Current Report no. 47 (2023)

14 december 2023

Correction of financial instruments classification.

With reference to the reclassification of the portfolio of selected bonds (Bonds) from the Held to Collect and for Sale model to the Held to Collect model (Reclassification) effected by Santander Bank Polska S.A. (Bank) as at 1 April 2022 and disclosed by the Bank in note 21 of the separate and consolidated interim financial statements for H1 2022, note 23 in the separate annual financial statements for 2022 and note 24 in the consolidated financial statements for 2022, the Bank's Management Board hereby reports that

the Bank received a letter from the Polish Financial Supervision Authority (KNF), whereby the supervision authority recommended that the Bank:

when producing subsequent consolidated and separate financial statements as well as condensed consolidated and separate financial statements:
- classify the portfolio of Bonds as financial assets measured at fair value through other comprehensive income;
- reverse the effects of the Reclassification made in 2022, and
when producing consolidated and separate financial statements for 2023 - correct the comparative amounts for 2022 so as to reflect the recommendation referred under point I in accordance with the requirement of paragraph 42(a), IAS 8.

In view of the above, in pursuance of the recommendation issued by the KNF, on 14 December 2023, the Bank's Management Board adopted a resolution whereby it decided to correct the Reclassification by classifying the Bonds portfolio again as financial assets measured at fair value through other comprehensive income (Change) and to correct the comparative amounts for 2022 and reflect the Change in accordance with the requirement of paragraph 42(a), IAS 8 when producing the consolidated and separate financial statements of the Bank for 2023.

The impact of the Change on the total capital ratio on a consolidated basis would be ca. 70 b.p. as at 30 September 2023.