Current Report no. 30 (2021)

Letter from the Bank Guarantee Fund regarding the minimum requirement for own funds and eligible liabilities (MREL) for Santander Bank Polska Group.

The Management Board of Santander Bank Polska S.A. (the "Bank") hereby advises that on 25 November 2021 it received a letter from the Bank Guarantee Fund ("Fund") with information about the its joint decision taken together with the resolution collage of Santander Group set up by the Single Resolution Board on the minimum requirement for own funds and eligible liabilities (MREL) for the Bank's Group which is 15.42% of the a total risk exposure amount ("TREA") and 5.91% of total exposure measure ("TEM") calculated in line with Article 429 and 429(a) of the Regulation (EU) 575/2013.

The MREL requirement was defined at the consolidated level and should be met by 31 December 2023.

The Bank is also obliged to meet the minimum MREL subordination requirement of 11.42% of TREA and 5.91% of TEM by 31 December 2023.

The Banking Guarantee Fund in agreement with SRB defined the mid-term targets that the Bank should meet by the end of each calendar year until it reaches the ultimate target. These targets in relation to TREA are 11.73% to be met by 31 December 2021 and 13.58% to be met by 31 December 2022. The mid-term targets for the subordination requirement in relation to TREA are respectively 9.73% by 31 December 2021 and 10.57% by 31 December 2022.

The mid-term targets in relation to TEM are 3% by 31 December 2021 and 4.46% by 31 December 2022.

At the same time, in accordance with Article 19(2)(3), Article 21(3)(3), Article 42(3) and Article 48(3) of the Act on macro-prudential supervision, that transposes Article 128 of the CRD, instruments of Tier I capital (CET1) maintained by the Bank, expressed as a percentage of the total risk exposure are not MREL eligible.

The above MREL requirement remains uninfluenced and does not breach requirements defined in Article 92a of the CRR.

In relation to the minimum requirements defined in Article 92a of the CRR, the Fund in agreement with the SRB decided that in order to meet these requirements in accordance with the conditions defined in Article 72b(3) of this regulation, the Bank may use the liabilities that do not meet the subordination condition in line with Article 72b(2)(d) of the CRR in the amount not exceeding 2.5% of TREA by 31 December 2021 and in the amount not exceeding 3.5% of TREA since 1 January 2022.

Each calendar year the Fund will analyse the target MREL requirement together with the subordination level, adjusting it to the Bank's changing capital requirements, adopted resolution strategy and assessment of its viability.

Legal basis:
Article 17(1) of Market Abuse Regulation - inside information.