Annual Consolidated

Financial Report

of the Bank Millennium S.A.

Capital Group

for the 12-month period

ending 31

December 2025

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.

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

9 120 235

8 823 127

2 152 420

2 049 888

Fee and commission income

1 078 772

1 058 319

254 595

245 881

Profit (loss) before income tax

1 619 764

875 024

382 272

203 295

Profit (loss) after taxes

1 201 789

719 209

283 628

167 095

Total comprehensive income of the period

1 443 473

876 737

340 667

203 693

Net cash flows from operating activities

13 625 999

10 282 113

3 215 803

2 388 856

Net cash flows from investing activities

(13 717 011)

(13 812 323)

(3 237 282)

(3 209 034)

Net cash flows from financing activities

821 739

2 185 281

193 934

507 709

Net cash flows, total

730 727

(1 344 929)

172 455

(312 469)

Earnings (losses) per ordinary share (in PLN/EUR)

0.99

0.59

0.23

0.14

Diluted earnings (losses) per ordinary share

0.99

0.59

0.23

0.14

31.12.2025

31.12.2024

31.12.2025

31.12.2024

Total Assets

155 673 331

138 864 367

36 830 939

32 498 097

Liabilities to banks and other monetary institutions

103 113

204 459

24 396

47 849

Liabilities to customers

130 807 491

117 257 213

30 947 900

27 441 426

Equity

9 125 614

7 682 141

2 159 040

1 797 833

Share capital

1 213 117

287 013

283 903

Number of shares (pcs.)

1 213 116 777

Book value per share (in PLN/EUR)

7.52

6.33

1.78

1.48

Diluted book value per share (in PLN/EUR)

7.52

6.33

1.78

1.48

Total Capital Ratio (TCR)

15.11%

17.24%

15.11%

17.24%

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

CONSOLIDATED 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

5 755 599

1 438 084

5 529 944

1 505 045

Interest income and other of similar nature

9 120 235

2 272 306

8 823 127

2 335 332

Income calculated using the effective interest method

9 002 944

2 243 978

8 677 377

2 304 781

Interest income from Financial assets at amortised

cost, of which:

7 215 545

1 742 910

7 326 377

1 949 227

- the impact of the adjustment to the gross

carrying amount of loans due to credit holidays

(112 709)

44 597

Interest income from Financial assets at fair value

through other comprehensive income

1 787 399

501 068

1 351 000

355 554

Result of similar nature to interest from Financial assets

at fair value through profit or loss

117 291

28 328

145 750

30 551

Interest expenses

(3 364 636)

(834 222)

(3 293 183)

(830 287)

Net fee and commission income

775 043

200 065

776 698

187 943

Fee and commission income

1 078 772

283 612

1 058 319

259 077

Fee and commission expenses

(303 729)

(83 547)

(281 621)

(71 134)

Dividend income

4 306

3 626

Result on derecognition of financial assets and liabilities not

measured at fair value through profit or loss

(4 448)

(1 189)

(1 982)

(849)

Results on financial assets and liabilities held for trading

24 270

6 340

(7 206)

(2 439)

Result on non-trading financial assets mandatorily at fair

value through profit or loss

89 472

34 549

19 134

9 263

Result on hedge accounting

289

(2 560)

1 544

1 343

Result on exchange differences

221 264

54 618

224 537

55 168

Other operating income

401 412

85 994

374 196

98 238

Other operating expenses

(330 209)

(44 881)

(399 185)

(126 769)

Administrative expenses

(2 332 023)

(601 932)

(2 026 444)

(537 051)

Impairment losses on financial assets

(228 917)

(49 778)

(304 526)

(673)

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

(3 164)

(423)

(2 198)

(304)

Depreciation

(224 378)

(57 467)

(226 191)

(59 190)

Banking tax

(405 713)

(105 101)

(232 419)

(98 907)

Profit before income taxes

1 619 764

415 419

875 024

311 277

Corporate income tax

(417 975)

(68 882)

(155 815)

(138 763)

Profit after taxes

1 201 789

346 537

719 209

172 514

Attributable to:

Owners of the parent

1 201 789

346 537

719 209

172 514

Non-controlling interests

Weighted average number of outstanding ordinary shares

(pcs.)

1 213 116 777

Profit (ordinary/diluted) per ordinary share (in PLN)

0.99

0.29

0.59

0.14

* 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.

CONSOLIDATED 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

restated

data

1.10.2024 -

31.12.2024*

restated

data

Result after taxes

1 201 789

346 537

719 209

172 514

Other comprehensive income items that may be (or were)

reclassified to profit or loss

327 973

104 458

184 704

(66 589)

Result on debt securities at fair value through other

comprehensive income

305 901

99 170

155 271

(70 298)

Hedge accounting

22 072

5 288

29 433

3 709

Other comprehensive income items that will not be

reclassified to profit or loss

(14 362)

9 775

Actuarial gains (losses)

(18 395)

1 928

Result on equity instruments at fair value through other

comprehensive income

4 033

7 847

Total comprehensive income items before taxes

313 611

90 096

194 479

(56 814)

Corporate income tax on other comprehensive income items

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

(73 774)

(31 306)

(35 094)

12 652

Corporate income tax on other comprehensive income items

that will not be reclassified to profit or loss

1 847

(1 857)

Total comprehensive income items after taxes

241 684

60 637

157 528

(46 019)

Total comprehensive income for the period

1 443 473

407 174

876 737

126 495

Attributable to:

Owners of the parent

1 443 473

407 174

876 737

126 495

Non-controlling interests

* 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 Consolidated Financial Statements 
of the Bank Millennium S.A. Capital Group 
for the 12-month period ending 31
st
 December 2025 
ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 
OF THE BANK MILLENNIUM S.A. CAPITAL GROUP 
  FOR THE 12-MONTH PERIOD ENDING 31
ST
 DECEMBER 2025 
 
TABLE OF CONTENT 
1.  CONSOLIDATED PROFIT AND LOSS ACCOUNT ............................................................... 7 
2.  CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME .......................... 8 
3.  CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................ 9 
4.  CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................... 11 
5.  CONSOLIDATED STATEMENT OF CASH FLOW .............................................................. 12 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ........................................................ 14 
6.  GENERAL INFORMATION ABOUT ISSUER AND THE ISSUER’S CAPITAL GROUP ..... 14 
7.  ACCOUNTING POLICY ........................................................................................................ 16 
7.1.  STATEMENT OF COMPLIANCE WITH THE INTERNATIONAL FINANCIAL REPORTING STANDARDS ....... 16 
7.2.  OPENING BALANCE ADJUSTMENT AND CHANGE IN THE PRESENTATION OF DATA IMPLEMENTED IN 
2025 AND THE RESTATEMENT OF COMPARATIVE DATA ................................................................ 16 
7.3.  STANDARDS AND INTERPRETATIONS APPLIED IN 2025 AND THOSE NOT BINDING AT THE BALANCE 
SHEET DATE ............................................................................................................................. 26 
7.4.  ADOPTED ACCOUNTING PRINCIPLES ........................................................................................... 27 
8.  FINANCIAL RISK MANAGEMENT ....................................................................................... 55 
8.1.  RISK MANAGEMENT .................................................................................................................. 55 
8.2.  CAPITAL MANAGEMENT ............................................................................................................. 59 
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.  OPERATIONAL SEGMENTS .............................................................................................. 102 
10.  TRANSACTIONS WITH RELATED ENTITIES ................................................................... 106 
10.1.  DESCRIPTION OF THE TRANSACTIONS WITH THE PARENT GROUP .............................................. 106 
10.2.  TRANSACTIONS WITH THE MANAGING AND SUPERVISING PERSONS ........................................... 107 
10.3.  INFORMATION ON COMPENSATIONS AND BENEFITS OF THE PERSONS SUPERVISING AND MANAGING 
THE BANK .............................................................................................................................. 107 
11.  FAIR VALUE ........................................................................................................................ 109 
12.  CONTINGENT LIABILITIES AND ASSETS ....................................................................... 114 
12.1.  LAWSUITS AND SIGNIFICANT PROCEEDINGS .............................................................................. 114 
12.2.  OFF – BALANCE ITEMS ............................................................................................................ 121 
13.  LEGAL RISK RELATED TO FOREIGN CURRENCY MORTGAGE LOANS .................... 123 
14.  ADDITIONAL EXPLANATORY NOTES ............................................................................. 129 
1.  INTEREST INCOME AND OTHER OF SIMILAR NATURE ................................................................... 129 
2.  INTEREST EXPENSE ................................................................................................................ 129 
3.  FEE AND COMMISSION INCOME AND EXPENSE ........................................................................... 130 
4.  DIVIDEND INCOME ................................................................................................................... 131 
5.  RESULT ON DERECOGNITION OF FINANCIAL ASSETS AND LIABILITIES NOT MEASURED AT FAIR VALUE 
THROUGH PROFIT OR LOSS ...................................................................................................... 131 
6.  RESULTS ON FINANCIAL ASSETS AND LIABILITIES HELD FOR TRADING ......................................... 131 

 
 
 
 
 
  
 
 

This document is a translation of a document originally issued in Polish. 
The only binding version is the original Polish version. 
Annual Consolidated Financial Statements  
of the Bank Millennium S.A. Capital Group 
for the 12-month period ending 31
st
 December 2025 
 RESULTS ON NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR 
LOSS ...................................................................................................................................... 131 
 RESULT ON HEDGE ACCOUNTING ............................................................................................. 132 
 OTHER OPERATING INCOME .................................................................................................... 132 
 OTHER OPERATING EXPENSE .................................................................................................. 132 
 ADMINISTRATIVE EXPENSES .................................................................................................... 133 
 IMPAIRMENT LOSSES ON FINANCIAL ASSETS ............................................................................. 133 
 IMPAIRMENT LOSSES ON NON-FINANCIAL ASSETS ...................................................................... 134 
 PROVISIONS FOR LEGAL RISK CONNECTED WITH FX MORTGAGE LOANS ..................................... 134 
 DEPRECIATION AND AMORTIZATION.......................................................................................... 135 
 CORPORATE INCOME TAX ........................................................................................................ 135 
 EARNINGS PER SHARE ............................................................................................................ 137 
 CASH, BALANCES AT THE CENTRAL BANK ................................................................................. 137 
 FINANCIAL ASSETS HELD FOR TRADING .................................................................................... 138 
 NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR LOSS, OTHER 
THAN LOANS AND ADVANCES TO CUSTOMERS ........................................................................... 140 
 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME .......................... 141 
 LOANS AND ADVANCES TO CUSTOMERS ................................................................................... 142 
 FINANCIAL ASSETS AT AMORTISED COST OTHER THAN LOANS AND ADVANCES TO CUSTOMERS .... 151 
 DERIVATIVES – HEDGE ACCOUNTING ....................................................................................... 153 
 INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES ........................................... 158 
 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 ......................... 167 
 FINANCIAL LIABILITIES HELD FOR TRADING ................................................................................ 168 
 LIABILITIES TO BANKS AND OTHER MONETARY INSTITUTIONS ...................................................... 168 
 LIABILITIES TO CUSTOMERS ..................................................................................................... 169 
 REPURCHASE AGREEMENTS .................................................................................................... 170 
 DEBT SECURITIES ISSUED ....................................................................................................... 170 
 SUBORDINATED DEBT ............................................................................................................. 172 
 PROVISIONS ........................................................................................................................... 173 
 OTHER LIABILITIES .................................................................................................................. 174 
 EQUITY .................................................................................................................................. 176 
 FINANCIAL LIABILITIES BY CONTRACTUAL MATURITY .................................................................. 180 
 SUPPLEMENTARY INFORMATION .................................................................................. 181 
1.  2024 DIVIDEND ....................................................................................................................... 181 
2.  DATA ABOUT ASSETS, WHICH SECURE LIABILITIES ..................................................................... 181 
3.  SECURITIES COVERED BY TRANSACTIONS WITH A BUY-BACK CLAUSE (SBB)............................... 183 
4.  OFFSETTING OF ASSETS AND LIABILITIES .................................................................................. 183 
5.  ADDITIONAL EXPLANATIONS TO THE CASH FLOW STATEMENT ..................................................... 184 
6.  INFORMATION ON CUSTODY ACTIVITY ....................................................................................... 186 
7.  INCENTIVE PROGRAM BASED ON SHARES FOR RISK TAKERS IN THE BANK MILLENNIUM S.A. GROUP
 ............................................................................................................................................. 186 
8.  ADDITIONAL INFORMATION AND OTHER ESSENTIAL EVENTS THAT OCCURRED AFTER THE DATE ON 
WHICH THE FINANCIAL STATEMENTS WERE PREPARED............................................................... 188 
 
   

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

1. Consolidated Profit and Loss Account

Amount ‘000 PLN

Note

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

restated data

Net interest income

5 755 599

5 529 944

Interest income and other of similar nature

9 120 235

8 823 127

Income calculated using the effective interest method

9 002 944

8 677 377

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

7 215 545

7 326 377

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

due to credit holidays

(112 709)

Interest income from Financial assets at fair value through other

comprehensive income

1 787 399

1 351 000

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

profit or loss

117 291

145 750

Interest expenses

(3 364 636)

(3 293 183)

Net fee and commission income

775 043

776 698

Fee and commission income

1 078 772

1 058 319

Fee and commission expenses

(303 729)

(281 621)

Dividend income

4 306

3 626

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

value through profit or loss

(4 448)

(1 982)

Results on financial assets and liabilities held for trading

24 270

(7 206)

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

loss

89 472

19 134

Result on hedge accounting

289

1 544

Result on exchange differences

221 264

224 537

Other operating income

401 412

374 196

Other operating expenses

(330 209)

(399 185)

Administrative expenses

(2 332 023)

(2 026 444)

Impairment losses on financial assets

(228 917)

(304 526)

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

(3 164)

(2 198)

Depreciation

(224 378)

(226 191)

Banking tax

(405 713)

(232 419)

Profit before income taxes

1 619 764

875 024

Corporate income tax

(417 975)

(155 815)

Profit after taxes

1 201 789

719 209

Attributable to:

Owners of the parent

1 201 789

719 209

Non-controlling interests

Weighted average number of outstanding ordinary shares (pcs.)

1 213 116 777

Profit (ordinary/diluted) per ordinary share (in PLN)

0.99

0.59

Notes on pages 14-190 are integral part of these consolidated financial statements.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

2. Consolidated Statement of Total

Comprehensive Income

Amount ‘000 PLN

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

restated data

Profit after taxes

1 201 789

719 209

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

327 973

184 704

Result on debt securities at fair value through other comprehensive income

305 901

155 271

Hedge accounting

22 072

29 433

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

(14 362)

9 775

Actuarial gains (losses)

(18 395)

1 928

Result on equity instruments at fair value through other comprehensive income

4 033

7 847

Other comprehensive income items before taxes

313 611

194 479

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

reclassified to profit or loss

(73 774)

(35 094)

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

profit or loss

1 847

(1 857)

Other comprehensive income items after taxes

241 684

157 528

Total comprehensive income for the period

1 443 473

876 737

Attributable to:

Owners of the parent

1 443 473

876 737

Non-controlling interests

Notes on pages 14-190 are integral part of these consolidated financial statements.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

3. Consolidated 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

1 019 418

1 005 542

620 486

Derivatives

155 309

255 845

498 249

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

42 512 088

29 255 449

22 096 200

Equity instruments

40 942

36 712

28 793

Debt securities

42 471 146

29 218 737

22 067 407

Loans and advances to customers

76 415 921

74 864 830

73 504 611

Mandatorily at fair value through profit or loss

745

1 825

19 349

Valued at amortised cost

76 415 176

74 863 005

73 485 262

Financial assets at amortised cost other than Loans and advances

to customers

27 316 092

24 816 002

20 695 023

Debt securities

26 905 373

24 381 485

18 749 907

Deposits, loans and advances to banks and other monetary

institutions

350 741

434 517

793 436

Repurchase agreements

59 978

1 151 680

Derivatives – Hedge accounting

15 069

Investments in subsidiaries, joint ventures and associates

38 657

44 012

52 509

Tangible fixed assets

557 034

532 226

529 876

Intangible fixed assets

609 981

534 417

465 425

Income tax assets

568 559

734 769

507 795

Current income tax assets

19 093

343

1 810

Deferred income tax assets

549 466

734 426

505 985

Other assets

2 082 093

1 765 188

1 544 328

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

16 717

14 549

17 514

Total assets

155 673 331

138 864 367

125 291 443

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

246 359

417 073

579 553

Derivatives

208 571

226 304

576 833

Liabilities from short sale of securities

37 788

190 769

2 720

Financial liabilities measured at amortised cost

140 109 103

125 343 000

112 633 690

Liabilities to banks and other monetary institutions

103 113

204 459

504 368

Liabilities to customers

130 807 491

117 257 213

107 246 428

Repurchase agreements

194 223

Debt securities issued

7 640 812

6 124 775

3 317 849

Subordinated debt

1 557 687

1 562 330

1 565 045

Derivatives – Hedge accounting

24 735

101 539

165 700

Provisions

3 746 520

2 951 752

1 493 800

Legal issues

3 566 628

2 847 003

1 403 105

Commitments and guarantees given

105 358

53 583

42 367

Retirement benefits

74 534

51 166

48 328

Income tax liabilities

17 549

223 767

461 457

Current income tax liabilities

16 525

220 659

461 217

Deferred income tax liabilities

1 024

3 108

240

Other liabilities

2 403 451

2 145 095

3 151 839

Total Liabilities

146 547 717

131 182 226

118 486 039

EQUITY

Share capital

1 213 117

Own shares

(21)

Share premium

1 147 502

Accumulated other comprehensive income

181 700

(59 984)

(217 512)

Retained earnings included:

6 583 316

5 381 527

4 662 318

- current net result

1 201 789

719 209

575 717

- other

5 381 527

4 662 318

4 086 601

Total equity

9 125 614

7 682 141

6 805 404

Total equity and total liabilities

155 673 331

138 864 367

125 291 443

Notes on pages 14-190 are integral part of these financial statements.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

4. Consolidated Statement of Changes in Equity

Amount ‘000 PLN

Total

consolidated

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

7 682 141

1 213 117

(21)

1 147 502

(59 984)

864 404

4 517 123

Total comprehensive

income for 2025 (net)

1 443 473

241 684

1 201 789

current profit /loss

1 201 789

other comprehensive

income items after taxes

241 684

Purchase and transfer of

own shares to employees

Appropriation of profit

(660 989)

660 989

Equity at the end of the

period

9 125 614

1 213 117

(21)

1 147 502

181 700

1 405 204

5 178 112

Amount ‘000 PLN

Total

consolidated

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

6 894 897

1 213 117

(21)

1 147 502

(217 512)

792 278

3 959 533

opening balance

adjustment

(89 493)

Adjusted Equity as at

01.01.2024

6 805 404

1 213 117

(21)

1 147 502

(217 512)

702 785

3 959 533

Total comprehensive

income for 2024 (net)

876 737

157 528

719 209

current profit /loss

719 209

other comprehensive

income items after taxes

157 528

Appropriation of profit

(557 590)

557 590

Equity at the end of the

period

7 682 141

1 213 117

(21)

1 147 502

(59 984)

864 404

4 517 123

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

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

5. Consolidated Statement of Cash Flow

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

1 201 789

719 209

Total adjustments:

12 424 210

9 562 904

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

(5 755 600)

(5 529 945)

Interest received

8 794 770

8 626 356

Interest paid

(2 750 454)

(2 761 412)

Depreciation and amortization

224 378

226 191

Foreign exchange (gains)/ losses

(47 868)

(34 238)

Dividends

(4 306)

(3 626)

Changes in provisions

776 373

1 459 881

Result on sale and liquidation of investing activity assets

(40 524)

(21 685)

Change in financial assets held for trading

(200 479)

(124 710)

Change in loans and advances to banks

11 165

33 774

Change in loans and advances to customers

(1 572 056)

(1 280 135)

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)

(247 518)

(226 641)

Change in deposits from banks

(100 943)

(298 535)

Change in deposits from customers

13 619 035

10 050 596

Change in liabilities from securities sold with buy-back clause

(194 223)

194 224

Change in debt securities issued

(33 455)

3 158

Income tax (from the Profit and loss statement)

417 975

155 815

Income tax paid

(529 910)

(657 430)

Change in other assets and liabilities

(37 444)

(1 217 758)

Net cash flows from operating activities

13 625 999

10 282 113

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

B. CASH FLOWS FROM INVESTING ACTIVITIES

Amount ‘000 PLN

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

restated data

Inflows:

596 556 007

562 020 923

Proceeds from sale of property, plant and equipment and

intangible assets

64 606

35 067

Proceeds from sale of shares in related entities

Proceeds from sale of investment financial assets

596 487 095

561 982 230

Other

4 306

3 626

Outflows:

(610 273 018)

(575 833 246)

Acquisition of property, plant and equipment and intangible

assets

(275 653)

(221 668)

Acquisition of shares in related entities

Acquisition of investment financial assets

(609 997 365)

(575 611 578)

Other

Net cash flows from investing activities

(13 717 011)

(13 812 323)

C. CASH FLOWS FROM FINANCING ACTIVITIES

Amount ‘000 PLN

1.01.2025 -

31.12.2025

1.01.2024 -

31.12.2024

restated data

Inflows from financing activities:

1 800 000

2 931 700

Long-term bank loans

Issue of debt securities

1 800 000

2 931 700

Increase in subordinated debt

Net proceeds from issues of shares and additional capital paid-

Other inflows from financing activities

Outflows from financing activities:

(978 261)

(746 419)

Repayment of long-term bank loans

Redemption of debt securities

(205 000)

(128 731)

Decrease in subordinated debt

Issue of shares expenses

Redemption of shares

Dividends paid and other payments to owners

Payments of lease liabilities

(87 637)

(90 752)

Other outflows from financing activities

(685 624)

(526 936)

Net cash flows from financing activities

821 739

2 185 281

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

730 727

(1 344 929)

- of which change resulting from FX differences

3 261

(343)

E. Cash and cash equivalents at the beginning of the reporting

period

14 159 599

15 504 527

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

(D + E)

14 890 326

14 159 598

Additional information regarding cash flows statement is presented in point 5) of chapter 15.

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

in points 32), 35), 36) of chapter 14. “Notes to the Consolidated Financial Statements”.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6. General Information about Issuer and the

Issuer’s Capital Group

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 centres, 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Capital Group of Bank Millennium S.A.

The Group’s parent entity is Bank Millennium S.A. while the ultimate parent entity of the Bank Millennium

S.A. is the Banco Comercial Portugues - company listed on the stock exchange in Lisbon. The

companies that belong to the Capital Group as at 31 December 2025, are presented by the table below:

Company

Activity domain

Head office

% of the

Group’s

capital share

% of the

Group’s

voting share

Recognition in

financial statements

MILLENNIUM BANK

HIPOTECZNY S.A.

mortgage bank

Warsaw

100

full consolidation

MILLENNIUM LEASING Sp. z o.o.

leasing services

Warsaw

100

full consolidation

MILLENNIUM CONSULTING S.A.

advisory services

Warsaw

100

full consolidation

MILLENNIUM TFI S.A.

investment funds

management

Warsaw

100

full consolidation

MILLENNIUM SERVICE Sp. z o.o.

rental and

management of real

estate, insurance

and brokers activity

Warsaw

100

full consolidation

MILLENNIUM GOODIE Sp. z o.o.

web portals activity

Warsaw

100

full consolidation

MILLENNIUM

TELECOMMUNICATION

SERVICES Sp. z o.o.

financial operations -

equity markets,

advisory services

Warsaw

100

full consolidation

EUROPA MILLENNIUM

FINANCIAL

SERVICES Sp. z o.o.

activities of

insurance agents

and brokers

Wrocław

equity method

valuation

LUBUSKIE FABRYKI MEBLI S.A.

in liquidation*

furniture

manufacturer

Świebodzin

50 (+1 share)

(*)

* The Group does not consolidate Lubuskie Fabryki Mebli S.A. due to the immateriality of this entity.

In the third quarter of 2025, the liquidation of Piast Expert Sp. z o.o. was completed, and as a result, the

company ceased to be consolidated.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

7. Accounting Policy

7.1. STATEMENT OF COMPLIANCE WITH THE INTERNATIONAL

FINANCIAL REPORTING STANDARDS

These financial statements of the Group 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 data 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 Group 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’.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group’s financial statement have been restated, as shown below in

tabular form.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

5 529 944

Interest income and other of similar nature

8 823 127

Income calculated using the effective interest

method

8 721 740

(44 363)

8 677 377

Interest income from Financial assets at

amortised cost, of which:

7 370 740

(44 363)

7 326 377

- the impact of the adjustment to the gross

carrying amount of loans due to credit

holidays

(112 709)

Interest income from Financial assets at fair

value through other comprehensive income

1 351 000

Result of similar nature to interest from Financial

assets at fair value through profit or loss

101 387

44 363

145 750

Interest expenses

(3 293 183)

Net fee and commission income

776 698

Fee and commission income

1 058 319

Fee and commission expenses

(281 621)

Dividend income

3 626

Result on derecognition of financial assets and

liabilities not measured at fair value through profit or

loss

(1 982)

Results on financial assets and liabilities held for

trading

(7 206)

Result on non-trading financial assets mandatorily at

fair value through profit or loss

19 134

Result on hedge accounting

1 544

Result on exchange differences

(178 868)

403 405

224 537

Other operating income

374 196

Other operating expenses

(520 325)

121 140

(399 185)

Administrative expenses

(2 026 444)

Impairment losses on financial assets

(271 082)

(33 444)

(304 526)

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

(182 257)

146 615

33 444

(2 198)

Depreciation

(226 191)

Share of the profit of investments in subsidiaries

Banking tax

(232 419)

Profit before income taxes

875 024

Corporate income tax

(155 815)

Profit after taxes

719 209

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

811 324

194 218

1 005 542

Derivatives

255 845

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

29 255 449

Equity instruments

36 712

Debt securities

29 218 737

Loans and advances to

customers

74 981 215

(110 485)

(5 900)

74 864 830

Mandatorily at fair value

through profit or loss

1 825

Valued at amortised cost

74 979 390

(110 485)

(5 900)

74 863 005

Financial assets at amortised cost

other than Loans and advances

to customers

25 010 220

(194 218)

24 816 002

Debt securities

24 381 485

Deposits, loans and advances

to banks and other monetary

institutions

434 517

Repurchase agreements

194 218

(194 218)

Derivatives – Hedge accounting

112 365

(112 365)

Investments in subsidiaries, joint

ventures and associates

44 012

Tangible fixed assets

588 741

(56 515)

532 226

Intangible fixed assets

557 309

(22 892)

534 417

Income tax assets

713 777

20 992

734 769

Current income tax assets

343

Deferred income tax assets

713 434

20 992

734 426

Other assets

1 765 188

Non-current assets and disposal

groups classified as held for sale

14 549

Total assets

139 151 532

(89 493)

(118 265)

(79 407)

138 864 367

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

417 073

Derivatives

226 304

Liabilities from short sale of

securities

190 769

Financial liabilities measured at

amortised cost

125 455 365

(112

365)

125 343 000

Liabilities to banks and other

monetary institutions

316 824

(112

365)

204 459

Liabilities to customers

117 257 213

Repurchase agreements

194 223

Debt securities issued

6 124 775

Subordinated debt

1 562 330

Derivatives – Hedge accounting

107 439

(5 900)

101 539

Provisions

2 900 586

51 166

2 951 752

Legal issues

2 847 003

Commitments and guarantees

given

53 583

Retirement benefits

51 166

Income tax liabilities

223 767

Current income tax liabilities

220 659

Deferred income tax liabilities

3 108

Other liabilities

2 275 668

(51 166)

(79 407)

2 145 095

Total Liabilities

131 379 898

(118

265)

(79 407)

131 182 226

EQUITY

Share capital

1 213 117

Own shares

(21)

Share premium

1 147 502

Accumulated other

comprehensive income

(59 984)

Retained earnings

5 471 020

(89 493)

5 381 527

Total equity

7 771 634

(89 493)

7 682 141

Total equity and total liabilities

139 151 532

(89 493)

(118

265)

(79 407)

138 864 367

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

608 924

11 562

620 486

Derivatives

498 249

Equity instruments

121

Debt securities, of which:

110 554

Debt instruments serving as

collateral for repurchase

transactions

Reverse sale and 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

22 096 199

Equity instruments

28 793

Debt securities

22 067 407

Loans and advances to

customers

73 643 060

(110 485)

(27 964)

73 504 611

Mandatorily at fair value

through profit or loss

19 349

Valued at amortised cost

73 623 711

(110 485)

(27 964)

73 485 262

Financial assets at amortised cost

other than Loans and advances

to customers

20 706 586

(11 562)

20 695 024

Debt securities

18 749 907

Deposits, loans and advances

to banks and other monetary

institutions

793 436

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

52 509

Tangible fixed assets

565 630

(35 754)

529 876

Intangible fixed assets

481 631

(16 206)

465 425

Income tax assets

486 803

20 992

507 795

Current income tax assets

1 810

Deferred income tax assets

484 993

20 992

505 985

Other assets

1 544 328

Non-current assets and disposal

groups classified as held for sale

17 514

Total assets

125 520 004

(89 493)

(87 108)

(51 960)

125 291 443

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

579 553

Derivatives

576 833

Liabilities from short sale of

securities

2 720

Financial liabilities measured at

amortised cost

112 692 833

(59 144)

112 633 689

Liabilities to banks and other

monetary institutions

563 512

(59 144)

504 368

Liabilities to customers

107 246 428

Repurchase agreements

Debt securities issued

3 317 849

Subordinated debt

1 565 045

Derivatives – Hedge accounting

193 664

(27 964)

165 700

Provisions

1 445 471

48 328

1 493 799

Legal issues

1 403 105

Commitments and guarantees

given

42 367

Retirement benefits

48 328

Income tax liabilities

461 456

Current income tax liabilities

461 217

Deferred income tax liabilities

240

Other liabilities

3 252 131

(48 328)

(51 960)

3 151 843

Total Liabilities

118 625 109

(87 108)

(51 960)

118 486 041

EQUITY

Share capital

1 213 117

Own shares

(21)

Share premium

1 147 502

Accumulated other

comprehensive income

(217 512)

Retained earnings

4 751 809

(89 493)

4 662 316

Total equity

6 894 895

(89 493)

6 805 402

Total equity and total liabilities

125 520 004

(89 493)

(87 108)

(51 960)

125 291 443

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

719 209

Total adjustments:

11 692 670

2 790

(2 324 592)

90 752

128 731

(27 447)

9 562 904

Interest income/expense result

(from the Profit and loss statement)

(5 529 945)

Interest received

8 403 056

223 300

8 626 356

Interest paid

(2 761 412)

Depreciation and amortization

226 191

Foreign exchange (gains)/ losses

(34 238)

Dividends

(3 626)

Changes in provisions

1 455 115

4 766

1 459 881

Result on sale and liquidation of

investing activity assets

(21 685)

Change in financial assets held for

trading

(265 138)

2 790

84 417

53 221

(124 710)

Change in loans and advances to

banks

7 341

26 433

33 774

Change in loans and advances to

customers

(7 335 779)

6 077 708

(22 064)

(1 280 135)

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)

(248 705)

22 064

(226 641)

Change in deposits from banks

(231 194)

(14 120)

(53 221)

(298 535)

Change in deposits from customers

12 719 191

(2 668 595)

10 050 596

Change in liabilities from securities

sold with buy-back clause

231 736

(37 512)

194 224

Change in debt securities issued

273 901

(433 712)

162 969

3 158

Change in the balance of income

tax-related receivables and

payables

(245 215)

245 215

Income tax (from the Profit and loss

statement)

155 815

Income tax paid

(256 400)

(401 030)

(657 430)

Change in the balance of other

assets and liabilities

(1 278 212)

1 915

90 752

(32 213)

(1 217 758)

Change in other items

98 844

(96 929)

(1 915)

Net cash flows from operating

activities

12 411 879

2 790

(2 324 592)

90 752

128 731

(27 447)

10 282 113

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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:

562 020 923

Proceeds from sale of property, plant

and equipment and intangible assets

35 067

Proceeds from sale of shares in

related entities

Proceeds from sale of investment

financial assets

561 982 230

Other

3 626

Outflows:

(581 200 791)

2 986 878

2 353 220

27 447

(575 833 246)

Acquisition of property, plant and

equipment and intangible assets

(249 115)

27 447

(221 668)

Acquisition of shares in related

entities

Acquisition of investment financial

assets

(580 951 676)

2 986 878

2 353 220

(575 611 578)

Other

Net cash flows from investing

activities

(19 179 868)

2 986 878

2 353 220

27 447

(13 812 323)

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 3e)

Change 3f)

Adjustments

resulting from

changes in the

statement of

financial

position

1.01.2024 -

31.12.2024

restated data

Inflows from financing activities:

2 931 700

Long-term bank loans

Issue of debt securities

2 931 700

Increase in subordinated debt

Net proceeds from issues of shares

and additional capital paid-in

Other inflows from financing

activities

Outflows from financing activities:

(498 308)

(28 628)

(90 752)

(128 731)

(746 419)

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

(90 752)

Other outflows from financing

activities

(498 308)

(28 628)

(526 936)

Net cash flows from financing

activities

2 433 392

(28 628)

(90 752)

(128 731)

2 185 281

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

(4 334 597)

2 989 668

(1 344 929)

- of which change resulting from

FX differences

(343)

E. Cash and cash equivalents at the

beginning of the reporting period

18 499 347

(2 994 820)

15 504 527

F. Cash and cash equivalents at the

end of the reporting period (D + E)

14 164 750

(5 152)

14 159 598

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

7.3. STANDARDS AND INTERPRETATIONS APPLIED IN 2025 AND

THOSE NOT BINDING AT THE BALANCE SHEET DATE

In these consolidated financial statements, the Group 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 Group’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 Group’s financial statements

Contracts Referencing Nature-dependent

Electricity: Amendments to IFRS 9 and IFRS 7

The Group 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 Group 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 Group 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 consolidated financial statements:

change

impact on the Group’s financial statements

IFRS 19 – Subsidiaries without Public

Accountability; simplified disclosures for

subsidiaries

The Group 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 Group 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 Group 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 Group has not yet assessed the impact of the

standard on the financial statements

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

7.4. ADOPTED ACCOUNTING PRINCIPLES

Going concern

These consolidated 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 consolidated financial statements on a going concern basis.

Basis of Financial Statements Preparation

Consolidated financial statements of the Group prepared for the financial year from 1 January 2025 to

31 December 2025 include financial data of the Bank and its subsidiaries forming the Group.

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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group is responsible for selection, application, development, and

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

consolidated financial statements.

All the entities subject to consolidation prepare their financial statements in accordance with the same

accounting standards applied by the whole Capital Group which is IFRS as adopted by the EU, at the

same balance sheet date.

Basis of Consolidation

Merger method

The merger method is used to account for business combination in which the Group acts as an acquirer.

The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued

and liabilities incurred or assumed at the date of exchange excluding acquisition related costs such as

advisory, legal, valuation and similar professional services.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination

are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-

controlling interests. The excess of the cost of acquisition over the fair value of the Group’s share of the

identifiable net assets acquired is recorded as goodwill. If the cost of combination is lower than the

Group’s interest in net fair value of identifiable assets, liabilities, contingent liabilities of the acquired

subsidiary, the Group reassesses identification and measures again the identifiable assets, liabilities

and contingent liabilities of the entity being acquired as well as measurement of the cost of the

combination. Any surplus remaining after the reassessment is immediately recognised in the Profit and

Loss Account.

Subsidiaries

Subsidiaries are those investees, including structured entities, that the Group controls because the

Group (i) has power to direct relevant activities of the investees that significantly affect their returns, (ii)

has exposure, or rights, to variable returns from its involvement with the investees, and (iii) has the

ability to use its power over the investees to affect the amount of investor’s returns. The existence and

effect of substantive rights, including substantive potential voting rights, are considered when assessing

whether the Group has power over another entity. For a right to be substantive, the holder must have

practical ability to exercise that right when decisions about the direction of the relevant activities of the

investee need to be made.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Subsidiaries are subject to consolidation from the date of taking over control by the Group until the date

on which the parent ceases to control the subsidiary.

Transactions, settlements and unrealized profits resulting from transactions among Group’s entities are

eliminated. The unrealised losses are also subject to elimination, as long as the transaction does not

provide evidence that the transferred asset is impaired.

Associates

Associates are any entities over which the Group has significant influence but do not control them,

generally accompanying a shareholding between 20% and 50% of the voting rights. Investments in

associates are initially accounted at purchase price and then accounted for by using the equity method.

The Group’s investment in associates includes goodwill (net of any accumulated impairment loss)

identified on acquisition.

The share of the Group in the profits (losses) of associates since the date of acquisition is recognised

in the profit and loss, whereas its share in changes in other reserves since the date of acquisition – in

other reserves. The carrying amount of the investment is adjusted by the total changes of different items

of equity after the date of their acquisition. When the share of the Group in the losses of an associate

becomes equal or greater than the share of the Group in that associate, the Group discontinues the

recognition of any further losses or creates provision only to such amount, it has assumed obligations

or has settled payments on behalf of the respective associate.

Any unrealised profits on transactions between the Group and its associates shall be eliminated in

proportion to the Group’s shareholding in the associates. Also unrealised losses are subject to

elimination, as long as the transaction does not deliver evidence that the transferred asset is impaired.

Functional currency and presentation currency

The items contained in the consolidated financial statements of the Group are presented in the currency

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

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

presentation currency for the Bank – a parent company of the Group and for other companies of the

Group.

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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Application of estimates in connection with Accounting Policies

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

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

The estimates and assumptions, revised by the Group 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 Group, the actual results may differ from the estimates. The major areas for

which the Group makes estimates are presented below:

▪ Impairment of loans and advances

Impairment estimation model within the Group 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 Group 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;

▪ 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 Group,

▪ Indexes options acquired/placed by the Group.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group applies the component of credit risk taking

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

value adjustment - DVA). The Group assesses that unobservable inputs related to applying this

component used for fair value measurement are not significant.

▪ Impairment of other non-current assets

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

balance sheet date. If such indications exist, the Group 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 Group may obtain from the given non-current asset (or cash

generating unit). The Group 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 13 "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.

▪ 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

▪ Other Estimate Values

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

value of future liabilities of the Group 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,

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

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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group’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 Group 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:

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.

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 Group 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).

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

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 analysed.

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).

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

In cases where there is a modification of the time value of money, e.g. 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 Group

performs an assessment based on the Benchmark Test, i.e. 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 Group'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 instrument 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 Group 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.

- 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group 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 Group recognized an

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

the Group's financial result for 2024 by PLN 112.7 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.

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 Group as POCI in all subsequent periods until they are derecognized

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

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

improvement of assets quality).

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 Group 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

lease,

• the Group 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 Group.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

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

when the Group:

▪ 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 Group.

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

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

▪ 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 Group 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 Group has not retained control, it

derecognises the financial asset accordingly.

The Group 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.

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

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 Group 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 Group makes use in the

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

knowledge and experience.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group’s risk (debit value adjustment - DVA).

Recognition of derivative instruments embedded in liabilities

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

from operating, financing and investing activities of the Group. 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 Group applies IAS 39 requirements for hedge accounting.

Hedge accounting criteria

The Group 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 Group'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);

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

▪ 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 Group.

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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group 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 Group). Any changes in fair value of FX forward

transactions are recorded in ‘Result on exchange differences’ of the Profit and Loss Account.

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

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

accounting.

▪ 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 Group). Changes of fair value of CCS

transactions are reported in ‘Results on financial assets and liabilities held for trading’.

Moreover the Group 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 Group)

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 Group.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

▪ FX and Index options

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

options issued by the Group’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 Group). 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 Group 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 Group

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.

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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

In the leasing portfolio, the LGD model includes the coverage factor (realisation value vs. valuation),

cure rate, and recovery rate. The model reflects the current economic situation (point in time) and

incorporates macroeconomic forecasts (FLI).

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. There is no EaD model applied to the leasing portfolio.

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’

Write-offs

The Group 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 Group 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 Group after the transfer.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

When the Group 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 Fixed 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 Group’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 Group 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 Group, and

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

incurred.

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 Fixed Assets

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

generate economic benefits for the Group 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 Group are recognized at cost less accumulated amortization and

accumulated impairment allowances.

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 Group. In the other cases, costs are

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

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

Non-current assets held for sale

The Group 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 Group ceases to

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

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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Impairment of non-financial non-current assets

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

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

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

impairment charge in the profit and loss.

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 Group

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.

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 "Notes to the Financial Statements".

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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Provisions

Provisions are established when (1) the Group 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 Group 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.

Employee Benefits

Short-term employee benefits

Short-term employee benefits of the Group (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 Group 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 Group employees are

entitled is calculated as the sum of unused holidays to which particular Group employees are entitled.

Long-term employee benefits

The Group’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 Group’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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

In 2012, as subsequently amended, the Group implemented a policy defining the remuneration rules

(including variable remuneration components) for individuals who have a material impact on the Group

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 15 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 Group fulfils a programme of post – employment benefits called defined contribution plan. Under

this plan the Group 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 Group 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.

Group’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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 S.A. 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

Group’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.

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 Group 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, finance lease, 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)).

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

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 Group 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 Group'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 Group'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 Group 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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:

▪ 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 Group, 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

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

Group’s banking and brokerage 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 Consolidated 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. In case of Millennium Bank Hipoteczny S.A. in 2024 assets did not exceed PLN 4 billion but

in 2025 the bank’s assets exceeded PLN 4 billion in 2025, which resulted in a bank tax liability arising

for this bank as well.

Other taxes and fees

The Bank and its subsidiaries are also taxpayers 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, insurance brokerage and investment fund distribution);

2) real estate tax;

3) tax on means of transport;

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 and its subsidiaries are 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".

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 Group offsets

deferred tax assets and deferred tax liabilities within each individual companies of the Group, 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 Group

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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group. It defines the framework for business development, profitability, and stability,

by creating rules ensuring the Group’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 Group 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 Group's operations. Important principle of risk management is the optimization of the risk and

profitability trade-off – the Group 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 Group's organizational structure.

Risk management is centralized for the Group 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 Group 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 Group’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 main 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

The Risk management process of the Group 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 Group’s risk-taking policy

with the Group’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

Group's Risk Strategy, including the Group'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 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

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

▪ 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 Group. 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 Underwriting Department, are responsible 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.

▪ 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

The Group 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 Group is currently exposed. The Group

should also have a forward-looking view how their risk profile may change under both expected and

stress economic scenarios in accordance with risk appetite,

2. Risk appetite – the maximum amount or type of risk the Group 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 Group 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 Group

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

▪ Regulations of Bank Millennium S.A. - Program of counteracting Anti-Money Laundering and

financing terrorism.

Within risk appetite, the Group 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 Group 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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, the Group 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 tolerance.

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 575/2013 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. The Bank reported this in Current Report No. 36/2025 dated 18 December 2025.

▪ 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

;

▪ 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 raised 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.

In November 2020 PFSA issued the decision on identification the Bank as other systemically important institution and

imposing OSII Buffer of 0.25%

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 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).

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Internal capital

The Group 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 Group over the last three years were as follows:

31.12.2025

31.12.2024

31.12.2023

Risk-weighted assets

54 878.7

45 116.2

41 354.50

Own Funds requirements, including:

4 390.3

3 609.3

3 308.40

- Credit risk and counterparty credit risk

3 373.2

3 086.6

2 841.20

- Market risk

23.2

19.8

15.4

- Operational risk

979.4

500.4

446.4

- Credit Valuation Adjustment CVA

14.5

2.5

5.4

Own Funds, including:

8 290.1

7 776.4

7 470.60

Common Equity Tier 1 Capital

7 508.0

6 688.4

6 089.70

Tier 2 Capital

782.2

1 087.90

1 380.90

Total Capital Ratio (TCR)

15.11%

17.24%

18.06%

Tier 1 Capital ratio (T1)

13.68%

14.82%

14.73%

Common Equity Tier 1 Capital ratio

(CET1)

13.68%

14.82%

14.73%

Leverage ratio

4.64%

4.66%

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Capital adequacy showed as surpluses/deficits on required or recommended levels is presented in the

below table.

Capital adequacy

31.12.2025

31.12.2024

31.12.2023

Total Capital Ratio (TCR)

15.11%

17.24%

18.06%

Minimum required level (OCR)

11.75%

12.21%

Surplus (+) / Deficit (-) of TCR capital

adequacy (p.p.)

3.36

5.03

5.85

Minimum recommended level TCR

(OCR+P2G)

11.78%

12.21%

13.81%

Surplus (+) / Deficit (-) on recommended

level (p.p.)

3.33

5.03

4.25

Tier 1 Capital ratio (T1)

13.68%

14.82%

14.73%

Minimum required level (OCR)

9.75%

9.85%

Surplus (+) / Deficit (-) of T1 capital adequacy

(p.p.)

3.93

4.97

4.88

Minimum recommended level T1

(OCR+P2G)

9.78%

9.85%

11.45%

Surplus (+) / Deficit (-) on recommended

level (p.p.)

3.90

4.97

3.28

Common Equity Tier 1 Capital ratio (CET1)

13.68%

14.82%

14.73%

Minimum required level (OCR)

8.25%

8.07%

Minimum recommended level CET1

(OCR+P2G)

8.28%

8.07%

9.67%

Surplus (+) / Deficit (-) on recommended

level (p.p.)

5.40

6.75

5.06

Leverage ratio

4.64%

4.66%

Minimum required level

3.00%

Surplus (+) / Deficit (-) of Leverage ratio

(p.p.)

1.64

1.66

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 PFSA 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

PFSA, they were achieved for all capital ratios with a clear surplus

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Minimum requirement for own funds and eligible liabilities (MREL)

The Bank manages the MREL requirement indicators in a manner analogous to capital adequacy

indicators.

In May 2025, the Bank received a joint decision of the resolution authorities requiring it to meet the

MREL requirements. The updated minimum requirements are 15.36% (consolidated MRELtrea) and

5.91% (consolidated MRELtem). Additionally, in relation 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 31 December 2025 and also meets the MRELtrea Requirement after

including the Combined Buffer Requirement.

8.3. CREDIT RISK

The credit risk is one of the most important risk types for the Group 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 Group’s regulatory environment.

The Group 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 Group 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

(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 Group assesses the probability of default (PD) of individual counterparties, using internal rating

models adapted to various categories of customers and transactions. The Group’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 Group’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 Group 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.

The Group’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 Group’s

predictions will be the Group’s receivables at the time of default against liabilities. Liabilities are

understood by the Group 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 Group expects will be its losses resulting from actual cases of

default.

Unification of the default definition across the Group

The Group adopted a unified definition of default, both in the calculation of capital requirements and for

the purposes of estimating impairment. The Group 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,

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

▪ 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 Group 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.

Derivatives

The Group 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 Group offers Treasury products for FX risk or interest rate risk only for hedging purposes and under

Treasury limits assigned to clients or secured by specific collateral - deposit.

Most of the Group’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 Group 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 Group.

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 Group 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 Group 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group 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 (mentioned above) limits 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 Group from the point

of view of punctual repayment of their principal and interest liabilities.

Collateral

The Group 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 Group, 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 Group as well as

more detailed requirements that are to ensure the probability of selling collateral of respective types in

the context of the Group's recovery experiences.

The Group 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 Group 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 Group 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

The Group 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 Group 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 Group stipulates the possibility of taking additional collateral for

the transaction.

(3c) Impairment and provisioning policy

Organization 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.

Supervision over the process of estimating impairment charges and provisions is exercised at the Group

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. Similarly organized is

the impairment process at Millennium Leasing.

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 Group’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 Group in finance, risk, and management information.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Expected credit loss measurement

Impairment estimation model within the Group 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.

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 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. For leasing customers, the relative threshold is at least 1.91, 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. For leasing customers, the relative threshold was at least 2.52.

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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group’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..

2) Identification of impairment triggers.

The Group 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 reorganizing 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

different enterprise reorganization.

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 Group 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 realization. The Group 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 realizing 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 Group 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:

▪ Group’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 Group 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.

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 realization 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 Group 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 (credit, leasing)

separate principles have been specified for portfolio types: business, restructuring-recovery, and leasing

portfolio. 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 recognized impairment triggers

because of an individual analysis.

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).

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

▪ 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.

▪ In the LGD model for leasing portfolio the main components are: the coverage factor, cure rate,

and recovery rate. The model reflects the current economic conditions (Point-in-Time concept) and

uses macroeconomic forecasts (FLI).

▪ 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.

Forward-looking information incorporated in the ECL models

In the process of calculation of expected credit losses, the Group 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 Group 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

Leasing

YES

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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)

Base

+3,7

+2,9

Optimistic

+4,9

+4,5

+4,2

Mild recession

+1,6

+2,3

Retail Sales

(annual average)

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

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%

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

Leasing

-1 106

1 766

Total

-4 715

8 076

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

Leasing

-613

1 079

Total

-5 075

13 041

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

Leasing

39 313

34 755

Total

873 527

628 643

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 Group 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

At the end of 2025, the Group applied management overlays for the following risks:

▪ Risk of reduced demand for the purchase of non-performing loans (NPL) by specialized 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

Impact of the implementation of the rating model for leasing receivables

-15 100

15 100

Suma

176 546

-10 595

187 141

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. Conversely, the adjustment attributable to the impact of the implementation of the rating model

for leasing receivables was released immediately upon the model’s implementation in that year.

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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Sale of receivables

In 2025, the Bank Group executed a sale of NPL exposures, with a total gross carrying amount of PLN

446 million.

Sold in 2025.

PLN’000

Gross Carrying

Amount

Provisions

Other retail

441 831

359 207

Companies

321

209

Leasing

4 237

2 242

Total

446 390

361 658

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

Leasing

6 938

6 755

Total

285 917

257 851

The total sales result is presented in Note 12

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

(3d) Maximum exposure to credit risk

31.12.2025

31.12.2024

Exposures exposed to credit risk connected with balance sheet

assets

149 027 640

131 512 033

Deposits, loans and advances to banks and other monetary institutions

350 741

434 517

Loans and advances to customers:

76 415 922

74 864 830

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 and public sector

Valued at amortized cost:

76 415 177

74 863 005

Loans to private individuals:

54 743 949

56 823 171

Receivables on account of payment cards

1 258 057

1 177 820

Cash loans and other loans to private individuals

17 839 484

17 121 238

Mortgage loans

35 646 408

38 524 113

Loans to companies

21 608 542

17 984 645

Loans to public entities

62 686

55 189

Financial derivatives (trading and hedging)

155 309

255 845

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

42 471 146

29 218 737

Debt instruments at amortised cost

26 905 373

24 381 485

Repurchase agreements held for trading

38 946

194 218

Repurchase agreements valued at amortised cost

59 978

Other financial assets

1 784 659

1 555 247

Credit risk connected with off-balance sheet items

16 749 818

13 441 259

Financial guarantees

2 076 330

1 686 880

Credit commitments

14 673 488

11 754 379

The table above presents the structure of the Group’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)

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

140 113 515

6 490 823

2 928 923

67 725

149 600 987

Expected Credit Losses

341 694

382 247

1 611 442

23 202

2 358 586

Loans and advances to banks (external

rating Fitch: from BBB to AAA; Moody's: from

B3 to Aaa; S&P: from B+ to AAA)

350 819

Loans and advances to private individuals

(according to Master Scale):

50 190 881

4 247 314

2 060 981

44 161

56 543 338

▪ 1-3 Highest quality

31 149 778

367 638

2 567

31 519 983

▪ 4-6 Good quality

9 895 431

882 934

2 323

10 780 688

▪ 7-9 Medium quality

7 250 546

1 426 708

1 605

8 678 859

▪ 10-12 Low quality

1 895 067

1 072 344

255

2 967 667

▪ 13-14 Watched

487 818

466

488 343

▪ 15 Default

2 060 981

36 945

2 097 926

▪ Without rating *

9 871

Expected Credit Losses

180 988

296 375

1 292 796

29 230

1 799 389

Loans and advances to companies

(according to Master Scale):

9 861 500

1 299 859

530 926

6 234

11 698 520

▪ 1-3 Highest quality

240 091

32 053

272 143

▪ 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

530 560

6 234

536 794

▪ Without rating *

1 789 133

447 003

366

2 236 502

Expected Credit Losses

96 100

47 892

214 538

-5 998

352 532

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

17 330

38 083

▪ Without rating *

63 240

Expected Credit Losses

27 580

7 008

12 852

-29

47 411

Leasing (according to Master Scale):

6 271 546

771 597

316 263

7 359 405

▪ 1-3 Highest quality

359 322

9 919

369 241

▪ 4-6 Good quality

1 498 933

53 694

1 552 627

▪ 7-9 Medium quality

3 531 008

176 383

3 707 391

▪ 10-12 Low quality

882 282

467 364

1 349 646

▪ 13-14 Watched

64 237

▪ 15 Default

316 263

▪ Without rating *

Expected Credit Losses

36 831

30 972

91 256

159 059

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

PLN’000, as of the end of 2025

Stage 1 (12-

month ECL)

Stage 2

(lifetime ECL)

Stage 3

(lifetime ECL)

POCI

Total

Debt securities valued at amortised cost

26 905 373

Derivatives (according to Master Scale) ***:

155 309

▪ 1-3 Highest quality

97 645

▪ 4-6 Good quality

3 663

▪ 7-9 Medium quality

30 038

▪ 10-12 Low quality

1 989

▪ 13-14 Watched

6 956

▪ 15 Default

▪ Without rating

15 019

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

42 471 146

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

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

122 794 743

6 221 408

3 366 015

82 228

132 464 394

Expected Credit Losses

337 560

338 668

1 793 605

33 613

2 503 446

Loans and advances to banks (external

rating Fitch: from BBB to AAA; Moody's: from

B3 to Aaa; S&P: from B+ to AAA)

434 534

Loans and advances to private individuals

(according to Master Scale):

51 562 592

4 747 957

2 441 024

69 669

58 821 242

▪ 1-3 Highest quality

31 794 233

399 680

2 875

32 196 788

▪ 4-6 Good quality

9 973 964

1 149 779

2 397

11 126 139

▪ 7-9 Medium quality

7 615 414

1 590 482

1 880

9 207 776

▪ 10-12 Low quality

2 065 029

1 109 851

1 993

3 176 873

▪ 13-14 Watched

424

498 044

113

498 581

▪ 15 Default

2 441 024

60 412

2 501 436

▪ Without rating *

113 528

121

113 648

Expected Credit Losses

194 702

282 628

1 487 996

32 745

1 998 072

Loans and advances to companies

(according to Master Scale):

7 397 389

789 547

499 331

12 559

8 698 826

▪ 1-3 Highest quality

403 094

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

499 070

12 530

511 600

▪ Without rating *

842 072

261

842 380

Expected Credit Losses

69 832

29 465

205 541

868

305 706

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

PLN’000, as of the end of 2024

Stage 1 (12-

month ECL)

Stage 2

(lifetime ECL)

Stage 3

(lifetime ECL)

POCI

Total

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

Leasing (according to Master Scale):

6 160 971

589 526

344 690

7 095 187

▪ 1-3 Highest quality

250 961

1 112

252 105

▪ 4-6 Good quality

440 761

7 395

448 156

▪ 7-9 Medium quality

1 191 820

57 727

1 249 547

▪ 10-12 Low quality

409 721

60 700

228

470 649

▪ 13-14 Watched

3 270

▪ 15 Default

322 009

▪ Without rating *

3 867 707

459 322

22 422

4 349 451

Expected Credit Losses

45 955

23 998

77 019

146 972

Debt securities valued at amortised cost

24 381 485

Derivatives (according to Master Scale)***:

255 845

▪ 1-3 Highest quality

198 253

▪ 4-6 Good quality

18 597

▪ 7-9 Medium quality

5 403

▪ 10-12 Low quality

989

▪ 13-14 Watched

▪ 15 Default

▪ Without rating

32 603

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

29 218 737

Receivables from securities bought with

sell-back clause at amortized 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 and some leasing clients;

** rating for Poland in 2024 A- (S&P), A2 (Moody’s), A- (Fitch)

*** is not subject to staging

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

14 779 713

1 947 135

22 202

767

16 749 818

Expected Credit Losses

59 129

38 676

7 553

105 358

To banks (external rating Fitch: from BBB to

AAA; Moody's: from B3 to Aaa; S&P: from

B+ to AAA)

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):

7 493 344

1 296 017

11 947

8 801 309

▪ 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 *

467 267

712 695

1 179 962

Expected Credit Losses

40 824

11 451

1 639

53 913

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

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

12 628 811

749 251

58 768

4 429

13 441 259

Expected Credit Losses

30 343

16 591

6 648

53 583

To banks (external rating Fitch: from BBB to

AAA; Moody's: from B3 to Aaa; S&P: from

B+ to AAA)

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):

6 275 066

346 904

6 227

3 592

6 631 788

▪ 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 *

882 237

882 291

Expected Credit Losses

24 083

3 129

1 809

29 021

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

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

(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

475 920

79 840

1 439

557 200

Collective analysis

415 221

660 491

1 356 156

2 431 868

Total

891 141

740 332

1 357 595

2 989 067

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

532 864

106 815

2 802

642 481

Collective analysis

404 396

791 382

1 600 438

2 796 216

Total

937 260

898 197

1 603 240

3 438 697

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

363 328

65.2%

31.2%

386 137

60.1%

28.1%

CHF

3 651

0.7%

15.8%

16 738

2.6%

14.1%

EUR

187 393

33.6%

43.4%

239 602

37.3%

42.6%

USD

2 827

0.5%

46.8%

0.0%

60.1%

Total (Case by Case impaired)

557 200

100.0%

35.3%

642 481

100.0%

33.1%

At the end of 2025, the financial impact from the established collaterals securing the Group’s receivables

with impairment recognized under individual analysis (Case by Case) amounted to PLN 273.5 million

(at the end of 2024 respectively PLN 320.3 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group 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 Group is exposed in connection with client transactions giving rise to the Group's

off-balance sheet receivables or liabilities.

The restructuring process applies to the receivables which, based on the principles in place in the Group,

are transferred to restructuring and recovery portfolios and includes setting new terms of transactions

which are acceptable for the Group (including the terms of their repayment and their collateral and

possibly obtaining additional collateral).

Recovery of retail receivables is a fully centralized 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 Group. 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 specialized 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 Group 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 recognized impairment managed by the Group’s

organizational units responsible for loan restructuring.

Gross exposure in ‘000 PLN

31.12.2025

31.12.2024

Loans and advances to private individuals

950 811

1 272 883

0 days

316 440

493 269

from 1 to 30 days

175 820

279 722

from 31 to 90 days

116 261

147 016

over 90 days

342 290

352 875

Loans and advances to companies

161 037

199 999

0 days

70 927

110 153

from 1 to 30 days

7 586

4 908

from 31 to 90 days

3 061

1 577

over 90 days

79 464

83 361

Total

1 111 848

1 472 882

(3f) Collateral transferred to the Group

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”).

At the same time, a subsidiary of Bank - Millennium Leasing, takes control over some of assets leased

and leads active measures aimed at their disposal. Data about the value of these assets and their

changes during the reporting period are shown in note (30) "Non-current assets held for sale” of the

consolidated balance sheet.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

(3g) Policy for writing off receivables

Credit exposures for which the Group 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 Group 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

49 850

9 634

51 433

110 918

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

30 394

487

121 496

152 377

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

(3h) Concentration of risks of financial assets with exposure to credit risk

Economy sectors

The table below presents the Group’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

350 820

Loans and advances

to customers

(Amortized cost)

374 642

6 098 775

6 237 155

3 006 142

25 352

36 141 032

20 402 305

6 488 359

78 773 762

Loans and advances

to customers

(FAIR VALUE)

658

745

Trading securities

157

824 912

825 165

Instruments valued at

amortised cost

1 915 598

24 989 824

26 905 422

Instruments

mandatorily at fair

value through P&L

176 307

Financial derivatives

(trading and hedging)

110 913

15 977

2 208

1 335

24 877

155 310

Instruments at fair

value through other

comprehensive

income

40 616

4 996

282

42 471 156

42 517 085

Repurchase

agreements

98 924

Total

3 067 904

6 119 905

6 239 366

3 007 852

68 311 244

36 141 032

20 402 963

6 513 274

149 803 540

* Including: credit cards, cash loans, current accounts overdrafts

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

31.12.2024

Financial

intermediation

Industry and

constructions

Wholesale and

retail business

Transport and

communicatio

Public sector

Mortgage

loans

Consumer

loans*

Other sectors

Total

Loans and advances

to banks

434 535

Loans and advances

to customers

(Amortized cost)

357 849

5 431 159

5 625 030

2 864 318

28 245

39 125 251

19 695 991

4 238 608

77 366 451

Loans and advances

to customers

(FAIR VALUE)

1 755

1 825

Trading securities

555 365

555 479

Instruments valued at

amortised cost

2 305 191

22 076 302

24 381 493

Instruments

mandatorily at fair

value through P&L

118 399

Financial derivatives

(trading and hedging)

243 594

6 006

1 627

2 073

2 545

255 845

Instruments at fair

value through other

comprehensive

income

472 632

4 996

285

28 782 497

29 260 445

Repurchase

agreements

194 218

Total

4 126 451

5 442 236

5 626 660

2 866 747

51 442 409

39 125 251

19 697 746

4 241 190

132 568 690

* Including: credit cards, cash loans, current accounts overdrafts

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Loans and advances to customers by economy sectors and segment

Taking into consideration segments and activity sectors concentration risk, the Group 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)

Share (%)

2024

Balance Exposure

(PLN million)

Share (%)

Credits for individual persons

56 543.3

71.8%

58 821.2

76.0%

Mortgage

36 141.0

45.9%

39 125.2

50.6%

Cash loan

17 906.5

22.7%

17 216.6

22.2%

Credit cards and other

2 495.8

3.2%

2 479.4

3.2%

Credit for companies*

22 230.4

28.2%

18 545.2

24.0%

Wholesale and retail trade; repair

6 237.2

7.9%

5 625.0

7.3%

Manufacturing

4 502.9

5.7%

4 045.7

5.2%

Construction

1 595.9

2.0%

1 385.4

1.8%

Transportation and storage

3 006.2

3.8%

2 864.4

3.7%

Public administration and defence

25.4

0.0%

28.2

0.0%

Information and communication

1 112.0

1.4%

872.4

1.1%

Other Services

1 337.8

1.7%

1 018.5

1.3%

Financial and insurance activities

374.6

0.5%

363.7

0.5%

Real estate activities

1 574.9

2.0%

829.8

1.1%

Professional, scientific, and technical

services

757.1

1.0%

444.0

0.6%

Mining and quarrying

69.5

0.1%

88.4

0.1%

Water supply, sewage, and waste

305.5

0.4%

238.2

0.3%

Electricity, gas, water

541.1

0.7%

81.8

0.1%

Accommodation and food service activities

274.4

0.3%

247.8

0.3%

Education

115.4

0.1%

99.0

0.1%

Agriculture, forestry, and fishing

91.8

0.1%

90.4

0.1%

Human health and social work activities

249.2

0.3%

168.8

0.2%

Culture, recreation, and entertainment

59.7

0.1%

53.7

0.1%

Total (gross)

78 773.8

100.0%

77 366.5

100.0%

* incl. Microbusiness, annual turnover below PLN 5 million

Concentration ratio of the 20 largest customers in the Group’s loan portfolio (considering groups of

connected entities) at the end of 2025 equals 7.4% comparing with 5.8% 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 5.4%.

The average LTV for the retail mortgage portfolio amounted to 44.5% at the end of 2025 compared to

45.4% 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%

21 886 825

60.6%

23 321 231

59.4%

50-80%

12 836 751

35.5%

14 092 659

35.9%

80-100%

1 283 591

3.6%

1 643 979

4.2%

>100%

133 697

0.4%

177 750

0.5%

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group’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 Group’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).

The framework of market risk and interest rate risk management and its control 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.

Market risk

The Group’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 Group. The equity risk

assumed to be irrelevant since the Group’s engagement in equity instruments is immaterial.

Each market risk type is measured individually using an appropriate risk model 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 Group 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 Group (VaR) is calculated considering the holding period of ten 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 accurately 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

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 several types of risk, which enables the Group 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 Group.

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 overall Group 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 Group continued to operate in a prudent manner. In 2025

the VaR indicators for the Group 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 Group’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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

The market risk in terms of VaR for the Group (‘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

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group. According to the Risk Strategy approved in the Group,

the FX open position is allowed, however should be kept at low levels. For this purpose, the Group 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 total FX open position remained on average at the level

of PLN 15.8 million with maximum of PLN 61.6 million. In 2025, the total FX 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.

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 Group. 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 rate 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

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 Group’s priority remained the stabilization of net interest income in the medium‑ and

long‑term perspective. In this context, the Group continued its strategy of gradually increasing both the

volume and the share of 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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% as of 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 100 bps 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.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

8.5. LIQUIDITY RISK

The objective of liquidity risk management is to ensure and maintain the Group’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 Group’s obligations.

There were no exposures to liquidity risk at a subsidiary level because the Bank manages liquidity risk

centrally. 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 Group’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 Group 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 Group’s Loan-to-Deposit ratio decreased and was equalled to 58% at the end of December 2025

(comparing to level of 64% as of end of December 2024).

The liquid assets portfolio is treated by the Group’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 debt securities

portfolio amounted to 99.9% and allowed to reach the level of approx. PLN 70.1 billion (45% of total

assets), whereas at the end of December 2024 was at the level of approx. PLN 53.9 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 Group. At the end of 2025 total Clients’ deposits of the

Group reached the level of PLN 130.8 billion (PLN 117.3 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. 75.2% at the end of December 2025 (74.7% at the end of December 2024). The

high share of funds from individuals had a positive impact on the Group’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

2025 amounted respectively to 1.6% and 4.3% (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 Group 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 and leasing portfolios.

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

In 2025 year, Millennium Mortgage Bank issued additional covered bonds (0.8 billion in March and

1 billion in November) and at the end of December 2025 total nominal of issued covered bonds by the

Group reached the level of PLN 2.6 billion (PLN 0.8 billion at the end of December 2024).

The total Credit Linked Notes issued by the Group amounts to PLN 677.8 million at the end of 2025 year

(PLN 882.8 million at the end of 2024). The Group has no medium-term loans from financial institutions

at the end of 2025 (the same as at the end of 2024).

The Group 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 an investment

portfolio in EUR, mostly concentrated in several western European countries’ sovereign debt in EUR.

Liquidity risk evaluation measures

The estimation of the Group’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 Group’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 Group 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 Group 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 Group. LCR reached the level of 402% at the end of December 2025

(371% 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 Group. NSFR is monitored and reported monthly. In 2025, the NSFR was above the

supervisory minimum of 100%. NSFR reached the level of 203% at the end of December 2025 (196%

as of the end of December 2024). Moreover, in line with Recommendation WFD (issued in July 2024),

the Group is calculating monthly Long Term Funding Ratio (LTFR/WFD), which in December 2025

reached 33% (28% in December 2024).

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Current Liquidity indicators PLN million

31.12.2025

Immediate liquidity

ratio (%)*

Quarterly liquidity

ratio (%)*

Central Bank Collateral

/ Total Deposits (%)**

Liquid assets

Portfolio (m PLN)***

LCR

(%)

Indicator

45%

47%

42%

70 354

402%

31.12.2024

Immediate liquidity

ratio (%)*

Quarterly liquidity

ratio (%)*

Central Bank Collateral

/ Total Deposits (%)**

Liquid assets

Portfolio (m PLN)***

LCR

(%)

Indicator

39%

35%

53 646

371%

* - 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 Group monitors liquidity based on internal liquidity measures, considering the impact of FX rates

on the liquidity situation.

Additionally, the Group employs an internal structural liquidity analysis based on cumulative, behaviour

liquidity gaps. The safe level adopted by the Group for the ratio of liquidity shortfall is established for

each time bucket below 5 years.

In December 2025, liquidity gaps were maintained positive. The results of cumulative, behaviour liquidity

gaps (normal conditions) are presented in tables below.

2025-12-31

Adjusted Liquidity Gap (PLN

mln)

Up to 6M

Up to 1Y

Up to 2Y

Up to 5Y

Counterbalancing capacity

68 303

Outflows

11 490

3 678

6 322

14 549

Outflows Cumulated

11 490

15 168

21 490

36 039

Inflows

12 437

7 725

11 362

27 073

Inflows Cumulated

12 437

20 162

31 524

58 597

Liquidity Gap

69 250

4 047

5 040

12 524

Liquidity Gap Cumulated

69 250

73 297

78 337

90 860

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

2024-12-31

Adjusted Liquidity Gap (PLN

mln)

Up to 6M

Up to 1Y

Up to 2Y

Up to 5Y

Counterbalancing capacity

52 165

Outflows

10 984

2 148

3 164

15 068

Outflows Cumulated

10 984

13 132

16 296

31 364

Inflows

10 077

4 539

8 012

17 049

Inflows Cumulated

10 077

14 616

22 628

39 678

Liquidity Gap

51 258

2 391

4 848

1 981

Liquidity Gap Cumulated

51 258

53 650

58 498

60 479

The Group 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 of 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 Group’s liquidity-risk profile, to ensure

that the Group 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 Group’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

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

The Group has also emergency procedures for situations of increased liquidity risk – the Liquidity

Contingency Plan (contingency plan in case the Group’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 Group 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.

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.

101

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 processes’ 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

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

9. Operational Segments

Information about operating segments has been prepared based on the reporting structure which is

used by the Management Board of the Bank for evaluating the results and managing resources of

operating segments. Group does not apply additional breakdown of activity by geographical areas

because of the insignificant scale of operations performed outside the Poland, in result such

complementary division is not presented.

The Group’s activity is pursued on the basis of diverse business lines, which offer specific products and

services targeted at the market segments listed below:

Retail Customer Segment

The Retail Customers Segment covers activity targeted at mass-market Customers, affluent Customers,

small companies and individual entrepreneurs.

The activity of the above business lines is developed with use of the full offer of banking products and

services as well as sales of specialised products offered by subsidiaries in the group. In the credit

products area the key products are mortgage loans, retail credit products, credit card revolving credit as

well leasing products for small companies. Meanwhile key Customers funds include: current and saving

accounts, term deposits, mutual funds and structured products. Additionally the offer comprises

insurance products, mainly linked with loans and credit cards, as well as specialised savings products.

The product offer for affluent customers was enriched to include selected mutual funds of other financial

intermediaries and foreign funds.

Corporate Customer Segment

The Corporate Customers Segment is based on activity targeted at Small and Medium sized Companies

as well as Large Corporations. The offer is also addressed to Customers from the Public Sector. As part

of the Bank's new strategy for 2025-2028, this segment also includes companies other than sole

proprietorships, previously serviced in the Retail Segment as small entrepreneurs. The comparative

data have been appropriately restated.

Business in the Corporate Customers segment is pursued with use of an offer of typical banking products

(loans for day-to-day activity, investment loans, current accounts, term deposits) supplemented by a

range of cash management products as well as treasury products (including derivatives) and leasing

and factoring services.

Treasury, ALM (assets and liabilities management) and Other

This segment covers the Group’s activity as regards investments by the Treasury Department,

brokerage, inter-bank market transactions and taking positions in debt securities, which are not assigned

to other segments.

This segment includes other assets and other liabilities, assets and liabilities connected with hedging

derivatives, liabilities connected with external funding of the Group and deferred income tax assets not

assigned to any of the segments.

103

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

For each segment the pre-tax profit is determined, comprising:

▪ Net interest income calculated on the basis of interest on external working assets and liabilities of

the segment as well as allocated assets and liabilities generating internal interest income or cost.

Internal income and costs are calculated based on market interest rates with internal valuation

model applied;

▪ Net commission income;

▪ Other income from financial transactions and FX gains, such as: dividend income, result on

investment and trading activity, FX gains/losses and result on other financial instruments;

▪ Other operating income and expenses;

▪ Costs on account of impairment of financial and non-financial assets;

▪ Segment share in operating costs, including personnel and administration costs;

▪ Segment share in depreciation costs;

▪ Operating profit calculated as a measure of segment profit differs from the IFRS financial result

before tax due to: share in net profits of associates and charge of bank tax. These items and the

income tax burden were presented only at the Group level.

The assets and liabilities of commercial segments are the operating assets and liabilities used by the

segment in its operations, allocated on business grounds. The difference between operating assets and

liabilities is covered by money market assets/liabilities and debt securities. The assets and liabilities of

the Treasury, ALM & Other segment are money market assets/liabilities and debt securities not allocated

to commercial segments.

Bank Millennium recent financial performance is significantly influenced by the costs related to managing

legacy FX mortgage portfolio of loans. To isolate these costs and other financial results related to this

portfolio Bank decided to isolate, commencing from 2021, a new segment from Retail and present it in

financial statements as “FX mortgage”. Such change impacts only results presentation and is not

triggering any organizational changes in the Bank. New segment includes loans separated based on

active FX mortgage contracts for a given period and is applying to portfolios of retail mortgages

originated in Bank Millennium and Eurobank in foreign currencies. This portfolio is expected to run-off

in line with repayments of FX loans, conversions to PLN loans, realization of court verdicts and write-

offs. Following P&L categories are presented as part of financial performance of new segment:

1. Net Interest Income: Margin on FX loans (interest results less Fund Transfer Pricing).

2. FX results .

3. Cost of FX mortgage portfolio legal risk including provisions for legal risk and other costs, partially

offset by valuation of SG Indemnity in other operating income line regarding ex-EB portfolio.

4. Cost of Credit Risk related to current FX portfolio.

5. Other Costs that are directly related to FX mortgages including, but not limited to:

i. Amicable negotiation costs,

ii. Legal chancellery costs (administrative costs),

iii. Court costs related to FX mortgage cases (other operating costs).

104

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Income statement 1.01.2025 – 31.12.2025

In ‘000 PLN

Retail

Banking

Corporate

Banking

Treasury.

ALM & Other

FX mortgage

TOTAL

Net interest income

4 557 357

808 911

391 506

(2 175)

5 755 599

Net fee and commission income

565 270

204 641

1 732

3 400

775 043

Dividends, other income from financial

operations and foreign exchange profit

101 446

107 384

30 597

6 254

245 681

Result on non-trading financial assets

mandatorily at fair value through profit

or loss

581

88 891

89 472

Other operating income and cost

(28 173)

5 583

(26 388)

120 181

71 203

Operating income

5 196 481

1 126 519

486 338

127 660

6 936 998

Staff costs

(1 057 448)

(263 970)

(34 994)

(1 356 412)

Administrative costs, including:

(654 026)

(111 788)

(114 441)

(95 356)

(975 611)

- BGF costs

(71 764)

(1 781)

(76 007)

(149 552)

Depreciation and amortization

(190 032)

(30 095)

(4 251)

(224 378)

Operating expenses

(1 901 506)

(405 853)

(153 686)

(95 356)

(2 556 401)

Impairment losses on assets

(107 706)

(126 884)

(19 968)

6 820

(247 738)

Results on modification

(40)

(3 124)

(3 164)

Costs of legal risk connected with FX

mortgage loans

(2 104 218)

Total operating result

3 187 229

590 658

312 684

(2 065 094)

2 025 477

Banking tax

(405 713)

Profit / (loss) before

income tax

1 619 764

Income taxes

(417 975)

Profit / (loss) after taxes

1 201 789

Balance sheet items as at 31.12.2025

In ‘000 PLN

Retail

Banking

Corporate

Banking

Treasury.

ALM &

Other

mortgage

TOTAL

Loans and advances to customers

57 744 252

17 958 170

713 499

76 415 921

Debt securities

(AC and HTCFS portfolios)

69 376 518

Liabilities to customers

102 341 660

28 465 831

130 807 491

105

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Income statement 1.01.2024 – 31.12.2024

In ‘000 PLN

Retail

Banking

Corporate

Banking

Treasury.

ALM & Other

FX mortgage

TOTAL

Net interest income

4 675 191

871 625

(9 570)

(7 302)

5 529 944

Net fee and commission income

563 291

204 350

2 924

6 133

776 698

Dividends, other income from financial

operations and foreign exchange profit

118 535

103 280

(6 795)

5 499

220 519

Result on non-trading financial assets

mandatorily at fair value through profit

or loss

745

18 389

19 134

Other operating income and cost

(9 013)

3 502

66 681

(86 159)

(24 989)

Operating income

5 348 749

1 182 757

71 629

(81 829)

6 521 306

Staff costs

(962 758)

(204 828)

(29 306)

(1 196 892)

Administrative costs, including:

(503 974)

(94 712)

(92 997)

(137 869)

(829 552)

- BGF costs

(9)

(60 841)

(60 850)

Depreciation and amortization

(194 753)

(27 293)

(4 145)

(226 191)

Operating expenses

(1 661 485)

(326 833)

(126 448)

(137 869)

(2 252 635)

Impairment losses on assets

(263 106)

(100 822)

(4 274)

59 402

(308 800)

Results on modification

(2 241)

(2 198)

Costs of legal risk connected with FX

mortgage loans

(2 850 230)

Total operating result

3 424 201

752 861

(59 093)

(3 010 526)

1 107 443

Banking tax

(232 419)

Profit / (loss) before

income tax

875 024

Income taxes

(155 815)

Profit / (loss) after taxes

719 209

Balance sheet items as at 31.12.2024

In ‘000 PLN

Retail

Banking

Corporate

Banking

Treasury.

ALM &

Other

mortgage

TOTAL

Loans and advances to customers

58 486 584

15 064 253

1 313 993

74 864 830

Debt securities

(AC and HTCFS portfolios)

53 600 222

Liabilities to customers

91 029 506

26 227 707

117 257 213

106

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

10. Transactions with Related Entities

All and any transactions between entities of the Group in 2025 resulted from the current operations.

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.

10.1. DESCRIPTION OF THE TRANSACTIONS WITH THE PARENT

GROUP

The following are the amounts of transactions with the Capital Group of Bank’s parent company - Banco

Comercial Portugues (ultimate parent company), these transactions are mainly of banking nature (in

‘000 PLN):

With parent company

With other entities from

parent group

31.12.2025

31.12.2024

31.12.2025

31.12.2024

ASSETS

Loans and advances to banks – accounts and deposits

2 593

1 788

Financial assets held for trading

Hedging derivatives

Other assets

LIABILITIES

Loans and deposits from banks

129

121

Debt securities

Financial liabilities held for trading

Hedging derivatives

Other liabilities

420

234

With parent company

With other entities from

parent group

2025

2024

2025

2024

Income from:

Interest

2 383

5 398

Commissions

292

209

Financial assets and liabilities held for trading

1 224

Expense from:

Interest

945

Commissions

Financial assets and liabilities held for trading

Other net operating

Administrative expenses

186

185

107

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

With parent company

With other entities from

parent group

31.12.2025

31.12.2024

31.12.2025

31.12.2024

Conditional commitments

34 816

24 680

granted

obtained

34 816

24 680

Derivatives (par value)

The Group receives counter-guarantees from the parent entity as collateral for locally issued

guarantees.

10.2. TRANSACTIONS WITH THE MANAGING AND SUPERVISING

PERSONS

Information on total exposure towards the 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 Group 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 Group’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

10.3. INFORMATION ON COMPENSATIONS AND BENEFITS OF THE

PERSONS SUPERVISING AND MANAGING THE BANK

Salaries (including the balance of created and reversed provisions for payments of bonuses) and

benefits of managing persons recognized in Profit and loss account of the Group were as follows (data

in thousand PLN):

108

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

Remuneration of the Members of the Supervisory Board of the Bank (data in thousand PLN):

Year

Short term remuneration and benefits

2025

2 250.9

2024

2 125.5

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.

109

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

11. 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 Group 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 Group

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.

With respect to floating rate leasing products fair value was assessed by adjusting balance-sheet value

with discounted cash flows resulting from difference of spreads.

110

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

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 at amortised cost (mainly Polish Treasury and Sovereign bonds in the

Held to Collect portfolio) was calculated on market quotations basis.

Liabilities to customers

The fair value of such instruments without maturity or with maturity under 30 days is considered by the

Group to be close to balance-sheet value.

The fair value of instruments with a maturity of more than 30 days has been determined by discounting

future principal and interest cash flows at current rates (based on current average margins by major

currencies and time bands) using contractual dates, with cash flows established based on original

average margins by major currencies and time bands.

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 results of the above-described analyses as at 31.12.2025 (data in PLN

thousand):

Note

Balance sheet value

Fair value

ASSETS MEASURED AT AMORTISED COST

Debt securities

26 905 373

27 403 322

Deposits, loans and advances to banks and other monetary

institutions

350 741

350 869

Loans and advances to customers

76 415 176

75 888 080

LIABILITIES MEASURED AT AMORTISED COST

Liabilities to banks and other monetary institutions

103 113

Liabilities to customers

130 807 491

130 832 782

Debt securities issued

7 640 812

7 641 674

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 26,874,258 thous. as at 31.12.2025 and PLN 24,343,749 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 Group'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.

111

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

The Group 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.

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

24 381 485

24 490 907

Deposits, loans and advances to banks and other monetary

institutions

434 517

434 304

Loans and advances to customers

74 863 005

74 287 705

LIABILITIES MEASURED AT AMORTISED COST

Liabilities to banks and other monetary institutions

204 459

Liabilities to customers

117 257 213

117 251 765

Debt securities issued

6 124 775

6 127 207

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

59 194

96 115

Equity instruments

252

Debt securities

824 911

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

40 258

Debt securities

32 155 728

10 315 417

Derivatives – Hedge accounting

LIABILITIES

Financial liabilities held for trading

Valuation of derivatives

111 590

96 984

Short positions

37 788

Derivatives – Hedge accounting

24 735

112

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

73 321

182 524

Equity instruments

115

Debt securities

555 364

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

36 231

Debt securities

20 526 513

8 692 224

Derivatives – Hedge accounting

LIABILITIES

Financial liabilities held for trading

Valuation of derivatives

40 312

185 991

Short positions

190 769

Derivatives – Hedge accounting

101 539

Using the criterion of valuation techniques as at 31.12.2025 Group classified into the third category

following financial instruments:

▪ 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);

▪ 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 Group did not make transfers of financial instruments between the techniques

of fair value measurement.

113

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

Balance on 31.12.2024

178 195

(181 662)

102 836

51 790

1 825

Settlement/sell/purchase

(86 701)

83 705

(34 004)

(2 725)

Change of valuation recognized in equity

4 033

Interest income and other of similar nature

1 064

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

Balance on 31.12.2025

94 275

(95 144)

195 910

20 655

745

For options on indexes concluded on an inactive market, and FX options the Group concludes back-to-

back transactions on the interbank market, in result estimated credit risk component has no impact on

the financial result.

Accordingly Group’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.

Indexes

options

Options

embedded in

securities issued

and deposits

Debt

securities

Loans and

advances

Balance on 31.12.2023

405 612

(414 200)

95 154

81 014

19 349

Settlement/sell/purchase

(248 040)

251 045

(46 959)

(21 554)

Change of valuation recognized in equity

7 847

Interest income and other of similar nature

3 285

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

(5)

Balance on 31.12.2024

178 195

(181 662)

102 840

51 790

1 825

114

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

12. Contingent liabilities and assets

12.1. LAWSUITS AND SIGNIFICANT PROCEEDINGS

Below please find the data on the court cases pending, brought up by and against entities of the Group.

Court cases brought up by the Group

Value of the court litigations, as at 31.12.2025, in which entities of the Group were a plaintiff, totaled

PLN 3,540.6 million (PLN 4,166.8 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.

115

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group

As at 31.12.2025, the most important proceedings, in the group of the court cases in which entities of

the Group were 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.

116

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The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

117

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

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.

118

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The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

119

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The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

120

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

121

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group’s companies

appeared as defendant, stood at PLN 5,060.6 million (PLN 6,186.4 million as at 31.12.2024) excluding

the class actions described in the Chapter 13). 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 13. “Legal risk related to foreign currency

mortgage loans”.

12.2. OFF – BALANCE ITEMS

Amount ‘000 PLN

31.12.2025

31.12.2024

Commitments granted:

16 749 818

13 441 260

loan commitments

14 673 488

11 754 380

guarantee

2 076 330

1 686 880

Commitments received:

2 819 055

2 730 692

financial

346

guarantee

2 819 054

2 730 346

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 Group 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 Group, should the

customers default on their obligations. The Group 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 Group

considers that the values presented in the above table are similar to the fair value of contingent liabilities.

122

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

The breakdown by entity of all net guarantee liabilities, 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

156 580

122 080

non-financial sector (companies)

1 919 750

1 564 785

public sector

Total

2 076 330

1 686 880

Guarantees and sureties granted to Clients

Commitments granted, Amount ‘000 PLN

31.12. 2025

31.12.2024

Active guarantees and sureties

1 087 703

1 025 597

Lines for guarantees and sureties

993 029

664 855

Total

2 080 731

1 690 452

Provisions created

(4 402)

(3 572)

Commitments granted – guarantee after provisions

2 076 330

1 686 880

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

805 371

750 189

Other currencies

282 333

275 408

Total:

1 087 704

1 025 597

By type of commitment

31.12.2025

31.12.2024

Number

Amount

Number

Amount

Guarantee

3 323

1 051 284

3 238

1 006 219

Surety

Re-guarantee

36 420

19 378

Total:

3 414

1 087 704

3 315

1 025 597

By object of the commitment

31.12.2025

31.12.2024

Number

Amount

% share

Number

Amount

% share

good performance of contract

2 823

557 842

51.28%

2 745

542 008

52.85%

punctual payment for goods or services

194

291 887

26.84%

223

257 016

25.06%

bid bond

23 224

2.14%

21 484

2.09%

rent payment

147

85 756

7.88%

151

87 388

8.53%

advance return

72 509

6.67%

60 039

5.85%

customs

25 502

2.34%

17 731

1.73%

other

7 597

0.70%

32 915

3.21%

payment of bank loan

23 387

2.15%

7 017

0.68%

Total:

3 414

1 087 704

100.00%

3 315

1 025 597

100.00%

123

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

13. 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).

124

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

125

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

126

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

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.

127

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

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.

128

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

(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.

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.

129

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

14. 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

1 787 399

1 351 000

Debt securities

1 787 399

1 351 000

Interest income from Financial assets at amortised cost

7 215 544

7 326 377

Balances with the Central Bank

215 090

223 301

Loans and advances to customers, including

5 791 337

6 074 423

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

holidays

(112 709)

Debt securities

1 156 468

1 002 220

Deposits, loans and advances to banks

21 136

26 433

Hedging derivatives

31 513

Income of similar nature to interest, including:

117 292

145 750

Loans and advances to customers mandatorily at fair value through profit or loss

1 064

3 285

Financial assets held for trading - derivatives

39 380

82 139

Financial assets held for trading - debt securities

26 198

15 963

Financial assets held for trading – repurchase agreements

50 650

44 363

Total

9 120 235

8 823 127

Interest income for the year 2025 contains interest accrued on impaired loans in the amount of PLN

208,008 thous. (for corresponding data in the year 2024 the amount of such interest stood at PLN

193,477 thous.).

Interest income from instruments measured at amortized cost for 2024 includes an adjustment for credit

holidays (reducing income) in the amount of PLN 112.7 million (for corresponding data in the year 2023

the amount of adjustment stood at PLN 9.2 million), more information on this subject is presented in

Chapter 7.3 Adopted accounting principles.

In the line “Hedging derivatives”, the Group 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 Group 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

(3 364 636)

(3 293 183)

Liabilities to banks and other monetary institutions

(15 014)

(14 120)

Liabilities to customers

(2 625 161)

(2 657 076)

Transactions with repurchase agreement

(27 071)

(37 513)

Debt securities issued

(566 597)

(433 712)

Subordinated debt

(116 744)

(125 557)

Liabilities due to leasing agreements

(14 049)

(11 520)

Hedging derivatives

(13 685)

Total

(3 364 636)

(3 293 183)

130

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

113 554

112 750

Resulting from money transfers, cash payments and withdrawals and other payment

transactions

108 288

102 097

Resulting from loans granted

199 971

202 855

Resulting from guarantees and sureties granted

14 024

13 698

Resulting from payment and credit cards

339 565

317 104

Resulting from sale of insurance products

79 357

128 757

Resulting from distribution of investment funds units and other savings products

30 791

28 251

Resulting from brokerage and custody service

14 882

13 375

Resulting from investment funds managed by the Group

124 222

89 769

Other

54 118

49 663

Total

1 078 772

1 058 319

In the above note, the Group presents commission income not subject to recognition under the effective

interest rate method, recognized in accordance with IFRS 9 in the amount of PLN 213,995 thous. for

2025 (and PLN 216,553 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 864,777 thous. for 2025 (and PLN 841,766 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)

(45 665)

Resulting from money transfers. cash payments and withdrawals and other payment

transactions

(4 451)

(4 548)

Resulting from loans granted

(57 590)

(35 574)

Resulting from payment and credit cards

(102 222)

(117 815)

Resulting from brokerage and custody service

(3 190)

(2 595)

Resulting from investment funds managed by the Group

(16 983)

(13 435)

Resulting from insurance activity

(7 848)

(8 280)

Other

(57 475)

(53 709)

Total

(303 729)

(281 621)

131

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

280

545

Financial assets at fair value through other comprehensive income

4 026

3 081

Total

4 306

3 626

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

Costs of financial operations

(3 156)

(2 125)

Total

(4 448)

(1 982)

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

13 050

(1 475)

Result on derivatives

11 119

(5 731)

Result on other financial operations

101

Total

24 270

(7 206)

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

120 026

47 614

Result on debt instruments

(31 135)

(29 225)

Total

89 472

19 134

132

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

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

58 867

41 811

Indemnifications, penalties and fines received

3 077

6 967

Income from sale of other services

50 026

42 371

Income from collection service

16 712

26 014

Income from leasing business

7 975

9 373

Income from write-back of provisions for disputed claims

8 283

4 547

Valuation of the Société Générale S.A. guarantee and indemnity agreement*

230 744

223 086

Other

25 728

20 027

Total

401 412

374 196

* 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

(11 695)

(11 771)

Indemnifications, penalties and fines paid

(32 187)

(28 130)

Costs of provisions for disputed claims

(93 133)

(8 914)

Costs of ‘Cashback’ operations

(22 324)

(17 770)

Costs of leasing business

(1 614)

(4 950)

Donations made

(1 033)

(2 039)

Costs of collection service

(145 004)

(299 527)

Costs of legal representation

(6 361)

(14 017)

Other

(16 858)

(12 067)

Total

(330 209)

(399 185)

133

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

11. ADMINISTRATIVE EXPENSES

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Staff costs:

(1 356 412)

(1 196 892)

Salaries

(1 111 236)

(979 160)

Surcharges on pay

(189 738)

(169 286)

Employee benefits, including:

(55 438)

(48 446)

provisions for retirement benefits

(6 631)

(6 227)

provisions for unused employee holiday

(6 236)

(2 461)

other

(42 571)

(39 758)

Other administrative expenses:

(975 611)

(829 552)

Costs of advertising, promotion and representation

(93 278)

(78 304)

IT and communications costs

(231 117)

(171 333)

Costs of renting

(55 589)

(57 330)

Costs of buildings maintenance, equipment and materials

(55 777)

(55 001)

ATM and cash maintenance costs

(34 718)

(35 407)

Costs of consultancy, audit and legal advisory and translation

(142 524)

(181 031)

Taxes and fees

(52 391)

(45 207)

KIR - clearing charges

(16 031)

(14 814)

PFRON costs

(10 269)

(9 512)

Banking Guarantee Fund costs

(149 552)

(60 850)

Financial Supervision costs

(19 619)

(16 591)

Other

(114 746)

(104 172)

Total

(2 332 023)

(2 026 444)

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

(176 915)

(293 228)

Impairment charges on loans and advances to customers

(1 372 764)

(1 566 942)

Reversal of impairment charges on loans and advances to customers

1 002 640

1 123 323

Amounts recovered from loans written off

34 081

64 451

Sale of receivables

167 916

119 388

Other directly recognised in profit and loss

(8 788)

(33 448)

Impairment losses on securities

(41)

(2)

Impairment charges on securities

(41)

(2)

Impairment losses on off-balance sheet liabilities

(51 961)

(11 296)

Impairment charges on off-balance sheet liabilities

(112 268)

(52 289)

Reversal of impairment charges on off-balance sheet liabilities

60 307

40 993

Total

(228 917)

(304 526)

134

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

135

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 of 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

(158 504)

(161 190)

Intangible assets

(65 874)

(65 001)

Total

(224 378)

(226 191)

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

(307 026)

(418 340)

Current year

(318 553)

(426 077)

Adjustment to previous years

11 527

7 736

Deferred tax:

(110 949)

262 526

Recognition and reversal of temporary differences

(110 949)

262 526

Total income tax reported in income statement

(417 975)

(155 815)

136

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

The effective tax rate (ETR) for 2025 was 25.80% (the ETR for 2024 was 17.81%). 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.

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

1 619 764

875 024

Statutory tax rate

19.00%

Income tax according to obligatory income tax rate of 19%

(307 755)

(166 255)

Impact of permanent differences on tax charges:

(230 950)

5 994

- Non-taxable income

134 853

115 975

Dividend income

1 782

2 200

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

- Cost which is not a tax cost

(365 803)

(109 980)

PFRON fee

(1 951)

(1 807)

Fees for Banking Guarantee Fund

(28 415)

(11 562)

Banking tax

(77 085)

(44 160)

Receivables written off

(14 920)

(25 129)

Costs of litigations and claims

(21 181)

(3 345)

Legal risk costs related to foreign‑currency mortgage loan

(210 254)

(14 028)

Other

(11 996)

(9 950)

Tax reliefs

12 155

4 445

Revaluation of assets due to changes in tax rates

108 575

Total income tax reported in income statement

(417 975)

(155 815)

Effective tax rate

25.80%

17.81%

137

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

16c. Deferred tax reported in equity

31.12.2025

31.12.2024

Valuation of investment assets at fair value through

other comprehensive income

(62 458)

9 760

Valuation of cash flow hedging instruments

806

4 704

Actuarial gains (losses)

3 792

(396)

Deferred tax reported directly in equity

(57 860)

14 068

Changes in deferred tax recognized directly in equity are presented in Note (39b).

17. EARNINGS PER SHARE

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Profit/loss after taxes

1 201 789

719 209

Weighted average number of shares in the period

1 213 116 777

Profit/loss per share – basic and diluted

0.99

0.59

Earnings per share have been calculated by dividing net profit for the period by the weighted average

number of shares. At the same time due to the nature of the issue it was not necessary to make a

separate calculation of diluted Earnings per Share (the calculation methodology in case of absence of

diluting instruments is the same as in case of Earnings per Share; as a result diluted Earnings per Share

equals basic Earnings Per Share).

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).

138

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

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

Quoted on the active market

252

115

a) financial institutions

b) non-financial institutions

166

Positive valuation of derivatives

155 309

255 845

Repurchase agreements

38 946

194 218

Total

1 019 418

1 005 542

Information on financial assets securing liabilities is presented in point 2) of chapter 15.

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

139

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

78 353

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 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

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

10 447 350

1 545 598

9 229

3 370

Interest rate swaps (IRS)

477 395

2 045 360

9 334 453

1 545 598

7 927

2 068

Other interest rate contracts:

options

219 333

514 709

1 112 897

1 302

2. FX derivatives*

6 889 617

6 518 115

956 121

49 965

108 218

FX contracts

1 232 204

784 673

84 136

6 661

9 081

FX swaps

5 657 413

5 733 442

21 015

37 651

94 419

Other FX contracts (CIRS)

850 970

5 653

4 718

3. Embedded instruments

168 940

520 109

351 002

95 143

Options embedded in

deposits

168 940

520 109

351 002

95 143

4. Indexes options

181 319

543 346

359 448

96 115

1 840

Total

7 936 604

10 141 639

12 113 921

1 545 598

155 309

208 571

Liabilities from short sale of debt

securities

37 788

*Notional value for double-currency derivatives constitutes the sum of both transactions expressed in PLN

140

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

above 5 years

Assets

Liabilities

1. Interest rate derivatives

899 208

1 372 822

9 088 667

516 687

9 971

13 446

Interest rate swaps (IRS)

899 208

1 137 324

8 447 889

516 687

2 909

6 384

Other interest rate contracts:

options

235 498

640 778

7 062

2. FX derivatives*

8 298 159

1 816 443

979 954

63 350

26 867

FX contracts

1 288 858

980 304

92 927

2 061

16 983

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

9 835 884

4 284 986

11 482 362

516 687

255 845

226 304

Liabilities from short sale of debt

securities

190 769

*Notional value for double-currency derivatives constitutes the sum of both transactions expressed in PLN

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

141

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

21. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER

COMPREHENSIVE INCOME

21a. Financial assets at fair value through other comprehensive income (split

by category)

31.12.2025

31.12.2024

Debt securities

42 471 146

29 218 737

Issued by State Treasury

31 871 072

20 090 261

a) bills

3 198 663

b) bonds

28 672 409

20 090 261

Issued by Central Bank

10 315 417

8 692 224

a) bills

10 315 417

8 692 224

Other securities

284 657

436 252

a) listed

284 657

436 252

Shares and interests in other entities

40 942

36 712

Total financial assets at fair value through other comprehensive income

42 512 088

29 255 449

Including

Instrument listed on active market

32 156 413

20 526 994

Instrument not listed on active market

10 355 675

8 728 455

21b. Debt securities at fair value through other comprehensive income (split

by interest rate applied)

31.12.2025

31.12.2024

with fixed interest rate

30 796 090

19 407 135

with variable interest rate

11 675 056

9 811 602

Total

42 471 146

29 218 737

21c. Debt securities at fair value through other comprehensive income by

maturity

31.12.2025

31.12.2024

to 1 month

11 786 776

8 692 224

above 1 month to 3 months

2 003 358

above 3 months to 1 year

6 073 329

5 681 089

above 1 year to 5 years

20 676 031

13 278 341

above 5 years

1 931 652

1 567 083

Total

42 471 146

29 218 737

142

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

29 255 449

22 096 200

Increases (purchase and accrual of interest and discount)

597 278 691

559 812 810

Reductions (sale and redemption)

(584 332 185)

(552 816 751)

Difference from measurement at fair value

310 136

163 196

Other

(3)

(6)

Balance at the end of the period

42 512 088

29 255 449

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 valued at amortised cost

31.12.2025

Companies

Individuals

Public sector

TOTAL

Gross balance sheet value - Stage 1

19 033 273

50 190 380

62 917

69 286 570

Gross balance sheet value - Stage 2

2 243 454

4 247 457

6 490 911

Gross balance sheet value - Stage 3

867 216

2 061 341

2 928 557

Gross balance sheet value - POCI

23 564

44 160

67 724

Gross balance sheet value - TOTAL

22 167 507

56 543 338

62 917

78 773 762

Impairment allowances - Stage 1

(160 806)

(180 848)

(231)

(341 885)

Impairment allowances - Stage 2

(85 872)

(296 376)

(382 248)

Impairment allowances - Stage 3

(318 330)

(1 292 922)

(1 611 252)

Impairment allowances - POCI

6 042

(29 242)

(23 201)

Impairment allowances - TOTAL

(558 966)

(1 799 389)

(231)

(2 358 586)

Net balance sheet value

21 608 541

54 743 949

62 686

76 415 176

143

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

31.12.2024

Companies

Individuals

Public sector

TOTAL

Gross balance sheet value - Stage 1

16 079 106

51 562 469

55 485

67 697 060

Gross balance sheet value - Stage 2

1 473 389

4 748 018

6 221 408

Gross balance sheet value - Stage 3

924 662

2 441 087

3 365 749

Gross balance sheet value - POCI

12 566

69 669

82 234

Gross balance sheet value - TOTAL

18 489 723

58 821 243

55 486

77 366 451

Impairment allowances - Stage 1

(142 967)

(194 544)

(297)

(337 808)

Impairment allowances - Stage 2

(56 039)

(282 629)

(338 668)

Impairment allowances - Stage 3

(305 203)

(1 488 142)

(1 793 344)

Impairment allowances - POCI

(868)

(32 758)

(33 626)

Impairment allowances - TOTAL

(505 077)

(1 998 072)

(297)

(2 503 446)

Net balance sheet value

17 984 646

56 823 171

55 189

74 863 005

22c. Loans and advances to customers

31.12.2025

31.12.2024

Valued at

amortised cost

Mandatorily at

fair value through

profit or loss

Valued at

amortised cost

Mandatorily at

fair value through

profit or loss

Loans and advances

69 054 756

68 029 024

▪ to companies

14 617 441

11 190 253

▪ to private individuals

54 381 909

56 793 419

▪ to public sector

55 406

45 352

Receivables on account of payment cards

1 370 009

745

1 281 389

1 825

▪ due from companies

12 193

12 911

▪ due from private individuals

1 357 816

658

1 268 478

1 755

Purchased receivables

117 032

148 514

▪ from companies

117 032

148 514

Guarantees and sureties realised

321

Financial leasing receivables

7 359 405

7 095 187

Other

183 374

104 033

Interest

689 186

707 983

Total:

78 773 762

745

77 366 451

1 825

Impairment allowances

(2 358 586)

(2 503 446)

Total balance sheet value:

76 415 176

745

74 863 005

1 825

144

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

22d. Quality of loans and advances to customers portfolio valued at amortised

cost

31.12.2025

31.12.2024

Loans and advances to customers (gross)

78 773 762

77 366 451

impaired

2 989 065

3 438 697

not impaired

75 784 697

73 927 754

Impairment write-offs

(2 358 586)

(2 503 446)

for impaired exposures

(1 658 273)

(1 859 971)

for not impaired exposures

(700 313)

(643 475)

Loans and advances to customers (net)

76 415 176

74 863 005

22e. 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)

78 773 762

77 366 451

case by case analysis

557 199

642 481

collective analysis

78 216 563

76 723 970

Impairment allowances

(2 358 586)

(2 503 446)

on the basis of case by case analysis

(196 453)

(212 925)

on the basis of collective analysis

(2 162 133)

(2 290 521)

Loans and advances to customers (net)

76 415 176

74 863 005

22f. Loans and advances to customers portfolio valued at amortised cost by

customers

31.12.2025

31.12.2024

Loans and advances to customers (gross)

78 773 762

77 366 451

corporate customers

22 230 424

18 545 209

individuals

56 543 338

58 821 242

Impairment allowances

(2 358 586)

(2 503 446)

for receivables from corporate customers

(559 197)

(505 374)

for receivables from private individuals

(1 799 389)

(1 998 072)

Loans and advances to customers (net)

76 415 176

74 863 005

145

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

22g. 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

2 503 446

2 496 554

Change in value of provisions:

(144 860)

6 892

Impairment allowances created in the period

1 372 574

1 566 924

Amounts written off

(174 150)

(247 871)

Impairment allowances released in the period

(1 002 511)

(1 123 163)

Sale of receivables

(361 593)

(255 131)

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

(2 027)

(5 662)

Other

(15 891)

2 436

Balance at the end of the period

2 358 586

2 503 446

* In accordance with IFRS 9, the Group 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 Group records POCI assets in the balance sheet mainly as a result of recognition of impaired loans

after the merger with Euro Bank and takeover of SKOK Piast. At the time of the merger, the

aforementioned assets 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

31.12.2025

- Companies

23 564

6 042

29 606

- Individuals

44 160

(29 242)

14 917

- Public sector

31.12.2024

- Companies

12 566

(868)

11 698

- Individuals

69 669

(32 758)

36 911

- Public sector

146

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

22h. 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

142 967

56 040

305 203

868

505 077

Transfers between stages

521

(32 181)

6 146

25 514

Increase due to granting or purchase

88 950

Changes in credit risk

(56 735)

68 532

97 897

(12 946)

96 748

Decrease due to derecognition (except exposures

sold and written off)

(16 695)

(6 393)

(27 121)

(50 209)

Sale of loans and advances

(15 210)

Loans and advances written off

(54 082)

KOIM

6 914

Allocation of the impairment to reduce the gross value

(19 337)

Other (including FX differences)

1 799

(125)

(1 417)

(141)

115

Balance at the end of the period

160 806

85 872

318 330

(6 042)

558 966

Companies: impairment allowances, 2024

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

103 386

42 805

246 392

(1 199)

391 384

Transfers between stages

812

(29 278)

28 465

Increase due to granting or purchase

81 118

Changes in credit risk

(32 387)

45 719

103 668

2 557

119 556

Decrease due to derecognition (except exposures

sold and written off)

(10 742)

(3 056)

(28 881)

(52)

(42 731)

Sale of loans and advances

(15 649)

Loans and advances written off

(33 081)

KOIM

5 627

5 652

Other (including FX differences)

780

(151)

(1 339)

(463)

(1 173)

Balance at the end of the period

142 967

56 040

305 203

868

505 077

Companies: loans and advances balance sheet

value, gross, 2025

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

16 079 106

1 473 389

924 662

12 566

18 489 723

Transfers between stages

(1 696 050)

1 386 501

269 113

40 436

Granted or purchased loans and advances

12 046 475

Repaid loans and advances

(7 546 520)

(612 817)

(256 940)

(29 716)

(8 445 993)

Loans and advances sold

(16 803)

Loans and advances written off

(54 082)

Other (including FX differences)

150 263

(3 619)

1 265

279

148 188

Balance at the end of the period

19 033 273

2 243 454

867 216

23 564

22 167 507

147

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Companies: loans and advances balance sheet

value, gross, 2024

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

15 425 306

1 303 056

707 728

23 106

17 459 196

Transfers between stages

(1 060 033)

614 225

445 808

Granted or purchased loans and advances

6 958 991

Repaid loans and advances

(5 119 698)

(439 911)

(279 170)

(9 807)

(5 848 586)

Loans and advances sold

(17 417)

Loans and advances written off

(33 080)

Other (including FX differences)

(125 460)

(3 981)

100 794

(734)

(29 381)

Balance at the end of the period

16 079 106

1 473 389

924 663

12 565

18 489 723

Individuals: impairment allowances, 2025

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

194 544

282 628

1 488 142

32 758

1 998 072

Transfers between stages

264 516

(348 619)

84 103

(0)

Increase due to granting or purchase

119 082

Changes in credit risk

(330

956

)

387 463

260 134

26 554

343 196

Decrease due to derecognition (except exposures

sold and written off)

(66 460)

(25 106)

(124 028)

(12 048)

(227 642)

Sale of loans and advances

(337 901)

(8 481)

(346 383)

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)

121

1 083

1 308

Balance at the end of the period

180 848

296 376

1 292 922

29 242

1 799 388

Individuals: impairment allowances, 2024

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

322 601

321 598

1 434 404

25 136

2 103 739

Transfers between stages

273 347

(424 040)

150 693

Increase due to granting or purchase

186 922

Changes in credit risk

(516

116

)

412 288

406 306

33 021

335 500

Decrease due to derecognition (except exposures

sold and written off)

(71 537)

(27 901)

(128 807)

(7 242)

(235 488)

Sale of loans and advances

(229 466)

(10 016)

(239 482)

Loans and advances written off

(205 782)

(9 008)

(214 791)

KOIM

62 804

903

63 707

Other (including FX differences)

(673)

684

(2 010)

(35)

(2 035)

Balance at the end of the period

194 544

282 628

1 488 142

32 758

1 998 072

148

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Individuals: loans and advances balance sheet

value, gross, 2025

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

51 562 468

4 748 018

2 441 086

69 669

58 821 241

Transfers between stages

(626 295)

309 152

317 143

Granted or purchased loans and advances

12 304 594

Repaid loans and advances

(15 053 078)

(899 614)

(307 132)

(26 488)

(16 286 312)

Reversal of Credit Holidays adjustment

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)

147 252

436

107 986

1 055

256 730

Balance at the end of the period

50 190 380

4 247 457

2 061 341

44 160

56 543 338

Individuals: loans and advances balance sheet

value, gross, 2024

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

50 884 255

4 736 329

2 645 545

93 690

58 359 819

Transfers between stages

(1 181 324)

797 478

383 846

Granted or purchased loans and advances

13 318 479

Repaid loans and advances

(11 786 651)

(814 393)

(338 442)

(26 277)

(12 965 763)

Reversal of Credit Holidays adjustment

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)

(475 727)

16 606

193 913

2 521

(262 687)

Balance at the end of the period

51 562 468

4 748 017

2 441 085

69 669

58 821 241

Public sector: impairment allowances, 2025

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

297

Transfers between stages

Increase due to granting or purchase

Changes in credit risk

Decrease due to derecognition (except exposures

sold and written off)

(151)

Other (including FX differences)

(5)

Balance at the end of the period

231

Public sector: impairment allowances, 2024

Stage 1

Stage 2

Stage 3

POCI

Total

Balance at the beginning of the period

1 431

Transfers between stages

Increase due to granting or purchase

Changes in credit risk

Decrease due to derecognition (except exposures

sold and written off)

(1 166)

Other (including FX differences)

(19)

Balance at the end of the period

297

149

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

55 485

55 486

Transfers between stages

Granted or purchased loans and advances

23 979

Repaid loans and advances

(16 547)

(1)

(16 548)

Other (including FX differences)

(0)

Balance at the end of the period

62 917

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

162 797

162 801

Transfers between stages

Granted or purchased loans and advances

8 884

Repaid loans and advances

(116 196)

(3)

(116 198)

Other (including FX differences)

Balance at the end of the period

55 485

55 486

22i. Loans and advances to customers portfolio valued at amortised cost by

maturity

31.12.2025

31.12.2024

Current accounts

3 958 763

3 676 289

to 1 month

2 596 912

2 391 578

above 1 month to 3 months

1 835 146

2 681 221

above 3 months to 1 year

8 442 271

8 076 902

above 1 year to 5 years

27 826 946

24 704 570

above 5 years

31 615 294

33 215 856

past due

1 809 244

1 912 052

Interest

689 186

707 983

Total gross

78 773 762

77 366 451

22j. 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

72 832 464

(2 173 587)

70 658 877

71 782 656

(2 286 964)

69 495 692

in foreign currencies (after

conversion to PLN)

5 941 299

(185 000)

5 756 300

5 583 795

(216 482)

5 367 313

currency: USD

74 625

(2 010)

72 615

61 794

(629)

61 165

currency: EUR

5 099 134

(154 161)

4 944 973

4 137 732

(161 589)

3 976 143

currency: CHF*

736 230

(28 471)

707 759

1 360 546

(53 852)

1 306 694

currency: GBP

31 309

(357)

30 952

23 723

(412)

23 311

Total

78 773 763

(2 358 586)

76 415 176

77 366 451

(2 503 446)

74 863 005

* 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.

150

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

22k. Financial leasing receivables

31.12.2025

31.12.2024

Financial leasing receivables (gross)

8 126 104

8 010 864

Unrealised financial income

(766 699)

(915 677)

Financial leasing receivables (net)

7 359 405

7 095 187

Financial leasing receivables (gross) by maturity

Under 1 year

2 981 828

2 930 958

From 1 year to 2 years

2 158 655

2 155 715

From 2 year to 3 years

1 486 027

1 440 469

From 3 year to 4 years

788 065

819 131

From 4 year to 5 years

389 677

365 283

Above 5 years

321 853

299 309

Total

8 126 104

8 010 865

Financial leasing receivables (net) by maturity

Under 1 year

2 643 802

2 536 687

From 1 year to 2 years

1 950 261

1 906 512

From 2 year to 3 years

1 371 977

1 303 172

From 3 year to 4 years

732 425

752 011

From 4 year to 5 years

364 095

334 949

Above 5 years

296 845

261 856

Total

7 359 405

7 095 187

The main groups of items financed through leasing are the means of transport (tractors, trailers, trucks,

vans, cars, etc.), machinery and equipment, computers as well as industrial and commercial real estate.

The leasing portfolio of the Group includes contracts in which fees are set in PLN or in EUR, based on

floating or fixed interest rates. Agreements with customers are concluded for term from 1 year to 10

years. Offered lease agreements provide a diverse client's own contribution and the residual value of

the object, as well as a diverse amount of lease payments, e.g., depending on seasonality. After the end

of the lease, a customer is obliged to buy the item at a final price specified at the time of the conclusion

of the agreement. The object during the entire lease term is owned by the Group and constitutes a major

collateral of lease payments.

151

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 allowances

Balance sheet

value, net

Stage 1

Stage 2

Stage 3

Stage 1

Stage 2

Stage 3

Debt securities

26 905 421

(48)

26 905 373

Deposits, loans and advances to

banks and other monetary institutions

350 820

(79)

350 741

Repurchase agreements

59 978

31.12.2024

Balance sheet value, gross

Accumulated impairment allowances

Balance sheet

value, net

Stage 1

Stage 2

Stage 3

Stage 1

Stage 2

Stage 3

Debt securities

24 381 493

(8)

24 381 485

Deposits, loans and advances to

banks and other monetary institutions

434 535

(18)

434 517

Repurchase agreements

23b. Debt securities

31.12.2025

31.12.2024

Banks and other financial institutions

1 915 598

2 305 192

European Union

1 594 833

1 703 876

Public sector - securities issued by governments of:

23 363 827

20 334 681

Poland

16 658 081

13 348 939

Other UE countries

6 705 746

6 985 742

Public sector – local governments

31 114

37 736

Total

26 905 372

24 381 485

23c. Deposits, loans and advances to banks and other monetary institutions

31.12.2025

31.12.2024

Current accounts

215 131

278 629

Deposits

133 110

154 662

Interest

2 579

1 244

Total (gross) deposits, loans and advances

350 820

434 535

Impairment allowances

(79)

(18)

Total (net) deposits, loans and advances

350 741

434 517

152

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

23d. Deposits, loans and advances to banks and other monetary institutions by

maturity date

31.12.2025

31.12.2024

Current accounts

215 131

278 629

to 1 month

78 110

144 662

above 1 month to 3 months

10 000

above 3 months to 1 year

55 000

above 1 year to 5 years

above 5 years

past due

Interest

2 579

1 244

Total (gross) deposits, loans and advances

350 820

434 535

23e. Deposits, loans and advances to banks and other monetary institutions by

currency

31.12.2025

31.12.2024

in Polish currency

58 084

11 580

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: GBP

28 885

21 944

currency: CHF

6 208

22 450

currency: JPY

2 707

4 307

other currencies

55 112

93 400

Total

350 820

434 535

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

(18)

(160)

Impairment allowances created in the period

(190)

(18)

Impairment allowances released in the period

129

160

Balance at the end of the period

(79)

(18)

153

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

23g. Repurchase agreements

31.12.2025

31.12.2024

Customers

59 964

Interests

Total

59 978

24. DERIVATIVES – HEDGE ACCOUNTING

The Risk Strategy approved in the Group 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 Group 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 Group 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 Group 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.

The Group 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 Group designates hedging instruments on their

trade date and by this eliminates this source of ineffectiveness.

154

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Detailed information on cash flow hedge relations applied by the Group, 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 Group 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 Group 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 Group 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

155

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 Group 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 Group 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 Group 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.

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

23 015

IRS contracts

2 483 430

6 098 510

850 000

1 720

3. Total hedging derivatives

2 883 430

6 868 886

850 000

24 735

* Notional value for double-currency derivatives constitutes the sum of both transactions expressed in PLN.

156

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

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).

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)

157

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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)

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

158

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

25. INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND

ASSOCIATES

25a. Investments in related entities

31.12.2025

31.12.2024

Investments in associates

38 657

44 012

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

44 012

52 509

Decrease in value of shares due to dividends received

(5 355)

(8 497)

Balance at the end of the period

38 657

44 012

26. TANGIBLE FIXED ASSETS

26a. Property, plant and equipment

31.12.2025

31.12.2024

Land

2 351

2 339

Buildings and premises

114 608

106 039

Machines and equipment

95 982

99 465

Vehicles

22 290

24 331

Other fixed assets

20 985

22 632

Fixed assets under construction

80 873

35 182

Rights to use office space

219 945

242 238

Total

557 034

532 226

159

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

2 339

354 293

340 495

49 992

98 917

35 182

627 100

1 508 318

b) increases (on account of)

26 948

35 333

10 193

10 053

123 942

71 050

277 531

purchase

8 706

123 942

132 648

transfer from fixed assets under

construction

26 948

35 333

1 473

10 053

73 819

recognition of the right‑of‑use asset

over the period

70 997

other

c) reductions (on account of)

14 561

32 380

6 376

14 206

78 251

33 891

179 665

sale

11 261

22 434

6 322

7 965

47 982

liquidation

3 300

9 919

6 241

33 891

53 351

settlement of fixed assets under

construction

73 819

other

4 432

4 513

d) gross value of property, plant

and equipment at the end of the

period

2 351

366 680

343 448

53 809

94 764

80 873

664 259

1 606 184

e) cumulated depreciation

(amortization) at the beginning of the

period

247 776

241 030

25 661

76 284

384 862

975 613

f) depreciation over the period (on

account of)

3 960

6 436

5 858

(2 506)

59 452

73 200

current write-off (P&L)

15 027

36 077

11 086

7 490

88 824

158 504

reductions on account of sale

(8 191)

(20 002)

(5 188)

(5 091)

(38 472)

reductions on account of liquidation

(3 018)

(9 612)

(4 905)

(29 425)

(46 960)

other

142

(27)

(40)

128

g) cumulated depreciation

(amortization) at the end of the

period

251 736

247 466

31 519

73 778

444 314

1 048 813

h) impairment allowances at the

beginning of the period

478

479

release of allowances

(142)

i) impairment allowances at the end

of the period

336

337

j) net value of property, plant and

equipment at the end of the period

2 351

114 608

95 982

22 290

20 985

80 873

219 945

557 034

160

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

construction

Rights to

use office

space

TOTAL

a) gross value of property,

plant and equipment at the

beginning of the period

2 339

332 536

310 398

50 587

93 333

30 574

569 763

1 389 530

b) increases (on account of)

24 649

36 701

10 736

7 834

74 099

82 879

236 898

purchase

10 736

74 099

84 920

transfer from fixed assets

under construction

24 649

36 616

7 834

69 099

recognition of rights to use

82 879

c) reductions (on account of)

2 892

6 604

11 331

2 250

69 491

25 542

118 110

sale

339

257

11 331

470

12 397

liquidation

2 553

6 347

1 780

25 542

36 222

settlement of fixed assets

under construction

69 099

other

392

d) gross value of property,

plant and equipment at the

end of the period

2 339

354 293

340 495

49 992

98 917

35 182

627 100

1 508 318

e) cumulated depreciation

(amortization) at the

beginning of the period

236 509

211 633

24 736

70 211

315 749

858 838

f) depreciation over the period

(on account of)

11 267

29 397

925

6 073

69 113

116 775

current write-off (P&L)

13 926

35 624

10 678

8 274

92 688

161 190

reductions on account of

sale

(339)

(240)

(9 756)

(468)

(10 803)

reductions on account of

liquidation

(2 320)

(5 987)

(1 733)

(23 575)

(33 615)

other

g) cumulated depreciation

(amortization) at the end of

the period

247 776

241 030

25 661

76 284

384 862

975 613

h) impairment allowances at

the beginning of the period

815

816

release of allowances

(337)

i) impairment allowances at

the end of the period

478

479

j) net value of property,

plant and equipment at the

end of the period

2 339

106 039

99 465

24 331

22 632

35 182

242 238

532 226

161

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

27. INTANGIBLE FIXED ASSETS

27a. Intangible fixed assets

31.12.2025

31.12.2024

Goodwill due to merger with Euro Bank

192 126

Other intangible fixed assets:

417 855

342 291

concessions, patents, licenses, know-how and similar assets

79 663

68 226

computer software

62 492

68 746

other

4 201

5 576

advances for intangible assets

271 499

199 743

Total

609 981

534 417

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

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

175 721

386 165

27 126

199 743

788 755

b) increases (on account of)

43 340

27 210

138 460

209 010

expenditures on intangible assets

738

3 808

138 460

143 006

takeover from investments and

addvances

42 602

23 402

66 004

c) reductions (on account of)

4 046

243

66 704

70 993

liquidation

4 046

243

4 289

settlement of advances

66 004

other

700

d) gross value of intangible fixed

assets at the end of the period

215 015

413 132

27 126

271 499

926 772

e) cumulated depreciation at the

beginning of the period

107 495

313 423

21 550

442 468

f) depreciation over the period (on

account of)

27 857

33 221

1 375

62 453

current write-off (P&L)

31 114

33 385

1 375

65 874

liquidation

(3 257)

(164)

(3 421)

g) cumulated depreciation at the end of

the period

135 352

346 644

22 925

504 921

h) impairment allowances at the

beginning of the period

3 996

j) impairment allowances at the end of the

period

3 996

j) net value of intangible fixed assets at

the end of the period

79 663

62 492

4 201

271 499

417 855

163

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

102 863

362 324

27 126

178 655

670 968

b) increases (on account of)

72 858

25 981

121 804

220 643

expenditures on intangible assets

121 804

takeover from investments and

addvances

72 858

25 981

98 839

c) reductions (on account of)

2 140

100 716

102 856

liquidation

2 140

2 141

settlement of advances

98 839

other

1 876

d) gross value of intangible fixed

assets at the end of the period

175 721

386 165

27 126

199 743

788 755

e) cumulated depreciation at the

beginning of the period

78 706

278 931

19 830

377 467

f) depreciation over the period (on

account of)

28 789

34 492

1 720

65 001

current write-off (P&L)

28 789

34 492

1 720

65 001

liquidation

g) cumulated depreciation at the end of

the period

107 495

313 423

21 550

442 468

h) impairment allowances at the

beginning of the period

3 996

j) impairment allowances at the end of the

period

3 996

j) net value of intangible fixed assets at

the end of the period

68 226

68 746

5 576

199 743

342 291

164

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

68 409

(14 177)

54 233

38 031

(19 336)

18 695

Balance sheet valuation of financial

instruments

74 857

(56 679)

18 178

37 287

(48 155)

(10 868)

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

100 894

(581 228)

(480 334)

87 284

(330 105)

(242 821)

Interest and discount on loans and

receivables

(205 589)

(134 756)

Income and cost settled at effective

interest rate

(102 865)

(16 155)

Impairment of loans presented as

temporary differences

655 957

529 605

Employee benefits

49 925

28 399

Rights to use

5 510

4 291

(5)

4 286

Provisions for future costs

52 006

24 171

Provisions for legal risk costs related

to foreign‑currency mortgage loans

616 119

545 073

Valuation of investment assets, cash

flows hedge and actuarial gains

(losses) recognized in other

comprehensive income

59 107

(116 888)

(57 780)

21 632

(7 521)

14 111

Shares valuation

2 010

(46 063)

(44 053)

1 273

(27 556)

(26 283)

Tax losses carried forward

500

16 319

Other

(3 759)

(3 288)

(7 047)

(3 229)

(4 441)

(7 670)

Net deferred income tax asset

1 799 928

(1 250 462)

549 466

1 385 635

(651 209)

734 426

including long-term net deferred

income tax asset

298 560

234 403

Deferred

income tax

asset

Deferred

income tax

provision

Net deferred

income tax

provision

Deferred

income tax

asset

Deferred

income tax

provision

Net deferred

income tax

provision

The difference between tax and

balance sheet depreciation

(6)

(22)

Interest payable/receivable on

deposits and securities

5 473

(311)

5 162

(111)

Interest and discount on loans and

receivables

(4 645)

Income and expenses settled at the

effective interest rate

(5 087)

(1 679)

Impairment of loans presented as

temporary differences

1 497

Employee benefits

720

246

Rights to use

Provisions for future costs

1 522

(1 518)

Valuation of investment assets, cash

flows hedge and actuarial gains

(losses) recognized in other

comprehensive income

(123)

(79)

(44)

(43)

Tax losses carried forward

369

Other

(574)

(565)

(29)

(19)

Net deferred income tax provision

9 716

(10 740)

(1 024)

(1 356)

(1 752)

(3 108)

Based on the provisions of IAS 12, the Group entities have offset deferred tax assets against deferred tax liabilities.

165

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

28b. Change of net temporary differences

31.12.2024

Changes to

financial

result

Changes to

equity

31.12.2025

Difference between tax and balance sheet depreciation

18 673

35 554

54 227

Balance sheet valuation of financial instruments

(10 867)

29 045

18 178

Unrealised receivables/ liabilities on account of derivatives

(7 680)

2 388

(5 292)

Interest on deposits and securities to be paid/ received

(242 931)

(232 241)

(475 172)

Interest and discount on loans and receivables

(134 756)

(75 479)

(210 235)

Income and cost settled at EIR

(17 834)

(90 118)

(107 952)

Impairment of loans presented as temporary differences

529 605

127 850

657 455

Employee benefits

28 644

22 000

50 644

Rights to use

4 324

1 273

5 597

Provisions for future costs

22 653

30 875

53 528

Provisions for legal risk costs related to foreign‑currency

mortgage loans

545 073

71 046

616 119

Valuation of investment assets, cash flows hedge and actuarial

gains (losses) recognized in other comprehensive income

14 068

(71 927)

(57 859)

Shares valuation

(26 283)

(17 770)

(44 053)

Tax losses carried forward

16 319

(15 450)

869

Other

(7 690)

(7 612)

Total

731 318

(110 949)

(71 927)

548 442

28c. Change of net temporary differences

31.12.2023

Changes to

financial

result

Changes to

equity

31.12.2024

Difference between tax and balance sheet depreciation

9 167

9 506

18 673

Balance sheet valuation of financial instruments

(53 103)

42 236

(10 867)

Unrealised receivables/ liabilities on account of derivatives

(573)

(7 107)

(7 680)

Interest on deposits and securities to be paid/ received

(196 316)

(46 616)

(242 932)

Interest and discount on loans and receivables

(113 818)

(20 938)

(134 756)

Income and cost settled at EIR

79 233

(97 067)

(17 834)

Impairment of loans presented as temporary differences

547 553

(17 948)

529 605

Employee benefits

23 268

5 377

28 645

Rights to use

4 204

119

4 323

Provisions for future costs

142 935

(120 282)

22 653

Provisions for legal risk costs related to foreign‑currency

mortgage loans

545 073

Valuation of investment assets, cash flows hedge and actuarial

gains (losses) recognized in other comprehensive income

51 021

(36 953)

14 068

Shares valuation

(32 027)

5 745

(26 282)

Tax losses carried forward

45 805

(29 486)

16 319

Other

(1 604)

(6 086)

(7 690)

Accounting policy adjustment related to the effective interest rate

20 992

Total

505 745

262 526

(36 953)

731 318

166

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

29. OTHER ASSETS

31.12.2025

31.12.2024

Expenses to be settled

101 146

86 825

Income to be received

31 794

61 298

Interbank settlements

924

6 924

Settlements of financial instruments transactions

35 532

19 881

Receivables from sundry debtors, including:

1 732 460

1 476 018

- 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

Settlements with the State Treasury

25 406

16 284

Settlements of brokerage activities

27 960

17 168

Other

170 882

106 831

Total other assets (gross)

2 126 104

1 791 229

Impairment allowances

(44 011)

(26 041)

Total other assets (net)

2 082 093

1 765 188

including other financial assets**

1 784 659

1 555 248

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 Settlements with

the State Treasury and Other items

167

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

30. NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS

HELD FOR SALE

30a. Change of balance of non-current assets held for sale in the period

01.01.2025 – 31.12.2025

land

buildings,

premises, civil

and hydro-

engineering

structures

machines

and

equipment

vehicles

other fixed

assets

TOTAL

a) value at the beginning of the period

14 549

b) impairment allowances at the beginning

of the period

c) net value of non-current assets held for

sale at the beginning of the period

14 549

d) change of value in the period, including:

2 169

- sale of non-current assets held for sale

e) value at the end of the period

16 717

f) change of impairment allowances in the

period, including:

- sale of non-current assets held for sale

g) impairment allowances at the end of the

period

h) net value of non-current assets held

for sale at the end of the period

16 717

30b. Change of balance of non-current assets held for sale in the period

01.01.2024 – 31.12.2024

land

buildings,

premises, civil

and hydro-

engineering

structures

machines

and

equipment

vehicles

other fixed

assets

TOTAL

a) value at the beginning of the period

17 514

b) impairment allowances at the beginning

of the period

c) net value of non-current assets held for

sale at the beginning of the period

17 514

d) change of value in the period, including:

(2 966)

- sale of non-current assets held for sale

e) value at the end of the period

14 549

f) change of impairment allowances in the

period, including:

- sale of non-current assets held for sale

g) impairment allowances at the end of the

period

h) net value of non-current assets held

for sale at the end of the period

14 549

168

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

31. FINANCIAL LIABILITIES HELD FOR TRADING

31.12.2025

31.12.2024

Valuation of derivatives

208 571

226 304

Short sale of securities

37 788

190 769

Financial liabilities valued at fair value through profit and loss

246 359

417 073

The division of the negative valuation of derivatives into specific types of instruments is presented in

note (19).

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

28 196

31 840

Term deposits

74 758

172 057

Interest

159

562

Total

103 113

204 459

32b. Liabilities to banks and other monetary institutions by maturity

31.12.2025

31.12.2024

Current accounts

28 196

31 840

to 1 month

68 916

169 465

above 1 month to 3 months

4 220

2 592

above 3 months to 1 year

1 622

above 1 year to 5 years

above 5 years

Interest

159

562

Total

103 113

204 459

32c. Liabilities to banks and other monetary institutions by currency

31.12.2025

31.12.2024

in Polish currency

58 347

58 251

in foreign currencies (after conversion to PLN)

44 766

146 208

currency: USD

1 807

2 997

currency: EUR

42 959

143 211

Total

103 113

204 459

169

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

29 476 767

29 463 221

Other

323 321

293 855

Accrued interest

213 908

268 832

Amounts due to companies

25 791 769

24 967 949

Balances on current accounts

16 063 240

14 896 746

Term deposits

9 363 004

9 725 173

Other

335 907

301 393

Accrued interest

29 618

44 637

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

130 807 491

117 257 213

33b. Liabilities to customers by maturity

31.12.2025

31.12.2024

Current accounts

90 448 045

76 719 445

to 1 month

15 768 678

14 732 871

above 1 month to 3 months

15 954 115

14 661 027

above 3 months to 1 year

7 638 890

9 530 615

above 1 year to 5 years

651 492

1 246 980

above 5 years

97 397

48 645

Interest

248 874

317 630

Total

130 807 491

117 257 213

33c. Liabilities to customers by currency

31.12.2025

31.12.2024

in Polish currency

119 121 516

106 405 468

in foreign currencies (after conversion to PLN)

11 685 975

10 851 745

currency: USD

2 679 879

2 498 267

currency: EUR

8 276 120

7 618 804

currency: GBP

424 240

383 020

currency: CHF

252 676

231 448

other currencies

53 060

120 206

Total

130 807 491

117 257 213

170

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

34. REPURCHASE AGREEMENTS

Liabilities from securities sold with buy-back clause

31.12.2025

31.12.2024

b) to banks

194 162

d) interest

Total

194 223

35. DEBT SECURITIES ISSUED

35a. Liabilities from debt securities

31.12.2025

31.12.2024

Bonds

4 903 699

5 153 379

Mortgage bonds

2 595 948

798 461

Valuation of the Bank's bonds designated to fair value hedging

19 008

52 463

Interest

122 157

120 472

Total

7 640 812

6 124 775

35b. Liabilities from debt securities by final legal maturity

31.12.2025

31.12.2024

to 1 month

30 000

above 1 month to 3 months

above 3 months to 1 year

69 000

52 463

above 1 year to 5 years

6 958 386

5 069 071

above 5 years

461 269

882 769

Interest

122 157

120 472

Total

7 640 812

6 124 775

35c. Change of debt securities

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Balance at the beginning of the period

6 124 775

3 317 849

Increases, on account of:

2 366 597

3 368 571

issue of Banking Securities

2 131 700

issue of mortgage bonds by Millennium Bank Hipoteczny

1 800 000

800 000

Valuation of Bank’s bonds designated to fair value hedge

3 159

interest accrual

566 597

433 712

Reductions, on account of:

(850 560)

(561 645)

repurchase of bonds

(205 000)

(128 731)

valuation of the Bank’s bonds within the fair value hedge relationship

(33 455)

Other changes including FX differences

(47 868)

(34 240)

interest payment

(564 237)

(398 674)

Balance at the end of the period

7 640 812

6 124 775

171

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

35d. Debt securities by type

As at 31.12.2025

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

2 191 798

60 035

2027-09-18

Luxembourg SE

Bank Millennium - MILP-2029/09

2 143 295

30 119

2029-09-25

Luxembourg SE

Millennium Bank Hipoteczny -

PLMLNBH00014

300 458

801

2027-06-11

Warszawa - Catalyst

Millennium Bank Hipoteczny -

PLMLNBH00022

503 310

4 105

2029-11-05

Warszawa - Catalyst

Millennium Bank Hipoteczny -

PLMLNBH00030

800 799

2 176

2030-03-12

Warszawa - Catalyst

Millennium Bank Hipoteczny -

PLL381300010

1 007 062

8 600

2030-11-04

Warszawa - Catalyst

Millennium Leasing - CLN 23-38

226 230

7 230

2038-10-20

Vienna MTF

Total

7 640 812

122 157

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

60 693

2027-09-18

Luxembourg SE

Bank Millennium - MILP-2029/09

2 175 303

30 449

2029-09-25

Luxembourg SE

Millennium Bank Hipoteczny -

PLMLNBH00014

300 536

1 101

2027-06-11

Warszawa - Catalyst

Millennium Bank Hipoteczny -

PLMLNBH00022

504 217

5 190

2029-11-05

Warszawa - Catalyst

Millennium Leasing - CLN 23-38

289 856

9 856

2038-10-20

Vienna MTF

Total

6 124 775

120 472

172

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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 PLN 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

01.01.2025 -

31.12.2025

01.01.2024 -

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 Group 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.

Provision for legal risk connected with fx mortgage loans

173

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

37. PROVISIONS

37a. Provisions

31.12.2025

31.12.2024

Provision for commitments and guarantees given

105 358

53 583

Provisions for retirement benefits

74 534

51 166

Provision for pending legal issues, including:

3 566 628

2 847 003

Provision for legal risk connected with fx mortgage loans

3 442 891

2 798 472

Total

3 746 520

2 951 752

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

53 583

30 305

16 613

6 665

Charge of provision

112 268

52 758

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

105 357

59 119

38 682

7 556

01.01.2024 – 31.12.2024

Total

Stage 1

Stage 2

Stage 3

Balance at the beginning of the period

42 367

21 612

10 127

10 628

Charge of provision

52 289

21 030

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

53 583

30 305

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

51 166

48 328

Charge/Release of provision

6 631

6 227

Utilization of provisions

(1 658)

(1 456)

Actuarial gains/losses

18 395

(1 928)

Inne

(5)

Balance at the end of the period

74 534

51 166

174

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

37d. Change of provision for pending legal issues

01.01.2025 -

31.12.2025

01.01.2024 -

31.12.2024

Balance at the beginning of the period

2 847 003

1 403 105

Charge of provision

93 133

8 914

Release of provision

(8 283)

(4 547)

Utilisation of provision

(1 424 189)

(420 111)

Creation of provisions 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

3 566 628

2 847 003

* Creation of provisions for legal risk related to foreign currency mortgage loans is described in more

detail in Chapter 13 “Legal risk related to foreign currency mortgage loans”.

38. OTHER LIABILITIES

38a. Other liabilities

31.12.2025

31.12.2024

Short-term

1 941 440

1 705 278

Accrued costs - bonuses, salaries

113 802

77 425

Accrued costs - other

210 582

166 896

Provisions for return of insurance fees

26 995

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:

712 569

524 413

- liabilities due to legally invalidated foreign currency mortgage loans

308 837

244 094

- payments towards leasing installments

101 903

102 797

- insurance settlements

70 720

16 342

Liabilities to public sector

66 523

42 747

Deferred income

9 514

25 764

Liabilities due to lease

80 904

80 973

Provisions for unused employee holiday

26 324

20 122

Settlement due to brokerage activity

5 794

2 585

Other

123 616

111 989

Long-term

462 011

439 817

Liabilities due to lease

159 521

183 465

Commitment to pay – BGF*

272 251

227 409

Other

30 239

28 943

Total

2 403 451

2 145 095

including other financial liabilities**

1 809 972

1 538 722

* - 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.

175

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

38b. Liabilities due to lease

31.12.2025

31.12.2024

Liabilities due to lease (gross)

261 216

285 424

Unrealised financial costs

(20 791)

(20 987)

Current value of minimum lease instalments

240 425

264 437

Liabilities due to lease (gross) by maturity

Under 1 year

90 998

89 931

From 1 year to 5 years

169 660

187 258

Above 5 years

557

8 235

Total

261 215

285 424

Liabilities due to lease (net) by maturity

Under 1 year

80 904

80 973

From 1 year to 5 years

158 653

175 414

Above 5 years

868

8 051

Total

240 425

264 438

38c. Change of provisions for unused employee holiday

01.01.2024 -

31.12.2024

01.01.2023 -

31.12.2023

Balance at the beginning of the period

20 122

17 445

Charge of provisions/ reversal of provisions

6 236

2 461

Utilisation of provisions

(34)

(26)

Other

242

Balance at the end of the period

26 324

20 122

176

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

39. EQUITY

39a. Capital

The share capital of the Bank Millennium S.A. (equal to the Group’s share capital) 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.

177

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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).

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 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.

178

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Accumulated other comprehensive income

31.12.2025

31.12.2024

Effect of valuation (gross)

239 560

(74 052)

Deferred income tax

(57 860)

14 068

Net effect of valuation

181 700

(59 984)

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

(51 377)

9 759

(41 618)

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

305 933

(69 882)

236 051

Profit/loss on revaluation of FVTOCI shares, recognized in equity

4 033

(2 341)

1 692

Revaluation reserve at the end of the period

258 557

(62 458)

196 099

Revaluation reserve on FVTOCI assets 1.01.2024 - 31.12.2024

Gross value

Deferred tax

Total

Revaluation reserve at the beginning of the period

(214 495)

40 752

(173 743)

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

155 414

(29 529)

125 885

Profit/loss on revaluation of FVTOCI shares, recognized in equity

7 847

(1 491)

6 356

Revaluation reserve at the end of the period

(51 377)

9 759

(41 618)

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

(24 760)

4 705

(20 055)

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

(2 687)

806

(1 881)

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

(54 193)

10 297

(43 896)

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

(24 760)

4 705

(20 055)

179

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

2 085

(396)

1 689

Change in the obligations arising from the provision for retirement benefits

(18 395)

4 188

(14 207)

Revaluation reserve at the end of the period

(16 310)

3 792

(12 518)

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

157

(30)

127

Change in the obligations arising from the provision for retirement benefits

1 928

(366)

1 562

Revaluation reserve at the end of the period

2 085

(396)

1 689

39c. Retained earnings

Supplementary

capital

Reserve

capital

General

banking risk

fund

Retained

earnings

TOTAL

Retained earnings at the beginning of

the period 01.01.2025

472 698

3 815 523

228 902

864 404

5 381 527

appropriation of profit

660 989

(660 989)

net profit/ (loss) of the period

1 201 789

Retained earnings at the end of the

period 31.12.2025

472 698

4 476 512

228 902

1 405 204

6 583 316

Supplementary

capital

Reserve capital

General banking

risk fund

Retained

earnings

TOTAL

Retained earnings at 31.12.2023

472 698

3 257 933

228 902

792 278

4 751 811

opening balance adjustment

(89 493)

Adjusted retained earnings at

01.01.2024

472 698

3 257 933

228 902

702 785

4 662 318

appropriation of profit

557 590

(557 590)

net profit/ (loss) of the period

719 209

Retained earnings at the end of the

period 31.12.2024

472 698

3 815 523

228 902

864 404

5 381 527

180

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

97 263

4 227

1 622

103 112

Deposits from customers

106 334 132

16 143 280

7 778 507

655 391

97 397

131 008 707

Liabilities from securities sold with buy-

back clause

Debt securities

11 861

8 119

560 348

8 587 561

1 048 962

10 216 851

Subordinated debt

24 817

105 887

1 693 958

1 824 662

Liabilities from trading derivatives -

notional value

1 922 542

2 302 029

6 065 523

10 732 659

1 578 734

22 601 487

Liabilities from hedging derivatives -

notional value

2 883 430

6 500 047

850 000

10 233 477

Commitments granted - financial

14 673 488

Commitments granted - guarantee

2 076 330

TOTAL

125 140 433

18 457 655

17 395 317

28 169 616

3 575 093

192 738 114

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

201 867

2 591

204 458

Deposits from customers

91 601 487

14 877 597

9 757 852

1 251 544

48 645

117 537 125

Liabilities from securities sold with buy-

back clause

194 254

Debt securities

16 607

15 288

656 985

6 680 684

2 028 705

9 398 269

Subordinated debt

28 611

128 090

1 018 593

830 000

2 005 294

Liabilities from trading derivatives -

notional value

3 556 879

1 399 841

2 081 440

6 013 031

263 740

13 314 931

Liabilities from hedging derivatives -

notional value

468 280

1 077 044

192 070

5 856 460

7 593 854

Commitments granted - financial

11 754 379

Commitments granted - guarantee

1 686 880

TOTAL

109 480 633

17 400 972

12 816 437

20 820 312

3 171 090

163 689 444

181

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

15. Supplementary Information

15.1. 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.

15.2. DATA ABOUT ASSETS, WHICH SECURE LIABILITIES

As at 31 December 2025 following assets of the Group 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

12.

Treasury Bonds

WZ0126

Held to maturity

pledge on the account of Millennium Leasing

related to the securitization transaction

240 900

245 908

13.

Treasury Bonds

WZ0126

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

5 000

5 111

14.

Treasury Bonds

WZ0330

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

30 000

29 636

15.

Treasury Bonds

WZ0528

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

10 000

9 970

16.

Treasury Bonds

WZ1128

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

10 000

9 921

17.

Treasury Bonds

WZ1127

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

15 000

14 995

18.

Treasury Bonds

WZ1129

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

15 000

14 740

19.

Treasury Bonds

WZ0533

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

60 000

57 729

20.

Treasury Bonds

WZ1131

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

35 000

33 731

21.

Mortgage loans

Held to maturity

mortgage bonds

Millennium Bank Hipoteczny *

3 803 463

3 879 439

TOTAL

6 113 018

6 182 797

* the carrying amount of secured liabilities (issued mortgage bonds) amounted to PLN 2,611,630 thousand as at the reporting

date.

182

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

Additionally, as at 31 December 2025, the Group had not concluded short-term (usually settled within 7

days) sales transactions of Treasury securities with a repurchase agreement

As at 31 December 2024 following assets of the Group 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

Treasury Bonds

WZ0126

Held to maturity

pledge on the Millennium Leasing account

related to a securitization transaction

311 835

321 623

Cash

receivables

initial settlement deposit in KDPW CCP (MAGB)

11 000

10.

Cash

receivables

ASO guarantee fund (PAGB)

795

11.

Cash

receivables

appropriate security deposit at KDPW CCP

(MATS)

321

12.

Cash

receivables

Settlement on transactions concluded

24 657

13.

Deposits placed

Deposits in banks

Settlement on transactions concluded

144 662

145 063

14.

Treasury Bonds

WZ1127

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

15 000

14 960

15.

Treasury Bonds

WZ0525

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

5 000

5 044

16.

Treasury Bonds

WZ1129

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

15 000

14 657

17.

Treasury Bonds

WZ0126

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

5 000

5 152

18.

Treasury Bonds

WZ0528

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

10 000

9 955

19.

Treasury Bonds

WZ1128

Held to Collect

and for Sale

mortgage bonds

Millennium Bank Hipoteczny

10 000

9 880

20.

Mortgage loans

Held to maturity

mortgage bonds

Millennium Bank Hipoteczny *

1 673 857

1 707 557

TOTAL

4 235 636

4 232 351

* the carrying amount of secured liabilities (issued mortgage bonds) amounted to PLN 804,752 thousand as at the reporting date.

The Group presents, in a separate line item in the Consolidated Statement of Financial Position, the

assets serving as collateral for liabilities that may be pledged or sold by the collateral taker. As at 31

December 2024, the Group had concluded short‑term repurchase (sell‑and‑repurchase) transactions

involving treasury securities meeting the above criteria, with a carrying amount 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 obligatory reserve

constitute restricted assets. The value of the provision maintained at the end of the financial year is

presented in note (18).

183

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

15.3. SECURITIES COVERED BY TRANSACTIONS WITH A BUY-BACK

CLAUSE (SBB)

The following securities (presented in the Group's balance sheet) were the subject of repurchase

transactions (SBB), in PLN thousand:

As at 31.12.2025 r.

Type of security

Nominal value

Balance sheet value

Treasury bonds

TOTAL

As at 31.12.2024 r.

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

Group is exposed to risks similar to those in the case of holding securities with the same characteristics

in its own portfolio.

15.4. OFFSETTING OF ASSETS AND LIABILITIES

Offsetting the valuation of derivative instruments concluded through clearing houses

The Group 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

378 556

446 308

Compensation effect

(223 247)

(237 737)

Valuation of derivative instruments for trading, after cpmpensation

155 309

208 571

Fair value

31.12.2024

Assets

Liabilities

Valuation of derivative instruments for trading, before cpmpensation

400 100

366 072

Compensation effect

(144 255)

(139 768)

Valuation of derivative instruments for trading, after cpmpensation

255 845

226 304

184

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

Theoretical offsetting of assets and liabilities on the basis of isda agreements

The part of the Group'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

15.5. ADDITIONAL EXPLANATIONS TO THE CASH FLOW STATEMENT

For the purpose of the cash flow statement the following financial assets are classified by the Group as

cash or its equivalents (PLN’000):

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*

10 315 417

8 692 223

of which FVTOCI and HTC

10 315 417

8 692 223

of which held for trading

Total

14 890 326

14 159 598

* Financial assets with original maturity below three months

185

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

Group’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.

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.

(227 056)

(158 107)

- the difference between interest accrued and interest paid (on a cash basis)

4 506

3 964

- hedge accounting valuation recognised in other comprehensive income

22 071

29 433

Change in financial assets measured at fair value through profit or loss, as presented in the

cash flow statement

(200 479)

(124 710)

2) Change in the balance of loans and advances granted to other banks resulting from

balance sheet balances

83 776

358 919

- the difference between interest accrued and interest paid (on a cash basis)

1 335

(1 069)

- 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

11 165

33 774

3) Change in the balance of loans and advances granted to customers resulting from balance

sheet balances

(1 551 091)

(1 360 219)

- the difference between interest accrued and interest paid (on a cash basis)

(18 797)

77 119

- other

(2 168)

2 965

Change in loans and advances to customers as presented in the cash flow statement

(1 572 056)

(1 280 135)

4) Change in the balance of amounts due to banks resulting from balance sheet balances

(101 346)

(299 909)

- the difference between interest accrued and interest paid (on a cash basis)

403

1 374

Change in liabilities to banks as presented in the cash flow statement

(100 943)

(298 535)

5) Change in the balance of amounts due to customers resulting from balance sheet

balances

13 550 278

10 010 785

- the difference between interest accrued and interest paid (on a cash basis)

68 757

39 811

Change in liabilities to customers as presented in the cash flow statement

13 619 035

10 050 596

6) Change in the balance of debt securities issued resulting from balance sheet balances

1 516 037

2 806 926

- the difference between interest accrued and interest paid (on a cash basis)

(2 360)

(35 037)

- foreign exchange differences presented in a dedicated line within operating activities

47 868

34 238

- issuance of securities recognised within financing activities in the statement of cash flows

(1 800 000)

(2 931 700)

- redemption of securities recognised within financing activities in the statement of cash

flows

205 000

128 731

Change in liabilities from the issuance of debt securities as presented in the cash flow

statement.

(33 455)

3 158

7) Change in the balance of other assets and liabilities resulting from balance sheet

balances

(58 549)

(1 227 608)

- change in the balance of finance lease liabilities

21 105

9 860

- other differences

1 918

Change in other assets and liabilities as presented in the cash flow statement

(37 444)

(1 215 830)

186

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

15.6. INFORMATION ON CUSTODY ACTIVITY

As of 31 December 2025, the Bank maintained 12,130 securities accounts and foreign financial

instrument accounts. The value of assets held in Clients’ securities accounts under custody services

amounted to PLN 27 billion. In 2025, the Bank also acted as the Issuing Agent and Depositary for 21

Investment Funds of the Millennium TFI S.A. group.

15.7. 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.

187

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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

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.

188

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

15.8. 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.

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.

189

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

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.

190

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

The only binding version is the original Polish version.

Annual Consolidated Financial Statements

of the Bank Millennium S.A. Capital Group

for the 12-month period ending 31

December 2025

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.

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 Group’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