant.

If the cash flows resulting from the agreement are subject to modification, which does not lead to

derecognition of a given asset (so called ‘insignificant modification”), the Bank adjusts the gross carrying

amount of the financial asset and recognizes the profit or loss due to insignificant modification in the

financial result (in a separate item of the Loss Profit Statement – “result on modification”). The

adjustment of the gross carrying amount of a financial asset is the difference between the discounted

cash flows before and after the contract modification. All costs and fees incurred adjust the carrying

amount of the modified financial asset and are depreciated in the period remaining until the maturity

date of the modified financial asset.

Credit Holidays

Following the signing by the President of the Republic of Poland and the announcement in the Journal

of Laws of the Republic of Poland of the Act of April 12, 2024 amending the Act on support for borrowers

who have taken out a mortgage loan and are in a difficult financial situation and the Act on crowdfunding

for business ventures and aid borrowers which, among other things, extends the possibility for borrowers

to suspend the repayment of a mortgage loan granted in Polish currency for a period of up to four months

(suspension of repayments up to 4 monthly installments), during the year, the Bank recognized an

adjustment due to credit holidays, which in the final settlement (the program is already over) charged

the Bank's financial result for 2024 by PLN 106.8 million. The credit holidays in 2024 were used by

customers holding a total of around 16% of the balance of the PLN mortgage loan portfolio concluded

before June 30, 2022 with an original loan amount not exceeding PLN 1.2 million, measured based on

the capital balance as at May 31, 2024.

The adjustment was calculated and recognized in accordance with IFRS 9, as a reduction of interest

income on assets measured at amortized cost and, on the other hand, reducing the gross value of

mortgage loans in PLN.

Pursuant to the concluded agreement, in the event of the entry into force of regulations enabling

customers to take advantage of subsequent credit holidays (not mentioned above), Bank Millennium

undertakes to return to Millennium Mortgage Bank the equivalent of benefits in the form of lost interest

income in connection with the suspension of repayment of loans constituting an element of proceeds

from sold mortgage loan portfolios (applies to proceeds from the portfolio that was sold by Bank

Millennium to Millennium Mortgage Bank in November 2023 and tranches sold later).

POCI assets

POCI assets ("purchased or originated credit-impaired") are financial assets that, upon initial

recognition, have an identified impairment. Financial assets that were classified as POCI at the time of

initial recognition are treated by the Bank as POCI in all subsequent periods until they are derecognized

from balance sheet, and expected credit loss is estimated based on ECL covering the remaining life

time of the financial asset, regardless of future changes in estimates of cash flows generated by them

(possible improvement of assets quality).

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

POCI assets can be created in 3 different ways, i.e.:

1) through the acquisition of a contract that meets the definition of POCI (e.g. as a result of the purchase

of the "bad credit" portfolio),

2) by entering into a contract that is POCI at the time of original granting (e.g. granting a loan to a client

in bad financial condition with the hope of improving it in the future)

3) through a significant modification of the contract included in stage 3 leading to derecognition of the

contract from the balance sheet, and then to its further recognition in the balance sheet as a contract

meeting the definition of POCI.

Receivables and liabilities from lease contracts

The Bank is a party to lease contracts, on the basis of which it grants for paid use or benefit of non-

current assets or intangible assets for an agreed period of time.

In the case of lease contracts, which result in transferring substantially all risks and rewards incidental

to ownership of the asset under lease, the subject of the lease is derecognized. A receivable amount is

recognized instead, however, in an amount equal to the present value of minimum lease payments.

Lease payments are accounted for (apportioned between the financial income and the reduction of the

balance of receivables) to reach constant periodic rate of return from the outstanding receivables.

Lease payments for contracts, which do not fulfil qualifications of a finance lease, are recognized as

income in the profit and loss, using the straight-line method, throughout the period of the lease.

The Bank is also a party to lease contracts, under which it takes for paid use or drawing benefits another

party’s non-current assets or intangible assets for an agreed period. These are mainly rental

agreements. In case of these contracts the financial report shows, both assets under the right of use

and liabilities under the lease, in separate items of the explanatory notes to the lines “Tangible fixed

assets” and “Other liabilities” respectively. On the start date of the lease, lease payments contained in

the valuation of the lease liability shall comprise following payments for the right to use the underlying

asset during the lease period, which remain due on that date:

• fixed lease payments less any and all due lease incentives,

• variable lease payments, which depend on the index or rate, initially valuated with use of this index

or this rate in accordance with their value on start date,

• amounts expected to be paid by the lessee under the guaranteed final value,

• the buy option strike price if it can be assumed with sufficient certainty that the lessee will exercise

this option,

• monetary penalties for lease termination if it is sufficiently probable that the lessee will exercise the

lease termination option.

A right to use asset comprises:

• amount of initial valuation of the lease liability,

• any and all lease payments paid on the start date or before it, less any and all lease incentives

received.

Financial result reflects following items:

• depreciation of right to use,

• interest on lease liabilities,

• VAT on rent invoices reported in cost of rent.

The Bank has adopted the following assumptions, based on which lease agreements are carried in

financial statements:

• calculation of liabilities and assets will use net values (VAT is excluded) of future cash flows,

• in case of agreements denominated in currency the liabilities will be carried in the original currency

of the contract while assets in Polish zloty converted at the rate from date of signing the contract,

• the right to use the asset will be depreciated according to the lease period,

• the Bank uses the option of not recognizing leasing in the case of short-term contracts for space

lease and car leasing contracts,

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

• the Bank also uses the option of not recognizing leasing in the case of leasing assets with a low

initial value, such as renting small areas, e.g. for garbage arbors, ramps, ATMs and devices such

as coffee machines, water dispensers, audiomarketing and aromatamarketing devices,

• new contracts will be discounted according to the SWAP rate on the day of signing the contract /

annex to the contract appropriate for the duration of the contract and applicable for the currency,

increased by the margin determined and updated in relation to the risk premium for the financial

liabilities incurred by the Bank.

Financial liabilities

Upon initial recognition a financial liability shall be classified as:

1) a financial liability measured at fair value through profit loss, or

2) other financial liability (measured at AC).

Additionally, financial liabilities shall not be reclassified subsequent to their initial recognition.

Recognition of financial instruments in the balance sheet

The Bank recognizes financial assets or liabilities on the balance sheet, when it becomes a party to the

contractual provisions of the instrument. Standardized purchase and sale transactions of financial assets

are recognized at the trade date.

All financial instruments at their initial recognition are valued at fair value adjusted, in the case of a

financial instrument not valued at fair value through profit or loss, by transaction costs that are directly

attributable to the acquisition or issue of the financial asset/liability.

De-recognition of financial instruments from the balance sheet

The Bank derecognizes a financial asset when: the contractual rights to the cash flows from the financial

asset expire, or the Bank transfers the financial asset to third party. The transfer takes place when the

Bank:

▪ transfers the contractual right to receive the cash flows from the financial asset, or

▪ retains the contractual rights to receive the cash flows from the financial asset, but assumes a

contractual obligation to pay those cash flows to an entity from outside the Bank.

On transferring a financial asset, the Bank evaluates the extent to which it retains the risks and rewards

of ownership of the financial asset. Accordingly, where the Bank:

▪ transfers substantially all the risks and rewards of ownership of the financial asset, it derecognises

the financial asset from the balance sheet;

▪ retains substantially all the risks and rewards of ownership of the financial asset, it continues to

recognise the financial asset in the balance sheet;

▪ neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset,

it determines whether it has retained control of the financial asset. In this case if the Bank has retained

control, it continues to recognise the financial asset in the balance sheet to the extent of its continuing

involvement in the financial asset, and if the Bank has not retained control, it derecognises the

financial asset accordingly.

The Bank removes a financial liability (or a part of a financial liability) from its balance sheet when the

obligation specified in the contract is discharged or cancelled or expired.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Hedge Accounting and Derivatives

Valuation at fair value

Derivative instruments are reported at fair value starting from the day of conclusion of the transaction.

Fair value is determined on the basis of quotations of instruments on active markets, including pricing

of recently concluded transactions. A market is considered as active when the quoted instrument prices

are regularly available and result from actual transactions on the market and represent a level, at which

the Bank could conclude such transactions. If the market for the instruments is not active the Bank

determines fair value with use of measurement techniques, including models based on discounted cash

flows and options measurement models. The measurement techniques used by the Bank are based on

maximum use of input data coming from the active market, such as interest rates, FX rates and implied

volatilities. In case of lack of input data from the active market the Bank makes use in the measurement

techniques of proprietary estimates of measurement parameters, based on best knowledge and

experience.

An additional element of the valuation of derivatives is a component of credit risk including both the risk

of the counterparty (credit value adjustment - CVA) and own Bank’s risk (debit value adjustment - DVA).

Recognition of derivative instruments embedded in liabilities

The Bank distinguishes and records in the balance sheet the derivatives which are a component of

hybrid instruments. A hybrid agreement contains an underlying (host) contract classified into financial

liabilities (not being a derivative) and an embedded derivative which on the basis of a specific interest

rate, price of financial instrument, price of a commodity, rate of a currency, index of prices or rates or

another variable modifies part or the total of the cash flows resulting from the underlying contract.

Embedded derivative instruments are treated as stand-alone derivative instruments provided they meet

conditions presented below. Embedded derivative instruments are valued at fair value, and their

changes are recognized in the profit and loss. Embedded derivative instruments are recognized and

valued separately from the host contract if, and only if:

▪ the economic characteristics and risks of the embedded derivative are not closely related to the

economic characteristics and risks of the host contract,

▪ a separate instrument with the same terms as the embedded derivative would meet the

definition of a derivative; and

▪ the hybrid (combined) financial instrument is not measured at fair value with changes in fair

value recognized in profit or loss.

The method of recognizing the resulting fair value gain or loss depends on whether the given derivative

instrument is designated as a hedging instrument, and if it is, it also depends on the nature of the hedging

relationship and the hedged item.

Derivative instruments designated as hedging instruments – hedge accounting

The Bank uses derivative instruments in order to hedge against interest rate risk and FX risk arising

from operating, financing and investing activities of the Bank. Some derivative instruments are

designated as a hedging instrument of:

▪ cash flows hedges of recognized asset or liability or highly probable forecasted transaction

(cash flow hedges), or:

▪ fair value hedges of recognized asset or liability or firm commitment (fair value hedges).

The Bank applies IAS 39 requirements for hedge accounting.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Hedge accounting criteria

The Bank uses hedge accounting, based on IAS 39, if the following conditions are met:

▪ At the inception of the hedge there is formal designation and documentation of the hedging

relationship and the Bank’s risk management objective and strategy for undertaking the hedge. That

documentation includes identification of the hedging instrument, the hedged item or transaction, the

nature of the risk being hedged. It documents also, at the inception of the hedge and through the

period of hedge relationship, the assessment of the hedging instrument's effectiveness in offsetting

the exposure to changes in fair value or cash flows of the hedged item;

▪ The hedge is expected to be highly effective in achieving offsetting changes in fair value or cash

flows attributable to the hedged risk, consistently with the originally documented risk management

strategy for that particular hedging relationship (prospective effectiveness test);

▪ For cash flow hedges, a forecast transaction that is the subject of the hedge must be highly probable

and must present an exposure to variations in cash flows that could ultimately affect profit or loss

(high probability test);

▪ The effectiveness of the hedge can be reliably measured, i.e. the fair value or cash flows of the

hedged item that are attributable to the hedged risk and the fair value of the hedging instrument can

be reliably measured;

▪ The hedge is assessed on an ongoing basis and determined actually to have been highly effective

throughout the financial reporting periods for which the hedge was designated (backward-looking

effectiveness test).

Cash flow hedge

Cash flow hedge: a hedge of the exposure to variability in cash flows that (i) is attributable to a particular

risk associated with a recognised asset or liability (such as all or some future interest payments on

variable rate debt) or a highly probable forecast transaction and (ii) could affect profit or loss.

A cash flow hedge is accounted for as follows: the portion of the gain or loss on the hedging instrument

that is determined to be an effective hedge is recognised in equity through the other comprehensive

income; and the ineffective portion of the gain or loss on the hedging instrument is recognised in Result

on hedge accounting.

The associated gains or losses that were recognised in other comprehensive income (effective hedge),

at the moment of recognition of a financial asset and liability being a result of planned hedged future

transaction, are transferred into profit or loss in the same period or periods during which the asset

acquired or liability assumed affects the profit or loss.

In case of a hedge of non-financial asset or a non-financial liability, the associated gains and losses

recognised in other comprehensive income as an effective hedge, are transferred successively into the

profit or loss account in the same period or periods during which the asset acquired or liability assumed

affects the profit or loss account directly from equity or are transferred from equity to initial purchase

price in the balance sheet and recognized successfully in the periods, in which non – financial asset or

liability has impact on profit and loss account.

Fair value hedge

Fair value hedge: a hedge of the exposure to changes in fair value of a recognised asset or liability or

an unrecognised firm commitment, or an identified portion of such an asset, liability or firm commitment,

that is attributable to a particular risk and could affect the profit or loss.

Changes in the fair value of derivative instruments classified and eligible as fair value hedges are

recognised in the Profit and Loss along with their corresponding changes of the hedged asset or liability

relating to the risk hedged by the Bank.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

It means that any gains or losses resulting from re-measuring the hedging instrument at fair value (for a

derivative hedging instrument) are recognised in profit or loss and the gains or losses on the hedged

item attributable to the hedged risk adjust the carrying amount of the hedged item and are recognised

in profit or loss. This applies if the hedged item is otherwise measured at cost. Recognition of the gain

or loss attributable to the hedged risk in profit or loss applies if the hedged item is an FVOCI asset. The

valuation of hedged financial assets classified as FVOCI, resulting from factors other than risk hedged,

is recognized in other comprehensive income till the date of sale or maturity of this financial asset.

Termination of hedge accounting

If the fair value hedge no longer meets the criteria for applying hedge accounting, the carrying value

adjustment of the hedged instrument valued at amortized cost and effective interest rate, is linearly

amortized through profit and loss account over the period ending on the maturity date. The value of

hedged financial assets classified as FVOCI resulting from factors other than hedged risks is recognized

in the revaluation reserve till the date of sale or maturity of this financial asset.

If the cash flow hedge no longer meets the criteria for hedge accounting, the valuation of hedging

instrument recognized in other comprehensive income at the date of the last effectiveness test remains

in equity until the realization of cash flow resulting from the hedged item. Then the amount is transferred

into profit and loss account in the periods, in which the hedged transaction influences the profit and loss

account.

Derivative instruments not qualifying as hedging instruments

Derivative instruments that are not subject to hedge accounting principles are classified as instruments

held for trading, and valued at fair value. The changes in fair value of derivative instruments held for

trading are recognized in the profit and loss in item “Results on financial assets and liabilities held for

trading”/“Result on exchange differences”, which was described below.

The Bank uses the following principles of recognition of gains and losses resulting from the valuation of

derivative instruments:

▪ FX forward

Forward transactions are valued at fair value on discounted future cash flows basis, taking into

account the credit risk of the counterparty (and the Bank). Any changes in fair value of FX forward

transactions are recorded in “Result on exchange differences” of the Profit and Loss Account.

Moreover the Bank designated selected FX forward transactions as hedging instruments. The

method of capturing and valuating hedging financial instruments was described in the part on hedge

accounting.

▪ FX SWAP

FX SWAP transactions are measured at fair value based on the discounted future cash-flow method

with use of interest rate curves based on spread reflecting current market conditions and with taking

into account the credit risk of the counterparty (and the Bank). Changes of fair value of FX SWAP

transactions are reported in “Results on financial assets and liabilities held for trading” in the Profit

and Loss Account.

▪ Interest Rate SWAP (IRS)

IRS transactions are valued at fair value on discounted future cash flows basis, taking into account

the credit risk of the counterparty (and the Bank). Any changes in fair value of IRS transactions are

recorded in “Results on financial assets and liabilities held for trading” of the Profit and Loss Account.

Moreover the Bank designated selected IRS transactions as hedging instruments. The method of

capturing and valuating hedging financial instruments was described in the part on hedge accounting.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

▪ Cross – Currency Swap (CCS)

CCS transactions are measured at fair value based on the discounted future cash-flows method with

use of interest rate curves adjusted with market spread reflecting its term structure and with taking

into account the credit risk of the counterparty (and the Bank). Changes of fair value of CCS

transactions are reported in “Results on financial assets and liabilities held for trading”.

Moreover the Bank designated selected CCS transactions as hedging instruments. The method of

recognition and measurement of hedging instruments was described in the part devoted to hedge

accounting.

▪ IRS transactions with embedded options

The transactions are valued at fair value: the swap component is valued with use of the future cash

flows discounting method taking into account the credit risk of the counterparty (and the Bank), while

the option component is valued with use of the option valuation models. Any changes in fair value of

the above transactions are recorded in “Results on financial assets and liabilities held for trading” of

the Profit and Loss Account. The option component hedges options embedded in securities or

deposits offered by the Bank.

▪ FX and Index options

Option transactions are measured at fair value with use of option measurement models. In case of

options issued by the Bank’s counterparties, the model measurement is supplemented with impact

on fair value of the estimated credit risk parameter. Changes of fair value of options are reported in

“Results on financial assets and liabilities held for trading” line of the Profit and Loss Account.

▪ Forward Rate Agreement (FRA)

FRA transactions are valued at fair value on discounted future cash flows basis and with taking into

account the credit risk of the counterparty (and the Bank). Any changes in fair value of FRA

transactions are recorded in “Results on financial assets and liabilities held for trading” of the Profit

and Loss Account.

▪ Commodity futures

Commodity futures are measured at fair value based on the discounted future cash flow

methodology, using reference prices set at the LME reference market (London Metal Exchange),

whereas the Bank does not keep own positions on the commodity market. Changes of fair value are

reported in “Results on financial assets and liabilities held for trading” of the Profit and Loss Account.

▪ Commodity options

Commodity options are measured at fair value with use of option valuation models as well as

reference prices set at the LME reference market (London Metal Exchange), whereas the Bank does

not keep own positions on the commodity market. Changes of fair value are reported in “Results on

financial assets and liabilities held for trading” of the Profit and Loss Account.

Impairment of financial assets

General assumptions of the model

The impairment estimation model is based on the concept of expected credit loss (ECL). The impairment

allowances calculated in line with this concept also incorporate forecasts and expectations regarding

future economic conditions that may affect the credit risk level of an exposure. The implemented

impairment model applies to financial assets classified under IFRS 9 as financial assets measured at

amortised cost or at fair value through other comprehensive income (excluding equity instruments), as

well as off-balance-sheet liabilities.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Credit exposures are classified into the following categories:

• Stage 1 – exposures without impairment, for which the expected credit loss is estimated over a

12-month horizon,

• Stage 2 – exposures without impairment, for which a significant increase in credit risk has been

identified, and for which the expected credit loss is calculated over the lifetime of the financial

asset,

• Stage 3 – exposures with identified evidence of impairment, for which the expected credit loss

is calculated over the lifetime of the financial asset.

In addition, a separate category POCI (purchased or originated credit-impaired) is distinguished. These

are assets recognised on initial recognition as credit-impaired, and the expected credit loss is calculated

on a lifetime ECL basis.

Identification of Significant Increase in Credit Risk

Assets for which a significant increase in credit risk has been identified compared to the moment of initial

recognition are classified into Stage 2. A significant increase in credit risk is identified based on

qualitative and quantitative criteria.

Qualitative criteria include:

• payment delays exceeding 30 days (without a materiality threshold for the amount of delay),

• exposures with granted forbearance measures where no impairment triggers are identified,

• use of the Borrower Support Fund for retail clients,

• attachments on current accounts resulting from enforcement titles,

• procedural rating reflecting initial payment delays,

• decisions limiting credit risk under the early warning system for corporate clients,

• listing a corporate client on the Watch List.

The quantitative criterion consists in comparing the lifetime probability of default (PD) determined at the

moment of the initial recognition of the financial asset in the balance sheet with the PD value as at the

current reporting date. If the relative change in PD exceeds the threshold defined for a given exposure

category, the exposure is transferred to Stage 2. Corporate exposures are additionally subject to an

assessment of the absolute change in lifetime PD. Detailed information on the applicable thresholds is

presented in chapter 8.3 “Credit risk,” in the subsection “Policy on impairment and allowance

recognition.”.

Incorporation of Forward-Looking Information (FLI)

In the ECL calculation process, the Group uses forward-looking information regarding future

macroeconomic events. The Macroeconomic Analysis Office prepares three scenarios (baseline,

optimistic and a mild recession) and assigns probabilities to each. These forecasts directly or indirectly

affect the estimated parameter values and exposure amounts. The forecasts are used to calibrate the

models applied in the calculation of expected credit losses within the so‑called FLI component. Detailed

data on the scenarios and their assigned weights have been presented in chapter 8.3 ‘Credit Risk’, in

the subsection ‘Incorporation of macroeconomic forecasts into impairment estimation models’.

Harmonisation of the Default Definition Across the Group

The Group has adopted a unified definition of default for both capital requirement calculations and

impairment estimation. The Group follows the EBA guidelines (EBA/GL/2016/07) – the so-called New

Definition of Default.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The harmonised default definition includes:

• payment delay exceeding 90 days, considering materiality thresholds: PLN 400 for retail

exposures, PLN 2,000 for corporate exposures, and a relative threshold of 1% of the client’s

total exposure,

• restructuring of an exposure (forbearance),

• terminated agreements and exposures under collection processes,

• consumer bankruptcy,

• indicators of corporate insolvency, such as:

▪ filing for arrangement approval,

▪ court order approving an arrangement,

▪ announcement of simplified restructuring proceedings,

▪ filing for / court opening of accelerated arrangement proceedings, arrangement

proceedings or rehabilitation proceedings,

▪ filing for / court opening of bankruptcy proceedings,

• credit fraud,

• qualitative impairment triggers identified through individual analysis for corporate clients (the list

of indicators is provided in chapter 8.3 ‘Credit Risk’, in the subsection ‘Impairment assessment

under the individual analysis approach’).

The Bank applies the cross-default principle to all segments.

PD Model

The PD model used to calculate expected credit losses is based on empirical data on 12-month default

rates. These are then used, through statistical and econometric methods, to estimate lifetime PD values

(including macroeconomic FLI forecasts).

LGD Models

For retail portfolios, the main LGD model components include: cure rate, recovery rate estimated from

discounted cash flows, and recoveries from collateral realisation. The model reflects the current

economic environment (point-in-time concept) and incorporates macroeconomic forecasts (FLI).

For corporate portfolios, the LGD model is based on recoveries from key collateral types and factors

reflecting other collateral types, including self-repayments. All parameters are based on historical

discounted cash flow data obtained by the corporate debt recovery unit.

EaD Model

The EaD model covers calculation of parameters such as: credit conversion factor, prepayment rate,

and expected lifetime of exposures for products without repayment schedules. Segmentation is based

on client type (retail, corporate) and product type (with/without schedule).The model incorporates FLI

macroeconomic forecasts.

The forecasts of the macroeconomic variables used in the models are presented in chapter 8.3 ‘Credit

Risk’, in the subsection ‘Incorporation of macroeconomic forecasts into impairment estimation models’,

while information on the variables used for model segmentation is provided in the subsection ‘Collective

analysis of the loan portfolio’.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Write-offs

The Bank directly reduces the gross carrying amount of a financial asset if there are no reasonable

grounds to recover a given financial asset in whole or partially. As a result of write-off, a financial asset

component ceases, in whole or partially, to be recognized in the financial statements. The indicators of

uncollectibility of receivables and the amounts of receivables written off from the balance sheet are

described in chapter 8.3 ‘Credit Risk’, in the subsection ‘Write‑off policy’.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet

when there is a legally enforceable right to offset the recognised amounts and there is an intention to

settle on a net basis, or realise the asset and settle the liability simultaneously.

Transactions with sell/buy-back clauses

Repo and sell-buy back transactions as well as reverse-repo and buy-sell back transactions, are

transactions of sale and purchase of securities for which a commitment has been made to repurchase

or resell them at a contractual date and for specified contractual price.

The Bank presents financial assets sold with the repurchase clauses (repo, sell buy-back) in its balance

sheet, by simultaneously recognizing a financial liability resulting from the repurchase clause, provided

that risks and rewards relating to this asset are retained by the Bank after the transfer.

When the Bank purchases securities with a sell back clause (reverse repo, buy-sell-back), the financial

assets are presented as receivables arising from sell back clause.

Repurchase transactions are classified as held for trading or measured at amortised cost (depending

on the portfolio classification of the security underlying the transaction).Securities, which are the subjects

of transactions with buy-back clause, are not removed from the balance sheet and are measured in

accordance with principles applicable for particular securities portfolio. The difference between sale and

repurchase price is treated as interest cost/ income, and is accrued over the period of the agreement by

application of an effective interest rate.

Property, plant and equipment and Intangible Assets

Own property, plant and equipment

Tangible fixed assets are the controlled fixed assets and outlays made to build such assets. Tangible

fixed assets include fixed assets with an expected period of use above one year, maintained to be used

to serve the Bank’s needs or to be transferred to other entities, based on the lease contract or for

administrative purposes.

Tangible fixed assets are reported at historical cost less depreciation and impairment presented under

‘Impairment losses on non‑financial assets’ in the Statement of Profit or Loss.

Fixed assets under construction are disclosed at purchase price or production costs and are not subject

to depreciation.

The Bank recognizes as a part of the asset’s carrying value, the replacement costs as incurred, only

when it is probable that future economic benefits associated with these items will flow to the Bank, and

the cost of the item can be reliably measured. Other outlays are recognised in profit and loss when

incurred.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Costs of repairs and maintenance of property, plant and equipment are charged to the profit and loss in

the reporting period in which they were incurred.

All tangible fixed assets are subject to periodic review in order to verify whether there were triggers

indicating possible loss of values, which would require a test for the loss of values and an impairment

recognition.

Intangible Assets

An intangible asset is an identifiable non-pecuniary asset which does not have physical form and will

generate economic benefits for the Bank in the future.

The main components of intangible assets are licenses for computer software.

Purchased licenses for computer software are capitalized at the cost of acquisition and preparation for

use, taking into account impairment losses presented under ‘Impairment losses on non‑financial assets’

in the Statement of Profit or Loss.

Expenditures related to the enhancement or maintenance of computer software are recognized as

expenses when incurred.

Other intangibles purchased by the Bank are recognized at cost less accumulated amortization and

accumulated impairment.

Subsequent costs incurred after initial recognition of acquired intangible assets are recognized only

when it is probable that future economic benefits will flow to the Bank. In the other cases, costs are

charged to the profit and loss in the reporting period in which they were incurred.

All intangible assets are subject to periodic review in order to verify whether there were triggers indicating

possible loss of values, which would require a test for the loss of values and an impairment recognition.

Depreciation and amortization charges

The depreciation charge of tangible and intangible assets is accounted for on a straight line basis with

the use of defined depreciation rates throughout the period of their useful lives. The depreciable amount

is the cost of an asset, or other amount substituted for cost, less its residual value. The useful life,

amortization/ depreciation rates and residual values of tangible and intangible assets are reviewed

annually. Conclusions of the review may lead to a change of depreciation periods recognized

prospectively from the date of application.

Land, an intangible asset with an unspecified useful life, outlays for tangible assets and intangible assets

are not depreciated. At each balance sheet date intangible assets with indefinite useful life are regularly

tested for impairment.

The following depreciation rates are applied to basic categories of tangible and intangible assets and

for investment property:

Selected categories of property, plant and equipment:

Bank buildings: 2.5%

Lease holding improvements: usually for 10 years

Computer hardware: 20%

Network devices: 20%

Vehicles as standard: 25%

Telecommunication equipment: in the range 10%-20%

Intangibles (software): expected useful life

Main applications (systems): expected useful life

Depreciation and amortization charges are recognized as operating expenses in the profit and loss

account.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Non-current assets held for sale

The Bank classifies a non-current asset as held for sale, if its carrying amount will be recovered

principally through a sale transaction rather than through continuing use. For this to be the case the

asset is available for immediate sale in its present condition subject only to terms that are usual and

customary for sales of such assets and its sale is highly probable. The sale is highly probable if the

appropriate level of management is committed to a plan to sell the asset (or disposal group), and an

active programme to locate a buyer and complete the plan has been initiated. Further, the asset is

actively marketed for sale at a price that is reasonable in relation to its current fair value. In addition, the

sale is expected to qualify for recognition as a completed sale within one year from the date of

classification.

Non-current assets held for sale are measured at the lower of: its carrying amount or fair value less cost

to sell. Assets classified in this category are not depreciated.

When criteria for classification to non-current assets held for sale are not met, the Bank ceases to

classify the assets as held for sale and makes reclassification to other assets category. The Bank

measures a non-current asset that ceases to be classified as held for sale at the lower of:

▪ its carrying amount before the asset (or disposal group) was classified as held for sale, adjusted

for any depreciation, amortisation or revaluations that would have been recognised had the

asset (or disposal group) not been classified as held for sale, and

▪ its recoverable amount at the date of the subsequent decision not to sell.

Impairment of non-financial non-current assets

The Bank assesses the existence of any indications that a non-current asset may be impaired at each

balance sheet date. If such indications exist, the Bank estimates the recoverable amount of the asset

and if the recoverable amount of an asset is less than its carrying amount, the Bank recognizes

impairment charge in the profit and loss (under the ‘Impairment losses on non‑financial assets’ line item).

The impairment loss is the difference between the carrying amount and the recoverable amount of the

asset. Recoverable amount is the higher of an asset’s fair value less cost to sell and its value in use.

Value in use is established for particular assets, if a given asset generates cash flows substantially

independent of those generated by other assets or groups of assets.

If such indications exist, the Bank performs an estimation of recoverable value. If, and only if, the

recoverable value of an asset is less than its carrying amount, the carrying amount of the asset is

reduced to its recoverable value.

If pursuant to IAS 36, paragraph 21 there is no reason to believe that an asset’s value in use materially

exceeds its fair value less costs to sell, the asset’s fair value less costs to sell may be used as its

recoverable amount. This will be particularly the case of an asset that is held for disposal.

An impairment loss can be reversed only to the amount, where the book value of impaired asset does

not exceed its book value, which decreased by depreciation charge, would be established, if any

impairment loss would not be recognized.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Other Assets

Other assets are presented at nominal value, taking into account impairment losses, except for

receivables due from Société Générale S.A. under an “CHF Portfolio Indemnity and Guarantee

Agreement”, which are recorded in the amount of the legal risk reserve, taking into account the credit

risk component of Société Générale S.A. (apart from settlements resulting from the realization of the

reserve, which correspond to the costs incurred). The methodology for creating provisions for legal risk

related to the mortgage loan portfolio, including, among others, the former Euro Bank denominated in

CHF or denominated in PLN but indexed to CHF, is described in Chapter 12 "Legal risk related to

foreign currency mortgage loans", while information on the genesis of these receivables is included

under Note 29 Other Assets in Chapter 13 "Additional Explanatory Notes".

For financial assets presented under ‘Other assets’, impairment allowances are recognised using the

simplified approach, which means that upon identifying an expected credit loss, the entire lifetime

expected loss is measured and recognised immediately.

Deferred costs (assets) refer to those expenses that will be charged to the profit and loss account over

time in future reporting periods.

Receivables are recognised when the performance obligations have been satisfied, in the amount of the

remuneration (or the relevant portion thereof) due, as a receivable of the Bank and as income in the

Statement of Profit or Loss.

Accruals and Deferred Income

Accruals are liabilities for costs arising from services provided to the Group, which will be payable over

future periods. The accruals are recognized in the caption “Other Liabilities” in the balance sheet.

Deferred income comprises among others received amounts of future services and other types of

income received in advance to be settled against in the profit and loss in future reporting periods. They

are presented in the caption “Other Liabilities” in the balance sheet.

Provisions

Provisions are established when (1) the Bank has an obligation (legal or constructive) as a result of past

events, and (2) it is probable (i.e. more likely than not) that an outflow of resources embodying economic

benefits will be required to settle the obligation; and (3) a reliable estimate can be made of the amount

of the obligation. If the effect is material, the amount of provision is measured by discounted, expected

cash flows using pre-tax rate that reflects current market assessments of the time value of money and

those risks specific to the liability.

A provision for restructuring costs is recognised only when the general criteria for provisions recognition

as well as specific criteria for restructuring provision recognition specified in IAS 37 are met. In particular,

the constructive obligation to restructure arises only when the Bank has a detailed formal plan for the

restructuring and has raised a valid expectation in those affected that it would carry out the restructuring

by starting to implement that plan or announcing its main features to those affected by it.

A detailed formal plan for the restructuring identifies at least: the business or part of a business

concerned; the principal locations affected; the location, function, and approximate number of

employees who will be compensated for terminating their services; the expenditures that will be

undertaken; and when the plan will be implemented.

A restructuring provision includes only the direct expenditures arising from the restructuring, which are

those that are both: (a) necessarily entailed by the restructuring; and (b) not associated with the ongoing

activities of the entity. The restructuring provision does not cover future operating expenses.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Employee Benefits

Short-term employee benefits

Short-term employee benefits of the Bank (other than termination benefits due wholly within 12 months

after work is completed) comprises of wages, salaries, bonuses and paid annual leave and social

security contributions.

The Bank recognizes the anticipated, undiscounted value of short-term employee benefits as an

expense of an accounting period when an employee has rendered service (regardless of payment date)

in correspondence with other on-balance liabilities.

The amount of short-term employee benefits on the unused holidays to which Bank employees are

entitled is calculated as the sum of unused holidays to which particular Bank employees are entitled.

Long-term employee benefits

The Bank’s liabilities on long-term employee benefits are equal to the amount of future benefits, which

the employee will receive in return for providing his services in the current and earlier periods, which are

not fully due within 12 months from carrying out the work. In accordance with the Employees

Remuneration By-laws and the Labour Code employees having worked a specific number of years and

attained the required age are entitled to receive a pension severance payment. Retirement pension

severance payments provision is calculated using an actuarial method by an independent actuary as

the present value of the Bank’s future liabilities due to employees according to the headcount and wages

as at the date of revaluation. Valuation is done using the projected unit credit method. Under this method,

each period of service gives power to an additional unit of benefit entitlement and each unit of benefit is

calculated separately. Computation takes into account that the base salary of each employee will vary

over time according to certain assumptions. The provision is updated on an annual basis. The

parameters that have a significant impact on the amount of current liabilities are: the rate of mobility

(rotation), the discount rate, the rate of wage growth. The nominal discount rate for the calculation for

year 2025 was set at 5.0% (compared with 5.61% for 2024).The calculation of the commitments is made

for employees currently employed and do not apply to persons who will start working in the future.

In 2012, as subsequently amended, the Bank implemented a policy defining the remuneration rules

(including variable remuneration components) for individuals who have a material impact on the Bank

Millennium’s risk profile.

The components of share‑based payments under the incentive program for eligible participants, which

are to be settled in shares, are recognized as expenses over the vesting period based on their fair value.

The details of the Policy are presented in point 7), Chapter 14 of these financial statements.

Provisions for short‑term and long‑term employee benefits (excluding provisions for retirement

severance payments) are recognised under the ‘Other liabilities’ line of the balance sheet, with a

corresponding entry in staff costs in the Statement of Profit or Loss.

The provision for retirement severance payments is recognised under the ‘Provisions’ line in the Bank’s

balance sheet, with a corresponding entry in staff costs in the Statement of Profit or Loss.

The Bank fulfils a programme of post – employment benefits called defined contribution plan. Under this

plan the Bank pays fixed contributions into the state pension fund. Post – employment benefits are paid

to an employee from the proceeds of the fund including the return on the invested contributions.

Consequently, the Bank does not have a legal or constructive obligation to pay further contributions if

the fund does not hold sufficient assets to pay all employee benefits relating to employee service.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Bank’s Equity

Equity consists of capital and funds established in compliance with the respective provisions of the law,

i.e., the appropriate legislative acts, the Company by-laws, or the Articles of Association.

Equity is comprised of the share capital, share premium, revaluation reserve and retained earnings. All

balances of capital and funds are presented at nominal value.

Share Capital

Share capital is presented at nominal value, in accordance with the Articles of Association and the entry

in the Register of Companies.

If the entity acquires its own shares, then the paid amount together with the costs directly attributed to

such purchase is treated as a change in the Equity. Acquired own shares are treated as own shares

and disclosed as reduction of the Equity until the time they are cancelled.

Dividends for the financial year, which have been approved by the General Shareholders’ Meeting, but

not distributed as of the balance sheet day, are disclosed in the caption „Other Liabilities” in the balance

sheet.

Share Premium

Share premium is formed from agio obtained from the issue of shares reduced by the attached direct

costs incurred with that issue.

Accumulated other comprehensive income

Accumulated other comprehensive income consists of: the valuation of financial assets measured at fair

value through other comprehensive income, the result of cash flow hedge valuation and actuarial gains

(losses) regarding provisions for retirement benefits with deferred income tax effect applied.

Accumulated other comprehensive income is not subject to distribution.

Retained Earnings

Retained earnings are created with charges against profit and are allocated for purposes specified in

the Articles of Association or other legal regulations (the remaining part of supplementary capital,

additional reserve capital, including general banking risk fund) or constitute previous years’ profit/loss

or year-to-date net financial result.

The General Banking Risk Fund at Bank Millennium SA is created from profit after tax in accordance

with the Banking Act dated 29 August 1997 as later amended.

Net profit of the current year represents net profit adjusted by corporate income tax. Losses attributed

to non-controlling interests and exceeding the value of equity attributed to them are charged to the

Bank’s equity.

Financial guarantee

A financial guarantee contract is a contract that requires the issuer to make specified payments to

reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in

accordance with the original or modified terms of a debt instrument.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The financial guarantees granted are valued at the higher of the following values:

• amounts of write-offs for expected credit losses,

• the amount initially recognized less the cumulative amount of income recognized in accordance with

IFRS 15.

Interest income and other of similar nature

Interest income includes interest on financial instruments measured at amortized cost and financial

assets measured at fair value through other comprehensive income using the effective interest rate

method.

The effective interest rate method is a method of calculating the amortized cost of a financial asset or

financial liability and the allocation of interest cost or interest income and certain commissions

(constituting an integral part of the interest rate) to the relevant period. The effective interest rate is the

rate that exactly discounts the estimated future cash flows (in the period until the financial instrument

expires) up to the gross carrying amount of the asset / amortised cost of the liability. When calculating

the effective interest rate, the Bank estimates cash flows considering all contractual terms of a given

financial instrument, without taking into account possible future losses due to unpaid loans. This

calculation includes all fees paid or received between parties to the contract, which are an integral part

of the effective interest rate, and transaction costs and all other differences due to the premium or

discount.

Interest income includes interest and commissions (received or due) included in the calculation of the

effective interest rate on: loans, interbank deposits and debt securities not classified into held for trading

category. Interest income also includes costs directly related to the conclusion of

a loan agreement borne by the Group (mainly commissions paid to external and own agents for

concluding a mortgage agreement and related property valuation costs related to this type of contract)

that are a component of the effective interest rate and are settled in time.

Upon recognizing the impairment of a financial instrument measured at amortized cost and financial

assets measured at fair value through other comprehensive income, interest income is recognized in

the Profit and Loss Account but is calculated on the newly established carrying amount of the financial

instrument (that is, less impairment).

Interest income also includes net interest income on derivative instruments designated and being

effective hedging instruments in hedge accounting (a detailed description of the existing hedging

relationships is included in note (24)).

Interest income and costs on derivatives classified as held for trading as well as interest income and the

settlement of a discount or premium on debt financial instruments classified as held for trading are

recognized under the item "Result of similar nature to interest from financial assets at fair value through

profit and loss" of the Profit and Loss Account. This item also includes interest income arising from

assets that are measured at fair value through profit and loss.

Interest costs

Interest costs include in particular interest resulting from financial instruments measured at amortized

cost using the effective interest rate method described above.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Fee and commission Income/ Fee and commission Costs

Fee and commission income and expenses charged on a monthly basis, arising from account and

payment card operations and brokerage activities, are recognised on a cash basis. All other fees and

commissions are accrued over time.

The basic types of commissions related to credit operations in the Bank include among others: loan

origination fees and commissions, and commitment fees.

Fees and commissions (both income and expense) directly attributable to initial recognition of financial

assets with established repayment schedules are recognized in profit and loss account as effective

interest rate component and are part of interest income. Other, attributed to initial recognition of financial

assets without established repayment schedules are amortized on a straight-line basis through the

expected life of the financial instrument as commissions income. Fees and commissions on pledge to

grant a loan, which is probable to be drawn, are deferred and since initial recognition of financial assets

are amortized as component of effective interest rate or on a straight-line basis based on above

mentioned criteria. In the case of loans and advances with undetermined instalment payments and

changes in interest, e.g. overdraft facilities and credit cards commissions are settled over the duration

of the card or overdraft limit by the straight-line method and included in commission income.

In connection with the Bank's bancassurance activity (selling insurance services), based on the criterion

how the income from aforementioned activity is recorded, two groups of products can be identified.

The first group consists of insurance products without direct links with the financial instrument - in this

case the Bank's remuneration is recognised as income after performance of a significant act, i.e. in a

date of commencement or renewal of insurance policies, taking into account provisions for thinkable

returns.

In the second group (where there is a direct link to a financial instrument, particularly when the insurance

product is offered to the customer only with credit product, i.e. there is not possibility to buy from the

bank separately, without a credit product, the same insurance product in terms of form, legal and

economic conditions) two sub-groups can be identified:

a) In the case of insurance for which the insurance premium is collected monthly, the remuneration

is recognised in the profit and loss account as commission income at the time the remuneration

is received.

b) In insurance for which the insurance premium is charged once for an insurance period longer

than one month, the Bank allocate the total value of remuneration for combined transaction due

to their respect for the individual elements of the transaction, after deducting by provision on the

part of the remuneration to be reimbursed, for example as a result of the cancellation by the

customer with insurance, prepayments or other titles. Provision estimate is based on an analysis

of historical information about the real returns in the past and predictions as to the trend returns

in the future.

Allocation of remuneration referred to above is based on the methodology of “relative fair value”

involving division of the total remuneration pro rata to, respectively, fair value of remuneration

with respect to financial instrument and fair value of intermediation service. Determination of the

above fair values is based on market data including, in particular, for:

▪ Intermediation services – upon market approach involving the use of prices and other

market data for similar market transactions,

▪ Remuneration relative to financial instrument – upon income approach based on conversion

of future amounts into present value using information on interest rates and other charges

applicable to identical or similar financial instruments offered separately from the insurance

product.

Individual, separated elements of a given transaction or several transactions considered jointly

are subject to the following income recognition principles:

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

▪ Fees charged by insurance agencies – partially including fee for performance of a significant

act, recognised in revenue on the day of commencement or renewal of insurance policy.

▪ Fees/charges constituting an integral part of effective interest rate accruing on financial

instrument – treated as adjustment of effective interest rate and recognised under interest

income.

The above provision applies to historically collected commissions, which are still settled

according to these rules.

Currently, the Bank's offer does not include any insurance for which the premium is charged once in

advance for an insurance period longer than one month.

Remaining fees and commissions connected with financial services offered by the Bank, such as:

▪ Asset management services;

▪ Services connected with cash management;

▪ Brokerage services;

are recognised in the Profit and Loss Account on an one-off basis.

Dividend Income

Dividend income is recognized in the profit and loss when the shareholders’ right to receive payment is

established.

Result on derecognition of financial assets and liabilities not measured at fair value through

profit or loss

The result on derecognition of financial assets and liabilities not measured at fair value through profit or

loss includes gains and losses arising from the sale of debt financial instruments classified to the portfolio

measured at fair value through comprehensive income and other gains and losses resulting from

investing activities.

Result on financial assets and liabilities held for trading

The result on financial assets and financial liabilities held for trading contains gains and losses on

disposal of financial instruments classified as financial assets / liabilities measured held for trading and

the effect of valuation of these instruments at fair value (incl. debt, equity and derivative instruments

intended for trading).

Result on non-trading financial assets mandatorily at fair value through profit or loss

The result on non-trading financial assets mandatorily at fair value through profit or loss includes gains

and losses on disposal and the effect of the measurement of financial instruments classified to this

category of assets.

Result on hedge accounting

The result on hedge accounting includes in particular: changes in the fair value of the hedging instrument

(including discontinuation), changes in the fair value of the hedged item resulting from the hedged risk

and inefficiencies resulting from cash flow hedges recognized in profit or loss.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Result on exchange differences

Foreign exchange differences include: i) realized result and result from the valuation of FX spot and FX

Forward transactions ii) positive and negative exchange rate differences, both realized and unrealized,

resulting from the daily valuation of foreign currency assets and liabilities, valid as at the balance sheet

day average NBP exchange rate and affecting income or expenses from the exchange position.

Other Operating Income and Expenses

Other operating income and expenses include expenses and incomes not associated directly with the

banking activity. In particular, this is result on sale and liquidation of fixed assets, income from sale of

other services, received and paid damages, penalties and fines and provisions for litigations issues.

Franchise fees

Franchise is a model of cooperation between the Bank and independent entrepreneurs who, based on

concluded agreements of the nature of agency agreements, defined by law, perform agency activities

in the sale of products and services from the Bank’s offer to the Bank’s clients and potential clients. The

cooperating franchisees use the Bank’s trademarks and know-how when performing the agreement,

and franchise outlets are almost as functional for customers as Bank’s own outlets (excluding investment

products). For cooperation, the Bank charges a franchise fee for the use of trademarks and fees for

renting IT equipment from the Bank necessary to perform activities in a given branch and pays

franchisees commissions on banking products and services sold. The Bank recognizes fees received

from or paid to franchisees in Other operating income or expenses, respectively.

Banking tax

The tax on certain financial institutions ("banking tax") is the tax presented in the Income Statement

under "Banking tax" levied on bank’s assets (it is not an income tax). In accordance with the Polish Act

of January 15, 2016 on the tax on certain financial institutions (consolidated text - Journal of Laws 2023,

item 623), domestic banks are the taxpayers and the tax base is defined as a surplus of the total value

of the bank's assets resulting from the trial balance, determined as at the last day of the month, based

on entries in the general ledger accounts, over the amount of PLN 4 billion. The banking tax is 0.0366%

of the tax base per month (in 2027 the tax rate will decrease to 0.0329%, and from 2028 to 0.0293% of

the tax base). As a result of the implementation of the Recovery Plan from July 2022, Bank Millennium

S.A. benefited from the exemption from the banking tax starting from that month until May 2024.

Other taxes and fees

The Bank is also taxpayer of the following taxes:

1) value added tax (VAT) performing activities both taxable (e.g. leasing, factoring services) and exempt

from VAT (e.g. banking services, brokerage);

2) real estate tax;

3) tax on means of transport;

4) other taxes occasionally charged to them (e.g. tax on civil law transactions, excise duty, foreign

withholding tax not subject to deduction).

In addition, the Bank is required to pay various fees (e.g. stamp duty,). Costs related to these taxes and

fees are presented in the Administrative Expenses Note under “Taxes and fees”.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Revenues, costs and assets are recognized in the amount less VAT, tax on civil law transactions and

other sales taxes, except when the sales tax paid on the purchase of goods and services is not

recoverable from tax authorities; then VAT is recognized as an expense or as part of the cost of acquiring

an asset, respectively. The amount of tax recoverable or payable to the tax authorities is presented in

the financial statement as part of receivables or liabilities.

Income Tax

Corporate income tax comprises current and deferred tax.

Current income tax is calculated on profit before tax, established in accordance with appropriate

accounting regulations adjusted by non-taxable income and non-tax deductible expenses, with usage

of binding tax rate. Moreover, for tax purposes, the gross profit is adjusted by previous years’ income

and expenses realised for tax purposes in a given reporting period and deductions from income arising

from e.g. donations.

Deferred income tax is recognized in profit and loss, except for when it is recognized in other

comprehensive income or directly in equity because it relates to transactions that are also recognized

in other comprehensive income or directly in equity.

Provision for deferred income tax is recognized in liabilities in the caption “Deferred income tax

liabilities”. Deferred income tax asset is recognized in assets as “Deferred income tax assets”. The Bank

offsets deferred tax assets and deferred tax liabilities, because it has a legally enforceable right for such

netting and the deferred tax assets and the deferred tax liabilities relate to income taxes (levied by the

same taxation authority).

Deferred income tax provision is recognised using the balance sheet method for all positive temporary

differences except when it arises from the amortization of goodwill or initial recognition of an asset or

liability in a transaction which is not a business combination and at the time of the transactions affects

neither accounting profit nor taxable profit (tax loss).

Deferred income tax assets are recognised using the balance sheet method with respect to tax loss

carry forwards and all negative temporary differences as at the balance sheet date between carrying

amount of an asset or liability in the balance sheet and its tax value only to the extent that it is probable

that future taxable profit will be available against which the deductions can be utilised.

Deferred income tax assets are not recognised for negative temporary differences arising from the initial

recognition of an asset or liability in a transaction which is not a business combination and at the time

of the transactions affects neither accounting profit nor taxable profit (tax loss).

An asset or a liability arising from temporary differences associated with investments in subsidiaries and

associates are not included in calculation of deferred income tax assets or liabilities, unless the Bank is

able to control the timing of the reversal of the temporary differences and it is probable that the temporary

difference will reverse in the foreseeable future.

The amount of calculated deferred tax is based on expected degree of realisation of balance-sheet

values of assets and liabilities with use of tax rates, which are expected to be in force when the asset is

realised or provision eliminated, assuming the tax rates (and tax legislation) legally or factually in force

as of the balance sheet date.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

8. Financial Risk Management

The management of risk is one of the key tasks of the Management Board in the process of effective

management of the Bank. It defines the framework for business development, profitability, and stability,

by creating rules ensuring the Bank’s compliance with best internal control practices and legal

requirements and coordination of the strategy for managing all risks.

8.1. RISK MANAGEMENT

The mission of risk management in the Bank Millennium is to ensure that all types of risks are managed,

monitored, and controlled as required for the risk profile (risk appetite), nature and scale of the Bank's

operations. Important principle of risk management is the optimization of the risk and profitability trade-

off – the Bank pays special attention to ensure that its business decisions balance risk and profitability

adequately.

The goals of the risk management mission are achieved through implementation of the following actions:

▪ Development of risk management strategies, credit policy, processes and procedures defining the

principles for acceptance of the allowable level of types of risk,

▪ Increasingly wider implementation of the IT tools for risks identification, control, and measurement,

▪ Increasing awareness of employees as regards their responsibility for proper risk management at

every level of the Bank's organizational structure.

Risk management is centralized for the Bank and considers the need to obtain the assumed profitability

and to maintain proper risk-capital relationship, in the context of having proper level of capital to cover

the risk. Within risk management system, a broad range of methods is used, both qualitative and

quantitative, including advanced mathematical and statistical tools supported by adequate IT systems.

When defining the business and profitability targets, the Bank considers the specified risk framework

(Risk Appetite) to ensure that business structure and growth will respect the risk profile that is targeted

and that will be reflected in several indicators such as:

▪ Loan growth in specific products / segments

▪ Structure of the loan portfolio

▪ Asset quality indicators

▪ Cost of risk

▪ Capital requirements / Economic capital

▪ Amount and structure of liquidity needed.

The risk management and control model at the Bank’s level is based on the following main principles:

▪ ensuring the full-scope quantification and parameterization of distinct types of risks in the

perspective of optimizing balance sheet and off-balance sheet items to the assumed level of

profitability of business activity. The primary areas of analysis encompass credit risk, market risk,

liquidity risk and operational risk; legal, compliance and litigation risks also are subject to specific

attention,

▪ all types of risks are monitored and controlled in reference to the profitability of operations and the

level of capital necessary to ensure the safety of operations from the point of view of capital

adequacy. The results of risk measuring are regularly reported as part of the management

information system,

▪ the segregation of duties between risk origination, risk management and risk control.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The Risk management process of the Bank is presented in the below diagram:

The split of competence in the field of risk management is as follows:

▪ The Supervisory Board is responsible for overseeing the compliance of the Bank’s risk-taking policy

with the Bank’s strategy and its financial plan. Within the Supervisory Board acts the Committee for

Risk Matters, which supports it in realization of those tasks, among others, issuing opinion on the

Bank's Risk Strategy, including the Bank's Risk Appetite.

▪ The Management Board is responsible for the effectiveness of the risk management system,

internal capital estimation process, for reviewing the internal capital calculation and maintenance

process and the internal control systems.

▪ The Credit Committee, the Capital, Assets and Liabilities Committee, and the Liabilities at Risk

Committee are responsible for current management of different areas of banking risk, within the

framework determined by the Management Board.

▪ The Risk Committee and the Processes and Operational Risk Committee are responsible for

defining the policy and for monitoring and control of different areas of banking risk, within the

framework determined by the Management Board

Within the Risk Committee, the Liquidity Crisis Subcommittee operates — responsible for

coordinating actions in the event of an extraordinary situation in the Bank, namely the occurrence

of a liquidity crisis. The Subcommittee is responsible for activating and coordinating emergency

and communication procedures under the Liquidity Contingency Plan at Bank Millennium S.A.

Within the Processes and Operational Risk Committee, the following bodies operate:

- ICT Security Subcommittee (Information and Communication Technologies) – responsible for

conducting specialized oversight of the Bank’s information security management system,

ensuring effective supervision over the implementation of continuous improvements in IT

security, as well as ongoing monitoring of the ICT environment’s security, focused on ensuring

timely implementation of effective control mechanisms and reporting completed tasks to the

Committee.

- Data Process Management Subcommittee – responsible for overseeing data process

management in the Bank (Data Governance).

- Subcommittee for Management in the Planning and Execution of Resolution and Orderly

Liquidation – responsible for coordinating the planning and execution of mandatory resolution

and orderly liquidation.

▪ The Products Committee reviews proposals for the implementation and withdrawal of products and

services from the bank's offering.

▪ IT Steering Committee – responsible for ensuring the alignment of the IT strategy with the Bank’s

overall strategy, including its business objectives, and for consistently achieving, through IT

deliverables, the appropriate levels across all dimensions of information technology.

▪ The AML Committee is responsible for supervision of anti-money laundering and terrorism

financing in the Bank and cooperation in the area of combating financial crime.

▪ The Validation Committee is responsible for confirmation of risk models’ validation results and

follow-up in the implementation of the measures defined by the Models Validation Office.

Delineate key

risk definitions

Delineate the

models and

definitions to

classify

customers,

products,

processes, and

risk measures

Define Risk

Strategy

Defining

principles and

risk targets

according to risk

appetite, risk

capacity and

business

strategy

Define risk

policy

Defining

thresholds,

levels,

competences,

limits, cut-offs

according to Risk

Strategy

Implement

defined policy

Designing

products with

Business and

implement

them in tools

and

regulations,

Decision

processes

Monitor,

Control,

Reporting

Monitor the

models

performance and

the portfolios

behavior

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

▪ The Sustainability Committee is responsible for making key decisions regarding sustainable

development in the Bank Millennium S.A. Group, in relation to environmental, social and

governance factors.

▪ The Sub-Committee for Court Cases is responsible for expressing opinions and taking decisions in

matters regarding court proceedings, for the cases when value of the dispute or direct effect for

assets value as a consequence of court verdict exceeds 1 mln PLN or as result of multiple cases

with the same nature, excluding cases belonging to the restructuring and recovery portfolio of

Bank’s receivables managed by the Corporate Recovery Department and Retail Restructuring and

Debt Collection Department. The Sub-Committee for Court Cases is also competent for disputes

in the portfolio of the Retail Restructuring and Debt Collection Department, which the nature of the

dispute corresponds to the nature of court disputes supervised by the Court Cases Risk Sub-

committee referred to in the first sentence above and matters relating to the determination of terms

of settlement as to the effects of legal relationships at the pre-trial stage or in circumstances

indicating a significant likelihood of litigation (such as in the process of FX mortgage negotiations

and amicable settlements with borrowers), and if materialized, would fall within the competence of

the Court Cases Risk Sub-committee, excluding cases managed by Corporate Recovery

Department.

▪ The Risk Department is responsible for risk management, including identifying, measuring,

analysing, monitoring, and reporting on risk within the Bank. The Risk Department also prepares

risk management policies and procedures as well as provides information and proposes courses

of action necessary for the Capital, Assets and Liabilities Committee, Risk Committee, and the

Management Board to make decisions with respect to risk management.

▪ The Rating Department is responsible for risk rating assignment for Corporate clients (based on

the evaluation of clients’ creditworthiness) as well as for rating monitoring and potential revision

during the period of its validity. Rating assignment process is independent from credit decision

process.

▪ The Corporate Credit Underwriting Department, Mortgage Credit Underwriting Department and

Consumer Finance Credit Underwriting Department have responsibility, within the Corporate

Customer segment and Retail Customer segment, respectively, for the credit decision process,

including analysing customers’ financial situation, preparing credit proposals for the decision-

making levels, and making credit decisions within specified limits.

▪ The Retail Liabilities Monitoring and Collection Department and Retail Liabilities Restructuring and

Recovery Department have responsibility for monitoring repayment of overdue debts by retail

customers and their collection.

▪ The Corporate Recovery Department develops specific strategies with respect to each debtor from

recovery portfolio, which aims to maximize timely collection of the outstanding debt and minimize

the risk incurred by the Group. This approach is constantly revised to reflect updated information,

and the best practices and experiences regarding collection of overdue debts.

▪ The Consumer Dispute Resolution Department – which supports and enhances the activities of

those Bank areas for which there is a high likelihood of entering into disputes with clients, potentially

resulting in financial consequences and reputational risk for the Bank.

▪ The Treasury Control and Analyses Office has responsibility for monitoring the use of part of the

Group’s limits, including counterparty and stop-loss limits, the Group’s FX position, results of active

trading and control of operations of the treasury segment.

▪ The Models Validation Office has responsibility for qualitative and quantitative models’ analysis and

validation, independent from the function of models’ development; development of the models’

validation and monitoring tools; activities connected with issuing opinions on the adequacy of the

models for the segment, for which they were developed; preparing reports for the Validation

Committee needs.

▪ The purpose of the Sustainability Department is to supervise and coordinate the process of

implementing the principles of sustainable development in the Bank and the Group.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

▪ The Anti-fraud Sub-unit has responsibility for implementation and monitoring Bank policy execution

in the scope of fraud risk management in cooperation with others Bank units. The Sub-unit

constitutes a competence centre for anti-fraud process.

▪ The Compliance Department has the responsibility to ensure compliance with legal regulations,

related regulatory standards, market principles and standards as well as internal organization

regulations and codes of conduct, and in anti-money laundering process.

▪ The Legal Department has responsibility for handling the litigation cases of the Bank, with support

of external legal offices and legal experts whenever necessary.

The Bank has prepared a comprehensive guideline document for the risk management policy/strategy:

“Risk Strategy for 2026-2029”. The document takes a 4-year perspective and is reviewed and updated

annually. It is approved by the Bank’s Management Board and Supervisory Board. The risk strategy is

inextricably linked to other strategic documents, such as: Budget, Liquidity Plan, and Capital Plan.

The Risk Strategy bases on the two concepts defined by the Group:

1. Risk profile – current risk profile in amount or type of risk the Bank is currently exposed. The Bank

should also have a forward-looking view how their risk profile may change under both expected

and stress economic scenarios in accordance with risk tolerance,

2. Risk appetite – the maximum amount or type of risk the Bank is prepared to accept/tolerate to

achieve its financial and strategic objective. Three zones are defined in accordance with

warning/action required level.

Risk appetite must ensure that business structure and growth will respect the forward risk profile. Risk

appetite was reflected through defined indicators in several key areas, such as:

▪ Solvency

▪ Liquidity and funding

▪ Earnings volatility and Business mix

▪ Operational activity and reputation.

The Bank has a clear risk strategy, covering retail credit, corporate credit, markets activity and liquidity,

operational and capital management, legal and ICT risks. For each risk type and overall, the Bank clearly

define the risk appetite.

The Risk Management is mainly defined through the principles and targets defined in Risk Strategy and

complemented in more detail by the principles and qualitative guidelines defined in the following

documents:

▪ Capital Management and Planning Framework

▪ Risk management and control principles

▪ Credit Principles and Guidelines

▪ Rules on Concentration Risk Management

▪ Principles and Rules for Liquidity Risk Management

▪ Principles and Rules on Market Risk Management for Financial Markets Activity

▪ Principles and Rules for Market Risk Management in Banking Book

▪ Investment Policy

▪ Principles and Guidelines for Management of Operational Risk

▪ Policy, Rules, and Principles of the Model Risk Management

▪ Stress tests policy

▪ Sustainability Policy

▪ Bye-laws of Bank Millennium SA - Program of counteracting Anti-Money Laundering and financing

terrorism.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Within risk appetite, the Bank has defined tolerance zones for its measures (build up based on the “traffic

lights” principle). As for all tolerance zones for risk appetite, it has been set:

▪ Risk appetite status – green zone means a measure within risk appetite, yellow zone means an

increased risk of risk appetite breach, red zone means risk appetite breach.

▪ Escalation process of actions/decisions taken - bodies/organizational entities responsible for

decisions and actions in a particular zone.

▪ Risk appetite monitoring process.

The Bank pays particular emphasis on continuous improvement of the risk management process. One

tangible result of this is obtaining approval to use the Internal Rating-Based (IRB) approach more

broadly in the process of calculating capital requirements.

8.2. CAPITAL MANAGEMENT

Capital management and planning

Capital management relates to two areas: capital adequacy management and capital allocation. For

both areas, management goals were set.

The goal of capital adequacy management is: (a) meeting the requirements specified in external

regulations (regulatory capital adequacy) and (b) ensuring the solvency in normal and stressed

conditions (economic capital adequacy/internal capital). Completing that goal, Bank strives to achieve

internal long-term capital limits (targets), defined in Risk Strategy.

Capital allocation purpose is to create value for shareholders by maximizing the return on risk in

business activity, considering established risk appetite.

In a scope of capital management process, there is also a capital planning process. The goal of capital

planning is to designate the own funds (capital base that is risk-taking capacity) and capital usage

(regulatory capital requirements and economic capital) in a way to ensure that capital targets/limits shall

be met, given forecasted business strategy and risk profile – in normal and stressed macroeconomic

conditions.

Regulatory capital adequacy

The Bank is obliged by law to meet minimum own funds requirements, set in art. 92 of Regulation (EU)

No 2024/1623 of 31 May 2024 amending Regulation (EU) No 575/2012 as regards requirements for

credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor (CRR 3). At

the same time, the following buffers were included in capital targets/limits:

▪ Pillar II FX mortgage loans buffer (P2R buffer) - in accordance with the joint decision which, among

other, covers capital and liquidity at local level for the European entities of the BCP (Banco

Comercial Portugues) Group, there was no additional capital or liquidity requirements imposed on

the Bank.

▪ Combined buffer – defined in Act on macro prudential supervision over the financial system and

crisis management – that consists of:

▪ Capital conservation buffer at the level of 2.5%;

▪ Other systemically important institution buffer (OSII) – at the level of 0.25%, and the value is set

by PFSA each year

;

In November 2020 PFSA issued the decision on identification the Bank as other systemically important institution and

imposing OSII Buffer of 0.25%

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

▪ Systemic risk buffer at the level of 0% in force from March 2020, in line with Regulation of

Ministry of Development and Finance;

▪ Countercyclical buffer at the 1% level from 25 September 2025; It will be raise to 2% on 25

September 2026.

In accordance with binding legal requirements and recommendations of PFSA, the Bank defined

regulatory minimum levels of capital ratios, being at the same time the base of defining capital limits.

The below table presents these levels as of 31 December 2025. The Bank will inform on each change

of required capital levels in accordance with regulations.

Capital ratio

31.12.2025

31.12.2024

CET1 ratio

Bank

Group

Bank

Group

Minimum

4.50%

P2R Buffer

0.00%

0.82%

TSCR CET1 (Total SREP Capital Requirements)

4.50%

5.32%

Capital Conservation Buffer

2.50%

OSII Buffer

0.25%

Systemic risk buffer

0.00%

Countercyclical capital buffer

1.00%

0.00%

Combined buffer

3.75%

2.75%

OCR CET1 (Overall Capital Requirements CET1)

8.25%

8.07%

T1 ratio

Bank

Group

Bank

Group

Minimum

6.00%

P2R Buffer

0.00%

1.10%

TSCR T1 (Total SREP Capital Requirements)

6.00%

7.10%

Capital Conservation Buffer

2.50%

OSII Buffer

0.25%

Systemic risk buffer

0.00%

Countercyclical capital buffer

1.00%

0.00%

Combined buffer

3.75%

2.75%

OCR T1 (Overall Capital Requirements T1)

9.75%

9.85%

TCR ratio

Bank

Group

Bank

Group

Minimum

8.00%

P2R Buffer

0.00%

1.47%

1.46%

TSCR TCR (Total SREP Capital Requirements)

8.00%

9.47%

9.46%

Capital Conservation Buffer

2.50%

OSII Buffer

0.25%

Systemic risk buffer

0.00%

Countercyclical capital buffer

1.00%

0.00%

Combined buffer

3.75%

2.75%

OCR TCR (Overall Capital Requirements TCR)

11.75%

12.22%

12.21%

In November 2025 the Bank has received a recommendation according to which the PFSA is imposing

an additional capital surcharge to absorb potential losses resulting from extreme conditions (P2G).

In particular, on the basis of the 2025 supervisory stress tests carried out by the PFSA, the PFSA set

the P2G capital add-ons, before the offsetting of the capital conservation buffer, at 2.63pp at the stand-

alone level and 2.53pp at the consolidated level. The total capital charges recommended under Pillar II

offset by the capital buffer requirement are 0.13pp at the stand-alone level and 0.03pp at the

consolidated level.

The Bank calculates its own funds requirements using standard methodologies and is implementing at

the same time a project of an implementation of internal ratings-based method (IRB) for calculation of

own funds requirements for credit risk and obtaining of approval decisions from Regulatory Authorities

on that matter.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The Bank has the approval of Banco de Portugal (consolidating Regulator) granted with cooperation of

PFSA on the use of IRB approach as to following loan portfolios: (i) Retail exposures to individual

persons secured by residential real estate collateral (RRE), (ii) Qualifying revolving retail exposures

(QRRE).

Internal capital

The Bank defines internal capital according to Polish Banking Act, as the estimated amount needed to

cover all identified, material risks found in the Bank’s activity and changes in economic environment,

considering the anticipated level of risk in the future.

Internal capital is used in capital management in following processes: economic capital adequacy

management and capital allocation. The Bank defined an internal (economic) capital estimation process.

To this end, as for measurable risk types, mathematic and statistic models and methods are used.

Maintaining economic capital adequacy means a coverage (provision) of internal capital (that is an

aggregated risk measure) by available financial resources (own funds). An obligation to banks to have

in place that sort of risk coverage stems from Banking Act. It was mirrored in the Group’s capital

targets/limits: economic capital buffer and economic capital buffer in stressed conditions.

At the same time internal capital is utilized in capital allocation process, to assign an internal capital to

products/business lines, calculating risk-adjusted performance measures, setting risk limits and internal

capital reallocation.

Capital ratios and capital adequacy

Capital ratios of the Bank over the last three years was as follows

31.12.2025

31.12.2024

31.12.2023

Risk-weighted assets

49 783.1

40 928.3

37 960.4

Own Funds requirements, including:

3 982.6

3 274.2

3 036.8

- Credit risk and counterparty credit risk

2 977.4

2 773.8

2 589.0

- Market risk

23.2

19.8

15.4

- Operational risk

966.6

478.0

427.0

- Credit Valuation Adjustment CVA

15.4

2.6

5.4

Own Funds, including:

7 983.8

7 352.5

7 228.3

Common Equity Tier 1 Capital

7 201.6

6 264.6

5 847.4

Tier 2 Capital

782.2

1 087.9

1 380.9

Total Capital Ratio (TCR)

16.04%

17.96%

19.04%

Tier 1 Capital ratio (T1)

14.47%

15.31%

15.40%

Common Equity Tier 1 Capital ratio

(CET1)

14.47%

15.31%

15.40%

Leverage ratio

4.81%

4.68%

4.77%

Bank uses transitional arrangements for IFRS 9 and considers a temporary treatment of unrealized gains and losses on bonds

measured by fair value through other comprehensive income (FVOCI) in accordance with Art. 468 of the CRR. As at 31.12.2024,

if IFRS 9 transitional arrangements and temporary treatment according to Art. 468 of the CRR had not been applied, capital ratios

were as follows:

- TCR: 17.83%

- T1: 15.18%

- CET1: 15.18%

- Leverage ratio: 4.65%

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Capital adequacy showed as surpluses/deficits on required or recommended levels (as of 31 December

2025) are presented in the below table.

Capital adequacy

31.12.2025

31.12.2024

31.12.2023

Total Capital Ratio (TCR)

16.04%

17.96%

19.04%

Minimum required level (OCR)

11.75%

12.22%

Surplus (+) / Deficit (-) of TCR capital

adequacy (p.p.)

4.29

5.74

6.82

Minimum recommended level TCR

(OCR+P2G)

11.88%

12.22%

13.81%

Surplus (+) / Deficit (-) on recommended

level (p.p.)

4.16

5.74

5.23

Tier 1 Capital ratio (T1)

14.47%

15.31%

15.40%

Minimum required level (OCR)

9.75%

9.85%

Surplus (+) / Deficit (-) of T1 capital

adequacy (p.p.)

4.72

5.46

5.55

Minimum recommended level T1

(OCR+P2G)

9.88%

9.85%

11.44%

Surplus (+) / Deficit (-) on recommended

level (p.p.)

4.59

5.46

3.96

Common Equity Tier 1 Capital ratio

(CET1)

14.47%

15.31%

15.40%

Minimum required level (OCR)

8.25%

8.07%

Minimum recommended level CET1

(OCR+P2G)

8.38%

8.07%

9.66%

Surplus (+) / Deficit (-) on recommended

level (p.p.)

6.09

7.24

5.74

Leverage ratio

4.81%

4.68%

4.77%

Minimum required level

3.00%

Surplus (+) / Deficit (-) of Leverage ratio

(p.p.)

1.81

1.68

1.77

In January 2026, the Bank issued Additional Tier 1 Eurobonds with a nominal value of PLN 1.5 billion.

Upon obtaining approval from the Polish Financial Supervision Authority (KNF), the proceeds from the

issue will be included in the Bank's T1 capital. Including the issue in T1 capital as of December 31, 2025,

would increase the Bank's T1 capital and TCR ratios by approximately 272 basis points, and the

leverage ratio by approximately 88 basis points.

Simultaneously, including the net profit generated in the second half of 2025 in its own funds would

increase the capital ratios by another 126 basis points and the leverage ratio by 42 basis points.

The minimum values of capital ratios required by the KNF in terms of the combined buffer requirement

(OCR) are achieved with a large surplus at the end of 2025. Also, in terms of the levels expected by the

KNF, they were achieved for all capital ratios with a clear surplus

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Minimum requirement for own funds and eligible liabilities (MREL)

The Bank manages MREL requirements ratios in a manner analogous to capital adequacy ratios.

The Bank received a joint decision of the resolution authorities in May 2025, requiring it to meet the

MREL requirements. The updated minimum requirements are 15.36% (consolidated MRELtrea) and

5.91% (consolidated MRELtem). Additionally, with respect to the above decisions, the Bank should also

meet the MREL requirement taking into account the Combined Buffer Requirement (currently 3.75%).

MREL

31.12.2025

31.12.2024

MRELtrea ratio (consolidated)

24.53%

28.06%

Minimum required level MRELtrea

15.36%

18.03%

Surplus (+) / Deficit (-) of MRELtrea (pp)

9.17

10.03

Minimum required level including Combined Buffer requirement (CBR)

19.11%

20.78%

Surplus (+) / Deficit (-) of MRELtrea+CBR (pp)

5.42

7.28

MRELtem (consolidated)

8.27%

8.71%

Minimum required level of MRELtem

5.91%

Surplus (+) / Deficit (-) of MRELtem (pp)

2.36

2.80

In terms of the MRELtrea and MRELtem requirements, the Group presents a surplus compared to the

minimum required levels as of December 31, 2025, and also meets the MRELtrea Requirement after

the inclusion of the Combined Buffer Requirement.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

8.3. CREDIT RISK

The credit risk is one of the most important risk types for the Bank Millennium SA and therefore

considerable attention is given to management of credit risk-bearing exposures. Credit risk relates to

balance-sheet credit exposures as well as off-balance sheet financial instruments, such as granted and

unutilized credit lines, guarantees and letters of credit, as well as limits for transactions in financial

instruments.

The credit policy is subject to periodic reviews and verification process considering the prevailing market

conditions and changes in the Bank’s regulatory environment.

The Bank uses several rating systems to manage credit risk depending on the type of exposure and the

customer segment involved. A rating system is a set of methods (models), processes, controls, data

collection procedures and IT systems that identify and measure credit risk, sort levels of exposure by

grades or pools (granting of credit rating) and quantify probability of default and expected loss estimates

for specific types of exposure.

In 2025, in the corporate segment, the Bank carried out initiatives aimed at improving, automating, and

digitizing credit processes, including decision-making processes. In the retail segment, the Bank

concentrated on adjusting its credit policy to the changing macroeconomic environment and evolving

external regulatory framework. In particular, development efforts continued with the aim of optimizing

and digitizing the credit process.

(3a) Measurement of Credit Risk

Loans and advances

Measurement of credit risk, for the purpose of the credit portfolio management, on the level of individual

customers and transactions, on account of granted loans is done with the consideration of three base

parameters:

(i) Probability of Default (PD) of a customer or counterparty as regards their liability;

(ii) amount of Exposure at Default (EAD) and

(iii) the ratio of Loss Given Default (LGD) regarding the customer’s liability.

(i) The Bank assesses the probability of default (PD) of individual counterparties, using internal rating

models adapted to various categories of customers and transactions. The Bank’s customers are

divided into 15 rating classes, which for the purposes of this Report have been grouped into 6 main

brackets. Moody’s short-term ratings correspond to the individual risk class ranges. The Bank’s

Master Ratings Scale, presented below, also contains the scale of probabilities of non-compliance

with the liabilities specified for a given class/rating group. Rating models are subject to regular

reviews and whenever necessary to relevant modification. Modifications of models are confirmed

by Validation Committee.

The Bank regularly analyses and assesses rating results and their predictive power with respect to

cases of default. The process of assigning ratings to clients (for Corporates performed by Rating

Department independently from credit decision process and transactions) is supported by IT

systems, obtaining, and analysing information from internal and external databases.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The Bank’s internal rating scale:

Master scale

Description of rating

Moody’s rating

1-3

Highest quality

Aaa-A2

4-6

Good quality

A3-Baa2

7-9

Medium quality

Baa3-Ba2

10-12

Low quality

Ba3-B3

13-14

Watched/Procedural

Caa1-Caa3

Default

(ii) EAD – amount of exposure at default – concerns amount which according to the Bank’s predictions

will be the Bank’s receivables at the time of default against liabilities. Liabilities are understood by

the Bank to mean every amount disbursed plus further amounts, which may be disbursed until

default, if such occurs.

(iii) LGD – loss given default is what the Bank expects will be its losses resulting from actual cases of

default.

Unification of the default definition in the Bank

The Bank has adopted a unified definition of default, both in the calculation of capital requirements and

for the purposes of estimating impairment. The Bank uses the definition of default in line with the EBA

Guidelines, the so-called New Definition of Default.

Unified Default definition includes following triggers:

▪ DPD>90 days considering materiality thresholds for due amount:

o absolute PLN 400 for retail and PLN 2000 for corporates,

o relative threshold of 1% in relation to total exposure,

▪ Restructured loans (forbearance measure),

▪ Terminated contracts and loans in debt collection process,

▪ Consumer bankruptcy,

▪ Indications of the insolvency of a corporate client, such as:

o filing an application for approval of an arrangement,

o an issued court decision approving an arrangement,

o an announcement of the opening of simplified restructuring proceedings,

o an application for/issuance of a court decision to open expedited arrangement

proceedings, an application to open arrangement proceedings, or an application to

open remedial proceedings,

o an application for/issuance of a court decision to open bankruptcy proceedings,

▪ Qualitative triggers identified in the individual analysis for corporate clients,

▪ Credit frauds.

The Bank is using cross-default approach for all segments. Default status includes all exposures

classified to Stage 3, as well as those POCI (Purchased Originated Credit Impaired) exposures for which

indicators of default still exist.

Debt Securities

Debt securities from Polish State Treasury and from the Polish Central Bank are monitored based on

Polish rating. Whereas the economic and financial situation of issuers of municipal debt securities is

monitored on a quarterly basis based on their financial reporting. Debt securities from other European

Union member states and supranational institutions are monitored based on their respective ratings.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Derivatives

The Bank maintains strict control over the limits of net open derivative positions both with respect to

amounts and transaction maturities. Credit risk exposures resulting from derivatives are managed as

part of total credit limits defined for individual customers calculated based on verification of natural

exposure and analysis of customer’s financial situation, and as part of counterparties’ limits.

The Bank offers Treasury products for FX risk or interest rate risk only for hedging purposes and under

Treasury limits assigned to clients or secured by collateral - deposit.

Most of the Bank’s agreements include the possibility of calling the client to replenish the margin deposit

(if the valuation of the client’s open position exceeds treasury limit) and if the client does not supplement

the deposit, the Bank has the right to close the position.

Credit risk-based off-balance sheet liabilities

Credit risk-based off-balance sheet liabilities include granted guarantees and letters of credit, granted

and unused limits (credit, factoring, guarantees and letters of credit and cards) as well as granted and

unpaid tranches of non-renewable loans. This category also includes credit decisions already made by

the Bank regarding mortgage financing, in which the client has received a positive credit decision, but

the loan agreement has not yet been concluded. The primary purpose of these instruments is to enable

the customer to manage in a specific manner the funds allocated by the Bank.

Granted guarantees and letters of credit granted are unconditional and irrevocable - after the receipt of

a claim compliant with the terms of the guarantee or letter of credit, the Bank must make a payment.

Typically, guarantees and letters of credit are related to commercial transactions.

In the case of most of the granted and unused limits, the Bank has the option of refusing to execute the

client's instruction regarding the use of funds from these limits - either unconditionally or upon meeting

the conditions set out in the documents and by-laws applicable to a given limit.

In the case of granted and undisbursed tranches of non-revolving loans, their disbursement depends on

the fulfilment of the conditions set out in the documents and by-laws applicable to a given non-revolving

loan.

(3b) Limits control and risk mitigation policy

The Bank measures, monitors and controls large credit exposures and high credit risk concentrations,

wherever they are identified. Concentration risk management process encompasses single-name

exposures with respect to an individual borrower or group of connected borrowers (with material capital,

organizational or significant economic relations) and sectoral concentration – to economic industries,

geographical regions, countries, and the real estate financing portfolio, portfolio in foreign currencies

and other. Above types of sectoral exposures are subject to internal limits system. Information about the

utilization of limits is presented at the Supervisory Board, the Committee for Risk Matters, and the Risk

Committee.

The internal limits (mentioned above) are monitored quarterly. Limits are subject to annual or more

frequent review, when deemed appropriate. The limits are approved by the Supervisory Board or the

Risk Committee.

Management of credit risk exposure is also performed through regular monitoring of customers’

economic and financial situation and/or track record of their relationship with the Bank from the point of

view of punctual repayment of their principal and interest liabilities.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Collateral

The Bank accepts collateral to mitigate its credit risk exposure; the key role of collateral is to minimize

loss in the event of customers' default in repayment of credit facilities in contractual amounts and on

contractual dates by ensuring an alternative source of repayment of due and payable amounts.

Collateral is accepted in accordance with the credit policy principles defined for each customer

segment. The key principle is that collateral for credit transaction should correspond to the credit risk

incurred by the Bank, considering the specific nature of the transaction (i.e., its type, amount, repayment

period and the customer's rating).

The credit policy defines the types, kinds and legal forms of collateral accepted in the Bank as well as

more detailed requirements that are to ensure the probability of selling collateral of respective types in

the context of the Bank's recovery experiences.

The Bank pays special attention to the correct determination of collateral value. It defined the rules for

preparing and verifying collateral valuation and does its utmost to ensure that such valuations are

objective, conservative and reflect the true value of the collateral. To ensure effective establishment of

collateral, the Bank has developed appropriate forms of collateral agreements, applications, powers-of-

attorney, and representations.

In the retail segment, accepted collateral consists mainly of residential real property (mortgage loans)

and financial assets. In the case of the corporate segment, all types of real estate (residential,

commercial, land) are accepted, as well as assignments of receivables under contracts.

Temporary collateral is also accepted in the period before the final collateral is established. Additionally,

the Bank uses various forms of instruments supplementing the collateral, which facilitate enforcement

or increase probability of effective repayment of debt from a specific collateral. Those instruments

include statement of submitting to enforcement in the form of

a notarial deed, blank promissory note, power-of-attorney to a bank account, assignment of rights under

an insurance agreement.

The Bank monitors the collateral to ensure that it satisfies the terms of the agreement, i.e., that the final

collateral of the transaction has been established in a legally effective manner or that the insurance

policies are renewed. The value of the collateral is also monitored during the term of the credit

transaction.

In accordance with credit policy adopted in the Bank it is also allowed to grant a transaction without

collateral, but this takes place according to principles, which are different depending on the client’s

segment. However, in the case of the deterioration of the debtor’s economic and financial situation, in

documents signed with the client the Bank stipulates the possibility of taking additional collateral for the

transaction.

(3c) Impairment and provisioning policy

Organisation of the Process

The process of impairment identification and measurement with respect to loan exposures is regulated

in the internal instruction introduced with IFRS9 application. The document defines in detail the mode

and principles of individual and collective analysis, including algorithms for calculating parameters.

The methodology and assumptions adopted for determining credit impairments are regularly reviewed

to reduce discrepancies between the estimated and actual losses. To assess the adequacy of the

impairment determined both in individual analysis and collective analysis a historical verification (back

testing) is conducted periodically (at least once a quarter), which results will be considered to improve

the quality of the process.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The Supervision over the process of estimating impairment charges and provisions is exercised at the

Bank by the Risk Department (DMR), which also has direct responsibility for individual analysis in the

business portfolio at the Bank, as well as collective analysis. In addition to DMR, the process also

involves recovery and restructuring units. These are the Corporate Recovery Department – DNG

(individual analysis for the recovery-restructuring portfolio for corporate customers) and the Retail

Liabilities Restructuring and Recovery Department - DRW (individual analysis of individually significant

retail impairments, mainly mortgages). DMR is a unit not connected with the process of underwriting; it

is supervised by the Management Board Member responsible for risk management.

The Management Board of the Bank plays an active role in the process of determining impairment

charges and provisions. The results of credit portfolio valuation are submitted to the Management Board

for acceptance in a monthly cycle with a detailed explanation of the most significant changes with an

impact on the overall level of impairment charges and provisions, in the period covered by the analysis.

Methodological changes resulting from the validation process and methodological improvements are

presented at the Validation Committee, and subsequently at the Risk Committee which includes all the

Management Board Members.

In monthly periods detailed reports are prepared presenting information about the Bank’s portfolio in

various cross-sections, including the level of impairment charges and provisions, their dynamics and

structure. The recipients of these reports are Members of the Management Board, supervising the

activity of the Bank in finance, risk, and management information.

Expected credit loss measurement

Impairment estimation model within the Bank is based on the concept of “expected credit loss,”

(hereinafter: ECL). As a direct result of using this approach, impairment charges now must be calculated

based on expected credit losses and forecasts of expected future economic conditions must be

considered when conducting evaluation of credit risk of an exposure.

The implemented impairment model applies to financial assets classified in accordance with IFRS 9 as

financial assets measured at amortized cost or at fair value through other comprehensive income

including off-balance exposures, except for equity instruments.

According to IFRS 9, credit exposures are classified in the following categories:

▪ Stage 1 – non-impaired exposures, for which expected credit loss is estimated for the 12-month

period,

▪ Stage 2 – non-impaired exposures, for which a significant increase in risk has been identified

(SICR) and for which expected credit loss is estimated for the remaining lifetime of the financial

asset,

▪ Stage 3 – credit impaired exposures, for which expected credit loss is estimated for the remaining

lifetime of the financial asset.

Additionally, a separate category is created for POCI (purchased or originated credit impaired)

exposures, which at the moment of initial recognition were impaired in the balance sheet. The expected

credit loss for these assets is determined over the entire remaining life of the exposure.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Identification of a significant increase in credit risk (SICR)

Assets, for which there has been identified a significant increase in credit risk compared to the initial

recognition in the balance sheet, are classified in Stage 2. The significant increase in credit risk is

recognized based on qualitative and quantitative criteria. The qualitative criteria include:

▪ repayment delays of more than 30 days,

▪ forborne exposures in non-default status, for which no impairment triggers are identified

▪ using the support from Banking Support Fund for retail customers,

▪ occurrence of seizures on current accounts resulting from execution titles,

▪ procedural ratings, which is reflect early delays in payments,

▪ taking a risk-mitigating decision for corporate clients, triggered by the early warning system,

▪ events leading to a corporate client being added to the Watch List

For retail customers, the quantitative criterion consists of analysing the relative change in lifetime PD,

i.e. comparing the lifetime PD determined at initial recognition with the lifetime PD determined as at the

current reporting date. If the relative change in the PD value exceeds the relative threshold, the exposure

is automatically classified to Stage 2.

For corporate customers, the quantitative criterion consists of analysing both the relative and absolute

change in lifetime PD. If the determined relative and absolute changes simultaneously exceed the

relative and absolute thresholds, respectively, the exposure is automatically classified to Stage 2.

The threshold values used in the quantitative criterion depend on the exposure recognition date. As of

December 31, 2025, the relative threshold is at least 1.44 for the retail portfolio and at least 3.47 for the

mortgage portfolio. For the corporate portfolio, the relative threshold is at least 2.28, and the absolute

threshold is at most 0.0015. As of December 31, 2024, the relative threshold was at least 1.44 for the

retail portfolio and at least 3.47 for the mortgage portfolio. For the corporate portfolio, the relative

threshold was at least 2.28.

The quantitative criterion does not apply to portfolios with low credit risk (LCR), including receivables

from local government units, public administration entities, State companies or subsidiaries.

Individual analysis of impairment for credit receivables

Individual analysis includes customers identified as significant to both the business and recovery

portfolios. Credit exposures are selected for individual analysis based on materiality criteria which

ensure that case-by case analysis covers at least 50% of the Bank’s business corporate portfolio and

80% of the portfolio managed by entities responsible for the recovery and restructuring of corporate

receivables.

Principal elements of the process of individual analysis:

1) Identification of events classifying corporate customers on the Watch List being one of qualitative

triggers of Significant Increase of Credit Risk (SICR).

A catalogue of events has been defined, the detection of which results in placing the client on the Watch

List and indicates a significant increase in credit risk (SICR), resulting in the classification of all

exposures of the examined client to Stage 2.

This process covers biggest business corporate customers, for whom financial-economic situation is

analysed on a quarterly basis based on latest financial statement, events connected with company

activities, information concerning related entities and economic environment, expectation about future

changes, etc.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

2) Identification of impairment triggers.

The Bank defined impairment triggers for individual analysis and adjusted them to its operational profile.

The catalogue of triggers contains among others following elements:

▪ The economic and financial situation pointing to the Customer’s considerable financial problems,

▪ Breach of the contract, e.g., significant delays in payments of principal or interest

▪ Stating the customer’s unreliability in communicating information about his economic and

financial situation,

▪ Permanent lack of possibility of establishing contact with the customer in the case of violating the

terms of the agreement,

▪ High probability of bankruptcy or a different type of reorganising the Customer’s

enterprise/business,

▪ Declaring bankruptcy or opening a recovery plan with respect to the Customer,

▪ Granting the Customer who has financial difficulties, facilities concerning financing conditions

(restructuring).

Internal regulations allow discovering above-mentioned triggers by indicating specific cases and

situations corresponding to them, with respect to triggers resulting from the Customer’s considerable

financial problems, violating the critical terms of the agreement and high probability of a bankruptcy or

a different enterprise reorganisation.

3) Scenario approach in calculation of impairment allowances for individually analysed customers.

If at least one of impairment triggers has been identified during the individual analysis, all exposures of

given customer are classified in Stage 3 and then detailed analysis of forecasted cash-flows should be

performed. Since introducing IFRS9 the Bank is using scenario approach. It means that analyst should

define at least two recovery scenarios which reflect described and approved recovery strategies: the

main and alternative ones with assigned probabilities of realisation. The Bank has defined guidelines

regarding the weights used for individual scenarios. Scenarios can be based on restructuring or debt

collection strategy; mixed solutions are also used.

Every scenario contains two general types of recoveries: direct cash-flows from customers and

recovered amounts from collateral.

4) Estimating expected cash-flows.

One element of the impairment calculation process is the estimation of the probability of cash flows

included in the timetable, pertaining to the following items: principal, interest, and other cash flows. The

probability of realising cash flows included in the timetable results from the conducted assessment of

the customer’s economic and financial situation (indication of the sources of potential repayments) must

be justified and assessed based on current documentation and knowledge (universally understood) of

his situation with the inclusion of financial projections. This information is gathered by an analyst prior

to the actual analysis in accordance with the guidelines specified in appropriate Bank regulations.

In the event of estimating the probability of cash flows for customers in the portfolio managed by

restructuring-recovery departments analysts will consider the individual nature of each transaction

pointing among others to the following elements which may have an impact on the value of potential

cash flows:

▪ Bank’s operational strategy regarding the customer,

▪ Results of negotiations with the customer and his attitude, i.e., willingness to settle his arrears,

▪ Improvement/deterioration of his economic and financial situation.

The Bank also uses the formal terms of setting and justifying the amount of probability and amount of

the payment by the Bank of funds under the extended off-balance sheet credit exposure such as

guarantees and letters of credit.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

5) Estimation of the fair value of collateral, specifying the expected date of sale and estimation of

expected revenues from the sale after deduction of the direct costs of the recovery process.

The inclusion of cash flows from realisation of collateral must be preceded by an analysis of how

realistically it can be sold and estimation of its fair value after recovery costs.

To ensure the fairness of the principles of establishing collateral recoveries, the Bank prepared

guidelines for corporate segment with respect to the recommended parameters of the recovery rate and

recovery period for selected collateral groups. Depending on the place of the exposure in the Bank’s

structure (business portfolio, restructuring-recovery portfolio) and type of exposure separate principles

have been specified for portfolio types: business and restructuring-recovery. The recommended

recovery rates and period of collateral recovery are verified in annual periods.

Collective analysis of the credit portfolio

Subject to collective analysis are the following receivables from the group of credit exposures:

▪ Individually insignificant exposures,

▪ Individually significant exposures for which there has not been recognised impairment triggers

because of an individual analysis.

For the purposes of collective analysis, the Bank has defined homogenous portfolios consisting of

exposures with a similar credit risk profile. These portfolios have been created based on segmentation

into business lines, types of credit products, number of days of default, type of collateral etc. The division

into homogenous portfolios is verified from time to time for their uniformity.

The expected credit loss in a collective analysis is calculated using Probability of Default (PD), Exposure

at Default (EAD), and Loss Given Default (LGD) parameters, which are the outcome of the following

models:

▪ The PD model is based on empirical data concerning 12-month default rates, which are used using

appropriate statistical and econometric methods to estimate the PD value over lifetime horizon of

a financial asset (taking into account information about future events – Forward Looking Information

- FLI).

▪ LGD models for retail portfolios include the following components: cure rate, recovery rate

estimated based on discounted cash flows (including those arising from the sale of receivables to

specialized external entities) and recoveries from collateral realization (in case of mortgage loans).

The model reflects the current economic situation (point-in-time concept) and uses macroeconomic

forecasts (FLI).

▪ For the corporate portfolio, the LGD model is based on a component reflecting recoveries for key

collateral types and a factor based on other collateral types, also taking into account own

repayments. All components were calculated using historical data, including discounted cash flows

obtained by the corporate recovery unit.

▪ The main components of the EAD model are: credit conversion rate, prepayment rate, and

expected exposure life for products without a repayment schedule. Segmentation is based on

customer type (retail, corporate) and product type (with/without a repayment schedule). The model

takes macroeconomic forecasts (FLI) into account.

The results of models employed in collective analysis are subject to periodical verification. The

parameters and models are also covered by the process of models’ management governed by the

document „Principles of Managing Credit Risk Models”, which specifies, among others, the principles of

creating, approving, monitoring and validation, and historical verification of models.

Each of the aforementioned IFRS 9 models has defined homogeneous portfolios, which vary depending

on the model. In the PD model, segmentation is hierarchical and based on client type, product mix, and

loan currency. In the corporate portfolio, it depends on turnover. In the retail LGD model, the

segmentation depends on product and currency. In the EaD model, exposures are classified into

individual homogeneous portfolios based on currency, the existence of a schedule, and a common

calculation method for this parameter. In the quantitative criterion of significant risk increase,

segmentation is based on client or product type.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Forward-looking information incorporated in the ECL models

In the process of calculation of expected credit losses, the Bank uses forward-looking information (FLI)

about future macroeconomic events. FLI is used in PD, LGD, and EAD as well as in the process of

determination of SICR and allocation of exposures to Stage 2 (Transfer Logic). The Macroeconomic

Analysis Office prepares three macroeconomic scenarios (baseline, optimistic and mild recession) and

determines the probability of their occurrence. Forecasts translate directly or indirectly into the values of

estimated parameters and exposures and their impact vary by model, product type, rating-class etc. The

Bank uses macroeconomic forecasts prepared only internally. Forecasts are provided on a quarterly

basis for a 3-year time horizon.

As with any economic forecasts, the projections and likelihoods of occurrence are subject to

a high degree of inherent uncertainty and therefore the actual outcomes may be significantly different to

those projected.

The table below presents the use of FLI as of 31 December 2025 and 31 December 2024 in ECL models,

considering exposure type:

Segment

Usage of FLI

Mortgage FX

YES

Mortgage PLN

YES

Cash Loans

YES

Other Retail

YES

Corporate

YES

Economic variable assumptions

The most significant period-end assumptions used for the ECL estimate as of 31 December 2025 are

set out below.

Macroeconomic variable

Scenario

2026

2027

2028

Gross Domestic Product

(annual average, % y/y)

Base

+3,7

+2,9

Optimistic

+4,9

+4,5

+4,2

Mild recession

+1,6

+2,3

Retail Sales

(annual average, % y/y)

Base

+4,7

+4,5

+4,1

Optimistic

+7,1

+7,2

+6,5

Mild recession

+2,7

+3,0

+3,5

Unemployment rate

(at the end of given year)

Base

5,5

5,4

5,3

Optimistic

4,7

4,6

Mild recession

6,9

7,1

6,8

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

For comparison, the assumptions regarding macroeconomic variables adopted for estimating the ECL

as of 31 December 2024 are presented below

Macroeconomic variable

Scenario

2025

2026

2027

Gross Domestic Product

(annual average)

Base

+3,6

+3,1

+3,0

Optimistic

+4,6

+4,3

+3,9

Mild recession

+1,9

+2,1

+2,6

Retail Sales

(annual average)

Base

+4,7

+4,5

+4,3

Optimistic

+5,4

+5,1

Mild recession

+3,2

+3,3

+3,9

Unemployment rate

(at the end of given year)

Base

5,1

5,2

Optimistic

4,7

4,8

Mild recession

6,2

7,0

6,6

The weightings assigned to each economic scenario on 31 December 2025 were as follows:

Base

Optimistic

Mild recession

Applied weighting

65%

10%

25%

For comparison, the weightings assigned to each economic scenario on 31 December 2024 were as

follows:

Base

Optimistic

Mild recession

Applied weighting

60%

10%

30%

ECL sensitivity to macroeconomic scenarios

The table below shows how the optimistic and mild recession scenarios affect the ECL compared to the

baseline scenario.

Impact of the optimistic and mild recession scenarios as of 31 December 2025:

Provisions change in ‘000 PLN

Optimistic

Mild recession

Mortgages

-1 216

1 997

Other retail

-1 752

2 891

Companies

-642

1 422

Total

-3 610

6 310

For comparison, the impact of scenarios as of 31 December 2024 was the following:

Provisions change in ‘000 PLN

Optimistic

Mild recession

Mortgages

-1 156

3 618

Other retail

-2 620

6 906

Companies

-686

1 438

Total

-4 462

11 962

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Additionally, in order to assess the sensitivity of the ECL to adverse macroeconomic factors, the

theoretical impact of reclassifying all exposures from Stage 1 to Stage 2 was estimated. The details are

presented in the table below.

Impact of reclassifying all Stage 1 loans to Stage 2:

Provisions change in ‘000 PLN

31.12.2025

31.12.2024

Mortgages

137 071

157 714

Other retail

443 514

405 641

Companies

253 629

30 533

Total

834 214

593 888

Management adjustments

The contemporary economic environment is characterised by heightened volatility and uncertainty,

which significantly affects the quality of the credit portfolio and the effectiveness of predictive models

applied. Rapidly changing market conditions and a dynamic macroeconomic environment limit the ability

of models to accurately forecast losses, particularly in the context of identifying and measuring credit

risk. In response to these challenges and in order to reduce model risk, the Bank has implemented a

procedure for creating additional management overlays. These overlays are intended to supplement

current credit loss estimation models with elements not captured by standard modelling solutions. The

developed methodology makes it possible to distinguish the overlays resulting from model deficiency

adjustments, overlays associated with model redevelopment, as well as overlays relating to temporary

risks and uncertainties not addressed by existing models. This approach enables an adequate and

flexible response to the dynamically changing market realities and ensures compliance with prevailing

supervisory standards and best risk management practices.

At the end of 2025, the Bank applied management overlays for the following risks:

▪ Risk of reduced demand for the purchase of non-performing loans (NPL) by specialised external

entities, as well as the risk of lower transaction prices offered for such assets. This adjustment was

introduced due to the Bank’s policy of systematically selling NPL portfolios as a key element in the

management of non-performing exposures,

▪ Risk of a potential decline in property prices serving as collateral for mortgage receivables from

individual clients.

▪ Increase in default rate for enterprises classified within “High-Risk” sectors. The Bank, at intervals

not shorter than one year, assesses the credit risk of business sectors and, based on this

assessment, categorises them into appropriate risk categories. The “High-Risk” category covers

sectors with unfavourable economic outlooks. Qualitative factors such as growth potential,

competition, legal and political risks, as well as socio-demographic factors, negatively affect the

credit risk assessment. This category also includes sectors with high ESG risk.

▪ Increase in the LGD parameter for mortgage loans due to deficiencies in the model's estimates

identified during historical back-testing.

Impact of management overlays on the level of provisions (‘000 PLN):

Addressed type of risk

31.12.2025

Change

31.12.2024

Decline in demand for the purchase of non-performing loans (NPL)

77 397

22 397

55 000

Decrease in real estate prices

20 829

-7 170

27 999

Increase in the insolvency rate of companies classified in High-Risk industries

49 194

19 547

29 647

Increase in the LGD parameter for mortgage loans due to deficiencies in the

model's estimates identified during historical back-testing.

29 126

-2 986

32 112

Reduction in recoveries for FX mortgage loans following the initiation of legal

proceedings

-27 283

27 283

Suma

176 546

4 505

172 041

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The adjustment related to the reduction in recoveries for FX mortgage loans following the initiation of

legal proceedings was in 2025 allocated to the provisions for legal risk associated with CHF mortgage

loans.

Reversal of impairment

Impairment Instruction being core document of Internal regulations provides a detailed definition of the

principle of reversing impairment losses. In principle, reversing a loss and elimination of

a revaluation charge is possible in the case of cessation of the impairment triggers, including the

repayment of arrears or in the case of selling receivables. Reclassification to the Non-Impaired category

is possible only when the customer has successfully passed the “quarantine” period, during which he

will not show delay in the repayment of principal or interest above 30 days. The quarantine period only

starts counting after any eventual grace period that may be granted on the restructuring.

Sale of receivables

In 2025, the Bank executed a sale of NPL exposures, with a total gross carrying amount of PLN 442

million.

Sold in 2025.

PLN’000

Gross Carrying

Amount

Provisions

Other retail

441 831

359 207

Companies

321

209

Total

442 153

359 416

The total sales result is presented in Note 12

Sold in 2024.

PLN’000

Gross Carrying

Amount

Provisions

Other retail

278 979

251 096

Companies

Total

278 979

251 096

The total sales result is presented in Note 12

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

(3d) Maximum exposure to credit risk

31.12.2025

31.12.2024

Exposures exposed to credit risk connected with balance sheet assets

145 722 144

129 835 359

Deposits, loans and advances to banks and other monetary institutions

2 081 137

2 378 592

Loans and advances to customers:

71 902 435

71 820 328

Mandatorily at fair value through profit or loss:

745

1 825

Loans to private individuals:

658

1 755

Receivables on account of payment cards

658

1 755

Credit in current account

Loans to companies

Valued at fair value through other comprehensive income

9 438 459

11 135 416

Valued at amortised cost:

62 463 231

60 683 087

Loans to private individuals:

40 895 376

42 727 672

Receivables on account of payment cards

1 258 091

1 177 834

Cash loans and other loans to private individuals

17 839 450

17 120 347

Mortgage loans

21 797 835

24 429 491

Loans to companies and public sector

21 512 301

17 910 093

Loans to public entities

55 554

45 322

Financial derivatives (trading and hedging)

156 827

257 094

Debt instruments held for trading

824 911

555 364

Debt instruments mandatorily at fair value through profit or loss

20 655

51 790

Debt instruments at fair value through other comprehensive income

42 226 448

28 986 939

Debt instruments at amortised cost

26 659 465

24 059 861

Repurchase agreements held for trading

38 946

194 218

Repurchase agreements valued at amortised cost

59 978

Other financial assets

1 751 342

1 531 173

Credit risk connected with off-balance sheet items

20 028 264

14 869 414

Financial guarantees

2 100 159

1 713 693

Credit commitments

17 928 105

13 155 721

The table above presents the structure of the Bank’s exposures to credit risk as of 31 December 2025

and 31 December 2024, not considering risk-mitigating instruments. As regards balance-sheet assets,

the exposures presented above are based on net amounts presented in the balance sheet.

Loans and advances to customers mandatorily at fair value through profit or loss

31.12.2025

31.12.2024

Mandatorily at fair value through profit or loss *

745

1 825

▪ Companies

▪ Individuals

658

1 755

▪ Public sector

* The above data includes the fair value adjustment, in the amount of:

(4 674)

(10 940)

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The credit quality of financial assets

PLN’000, as of the end of 2025

Stage 1 (12-

month ECL)

Stage 2

(lifetime ECL)

Stage 3

(lifetime ECL)

POCI

Total

Balance exposures exposed to credit risk

129 145 970

4 954 541

2 515 667

67 725

136 683 903

Expected Credit Losses

315 772

335 258

1 477 860

23 202

2 152 092

Loans and advances to banks (external rating

Fitch: from BBB to AAA; Moody's: from B3 to

Aaa; S&P: from B+ to AAA)

2 081 216

Loans and advances to private individuals

(according to Master Scale):

37 140 563

3 482 626

1 963 812

44 161

42 631 162

▪ 1-3 Highest quality

20 376 234

230 043

2 567

20 608 844

▪ 4-6 Good quality

8 222 393

669 582

2 323

8 894 297

▪ 7-9 Medium quality

6 740 401

1 153 624

1 605

7 895 630

▪ 10-12 Low quality

1 801 476

951 865

255

2 753 597

▪ 13-14 Watched

467 641

466

468 166

▪ 15 Default

1 963 812

36 945

2 000 757

▪ Without rating (*)

9 871

Expected Credit Losses

174 772

280 358

1 250 731

29 230

1 735 091

Loans and advances to companies (according

to Master Scale):

11 094 187

1 299 862

531 102

6 234

12 931 385

▪ 1-3 Highest quality

240 092

32 053

272 144

▪ 4-6 Good quality

2 198 080

76 180

2 274 260

▪ 7-9 Medium quality

4 240 764

162 875

4 403 639

▪ 10-12 Low quality

1 393 432

532 326

1 925 758

▪ 13-14 Watched

49 424

▪ 15 Default

530 736

6 234

536 970

▪ Without rating (*)

3 021 818

447 005

366

3 469 190

Expected Credit Losses

99 251

47 892

214 276

-5 998

355 420

Loans and advances to public entities

(according to Master Scale):

55 750

▪ 1-3 Highest quality

▪ 4-6 Good quality

13 777

▪ 7-9 Medium quality

▪ 10-12 Low quality

▪ 13-14 Watched

▪ 15 Default

▪ Without rating (*)

41 972

41 973

Expected Credit Losses

196

Factoring (according to Master Scale):

2 906 703

172 053

20 753

17 330

3 116 838

▪ 1-3 Highest quality

54 773

▪ 4-6 Good quality

775 065

4 022

779 087

▪ 7-9 Medium quality

1 554 020

30 150

1 584 171

▪ 10-12 Low quality

522 844

74 640

597 485

▪ 13-14 Watched

▪ 15 Default

20 753

330

38 083

▪ Without rating (*)

63 240

Expected Credit Losses

27 580

7 008

12 852

-29

47 411

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

PLN’000, as of the end of 2025

Stage 1 (12-

month ECL)

Stage 2

(lifetime ECL)

Stage 3

(lifetime ECL)

POCI

Total

Repurchased receivables from Millennium

Leasing (according to Master Scale):

5 880 276

▪ 1-3 Highest quality

▪ 4-6 Good quality

5 880 276

▪ 7-9 Medium quality

▪ 10-12 Low quality

▪ 13-14 Watched

▪ 15 Default

▪ Without rating (*)

Expected Credit Losses

13 974

Debt securities valued at amortised cost

26 659 513

Derivatives (according to Master Scale) ***:

156 827

▪ 1-3 Highest quality

97 645

▪ 4-6 Good quality

2 777

▪ 7-9 Medium quality

30 837

▪ 10-12 Low quality

2 074

▪ 13-14 Watched

▪ 15 Default

▪ Without rating

23 493

Trading debt securities (State Treasury**

bonds)***

824 911

Receivables from securities bought with sell-

back clause – held for trading***

38 946

Debt securities mandatorily at fair value

through profit or loss***

20 655

Investment debt securities (State Treasury**,

Central Bank**, Local Government, EIB) at

fair value through other comprehensive

income

42 226 448

Receivables from securities bought with sell-

back clause – at amortised cost

59 978

* The group of clients without an internal rating includes, among others, exposures related to loans to local government units as

well as investment projects.

** rating for Poland in 2025 A- (S&P), A2 (Moody’s), A- (Fitch).

*** is not subject to staging.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

PLN’000, as of the end of 2024

Stage 1 (12-

month ECL)

Stage 2

(lifetime ECL)

Stage 3

(lifetime ECL)

POCI

Total

Balance exposures exposed to credit risk

111 654 562

4 798 116

2 936 353

82 228

119 471 259

Expected Credit Losses

286 589

296 505

1 681 620

33 613

2 298 327

Loans and advances to banks (external rating

Fitch: from BBB to AAA; Moody's: from B3 to

Aaa; S&P: from B+ to AAA)

2 378 610

Loans and advances to private individuals

(according to Master Scale):

38 338 090

3 914 189

2 356 084

69 669

44 678 032

▪ 1-3 Highest quality

20 687 372

266 832

2 875

20 957 079

▪ 4-6 Good quality

8 376 846

848 297

2 397

9 227 540

▪ 7-9 Medium quality

7 174 869

1 309 947

1 880

8 486 696

▪ 10-12 Low quality

1 985 051

1 013 711

1 993

3 000 755

▪ 13-14 Watched

424

475 281

113

475 818

▪ 15 Default

2 356 084

60 412

2 416 496

▪ Without rating (*)

113 528

121

113 648

Expected Credit Losses

188 235

264 464

1 453 030

32 745

1 938 474

Loans and advances to companies (according

to Master Scale):

8 516 516

789 549

499 299

12 559

9 817 922

▪ 1-3 Highest quality

403 095

391

403 485

▪ 4-6 Good quality

1 375 095

36 417

1 411 512

▪ 7-9 Medium quality

3 227 254

231 851

3 459 104

▪ 10-12 Low quality

1 549 874

474 979

2 024 853

▪ 13-14 Watched

45 893

▪ 15 Default

499 038

12 530

511 568

▪ Without rating (*)

1 961 198

261

1 961 507

Expected Credit Losses

70 105

29 465

205 541

868

305 979

Loans and advances to public entities

(according to Master Scale):

45 449

45 450

▪ 1-3 Highest quality

▪ 4-6 Good quality

352

▪ 7-9 Medium quality

392

▪ 10-12 Low quality

▪ 13-14 Watched

▪ 15 Default

▪ Without rating (*)

44 705

44 706

Expected Credit Losses

129

Factoring (according to Master Scale):

2 536 369

94 377

80 970

2 711 716

▪ 1-3 Highest quality

46 004

▪ 4-6 Good quality

805 613

455

806 069

▪ 7-9 Medium quality

900 426

696

901 122

▪ 10-12 Low quality

716 568

93 211

809 779

▪ 13-14 Watched

▪ 15 Default

80 970

▪ Without rating (*)

67 758

67 772

Expected Credit Losses

26 942

2 577

23 049

52 568

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

PLN’000, as of the end of 2024

Stage 1 (12-

month ECL)

Stage 2

(lifetime ECL)

Stage 3

(lifetime ECL)

POCI

Total

Repurchased receivables from Millennium

Leasing (according to Master Scale):

5 734 263

▪ 1-3 Highest quality

▪ 4-6 Good quality

▪ 7-9 Medium quality

▪ 10-12 Low quality

▪ 13-14 Watched

▪ 15 Default

▪ Without rating (*)

5 734 263

Expected Credit Losses

1 178

Debt securities valued at amortised cost

24 059 861

Derivatives (according to Master Scale) ***:

257 094

▪ 1-3 Highest quality

198 702

▪ 4-6 Good quality

18 660

▪ 7-9 Medium quality

5 695

▪ 10-12 Low quality

1 001

▪ 13-14 Watched

▪ 15 Default

▪ Without rating

33 036

Trading debt securities (State Treasury**

bonds)***

555 364

Receivables from securities bought with sell-

back clause – held for trading***

194 218

Debt securities mandatorily at fair value

through profit or loss***

51 790

Investment debt securities (State Treasury**,

Central Bank**, Local Government, EIB) at

fair value through other comprehensive

income

28 986 939

Receivables from securities bought with sell-

back clause – at amortised cost

* The group of clients without an internal rating includes, among others, exposures related to loans to local government units as

well as investment projects.

** rating for Poland in 2024 A- (S&P), A2 (Moody’s), A- (Fitch).

*** is not subject to staging.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Credit risk related to off-balance sheet exposures (financial guarantees and loan commitments):

PLN’000, as of the end of 2025

Stage 1 (12-

month ECL)

Stage 2

(lifetime ECL)

Stage 3

(lifetime ECL)

POCI

Total

Off-Balance exposures exposed to credit

risk

18 058 159

1 947 135

22 202

767

20 028 264

Expected Credit Losses

59 299

38 676

7 553

105 528

To banks (external rating Fitch: from BBB to

AAA; Moody's: from B3 to Aaa; S&P: from

B+ to AAA)

2 971 015

To private individuals (according to Master

Scale):

4 055 674

473 897

7 216

767

4 537 554

▪ 1-3 Highest quality

3 311 651

78 046

299

3 389 997

▪ 4-6 Good quality

508 413

104 680

152

613 245

▪ 7-9 Medium quality

203 350

64 990

268 393

▪ 10-12 Low quality

32 259

22 962

55 263

▪ 13-14 Watched

3 396

3 398

▪ 15 Default

7 216

183

7 399

▪ Without rating *

199 822

199 860

Expected Credit Losses

3 266

25 591

5 392

34 249

To companies (according to Master Scale):

7 800 775

1 296 017

11 947

9 108 740

▪ 1-3 Highest quality

783 650

32 604

816 254

▪ 4-6 Good quality

2 528 627

200 770

2 729 397

▪ 7-9 Medium quality

3 111 555

192 256

3 303 812

▪ 10-12 Low quality

602 245

157 586

759 830

▪ 13-14 Watched

106

▪ 15 Default

11 947

▪ Without rating *

774 698

712 695

1 487 393

Expected Credit Losses

40 994

11 451

1 639

54 084

Public entities (according to Master Scale):

476 435

1 600

478 035

▪ 1-3 Highest quality

▪ 4-6 Good quality

19 290

▪ 7-9 Medium quality

▪ 10-12 Low quality

▪ 13-14 Watched

▪ 15 Default

▪ Without rating *

457 144

1 600

458 744

Expected Credit Losses

1 331

1 337

Factoring (according to Master Scale):

2 754 261

175 620

3 039

2 932 920

▪ 1-3 Highest quality

74 467

1 000

75 467

▪ 4-6 Good quality

868 577

3 001

871 578

▪ 7-9 Medium quality

1 339 297

91 723

1 431 020

▪ 10-12 Low quality

471 919

66 056

537 975

▪ 13-14 Watched

▪ 15 Default

3 039

▪ Without rating *

13 840

Expected Credit Losses

13 708

1 629

522

15 859

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

PLN’000, as of the end of 2024

Stage 1 (12-

month ECL)

Stage 2

(lifetime ECL)

Stage 3

(lifetime ECL)

POCI

Total

Off-Balance exposures exposed to credit

risk

14 056 966

749 251

58 768

4 429

14 869 414

Expected Credit Losses

30 365

16 591

6 648

53 605

To banks (external rating Fitch: from BBB to

AAA; Moody's: from B3 to Aaa; S&P: from

B+ to AAA)

980 015

To private individuals (according to Master

Scale):

4 104 088

300 285

7 080

836

4 412 290

▪ 1-3 Highest quality

3 286 931

75 559

264

3 362 754

▪ 4-6 Good quality

537 950

118 811

201

656 963

▪ 7-9 Medium quality

222 927

73 838

102

296 868

▪ 10-12 Low quality

30 302

27 091

57 409

▪ 13-14 Watched

3 442

3 447

▪ 15 Default

7 080

220

7 301

▪ Without rating *

25 977

1 543

27 548

Expected Credit Losses

4 396

13 331

4 839

22 566

To companies (according to Master Scale):

6 723 206

346 904

6 227

3 592

7 079 928

▪ 1-3 Highest quality

982 781

1 021

983 802

▪ 4-6 Good quality

1 939 793

48 071

1 987 864

▪ 7-9 Medium quality

1 948 909

126 092

2 075 001

▪ 10-12 Low quality

521 346

171 109

692 455

▪ 13-14 Watched

557

▪ 15 Default

6 227

3 592

9 819

▪ Without rating *

1 330 377

1 330 431

Expected Credit Losses

24 105

3 129

1 809

29 043

Public entities (according to Master Scale):

340 793

▪ 1-3 Highest quality

▪ 4-6 Good quality

21 400

▪ 7-9 Medium quality

▪ 10-12 Low quality

▪ 13-14 Watched

▪ 15 Default

▪ Without rating *

319 385

Expected Credit Losses

827

Factoring (according to Master Scale):

1 908 864

102 062

45 461

2 056 388

▪ 1-3 Highest quality

106 634

▪ 4-6 Good quality

476 674

16 800

493 474

▪ 7-9 Medium quality

833 280

4 635

837 916

▪ 10-12 Low quality

456 317

80 627

536 944

▪ 13-14 Watched

▪ 15 Default

45 461

▪ Without rating *

35 959

Expected Credit Losses

1 038

132

1 169

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

(3e) Loans

Impaired loans and advances

The gross amount of impaired loans and advances broken down into customer segments is as follows:

Gross exposure in ‘000 PLN

31.12.2025

Loans and advances to customers

Loans and

advances

to banks

Total

Companies

Mortgages

Other retail

By type of analysis

Case by case analysis

353 636

72 054,30

1 439

427 129

Collective analysis

221 418

571 107,50

1 356 156

2 148 682

Total

575 054

643 162

1 357 595

2 575 811

Gross exposure in ‘000 PLN

31.12.2024

Loans and advances to customers

Loans and

advances

to banks

Total

Companies

Mortgages

Other retail

By type of analysis

Case by case analysis

409 499

99 499

2 802

511 799

Collective analysis

183 040

713 757

1 600 438

2 497 235

Total

592 538

813 256

1 603 240

3 009 034

Loans and advances covered by case-by-case analysis

The quantification of the value of the portfolio subjected to case-by-case analysis as well as of the value

of created charges, split between impaired receivables (and respectively charges) is presented in

financial notes.

The tables below present the structure of the impaired portfolio subjected to case-by-case analysis.

Case by Case loans and advances to customers - by currency

31.12.2025

31.12.2024

Amount in

‘000 PLN

Share %

Coverage by

impairment

provisions

Amount in ‘000

PLN

Share %

Coverage by

impairment

provisions

PLN

297 929

69.8%

33.3%

292 179

57.1%

31.9%

CHF

3 651

0.9%

15.8%

16 738

3.3%

14.1%

EUR

122 722

28.7%

50.3%

202 879

39.6%

48.6%

USD

2 827

0.7%

46.8%

0.0%

60.1%

Total (Case by Case impaired)

427 129

100.0%

38.1%

511 799

100.0%

37.9%

At the end of 2025, the financial impact from the established collaterals securing the Bank’s receivables

with impairment recognised under individual analysis (Case by Case) amounted to PLN 207.7 million

(at the end of 2024 respectively PLN 262.4 million). It is the amount, by which the level of required

provisions assigned to relevant portfolio would be higher if flows from collaterals were not to be

considered in individual analysis.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Restructured loans and advances

The restructuring of receivables is done by dedicated units (separately for corporate and retail

receivables).

The restructuring of both corporate and retail receivables allows the Bank to take effective action

towards the customers, the purpose of which is to minimize losses and mitigate, as quickly as possible,

any risks to which the Bank is exposed in connection with client transactions giving rise to the Bank's

off-balance sheet receivables or liabilities.

The restructuring process applies to the receivables which, based on the principles in place in the Bank,

are transferred to restructuring and recovery portfolios and includes setting new terms of transactions

which are acceptable for the Bank (including the terms of their repayment and their collateral and

possibly obtaining additional collateral).

Recovery of retail receivables is a fully centralised process implemented in two stages:

▪ monitoring and amicable debt collection proceedings - conducted by Retail Liabilities Monitoring

and Collection Department,

▪ restructuring and execution proceedings – implemented by Retail Liabilities Restructuring and

Recovery Department.

Process performed by Retail Liabilities Monitoring and Collection Department involves direct telephone

contacts with Customers and obtaining repayment of receivables due to the Bank. In case of failure to

receive repayment or in case the Customer applies for debt restructuring, the case is taken over by the

Retail Liabilities Restructuring and Recovery Department and involves all restructuring and execution

activities.

Recovery process is supported by specialised IT system covering the entire Customer portfolio, fully

automated at the stage of portfolio monitoring and supporting actions undertaken in later restructuring

and recovery phases. The behavioural scoring model constitutes an integral component of the system,

used at the warning stage. The system is used for retail liabilities collection process applicable to all

retail Customer segments.

The scoring model is based on internal calculations including, inter alia, Customer’s business segment

type of credit risk-based product (applicable, primarily, to mortgage products) and history of cooperation

with the Customer relative to previous restructuring and execution activities. Late receivables from retail

customers are sent to the IT system automatically no later than 4 days after the date of the receivable

becoming due and payable.

The restructuring and recovery process applicable to corporate receivables (i.e., balance and off-

balance receivables due from corporate and SME customers) is centralized and performed by the

Corporate Recovery Department. Recovery of corporate receivables aims to maximize the recovery

amounts and to mitigate risk incurred by the Bank in the shortest possible periods of time by carrying

out the accepted restructuring and recovery strategies towards:

▪ the customer,

▪ corporate receivables,

▪ collateral ensuring their repayment.

The actions performed as part of those strategies include, among others: setting the terms and

conditions of Customer financing, terms and conditions of restructuring corporate receivables (also

within court restructuring proceedings), including the terms on which they will be repaid and secured,

obtaining valuable and liquid collateral, achieving amicable repayment, recovery of due and payable

receivables (also by court executive officer), also from collateral, actions performed within debtors’

bankruptcy proceedings, conducting required legal actions.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Corporate Recovery Department manages the corporate receivable restructuring and recovery process

by using IT applications supporting the decision-making process and monitoring. They provide

instantaneous information on receivables, collateral, approach used and key actions and dates.

All restructured exposures are classified directly after signing sufficient annex/agreement to Stage 3. In

terms of regular payments such exposure can be cured when fulfil internally defined quarantine rules in

accordance with EBA Guidelines concerning New Definition of Default. Cured restructured cases are

classified to Stage 2 for at least following 2 years after cure in accordance with EBA technical standards

for forborne exposures.

The table below presents the loan portfolio with recognised impairment managed by the Bank’s

organisational units responsible for loan restructuring.

Gross exposure in ‘000 PLN

31.12.2025

31.12.2024

Loans and advances to private individuals

886 554

1 212 462

0 days

271 524

449 482

from 1 to 30 days

167 359

273 661

from 31 to 90 days

112 434

140 376

over 90 days

335 237

348 943

Loans and advances to companies

161 035

199 632

0 days

70 925

110 043

from 1 to 30 days

7 586

4 908

from 31 to 90 days

3 061

1 577

over 90 days

79 464

83 104

Total

1 047 589

1 412 094

(3f) Collateral transferred to the Bank

In 2025 there were no major seizures by the Bank or sale of fixed assets constituting loan collateral.

The above situation was caused by the implementation of other more cost-effective paths of satisfying

oneself from lien or transfers of title (more effective in terms of time and money with the limitation of

costs), i.e., leading to the sale of the object of collateral under the Bank’s supervision and with the

allocation of obtained sources for repayment. A variety of such action is concluding agreements with

official receivers based on which the receiver for an agreed fee secures and stores objects of collateral

and in agreement with the Bank puts them up for sale and sells them (also as part of selling organized

parts or the debtor’s whole enterprise). Funds obtained in such a way are allocated directly for

repayment of the Bank’s receivables (such debt-collection procedure is implemented without recording

transferred collateral on the so-called “Fixed Assets for Sale”).

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

(3g) Policy for writing off receivables

Credit exposures for which the Bank does not expect any cash flows to be recovered, and for which an

impairment allowance or a fair value adjustment for receivables arising from matured transactions has

been recognised that fully covers the outstanding balance, are removed from the balance sheet and

transferred to off‑balance‑sheet records. This operation does not cause the debt to be cancelled, i.e. it

does not release the debtor from the obligation nor does it discontinue the legally required and

economically justified legal and recovery actions aimed at enforcing payment. After removal from the

balance sheet, collection activities continue to be carried out.

Most often, the Bank writes off impaired receivables in the event of the receivable being deemed

uncollectible, i.e., among others:

▪ obtaining a decision on ineffectiveness of execution proceedings;

▪ death of a debtor;

▪ confirmation that there are no chances to satisfy claims from the estate in bankruptcy;

▪ exhaustion of all opportunities to carry out execution due to the lack of assets of the main debtor

and other obligors (e.g., collateral providers).

Gross exposure receivables removed

from the balance sheet in ‘000 PLN

In 2025

Loans and advances to customers

Loans and

advances

to banks

Total

Companies

Mortgages

Other retail

Removed from the balance sheet

18 099

9 634

51 433

79 167

Gross exposure receivables removed

from the balance sheet in ‘000 PLN

In 2024

Loans and advances to customers

Loans and

advances

to banks

Total

Companies

Mortgages

Other retail

Removed from the balance sheet

1 029

487

121 496

123 012

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

(3h) Concentration of risks of financial assets with exposure to credit risk

Economy sectors

The table below presents the Bank’s main categories of credit exposure broken down into components,

according to category of customers.

31.12.2025

Financial

intermediation

Industry and

constructions

Wholesale and

retail business

Transport and

communication

Public sector

Mortgage loans

Consumer

loans*

Other sectors

Total

Loans and advances to

banks

2 081 216

Loans and advances to

customers (Amortized

cost)

7 367 334

3 967 085

5 186 704

704 344

25 185

22 228 857

20 402 218

4 733 596

64 615 323

Loans and advances to

customers (Fair value

through OCI)

9 438 459

Loans and advances to

customers

(Fair value through P&L)

658

745

Trading securities

157

824 912

825 165

Instruments valued at

amortised cost

1 915 598

24 743 916

26 659 514

Instruments mandatorily

at fair value through P&L

176 307

Financial derivatives

(trading and hedging)

112 431

15 977

2 208

1 335

24 877

156 828

Instruments at fair value

through other

comprehensive income

325 273

4 996

282

41 941 801

42 272 383

Repurchase agreements

98 924

Total

12 077 167

3 988 215

5 188 915

706 054

67 535 814

31 667 316

20 402 876

4 758 508

146 324 864

* including: credit cards, cash loans, current accounts overdrafts

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

31.12.2024

Financial

intermediation

Industry and

constructions

Wholesale and

retail business

Transport and

communication

Public sector

Mortgage loans

Consumer

loans*

Other sectors

Total

Loans and advances to

banks

2 378 610

Loans and advances to

customers (Amortized

cost)

7 102 892

3 377 257

4 562 098

620 643

28 075

24 971 031

19 706 931

2 612 486

62 981 413

Loans and advances to

customers

(Fair value through OCI)

11 135 416

Loans and advances to

customers

(Fair value through P&L)

1 755

1 825

Trading securities

555 365

555 479

Instruments valued at

amortised cost

2 305 191

21 754 678

24 059 869

Instruments mandatorily

at fair value through P&L

118 399

Financial derivatives

(trading and hedging)

244 843

6 006

1 627

2 073

2 545

257 094

Instruments at fair value

through other

comprehensive income

472 631

4 996

285

28 550 699

29 028 643

Repurchase agreements

194 218

Total

12 816 817

3 388 334

4 563 728

623 072

50 888 817

36 106 447

19 708 686

2 615 065

130 710 966

* including: credit cards, cash loans, current accounts overdrafts

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Loans and advances to customers by economy sectors and segment

Taking into consideration segments and activity sectors concentration risk, the Bank defines internal

concentration limits in accordance with the risk tolerance allowing it to keep well diversified loan portfolio.

Sector name

2025

Balance Exposure

(PLN million)

(%)

2024

Balance Exposure

(PLN million)

(%)

Credits for individual persons

51 918.1

70.3%

55 940.1

75.3%

Mortgage

31 510.4

42.6%

36 231.4

48.9%

Cash loan

17 906.5

24.2%

17 216.6

23.2%

Credit cards and other

2 501.1

3.4%

2 492.1

3.4%

Credit for companies*

21 984.2

29.7%

18 309.4

24.7%

Wholesale and retail trade; repair

5 186.7

7.0%

4 562.1

6.1%

Manufacturing

3 042.7

4.1%

2 590.3

3.5%

Construction

924.4

1.3%

786.9

1.1%

Transportation and storage

704.3

1.0%

620.6

0.8%

Public administration and defence

25.2

0.0%

28.1

0.0%

Information and communication

1 018.8

1.4%

793.4

1.1%

Other Services

623.1

0.8%

325.7

0.4%

Financial and insurance activities

7 367.3

10.0%

7 108.8

9.6%

Real estate activities

1 398.1

1.9%

642.5

0.9%

Professional, scientific, and technical

services

516.0

0.7%

252.1

0.3%

Mining and quarrying

9.9

0.0%

16.2

0.0%

Water supply, sewage, and waste

133.4

0.2%

102.2

0.1%

Electricity, gas, water

526.5

0.7%

65.4

0.1%

Accommodation and food service activities

204.0

0.3%

187.6

0.3%

Education

85.6

0.1%

76.1

0.1%

Agriculture, forestry, and fishing

14.7

0.0%

15.3

0.0%

Human health and social work activities

165.3

0.2%

99.4

0.1%

Culture, recreation, and entertainment

38.4

0.1%

36.7

0.0%

Total (gross)

73 902.3

100.0%

74 249.5

100.0%

* incl. Microbusiness, annual turnover below PLN 5 million

Concentration ratio of the 20 largest customers in the Bank’s loan portfolio (considering groups of

connected entities) at the end of 2025 equals 7.5% comparing with 5.5% at the end of 2024.

Concentration ratio for the 10 largest customers increased during 2025, from 4.2% at the end of the

previous year to 5.5%.

The average LTV for the retail mortgage portfolio amounted to 44.8% at the end of 2025 compared to

45.8% at the end of 2024. The table below presents the distribution of on-balance-sheet exposures for

retail mortgage loans by levels of the current loan-to-value (LTV) ratio.

LTV Bucket

2025

Balance Exposure

(in ‘000 PLN)

Share (%)

2024

Balance Exposure

(in ‘000 PLN)

Share (%)

0-50%

18 735 862

51.8%

21 022 543

53.6%

50-80%

11 357 124

31.4%

13 497 810

34.4%

80-100%

1 283 591

3.6%

1 643 979

4.2%

>100%

133 697

0.4%

177 409

0.5%

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

8.4. MARKET RISK AND INTEREST RATE RISK

The market risk encompasses current and prospective impact on earnings or capital, arising from

changes in the value of the Bank’s portfolio due to adverse movement in interest rates, foreign exchange

rates or prices of bonds, equities, or commodities.

The interest rate risk arising from Banking Book activities (IRRBB) encompasses current or prospective

impact to both the earnings and the economic value of the Bank’s portfolio arising from adverse

movements in interest rates that affect interest rate sensitive instruments. The risk includes gap risk,

basis risk and Client’s option risk and credit spread risk (CSRBB).

Market risk

The Bank’s market risk measurement allows monitoring of all the risk types, which are generic risk

(including interest rate risk, foreign exchange risk and equity risk), non-linear risk, specific risk, and

commodity risk. In 2025 the non-linear and commodities risk did not exist in the Bank. The equity risk

assumed to be irrelevant since the Bank’s engagement in equity instruments is immaterial.

Each market risk type is measured individually using appropriate risk models and then integrated

measurement of total market risk is built from those assessments without considering any type of

diversification between the four risk types (the worst-case scenario).

The main measure used by the Bank to evaluate market risks (interest rate risk, foreign exchange risk,

equity risk) is the parametric VaR (Value at Risk) model – an expected loss that may arise on the portfolio

over a specified period (holding period) and with specified probability (confidence level) from an adverse

market movement.

The Value at Risk in the Bank (VaR) is calculated considering the holding period of 10 working days and

a 99% confidence level (one tail). In line with regulatory requirements of CRD V/CRR III, the volatility

associated with each market risk vertex considered in the VaR model (and respective correlation

between them) has been estimated by the equally weighted changes of market parameters using the

effective observation period of historical data of last year. The EWMA method (exponentially weighted

moving average method) with effectively shorter observation period is only justified by a significant

upsurge in price volatility.

To monitor and limit the positions in instruments, for which it is not possible to properly assess market

risk with the use of the VaR model (non-linear risk, commodity risk and specific risk), the appropriate

assessment rules were defined. The non-linear risk is measured according to internally developed

methodology which is in line with the VaR methodology – the same time horizon and significant level is

used. Specific and commodities’ risks are measured through standard approach defined in supervisory

regulations, with a corresponding change of the time horizon considered.

The market risk measurement is carried out daily (intra-day and end-of-day), both on an individual basis

for each of the areas responsible for risk taking and risk management, and in consolidated terms for

Global Bank, Trading and Banking Book considering the effect of the diversification that exists between

the portfolios. In addition, each Book is divided into the risk management areas.

To ensure that the VaR model adopted is appropriate for the evaluation of the risks involved in the open

positions, a back-testing process has been instituted and is carried out daily.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

All reported excesses are documented. This includes an explanation of their causes and their

incorporation in one of the three classes of excess explanation: adequacy of the model, insufficient

model accuracy or unanticipated market movements.

Parallel to the VaR calculation the portfolios are subject to a set of sensitivity analysis and stress

scenarios, to:

▪ Estimate the potential economic loss resulting from extreme variations in market risk factors,

▪ Identify the market risk movements, possibly not captured by VaR, to which the portfolios are

more sensitive,

▪ Identify the actions that can be taken to reduce the impact of extreme variations in the risk

factors.

The following types of market scenarios are being applied:

▪ Parallel shifts of the yield curves;

▪ More steep or flat shape of the yield curves;

▪ Variations of the exchange rates;

▪ Historical adverse scenarios;

▪ Customized scenarios based on observed, adverse changes of market risk parameters.

The global VaR limit is expressed in million PLN. The limit is divided into the books, risk management

areas and various types of risk, which enables the Bank for full measurement, monitoring, and control

of market risk. The market risk exposure (VaR) together with the limit utilization is reported daily to all

areas responsible for management and control of market risk in the Bank.

The market risk limits are revised at least once a year and to consider, inter alia, the change of the

consolidated Own Funds, current and projected balance sheet structure as well as the market

environment. The market risk limits valid for 2025 reflected the assumptions and risk appetite defined

under Risk Strategy 2025-2028. The applicable limits, introduced as of 30 September 2024, remained

in 2025 at levels not exceeding PLN 574.5 million for the Bank in total and PLN 20.8 million for Trading

Book. In December 2025, the Risk Committee conducted a review of the market limits and confirmed

their maintenance at the current level.

In 2025, the VaR limits were not breached for Global Bank and also for Trading and Banking Book.

It should be noted that the value at risk in Banking Book is only complementary risk measurement tool

as positions are expected to be held to maturity and are normally not marked to market (see next section

- Interest rate risk in Banking Book, IRRBB). All excesses of market risk limits are always reported,

documented, and ratified at the proper competence level.

Within the current market environment, the Bank continued to operate in a prudent manner. In 2025 the

VaR indicators for the Bank remained on average at the level of PLN 204,2million (36% of the limit) and

PLN 161,4 million (28% of the limit) as of the end of December 2025. The diversification effect applies

to the generic risk and reflects correlation between its constituents. The low level of diversification effect

relates to the fact that the Bank’s market risk is mainly the interest rate risk. The figures in the Table

below also include the exposures to market risk generated in subordinated companies, as the Bank

manages market risk at central level.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The market risk in terms of VaR for the Bank (‘000 PLN):

VaR measures for market

risk (‘000 PLN)

VaR (2025)

31.12.2024

Average

Maximum

Minimum

31.12.2025

Total risk

223 391

204 231

299 142

92 413

161 358

Generic risk

134 159

159 664

231 481

78 340

148 255

Interest Rate Risk

134 158

159 662

231 474

78 343

148 257

FX Risk

842

Equity Risk

Diversification Effect

0.0%

Specific risk

89 233

44 568

89 235

13 104

The corresponding exposures as of 2024 respectively amounted to (‘000 PLN):

VaR measures for market

risk (‘000 PLN)

VaR (2024)

31.12.2023

Average

Maximum

Minimum

31.12.2024

Total risk

269 971

263 193

298 165

192 017

223 391

Generic risk

199 442

179 983

213 965

102 075

134 159

Interest Rate Risk

199 439

179 992

213 969

102 072

134 158

FX Risk

851

Equity Risk

Diversification Effect

0.0%

Specific risk

70 529

83 210

91 456

70 203

89 233

The market risk exposure divided into Trading Book and Banking Book together with risk type division

is presented in the table below (‘000 PLN):

Banking Book:

VaR measures for

market risk (‘000 PLN)

VaR (2025)

31.12.2024

Average

Maximum

Minimum

31.12.2025

Total risk

223 121

202 205

295 250

91 794

160 128

Generic risk

133 892

157 640

227 389

77 724

147 028

Interest Rate Risk

133 892

157 640

227 389

77 724

147 028

FX Risk

Equity Risk

Diversification Effect

0,0%

Specific risk

89 229

44 564

89 231

13 100

VaR measures for

market risk (‘000 PLN)

VaR (2024)

31.12.2023

Average

Maximum

Minimum

31.12.2024

Total risk

269 052

261 853

297 344

191 331

223 121

Generic risk

198 527

178 647

211 281

101 393

133 892

Interest Rate Risk

198 527

178 647

211 281

101 393

133 892

FX Risk

Equity Risk

Diversification Effect

0.0%

Specific risk

70 525

83 205

91 453

70 200

89 229

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Trading Book:

VaR measures for

market risk (‘000 PLN)

VaR (2025)

31.12.2024

Average

Maximum

Minimum

31.12.2025

Total risk

784

2 384

4 991

452

1 556

Generic risk

780

2 381

4 988

448

1 552

Interest Rate Risk

780

2 379

4 984

446

1 556

FX Risk

830

Equity Risk

Diversification Effect

7.3%

4.1%

Specific risk

VaR measures for

market risk (‘000 PLN)

VaR (2024)

31.12.2023

Average

Maximum

Minimum

31.12.2024

Total risk

1 078

2 365

7 512

269

784

Generic risk

1 075

2 361

7 509

264

780

Interest Rate Risk

1 071

2 348

7 516

263

780

FX Risk

850

Equity Risk

Diversification Effect

3.1%

7.3%

Specific risk

Open positions mostly included interest-rate instruments and FX risk instruments. The FX risk covers

all the foreign exchange exposures of the Bank. According to the Risk Strategy, the FX open position is

allowed, however should be kept at low levels. For this purpose, the Bank has introduced a system of

conservative limits for FX open positions (both Intraday and Overnight limits) and allows keeping FX

open positions only in Trading Book.

In 2025, as a rule FX position generated in the Banking Book was fully transferred to the Trading Book

where it was managed daily. During 2025 the FX open position remained on average at the level of

PLN15.8 million with maximum of PLN 61.6 million. In 2025, the FX Total open position (Intraday as well

as Overnight) remained below 2% of Own Funds and well below the maximum limits in place.

Evolution of the total FX open position (Overnight) in Trading Portfolio (PLN thousand):

Total FX position *

Period Average

Period Minimum

Period Maximum

The Last Day of

Period

2025

15 830

4 744

61 556

21 672

2024

13 956

4 080

50 167

12 591

* Total foreign exchange position – the sum of negative (short) or the sum of positive (long) individual currency positions across

currencies, whichever of these sums is greater in absolute value.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

In addition to above mentioned market risk limits, the stop loss limits are introduced for the financial

markets’ portfolios. The aim is to limit the maximum losses of the trading activity of the Bank. In case

the limit is reached, a review of the management strategy and assumptions for the positions in question

must be undertaken. Stop loss limits were not reached.

VaR assessment is supplemented by monitoring the market risk sensitivity to the above-mentioned

stress tests scenarios of portfolios carrying market risk.

The results of market risk sensitivity and customized stress tests were regularly reported to the Capital,

Assets and Liabilities Committee.

Interest rate risk in Banking Book (IRRBB)

The interest rate risk arising from Banking Book activities (IRRBB) encompasses current or prospective

impact to both the earnings and the economic value of the Group’s balance sheet, arising from adverse

movements in interest rates that affect interest rate sensitive positions. The risk includes repricing gap

risk, basis risk, Client’s option risk and credit spread risk (CSRBB).

The framework of market risk and interest rate risk management and its controls are defined on

a centralized basis with the use of the same concepts and metrics which are used in all the entities of

the BCP Group.

The variations in market interest rates have an influence on the Group’s net interest income, both under

a short and medium-term perspective, at the same time affecting economic value of net equity in the

long term. The measurement of both is complementary in understanding the complete scope of interest

rate risk in Banking Book. For this reason, apart from daily market risk measurement in terms of value

at risk, the scope of the additional measurement of interest rate risk covers both earnings-based and

economic value measures and their forecasts considering expected balance-sheet development,

investment, and hedging strategy. Results of measurement are reported monthly:

- The impact on net interest income (NII) over a time horizon of next 12 months resulting from one-off,

parallel interest rate shock of 100 basis points and the supervisory outlier test (SOT NII) with a set

of two interest rate risk stress scenarios.

- The impact on the economic value of equity (EVE) resulting from 100 bps parallel upward/downward

yield curve movements as well as from supervisory outlier test (SOT EVE) with set of six interest rate

risk stress scenarios.

- The interest rate sensitivity in terms of BPVx100, that is the change of the portfolio’s value caused

by a parallel shift of the yield curve by 1 basis point multiplied by 100.

The interest rate risk measurement is carried out across all the risk management areas in the Bank, with

the particular attention on Banking Book.

The results of the above-mentioned analysis for net interest income (NII), BPVx100 and economic value

measures are regularly monitored and reported to the Capital, Assets and Liabilities Committee, to Risk

Committee, the Management Board and Supervisory Board.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The exposure to interest rate risk in the Banking Book is primarily generated by the differences in

frequency and repricing dates of the assets and liabilities, as well as contractually used reference

indexes or sensitivity of client rate to market rates. It is specifically affected by the imbalance between

assets and liabilities that have fixed rate and specificity of products with floating rate, in particular by:

- The liabilities – for those, whose sensitivity (i.e. pass-through rate) is reduced, as the interest rate

offered to Client cannot be lower than zero, therefore rate cuts result in smaller scope for reduction

of the respective cost.

- The assets - for variable-rate loans the transfer of market rate movements is proportional and

automatic at next repricing. On top of that due to specificity of the polish legal system, the interest

rate of credits is capped (it cannot exceed two times Reference Rate of the National Bank of Poland

increased by 7 percentage points). In case of some consumer- or fixed-rate loans and decreasing

interest rates, the impact on Net Interest Income can be negative and can exceed the nominal rate

cuts due to the multiplier effects.

Consequently, sensitivity of the NII to interest rate changes is influenced by the absolute level of interest

rates taken as a reference, in particular it increases when market rates are low due to margin

compression. Therefore, assumptions regarding the timing and magnitude of deposits repricing and

automatic activation of loan rate caps in response to market rate movements are especially important

when assessing the interest rate sensitivity and risk.

Regarding the interest rate risk in Banking Book, the following principles are in place:

- The market risk that results from the commercial banking activity transferred on the monthly basis to

areas that actively manage market risk and that are measured in terms of risk and profit and loss,

- The Bank uses natural hedging between loans and deposits, complemented by fixed and floating

rate bonds and derivatives to manage interest rate risk with the main purpose of protecting the net

interest income, while reducing the variability of market value of the portfolios recognized through

Profit and Loss or Other Comprehensive Income (OCI).

The results of the IRRBB measurement as of the end of December 2025 indicate that in the EVE

perspective the Group is the most exposed to the scenario of interest rates increase, while in the

earnings perspective – to a decrease. Although, a simultaneous maintenance of supervisory limit for the

SOT NII and SOT EVE metrics remains a key challenge for the Group, as well as for the entire banking

sector, the results for outlier stress test scenarios (SOT) as of December 2025 show that even under

the most severe outlier stress test scenario, the decline of EVE and NII for Banking Book is below

supervisory limit of i.e. below 15% of Tier 1 and 5% of Tier 1, respectively.

The results of the sensitivity of the Banking Book to changes of interest rates in terms of BPVx100 and

EVE under supervisory stress tests are presented in Table below.

Sensitivity of the Banking Book to changes of interest rates was as follows (‘000 PLN):

31.12.2025

31.12.2024

BPVx100

PLN

-396 768

-246 989

CHF

-56 861

-9 080

EUR

84 986

45 108

USD

31 469

21 878

Other

9 456

9 497

TOTAL

-327 721

-179 585

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Sensitivity to changes of interest rates

31.12.2025

31.12.2024

Supervisory outlier test EVE (the most severe scenario, % CET1)

-12.40%

-11.89%

In 2025 the Bank’s priority remained the stabilization of net interest income in the medium‑ and long‑term

perspective. In this context, the Bank continued its strategy of gradually increasing both the volume and

the share of the fixed rate loans and fixed‑coupon bond portfolio, aiming to achieve an optimal balance

between the risk resulting from extending duration, reflected in the SOT EVE measure, and the risk of

volatility in the current net interest income captured in the SOT NII measure.

As of the reporting date, the main net interest income’s sensitivity measure - calculated under a scenario

of parallel shift of interest rates by 100 basis points over a 12-month horizon following 31 December

2025 (with the most adverse scenario being a decrease in interest rates) - stood at 2.18%. The

corresponding values are presented in the table below.

Sensitivity of NII for position in all major currencies:

- 100 bps change of interest rates

31.12.2025

31.12.2024

PLN million

-125

-27

% of net interest income over the last 12 months

-2.18%

-0.49%

The above results of internal metrics for sensitivity of NII for the next 12 months after 31

December

2025 in Banking Book are conducted under the following assumptions:

- static balance sheet structure as of that reference date (no change during the following 12 months),

- reference level of net interest income if all assets and liabilities with variable interest rate already

reflect market interest rates levels as of 31

December 2025 (for example, the NBP Reference rate

was at 4.00%, versus 5.75% on 31

December 2024, i.e. reflecting a cumulative cut of 175 bps in

2025, of which 75 bps in 4Q 2025),

- application of a parallel move of 100bps in the yield curve up and down is an additional shock to all

market interest rates levels as of 31

December 2025 and is set at the repricing date of the assets

and liabilities that happens during the 12 following months.

Apart from reference date for the analysis, which is set in the context of a significantly lower interest rate

environment in Poland – following cumulative monetary easing of 175 basis points in 2025 as decided

by the Monetary Policy Council the increase of the NII sensitivity metric observed in December 2025

compared to the one published for the end of 2024 is also due to a revision of methodology for non-

maturity products. As part of this process, the sensitivity of non-maturing deposits (NMD) to interest rate

cuts specifically was reassessed resulting in a more limited scope of adjustment in case of interest rate

cut shocks., It means that smaller part of the decrease in interest rate shock is expected to be reflected

in lowering of the cost of funding. This adjustment for NMD was applied only for internal NII measures

(+/- 100 bps shock) and aims to provide a more conservative representation of interest rate risk in the

banking book, in line with Bank’s pricing policy as well as prevailing market practices. The Bank has

already taken a set of measures aimed at protecting its net interest income. These include, in particular,

the investment in fixed‑rate Sovereign and Supranational debt securities and limiting the volume of NBP

money bills, held in the Banking Book.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

8.5. LIQUIDITY RISK

The objective of liquidity risk management is to ensure and maintain the Bank’s ability to meet both

current, as well as future funding requirements considering costs of funding.

Liquidity risk reflects the possibility of incurring significant losses because of deteriorated financing

conditions (financing risk) and/or of the sale of assets for less than their market value (market liquidity

risk) to meet the needs for funding arising from the Bank’s obligations.

Both the financing requirements and any liquidity surplus of subsidiaries are managed by transactions

with the Bank unless specific market transactions are previously decided and agreed. The Treasury

Department is responsible for the day-to-day management of the Bank’s liquidity position in accordance

with the adopted rules and procedures considering goals defined by the Management Board and the

Capital, Assets and Liabilities Committee.

In 2025, all the supervisory and internal liquidity indicators of the Bank remained above minimum limits

in place. In accordance with internal regulations all potential breaches of internal liquidity risk limits are

in each time reported, documented and ratified at the proper competence level.

In 2025, in consequences of the increase of the deposits from Customers at the faster pace than loans,

the Bank’s Loan-to-Deposit ratio decreased and was equalled to 55% at the end of December 2025

(comparing to level of 61% as of end of December 2024). The liquidity assets portfolio is treated by the

Bank’s as liquidity reserve, which will overcome crisis situations. The liquidity assets portfolio consists

of liquid debt securities issued or guaranteed by Polish government, other EU’s sovereigns, European

Union, and multilateral development banks. It is additionally supplemented by the cash and exposures

to the National Bank of Poland. At the end of 2025, the share of above-mentioned liquid debt securities

(including NBP Bills) in total securities portfolio amounted to 99.9% and allowed to reach the level of

approx. PLN 69.9 billion (46% of total assets), whereas at the end of December 2024 PLN 53.7 billion

(39% of total assets).

Consequently, the large, diversified, and stable funding from retail, corporate and public sector Clients

remains the main source of financing of the Bank. At the end of 2025 total Clients’ deposits of the Bank

reached the level of PLN 131.2 billion (PLN 117.6 billion at the end of December 2024). The deposit

base constituted mainly funds of individuals Clients, of which the share in total Client’s deposits equalled

to approx. 75.0% at the end of December 2025 (74.4% at the end of December 2024). The high share

of funds from individuals had a positive impact on the Bank’s liquidity and supported the compliance of

the supervisory liquidity measures.

Concentration of the deposits base, based on the share of top 5 and top 20 depositors, at the end of

2024 amounted respectively to 1.4% and 3.8% (in December 2024 it was respectively 1.4% and 3.8%).

The level of deposit concentration is regularly monitored and did not have any negative impact on the

stability of the deposit base in 2025. In case of significant increase of the share of the largest depositors,

the additional funds from the depositors are not treated as stable. Despite of that, to prevent deposit

base fluctuations, the Bank maintains the reserves of liquid assets in the form of securities portfolio.

The deposit base is supplemented by medium – long term funding: at the end of 2025, the source of

medium-term funding included subordinated debt, own EUR bonds issue, covered bonds issued by

Millennium Mortgage Bank, and securitization of loan portfolio.

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The total Credit Linked Notes issued by the Bank amounts to PLN 458.8 million at the end of 2025 year

in comparison to PLN 602.8 million at the end of 2024. The Bank has no medium-term loans from

financial institutions at the end of 2025, the same as at the end of 2024.

The Bank has also an excess of liquidity in foreign currencies (in particular in EUR and USD) which has

increased in recent years due to the significant decrease of the CHF loan portfolio, the conversion of

part of provisions for legal risk to CHF and the issue of two senior non-preferred bonds in a total amount

of EUR 1 billion. Consequently, the management of FX liquidity is focused on efficient investment of the

surplus and diversification of the risk, which has led to the creation of a investment portfolio in EUR,

mostly concentrated in several western European countries sovereign debt in EUR.

Liquidity risk evaluation measures

The estimation of the Bank’s liquidity risk is carried out with the use of both measures defined by the

supervisory authorities and internally, for which exposure limits were established.

The evolution of the Bank’s liquidity position in short-term horizons is tested daily based on liquid asset

portfolio, Central Bank’s eligible collateral for standard monetary operation and two internally defined

indicators: immediate liquidity and quarterly liquidity. The last two indicators measure the maximum

borrowing requirement, which could arise on a particular day, taking into consideration the cash-flow

projections for spot date and period of 3 months, respectively. Additionally, the liquid asset portfolio is

calculated on the daily basis.

These figures are compared with the exposure limits in force and reported daily to the areas responsible

for the management and control of the liquidity risk in the Bank as well as presented in monthly and/or

quarterly basis to the Bank’s Management Board and Supervisory Board.

The liquidity risk limits are revised at least once a year to consider, inter alia, the change of the size of

the consolidated own funds, current and expected balance sheet structure, historical limits’

consumption, as well as current market conditions and supervisory requirements. According to rules in

place, all eventual excesses of internal liquidity risk limits are always reported, documented, and ratified

at the proper competence level.

According to the provisions of CRD/CRR package, the Bank is calculating the liquidity coverage

requirement (LCR) and the net stable funding ratio (NSFR). The regulatory minimum of 100% for both

LCR and NSFR was met by the Bank. LCR reached the level of 361% at the end of December 2025

(342% as of the end of December 2024). The increase was mainly connected with significant increase

of deposits from retail Clients, which was invested in liquid assets portfolio. The measure is calculated

daily and has been reported on the monthly basis to NBP since March 2014. Internally, the LCR is

estimated daily and reported to the areas responsible for the management and control of the liquidity

risk in the Bank. NSFR is monitored and reported monthly. In 2025, the NSFR was above the supervisory

minimum of 100%. NSFR reached the level of 207% at the end of December 2025 (196% as of the end

of December 2024). Moreover, in line with PFSA Recommendation WFD (issued in July 2024), the Bank

is calculating at the Group level monthly Long Term Funding Ratio (LTFR/WFD), which in December

2025 reached 33% (28% in December 2024).

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Current Liquidity indicators

31.12.2025

Immediate liquidity

ratio (%) *

Quarterly liquidity

ratio (%)*

Central Bank Collateral

/ Total Deposits (%)**

Liquid assets

Portfolio (m PLN)***

LCR (%)

Indicator

45%

47%

42%

70 285

361%

31.12.2024

Immediate liquidity

ratio (%)*

Quarterly liquidity

ratio (%)*

Central Bank Collateral

/ Total Deposits (%)**

Liquid assets

Portfolio (m PLN)***

LCR (%)

Indicator

39%

35%

53 473

342%

* - Immediate and Quarterly Liquidity Indicator: Ratio between value of the liquidity buffer available for discount with the Central

Bank (NBP) minus the net outflows projected for the next 3 working days for Immediate Liquidity Indicator and for the next 3

months for Quarterly Liquidity Indicator in all convertible currencies and the total deposits. The liquidity buffer is determined as

the difference between the sum of the portfolio of unencumbered central bank (NBP) eligible assets after haircuts, mobilized or

not to the respective monetary policy pool, and by cash and deposits held in the NBP in the part available for withdrawal, and the

gross funding with NBP and accrued interest

** - Central Bank Collateral / Total Deposits: Ratio between the value after haircuts of the eligible collateral for NBP, plus the cash

and deposits in the Central Bank (NBP) deducted of the minimum reserve requirements and the total customers’ deposits

*** - Liquid Assets Portfolio: The sum of cash, nostro balance (reduced by the required obligatory reserve), unencumbered liquid

securities portfolio, NBP-Bills and short-term, due from banks (up to 1 month).

The Bank monitors liquidity based on internal liquidity measures, considering the impact of FX rates on

the liquidity situation.

Additionally, the Bank employs an internal structural liquidity analysis based on cumulative, behaviour

liquidity gaps calculated. The safe level adopted by the Bank for the ratio of liquidity shortfall is

established for each time bucket below 5 years.

In December 2024, liquidity gaps were maintained positive and still at safe levels. The results of

cumulative, behaviour liquidity gaps (normal conditions) are presented in tables below.

31.12.2025

Adjusted Liquidity Gap (PLN

mln)

Up to 6M

Up to 1Y

Up to 2Y

Up to 5Y

Counterbalancing capacity

68 236

Outflows

11 680

3 630

5 894

11 961

Outflows Cumulated

11 680

15 309

21 204

33 165

Inflows

13 702

7 026

13 866

22 635

Inflows Cumulated

13 702

20 727

34 594

57 229

Liquidity Gap

70 258

3 396

7 972

10 674

Liquidity Gap Cumulated

70 258

73 654

81 626

92 300

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

31.12.2024

Adjusted Liquidity Gap (PLN

mln)

Up to 6M

Up to 1Y

Up to 2Y

Up to 5Y

Counterbalancing capacity

51 995

Outflows

11 004

2 078

3 035

14 117

Outflows Cumulated

11 004

13 082

16 117

30 234

Inflows

10 524

4 516

7 747

17 663

Inflows Cumulated

10 524

15 040

22 788

40 451

Liquidity Gap

51 516

2 437

4 713

3 546

Liquidity Gap Cumulated

51 516

53 953

58 666

62 212

The Bank structural liquidity risk management tool covers sensitivity analysis and stress scenarios

(idiosyncratic, systemic and combination of both). For stress tests, liquidity gaps are calculated on a real

basis assuming a conservative approach to the assessment of probability of cash flow occurrence

among others considering increased deposits outflows, decreased or delayed loans repayment inflows,

deteriorated liquidity of the secondary securities market, the highest cost of funding - the assumption of

the worst observed margins on deposits in the Bank, parallel shift of the yield curve and PLN

depreciation.

Stress tests are performed at least quarterly, to determine the Bank’s liquidity-risk profile, to ensure that

the Bank can fulfil its obligations in the event of a liquidity crisis and to update the liquidity contingency

plan and management decisions. Additionally, stress test results are used for setting thresholds for early

warning signals, which aim is to identify upcoming liquidity problems and to indicate to the Management

Board the eventual necessity of launching Liquidity Contingency Plan.

The assumptions for both internal structural liquidity analysis and stress tests are annually revised. The

last revision was carried out in December 2025. The approach is based on additional liquidity monitoring

metrics’ maturity ladder for supervisory liquidity reporting, however, includes internal adjustments

according to behavioural assumptions on balance and off-balance outflows and inflows. As the maturity

ladder is a contractual liquidity gap that assumes static balance sheet, the internal assumptions

regarding roll-over of funding and future interests cash flows were aligned and eliminated. In December

2025 cumulative liquidity gap was positive and better than in December 2024, mainly due to increase

on deposits from retail Clients, which was reflected in liquid assets portfolio (counterbalancing capacity).

The internally defined limit of 12% total assets was not breached and the liquidity position was confirmed

as solid. As of December 2025, also the results of the stress test analysis demonstrated that liquidity

position is not threatened as even in the most severe scenario the survival period is still above the limit

of 3 months.

The information regarding the liquidity risk management, including the utilization of the established limits

for internal and supervisory measures, is reported monthly to the Capital, Assets and Liabilities

Committee and quarterly to the Management Board and Supervisory Board.

The process of the Bank’s planning and budgeting covers the preparation of the Liquidity Plan to make

sure that the growth of business will be supported by an appropriate liquidity financing structure and

supervisory requirements in terms of quantitative liquidity measures will be met.

100

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The Bank has also emergency procedures for situations of increased liquidity risk – the Liquidity

Contingency Plan (contingency plan in case the Bank’s financial liquidity deteriorates). The Liquidity

Contingency Plan establishes the concepts, priorities, responsibilities, and specific measures to be

taken in the event of a liquidity crisis. The Liquidity Contingency Plan is revised at least once a year. In

2025 the Liquidity Contingency Plan was tested and revised to guarantee that it is operationally robust.

The Plan also confirmed warning thresholds for early warning indicators, considering scenarios and

stress test results. The revised Plan was approved by the Supervisory Board in November 2025.

8.6. OPERATIONAL RISK

Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes,

people, and systems, or from external events, including legal risk and excluding strategic and

reputational risk (last two are treated as separate categories). Operational risk is demonstrated in every

aspect of activity of the organization and constitutes its intrinsic part.

In the year 2025 there could be observed a continuous use of standards implemented for the purpose

of management of operational risk, which are in line with the best practice of national and international

financial institutions. The adopted risk management structure describes the various management levels

and scopes of their duties and responsibilities.

Owners of defined business and support processes play a key role in the day-to-day operation of the

Bank. Process owner, basing on thorough knowledge about the process, accurately identifies and

mitigates recognized risks, thus constituting the first line of defence. The second line of defence is the

level of specialized units dealing with the organization of the management and control of an acceptable

level of risk, with consideration of the areas such as: compliance, anti-money laundering, antifraud,

security and business continuity as well as insurance and outsourcing. The third line of defence is the

independent internal audit unit.

Every decision regarding optimizing operational risk is preceded by cost-benefit analysis.

A higher risk management level is the Processes and Operational Risk Committee, which focuses on

threats identified in more than one process. All and any activities concerning operational risk are

coordinated and supervised by the Risk Committee, the Management Board, and the Supervisory

Board.

In keeping with the adopted model, risk management is a process of continuous improvement as regards

identification, assessment, monitoring, mitigating, and reporting by:

▪ Gathering operational risk events,

▪ Self-assessment of operational risk in individual processes,

▪ Analysis and monitoring of risk indicators.

The Bank gathers operational risk events in an IT tool. The tool supports management of operational

risk. Such events are being afterwards analysed in what concerns the source of event and possibility of

mitigating the effects and apply appropriate preventive actions. In the IT tool, events are being ascribed

to a certain risk category and proper process type, which is later used as a part of reporting and risk

self-assessment validation. The internal database of risk events additionally meets qualitative and

quantitative requirements for following the advanced approach in calculating capital requirements on

account of operational risk.

101

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The risk self-assessment was being realized together with the processes review. It relied on assessment

of adopted solutions’ effectiveness in fulfilling expectations of Clients and business partners in the scope

of both, services quality, and costs optimization. Approved operational risk and control methodology

allowed assessment of risk level in each process, considering existing controls and basing on accepted

scenarios. Mitigation actions were proposed implemented and are monitored for purposes of

assessment of risk levels above the accepted tolerance threshold.

During the risk and control self-assessment exercise an analysis of performance indicators was made,

including risk indicators defined for each process. Key persons - responsible for creating and

implementation activities in given processes - have defined and adjusted the indicators thus to make

them the best forecasts of future risks. On-going monitoring of indicators serves the purpose of

increasing effectiveness and productivity of processes as well as effective control of risk on the level of

individual actions within processes.

Information about operational risk in processes is included in the top-level dashboards consolidating

information about the process’s performance.

Considering the degree of development of operational risk management and the scale and profile of its

activity, the Bank calculates its capital requirement due to the operational risk using the new

Standardised Approach, according to CRR3.

8.7. ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) RISK

FACTORS

ESG risk—arising from environmental (including climate related), social, and governance factors—is not

considered a separate risk category but rather a source of risk that materializes through traditional risk

categories, such as credit risk, liquidity risk, market risk, operational risk, and reputational risk. This

materialization occurs through transmission channels, which are cause and effect relationships

explaining how ESG factors affect the Group through its counterparties and invested assets. At the

current stage of methodological and market practice development, the Group focuses on analysing the

impact of environmental factors, particularly those related to climate change. The identification and

assessment of these risks are carried out as part of the periodic materiality assessment of environmental

and climate risk factors for the traditional risk categories in the Bank’s operations. The materiality

analysis covers physical risk and transition risk factors, as well as sensitivity analyses using climate

scenarios.

The rules related to managing and controlling the ESG area (including ESG risk management and

control) at the level of the entire Bank Millennium Group are regulated by the document ESG –

Management and Control Principles, adopted by the Management Board. The purpose of implementing

this document is to provide the Bank Millennium Group with a solid framework for ESG management

and control, fully aligned with legal requirements, applicable internal regulations, and best market

practices. As part of ESG risk management, the Group adheres to the Environmental Policy of the Bank

Millennium Group and the Principles of Responsible Financing. The Group incorporates environmental

and social risks into customer assessment processes, credit and project financing decisions, and the

offering of investment products (including those of Millennium TFI), taking into account risks associated

with the sectors in which clients operate as well as their individual exposure to such risks.

ESG risk management also includes the execution of climate stress tests. In 2025, the Bank carried out

such tests in the most significant area—credit risk. Based on the analyses conducted, the Bank currently

considers its ESG risk management methods that do not require the recognition of provisions in the

financial statements to be adequate. More information on ESG risk management is presented in the

Sustainability Reporting section of the Management Board Report (Management Board Report on the

Operations of Bank Millennium S.A. and the Bank Millennium S.A. Capital Group for 2025).

102

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

9. Transactions with Related Entities

9.1. TRANSACTIONS WITH THE SUBSIDIARIES AND PARENT’S

GROUP

All transactions among members of the Group made in 2025 and 2024 were driven by current activity.

The below table presents major amounts of intergroup transactions, these were transactions with the

following entities:

▪ MILLENNIUM BANK HIPOTECZNY,

▪ MILLENNIUM LEASING,

▪ MILLENNIUM CONSULTING,

▪ MILLENNIUM TFI

▪ MILLENNIUM SERVICE,

▪ MILLENNIUM TELECOMMUNICATION SERVICES,

▪ MILLENNIUM GOODIE,

and with the Capital Group of Bank parent company - Banco Comercial Portugues (ultimate parent

company), these transactions are mainly of banking nature.

Apart from transactions described herein, in the indicated period neither Bank Millennium S.A., nor

subsidiaries of Bank Millennium S.A. made any other transactions with related entities, which individually

or jointly may have been significant and concluded under terms and conditions other than market-based.

ASSETS AND LIABILITIES FROM TRANSACTIONS WITH RELATED PARTIES (DATA IN ‘000 PLN)

AS AT 31.12.2025

With

subsidiaries

With parent

company

With other entities

from parent group

ASSETS

Loans and advances to banks – accounts and deposits

1 730 396

2 593

Loans and advances to customers

7 096 973

Investments in associates

572 476

Financial assets valued at fair value through profit and loss (held for

trading)

1 518

Hedging derivatives

Other assets

18 439

LIABILITIES

Deposits from banks

2 919

129

Deposits from customers

391 931

Liabilities from securities sold with buy-back clause

Liabilities arising from debt securities

Financial liabilities valued at fair value through profit and loss (held for

trading)

Subordinated debt

Other liabilities, including:

32 811

420

financial leasing liabilities

23 653

103

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

ASSETS AND LIABILITIES FROM TRANSACTIONS WITH RELATED PARTIES (DATA IN ‘000 PLN)

AS AT 31.12.2024

With

subsidiaries

With parent

company

With other entities

from parent group

ASSETS

Loans and advances to banks – accounts and deposits

1 944 076

1 788

Loans and advances to customers

6 863 794

Investments in associates

465 714

Financial assets valued at fair value through profit and loss (held for

trading)

1 249

Hedging derivatives

Other assets

17 835

LIABILITIES

Deposits from banks

6 803

121

Deposits from customers

385 388

Liabilities from securities sold with buy-back clause

Liabilities arising from debt securities

Financial liabilities valued at fair value through profit and loss (held for

trading)

652

Subordinated debt

Other liabilities, including:

33 908

234

financial leasing liabilities

27 074

PROFIT AND LOSS ON TRANSACTIONS WITH RELATED PARTIES (DATA IN ‘000 PLN) FOR THE

PERIOD OF 1.01-31.12.2025

With

subsidiaries

With parent

company

With other entities

from parent group

Income from:

Interest

466 350

2 383

Commissions

40 440

292

Financial assets and liabilities not measured at fair value through

profit or loss

3 930

Financial instruments valued at fair value through other

comprehensive income

851

Dividends

31 495

Other net operating

45 633

Expense from:

Interest

14 823

945

Commissions

Financial instruments held for trading

Other net operating

General and administrative expenses

17 653

186

104

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

PROFIT AND LOSS ON TRANSACTIONS WITH RELATED PARTIES (DATA IN ‘000 PLN) FOR THE

PERIOD OF 1.01-31.12.2024

With

subsidiaries

With parent

company

With other entities

from parent group

Income from:

Interest

461 443

5 398

Commissions

30 632

209

Financial instruments held for trading

689

1 224

Dividends

26 618

Other net operating

27 788

Expense from:

Interest

11 910

Commissions

Financial assets and liabilities not measured at fair value through

profit or loss

8 771

Financial instruments held for trading

Other net operating

General and administrative expenses

14 449

185

OFF-BALANCE TRANSACTIONS WITH RELATED PARTIES (DATA IN ‘000 PLN) AS AT 31.12.2025

With

subsidiaries

With parent

company

With other entities

from parent group

Conditional commitments

3 597 470

34 816

granted

3 278 446

obtained

319 024

34 816

Derivatives (par value)

209 002

OFF-BALANCE TRANSACTIONS WITH RELATED PARTIES (DATA IN ‘000 PLN) AS AT 31.12.2024

With

subsidiaries

With parent

company

With other entities

from parent group

Conditional commitments

1 744 559

24 680

granted

1 428 155

obtained

316 404

24 680

Derivatives (par value)

180 379

The Bank receives counter-guarantees from the parent entity as collateral for locally issued guarantees.

105

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

9.2. TRANSACTIONS WITH THE MANAGING AND SUPERVISING

PERSONS

Information on total exposure towards the Bank’s managing and supervising persons as at 31.12.2025

(in ‘000 PLN):

The managing persons

The supervising persons

Total debt limit

including an unutilized limit

189

163

The Bank provides standard financial services to Members of the Management Board and Members of

the Supervisory Board and their relatives, which services comprise i.a.: keeping bank accounts,

accepting deposits or sale of financial instruments. In the Bank’s opinion these transactions are

concluded on market terms and conditions. In accordance with the credit lending policy adopted in the

Bank, term credits described in this section have appropriate collateral to mitigate its credit risk

exposure.

Information on total exposure towards the managing and supervising persons as at 31.12.2024 (in ‘000

PLN):

The managing persons

The supervising persons

Total debt limit

including an unutilized limit

261

179

108

9.3. INFORMATION ON COMPENSATIONS AND BENEFITS OF THE

PERSONS SUPERVISING AND MANAGING THE BANK

The Bank’s Profit and Loss Account was charged with costs of remuneration and benefits for

management personnel, as presented in the table below (in PLN thousand):

Year

Remuneration

Benefits

Total

2025

14 259

2 725

16 984

2024

12 075

2 345

14 420

The benefits are mainly the costs of medical care, PPK contributions, and cost of an accommodation of

the foreign members of the Management Board. The values presented in the table above include items

classified to the category of short-term benefits. Additionally, in 2025 the Bank’s costs were charged

with provisions for variable components of remuneration (bonuses, awards) created in the amount of

PLN 27,036 thousand (for 2024, respectively PLN 12,000 thousand).

In 2025, current and former Management Board members were paid bonuses for 2021, 2022, and 2023

in the amount of PLN 5,617 thous. after a one-year retention period in phantom shares.

Additionally, in 2025, current and former Management Board members, serving until March 27, 2025,

were paid bonuses for 2021, 2022, 2023, and 2024 in the amount of PLN 9,534 thous. including PLN

5,330 thous. in treasury shares with a one-year retention period.

In 2025 and 2024, the Members of the Management Board did not receive any salaries or any fringe

benefits from Subsidiaries.

106

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Remuneration of the Members of the Supervisory Board of the Bank (data in thousand PLN):

Year

Short term salaries and benefits

2025

2 859

2024

2 251

None of the members of the Bank’s Supervisory Board holding office as at 31 December 2025 received

remuneration from Subsidiaries. In 2024 the Members of the Bank's Supervisory Board received

remuneration for performing their functions in subsidiaries in the amount of PLN 140.0 thousand.

107

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

10. Fair Value

The best reflection of fair value of financial instruments is the price which can be obtained for the sale

of assets or paid for the transfer of liability in case of market transactions (an exit price). For many

products and transactions for which market value to be taken directly from the quotations in an active

market (marking-to-market) is not available, the fair value must be estimated using internal models

based on discounted cash flows (marking-to-model). Financial cash flows for the various instruments

are determined according to their individual characteristics, and discounting factors include changes in

time both in market interest rates and margins.

According to IFRS 13 “Fair value measurement” in order to determinate fair value the Bank applies

models that are appropriate under existing circumstances and for which sufficient input data is available,

based to the maximum extent on observable input whereas minimizing use of unobservable input,

namely:

Level 1 - valuation based on the data fully observable (active market quotations);

Level 2 - valuation models using the information not constituting the data from level 1, but observable,

either directly or indirectly;

Level 3 - valuation models using unobservable data (not derived from an active market).

Valuation techniques used to determine fair value are applied consistently. Change in valuation

techniques resulting in a transfer between these methods occurs when:

▪ transfer from Level 1 to 2 takes place when for the financial instruments measured according to

Level 1 quoted market prices from an active market are not available at the balance sheet day

(whereas previously used to be);

▪ transfer from Level 2 to 3 takes place when for the financial instruments measured according to

the Level 2 value of parameters not derived from the market has become significant at the

balance sheet day (whereas previously used to be irrelevant).

The Bank recognizes transfers between valuation levels at the end of the reporting period.

Financial instruments not recognized at fair value in the balance sheet

All estimation models are arbitrary to some extent and this is why they reflect only the value of those

instruments for which they were built. Fair value of these instruments is determined solely in order to

meet the disclosure requirements of IFRS 13 and IFRS 7.

The main assumptions and methods applied in estimating fair value of assets and liabilities of the Bank

are as follows:

Receivables and liabilities with respect to banks

The fair value of these instruments was determined by discounting the future principal and interest flows

with current rates, assuming that the flows arise on contractual dates.

Loans and advances granted to customers valued at amortised cost

The fair value of such instruments without specified repayment schedule, given their short-term nature

and the time-stable policy of the Group with respect to this portfolio, is close to balance-sheet value.

The fair value of instruments with defined maturity is estimated by discounting related cash flows on

contractual dates and under contractual conditions with the use of current zero-coupon rates and credit

risk margins.

108

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

In case of mortgage loans due to their long-term nature estimation of the future cash flows also includes:

the effect of early repayment and liquidity risk in foreign currencies.

Debt securities valued at amortised cost

The fair value of debt securities measured at amortized cost (mainly treasury bonds issued by domestic

and foreign governments, classified in the Held to Collect portfolio) was calculated on the basis of market

quotations.

Liabilities to customers

The fair value of such instruments without maturity or with maturity under 30 days is considered by the

Bank to be close to balance-sheet value.

The fair value of instruments with a maturity of more than 30 days was determined by discounting future

principal and interest cash flows (including the original average margins by major currencies and time

buckets) at current interest rates (including current average margins by major currencies and time

buckets) over the contractual terms.

Subordinated liabilities, debt securities issued and medium-term loans

The fair value of these financial instruments is estimated on the basis of a model used for determining

the market value of floating-rate bonds with the current level of market rates and historical margin for

credit risk and in the case of fixed-rate coupon bonds, by discounting cash flows at the current level of

market rates and the original credit risk margin. Similar as in loan portfolio the Bank includes the level

of the original margin as a part of mid-term cost of financing obtained in the past in relation to the current

margin level for the comparable instruments, as long as reliable assessment is possible.

The table below presents data as at 31.12.2025 (data in PLN thousand):

Note

Balance sheet value

Fair value

ASSETS MEASURED AT AMORTISED COST

Debt securities

26 659 465

27 157 044

Deposits, loans and advances to banks and other monetary

institutions

2 081 137

2 081 265

Loans and advances to customers

62 463 231

61 719 933

LIABILITIES MEASURED AT AMORTISED COST

Liabilities to banks and other monetary institutions

105 702

Liabilities to customers

131 199 422

131 224 713

Debt securities issued

4 802 952

4 805 810

Subordinated debt

1 557 687

1 557 086

The fair value of debt securities measured at amortized cost for which market quotations are available

is determined based on them and, as a result, these assets are classified in the first valuation category

(with a carrying amount of PLN 26,628,350 thous. as at 31.12.2025 and PLN 24,022,125 thous. as at

31.12.2024). The models used to determine the fair value of the other financial instruments listed in the

above table that are not recognized at fair value in the Bank's balance sheet use valuation techniques

based on parameters that are not derived from the market. Therefore, they are classified in the third

valuation category.

The Bank also has assets measured at amortized cost, the carrying amount of which corresponds to

fair value, in particular these are components of "Other assets" classified as other financial assets.

109

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The table below presents data as at 31.12.2024 (data in PLN thousand):

Note

Balance sheet value

Fair value

ASSETS MEASURED AT AMORTISED COST

Debt securities

24 059 861

24 169 924

Deposits, loans and advances to banks and other monetary

institutions

2 378 592

2 378 379

Loans and advances to customers

60 683 086

60 151 860

LIABILITIES MEASURED AT AMORTISED COST

Liabilities to banks and other monetary institutions

210 931

Liabilities to customers

117 642 600

117 637 152

Debt securities issued

5 030 166

5 035 868

Subordinated debt

1 562 330

1 563 653

Financial instruments recognized at fair value in the balance sheet

The table below presents balance-sheet values of instruments measured at fair value, by applied fair

value measurement technique:

Data in PLN‘000, as at 31.12.2025

Note

Quoted market

prices

Valuation

techniques -

observable inputs

Valuation

techniques -

significant

unobservable

inputs

Level 1

Level 2

Level 3

ASSETS

Financial assets held for trading

Valuation of derivatives

60 712

96 115

Equity instruments

252

Debt securities

824 911

Transactions with repurchase agreements

38 946

Non-trading financial assets mandatorily at fair value

through profit or loss

Equity instruments

155 652

Debt securities

20 655

Loans and advances

745

Financial assets at fair value through other

comprehensive income

Equity instruments

684

40 255

Debt securities

31 931 022

10 295 426

Loans and advances

9 438 459

Derivatives – Hedge accounting

LIABILITIES

Financial liabilities held for trading

Valuation of derivatives

111 656

96 984

Short positions

37 788

Derivatives – Hedge accounting

24 735

110

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Data in ‘000 PLN, as at 31.12.2024

Note

Quoted market

prices

Valuation

techniques -

observable inputs

Valuation

techniques -

significant

unobservable

inputs

Level 1

Level 2

Level 3

ASSETS

Financial assets held for trading

Valuation of derivatives

74 570

182 524

Equity instruments

115

Debt securities

555 364

Transactions with repurchase agreements

194 218

Non-trading financial assets mandatorily at fair value

through profit or loss

Equity instruments

66 609

Debt securities

51 790

Loans and advances

1 825

Financial assets at fair value through other

comprehensive income

Equity instruments

481

36 227

Debt securities

20 389 685

8 597 254

Loans and advances

11 135 416

Derivatives – Hedge accounting

112 365

LIABILITIES

Financial liabilities held for trading

Valuation of derivatives

40 758

185 991

Short positions

190 769

Derivatives – Hedge accounting

107 439

Using the criterion of valuation techniques as at 31.12.2025 Bank classified into the third category

following financial instruments:

▪ The portfolio of PLN‑denominated mortgage loans that will be subject to future sale (pooling) to

the Mortgage Bank (measured at fair value through other comprehensive income). The fair

value of a loan is calculated as the sum of discounted cash flows arising from principal and

interest payments: i) for loans, the starting point for determining the forecasted cash flows

(interest and principal instalments) is the contractual repayment schedule of principal and

interest ii) the calculation of the discount rate used to estimate the value of the cash flows takes

into account: the WIBOR reference rate, a calibration margin determined on the basis of the

most recent production of a mortgage loan portfolio comparable to the portfolio being valued,

the credit risk cost of the valued portfolio, and the percentage prepayment adjustment factor.

▪ credit exposures with a leverage / multiplier feature inbuilt in the definition of interest rate (these

are credit card exposures and overdraft limits for which the interest rate is based on a multiplier:

4 times the lombard rate).

111

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

▪ index options, option transactions are measured at fair value with use of option measurement

models, the model measurement is supplemented with impact on fair value of the estimated

credit risk parameter;

▪ VISA Inc. engagement shares; the method of fair value calculation of this instrument considers

the time value of money and the time line for conversion of preferred stock in common stock of

VISA.

▪ other equity instruments measured at fair value (unquoted on an active market). In particular,

the Bank holds a block of shares in an entity classified in the category “measured at fair value

through profit or loss.” for which in 2025 the Bank changed the valuation technique and applied

the valuation based on a combination of several fair value measurement techniques, including

the discounted cash flow (DCF) method, the market comparison method, and an approach

based on implied market multiples using P/E and P/BV variants. Given that these shares are

not traded on an active market and do not provide the ability to exercise control over the entity,

the valuation model incorporates an appropriate discount reflecting the limited capacity to

influence the entity and the lower liquidity. This discount is characterized by significant sensitivity

to the parameters and assumptions applied. The valuation effect recognized in the 2025 Profit

or Loss Statement amounted to PLN 89 million. Due to the use of significant unobservable

inputs and the nature of the applied techniques, the valuation has been classified within Level

3 of the fair value hierarchy.

In the reporting period, the Bank did not make transfers of financial instruments between the techniques

of fair value measurement.

Changes of fair values of instruments measured on the basis of valuation techniques with use of

significant parameters not derived from the market are presented in the table below (in ’000 PLN):

Indexes

options

Options

embedded in

securities issued

and deposits

Debt

securities

Loans and

advances

FVP&L

Loans and

advances

FVOCI

Balance as at 31.12.2024

178 195

(181 662)

102 836

51 790

1 825

11 135 416

Settlement/sell/purchase/transfer

(86 701)

83 705

(34 004)

(2 725)

(2 555 570)

Change of valuation recognized in

equity

4 033

273 399

Interest income and other of similar

nature

1 064

585 214

Results on financial assets and

liabilities held for trading

2 781

2 813

Result on non-trading financial

assets mandatorily at fair value

through profit or loss

123 045

(31 135)

581

Result on exchange differences

(3)

Balance as at 31.12.2025

94 275

(95 144)

195 907

20 655

745

9 438 459

For options on indexes concluded on an inactive market, and FX options the Bank concludes back-to-

back transactions on the interbank market, in result estimated credit risk component has no impact on

the financial result.

Accordingly Bank’s estimation impact of adjustments for counterparty credit risk was not significant from

the point of view of individual derivative transactions concluded by the Bank. Consequently, the Bank

does not consider the impact of unobservable inputs used in the valuation of derivative transactions for

significant and in accordance with the provisions of IFRS 13.73 does not classify such transactions for

level 3 fair value measurements.

112

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Indexes

options

Options

embedded in

securities issued

and deposits

Debt

securities

Loans and

advances

FVP&L

Loans and

advances

FVOCI

Balance as at 31.12.2023

405 612

(414 200)

95 151

81 014

19 349

11 799 748

Settlement/sell/purchase/transfer

(248 040)

251 045

(46 959)

(21 554)

(1 298 422)

Change of valuation recognized in

equity

7 847

(160 097)

Interest income and other of similar

nature

3 285

794 187

Results on financial assets and

liabilities held for trading

20 623

(18 507)

Result on non-trading financial

assets mandatorily at fair value

through profit or loss

46 803

(29 224)

745

Result on exchange differences

(6)

Balance as at 31.12.2024

178 195

(181 662)

102 836

51 790

1 825

11 135 416

113

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

11. Contingent Liabilities and Assets

11.1. LAWSUITS AND SIGNIFICANT PROCEEDINGS

Below please find the data on the court cases pending, brought up by and against entities of the Bank.

Court cases brought up by the Bank

Value of the court litigations, as at 31.12.2025, in which the Bank was a plaintiff, totaled PLN 3,489.0

million (PLN 4,112.4 million as at 31.12.2024).

Proceedings on infringement of collective consumer interests

On January 3 2018, the Bank received a decision of the Chairman of the Office for Protection of

Competition and Consumers (OPCC Chairman), in which the OPCC Chairman found infringement by

the Bank of the rights of consumers. In the opinion of the OPCC Chairman the essence of the violation

is that the Bank informed consumers (it regards 78 agreements) in responses to their complaints, that

the court verdict stating the abusiveness of the provisions of the loan agreement regarding exchange

rates does not apply to them. According to the position of the OPCC Chairman the abusiveness of

contract’s clauses determined by the court in the course of abstract control is constitutive and effective

for every contract from the beginning. As a result of the decision, the Bank was obliged to:

1) send information on the UOKiK’s decision to the said 78 clients,

2) place the information on decision and the decision itself on the website and on Twitter,

3) to pay a fine amounting to PLN 20.7 mln.

The Bank lodged an appeal within the statutory time limit.

On January 7, 2020, the first instance court dismissed the Bank's appeal in its entirety. The Bank

appealed against the judgment within the statutory deadline. The court presented the view that the

judgment issued in the course of the control of a contractual template (in the course of an abstract

control), recognizing the provisions of the template as abusive, determines the abusiveness of similar

provisions in previously concluded contracts. Therefore, the information provided to consumers was

incorrect and misleading. As regards the penalty imposed by OPCC, the court pointed out that the policy

of imposing penalties by the Office had changed in the direction of tightening penalties and that the court

agrees with this direction.

In the Bank's assessment, the Court should not assess the Bank's behaviour in 2015 from the

perspective of today's case-law views on the importance of abstract control (it was not until January

2016 that the Supreme Court's resolution supporting the view of the OPCC Chairman was published),

the more penalties for these behaviours should not be imposed using current policy. The above

constitutes a significant argument against the validity of the judgment and supports the appeal which

the Bank submitted to the Court of second instance.

The second instance court, in its judgment of February 24, 2022, completely revoked the decision of the

OPCC Chairman. On August 31, 2022, the OPCC Chairman lodged a cassation appeal to the Supreme

Court. On July 3, 2024, the Supreme Court issued a decision accepting the cassation appeal for

consideration.

The Bank believes that the prognosis regarding the litigation chances of winning the case before the

Supreme Court is positive and therefore no provision has been recognized.

114

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Proceedings on competition-restricting practice

The Bank (along with other banks) is also a party to the dispute with OPCC, in which the OPCC

Chairman recognized the practice of participating banks, including Bank Millennium, in an agreement

aimed at jointly setting interchange fee rates charged on transactions made with Visa and Mastercard

cards as restrictive of competition, and by decision of 29 December 2006 imposed a fine on the Bank in

the amount of PLN 12.2 million. The Bank, along with other banks, appealed the decision.

In connection with the judgment of the Supreme Court and the judgment of the Court of Appeal in

Warsaw of November 23, 2020, the case is currently pending before the court of first instance - the

Court of Competition and Consumer Protection.

The Bank has created a provision in the amount equal to the imposed penalty.

Court cases against the Bank

As at 31.12.2025, the most important proceedings, in the group of the court cases where the Bank was

defendant, were following:

- The Bank is a defendant in two court proceedings, in which the subject of the dispute is the amount of

the interchange fee. The total value of claims reported in these cases is PLN 729.2 million. The

procedure with the highest value of the reported claim is the case is brought by PKN Orlen SA, the

plaintiff demands payment of PLN 635.7 million. The plaintiff in this proceeding alleges that the banks

acted under an agreement restricting competition on the acquiring services market by jointly setting the

level of the national interchange fee in the years 2006-2014. In this case, the Bank was sued jointly with

another bank and card organizations. On 19 December 2025, the District Court in Warsaw dismissed in

full the claims of PKN Orlen S.A. The judgment is not final. In the case brought by LPP S.A. the

allegations are similar to those raised in the case brought by PKN Orlen SA, while the period of the

alleged agreement is indicated as 2008-2014. In this case, the Bank is sued jointly and severally with

another bank. The case was resolved positively for the Bank by the courts of both instances, and is

currently at the stage of a cassation appeal filed by LPP S.A. The Supreme Court did not issue a decision

regarding the acceptance of the cassation appeal for consideration. According to current estimates of

the risk of losing a dispute in these matters, the Bank did not create a provision. In addition, we point

out that the Bank participates as a side intervener in three other proceedings regarding the interchange

fee. Other banks are the defendant. Plaintiffs in these cases also accuse banks of acting as part of an

agreement restricting competition on the acquiring services market by jointly setting the level of the

national interchange fee in the years 2008-2014.

The Bank believes that the prognosis regarding the litigation chances of winning the case is positive and

therefore no provision has been recognized.

- A lawsuit brought up by shareholder of PCZ S.A. in bankruptcy (PHM, then the European Foundation

for Polish-Belgian Cooperation - EFWP-B, currently called The European Foundation for Polish-Kenyan

Cooperation) against Bank Millennium S.A., worth of the dispute 521.9 million PLN with statutory interest

from 05.04.2016 until the day of payment. The plaintiff filed the suit dated 23.10.2015 to the Regional

Court in Warsaw; the suit was served to the Bank on 04.04.2016. According to the plaintiff, the basis

for the claim is damage to their assets, due to the actions taken by the Bank and consisting in the wrong

interpretation of the Agreement for working capital loan concluded between the Bank and PCZ S.A.,

which resulted in placing the loan on demand. The Bank is requesting complete dismissal of the suit,

stating disagreement with the charges raised in the claim. Supporting the position of the Bank, the

Bank’s attorney submitted a binding copy of final verdict of Appeal Court in Wrocław favourable to the

Bank, issued in the same legal state in the action brought by PCZ SA against the Bank. On May 10,

2023, the Court of First Instance announced a judgment dismissing the claim in its entirety. The verdict

is not final, the plaintiff filed an appeal.

115

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

On May 6, 2024, the Bank's representative submitted a response to the appeal, requesting that it be

dismissed in its entirety as unfounded. On December 17, 2024, the Court of Appeal in Warsaw issued

a judgment favorable to the Bank, dismissing the Plaintiff's appeal. The judgment is final. The Bank has

been served with the Plaintiff’s cassation complaint and has submitted a formal response. On 19

December 2025, the cassation appeal was admitted for consideration..

The Bank believes that the prognosis regarding the litigation chances of winning the case is positive and

therefore no provision has been recognized.

The class action related to the LTV insurance :

On the 3 of December 2015 a class action was served on the Bank. A group of the Bank's debtors

(initially covering 454 borrowers party to 275 loan agreements) is represented by the Municipal

Consumer Ombudsman in Olsztyn. The plaintiffs demanded payment of the amount of PLN 3.5 million,

claiming that the clauses of the agreements, pertaining to the low down payment insurance, are unfair

and thus not binding. Plaintiff extended the group in the court letter filed on the 4th of April 2018,

therefore the claims increased from PLN 3.5 million to over PLN 5 million.

On the 1 of October 2018, the group's representative corrected the total amount of claims pursued in

the proceedings and submitted a revised list of all group members, covering the total of 697 borrowers

– 432 loan agreements. The value of the subject of the dispute, as updated by the claimant, is PLN

7,371,107.94.

By the resolution of 1 April 2020 the court established the composition of the group as per request of

the plaintiff and decided to take witness evidence in writing. On 18.10.2024, the Court adjourned the

hearing without setting a new date. The court decided to disregard the evidence from the hearing of the

parties and obliged the parties to submit documents - agreements concluded between the group

members and the Bank and final judgments regarding the agreements in question. The court adjourned

the hearing without specifying a new date. The Bank submitted the above-mentioned documents in a

letter dated December 17, 2024, while the group representative, in performance of the obligation,

submitted two letters containing documents confirming the legitimacy of individual group members. The

court obliged the Bank to submit a position in response to the letters of the group representative. The

obligation has been fulfilled.

The Bank has recognized a provision for this case in the amount resulting from the expected cash

outflow - PLN 4.4 million.

As at 31 December 2025, there were also 66 individual court cases regarding LTV insurance (cases in

which only a claim for the reimbursement of the commission or LTV insurance fee is presented).

For cases in which, in the Bank’s assessment, the probability of losing the dispute is higher than that of

winning it, provisions are created in an amount resulting from the expected cash outflows.

Lawsuits filed by Financial Ombudsman for discontinuation of unfair market practices

On 13 August 2020 the Bank received lawsuit from the Financial Ombudsman. The Financial

Ombudsman, in the lawsuit, demands that the Bank and the Insurer Towarzystwo Ubezpieczeń Europa

S.A. be ordered to discontinue performing unfair market practices involving, as follows:

- presenting the offered loan repayment insurance as protecting interests of the insured in case when

insurance structure indicates that it protects the Bank’s interests;

- use of clauses linking the value of insurance benefit with the amount of borrower’s debt;

- use of clauses determining the amount of insurance premium without prior risk assessment

(underwriting);

- use of clauses excluding insurer’s liability for insurance accidents resulting from earlier causes.

116

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Furthermore, the Ombudsman requires the Bank to be ordered to publish, on its web site, information

on use of unfair market practices.

The lawsuit does not include any demand for payment, by the Bank, of any specified amounts.

Nonetheless, if the practice is deemed to be abusive it may constitute grounds for future claims to be

filed by individual clients.

The case is being examined by the court of first instance.

The Bank believes that the prognosis regarding the litigation chances of winning the case is positive and

therefore no provision has been recognized.

Court cases concerning the free loan sanction (within the meaning of the Consumer Credit Act)

By December 31, 2025, the Bank received 2,355 lawsuits in which the plaintiffs (both clients and

companies purchasing claims), alleging violation of the information obligations and demanding

reimbursement of interest and other costs incurred in connection with taking out a loan.

As of December 31, 2025, 373 cases have been legally concluded, in 332 cases the Bank won the

dispute and lost in 41 cases. Disputes in the above respect are subject to constant observation and

analysis. In the cases in question, the Bank makes an individual assessment of the litigation chances in

each of the court cases, which is justified by the lack of a uniform line of jurisprudence. For cases in

which, in the Bank’s assessment, the probability of losing the dispute is higher than that of winning it,

provisions are created in an amount resulting from the expected cash outflow.

The case-law of the Court of Justice of the European Union, which interprets the provisions relating to

the objections raised in national judicial proceedings, plays an important role in shaping the line of

jurisprudence.

On 13 February 2025, the Court of Justice of the European Union issued a judgment in a case registered

under the reference number C472/23 as a result of an application filed by the District Court for the

Capital City of Warsaw. In its judgment, the CJEU, interpreting the provisions of Directive 2008/48/EC

of the European Parliament and of the Council of 23 April 2008 on consumer credit agreements, found

that:

(i) the fact that a credit agreement indicates an annual percentage rate which turns out to be inflated

because certain terms of that agreement were subsequently found to be unfair within the meaning of

Article 6(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts and

therefore not binding on the consumer, does not in itself constitute an infringement of the obligation to

provide information laid down in that provision of Directive 2008/48.

(ii) the fact that a credit agreement lists a number of circumstances justifying an increase in the fees

related to the performance of the agreement, without a properly informed and sufficiently observant and

reasonable consumer being able to verify their occurrence or their impact on those fees, constitutes an

infringement of the information obligation laid down in that provision, provided that this indication may

undermine the consumer's ability to assess the extent of his obligation.

(iii) Directive 2008/48 does not preclude national legislation which provides, in the event of a breach of

the obligation to provide for information imposed on the creditor in accordance with Article 10(2) of that

directive, a uniform penalty consisting in depriving the creditor of the right to interest and fees,

irrespective of the individual degree of gravity of such a breach, provided that such breach may

undermine the consumer's ability to assess the extent of his obligation.

117

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Following the judgment of the Tribunal, it is still up to the domestic courts to assess the possibility of

crediting non-interest costs of the loan and to assess compliance with the information obligation

regarding the possibility of changing fees. The CJEU also noted that the right to benefit from the free

loan sanction is updated only if a potential breach of the bank may undermine the consumer's ability to

assess the scope of his liability.

On 9 October 2025, the Court of Justice of the European Union, in case registered under reference

C‑80/24, following a request submitted by the District Court for Warsaw – Śródmieście in Warsaw, while

interpreting the provisions of Directive 2008/48/EC of the European Parliament and of the Council of 23

April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC, as well as

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, held that:

(i) Article 22(2) of Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008

on credit agreements for consumers and repealing Council Directive 87/102/EEC must be interpreted

as meaning that it does not preclude national legislation allowing a consumer to assign to a third party,

who is not a consumer, a claim based on the infringement of a right granted to him under national

provisions implementing that Directive.

(ii) Articles 6(1) and 7(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer

contracts must be interpreted as meaning that a national court is not required to examine of its own

motion the unfair nature of a term in an assignment agreement concluded by a consumer, where the

dispute pending before that court between the assignee company and the trader does not concern that

assignment agreement but rather the consumer’s claim against that trader.

On March 21, 2025, the Financial Stability Committee issued a resolution (No. 79/2025) on the position

regarding the risk associated with the sanction of free credit (SKD). The Committee noted that ‘while the

violations listed in the Consumer Credit Act are of a varied nature and severity, the sanction itself is not

subject to gradation. The inability to moderate sanctions creates a system of incentives to instrumentally

use the benefits of the SKD and to undermine credit agreements, regardless of whether the violation

has economic consequences for the borrower or not’.

On 19 September 2025, the Financial Stability Committee convened. In the communiqué issued

following the meeting, the Committee stated:

’in the context of SKD-related risk, the Committee concluded that the draft Consumer Credit Act

presented for public consultation did not adequately reflect the FSC’s position on the risks associated

with the application of the free credit sanction. The Committee notes that no regulatory measures have

been introduced that sufficiently restrict the scope and possibility of applying this sanction. The

Committee continues to identify areas that may facilitate the misuse of legal provisions intended to

protect consumers.’

Court cases regarding mortgage loans in PLN

By December 31, 2025, the Bank recorded the receipt of 241 lawsuits by borrowers of mortgage loans

in PLN for reimbursement of benefits provided under the loan agreement. Seven final and favourable

rulings for the Bank were issued. The borrowers' allegations focus on the WIBOR ratio as an

incomprehensible, unverifiable element affecting the consumer's liability, as well as the issue of

insufficient information on the effects of variable interest rates provided to the consumer by the bank

before the conclusion of the contract.

On 12 February 2026, the Court of Justice of the European Union issued a judgment in case C-471/24,

which may have great significance for the manner in which national courts examine disputes in the

relevant scope. It appears that this ruling will be invoked by banks in order to strengthen their

argumentation against the allegations formulated against the durability of contractual obligations.

118

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The Court stated that:

1. Article 1(2) of Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (that is that:

contract terms reflecting mandatory statutory or regulatory provisions and the provisions or principles

of international conventions to which the Member States or the Community are parties, in particular

in the field of transport, shall not be subject to the provisions of this Directive), must be interpreted

as meaning that: the exception provided therein does not cover a term of a mortgage loan agreement

providing for a variable interest rate based on a reference index within the meaning of Regulation

(EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as

benchmarks in financial instruments and financial contracts or to measure the performance of

investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No

596/2014, and on a fixed margin, if the statutory or regulatory provisions applicable to such a term

establish only a general framework for determining the interest rate of such agreements while

simultaneously leaving the trader the possibility of determining the contractual reference index or the

fixed margin which may be added to the value of that index.

2. Article 4(2) of Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must be

interpreted as meaning that where a mortgage loan agreement relating to residential property

contains a term providing for a variable interest rate based on a reference index within the meaning

of Regulation 2016/1011, the transparency requirement resulting from that provision does not impose

on the lender specific information obligations relating to the methodology of that index. The

circumstance that the lender fulfilled all information obligations imposed on it by Directive 2014/17/EU

of the European Parliament and of the Council of 4 February 2014 on credit agreements for

consumers relating to residential immovable property and amending Directives 2008/48/EC and

2013/36/EU and Regulation (EU) No 1093/2010, as amended by Regulation 2016/1011, in relation

to such a term, and, in the case of providing additional information, did not present indications that

would give a distorted picture of the said index, may indicate that the lender fulfilled this transparency

requirement with regard to that term.

3. Article 3(1) of Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must be

interpreted as meaning that where a term of a mortgage loan agreement specifies a variable interest

rate based on a reference index within the meaning of Regulation 2016/1011, the following cannot

render that term unfair: first, the lack of informing the consumer of certain specific features of the

contractual reference index, in particular that the methodology of that index provides for the use of

input data not necessarily corresponding to actual transactions, and that the lender is one of the

banks providing data used to determine that index, and second, those specific features themselves,

provided that the said index could be regarded as compliant with that Regulation at the time of

conclusion of that agreement.

On June 29, 2023, The Polish Financial Supervision Authority (KNF) announced that it had assessed

the ability of the WIBOR interest rate reference index to measure the market and economic realities.

The KNF stated that the WIBOR interest rate reference index is capable of measuring the market and

economic realities for which it was established. According to the Commission's assessment, the WIBOR

ratio responds appropriately to changes in liquidity conditions, changes in central bank rates and

economic realities.

On July 26, 2023, the Polish Financial Supervision Authority (PFSA) presented its position on legal and

economic issues related to mortgage loan agreements in Polish currency in which the WIBOR interest

rate reference index is used. This position can be used in court proceedings and can then be treated as

an “amicus curiae” opinion. The Polish Financial Supervision Authority stated that the WIBOR reference

index meets all legal requirements. In the opinion of the Polish Financial Supervision Authority, there

are no grounds to question the credibility and legality of WIBOR, in particular in the context of the use

of this indicator in mortgage loan agreements in the Polish currency.

For cases in which, in the Bank’s assessment, the probability of losing the dispute is higher than that of

winning it, provisions are created in an amount resulting from the expected cash outflows.

119

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Handling of unauthorised transactions

Currently, in connection with the activities of Bank Millennium - as it is the case with the activities of

other banks in Poland - the President of the Office of Competition and Consumer Protection is

conducting proceedings on the use of practices infringing the collective interests of consumers as

regards the so-called "unauthorized transactions". In the opinion of the President of the Office of

Competition and Consumer Protection, in the case of Bank Millennium, such actions include the

following: (i) failure – no later than by the end of the business day after the date of receipt of an

appropriate notification from the consumer regarding the occurrence of an unauthorised payment

transaction – to refund the amount of the unauthorised payment transaction or to restore the debited

payment account to the state that would have existed if the unauthorised payment transaction had not

taken place, despite the lack of justified and duly documented grounds to suspect fraud on the part of

the consumer and informing the authorities appointed to prosecute crimes about this suspicion in writing,

as well as (ii) providing consumers – in the replies to their reports regarding the occurrence of

unauthorized payment transactions – with information about the verification by the payment service

provider of the correct use of the payment instrument by using individual authentication data in a way

suggesting that the Bank's demonstration only that the disputed payment transactions have been

correctly authenticated constitutes at the same time demonstration of the authorization of such a

transaction and excludes its obligation to return the amount of the unauthorized transaction and (iii)

providing consumers – in the replies to their reports regarding the occurrence of unauthorized payment

transactions – with false information about authorization of the transactions questioned by consumers,

while presenting information indicating that the transactions took place as a result of an intentional or

grossly negligent violation by consumers of at least one of the obligations referred to in Article 42 of the

Payment Services Act and in the agreement between the consumer and the bank, as a result of which

they are liable for the questioned payment transactions.

In the course of the proceedings, the Bank provided appropriate explanations and also substantively

referred to the allegations formulated by the President of the Office of Competition and Consumer

Protection. The proceedings have been extended until the end of June 2026.

On 18.04.2025, the Bank filed an application for a binding decision pursuant to Article 28 section 1 of

the Act on Competition and Consumer Protection. The application (proposal) includes all allegations

presented by the UOKiK, i.e. changes in the procedure for handling reports regarding unauthorized

payment transactions, changes in the classification of a given transaction as authorized and changes in

complaint response templates. The application also includes a proposal for "compensation" for

customers whose complaints were rejected. Currently, discussions with the President of the UOKiK

regarding the issuance of a commitment decision are still ongoing.

In connection with the proceedings, the Bank recognized a provision as at the end of December 2025

in the amount of PLN 82 million based on estimated outflow of funds.

As of December 31, 2025, the Bank was a party to 352 court proceedings in which customers questioned

the fact of their authorization of a transaction. In the cases in question, the Bank makes an individual

assessment of the litigation chances in each of the court cases. In cases where, in the Bank's opinion,

there is a greater probability of losing the dispute than winning it, provisions in the amount resulting from

the potential loss of the Bank are created.

120

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Proceedings regarding modification clauses

The Bank is a party to proceedings initiated by the President of UOKiK regarding the recognition of

certain provisions of a contract template as abusive. The proceedings concern modification clauses

indicating the circumstances in which the Bank is entitled to amend the terms and conditions and the

fees and commissions price lists. According to UOKiK, these clauses grant the Bank unlimited discretion

in shaping the content of the contract, which may violate good practice and grossly infringe the interests

of consumers. The Bank challenged the validity of these allegations, indicating that the provisions are

precise and clearly define the conditions for their application. The President of UOKiK extended the

proceedings until 25 June 2026.

The Bank is also a party to proceedings initiated by the President of UOKiK regarding the modification

clauses used by Euro Bank S.A., for which Bank Millennium S.A. is the legal successor. The President

of UOKiK extended these proceedings until 31 August 2026.

As at 31.12.2025, the total value of the subjects of the other litigations in which the Bank appeared as

defendant, stood at PLN 5,058.5 million (PLN 6,186.0 million as at 31.12.2024) excluding the class

actions described in the Chapter 12). In this group the most important category are cases related with

FX loans mortgage portfolio.

FX mortgage loans legal risk

FX mortgage loans legal risk is described in the Chapter 12. “Legal risk related to foreign currency

mortgage loans”.

11.2. OFF-BALANCE ITEMS

Amount ‘000 PLN

31.12.2025

31.12.2024

Commitments granted:

20 028 264

14 869 414

Loan commitments

17 928 105

13 155 721

guarantee

2 100 159

1 713 693

Commitments received:

3 138 078

3 047 096

financial

346

guarantee

3 138 078

3 046 750

The granted conditional commitments presented in the table above comprise commitments to grant

credit (such as: unutilised credit card limits, unutilised current account overdraft facilities, unutilised

tranches of investment loans) and issued guarantees and Letters of Credit (securing performance by

customers of the Bank of their obligations to third parties). The value of above-presented guarantee

commitments presents the maximum value of a loss, which may be incurred by the Bank, should the

customers default on their obligations. The Bank creates provisions for impaired irrevocable conditional

commitments, reported in the “provisions” item under liabilities in the balance-sheet. The provision value

is determined as the difference between the estimated amount of utilised conditional exposure and the

present value of expected future cash flows under this credit exposure. In this context, the Bank

considers that the values presented in the above table are similar to the fair value of contingent liabilities.

121

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The breakdown by entity of all net guarantee liabilities granted, reported in off-balance sheet items is

presented in the table below:

Customer – sector, amount ‘000 PLN

31.12.2025

31.12.2024

financial sector

176 580

142 080

non-financial sector (companies)

1 923 579

1 571 598

public sector

Total

2 100 159

1 713 693

As the parent company, the Bank granted subsidiaries lines for guarantees with a total value of PLN

23.4 million as at December 31, 2025. In addition, the Bank provided guarantees and sureties to external

entities on behalf of Group’s companies. The total value of guarantee obligations from the above titles

is presented in the table:

Subordinated company, amount ‘000 PLN

31.12.2025

31.12.2024

Millennium Leasing Sp. z o.o.

20 000

Millennium Service Sp. z o.o.

830

1 813

Millennium Goodie Sp. z o.o.

3 000

5 000

Total

23 830

26 813

Guarantees and sureties granted to Clients

Commitments granted – guarantee, amount ‘000 PLN

31.12.2025

31.12.2024

Active guarantees and sureties

1 088 154

1 026 288

Lines for guarantees and sureties

1 016 407

690 978

Total

2 104 561

1 717 266

Provisions created

(4 402)

(3 572)

Commitments granted – guarantee after provisions

2 100 159

1 713 693

The structure of liabilities under active guarantees and sureties divided by particular criteria are

presented by the tables below (PLN’000):

By currency

31.12.2025

31.12.2024

PLN

805 370

750 333

Other currencies

282 784

275 955

Total:

1 088 154

1 026 288

By type of commitment

31.12.2025

31.12.2024

Number

Amount

Number

Amount

Guarantee

3 325

1 051 734

3 242

1 006 910

Surety

Re-guarantee

36 420

19 378

Total:

3 416

1 088 154

3 319

1 026 288

By object of the commitment

31.12.2025

31.12.2024

Number

Amount

% share

Number

Amount

% share

good performance of contract

2 824

558 041

51.28%

2 747

542 308

52.84%

punctual payment for goods or services

194

291 887

26.84%

223

257 016

25.05%

bid bond

23 224

2.13%

21 484

2.09%

rent payment

148

86 008

7.90%

153

87 778

8.55%

advance return

72 509

6.66%

60 039

5.85%

customs

25 502

2.34%

17 731

1.73%

payment of bank loan

7 597

0.70%

7 017

0.68%

other

23 386

2.15%

32 915

3.21%

Total:

3 416

1 088 154

100.00%

3 319

1 026 288

100.00%

122

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

12. Legal risk related to foreign currency mortgage

loans

On December 31, 2025, the Bank had 16,653 loan agreements and additionally 2,285 loan agreements

from former Euro Bank under individual ongoing litigations (excluding claims submitted by the Bank

against clients i.e. debt collection cases) concerning indexation clauses of FX mortgage loans submitted

to the courts (43% loans agreements before the courts of first instance and 57% loans agreements

before the courts of second instance) with the total value of claims filed by the plaintiffs amounting to

PLN 3,551.2 million and CHF 293.2 million (Bank Millennium portfolio: PLN 3,057.8 million and CHF

281.4 million and former Euro Bank portfolio: PLN 493.4 million and CHF 11.8 million). The original

value of the portfolio of CHF agreements granted (the sum of tranches paid to customers), taking into

account the exchange rate as at the date of disbursement of loan tranches, amounted to PLN 19.4 billion

for 109.0 thousand loan agreements (Bank Millennium portfolio: PLN 18.3 billion for 103.8 thousand

loan agreements and former Euro Bank portfolio: PLN 1.1 billion for 5.2 thousand loan agreements).

Out of 16,653 BM loan agreements in ongoing individual cases 426 are also part of class action. From

the total number of individual litigations against the Bank approximately 4,380 or 26% were submitted

by borrowers that did not have any active loans with a CHF balance at the moment of submission.

Approximately another 1,170 cases correspond to loans that were fully repaid during the proceedings

(as court proceedings are lengthy).

The claims formulated by the clients in individual proceedings primarily concern the declaration of

invalidity of the contract and payment for reimbursement of paid principal and interest instalments as

undue performance, due to the abusive nature of indexation clauses, or maintenance of the agreement

in PLN with interest rate indexed to CHF Libor (currently CHF Saron).

In addition, the Bank is a party to the group proceedings (class action) subject matter of which is to

determine the Bank's liability towards the group members based on unjust enrichment (undue benefit)

ground in connection with the foreign currency mortgage loans concluded. It is not a payment dispute.

The judgment in these proceedings will not directly grant any amounts to the group members. The

number of credit agreements currently covered by these proceedings is 1,389. Out of 1,389 loan

agreements in class action 426 are also part of ongoing individual cases, 27 concluded settlements and

15 received final verdicts (invalidation of loan agreement). On 24 May 2022 the court issued a judgment

on the merits, dismissing the claim in full. On 13 December 2022 the claimant filed an appeal against

the judgment of 24 May 2022. On 25 June 2024 an appeal hearing was held, at which the Bank filed a

motion to amend the composition of the group and exclude those group members who had entered into

an amicable settlement. The court required the plaintiffs' attorneys to take a written position on the

current composition of the group. On January 31, 2025, and then on: March 25, 2025, May 8, 2025,

June 6, 2025, July 30, 2025, September 1, 2025, October 6, 2025, November 24, 2025, December 15,

2025 and January 13, 2026, the court issued orders setting aside the judgment and discontinuing the

proceedings from the persons who entered into amicable settlements. On January 19, 2026, another

appellate hearing took place, during which the Court obliged both the claimant and the Bank to further

specify the composition of the group. The next hearing date will be scheduled ex officio. Based on these

orders, the number of credit agreements covered by the class action dropped from 3,273 to 1,389.

Until the end of 2019, 1,980 individual claims were filed against the Bank (in addition, 235 against former

Euro Bank), in 2020 3,002 (265), in 2021 6,151 (421), in 2022 5,754 (407), in 2023 6,864 (645), in 2024

5,838 (655) in 2025 3,712 (427).

123

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

As far as Bank Millennium (incl. former Euro Bank portfolio) is concerned, from 2015 until the end of

2025, 17,730 cases were finally resolved (17,593 in claims submitted by clients against the Bank and

137 in claims submitted by the Bank against clients i.e. debt collection cases) out of which 5,488 were

settlements, 136 were remissions, 89 rulings were favourable for the Bank and 12,017 were

unfavourable including both invalidation of loan agreements as well as conversions into PLN+LIBOR

(currently Saron). The Bank undertakes proper legal actions in order to secure repayment of initially

disbursed capital of the loan.

The methodology developed by the Bank of calculating provisions for legal risk involved with indexed

loans is based on the following main parameters:

(i) the number of ongoing cases (including class action agreements);

(ii) the number of potential future court cases: the Bank monitors customer behaviors, analyzes their

willingness to sue the Bank, including due to economic factors and applies the following

assumptions:

a. regarding active loans (i.e., loans with an outstanding balance), the Bank estimates that

approximately 18% of them will neither sign an out-of-court settlement nor decide to file a

lawsuit;

b. regarding loans already fully repaid or converted to polish zloty, the Bank anticipates that

approximately 4,7 thousand repaid loans — those which were not previously subject to a

settlement — may result in future litigation initiated by the borrowers.

The impact on the level of provisions of a change by 100 clients (assuming recent inflow structure)

would be around PLN 14,4 million.

(iii) the amount of the Bank's potential loss in the event of a specific court judgment (including statutory

interest estimation significantly dependent on the period for which they are awarded);

(iv) estimates involved with amicable settlements with clients, concluded in court or out of court.

As a result of negotiations, the number of active FX mortgage loans originated by Bank Millennium

decreased by 30,369. As of the end of 2025, the Bank had 14,741 active FX mortgage loans.

The costs of provisions created for legal risk related to foreign-currency mortgage loans are presented

in Note 14 in the section Additional explanatory notes, while the legal risk of the former Euro Bank

portfolio is fully covered by Indemnity Agreement with Société Générale S.A.(see Note 9 in the section

Additional explanatory notes).

Over the past years, the Court of Justice of the European Union (CJEU) has interpreted a number of

legal issues concerning disputes in the area of foreign currency housing loan agreements. As a result

of these actions, the legal assessments of national courts regarding claims submitted by borrowers have

been significantly unified. The established line of case law is generally favorable to consumers, and the

legal arguments put forward by banks, including those referring to principles of fairness, are taken into

account only to a limited extent.

It can reasonably be assumed that the legal issues relating to foreign currency mortgage loans will be

further examined by the domestic courts and the European Court of Justice which could potentially result

in the further interpretations, that are relevant for the assessing of the risks associated with proceedings.

The issues related to the statute of limitations for the Bank's and the customer's restitutionary claims

following the invalidation of a loan agreement remain an area that may be subject to further analysis in

the jurisprudence of Polish courts. Legal interpretations in this subject may have an impact for the

amount of provisions in the future.

124

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

There is a need for constant analysis of these matters. The Bank will have to regularly review and may

need to continue to create additional provisions for FX mortgage legal risk, taking into consideration not

only the above mentioned developments, but also the negative verdicts in the courts regarding FX

mortgage loans and important parameters, such as the number of new customer claims, including those

relating to repaid loan agreements.

On October 2, 2025 The Council of Ministers adopted a draft act on special solutions for the examination

of cases concerning loan agreements denominated or indexed to the Swiss franc and referred it to the

Parliament. The first reading of the draft act took place on October 16, 2025. The draft was referred for

further parliamentary work.

The bill aims to create new regulations enabling courts to consider Swiss franc cases faster and more

effectively. Its primary task is to relieve the judiciary, by accelerating the examination of Swiss franc

cases.

At present, the Bank is unable to estimate the impact of the ongoing legislative work on the Bank’s

Financial Statements, but it does not alter the Bank’s strategic approach, which remains focused on the

amicable resolution of disputes with clients through the conclusion of settlement agreements.

Selected theses and decisions of the CJEU and the Supreme Court that have shaped the line of

jurisprudence.

Case law of the Court of Justice of the European Union

On 3 October 2019, in case C 260/18, the CJEU ruled that a national court may annul a credit agreement

if the removal of unfair terms identified in that agreement would alter the nature of the main subject

matter of the contract, and that it is excluded to fill the gaps in the agreement caused by the removal of

unfair terms solely on the basis of national legislation of a general nature or on the basis of accepted

customs. The Court also found that the consumer, if he or she so wishes, may maintain the agreement

in force.

On 10 June 2021, the CJEU found that the protection provided for in Directive 93/13/EEC applies to

every consumer, and not only to one who may be regarded as a “reasonably well informed, observant

and circumspect average consumer”.

With regard to the definition of a consumer, on 8 June 2023, in case C 570/21, the CJEU ruled that the

notion of “consumer” within the meaning of Directive 93/13 also includes a person who concluded a

credit agreement for use partly related to his or her business or professional activity.

On 15 June 2023, in case C 520/21, the CJEU, referring to the issue of settlements between the bank

and the consumer as a consequence of the annulment of a credit agreement, explained that the

provisions of Directive 93/13 preclude a judicial interpretation of national law under which a credit

institution has the right to demand from the consumer compensation exceeding the return of the capital

disbursed under the performance of that agreement, as well as exceeding statutory default interest from

the date of the demand for payment.

On 21 September 2023, in case C 139/22, the Court ruled that it is possible to consider a contractual

term unfair solely because its content is equivalent to the content of a clause included in the national

that character because of another provision of the same agreement that provides the consumer with the

possibility of performing obligations under different conditions. Furthermore, the trader is obliged to

inform the concerned consumer about the essential features of the agreement concluded with him or

her, as well as about the risks connected with that agreement, even if that consumer is the trader’s

employee and has relevant knowledge in the field of that agreement.

125

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

On 7 December 2023, in case C 140/22, the Court ruled that the exercise of a consumer’s rights cannot

be made conditional upon the consumer submitting to the court, in particular, a statement declaring that

he or she agrees to the recognition of the agreement as null and void.

On 14 December 2023, in case C 28/22, the Court ruled that the limitation period for the trader’s claims

arising from the invalidity of the agreement cannot begin later than the limitation period for the

consumer’s claims arising from the invalidity of that agreement. The Court also indicated, among other

things, that the trader cannot rely on the right of retention that would allow him to make the return of the

benefits received from the consumer conditional upon the consumer offering to return the benefits he or

she received, if the exercise of this right of retention would cause the consumer to lose the right to obtain

default interest.

The Court of Justice of the European Union on 19 June 2025 issued a judgment in case C 396/24. The

Court stated in particular that a trader, in the case of the invalidity of the agreement, may not demand

from the consumer the return of the entire nominal amount of the credit granted, regardless of the

amount of repayments made by the consumer under that agreement and regardless of the amount

remaining to be repaid.

In its judgment of 27 November 2025, in case C 746/24, the CJEU addressed the possibility of charging

the consumer with the costs of legal proceedings lost by the consumer concerning the repayment of the

capital disbursed by the bank. The Court found that it is not permissible to charge the consumer with

costs that significantly exceed the costs that the consumer would have had to bear had he or she lost

the case in proceedings initiated to challenge the unfairness of the credit agreement terms.

On 11 December 2025, in case C 767/24, the CJEU held that in the event of the invalidity of a credit

agreement, the submission by the consumer of a statement on the set off of his or her claim with the

bank’s claim does not entail an implied waiver of the statute of limitations defense.

On 22 January 2026 in case C 902/24, the CJEU stated that the provisions of Directive 93/13 do not

preclude a judicial interpretation of national law that, within proceedings initiated by a consumer for the

purpose of establishing the invalidity of a mortgage loan agreement, allows the trader, while maintaining

as the main argument that the agreement is valid, to raise alternatively a set off defense based on a

claim corresponding to the amount of that mortgage loan, provided that, first, that latter claim is not

considered due before the competent court establishes the invalidity of the agreement itself, and second,

that the acceptance of such a defense does not lead to a decision on costs that could discourage the

consumer from exercising the rights granted to him or her under that Directive.

Jurisprudence of the Polish Supreme Court

The case law of the Supreme Court remains consistent with the guidance of the Court of Justice of the

European Union.

On 7 May 2021, the Supreme Court composed of 7 judges of the Supreme Court, issued a resolution

for which the meaning of legal principle has been granted, stating that:

(i) an abusive contractual clause (art. 385(1) § 1 of the Civil Code), by force of the law itself, is

ineffective to the benefit of the consumer who may consequently give conscious and free

consent to this clause and thus restore its effectiveness retroactively;

(ii) if without the ineffective clause the loan agreement cannot bind, the consumer and the lender

shall be eligible for separate claims for return of monetary performances made in exercising this

agreement (art. 410 § 1 in relation to art. 405 of the Civil Code). The lender may demand return

of the performance from the moment the loan agreement becomes permanently ineffective.

126

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

On April 28, 2022 the Supreme Court issued a resolution (III CZP 40/22) in which it indicated that in

disputes with consumers, the provision of Article 358(1) of the Civil Code is a special provision to Article

353(1) of the Civil Code, which means that if the prerequisites for the application of both provisions exist,

the court should apply the special provision and declare the contractual provision permanently

ineffective, rather than invalid.

The effect of the Supreme Court's resolution of 7 May 2021 is that the bank is entitled to a refund of the

cash benefit provided by the bank in performance of a permanently ineffective contract. Taking into

account the uncertainty as to the starting point of the limitation period for the bank's claims, the Bank, in

order to protect its interests, files lawsuits for payment against borrowers in a court dispute with the Bank

and in other circumstances where such risk may exist. The Bank's demand consists of a claim for return

of the capital made available to the borrower under the contract. By 31 December 2025 the Bank filed

18,191 lawsuits against the borrowers.

On 25 April 2024, a session of the Civil Chamber of the Supreme Court was held to answer questions

formulated by the First President of the Supreme Court, published on 29 January 2021, on key issues

related to FX mortgage loan agreements. The Supreme Court, composed of the entire Civil Chamber,

adopted a resolution having the force of a legal principle, in which it stated that:

(i) When finding that a provision of an indexed or denominated credit agreement relating to the

manner of determining the foreign currency exchange rate constitutes an unfair contractual

provision and is not binding, then in currently existing legal situation it cannot be stated that such

a provision could be replaced by another formula of defining the foreign currency exchange rate

resulting from law or custom.

(ii) In case of impossibility to determine the foreign currency exchange rate binding the parties in

the indexed or denominated loan agreement, the agreement is not binding also in the remaining

scope.

(iii) If, in the performance of a credit agreement which is not binding due to the unfair nature of its

provisions, the bank has disbursed to the borrower all or part of the amount of the credit and the

borrower has made repayments of the credit, independent claims for repayment of the undue

performance shall arise in favor of each party.

(iv) If a credit agreement is not binding due to the unfair nature of its provisions, the statute of

limitations of the bank's claim for repayment of amounts disbursed under the credit shall, as a

rule, start to run from the day following the day on which the borrower challenges being bound

by the provisions of agreement.

(v) If a credit agreement is not binding due to the unfair nature of its provisions, there shall be no

legal basis for any party to claim interest or other remuneration because of using party's

pecuniary means during the period from the provision of undue benefit until the delay in the

return of this benefit.

On 19 June 2024, the Supreme Court issued a resolution by a panel of 7 Supreme Court judges (III CZP

31/23) stating that:

The right of retention (Article 496 of the Civil Code) does not apply to the party that can set off its claim

against the claim of the other party.

127

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

On 28 February 2025, the Supreme Court issued a resolution of 7 judges of the Supreme Court (III CZP

126/22), in which it stated that:

(i) A bank loan agreement (Article 69(1) of the Banking Law Act of 29 August 1997) is a mutual

agreement within the meaning of Article 487 § 2 of the Civil Code.

On 5 March 2025 the Supreme Court issued a resolution by a panel of 7 Supreme Court judges (III CZP

37/24), in which it stated that:

(i) In the event of a claim for repayment from a bank of a consideration fulfilled on the basis of a credit

agreement which has proved to be invalid, the bank is not entitled to the right of retention under

Article 496 in connection with Article 497 of the Civil Code.

On May 15, 2025, the Supreme Court issued a resolution by a panel of 7 Supreme Court judges (III CZP

22/24), in which it indicated that:

(i) Under the legal state in force until June 30, 2022, a request for a settlement attempt interrupted the

limitation period of the claim, unless the circumstances of making this action indicate that it was not

undertaken directly for the purpose of pursuing or determining, or satisfying or securing the claim

(Article 123 § 1 point 1 of the Civil Code).

Due to the CJEU jurisprudence interpreting the causes and effects of invalidity of foreign currency

mortgage loan agreements as well as above indicated resolution of the Civil Chamber of the Supreme

Court, the area of interpretation of regulations by Polish courts in this respect appears to be limited.

However, further jurisprudential practice of the Polish courts will play certain role in practical realisation

of the CJEU's and the Supreme Court’s guidance.

128

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

13. Additional Explanatory Notes

Amounts presented in the notes below are expressed in PLN thousands.

1. INTEREST INCOME AND OTHER OF SIMILAR NATURE

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Interest income from Financial assets at fair value through other comprehensive income

2 356 071

2 132 774

Debt securities

1 770 857

1 338 587

Loans and advances

585 214

794 187

Interest income from Financial assets at amortised cost

6 375 710

6 380 835

Balances with the Central Bank

215 090

223 301

Loans and advances to customers, including:

4 856 438

5 058 108

- the impact of the adjustment to the gross carrying amount of loans due to credit

holidays

(106 788)

Debt securities

1 142 355

985 630

Deposits, loans and advances to banks

130 314

113 796

Hedging derivatives

31 513

Result of similar nature to interest, including:

117 253

145 334

Loans and advances to customers mandatorily at fair value through profit or loss

1 064

3 285

Financial assets held for trading - derivatives

39 341

81 723

Financial assets held for trading - debt securities

26 198

15 963

Financial assets held for trading - Repurchase agreements

50 650

44 363

Total

8 849 034

8 658 943

Interest income for the year 2025 contains interest accrued on impaired loans in the amount of PLN

193,798 thous. (for corresponding data in the year 2024 the amount of such interest stood at PLN

177,985 thous.).

Interest income from instruments measured at amortized cost for 2024 includes an adjustment for credit

holidays (reducing income) in the amount of PLN 106.8 million (more information on this subject is

presented in Chapter 7.3 Adopted accounting principles.

In the line “Hedging derivatives”, the Bank presents the interest result from derivative instruments

designated as, and effectively functioning as, hedging instruments in cash flow hedge and fair value

hedge relationships. A detailed description of the hedge relationships applied by the Bank is provided

in Note (24).

2. INTEREST EXPENSE

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Interest expense from Financial liabilities measured at amortised cost

(3 237 367)

(3 238 298)

Liabilities to banks and other monetary institutions

(15 697)

(14 393)

Liabilities to customers

(2 639 027)

(2 668 228)

Transactions with repurchase agreement

(27 070)

(37 513)

Debt securities issued

(424 797)

(367 570)

Subordinated debt

(116 744)

(125 557)

Leasing liabilities

(14 032)

(11 352)

Hedging derivatives

(13 685)

Total

(3 237 367)

(3 238 298)

129

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

3. FEE AND COMMISSION INCOME AND EXPENSE

3a. Fee and commission income

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Resulting from accounts service

113 892

113 298

Resulting from money transfers, cash payments and withdrawals and other payment

transactions

108 288

102 097

Resulting from loans granted

157 789

161 707

Resulting from guarantees and sureties granted

14 032

13 711

Resulting from payment and credit cards

338 658

317 104

Resulting from sale of insurance products

43 110

88 680

Resulting from distribution of investment funds units and other savings products

64 050

52 861

Resulting from brokerage and custody service

17 103

14 574

Other

58 502

53 802

Total

915 424

917 834

In the above note, the Bank presents commission income not subject to recognition under the effective

interest rate method, recognized in accordance with IFRS 9 in the amount of PLN 171,821 thous. for

2025 (and PLN 175,418 thous. for 2024, respectively), related to financial instruments not measured at

fair value through profit or loss, as well as income recognized in accordance with IFRS 15 in the amount

of PLN 743,603 thous. for 2025 (and PLN 742,416 thous. for 2024, respectively) arising from the

provision of services to customers.

3b. Fee and commission expense

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Resulting from accounts service

(53 970)

(44 419)

Resulting from money transfers. cash payments and withdrawals and other payment

transactions

(4 451)

(4 548)

Resulting from loans granted

(34 677)

(18 822)

Resulting from payment and credit cards

(102 222)

(117 815)

Resulting from brokerage and fiduciary services

(3 063)

(2 586)

Resulting from selling insurance products

(7 848)

(8 280)

Other

(55 365)

(53 207)

Total

(261 596)

(249 677)

4. DIVIDEND INCOME

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Non-trading financial assets mandatorily at fair value through profit or loss

281

544

Financial assets at fair value through other comprehensive income

3 402

3 082

Investments in subordinated companies

32 119

26 618

Investments in associated companies

5 354

8 497

Total

41 156

38 741

130

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

5. RESULT ON DERECOGNITION OF FINANCIAL ASSETS AND

LIABILITIES NOT MEASURED AT FAIR VALUE THROUGH PROFIT

OR LOSS

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Operations on debt instruments

(1 292)

143

Sale of the FVTOCI portfolio

3 930

(8 771)

Costs of financial operations

(3 156)

(2 125)

Total

(518)

(10 753)

6. RESULTS ON FINANCIAL ASSETS AND LIABILITIES HELD FOR

TRADING

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Result on debt instruments

13 051

(1 475)

Result on derivatives

11 035

(5 091)

Result on other financial operations

101

Total

24 187

(6 566)

7. RESULTS ON NON-TRADING FINANCIAL ASSETS MANDATORILY

AT FAIR VALUE THROUGH PROFIT OR LOSS

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Loans and advances to customers

581

745

Result on equity instruments

123 045

46 605

Result on debt instruments

(31 134)

(29 225)

Total

92 492

18 125

8. RESULT ON HEDGE ACCOUNTING

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Changes in the fair value of the hedging instrument (including abandonment)

(133 993)

18 323

Changes in the fair value of the hedged item resulting from the hedged risk

134 256

(16 558)

Inefficiency in cash flow hedges

(221)

Total

289

1 544

131

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

9. OTHER OPERATING INCOME

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Gain on sale and liquidation of property, plant and equipment, intangible assets

31 792

5 630

Income from sale of other services

17 683

13 607

Income from collection service

16 701

26 014

Income from write-back of provisions for disputed claims

7 458

4 233

Valuation of the Société Générale S.A. guarantee and indemnity agreement*

230 744

223 086

Other

60 744

45 931

Total

365 122

318 501

* In implementing the Euro Bank share purchase agreement, which ultimately led to the Purchase of Euro Bank by Bank Millennium

and subsequent Legal Merger, in order to limit the risk associated with the Euro Bank's portfolio of mortgage loans denominated

in CHF or denominated in PLN but indexed to CHF, Euro Bank and Société Générale S.A. concluded on 31 May 2019 a “CHF

Portfolio Indemnity and Guarantee Agreement” under which the losses resulting from legal risk are covered by Société Générale

S.A.

10. OTHER OPERATING EXPENSE

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Loss on sale and liquidation of property, plant and equipment, intangible assets

(2 345)

(920)

Indemnifications, penalties and fines paid

(28 934)

(22 758)

Costs of provisions for disputed claims

(93 051)

(8 915)

Costs related with providing other services

(6 412)

(2 631)

Donations made

(1 033)

(2 039)

Costs of collection service

(140 850)

(295 321)

Costs of legal representation

(6 361)

(14 017)

Other

(16 365)

(18 298)

Total

(295 351)

(364 899)

132

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

11. ADMINISTRATIVE EXPENSES

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Staff costs:

(1 290 211)

(1 138 045)

Salaries

(1 057 399)

(930 982)

Surcharges on pay

(180 234)

(160 910)

Employee benefits, including:

(52 578)

(46 153)

- provisions for retirement benefits

(6 225)

(5 816)

- provisions for unused employee holiday

(5 971)

(2 303)

- other

(40 382)

(38 034)

Other administrative expenses:

(962 380)

(816 276)

Costs of advertising, promotion and representation

(90 984)

(76 659)

IT and communications costs

(223 699)

(165 054)

Costs of renting

(52 644)

(54 388)

Costs of buildings maintenance, equipment and materials

(55 376)

(54 774)

ATM and cash maintenance costs

(34 897)

(35 639)

Costs of consultancy, audit and legal advisory and translation

(139 430)

(177 811)

Taxes and fees

(50 510)

(43 705)

KIR - clearing charges

(15 984)

(14 814)

PFRON costs

(9 663)

(8 973)

Banking Guarantee Fund costs

(149 528)

(60 841)

Financial Supervision costs

(19 426)

(16 475)

Other

(120 239)

(107 143)

Total

(2 252 591)

(1 954 321)

12. IMPAIRMENT LOSSES ON FINANCIAL ASSETS

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Impairment losses on loans and advances to customers

(148 998)

(259 555)

Impairment charges on loans and advances to customers

(1 080 972)

(1 318 147)

Reversal of impairment charges on loans and advances to customers

744 353

916 884

Amounts recovered from loans written off

30 550

60 227

Sale of receivables

165 859

114 926

Other directly recognised in profit and loss

(8 788)

(33 445)

Impairment losses on securities

(41)

(2)

Impairment charges on securities

(41)

(2)

Impairment losses on off-balance sheet liabilities

(52 110)

(11 309)

Impairment charges on off-balance sheet liabilities

(112 417)

(52 302)

Reversal of impairment charges on off-balance sheet liabilities

60 307

40 993

Total

(201 149)

(270 866)

133

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

13. IMPAIRMENT LOSSES ON NON-FINANCIAL ASSETS

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Other assets

(18 821)

(4 274)

Total

(18 821)

(4 274)

14. PROVISIONS FOR LEGAL RISK CONNECTED WITH FX

MORTGAGE LOANS

In the case of the portfolio of foreign currency mortgage loans, claims filed by customers, primarily

concerning the declaration of invalidity of the agreement and the return of paid principal and interest

installments, as well as settlements offered to borrowers by the Bank, have a significant impact on the

amount and repayment dates of the expected cash flows resulting from the loan agreement estimated

by the Bank. Taking the above into account, the Bank believes that the appropriate way to reflect the

legal risk related to the portfolio of active foreign currency mortgage loans is to apply the provisions of

IFRS 9 paragraph B5.4.6, which in practice means reducing the gross carrying amount of these loans

in order to reflect the current estimates of cash flows from these agreements.

As regards following:

(i) repaid foreign currency mortgage loans;

(ii) active loans, for which the loss due to legal risk exceeds the current carrying amount (for that

excess);

(iii) for the expected outflow of cash that does not represent a return of contractual cash flows,

the provisions of IAS 37 are applied, according to which the Bank creates a provision for court cases,

recognizing it in the balance sheet as a component of provisions for claims.

Legal risk costs related to foreign currency mortgage loans

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

Costs of provisions for legal risk related with FX mortgage loans

(2 037 431)

(2 179 070)

Other costs

(66 787)

(671 160)

Total

(2 104 218)

(2 850 230)

In the first half of 2025, the Bank introduced changes to the presentation of financial data, among others

in the area of legal risk costs related to foreign currency mortgage loans. Details of these changes are

presented in Chapter 7. INTRODUCTION AND ACCOUNTING POLICIES – Opening balance

adjustment and change in the presentation of data implemented in 2025 and the restatement of

comparative data, item 1) a.

134

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Costs of provisions for legal risk related with FX mortgage loans

01.01.2025 – 31.12.2025

TOTAL

Decreasing gross

value of credit

portfolio

Provisions for legal

issues

Balance at the beginning of the period

8 463 696

5 665 224

2 798 472

Utilization of provisions during the period

(3 418 380)

(2 006 430)

(1 411 950)

Costs of provisions for legal risk connected wIth FX

mortgage loans

2 037 431

(18 937)

2 056 368

Allocation from impairment allowances

24 678

Change of provisions due to FX rates differences

6 048

Balance at the end of the period

7 113 473

3 670 583

3 442 890

01.01.2024 – 31.12.2024

TOTAL

Decreasing gross

value of credit

portfolio

Provisions for legal

issues

Balance at the beginning of the period

7 871 789

6 516 460

1 355 329

Utilization of provisions during the period

(1 386 008)

(972 009)

(413 999)

Costs of provisions for legal risk connected wIth FX

mortgage loans

2 179 070

321 928

1 857 142

Change of provisions due to FX rates differences

(201 155)

Balance at the end of the period

8 463 696

5 665 224

2 798 472

15. DEPRECIATION AND AMORTIZATION

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Property, plant and equipment

(156 134)

(159 032)

Intangible assets

(65 187)

(63 630)

Total

(221 321)

(222 662)

16. CORPORATE INCOME TAX

16a. Income tax reported in income statement

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Current tax

(252 804)

(377 124)

Current year

(252 804)

(384 860)

Adjustment to prior periods

7 736

Deferred tax:

(136 520)

249 679

Recognition and reversal of temporary differences

(136 520)

249 679

Total income tax reported in income statement

(389 324)

(127 445)

The effective tax rate (ETR) for 2025 was 25,84% (the ETR for 2024 was 16,54%). The biggest negative

impact on the ETR were the cost of legal risk related to CHF mortgage loans, the banking tax, and the

contributions to the Bank Guarantee Fund. The biggest positive impact on the income tax burden for

year 2025 was the revaluation of the deferred tax asset and liability in connection with the entry into

force from 1 January 2026 of the Act of 6 November 2025 amending the Corporate Income Tax Act and

the Act on the Tax on Certain Financial Institutions (Journal of Laws of 2025, item 1658), which increases

the CIT rate for banks from 19% to 30% in 2026 (in year 2027 the CIT rate will be reduced to 26% and

from 2028 it will be 23%). This positive effect of the revaluation was one-off and resulted from the excess

of the assets over the liabilities in deferred tax.

135

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The year‑on‑year difference in the ETR also results from the recognition in 2024 of a deferred tax asset

related to future cancellations of CHF loans in the amount of PLN 186.8 million as a consequence of the

judgment of the Supreme Administrative Court of 6 December 2023 on the rules for recognizing in CIT

the effects of annulments of CHF loans adjudicated by common courts which significantly lowered the

ETR for 2024.

16b. Effective tax rate

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Profit before tax / (loss)

1 506 638

770 548

Statutory tax rate

19%

Income tax according to obligatory income tax rate of 19%

(286 261)

(146 404)

Impact of permanent differences on tax charges:

(223 770)

14 514

Non-taxable income

140 718

121 027

Dividend income

7 766

7 257

Release of other provisions

47 445

44 726

Adjustment of revenue related to CHF loan annulments and settlements involving cash

payments

85 556

69 043

Other

(49)

Cost which is not a tax cost

(364 489)

(106 514)

PFRON fee

(1 836)

(1 705)

Fees for Banking Guarantee Fund

(28 410)

(11 560)

Banking tax

(77 004)

(44 160)

Receivables written off

(14 742)

(24 614)

Costs of litigations and claims

(21 181)

(3 345)

Legal risk costs related to foreign‑currency mortgage loan

(210 254)

(14 028)

Other

(11 061)

(7 102)

Tax reliefs

12 155

4 445

Revaluation of assets due to changes in tax rates

108 553

Total income tax reported in income statement

(389 324)

(127 445)

Effective tax rate

25.84%

16.54%

In the note with the effective tax rate reconciliation, the Bank has separated an item related to mortgage

loans indexed to the CHF and foreign currency loans in this currency (CHF Loans) – "Costs of legal risk

associated with foreign currency mortgage loans". This item refers to provisions and costs related to the

cancellation of CHF loans by courts and the costs of settlements concluded with borrowers. In the

financial statements for the previous year, these data were included in Note 16 separately in two items:

"Costs of court proceedings and litigation" (including costs of other litigations) and "Assets from future

cancellations of loans in CHF" in order to present a positive financial effect of PLN 186.8 million resulting

from the judgment of the Supreme Administrative Court of 6 December 2023 on the principles of

recognizing in CIT the effects of cancellations of CHF loans adjudicated by common courts. The year-

on-year difference in the item "Costs of legal risk related to FX mortgage loans" results from the Bank's

recognition in 2024 of such deferred tax assets for the costs of future cancellations of CHF loans in

connection with the aforementioned judgment.

136

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

16c. Deferred tax reported in equity

31.12.2025

31.12.2024

Valuation of investment assets at fair value through other comprehensive income

(61 771)

10 447

Valuation of credit portfolio at fair value through other comprehensive income

(54 531)

11 074

Valuation of cash flow hedging instruments

806

4 704

Actuarial gains (losses)

3 941

(119)

Deferred tax reported directly in equity

(111 555)

26 106

Changes in deferred tax recognized directly in equity are presented in Note (39b).

17. EARNINGS PER SHARE

In accordance with the requirements of IAS 33, the Bank calculates earnings per share based on

consolidated data and presents it accordingly in the consolidated financial statements.

18. CASH, BALANCES AT THE CENTRAL BANK

18a. Cash, balances at the central bank

31.12.2025

31.12.2024

Cash

1 046 063

1 065 998

Cash in Central Bank

3 314 401

4 112 986

Total

4 360 464

5 178 984

In the period from 8 December 2025 to 11 January 2026 the Bank was obliged to keep on its current

account with NBP (the central bank) an average balance of PLN 4,485,265 thousand (arithmetic average

of balances on the NBP current account on all days of the deposit-holding period).

18b. Cash, balances at the Central Bank – by currency

31.12.2025

31.12.2024

in Polish currency

3 752 084

4 309 067

in foreign currencies (after conversion to PLN)

608 380

869 917

▪ currency: USD

58 767

78 400

▪ currency: EUR

507 762

745 984

▪ currency: CHF

13 662

16 063

▪ currency: GBP

21 088

22 372

▪ other currencies

7 101

7 098

Total

4 360 464

5 178 984

137

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

19. FINANCIAL ASSETS HELD FOR TRADING

19a. Financial assets held for trading

31.12.2025

31.12.2024

Debt securities

824 911

555 364

Issued by State Treasury

824 911

555 364

a) bonds

824 911

555 364

Equity instruments

252

115

Positive valuation of derivatives

156 827

257 094

Repurchase agreements

38 946

194 218

Total

1 020 936

1 006 791

Information on financial assets securing liabilities is presented in point 2) of Chapter 14.

19b. Debt securities valued at fair value through profit and loss (held for trading), at balance sheet value

31.12.2025

31.12.2024

▪ with fixed interest rate

251 978

108 141

▪ with variable interest rate

572 933

447 223

Total

824 911

555 364

19c. Debt securities valued at fair value through profit and loss (held for trading), by maturity

31.12.2025

31.12.2024

to 1 month

7 187

above 1 month to 3 months

above 3 months to 1 year

354 894

2 372

above 1 year to 5 years

384 476

472 055

above 5 years

78 354

80 937

Total

824 911

555 364

19d. Change of debt securities and equity instruments valued at fair value through profit and loss (held

for trading)

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Balance at the beginning of the period

555 479

110 675

Increases (purchase, takeover and accrual of interest and discount)

13 359 048

17 003 282

Reductions (sale and redemption)

(13 093 769)

(16 556 021)

Differences from valuation at fair value

4 405

(2 457)

Balance at the end of the period

825 163

555 479

138

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

19e. Financial assets and liabilities held for trading - Valuation of derivatives, Adjustment from fair value

hedge and Short positions as at:

31.12.2025

Nominal value of instruments with remaining maturity

Fair value

below 3

months

from 3 months

to 1 year

from 1 year

to 5 years

above5 years

Assets

Liabilities

1. Interest rate derivatives

696 728

2 560 069

10 487 655

1 578 734

10 528

3 427

Interest rate swaps (IRS)

477 395

2 045 360

9 374 758

1 578 734

9 226

2 125

Other interest rate contracts:

options

219 333

514 709

1 112 897

1 302

2. FX derivatives*

7 025 179

6 518 115

956 121

50 184

108 229

FX contracts

1 367 766

784 673

84 136

6 880

9 091

FX swaps

5 657 413

5 733 442

21 015

37 651

94 420

Other FX contracts (CIRS)

850 970

5 653

4 718

3. Embedded instruments

168 940

520 109

351 002

95 144

Options embedded in

deposits

168 940

520 109

351 002

95 144

4. Indexes options

181 319

543 346

359 448

96 115

1 840

Total

8 072 166

10 141 639

12 154 226

1 578 734

156 827

208 640

Liabilities from short sale of debt

securities

37 788

*Notional value for double-currency derivatives constitutes the sum of both transactions expressed in PLN

31.12.2024

Nominal value of instruments with remaining maturity

Fair value

below 3

months

from 3 months

to 1 year

from 1 year

to 5 years

above5 years

Assets

Liabilities

1. Interest rate derivatives

899 208

1 372 822

9 111 580

555 427

11 026

13 636

Interest rate swaps (IRS)

899 208

1 137 324

8 470 802

555 427

3 964

6 574

Other interest rate contracts:

options

235 498

640 778

7 062

2. FX derivatives*

8 416 883

1 816 443

979 954

63 544

27 122

FX contracts

1 407 582

980 304

92 927

2 255

17 238

FX swaps

7 009 301

836 139

31 427

59 128

8 906

Other FX contracts (CIRS)

855 600

2 161

978

3. Embedded instruments

307 203

534 393

700 523

181 662

Options embedded in

deposits

307 203

534 393

700 523

181 662

4. Indexes options

331 314

561 328

713 218

182 524

4 329

Total

9 954 608

4 284 986

11 505 275

555 427

257 094

226 749

Liabilities from short sale of debt

securities

190 769

*Notional value for double-currency derivatives constitutes the sum of both transactions expressed in PLN

139

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

20. NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR

VALUE THROUGH PROFIT OR LOSS, OTHER THAN LOANS AND

ADVANCES TO CUSTOMERS

31.12.2025

31.12.2024

Equity instruments

155 652

66 609

other corporates

155 652

66 609

Debt securities

20 655

51 790

other corporates

20 655

51 790

Total

176 307

118 399

21. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER

COMPREHENSIVE INCOME

21a. Financial assets at fair value through other comprehensive income

31.12.2025

31.12.2024

Debt securities

42 226 448

28 986 939

Issued by State Treasury

31 646 365

19 953 433

a) bills

3 198 662

b) bonds

28 447 703

19 953 433

Issued by Central Bank

10 295 426

8 597 254

a) bills

10 295 426

8 597 254

Other securities

284 657

436 252

a) listed

284 657

436 252

Shares and interests in other entities

40 939

36 708

Total financial assets at fair value through other comprehensive income

42 267 387

29 023 647

Including:

Instruments listed on the active market

31 931 706

20 390 166

Instruments not listed on the active market

10 335 681

8 633 481

21b. Debt securities at fair value through other comprehensive income

31.12.2025

31.12.2024

▪ with fixed interest rate

30 776 098

19 312 165

▪ with variable interest rate

11 450 350

9 674 774

Total

42 226 448

28 986 939

140

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

21c. Debt securities at fair value through other comprehensive income by maturity

31.12.2025

31.12.2024

▪ to 1 month

11 766 785

8 597 254

▪ above 1 month to 3 months

1 998 247

▪ above 3 months to 1 year

6 073 329

5 676 045

▪ above 1 year to 5 years

20 557 532

13 223 737

▪ above 5 years

1 830 555

1 489 903

Total

42 226 448

28 986 939

21d. Change of financial assets at fair value through other comprehensive income

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Balance at the beginning of the period

29 023 647

21 924 652

Increases (purchase and accrual of interest and discount)

591 805 952

554 476 615

Reductions (sale and redemption)

(578 872 485)

(547 541 651)

Difference from measurement at fair value

310 276

164 037

Other

(3)

(6)

Balance at the end of the period

42 267 387

29 023 647

22. LOANS AND ADVANCES TO CUSTOMERS

22a. Loans and advances to customers mandatorily at fair value through profit or loss

Balance sheet value:

31.12.2025

31.12.2024

Mandatorily at fair value through profit or loss

745

1 825

Companies

Individuals

658

1 755

22b. Loans and advances to customers at fair value through other comprehensive income

Balance sheet value:

31.12.2025

31.12.2024

at fair value through other comprehensive income

9 438 459

11 135 416

▪ Individuals

9 438 459

11 135 416

Balance sheet value - maturity

31.12.2025

31.12.2024

to 1 month

21 417

19 860

above 1 month to 3 months

34 194

33 392

above 3 months to 1 year

164 235

163 478

above 1 year to 5 years

1 040 459

1 151 759

above 5 years

8 178 154

9 766 927

Total

9 438 459

11 135 416

141

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

22c. Loans and advances to customers valued at amortised cost

31.12.2025

Companies

Individuals

Public sector

TOTAL

Gross balance sheet value - Stage 1

19 882 731

37 139 241

55 750

57 077 722

Gross balance sheet value - Stage 2

1 471 857

3 482 717

4 954 575

Gross balance sheet value - Stage 3

550 953

1 964 350

2 515 303

Gross balance sheet value - POCI

23 564

44 160

67 724

Gross balance sheet value - TOTAL

21 929 106

42 630 468

55 750

64 615 323

Impairment allowances - Stage 1

(140 872)

(174 634)

(196)

(315 702)

Impairment allowances - Stage 2

(54 900)

(280 358)

(335 258)

Impairment allowances - Stage 3

(227 074)

(1 250 857)

(1 477 931)

Impairment allowances - POCI

6 042

(29 242)

(23 201)

Impairment allowances - TOTAL

(416 805)

(1 735 091)

(196)

(2 152 092)

Net balance sheet value

21 512 301

40 895 376

55 554

62 463 231

31.12.2024

Companies

Individuals

Public sector

TOTAL

Gross balance sheet value - Stage 1

16 793 416

38 326 116

45 449

55 164 982

Gross balance sheet value - Stage 2

883 863

3 914 183

4 798 047

Gross balance sheet value - Stage 3

579 973

2 356 178

2 936 151

Gross balance sheet value - POCI

12 566

69 669

82 234

Gross balance sheet value - TOTAL

18 269 817

44 666 146

45 450

62 981 413

Impairment allowances - Stage 1

(98 632)

(188 077)

(129)

(286 837)

Impairment allowances - Stage 2

(32 041)

(264 464)

(296 505)

Impairment allowances - Stage 3

(228 184)

(1 453 175)

(1 681 359)

Impairment allowances - POCI

(868)

(32 758)

(33 626)

Impairment allowances - TOTAL

(359 725)

(1 938 474)

(129)

(2 298 327)

Net balance sheet value

17 910 093

42 727 672

45 322

60 683 086

142

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

22d. Loans and advances to customers

31.12.2025

31.12.2024

Loans and advances

62 303 531

60 793 370

to companies

21 731 092

18 055 316

to private individuals

40 517 033

42 692 702

to public sector

55 406

45 352

Receivables on account of payment cards

1 370 044

1 281 402

due from companies

12 228

12 924

due from private individuals

1 357 816

1 268 478

Purchased receivables

117 032

148 514

from companies

117 032

148 514

Guarantees and sureties realised

321

Other

183 374

104 033

Interest

641 342

653 773

Total:

64 615 323

62 981 413

Impairment allowances

(2 152 092)

(2 298 327)

Total balance sheet value

62 463 231

60 683 086

22e. Quality of loans and advances to customers portfolio valued at amortised cost

31.12.2025

31.12.2024

Loans and advances to customers (gross)

64 615 323

62 981 413

impaired

2 575 811

3 009 099

not impaired

62 039 512

59 972 314

Impairment allowances

(2 152 092)

(2 298 327)

for impaired exposures

(1 524 952)

(1 747 986)

for not impaired exposures

(627 140)

(550 341)

Loans and advances to customers (net)

62 463 231

60 683 086

22f. Loans and advances to customers portfolio valued at amortised cost by methodology of impairment

assessment

31.12.2025

31.12.2024

Loans and advances to customers (gross)

64 615 323

62 981 413

case by case analysis

427 129

511 799

collective analysis

64 188 194

62 469 614

Impairment allowances

(2 152 092)

(2 298 327)

on the basis of case by case analysis

(162 800)

(194 181)

on the basis of collective analysis

(1 989 292)

(2 104 146)

Loans and advances to customers (net)

62 463 231

60 683 086

143

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

22g. Loans and advances to customers portfolio valued at amortised cost by customers

31.12.2025

31.12.2024

Loans and advances to customers (gross)

64 615 323

62 981 413

corporate customers

21 984 855

18 315 267

individuals

42 630 468

44 666 146

Impairment allowances

(2 152 092)

(2 298 327)

for receivables from corporate customers

(417 001)

(359 853)

for receivables from private individuals

(1 735 091)

(1 938 474)

Loans and advances to customers (net)

62 463 231

60 683 086

22h. Movements in impairment allowances for loans and advances to customers carried at amortised

cost

01.01.2025 -

31.12.2025

01.01.2024-

31.12.2024

Balance at the beginning of the period

2 298 327

2 299 364

Change in value of provisions:

(146 235)

(1 037)

Impairment allowances created in the period

1 017 358

1 229 349

Amounts written off

(142 399)

(218 506)

Impairment allowances released in the period

(687 988)

(831 022)

Sale of receivables

(354 332)

(247 429)

KOIM created in the period(*)

63 416

69 359

Allocation for coverage of FX mortgage loan risk

(24 678)

Changes resulting from FX rates differences

(1 721)

(5 260)

Other

(15 891)

2 472

Balance at the end of the period

2 152 092

2 298 327

* In accordance with IFRS 9, the Bank calculates interest on the loan portfolio with a recognized impairment based on the net

exposure value. For this purpose, the so-called impaired interest adjustment (“KOIM”) is calculated and recorded as a reduction

of interest income. Aforementioned KOIM adjustment in the balance sheet is presented as an impairment allowances, and as a

consequence the reconciliation of the change in impairment allowances requires consideration of the KOIM recognized in the

interest income.

The Bank records POCI assets in the balance sheet mainly as a result of recognition of impaired loans

after the merger with Euro Bank S.A. and takeover of SKOK Piast. At the time of the merger, the

aforementioned assets were included in the Bank's books at fair value.

The value of POCI assets is as follows:

Gross balance

sheet value

Accumulated

impairment

Net balance sheet

value

31.12.2024

- Companies

23 564

6 042

29 606

- Individuals

44 160

(29 242)

14 918

- Public sector

31.12.2023

- Companies

12 566

(868)

11 698

- Individuals

69 669

(32 758)

36 911

- Public sector

144

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

22i. Changes in impairment allowances and gross carrying amount of loans and advances valued at

amortised cost divided into stages and classes:

Companies: impairment allowances,

2025

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

98 632

32 041

228 184

868

359 725

Transfers between stages

3 696

(37 458)

8 248

25 514

Increase due to granting or purchase

53 678

Changes in credit risk

(3 000)

65 822

40 765

(12 946)

90 641

Decrease due to derecognition (except

exposures sold and written off)

(13 979)

(5 527)

(22 428)

(41 934)

Sale of loans and advances

(10 973)

Loans and advances written off

(22 331)

KOIM

6 914

Allocation of an impairment write‑down to

reduce the gross carrying amount

(19 337)

Other (including FX differences)

1 846

(1 305)

(141)

421

Balance at the end of the period

140 872

54 900

227 074

(6 042)

416 804

Companies: impairment allowances,

2024

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

71 384

26 531

157 700

(1 199)

254 416

Transfers between stages

4 645

(33 662)

29 016

(0)

Increase due to granting or purchase

45 753

Changes in credit risk

(15 292)

41 624

72 393

2 557

101 281

Decrease due to derecognition (except

exposures sold and written off)

(8 684)

(2 432)

(23 036)

(52)

(34 204)

Sale of loans and advances

(8 710)

Loans and advances written off

(3 716)

KOIM

5 627

5 652

Other (including FX differences)

826

(20)

(1 091)

(463)

(748)

Balance at the end of the period

98 632

32 041

228 184

868

359 725

Companies: loans and advances

balance sheet value, gross, 2025

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

16 793 416

883 863

579 973

12 566

18 269 817

Transfers between stages

(1 076 683)

911 789

124 458

40 436

Granted or purchased loans and

advances

9 567 414

Repaid loans and advances

(5 557 866)

(321 929)

(118 680)

(29 716)

(6 028 192)

Loans and advances sold

(12 803)

Loans and advances written off

(22 331)

Other (including FX differences)

156 450

(1 866)

337

279

155 200

Balance at the end of the period

19 882 731

1 471 857

550 953

23 564

21 929 105

145

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Companies: loans and advances

balance sheet value, gross, 2024

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

16 086 162

720 295

400 457

23 106

17 230 020

Transfers between stages

(682 380)

470 295

212 085

Granted or purchased loans and

advances

4 639 337

Repaid loans and advances

(3 120 652)

(305 794)

(118 680)

(9 807)

(3 554 933)

Loans and advances sold

(10 481)

Loans and advances written off

(3 716)

Other (including FX differences)

(129 051)

(932)

100 307

(734)

(30 410)

Balance at the end of the period

16 793 416

883 864

579 972

12 565

18 269 817

Individuals: impairment allowances,

2025

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

188 077

264 464

1 453 175

32 758

1 938 474

Transfers between stages

240 911

(325 765)

84 854

(0)

Increase due to granting or purchase

119 082

Changes in credit risk

(307 723)

365 826

249 260

26 554

333 916

Decrease due to derecognition (except

exposures sold and written off)

(65 836)

(24 174)

(124 028)

(12 048)

(226 085)

Sale of loans and advances

(334 878)

(8 481)

(343 359)

Loans and advances written off

(110 434)

(9 635)

(120 069)

KOIM

56 501

Allocation for coverage of FX mortgage

loan risk

(24 678)

Other (including FX differences)

123

1 083

1 309

Balance at the end of the period

174 634

280 358

1 250 857

29 242

1 735 091

Individuals: impairment allowances,

2024

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

297 078

302 936

1 419 678

25 136

2 044 828

Transfers between stages

248 566

(398 582)

150 017

(0)

Increase due to granting or purchase

186 922

Changes in credit risk

(473 317)

386 132

385 966

33 021

331 802

Decrease due to derecognition (except

exposures sold and written off)

(70 500)

(26 705)

(128 807)

(7 242)

(233 255)

Sale of loans and advances

(228 703)

(10 016)

(238 719)

Loans and advances written off

(205 782)

(9 008)

(214 791)

KOIM

62 804

903

63 707

Other (including FX differences)

(672)

684

(1 997)

(35)

(2 021)

Balance at the end of the period

188 077

264 464

1 453 175

32 758

1 938 474

146

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Individuals: loans and advances

balance sheet value, gross, 2025

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

38 326 116

3 914 183

2 356 178

69 669

44 666 145

Transfers between stages

(532 571)

275 818

256 753

Granted or purchased loans and

advances

10 013 803

Repaid loans and advances

(12 670 081)

(797 185)

(258 303)

(26 488)

(13 752 056)

Change in provisions for legal risk of the

foreign currency-indexed mortgage loan

portfolio

1 855 439

89 464

49 737

1 994 641

Loans and advances sold

(427 411)

(76)

(427 487)

Loans and advances written off

(120 069)

Other (including FX differences)

146 534

436

107 465

1 055

255 491

Balance at the end of the period

37 139 241

3 482 717

1 964 350

44 160

42 630 468

Individuals: loans and advances

balance sheet value, gross, 2024

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

38 823 130

3 968 886

2 579 786

93 690

45 465 492

Transfers between stages

(1 037 575)

680 237

357 339

Granted or purchased loans and

advances

10 466 916

Repaid loans and advances

(10 455 492)

(736 857)

(311 114)

(26 277)

(11 529 740)

Change in provisions for legal risk of the

foreign currency-indexed mortgage loan

portfolio

803 437

11 997

35 802

851 236

Loans and advances sold

(264 873)

(181)

(265 054)

Loans and advances written off

(214 706)

(85)

(214 791)

Other (including FX differences)

(274 300)

(10 081)

173 944

2 521

(107 916)

Balance at the end of the period

38 326 116

3 914 182

2 356 178

69 668

44 666 144

Public sector: impairment allowances,

2025

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

129

Transfers between stages

Increase due to granting or purchase

Changes in credit risk

Decrease due to derecognition (except

exposures sold and written off)

(18)

Other (including FX differences)

(5)

Balance at the end of the period

196

Public sector: impairment allowances,

2024

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

120

Transfers between stages

Increase due to granting or purchase

Changes in credit risk

Decrease due to derecognition (except

exposures sold and written off)

(23)

Other (including FX differences)

(19)

Balance at the end of the period

129

147

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Public sector: loans and advances

balance sheet value, gross, 2025

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

45 449

45 450

Transfers between stages

Granted or purchased loans and advances

23 979

Repaid loans and advances

(13 678)

(1)

(13 679)

Loans and advances sold

Loans and advances written off

Other (including FX differences)

(0)

Balance at the end of the period

55 750

Public sector: loans and advances

balance sheet value, gross, 2024

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

51 748

51 752

Transfers between stages

Granted or purchased loans and advances

8 884

Repaid loans and advances

(15 182)

(3)

(15 185)

Loans and advances sold

Loans and advances written off

Other (including FX differences)

Balance at the end of the period

45 449

45 450

22j. Loans and advances to customers portfolio valued at amortised cost by maturity

31.12.2025

31.12.2024

Current accounts

3 958 764

3 676 289

to 1 month

8 152 203

7 783 439

above 1 month to 3 months

1 325 768

2 208 463

above 3 months to 1 year

6 266 412

6 054 478

above 1 year to 5 years

22 917 982

19 966 083

above 5 years

19 584 486

20 776 798

past due

1 768 366

1 862 090

Interest

641 342

653 773

Total gross

64 615 323

62 981 413

22k. Loans and advances to customers portfolio valued at amortised cost by currency

31.12.2025

31.12.2024

Balance sheet

value, gross

Impairment

allowances

Balance sheet

value

Balance sheet

value, gross

Impairment

allowances

Balance sheet

value

in Polish currency

58 747 759

(2 024 322)

56 723 437

57 468 024

(2 127 147)

55 340 877

in foreign currencies (after

conversion to PLN)

5 867 564

(127 771)

5 739 793

5 513 389

(171 180)

5 342 209

currency: USD

74 625

(2 010)

72 615

61 794

(629)

61 165

currency: EUR

5 025 399

(96 932)

4 928 467

4 067 326

(116 287)

3 951 039

currency: CHF*

736 230

(28 471)

707 759

1 360 546

(53 852)

1 306 694

other currencies

31 309

(357)

30 952

23 723

(412)

23 311

Total

64 615 323

(2 152 092)

62 463 231

62 981 413

(2 298 327)

60 683 086

* gross carrying amount of mortgage is decreased by the change in expected cash flows resulting from the issue of legal risk of

CHF mortgage loans, the adjustment is presented in note (14).

148

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

23. FINANCIAL ASSETS AT AMORTISED COST OTHER THAN LOANS

AND ADVANCES TO CUSTOMERS

23a. Financial assets at amortised cost other than Loans and advances to customers

31.12.2025

Balance sheet value, gross

Accumulated impairment write-offs

Balance

sheet value,

net

Stage 1

Stage 2

Stage 3

Stage 1

Stage 2

Stage 3

Debt securities

26 659 513

(48)

26 659 465

Deposits, loans and

advances to banks and

other monetary

institutions

2 081 215

(79)

2 081 137

Repurchase agreements

59 978

31.12.2024

Balance sheet value, gross

Accumulated impairment write-offs

Balance

sheet value,

net

Stage 1

Stage 2

Stage 3

Stage 1

Stage 2

Stage 3

Debt securities

24 059 869

(8)

24 059 861

Deposits, loans and

advances to banks and

other monetary

institutions

2 378 610

(18)

2 378 592

Repurchase agreements

23b. Debt securities

31.12.2025

31.12.2024

Banks and other financial institutions

1 915 599

2 305 191

European Union

1 594 833

1 703 876

Public sector - securities issued by governments of:

23 117 919

20 013 058

Poland

16 412 173

13 027 316

Other UE countries

6 705 746

6 985 742

Public sector – local governments

31 114

37 736

Total

26 659 465

24 059 861

149

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

23c. Deposits, loans and advances to banks and other monetary institutions

31.12.2025

31.12.2024

Current accounts

215 131

278 628

Deposits

133 110

154 662

Loans and advances granted

1 729 108

1 943 735

Interest

3 867

1 585

Total (gross) deposits, loans and advances

2 081 216

2 378 610

Impairment allowances

(79)

(18)

Total (net) deposits, loans and advances

2 081 137

2 378 592

23d. Deposits, loans and advances to banks and other monetary institutions by maturity date

31.12.2025

31.12.2024

Current accounts

215 131

278 628

to 1 month

78 110

218 397

above 1 month to 3 months

10 000

above 3 months to 1 year

55 000

above 1 year to 5 years

1 729 108

1 870 000

above 5 years

past due

Interest

3 867

1 585

Total (gross) deposits, loans and advances

2 081 216

2 378 610

23e. Deposits, loans and advances to banks and other monetary institutions by currency

31.12.2025

31.12.2024

in Polish currency

1 788 480

1 955 655

in foreign currencies (after conversion to PLN)

292 736

422 955

▪ currency: USD

52 965

93 834

▪ currency: EUR

100 996

173 372

▪ currency: CNY

45 863

13 648

▪ currency: CHF

6 208

22 450

▪ currency: GBP

28 885

21 944

▪ currency: JPY

2 707

4 307

▪ other currencies

55 112

93 400

Total

2 081 216

2 378 610

150

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

23f. Change of impairment allowances for deposits, loans and advances to banks and other monetary

institutions

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Balance at the beginning of the period

160

Impairment allowances created in the period

190

Impairment allowances released in the period

(129)

(160)

Balance at the end of the period

23g. Repurchase agreements

31.12.2025

31.12.2024

other customers

59 964

interest

Total

59 978

24. DERIVATIVES – HEDGE ACCOUNTING

The Risk Strategy approved in the Bank defines a general rules for hedging of market risk generated by

its commercial activity. External transactions eligible for hedge accounting are pointed in the Strategy

just after the natural economic hedge.

As at 31 December 2025, the Bank continued its cash flow hedging relationships:

✓ on PLN denominated financial assets,

✓ due to future income and interest costs denominated in foreign currencies,

attributable to interest rate risk and currency risk in the time horizon limited to maturity of hedging

instruments, presented in note (24b).

During 2025, the Bank discontinued the application of the cash flow hedge relationship for the variability

of cash flows generated by the portfolio of foreign-currency mortgage loans and the PLN-denominated

liabilities financing them.

In addition, the Bank continued to apply fair value hedging for:

• a fixed-rate debt instrument,

• the cash flows from fixed-rate issued liabilities denominated in foreign currencies,

• the fair value of the risk profile attributable to homogeneous portfolios of non-interest-bearing PLN

current accounts,

• the fair value of the risk profile attributable to homogeneous portfolios of non-interest-bearing current

accounts denominated in foreign currencies.

Furthermore, in 2025 the Bank established a new fair value hedge for a fixed-rate debt instrument

denominated in foreign currencies.”

The underlying of hedged and hedging items are economically related in a way that they respond in a

similar way to the hedged risk, their fair value will offset in response to the market interest and FX rates

movements.

151

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The Bank performs the effectiveness tests on a monthly basis, calculates and compares the changes in

fair value of hedged and hedging positions. Hedge effectiveness is tested using hypothetical derivative

method, hedged items are presented as a hypothetical derivative, for which changes in the fair value

are calculated and compared with changes in fair value of hedging instruments. Hedge ineffectiveness

can arise from differences in repricing dates of hedged and hedging positions or from designation as

hedging item the existing derivative instrument. The Bank designates hedging instruments on their trade

date and by this eliminates this source of ineffectiveness.

Detailed information on cash flow hedge relations applied by the Bank, items designated as hedged and

hedging and presentation of the result (as at 31.12.2025) is shown in a table below:

Hedge of volatility of the cash

flows generated by PLN

denominated financial assets

Fair value hedge of a fixed

interest rate debt instrument

Cash flow volatility hedge

due to future income and

interest costs denominated

in foreign currencies

Description of hedge

transactions

The Bank hedges the risk of the

volatility of cash flows

generated by PLN denominated

financial assets. The volatility of

cash flows results from interest

rate risk.

The Bank hedges part of the

interest rate risk associated with

the change in the fair value of a

fixed-rate debt instrument

recorded in other comprehensive

income, resulting from

fluctuations in market interest

rate.

The Bank hedges the risk of the

volatility of cash flows

generated by income and

interest costs denominated in

foreign currencies. The volatility

of cash flows results from the

currency risk.

Hedged items

Cash flows resulting from PLN

denominated financial assets.

A portfolio of fixed coupon debt

securities classified as financial

assets measured at fair value

through other comprehensive

income denominated in PLN.

Cash flows resulting from

income and interest costs

denominated in foreign

currencies.

Hedging instruments

IRS transactions

FX position resulting from

recognized future leasing

liabilities.

Presentation of the

result on the hedged

and hedging

transactions

Effective part of the valuation of

hedging instruments is

recognised in revaluation

reserve; interest on both: the

hedged and the hedging

instruments are recognised in

net interest income.

Ineffective part of the valuation

of hedging instruments is

recognized in the income

statement as a result on hedge

accounting.

The result on the change in the

fair value measurement of

hedged items in the hedged risk

is referred to the result on hedge

accounting. The remaining part of

the change in fair value

measurement is recognized in

other comprehensive income.

Interest on debt securities is

recognized in net interest income.

The change in fair value

measurement of derivative

instruments being a hedge is

presented in the result on hedge

accounting, and interest on these

instruments is recognized in the

interest result.

The effective part of the spot

revaluation of hedging

instruments is recognized in the

revaluation reserve.

The ineffective part of the

valuation of the hedging item is

recognized in the income

statement as a result on hedge

accounting

152

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Hedging the fair value of cash

flows from issued fixed-rate

liabilities denominated in

foreign currencies

Hedging the fair value of the

risk profile assigned to a

portfolio of homogeneous,

non-interest-bearing current

accounts in PLN (portfolio

hedging)

Hedging the fair value of the

risk profile assigned to

portfolios of homogeneous,

non-interest-bearing current

accounts in foreign currencies

(portfolio hedge) and fixed-rate

debt instruments denominated

in foreign currencies)

Description of

hedge transactions

The Bank hedges part of the

interest rate risk related to

changes in the fair value of cash

flows from issued fixed-rate

liabilities denominated in foreign

currencies, resulting from the

volatility of market interest rates.

The Bank hedges part of the

interest rate risk related to the

change in the fair value of the

risk profile assigned to the

portfolios of homogeneous,

non-interest-bearing current

accounts in PLN and separately

foreign currencies, resulting

from the volatility of market

interest rates.

The Bank hedges part of the

interest rate risk related to the

change in the fair value of the risk

profile assigned to the portfolios

of homogeneous, non-interest-

bearing current accounts,

separately in PLN and in foreign

currencies, and risk related to the

change in the fair value of a fixed-

rate debt instrument denominated

in foreign currencies measured

through other comprehensive

income, resulting from the

volatility of market interest rates.

Hedged items

Cash flows from issued fixed-rate

liabilities denominated in foreign

currencies

Risk profile assigned to a

portfolios of homogeneous,

non-interest-bearing current

accounts in PLN.

Risk profile assigned to portfolios

of homogeneous, non-interest-

bearing current accounts in

foreign currencies and a portfolio

of fixed-coupon debt securities

classified as financial assets

valued at fair value through other

comprehensive income

denominated in foreign

currencies.

Hedging

instruments

IRS transactions

CIRS/IRS transactions

Presentation of the

result on the

hedged and

hedging

transactions

The result from the change in the

fair value measurement of flows

from hedged items in terms of the

hedged risk is recognized in the

result from hedge accounting.

Interest on debt securities is

recognized in interest income.

The change in the fair value

measurement of derivative

instruments constituting hedging

is presented in the result from

hedge accounting, and interest on

these instruments is recognized

in net interest income.

The result from the change in

fair value measurement

determined for hedged items in

terms of the hedged risk is

recognized in the result from

hedge accounting. The change

in the fair value measurement

of derivative instruments

constituting security is

presented in the result from

hedge accounting, and interest

on these instruments is

recognized in net interest

income.

The result of the change in fair

value measurement designated

for hedged items to the extent of

the hedged risk is recorded in the

result on hedge accounting. The

remaining part of the change in

fair value measurement of the

debt instrument is recorded in

other comprehensive income.

The change in fair value

measurement of derivative

instruments constituting the

hedge is presented in the result

on hedge accounting, and interest

on these instruments is recorded

in the interest result.

153

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

24a. Hedge accounting

31.12.2025

Nominal value of instruments with remaining maturity

Fair values

below 3 months

from 3

months to 1

year

from 1 year

to 5 years

above 5 years

Assets

Liabilities

1. Derivative instruments constituting cash flow hedges related to interest rate*

IRS contracts

400 000

2. Derivatives used as interest rate hedges related to interest rates

CIRS contracts

770 376

23 016

IRS contracts

2 483 430

6 098 510

850 000

1 720

3. Total hedging derivatives

2 883 430

6 868 886

850 000

24 736

* Notional value for double-currency derivatives constitutes the sum of both transactions expressed in PLN.

31.12.2024

Nominal value of instruments with remaining maturity

Fair values

below 3 months

from 3

months to 1

year

from 1 year

to 5 years

above 5 years

Assets

Liabilities

1. Derivative instruments constituting cash flow hedges related to interest rate and/or exchange rate *

CIRS contracts

802 830

100 751

IRS contracts

75 000

400 000

788

FXS contracts

2. Derivatives used as interest rate hedges related to interest rates

IRS contracts

505 060

6 128 180

3. Total hedging derivatives

802 830

580 060

6 528 180

101 539

* Notional value for double-currency derivatives constitutes the sum of both transactions expressed in PLN.

24b. Hedge accounting for cash flow volatility

Hedge relationship

Maximum date of occurrence of cash

flows whose value is hedged

Hedge of volatility of the cash flows generated by PLN denominated financial

assets

2026-05-11

Fair value hedge of a fixed interest rate debt instrument

2031-01-25

Cash flow volatility hedge due to future income and interest costs denominated in

foreign currencies

2030-09-30

Fair value hedge of cash flows from issued fixed-rate liabilities denominated in

foreign currencies

2028-09-25

Hedging the fair value of the risk profile assigned to a portfolio of homogeneous,

non-interest-bearing current accounts (portfolio hedging)

2026-07-06

Hedging the fair value of the risk profile assigned to portfolios of homogeneous,

non-interest-bearing current accounts in foreign currencies (portfolio hedge) and

fixed-rate debt instruments denominated in foreign currencies)

2028-06-26

The inefficient part of the valuation of hedging instruments recognized in the Profit and Loss Account in 2025 amounted to PLN

288 thousand. (in 2024, it was PLN 1,544 thousand, respectively)

The inefficient part of the valuation of hedging instruments recognized in the Profit and loss account and

losses was presented in note (8).

154

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

24c. Cash flow hedge – Hedged Instruments

Balance sheet item

Type of contract

Changes in fair value

used in the calculation

of the ineffectiveness in

the 2025

Balance in cash

flow hedge reserve

for continuing

hedges 31.12.2025

Balance in cash flow

hedge reserve for

discontinued hedges

31.12.2025

Loans and advances

to customers

CIRS

(40)

Debt instruments

IRS

(20 223)

(3 831)

Future interest

income and costs

FX position resulting

from recognized future

leasing liabilities

(1 810)

1 143

Loans and advances

to customers

IRS

Total

(22 073)

(2 688)

Balance sheet item

Type of contract

Changes in fair value

used in the calculation

of the ineffectiveness in

the 2024

Balance in cash

flow hedge reserve

for continuing

hedges 31.12.2024

Balance in cash flow

hedge reserve for

discontinued hedges

31.12.2024

Loans and advances

to customers

CIRS

(4 489)

(40)

Debt instruments

IRS

(12 350)

(24 054)

Future interest

income and costs

FX position resulting

from recognized future

leasing liabilities

(4 312)

(667)

Loans and advances

to customers

IRS

(8 282)

Total

(29 433)

(24 760)

24d. Cash flow hedge – Hedging instruments

Year:

2025

2024

Type of contract

Changes in fair value

used in the calculation

of the ineffectiveness

in the period

Ineffectiveness

recognized in P&L

Changes in fair value

used in the calculation

of the ineffectiveness

in the period

Ineffectiveness

recognized in P&L

CIRS

4 268

(221)

IRS

20 223

12 350

FX position resulting from

recognized future leasing liabilities

1 810

4 312

IRS

8 282

Razem

22 073

29 212

(221)

24e. Fair value hedge – Hedged instruments

Balance sheet item

Type of

contract

Changes in the fair value of the

hedged instrument used in the

calculation of the ineffectiveness

in the 2025

Changes in the fair value of the

hedged instrument used in the

calculation of the ineffectiveness

in the 2024

Debt instruments valued in other

comprehensive income

IRS

112 083

(9 826)

Issued liabilities

IRS

33 003

(4 009)

Liabilities to clients

IRS

(10 830)

(2 723)

Total

134 256

(16 558)

155

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

24f. Fair value hedge – Hedging instruments

Year:

2025

2024

Type of contract

Changes in the fair value

of the hedging instrument

used in the calculation of

the ineffectiveness in the

period

Ineffectiveness

recognized in P&L

Changes in the fair value

of the hedging instrument

used in the calculation of

the ineffectiveness in the

period

Ineffectiveness

recognized in P&L

IRS

(111 781)

302

9 466

(359)

IRS

(33 410)

(407)

5 121

1 112

IRS

11 197

368

3 735

1 013

Total

(133 994)

263

18 323

1 765

25. INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND

ASSOCIATES

25a. Investments in related entities

31.12.2025

31.12.2024

Investments in subsidiaries and associates

626 996

517 214

25b. Change of investments in related entities

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Balance at the beginning of the period

517 214

399 223

Increase of share in Millennium Bank Hipoteczny S.A.

99 000

120 000

Change of additional capital payment of Millennium Goodie Sp. z o.o.

13 500

(1 000)

Valuation of stake in Europa Millennium Financial Services Sp. z o.o.

3 019

(1 009)

Liquidation of Piast Expert Sp. z o.o.

(5 737)

Balance at the end of the period

517 214

399 223

156

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

25c. Investments in related entities as at 31.12.2025

Name

Activity domain

Head office

% of the Bank’s

capital share

% of the Bank’s

voting share

MILLENNIUM BANK

HIPOTECZNY S.A.

Mortgage bank

Warszawa

100

MILLENNIUM LEASING

Sp. z o.o.

leasing services

Warszawa

100

MILLENNIUM

CONSULTING S.A.*

advisory services

Warszawa

100

MILLENNIUM SERVICE

Sp. z o.o.

rental and management of

real estate, insurance and

brokers activity

Warszawa

100

MILLENNIUM GOODIE

Sp. z o.o.

web portals activity

Warszawa

100

MILLENNIUM

TELECOMMUNICATION

SERVICES Sp. z o.o.

financial operations - equity

markets, advisory services

Warszawa

EUROPA MILLENNIUM

FINANCIAL SERVICES

Sp. z o.o.

agents' activities

and insurance brokers

Wrocław

LUBUSKIE FABRYKI

MEBLI S.A. in liquidation

furniture manufacturer

Świebodzin

50 + 1 share

50 +1 share

* Millennium Consulting S.A., subsidiary of the Bank, is a 100% holder of Millennium TFI S.A.

Name

Gross value of

shares/

interests

Impairment

allowances

Additional

capital paid in

Assets

Liabilities

Equity

Income

Profit / (Loss)

Relationship

MILLENNIUM BANK

HIPOTECZNY S.A.

489 000

4 868

001

4 349

241

163

000

70 418

38 295

subordinated

MILLENNIUM

LEASING Sp. z o.o.

63 942

7 968

387

7 645

486

48 195

127 675

10 791

subordinated

MILLENNIUM

CONSULTING S.A.*

4 340

105 863

137

4 340

35 328

34 914

subordinated

MILLENNIUM

SERVICE Sp. z o.o.

1 000

58 411

8 658

1 000

27 746

20 073

subordinated

MILLENNIUM GOODIE

Sp. z o.o.

597

13 500

33 935

17 858

500

9 680

763

subordinated

MILLENNIUM

TELECOMMUNICATIO

N SERVICES Sp. z o.o.

644

112

100

1 534

subordinated

EUROPA

MILLENNIUM

FINANCIAL SERVICES

Sp. z o.o.**

54 519

52 547

15 623

100

24 827

16 938

associated

LUBUSKIE FABRYKI

MEBLI S.A. in

liquidation

company in liquidation

subordinated

TOTAL

613 496

13 500

* Millennium Consulting S.A., subsidiary of the Bank, is a 100% holder of Millennium TFI S.A. shares

** data of Europa Millennium Financial Services sp. z o.o. as of 30.11.2025

157

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

25d. Investments in related entities as at 31.12.2024

Name

Activity domain

Head office

% of the Bank’s

capital share

% of the Bank’s

voting share

MILLENNIUM BANK

HIPOTECZNY S.A.

Mortgage bank

Warszawa

100

MILLENNIUM LEASING

Sp. z o.o.

leasing services

Warszawa

100

MILLENNIUM

CONSULTING S.A.*

advisory services

Warszawa

100

MILLENNIUM SERVICE

Sp. z o.o.

rental and management of

real estate, insurance and

brokers activity

Warszawa

100

MILLENNIUM GOODIE

Sp. z o.o.

web portals activity

Warszawa

100

MILLENNIUM

TELECOMMUNICATION

SERVICES Sp. z o.o.

financial operations - equity

markets, advisory services

Warszawa

EUROPA MILLENNIUM

FINANCIAL SERVICES

Sp. z o.o.

agents' activities

and insurance brokers

Wrocław

PIAST EXPERT

Sp. z o.o. in liquidation

marketing services

Warszawa

100

LUBUSKIE FABRYKI

MEBLI S.A. in liquidation

furniture manufacturer

Świebodzin

50 + 1 share

50 +1 share

* Millennium Consulting S.A., subsidiary of the Bank, is a 100% holder of Millennium TFI S.A. shares

Name

Gross value of

shares/

interests

Impairment

allowances

Additional

capital paid in

Assets

Liabilities

Equity

Income

Profit / (Loss)

Relationship

MILLENNIUM BANK

HIPOTECZNY S.A.

390 000

3 136 565

2 754 876

130 000

39 970

17 070

subordinated

MILLENNIUM

LEASING Sp. z o.o.

63 942

7 724 974

7 412 561

48 195

124 480

17 878

subordinated

MILLENNIUM

CONSULTING S.A.*

4 340

70 933

113

4 340

20 541

20 158

subordinated

MILLENNIUM

SERVICE Sp. z o.o.

1 000

76 036

14 865

1 000

42 683

31 491

subordinated

MILLENNIUM GOODIE

Sp. z o.o.

597

16 353

14 532

500

6 024

220

subordinated

MILLENNIUM

TELECOMMUNICATIO

N SERVICES Sp. z o.o.

527

100

1 448

subordinated

EUROPA

MILLENNIUM

FINANCIAL SERVICES

Sp. z o.o.**

51 500

110 014

72 565

100

49 630

37 350

associated

PIAST EXPERT Sp. z

o.o. in liquidation

5 737

6 371

5 900

531

440

subordinated

LUBUSKIE FABRYKI

MEBLI S.A. in

iquidation

company in liquidation

subordinated

TOTAL

517 214

* Millennium Consulting S.A., subsidiary of the Bank, is a 100% holder of Millennium TFI S.A. shares

** data of Europa Millennium Financial Services sp. z o.o. as of 30.11.2024

158

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

26. TANGIBLE FIXED ASSETS

26a. Property, plant and equipment

31.12.2025

31.12.2024

Land

2 201

2 189

Buildings and premises

114 729

106 006

Machines and equipment

95 961

99 330

Vehicles

17 048

18 636

Other fixed assets

19 617

23 043

Fixed assets under construction

79 602

32 469

Rights to use office space

219 403

236 472

Total

548 561

518 145

159

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

26b. Change of balance of property, plant and equipment (by type groups) in the period 01.01.2025 –

31.12.2025

Land

Buildings

and

premises

Machines

and

equipment

Vehicles

Other

fixed

assets

Fixed

assets

under

construc

-tion

Rights to

use

office

space

TOTAL

a) gross value of property, plant and

equipment at the beginning of the

period

2 189

337 237

309 665

37 564

88 596

32 469

599 046

1 406 766

b) increases (on account of)

26 948

35 295

8 272

8 245

122 065

74 657

275 494

purchase

122 065

transfer from fixed assets under

construction

26 948

35 295

8 245

70 500

recognition under a finance lease

8 272

74 657

82 929

c) reductions (on account of)

14 540

32 082

2 866

14 188

74 932

22 033

160 641

sale

10 889

2 281

7 711

20 881

liquidation

3 300

9 919

6 240

22 033

41 492

settlement of fixed assets under

construction

70 499

financial lease

351

19 882

2 866

237

23 336

other

4 433

d) gross value of property, plant

and equipment at the end of the

period

2 201

349 645

312 878

42 970

82 653

79 602

651 670

1 521 619

e) cumulated depreciation

(amortization) at the beginning of the

period

230 771

210 335

18 928

65 553

362 573

888 160

f) depreciation over the period (on

account of)

3 809

6 582

6 994

(2 517)

69 694

84 562

current write-off (P&L)

14 894

35 926

9 387

7 461

88 466

156 134

reductions on account of sale

(7 842)

(2 237)

(4 851)

(14 930)

reductions on account of liquidation

(3 018)

(9 612)

(4 905)

(18 772)

(36 307)

financial lease

(349)

(17 495)

(2 393)

(222)

(20 459)

other

124

g) cumulated depreciation

(amortization) at the end of the

period

234 580

216 917

25 922

63 036

432 267

972 722

h) impairment allowances at the

beginning of the period

460

release of allowances

124

i) impairment allowances at the end

of the period

336

j) net value of property, plant and

equipment at the end of the period

2 201

114 729

95 961

17 048

19 617

79 602

219 403

548 561

including assets used based on

leasing agreements

256

1 481

17 048

219 403

238 198

160

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

26c. Change of balance of property, plant and equipment (by type groups) in the period 01.01.2024 –

31.12.2024

Land

Buildings

and

premises

Machines

and

equipment

Vehicles

Other

fixed

assets

Fixed

assets

under

construc

-tion

Rights to

use

office

space

TOTAL

a) gross value of property, plant and

equipment at the beginning of the

period

2 189

315 480

279 520

38 610

83 012

30 472

542 694

1 291 977

b) increases (on account of)

24 649

36 616

9 100

7 834

71 488

81 894

231 581

purchase

71 488

transfer from fixed assets under

construction

24 649

36 616

7 834

69 099

recognition under a finance lease

9 100

81 894

90 994

c) reductions (on account of)

2 892

6 471

10 146

2 250

69 491

25 542

116 792

sale

423

liquidation

2 553

6 344

1 780

25 542

36 219

settlement of fixed assets under

construction

69 099

financial lease

339

127

10 146

10 659

other

392

d) gross value of property, plant

and equipment at the end of the

period

2 189

337 237

309 665

37 564

88 596

32 469

599 046

1 406 766

e) cumulated depreciation

(amortization) at the beginning of the

period

219 641

180 986

18 771

59 505

294 944

773 847

f) depreciation over the period (on

account of)

11 130

29 349

157

6 048

67 630

114 314

current write-off (P&L)

13 791

35 460

9 120

8 248

92 413

159 032

reductions on account of sale

(422)

reductions on account of liquidation

(2 322)

(5 984)

(1 732)

(24 783)

(34 821)

financial lease

(339)

(127)

(8 963)

(46)

(9 475)

g) cumulated depreciation

(amortization) at the end of the

period

230 771

210 335

18 928

65 553

362 574

888 161

h) impairment allowances at the

beginning of the period

797

release of allowances

337

i) impairment allowances at the end

of the period

460

j) net value of property, plant and

equipment at the end of the period

2 189

106 006

99 330

18 636

23 043

32 469

236 472

518 145

including assets used based on

leasing agreements

673

6 388

18 636

236 472

262 248

161

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

27. INTANGIBLE FIXED ASSETS

27a. Intangible fixed assets

31.12.2025

31.12.2024

Goodwill due to merger with Euro Bank S.A.

192 126

Other intangible fixed assets:

418 517

345 299

concessions, patents, licenses, know-how and similar assets

78 925

68 226

computer software

62 379

71 754

other

4 201

5 576

advances for intangible assets

273 012

199 743

Total

610 643

537 425

As a result of the purchase by Bank Millennium of 99.787% of shares of Euro Bank S.A. from SG

Financial Services Holdings, a 100% subsidiary of Société Générale S.A., and the subsequent merger

with the above-mentioned entity in 2019, the difference in the fair value of the acquired assets and

liabilities as at the acquisition date to the purchase price was determined and, in accordance with the

provisions of IFRS 3.32, was recognized as goodwill in intangible assets (assigned to retail activities).

With respect to goodwill, an impairment test is performed at least once a year, regardless of any

indication that impairment may have occurred.

The input data for the goodwill test include the result on retail assets and liabilities allocated to Cash

Generating Units. To determine the amount of capital, an estimate of risk-weighted assets and a capital

adequacy ratio that meets regulatory minimums for the business were used. The test is performed by

comparing the present value of cash flows generated by the listed assets with the estimated amount of

capital. Cash flow forecasts have been prepared based on management's assumptions about all the

conditions that will occur over the remaining useful lives of the assets. They are consistent with the

medium-term financial plan adopted by the Bank for 2026-2028 and the Bank's Strategy. Data for

subsequent years after 2028 are the result of extrapolation of forecasts assuming continued changes in

the balance sheet and income statement and applying a residual value growth rate of 3%. Cash flows

were discounted using a cost of capital of approximately 12%, consisting of the market rate plus a risk

premium.

The test, executed as at the end of 2025, showed a surplus of the current value of cash flows over the

net book value of the cash-generating unit and therefore no impairment was found for this unit.

162

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

27b. Change of balance of intangible fixed assets (by type groups) in the period 01.01.2025 –

31.12.2025

concessions,

patents,

licenses, know-

how and similar

assets

computer

software

other

advances for

intangible

assets

TOTAL

a) gross value of intangible fixed

assets at the beginning of the period

179 874

345 989

25 021

199 743

750 627

b) increases (on account of)

42 602

23 402

139 973

205 977

expenditures on intangible assets

139 973

settlement of advances

42 602

23 402

66 004

c) reductions (on account of)

4 046

169

66 704

70 919

liquidation

4 046

169

4 215

settlement of advances

66 004

other

700

d) gross value of intangible fixed

assets at the end of the period

218 430

369 222

25 021

273 012

885 685

e) cumulated depreciation at the

beginning of the period

111 648

274 235

19 445

405 328

f) depreciation over the period (on

account of)

27 857

32 608

1 375

61 840

current write-off (P&L)

31 114

32 698

1 375

65 187

Liquidation and sale

(3 257)

(90)

(3 347)

g) cumulated depreciation at the end

of the period

139 505

306 843

20 820

467 168

h) impairment allowances at the

beginning of the period

i) impairment allowances at the end of

the period

j) net value of intangible fixed assets

at the end of the period

78 925

62 379

4 201

273 012

418 517

163

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

27c. Change of balance of intangible fixed assets (by type groups) in the period 01.01.2024 –

31.12.2024

concessions,

patents,

licenses, know-

how and similar

assets

computer

software

other

advances for

intangible

assets

TOTAL

a) gross value of intangible fixed

assets at the beginning of the period

107 016

320 035

25 021

162 422

614 494

b) increases (on account of)

72 858

25 954

138 010

236 822

expenditures on intangible assets

138 010

settlement of advances

72 858

25 954

98 812

c) reductions (on account of)

100 689

liquidation

settlement of advances

98 812

other

1 877

d) gross value of intangible fixed

assets at the end of the period

179 874

345 989

25 021

199 743

750 627

e) cumulated depreciation at the

beginning of the period

82 859

241 114

17 725

341 698

f) depreciation over the period (on

account of)

28 789

33 121

1 720

63 630

current write-off (P&L)

28 789

33 121

1 720

63 630

liquidation

g) cumulated depreciation at the end

of the period

111 648

274 235

19 445

405 328

h) impairment allowances at the

beginning of the period

i) impairment allowances at the end of

the period

j) net value of intangible fixed assets

at the end of the period

68 226

71 754

5 576

199 743

345 299

164

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

28. DEFERRED INCOME TAX ASSETS

28a. Deferred income tax assets and liability

31.12.2025

31.12.2024

Deferred

income tax

asset

Deferred

income tax

provision

Net deferred

income tax

asset

Deferred

income tax

asset

Deferred

income tax

provision

Net deferred

income tax

asset

Difference between tax and balance

sheet depreciation

(1 461)

(1 384)

(1 304)

(1 240)

Balance sheet valuation of financial

instruments

52 456

(56 679)

(4 223)

11 574

(48 155)

(36 581)

Unrealised receivables/ liabilities on

account of derivatives

118 394

(123 686)

(5 292)

55 499

(63 179)

(7 680)

Interest on deposits and securities to

be paid/ received

97 281

(581 227)

(483 946)

81 322

(329 891)

(248 569)

Interest and discount on loans and

receivables

(205 840)

(132 090)

Income and cost settled at effective

interest rate

(102 865)

(13 947)

Impairment of loans presented as

temporary differences

601 719

478 896

Employee benefits

48 931

27 276

Rights to use

5 488

4 242

Provisions for future costs

48 394

21 130

Provisions for legal risk costs related

to foreign‑currency mortgage loans

616 119

545 073

Valuation of investment assets,

loans, cash flows hedge and

actuarial gains (losses) recognized in

other comprehensive income

4 749

(116 302)

(111 553)

32 940

(6 834)

26 106

Equity instruments valuation

2 010

(46 063)

(44 053)

1 273

(27 556)

(26 283)

Other

(3 303)

(3 963)

(3 962)

Total

1 595 618

(1 237 426)

358 192

1 259 290

(626 919)

632 371

including long-term net deferred

income tax asset

187 984

205 983

Based on the provisions of IAS 12, the Group entities have offset deferred tax assets against deferred

tax liabilities.

165

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

28b. Change of temporary differences

31.12.2024

Changes to

financial result

Changes to

equity

31.12.2025

Difference between tax and balance sheet depreciation

(1 240)

(143)

(1 383)

Balance sheet valuation of financial instruments

(36 580)

32 358

(4 223)

Unrealised receivables/ liabilities on account of derivatives

(7 680)

2 388

(5 292)

Interest on deposits and securities to be paid/received

(248 568)

(235 377)

(483 946)

Interest and discount on loans and receivables

(132 090)

(73 751)

(205 840)

Income and cost settled at effective interest rate

(13 947)

(88 918)

(102 865)

Impairment of loans presented as temporary differences

478 896

122 823

601 719

Employee benefits

27 276

21 655

48 931

Rights to use

4 242

1 246

5 488

Provisions for future costs

21 129

27 264

48 394

Provisions for legal risk costs related to foreign‑currency

mortgage loans

545 073

71 046

616 119

Valuation of investment assets, loans, cash flows hedge

and actuarial gains (losses) recognized in other

comprehensive income

26 106

(137 659)

(111 553)

Equity instruments valuation

(26 283)

(17 770)

(44 053)

Other

(3 963)

659

(3 304)

Total

632 371

(136 520)

(137 659)

358 192

28c. Change of temporary differences

31.12.2023

Changes to

financial result

Changes to

equity

31.12.2024

Difference between tax and balance sheet depreciation

(1 370)

130

(1 240)

Balance sheet valuation of financial instruments

(35 144)

(1 436)

(36 580)

Unrealised receivables/ liabilities on account of derivatives

(573)

(7 107)

(7 680)

Interest on deposits and securities to be paid/received

(200 833)

(47 735)

(248 568)

Interest and discount on loans and receivables

(113 015)

(19 075)

(132 090)

Income and cost settled at effective interest rate

81 206

(95 153)

(13 947)

Impairment of loans presented as temporary differences

494 879

(15 983)

478 896

Employee benefits

21 984

5 292

27 276

Rights to use

4 128

114

4 242

Provisions for future costs

138 929

(117 800)

21 129

Provisions for legal risk costs related to foreign‑currency

mortgage loans

545 073

Valuation of investment assets, loans, cash flows hedge

and actuarial gains (losses) recognized in other

comprehensive income

32 685

(6 579)

26 106

Equity instruments valuation

(32 027)

5 744

(26 283)

Other

(1 578)

(2 385)

(3 963)

Total

389 271

249 679

(6 579)

632 371

166

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

29. OTHER ASSETS

31.12.2025

31.12.2024

Expenses to be settled

88 877

77 397

Income to be received

20 952

53 996

Interbank settlements

924

6 924

Settlements of financial instruments transactions

35 532

19 881

Receivables from sundry debtors, including:

1 737 807

1 476 275

- receivables due from Société Générale S.A. under an “CHF Portfolio Indemnity and

Guarantee Agreement”*

927 425

797 262

- receivables due to legally invalidated foreign currency mortgage loans

341 367

267 507

Public and legal settlements

12 488

12 372

Total other assets (gross)

1 896 580

1 646 845

Impairment allowances

(43 874)

(25 904)

Total other assets (net)

1 852 706

1 620 941

▪ including other financial assets**

1 751 341

1 531 172

▪ including long-term other assets

* In implementing the Euro Bank share purchase agreement, which ultimately led to the Purchase of Euro Bank by Bank Millennium

and subsequent Legal Merger, in order to limit the risk associated with the Euro Bank's portfolio of mortgage loans denominated

in CHF or denominated in PLN but indexed to CHF, Euro Bank and Société Générale S.A. concluded on 31 May 2019 a “CHF

Portfolio Indemnity and Guarantee Agreement” under which the losses resulting from legal risk are covered by Société Générale

S.A.

** other financial assets includes all of the remaining other net assets excluding the Expenses to be settled and Public and legal

settlements

30. NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED

AS HELD FOR SALE

As at December 31, 2025 and December 31, 2024, the Bank did not classify any assets to the Non-

current asset held for sale.

31. FINANCIAL LIABILITIES HELD FOR TRADING

31.12.2025

31.12.2024

Valuation of derivatives

208 640

226 749

Adjustment due to fair value hedge

37 788

190 769

Short sale of securities

246 428

417 518

Financial liabilities valued at fair value through profit and loss

208 640

226 749

The division of the negative valuation of derivatives into specific types of instruments is presented in

note (19).

167

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

32. LIABILITIES TO BANKS AND OTHER MONETARY INSTITUTIONS

32a. Liabilities to banks and other monetary institutions

31.12.2025

31.12.2024

In current account

31 075

38 643

Term deposits

74 467

171 726

Interest

160

562

Total

105 702

210 931

32b. Liabilities to banks and other monetary institutions by maturity

31.12.2025

31.12.2024

Current accounts

31 075

38 643

▪ to 1 month

68 625

169 135

▪ above 1 month to 3 months

4 220

2 591

▪ above 3 months to 1 year

1 622

▪ above 1 year to 5 years

▪ above 5 years

Interest

160

562

Total

105 702

210 931

32c. Liabilities to banks and other monetary institutions by currency

31.12.2025

31.12.2024

in Polish currency

63 368

64 023

in foreign currencies (after conversion to PLN)

42 334

146 908

▪ currency: USD

1 807

2 997

▪ currency: EUR

40 527

143 911

Total

105 702

210 931

168

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

33. LIABILITIES TO CUSTOMERS

33a. Structure of liabilities to customers by type

31.12.2025

31.12.2024

Amounts due to private individuals

98 378 743

87 566 756

Balances on current accounts

68 364 747

57 540 848

Term deposits

29 476 766

29 463 221

Other

323 321

293 855

Accrued interest

213 909

268 832

Amounts due to companies

26 183 700

25 353 336

Balances on current accounts

16 295 395

15 139 387

Term deposits

9 499 866

9 863 902

Other

357 689

304 749

Accrued interest

30 750

45 298

Amounts due to public sector

6 636 979

4 722 508

Balances on current accounts

6 020 058

4 281 851

Term deposits

609 933

434 813

Other

1 640

1 683

Accrued interest

5 348

4 161

Total

131 199 422

117 642 600

33b. Liabilities to customers by maturity

31.12.2025

31.12.2024

Current accounts

90 680 200

76 962 086

to 1 month

15 802 822

14 765 403

above 1 month to 3 months

15 984 115

14 711 027

above 3 months to 1 year

7 733 390

9 590 167

above 1 year to 5 years

651 492

1 246 980

above 5 years

97 397

48 645

Interest

250 006

318 292

Total

131 199 422

117 642 600

33c. Liabilities to customers by currency

31.12.2025

31.12.2024

in Polish currency

119 474 419

106 733 736

in foreign currencies (after conversion to PLN)

11 725 003

10 908 864

▪ currency: USD

2 679 879

2 498 299

▪ currency: EUR

8 315 075

7 675 813

▪ currency: GBP

424 306

383 090

▪ currency: CHF

252 676

231 448

▪ other currencies

53 067

120 214

Total

131 199 422

117 642 600

169

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

34. SALE AND REPURCHASE AGREEMENTS

Liabilities from securities sold with buy-back clause

31.12.2025

31.12.2024

to banks

194 162

interest

Total

194 223

35. DEBT SECURITIES ISSUED

35a. Liabilities from debt securities

31.12.2025

31.12.2024

Bonds

4 684 699

4 873 379

Valuation of Bank’s bonds designated to fair value hedge

19 008

52 463

Interest

99 245

104 324

Total

4 802 952

5 030 166

35b. Liabilities from debt securities by final legal maturity

31.12.2025

31.12.2024

▪ to 1 month

▪ above 1 month to 3 months

▪ above 3 months to 1 year

52 463

▪ above 1 year to 5 years

4 244 938

4 270 610

▪ above 5 years

458 769

602 769

Interest

99 245

104 324

Total

4 802 952

5 030 166

35c. Change of debt securities

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

Balance at the beginning of the period

5 030 166

3 027 952

Increases, on account of:

424 797

2 502 429

Issue of bonds

2 131 700

valuation of Bank’s bonds designated to fair value hedge

3 159

interest accrual

424 797

367 570

Reductions, on account of:

(652 011)

(500 215)

repurchase of bonds

(144 000)

(128 731)

valuation of the Bank’s bonds within the fair value hedge relationship

(33 455)

other changes in carrying amount (including exchange rate differences)

(44 680)

(32 701)

interest payment

(429 876)

(338 783)

Balance at the end of the period

4 802 952

5 030 166

170

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

35d. Debt securities by type

As at 31.12.2024

Balance sheet

value

Including

interests

Final legal maturity

Market

Bank Millennium - BMCN_012040

90 643

2 874

2040-01-25

Vienna MTF

Bank Millennium - BMCN_082036

377 217

6 217

2036-08-25

Vienna MTF

Bank Millennium - MILP-2027/09

2 191 797

60 035

2027-09-18

Luxembourg SE

Bank Millennium - MILP-2029/09

2 143 295

30 119

2029-09-25

Luxembourg SE

Total

4 802 952

99 245

As at 31.12.2024

Balance sheet

value

Including

interests

Final legal maturity

Market

Bank Millennium - BMCN_012040

117 955

4 186

2040-01-25

Vienna MTF

Bank Millennium - BMCN_082036

497 997

8 997

2036-08-25

Vienna MTF

Bank Millennium - MILP-2027/09

2 238 911

60 692

2027-09-18

Luxembourg SE

Bank Millennium - MILP-2029/09

2 175 303

30 449

2029-09-25

Luxembourg SE

Total

5 030 166

104 324

36. SUBORDINATED DEBT

36a. Subordinated debt

31.12.2025

31.12.2024

Amount of subordinated bonds in PLN - BKMO_071227R

700 000

Currency

PLN

Interest rate

6.31%

8.08%

Maturity

2027-12-07

Interest

2 870

3 719

Amount of subordinated bonds in PLN - BKMO_300129W

830 000

Currency

PLN

Interest rate

7.09%

8.17%

Maturity

2029-01-30

Interest

24 817

28 611

Balance sheet value of subordinated debt

1 557 687

1 562 330

36b. Change of subordinated debt

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

Balance at the beginning of the period

1 562 330

1 565 045

Increases, on account of:

116 744

125 557

interest accrual

116 744

125 557

Reductions, on account of:

(121 387)

(128 272)

interest payment

(121 387)

(128 272)

Balance at the end of the period

1 557 687

1 562 330

During 2025 and 2024 the Bank did not have any delays in the payment of principal and interest

instalments, nor did it infringe any contractual provisions resulting from its subordinated liabilities.

171

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

37. PROVISIONS

37a. Provisions

31.12.2025

31.12.2024

Provision for commitments and guarantees given

105 528

53 605

Provisions for retirement benefits

70 651

48 312

Provision for pending legal issues, including:

3 566 379

2 846 010

Provision for legal risk connected with fx mortgage loans

3 442 890

2 798 472

Total

3 742 558

2 947 927

37b. Change of Provision for commitments and guarantees given

01.01.2025 – 31.12.2025

Total

Stage 1

Stage 2

Stage 3

Balance at the beginning of the period

53 605

30 327

16 613

6 665

Charge of provision

112 417

52 907

52 836

6 674

Release of provision

(60 307)

(46 562)

(8 589)

(5 156)

Movement between stages

22 730

(22 164)

(566)

FX rates differences

(187)

(112)

(14)

(61)

Balance at the end of the period

105 528

59 290

38 682

7 556

01.01.2024 – 31.12.2024

Total

Stage 1

Stage 2

Stage 3

Balance at the beginning of the period

42 375

21 620

10 127

10 628

Charge of provision

52 303

21 044

26 166

5 093

Release of provision

(40 993)

(27 432)

(5 749)

(7 812)

Movement between stages

15 180

(13 933)

(1 247)

FX rates differences

(80)

(85)

Balance at the end of the period

53 605

30 327

16 613

6 665

37c. Change of Provision for retirement benefits

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Balance at the beginning of the period

48 312

45 227

Charge/Release of provision

6 225

5 816

Utilization of provisions

(1 657)

(1 400)

Actuarial gains/losses

17 771

(1 331)

Balance at the end of the period

70 651

48 312

172

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

37d. Change of Provision for pending legal issues

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

Balance at the beginning of the period

2 846 010

1 401 798

Charge of provision

93 051

8 914

Release of provision

(7 458)

(4 233)

Utilisation of provision

(1 424 188)

(420 111)

Creation of provision for legal risk connected with FX mortgage loans*

2 056 368

1 857 142

Reclassification of provisions

2 596

2 500

Balance at the end of the period

3 566 379

2 846 010

* Creation of provisions for legal risk related to foreign currency mortgage loans is described in more detail in Chapter 12 “Legal

risk related to foreign currency mortgage loans”.

38. OTHER LIABILITIES

38a. Other liabilities

31.12.2025

31.12.2024

Short-term

1 654 890

1 468 071

Accrued costs - bonuses, salaries

110 877

74 982

Accrued costs - other

188 305

154 188

Provisions for return of insurance fees

26 996

98 921

Interbank settlements

500 476

482 843

Provisions for potential return of fees in the event of early repayment of the loan

64 341

70 600

Other creditors, including:

593 447

413 895

- liabilities due to legally invalidated foreign currency mortgage loans

308 837

244 094

- insurance settlements

70 720

16 342

Liabilities due to leases

91 175

93 915

Liabilities to public sector

45 266

39 461

Deferred income

7 872

19 321

Provisions for unused employee holiday

25 606

19 635

Other

529

310

Long-term

446 439

425 882

Commitment to pay – BGF*

272 251

227 409

Liabilities due to leases

174 188

198 473

Total

2 101 329

1 893 953

including other financial liabilities**

1 684 074

1 437 931

* The Bank uses the option of contributing some of the fees paid to the BGF in the form of a payment obligation, which involves

recognizing a commitment to pay and simultaneously recording encumbered assets in the form of debt securities held on a

separate account created for this purpose. The settlement date of the above liability is unknown.

** other financial liabilities includes all of the other liabilities excluding the Liabilities to public sector, Deferred income, Provisions

for return, Commitment to pay – BGF, and other items

On September 11, 2019, the Court of Justice of the European Union ruled in the case of Lexitor vs.

SKOK Stefczyk, Santander Consumer Bank, and mBank (Case C‑383/18), stating that the consumer

has the right to request a reduction of the total cost of the loan, which includes interest and costs

attributable to the remaining term of the agreement, in the event of early repayment of the credit.

Considering this judgment, the Bank recognizes a provision for potential refunds, which as of December

31, 2025 amounted to PLN 64.3 million.

173

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

38b. Liabilities from lease

31.12.2025

31.12.2024

Liabilities from lease (gross)

297 194

324 449

Unrealised financial costs

(31 831)

(32 061)

Current value of minimum lease instalments

265 363

292 388

Liabilities from lease (gross) by maturity

Under 1 year

106 025

108 308

From 1 year to 5 years

189 479

207 906

Above 5 years

1 690

8 235

Total

297 194

324 449

Liabilities from lease (net) by maturity

Under 1 year

91 175

93 915

From 1 year to 5 years

172 554

190 422

Above 5 years

1 634

8 051

Total

265 363

292 388

38c. Change of provisions for unused employee holiday

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

Balance at the beginning of the period

19 635

17 089

Charge of provisions/ reversal of provisions

5 971

2 303

Utilisation of provisions

Other

243

Balance at the end of the period

25 606

19 635

174

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

39. EQUITY

39a. Capital

The share capital of the Bank Millennium S.A. is PLN 1,213,116,777 divided into 1,213,116,777 shares

of PLN 1 par value each, as presented by the table below.

SHARE CAPITAL

Par value of one share = 1 PLN.

Series/

issue

Share type

Type of

preference

Number of

Value of

series/issue

(PLN)

Manner of

capital

coverage

Registration

date

Right to

dividend

registered founder

x2 as to voting

106 850

cash

30.06.1989

registered ordinary

150 000

cash

13.06.1990

01.01.1990

registered ordinary

150 000

cash

13.12.1990

01.01.1990

bearer ordinary

4 693 150

cash

17.05.1991

01.01.1991

bearer ordinary

1 700 002

cash

31.12.1991

01.01.1992

bearer ordinary

2 611 366

cash

31.01.1992

01.01.1992

bearer ordinary

1 001 500

cash

10.03.1992

01.01.1992

bearer ordinary

6 000 000

cash

28.05.1993

01.01.1992

bearer ordinary

9 372 721

cash

10.12.1993

01.01.1993

bearer ordinary

8 000 000

cash

30.05.1994

01.10.1993

bearer ordinary

7 082 129

cash

24.10.1994

01.10.1994

Increasing of par value of shares from 1 to 4 PLN

122 603 154

surplus

24.11.1994

1:4 split

122 603 154

05.12.1994

bearer ordinary

65 000 000

cash

12.08.1997

01.10.1996

bearer ordinary

196 120 000

capitals of Bank

Gdański S.A.

12.09.1997

01.10.1996

bearer ordinary

424 590 872

cash

31.12.2001

01.01.2001

bearer ordinary

363 935 033

cash

26.02.2010

01.01.2009

Total number of shares

1 213 116 777

Total share capital

1 213 116 777

Due to earlier conversions of ordinary registered shares into bearer shares (no such conversions were

made in the reporting period), the number of registered shares as at 31.12.2025 amounted to 99,480 of

which 61,600 are founders’ shares, privileged so that one share entitles to two votes at the Annual

General Meeting.

According to the information available to the Bank, with respect to shareholders holding more than 5%

of votes at the General Meeting, the Bank's shareholders are the following entities

Shareholder 31.12.2025

Number of

% share in

share capital

Number of

votes

% share in votes

at Shareholders’

Meeting

Banco Comercial Portugues S.A.

607 771 505

50.10

607 771 505

50.10

Nationale-Nederlanden Otwarty Fundusz Emerytalny

117 925 289

9,72

117 925 289

9,72

Allianz Polska Otwarty Fundusz Emerytalny

98 182 510

8,09

98 182 510

8,09

The data contained in the table has been determined according to the rules described below. With

regard to Banco Comercial Portugues S.A. this data collected in connection with the registration of

shareholders entitled to participate in the Ordinary General Meeting of Shareholders held on March 27,

2025. In the scope of Nationale-Nederlanden Otwarty Fundusz Emerytalny and Allianz Polska Otwarty

Fundusz Emerytalny the number of shares and their participation in the share capital of the Bank were

calculated on the basis of the annual structure of assets of the above mentioned Funds as at 31

December 2025 and 31 December 2024 (announced on the websites respectively: www.nn.pl,

www.allianz.pl) In terms of the calculations made on the basis of the annual structures of the above

mentioned funds, the volume-weighted average price (VWAP) of the Bank's shares was assumed at

PLN 8.9290 (for 2024) and PLN 16.6554 zł (for 2025).

175

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Shareholder 31.12.2024

Number of

% share in

share capital

Number of

votes

% share in

votes at

Shareholders’

Meeting

Banco Comercial Portugues S.A.

607 771 505

50.10

607 771 505

50.10

Nationale-Nederlanden Otwarty Fundusz Emerytalny

112 638 286

9.29

112 638 286

9.29

Allianz Polska Otwarty Fundusz Emerytalny

108 832 510

8.97

108 832 510

8.97

Otwarty Fundusz Emerytalny PZU „Złota Jesień”

65 599 757

5.41

65 599 757

5.41

39b. Accumulated other comprehensive income

Other comprehensive income arises on the recognition of:

▪ effect of valuation (at fair value) of financial assets FVTOCI in the net amount, i.e. after having

accounted for deferred tax. These values (related to debt securities and loans) are taken off

revaluation reserve at the moment of excluding the valued assets from the books of account -

in full or in part or at the moment of recognising impairment (the effect of valuation is then put

through the profit and loss account), the effect on capital instruments valuation is not transferred

to the profit and loss account.

▪ effect of valuation (at fair value) of derivatives hedging cash flows in the net amount, i.e. having

accounted for deferred tax. Revaluation reserve records such part of profits or losses connected

with the derivatives hedging cash flows which is an effective hedge, while the ineffective part of

the profits or losses connected with such hedging instrument is recognised in the profit and loss

account.

▪ actuarial gains (losses) at their net value, i.e. after deferred tax. Aforementioned gains or losses

result from the discounting of future liabilities arising from a provision created for retirement

benefits. Valuation is done using the projected unit cost method. The parameters that have a

significant impact on the amount of current liabilities are: the rate of mobility (rotation) of

employees, the discount rate, the rate of wage growth. These values are not reclassified to the

profit and loss account.

Accumulated other comprehensive income

31.12.2025

31.12.2024

Effect of valuation (gross)

450 374

(137 400)

Deferred income tax

(111 555)

26 105

Net effect of valuation

338 819

(111 295)

The sources of revaluation reserve are as follows (data in PLN thousand):

Revaluation reserve on FVTOCI assets 1.01.2025 - 31.12.2025

Gross value

Deferred tax

Total

Revaluation reserve at the beginning of the period

(54 981)

10 447

(44 534)

Transfer to income statement of the period as a result of sale

(32)

(26)

Change connected with maturity of securities

Profit/loss on revaluation of FVTOCI debt securities, recognized in equity

306 072

(69 883)

236 189

Profit/loss on revaluation of FVTOCI shares, recognized in equity

4 033

(2 341)

1 692

Revaluation reserve at the end of the period

255 092

(61 771)

193 321

176

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Revaluation reserve on FVTOCI assets 1.01.2024 - 31.12.2024

Gross value

Deferred tax

Total

Revaluation reserve at the beginning of the period

(218 941)

41 600

(177 341)

Transfer to income statement of the period as a result of sale

(143)

(116)

Change connected with maturity of securities

Profit/loss on revaluation of FVTOCI debt securities, recognized in equity

156 256

(29 689)

126 567

Profit/loss on revaluation of FVTOCI shares, recognized in equity

7 847

(1 491)

6 356

Revaluation reserve at the end of the period

(54 981)

10 447

(44 534)

Revaluation reserve on cash flows hedge financial instruments 1.01.2025 - 31.12.2025

Gross value

Deferred tax

Total

Revaluation reserve at the beginning of the period

(24 761)

4 705

(20 056)

Gains or losses on valuation of financial instruments recognized in equity

22 033

(3 891)

18 142

Transfer to income statement during period

(8)

Revaluation reserve at the end of the period

(2 688)

806

(1 882)

Revaluation reserve on cash flows hedge financial instruments 1.01.2024 - 31.12.2024

Gross value

Deferred tax

Total

Revaluation reserve at the beginning of the period

(54 194)

10 297

(43 897)

Gains or losses on valuation of financial instruments recognized in equity

29 212

(5 550)

23 662

Transfer to income statement during period

221

(42)

179

Revaluation reserve at the end of the period

(24 761)

4 705

(20 056)

Revaluation reserve due to actuarial gains (losses) 1.01.2025 - 31.12.2025

Gross value

Deferred tax

Total

Revaluation reserve at the beginning of the period

629

(121)

508

Change in the obligations arising from the provision for retirement benefits

(17 771)

4 062

(13 709)

Revaluation reserve at the end of the period

(17 142)

3 941

(13 201)

Revaluation reserve due to actuarial gains (losses) 1.01.2024 - 31.12.2024

Gross value

Deferred tax

Total

Revaluation reserve at the beginning of the period

(702)

132

(570)

Change in the obligations arising from the provision for retirement benefits

1 331

(253)

1 078

Revaluation reserve at the end of the period

629

(121)

508

Revaluation reserve on FVTOCI credit portolio 1.01.2025 - 31.12.2025

Gross value

Deferred tax

Total

Revaluation reserve at the beginning of the period

(58 287)

11 074

(47 213)

Gains or losses on valuation of financial instruments recognized in equity

280 587

(66 971)

213 617

Transfer to Profit and loss due to impairment calculation

(7 188)

1 366

(5 823)

Revaluation reserve at the end of the period

215 112

(54 531)

160 581

177

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Revaluation reserve on FVTOCI credit portolio 1.01.2024 - 31.12.2024

Gross value

Deferred tax

Total

Revaluation reserve at the beginning of the period

101 810

(19 344)

82 466

Gains or losses on valuation of financial instruments recognized in equity

(157 018)

29 833

(127 185)

Transfer to Profit and loss due to impairment calculation

(3 079)

585

(2 494)

Revaluation reserve at the end of the period

(58 287)

11 074

(47 213)

39c. Retained earnings

Supplementary

capital

Reserve capital

General banking

risk fund

Retained

earnings

TOTAL

Retained earnings at the beginning of

the period

374 957

3 789 409

228 902

553 610

4 946 878

appropriation of profit

643 103

(643 103)

net profit/ (loss) of the period

1 117 313

Retained earnings at the end of the

period 31.12.2025

374 957

4 432 512

228 902

1 027 820

6 064 191

Supplementary

capital

Reserve capital

General banking

risk fund

Retained

earnings

TOTAL

Retained earnings at 31.12.2023

374 957

3 279 150

228 902

510 259

4 393 268

opening balance adjustment

-89 493

Adjusted retained earnings at

01.01.2024

374 957

3 279 150

228 902

420 766

4 303 775

appropriation of profit

510 259

-510 259

net profit/ (loss) of the period

643 103

Retained earnings at the end of the

period 31.12.2024

374 957

3 789 409

228 902

553 610

4 946 878

178

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

40. FINANCIAL LIABILITIES BY CONTRACTUAL MATURITY

31.12.2025

Below 1

month

from 1

month to 3

months

from 3

months to

1 year

from 1

year

to 5 years

above

5 years

TOTAL

Deposits from banks

99 852

4 227

1 622

105 701

Deposits from customers

106 601 563

16 173 280

7 873 007

655 391

97 397

131 400 638

Liabilities from securities sold with

buy-back clause

Debt securities

2 874

6 217

488 491

5 401 891

542 392

6 441 865

Subordinated debt

24 817

105 887

1 693 958

1 824 662

Liabilities from trading derivatives -

notional value

1 963 129

2 329 165

6 105 828

10 765 795

1 578 734

22 742 651

Liabilities from hedging derivatives

- notional value

2 883 430

6 500 047

850 000

10 233 477

Commitments granted - financial

17 928 105

Commitments granted - guarantee

2 100 159

TOTAL

128 720 499

18 512 889

17 458 265

25 017 082

3 068 523

192 777 258

31.12.2024

Below 1

month

from 1

month to 3

months

from 3

months to

1 year

from 1

year

to 5 years

above

5 years

TOTAL

Deposits from banks

208 340

2 591

210 931

Deposits from customers

91 870 954

14 927 597

9 817 405

1 251 544

48 645

117 916 145

Liabilities from securities sold with

buy-back clause

194 254

Debt securities

4 186

8 997

579 212

5 538 619

1 301 540

7 432 554

Subordinated debt

28 611

128 090

1 018 593

830 000

2 005 294

Liabilities from trading derivatives -

notional value

3 589 735

1 426 436

2 104 353

6 051 771

263 740

13 436 035

Liabilities from hedging derivatives

- notional value

468 280

1 077 044

192 070

5 856 460

7 593 854

Commitments granted - financial

13 155 721

Commitments granted - guarantee

1 713 693

TOTAL

111 205 163

17 471 276

12 821 130

19 716 987

2 443 925

163 658 481

179

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

14. Supplementary Information

14.1. 2024 DIVIDEND

Bank Millennium has a dividend policy of distribution between 35% and 50% of net profit, taking into

account supervisory recommendations. Considering the position of the Commission on the dividend

policy of commercial banks for 2025, formulated in the letter of the Polish Financial Supervision Authority

dated 10 January 2025, the Bank's Management Board presented a proposal and the Annual General

Meeting of the Bank, held on 27 March 2025, decided to allocate the entire profit generated in 2024 in

the amount of PLN 643,103,011.05 to reserve capital.

14.2. DATA ABOUT ASSETS, WHICH SECURE LIABILITIES

As at 31 December 2025 following assets of the Bank constituted collateral of liabilities (PLN’000):

No.

Type of assets

Portfolio

Secured liability

Par value of

assets

Balance sheet

value of assets

Treasury Bonds

PS0527

Held to maturity

Security of payment obligation to BFG

contribution - guarantee fund

155 000

154 611

Treasury Bonds

DS0726

Held to maturity

Security of payment obligation to BFG

contribution compulsory resolution fund

172 000

170 942

Treasury Bonds

DS0727

Held to Collect and

for Sale

pledge on the Bank's account related to a

securitization transaction

425 000

422 051

Treasury Bonds

WZ1129

Held to maturity

pledge on the Bank's account related to a

securitization transaction

102 000

100 894

Treasury Bonds

PS0527

Held to maturity

financial and registered pledge on the

Bank's account in the brokerage house

188 850

188 376

Treasury Bonds

PS0527

Held to maturity

financial pledge on the Bank's account in

the brokerage house

583 659

582 193

Cash

receivables

initial settlement deposit in KDPW CCP

(MAGB)

15 000

Cash

receivables

ASO guarantee fund (PAGB)

4 245

Cash

receivables

appropriate security deposit at KDPW CCP

(MATS)

328

10.

Cash

receivables

Settlement on transactions concluded

164 464

164 689

11.

Deposits placed

Deposits in banks

Settlement on transactions concluded

78 109

78 290

TOTAL

1 888 655

1 881 618

Additionally, as at 31 December 2025, the Bank had not concluded short-term (usually settled within 7

days) sales transactions of Treasury securities with a repurchase agreement.

180

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

As at 31 December 2024 following assets of the Bank constituted collateral of liabilities (PLN’000):

No.

Type of assets

Portfolio

Secured liability

Par value of

assets

Balance sheet

value of assets

Treasury Bonds

DS0727

Held to maturity

Securing the Fund for Protection of Funds

Guaranteed as part of the Bank Guarantee

Fund

267 000

247 461

Treasury Bonds

PS0527

Held to maturity

Security of payment obligation to BFG

contribution - guarantee fund

142 000

139 128

Treasury Bonds

DS0726

Held to maturity

Security of payment obligation to BFG

contribution compulsory resolution fund

150 000

144 743

Treasury Bonds

PS0425

Held to Collect and

for Sale

pledge on the Bank's account related to a

securitization transaction

550 000

545 358

Treasury Bonds

WZ0525

Held to Collect and

for Sale

pledge on the Bank's account related to a

securitization transaction

127 000

128 110

Treasury Bonds

PS0527

Held to maturity

financial and registered pledge on the

Bank's account in the brokerage house

188 850

185 031

Treasury Bonds

PS0527

Held to maturity

financial pledge on the Bank's account in

the brokerage house

583 659

571 855

Cash

receivables

initial settlement deposit in KDPW CCP

(MAGB)

11 000

Cash

receivables

ASO guarantee fund (PAGB)

795

10.

Cash

receivables

appropriate security deposit at KDPW CCP

(MATS)

321

11.

Cash

receivables

Settlement on transactions concluded

24 657

12.

Deposits placed

Deposits in banks

Settlement on transactions concluded

144 662

145 063

TOTAL

2 189 944

2 143 522

Additionally, as at 31 December 2024, the Bank had concluded short-term (usually settled within 7 days)

sales transactions of Treasury securities with a repurchase agreement, the subject of which were

securities with a value of PLN 194,088 thousand.

The Bank is also obliged to maintain the obligatory reserve on the current account with the NBP, the

amount of which depends on the average balance of funds of customer deposit accounts and the reserve

rate set by the NBP. From the Bank's point of view, the funds held as part of the obligsatory reserve

constitute restricted assets. The value of the provision maintained at the end of the financial year is

presented in note (18).

14.3. SECURITIES COVERED BY TRANSACTIONS WITH A BUY-BACK

CLAUSE (SBB)

The following securities (presented in the Bank's balance sheet) were the subject of repurchase

transactions (SBB), in PLN thousand:

As at 31.12.2025

Type of security

Nominal value

Balance sheet value

Treasury bonds

TOTAL

As at 31.12.2024

Type of security

Nominal value

Balance sheet value

Treasury bonds

193 346

194 088

TOTAL

193 346

194 088

As a result of concluding repurchase transactions involving securities presented in the table above, the

Bank is exposed to risks similar to those in the case of holding securities with the same characteristics

in its own portfolio.

181

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

14.4. OFFSETTING OF ASSETS AND LIABILITIES

Offsetting the valuation of derivative instruments concluded through clearing houses

The Bank enters into IRS transactions held for trading or designated as hedging instruments, among

others, through clearing houses. Valuations of such instruments are recorded in the Statement of

Financial Position at net settlement amounts, taking into account variable margins. The effect of

offsetting the related receivables and liabilities with clearing houses is presented in the tables below.

Fair value

31.12.2025

Assets

Liabilities

Valuation of derivative instruments for trading, before cpmpensation

380 074

446 377

Compensation effect

(223 247)

(237 737)

Valuation of derivative instruments for trading, after cpmpensation

156 827

208 640

Fair value

31.12.2024

Assets

Liabilities

Valuation of derivative instruments for trading, before cpmpensation

401 349

366 517

Compensation effect

(144 255)

(139 768)

Valuation of derivative instruments for trading, after cpmpensation

257 094

226 749

Fair value

31.12.2025

Assets

Liabilities

Valuation of derivative instruments for trading, before cpmpensation

84 134

143 075

Compensation effect

(84 134)

(118 340)

Valuation of derivative instruments for trading, after cpmpensation

24 735

Fair value

31.12.2024

Assets

Liabilities

Valuation of derivative instruments for trading, before cpmpensation

127 335

126 896

Compensation effect

(127 335)

(25 357)

Valuation of derivative instruments for trading, after cpmpensation

101 539

182

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Theoretical offsetting of assets and liabilities on the basis of isda agreements

The part of the Bank's derivatives portfolio arises due to conclusion by the Bank framework ISDA

agreements (International Swaps and Derivatives Agreements). Provisions included in the agreements

define comprehensive procedures in case of infringement (mainly difficulties in payments), and provide

possibility to cancel a deal, making settlements with counterparty base on offset amount of mutual

receivables and liabilities. To date, the Bank has not exercised that option, however, in order to meet

information requirements as described in IFRS 7 the following table presents the fair values of derivative

instruments (both classified as held for trading and dedicated to hedge accounting) as well as cash

collaterals under ISDA framework agreements with a theoretical maximum amount resulting from the

settlement on the basis of compensation.

PLN’000

Amounts to be received

Amounts to be paid

Valuation of derivatives

58 632

66 555

Amount of cash collaterals accepted/granted

(39 177)

(41 041)

Financial assets and liabilities covered by framework ISDA

agreements allowing compensation

19 455

25 514

Theoretical maximum amount of compensation

(19 455)

Financial assets and liabilities covered by framework ISDA

agreements allowing compensation taking into account

theoretical amount of compensation

6 059

14.5. ADDITIONAL EXPLANATIONS TO THE CASH FLOW STATEMENT

For the purpose of the cash flow statement the following financial assets are classified by the Bank as

cash or its equivalents:

PLN’000

31.12.2025

31.12.2024

Cash and balances with the Central Bank

4 360 464

5 178 984

Receivables from interbank deposits*

214 445

288 391

Debt securities issued by the State Treasury*

10 295 426

8 597 254

of which FVTOCI and HTC

10 295 426

8 597 254

of which held for trading

Total

14 870 335

14 064 629

* Financial assets with original maturity below three months

For the purpose of the cash flow statement the following classification of activity types was adopted:

1. Operating activities – cover the basic scope of operations connected with services provided by the

Bank’s units covering events whose purpose is to earn profit and not being investment or financial

activity,

2. Investment activities cover operations connected with the purchasing and selling of fixed assets, in

particular financial assets not included in the ”for trading” category, shares and shares in

subsidiaries, tangible and intangible fixed assets,

3. Financial activities cover activities connected with raising of funds in the form of capital or liabilities,

as well as servicing sources of funding.

183

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Reconciliation of changes in balance sheet items with the changes presented in the operating section

of the statement of cash flows.

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

1) Change in the carrying amount of financial assets measured at fair value through profit

or loss resulting from balance sheet balances.

(227 325)

(159 028)

- the difference between interest accrued and interest paid (on a cash basis)

4 506

3 965

- hedge accounting valuation recognised in other comprehensive income

22 072

29 433

Change in financial assets measured at fair value through profit or loss, as presented in

the cash flow statement

(200 747)

(125 630)

2) Change in the balance of loans and advances granted to other banks resulting from

balance sheet balances

297 455

(511 904)

- the difference between interest accrued and interest paid (on a cash basis)

2 283

(912)

- interbank deposits and current accounts classified as cash and cash equivalents

(73 946)

(324 076)

Change in loans and advances to other banks arising from balance sheet movements,

presented in the cash flow statement

225 792

(836 892)

3) Change in the balance of loans and advances granted to customers resulting from

balance sheet balances

(82 108)

446 670

- the difference between interest accrued and interest paid (on a cash basis)

(12 430)

72 927

- valuation of the loan portfolio recognised in other comprehensive income

273 399

(160 098)

Change in loans and advances to customers as presented in the cash flow statement

178 861

359 499

4) Change in the balance of amounts due to banks resulting from balance sheet balances

(105 229)

(295 309)

- the difference between interest accrued and interest paid (on a cash basis)

402

1 374

Change in liabilities to banks as presented in the cash flow statement

(104 827)

(293 935)

5) Change in the balance of amounts due to customers resulting from balance sheet

balances

13 556 822

10 136 964

- the difference between interest accrued and interest paid (on a cash basis)

68 286

39 198

Change in liabilities to customers as presented in the cash flow statement

13 625 108

10 176 162

6) Change in the balance of debt securities issued resulting from balance sheet balances

(227 214)

2 002 214

- the difference between interest accrued and interest paid (on a cash basis)

5 079

(28 787)

- foreign exchange differences presented in a dedicated line within operating activities

44 680

32 701

- issuance of securities recognised within financing activities in the statement of cash

flows

(2 131 700)

- redemption of securities recognised within financing activities in the statement of cash

flows

144 000

128 731

Change in liabilities from the issuance of debt securities as presented in the cash flow

statement.

(33 455)

3 159

7) Change in the balance of other assets and liabilities resulting from balance sheet

balances

(24 389)

(1 201 494)

- change in the balance of finance lease liabilities

17 914

11 215

- other differences

990

Change in other assets and liabilities as presented in the cash flow statement

(6 475)

(1 189 289)

14.6. INFORMATION ON CUSTODY ACTIVITY

As at 31 December 2025, the Bank maintained 12,130 securities accounts and accounts for foreign

financial instruments. The value of assets held in Clients’ securities accounts under custodial services

amounted to PLN 27 billion. In 2025, the Bank also acted as Issuing Agent and Depositary for 21

Investment Funds of the Millennium TFI S.A. Group.

184

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

14.7. INCENTIVE PROGRAM BASED ON SHARES FOR RISK TAKERS

IN THE BANK MILLENNIUM S.A. GROUP

In accordance with the Group’s ‘Remuneration Policy for employees having a material impact on the

risk profile of the Bank Millennium S.A. Group’, employees identified as having a material impact on the

Group’s risk profile (Risk Takers) may receive variable remuneration, part of which is paid in the form of

financial instruments.

Under the rules set out in the Risk Takers Remuneration Policy, to the extent that the bonus is awarded

in a non-cash form, it is paid in the form of the Bank’s shares. In justified cases, the Bank may introduce

payment in other financial instruments. At the same time, where the bonus amount determined for a

Risk Taker for a given calendar year does not exceed the equivalent of EUR 50,000 and one-third of

the total annual remuneration, the bonus may be paid entirely in cash (in bonus schemes in force since

1 January 2021, financial instruments were awarded only to Risk Takers I – Members of the

Management Board of Bank Millennium S.A.).

On the basis of the Bank’s applicable three-year incentive programme, bonuses for 2021 were awarded

in the form of the Bank’s shares. In 2023, due to amendments to the Act on Public Offering and

Conditions for Introducing Financial Instruments to an Organised Trading System and on Public

Companies, the Personnel Committee of the Supervisory Board decided to convert the Bank’s own

shares granted to the Members of the Management Board under the programmes for 2021 into phantom

shares. Bonuses for 2022 and 2023 were awarded in the form of phantom shares.

In 2025, following a resolution of the General Meeting of Shareholders dated 27 March 2025, a new

incentive programme was introduced, constituting a remuneration system for Risk Takers, under which

they are granted the opportunity to acquire the Bank’s own shares using funds provided by the Bank.

As part of the programme’s implementation, at its meeting on 6 May 2025, the Personnel Committee of

the Supervisory Board decided to convert the deferred portion of variable remuneration of Members of

the Management Board of Bank Millennium for 2021, 2022 and 2023 in the form of phantom shares into

the Bank’s own shares. The bonus for 2024 was partially awarded in the form of the Bank’s own shares.

Variable remuneration in the financial instrument transferred to Risk Takers I in 2025, for the year:

2021

2022

2023

2024

Granting date

13.04.2022

03.11.2023

07.05.2024

06.06.2025

Type of transaction

under IFRS 2

cash settled

Vesting date

06.05.2025

06.06.2025

Vesting conditions

Meeting

the employment

conditions at the Bank in

2021, the Bank’s

performance, and

individual performance

results

Meeting

the employment

conditions at the Bank

in 2022, the Bank’s

performance, and

individual performance

results

Meeting

the employment

conditions at the Bank

in 2023, the Bank’s

performance, and

individual performance

results

Meeting

the employment

conditions at the Bank in

2024, the Bank’s

performance, and

individual performance

results

Program settlement

after vesting, the participant was granted funds for share purchase

Program valuation

share price on the last day of the reporting year

185

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

phantom shares

of Members of the Management Board

of Bank Millennium S.A. for the year:

Status at the end of 2025

Status at the end of 2024

Programs

for 2021, 2022, 2023 i 2024*

Programs

for 2021, 2022 i 2023

Number of phantom shares at the

beginning of the year:

1 124 861

884 081

Number of deferred phantom shares

in the year:

59 398

306 172

deferal rate

12,7780

9,5230

Number of phantom shares paid out after

the retention period in the year:

401 056

346 055

payout rate

14,0050

8,2100

Number of phantom shares vested

in a year:

59 398

401 056

vesting rate

12,7780

9,5230

Number of phantom shares at the end of

the year:

59 398

1 124 861

closing rate as of 31.12.2025

16,6300

8,9000

Fair value at closing price

on 31.12.2025 (PLN ths.)

988

10 011

* including severance pay for former Management Board Members serving until March 27, 2025

Bank Millennium shares

of Members of the Management Board

of Bank Millennium S.A. for the year:

Status at the end of 2025

Status at the end of 2024

Programs

for 2021, 2022, 2023 i 2024*

Programs

for 2021, 2022 i 2023

Number of shares at the beginning

of the year:

Number of deferred shares in the year:

193 386

deferal rate

14,5155

Number of shares paid out after

the retention period in the year:

payout rate

0,0000

Number of shares vested in a year:

375 025

vesting rate **

13,8900 / 14,5155

Number of shares at the end of the year:

794 950

closing rate as of 31.12.2025

16,6300

Fair value at closing price

on 31.12.2025 (PLN ths.)

13 220

** rate from two separate meetings of the Personnel Committee of the Supervisory Board

As at the date of publication of the Annual Report, the Personnel Committee of the Supervisory Board

had not made a decision regarding the amount of variable remuneration for the Management Board

Members for 2025.

14.8. ADDITIONAL INFORMATION AND OTHER ESSENTIAL EVENTS

THAT OCCURRED AFTER THE DATE ON WHICH THE FINANCIAL

STATEMENTS WERE PREPARED

REFORM OF BENCHMARKS - WIBOR

In May 2022, the Polish government announced that the WIBOR rate would be replaced with another

rate as of 1 January 2023. In June 2022, a Working Group was established, comprising commercial

banks, GPW Benchmark (the WIBOR Administrator) and the Polish Financial Supervision Authority

(KNF).

In July 2022, in connection with the planned reform of reference indices in Poland, the National Working

Group on Reference Rate Reform (NGR) was established. The objectives of the NGR include, among

others, the introduction of a new interest rate benchmark and replacing the currently used WIBOR index

in a safe and BMR-compliant manner, ensuring in particular the credibility, transparency and reliability

of the development and application of the new reference index.

186

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

The National Working Group is composed of representatives of the Ministry of Finance, the National

Bank of Poland, the Polish Financial Supervision Authority, the Bank Guarantee Fund, the Polish

Development Fund, the Warsaw Stock Exchange, the Central Securities Depository of Poland, Bank

Gospodarstwa Krajowego, GPW Benchmark, as well as representatives of banks, investment fund

companies, insurance undertakings, factoring and leasing companies, and issuers of bonds, including

corporate and municipal bonds, as well as clearing houses.

The work of the National Working Group is coordinated and supervised by a Steering Committee,

composed of representatives of key institutions: the Polish Financial Supervision Authority, the National

Bank of Poland, the Ministry of Finance, the Bank Guarantee Fund, GPW Benchmark – the administrator

of reference rates, BondSpot S.A. – and the Polish Bank Association.

NGR activities are conducted in a project-based formula with dedicated workstreams, in which

representatives of Bank Millennium actively participate.

On 28 March 2025, the Steering Committee of the National Working Group approved an updated

Roadmap for the replacement of WIBOR and WIBID reference indices and confirmed the final

conversion date at the end of 2027. On 2 June 2025, the official determination of the POLSTR (Polish

Short Term Rate) Interest Rate Index and the POLSTR Compounded Index Family commenced.

GPW Benchmark S.A. is the administrator of POLSTR. In September 2025, the NGR Steering

Committee published updated recommendations on the standards for applying the new target RFR

(risk-free rate) in new banking, leasing and factoring products, as well as financial instruments.

Recommendations concerning legacy portfolios remain under consultation.

On 1 September 2025, the first use of the POLSTR interest rate index occurred on the domestic financial

market, granting POLSTR the status of a reference index in accordance with BMR requirements.

On 30 September 2025, GPW Benchmark S.A., the administrator of interest rate benchmarks,

announced its decision to cease the calculation of the WIBID and WIBOR Reference Rates for the

following Fixing Tenors as of the dates indicated below:

- Overnight (O/N) – from 1 October 2026

- Tomorrow/Next (T/N) – from 22 December 2025

- 2 weeks (2W) – from 22 December 2025

- 1 year (1Y):

- from 22 December 2025 under the current methodology,

- from 22 December 2026 in connection with the supervisory authority’s requirement for the

administrator to continue publication of the benchmark under Article 21 of the BMR, following a

methodological change for the 1Y WIBOR Fixing Tenor.

The decision to discontinue certain Fixing Tenors aligns with the actions set out in the NGR Roadmap

adopted by its Steering Committee, and brings the structure of the Polish money-market curve closer to

selected foreign current and historical money-market curves. The decision supports the Roadmap’s

implementation for those Fixing Tenors for which (as in the case of T/N and 1Y) transaction volumes

are relatively low, their usage is limited, and discontinuation facilitates the introduction of the new interest

rate benchmark.

On 21 November 2025, the Ministry of Finance conducted the first pilot issuance of POLSTR-based

government bonds through a sale auction. Sales amounted to PLN 1,48 billion, with demand reaching

PLN 1,9 billion. In the additional sale, investors purchased bonds worth PLN 0,4 billion. From 26

November 2025, the bonds are listed on the Treasury BondSpot Poland (TBSP) market and on the

regulated markets of BondSpot and the Warsaw Stock Exchange. The interest rate on the new bonds

is based on a compounded rate calculated separately for each business day of the interest period, in

line with the recommended standards for applying the index.

187

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

For financial institutions, the key activities will include adapting IT systems, operational procedures and

legal solutions related to the application of the target POLSTR index. Accordingly, on 24 August 2022,

the Management Board of Bank Millennium S.A. established an internal project reporting to the

Management Board, aimed at ensuring proper management of the transition from WIBOR to the new

index and implementation of tasks in line with the Roadmap. Representatives of numerous

organizational units of the Bank participate in this work, in particular those responsible for product areas

and risk management, including interest rate risk and operational risk. The project structure is based on

workstreams covering products and processes where the WIBOR reference rate is applied, project

management by a dedicated project manager, and periodic reporting of status for each workstream.

At the current stage of the project, the Bank continuously monitors the work of the National Working

Group and actively participates in activities undertaken in individual workstreams. At the same time,

appropriate project decisions are being taken, and all recommendations developed by the NGR are

systematically incorporated into initiatives implemented within the Bank.

Bank Millennium applies the WIBOR reference rate in the following products (in PLN million, as at 31

December 2025):

- Mortgage loans: 19 867.29 (23 049.81 as at 31 December 2024) of loans indexed to WIBOR

(excluding mortgage loans of PLN 14 785.93 (13 884.02 as at 31 December 2024) currently with

periodically fixed interest rates, for which customers may switch to a variable WIBOR-indexed rate

after the end of the fixed-rate period);

- Corporate credit, factoring and discount products: 13 122.24 (12 839.86 as at 31 December 2024);

The following data for the debt and derivative instruments portfolio include the Bank’s data:

- Debt instruments: 14 954.2 (13 169.30 as at 31 December 2024)

- Assets: 12 965.5 (11 036.53 as at 31 December 2024)

- Liabilities: 1 988.8 (2 132.77 as at 31 December 2024)

- Derivative instruments: 17 687.3 incl. 5 065.00 hedging instruments (13 491.95 and 2 364.12 as at

31 December 2024)

The Bank also uses WIBOR-based instruments for hedge accounting. Detailed information on hedge

relationships applied by the Group, hedged items and hedging instruments, as well as the presentation

of results from these transactions, is provided in Note 24 “Derivative Instruments – Hedge Accounting”

in Chapter 13 “Notes to the Consolidated Financial Statements”.

Taking into account the changes introduced to IFRS by IASB, the Bank does not assume that continuing

active hedging relationships will be impossible due to the implementation of the WIBOR reform, and the

occurrence of ineffectiveness should not affect the fulfillment of the effectiveness tests of these

relationships.

The notional value of derivative instruments related to fair value hedges of fixed-interest assets

denominated in PLN, which use the WIBOR index subject to the interest rate reform, was PLN 3,425.0

million as of December 31, 2025 and includes only items relating to the year 2025.The notional amounts

of derivative instruments related to hedging relationships represent a close approximation of the risk

exposure managed within those relationships.

During the reporting period, the Bank applied the exceptions resulting from Stage 1 of the WIBOR reform

regarding hedge accounting in accordance with IAS 39 for hedging relationships directly affected by

uncertainty regarding the WIBOR benchmark. These exceptions included: (i) the assessment of the high

probability of future cash flows, (ii) prospective and retrospective effectiveness testing, and (iii) the

identification of discrete risk components. The exceptions applied to hedges referencing the WIBOR

index within the framework of fair value hedges. In accordance with IFRS requirements, any hedge

ineffectiveness was recognized in the income statement. The Bank will discontinue the exceptions at

the time of and on the basis of contract modifications.

188

Annual Financial Statements

of the Bank Millennium S.A.

for the 12-month period ending 31

December 2025

This document is a translation of a document originally issued in Polish.

The only binding version is the original Polish version.

Between the date on which this financial statement was prepared and the date of its publication, no

material events occurred that would affect the financial statements and the Bank’s future results, except

for the issuance of the Bank’s eurobonds described in Chapter 8.2 Capital Management.

Date

Name and surname

Position/Function

Signature

27.02.2026

Joao Bras Jorge

Chairman of

the Management Board

Signed by a qualified

electronic signature

27.02.2026

Fernando Bicho

Deputy Chairman of

the Management Board

Signed by a qualified

electronic signature

27.02.2026

Wojciech Haase

Member of

the Management Board

Signed by a qualified

electronic signature

27.02.2026

Jarosław Hermann

Member of

the Management Board

Signed by a qualified

electronic signature

27.02.2026

Halina Karpińska

Member of

the Management Board

Signed by a qualified

electronic signature

27.02.2026

Antonio Pinto Junior

Member of

the Management Board

Signed by a qualified

electronic signature

27.02.2026

Magdalena Zmitrowicz

Member of

the Management Board

Signed by a qualified

electronic signature