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2018 Financial and Social Report

Bank Millennium has a dividend policy of distributing between 35% to 50% of net profit, assuming that the recommendations of the Polish Financial Supervision Authority (KNF) regarding the payment of dividends will be met.

The high capital ratios at the end of 2018 would have allowed payment of 75% were it not for additional K1 and K2 criteria for banks with FX mortgage loan portfolios, which KNF maintained when announcing in January 2019 a recommendation on the banks’ dividend policy. K1 criterion is based on FX mortgage share in total portfolio and K2 criterion is based on share of 2007-2008 vintages in total FX mortgage portfolio.

Due to the above and considering the planned acquisition of Euro Bank S.A., the Bank intends to retail all of its 2018 net profit in own funds in order to strengthen capital ratios. The Bank’s Management Board will submit to the General Shareholders Meeting a relevant proposal to retain the full net profit generated in 2018.

If this proposal is accepted, T1 capital ratio as well as Total Capital Ratio (TCR) of the Group would increase by more than 2 p.p. to 21,9% and 23,8% respectively (as of 31 December 2018).