mBank S.A.

Capital/Financing Update • Dec 18, 2020

Decision of the Polish FinancialSupervision Authority concerning the level of an additional capitalrequirement related to FX mortgage loan portfolio imposed on mBank S.A.at the consolidated levelWithreference to the Current Report no 81/2020 of 2 December 2020, theManagement Board of mBank S.A. ("Bank") informs that the Bank received aletter from the Polish Financial Supervision Authority ("PFSA") dated 17December 2020 concerning the level of the additional own fundsrequirement at the consolidated level of the Capital Group over theamount calculated in accordance with the detailed rules defined in theRegulation of the European Parliament and of the Council (EU) No575/2013 of 26 June 2013 on prudential requirements for creditinstitutions and investment firms and amending Regulation (EU) No.648/2012 ("Regulation 575/2013").Inthe above letter, the PFSA recommended the Bank to maintain, at theconsolidated level, own funds for covering the additional capitalrequirement related to risk arising from foreign currency mortgage loansfor households at 2.82 p.p. over the amount of the total capital ratio(TCR) referred to in article 92 item 1 letter c of the Regulation No575/2013. The additional own funds requirement should be covered atleast in 75% by Tier 1 capital (which corresponds to the capitalrequirement of 2.11 p.p. over the Tier 1 capital ratio referred to inArticle 92 item 1 letter b of the Regulation no 575/2013) and at leastin 56% by Common Equity Tier 1 capital at least in 56% by Common EquityTier 1 capital (which corresponds to a capital requirement of 1.58 p.p.over the Common Equity Tier 1 capital ratio calculated in accordancewith Article 92 item 1 letter a of the Regulation no 575/2013).ThePFSA decision has the power of a final administrative decision and isimmediately in force. Previously, the additional capital requirement formBank S.A. on the consolidated level amounted to 3.11 p.p. for the totalcapital ratio, 2.33 p.p. for the Tier 1 capital ratio and 1.74 p.p. forthe Common Equity Tier 1 capital ratio. The Bank informed about theserequirements in the report no 48/2019 dated 19 November 2019.Atthe date of this current report, the Bank fulfils the PFSA requirementsrelated to the minimum capital adequacy ratios on both the individualand consolidated levels.