Bank Polska Kasa Opieki (PEO) Status update summary

Transaction structure and reorganization

• Two-stage transaction involves splitting PZU and establishing a holding company, followed by a merger with Pekao, enabling regulatory compliance and operational synergies.

• Shareholders of the new holding company will receive Pekao shares currently held by PZU and newly issued Pekao shares.

• The reorganization does not address Alior Bank, but further optimization or divestment of Alior is under consideration.

• Pro forma shareholder structure is based on June 2025 share prices, with final structure to be determined post-transaction.

Capital impact

• The transaction is expected to release approximately PLN 15-20bn of capital through the application of the Danish Compromise.

• Pekao's current excess capital above 14.5% TCR stands at PLN 3.9bn, with the merger potentially releasing an additional PLN 10.7bn.

• Further optimization of Alior could release up to PLN 7.0bn more, leading to a total of up to PLN 21.6bn in excess capital.

• Post-transaction, up to PLN 24.6bn in total excess capital could be available.

Dividend policy

• PZU aims to pay out at least 50% of net profit as dividends for 2025-2027.

• Bank Pekao targets a 50-75% payout ratio of net profit as dividends for 2025-2027.

• The combined entity will provide stable and predictable dividend payouts while maintaining sufficient equity for operational growth.