Bank Pekao S.A.

Annual Report (ESEF) • Feb 22, 2024

Report_on_the_activities_of_the_Bank_Pekao_Group_RR2023 This document is a free translation of the Polish original. Terminology current in Anglo-Saxon countries has been used where practicable for the purposes of this translation in order to aid understanding. The binding Polish original should be referred to in matters of interpretation. Report on the activities of Bank Pekao S.A. Group for the year 2023 (prepared jointly with the Report on the activities of Bank Pekao S.A.) Warsaw, February 2024 2 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 1. Highlights of Bank Pekao S.A. Group ....................................................................................................................................................................... 5 2. Highlights of Bank Pekao S.A. ................................................................................................................................................................................... 6 3. Summary of Performance ........................................................................................................................................................................................... 7 4. External Activity Conditions ..................................................................................................................................................................................... 10 5. Important Events and Achievements ...................................................................................................................................................................... 14 5.1 Changes in the Group’s structure .................................................................................................................................................................... 14 5.2 Changes in the Statutory Bodies of the Bank .................................................................................................................................................. 14 5.3 Organizational changes ................................................................................................................................................................................... 17 5.4 Awards and distinctions ................................................................................................................................................................................... 18 6. Information for the Investors .................................................................................................................................................................................... 21 6.1 The Bank’s share capital and share ownership structure ................................................................................................................................ 21 6.2 Performance of market valuation of Bank Pekao S.A.’s stock ......................................................................................................................... 22 6.3 Dividend payment history ................................................................................................................................................................................. 23 6.4 Investor Relations ............................................................................................................................................................................................ 23 6.5 Financial credibility ratings ............................................................................................................................................................................... 24 7. Activity of Bank Pekao S.A. Group .......................................................................................................................................................................... 26 7.1 Important factors influencing the Group’s activities and results ....................................................................................................................... 26 7.2 Major sources of risk and threats ..................................................................................................................................................................... 29 7.3 Capital adequacy ............................................................................................................................................................................................. 32 7.4 Bank Pekao S.A. on the Polish banking market .............................................................................................................................................. 34 7.5 Major areas of activities of the Group’s subsidiaries ........................................................................................................................................ 47 7.5.1 Banking activity ................................................................................................................................................................................ 47 7.5.2 Assets management ......................................................................................................................................................................... 47 7.5.3 Leasing activity ................................................................................................................................................................................. 47 7.5.4 Factoring activity .............................................................................................................................................................................. 48 7.5.5 Transactional advisory ..................................................................................................................................................................... 48 7.5.6 Other financial services .................................................................................................................................................................... 48 7.6 Investing in human capital ............................................................................................................................................................................... 50 7.7 Sponsorship and charity policy ........................................................................................................................................................................ 56 8. Statement of Financial Position and Financial Results ......................................................................................................................................... 57 8.1 The consolidated income statement – presentation form ................................................................................................................................ 57 8.2 Structure of the consolidated statement of financial position – short form ....................................................................................................... 61 8.2.1 Assets ............................................................................................................................................................................................... 62 8.2.2 Liabilities ........................................................................................................................................................................................... 63 8.3 Consolidated income statement ....................................................................................................................................................................... 66 8.4 Consolidated statement of comprehensive income ......................................................................................................................................... 67 8.5 Consolidated income statement – presentation form ....................................................................................................................................... 67 8.6 Reconciliation of income statement – presentation form and long form .......................................................................................................... 68 9. Separate Statement of Financial Position and Financial Results ......................................................................................................................... 70 9.1 The Separate income statement – presentation form ...................................................................................................................................... 70 9.2 Structure of the separate statement of financial position – short form ............................................................................................................. 74 9.2.1 Assets ............................................................................................................................................................................................... 75 9.2.2 Liabilities ........................................................................................................................................................................................... 76 9.3 Separate income statement ............................................................................................................................................................................. 79 9.4 Separate statement of comprehensive income ................................................................................................................................................ 80 9.5 Separate income statement – presentation form ............................................................................................................................................. 80 9.6 Reconciliation of income statement – presentation form and long form .......................................................................................................... 81 9.7 The structure of the net profit ........................................................................................................................................................................... 83 9.8 Off–balance sheet items .................................................................................................................................................................................. 84 10. Other Information ...................................................................................................................................................................................................... 85 11. Prospects for Development ...................................................................................................................................................................................... 90 11.1 Factors which will affect the results of the Group ............................................................................................................................................ 90 11.2 Strategic directions and business priorities ...................................................................................................................................................... 91 12. Statement of Bank Polska Kasa Opieki Spółka Akcyjna on application of Corporate Governance Standards in 2023 .................................. 96 13. Statement of Bank Pekao S.A. Group on Non-financial Data .............................................................................................................................. 119 3 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.1 About Bank Pekao ......................................................................................................................................................................................... 119 13.1.1 Basic information ............................................................................................................................................................................ 119 13.1.2 Business model .............................................................................................................................................................................. 120 13.1.3 Financial results ............................................................................................................................................................................. 120 13.1.4 Bank Pekao S.A. Capital Group ..................................................................................................................................................... 121 13.1.5 Business profile .............................................................................................................................................................................. 121 13.1.6 Organizational and management structure .................................................................................................................................... 122 13.1.7 Strategic approach to ESG issues ................................................................................................................................................. 125 13.1.8 Sustainable development strategy ................................................................................................................................................. 126 13.1.9 Changes in the regulatory environment for sustainable finance .................................................................................................... 128 13.2 Climate and environment ............................................................................................................................................................................... 129 13.2.1 Green and sustainable products .................................................................................................................................................... 129 13.2.2 Climate risks and opportunities ...................................................................................................................................................... 131 13.2.3 ESG risks in the credit business ..................................................................................................................................................... 132 13.2.4 Reduction of the consumption of raw materials and resources ...................................................................................................... 132 13.2.5 Pekao Group carbon footprint calculation ...................................................................................................................................... 135 13.3 Social commitment ......................................................................................................................................................................................... 136 13.3.1 Mission, values and corporate culture ............................................................................................................................................ 136 13.3.2 Employee Volunteer Work Program ............................................................................................................................................... 137 13.3.3 Community service, charity and sponsorship ................................................................................................................................. 140 13.3.4 Bank’s response to armed conflict in Ukraine ................................................................................................................................ 145 13.4 Responsible sales, quality management ....................................................................................................................................................... 146 13.4.1 Caring for good customer experience ............................................................................................................................................ 146 13.4.2 Complaint process .......................................................................................................................................................................... 147 13.4.3 Principles for the fair design and sale of financial products and services ...................................................................................... 148 13.4.4 Responsible marketing ................................................................................................................................................................... 148 13.4.5 Bank’s image .................................................................................................................................................................................. 149 13.4.6 Consumer protection ...................................................................................................................................................................... 151 13.4.7 Customer safe online ..................................................................................................................................................................... 152 13.4.8 Development of innovation in business operations ........................................................................................................................ 154 13.5 Human capital ................................................................................................................................................................................................ 155 13.5.1 Information on employment structure ............................................................................................................................................. 155 13.5.2 Core employment regulations ........................................................................................................................................................ 158 13.5.3 Bank as an employer ...................................................................................................................................................................... 162 13.5.4 Recruitment, internship and apprenticeship programs ................................................................................................................... 164 13.5.5 Employer branding activities .......................................................................................................................................................... 165 13.5.6 Inclusive organization ..................................................................................................................................................................... 166 13.6 Health and safety ........................................................................................................................................................................................... 171 13.6.1 OHS issues .................................................................................................................................................................................... 171 13.6.2 Medical care and health-promoting activities ................................................................................................................................. 172 13.7 Business ethics and corporate governance ................................................................................................................................................... 173 13.7.1 Preventing corruption ..................................................................................................................................................................... 176 13.7.2 Whistleblowing procedure and Compliance Policy ......................................................................................................................... 178 13.7.3 Conflict of Interest Management .................................................................................................................................................... 179 13.7.4 Counteracting crime and countering money laundering and terrorist financing ............................................................................. 180 13.7.5 Control and repair mechanisms ..................................................................................................................................................... 181 13.7.6 Compliance culture ......................................................................................................................................................................... 182 13.7.7 Approach to risk management ....................................................................................................................................................... 182 13.8 Observance of human and worker rights, responsibility in the supply chain ................................................................................................. 183 13.8.1 Bank regulations in line with the 10 Principles of the United Nations Global Compact .................................................................. 184 13.8.2 Prevention of mobbing and discrimination ..................................................................................................................................... 185 13.8.3 Relations with the trade unions ...................................................................................................................................................... 186 13.8.4 Responsible purchasing process ................................................................................................................................................... 186 4 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.9 Mandatory disclosures under the Taxonomy Regulation ............................................................................................................................... 189 13.10 Disclosure to the extent specified by the Principle Adverse Impacts under the SFDR Regulation for Pekao Group as an investee ........... 230 13.11 Non-financial reporting process ..................................................................................................................................................................... 236 13.11.1 Communication with stakeholders .................................................................................................................................................. 236 13.11.2 Information about the report ........................................................................................................................................................... 238 13.11.3 Significance of topics ...................................................................................................................................................................... 239 13.12 Bank’s position in ESG ratings and indices ................................................................................................................................................... 240 List of indicators included in the report ....................................................................................................................................................................... 241 Table of Compliance with the Accounting Act ............................................................................................................................................................ 244 5 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 1. Highlights of Bank Pekao S.A. Group 2023 2022 2021 2020 2019 2018 INCOME STATEMENT – SELECTED ITEMS (in PLN million) Operating income 14,733 10,664 8,522 7,796 8,282 7,830 Operating costs (4,631) (3,987) (3,739) (3,451) (3,537) (3,445) Profit before income tax 8,480 2,882 3,002 1,725 3,002 3,047 Net profit attributable to equity holders of the Bank 6,578 1,717 2,175 1,102 2,165 2,287 PROFITABILITY RATIOS Return on average equity (ROE) - nominally 24.7% 7.6% 8.7% 4.5% 9.5% 10.2% Return on assets (ROA) 2.2% 0.6% 0.9% 0.5% 1.1% 1.3% Net interest margin 4.2% 3.3% 2.4% 2.5% 2.9% 2.8% Cost / income (including to contributions to the BFG cost and fee paid for the Protection Schemes ) 32.7% 44.4% 47.3% 49.2% 48.2% 47.4% Costs of risk 0.31% 1.12% 0.45% 0.99% 0.46% 0.36% STATEMENT OF FINANCIAL POSITION – SELECTED ITEMS (in PLN million) Total assets 305,723 281,139 250,567 233,217 203,323 191,090 Customers’ financing () 171,057 167,510 169,073 151,684 151,384 140,032 Amounts due to customers () 232,078 209,596 194,804 177,745 157,203 149,143 Debt securities issued and subordinated liabilities 12,739 13,127 8,117 8,905 9,072 7,243 Equity 30,341 22,775 23,863 25,495 23,398 22,808 STATEMENT OF FINANCIAL POSITION STRUCTURE RATIOS Customers’ financing () / total assets 56.0% 59.6% 67.5% 65.0% 74.5% 73.3% Securities / total assets 32.7% 25.3% 22.9% 26.7% 17.8% 15.0% Deposits () / total assets 80.1% 79.2% 81.0% 80.0% 81.8% 81.8% Customers’ financing () / deposits () 69.9% 75.2% 83.3% 81.3% 91.0% 89.5% Equity / total assets 9.9% 8.1% 9.5% 10.9% 11.5% 11.9% Total capital ratio () 16.8% 17.8% 17.7% 19.2% 17.1% 17.4% EMPLOYEES AND NETWORK Total number of employees () 15,129 14,642 14,702 14,994 15,678 16,714 Number of outlets 574 597 650 713 805 818 Number of ATMs 1,306 1,328 1,475 1,592 1,648 1,708 () Including net investments in financial leases to customers, non-treasury debt securities and excluding reverse repo transactions. () Excluding repo transactions and lease liabilities. () Deposits include amounts due to customers, debt securities issued and subordinated liabilities. () Data for 31 December, 2022 have been recalculated taking into account the retrospective recognition of part of the profit for 2022, in accordance with the EBA position expressed in Q&A 2018_3822 and Q&A 2018_4085. Note: Income statement data included in the table above and other notes to the Report on activities were presented according to income statement in a presentation form, which differs from the long form of the income statement presented in the Financial statements of the Group. Reconciliation of income statement in the presentation form and the long form is in the point 8.6 of the Report on activities. 6 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 2. Highlights of Bank Pekao S.A. 2023 2022 2021 2020 2019 2018 INCOME STATEMENT – SELECTED ITEMS (in PLN million) Operating income 14,283 10,320 8,084 7,454 7,887 7,478 Operating costs (4,230) (3,658) (3,438) (3,169) (3,204) (3,119) Profit before income tax 8,559 3,012 2,995 1,697 3,016 3,021 Net profit 6,718 1,898 2,237 1,126 2,247 2,311 PROFITABILITY RATIOS Return on average equity (ROE) - nominally 25.8% 8.7% 9.2% 4.8% 10.2% 10.7% Return on assets (ROA) 2.3% 0.7% 0.9% 0.5% 1.2% 1.3% Net interest margin 4.3% 3.3% 2.4% 2.5% 2.9% 2.8% Cost / income (including to contributions to the BFG cost and fee paid for the Protection Schemes ) 30.9% 42.7% 46.1% 47.6% 46.4% 45.3% Costs of risk 0.26% 1.12% 0.41% 1.03% 0.43% 0.36% STATEMENT OF FINANCIAL POSITION – SELECTED ITEMS (in PLN million ) Total assets 294,477 271,705 241,275 222,381 194,650 184,347 Customers’ financing () 157,322 155,477 157,783 139,926 142,146 133,085 Amounts due to customers () 232,307 209,802 195,064 178,276 157,750 149,784 Debt securities issued and subordinated liabilities 6,859 8,683 2,940 3,281 4,369 3,745 Equity 29,896 22,190 23,100 24,647 22,527 21,822 STATEMENT OF FINANCIAL POSITION STRUCTURE RATIOS Customers’ financing () / total assets 53.4% 57.2% 65.4% 62.9% 73.0% 72.2% Securities / total assets 34.5% 26.8% 24.2% 28.2% 18.6% 15.5% Deposits () / total assets 81.2% 80.4% 82.1% 81.6% 83.3% 83.3% Customers’ financing () / deposits () 65.8% 71.2% 79.7% 77.1% 87.7% 86.7% Equity / total assets 10.2% 8.2% 9.6% 11.1% 11.6% 11.8% Total capital ratio 19.4% 19.9% 19.6% 21.3% 18.7% 18.7% EMPLOYEES AND NETWORK Total number of employees () 12,689 12,435 12,661 12,870 13,779 14,569 Number of outlets 574 597 650 713 805 818 Number of ATMs 1,306 1,328 1,475 1,592 1,648 1,708 () Including non-treasury debt securities and excluding reverse repo transactions. (**) Excluding repo transactions and lease liabilities. () Deposits include amounts due to customers, debt securities issued and subordinated liabilities. (*) Data for 31 December, 2022 have been recalculated taking into account the retrospective recognition of part of the profit for 2022, in accordance with the EBA position expressed in Q&A 2018_3822 and Q&A 2018_4085. Note: Income statement data included in the table above and other notes to the Report on activities were presented according to income statement in a presentation form, which differs from the long form of the income statement presented in the Financial statements of the Bank. Reconciliation of income statement in the presentation form and the long form is in the point 9.6 of the Report on activities. 7 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 3. Summary of Performance Main P&L items In the 2023, we generated net profit of the Bank Pekao S.A. Group attributable to the Bank's shareholders in the amount of PLN 6,578 million. This result is higher by PLN 4,861 million than the result achieved in the 2022, mainly due to higher operating income, in particular higher interest income and trading result, as well as lower costs related to the modification of PLN mortgage loan agreements granted to consumers due to the suspension of their loan repayments (credit holidays), lower provisions for legal risk regarding foreign currency loans mortgages, no additional regulatory costs, including the Bank Protection System and payments to the Borrower Support Fund, lower BFG contributions, despite the increase in operating costs. The ROE ratio was at the level of 24.7%.  The Group's operating income in the 2023 amounted to PLN 14,733 million and was 38.2% higher than the income generated in the 2022, mainly due to interest income and trading result.  The net interest income achieved in the 2023 amounted to PLN 11,923 million and was higher by PLN 3,680 million, i.e. 44.6% compared to the result achieved in the 2022. Net interest income in the 2022 included costs related to the modification of PLN mortgage loan agreements granted to consumers due to the suspension of their loan repayments in the amount of PLN 1,958 million.  The Group’s net fee and commission income achieved in the 2023 amounted to PLN 2,786 million and was higher by PLN 76 million, i.e. 2.8% compared to the result achieved in the 2022, thanks to higher commissions from investment funds and brokerage activities, as a result of improved sentiment on capital markets and higher customer activity in the area of loans and card payments.  The trading result achieved in 2023 amounted to PLN 507 million and was higher by PLN 320 million compared to the result achieved in 2022, due to a higher result on foreign exchange and a higher valuation of derivative instruments.  Other net operating revenues and costs achieved in 2023 amounted to (minus) PLN 513 million and were higher by PLN 9 million compared to 2022. Operating costs in the 2023 amounted to PLN 4,631 million and were higher by PLN 644 million, i.e. 16.2% compared to the 2022, mainly due to the inflation indexation of salaries and higher property maintenance costs, due to increases in energy prices and the minimum wage. The result on allowances for expected credit losses in the 2023 amounted to PLN 559 million and was lower by PLN 1,457 million, i.e. 72.3% than in the 2022, mainly due to lower risk provisions regarding foreign currency mortgage loans in CHF and lower costs of risk. Contributions to the Bank Guarantee Fund in 2023 amounted to PLN 190 million and were lower by PLN 77 million i.e. 28.8% than in the 2022. The tax on certain financial institutions in the 2023 amounted to PLN 879 million and was higher by PLN 13 million, i.e. 1.5% than in the 2022 due to the increase in the Bank's assets. 8 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Volumes As at the end of December 2023, loans and advances at nominal value amounted to PLN 178,815 million and were higher by PLN 2,968 million, i.e. 1.7% than at the end of December 2022. As at the end of December 2023 the volume of retail l oans amounted to PLN 80,034 million and were higher by PLN 3,190 million, i.e. 4.2% than at the end of December 2022. Corporate loans including non-treasury debt securities at the end of December 2023 amounted to PLN 98,780 million and were lower by PLN 222 million, i.e. 0,2% compared to the end of December 2022. As at the end of December 2023 amounts due to the Group’s customers and debt securities issued amounted to PLN 244,817 million and were higher by PLN 22,095 million, i.e. 9.9% than at the end of December 2022. The value of net assets of investment funds managed by Pekao TFI S.A. amounted to PLN 24,228 million and was higher by PLN 5,056 million, i.e. 26.4% compared to the end of December 2022. We continued to increase commercial activity, actively support clients in maintaining financial liquidity, continue to digitize and automate processes and implement advanced digital solutions. In 2023, we opened 583 thousand accounts for individual customers and this is the best result of the acquisition of accounts for individual customers, the sales dynamics amounted to +5% y/y. We offer a wide range of deposit offers to individual clients, including: interest rate of 7.0% per annum on savings accounts, deposit with a fund at 8.0% per annum for a period of 12 months, deposits with "Żubr" in PeoPay with an interest rate of up to 7.0% per annum. We were one of the first banks to introduce Safe Credit 2% as part of the government program "First Apartment". The loan was very popular among customers, who deposited over 51 thousand number of applications which constitutes 50% of all applications obtained in the entire banking sector. The total volume of contracts signed at the end of 2023 was PLN 7.2 billion. We have extended a special offer for individual and corporate customers from Ukraine. The new headquarters of the Bank In 2023, the Bank's Headquarters was moved to the Pekao Tower skyscraper in the Forest complex at 1 Żubra Street in Warsaw. In the new headquarters, we ensured a high standard of work, modern office and ICT solutions that were adapted to the hybrid work model and consistent with the latest trends supporting cooperation, communication and the implementation of projects using the Agile methodology. Forest is a modern building that provides very good access to natural light, thanks to the use of an innovative, energy-saving façade, it helps reduce the carbon footprint and consumption of raw materials, including: enables reuse of rainwater. 200 trees and the same number of shrubs were planted in the open courtyard, recreational terraces and the roof of the building. In 2023, we started the Multi-Branch- Polska project, the aim of which is to consolidate business and retail customer service units and support teams in one office space. We have launched 5 Multi- Branch branches: in Gdańsk, Katowice, Kraków, Lublin and Łódź. The new head office in Pekao Tower was a model for the Multi-Branch-Polska project. Multi- Branch units enable employees to use a modern and functional space that takes into account the highest standards of space arrangement, equipment, as well as solutions for hybrid work. 9 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. We focused our activities in the following key strategic areas (in accordance with the adopted Strategy for 2021-2024). Strategy and key financial indicators „Responsible Bank. Modern banking ” is th strategy for the years 2021-2024, announced in March 2021. According to the strategic plan: • we are a universal bank, we want to be the bank of first choice for our clients, • we develop a remote distribution and customer service model, • we focus on cost and process efficiency, • we are growing in the most profitable market segments. Our ambition is a strong position among the most profitable and effective banks in Poland, including increasing the return on equity (ROE), reducing the cost-to-income ratio and increasing the number of active mobile banking customers. 10 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 4. External Activity Conditions Economic growth According to the flash estimate from Statistics Poland, on 2023, the Polish economy grew by approximately 0.2%, compared to an increase of 5.3% a year earlier. According to the Bank's estimates, domestic demand in 2023 decreased by 4.1%, while foreign trade added 5.4 p.p. to the growth. Growth was hampered mainly by gross accumulation, of which 7 p.p of GDP growth was taken away by inventories. Consumption remained a small drag on growth as it declined by 0.1%, of which household consumption dropped by 1% yoy. The year 2023 can be summarized as the last period of slowing consumer demand before GDP recovery due to tightening monetary policy and rising inflation, destocking due to subsiding geopolitical uncertainty and further slowing demand and strong investments. In 2024, the Polish economy will start to rebound, and GDP growth will amount to 3.0% yoy. In our opinion, this will be a consequence of several factors. Firstly, the recovery of real consumer income, due to the further but slower disinflation process and elevated wage growth, will trigger a rebound in consumption, which will be the main driver behind stronger growth this year. Secondly, a decline in investment is expected due to the weakness of private investment and the slow recovery of public investment. Thirdly, the weak economic situation in the eurozone and the simultaneous domestic consumption rebound will translate into a negative contribution of net exports. Labour market 2023 brought a cooling of the domestic labor market. After the economic recovery in 2022, employment in the corporate sector gradually slowed down last year and although the unemployment rate decreased by 0.4 p.p. during the year, it stagnated for five months in the second half of 2023. The unemployment rate at the end of 2023 amounted to 5.1% compared to 5.2% at the end of 2022. The rate of its decline was clearly slower than in previous years, which clearly illustrates the condition of the Polish labor market and the entire economy in 2023. This was a direct result of weakening consumer demand in response to unprecedented monetary tightening. Despite the economic slowdown, the unemployment rate continued to fall towards, but did not reach its historic low (4.9%). The lack of significant increases in the unemployment rate is the result of the continuing tightness in the labor market and employers' anticipation of the upcoming economic rebound. As a result, the average employment in the enterprise sector in December 2023 amounted to less than 6.5 million people compared to a similar result in the previous year. Wage growth in the enterprise sector began to slowly shrink in 2023, following inflation. On average, wages increased by 11.9% compared to 12.9% in 2022. The growth was driven by the CPI that remained above the NBP inflation target and the high wage claims, lagging behind the fall in inflation. On the other hand, weakening inflation expectations began to translate into lower, but still double-digit wage growth, especially in the second half of the year. Wage growth in 2023 has been repeatedly boosted by various inflation bonuses. Real wage growth in 2023 amounted to 0.3% but at the end of the year reached over 4%. The unemployment rate will slightly increase in the first quarter of 2024 due to seasonal factors but will begin to decline again at the turn of the first two quarters to reach its historic low in mid-year. At the end of 2024, the unemployment rate should decrease to 4.8% from 5.1% a year earlier. In turn, wage growth will follow a downward trend, but much slower than inflation in 2023. As a consequence, real wages will grow at a fast pace, at times exceeding 6% yoy. Real wages in the enterprise sector will grow by 5% in 2024, and nominal wages by 9.3%. Moreover, the Bank forecasts a slowdown in employment growth in the enterprise sector to -0.1% in 2024 from 0.2% in 2023. 11 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Inflation and monetary policy As expected, 2023 was the year of not only Polish, but also global disinflation, especially in non-core factors (food, energy, fuel). In Poland, a dynamic drop in consumer inflation (to 6.2% yoy at the end of the year from just over 18% in February, when we recorded the maximum) was caused by several factors. Firstly, the relatively mild course of the energy crisis in Europe translated into declines in energy prices. Secondly, the 2022 events and extremely high price increases in many categories have created a high reference base. Thirdly, at the end of 2022, global prices of raw materials, industrial goods and freight were falling. The global full scale of disinflation of industrial goods came to Poland with a delay, accelerating the process of general disinflation in the second half of 2023. Finally, the effects of monetary tightening had the greatest impact. At the end of 2023, the period of rapid disinflation has been gradually coming to an end. However, the first quarter of 2024 will bring a continuation of inflation decline and the shape of inflation path in the following months will depend heavily on regulated factors. If the assumptions of Bank Pekao economists are implemented: a return of 5% VAT rate on food products (from the beginning of the second quarter) and new energy tariffs for households (freezing until mid-2024, then introducing other protective measures partially mitigating return of tariff rates administrated by the Energy Regulatory Office), CPI inflation in March will reach a minimum of around 3% yoy. Inflation will be within the band for deviations from the NBP inflation target for a while and then accelerate in the second half of the year to approximately 4.5-5% at the end of the year. However, this rebound will be based solely on non-core factors. In turn, core inflation will decline asymptotically over the course of 2024, amid the persistent negative output gap, restrictive monetary policy, final phasing out of the energy shock, declining growth of unit labor costs and still high reference base in the first half of the year. The return of inflation permanently to the NBP target is still uncertain (not earlier than the second half of 2025). On yearly average, CPI will drop significantly in 2024 to 4.3% from 11.4% in 2023. At the turn of 2022 - 2023, we reached the peak of global monetary tightening. Developing countries have started to raise interest rates faster in the face of the latest inflation shock and are now the first to begin to turn towards monetary easing. Global disinflation has opened up space for rate cuts and greater concern will now be given to economic growth. The main central banks (Fed, ECB) will be more conservative and will start a cycle of cuts later. In turn, the NBP reaction function changed to a more restrictive, shifting from a loose policy in 2023 (rate cuts by a total of 100 bps). Interest rates in Poland will stay "higher for longer". According our opinion, the Monetary Policy Council will leave interest rates unchanged in 2024, taking into consideration forecasts of higher inflation in the second half of the year and a stronger rebound in consumption than previous predictions. The risk of corrective cuts exists, but due to the external factors (rate cuts abroad) and the risk of PLN excessive appreciation. Fiscal policy Last year the fiscal stance of Polish government has somewhat deteriorated. The expenditures of central budget have increased by as much as 28% yoy (for Jan-Nov ’23), much faster than revenues (14% yoy), especially tax revenues (9% yoy). The year-end deficit can be expected to reach PLN 90 billion, up from PLN 12.5 billion in 2022. However, this increase in the deficit is partly a cognitive illusion as a result of the normalization of the Finance Ministry's budget policy. Previously, in 2020 and 2021, it had a habit of advancing a large part of public spending a year ahead and shifting it to off-budget funds (BGK and PFR). In 2022, it reverted to more standard rules - the lack of advance payment meant that the deficit then amounted to only 12 of the planned PLN 40 billion. The side effect was an increase in the 2023 deficit by about PLN 30 billion. The deficit of the general government as a whole - that is, in addition to the budget, also extra-budgetary funds and local governments - rose from 3.7 to about 4.9% of GDP with risks on the higher side. The reason for the increase in the gap in public finances was primarily the cost of anti- inflationary shields, i.e. the freezing of electricity and gas prices for sensitive consumers and the introduction of a zero VAT rate on food. In addition, armament spending increased (as an indirect effect of the war in Ukraine). Tax revenues, in turn, were permanently lowered belatedly by the reform of the PIT (Polish Deal). 12 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. A high deficit is also planned for 2024, with the state budget expected to reach a record PLN 184 billion and the entire public finance sector 5.3% of GDP. Its source, in addition to high spending on defense and anti-inflationary shields (which will be gradually phased out), will be an increase in social benefits (including an increase in 500+ to 800+) and salary increases in the public sector. Net borrowing needs will exceed PLN 200 billion. Most of them will be covered by the domestic banking sector. This will be possible thanks to operations to swap money bills (accumulated from the time of COVID issues) for newly issued Treasury bonds. Banks' demand for government debt securities will be further supported by persistent excess liquidity (vide the sustained downward trend in the loan-to-deposit ratio, L/D, in November 2023 L/D fell below 70%), as well as by regulatory factors (the removal of sell/buy/back (SBB) transactions, a commercial variant of repo, from the bank tax). We estimate that the decline in L/D we anticipate in 2024 will translate into approximatly 1:1 increase in demand for bonds/vouchers. Capital markets 2023 was not kind to bond holders, but equities brought a hefty return as all major stock indices entered bull market over the course of 2023. At the end of the year, S&P500 gained 24.2%, German DAX earned 20.3%, French CAC40 increased by 20.1% and British FTSE250 rose by 3.8%. The increases in bond yields were much smaller than in 2022. However, it wasn’t the scale, but the levels reached by yields and the lack of widely expected declines. Forecasts of a decline in yields did not materialize, which was primarily due to the relative resistance of major economies to monetary tightening, resulting in serial upward surprises in macroeconomic data and supporting the "higher for longer" rhetoric common in the world of central banking. In addition, some investors were speculation about possible structural shift upward in interest rates globally. This debate is far from settled, but central banks do not subscribe to that view and are moving towards monetary easing. In 2023 all equity indices on the Warsaw Stock Exchange rose considerably, following foreign benchmarks. The rate of return on the broad WIG index amounted to 36.5%, WIG20 rose by 30,8% and midcap index mWIG40 gained 39.3%. Finally, the small cap benchmark sWIG80 rose by 30,9%. In 2023 the multi-year trend of net withdrawal from the stock market slowed down, but not ended – there were 12 withdrawals and 10 IPOs. WSE exhibited relatively low turnover of PLN 274 billion (as compared to PLN 286 billion in 2022). Banking sector According to the Financial Supervision Authority (KNF) data, covering the period until December 2023, the sector generated an aggregate net profit of PLN 27.9 billion, an increase of 159.4% compared to the same period of 2022. The entire 2022 had been closed with aggregate net profit of PLN 10.7 billion. Such a strong result is primarily associated with historically high interest rates (the NBP key rate amounted to 5.75% at the end of 2023, even after two rate cuts in the latter half of the year). In 2023, apart from strong interest revenue growth (by 41.8% yoy), the sector has also seen significant increases in interest costs (63.7% yoy). It is worth noting that operating cots barely changed (PLN 50.7 billion in 2023 compared to PLN 49.8 billion in 2022) despite strong nominal wage growth (on average 12.2% yoy) – this was made possible by cuts in general management cots. Cost of risk declined by 32,4% yoy. According to KNF data, at the end of November 2023 the banking sector assets amounted to PLN 3,008.8 billion, an increase by 10.1% y/y. According to National Bank of Poland (NBP) data, at the end of 2023 the following developments were noted in terms of main deposit categories: The volume of households’ deposits increased by 11.2% y/y with double digit growth prevalent since May. Such a high growth rate may be indicative of household’s increased willingness to use the improvement in economic fundamentals and high interest rates to rebuild real savings, Corporate deposits rose by 8.8%; This category is slowing down visibly (the peak was at 17.2% in February 2023), which might fit the pattern of improving corporate sentiment and their optimism on the economy in 2024. Incerease other deposits by +3.8% y/y, in comparison to 1.9% y/y in 2022. 13 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Household deposits accounted for 61%, corporate deposits 25%, and other deposits 14% of all deposits. Around 83% of them were current deposits. In terms of main receivables categories, at the end of 2023 the following developments were noted: The volume of receivables from households decreased by 2.2% year-on-year, mainly due to the decline in the value of housing loans in 2023. Sales of new housing loans in the first quarter of 2023 amounted to PLN 2 billion, and then increased significantly, to PLN 9 billion in November. The reasons for this recovery were the easing of monetary policy, government support and a general improvement in household sentiment. A 3% y/y decline in receivables in the corporate segment, in addition to the economic slowdown reducing the demand for corporate loans, was influenced by the high base related to working capital financing in 2022. An increase of 14.3% y/y in other loans. At the end of 2023, receivables from households accounted for 56% of the total portfolio, receivables from enterprises 27%, and other loans 17%. Loan portfolio quality maintained its historically high levels as the NPL ratio stood at 4.0% in December, falling from 4.3% in the same period of 2022, despite the business cycle trough occurred in the period. NPL ratio for corporate loans after December 2023 amounted to 6.1%, down from 6.4% a year before. An improvement in loan quality concerned mainly small and medium enterprises (decrease from 9.6% to 8.2%), The share of non-performing loans in the portfolio of loans to households reached 5.0%, figure seen at the same period of 2022. Unchanged solvency occurred in the mortgage sector (2.2%), while consumer loans have improved their quality. 14 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 5. Important Events and Achievements 5.1 Changes in the Group’s structure The composition of Bank Pekao S.A. Group is presented in the Note 2 to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2023. Increase of the share capital of Pekao Bank Hipoteczny S.A. On November 24, 2023, the District Court for the Capital City of Warsaw, XIII Commercial Division of the National Court Register entered an increase in the share capital of Pekao Bank Hipoteczny S.A. by the amount of PLN 180,000,000 through the issue of 1,800 Shares Series L, with a nominal value of PLN 100,000 each and an issue price equal to the nominal price, ie PLN 100,000 per share. All shares were acquired by Bank Pekao S.A. (the shares were offered only to Bank Pekao S.A.) by private subscription pursuant to Article 431 § 2 point 1 of the Commercial Companies Code). Following the increase, the share capital of Pekao Bank Hipoteczny S.A. amounts to PLN 603,000,000. 5.2 Changes in the Statutory Bodies of the Bank Supervisory Board The composition of the Supervisory Board of Bank Pekao S.A. has as follows: AS AT THE DATE OF SUBMITTING THE REPORT FOR 2023 31 DECEMBER, 2023 AS AT THE DATE OF SUBMITTING THE REPORT FOR THE THIRD QUARTER OF 2023 Beata Kozłowska-Chyła Chairwoman of the Supervisory Board Beata Kozłowska-Chyła Chairwoman of the Supervisory Board Beata Kozłowska-Chyła Chairwoman of the Supervisory Board Małgorzata Sadurska Deputy Chairwoman of the Supervisory Board Joanna Dynysiuk Deputy Chairwoman of the Supervisory Board Joanna Dynysiuk Deputy Chairwoman of the Supervisory Board Stanisław Ryszard Kaczoruk Secretary of the Supervisory Board Małgorzata Sadurska Deputy Chairwoman of the Supervisory Board Małgorzata Sadurska Deputy Chairwoman of the Supervisory Board Sabina Bigos-Jaworowska Member of the Supervisory Board Stanisław Ryszard Kaczoruk Secretary of the Supervisory Board Stanisław Ryszard Kaczoruk Secretary of the Supervisory Board Michał Kaszyński Member of the Supervisory Board Sabina Bigos-Jaworowska Member of the Supervisory Board Sabina Bigos-Jaworowska Member of the Supervisory Board Marian Majcher Member of the Supervisory Board Justyna Głębikowska-Michalak Member of the Supervisory Board Justyna Głębikowska-Michalak Member of the Supervisory Board Marcin Izdebski Member of the Supervisory Board Michał Kaszyński Member of the Supervisory Board Michał Kaszyński Member of the Supervisory Board Marian Majcher Member of the Supervisory Board Marian Majcher Member of the Supervisory Board Marcin Izdebski Member of the Supervisory Board Marcin Izdebski Member of the Supervisory Board On 13 November 2023 Mrs. Joanna Dynysiuk resigned from the position of Deputy Chairwoman of the Bank's Supervisory Board and from the composition of the Bank’s Supervisory Board, with effect from 31 December 2023. The resignation does not contain information about its reasons. On 22 December 2023 Ms. Justyna Głębikowska-Michalak resigned from the composition of the Bank’s Supervisory Board, effective 31 December 2023. The resignation does not contain information about its reasons. 15 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Management Board of the Bank The composition of the Management Board of Bank Pekao S.A. has as follows: AS AT THE DATE OF SUBMITTING THE REPORT FOR 2023 31 DECEMBER, 2023 AS AT THE DATE OF SUBMITTING THE REPORT FOR THE THIRD QUARTER OF 2023 Leszek Skiba President of the Management Board Leszek Skiba President of the Management Board Leszek Skiba President of the Management Board Jarosław Fuchs Vice President of the Management Board Jarosław Fuchs Vice President of the Management Board Jarosław Fuchs Vice President of the Management Board Marcin Gadomski Vice President of the Management Board Marcin Gadomski Vice President of the Management Board Marcin Gadomski Vice President of the Management Board Jerzy Kwieciński Vice President of the Management Board Jerzy Kwieciński Vice President of the Management Board Jerzy Kwieciński Vice President of the Management Board Paweł Strączyński Vice President of the Management Board Paweł Strączyński Vice President of the Management Board Paweł Strączyński Vice President of the Management Board Błażej Szczecki Vice President of the Management Board Błażej Szczecki Vice President of the Management Board Błażej Szczecki Vice President of the Management Board Wojciech Werochowski Vice President of the Management Board Wojciech Werochowski Vice President of the Management Board Wojciech Werochowski Vice President of the Management Board Piotr Zborowski Vice President of The Management Board Piotr Zborowski Vice President of The Management Board Piotr Zborowski Vice President of The Management Board Magdalena Zmitrowicz Vice President of the Management Board Magdalena Zmitrowicz Vice President of the Management Board Magdalena Zmitrowicz Vice President of the Management Board 16 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The Management Board ensures that the management system at the Bank is transparent and effective and runs the Bank's affairs in compliance with applicable laws and Best Practices. The core values underlying the management of the Bank are professionalism, reliability and confidentiality. As of 31 December, 2023 the split of competences between the Members of the Management Board of the Bank was as follows: 17 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 5.3 Organizational changes In 2023, we introduced a number of organizational changes in the Bank's Head Office as well as in the Bank's regional structure. In the structure of organizational units supervised directly by the President of Management Board, Security Center was established instead of current Security Department, and in the structure of Analytics and Digital Transformation Center, the Customer Verification Process Transformation Department was created, to which the activities of former Customer Verification Office (AML CoE) were incorporated. In Retail Banking Division, the activities of former CRM and Customer Knowledge Department were incorporated into Retail Banking Strategy and Transformation Department. In Risk Management Division the ESG and Risk Development Strategy Office was established, to which part of the activities carried out by Investors Relations and ESG Strategy Department were transferred, whose name was changed to Investors Relations and ESG Department. In Private Banking and Investment Products Division, the activities carried out by full-range Brokerage Service Points (exCDM) were transferred from Private Banking and Brokerage Services Department to Pekao Brokerage Office, as a consequence, name of department was changed to Private Banking Department. In Commercial Banking Division the Credit Products and Processes Office was established by separating this activity from Commercial Banking Strategy and Development Department and the activities carried out by Business Analysis and Modelling Office were incorporated into Customer Service Department, whose name was changed to Customer Service and Data Analytics Department. SME Credit Service Teams were created in the structure of SME Banking Regions Direction by transferring the activities carried out by SME Business Analysts from SME Customer Department. 18 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 5.4 Awards and distinctions The activities of Bank Pekao S.A. gained wide recognition by clients, industry specialists, the market and the media, as evidenced by numerous awards and distinctions granted by Polish and foreign institutions. Measures aimed at providing customers with the highest quality products and services, innovation of the proposed solutions have been appreciated. Bank Pekao S.A. received a number of awards and distinctions in 2023. The most relevant honors are presented below. 2023 EU-Wide Stress Test Results In this year's edition of pan-European stress tests conducted by the European Banking Authority (EBA), we turned out to be the most resistant bank in Europe to negative macroeconomic scenarios, out of 70 entities covered by the study. It was one of only two banks on the list that did not record a decline in capital ratios in the extreme scenario. The strength of the balance sheet and extraordinary resilience of Bank Pekao was confirmed by the latest EBA stress test, in which Pekao turned out to be the safest bank in Europe. Bank of the Year 2023 in Poland Top Employer An international group of experts appreciated the Bank's strategic approach to conducting business, as well as the solutions introduced in the field of digitalization, such as, among others: Omnibank CRM. We have received the title of Top Employer for the fourteenth time, and we are strengthening our position as one of the best employers in the country. Thanks to our human resources policy and constantly improved HR practices, we create an inspiring, friendly working environment for our employees and an attractive offer for candidates. AWARDS AND DISTINCTIONS FOR CORPORATE AND INVESTMENT BANKING The Best Investment Bank For the seventh time, we have won the title of the best investment bank in Poland "The Best Investment Bank in Poland for 2023". The Best bank in Poland in terms of Sustainable financing and a leader in the Central and Eastern European region in financing sustainable infrastructure We were recognized as the best bank in terms of sustainable financing. For the first time, we received the title of leader in the Central and Eastern Europe region in financing sustainable infrastructure as part of "Outstanding Leadership in Sustainable Infrastructure Finance". Our activities in financing initiatives and bond issue programs aimed at the country's energy transformation, mitigating the negative effects of climate change, supporting local communities and developing sustainable infrastructure projects were appreciated. Treasury and Cash Management Provider. Awarded again in the Treasury and Cash Management Provider category.In order to select the best treasury and cash management service providers, the following criteria were taken into account: efficiency, market share, quality of customer service, competitive prices, product innovation and the extent to which service providers have effectively differentiated themselves from their competitors. 19 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. "The Best Trade Finance Provider in Poland" For the fifth time, we have received distinction for handling trade financing transactions. Our knowledge of local economic conditions, customer needs and innovation in products and services were appreciated. The best trust bank For the eleventh time in history and for the sixth time in a row, we received the "Best Sub-custodian Bank in Poland for 2023" award. Since 2012, we have been a leader in custody services on the Polish market. The quality of relationships with foreign institutional clients and the level of their service, market knowledge, price offers, IT systems and operational activities in the field of settlement of securities transactions were appreciated. Treasury Securities Dealer We took third place in the annual ranking of Treasury Securities Dealers, which assesses the activity of domestic and foreign banks in the primary and secondary market of State Treasury bonds and the quality of cooperation with the Ministry of Finance. Bank of the Year 2023 on the commercial real estate market in Central and Eastern Europe Bank Pekao SA was the winner of the CEE Retail Real Estate Award competition in the "Bank of the Year" category. The CEE Retail Real Estate Awards competition is organized every year by EuropaProperty to emphasize the importance of the commercial real estate market in the countries of Central and Eastern Europe. The awards are given for achievements in the commercial real estate sector. AWARDS AND DISTINCTIONS FOR RETAIL BANKING AND PRIVATE BANKING Institution of the Year In the Institution of the Year ranking organized by Moje Bankowanie, we took first place in two categories, and we took leading top places in five further categories. Best Online Banking and Best Mobile Application. We achieved the highest rate of available functionalities in both channels and the highest ratings from users of the mobile application. The best service in the facility - 3rd place . Bank branches competed for individual awards throughout the year. Individual awards and the title of the Best Bank Branch in Poland were awarded to as many as 25 branches of the Bank. We have also received awards, including: in the categories: Best remote account opening process (2nd place), Best personal banking (2nd place), Best private banking (3rd place) and Best bank for companies (4th place). Złoty Laur Konsumenta 2023 Złoty Bankier competition Customers once again appreciated the possibilities of remote service in electronic banking on the Pekao24 Internet service and the PeoPay application, which enable the use of an online bank without leaving home The best Personal account: Konto Przekorzystne, Konto dla dzieci , Our attractive price offer, account services, convenient and comprehensive electronic banking and implemented new products were appreciated. 20 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Quality International Analyst Ranking on the Brokerage Market Two Golden Emblems for Private Banking UNIQUE credit card and Family Office - a product and service of the highest quality. Biuro Maklerskie Pekao won in the ranking of PARKIET analysts. Our experts took the first three places in the individual category. 56 management teams from TFI, OFE, but also FIZ and Family Office took part in this year's vote for the best analyst and analytical team. AWARDS AND DISTINCTIONS FOR ENTERPRISE BANKING Company Friendly Ban k The best loans for companies in the Marka Godna Zaufania ranking Third place in the ranking of Forbes magazine "Firm-Friendly Bank" for the quality of service for entrepreneurs. In this year's ranking, the priority was to examine how much the entrepreneur feels the bank's support when he comes to the branch. The assessment was given in four categories: service quality, customer acquisition, remote contact channels and features of bank branches with an emphasis on the safety of direct contact In the eighth edition of the Trustworthy Brand survey - an initiative of the publisher of the "My Company Polska" monthly in cooperation with the Kantar Polska Research Institute, we became the winner of the Marka Godna Zaufania ranking in the "Financial injection, i.e. a bank that offers the best loans for companies" category. Best Online Banking for SMEs 2023 PekaoBiznes24 - online banking for enterprises - was recognized as the best in Central and Eastern Europe in the ranking organized by the SME Banking Club association. PekaoBiznes24 has overtaken the online systems of as many as 34 other banks from the Central and Eastern European region that serve companies from the SME sector. In addition, we took second place in the "Best Digital SME Lending 2023" category, i.e. the best online lending for SMEs. AWARDS AND DISTINCTIONS FOR GROUP’S SUBSIDIARIES Pearl of Polish Leasing Pekao Leasing receives the "Teraz Polska" emblem Pekao Leasing received a distinction in the Pearls of Polish Leasing 2023 plebiscite for an individual approach to customer needs and skilful use of the latest technologies that translate into effective service. Pekao Leasing was awarded for leasing services and modern solutions guaranteeing the highest quality of customer after-sales service. Pekao TFI honored with the prestigious "Bulls and Bears" award in the "TFI of the Year" category awarded by the Stock Exchange and Investors Gazeta "Parkiet" The main selection criterion for the best TFI were the high rates of return of funds managed by Pekao TFI, which were ranked at the top in individual categories. Pekao Direct Sp. z o. o. - The winner of the international competition International Business Excellence Awards Pekao Direct won two awards in the international competition International Business Excellence Awards™ 2023. In the "Best Customer Service" and "Best Learning and Development" categories, the jury awarded an innovative approach to the customer and employee. 21 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 6. Information for the Investors 6.1 The Bank’s share capital and share ownership structure As at 31 December, 2023, the share capital of Bank Pekao S.A. amounted to PLN 262,470,034 and remained unchanged until the date of submitting the report. The Bank's share capital was divided into 262,470,034 shares in the following series:  137,650,000 Series A bearer shares with a par value of PLN 1.00 per share,  7,690,000 Series B bearer shares with a par value of PLN 1.00 per share,  10,630,632 Series C bearer shares with a par value of PLN 1.00 per share,  9,777,571 Series D bearer shares with a par value of PLN 1.00 per share,  373,644 Series E bearer shares with a par value of PLN 1.00 per share,  621,411 Series F bearer shares with a par value of PLN 1.00 per share,  603,377 Series G bearer shares with a par value of PLN 1.00 per share,  359,840 Series H bearer shares with a par value of PLN 1.00 per share,  94,763,559 Series I bearer shares with a par value of PLN 1.00 per share. All the existing shares are ordinary bearer shares. There are no special preferences or limitations connected with the shares, or differences in the rights attached to them. The rights and obligations related to the shares are defined by the provisions of the Polish Commercial Companies Code and other applicable law. Shareholders of Bank Pekao S.A., holding directly or indirectly, through subsidiaries, at least 5% of the total number of votes at the General Meeting of the Bank, are as follows: NUMBER OF SHARES AND VOTES AT THE GENERAL MEETING SHARE IN SHARE CAPITAL AND TOTAL NUMBER OF VOTES AT THE GENERAL MEETING NUMBER OF SHARES AND VOTES AT THE GENERAL MEETING SHARE IN SHARE CAPITAL AND TOTAL NUMBER OF VOTES AT THE GENERAL MEETING NUMBER OF SHARES AND VOTES AT THE GENERAL MEETING SHARE IN SHARE CAPITAL AND TOTAL NUMBER OF VOTES AT THE GENERAL MEETING SHAREHOLDER’S NAME AS AT THE DATE OF SUBMITTING THE REPORT FOR 2023 31 DECEMBER 2023 AS AT THE DATE OF SUBMITTING THE REPORT FOR THE THIRD QUARTER OF 2023 Powszechny Zakład Ubezpieczeń S.A. 52,494,007 20.00% 52,494,007 20.00% 52,494,007 20.00% Polski Fundusz Rozwoju S.A. 33,596,166 12.80% 33,596,166 12.80% 33,596,166 12.80% Funds managed by Nationale- Nederlanden Powszechne Towarzystwo Emerytalne S.A. 16,800,000 6.40% 16,800,000 6.40% 16,800,000 6.40% Funds managed by Powszechne Towarzystwo Emerytalne Allianz Polska S.A. 15,500,051 5.91% 15,500,051 5.91% 15,500,051 5.91% Other shareholders (below 5%) 144,079,810 54.89% 144,079,810 54.89% 144,079,810 54.89% Total 262,470,034 100.00% 262,470,034 100.00% 262,470,034 100.00% On 10 October 2023, in the current Report No. 23/2023, Bank Pekao S.A. informed that received a notification from BlackRock, Inc. on reducing the voting share below the threshold of 5% of the total number of votes in the General Meeting of Bank. Until the date of submitting the report the Bank has not received any other notifications regarding changes in the ownership structure in accordance with par. 69 of the Act of July 29, 2005 on Public Offerings and Conditions Governing the Introduction of Financial Instruments to an Organized System of Trading, and on Public Companies. 22 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Polish open-end pension funds (OFE) constitute the group of financial investors holding a significant equity interest in the Bank. Based on their publicly available financial reports, as of 31 December, 2023 OFE’s held in aggregate 21.15% of the Bank’s shares. The Polish open-end pension funds’ holdings in Bank Pekao S.A.: NUMBER OF SHARES AND VOTES AT GENERAL MEETING % OF SHARE CAPITAL AND TOTAL VOTE AT GENERAL MEETING NUMBER OF SHARES AND VOTES AT GENERAL MEETING % OF SHARE CAPITAL AND TOTAL VOTE AT GENERAL MEETING SHAREHOLDER 31 DECEMBER 2023 31 DECEMBER 2022 Nationale-Nederlanden OFE 18,928,030 7.21% 16,884,004 6.43% Allianz Polska OFE () 15,500,051 5.91% 2,115,460 0.81% Generali OFE () 8,406,878 3.20% 3,508,634 1.34% Vienna OFE () 4,998,495 1.90% 4,543,495 1.73% PKO BP Bankowy OFE 3,610,401 1.38% 3,314,222 1.26% Uniqa OFE 3,153,684 1.20% 3,153,684 1.20% OFE Pocztylion 926,568 0.35% 926,568 0.35% Drugi Allianz Polska OFE () - - 13,384,591 5.10% NNLife OFE () - - 5,252,062 2.00% Total 55,524,107 21.15% 53,082,720 20.22% Note : OFE Reports, annual structure of open-end pension funds assets. () In 2023, Drugi Allianz Polska OFE was liquidated and its assets were merged with Allianz Polska OFE. () In 2023, NNLife OFE was liquidated and its assets were merged with Generali OFE. () Former Aegon OFE. 6.2 Performance of market valuation of Bank Pekao S.A.’s stock The shares of Bank Pekao S.A. have been listed on the Warsaw Stock Exchange since June 1998 and they are one of the most liquid equities in Poland and Central and Eastern Europe. The Bank’s market capitalization as of December 31, 2023 amounted to PLN 39.9 billion making the Bank one of the largest listed companies in Central and Eastern Europe. Given the high capitalization and liquidity the Bank’s shares are a part of many important stock indices maintained by domestic and foreign institutions including Polish blue chips index – WIG20 and WIG30, banking sector index WIG-Banks as well as MSCI Emerging markets. The Bank's shares are also included in the WIG-ESG index, i.e. the index of socially responsible companies run by the Warsaw Stock Exchange. In 2018 the shares of Bank Pekao S.A. were included in the STOXX Europe 600 Index, the index of the largest and most liquid securities in Europe and the FTSE Developed Equity Index, due to reclassification of Poland into developed market. In 2020, the Bank as one of the few in the entire region of Central and Eastern Europe, was included in the global Bloomberg Gender Equality Index, bringing together a listed company actively working for gender equality at work. With the average daily turnover volume at the level of 737 thousands of shares and the worth of trading at PLN 19.5 billion in 2023, the share of the Bank’s stock in trading on the WSE amounted to 7.1%. Share price of Bank Pekao S.A. increased by 76% y/y and reached PLN 152.05 as at the end of December 2023 compared to PLN 86.50 a year earlier. Total shareholder return for the Bank's shareholders (including dividend payment at PLN 5.42 per share) amounted to 82% and was higher than return for the WIG Banks index, which grew by 77% in 2023. Share price performance of Polish banks in 2023 was influenced primarily by the sector's record results thanks to high interest rates remaining throughout the year. Additionally, regulatory costs incurred by banks in 2023 were significantly lower compared to 2022. 23 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Basic information about Bank Pekao S.A. shares 2023 2022 Share price at the end of the year (PLN) 152.05 86.50 Maximum share price (PLN) 154.00 138.90 Minimum share price (PLN) 73.54 58.42 Number of shares 262 470 034 262 470 034 Capitalization at the end of the year (PLN billion) 39.9 22.7 Average trading volume 736 579 1 032 138 Earnings per share (PLN) () 21.87 5.81 Book value per share (PLN) (**) 107.91 79.80 Dividend per share paid in a given year (PLN) 5.42 4.30 P/E (x) () 7.0 14.9 P/BV (x) () 1.41 1.08 Note: Data based on GPW statistics. () Earnings per share calculated as the sum of quarterly earnings per share for four consecutive quarters, where the last quarter is the third quarter of a given year. () Book value per share calculated on the basis of financial data for the third quarter of a given year. () Indicators calculated in relation to the financial data after the third quarter of a given year. 6.3 Dividend payment history In 2023, the Bank paid dividend for 2022 in the amount of PLN 5.42 per share. Dividend yield was 4.9%. In the years 2009- 2023, the Bank regularly paid dividends, except for the distribution of profit for 2019, when due to the COVID-19 pandemic, the Polish Financial Supervision Authority recommended the Bank not to pay dividends. The total value of dividends paid for the years 2009-2022 amounted to over PLN 23 billion, making the Bank one of the Polish companies with the highest level of dividends paid in recent years. The dividend payments from 2009 to 2022 are presented below: 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Dividend for the year (in PLN million) 761 1,785 1,412 2,202 2,614 2,625 2,283 2,278 2,074 1,732 - 843 1,129 1,423 Dividend per 1 share (in PLN) 2.90 6.80 5.38 8.39 9.96 10.00 8.70 8.68 7.90 6.60 - 3.21 4.30 5.42 Note: Dividend presented in the year in which the profit intended for dividend payment was generated. In line with the Bank's strategy for 2021-2024, Bank Pekao intends to allocate 50-75% of its net profit to dividend payments. The final decision on the distribution of the profit for 2023 and its allocation to the payment of dividends will be made by the General Meeting of Shareholders. 6.4 Investor Relations The Bank’s activity, in the investor relations area, is focused on providing transparent and active communication with the market through active co-operation with investors, analysts and rating agencies, as well as fulfilling disclosure requirements within the frameworks of applicable law regulations. The Bank’s representatives regularly hold many meetings with investors from Poland and abroad, and take part in most of the regional and sector dedicated investors conferences. In total, in 2023, the bank participated in 20 Investor conferences and roadshows meetings with institutional investors from key financial centers around the world. As part of the conference, the Bank held 262 meetings with investors last year. Financial results of Bank Pekao S.A. Group are presented quarterly at conferences that are simultaneously transmitted via Internet. The Bank’s financial results and its activity are regularly monitored by analysts representing Polish and foreign brokerage entities. In 2023, 17 analysts published reports and recommendations on the Bank. Recommendation structure for Bank Pekao S.A. shares for 31 December 2023 Buy/Accumulate 12 Hold/Neutral 4 Reduce/Sell 1 The activity of the Bank’s investor relations is to enable to make a reliable evaluation of the Bank’s financial situation, its market position and business model effectiveness in the context of banking sector conditions and macroeconomic situation in the domestic economy as well as on international markets. 24 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Relevant information for the investors about the Bank is available on the Bank’s website: https://www.pekao.com.pl/en/investors-relations.html The Bank publishes also on-line annual report available on the Bank’s website, where is also posted “Information Policy of Bank Polska Kasa Opieki Spółka Akcyjna regarding communication with investors, media and customers”. Contact details for the Investor Relations Office e-mail: bri@pekao.com.pl tel.: +48 22 524 55 27 6.5 Financial credibility ratings Bank Pekao S.A. financial credibility ratings Bank Pekao S.A. co-operates with three leading credit rating agencies: Fitch Ratings (the Fitch), S&P Global Ratings (S&P), and Moody’s Investors Service. In the case of the first two agencies, the ratings are provided on a solicited basis under relevant agreements and with respect to Moody’s Investors Service the ratings are unsolicited and they are based on publicly available information and review meetings. As of 31 December 2023, Bank Pekao S.A. had assigned following financial credibility ratings: FITCH RATINGS BANK PEKAO S.A. POLAND Long-Term Default rating (IDR) BBB A- Short-Term Default Rating F2 F1 Viability Rating bbb - Government Support Rating No support - Outlook Stable Stable National Long-Term Rating AA-(pol) (stable outlook) - National Short-Term Rating F1+(pol) - S&P GLOBAL RATINGS BANK PEKAO S.A. POLAND Long-term rating in foreign currencies BBB+ A- Long-term rating in domestic currency BBB+ A Short-term rating in foreign currencies A-2 A-2 Short-term rating in domestic currency A-2 A-1 Stand-alone credit profile bbb+ - Outlook Positive Stable Rating of Senior Preferred series SP1 bonds BBB+ - Rating of Senior Non-Preferred series ESN1 bonds BBB - S&P GLOBAL RATINGS (RESOLUTION COUNTERPARTY RATING) BANK PEKAO S.A. POLAND Long - term RCR in foreign currencies A- - Short - term RCR in foreign currencies A-2 - Long - term RCR in domestic currency A- - Short - term RCR in domestic currency A-2 - MOODY’S INVESTORS SERVICE (UNSOLICITED RATING) BANK PEKAO S.A. POLAND Long-term foreign-currency deposit rating A2 A2 Short-term deposit rating Prime-1 Prime-1 Baseline Credit Assessment baa2 - Long-term counterparty risk assessment A2(cr) - Short-term counterparty risk assessment Prime-1(cr) - Outlook Stable Stable Long-term Counterparty Risk Rating (CRR) A2 - Short-term Counterparty Risk Rating (CRR) Prime-1 - On 27 June 2023 S&P informed the bank about maintaining the ratings of the bank at the current level with the stable outlook and assigning long-term rating of BBB+ for the issue of Senior Preferred series SP1 bonds. 25 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. According to S&P, the bank’s ratings assesments reflect the Bank's limited exposure to legacy CHF-denominated loans, which puts the bank in a comfortable position regarding this legal risk. Also, considering its strong capitalization, Pekao might actually benefit from competitors' capital constraints and gain market share in the domestic corporate and retail business should loan demand pick up in the future. In addition, S&P considers that Pekao's strong capital and robust profitability provide comfortable buffers to absorb costs from potentially adverse scenarios. Its affiliation with its largest single investor, state-owned insurance company PZU, benefits its franchise in the domestic corporate banking business and also supports the placement of MREL instruments with domestic investors. On 28 September 2023 Fitch informed the Bank about maintaining the Bank Pekao S.A.'s Long-Term Issuer Default Rating (IDR) at 'BBB' with “Stable” outlook and Viability Rating (VR) at 'bbb'. According to Fitch, Bank Pekao S.A.'s ratings reflect its strong domestic franchise, and its seasoned and stable business model. This, combined with a moderate risk appetite, allows the bank to generate fairly stable returns, while maintaining reasonable capitalisation, and strong funding and liquidity. This is despite it being exposed to risks in the domestic operating environment, including government intervention risk. Bank Pekao S.A.'s National Ratings reflect the bank's creditworthiness relative to that of other issuers in Poland. On 14 November 2023 S&P informed the bank about maintaining the ratings of the bank at the current level, revising the outlook from stable to positive and assigning long-term rating of BBB for the issue of Senior Non-Preferred series ESN1 bonds. According to S&P, the positive outlook reflects the view that Pekao could opportunistically issue further substantial amounts of Senior Non-Preferred instruments over the next 12-24 months, which could lead S&P to raise the issuer credit rating by one notch based on this extraordinary support. Pekao Bank Hipoteczny S.A. financial credibility ratings Pekao Bank Hipoteczny S.A. cooperates with the international rating agency Fitch Ratings. Fitch emphasizes that the rating of Pekao Bank Hipoteczny S.A. is related to the rating of Bank Pekao S.A., which holds 100% of the Bank's shares. Fitch believes in the rating of Pekao Bank Hipoteczny S.A. is influenced by the level of integration with the parent company and the scale of operations as well as the Bank's capital. At the end of December 2023, the long-term rating of Pekao Bank Hipoteczny S.A., assigned by the Fitch rating agency, was at the BBB level with a "Stable" outlook. Covered bonds issued by Pekao Bank Hipoteczny S.A. had a "BBB+" rating. A high rating for the letters means that Pekao Bank Hipoteczny S.A. has the ability to issue securities with a high level of security and obtain long-term funds for lending activities. 26 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 7. Activity of Bank Pekao S.A. Group 7.1 Important factors influencing the Group’s activities and results Activities of the Bank Pekao S.A. Capital Group in 2023 was mainly determined by the macroeconomic situation in the country and abroad. The economies of Poland, as well as those of its key European trading partners, felt the effects of the war in Ukraine, which began in 2022. The GDP growth rate in Poland slowed down significantly to +0.2% in 2023 compared to 5.3% achieved in 2022. Throughout last year, the Polish economy experienced a falling inflation rate, which, however, remained systematically at elevated levels, reaching in December +6.2%. Interest rates in key Western economies were systematically raised in the first half of the year and remained at high levels until the end of 2023. The Monetary Policy Council maintained elevated interest rates for most of the year, making two reductions at the end of the year (the reference rate was lowered from 6.75% to 5.75%). The low economic growth rate in Poland last year translated into low demand for loans. This was particularly visible in the corporate segment, where the annual dynamics of loan volumes was negative. Geopolitical uncertainty and the slowdown in key trading partners (especially Germany) forced enterprises to postpone larger investment plans, limiting the demand for investment loans. Inventory accumulated by enterprises in 2022 and weakening demand in 2023 also reduced the interest of companies in working capital loans. The situation was slightly better in the retail segment. PLN mortgage loans recorded an increase, which resulted mainly from the introduction of the government program "Safe 2% Credit". This program curbed the mortgage market in the second half of 2023. Positive dynamics were also visible in the area of consumer loans. Throughout 2023, the unemployment rate in Poland remained low and the financial situation of consumers remained stable, contributing to the good economic situation in this area. Deposits in the banking sector, both in the retail and corporate segments, grew at a moderate pace last year. The environment of high interest rates and a more favorable deposit offer from banks than in previous years encouraged customers to allocate a larger part of their savings on term deposits. However, the pace of transfer of funds from current to term deposits turned out to be much slower than expected at the beginning of the year. A positive phenomenon for the banking sector in 2023 was the persistence of NBP interest rates at a high level, which translated into interest income that increased at a high double-digit rate. The situation in the deposit area was favorable for banks, as customers decided to transfer funds from current to term deposits only at a moderate pace. This allowed the banking sector to keep the cost of financing low and achieve a very high interest margin. Despite the slowing economy and, consequently, decreasing customer activity, banks improved their commission income in 2023. Commissions related to asset management and brokerage services were particularly positive, and they increased significantly last year due to the improving situation on the capital market. Strong inflationary pressure in the economy translated into a significant increase in banks' operating costs. Wages and other operating costs increased significantly, which were partially compensated by banks through the continuation of employment restructuring programs and reducing the number of branches. Bank Pekao also continued to optimize its branch network. Last year, there was a strong decline in regulatory costs in the banking sector. In 2022, due to the economic effects of the war in Ukraine, the government introduced significant additional burdens on banks (credit holidays, additional payments to the Borrower Support Fund, Commercial Bank Protection System). These costs did not occur last year, contributing to a significant improvement in the sector's results. Additionally, thanks to participation in the Commercial Bank Protection System, banks paid lower contributions to the Bank Guarantee Fund in 2023. The costs of risk in the banking sector increased significantly in 2023, mainly due to growing provisions related to mortgage loans in CHF. Court decisions remained unfavorable for the sector, and the number of lawsuits from customers increased significantly. It has not been possible to develop a systemic solution to this problem. Banks were forced to add new provisions for this purpose, which significantly affected the profitability of the sector. This situation only slightly affected Bank Pekao, which created significant provisions for the CHF portfolio already in 2022. Other risk costs remained at a stable, relatively low level for most of the year. In 2023, banks continued operational and digital transformation processes, the importance of customer service in remote channels increased, and many banking processes were digitized. New technical solutions were introduced and the functionalities of banking applications were expanded. These phenomena were accompanied by a reduction in stationary branches. Due to MREL requirements, in 2023 banks issued instruments that met these requirements. Bank Pekao also obtained financing in this way by issuing Senior Preferred instruments (worth PLN 750 million) and Senior Non-Preferred (PLN 1,100 million in two series on the Polish market and EUR 500 million on the European market). 27 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In terms of capital requirements, in accordance with the law, Bank Pekao S.A. Group should maintain minimum levels of capital ratios at regulatory level of Pillar I resulting from the CRR Regulation, the Pillar II requirement under the Banking Law and the combined buffer requirement resulting from the Act on Macroprudential Supervision. Pursuant to the CRR Regulation, the minimum level of capital ratios maintained by the Group and the Bank should be as follows:  Total capital ratio (TCR) - 8%,  Tier I (T1) capital ratio - 6%,  Common Equity Tier I (CET1) ratio - 4.5%. Under Pillar II, neither Bank Pekao S.A. nor the Bank Pekao S.A. Capital Group have no additional capital requirement (P2R). The combined buffer requirement as of December 31, 2023 consists of the following buffers:  conservation buffer at 2.5%,  other systemically important institution buffer at 1.00%,  countercyclical buffer at 0.00% 1 ,  systemic risk buffer at 0.00% 2 . For Bank Pekao and Bank Pekao Group, as at 31 December, 2023, the minimum total capital ratio was 11.5%, the Tier 1 capital ratio was 9.5% and the Common Equity Tier 1 capital ratio was 8.0%. On March 20, 2023, Bank Pekao S.A. received an individual recommendation from the Polish Financial Supervision Authority regarding the Bank's dividend policy. As at December 31, 2022, Bank Pekao S.A., in terms of the basic criteria specified in the position of the Polish Financial Supervision Authority of December 6, 2022 on the dividend policy of commercial banks in 2023, and taking into account the quality of the Bank's loan portfolio, measured by the share of non-performing receivables in the total portfolio of receivables from the non-financial sector, including debt instruments, met the requirements qualifying for the payment of up to 75% of the dividend from the Bank's profit earned in the period January 1, 2022 - December 31, 2022. In addition, the KNF recommended Bank Pekao S.A. not taking, without prior consultation with the supervisory authority, other actions, in particular those outside the scope of current business and operating activities, which may result in a decrease in own funds, including possible dividend payments from undistributed profit from previous years and share buybacks. Based on the above recommendation and the resolution of the Ordinary General Meeting of Bank Pekao S.A. of June 6, 2023 on the distribution of profit of Bank Pekao S.A. for 2022, Bank Pekao S.A. paid a dividend of 74.9% of standalone net profit (82.8% of consolidated profit). On 14 December, 2023 Bank received a recommendation from the Polish Financial Supervision Authority in which the PFSA recommended the Bank to limit the risk occurring in the Bank's operations by maintaining own funds to cover the additional capital add-on in order to absorb potential losses resulting from the occurrence of stress conditions (P2G) at the level of 0.50 p.p. on standalone basis and 0.49 p.p. on consolidated basis above the value of each of the own funds requirements referred to in Art. 92 section 1 letter a-c of the regulation (EU) No. 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions increased by the additional own funds requirement referred to in Article 138(2)(2) of the Banking Law and by the combined buffer requirement referred to in Article 55(4) of the Act on macro prudential oversight. The additional capital requirement should be made up of Tier 1 funds only. On December 14, 2023, the Polish Financial Supervision Authority adopted a position on the dividend policy of commercial banks for 2024. The PFSA adopted the following rules for the dividend policy of commercial banks in 2024: 1. The dividend up to 50% of the profit from 2023 may be paid out only by banks that meet the following criteria at the same time: a) not in the middle of recovery program or recovery plan; b) positively assessed as part of the Supervisory Audit and Assessment process (final BION grade not worse than 2.5), c) having a leverage ratio (LR) at above 5%, d) having Common Equity Tier I (CET1) ratio not lower than the required minimum: 4.5% + 56% * P2R 3 requirement + combined buffer requirement + P2G requirement, 1 The countercyclical buffer calculated as at 31 December, 2023 was 0.0X% for Bank Pekao S.A. and 0.0X% for Capital Group. 2 Due to the published Regulation of the Minister of Finance, the systemic risk buffer was repealed on March 19, 2020. The buffer value effective until that date was 3% of the total risk exposure amount for all exposures located only in the territory of the Republic of Poland. 3 Pillar II Requirement (P2R), which is an additional regulatory capital requirement. 28 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. e) having Tier I (T1) capital ratio not lower than the required minimum: 6% + 75% * P2R requirement + combined buffer requirement +P2G requirement, f) having Total Capital Ratio (TCR) not lower than the required minimum: 8% + P2R requirement + combined buffer requirement + P2G requirement, 2. The dividend up to 75% of the profit from 2023 can only be paid by banks that meet the criteria for a 50% payment and at the same time whose portfolio of receivables from the non-financial sector is characterized by good credit quality (the share of NPLs, including debt instruments, at a level not exceeding 5%). The criteria specified in points 1 and 2 should be met by the bank both at the individual and consolidated level, as at the end of 2023 and on the date of the decision by the General Meeting of Shareholders on the payment of dividend. The maximum level of dividend that can be paid from the profit earned in 2023 is limited to 75% due to the expected strengthening of the capital base in order to absorb the possible materialization of risks accumulated in the environment of the Polish banking sector.For banks with a significant portfolio of foreign currency mortgage loans, the dividend yield should be additionally adjusted in accordance with the following criteria: a) Criterion 1 - based on the share of foreign currency mortgage loans for households in the entire portfolio of receivables from the non-financial sector: • banks with a share exceeding 5% - dividend rate adjustment by 20 p.p. • banks with a share exceeding 10% - dividend rate adjustment by 40 p.p. • banks with a share exceeding 20% - dividend rate adjustment by 60 p.p. • banks with a share exceeding 30% - dividend rate adjustment by 100 p.p. b) Criterion 2 - based on the share of loans granted in 2007 and 2008 in the portfolio of foreign currency mortgage loans for households: • banks with a share exceeding 20% - dividend rate adjustment by 30 p.p. • banks with a share exceeding 50% - dividend rate adjustment by 50 p.p., wherein the total value of the correction (maximum 100%) is the sum of the corrections resulting from both criteria. On 7 February, 2024 Bank received a letter from Polish Financial Supervision Authority in which PFSA indicated that after analyzing the current financial, economic and capital of the Bank as well as the arguments and additional explanations presented by the Bank, PFSA does not raise any objections to the possibility of paying, in 2024, the undistributed profit in the amount of PLN 1,685,057,618.28 retained by the Bank for 2019 in the form of a dividend. The final decision on the distribution of the profit for 2023 and its allocation to the payment of dividends will be made by the General Meeting of Shareholders. 29 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 7.2 Major sources of risk and threats Risk management Effective risk management is a prerequisite for maintaining a high level of security of the funds entrusted to the Group, and for achieving a sustainable and balanced profit growth within the Group’s risk appetite. The key risks material for the Group include credit risk, liquidity, market risks and operational risk. Moreover, the Group identifies the following risks as material in its business activity: business, reputation, compliance, excessive leverage, bancassurance and model risks. The Group also identifies ESG risk defined as risk of losses arising from environmental, social and governance factors The Group has adopted a comprehensive and consolidated approach to risk management. It extends to all units of the Bank and subsidiaries. Risks are monitored and managed taking into account business profitability and the capital required to cover the losses resulting from these risks. The Management Board of the Bank is responsible for achieving the strategic risk management goals. The Management Board designs, implements and ensures the operation of the risk management system which covers all material risks. The Management Board develops the risk management strategy and defines the Group’s risk appetite. The Supervisory Board, supported by the Risk Committee and Audit Committee, oversees whether the Group’s policy of taking various risks is compliant with the overall strategy and financial plan. The Supervisory Board approves the risk management strategy and risk appetite of the Group and evaluates the adequacy and efficiency of the risk management system. The Credit Committee and Credit Risk Committee play an important role in the credit risk management, the Asset, Liability and Risk Committee and Liquidity and Market Risk Committee in market and liquidity risk management, the Operational Risk Committee and Bank Security Committee in the management of the operational risk and the Model Risk Committee in model risk management. The rules of managing each of the risks are defined by internal procedures and the guidelines set up by the credit risk strategy and policy, financial risk strategy and investment and market risk policy and the operational risk management strategy and policy approved annually by the Management Board (policies) and by the Supervisory Board (strategies). Detailed reports on credit, liquidity, market, operational and model risks are presented to the Management Board and the Supervisory Board on a regular basis. The rules and instruments of managing each of the risks and information on the risk exposure are included in Note 46 to the Consolidated Financial Statements of Bank Pekao S.A. for the period ended on 31 December, 2022 and in the document “Information in respect to capital adequacy of Bank Pekao S.A Group as at 31 December 2022” published on the Bank’s website. Operational risk The objective of proper operational risk management is to maintain the operational risk the Group takes, on the level consistent with a specific risk appetite. Operational risk management is based on internal procedures that are consistent with the law requirements, resolutions, recommendations and guidelines of the supervisor and includes: identification, assessment, monitoring, preventing and reporting of operational risk. The operational risk profile is determined mainly by two operational event categories, in which the highest exposure to operational risk is identified i.e. Clients, products and business practices and Execution, delivery and process management. This is reflected in the table below, which presents the distribution of losses resulting from operational events by categories as defined by the Article 324 of Regulation (EU) No 575/2013 of the European Parliament and of the Council. The Group executes mitigation actions for all of the operational event categories, with particular emphasis on categories of the highest relevance. OPERATIONAL EVENTS BY CATEGORIES 2023 2022 Internal frauds 0,15% 0,09% External frauds 1,28% 0,55% Employment practices and workplace safety 0,00% 0,18% Clients, products and business practices 94,05% 96,21% Damages to physical assets 0,28% 0,09% Business disruption and system failures 0,03% 0,50% Execution, delivery and process management 4,21% 2,38% Total 100,00% 100,00% 30 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Bank executes mitigation actions for all of the operational event categories, with particular emphasis on categories of the highest relevance. OPERATIONAL EVENTS BY CATEGORIES 2023 2022 Internal frauds 0,18% 0,10% External frauds 0,66% 0,60% Employment practices and workplace safety 0,00% 0,20% Clients, products and business practices 93,71% 96,42% Damages to physical assets 0,34% 0,10% Business disruption and system failures 0,03% 0,13% Execution, delivery and process management 5,08% 2,45% Total 100,00% 100,00% Credit risk Managing credit risk and maintaining it at a safe level is vital for the Bank’s financial performance. In order to minimize credit risk, special procedures have been established, pertaining in particular to the rules of assessing obligor and transaction risk, collateralization of loan and lease receivables, credit decision powers and concentration risk management. Prudent credit risk management at Bank Pekao S.A. is based on the Credit Risk Strategy and Credit Risk Policy, which take into account, among the others, measures reducing the potential threats coming from macroeconomic factors related to the armed conflict in Ukraine and the related disturbances in the supply of raw materials and their impact on the quality of the loan portfolio. The same approach is applied in the Bank’s subsidiaries. Lending activities are subject to limits following both from the external regulations (CRR) and the Bank’s internal standards, including limits concerning exposure concentration ratios for individual sectors of the economy, limit on the share of large exposures in the Bank’s loan portfolio, portfolio limits and limits of exposures to countries, foreign banks and domestic financial institutions. The credit decision powers, lending restrictions as well as internal and external prudential standards, pertain to loans and guarantees as well as derivative transactions and debt instruments. The quality of the loan portfolio is also protected by periodic reviews and ongoing monitoring of the timely servicing of loans and the financial standing of customers. The Bank has continued to work on further rationalization of the credit process with an aim to obtaining better efficiency and security, including in particular enhancement of the procedures and tools for risk measurement and monitoring. Credit risk concentration limits According to the applicable regulations the total exposure of the Bank to the risks associated with the single borrower or a group of borrowers in which entities are related by capital or management may not exceed 25% of a bank’s Tier 1 capital. In 2023, the maximum exposure limits set forth in the external regulations were not exceeded. Sector concentration In order to mitigate credit risk associated with excessive sector concentration the Bank sets up a system for shaping the sectoral structure of credit exposure. Every year within Credit Policy the Bank defines sector limits for particular sectors of economy. These limits are subject to ongoing monitoring. The system applies to credit exposure in particular types of business activity according to the classification based on the Polish Classification of Economic Activities (Polska Klasyfikacja Działalności – PKD). Concentration limits are set based on the Bank’s current credit exposure and risk assessment of each sector. Periodic monitoring of the Bank’s exposure allows for ongoing identification of the sectors in which the concentration of exposure may be too excessive. In such cases, an analysis of the economic situation of the sector is performed including both the current and forecast trends and an assessment of quality of the current exposure to that sector. These measures enable the Bank to formulate the activities to reduce sector concentration risk and ongoing adaptation of the Bank’s Credit Policy to a changing environment. The Group’s risk management process The Bank supervises the risk related with subsidiaries. In particular an assessment on size and profile of risk related with their activities is performed. Risk management processes are consistent throughout the Group and adapted to the complexity of the risk profile of individual entities, in accordance with the principle of proportionality. 31 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Compliance risk Compliance risk is the risk resulting from breaching laws, internal regulations and market standards in the processes functioning within the Bank. Compliance risk can lead to criminal or administrative sanctions, material financial losses, diminished reputation, reduced brand value, reduced development potential and inability to perform contracts, as well as limitation or loss of the ability to conduct business activities. There is a separate unit for compliance matters functioning within the Bank , the Compliance Department, organisationally and operationally independent and subordinated directly to the President of the Management Board. Compliance Department is the key element of ensuring compliance within the Bank. The Bank ensures compliance through application of suitable control mechanisms and compliance risk management process coordinated by the Compliance Department. Within the control function, the Compliance Department designs and supervises the implementation of control mechanisms with the aim to ensure compliance with law, internal regulations and market standards. The Compliance Department autonomously applies some of such control mechanism and performs independent monitoring of their compliance by other organizational units of the Bank, as well as reports the results of this monitoring. The compliance risk management process includes the following stages: identification, assessment, control, monitoring and reporting of the compliance risk level. Within the control function, the Compliance Department ensures compliance, in particular through:  current vertical verification on a continuous basis within risk-based approach on selected processes operating at the Bank (ex-ante activities),  vertical testing, including monitoring of adherence to selected on risk-based approach control mechanisms, performed in the case of completed activities within selected processes functioning at the Bank (ex-post activities), within the scope specified in the Regulations of functioning of the Compliance Department at Bank Pekao S.A. As part of compliance with laws, internal regulations and market standards each employee of the Bank is obliged to apply appropriate control mechanisms and to perform independent monitoring of adherence to control mechanisms , within the scope of duties assigned to him/her. The assumptions of the compliance risk management process were defined in developed by the Management Board and approved by the Supervisory Board, the Compliance Policy of Bank Pekao S.A. and Regulations of functioning of the Compliance Department at Bank Pekao S.A. There are following key elements supporting compliance risk management process:  supervision of the Supervisory Board and responsibility of the Management Board for the effective management of compliance risk and observance of the Compliance Policy of Bank Pekao S.A.,  responsibility of the Bank’s employees for ensuring compliance within the scope of their duties,  properly defined organizational structure, including appropriate location of the Compliance Department,  internal regulations on compliance matters,  training,  constant cooperation between the Compliance Department, and the Internal Audit Department and other internal control system units. The reports on performance of tasks by Compliance Department together with the level of assessed compliance risk are presented to the Management Board and Supervisory Board. The oversight of compliance risk related to the activities of subsidiaries is performed in the Bank. Implementation and application of the compliance risk management standards are key factors in creating the enterprise value, reinforcing and protecting the Bank’s reputation, and winning public trust in the Bank’s activities and its standing. 32 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 7.3 Capital adequacy Bank Pekao S.A. Group and Bank Pekao S.A. Capital ratios are the basic measure applied for the measurement of capital adequacy according to Regulation of the European Parliament and of the Council (EU) No 575/2013 of June 26, 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012, which entered into force since January 1, 2014 together with further amendments, as well as Commission Implementing Regulations or Delegated Regulations (EU) (CRR Regulation). Capital ratios, capital requirements and own funds have been calculated in accordance with the above mentioned CRR Regulation using national options defined in article 171a of The Banking Act, Act of 5 August 2015 on macro-prudential supervision over financial system and crisis management in financial system (Act on macro-prudential supervision), as well as regulations of minister in charge of the finance institutions. According to law, the Group and the Bank are required to maintain minimal values of capital ratios resulting from Pillar I level (CRR Regulation), capital requirement of Pillar II resulting from The Banking Act and combined buffer requirement resulting from Act on macro-prudential supervision. Minimal value of capital ratios on Pillar I level are:  Total capital ratio (TCR) in amount of 8%,  Tier I capital ratio (T1) in amount of 6%,  Common Equity Tier I capital ratio (CET 1) in amount of 4.5%. Combined buffer requirement as at 31 December 2023 consists of:  Capital conservation buffer in amount of 2.50%,  Countercyclical capital buffer in amount of 0.02% 4 ,  Other systemically important institution buffer in amount of 1.00%,  Systemic risk buffer in amount of 0.00% 5 . On Pillar II, Pekao Group has no additional capital requirement (P2R). Together, the Group and the Bank are obliged to maintain:  Total capital ratio (TCR) in amount of 11.52%,  Capital ratio Tier I (T1) in amount of 9.52%,  Common Equity Tier (CET 1) in amount of 8.02%. The capital ratios of the Group and the Bank were significantly above the minimum required by the law. 4 Countercyclical capital buffer was calculated as of December 31, 2023 at the level 0.0247% for Bank and 0.0216% for Group. 5 According to the Regulation of the Minister of Finance, the systemic risk buffer was abolished on March 19, 2020. The buffer value applicable until that date was 3% of the total risk exposure amount for all exposures located only in the territory of the Republic of Poland. 33 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Bank Pekao S.A. Group As of December 31, 2023 Group total capital ratio amounted to 16.8% and common equity Tier I ratio amounted to 15.2%. The table below presents the basic information concerning the Group capital adequacy as of 31 December1, 2023 and 31 December, 2022. CAPITAL REQUIREMENT ( mln PLN) 31.12.2023 31.12.2022 () Credit Risk 10,393 10,027 Market Risk 109 106 Counterparty credit risk including CVA 154 228 Operational risk 1,678 1,360 Total capital requirement 12,334 11,721 OWN FUNDS (mln PLN) Common Equity Tier I Capital 23,503 23,389 Tier II Capital 2,434 2,707 Own funds for total capital ratio 25,937 26,096 Common Equity Tier I Capital ratio (%) 15.2% 16.0% Total capital ratio TCR (%) 16.8% 17.8% () Data for December 31, 2022 have been recalculated taking into account the retrospective recognition of part of the profit for 2022, in accordance with the EBA position expressed in Q&A 2018_3822 and Q&A 2018_4085. Total Capital Ratio of Pekao Group as at the end of December 2023 was lower by 1.0 p.p. compared to the end of December 2022, mainly due increase of total capital requirement by 5.2%. Common equity Tier I Capital Ratio of Pekao Group as at the end of December 2023 was lower by 0.8 p.p. compared to the end of December 2022. Decrease of own funds for total capital ratio results mainly from amortization of subordinated bonds A series and B series (during final 5 years of maturity of the instrument). Bank Pekao S.A. As of 31 December, 2023 Bank total capital ratio amounted to 19.4% and common equity Tier I ratio amounted to 17.6%. The table below presents the basic information concerning the Bank capital adequacy as of 31 December, 2023 and 31 December, 2022. CAPITAL REQUIREMENT ( mln PLN) 31.12.2023 31.12.2022 () Credit Risk 9,028 8,911 Market Risk 103 106 Counterparty credit risk including CVA 154 228 Operational risk 1,539 1,243 Total capital requirement 10,824 10,488 OWN FUNDS (mln PLN) Common Equity Tier I Capital 23,858 23,418 Tier II Capital 2,434 2,707 Own funds for total capital ratio 26,292 26,125 Common Equity Tier I Capital ratio (%) 17.6% 17.9% Total capital ratio TCR (%) 19.4% 19.9% () Data for December 31, 2022 have been recalculated taking into account the retrospective recognition of part of the profit for 2022 (confirmation of the financial results by the General Shareholders Meeting), in accordance with the EBA position expressed in Q&A 2018_3822 and Q&A 2018_4085. Total Capital Ratio of the Bank as at the end of December 2023 was lower by 0.5 p.p. compared to the end of December 2022, mainly due increase of total capital requirement by 3.2%. Common equity Tier 1 Capital Ratio of Bank as at the end of December 2023 was lower by 0.3 p.p. compared to the end of December 2022. Decrease of own funds for total capital ratio results mainly from amortization of subordinated bonds A series and B series (during final 5 years of maturity of the instrument). 34 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 7.4 Bank Pekao S.A. on the Polish banking market Bank Pekao S.A. is a universal commercial bank offering all financial services available in Poland for individual and institutional clients. A wide range of products, innovative solutions and individual approach ensure comprehensive financial support for clients and an integrated customer service model is a guarantee of the highest quality of services and optimal adjustment to changing customer needs. Since 2017, Bank Pekao S.A. is part of the PZU S.A. capital group, the largest financial institution in Central and Eastern Europe. A wide product offer, innovative solutions and individual approach provide comprehensive financial service to clients and the integrated customer service model provides the highest quality of services and their optimal adaptation to changing needs. The Bank has measurable advantages that allow it to compete effectively on the market and strengthen its market position in the strategic areas of the Bank's operations. The Bank offers competitive products and services on the Polish market, and high level of customer service and a well-developed distribution network. BUSINESS MODEL The Bank’s business model is based on customer segmentation with the following groups of customers: • RETAIL BANKING AND PRIVATE BANKING – serving individual clients, including affluent private banking clients and micro enterprises. Private banking clients are offered investment advisory through private banking centers and remote channels, while all individual clients and micro-enterprises are served through a wide network of branches and partner outlets supported by market-leading remote service channels, including digital channels, • ENTERPRISE BANKING – providing financial services to clients from small and medium-sized enterprises sector that are served by relationship managers with the support of product specialists. The service is carried out in specialized Business Customer Centers, Corporate Centeres and universal retail branches. Customers are offered with products and services tailored to their individual needs based on solutions proven in corporate banking and adapted to the needs of the enterprise segment, • CORPORATE AND INVESTMENT BANKING – providing financial services to large enterprises (segmentation by revenues of companies), public sector entities, financial institutions and entities from the commercial real estate financing sector. Corporate and investment banking clients are served by relationship managers with the support of product specialists. Distribution channels The Bank offers to its clients a broad distribution network with ATMs and outlets conveniently located throughout Poland as well as a professional call center and a competitive online and mobile banking platform for individual, corporate and micro- enterprises. 31.12.2023 31.12.2022 Total number of outlets 574 597 own outlets 493 515 partner branches 81 82 Total number of own ATMs 1,306 1,328 The number of accounts At the end of December 2023, the Bank maintained 7,977.7 thousand PLN denominated current accounts, 366.3 thousand mortgage loan accounts and 583.8 thousand “Pożyczka Ekspresowa” ( Express Loan) accounts. (in thousand) 31.12.2023 31.12.2022 Total number of PLN current accounts () 7,977.7 7,455.2 of which packages 5,665.4 5,330.5 Number of mortgage loans accounts () 366.3 371.9 of which PLN mortgage loans accounts 343.8 347.0 Number of Pożyczka Ekspresowa loan accounts () 583.8 582.5 () Number of accounts including accounts of prepaid cards. () Retail customers accounts. () Pożyczka Ekspresowa, Pożyczka Ekspresowa Biznes. The data presented according to the business model based on the managerial model in which the main criterion for dividing the Group's reporting is the classification of the client depending on his profile and service model. RETAIL BANKING AND PRIVATE BANKING 35 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Strategy - The „Customer” pillar We are intensively developing digital channels as well as quick and convenient service processes. We seek to enable retail clients to handle almost any matter online. The digitization rate of nearly 100% is one of the key strategic aspirations. The PeoPay mobile application becomes the main channel of contact with the client. We plan to make even greater use of advanced data analytics and modern sales support tools in order to personalize the offer. improve service quality and increase the tendency to recommend our services. The key measure of success that we strive for is a leap advance in customer satisfaction rankings. Development of electronic and mobile banking In 2023, the number of active mobile banking customers increased by 379 thousand to 3.1 million and was 14% higher than a year ago and 31% higher than two years ago. The number of active mobile customers using the PeoPay application increased by 433 thousand to 2.9 million and was 18% higher than a year ago and 41% higher than two years ago. () Unique user actively using electronic banking is a user who logged in to the system and the mobile service m.pekao24.pl. at least once during the last quarter (in case of using different mobile channels the client is counted only once). () Unique user PeoPay application who logged in to the system PeoPay at least once during the last quarter. In 2023, the number of corporate customers actively using electronic banking increased by 26 thousand to the level 244 thousand. The number of active corporate mobile banking customers increased by 57 thousand to the level of 144 thousand. 10 th birthday of the PeoPay Application The PeoPay application is a quick and safe access to your personal and company account, cards and savings from your smartphone. This is one of the first mobile banking applications on the Polish market. Over 3.6 million PeoPay applications are already installed on our customers' phones. The PeoPay application is a bank branch in the phone, because it offers a wide range of services used by 2.9 million active users. The most popular are mobile contactless payments, purchases of transport tickets and motorway tolls. The ability to personalize PeoPay makes it even more unique. PeoPay is appreciated on the market by both experts and the Bank's customers. It was awarded in the "Institution of the Year 2023" ranking organized by Moje Bankowanie in the categories "Best Mobile Application", "Best Internet Banking" and "Best Remote Account Opening Process". The PeoPay application also took second place in the ranking of banking applications in Poland. PeoPay is one of the best-rated financial applications available in Google Play and AppStore. 36 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In 2023, we introduced the following solutions in electronic banking: new functionalities of the PeoPay and Pekao24 applications:  a new self-service "I forgot my Pin" process on the PeoPay login screen, thanks to which the customer can regain access to the application himself,  the process of selling a housing account for children 13+ in the Parent Panel,  ability to redirect the customer during service by an employee to the PeoPay application or Pekao24 website - to any screen in the application or in website, including sales processes,  a new version of the currency exchange office,  new features in transfers: execution of Sorbnet instant transfer, execution of split payment with a future date - open and hidden split payment, transfer between the accounts of a natural person and those run as a sole proprietorship, development of functionalities for companies in PeoPay and Pekao24:  ability to update company data from PeoPay and Pekao24,  application for an auxiliary account in PLN and foreign currencies for clients who are sole proprietorships,  launching the Merchant Portal for companies leasing terminals, which enables handling payments and settlements of payment transactions,  notifications for corporate clients, integration of Pekao24 with the Księgowość z Żubrem website, application for a debit card for companies, safety-enhancing features:  possibility of verifying the identity of a Bank employee in the PeoPay application and the Pekao24 website by the customer during a telephone conversation,  device counter allowing to install PeoPay on a maximum of three devices, process improvements in PeoPay and Pekao24:  improvements in complaint processes,  providing new landing pages for applications for co-financing for a nursery, family care capital and a trusted profile, PeoPay and Pekao24 personalization and ergonomics:  ability to set application background and avatars in PeoPay,  new card images,  simplifying navigation in Pekao24 - creating a profile menu and switching the context between individual and company profiles. We also developed the PeoPay Kids application, to which we added new personalization options (additional skins), an educational module (an educational game), and released a demo version of the application. Strategy - The „Growth” pillar We strive for business growth in the most profitable market segments product groups and areas of untapped potential, which will result in improved profitability. i.e. consumer finance and in the micro-enterprises segment. Over the next four years, Pekao wants to acquire over 400 thousand individual customers every year and increase its market share in cash loans. Moreover we will seek to rejuvenate the demographic structure of the retail customer base. The goal is to acquire over 600 thousand customers under 26 years of age by 2024. We also focus on digital growth in investment products . We are also strengthening business synergies with the PZU Group, which will result in an increase in sales of insurance products and a twofold increase in the gross written premium by 2024. 37 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Number of clients and accounts In 2023, we opened 583 thousand accounts for individual customers and this is the best result of the acquisition of accounts for individual customers, the sales dynamics amounted to +5% y/y. New customers account for 72% of account sales, and over 127 thousand accounts were created for selfies, which is an increase of +27% y/y. We also achieved very good acquisition results among young customers aged up to 26, we opened 204 thousand for young people, which constitutes 35% of total accounts. Thanks to an attractive offer supported by marketing activities, we are the market leader in terms of net increase in accounts year-on-year (according to data after the third quarter). In 2023, the number of new Świat Premium accounts, dedicated to customers who deposit savings above PLN 200 thousand on various savings products of the Bank, reached the level of 28.6 thousand, which is an increase of over +26% compared to 2022. The good acquisition results were influenced by the marketing campaign of Konto Przekorzystne with a high-interest Savings Account and the television campaign "Lato pełene swobody" of the holiday package - Konto Przekorzystne with a free gold card for the account. We launched subsequent editions of online account opening promotions, under which customers could receive a bonus of up to PLN 200 for opening an account and actively using a debit card. We are consistently developing our offer addressed to young customers up to 26 years of age. On the new communication platform " Jeśli nie teraz to kiedy..." we present young people, safe, modern and comprehensive financial solutions that will make it easier to realize their passions, goals and dreams. Our offer includes the "Musician's Passion: If not now, when will you get carried away by music?" option, thanks to which customers can order a card with a musical image and choose a musical background in the PeoPay application. We was a strategic partner of the concert "Jimek and the guests: History of Polish hip-hop II. Symphonic rap in Silesia", which took place at the Silesian Stadium in Chorzów. For music lovers, we have prepared a special zone with a basketball court, dunk shows by World Champion Piotr "Grabo" Grabowski and the opportunity to meet Radzimir Dębski. In 2023, thanks to the expansion of the PeoPay KIDS application with new functionalities, we developed financial education among the youngest. The educational game available engages and introduces children to the world of finance in an attractive way. During the game, the child acquires knowledge about finances by solving quizzes, answering questions and completing interesting tasks. To start with, we have made the first three seasons available, the next seven will be made available gradually in the application. In addition, we have prepared offers with attractive interest rates on funds on the Moje Skarb savings account and promotions for opening an account addressed to parents. The Bank's involvement in pro-family programs, including accepting applications for the 500+ parental benefit, encouraging parents to open accounts and transfer pocket money to children's bank accounts, also contributed to the high acquisition of accounts for young people. We continue our special offer for Ukrainian citizens, under which maintaining a Konto Przekorzystne, using an account card and cash withdrawals from all ATMs in Poland as well as outgoing and incoming transfers from banks in Ukraine are free of charge, until the end of 2025. In 2023, we opened 41 thousand accounts for Ukrainian citizens. Payment cards In 2023, we achieved the best credit card sales result and recorded a +65% increase y/y. At the end of 2023, over 125 thousand people used the Żubr Credit Card. customers. Numerous promotions encouraged the use of payment cards, including the Mastercard Bezcenne Chwile program, in which customers could gain additional points worth up to PLN 800 (in the spring edition) and PLN 600 (in the autumn edition), and the Holiday Lottery, in which holders of debit cards and Mastercard credit card users could win vouchers for a dream trip worth PLN 30 thousand every week, electric bikes and vouchers for purchases in a popular chain of sports stores. Nearly 100 thousand customers took part in the Lottery. Also in 2023, we recorded an almost 6-fold increase in credit card sales to business customers, including: thanks to the implementation of a new card sales process and an attractive offer, including: MOTO Biznes cards with a promotional interest rate of 9.99% and reimbursement of expenses for payments at gas stations of up to PLN 600 per year. Lending products In 2023, the value of cash loans granted measured by net volume increased to PLN 5.2 billion, i.e. by +16.4% compared to 2022. In terms of the volume of signed contracts, sales increased by +20.1% to PLN 5.7 billion and was higher than the growth dynamics in the banking sector of +13.7%. 38 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In 2023, sales of cash loans in electronic channels reached a record result of PLN 3.8 billion and were higher by +31% y/y, while in the fourth quarter of 2023, 85% of cash loans were concluded in electronic channels. This was possible thanks to the development and increasing the availability of remote credit processes. For new customers who have not yet had any product in our Bank, we have made available on the Pex Prospekt website (pekao24.pl) the possibility of obtaining a loan online using remote selfie authorization or as part of open banking. We supported loan sales with advertising campaigns "Weź wygodną pożyczkę gdzie chcesz i na co chcesz " on TV, VOD, the Internet, social media and the Bank's electronic channels. In 2023, sales of Loans in the account increased by +31% compared to newly concluded contracts in 2022, thus reaching the number of 40.9 thousand concluded new contracts with customers. We are the only one in Poland, in cooperation with Bank Gospodarstwa Krajowego, to grant a loan to finance tuition fees for paid medical studies. Students can benefit from interest subsidies, loan guarantees, and full or partial loan forgiveness. By the end of 2023, we have concluded nearly 3 thousand loan agreements and disbursed PLN 133 million of loan tranches. Mortgage loans In 2023, sales of housing loans amounted to PLN 10.4 billion and were at the record level seen in 2021. In 2023, we strengthened our market position and took second place in the banking sector in terms of the sales volume of mortgage loans throughout the year, and in August, thanks to the very good start of the 2% Safe Loan offer, we achieved first place. We were one of the first banks to introduce Safe Credit 2% as part of the government program "First Apartment". The loan was very popular among customers, who deposited over 51 thousand number of applications which constitutes 50% of all applications obtained in the entire banking sector. The total volume of contracts signed at the end of 2023 was PLN 7.2 billion. We have adapted and updated our mortgage loan offer on an ongoing basis to changing market conditions and needs. As part of the "Mieszkanie bez wkładu własnego" program with a guarantee from Bank Gospodarstwa Krajowego, we changed the conditions and enabled a wider group of customers to apply for financing and offered attractive price conditions. At the beginning of October, the Bank's offer also included a new offer of settlements for borrowers with active housing loans denominated in CHF, which are in the Bank's portfolio almost entirely as a result of the merger of a separated part of Bank BPH SA in 2007. The program met with great interest, nearly 70% of customers who have responded to the Bank's offer so far have accepted the settlement proposal. In 2023, we transferred some mortgage loan receivables to Pekao Bank Hipoteczny. The total number of loans transferred so far is over 9.8 thousand worth PLN 1.9 billion. Business clients loans In the 2023, new sales of financing to business customers amounted to PLN 2.3 billion and were +26% higher y/y. The dynamic increase in new sales of bank loans in the business segment in the third quarter of 2023 by +48% y/y to the level of PLN 1,2 billion was supported by the implementation of the quick risk assessment path, which allows for quick calculation of the available limit and quick disbursement of a loan or revolving limit, implementation of a loan to maintain financial liquidity by agricultural producers and marketing activities supporting the development of relationships with customers. 39 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Development in the area of insurance products In 2023, in the area of bancassurance, we implemented projects extending the availability of the offer to customers in various distribution channels and related to the process of easy renewal of motor insurance for the next period. Sales of motor insurance and life insurance are available in all channels. We provide credit card insurance to private segment customers. In 2023, we collected +14.6% more premiums from the sale of protection insurance than in 2022. We recorded great dynamics in cash loan insurance, with 21.3% more premiums y/y and a 3-times increase in sales of travel insurance. The share of mortgage loans sold with insurance (for which insurance could be offered) remained at a stable high level of 92%, and in the case of cash loans it amounted to 40% (an increase y/y by 1.6 percentage points). In the area of assurbanking, we have consistently worked on expanding the scale of operations by implementing the Bank's product acquisition processes in subsequent PZU branches. In 2023, we acquired 10% more customers in the assurbanking area compared to 2022. Deposit, brokering activity and sale of investment products At the end of December 2023, the total value of deposits held by individual clients (including Private Banking clients) and business clients amounted to PLN 145.1 billion, an increase of PLN +3.3 billion (+2%) compared to the end of September 2023, and PLN +14.5 billion (+12%) compared to December 2022. In 2023, promotions on savings accounts and Moje Skarb accounts were popular among new individual customers. The total balance of funds deposited in these accounts increased by PLN 2.4 billion (over +18%) during the year. Customers also set up a record number of over 250,000. new savings accounts and Moje Skarb accounts. Customers expecting higher income from deposited funds and accepting the possibility of investing part of their savings in investment products chose the Investing Deposit, which automatically transfers funds from a term deposit to an investment fund selected by the customer. By the end of 2023, customers had invested over PLN 3 billion on this deposit. We actively offered a new savings product, Konto Mieszkaniowe, which was implemented as part of the new government First Apartment Program. At the end of 2023, we had opened 2 thousand account. In 2023, we also started selling State Treasury Bonds in the Bank's branches. Total sales in all channels amounted to close PLN 9 billion. In the area of investment products, we achieved the highest net sales in history of PLN 11.5 billion. In the end of 2023, we introduced the following investment products to our offer for individual clients: - Structured product with full capital protection on the redemption date in PLN: Capital Protection Certificate Linked to Shares of BMW AG and Volkswagen AG for 1 year and 3 months/1 year and 6 months in PLN, - Structured product with full capital protection at maturity in EUR/USD: Two-Year Bond with 100% Worst Of Capital Protection Linked to shares of Carrefour SA and TotalEnergies SE in EUR/USD, - Structured product with full capital protection on the redemption date in PLN: Capital Protection Certificate Linked to shares Walmart Inc. and Siemens AG for 1 year and 6 months in PLN, 40 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - Two-year Certificate with 100% Capital Protection Only at Worst Of Maturity Linked to shares of NESTLE SA and HEINEKEN NV, - Two-year Worst Of Certificate Linked to Shares of L'Oreal SA and Roche Holding AG with Capital Protection Only at Maturity in EUR/USD, - Structured product with full capital protection on the redemption date in PLN: Capital Protection Certificate Linked to Advanced Micro Devices and Microsoft Corporation Shares for 2 years in PLN, - Structured product with full capital protection on the redemption date: Two-Year Certificate with 100% Capital Protection Only at the Worst Of Maturity Date Related to LVMH MOET HENNESSY LOUIS VUITTON SE and CIE FINANCIERE RICHEMONT SA Shares in PLN, - Structured product with full capital protection on the redemption date in PLN: Certificate with Capital Protection Linked to Alphabet Inc. Shares. - Class A, Microsoft Corporation and Nvidia Corporation for 1 year and 3 months in PLN, - Structured product with full capital protection on the redemption date in PLN: Annual Certificate with Capital Protection Linked to Shares of Samsung Electronics Co., Ltd., Apple Inc. and Nvidia Corporation in PLN, - Structured product with full capital protection at maturity in USD: Two-Year Certificate with 100% Capital Protection Only at Worst Of Maturity Linked to Samsung Electronics Co Ltd and Alphabet Inc Class C Shares in USD, - Structured product with full capital protection at maturity in EUR: Two-Year Certificate with 100% Capital Protection Only at Worst Of Maturity Linked to Shares of Tesla Inc and Toyota Motor Corp in EUR, - Structured product with full capital protection on the redemption date: 15-month Share-Linked Certificate: Mercedes-Benz Group AG, Pfizer Inc and Ubisoft Entertainment SA with Capital Protection Only at Maturity in PLN, - Structured product with full capital protection on the redemption date in PLN: Certificate with Capital Protection Linked to shares of McDonald's Corporation and Nestlé S.A. for 2 years in PLN, - Structured product with full capital protection on the redemption date in PLN/EUR: Capital Protection Certificate Linked to share Airbus SE and FedEx Corp., for 2 years, - Structured product with full capital protection on the redemption date in USD/PLN: 2-year Certificate with Capital Protection on the Redemption Date Linked to shares MasterCard Inc. and Visa Inc., in USD, We have prepared preferential price conditions for clients purchasing investment products via Internet applications and actively encouraged clients to use remote channels for their ongoing service. 41 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. ENTERPRISE BANKING Enterprise Banking consists of two segments: Small and Medium Enterprises (SME) and Medium Enterprises (MID) segments. In the 2023 we focused on the automation and digitization of the credit process and the development of electronic banking functionalities enabling customer self-service. Strategy - The „Customer” pillar We put the customer and his needs at the center of our activities. intensively develop digital channels and fast and convenient service processes. To an even greater extent, we will use advanced data analytics and modern CRM tools to support sales, which will allow us to better adjust the offer improve the quality of service and increase the tendency to recommend our services. Lending activities and customer financing In 2023, the dynamics of the loan portfolio volume was +3.6% y/y, which translated into an increase of +PLN 1.2 billion. The increase in the value of the financing portfolio volume is visible both in the segments of bank loans, leasing and factoring. In 2023, the value of new loans sold (without renewals) in the SME segment reached PLN 6.9 billion, maintaining the high level from the previous quarters and 2022. In the MID segment, the value of new loans sold (excluding renewals) amounted to PLN 14.0 billion. As part of cooperation with the Agency for Restructuring and Modernization of Agriculture, we have introduced two new loans to our offer: liquidity and purchase loans. They will allow for comprehensive support for farmers, including: on the use of subsidized interest on loans and securing the repayment of loans granted to finance part of the investment costs with a guarantee or surety (purchase loan) or counteracting the threat of loss of financial liquidity due to restrictions on the agricultural market caused by the aggression of the Russian Federation towards Ukraine (liquidity loan). The interest rate on these loans is 2% per annum. Customer acquisition We have maintained a high level of new customer acquisition, in the SME segment we acquired over 3 thousand customers and over 700 new customers in the MID segment. In 2023, we launched an application thanks to which internal processes related to acquisition and product parameterization for new customers were automated. Transactional and product activity In 2023, we developed the PekaoBiznes24 self-service zone, launched a fully automatic process of managing access to the card module, in which we made PIN distribution available to the user's phone via SMS. We have modified the handling of the auto-withdrawal product and introduced additional options for managing ordered transfers in foreign exchange. We have also improved the management of personal data of electronic banking users, including granting authorizations to new electronic banking users. 42 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. CORPORATE AND INVESTMENT BANKING The Corporate Banking includes corporate segments, significant capital groups (the so-called large corporations), public sector clients, financial institutions as well as commercial real estate and specialized financing. The Pekao Group is a leader in these segments. It has a competitive advantage resulting from experience, unique staff, specialized knowledge and processes and the potential to co-finance large projects based on a very strong liquidity and capital position. The Bank provides both the comprehensive services of a universal bank and the services in such areas as leasing, factoring, investment advisory services, advisory in M&A as well as highly advanced treasury, capital market products and custody services. A wide range of products and services, innovative solutions, customised approach and the comprehensive financial services for the largest enterprises, institutions and public sector units are appreciated by clients and decide about the strength of corporate banking of Bank Pekao S.A. CLIENTS At the end of the end of 2023, we serviced 6.6 thousand clients. We cooperate with the largest companies, we provide support in the field of substantive, operational and financial development of our clients both in everyday business and large strategic projects. Strategy Since 2021, we have been implementing a strategy providing for effective volume growth. using competitive advantages such as: in-depth sector expertise, specialist financing knowledge as well as the growing digitalization of processes. According to this Strategy, we want to maintain our leadership position and a high market share in revenues. Plans and ambitions of Corporate Banking rest on 4 pillars: Growth: • increase of x-sell. • high market share in the segment of large corporations. Effectiveness: • digitalisation and automation of processes. • promotion of self-service in digital channels. Clients: • specialist, customised service of complex transactions. • support in financing public sector projects. Responsibility: • responsible capital management. • support of sustainable economic development. An integral part of our business strategy is the adopted ESG strategy. Pursuing this strategy we want to engage in financing sustainable projects. support the energy transformation of our clients and their transition to a low-carbon economy. We want to achieve these goals. among other things. by financing the development of renewable energy sources (RES), entities operating in the sectors of new technologies, as well as by actively participating in the government and EU programs aimed at reconstruction and climate transformation. T he development and modernization of the Polish economy, supporting the service and use of state and EU programs. Our approach to growth is focused on the continuous development of modern digital tools that support the activities of analysts, relationship managers and clients. In business areas, we engage in projects related to a responsible approach to the way in which business activity is conducted. We are also developing international banking and supporting the foreign expansion of our clients. While strengthening our effectiveness we focus on increasing the level of robotization and automation of internal processes as well as solutions available to clients. We are also continuously expanding the scope of self-service operations in digital channels and we are implementing more products available to corporate clients for online purchase. We are invariably building a customer-centric culture and we want to be the first choice bank for our clients. Therefore, we try to quickly and accurately recognize their needs. We provide advise based on our knowledge of client's profile, industry and segment. We try to increase the level of satisfaction of clients with their interaction with the Bank. 43 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Supporting sustainable economic development , we engage in private as well as in government and EU programs for economic recovery and climate transformation. An important area of our activity is also the cooperation with public sector entities, where, in addition to green investments and infrastructural projects, we are involved in financing socially responsible projects which have a positive impact upon the living standard of Poles. The fundamental of our business is responsible capital management . We do this relying on sector expertise, a flexible and specialized product offer, unique competences in structuring financing and extensive opportunities to operate on Polish and foreign financial markets. Such knowledge allows us to rationally and maturely select customers and the most appropriate products and transactions. Cooperation with financial institutions and custody services The Bank holds a leadership position in servicing domestic financial institutions, focusing on providing the highest quality services to insurance companies, investment funds, brokerage houses, financial sector infrastructure entities, cooperative banks as well as savings and credit unions. The range of services includes modern transactional banking products, clearing products, treasury products, custody services and services of depository bank, as well as the access to the comprehensive offer of the Pekao Group entities addressed to this segment of clients. In 2023, jointly with Pekao Leasing Sp. z o. o., we obtained financing to support Polish micro, small and medium-sized enterprises, in which we acted as the arranger and underwriter of financing: - EUR 150 million from the European Bank for Reconstruction and Development (EBOiR) - to support Polish enterprises affected by the effects of the Russian invasion of Ukraine, whereas 60% of the loan will finance green investments including, among other things: improvement of energy, resource and water efficiency, renewable energy and waste minimization, - EUR 100 million from the Council of Europe Development Bank - to finance the purchase of fixed assets and production equipment necessary for their core activities of enterprises, - EUR 68 million from the European Investment Bank - under this agreement, at least 20% of the funds are to be allocated to investments supporting climate protection and sustainable development of environment, - PLN 300 milion from Bank Gospodarstwa Krajowego for the purchase of vehicles, production lines, machines and equipment. The Bank cooperates extensively with banks from all over the world. We have over 1.3 thousand exchanged swift keys, direct or indirect access to the most important settlement systems, nostro accounts and we run loro accounts for a very large group of foreign banks. The Bank has infrastructure ensuring efficient foreign settlements in the 19 most important currencies. Transactional banking In 2023: - we recorded an increased volume of transactions processed under Pekao Collect service by +13%, and increased number of processed transactions by +4% (in 2023 we processed more than 170 million transactions with a total volume of over PLN 323 billion) as compared to the data for 2022. - we recorded an increased number of Elixir domestic transfers by +5% and the number of ExpressElixir instant transfers sent from PekaoBiznes24 which rose by 15% (we maintain about 20% market share for domestic payments), - we recorded an increased number of outgoing foreign transfers by 8% and an increased number of incoming transfers by 6%, - we processed nearly 6 million Direct Debit transactions, which is a comparable number to the whole 2022, while at the same time the transaction volume rose by 7.64% up to total amount of almost PLN 2,104 million. The key achievements in the area of transaction banking include: - introducing the possibility of making cash deposits in open form at the branches of Poczta Polska S.A., - implementing the automation of handling returns of postal orders for the Pekao Przekaz service, thanks to which the refunded amounts are automatically posted to customer accounts on the day the transfer is made from Poczta Polska, - introducing the service of providing PIN code for business cards with the use of SMS messages. In the PekaoBiznes24 system: - we enabled clients to execute money transfers under PekaoPłace service in the form of ExpressElixir instant transfers, - we provided new functionalities allowing clients to change orders or correct instructions to foreign payment orders, - we enabled clients to cancel by themselves domestic/foreign transfer orders waiting for the account to be credited. 44 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In the self-service zone in PekaoBiznes24: - we enabled all clients to open a new settlement account which the client can use immediately after signing the application. The client receives confirmation of opening the account in electronic form with the Bank's qualified seal, - we introduced new functionalities that allow you to order changes or correct the sent foreign transfer instructions, - we implemented the „Application for modification of authorisations for cards with the limit” that allows clients to modify on their own the authorisations for cards with the credit limit, - we implemented the "Application for the Autowypłata service" which gives our clients the opportunity to: independently add or remove accounts available in the service and modify the service execution modes. - we provided a new application for changing credit card limits, which allows clients to independently modify user rights to cards with a credit limit. We enabled the Bank’s branches to identify customers using the mID document, available in the mObywatel application. We have enabled clients to open an Auxiliary Account with interest based on WIRON (Warsaw Interest Rate Overnight), used to invest financial surpluses. We currently enable the use of the WIRON index to determine interest rates on both bank accounts and as part of the automatic funds investment service Trade finance In 2023, we maintained our leadership position in trade finance among banks in Poland. We recorded an increase in the number of completed documentary transactions and guarantees. We were consistently developing financing programs for suppliers with which our key clients cooperate, especially from the clothing, footwear industry and FMCG retail chains. The amount of newly granted guarantees and sureties rose by nearly 47% in 2023, whereas the exposure resulting from active transactions at the year-end was higher by 22% in comparison with 2022. The Bank financed invoices under the Open Financing Platform (OFP) in the total amount of nearly PLN 2.3 billion higher than in 2022. At the end of 2023, we launched the first version of a new back-office system that supports units handling bank guarantees. Cooperation with international clients The Bank granted loans and prepared comprehensive offers for short and long-term financing and the offers for hedging risk of international transactions, supporting the expansion of Polish enterprises on both European markets and in developing countries. The Bank’s clients can take advantage of the package of the most beneficial financial solutions adjusted to the model of the conducted business activity. In 2023, we signed an agreement with the National Chamber of Commerce aimed at supporting Polish entrepreneurs in activities related to the development of Polish exports and assistance in international economic expansion. We want to provide the entrepreneurs with access to the coordinated substantive care, expertise as well as financial and non-financial solutions supporting expansion into foreign markets, including African markets. Investment finance, structured finance and commercial real estate We offer our clients the services in the field of investment banking, structured finance and financing of commercial real estate projects, including financing of the construction of warehouses. The key projects financed by the Bank in 2023 include: - participation in a syndicated loan related to sustainable development goals for one of the largest groups operating in the media and telecommunications industry. The financing amounted to over PLN 10 billion, - financing provided for modernisation and development of the fiber optic network. Syndicated loan in the amount of PLN 5.1 billion, - syndicated loan in the amount of EUR 800 million granted to a leading international group from the catering industry, - a loan in project finance formula for the total amount of PLN 2.64 billion granted by the consortium of banks for the construction of a gas and steam block, - participation in a consortium of financial institutions and granting a loan for the total amount of PLN 2.5 billion related to sustainable development of the borrower, - increasing the amount of financing up to PLN 1 billion for an entity from the automotive industry, - increasing the amount of overdraft facility up to PLN 1 billion for one of the top companies from the energy industry, - a syndicated loan for the amount of EUR 125 million granted for refinancing the investments for development of a shopping centre in Warsaw, - a loan for building a logistic centre in eastern Poland. The financing amounted to EUR 43 million, 45 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - a loan for the amount of EUR 25 million granted to a leading company operating in the food industry for modernisation of production plant, - an investment loan in the amount of EUR 16 million for launching a factory in a company from paper industry. “Green financing”, - financing provided for the project of apartments for rent. The amount of financing was PLN 133 million. The Bank is consistent in supporting this segment of commercial real estate market - investment financing in the amount of PLN 95 million granted for building a wind farm. The project is being implemented with a leading company from the energy industry, - working capital financing in the amount of PLN 80 million granted to an entity from the biofuels sector, - increasing the line for guarantees from PLN 550 to 700 million for the key entity from the construction industry, - participation in a syndicated loan to finance and refinance the expenditures related to the ongoing investment program of a client from the construction materials industry. The Bank's participation is EUR 90 million. The Bank was the loan agent and security agent. Issuance of debt securities In 2023, the Bank participated in issuance of non-treasury debt securities (of corporate entities, banks and municipal units) for the total amount of more than PLN 51 billion, of which the following transactions deserve special attention: - the issue of three series of MREL Bank’s own bonds: 2-year (2NC1) senior preferred securities for the amount of PLN 750 million, 4-year (4NC3) non-preferred senior securities for the amount of PLN 350 million and 3-year (3NC2) non- preferred Bank’s own bonds for the amount of PLN 750 million, which the Bank carried out on its own, - the issue of 4-year (4NC3) green senior non-preferred Eurobonds of the Bank for the amount of EUR 500 million. The Bank also acted as the co-bookrunner. The funds obtained from the bonds issue will be used for financing or refinancing of projects qualified in accordance with the Bank’s Sustainable Finance Framework, - the issue of two series of sustainability-linked bonds for the total amount of PLN 3.49 billion for the biggest provider of integrated media and telecommunication services in Poland with maturity date in January 2030. The Bank was a co- arranger and co-bookrunner. The bonds will finance the implementation of the development strategy of the issuer's group, including the construction of assets producing clean energy and green hydrogen, and they are based on sustainable development goals, - the issue of 7-year Eurobonds for a leading multi-energy company in Poland for the amount of EUR 500 million, where the Bank was a global coordinator for Poland and co-bookrunner - the issue of three series of Eurobonds in the total amount of PLN 1.4 billion for an international financial institution, in which the Bank was the sole arranger, including the issue of Climate Awareness Bonds for the amount of PLN 400 million. The proceeds obtained from the issue are to be used for the issuer's lending activity which significantly contributes to limiting climate change in terms of eliminating or reducing greenhouse gas emissions, - the issue of 5-year Eurobonds for an international group from retail industry for the amount of EUR 375 million in which the Bank was the passive bookrunner, - the issue of two series of bonds for a company owned by an international automotive concern for the total amount of PLN 1.24 billion, where the Bank was the sole arranger and dealer, - the issue of two series of 6-year bonds for the leading company from the asset recovery industry for the total amount of PLN 570 million in which the Bank was the leader of the consortium, - the issue of 3,5-year and 3-year green bonds of a company owned by an international development group for the total amount of PLN 520 million in which the Bank was a co -arranger and dealer. The proceeds from the issue will be allocated exclusively to environmentally friendly investments, including energy-neutral buildings and renewable energy sources, such as solar and wind farms implemented for these projects, - the issue of short-term securities of a multilateral financial institution for the amount of PLN 500 million in which the Bank acted as the dealer, - the issue of three series (3-year and two series of short-term) bonds of a leasing company belonging to an international financial group for the total amount of PLN 500 million. The Bank was the sole arranger and dealer, - the issue of 3-year bonds for a company from the developer industry for the amount of PLN 220 million, in which the Bank was the co-arranger and dealer, 46 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - the issue of 3,5-year bonds of a company being the largest IT distributor in Poland for the amount of PLN 80 million for which the Bank acted as the sole arranger and dealer, - the issue of 3-year bonds for the top company from the Polish asset recovery sector for the total amount of PLN 70 million in which the Bank was the dealer of the consortium, - the issue of 3-year ESG KPI Linked bonds for the amount of PLN 65 million for a company operating in the fuel industry in which the Bank was the sole arranger and dealer, - the issue of 23 series of bonds of a leasing company from the Bank Pekao Capital Group, in EUR and PLN, for the total amount of PLN 9.4 million and the issue of 51 series of bonds of a factoring company from the Bank’s Capital Group, for the total amount being the equivalent in PLN and EUR of about PLN 24.2 billion. The Bank performed the role of a sole arranger and dealer in those transactions, - the issue of 3 series of short-term bonds of a mortgage bank from the Bank Pekao Capital Group for the total amount of PLN 600 million in which the Bank acted as the sole arranger and dealer, - the issue of 15 series of bonds of an enterprise involved in management of municipal waste and raw materials for the total amount of more than PLN 772 million, - the issue of 109 series of bonds of 24 municipal units for the total amount of nearly PLN 1.8 billion. Comprehensive service of public sector finances One of the elements of our strategy is to finance public sector and municipal projects. We render our services and we provide financing to self-government units, municipal companies, institutions of higher education as well as entities established as part of public-private partnership. We are actively involved in activities related to building and developing Polish infrastructure, including the support for sustainable development of the economy and environmental protection. We cooperate with 11 out of 12 Polish metropolises (92% market share) and we provide ongoing budget support for five of them. We cooperate with every fourth municipality in Poland (25% market share). We maintain business relationships with 92% of towns with county rights and we provide ongoing services to every fifth of them (21%). We also cooperate with every third county (37%) and with almost all provinces (94%). We are a major bank for state universities – 60 of them use our services. In 2023, we joined an international consortium that will finance the construction of a tram line in Cracow in the public-private partnership formula. The European Investment Bank, the European Bank for Reconstruction and Development and the Polish Development Fund also participate in this financing. Our participation in financing exceeds PLN 0,5 billion and it is the largest project implemented in this formula in the area of public urban transport. The project is of strategic importance to the city of Cracow in terms of development of the fast and low-emission urban transport We provided ESG funding to support the development of local government units, e.g. for: the city of Łódź in the amount of PLN 499,6 million, Lublin in the amount of PLN 250 million, Toruń in the amount of PLN 140 million, Zabrze in the amount of PLN 50 million, Siemianowice Śląskie in the amount of PLN 28 million and Sanok in the amount of PLN 20 million. As part of the public sector, we provided financing for municipal companies, including: for MPO Kraków (PLN 60 million) - working capital financing or Gdańskie Autobusy i Tramwaje (PLN 50 million). We also provided financing to the Regional Hospital in Skierniewice in the amount of PLN 30 million, and as part of the consortium with BGK (Bank Pekao's participation - PLN 115 million) for the Lower Silesian Center for Rehabilitation, Recreation and Sports and Wellness for Seniors and Disabled and Physically Active People Residents of the Copper Basin - a project with a total value of PLN 230 million. In 2023, we won a competition for offers to service the Łódź Province and the Górnośląskie Przedsiębiorstwo Wodociągów SA. European Passport Since 2023, we have the so-called a single European passport that allows you to provide cross-border banking services within the European Economic Area (EEA), without opening a branch. As a result, we will more actively support corporate clients operating outside Poland and acquire new clients in Europe. 47 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 7.5 Major areas of activities of the Group’s subsidiaries Bank Pekao S.A. is one of the leading providers of banking services and groups together a number of financial institutions active in the asset management, pension funds, brokerage services, transactional advisory, leasing and factoring markets. Below are described the areas of operations of the Group’s key companies from the financial sector. 7.5.1 Banking activity Pekao Bank Hipoteczny S.A. – Pekao Bank Hipoteczny Pekao Bank Hipoteczny (pekaobh.pl) Pekao Bank Hipoteczny is a specialist bank, focusing on granting mortgage loans and issuing covered bonds. Pekao Bank Hipoteczny is a specialist bank focusing on granting mortgage loans and issuing covered bonds. As part of the cooperation, portfolios of mortgage loans and bonds of local government units are transferred to Pekao Bank Hipoteczny, which may constitute security for mortgage bonds issued by Pekao Bank Hipoteczny. In 2023, Pekao Bank Hipoteczny completed transactions of purchasing and transferring mortgage receivables from Bank Pekao S.A. for a total amount of PLN 221 million. The transferred portfolio of mortgage receivables included loans granted in PLN, which were intended to finance the housing needs of individual persons. In order to build a safe asset portfolio, in 2023, bonds of local government units were also transferred from Bank Pekao. In accordance with the schedule of local government bond transfers in 2023, 71 transactions included the purchase and transfer of local government bonds with a total value of PLN 418 million. The net value of the loan portfolio (including the local government bond portfolio) at the end of 2023 amounted to PLN 3,060 million. Loans granted to enterprises and local government units accounted for 12.2% and 18.8% of the loan portfolio, respectively, while loans granted to individual customers accounted for 69.0% of the portfolio. In 2023, Pekao Bank Hipoteczny completed two issues of covered bonds. The total value of liabilities under covered bonds as at December 31, 2023 was PLN 2,213 million (including EUR 50 million). As part of the diversification of financing sources, Pekao Bank Hipoteczny issues bonds. The value of liabilities arising from the issued bonds as at December 31, 2023 amounted to PLN 394 million. 7.5.2 Assets management Pekao Investment Management S.A.– Pekao IM Pekao Investment Mangament S.A - Pekao TFI Pekao IM, in which Bank Pekao S.A. holds a 100% share, is an owner of Pekao Towarzystwo Funduszy Inwestycyjnych S.A.(Pekao TFI). Pekao TFI is the oldest investment fund in Poland providing customers with modern financial products and opportunity to invest on the Polish and the largest global capital markets. For many years, it creates savings programs, including programs offering additional savings for retirement under the third pillar, voluntary pension pillar. The Pekao TFI offer includes also a portfolio management service and Employee Capital Plans (PPK). The company has been entered into the PPK register, and its offer is available on the portal www:mojeppk.pl. As at 31 December, 2023, the net asset value of Pekao TFI investment funds (including PPK) amounted to PLN 24 billion and was higher by PLN 5 billion, i.e. 26% compared to the end of December 2022. The higher value of assets is influenced by the positive situation on capital markets. 7.5.3 Leasing activity Pekao Leasing Sp. z o.o. – Pekao Leasing Pekao Leasing - Pekao Leasing Sp. z o.o Pekao Leasing provides financial services supporting purchases and sale of fixed assets, i.e. vehicles, plant and equipment, and office space, both in the form of operating and finance leases. The company cooperates with Bank Pekao S.A. in the scope of leasing sales to customers who are also the Bank's customers. Pekao Leasing, under agreements with the European Investment Bank, offers financing for small and medium-sized enterprises on preferential terms. The company also cooperates with BGK S.A. offering financing for vehicles, machinery and equipment with a BGK guarantee. In 2023, the Company concluded 19 thousand new contracts. With the Polish leasing market growing by 16%, the value of assets leased by Pekao Leasing was 25% higher than in 2022 and amounted to PLN 7 billion, including: 56% - means of transport, 41% - machinery and equipment, 1% - real estate, 1% - other. 48 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 7.5.4 Factoring activity Pekao Faktoring Sp. z o.o. - Pekao Faktoring Pekao Faktoring Sp. z o.o. The company offers a full range of factoring services (including full and partial factoring), as well as services accompanying factoring, which include, among others: collecting information on the financial situation of debtors, collection, debt collection, settlement accounting and ongoing monitoring of payment execution. The Company's offer is complemented by the settlement of mass transactions, financial advice and consulting in the selection of the method of financing the activity, as well as granting loans and credits related to the factoring agreement. In cooperation, Pekao Faktoring develops the range of services for customers and new sales channels for products and services. As part of this cooperation, a factoring service is offered to micro entrepreneurs - the Bank's clients, based on a fully automated decision-making process. The company participates in the factoring limit repayment program with the support of Bank Gospodarstwa Krajowego S.A. – using repayment guarantees for partial and reverse factoring financing, granted as part of public aid from the BGK Crisis Guarantee Fund. Pekao Faktoring ranks first on the Polish factoring market with almost 20% market share. 7.5.5 Transactional advisory Pekao Investment Banking S.A. – Pekao IB Pekao Investment Banking S.A. (pekaoib.pl) Pekao IB provides highly specialized services for large and medium-sized enterprises and financial institutions. The scope of services provided by Pekao IB includes in particular brokerage services: accepting and transmitting orders to purchase or sell financial instruments, offering financial instruments, as well as consulting for enterprises in the field of capital structure, corporate strategy or other issues related to such structure or strategy, as well as consulting and other services in the field of mergers , divisions and takeovers of enterprises. In 2023, Pekao IB also acted as the global coordinator and co-bookrunner in three successful public offerings, including the IPO, which ended with the first debut on the Warsaw Stock Exchange since 2021. Particularly noteworthy is the advice in two closed processes of obtaining debt financing: in the process of obtaining debt financing in a transaction recognized by Project Finance International as the European transaction of 2023 and in the project of financing the energy transformation. Additionally, Pekao IB was an advisor to three successful mergers and acquisitions transactions. The company also acted as an intermediary in the public tender offer of a company listed on the WSE and provided bond issue services for eighteen entities. 7.5.6 Other financial services Centrum Kart S.A. - CK S.A. Centrum Kart S.A. - O nas The company provides comprehensive services related to, among others: with support for payment card management systems, transaction authorization and card personalization. The company mainly provides services for Bank Pekao S.A. and in cooperation with the Bank, implements projects aimed at expanding the Bank's product offer. In 2023, the most important projects implemented as part of cooperation with the Bank include the implementation by Bank Pekao S.A. handling payments with electronic wallets in the e-commerce channel. Krajowy Integrator Płatności S.A.– KIP Szybkie przelewy i płatności online | Tpay Bank has been the owner of shares constituting 38.33% of shares in Krajowy Integrator Płatności S.A., the owner of the fast online payment system Tpay (formerly Transferuj.pl). The company has the status of a national payment institution and is supervised by the PFSA. The activity of KIP consists in intermediating in the transfer of payments between the payer and the recipient. In 2023, the Company increased the scale of its operations in the area of online payments, service websites and looked for new areas for the development of services provided by KIP, including cooperation with the Bank. 49 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Pekao Direct Sp. z o.o. – Pekao Direct Strona główna - Pekao Direct Pekao Direct provides financial intermediation services and comprehensive services via alternative communication channels to clients of the non-banking sector. The company supports the Bank as its main client in the field of online banking, cards and product hotlines. Pekao Direct serves customers via alternative communication channels, including primarily by telephone, e-mail and chat. The main communication channel is telephone calls, in 2023 Pekao Direct handled almost 16 million calls, 23% more than in 2022. Pekao Direct participated in the process of setting up selfie accounts, in which it verified 127 thousand accounts opened for selfies, i.e. 27% more than in 2022. Managing marketing campaigns and selling banking products, including express loans and mortgage loans, is an increasingly important element of the services provided to Bank Pekao S.A. Pekao Financial Services Sp. o.o. – PFS https://www.pekao-fs.com.pl PFS provides transfer agent services as part of outsourcing to financial institutions in the field of operational and technological solutions. PFS specializes in servicing domestic and foreign investment funds, general and employee pension societies, as well as entities offering insurance products. The clients served by the Company include companies with an established market position. PFS, following changes in the OFE market, has become the only company that services OFE funds using the services of an external transfer agent. PeUF Sp. z o. o. – PEUF PeUF is a company 100% owned by Pekao Leasing Sp. z o. o. and acts as an insurance agent, providing insurance sales services. PeUF supports the Pekao Leasing portfolio in the scope of newly concluded insurance contracts. PeUF's activities include agency services related to insurance services for newly concluded leasing transactions, as well as policy renewal services. In addition to agency services, activities include: policy monitoring, claims settlements, and insurance terminations. In 2023, PeUF provided intermediation services for five insurance companies, and the value of commission from sold policies amounted to PLN 31 million and was 63% higher. 50 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 7.6 Investing in human capital Human Capital as a key asset The principles of the Bank’s policy in the area of Human Resources (HR) development are set by its mission and values considered as the key for the Bank sustainable growth. The Bank invests in training, professional development of employees , creation of a friendly work environment and it conducts questionnaire surveys on employees’ engagement and satisfaction. Significant area of the Bank’s HR policy is outstanding talents spotting within the organization and investing in development of their skills. Training and professional development We create learning opportunities and provide access to various forms of training for its employees. Educational activities focus on realization of in-class training programs, on-the-job learning, coaching and Virtual Class system allowing for distance learning in form of Webinars. In 2023, the main training priorities of the Bank were as follows:  professional knowledge development of the Bank’s employees including a strong focus on the development of future competencies,  leadership development - education for managers,  implementation of cybersecurity trainings,  realization of mandatory training programs required under internal and external regulations. We continued to realization of training projects related with implementation of adopted business strategies. Training programs for employees with high potential and training for new employees were conducted. In 2023 , we completed over 227 thousand of training hours (class room and virtual sessions), in which attended over 11 thousand of employees, his proves the effective implementation of products, methods, required regulations and customer care. E-learning courses and trainings were completed at a similar lever of over 279 thousand hours. For many years we have been investing in the education and development of employees, offering very wide opportunities for development and improvement of competences, which in the long run affect the achievement of individual professional success of employees and the development of key competences. Expanding the specialist knowledge of the Bank's employees, including strong emphasis on the development of future competences We care about the comprehensive development of our employees' competences so that they can fully use their potential.  "Academy of the Future" - we develop key competencies that are the basement of success in a modern work environment,  "Innovation Laboratory" - we analyse new products on the market, test new technological initiatives created at the Bank, also cooperating with external partners,  "Robotization Academy" - an original training program developed by our practitioners in cooperation with an external company. The program allows you to develop digital competences and use automation. Thanks to the acquired competences, you can independently build robots that will perform the most repetitive tasks,  Agility Forge - a program thanks to which each employee has the opportunity to acquire specialist knowledge in the field of agile methodologies (Agile path) and process optimization (Lean path). Each path supports competences, enables the extraction of potential and obtaining effectiveness in fulfilling a specific role related to improving and optimizing processes,  Banking Sales School - a program aimed at supporting effective sales behavior, improving competences in the area of up-selling, reaching new customers, conducting meetings and coping with difficult situations. Leadership development - education for managers In 2023, we continued and developed training and development programs for managerial staff:  Leadership Academy and Retail Manager Academy - programs are based on acquiring systematic knowledge and practically translating it into real actions and implementing key changes. The aim of the programs is not only to prepare management staff for the effective implementation of business challenges but also to strengthen competences in the changing reality, both in business and social aspects.  Leader of Change - is a continuation of the aforementioned programs and is dedicated to their participants. The objective of the programs is to introduce managers to what it is to build a position as an inspiring leader of change in the VUCA environment. The training program allows you to understand what authentic and natural leadership and management is and develop a practical, own, individual leadership and management style. 51 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Cybersecurity training We continue training our employees in the field of Cybersecurity, the aim of which is to provide knowledge about conscious and safe use of the Internet, both at work and in private life. Realization of mandatory training programs required under internal and external regulations In 2023, we carried out mandatory training, with particular emphasis on regulatory training in the areas of Bancassurance, MIFID 2 and the Mortgage Directive. Training related to regulatory areas constitutes 40% of training, which confirms the Bank's determination to train staff in line with the expectations of the market regulator and compliance with legal regulations. The Bank also organizes a series of training courses in the field of occupational health and safety, First Aid and Recognition of the Authenticity of Money, as well as many other programs related to external regulations. Development programs and initiatives In 2023, we implemented development programs and initiatives for employees aimed at providing support in the development of interpersonal and managerial competences. We implement the following development programs aimed at identifying, reviewing, verifying and developing current and future leaders.  Succession Plans - a program that ensures continuity of employment in strategic positions, implementation of long-term projects and minimization of operational risk,  Annual Employee Appraisal System – process of evaluation of the Bank’s employees which comprises appraisal of competencies, potential, personal development planning and business goals appraisal,  research on professional potential in various forms, such as online diagnoses based on methods of an assessment center and/or development center, the results of which are used in processes supporting decision-making regarding employment, promotion and employee development. We provide employees with development initiatives aimed at supporting professional development, skills, knowledge and competences, as well as a number of initiatives strengthening employee engagement.. As part of development activities in 2023:  we implemented a new development tool, CliftonStrengths®, within which we conducted individual coaching sessions and team workshops,  we continued the process of implementing team coaching to support teams in building effective relationships and achieving business goals,  we continued activities related to the Insights Discovery tool, systematically held group workshops and individual development meetings based on the results of ID. In 2023, we completed the implementation of development activities as part of the development path of the first edition of the Talents Up program, including (mastermind sessions, job crafting - group sessions and individual, individual coaching sessions, a series of workshops "How to consciously navigate emotions and thoughts using development techniques", project/job rotation, Agile in theory and practice - specialized course). "Without sugar" - program for Women. In 2023, we held weekly meetings and webinars regarding the development of personal and professional competences. In total, as part of the "No Sugar" Program, we organized 36 webinars, attended by over 5,000 people. Over 1.3 thousand people took part in training courses related to the development of technological competences, i.e. the "Closer to Technology" project - 7 webinars, and in 6 closed training courses in Excel and SQL took part 84 ladies. Over 100 people took part in the "Excel doesn't bite" training courses carried out in the 7 largest cities in Poland. In the area of the "No Sugar" Program, there is also a development program for Local Leaders, during which participants develop leadership competences and carry out activities in local communities. In 2023, we celebrated the 2nd Birthday of the "Without Sugar" Program, which was attended by almost 250 ladies in-store and 100 via the streaming platform. Pro-Wellness activities On the "Take your health by the horns!" website, we support and educate employees in 4 areas: healthy eating, physical activity, mental health and prevention. 52 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In the area of prevention, we have implemented two main programs:  "How to sleep to get enough sleep?" – a series of 4 meetings with an insomnia expert who talked about the quality of our sleep and its impact on physical health, cognitive functions and emotions. The meetings enjoyed great interest and a record number of participants at these events, which makes us even more aware of how important an element of our functioning is the quality of sleep and how much we need to take care of this area.  "100 questions for..." is a series of meetings with doctors of various specializations who shared their knowledge not only in the field of prevention but also on the actions we should take to care for our health. We continued the MiLOVE running with Żubr campaign - helping through running. Together we covered 363,324 charity miles, which contributed to supporting the charity goal in the amount of PLN 80 thousand. In meetings entitled "The ABC of mental well-being", which was dedicated to the ability of rest effectively, strengthen willpower and deal with things that are beyond our control. Employees had the opportunity to take advantage of free and anonymous consultations with a psychologist. Moreover, in cooperation with the University, we have started a project to examine the psychophysical condition of employees, the aim of which is to examine the level of psychophysical condition of employees and develop methods that will be effective in reducing the stress experienced at work. In 2023, we also implemented programs in the field of healthy eating, which disseminated knowledge on introducing an appropriate and healthy diet. Apprenticeship programs Our important goal is to obtain a certain number of graduates of the best universities in Poland and abroad, offering them career development within the organization: the network of branches and units of the Head Office of the Bank. We achieve these goals through:  Summer Internship Program “Akademia Żubra” addressed to students and graduates of universities. The program is implemented for a period of 2 months - it is a good start for students who want to learn about the functioning of one of the Bank's business areas. Participants actively support Bank’s units and implement individual projects. During the Program, the intern can become familiar with work in Retail Banking branches, SME and Corporate Business Centers,  “ Banking Champions” It is a program that allows interns to gain unique competences and practical experience in the area of finance and banking. Participants of the program have the opportunity to expand their skills in areas such as risk management, corporate and investment banking, data science, data analysis and big data, as well as new technologies and development,  IT Banking Champions – offer of internships in the IT area. The program is addressed to students of IT universities in Poland who want to create innovative solutions in the banking sector. Participants have the opportunity to cooperate on projects of the most omnichannel bank in Poland. Compensation policy The compensation strategy was developed in line with the business standards and values underlying the Bank’s mission and reflected in the internal regulations as well as it constitutes the basis for enhancing and protecting the Bank's reputation and creating long term value for all the stakeholders. The key regulation in this area is the Remuneration Policy of Bank Polska Kasa Opieki Spółka Akcyjna , the last update of which was approved by the Supervisory Board of the Bank by resolution of December 16, 2022. This policy reflects the mission and values in the Bank's approach to remuneration systems, including:  defines the compensation pillars, management of its structure, corporate and organizational processes,  confirms the compliance requirements of the compensation systems with the generally binding law,  defines the principles of market practice monitoring, and the approach to the matter of compensation systems which guarantees the sustainability of the Bank's functioning. The remuneration structure ensures a direct link between remuneration and performance by guaranteeing financial stability and variable remuneration levels appropriate to the Bank's financial capacity, setting performance-based remuneration levels and developing incentive systems foreseeable the minimum levels of the Bank's performance below which the bonus is not paid. Variable remuneration covers all remuneration components, the granting of which depends on the results, and its payment is directly dependent on individual achievements and the results achieved by the Bank and adjusted to the risk. Sustainable results contributing to the creation of long-term value for stakeholders relate to the actual results achieved and how they are achieved, with a view to measuring results consistent with shareholders' interests and profitability principles based on safe risk levels, sustainable risk management practices and a multi-dimensional performance analysis and quality of operation. 53 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In order to ensure the competitiveness of the remuneration structures, as well as their transparency and an effective and fair remuneration system, the Bank monitors market trends in terms of forms of remuneration and the level of remuneration offered on the market. Decisions on the remuneration system at the Bank are made taking into account the available data on market trends in the area of fixed remuneration as well as incentive systems. Such data is obtained from consulting companies offering financial sector analyzes.. In 2023, attention was paid to the analysis of wage coherence between women and men in identical positions, in order to make efforts to compensate for the pay gap existing at the Bank. The Bank also has a Remuneration Policy for Members of Supervisory Board of the Bank and the Management Board of Bank Polska Kasa Opieki Spółka Akcyjna, which sets out the framework principles and rules for determining, monitoring and controlling the remuneration rules and practices applied by the Bank in relation to the Members of its Supervisory Board and the Management Board of the Bank. The Remuneration Policy for Members of the Supervisory Board of the Bank and the Management Board of Bank Polska Kasa Opieki Spółka Akcyjna supports proper and effective risk management and does not encourage taking excessive risks exceeding the acceptable general risk level approved by the Bank's Supervisory Board; implementation of the Bank's management strategy and risk management strategy; mechanisms for managing conflicts of interest occurring in the Bank's operations and limiting them; as well as ensuring that remuneration and any related terms and conditions of employment that affect remuneration, including those relating to conditions for granting and payment of remuneration, are gender neutral, i.e. they are not differentiated on the basis of gender. As part of the remuneration system, employees are offered non-wage benefits ensuring fair treatment and consistency of the remuneration system. Each year, a report on the functioning of the Remuneration Policy at the Bank is prepared, which is then presented at the General Meeting of Shareholders in order to assess whether the functioning of the Remuneration Policy in force at the Bank, supports the development and security of the Bank's operations. Information regarding remuneration value of each Member of the Management Board is presented in the point 10, the section of the Management Board and the Supervisory Board Remuneration. The Subsidiaries of the Bank's Capital Group have remuneration policies adapted to the size and specificity of their activities and the remuneration principles. Incentive systems In the Bank, there are three main incentive systems: an Executive Variable Compensation System, a System based on Management by Objectives (MBO), and a system based on provisions of Corporate Collective Labour Agreement, which is based on quarterly bonuses, bonus for retail sales forces and incentive reward. The top management is covered by a variable remuneration system dedicated to people who have a significant impact on the Bank's risk profile. The aim of the System is to support the execution of the Bank’s operational strategy and to mitigate excessive risk conflicts of interest. Participant covered by the system may receive a variable compensation based on a bonus pool approach. The System provides a comprehensive performance measurement at individual level, level of his/her organizational unit and results of the entire Bank, as well as verification of the participant’s compliant behaviour with respect to law provisions, and standards adopted by the Bank and risk assessment. For reinforcement of care for long-term welfare of the Bank, under the system at least 50% of variable remuneration is provided in phantom shares based on the value of the Bank shares and at least 40% of the bonus is deferrable and paid after the end of the evaluation period it is payable for. Annual goals set for the Bank's top management as part of the incentive system ensure consistency with the strategy of introducing sustainable development risks into the business in the investment decision-making process, and are consistent with the goals of the Bank's business strategy and risk strategy, including environmental, social and governance risks. (ESG risk), are consistent with the Bank's corporate culture and values, risk culture, including in relation to the long-term interests of the institution, as well as with the measures used to prevent conflicts of interest, and should not encourage excessive risk- taking. The system of variable remuneration components is developed by Human Resources Division, with the involvement and participation of other organizational units of the Bank, including Legal Department, Compliance Department, Risk Management Division, Financial Division, and in consultation with Internal Audit Department. This is to ensure compliance with the regulations, the Bank's articles of association and the standards of ethical conduct or other standards of conduct applicable to the Bank, in such a way that legal, compliance and reputational risks mostly related to customer relations are properly controlled and managed. Variable remuneration systems implemented in the Bank's subsidiaries have schemes similar to the Bank for the division of remuneration into cash and financial instruments, taking into account general provisions and guidelines of market regulators regarding the sectors in which the subsidiaries operate. 54 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. MBO system covers employees employed under the management contract and refers in particular to the sales positions and to the managerial positions, which play a significant role in achieving the Bank’s commercial goals. Under the MBO system, employees receive individual goals for realisation, which result from the financial plan adopted for a given year and the Bank's key goals. The amount of the annual bonus depends on the level of implementation of these goals, as well as the result achieved by the Bank. Sales functions employees, in each quarter, can receive an advance payment towards the annual bonus in achieving of the set goals. The system based on the provisions of the Corporate Collective Labour Agreement (CCLA) applies to all employees who are covered by it. According to the provisions of CCLA the basis of the system is a quarterly bonus which is discretionary and depends on evaluation of employee’s performance, the level of commitment and the results achieved by the Bank in a given year, as well as the incentive bonus, which is granted for outstanding achievements in professional work. In 2023, guidelines for variable remuneration, i.e. the quarterly bonus for sales network employees covered by the CCLA. According to the guidelines, the employee bonus was awarded based on the employee's individual sales results, taking into account the qualitative component. Determining the final amount of variable remuneration of employees covered by the Guidelines depended on the results of assessing the compliance of the employee with achieving goals or tasks. Selections and Suitability Assessment Policy The Bank has a Policy of selecting candidates for the position of a member of the Management Board and the key function as well as assessing the suitability of proposed and appointed members of the Management Board, Supervisory Board and persons holding key functions at Bank Polska Kasa Opieki Spółka Akcyjna (Selection and suitability assessment policy) approved by the Bank's Supervisory Board on 30 December 2020. The aim of the Policy is to guarantee an optimal and uniform process of selecting candidates for the position of a member of the Management Board and the Key Function at the Bank, so as to ensure that tasks related to the implementation of the Bank's plans and business strategy are performed by persons who have the necessary knowledge, experience and skills, and who enjoy get a good reputation. The policy of selecting and assessing suitability also defines the criteria for assessing the individual and collective suitability of candidates and members of the Management Board, Supervisory Board and Key Functions at the Bank at the stage of appointment and during the performance of the function, as well as events resulting in the need to conduct a suitability assessment, the course of the suitability assessment process, including the roles and responsibilities in the process and the impact of the assessment including corrective measures to ensure compliance with the suitability requirements. In 2023, the secondary individual and collective suitability of members of the Bank's Supervisory Board was assessed, and the secondary individual and collective suitability of members of the Bank's Management Board was assessed as well as suitability assessment due to changes in additional functions performed by members of the Bank's governing bodies. The subsidiaries have implemented the Suitability Assessment Policies in accordance with applicable law. Gender equality and Diversity policy The Bank has a Gender equality and diversity policy with regard to members of the Supervisory Board, members of the Management Board and persons holding Key Functions at Bank Polska Kasa Opieki Spółka Akcyjna (Gender equality and diversity policy) introduced on December 18, 2020 by the Order of the President of the Management Board, which defines the strategy in the scope of managing diversity of the Bank's employees, including diversity with regard to the appointment of members of the Supervisory Board, members of the Management Board and persons performing Key Functions at the Bank. The gender equality and diversity policy defines guidelines aimed at ensuring that the Bank's employees can manage their careers, achieve success and evaluate their work on the basis of individual achievements, regardless of gender. The purpose of the Bank's diversity strategy referred to in the Gender Equality and Diversity Policy is to ensure high-quality performance of tasks by the Bank's employees, including the selection of competent persons to perform functions in the Supervisory Board, Management Board and Key Functions at the Bank, first of all applying objective substantive criteria and taking into account the benefits of diversity. The gender equality and diversity policy, in accordance with the legislative process in force at the Bank, was adopted by the Bank's Management Board and approved by the Supervisory Board and in relation to Members of the Supervisory Board, by the General Meeting of Shareholders. Gender equality enables the Bank's employees to manage their career, achieve success and evaluate their work on the basis of individual achievements, regardless of gender. Relations with Trade Union Organizations In 2023 the cooperation between the Bank and Trade Unions in the range of consultation, negotiations and other agreements were led pursuant to the rules defined in the labour law, with respect for both sides’ interests and social dialog rules. In 2023, 24 meetings (1 or 2-day meetings and one 3-day meeting) between the Bank and Trade Unions were taken place. The meetings and the agreements were mainly about: - Agreeing on the determination of the rate of the Collective Labour Agreement increases for 2023, 55 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - Agreeing on the plan of expenditure from the Company Social Benefits Fund for 2023, agreeing on the content of the regulations of the Company Social Benefits Fund, - Agreeing on the principles of remote working, - Agreeing on the distribution of the incentive reward fund for 2022, - Agreeing on the rules for the distribution of the bonus fund in each quarter resulting from the Collective Labor Agreement’s records, - Amendments to the Work Regulations of Bank Polska Kasa Opieki Spółka Akcyjna, - Meetings with Management Board Members. In September 2023, the Bank began talks with trade union organizations regarding to the bonus rules for sales network employees in the Retail Banking Division. A total of 7 two-day meetings were held and in November 2023 the Additional Protocol no 3 was signed with 4 Trade Union Organizations (the Collective Labour Agreement sides), which was registered by the State Labour Inspectorate on 21 December 2023. During year 2023, there were three group disputes in the Bank, initiated in 2016, 2019 and 2021. In terms of the 2016 group dispute, there is a signed protocol of divergence. Trade Unions are entitled to place on the Bank’s intranet web sides their newsletters and information concerning the crucial employee’s matters, including dialogue conducted with the Employer. Bank, in the mutual relations with Trade Union organizations guided the principles of good will to achieve the best solutions in the range of collective labour law both for employees and for the Bank. Relations with the Works Council In 2023, 4 meetings with Works Council took place. The main topics were as follows:  organizational changes in ESG area,  Multibranch Polska project,  Meeting with representatives of the Procurement Department,  The principles of cooperation between the Bank and the Works Council. At the same time, in accordance with the provisions of the Law of April 7, 2006 on Informing and Consulting Employees, the Employer shall each time provide the Works Council with information on the status, structure and anticipated changes in employment, as well as activities that may cause significant changes in the organization of work or the basis of employment. At the same time, each time at the request of the Works' Council, the Employer consults the Council on the above issues. Workforce in number As at the end of December 2023, the Group employed 15,129 employees (in the Bank and the companies consolidated under full consolidation method) as compared to 14,642 employees as at the end of 2022. As at the end of December 2023, the Bank employed 12,689 employees as compared to 12,435 employees as at the end of 2022. The average age of the employees was 45.8 years, 76.6% of the employees are university graduates ( 75.5% in 2022), women represent 67.9% of the total workforce. 56 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 7.7 Sponsorship and charity policy Our sponsorship and charity activities are aimed at strengthening the Bank's image as an open, modern institution, close to customers and the communities in which we operate. We support nationwide projects by sponsoring strategic events that have a significant impact on Polish culture and are dedicated to local communities. We strive to care for the quality of life of society and build and strengthen long-term relationships based on mutual understanding of needs. We engage in initiatives based on long-term social involvement with selected organizations and institutions that implement projects in areas such as: - responsible development of the economy, - promotion of the national brand and Polish values, - support for culture and sports, - helping children in need, - environmental Protection. Our charitable activities are carried out mainly through the Bank Pekao S.A. Foundation, which was established in 1997. In 2023, the Foundation made 128 targeted donations. The areas covered by the supported projects were consistent with the statutory objectives and included, among others: charity, cultural and educational activities, health care and the development of physical culture and sports. The Foundation supported initiatives promoting volunteering, as well as activities in the field of ecology and animal protection. The Foundation initiated and implemented the "Rural Women's Circles Support Grant Program 2023", the aim of which was to support activities in the field of culture, art, protection of cultural goods and national heritage, dissemination of national traditions, nurturing Polishness and the development of national, civic and cultural awareness. Under this program, support was provided to 262 Rural Women's Associations from all over the country. The Foundation also supports activities in the area of promotion and organization of employee volunteering. As part of the "We are close" campaign, volunteer leaders and their teams implemented 120 projects for local communities in 100 towns throughout Poland. Thanks to the Foundation's financial support, we have provided equipment and necessary materials to schools, care facilities for children and people with disabilities, local associations and shelters for homeless animals. Volunteers helped children from care facilities, seniors, people with disabilities, and took care of animals in shelters. They promoted sports activities of children and youth, culture and history of Poland. Volunteer leaders carried out a number of pro-health campaigns, including: health prevention, mental health care. They took actions aimed at counteracting social exclusion of various groups of people at risk of functioning outside society. In 2023, the Bank signed an agreement with the Polish Basketball Association, thanks to which, from the next season, we will be the Main Sponsor of the Polish National Basketball Team and the Sponsor of the Official Basket League (women's and men's top league). The Bank's logo will appear on the match shirts of the Polish national team and national 3x3 basketball teams, and will also be more visible on the Basket Liga and Basket Liga Women's courts. We also became a partner of the 3x3 Red Bull Half Court International Basketball Tournament, which, thanks to our support, was held in Poland for the first time, and its aim is to promote street basketball and discover new talents in the international arena. In 2023, we were also involved in musical events, the Bank was a strategic partner of the concert "Jimek & Guests History of Polish Hip-Hop II. Symphonic rap in Silesia", which took place at the Silesian Stadium in Chorzów. For music lovers, we have prepared a special zone with a basketball court, dunk shows by World Champion Piotr "Grabo" Grabowski and the opportunity to meet Radzimir Dębski. In 2023, we supported economic and economic initiatives, we were present at one of the most prestigious economic and technological events in Central and Eastern Europe - Impact'23, the Corporate and Investment Banking Congress, the Economic Forum in Karpacz and the Krynica Forum 2023, as well as at World Economic Forum in Davos. The bank also supported activities aimed at promoting Polish cultural heritage, we were involved in cultural initiatives and events promoting art. One of such initiatives was an exhibition of works of art from Pekao's collection entitled "The Color of Variety", which could be viewed at the Czapski Palace in Warsaw, and an outdoor exhibition and artistic picnic called "Picnic with Art", which took place in nine cities in Poland. The main goal of the picnics was to disseminate the artistic achievements of famous Polish artists representing ancient and contemporary art. 57 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 8. Statement of Financial Position and Financial Results Consolidated income statement containing cumulated items for the period from 1 January to 31 December, 2023 and 2022 respectively is presented in the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2023. The Report on activities of Bank Pekao S.A. Group for the year 2023, includes statement of financial position in a short form and income statement in a presentation form as well as the key, selected items from these statements are discussed. 8.1 The consolidated income statement – presentation form In the 2023, we generated net profit of the Bank Pekao S.A. Group attributable to the Bank's shareholders in the amount of PLN 6,578 million. This result is higher by PLN 4,861 million than the result achieved in the 2022, mainly due to higher operating income, in particular higher interest income and trading result, as well as lower costs related to the modification of PLN mortgage loan agreements granted to consumers due to the suspension of their loan repayments (credit holidays), lower provisions for legal risk regarding foreign currency loans mortgages, no additional regulatory costs, including the Bank Protection System and payments to the Borrower Support Fund, lower BFG contributions, despite the increase in operating costs. (in PLN million) 2023 2022 CHANGE Net interest income 11,923 8,243 44.6% Net fee and commission income 2,786 2,710 2.8% Dividend,income 30 28 7.1% Trading result 507 187 > 100% Net other operating income and expenses (513) (504) 1,8% including: legal risk regarding foreign currency mortgage loans (497) (352) 41.2% Net non-interest income 2,810 2,421 16.1% Operating income 14,733 10,664 38.2% Operating costs (4,631) (3,987) 16.2% Gross operating profit 10,102 6,677 51.3% Net allowances for expected credit losses (559) (2,016) (72.3%) including: legal risk regarding foreign currency mortgage loans 91 (1,246) x Net operating profit 9,543 4,661 > 100% Contributions to the Bank Guarantee Fund (190) (267) (28.8%) Fee paid for the Protection Schemes - (482) x Contributions to the Borrowers Support Fund - (169) x Tax on certain financial institutions (879) (866) 1.5% Gains on associates and disposal of subsidiaries 6 5 20.0% Profit before tax 8,480 2,882 > 100% Income tax expense (1,900) (1,163) 63.4% Net profit 6,580 1,719 > 100% Attributable to equity holders of the Bank 6,578 1,717 > 100% Attributable to non-controlling interest 2 2 0.0% Operating income The Group's operating income in the 2023 amounted to PLN 14,733 million and was 38.2% higher than the income generated in the 2022, mainly due to interest income and trading result. 58 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Total net interest income (in PLN million) 2023 2022 CHANGE Interest income 18,085 11,111 62.8% Interest expense (6,162) (2,868) > 100% Net interest income 11,923 8,243 44.6% The net interest income achieved in the 2023 amounted to PLN 11,923 million and was higher by PLN 3,680 million, i.e. 44.6% compared to the result achieved in the 2022. Net interest income in the 2022 included costs related to the modification of PLN mortgage loan agreements granted to consumers due to the suspension of their loan repayments in the amount of PLN 1,958 million. Interest income Interest income in the 2023 amounted to PLN 18,085 million and was higher by PLN 6,974 million y/y, mainly due to higher interest rates. Interest expense Interest costs in the 2023 amounted to PLN 6 162 million and were higher by PLN 3,294 million y/y due to the adjustment of the Bank's product offer to market conditions and customer expectations. Interest margin The interest margin achieved in the 2023 amounted to 4.22% and was higher by 0.95 p.p than the margin achieved in the 2022. 59 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Net non-interest income (in PLN million) 2023 2022 CHANGE Fee and commission income 3,590 3,439 4.4% Fee and commission expense (804) (729) 10.3% Net fee and commission income 2,786 2,710 2.8% Dividend income 30 28 7.1% Trading result 507 187 > 100% Net other operating income and expense (513) (504) 1.8% including: legal risk regarding foreign currency mortgage loans (497) (352) 41.2% Net non-interest income 2,810 2,421 16.1% The non-interest result achieved in the 2023 amounted to PLN 2,810 million and was higher by PLN 389 million, i.e. 16.1% compared to the result achieved last year, thanks to a higher result from trading activities, in particular the result from foreign exchange and the result on derivatives. The Group’s net fee and commission income achieved in the 2023 amounted to PLN 2,786 million and was higher by PLN 76 million, i.e. 2.8% compared to the result achieved in the 2022, mainly thanks to higher commissions from investment funds and brokerage activities , as a result of improved sentiment on capital markets and higher customer activity in the area of loans and card payments. The table below presents the Group’s net fee and commission income divided according to the main areas of the activity. (in PLN million) 2023 2022 CHANGE Net fee and commission income 2,786 2,710 2.8% on loans 617 562 9.8% on cards 361 314 14.9% on mutual funds 350 304 15.1% on brokerage activate 171 126 35.3% on margins on foreign exchange transactions with clients 723 743 (2.6%) other 564 661 (14.7%) Operating costs Operating costs in the 2023 amounted to PLN 4,631 million and were higher by PLN 644 million, i.e. 16.2% compared to the 2022, mainly due to the inflation indexation of salaries and higher property maintenance costs, due to increases in energy prices and the minimum wage. (in PLN million) 2023 2022 CHANGE Personnel expenses (2,752) (2,300) 19.7% General administrative expenses and depreciation (1,879) (1,687) 11.4% Operating costs (4,631) (3,987) 16.2% In the 2023 cost / income ratio amounted to 31.4% and was lower by 6.0 p.p. y/y. As of 31 December 2023 the Group employed 15,129 employees (in the Bank and the companies consolidated under full consolidation method) as compared to 14,642 employees as at the end of December 2022. Contributions to the Bank Guarantee Fund Contributions to the Bank Guarantee Fund in 2023 amounted to PLN 190 million and were lower by PLN 77 million i.e. 28.8% than in the 2022. Tax on certain financial institutions The tax on certain financial institutions in the 2023 amounted to PLN 879 million and was higher by PLN 13 million, i.e. 1.5% than in the 2022 due to the increase in the Bank's assets. 60 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Net allowances for expected credit losses (in PLN million) 2023 2022 CHANGE financial assets measured at amortized cost excluding provisions for legal risk regarding foreign currency mortgage loans in CHF (546) (753) (27.5%) financial assets measured at fair value through other comprehensive income 12 12 0.1% financial liabilities measured at amortized cost (116) (30) > 100% Net allowances for expected credit losses excluding provisions for legal risk regarding foreign currency mortgage loans in CHF (650) (770) (15.6%) financial assets measured at amortized cost - provisions for legal risk regarding foreign currency mortgage loans in CHF 91 (1,246) x Net allowances for expected credit losses (559) (2,016) (72.3%) The result on allowances for expected credit losses in the 2023 amounted to PLN 559 million and was lower by PLN 1,457 million, i.e. 72.3% than in the 2022, mainly due to lower risk provisions regarding foreign currency mortgage loans in CHF and lower cost of risk. Costs of risk The Group's cost of risk, after excluding the provision for legal risk related to foreign currency mortgage loans, in the 2023 amounted to 0.37% and were lower by 0.06 p.p. from last year's level. 61 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 8.2 Structure of the consolidated statement of financial position – short form The balance sheet of Bank Pekao S.A. determines the amount of total assets in balance sheet and the structure of the assets and liabilities of the Group. As at the end of December 2023, the total assets of Bank Pekao S.A. constitutes 96.3% of the total assets of the whole Group. 31.12.2023 31.12.2022 ASSETS PLN MILLION STRUCTURE PLN MILLION STRUCTURE CHANGE Cash and cash equivalents () 14,715 4.8% 17,693 6.3% (16.8%) Loans and advances to banks () 173 0.1% 422 0.2% (59.0%) Loans and advances to customers () 171,057 56.0% 167,510 59.6% 2.1% Reverse repo transactions 1,703 0.6% 1,338 0.5% 27.3% Securities () 99,962 32.7% 71,121 25.3% 40.6% Investments in associates 54 0.0% 49 0.0% 11.3% Property, plant and equipment and intangible assets 4,341 1.4% 3,825 1.4% 13.5% Other assets 13,718 4.5% 19,182 6.8% (28.5%) Total assets 305,723 100.0% 281,139 100.0% 8.7% () Cash and cash equivalents include cash in hand, amounts due from the National Bank of Poland, as well as amounts due from banks with a maturity of up to 3 months. (**) Including net investments in financial leases to banks. () Including net investments in financial leases to customers and non-treasury debt securities . (*) Including financial assets held for trading. other financial instruments at fair value through profit and loss and excluding non-treasury debt securities . 31.12.2023 31.12.2022 EQUITY AND LIABILITIES PLN MILLION STRUCTURE PLN MILLION STRUCTURE CHANGE Amounts due to other banks 7,597 2.5% 8,594 3.1% (11.6%) Amounts due to customers 232,078 75.9% 209,596 74.6% 10.7% Debt securities issued 9,958 3.3% 10,338 3.7% (3.7%) Subordinated liabilities 2,781 0.9% 2,789 1.0% (0.3%) Repo transactions 1,649 0.5% 879 0.3% 87.6% Lease liabilities 579 0.2% 272 0.1% > 100% Other liabilities 20,739 6.8% 25,896 9.2% (19.9%) Total equity including 30,342 9.9% 22,775 8.1% 33.2% non-controlling interests 12 0.0% 12 0.0% (0.8%) Total equity and liabilities 305,723 100.0% 281,139 100.0% 8.7% 62 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 8.2.1 Assets Changes in the structure of assets Loans and advances to customers and securities represent items of the largest value under assets. As at the end of 2023, they accounted for 56.0% and 32.7% of the total assets respectively in comparison with 59.6% and 25.3% respectively as at the end of 2022. Customers’ Financing Customer structure of loans and advances (in PLN million) 31.12.2023 31.12.2022 CHANGE Loans and advances at nominal value () 178,815 175,847 1.7% Loans and investments in financial leases 167,567 165,757 1.1% Retail 80,034 76,844 4.2% Corporate 87,532 88,913 (1.6%) Non-treasury debt securities 11,248 10,089 11.5% Other () 2,039 1,822 11.9% Impairment allowances (9,797) (10,159) (3.6%) Total net receivables 171,057 167,510 2.1% Reverse repo transactions 1,698 1,338 26.9% Total Customers’ financing () 180,513 177,184 1.9% () Excluding reverse repo transactions. () Including interest and receivables in transit. () Total customers’ financing includes loans and advances at nominal value. securities issued by non-monetary entities and reverse repo transactions. As at the end of December 2023, loans and advances at nominal value amounted to PLN 178,815 million and were higher by PLN 2,968 million, i.e. 1.7% than at the end of December 2022. As at the end of December 2023 the volume of retail l oans amounted to PLN 80,034 million and were higher by PLN 3,190 million, i.e. 4.2% than at the end of December 2022. Corporate loans including non-treasury debt securities at the end of December 2023 amounted to PLN 98,780 million and were lower by PLN 222 million, i.e. 0,2% compared to the end of December 2022. Receivables and impairment losses () (in PLN million) 31.12.2023 31.12.2022 CHANGE Gross receivables 180,854 177,669 1.8% Stage 1 151,971 146,797 3.5% Stage 2 17,310 19,508 (11.3%) Stage 3 11,573 11,363 1.8% Impairment allowances (9,797) (10,159) (3.6%) Stage 1 (839) (883) (4.9%) Stage 2 (902) (1,288) (30.0%) Stage 3 (8,056) (7,988) 0.9% Total net receivables 171,057 167,510 2.1% () Including net investments in financial leases to customers. non-treasury debt securities . interest and receivables in transit and excluding reverse repo transactions. As at the end of December 2023 the ratio of impaired receivables (stage 3) to the gross receivables amounted to 6.4%. 63 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Loans and advances to customers by currency () 31.12.2023 31.12.2022 PLN MILLION STRUCTURE PLN MILLION STRUCTURE CHANGE Denominated in PLN 144,883 80.1% 142,039 79.9% 2.0% Denominated in foreign currencies () 35,971 19.9% 35,630 20.1% 1.0% Total 180,854 100.0% 177,669 100.0% 1.8% Impairment allowances (9,797) x (10,159) x (3.6%) Total net 171,057 x 167,510 x 2.1% () Including net investments in financial leases to customers. non-treasury debt securities . interest and receivables in transit and excluding reverse repo transactions. () Including indexed loans. The currency structure of loans and advances to customers is dominated by amounts expressed in the Polish złoty, as at the end of December 2023 their share was 80.1%. The largest portion of foreign currency loans and advances to customers were represented by those denominated in EUR (86.4%), CHF (6.0%) and USD (6.1%). Loans and advances to customers by contractual maturities () 31.12.2023 31.12.2022 PLN MILLION STRUCTURE PLN MILLION STRUCTURE CHANGE Current and up to 1 month 19,793 10.9% 22,452 12.6% (11.8%) 1 to 3 months 9,115 5.0% 6,931 3.9% 31.5% 3 months to 1 year 18,562 10.3% 18,651 10.5% (0.5%) 1 to 5 years 58,314 32.2% 56,182 31.6% 3.8% Over 5 years 68,362 37.8% 66,526 37.4% 2.8% Past due 4,669 2.6% 5,105 2.9% (8.5%) Other 2,039 1.1% 1,822 1.0% 11.9% Total 180,854 100.0% 177,669 100.0% 1.8% Impairment allowances (9,797) x (10,159) x (3.6%) Total net 171,057 x 167,510 x 2.1% () Including net investments in financial leases to customers. non-treasury debt securities . interest and receivables in transit and excluding reverse repo transactions. As at the end of December 2023 loans and advances with maturity over 5 years represents 37.8% of total loans and advances (mainly attributed to mortgage loans, investment loans and non-treasury debt securities). Information on loan concentration is included in the Note to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2023. 8.2.2 Liabilities Changes in the structure of liabilities Amounts due to customers were the main item under the Group’s liabilities and equity. As at the end of 2023, amounts due to customers, debt securities issued and subordinated liabilities totaled PLN 244,817 million, and their share in the total assets was 80.1%, compared with 79.2% as at the end of 2022. The share of total shareholder’s equity in the total assets was 9.9% as at the end of 2022, compared with 8.1% as at the end of 2022. External sources of financing (in PLN million) 31.12.2023 31.12.2022 CHANGE Amounts due to other banks 7,597 8,594 (11.6%) Amounts due to customers 232,078 209,596 10.7% Debt securities issued 9,958 10,338 (3.7%) Subordinated liabilities 2,781 2,789 (0.3%) Repo transactions 1,649 879 87.6% Total external sources of financing 254,063 232,196 9.4% The deposit base is widely diversified and is sourced from retail and corporate customers. In addition, the Group uses also funds borrowed on the interbank market. The Group is not dependent on any single customer nor group of customers. 64 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Amounts due to customers and debt securities issued (in PLN million) 31.12.2023 31.12.2022 CHANGE Corporate deposits 100,005 90,502 10.5% Non-financial entities 76,394 71,916 6.2% Non-banking financial entities 6,337 4,831 31.2% Budget entities 17,274 13,755 25.6% Retail deposits 130,964 118,370 10.6% Other () 1,109 724 53.2% Amounts due to customers () 232,078 209,596 10.7% Debt securities issued of which 12,739 13,127 (3.0%) Structured Certificates of Deposit (SCD) - 952 x Certificates of Deposit - 4,909 x Senior bonds 4,014 - x Subordinated bonds 2,750 2,750 0.0% Pekao Bank Hipoteczny S.A. covered bonds 1,042 943 10.5% Pekao Bank Hipoteczny S.A. bonds 270 - x Pekao Leasing Sp. z o.o. bonds 2,244 1,527 46.9% Pekao Faktoring Sp. z o.o. bonds 2,286 1,932 18.3% Interest 133 113 17.5% Amounts due to customers and debt securities issued () 244,817 222,722 9.9% Lease liabilities 579 272 > 100% Repo transactions 1,649 879 87.6% Amounts due to customers and debt securities issued total () 247,045 223,874 10.4% Investment funds of Pekao TFI S.A. (ex. Pioneer Pekao TFI) 24,228 19,172 26.4% Bond and money market funds 16,753 13,062 28.3% Balanced funds 4,221 3,628 16.4% Equity funds 2,102 1,888 11.3% PPK 1,152 595 93.8% including distributed through the Group’s network 20,921 16,658 25.6% () Other item includes interest and funds in transit. () Excluding repo transactions and lease liabilities. () Including repo transactions and lease liabilities. As at the end of December 2023 amounts due to the Group’s customers and debt securities issued amounted to PLN 244,817 million and were higher by PLN 22,095 million, i.e. 9.9% than at the end of December 2022. The total volume of retail deposits, Structured Certificates of Deposit and other amounted to PLN 131,912 million at the end of December 2023 an increase by PLN 11 966 million, i.e. 10.0% compared to the end of December 2022. The total volume of corporate deposits, Certificates of Deposit, Senior bonds, Subordinated bonds, Pekao Bank Hipoteczny S.A. covered bonds and bonds Pekao Leasing Sp. z o.o. bonds Pekao Faktoring Sp. z o.o. bonds interest and other amounted to PLN 112,905 million and were higher by PLN 10,129 million, i.e. 9.9% compared to the end of December 2022. The value of net assets of investment funds managed by Pekao TFI S.A. amounted to PLN 24,228 million and was higher by PLN 5,056 million, i.e. 26.4% compared to the end of December 2022. 65 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Amounts due to customers by currency () 31.12.2023 31.12.2022 PLN MILLION STRUCTURE PLN MILLION STRUCTURE CHANGE Denominated in PLN 190,457 82.1% 170,876 81.5% 11.5% Denominated in foreign currencies 41,622 17.9% 38,719 18.5% 7.5% Total 232,078 100.0% 209,596 100.0% 10.7% () Including interest and amounts due in transit and excluding repo transactions and lease liabilities. The bulk of the amounts due to customers are denominated in the Polish currency and its share as at the end of December 2023 amounted to 82.1%. The majority of amounts due to customers denominated in foreign currencies were in EUR (65.0%) and USD (28.5%). Amounts due to customers by contractual maturities () 31.12.2023 31.12.2022 PLN MILLION STRUCTURE PLN MILLION STRUCTURE CHANGE Current accounts and overnight deposits 170,978 74.0% 157,683 75.5% 8.4% Term deposits 59,991 26.0% 51,189 24.5% 17.2% Total deposits 230,969 100.0% 208,872 100.0% 10.6% Interest accrued 632 x 382 x 65.4% Funds in transit 476 x 342 x 39.2% Total 232,078 x 209,596 x 10.7% () Excluding repo transactions and lease liabilities. Provisions, deferred tax assets and liabilities (in PLN million) 31.12.2023 31.12.2022 CHANGE Total provisions 1,977 1,402 41.0% provisions for off-balance sheet commitments 504 397 26.9% provisions for liabilities to employees 397 310 27.9% other provisions 1,077 695 54.9% Deferred tax liabilities 21 23 (9.7%) Deferred tax assets 1,119 1,579 (29.1%) 66 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 8.3 Consolidated income statement (in PLN million) Q42023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Interest income 4,605 4,651 4,588 4,241 4,442 1,357 3,057 2,255 Interest income calculated using the effective interest method 4,594 4,638 4,579 4,234 4,429 1,348 3,051 2,252 Financial assets measured at amortised cost 4,150 4,216 4,096 3,794 4,130 1,189 2,935 2,150 Financial assets measured at fair value through other comprehensive income 444 422 483 440 299 159 116 102 Other interest income related to financial assets measured at fair value through profit or loss 11 13 9 7 13 9 6 3 Interest expense (1,472) (1,627) (1,596) (1,467) (1,233) (958) (491) (186) Net interest income 3,133 3,024 2,992 2,774 3,209 399 2,566 2,069 Fee and commission income 936 913 886 855 863 873 867 836 Fee and commission expense (203) (210) (198) (193) (216) (183) (174) (156) Net fee and commission income 733 703 688 662 647 690 693 680 Dividend income 1 - 29 - 1 1 26 - Result on financial assets and liabilities measured at fair value through,profit or loss and foreign exchange result 109 76 145 162 154 20 (39) 53 Result on fair value hedge accounting (1) 1 1 (1) 1 - 1 1 Result on derecognition of financial assets and liabilities not measured at fair value through profit or loss (9) 15 12 (3) 6 1 (7) (4) Net allowances for expected credit losses 4 (167) (291) (105) (1,091) (260) (531) (134) including: legal risk regarding foreign currency mortgage loans 110 22 (68) 27 (913) (24) (300) (9) Operating income 33 22 26 38 48 37 24 28 Operating expenses (366) (90) (75) (101) (271) (143) (199) (28) including: legal risk regarding foreign currency mortgage loans - (61) (60) (72) (223) (18) (105) (6) General administrative expenses and depreciation (1,429) (1,371) (1,383) (1,517) (1,244) (1,330) (1,774) (1,423) Gains (losses) on associates 2 1 2 1 2 1 1 1 Profit / loss before income tax 2,210 2,214 2,146 1,910 1,462 (584) 761 1,243 Income tax expense (487) (498) (451) (464) (577) 41 (292) (335) Net profit / loss 1,723 1,716 1,695 1,446 885 (543) 469 908 Attributable to equity holders of the Bank 1,723 1,715 1,694 1,446 885 (543) 468 907 Attributable to non-controlling interests - 1 1 - - - 1 1 67 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 8.4 Consolidated statement of comprehensive income (in PLN million) Q42023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Net profit / loss 1,723 1,716 1,695 1,446 885 (543) 469 908 Other comprehensive income Item that are or may be reclassified subsequently to profit or loss: Impact of revaluation of debt financial instruments and loan measured at fair value through other comprehensive income (net): 114 169 139 331 175 (61) (298) (454) Profit or loss on fair value measurement 115 175 145 334 184 (57) (296) (450) Profit or loss reclassification to income statement after derecognition (1) (6) (6) (3) (9) (4) (2) (4) Impact of revaluation of derivative instruments hedging cash flows (net) 162 466 428 561 762 43 (988) (800) Items that will never be reclassified to profit or loss: Impact of revaluation of investments in equity instruments designated at fair value through other comprehensive income (net) 8 18 (5) 43 25 (6) (46) (21) Remeasurements of the defined benefit liabilities (net) (2) - (22) - (22) - 14 - Other comprehensive income (net of tax) 282 653 540 935 940 (24) (1,318) (1,275) Total comprehensive income 2,005 2,369 2,235 2,381 1,825 (567) (849) (367) Attributable to equity holders of the Bank 2,005 2,368 2,234 2,381 1,825 (567) (850) (368) Attributable to non-controlling interests - 1 1 - - - 1 1 8.5 Consolidated income statement – presentation form (in PLN million) Q42023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Net interest income 3,133 3,024 2,992 2,774 3,209 399 2,566 2,069 Net fee and commission income 733 703 688 662 647 690 693 680 Dividend income 1 - 29 - 1 1 26 - Trading result 99 92 158 158 161 21 (45) 50 Net other operating income and expenses (333) (68) (49) (63) (223) (106) (175) - including: legal risk regarding foreign currency mortgage loans (304) (61) (60) (72) (223) (18) (105) (6) Net non-interest income 500 727 826 757 586 606 499 730 Operating income 3,633 3,751 3,818 3,531 3,795 1,005 3,065 2,799 Operating costs (1,209) (1,149) (1,167) (1,106) (1,014) (956) (1,063) (954) Gross operating profit 2,424 2,602 2,651 2,425 2,781 49 2,002 1,845 Net allowances for expected credit losses 4 (167) (291) (105) (1,091) (260) (531) (134) including: legal risk regarding foreign currency mortgage loans 110 22 (68) 27 (913) (24) (300) (9) Net operating profit 2,428 2,435 2,360 2,320 1,690 (211) 1,471 1,711 Contributions to the Bank Guarantee Fund - - 2 (192) - 57 (57) (267) Fee paid for the Protection Schemes - - - - - (42) (440) - Contributions to the Borrowers Support Fund - - - - (3) (166) - - Tax on certain financial institutions (220) (222) (218) (219) (227) (223) (214) (202) Gains (losses) on associates 2 1 2 1 2 1 1 1 Profit / loss before income tax 2,210 2,214 2,146 1,910 1,462 (584) 761 1,243 Income tax expense (487) (498) (451) (464) (577) 41 (292) (335) Net profit / loss 1,723 1,716 1,695 1,446 885 (543) 469 908 Attributable to equity holders of the Bank 1,723 1,715 1,694 1,446 885 (543) 468 907 Attributable to non-controlling interest - 1 1 - - - 1 1 68 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 8.6 Reconciliation of income statement – presentation form and long form Consolidated income statement for the 2023 INCOME STATEMENT – PRESENTATION FORM'S ITEMS LONG FORM'S ITEMS RECLASSIFFIED TO PRESENTATION FORM 2023 Net interest income Net interest income 11,923 Net fee and commission income Net fee and commission income 2,786 Dividend income Dividend income 30 Trading result - 507 Net result on other financial instruments at fair value through profit and loss 492 Result on fair value hedge accounting - (Gains) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss 15 Net other operating income and expenses Net other operating income and expenses (513) Operating income 119 Operating expenses (632) Net non-interest income - 2,810 Operating income - 14,733 Operating costs - (4,631) General administrative expenses depreciation (5,700) less - Contributions to the Bank Guarantee Fund 190 less - Fee paid for the Protection Schemes - less - Contributions to the Borrowers Support Fund - less – Tax on certain financial institutions 879 Gross operating profit - 10,102 Net allowances for expected credit losses Net allowances for expected credit losses (559) Net operating profit - 9,543 Contributions to the Bank Guarantee Fund Contributions to the Bank Guarantee Fund (190) Fee paid for the Protection Schemes Fee paid for the Protection Schemes - Contributions to the Borrowers Support Fund Contributions to the Borrowers Support Fund - Tax on certain financial institutions Tax on certain financial institutions (879) Gains (losses) on associates Gains (losses) on associates 6 Profit before income tax Profit before income tax 8,480 Income tax expense Income tax expense (1,900) Net profit for the period Net profit for the period 6,580 Attributable to equity holders of the Bank Attributable to equity holders of the Bank 6,578 Attributable to non-controlling interest Attributable to non-controlling interest 2 69 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Consolidated income statement for the 2022 INCOME STATEMENT – PRESENTATION FORM'S ITEMS LONG FORM'S ITEMS RECLASSIFFIED TO PRESENTATION FORM 2022 Net interest income Net interest income 8,243 Net fee and commission income Net fee and commission income 2,710 Dividend income Dividend income 28 Trading result - 187 Net result on other financial instruments at fair value through profit and loss 188 Result on fair value hedge accounting 3 (Gains) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss (4) Net other operating income and expenses Net other operating income and expenses (504) Operating income 137 Operating expenses (641) Net non-interest income - 2,421 Operating income - 10,664 Operating costs - (3,987) General administrative expenses depreciation (5,771) less - Contributions to the Bank Guarantee Fund 267 less - Fee paid for the Protection Schemes 482 less - Contributions to the Borrowers Support Fund 169 less – Tax on certain financial institutions 866 Gross operating profit - 6,677 Net allowances for expected credit losses Net allowances for expected credit losses (2,016) Net operating profit - 4,661 Contributions to the Bank Guarantee Fund Contributions to the Bank Guarantee Fund (267) Fee paid for the Protection Schemes Fee paid for the Protection Schemes (482) Contributions to the Borrowers Support Fund Contributions to the Borrowers Support Fund (169) Tax on certain financial institutions Tax on certain financial institutions (866) Gains (losses) on associates Gains (losses) on associates 5 Profit before income tax Profit before income tax 2,882 Income tax expense Income tax expense (1,163) Net profit for the period Net profit for the period 1,719 Attributable to equity holders of the Bank Attributable to equity holders of the Bank 1,717 Attributable to non-controlling interest Attributable to non-controlling interest 2 70 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 9. Separate Statement of Financial Position and Financial Results Separate income statement containing cumulated items for the period from 1 January to 31 December, 2023 and 2022 respectively is presented in the Separate Financial Statements of Bank Pekao S.A. for the period ended on 31 December 2023 . Below presented statement of financial position in a short form and income statement in a presentation form as well as the key, selected items from these statements are discussed. 9.1 The Separate income statement – presentation form In 2023, Net profit of the Bank Pekao S.A , we generated in the amount of PLN 6,718 million. This result is higher by PLN 4,820 million than the result achieved in the 2022, mainly due to lower costs related to the modification of PLN mortgage loan agreements granted to consumers due to the suspension of their loan repayments (credit holidays), lower risk provisions regarding foreign currency mortgage loans, no additional regulatory costs, including those for the Bank Protection System and payments to the Borrower Support Fund, lower contributions to the BFG, as well as higher income despite the increase in operating costs. (in PLN million) 2023 2022 CHANGE Net interest income 11,588 8,009 44.7% Net fee and commission income 2,346 2,359 (0.6%) Dividend income 268 257 4.3% Trading result 502 169 > 100% Net other operating income and expenses () (421) (474) (11.2%) including: legal risk regarding foreign currency mortgage loans (403) (319) 26.3% Net non-interest income () 2,695 2,311 16.6% Operating income () 14,283 10,320 38.4% Operating costs (4,230) (3,658) 15.6% Gross operating profit () 10,053 6,662 50.9% Net allowances for expected credit losses (427) (1,879) (77.3%) including: legal risk regarding foreign currency mortgage loans 114 (1,185) (109.6%) Net operating profit 9,626 4,783 > 100% Contributions to the Bank Guarantee Fund (188) (265) (29.1%) Fee paid for the Protection Schemes - (482) x Contributions to the Borrowers Support Fund - (158) x Tax on certain financial institutions (879) (866) 1.5% Profit before tax 8,559 3,012 > 100% Income tax expense (1,841) (1,114) 65.3% Net profit 6,718 1,898 > 100% Operating income In 2023, the operating income amounted to PLN 14,283 million and was higher by 38.4% in comparison with 2022 , mainly due to interest income and trading result. 71 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Total net interest income (in PLN million) 2023 2022 CHANGE Interest income 17,127 10,519 62.8% Interest expense (5,539) (2,510) >100% Net interest income 11,588 8,009 44.7% Net interest income in 2023, amounted to PLN 11,588 million and was higher by PLN 3,579 million, i.e. 44.7% compared to the result achieved in the 2022. Net interest income in the 2022 included costs related to the modification of PLN mortgage loan agreements granted to consumers due to the suspension of their loan repayments in the amount of PLN 1.883 million. Interest income I n 2023 , the interest income amounted to PLN 17,127 million and was higher by PLN 6,608 million y/y, mainly due to higher interest rates. Interest expense In 2023, the interest expense amounted amounted to PLN 5,539 million and were higher by PLN 3,029 million y/y due to the adjustment of the Bank's product offer to market conditions and customer expectations. Net interest margin The interest margin achieved in the 2023 amounted to 4.28% and was higher by 0,97 p.p than the margin achieved in the 2022. 72 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Net non-interest income (in PLN million) 2023 2022 CHANGE Fee and commission income 3,196 3,116 2.6% Fee and commission expense (850) (757) 12.3% Net fee and commission income 2,346 2,359 (0.6%) Dividend income 268 257 4.3% Trading result 502 169 >100% Net other operating income and expense (421) (474) (11.2%) including: legal risk regarding foreign currency mortgage loans (403) (319) 26.3% Net non-interest income 2,695 2,311 16.6% The non-interest income in 2023 amounted to PLN 2,695 million and was higher by PLN 384 million, i.e. 16.6% compared to the result achieved last year, thanks to a higher result from trading activities, in particular the result from foreign exchange and the result on derivatives. Net fee and commission income in 2023, amounted to PLN 2,346 million and was lower by PLN 13 million, i.e. 0.6% compared to the result achieved in the 2022, mainly due to higher commissions from investment funds and brokerage activities, as a result of improved sentiment on capital markets and higher customer activity in the area of loans and card payments. The trading result achieved in 2023 amounted to PLN 502 million and was higher by PLN 333 million compared to the result achieved in 2022, due to a higher result on foreign exchange and a higher valuation of derivative instruments. Other net operating revenues and costs achieved in 2023 amounted to (minus) PLN 421 million and were lover by PLN 53 million compared to 2022. The table below presents the Bank’s net fee and commission income divided according to the main areas of the activity. (in PLN million) 2023 2022 CHANGE Net fee and commission income 2,346 2,359 (0.6%) on loans 511 465 9.9% on cards 361 314 14.9% on mutual funds 99 108 (8.5%) on brokerage activate 145 104 38.9% on margins on foreign exchange transactions with clients 723 743 (2.6%) other 509 624 (18.5%) Operating costs In 2023, operating costs amounted to PLN 4,230 million and were higher by PLN 572 million, i.e. 15.6% compared to the 2022, mainly due to the inflation indexation of salaries and higher property maintenance costs, due to increases in energy prices and the minimum wage. (in PLN million) 2023 2022 CHANGE Personnel expenses (2,409) (2,019) 19.3% General administrative expenses and depreciation (1,821) (1,639) 11.1% Operating costs (4,230) (3,658) 15.6% In 2023 , cost / income ratio amounted to 29.6% and was lower by 5.8 p.p. y/y. As of 31 December 2023, the Bank employed 12,689 employees as compared to 12,435 employees as at the end of December 2022 an was lower y/y. Contributions to the Bank Guarantee Fund Bank Guarantee Fund fee in the 2023, amounted to PLN 188 million, and were lower by PLN 77 million, i.e. 29.1% in comparison with of 2022. 73 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Tax on certain financial institutions Tax on certain financial institutions in 2023 amounted to PLN 879 million and was higher by PLN 13 million, i.e. 1.5% compared to 2022 , due to an increase in Bank’s assets. Net allowances for expected credit losses (in PLN million) 2023 2022 CHANGE financial assets measured at amortized cost excluding provisions for legal risk regarding foreign currency mortgage loans in CHF (434) (711) (39.0%) financial assets measured at fair value through other comprehensive income 6 19 (66.5%) financial liabilities measured at amortized cost (113) (1) x Net allowances for expected credit losses excluding provisions for legal risk regarding foreign currency mortgage loans in CHF (541) (694) (22.1%) financial assets measured at amortized cost - provisions for legal risk regarding foreign currency mortgage loans in CHF 114 (1,185) >100% Net allowances for expected credit losses (427) (1,879) (77.3%) The result on allowances for expected credit losses in the 2023 amounted to PLN 427 million and was lower by PLN 1,452 million, i.e. 77.3% than in the 2022, mainly due to lower risk provisions regarding foreign currency mortgage loans in CHF and lower cost of risk. Costs of risk The Bank's cost of risk, after excluding the provision for legal risk related to foreign currency mortgage loans, in the 2023 amounted to 0.33% and were lower by 0.08 p.p. from last year's level. 74 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 9.2 Structure of the separate statement of financial position – short form The table below presents the Bank’s statement of financial position – short form. 31.12.2023 31.12.2022 ASSETS PLN MILLION STRUCTURE PLN MILLION STRUCTURE CHANGE Cash and due from Central Bank () 14,836 5.0% 18,211 6.7% (18.5%) Loans and advances to banks 426 0.1% 626 0.2% (31.9%) Loans and advances to customers (*) 157,322 53.4% 155,477 57.2% 1.2% Reverse repo transactions 1,703 0.6% 1,338 0.5% 27.3% Securities () 101,730 34.5% 72,691 26.8% 39.9% Investments in subsidiaries 1,922 0.7% 1,742 0.6% 10.3% Investments in associates 42 0.0% 42 0.0% x Property. plant and equipment and intangible assets 3,344 1.1% 2,909 1.1% 15.0% Other assets 13,150 4.5% 18,668 6.9% (29.6%) Total assets 294,477 100.0% 271,705 100.0% 8.4% () Cash and cash equivalents include cash in hand, amounts due from the National Bank of Poland, as well as amounts due from banks with a maturity of up to 3 months. () Including non-treasury debt securities . () Including financial assets held for trading, other financial instruments at fair value through profit and loss and excluding non-treasury debt securities . 31.12.2022 31.12.2021 EQUITY AND LIABILITIES PLN MILLION STRUCTURE PLN MILLION STRUCTURE CHANGE Amounts due to other banks 2,825 1,0% 4,135 2% (31.7%) Amounts due to customers 232,307 78,9% 209,802 77% 10.7% Debt securities issued 4,078 1,4% 5,894 2% (30.8%) Subordinated liabilities 2,781 0,9% 2,789 1% (0.3%) Repo transactions 1,649 0,6% 879 0% 87.6% Lease liabilities 585 0,2% 307 0% 90.6% Other liabilities 20,356 6,9% 25,709 10% (20.8%) Equity 29,896 10,2% 22,190 8% 34.7% Total equity and liabilities 294,477 100,0% 271,705 100% 8.4% 75 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 9.2.1 Assets Changes in the structure of assets Loans and advances to customers and securities represent items of the largest value under assets. As at the end of 2023, they accounted for 53.4% and 34.5% of the total assets respectively in comparison with 57.2% and 26.8% respectively as at the end of 2022. Customers’ Financing Customer structure of loans and advances (in PLN million) 31.12.2023 31.12.2022 CHANGE Loans and advances at nominal value () 164,589 163,402 0.7% Loans and investments in financial leases 147,372 149,054 (1.1%) Retail 77,800 74,470 4.5% Corporate 69,571 74,585 (6.7%) Non-treasury debt securities 17,217 14,347 20.0% Other (**) 1,921 1,732 10.9% Impairment allowances (9,187) (9,657) (4.9%) Total net receivables 157,322 155,477 1.2% Reverse repo transactions 1,703 1,338 27.3% Total Customers’ financing () 166,291 164,740 0.9% () Excluding reverse repo transactions. () Including interest and receivables in transit. () Total customers’ financing includes loans and advances at nominal value, securities issued by non-monetary entities and reverse repo transactions. As at the end of December 2023, loans and advances at nominal value amounted to PLN 164,589 million, an increase of PLN 1,187 million, i.e. 0.7% in comparison to the end of December 2022. As at the end of December 2023 , the volume of retail loans amounted to PLN 77,800 million, an increase of PLN 3,330 million, i.e. 4.5% in comparison to the end of December 2022 . As at the end of December 2023, corporate loans and non-treasury debt securities amounted to PLN 86,789 million, an decrease of PLN 2,144 million, i.e. 2.4% in comparison to the end of December 2022. Receivables and impairment losses () (in PLN million) 31.12.2023 31.12.2022 CHANGE Gross receivables 166,509 165,134 0.8% Stage 1 140,168 136,300 2.8% Stage 2 16,187 18,619 (13.1%) Stage 3 10,154 10,216 (0.6%) Impairment allowances (9,187) (9,657) (4.9%) Stage 1 (817) (869) (6.0%) Stage 2 (844) (1,212) (30.4%) Stage 3 (7,526) (7,576) (0.7%) Total net receivables 157,322 155,477 1.2% () Including non-treasury debt securities , interest and receivables in transit and excluding reverse repo transactions. As at the end of December 2023 the ratio of impaired receivables (stage 3) to the gross receivables amounted to 6.1%. 76 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Loans and advances to customers by currency () 31.12.2023 31.12.2022 PLN MILLION STRUCTURE PLN MILLION STRUCTURE CHANGE Denominated in PLN 134,358 80.7% 132,813 80.4% 1.2% Denominated in foreign currencies () 32,151 19.3% 32,321 19.6% (0.5%) Total 166,509 100.0% 165,134 100.0% 0.8% Impairment allowances (9,187) x (9,657) x (4.9%) Total net receivables 157,322 x 155,477 x 1.2% (*) Including non-treasury debt securities , interest and receivables in transit and excluding reverse repo transactions. () Including indexed loans. The currency structure of loans and advances to customers is dominated by amounts expressed in the Polish złoty; as at the end of December 2023, their share was 80.7%. The largest portion of foreign currency loans and advances to customers were represented by those denominated in EUR (85.5%), CHF (6.1%) and USD (6.9%). Loans and advances to customers by contractual maturities () 31.12.2023 31.12.2022 PLN MILLION STRUCTURE PLN MILLION STRUCTURE CHANGE Current and up to 1 month 17,767 10.7% 21,128 12.8% (15.9%) 1 to 3 months 7,297 4.4% 7,065 4.3% 3.3% 3 months to 1 year 18,379 11.0% 17,009 10.3% 8.1% 1 to 5 years 51,716 31.1% 50,078 30.3% 3.3% Over 5 years 65,335 39.2% 63,640 38.5% 2.7% Past due 4,095 2.5% 4,481 2.7% (8.6%) Other 1,920 1.2% 1,732 1.0% 10.8% Total 166,509 100.0% 165,134 100.0% 0.8% Impairment allowances (9,187) x (9,657) x (4.9%) Total net receivables 157,322 x 155,477 x 1.2% () Including non-treasury debt securities , interest and receivables in transit and excluding reverse repo transactions. As at the end of December 2023, loans and advances with maturity over 5 years represents 39.2% of total loans and advances (mainly attributed to mortgage loans, investment loans, and non-treasury debt securities). Information on loan concentration is included in the Note 26 to the Separate Financial Statements of Bank Pekao S.A. for the year ended on 31 December 2023. 9.2.2 Liabilities Changes in the structure of liabilities Amounts due to customers were the main item under the Bank’s liabilities and equity. As at the end of 2023, amounts due to customers, debt securities issued and subordinated liabilities totaled PLN 239,166 million, and their share in the total assets was 66.6%, compared with 80.4% as at the end of 2022. The share of total shareholder’s equity in the total assets was 10.2% as at the end of 2023, compared with 8.2% as at the end of 2022. External sources of financing (in PLN million) 31.12.2023 31.12.2022 CHANGE Amounts due to other banks 2,825 4,135 (31.7%) Amounts due to customers 232,307 209,802 10.7% Debt securities issued 4,078 5,894 (30.8%) Subordinated liabilities 2,781 2,789 (0.3%) Repo transactions 1,649 879 x Total external sources of financing 243,640 223,499 9.0% The deposit base is widely diversified and is sourced from retail and corporate customers. In addition, the Bank uses also funds borrowed on the interbank market. The Bank is not dependent on any single customer nor group of customers. 77 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Amounts due to customers and debt securities issued (in PLN million) 31.12.2023 31.12.20221 CHANGE Corporate deposits 100,234 90,708 10.5% Non-financial entities 76,375 71,875 6.3% Non-banking financial entities 6,584 5,079 29.6% Budget entities 17,275 13,755 25.6% Retail deposits 130,964 118,370 10.6% Other () 1,110 724 53.3% Amounts due to customers () 232,307 209,802 10.7% Debt securities issued of which 6,859 8,683 (21.0%) Structured Certificates of Deposit (SCD) - 952 x Certificates of Deposit (CD) - 4,909 x Senior bonds 4,014 x Subordinated bonds 2,750 2,750 x Interest 96 72 32.8% Amounts due to customers and debt securities issued (*) 239,166 218,485 9.5% Repo transactions 1,649 879 87.6% Lease liabilities 585 307 90.4% Amounts due to customers and debt securities issued, total () 241,401 219,672 9.9% Investment funds of Pekao TFI S.A. (ex. Pioneer Pekao TFI) 24,228 19,172 26,4% including distributed through the Bank’s network 20,206 16,000 26,3% () Other item includes interest and funds in transit. () Excluding repo transactions and lease liabilities. () Including repo transactions and lease liabilities. As at the end of December 2023, amounts due to the Group’s customers and debt securities issued amounted to PLN 239,166 million, an increase of PLN 20,680 million, i.e. 9.5% in comparison to the end of December 2022. The total volume of retail deposits, Structured Certificates of Deposit and other amounted to PLN 131,911 million as at the end of December 2023, an increase of PLN 11,965 million, i.e. 10.0% in comparison to the end of December 2022. The total volume of corporate deposits, Certificates of Deposit, subordinated bonds, senior bonds interest and other amounted to PLN 107,255 million as at the end December 2023, an increase of PLN 8,716 million, i.e. 8.8% as compared to the end of December 2022. The value of net assets of investment funds managed by Pekao TFI S.A. amounted to PLN 24,228 million as at the end of December 2023, an increase of PLN 5,057 million, i.e. 26.4% in comparison to the end of December 2022. Amounts due to customers by currency () 31.12.2023 31.12.2022 PLN MILLION STRUCTURE PLN MILLION STRUCTURE CHANGE Denominated in PLN 190,713 82.1% 171,122 81.6% 11.4% Denominated in foreign currencies 41,594 17.9% 38,680 18.4% 7.5% Total 232,307 100.0% 209,802 100.0% 10.7% () Including interest and amounts due in transit and excluding repo transactions and lease liabilities. The bulk of the amounts due to customers are denominated in the Polish currency and its share as at the end of December 2023 amounted to 82.1%. The majority of amounts due to customers denominated in foreign currencies were in EUR (64.9%) and USD (28.5%). 78 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Amounts due to customers by contractual maturities () 31.12.2023 31.12.2022 PLN MILLION STRUCTURE PLN MILLION STRUCTURE CHANGE Current accounts and overnight deposits 171,009 74,0% 157,873 75,5% 8.3% Term deposits 60,189 26,0% 51,205 24,5% 17.5% Total deposits 231,197 100,0% 209,078 100,0% 10.6% Interest accrued 634 x 382 x 65.9% Funds in transit 476 x 342 x 39.3% Total 232,307 x 209,802 x 10.7% () Excluding repo transactions and lease liabilities. Provisions, deferred tax assets and liabilities (in PLN million) 31.12.2023 31.12.2022 CHANGE Total provisions 1,871 1,394 34.2% provisions for off-balance sheet commitments 552 449 22.8% provisions for liabilities to employees 385 301 28.0% other provisions 934 644 45.1% Deferred tax liabilities - - x Deferred tax assets 785 1,280 (38.7%) 79 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 9.3 Separate income statement (in PLN million) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Interest income 4,359 4,389 4,353 4,026 4,218 1,262 2,904 2,135 Interest income calculated using the effective interest method 4,342 4,372 4,342 4,014 4,203 1,252 2,897 2,131 Financial assets measured at amortised cost 3,857 3,925 3,823 3,515 3,860 1,048 2,730 2,002 Financial assets measured at fair value through other comprehensive income 485 447 519 499 343 204 167 129 Other interest income related to financial assets measured at fair value through profit or loss 17 17 11 12 15 10 7 4 Interest expense (1,317) (1,444) (1,445) (1,333) (1,098) (844) (424) (144) Net interest income 3,042 2,945 2,908 2,693 3,120 418 2,480 1,991 Fee and commission income 833 805 790 768 779 791 790 756 Fee and commission expense (215) (222) (209) (204) (228) (189) (180) (160) Net fee and commission income 618 583 581 564 551 602 610 596 Dividend income 30 1 237 - 45 1 211 - Result on financial assets and liabilities measured at fair value through profit or loss and foreign exchange result 106 80 142 159 146 18 (43) 49 Result on fair value hedge accounting (1) 1 1 (1) 1 - 1 1 Result on derecognition of financial assets and liabilities not measured at fair value through profit or loss (9) 14 13 (3) 6 1 (7) (4) Net allowances for expected credit losses 70 (134) (255) (108) (1,013) (251) (471) (144) including: legal risk regarding foreign currency mortgage loans 129 20 (60) 25 (852) (25) (298) (10) Operating income 28 21 25 35 47 34 22 27 Operating expenses (281) (88) (64) (97) (237) (143) (196) (28) including: legal risk regarding foreign currency mortgage loans (226) (58) (50) (69) (193) (18) (103) (5) General administrative expenses and depreciation (1,318) (1,267) (1,289) (1,423) (1,150) (1,236) (1,697) (1,346) Profit / loss before tax 2,285 2,156 2,299 1,819 1,516 (556) 910 1,142 Income tax expense (475) (483) (438) (445) (559) 36 (281) (310) Net Profit / loss 1,810 1,673 1,861 1,374 957 (520) 629 832 80 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 9.4 Separate statement of comprehensive income (in PLN million) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Net profit 1,810 1,673 1,861 1,374 957 (520) 629 832 Other comprehensive income Item that are or may be reclassified subsequently to profit or loss: Impact of revaluation of debt financial instruments and loan measured at fair value through other comprehensive income (net): 125 167 131 329 172 (59) (293) (460) profit or loss on fair value measurement 126 173 137 332 181 (55) (291) (456) profit or loss reclassification to income statement after derecognition (1) (6) (6) (3) (9) (4) (2) (4) Impact of revaluation of derivative instruments hedging cash flows (net) 162 466 428 561 762 43 (988) (800) Items that will never be reclassified to profit or loss: Impact of revaluation of investments in equity instruments designated at fair value through other comprehensive income (net) 7 19 (5) 43 25 (6) (46) (21) Remeasurements of the defined benefit liabilities (net) (1) - (22) - (23) - 14 - Other comprehensive income (net of tax) 293 652 532 933 936 (22) (1,313) (1,281) Total comprehensive income 2,103 2,325 2,393 2,307 1,893 (542) (684) (449) 9.5 Separate income statement – presentation form (in PLN million) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Net interest income 3,042 2,945 2,908 2,693 3,120 418 2,480 1,991 Net fee and commission income 618 583 581 564 551 602 610 596 Dividend income 30 1 237 - 45 1 211 - Trading result 96 95 156 155 153 19 (49) 46 Net other operating income and expenses () (253) (67) (39) (62) (190) (109) (174) (1) including: legal risk regarding foreign currency mortgage loans (226) (58) (50) (69) (193) (18) (103) (5) Net non-interest income () 491 612 935 657 559 513 598 641 Operating income () 3,533 3,557 3,843 3,350 3,679 931 3,078 2,632 Operating costs (1,098) (1,045) (1,071) (1,016) (918) (875) (986) (879) Gross operating profit () 2,435 2,512 2,772 2,334 2,761 56 2,092 1,753 Net allowances for expected credit losses 70 (134) (255) (108) (1,013) (251) (471) (144) including: legal risk regarding foreign currency mortgage loans 129 20 (60) 25 (852) (25) (298) (10) Net operating profit 2,505 2,378 2,517 2,226 1,748 (195) 1,621 1,609 Contributions to the Bank Guarantee Fund - - - (188) - 57 (57) (265) Fee paid for the Protection Schemes - - - - - (42) (440) - Contributions to the Borrowers Support Fund - - - - (5) (153) - - Tax on certain financial institutions (220) (222) (218) (219) (227) (223) (214) (202) Profit before tax 2,285 2,156 2,299 1,819 1,516 (556) 910 1,142 Income tax expense (475) (483) (438) (445) (559) 36 (281) (310) Net profit 1,810 1,673 1,861 1,374 957 (520) 629 832 81 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 9.6 Reconciliation of income statement – presentation form and long form Separate income statement for 2023 (in PLN million) INCOME STATEMENT – PRESENTATION FORM'S ITEMS LONG FORM'S ITEMS RECLASSIFFIED TO PRESENTATION FORM 2023 Net interest income Net interest income 11,588 Net fee and commission income Net fee and commission income 2,346 Dividend income Dividend income 268 Trading result 502 Net result on other financial instruments at fair value through profit and loss 487 Result on fair value hedge accounting - (Gains) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss 15 Net other operating income and expenses (421) Operating income 109 Operating expenses (530) Net non-interest income 2,695 Operating income 14,283 Operating costs (4,230) General administrative expenses depreciation (5,297) less - Contributions to the Bank Guarantee Fund 188 less - Fee paid for the Protection Schemes - less - Contributions to the Borrowers Support Fund - less – Tax on certain financial institutions 879 Gross operating profit 10,053 Net allowances for expected credit losses Net allowances for expected credit losses (427) Net operating profit 9,626 Contributions to the Bank Guarantee Fund Contributions to the Bank Guarantee Fund (188) Fee paid for the Protection Schemes Fee paid for the Protection Schemes - Contributions to the Borrowers Support Fund Contributions to the Borrowers Support Fund - Tax on certain financial institutions Tax on certain financial institutions (879) Profit before tax Profit before tax 8,559 Income tax expense Income tax expense (1,841) Net profit Net profit 6,718 82 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Separate income statement for 2022 (in PLN million) INCOME STATEMENT – PRESENTATION FORM'S ITEMS LONG FORM'S ITEMS RECLASSIFFIED TO PRESENTATION FORM 2022 Net interest income Net interest income 8,009 Net fee and commission income Net fee and commission income 2,359 Dividend income Dividend income 257 Trading result 169 Net result on other financial instruments at fair value through profit and loss 170 Result on fair value hedge accounting 3 (Gains) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss (4) Net other operating income and expenses (474) Operating income 130 Operating expenses (604) Net non-interest income 2,311 Operating income 10,320 Operating costs (3,658) General administrative expenses depreciation (5,429) less - Contributions to the Bank Guarantee Fund 265 less - Fee paid for the Protection Schemes 482 less - Contributions to the Borrowers Support Fund 158 less – Tax on certain financial institutions 866 Gross operating profit 6,662 Net allowances for expected credit losses Net allowances for expected credit losses (1,879) Net operating profit 4,783 Contributions to the Bank Guarantee Fund Contributions to the Bank Guarantee Fund (265) Fee paid for the Protection Schemes Fee paid for the Protection Schemes (482) Contributions to the Borrowers Support Fund Contributions to the Borrowers Support Fund (158) Tax on certain financial institutions Tax on certain financial institutions (866) Profit before tax Profit before tax 3,012 Income tax expense Income tax expense (1,114) Net profit Net profit 1,898 83 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 9.7 The structure of the net profit (in PLN million) 2023 2022 CHANGE Net profit of Bank Pekao S.A. 6,718 1,898 > 100% Entities consolidated under full method Pekao Leasing Sp. z o.o. 96 100 (4.0%) Pekao Investment Management S.A. 95 62 53.2% Pekao Investment Banking S.A. 14 10 40.0% Pekao Faktoring Sp. z o.o. 13 45 (71.1%) PEUF Sp. z o.o. 8 4 100.0% Pekao Financial Services Sp. z o.o. 7 6 16.7% Centrum Kart S.A. 3 9 (66.7%) Pekao Direct Sp. z o.o. 3 2 50.0% Pekao Fundusz Kapitałowy Sp. z o.o. w likwidacji 2 1 100.0% Pekao Property S.A. w likwidacji 1 - x FPB "MEDIA" Sp. z o.o. w upadłości - - x Pekao Bank Hipoteczny S.A. (109) (164) (33.5%) Entities valued under the equity method Krajowy Integrator Płatności S.A. 6 5 20.0% Exclusions and consolidation adjustments () (279) (261) 6.9% Net profit of the Group attributable to equity holders of the Bank 6,578 1,717 > 100% () Includes among others transactions within the Group (including dividends from subsidiaries for the previous years). and net profit attributable to non- controlling interest. Results of the Bank’s major related entities Pekao Leasing Sp. z o.o. - Pekao Leasing In 2023, Pekao Leasing generated a net profit of PLN 96 million , compared to a profit of PLN 101 million in the 2022. The result of Pekao Leasing, achieved with a 25.3% increase in the value of assets leased, was burdened by higher financing costs, an inflationary increase in operating costs and higher risk costs due to the revaluation of provisions for customers dependent on the increase in energy prices and portfolio growth . Pekao Investment Management S.A. - Pekao IM Consolidated net profit of Pekao IM in the 2023, amounted to PLN 95 million , compared to PLN 62 million in the 2022. The result was influenced by the improving situation on the capital market, which translated into an increase in the value of Pekao TFI assets. Pekao Investment Banking S.A. - Pekao IB In the 2023, Pekao IB generated a net profit of PLN 14 million , compared to PLN 10 million in the 2022. The result was affected by a smaller number and value of finalized transactions in the area of advisory services on the private and public capital market compared to the previous year. Pekao Faktoring Sp. z o.o. - Pekao Faktoring In the 2023, Pekao Faktoring generated a net profit of PLN 13 million compared to a profit of PLN 45 million in the of 2022. The result was influenced by higher credit risk costs (including a one-off write-off) and higher inflation costs - despite an increase in income by 9% y/y, limited by an increase in financing costs. Pekao Faktoring ranks first in turnover on the Polish factoring market. PeUF Sp. z o. o. – PEUF In 2023, PeUF generated a net profit of PLN 8 million . The result was achieved with a 62.5% increase in the value of commission on policies sold in 2023 compared to 2022. Krajowy Integrator Płatności S.A.- KIP In 2023, KIP generated a net profit of PLN 16 million (including the Bank's share of PLN 6 million ), compared to a profit of PLN 12 million achieved in the 2022. The results are the effect of the continous development of KIP's activities in the area of online payment services, service websites, a wider range of services provided by KIP, including as part of cooperation with the Bank. 84 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Pekao Financial Services Sp. z o.o. - PFS In 2023, PFS generated a net profit of PLN 7 million (including the Bank's share of PLN 5 million ), compared to a profit of PLN 6 million in the of 2022. The net result was higher due to an increase in revenues, among others, from the provision of services under Employee Capital Plans and the commencement of servicing a new client. Centrum Kart S.A. – Centrum Kart In 2023, Centrum Kart generated a net profit of PLN 3 million compared to PLN 8 million generated last year. The result was influenced by the stabilization of income, with the company's operating costs rising at an inflationary rate . Pekao Direct Sp. z o.o. - Pekao Direct In 2023, Pekao Direct reported a net profit of PLN 3 million , compared to PLN 2 million profit generated in the 2022. The result was influenced by the increase in income resulting from the increase in the scale of customer service and the increase in sales of banking products via remote channels, as well as taking into account the change in rates resulting from the growing operating costs of the company. Pekao Bank Hipoteczny S.A. - Pekao Bank Hipoteczny In 2023, Pekao Bank Hipoteczny reported a net loss of PLN -109 million , compared to a loss of PLN 164 million in 2022. The result of the current period was influenced by an increase of PLN 117 million in the provision for legal risk related to the portfolio of mortgage loans denominated in CHF, compared to PLN 94 million in 2022. However, the loss for 2022 was also the result of taking into account credit holidays for mortgage loans in PLN and the costs of the Borrower Support Fund. 9.8 Off–balance sheet items Bank Pekao S.A. Group - Statement of Off-balance sheet items (in PLN million) 31.12.2023 31.12.2022 CHANGE Contingent liabilities granted and received 97,732 111,497 (12.3%) Liabilities granted: 65,854 69,289 (5.0%) financial 55,137 57,209 (3.6%) guarantees 10,718 12,080 (11.3%) Liabilities received: 31,878 42,208 (24.5%) financial 452 2,089 (78.4%) guarantees 31,426 40,119 (21.7%) Derivative financial instruments 530,320 491,490 7.9% interest rate transactions 431,205 354,432 21.7% transactions in foreign currency and in gold 94,698 131,291 (27.9%) transactions based on commodities and equity securities 4,416 5,768 (23.4%) Total off-balance sheet items 628,052 602,988 4.2% Information on off-balance-sheet items is included in the N otes to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 202 3. Bank Pekao S.A - Statement of Off-balance sheet items (in PLN million) 31.12.2023 31.12.2022 CHANGE Contingent liabilities granted and received 120,167 129,481 (7.2%) Liabilities granted: 88,615 87,941 0.8% financial 57,888 59,070 (2.0%) guarantees 30,727 28,872 6.4% Liabilities received: 31,552 41,539 (24.0%) financial 126 1,420 (91.1%) guarantees 31,426 40,119 (21.7%) Derivative financial instruments 531,872 494,738 7.5% interest rate transactions 431,703 354,763 21.7% transactions in foreign currency and in gold 95,753 134,207 (28.7%) transactions based on commodities and equity securities 4,416 5,768 (23.4%) Total off-balance sheet items 652,039 624,219 4.5% Information on off-balance-sheet items is included in the Notes to the Separate Financial Statements of Bank Pekao S.A. for the year ended on 31 December 2023. 85 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 10. Other Information Information required pursuant to Art. 111a of the Banking Law Bank Pekao S.A. is a universal commercial bank providing a full range of banking services to individual and institutional clients in Poland. Bank Pekao S.A. Group includes financial institutions operating in banking, asset management, pension funds, brokerage services, transactional advisory, leasing and factoring markets. The Bank and all subsidiaries of the Bank, within a consolidated basis under article 4, section 1, point 48 of the Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms, run its activities on territory of Poland. As at the end of December 2023, the number of full-time jobs in the Group was 14,722 compared to 14,220 as at the end of 2022. As at the end of December 2023, the number of full-time jobs in the Bank was 12,402 compared to 12,143 as at the end of 2022. In 2023, the Group’s operating income amounted to PLN 14,733 million, and was higher by 38.2% in comparison 2022. In 2023, the Bank’s operating income amounted to PLN 14,283 million, and was higher by 38.4% in comparison 2022. Profit before tax of Bank Pekao S.A. Group in 2023 amounted to PLN 8,480 million and was higher by PLN 5,598 million, in comparison to 2022. Income tax expense in 2023 amounted to PLN 1,900 million vs. PLN 1,163 million in 2022 and was higher by 63.4%. Profit before tax of Bank Pekao S.A. in 2023 amounted to PLN 8,559 million and was higher by PLN 5,547 million in comparison to 2022. Income tax expense in 2023 amounted to PLN 1,841 million vs. PLN 1,114 million in 2022 and was higher by 65.3%. As at the end of December 2023, the return on assets (ROA) of the Group was 2.2% vs. 0.6% at the end of December 2022. As at the end of December 2023, the return on assets (ROA) of the Bank was 2.3% vs. 0.7% at the end of December 2022. In 2023, the Bank do not conclude any agreements according to article 141t, section 1 of the Banking Law Act. Information on significant agreements In 2023, there have been no other significant agreements concluded by the Bank, in particular the Bank has not concluded material agreements with central bank or the competent supervision authorities. Management Board position regarding the possibility of achieving previously published forecasts The Bank has not published the forecast of the financial results for 2023. Management Board remunerations The amount of remunerations or benefits (in cash, payments in kind or in any form) paid or due to the Management Board Members in 2023. ( in PLN thousand ) NAME PERIOD BASE SALARY VARIABLE REMUNERATION () OTHER BENEFITS () Leszek Skiba 01.01.2023 - 31.12.2023 1 254 760 39 Jarosław Fuchs 01.01.2023 - 31.12.2023 1 212 762 252 Marcin Gadomski 01.01.2023 - 31.12.2023 1 212 751 35 Jerzy Kwieciński 01.01.2023 - 31.12.2023 1 212 598 46 Paweł Strączyński 01.01.2023 - 31.12.2023 1 212 447 128 Błażej Szczecki 01.01.2023 - 31.12.2023 1 212 612 84 Wojciech Werochowski 01.01.2023 - 31.12.2023 1 212 612 56 Piotr Zborowski 01.01.2023 - 31.12.2023 1 212 371 73 Magdalena Zmitrowicz 01.01.2023 - 31.12.2023 1 212 927 266 (*) The variable remuneration includes the cash bonuses paid in 2022 for 2019-2022 and phantom shares for 2018-2021 resulting from the Variable Remuneration System. () Other benefits include, among others: compensation for non-competition, insurance policies, medical care. 86 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The part of variable remuneration in phantom shares due to the current Members of the Bank's Management Board and remaining in retention amounts to 41,733 shares. The value of this part of the variable remuneration as at 31 December, 2023 is PLN 6,346 thousand PLN according to the Bank's share price on 29 December, 2023, which is PLN 152.05. Members of the Bank's Management Board did not receive any remuneration in any form in 2023, nor do they have any receivables from the Bank's subsidiaries and associates. Former Members of the Bank's Management Board remuneration The value of variable remuneration paid to former Members of the Bank's Management Board who ceased to perform their functions in the Bank's Management Board before 1 January 2023 amounted to PLN 8,325 thousand in 2023. The part of the variable remuneration in phantom shares due to former Members of the Bank's Management Board who held the position of members of the Bank's Management Board before 1 January, 2023, amount to phantom 35,549 shares.The value of this part of the variable remuneration as at 31 December 2023 is PLN 5,405 thousand at the Bank Pekao share price as at 29 December 2023 amounting to PLN 152.05 Supervisory Board remunerations The amount of remunerations or benefits (in cash, payments in kind or in any form) paid or due to the Supervisory Board Members in 2023: ( in PLN thousand ) PERIOD TOTAL Sabina Bigos-Jaworowska 01.01.2023 - 31.12.2023 254 Joanna Dynysiuk 01.01.2023 - 31.12.2023 251 Justyna Głębikowska-Michalak 01.01.2023 - 31.12.2023 251 Stanisław Kaczoruk 01.01.2023 - 31.12.2023 251 Michał Kaszyński 01.01.2023 - 31.12.2023 254 Marian Majcher 01.01.2023 - 31.12.2023 254 Marcin Izdebski 01.01.2023 - 31.12.2023 254 Beata Kozłowska-Chyła 01.01.2023 - 31.12.2023 - Małgorzata Sadurska 01.01.2023 - 31.12.2023 - In 2023, the Supervisory Board Members did not receive nor are due any compensation from subsidiaries and associated entities of Bank Pekao S.A. Shares in the Bank and related entities held by the Bank's Directors According to information available to the Bank as at the date of submitting of Report on the activities of Bank Pekao S.A. Group for 2023 and as at the date of submitting of Report on the activities of Bank Pekao S.A. Group for the third quarter of 2023 the Members of the Bank’s management and supervisory bodies did not held shares of Bank Pekao S.A. Compensation for the Non-Competition after the termination of the Management Services Agreement The following Members of the Bank's Management Board: Mr. Leszek Skiba - President of the Management, Mr. Jarosław Fuchs - Vice President of the Management Board, Marcin Gadomski - Vice President of the Management Board, Mr. Jerzy Kwieciński - Vice President of the Management Board, Mr. Paweł Strączyński - Vice President of the Management Board, Mr. Błażej Szczecki - Vice President of the Management Board, Mr. Wojciech Werochowski - Vice President of the Management Board, Mr. Piotr Zborowski - Vice President of the Management Board, Ms. Magdalena Zmitrowicz - Vice President of the Management Board, , in accordance with the provisions in the Management Services Agreement, are obliged to comply with the Competition Prohibition and not to conduct competitive activities during the term of the agreement and for the period specified in the agreement after its termination. In 2023, no Compensation was paid under the Non-Competition Agreement after the termination of the Management Services Agreement. Liabilities due to pensions for former supervisors and managers In 2023, there were no liabilities arising from pensions and benefits of a similar nature for former managing and supervising persons (the Bank's Management Board and the Supervisory Board). 87 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Agreements with companies entitled to auditing of financial reports On the basis of the agreement concluded on July 24, 2018, audit company KPMG Audyt sp. z o.o. Sp.k. is the company appointed to audit and review the financial statements of Bank Pekao S.A. and Bank Pekao S.A. Group for the years 2021- 2023 (with subsequent annexes). Remuneration of the audit company and entities related to it for services provided to the Bank Pekao S.A. Capital Group is presented in the table below: (in PLN thousand) 2023 2022 Fee for the audit of annual financial statements 3 385 2 759 Fee for other attestation services, including review of financial statements 2 448 1 539 The amounts above do not include value added tax (VAT). Remuneration of the audit company and entities related to it for services provided to the Bank Pekao S.A. is presented in the table below: (in PLN thousand) 2023 2022 Fee for the audit of annual financial statements 2 469 2 025 Fee for other attestation services, including review of financial statements 1 952 1 025 The amounts above do not include value added tax (VAT). Average interest rates in Bank Pekao S.A. in 2023 The average nominal interest rates for the basic types of PLN deposits for non-financial sector residents: PLN retail deposits 2.1% p.a PLN corporate clients deposits 2.8% p.a The average nominal interest rates for the PLN loans for non-financial sector residents: Total retail loans 8.0% p.a. Mortgage 6.8% p.a. Consumption 12.7% p.a. Other 11.8% p.a. Corporate loans 8.3% p.a. Number and value of titles of execution and value of collaterals Bank Pekao S.A. has established specific policy with regard to collateral accepted to secure loans and guarantees. This policy is reflected under internal rules and regulations in the Bank. The type of collateral and its value are carefully analyzed and chosen regarding the particular risk of the secured transaction. The Bank obeys the rule, according to which the value of collateral should relate directly to the value of secured liability, that is cash provided by the Bank to a client (capital or the amount of off-balance sheet commitments granted by the Bank) together with extraneous amounts due, for example, interest or commissions. In order to hedge risk related to lending activities the Bank accepts legal collateral under the Civil Code, the law on bills of exchange or resulting from the habits adopted in domestic or foreign trade, i.e. bank guarantees, guarantee under the Civil Code, blank of promissory notes, aval, transfer of debts, mortgages, registered pledges, pledges, assignment as collateral, transfer of assets in bank account, blockade assets on client’s account. For corporate clients, the total value of the collateral for impaired transactions as at 31 December, 2023 amounted to PLN 1,213 million. For retail clients, the total value of the collateral for impaired transactions as at 31 December, 2023 amounted to PLN 1,446 million. Pending litigations Information on significant legal proceedings pending before courts, arbitration bodies or public administration authorities in respect of liabilities and receivables of the Bank and its subsidiaries is included in Note 41 to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2023. 88 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Information on derivative financial instruments and hedge accounting Information on derivative financial instruments and hedge accounting is included in Note 21 to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2023. Related party transactions In 2023, the Bank and its subsidiaries have not concluded any significant transactions (single or aggregate) with related entities other than those executed on arm’s length. In 2023, the Bank and its subsidiaries did not provide any sureties in respect of loans or advances or did not provide any guarantees to an entity or a subsidiary of such entity, which the total value would be significant. Detailed information on related party transactions is included in Note 45 to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2023. Accounting principles adopted in the preparation of the report Accounting principles adopted in the preparation of the report are described in Note 5 to the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2022. Seasonality or cyclical nature of the Bank’s activity The demand for the financial services offered by the Bank is stable with no material impact of seasonal changes. Due to the nature of the Bank’s activity, it is not subject to seasonal or cyclical changes. Activities of other companies of the Bank Pekao S.A. Capital Group also does not show significant seasonal or cyclical characteristics. Issuance, redemption and repayment of debt securities Senior bonds On April 3, 2023, the Bank issued senior non-preferred bonds (“SNP bonds”) with a maturity of 3 years and the total nominal value amounted to PLN 0.75 billion. The SNP bonds have an option giving the Bank the right to early redemption of the bonds within 2 years from the date of issue, subject to the approval of the Bank Guarantee Fund. The SNP bonds will constitute eligible liabilities of the Bank within the meaning of Article 97a (1) pt. 2) of the Act on the Bank Guarantee Fund, Deposit Guarantee System and Forced Restructuring of 10 June 2016. The bonds will be traded on the alternative trading system Catalyst operated by the Warsaw Stock Exchange S.A. On July 28, 2023, the Bank issued both senior non-preferred bonds with a maturity of 4 years and the total nominal value amounted to PLN 0.35 billion and senior preferred bonds (“SP bonds”) with a maturity of 2 years and the total nominal value amounted to PLN 0.75 billion. The SNP bonds have an option giving the Bank the right to early redemption of the bonds within 2 years from the date of issue whereas the SP bonds have an option giving the Bank the right to early redemption of the bonds within 1 year from the date of issue, subject to the approval of the Bank Guarantee Fund. The SNP bonds and the SP bonds will constitute eligible liabilities of the Bank within the meaning of Article 97a (1) pt. 2) of the Act on the Bank Guarantee Fund, Deposit Guarantee System and Forced Restructuring of 10 June 2016. The bonds will be traded on the alternative trading system Catalyst operated by the Warsaw Stock Exchange S.A. On November 23, 2023, the Bank issued senior non-preferred eurobonds (“SNP eurobonds”) with a maturity of 4 years and the total nominal value amounted to EUR 0.5 billion. The SNP bonds have an option giving the Bank the right to early redemption of the bonds within 4 years from the date of issue, subject to the approval of the Bank Guarantee Fund. The SNP eurobonds will constitute eligible liabilities of the Bank within the meaning of Article 97a (1) pt. 2) of the Act on the Bank Guarantee Fund, Deposit Guarantee System and Forced Restructuring of 10 June 2016. The SNP eurobonds were issued under the Euro Medium Term Note Programme ("EMTN Programme") and were admitted to trading on the regulated market of the Luxembourg Stock Exchange. Subordinated bonds On 30 October 2017 the Bank issued 10 years subordinated bonds with a total nominal value of PLN 1.25 billion. The funds from the issue were designated – after receiving the approval of the Polish Financial Supervision Authority on 21 December 2017 – to increase the Bank's supplementary capital. pursuant to art. 127 para. 2 point 2 of the Banking Law and art. 63 of Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms . The bonds were introduced to trading on the ASO Catalyst market. On 15 October 2018 the Bank issued 10 years subordinated bonds with a total nominal value of PLN 0.55 billion. The funds from the issue were designated – after receiving the approval of the Polish Financial Supervision Authority on 16 November 2018 – to increase the Bank's supplementary capital. pursuant to art. 127 para. 2 point 2 of the Banking Law and art. 63 of Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms . The bonds were introduced to trading on the ASO Catalyst market. 89 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. On 15 October 2018 the Bank issued 15 years subordinated bonds with a total nominal value of PLN 0.20 billion. The funds from the issue were designated – after receiving the approval of the Polish Financial Supervision Authority on 18 October 2018 – to increase the Bank's supplementary capital. pursuant to art. 127 para. 2 point 2 of the Banking Law and art. 63 of Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms . The bonds were introduced to trading on the ASO Catalyst market. On 4 June 2019 the Bank issued 12 years subordinated bonds with a total nominal value of PLN 0.35 billion. The funds from the issue were designated – after receiving the approval of the Polish Financial Supervision Authority on 8 July 2019 – to increase the Bank's supplementary capital. pursuant to art. 127 para. 2 point 2 of the Banking Law and art. 63 of Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms . The bonds were introduced to trading on the ASO Catalyst market. On 4 December 2019 the Bank issued 12 years subordinated bonds with a total nominal value of PLN 0.40 billion. The funds from the issue were designated – after receiving the approval of the Polish Financial Supervision Authority on 10 December 2019 – to increase the Bank's supplementary capital. pursuant to art. 127 para. 2 point 2 of the Banking Law and art. 63 of Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms . The bonds were introduced to trading on the ASO Catalyst market. On 3 August 2022 the Management Board of the Bank adopted a resolution not to use the option of early redemption of subordinated bond issued by Bank on 30 October 2017 with a total nominal value of PLN 1.25 billion. On 29 August 2023 the Management Board of the Bank adopted a resolution not to use the option of early redemption of subordinated bond issued by Bank on 15 October 2018 with a total nominal value of PLN 0.55 billion. Pekao Bank Hipoteczny S.A. covered bonds The total value of the company’s liabilities due to covered bonds amounted to PLN 1,042 million (principal value) as at the end of December 2023. Liabilities from covered bonds with maturity, up to 6 months account for 12%, up to 1 year account for 14%, up to 2 years account for 14%, up to 5 years account for 60%. Pekao Bank Hipoteczny S.A. bonds The total value of the company’s liabilities under bonds amounted to PLN 270 million (principal value) as at the end of December 2023 with maturity date up to 6 months. Pekao Leasing Sp. z o.o. bonds The total value of the company’s liabilities under bonds amounted to PLN 2,244 million (principal value) as at the end of December 2023 with maturity date up to 3 months account for 28%, up to 1 year for 55%, and up to 2 years account for 18%. Pekao Faktoring Sp. z o.o. bonds The total value of the company’s liabilities under bonds with maturity date to 3 months amounted to PLN 2,286 million (principal value) as at the end of December 2023. Subsequent events Significant events after the balance sheet date are presented in Note 47 " Subsequent events” in the Consolidated Financial Statements of Bank Pekao S.A. Group for the year ended on 31 December 2023. 90 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 11. Prospects for Development 11.1 Factors which will affect the results of the Group The activity of Bank Pekao S.A. and the Group’s companies is in majority conducted on the Polish territory, hence the Group’s performance will be mainly affected by economic situation in the country and international events that have influence on domestic economy. Our macroeconomic outlook assumes disinflation slowdown alongside with stable output growth and elevated uncertainty. CPI inflation decreases: it amounted to 11.4% yoy in 2023, while our estimates point to 3.8% in 2024. Further disinflation means that global factors (energy, oil, goods in general) will play a diminishing role in the inflation-setting process, while domestic factors will become more important in 2024. Perspectives for GDP growth remain optimistic. After contractionary second quarter of 2023 (-0.6% yoy) and worse-than- expected IV quarter 23 (1.1% yoy) average growth in 2023 was 0.2% yoy and will amount to 2.0% yoy in. Growth will be propelled by private consumption (in line with historical trends). Negative contribution of stocks will wane, while net exports will contribute negatively to the GDP growth. A robust, consumption-fueled growth shall be considered a risk factor affecting path of disinflation; however, it may also bolster credit demand and drive further positive innovations to the cost of risk. Monetary policy has always affected banks’ financial results, and we consider it the pivotal factor shaping next year results. Profits achieved by the banking sector in 2022 and 2023 have been elevated by historically high interest rates. A cycle of rate hikes which started in October 2021 had raised the main interest rate to a historical high of 6.75%, which in turn drove banks interest revenue upwards. Yet we expect that after broad cuts in second half of 2023 (-100 bp) Monetary Policy Council will keep interest rates unchanged throughout 2024, which means that this year Polish economy will be dealing with elevated nominal rates and rising real interest. Housing credit sales growth will be slightly above 5% yoy in 2024. Mortgage market dynamics shall be similar to the ones from 2023: we expect weak growth in the first half of the year, due to high interest rates, and increased sales after June fueled by the Government support programmes. Strengthening consumption, propelled by real wage growth, may boost demand for consumer credit. At the same time households trying to recover their real savings shall drive inflow of retail deposits upwards. Another significant factors are Government mortgage debtor support programs, i.a. so-called ‘credit holidays’ and ‘safe credit 2%’. Aggregate cost of the ‘credit holidays’ has been estimated to PLN 1.9 billion in years 2022-2023. The programme shall be continued in 2024, but under eligibility restrictions (only debtors with installment-to-income ratio of 35% or higher will be eligible). On the other hand, ‘safe credit 2%’ has incured no cost at the Bank – both currently and in the medium-run perspective. Financial results of the Pekao Group may be subject to the risks related to the investment cycle; in particular, Next Generation EU (NGEU) funds may have particular impact. NGEU funds inflow could boost investment and demand for corporate credit, especially given the slump in absorption of the EU 2021-2027 budgetary perspective resources which is expected in 20242- 25. One shall bear in mind that according to our internal forecasts, average investment growth rate in 2025 will be negative. Yet the timing of NGEU funds inflow will be subject to political negotiation between Poland and the European Commission, possibly also to completion of given legislative or administrative procedures. 91 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 11.2 Strategic directions and business priorities „Responsible Bank. Modern banking" is the new strategy of Bank Pekao S.A. for the years 2021-2024. In line with strategic plans: • we will remain a universal bank , • we will strive to be the bank of first choice for an increasing number of our customers, • we will continue to develop remote distribution and customer service model , • we will focus on cost and process efficiency , • we will grow in most profitable market segments . Our ambition in the 2024 horizon is to be among the most profitable and effective banks in Poland. Therefore, as part of the implementation of the new strategy, the Bank focuses on: • significant increase in the return on equity (ROE), • reduction of the cost-to-income ratio (C / I). The main strategic goals also include: • an increase in the number of active mobile banking customers from 2 million in 2020 to 3.2 million in 2024 • digitization rate at the target level of ~100% in 2024. The strategy is based on four pillars: Customer, Growth, Efficiency and Responsibility. The „Customer” pillar We will put customers and their needs at the center of all its activities, therefore it intends to intensively develop digital channels as well as fast and convenient service processes. We will strive to enable retail clients to handle almost any matter online. The digitization rate amounting to nearly 100% is one of the key strategic aspirations for 2024. The PeoPay mobile application will be the main contact channel with our customers. We are planning to make even greater use of advanced data analytics and modern sales support tools in order to personalize the offer, improve the quality of service and increase customers’ willingness to recommend its services. A key measure of success that we will strive for is a significant improvement in customer satisfaction rankings. The „Growth” pillar In line with the Strategy, we focus on business growth in the most profitable market segments, product groups and areas of untapped potential, which will bring improved profitability, i.e. consumer finance, microbusiness, SME and MID enterprises. Over the next year, we want to acquire over 400 thousands individual customers every year and increase our market share in cash loans. Moreover, we will seek to rejuvenate the demographic structure of the retail customer base. Our goal is to acquire a total of over 600 thousands customers under 26 years of age by 2024. We want to strengthen our market position and increase our market share in the segment of small and medium-sized enterprises and in the segment of micro-enterprises. We plan also to strengthen business synergies and cooperation with PZU, which will result in an increase in sales of insurance products and a twofold increase in the gross written premium by 2024. In line with our Strategy, we will strengthen our presence on the e-commerce market through making installment loans available on-line. We will also offer solutions for e-stores and e-commerce platforms enabling sale in installments. The „Efficiency” pillar In times of strong pressure on the profitability of the banking sector, the ability to effectively manage costs and process excellence has become even more important, which is why the Bank focuses on technological transformation and improvement of efficiency of operations, accelerates digitization and migration of processes to remote channels and optimizes credit processes. An important element of the Strategy is the expansion of the self-service zone for customers in remote channels. We will strive to increase the level of customer self-service so that by 2024 80% of customers from the SME, MID and Corporate segments will use the self-service zone in digital channels. Due to the challenges in technological transformation, we invest and develop the following IT areas: • technology and innovation, • modern architecture, • rapid software development, 92 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. • infrastructure reliability, • people and competences. In line with the Strategy, we strive to optimise key credit processes, which should result in shortening the time to loan decision. The „Responsibility” pillar We want to support economic development by actively engaging in governmental, EU economic recovery, and climate transformation programs for our clients. Our commercial and operational activities will be even more based on the factors of sustainable development. We will strive to maintain a safe risk profile in the changing market environment and to maintain one of the lowest costs of risk among the largest banks. To achieve that, we will improve the infrastructure of risk models and automate credit assessment processes. Strategy execution in 2023 : In 2023, we continued the implementation of the Bank's strategy for 2021-2024 in a volatile macroeconomic environment, which consisted of y/y GDP declines in the first two quarters and the strongest contraction in consumption since the pandemic crisis in the second quarter of the year. The GDP growth rate in Poland slowed down significantly to 0.2% in 2023 compared to 5.3% achieved in 2022. Throughout last year, the Polish economy experienced a falling inflation rate, which, however, remained systematically at elevated levels, reaching in December 6.2%.The financial results in 2023 were also affected by government support programs, such as credit holidays, which constituted a cost of PLN 1.9 billion. It should be noted that Strategy of Bank Pekao S.A. for 2021-2024 was developed in an environment of historically low interest rates. A series of interest rate increases that have taken place since then (increase in the reference rate from 0.1% at the beginning of 2021 to 6.75% in 2022 and 5,75% in 2023) has had a significant impact on the growth trajectory of the Bank's net interest income in 2023 in relation to strategic assumptions. In 2023, the implementation of the Bank’s main strategic goals again achieved very good results. Key strategic goals: In 2023, the Bank achieved very good results for the ROE and C/I objectives. Also, the number of active mobile banking users was steadily growing. At the end of the year it amounted to PLN 3.1 million and was 14% higher than a year ago and 31% higher than two years ago. The ongoing digitization of services, on the other hand, translated into an increase in the total digitization rate from ~50% at the beginning of the Strategy horizon to 84% in 2023. KEY STRATEGIC GOALS: ACHIEVED IN 2023 ACHIEVED IN 2022 2024 GOAL ROE (%) 24,7% 7,6% ~10% C/I (%, (including to contributions to the BFG cost and fee paid for the Protection Schemes ) 32,7% 44,4% 42% Number of mobile banking customers (in million) 3,1 2,8 3,2 Total digitalization ratio (%) 84% 69% ~100% The „Customer” Pillar Bearing in mind the priorities defined in the strategic pillar "Customer", we carried out intensive work on the development of the functionality of digital service channels, with particular emphasis on mobile banking for retail customers. In 2023, we introduced a number of new solutions in electronic banking Pekao24, PeoPay and PeoPay Kids. On the Pekao24 website and the PeoPay application implementations included:  new functionalities of PeoPay and P24 applications: • the process of selling a housing account for children 13+ in the Parent Panel, • process "I don't remember my Pin" on the PeoPay login screen, thanks to which the customer can regain access to the application himself, • possibility to redirect the customer in the service process by the Bank’s employee to PeoPay application or Pekao24 service – to any screen in the application or service including purchasing processes, • new currency exchange platform, • registration and withdrawal of marketing objection, • execution of the Sorbnet instant transfer, • implementation of a split payment with a future date – open and hidden split payment, • transfer between own accounts of a natural person and a sole proprietorship, 93 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A.  PeoPay and P24 process improvements: • improvements in complaint processes, • providing new landing pages for applications for co-financing a nursery, family care capital, and a trusted profile,  development of functionalities for companies in PeoPay and P24: • providing the ability to update company data from the PeoPay and Pekao24 level, • application for an auxiliary account in PLN and foreign currencies for JDG corporate clients, • launching the Portal Akceptanta in Pekao24 for companies leasing terminals, which enables handling of payments and settlements of payment transactions, • notifications for corporate clients, integration of Pekao24 with the Accounting with Żubr service, application for a debit card for companies,  options to increase security: • possibility of verifying the identity of a Bank employee in the PeoPay application and the Peako24 service during a telephone conversation, • device counter allowing PeoPay to be installed on up to three devices,  PeoPay Kids application development: • personalization of PeoPay KIDS application – adding new skins, educational module, demo version of the application  personalization and ergonomics of PeoPay and P24: • personalization of Pekao24 – possibility to hide account balances, • new card images, • simplifying navigation in Pekao24, • new version of offer section, • possibility to set application background and avatars in PeoPay. The number of active mobile customers in relation to the current accounts number was 60% at the end of 2023, +3 p.p. compared to December 2022), which brings the Bank closer to achieving the strategic aspiration of at least 62% in 2024. In addition, the sale of cash loans in remote channels (measured by the share in the number of products sold) increased and at the end of 2023 amounted to 83% compared to 78% in the previous year. Bank Pekao also continued to implement a new CRM system, which is the first such comprehensive CRM implementation in the public cloud in Polish banking sector. With the support of a real-time data processing platform, advanced analytics and cloud solutions, Omnibank CRM provides customers with the most relevant offers and messages. The Bank also continued the multi-dimensional development of services for corporate clients. We have implemented a modern currency exchange platform, Kantor Pekao24, which provides corporate clients with broader opportunities and greater convenience in making currency exchange transactions. The system provides users with, among others: shortened quotation and transaction registration time, a wide range of currency pairs and full access to transaction history. The platform is easy and intuitive to use thanks to its modern design and the ability to personalize the desktop. To meet the stationary needs of our customers, we have expanded our presence on the local market. We have provided companies with new operational tools, e.g. the ability for companies and corporate clients to make cash deposits at post offices. In addition, we have implemented a modern CRM system to service corporate clients. The „Growth” pillar In 2023, we consistently carried out activities aimed at strengthening our position in the highest profitable segments, i.e. consumer finance, micro-enterprises, SMEs and MID enterprises. The goal in the area of current accounts acquisition of individual clients set out in the Strategy at the level of min. 400 thousand CAs annually was achieved. In 2023, we opened 583,000. accounts for individual customers and this is the best result of the acquisition of accounts for individual customers, the sales dynamics amounted to 5% y/y. New customers account for 72% of account sales, and over 127 thousand were created for selfies, which is an increase of 27% y/y. We also achieved very good acquisition results among young customers aged up to 26, we opened 204 thousand for young people, which constitutes 35% of total accounts.The very good acquisition results in 2023 were primarily influenced by: the marketing campaign of Konto Przekorzystne combined with an attractive interest rate on Konto Oszczędnościowe and the television campaign "Lato pełne swobody" of the holiday package - Konto Przekorzystne with a free gold card for the account. We successfully launched subsequent editions of online account opening promotions, under which customers could receive a bonus of up to PLN 200 for opening an account and actively using a debit card. 94 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Bank Pekao focuses on young people and consistently implements many new products for people aged up to 26. We focus on two areas - the development of the offer and marketing activities aimed at young people. We have introduced, among others, a new communication platform "Jak nie teraz to kiedy …" presenting young people with safe, modern and comprehensive financial solutions that will make it easier to realize their passions, goals and dreams. We develop passions for young people. After implementing the passions of traveling and gaming in 2022, in 2023 we implemented the passions of music, also being the Strategic Partner of the concert: Jimek&Goście: Historia Polskiego HIP-HOP’u Rozdział 2, which took place at the Śląski Stadium in Chorzów. In 2023, new sales of financing for Business segment customers amounted to PLN 2.3 billion and were higher by almost +26% y/y. The dynamic increase in new sales of bank loans in the business segment in 2023 by almost +48% y/y to the level of PLN 1.2 billion was supported by the implementation of the risk assessment path, which allows for quick calculation of the available limit and quick disbursement of a loan or revolving limit, changes in the pre-approved offer, implementation of a loan to maintain financial liquidity by agricultural producers, making the credit process available to intermediaries and marketing activities supporting the development of relationships with customers. In 2023, sales of housing loans amounted to over PLN 10,4 billion - at a record level as in 2021. In 2023, we strengthened our market position and took second place in the banking sector in terms of the volume of mortgage loan sales throughout 2023, and in August, thanks to the quick implementation of Bezpieczny Kredyt 2%, we achieved first place.We were one of the first banks to introduce “Bezpieczny Kredyt 2%” as part of the government program "Pierwsze mieszkanie". The loan was very popular among customers, who submitted over 51,000 loan applications to the Bank by the end of 2023, which constitutes 50% of all applications received in the entire banking sector. The total volume of contracts signed at the Bank at the end of the year was PLN 7.2 billion. Thanks to effective business activities aimed at strengthening the existing and building new competitive advantages in the SME segment, we have consistently strengthened the Bank's position on this market. We offer our clients a wide, comprehensive range of products and services. such as bank loans, leasing, factoring, arranging issues of debt securities and other specialized forms of financing. We expand our offer with new product and functional solutions. In 2023, among others: • As part of cooperation with the Agency for Restructuring and Modernization of Agriculture, we have introduced two new loans to our offer: liquidity and purchase loans, • We have introduced the application thanks to which we automated internal processes related to acquisition and parameterization of products for new customers, • We have launched a fully automatic dealing module access management process. We enabled corporate and MID customers to change credit card and charge limits. We have significantly improved navigation through basic functionalities of the PekaoBiznes24 self-service zone. We have maintained a high level of new customer acquisition, in the SME segment we acquired over 3 thousand customers and over 700 new customers in the MID segment. In 2023, the value of new loans sold (excluding renewals) in the SME segment reached PLN 6.9 billion, maintaining the high level from the previous quarters and 2022. In the MID segment, the value of new loans sold amounted to PLN 14.0 billion. In the corporate banking segment our approach to growth is focused on development of modern, digital tools supporting the work of our analysts and relationship managers. We pursue this aim by automating their work and providing them with market data, which increases their advisory competences and facilitates establishing long-term business relationships. We are significantly involved in projects related to a responsible approach to running business. We are also developing international banking and we actively support foreign expansion of our clients. In 2023, we significantly improved the income of the corporate banking segment. Entire Division generated revenues that were 11% higher than a year ago, and we developed most significantly by cooperating with strategic clients, where our revenues increased by 14% y/y. We improved both credit and non-credit income. The „Efficiency” pillar One of the strategic directions defined in the „Efficiency” pillar is the acceleration of digitalization and migration of processes to remote channels, which includes not only retail banking customers, and the development of the PeoPay mobile application (as mentioned in the „Customer” pillar section), but also digital services for corporate customers. We have continued to develop the self-service zone for corporate clients in the PekaoBiznes24 electronic banking, providing the possibility of submitting the disposition enabling the remote delivery of wide-ranging documents and the signing of contracts and annexes. Applications submitted using this disposition are processed using automation, including elements of artificial intelligence. We have also enabled customers remote submitting of applications in the field of Treasury. We were also developing PeoBIZ - a mobile application for companies with access to the PekaoBiznes24 electronic banking system . 95 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The development of remote distribution channels was accompanied by improvement in the effectiveness of the Bank's branch network. In 2023, the Bank reduced its branch network by 23 units. At the end of the year, the branch network consisted of 493 own branches and 81 partner branches. We have increased the level of robotization and automation in the Bank's operations, and we have also increased the efficiency of credit processes. We implement processes related to the optimization and increasing the use of analytical tools in credit processes in every customer segment. In 2023, the completed project implementations translated into improved efficiency of credit processes and shortened time for issuing a credit decision, among others: in the retail customer segment and in the enterprise segment. The „Responsibility” pillar We care about maintaining a safe risk profile in a changing market environment. Throughout 2023, the cost of risk amounted to 0.31% while maintaining a high level of NPL coverage. At the same time, a significant capital surplus above the regulatory minimum was maintained, i.e. the Tier I ratio reached 15.2%. Bank Pekao became the leader of the EU-wide stress test conducted by the European Banking Authority (EBA) and proved to be most resistant to stress factors among the 70 banks participating in the test. In June 2021, the Bank adopted and announced the ESG strategy for 2021-2024, defining the goals connected to caring for the natural environment, supporting the development of the economy and society, and the bank's sustainable development. The effects of its implementation were presented in the non-financial report for 2023. In particular, the Bank is even more involved in the energy and ecological transformation of Poland and environmental protection, including active participation in the development of renewable energy sources (RES) sector in Poland, offering and organizing the issue of sustainable development bonds (ESG). Our activities were appreciated by the market and in the fourth quarter of 2023 we launched the first international issue of green bonds with a nominal value of EUR 500 million. In November 2023, we published the Sustainable Finance Framework, a document specifying to which areas funds from bonds issued by the bank may be allocated. The defined categories: renewable energy, ecological construction, energy efficiency and access to basic services. Business priorities for 2024 Prospects for economic development (including, among others, potential slowdown in the pace of disinflation, moderate recovery in consumption, decisions regarding monetary policy, changes in investment dynamics) will affect the demand for banking products and possible changes in the cost of risk. We monitor the development of the situation in the Bank's environment on an ongoing basis, including the direct and indirect effects of the war in Ukraine, and we adapt our activities to the observed challenges. In the context of the directions of the observed changes, the business assumptions of the “Responsible Bank. Modern banking” Strategy remains valid, and the goals of the implemented strategic initiatives are periodically reviewed in order to ensure they are adjusted to the current external and internal conditions. In line with the adopted strategy, in 2024 we will consistently implement a number of projects and strategic initiatives aimed primarily at: • improving the quality of services offered and increasing the level of customer satisfaction, • dynamic business growth in profitable market segments (consumer finance, Business, SME, MID), • digital channels development and migration of processes to remote channels, • optimization and digitalization of credit processes, • strengthening the market position among young customers, • achieving the goals defined in the ESG Strategy, • ensuring the highest standards in the area of cybersecurity, • automation and robotization of operations. In addition, we will strive to strengthen a structured approach to data management and develop competences in the field of data analytics. The Bank will continue to develop cooperation with the PZU Group in the area of insurance and investment. 96 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 12. Statement of Bank Polska Kasa Opieki Spółka Akcyjna on application of Corporate Governance Standards in 2023 According to § 70 item 6 point 5 a and b of the ordinance of Minister of Finance dated 29 March 2018 on current and periodic information published by issuers of securities and the conditions for recognition as equivalent the information required by the laws of a non- member state 6 (hereinafter referred to as “the ordinance of the Minister of Finance dated 29 March 2018 ”), Bank Polska Kasa Opieki Spółka Akcyjna (hereinafter referred to as the “Bank”) states that it falls within the following set of corporate governance rules, including standards that issuer applies voluntarily and corporate governance practices used by issuer beyond the requirements of national law. 7 Corporate governance rules applied in the Bank i.e. a system of regulations and procedures defining guidelines for the activities of the Bank’s governing bodies , including their relations with entities interested in the Bank’s activities (stakeholders ) result from generally applicable law, especially from the Commercial Companies Code , the Banking Law and capital market regulations , as well as the rules laid down in : Code of Best Practice for WSE Listed Companies 2021, Corporate Governance Rules for the Supervised Institutions issued by the Financial Supervision Authority on 22 July 2014 and Code of Banking Ethics of Polish Bank Association. Subject with the exception of the matters presented below, in 2023 the Bank applied corporate governance rules laid down in the Code of Best Practice for WSE Listed Companies 2021 8 (hereinafter referred to as “Best Practice 2021”) set by WSE Supervisory Board’s Resolution No. 13/1834/2021 of 29 March 2021. The Bank did not apply detailed principles: 2.1; 2.2; 2.4 of "Best Practice 2021" concerning the diversity policy and the openness of voting of the Management Board and the Supervisory Board. In accordance with § 29 section 3 of the Rules of the Warsaw Stock Exchange, the Bank published Information on the application of the "Best Practice 2021" in Report No. 1/2021 of 4 August 2021, where explained reasons for non-application of the above-mentioned detailed rules. The Bank did not apply detailed rules 2.1 and 2.2 of "Best Practice 2021" according to which, in terms of gender diversity, the condition for ensuring the diversity of company bodies is the participation of minority in a given body at a level not lower than 30%. These criteria have been fulfilled in relation to the Bank's Supervisory Board. The Bank has the “Policy on Gender Equality and Diversity with regard to the Bank's Employees, including Members of the Supervisory Board, Members of the Management Board and Persons Performing Key Functions in Bank Polska Kasa Opieki Spółka Akcyjna" (hereinafter referred as “Policy”) approved by the Supervisory Board. The Policy defines the objectives and criteria of diversity, including in the scope indicated in the Best Practice 2021. The “Policy” has been developed taking into consideration requirements resulting from generally applicable regulations addressed to entities operating in the banking sector and recommendations of authorities that exercise control and supervision over that sector, including in particular recommendations included in the European Banking Authority and the European Securities and Markets Authority Guidelines on the assessment of the suitability of members of the management body and key functions holders . According to the Guidelines, a target for the representation of the under-represented gender in the statutory body should be specified by means of a Policy implemented in the Bank and, in principle, should be determined for the Bank's Supervisory Board and the Management Board jointly, which was applied in the aforementioned Policy implemented in the Bank. The total share of representatives of the under-represented gender in the composition of the Bank's Supervisory Board and the Management Board is in line with the target set out in the Policy implemented in the Bank and exceeds 30%. The Bank also did not apply the detailed rule 2.4 of the "Best Practice 2021" according to which the votes of the supervisory board and the management board should be public, unless otherwise provided for by law. The Bank shares the WSE Corporate Governance Committee’s view that, in general, all resolutions of the Bank's Management Board and Supervisory Board should be adopted in a transparent manner, i.e. after they are duly discussed and after all members of the body have expressed their opinion. Therefore, both the Rules of the Supervisory Board and the Rules of the Bank's Management Board, generally provide for open vote, with exceptions which allow the secret vote in cases provided for by law and in other indicated cases: 6 Journal of Laws 2018.757 7 Par. 70.6.5.a and b of the ordinance of the Minister of Finance of 29 March 2018 8 The document is publicly available on the WSE website: https://www.gpw.pl/dobre-praktyki 97 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 1) The Rules of the Supervisory Board stipulate that the Chairman shall order a secret vote only in one case, namely at the request of at least one member of the Supervisory Board, as an exception to the principle of open vote (§ 11 section 8 of the Rules). Other provisions of the Rules relating to secret vote have already been repealed or amended by the Supervisory Board, 2) The Rules of the Bank's Management Board stipulate that resolutions are adopted in an open vote. As an exception to this rule, the Rules indicate that only in situations specified by law or in other justified cases, the President of the Management Board may order a secret vote (§ 8 section 2 of the Rules). In the Bank’s view, due to the specific nature of the banking sector, it is not possible to exhaustively define all situations in which secret vote would be the optimal solution for the Bank's corporate governance. For this reason, the Bank does not completely exclude the ability to order a secret vote in cases other than those provided for by law. The Bank limited such ability to the abovementioned cases, considering such a solution to be the optimal compromise between the postulate of full transparency of the decision-making process in the Bank and the need to provide the members of the Bank's Management Board and Supervisory Board with the ability to adjust the manner of operation to unique circumstances. By Report No. 1/2022 of 15 June 2022 The Bank updated the information on the state of application of the "Best Practices 2021" taking into account the Resolutions No. 32 and 34 adopted by the Ordinary General Meeting of the Bank. In 2023, the Bank also applied Corporate Governance Rules for the Supervised Institutions issued by the Polish Financial Supervision Authority on 22 July 2014 9 , with the exception of:  chapter 9 of the Rules related to asset management at the client's risk , in view of the fact that the Bank does not pursue any activity in this area ,  § 49 section 4 and § 52 section 2 of the Rules in view of the fact that there is an audit unit and a compliance unit functioning in the Bank. The Bank applied the principle set out in § 21 section 2 of the Corporate Governance Principles for the Supervised Institutions regarding the chairman of the Supervisory Board. The election of the Chairman of the Bank’s Supervisory Board was made on the basis of knowledge, experience, including the management of the body, and skills that confirm the competences necessary for the proper performance of supervision duties. Moreover, in accordance with point 90 of the Guidelines on the assessment of the suitability of members of the management body and persons performing key functions EBA/GL/2021/06, ESMA35-36- 2319 of 2 July 2021, the Bank recognizes that the Chairman of the Supervisory Board of the Bank is independent. In 2023, the Bank applied corporate governance rules laid down in the Code of Banking Ethics of Polish Bank Association 10 . The activities undertaken by the Bank comply with the laws regulations, the Bank’s Statute, internal Bank’s regulations, market standards and ethic norms. Acting in compliance with par. 70.6.5c–m of above mentioned ordinance of Minister of Finance dated 29 March 2018, the Bank presents following information: 1) The description of key features of the Bank’s internal control and risk management systems related to the preparation of financial statements and consolidated financial statements 11 The Management Board of the Bank is responsible for developing and implementing of an independent, adequate and efficient Internal Control System, one of whose objectives is to ensure the reliability of financial reporting . As part of the Internal Control System, the Bank distinguishes: 1) control function, 2) an independent compliance unit, i.e. the Compliance Department, tasked with identifying, assessing, controlling and monitoring the risk of non-compliance of the Bank's activities with the law, internal regulations and market standards and presenting reports in this regard, 3) an independent internal audit unit, i.e. the Internal Audit Department, tasked with examining and assessing, in an independent and objective manner, the adequacy and effectiveness of the risk management system and the Internal Control System, excluding its own activities within these systems. 9 The document is publicly accessible on the Polish Financial Supervision Authority website: https://www.knf.gov.pl/dla_rynku/regulacje_i_praktyka/zasady_ladu_korporacyjnego 10 The document is publicly accessible on the Polish Bank Association website: https://zbp.pl/Dla-Bankow/Prawo-i-legislacja/Komisja-Etyki-Bankowej 11 Par. 70.6.5.c of the ordinance of the Minister of Finance of 29 March 2018 98 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The Supervisory Board supervises the introduction and ensuring the functioning of an adequate and effective Internal Control System. The Supervisory Board performs an annual assessment of the adequacy and effectiveness of the Internal Control System, including an annual assessment of the adequacy and effectiveness of control functions, compliance units and internal audit units. The internal control system within the process of financial statements preparation is aimed at ensuring reliable, complete and correct disclosure of all commercial transactions executed over a given period. In order to carry out the reporting process, the Bank shall have established accounting policies in accordance with the requirements of International Financial Reporting Standards and other applicable regulations, an account plan, detailed internal instructions, rules for the recording of particular types of economic transactions, as well as reporting systems. At the same time, the Bank shall monitor developments in external legislation on an ongoing basis and shall carry out an assessment of the possible impact of these changes on accounting policies and reporting processes. IT systems shall ensure that clear and centralised data obtained, confirming the entries in the accounts and ensuring the continuity of records and the transfer of turnover and balances and the preparation of financial statements. The Bank shall have a formalised process for closing the accounts and drawing up its accounts, in particular on the basis of a fixed timetable which defines the activities and the bodies responsible for their implementation. The responsibility for preparation of financial statements, periodic financial and supervisory reporting and the provision of information management information rests with the Financial Division supervised by the Vice President of the Bank’s Management Board . 2) Identification of shareholders owning directly or indirectly a significant block of shares together with identification of number of shares owned by those shareholders, percentage of shareholders share in share capital , number and percentage of votes at general meeting resulting from owned shares 12 [A] The main shareholders of the Bank from 7 June 2017 are:  Powszechny Zakład Ubezpieczeń S.A. holding shares in the number of 52 . 494 . 007 (fifty-two million four hundred ninety four thousand seven) shares of the Bank, constituting approximately 20% (twenty percent) of the Bank's share capital and entitling to exercise 52 . 494 . 007 (fifty-two million four hundred and ninety four thousand seven) votes , representing about 20% of the total number of votes , and  Polski Fundusz Rozwoju S.A. holding shares in the number of 33.596.166 (thirty-three million five hundred ninety six thousand one hundred and sixty six) of the Bank's shares, representing approximately 12.8% of the Bank's share capital and entitling to 33.596.166 (thirty-three million five hundred ninety six thousand one hundred sixty six) votes representing about 12.8% of the total number of votes. [B] On 16 May 2023, Bank Pekao S.A. informed that on 16 May 2023, it received notice of the participation of Powszechne Towarzystwo Emerytalne Allianz Polska Spółka Akcyjna in the share capital and the total number of votes in Bank Polska Kasa Opieki Spółka Akcyjna. The Notice included the following information: Powszechne Towarzystwo Emerytalne Allianz Polska Spółka Akcyjna ("PTE Allianz Polska S.A."), managing the Allianz Polska Open Pension Fund ("Allianz OFE") and managing the Second Allianz Polska Open Pension Fund ("Drugi Allianz OFE"), notified that pursuant to Art. 69 section 1 of the Act of 28 August 1997 on the organization and operation of pension funds (consolidated text: Journal of Laws of 2022, item 2342, as amended) on 12 May 2023, as a result of the liquidation of the Second Allianz OFE by way of transfer of its assets to Allianz OFE, the share in the total number of votes in the Bank on Allianz OFE accounts was above 5%. Before the liquidation of the Second Allianz OFE, the total balance in the accounts of Allianz OFE and the Second Allianz OFE was 15,500,051 shares of the Bank, which constituted a total of 5.91% of the share capital of the Bank and gave the right to exercise 15,500,051 votes, constituting 5.91% of the share in the total number of votes at the General Meeting of Shareholders (“ GM ”) of the Bank. After the liquidation of the Second Allianz OFE, 15,500,051 shares were registered on the Allianz OFE account, constituting 5.91% of the share capital of the Bank, which gives the right to exercise 15,500,051 votes from the shares constituting 5.91% of the total number of votes on GM of the Bank. 12 Par. 70.6. 5 .d of the ordinance of the Minister of Finance of 29 March 2018 99 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. At the same time, Powszechne Towarzystwo Emerytalne Allianz Polska S.A., managing Allianz OFE, announced that:  has no subsidiaries holding shares of the Bank,  the situation described in Art.. 69 section 4 point 6 of the Act of 29 July 2005 on public offering and conditions for introducing financial instruments to organized trading and on public companies, does not occur,  it also does not have the financial instruments referred to in Art. 69b section 1 point 1) and 2) of the Act of 29 July 2005 on public offering and conditions for introducing financial instruments to organized trading and on public companies. [C] On 10 January 2023, Bank Pekao S.A. informed that on 5 January 2023 it received a notification from Powszechne Towarzystwo Emerytalne Allianz Polska Spółka Akcyjna regarding exceeding the threshold of 5% of the total number of votes in the Bank ("Notification") . Powszechne Towarzystwo Emerytalne Allianz Polska Spółka Akcyjna ("PTE Allianz Polska S.A."), the manager of Allianz Polska Otwarty Fundusz Emerytalny ("Allianz OFE") and the manager of Allianz Polska Dobrowolny Fundusz Emerytalny ("Allianz DFE"), informed that as a result of the merger pursuant to Article 67 of the Act of 28 August 1997 on the Organization and Operation of Pension Funds and Article 492 § 1(1) of the Commercial Companies Code, on 30 December 2022 with Aviva Powszechne Towarzystwo Emerytalne Aviva Santander Spółka Akcyjna managing the Second Allianz Polska Otwarty Fundusz Emerytalny ("Second Allianz OFE"), the share in the share capital and total number of votes of the Bank in the accounts of Allianz OFE, Allianz DFE and Second Allianz OFE increased above 5%. Prior to the merger, a total of 2,115,460 shares were registered on the accounts of Allianz OFE and Allianz DFE, representing 0.81% of the Bank's share capital, which gave the right to exercise 2,115,460 votes from shares representing 0.81% of the total number of votes at the Bank's General Meeting (“GM”). In the account of the Second Allianz Open Pension Fund 13,384,591 shares were registered, representing a 5.10% share in the Bank's share capital, which gave the right to exercise 13,384,591 votes from shares representing a 5.10% share in the total number of votes at the Bank's GM. After the merger, the total balance in the accounts of Allianz OFE, Allianz DFE and Second Allianz OFE increased to 15,500,051 shares, representing 5.91% of the Bank's share capital, which gives the right to exercise 15,500,051 votes from shares representing 5.91% of the total number of votes at the Bank's GM. At the same time, PTE Allianz Polska S.A., managing jointly Allianz OFE, Allianz DFE and Second Allianz OFE, informed that: • it has no subsidiaries holding shares in the Bank, • does not have a situation described in Article 69 section 4 item 6 of the Act of 29 July 2005 on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading, and Public Companies (“Act on Public Offering”), • it also does not have the financial instruments referred to in Article 69b Section 1 item 1 and 2 of the aforementioned Act on Public Offering. According to the information provided in the notification, the total share of Allianz OFE, Allianz DFE and Second Allianz OFE, managed by PTE Allianz Polska S.A., in the Bank's share capital and the total number of votes is 5.91%. [D] On 10 October 2023, Bank Pekao S.A. announced that on 10 October 2023, the Bank received a notification of a change in the share in the total number of votes at the General Meeting of the Bank prepared on the basis of ESMA/2015/1597 standards. The notifier was BlackRock, Inc. According to the information contained in the notification, BlackRock, Inc reduced its share in the total number of votes at the General Meeting of the Bank below the threshold of 5%. The shareholders of the Bank owning directly or indirectly through their subsidiaries at least 5% of the total number of voting rights at the Bank’s General Shareholders Meeting are as follows: SHAREHOLDER NAME NUMBER OF SHARES AND VOTES AT THE GENERAL MEETINGM SHARE IN SHARE CAPITAL AND TOTAL NUMBER OF VOTES AT THE GENERAL MEETING NUMER OF SHARES AND VOTES AT THE GENERAL MEETING SHARE IN SHARE CAPITAL AND TOTAL NUMBER OF VOTES AT THE GENERAL MEETING AT THE END OF DECEMBER, 31 2023 ET THE END OF DECEMBER, 31 2022 Powszechny Zakład Ubezpieczeń S.A. 52 494 007 20,00% 52 494 007 20,00% Polski Fundusz Rozwoju S.A. 33 596 166 12,80% 33 596 166 12,80% Funds managed by Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A. 16 800 000 6,40% 16 800 000 6,40% Funds managed by Powszechne Towarzystwo Emerytalne Allianz Polska S.A. 15 500 051 5,91% 15 500 051 5,91% Subsidiares managed by BlackRock, Inc - - 13 231 421 5,04% Other shareholders (below 5%) 144 079 810 54,89% 130 848 389 49,85% Total 262 470 034 100,00% 262 470 034 100,00% 100 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 3) Identification of holders of any securities with special control rights with description of those rights 13 According to the Bank’s Statute all the existing Bank’s shares are ordinary bearer shares. There are no special preferences or limitations connected with the shares, or differences in the rights attached to them. The rights and obligations related to the Bank’s shares result from generally applicable laws, in particular provisions of the Polish Commercial Companies Code. Securities issued by the Bank do not give their holders any special control rights. 4) Identification of any restrictions of voting rights, such as restriction of voting rights of holders of given number or percentage of votes, temporary restrictions of voting or provisions according to which rights resulting from securities are separated from the fact of holding those securities 14 According to the Bank’s Statute there are no restrictions regarding voting rights of Bank’s shares (generally applicable laws may in certain circumstances restrict voting rights of shareholder). 5) Identification of any restrictions of ownership transfer of securities issued by the Bank 15 According to the Bank’s Statute there are no restrictions of ownership transfer of securities issued by the Bank (generally applicable laws may in certain circumstances restrict ownership transfer of securities issued by the Bank). 6) Description of rules governing appointment and dismissal of Members of managerial bodies and their rights, in particular right to decide whether to issue or repurchase shares 16 Management Board As stated in the Bank’s Statute the Management Board is composed of 5 to 9 Members. Vice Presidents and Members of the Bank's Management Board are appointed and dismissed by the Supervisory Board at the request of the President of the Management Board, taking into account the assessment of compliance with the suitability requirements. Members of the Bank's Management Board are appointed for a joint term of office of three years. The Management Board comprises the President of the Management Board of the Bank, Vice Presidents of the Management Board of the Bank and Members of the Management Board of the Bank. Vice Presidents and Members of the Management Board are appointed and removed on the motion of the President. Appointment of the President of the Management Board and the Member of the Management Board supervising significant risk management or entrusting this function to the appointed Member of the Management Board, is subject to approval by the Financial Supervision Authority. The body which applies to the Financial Supervision Authority for the approval is the Supervisory Board. At least half of the Members of the Management Board, including its President, should possess a thorough knowledge of the Polish banking market, i.e. they should meet all of the following criteria:  they have professional experience gained on the Polish market, relevant for the performance of a managerial function at the Bank,  they are permanently domiciled in Poland,  they have command of the Polish language. The Management Board runs the business and represents the Bank. Each Member of the Bank’s Management Board is obliged to undertake actions in Bank’s interest. Members of the Management Board are prohibited from taking any decisions or actions that would lead to conflicts of interests or that would be incompatible with the Bank’s interests or their official duties. A Management Board Member is obliged to notify the Management Board of the Bank of any situation in which a conflict of interests might occur or has occurred as well as refrain from participating in discussion and voting on resolution in case of which a conflict of interest has occurred. Members of the Management Board shall have rights under the generally applicable law. The Bank’s Statute does not provide for the Management Board or its members right to decide whether to issue or purchase shares. 13 Par. 70.6.5.e of the ordinance of the Minister of Finance of 29 March 2018 14 Par. 70.6.5.f of the ordinance of the Minister of Finance of 29 March 2018 15 Par. 70.6.5.g of the ordinance of the Minister of Finance of 29 March 2018 16 Par. 70.6.5.h of the ordinance of the Minister of Finance of 29 March 2018 101 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 7) Description of rules governing amendment of the Statute of the Bank 17 Amendment of the Bank’s Statute requires adoption by way of resolution of the Bank’s General Shareholders Meeting as well as registering the amendment in the National Court Register. Procedure of the General Shareholders Meeting of the Bank 18 defines detailed rules of conducting the Bank’s General Shareholders Meetings and adopting resolutions. The Bank’s General Shareholders Meetings resolutions concerning the amendments of the Bank’s Statute are being adopted by the three-quarter majority. Moreover, as stated in Par. 34.2 of the Banking Act, any amendment of the Statute of the Bank shall require the authorization of the Polish Financial Supervision Authority. 8) Functioning of the General Shareholders Meeting and its key powers, as well as description of the rights of shareholders and the manner of exercising these rights, in particular rules resulting from Rules of Procedure for the General Shareholders Meeting, unless these rules result directly from generally applicable law 19 The operation of the Bank’s General Shareholders Meeting is governed by the Rules of Procedure for the Bank’s General Shareholders Meeting, adopted by way of Resolution No. 19 of 8 April 2003, amended by way of Resolution No. 41 of 5 May 2009, Resolution No. 41 of 1 June 2012 and Resolution No. 42 dated 16 June 2016. The Regulation of Shareholders’ Meetings of the Bank defines detailed rules of conducting General Shareholders Meetings and adopting resolutions. The Rules of Procedure are available to the public on the Bank’s website 20 . Apart from powers and authorities mentioned in binding laws, in particular in the Code of Commercial Companies and the Banking Law Act, in the Regulators’ recommendations and the Bank’s Statute, the Bank’s General Shareholders Meeting has the following powers and authority:  to review and approve the report on the Bank’s operations and the Bank’s financial statements for the previous financial year,  to adopt a resolution on profit distribution or coverage of loss,  to review and approve the report on the activities of the Supervisory Board,  to grant discharge to Members of the Supervisory Board and Management Board in respect of their duties,  to review and approve the report on the Group’s operations and the Group’s financial statements,  to set the dividend record date and dividend payment date,  to dispose of or lease a business or its organized part, and to encumber it with limited property rights,  to amend the Bank’s Statute and to draft its consolidated text,  to increase or decrease the Bank’s share capital,  to issue convertible bonds, bonds with pre-emptive rights to acquire shares, and subscription warrants,  to retire shares and to define the terms of retirement,  to decide on the Bank’s merger, demerger or liquidation,  to create and release special accounts,  to appoint and remove from office Members of the Supervisory Board, taking into account assessment of fulfilment of the suitability requirements,  to define the remuneration rules for Members of the Supervisory Board,  to conclude an agreement with a subsidiary which provides for the management of the subsidiary or for the transfer of profit by the subsidiary,  to deal with other matters falling within the scope of the Bank’s activities which are submitted to the Bank’s General Shareholders Meeting . 17 Par. 70.6.5.i of the ordinance of the Minister of Finance of 29 March 2018 18 Introduced by Resolution of the General Meeting No. 19 of 8 April 2003, as amended 19 Par. 70.6.5.j of the ordinance of the Minister of Finance of 29 March 2018 20 https://www.pekao.com.pl/o-banku/lad-korporacyjny.html 102 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The Bank’s General Shareholders Meeting is convened via the Bank’s website and in a way determined for passing current information according to rules regarding public offer and conditions, under which the financial instruments are introduced to organized turnover system and to rules regarding public companies. The convocation have to take place at least twenty-six days before the Bank’s General Shareholders Meeting. The Ordinary General Shareholders Meeting should take place once a year, not later than six months after the end of each financial year. When determining the date of the Bank’s General Shareholders Meeting, the Management Board seeks to enable as many shareholders as possible to participate in the Meeting. The Statute allows the participation in the General Meeting with the use of electronic communication means if the Management Board adopts such decision. Management Board adopts decision mentioned in the previous sentence in the case of fulfilling by the Bank technical conditions necessary for participation in the General Meeting with the use of electronic communication means what covers in particular: 1) real-life broadcast of General Meeting, 2) real-time bilateral communication where shareholders may take the floor during a General Meeting from location other than the General Meeting, 3) exercising the rights to vote during a General Meeting either in person or through a plenipotentiary. According to the Bank’s Statute, in each case of convening the General Meeting, the Management Board of the Bank defines whether the participation in the General Meeting with the use of electronic communication means is possible and what are the requirements and limitations necessary to identify of shareholders and to ensure the safety of electronic communication. Detailed conditions for participation in the General Meeting using electronic means of communication are set out in the rules adopted by the General Meeting, the announcement on convening the General Meeting and the Rules for participation in the General Meeting of the company under the name Bank Polska Kasa Opieki Spółka Akcyjna with its registered office in Warsaw using electronic means of communication adopted by Resolution No. 94/21 of the Supervisory Board of the Bank of 5 May 2021 on the adoption of Rules for participation in the General Meeting of the Company using electronic means of communication. The Bank’s Supervisory Board can convene Annual General Shareholders Meeting, if the Management Board does not convene it in due time stated in the Statute and the Extraordinary Shareholders Meeting, if necessary. The full documentation which is to be presented to the Bank’s General Meeting, together with the drafts of resolutions and information concerning the Bank’s General Meeting are made available to persons entitled to participate in the Bank’s General Meeting on the Bank’s website and in paper form which is available in the place indicated in the announcement about convening the General Meeting, published in accordance with Art. 402² of Code of Commercial Companies. Official copies of the Bank’s Management Board on the Bank’s operations and financial statements as well as copies of the Supervisory Board’s report and external auditor’s opinion are issued to shareholders upon request no later than 15 days prior to the Bank’s General Meeting date. The rights of the Bank’s shareholders include in particular:  the right of shareholders holding at least a half of the share capital or at least a half of the votes to convene Extraordinary Meeting of Shareholders. In this case, the shareholders elect the chairman of the Bank’s General Meeting,  the right of shareholders holding at least 1/20 of share capital to demand that specific issues be placed on the agenda of the next Bank’s General Shareholders Meeting. The demand should include the justification and the project of resolution’s project concerning proposed issue and should be submitted to the Management Board no later than twenty one days prior to the Meeting date. The demand can be submitted also in electronic form. The Management Board is obliged to announce changes in the Meeting agenda introduced because of shareholder’s demand as fast as possible and no later than eighteen days prior to the Meeting date. The Announcement takes place according to the way proper for General Meeting convocation,  the right of shareholders holding at least 1/20 of share capital to submit via electronic communication media projects of resolutions concerning issues introduced to the Bank’s General Meeting agenda or issues, which are supposed to be introduced to the Meeting agenda before the date of holding the Bank’s General Meeting. The Bank instantly announces projects of resolutions on the Bank’s website,  the right of every shareholder to submit projects of resolutions concerning issues introduced to the Meeting’s agenda,  the right of shareholders to participate in the Bank’s General Shareholders Meeting personally or by proxy, 103 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A.  the right of shareholders holding a tenth of the share capital represented at the Bank’s General Shareholders Meeting to demand that the attendance list of the Bank’s General Shareholders Meeting be checked by a committee appointed for that purpose and composed of at least three persons, including one person appointed by the parties making the demand,  the right according to which the Bank’s General Shareholders Meeting is not allowed to adopt a resolution to remove an item from the agenda or not to consider an issue which was placed on the agenda upon request of shareholders unless the shareholders express their consent to the same,  the right according to which the Bank’s General Shareholders Meeting may not be adjourned deliberately to obstruct the exercise of the shareholders rights,  the right of each individual participant of the Bank’s General Shareholders Meeting to nominate one or more candidates for membership on the Bank’s Supervisory Board,  the right of shareholders holding at least a fifth of the share capital to demand block voting on the appointment of the Supervisory Board; a relevant request should be submitted to the Management Board in writing at such time as to enable its placement on the agenda of the Bank’s General Shareholders Meeting,  the right to inspect the book of minutes and to receive copies of resolutions authenticated by the Management Board,  the right according to which the Chairperson of the Bank’s General Shareholders Meeting is obliged to ensure that the rights of minority shareholders are respected,  the right of shareholders who raise an objection against a resolution to justify the objection in a concise manner. All issues submitted to the Bank’s General Shareholders Meeting have the opinion of the Supervisory Board. According to § 9 of the Bank’s Statute, issues submitted to the Bank’s General Shareholders Meeting should be submitted to the Supervisory Board for consideration. The Bank’s General Shareholders Meetings are attended by Members of the Management Board and Supervisory Board in makeup that enables providing content-related answers to question in discussion. An auditor is present at the General Shareholders Meeting in particular Ordinary General Shareholders Meeting, if financial matters of the Bank are to be discussed at the Meeting. The Bank’s Management Board, as a body responsible for providing legal service to the Bank’s General Shareholders Meeting, exerts every effort to ensure that resolutions are formulated in a clear and unambiguous manner. The Rules of Procedure for the Bank’s General Shareholders Meeting contain provisions (§ 13 item 10–17) regarding block voting on the appointment of the Supervisory Board. Any amendments to the Rules of Procedure for the Bank’s General Shareholders Meeting take effect as of the date of the next General Shareholders Meeting. Responsibilities and powers of the Chairperson of the General Shareholders Meeting include in particular taking care of the orderly and compliant with the agreed agenda conduct of the meeting, ensuring that the rights and interests of all shareholders are respected, counteracting any abuse of rights by the participants, and ensuring that the rights of minority shareholders are observed. Within the scope of their competence and to the extent necessary to resolve issues placed under discussion of the Bank’s General Shareholders Meeting, Members of the Supervisory Board, Members of the Management Board and the auditor provide the participants with the required explanations and information concerning the Bank. Voting on procedural matters may be carried out only on issues related to the conduct of the Meeting. This voting procedure cannot be applied to resolutions which may have impact on the exercise of the shareholders rights. Removing an item from the agenda or a decision not to consider an issue placed on the agenda at the request of shareholders requires a resolution of the Bank’s General Shareholders Meeting, adopted with a three-quarter majority of the votes, following approval by all the present shareholders who submitted such a request. 104 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 9) Rules of procedure of the Bank’s managerial, supervisory or administrative bodies and it’s committees, indicating its composition and changes that occurred during last financial year as 21 Management Board The Management Board of the Bank acts according to the Bank’s Statute and the Rules of procedure adopted by virtue of its Resolution No. 64/II/19 of 25 February 2019, amended by Resolution No. 92/III/20 of 12 March 2020, Resolution No. 153/IV/20 of 17 April 2020 Resolution No. 328/VII/20 of 24 July 2020 and Resolution No. 3/I/22 of 5 January 2022 and Resolution No. 31/I/23 of 23 January 2023.The Rules of procedure shall in particular define the matters which require joint consideration by the Management Board, and rules of holding Management Board meetings, including meetings held through means of remote communication and the rules for adopting resolutions by written procedure or by means of remote communication. The Rules of Procedure of the Management Board are available on the Bank’s website 22 . The Management Board of the Bank believes that the Rules of the Management Board of Bank Polska Kasa Opieki Spółka Akcyjna as a regulation defining the functioning of the Management Board are adequate and consistent with the law and the requirements of supervisory authorities. According to the Bank’s Statute, the Management Board shall conduct the matters of the Bank and represent the Bank. Issues not reserved by virtue of the provisions of the law or of the Statute to fall within the scope of competence of other Bank’s statutory bodies, shall fall within the scope of competence of the Bank’s Management Board. Pursuant to the provisions of the Management Board’s Rules of procedure, the Bank’s Management Board prepares the development strategy for the Bank. The Supervisory Board issues its opinions on the Bank’s long-term development plans and annual financial plans, prepared by the Management Board. The Management Board ensures that the risk management system at the Bank is transparent and effective, and runs the Bank’s affairs in compliance with applicable laws and Best Practices. The core values underlying the management of the Bank are professionalism, credibility, while customer relations are underpinned by reliability and integrity, as well as compliance with applicable laws, including the provisions on anti-money laundering and financing of terrorism. The Bank's Management Board determines the principles and manner of implementation, for example, investment policy, asset and liability management policy, credit policy, HR, remuneration and social policy in the Bank and interest rate policy. Pursuing the principle of efficient and prudent management, the Management Board is responsible for initiation and implementation of programs aimed at increasing the Bank’s value and rate of return for the shareholders, as well as protection of the employees’ long-term interests. In its decisions, the Bank’s Management Board makes every effort to ensure, to the maximum extent possible, the promotion of the interests of the shareholders, creditors, employees, as well as other entities and persons co-operating with the Bank in its business activity. In the opinion of the Bank's Management Board, the actions taken by the Bank's Management Board to perform the tasks entrusted to it in 2023 were effective. As at 1 January 2023, the Management Board of the Bank was composed of the following persons: Leszek Skiba President of the Management Board. In 2015, he was appointed Undersecretary of State in the Ministry of Finance, where he was responsible for the supervision over macroeconomic policy and tax legislation. He was also supporting legislative works connected with financial and capital markets, and prepared general outline of the budget system reform. Between March 2019 and April 2020 he served as the President of the Council of the Bank Guarantee Fund. Between 2009 and 2015 Leszek Skiba worked at the National Bank of Poland, at the Economic Institute, where he worked on NBP’s report devoted to the consequences of Poland’s membership of the euro area and prepared analyses of the euro area economy. Since 2009, Leszek Skiba has been running public non-profit activities as the President of the Council and expert of the Sobieski Institute. Leszek Skiba is a graduate of master’s degree studies at the Warsaw School of Economics, in the faculty of International Economic and Political Relations. He’s the author of numerous publications in the field of his professional work and public activities. Leszek Skiba fulfills suitability requirements determined in art. 22aa of Banking Law Act. Magdalena Zmitrowicz Vice President of the Management Board. In 2018 she started working in Bank Pekao S.A. as Managing Director in Corporate Banking Department and from 1st December 2018 she was appointed as the Vice President of the Management Board of the Bank. She started her professional career in 1999 in Bank Handlowy w Warszawie S.A. in Retail Banking Sector. She pursued her career in Corporate Banking Division, holding various leadership roles in regional structures of the Bank, including a position of Head of Sales for Northern Region and Head of Public Sector for Regions in the Public Sector Department. Having 21 Par. 70.6.5.k and l of the ordinance of the Minister of Finance of 29 March 2018 22 https://www.pekao.com.pl/o-banku/lad-korporacyjny.html 105 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. worked for almost twenty years in the banking industry, she has gained extensive experience both in general banking operations, including in particular the areas of sales, risk, operations and foreign-currency market, as well as in various customers segments, such as retail clients, small, medium and large companies, institutional clients, public sector and international corporations. In 2016-2017, she managed the Corporate Banking Department in the structures of the CEEMEA Commercial Banking Group - Citigroup. She managed the activities of the Strategy Champions Group at Bank Handlowy w Warszawie S.A. From January 2019, a Member of the Supervisory Board of Pekao Leasing Sp. z o.o. From December 2018, Deputy Chairman of the Supervisory Board of Pekao Faktoring Sp. z o.o., and from March 2021, the Chairman of the Supervisory Board of the Company. A graduate of the Faculty of Social Sciences at the University of Gdańsk, postgraduate studies at the Faculty of Management at the University of Gdańsk and postgraduate Executive MBA studies (EMBA) organized at the Faculty of Management at the University of Warsaw. She completed many local and foreign trainings, including those in credit risk management, financial analysis and sales. In 2013, she graduated from Commercial Credit College in the USA New York as part of Citigroup. She also completed the Global CEO Program at IESE Business School & Wharton School University of Pennsylvania. Magdalena Zmitrowicz meets suitability requirements determined in art. 22aa of the Banking Law Act. Marcin Gadomski Vice President of the Management Board supervising the management of risks significant for the Bank’s activity. Marcin Gadomski graduated from the Warsaw School of Economics, majoring in Finance and Banking. He was also a scholarship holder studying at the University of Kiel (Germany) and completed doctoral studies at the Warsaw School of Economics. He passed a number of professional certification exams, including: Financial Risk Manager (FRM), Association of Chartered Certified Accountants (ACCA), Project Management Professional (PMP). He participated in the Leadership Development Program run by The John Maxwell Team as well as the Deloitte Leadership Program. He also completed the Global CEO Program at IESE Business School & Wharton School University of Pennsylvania. Marcin Gadomski began his professional career at the consulting company Ernst & Young (now EY) in 2002, where he conducted projects in the area of risk, finance and internal audit in financial institutions and non-financial enterprises. During this period, for several years he supported the Pekao Group in implementing among others requirements of IAS 39, Basel II and solutions regarding capital management as well as assets and liabilities management. Then he continued his career with Deloitte Advisory, first in 2008-2012 as a Senior Manager, and, after a break, in 2016-2018 as a Director. As part of Deloitte Advisory, Marcin Gadomski provided solutions for the largest financial institutions in Poland and abroad (banks, insurers, leasing companies, brokerage houses), among others in the field of credit policy, risk models, improving the credit process for retail and corporate clients, market and liquidity risk management, regulatory requirements (e.g. IFRS 9, the PFSA recommendations, regulations regarding capital requirements, liquidity, information or reporting obligations), due diligences for takeover purposes. In the years 2012 - 2016 Marcin Gadomski was the Director of Retail Credit Risk Unit at Bank Millennium. He was responsible for credit risk strategy, risk appetite, credit policy, credit assessment models, credit decision engines, risk reporting, credit product profitability assessment and credit process support for such business lines as unsecured consumer loans, mortgage loans and small business. From August 2018 to November 2019 Marcin Gadomski was a Member of the Management Board of Pekao Bank Hipoteczny S.A. Between 29 November 2019 and 21 April 2020 Marcin Gadomski held position of the Vice President of the Management Board of Bank Pekao S.A. responsible for Risks Management Division. Later he was Credit Risk Director there. From 1 July 2020, he was re-appointed to the Management Board of Bank Pekao S.A., where he is responsible for the Risks Management Division. On 15 February 2021, he 106 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. obtained consent from the Polish Financial Supervision Authority to serve as a Member of the Management Board supervising the management of significant risk in the Bank's activities. Marcin Gadomski additionally is a member of supervisory boards as the Chairman of Pekao Bank Hipoteczny S.A., Vice-Chairman of the Supervisory Board in Pekao Leasing Sp. z o. o., Pekao Investment Banking S.A. and additionally, he is the Deputy Chairman of the Supervisory Board of Biuro Informacji Kredytowej S.A. and Member of the Supervisory Board of the Commercial Bank Protection System. Marcin Gadomski meets suitability requirements determined in art. 22aa of the Banking Law Act. Jarosław Fuchs Vice President of the Management Board. Jarosław Fuchs received his Master degree with honors in Marketing and Management, in the Faculty of Management of AGH University of Science and Technology in Cracow, as well as he graduated from Banking and Finance studies in Cracow University of Economics. He completed postgraduate Executive MBA (EMBA) studies organized at the Faculty of Management at the University of Warsaw. He started his career in 1994, initially in Big Bank S.A. and AGH University of Science and Technology in Cracow, where he acted as a teaching assistant in Management Faculty. From 1996 to 1997, he worked for Raiffeisen Centrobank S.A. Branch in Cracow, where he was responsible for building relationships with corporate customers. From September 1997, Jarosław Fuchs worked for Societe Generale Warsaw Branch as a Senior Marketing Specialist in the Trade Office in Cracow. In October 2000, he moved to Fortis Bank Polska S.A., as a Senior Customer Advisor in Medium and Large Enterprises Center. From March 2003, Jarosław Fuchs worked for Bank Millennium S.A. in the position of the Senior Expert and, subsequently – Director of Małopolskie Customer Cooperation Center (Medium and Large Enterprises). From August 2004, he was associated with Bank BPH S.A. in Cracow. From December 2007 with Bank Pekao S.A. in managerial positions responsible for corporate customer relations. From March 2011, Jarosław Fuchs was responsible for management of Private Banking Relationship Managers Team as a Regional Sales Office Director in Cracow. At the same time, from 2013, Jarosław Fuchs was working for Pekao Central Brokerage House as a Director in the Region in Strategic Customers Office, where he was responsible for investment product distribution for strategic customers . Jarosław Fuchs serves as the Chairman of the Supervisory Board of Pekao Investment Management SA. Jarosław Fuchs meets suitability requirements determined in art. 22aa of the Banking Law Act. PhD Jerzy Kwieciński Vice President of the Management Board. He is a graduate of Faculty of Materials Engineering of the Warsaw University of Technology and holds a degree of Doctor in the field of technical science. He also completed a postgraduate course for managers at the Warsaw School of Economics and an international Master of Business Administration (MBA) programme run by the University of Antwerp, the University of Staffordshire, the Free University of Brussels and the University of Warsaw. Jerzy Kwieciński also has experience in academic and research and development work, which he gained, among others at the Warsaw University of Technology and as a visiting professor at Brunel University of West London. Jerzy Kwieciński has more than 30 years of international experience in strategic planning, management of large organizations, programs and projects in the public, private, non- governmental and scientific research sectors, including energy sector. From 1993 to 2004, he worked for the European Commission Representation in Poland, where his duties included management of programmes and projects financed by the European Union. He also participated in the works preparing Poland for membership in the 107 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. European Union. Between 2004 and 2005 he was the President of Europejskie Centrum Przedsiębiorczości sp. z o.o. From 2008 to 2015 he acted as a Vice-President of the Management Board. In 2005, Jerzy Kwieciński took a position of the Undersecretary of State at the Ministry of Regional Development, where he coordinated the national development policy and cohesion policy, including the work on the National Development Strategy for 2007-2015 and the National Cohesion Strategy for 2007-2013. From 2008 to 2015, he served as President of the Management Board of JP Capital Group sp. z o.o., specializing in preparation and implementation of projects and innovations, including establishing and running start-ups. At that time, he also ran the European Entrepreneurship Center Foundation. In 2015, he was appointed the Secretary of State in the Ministry of Development. Since 2015, he has been a member of the National Development CouncilIn November 2015, he was appointed the First Deputy of the Deputy Prime Minister in the Ministry of Development. From January 2018, he held the office of the Minister of Investment and Development, and from September 2019 he served also as the Minister of Finance. He held both functions until 15 November 2019. He worked on, among others on preparation and implementation of the Strategy for Responsible Development and implementation of cohesion policy. From January to December 2020 he acted as President of the Management Board of Polskie Górnictwo Naftowe i Gazownictwo S.A. (PGNiG), he has been a member of the Supervisory Board in TUW Polski Gaz, Europolgaz SA and President of the Board of Directors PGNiG Upstream Norway. Jerzy Kwieciński is a member of supervisory boards: as the Chairman of the Supervisory Board of Pekao Investment Banking S.A. and Member of the Supervisory Board of Pekao Leasing Sp. z o. o. Jerzy Kwieciński fulfills suitability requirements determined in art. 22aa of Banking Law Act. Paweł Strączyński Vice President of the Management Board. Mr. Paweł Strączyński has a university degree from the Wrocław University of Economics, the Faculty of National Economy, field of study: finance and banking and Master of Business Administration – Executive MBA degree. He has extensive managerial experience. Mr. Paweł Strączyński has held position of the President of the Management Board of TAURON S.A. He was also Member of the Management Board of PKEE – Polish Electricity Associotion. Previously Mr. Paweł Strączyński had held position of the Vice President of the Management Board for Finance at PGE Polska Grupa Energetyczna S.A. He had been a Member of the Management Board of companies such as: Zespół Elektrociepłowni Wrocławskich KOGENERACJA S.A., ZOWER Sp. z o.o., PGNiG Termika Energetyka Przemysłowa S.A., Przedsiębiorstwo Energetyki Cieplnej S.A. in Jastrzębie-Zdrój and Polska Grupa Biogazowa S.A. Paweł Strączyński is also a Member of the Supervisory Board of Krajowa Izba Rozliczeniowa S.A. as well as a Member of the Board of Directors KGHM International LTD in Canada and a Member of the Team of Economic Advisors at the Ministry of State Assets. Paweł Strączyński fulfills suitability requirements determined in art. 22aa of Banking Law Act. PhD Błażej Szczecki Vice President of the Management Board. Professionally associated with the Pekao Group since 2004. From 2018 till 2021 he has served as the Chief Transformation Officer and subsequently as the Chief Strategy Officer of Bank Pekao, responsible a.o. for the digital and operational transformation, as well as for the coordination of the work on the strategy of the Bank. From 2017 till 2018 he was responsible for the Transformation and Services Division, where he managed a.o. IT and Operations of the Bank. In 2010-2017 he was Member of the Management Board of Pekao Leasing Sp. z o.o., where he assumed responsibility for IT, operations, insurance business, and customer service. From 2004 to 2010 he held various leadership roles in the Corporate Banking Division of Bank Pekao, including participation in the taskforce preparing the merger of Bank Pekao with the BPH Bank. Before joining Bank Pekao, he worked as consultant for McKinsey and Co. in Frankfurt (Main) in Germany. He also served as a research associate at the 108 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. University in Frankfurt (Oder) and in Giessen (Germany), as well as professional experience at Dresdner Bank. Since 2017 he has served as the Chairman of the Supervisory Board of Centrum Kart. In addition, from 2017 till 2020 he was also the Vice- Chairmen of the Supervisory Board of Pekao Financial Services. From 2017, Chairman of the Supervisory Board of Centrum Kart S.A. From 2017 to August 2020, in the Supervisory Board of Pekao Financial Services Sp. z o.o. he was the Deputy Chairman and Secretary of the Supervisory Board. He was reappointed to the Supervisory Board of Pekao Financial Services Sp. z o.o. in March 2021 and serves as the Chairman of the company's Supervisory Board. He has a PhD degree in economics from the European University Viadrina Frankfurt (Oder), he graduated from the Faculty of Economics at the European University Viadrina Frankfurt (Oder). He participated in numerous courses and trainings in Poland and abroad, a.o. Unifuture in cooperation with the Institute for Management Development (IMD) in Lausanne (Switzerland). Błażej Szczecki fulfills suitability requirements determined in art. 22aa of Banking Law Act. Wojciech Werochowski Vice President of the Management Board. Manager with 20 years of experience in banking, for 4 years associated with Bank Pekao S.A., with the Retail Banking Division. From December 2017 served as a director of the Retail Customer Credit Products Department, where he managed retails customer credit products and was responsible for the sales activity, portfolio quality as well as financial performance of the product and product development. Before joining Bank Pekao S.A. he worked at PKO Bank Polski, Bank Citi Handlowy, and Bank BPH, where he was responsible for the development and management of credit products, including mortgage loans, and the CRM function. Between 2000 and 2008 he was associated with General Electric Capital in Poland, with GE Money Bank. He has worked in a number of positions in the areas of product management, development of new business models, strategic pricing and finance management, Lean Six Sigma programs. He has a university degree and an MBA degree from the University of Gdańsk, Copenhagen Business School and Universiteit Antwerpen. He completed trainings under the GE Management Development Institute, including Six Sigma Black Belt and Advanced Manager Course. He performed the function as Chairman of the Supervisory Board of Pekao Direct Sp. z o.o. From April 2022, member of the Supervisory Board of Pekao Bank Hipoteczny S.A. Wojciech Werochowski fulfills suitability requirements determined in art. 22aa of Banking Law Act. Piotr Zborowski Vice President of the Management Board. Piotr Zborowski is a graduate of the University of Warmia and Mazury in Olsztyn, Faculty of Law and Administration, major in law. He completed his legal adviser apprenticeship at the District Chamber of Legal Advisers in Warsaw. He holds the title of Executive Master of Business Administration. In Bank Pekao S.A. he was the director responsible for servicing corporate offices as well as corporate governance and supporting the work of the Management Board and Supervisory Board. He was involved in the process of building and implementing the Bank's strategy, as well as in the implementation of a number of strategic projects and cooperation on behalf of the Bank with the PZU S.A. group. Previously, he worked, among others in government administration bodies: the Chancellery of the Prime Minister and the Ministry of State Assets, as the Deputy Director of the Minister's Office. He performed advisory functions in the Military Property Agency and was responsible for organizational and legal supervision in the Military Trade Company. From September 2022, he was appointed Member of the Supervisory Board of Pekao Bank Hipoteczny S.A. Piotr Zborowski meets suitability requirements determined in art. 22aa of the Banking Law Act. 109 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Until 31 December 2023, the composition of the Bank's Management Board had not changed. Members of the Bank's Management Board coordinate and supervise the Bank's operations in accordance with the division of competences adopted by the Bank's Management Board and approved by the Supervisory Board. As at 31 December 2023, the division of competences among the members of the Bank’s Management Board was as follows: The President of the Bank’s Management Board Mr. Leszek Skiba convenes and chairs meetings of the Bank’s Management Board, presents the position of the Bank’s Management Board towards the Bank’s bodies and in external relations, in particular towards the State authorities. President of the Management Board Mr. Leszek Skiba coordinates the work of the members of the Bank's Management Board and issues orders in accordance with the provisions of the Bank's internal regulations. The President of the Bank's Management Board supervises the following areas of the Bank's operations: internal audit, compliance risk, corporate communication, investor relations, security, legal risk, strategic projects, human resources management, macroeconomic analysis and digital transformation. The President of the Bank's Management Board was appointed as a Member of the Management Board responsible for the implementation of duties specified in the Act on Counteracting Money Laundering and Terrorist Financing. Mr. Marcin Gadomski Vice President of the Management Board supervising the Risk Management Division and is responsible for supervising the risk management process of bancassurance activities. Mr. Paweł Strączyński Vice President of the Management Board supervises the activities of the Financial Division and has been appointed as a member of the Management Board to whom infringements will be reported and who will be responsible for the day-to-day operation of the whistleblowing procedure. Mr. Jerzy Kwieciński Vice President of the Management Board supervising the Corporate Banking and MIB Division. Mr. Wojciech Werochowski Vice President of the Management Board supervising the Retail Banking Division. Mrs. Magdalena Zmitrowicz Vice President of the Management Board supervising the Banking Enterprise Division. Mr. Jarosław Fuchs Vice President of the Management Board supervising the Private Banking and Investment Products Division. Mr. Piotr Zborowski Vice President of the Management Board supervising the Strategy Division. Mr. Błażej Szczecki Vice President of the Management Board supervising Banking Operations and IT Division and coordinates activities aimed at appropriate risk management related to the security of the ICT environment. Supervisory Board The Supervisory Board operates on the basis of the Rules of the Supervisory Board of Bank Polska Kasa Opieki Spółka Akcyjna adopted by Resolution No. 10/15 of the Supervisory Board of 6 February 2015, and then as amended by Resolution No. 9/18 of the Supervisory Board of 13 March 2018 and Resolution No. 128/20 of 15 July 2020; Resolution No. 157/20 of 13 November 2020; Resolution No. 168/20 of 10 November 2020 and Resolution No. 108/21 of 8 July 2021, Resolution No. 10/22 of 24 January 2022 and Resolution No. 116/23 of 18 October 2023. The Rules of the Supervisory Board are available on the Bank's website. 23 The role of the Supervisory Board is to exercise a general and permanent supervision over the Bank’s activities, taking into consideration the Bank’s function of a parent company regarding subsidiaries of the Bank. Apart from the competence defined in law, the Supervisory Board possesses competences stated in the Bank’s Statute, the Supervisory Board in particular examines every matter submitted to the Bank’s General Shareholders Meeting. The Supervisory Board Members always act with due regard to the Bank’s interests and take all actions necessary to ensure efficient functioning of the Supervisory Board. Moreover, Members of the Supervisory Board of the Bank are prohibited from taking any decisions or actions that would lead to conflicts of interests or that would be not in line with the Bank’s best interest. About existing or potential conflict of interests the Member of the Supervisory Board informs the Supervisory Board and restrains from participating in a discussion and voting on resolution regarding issue in the case of which a conflict of interest occurred. Each year, according to regulations in force, the Supervisory Board prepares and submits to the Bank’s General Shareholders Meeting an assessment of the report on the activities of the Bank and the Group prepared by the Bank’s Management Board, assessment of the Bank’s financial statements and consolidated financial statements of the Group, assessment of motion concerning profit’s division or losses coverage, as well as the Supervisory Board activities statements. The assessments prepared by the Supervisory Board are made available to the shareholders before the Bank’s General Shareholders Meeting. 23 https://www.pekao.com.pl/o-banku/lad-korporacyjny.html 110 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The Supervisory Board set up dedicated committees which deal with specific areas of the Bank’s operations, including the Audit Committee, the Nomination and Remuneration Committee, and Risk Committee. Reports of the committees set up by the Supervisory Board are stored at the Bank’s Head Office. Annual reports of committees are annexed to and published with the Supervisory Board statement. In 2023, the Supervisory Board held 13 meetings. As at 1 January 2023, the composition of the Supervisory Board was as follows: PhD hab. Beata Kozłowska-Chyła Chairwoman of the Supervisory Board. She serves as the President of the Management Board of PZU S.A. She graduated in law from the Faculty of Law and Administration of the University of Warsaw. She obtained a habilitated doctor's degree in legal sciences. She is a lecturer at the Faculty of Law and Administration of the University of Warsaw, Department of Commercial Law. She works as a legal counsel and she is a recommended arbitrator at the Court of Arbitration at the National Chamber of Commerce in Warsaw. She served as a Member of the Supervisory Board of PZU S.A., a Member of the Supervisory Board of TFI PZU S.A. and PTE PZU S.A. and was twice a Member of the Management Board of PZU S.A. She also was a Member of the Management Board of PZU Życie S.A. She also worked as deputy director of the Legal-Licensing Department at the Pension Funds Supervision Office and served as the President of the Management Board of Polskie Wydawnictwo Ekonomiczne S.A. Beata Kozłowska-Chyła is currently the Chairwoman of the Supervisory Board of PZU Życie S.A. She is also a Member of the Audit Committee of the Polish Chamber of Insurance and a member of the Council of the Insurance Guarantee Fund. She is the author of several dozen scientific publications in the field of company law, securities law and insurance law, published in renowned Polish and foreign magazines, as well as the author of popularizing articles. Joanna Dynysiuk Vice-Chairwoman of the Supervisory Board. She is a graduate of the Faculty of Law and Administration of the University of Warsaw. In 2010, she completed legal counsel training and obtained the title of legal counsel. She started her professional career in 2005 at the K&L Gates law firm (former Hogan&Hartson), and then continued at the CMS Cameron McKenna law firm. From August 2016 to February 2023, she was employed at Polski Fundusz Rozwoju S.A., where she started working as Deputy Director of the Legal Department, and then served as Director of the Legal Department. Currently, he serves as General Consuel and Head of Group Legal at FTF Services Spółka z o.o. She participated in a number of mergers and acquisitions, financing and securities issuance transactions. She was responsible for legal advice on the implementation by Polski Fundusz Rozwoju S.A. Financial Shield for micro, small and medium-sized enterprises and large companies. Since 2017, Vice-Chairwoman of the Supervisory Board of Bank Pekao S.A. Małgorzata Sadurska Vice-Chairwoman of the Supervisory Board. Since 2017, she has been a Member of the Management Board of PZU S.A., and in the period from 2017 to 2022, she was a Member of the Management Board of PZU Życie S.A., where she currently serves as the Director of the PZU Group. A graduate of the Faculty of Law and Administration of the Maria Curie-Skłodowska University in Lublin and postgraduate studies in Organization and Management at the Lublin Business School. She completed Master of Business Administration studies at the Faculty of Management of the Lublin University of Technology. The management studies program was carried out in cooperation with the American university, the University of Minnesota in Minneapolis. In the Management Board of PZU S.A., she is responsible for the Bank Cooperation Division and the Corporate Client Division. She is also a Member of key committees operating in PZU S.A. and PZU Życie S.A. Until 2017, she was the Head of the Chancellery of the President of the Republic of Poland. In the years 2005-2015 she was a Member of the Parliament of the Republic of Poland. In 2007, she served as the Chairwoman of the Supervisory Board of the Social Insurance Institution and Secretary of State in the Chancellery of the Prime Minister. 111 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Currently Member of the Supervisory Board of Link4 TU S.A. and the Chairwoman of the Supervisory Board of Mutual Insurance Company PZUW, POLSKI GAZ Mutual Insurance Company and POLSKI GAZ Mutual Life Insurance Company. She is also a lecturer at the University of Entrepreneurship and Administration in Lublin. PhD Stanisław Ryszard Kaczoruk Secretary of the Supervisory Board of Bank Pekao S.A. Stanisław Ryszard Kaczoruk, Ph.D. is a member of the following Supervisory Boards of companies listed on the WSE: MCI Capital Towarzystwo Funduszy Inwestycyjnych S.A. (2009-2011), Eficom-Sinersio S.A (2015-2016), Alior Bank (2016-2017), Bank Pekao S.A. (Vice Chairman of the Supervisory Board, from 2017), Qumak S.A. (2017-2019), PKP PLK S.A. (from 2018). He participated in projects related to the creation of strategies for strategic companies, and also cooperated with leading consulting companies in the area of capital takeovers and restructuring of the companies (including PKP Energetyka, Elester PKP). He also cooperated in the organization of TFI KGHM. Expert of the Ministry of Development on the use of EU subsidies. He was also an advisor to the Aplikacje Krytyczne (VAT analysis) company acting for the Ministry of Finance. In the years 1998–2016 he worked as directors and in the management of companies operating on the IT market and legal and consulting services market, at the same time conducting business activity in the field of building business models, developing market analyzes, segmentation, analysis of organizational structures and processes, financial engineering, debt collection and restructuring of the companies and strategy building. He carried out conceptual, coordination, promotional and educational activities in the field of cyber security in Poland. He has extensive knowledge and practical and managerial experience. From 1978 to 1992 he conducted teaching and research activities at universities in Wrocław and Szczecin. In the years 1991–93 the head of the IT department at KGHM-Metraco sp.z o.o., in 1993 the head of the IT department of the Management Board Office of KGHM S.A., in 1994 the commercial and regional director at InterAms sp.z o.o.; 1994-95 commercial director at NetCom sp.z o.o.; 1995-97 managing director at Kaczmarski Burgel Inkasso sp.z o.o.; 1997-2002 commercial director at Winue S.A. (Emax); 2002-2005 cooperated with ComputerLand S.A. and 2005-2006 with SPIN S.A. in the scope of defining and implementing product development strategies, market research, customer acquisition; 2004-2012 member of the board of Value BasedAdvisors sp.z o.o., from 1999 president and co-owner of the International Court of Arbitration sp.z o.o. (2013-2018 president of the International Arbitration Court S.A.); 2015-2016 commercial proxy in Eficom-Sinersio S.A. Mathematician. A graduate of the Faculty of Mathematics, Physics and Chemistry of the University of Wrocław. In the years 1979-1991 didactic and scientific work at universities. In 1986 he obtained a doctorate in technical sciences, additionally completed in 1986 postgraduate pedagogical study, IFG training, in 1993 Postgraduate Polish-American College of Social Communication, Wrocław University of Technology & Univ. of Connecticut, USA; dozens of training in marketing and management, economics, finance, IT, NLP, health and safety. Participation in many scientific and research works, cooperation with several universities and research centers in Poland (among others from 2016 - CEZAMAT - member of the Program Council), several publications in the field of theoretical analyzes and applications of mathematics (including mathematical statistics) and computer science, among others in economics and environmental protection, published in numerous Polish and foreign scientific journals. He was awarded the Bronze Cross of Merit (2005), the Knight's Cross of the Order of Polonia Restituta (2012) and numerous awards and distinctions of social organizations and associations. Marcin Izdebski Member of the Supervisory Board. A graduate of the Warsaw University of Technology and the Warsaw School of Economics. He gained professional experience in the private sector, non-governmental organizations and government administration, with which he has been continuously associated since 2016. During this time, he was responsible for the supervision of companies with State Treasury participation. He was responsible for carrying out capital transactions involving acquisitions, mergers, separations of assets or companies. He has experience in supervisory bodies of capital companies, including: PKO Bank Polski S.A. Currently, he is the Director of the Department of Fuel and Energy Companies at the Ministry of State Assets. In the years 2017 - 2022, he served as the Chairman of the Supervisory Board of Polska Grupa Lotnicza S.A. and Member of the Supervisory Board of Polski Holding Hotelowy Sp. z o.o., Polska Wytwórnia Papierów 112 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Wartościowych S.A., PKO Bank Polski S.A., and is currently a Member of the Supervisory Board of System Gazociągów Tranzytowych EuropolGaz S.A. Sabina Bigos-Jaworowska Member of the Supervisory Board. A graduate of the University of Economics in Katowice, Faculty of Economics. She completed Postgraduate Studies in Health Care Management at the same university. She holds a diploma from the Minister of the Treasury entitling her to be a member of the supervisory boards of State Treasury companies. She has been associated with the Health Care sector since 1994, in 2000 she became the Director of the Health Care Complex in Oświęcim, and since 2019 she has been the Director of the Provincial Hospital in Bielsko-Biała. In 2016, she served as a Member of the Supervisory Board of PL 2012+, the operator of the National Stadium in Warsaw. In April 2017, she was re-appointed for another term as Vice-President. Additionally, she serves as Vice-President of the Małopolska Hospital Association, Member of the Management Board of the National Association of District Hospital Employers, Representative of the Employers' Convention of the State Higher Vocational School in Oświęcim and Member of the Health Protection Council within the National Development Council under the President of the Republic of Poland. Justyna Głębikowska-Michalak Member of the Supervisory Board . Justyna Głębikowska-Michalak graduated from the Faculty of Economics of the Maria Curie-Skłodowska University in Lublin, in the field of "Management and Marketing" (1997) and from post-graduate studies in "Accounting" at the University of Economics in Poznań. In 2001, she obtained the authorization of the Minister of Finance to provide bookkeeping services (No. 25706/01). Since 2003, she runs her own Accounting Office "Vademecum", specializing in providing services for business entities obliged to keep full accounting. She has the authorization for being an auditor. She is also extensively experienced in accounting services for numerous business entities from all over the country, including management accounting. She is interested in finance and business psychology. Michał Kaszyński Member of the Supervisory Board of Bank Pekao S.A. Michał Kaszyński is a graduate from the Faculty of Law at the Jagiellonian University in Cracow and postgraduate studies in Personnel Management at the AGH University of Science and Technology in Cracow. In 1992 he completed an internship under the Tempus program at the Instituto Formazione Operatori Aziendali in Italy in the field of management and marketing. In 2005 he completed legal advisor training and is included on the list of legal advisors at the District Chamber of Legal Advisors in Katowice. Between 1988 and 2011 he was associated with the company SAOL Distribution, engaged in distribution of alcoholic beverages, which since 2004 belonged to the CEDC S.A. group. In that company he held a position of the Director for Human Resources Management and then the Director for Administrative and Legal Affairs and HR. Since 2005, he has been running his own business under which he provides legal assistance to entrepreneurs and local government units in the field of investment, production, housing resource management, sales and medical activities. Member of the Supervisory Boards of: Miejski Zakład Energetyki Cieplnej, Firma Handlowa SAOL, Przedsiębiorstwo Handlu Spożywczy, KBO Oświęcim, and Gliwice Zakłady Usług Górniczych and Krynica Uzdrowisko-Żegiestów SA. Marian Majcher Member of the Supervisory Board of Bank Pekao S.A. Marian Majcher is a graduate of the University of Silesia in Katowice at the Faculty of Social Sciences and Postgraduate Studies in Business Management at the Institute of Organization and Management in Industry with headquarters in Warsaw. He started his professional career as a researcher at the University of Silesia in Katowice. In the years 1990–1999 he devoted himself to building free media in Poland, as a co-owner of the press publishing companies 'Word' in Chorzów and 'Free Word' in Katowice. He began his professional career in industry in 1999, being until 2016 associated with the CTL Maczki-Bór S.A. Group and its wide activity in the Upper Silesian Industrial District. He held the position of the Managing Director and the Vice President of the Management Board of CTL, playing a key role in the privatization of this enterprise (then Kopalnia Piasku Maczki-Bór) and adding it to the CTL Logistics Group - one of the largest independent and private rail carrier in Europe. From May 2010 to May 2016 he was the President of the Management Board of CTL Maczki – Bór S.A. Since 2003, he has been the President of the Management Board of CTL Haldex S.A., a company dealing with the technological recovery of hard coal from waste gangue. At the same time, it is one of the largest completed and pro-ecological development projects of the CTL 113 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Maczki-Bór Group in cooperation with Haldex S.A. He is a qualified member of Supervisory Boards in State Treasury companies. He expanded his banking knowledge at the Boston Consulting Group workshops in market analysis, risk management and the economic environment. He is also a specialist in the field of obtaining financing sources for modernization and restructuring of enterprises as well as conducting negotiations. He served on the Supervisory Boards of, among others: Agencja Rozwoju Regionalnego in Żory (Vice Chairman of the Supervisory Board), Wojewódzkie Przedsiębiorstwo Energetyki Cieplnej in Legnica (member of Supervisory Board), Tauron Czech Energy s.r.o. in Ostrava, Kopalni Piasku Maczki-Bór Spółka z o.o. (Chairman of the Supervisory Board), Centralny Ośrodek Informatyki Górnictwa S.A. in Katowice (member of the Supervisory Board), EIB S.A. in Toruń (member of the Supervisory Board), MB EKO S.A. in Sosnowiec, Metanel S.A. in Warsaw, and Centrala Zaopatrzenia Hutnictwa S.A. in Katowice. Since 2017, he has been a member of the Supervisory Board of Bank Pekao S.A., including a member of the Risks Committee of the Supervisory Board. Winner of many management awards, including: (i) "Success in Silesia. People and companies" in the Manager category in Silesia 2012 awarded by the Silesian Association of Managers in Katowice, (ii) “Business Gazelle” for the achieved development and growth of the company awarded by Puls Biznesu, (iii) "Well seen company" awarded by the Business Center Club. He was awarded the Medal of Merit for the Katowice Province (1999) and the Medal of Merit for Culture (1999). In 2010, President of the Republic of Poland Lech Kaczyński honored Mr. Marian Majcher with the Knight's Cross of the Order of Polonia Restituta for shaping free media in the 1980s. Until 31 December 2023, the composition of the Supervisory Board has not changed. Two members of the Bank's Supervisory Board, Ms. Joanna Dynysiuk and Ms. Justyna Głębikowska-Michalak resigned from the composition of the Bank’s Supervisory Board effective 31 December 2023. Five members of the Supervisory Board - Sabina Bigos-Jaworowska, Justyna Głębikowska-Michalak, Stanisław Ryszard Kaczoruk, Michał Kaszyński, Marian Majcher meet the independence criteria set out in the Act of 11 May 2017 on statutory auditors, audit firms and public supervision and have no real and significant relations with a shareholder holding at least 5% of the total number of votes in the company. Audit Committee In 2023, the Audit Committee operated on the basis of the Regulations of the Supervisory Board adopted by Resolution of the Supervisory Board of the Bank No. 10/22 of 24 January 2022 and Resolution of the Supervisory Board of the Bank No. 116/23 of 18 October 2023 and the Regulations of the Audit Committee of the Supervisory Board of Bank Polska Kasa Opieki Spółka Akcyjna adopted by Resolution of the Supervisory Board of the Bank No. 11/22 of 24 January 2022 and Resolution of the Supervisory Board of the Bank No. 118/23 of 18 October 2023.The purpose of the Audit Committee is to support the Bank’s Supervisory Board in fulfilling its duties concerning in particular : 1) monitoring the financial reporting process, 2) monitoring the effectiveness of internal control and risk management systems and internal audit, including in the field of financial reporting, 3) monitoring the performance of financial audit activities, in particular the audit conducted by the audit firm, taking into account the conclusions and findings of the Polish Audit Oversight Agency resulting from the inspection carried out at the audit firm, 4) controlling and monitoring the independence of the statutory auditor and the audit firm, in particular if the audit firm provides services other than auditing to the Bank, 5) informing the Bank's Supervisory Board about the results of the audit and explaining how the audit contributed to the reliability of financial reporting, as well as what was the role of the Audit Committee in the audit process, 6) making assessments of the independence of the statutory auditor and expressing consent to provide by him permitted non-audit services, 7) developing a policy for selecting an audit firm to conduct the audit, 8) developing a policy for the provision of permitted services that do not constitute an audit of financial statements by the audit firm that conducts the audit, entities related to this audit firm and a member of the audit firm's network, 9) determining the procedure for selecting an audit firm to audit financial statements, 10) submitting recommendations to the Bank's Supervisory Board regarding the selection of an audit firm to audit financial statements, 11) submitting recommendations to the Bank's Supervisory Board aimed at ensuring the reliability of the financial reporting process, 114 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 12) giving opinions on the audit plan presented by the Internal Audit for a given financial year and presenting recommendations to the Supervisory Board regarding its approval; 13) examining, at least once a year, the process of preparing annual and interim financial statements based on reports submitted by the appropriate organizational unit of the Bank's headquarters; 14) assessment of significant (i.e. those affecting the Bank's operations, financial statements, Bank's reputation and compliance with the law) conclusions resulting from the work of the Bank's Internal Audit or from other inspections and proceedings conducted by external entities, in particular from the control reports of the Polish Financial Supervision Authority ); 15) supervising corrective actions in relation to identified irregularities; 16) meeting, at least once a year, with the statutory auditor to analyze the annual audit report; 17) submitting, at least once a year, reports on its activities to the Supervisory Board and, at least once in a quarter of the financial year, information on the supervisory activities undertaken and their results; 18) maintaining effective working relationships with the Supervisory Board, Management Board, Internal and External Auditors; and 19) analyzing and reporting on transactions concluded between related entities and in situations of direct or indirect conflict of interest. The Audit Committee consists of 3 (three) to 5 (five) Members elected from among the Members of the Supervisory Board. At least one Member of the Audit Committee has the knowledge and skills in accounting or auditing financial statements. Most Members of the Audit Committee, including its Chairwoman and a Member of the Committee with knowledge and skills in accounting or auditing of financial statements , are independent of the Bank in the meaning of the Par. 129 section 3 Act of 11 May 2017 on statutory auditors, audit firms and public supervision (hereinafter referred to as the "Act"). The members of the Audit Committee have the skills necessary to properly perform the entrusted function, including appropriate education and professional experience. Qualifications of the members of the Audit Committee, including education and professional experience, together with an indication of how were acquired, were presented on the Bank’s website. 24 Meetings of the Audit Committee are held as depending to the needs, but not less frequently than four times a year, in compatible terms with key dates in the Bank’s quarterly reporting cycle and the review of the annual audit plan presented by the Chief of the Internal Audit Department . In 2023 there were 12 meetings of the Audit Committee. As at 1 January 2023, the composition of the Audit Committee was as follows: Justyna Głębikowska-Michalak President of the Committee (independent member, has the qualifications of a statutory auditor, graduate of the Faculty of Economics UMCS in Lublin and post-graduate studies "Accounting" at the University of Economics in Poznań), Marcin Izdebski Secretary of the Committee, Joanna Dynysiuk Committee Member, Sabina Bigos-Jaworowska Committee Member (independent member), Michał Kaszyński Committee Member (independent member) and remained unchanged until 31 December 2023 . Member of the Audit Committee, Ms. Joanna Dynysiuk, and Chairwoman of the Audit Committee, Ms. Justyna Głębikowska-Michalak resigned from the composition of the Bank’s Supervisory Board Member effective 31 December 2023 . As a public interest entity, the Bank implemented, based on the resolutions of the Supervisory Board of the Bank, the policies and procedures set out in Article 130 para. 1 item 5-7 of the Act i.e.: 1. The policy of selecting an audit firm to carry out statutory audit of Bank Pekao S.A. financial statements and the principles of cooperation with the audit firm, the statutory auditor and the supervisory authority (hereinafter referred to as "Choice Policy"), 2. Procedure for selecting an audit firm to carry out a statutory audit of the financial statements of Bank Pekao S.A. (hereinafter referred to as the "Selection Procedure"), 24 https://www.pekao.com.pl/o-banku/wladze-banku.html 115 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 3. The audit firm's audit performance policy by the audit firm carrying out the audit, by entities affiliated to that audit firm and by a member of the audit firm's network (hereinafter referred to as “Service Provision Policy”). The selection policy sets out the following rules for the mandatory rotation and grace period of the audit firm and the key statutory auditor: • Maximum duration of continued duration of statutory audits, carried out by the same audit firm or audit firm associated with this audit firm or any member of the network operating in the European Union countries to which these audit firms belong, must not exceed 10 years and respectively 5 years for the key statutory auditor. • The first contract for the audit of financial statements is concluded with an audit firm for a period of not less than 2 years with the possibility of extension for another period of at least two years. • After the maximum duration of the order, the Bank cannot commission a statutory audit to the audit firm or any entity from its network operating within the European Union for the next 4 years, and in the case of a key statutory auditor after at least 3 years from the end of the last statutory audit. • The key auditor may not carry out a statutory audit of financial statements for a period longer than 5 years. In accordance with the Selection Procedure, the purchasing procedure aimed at selecting an audit firm is carried out in the form of a tender. Following the Selection Procedure organized by the Bank, the Audit Committee submits a recommendation to the Supervisory Board regarding the selection of the audit firm. This recommendation, unless it concerns the renewal of an audit engagement, contains at least two options for selecting an audit firm with a justification and an indication of a justified preference for one of them. However, in the event of extending the contract with the audit company, the Audit Committee recommends to the Supervisory Board to select the current audit company. The Supervisory Board, after reviewing the recommendation and (if the mandate is not renewed) the preference of the Audit Committee, selects the audit firm, specifying the years for which the financial statements of the Bank and the consolidated financial statements of the Bank Capital Group will be subject to statutory audit by the selected audit firm. Before changing the Selection Procedure in 2023, in the event of extending the contract with the audit firm, the Audit Committee recommended that the Supervisory Board present a proposal to select the current audit firm to the General Meeting. The Supervisory Board, after reviewing the recommendation and (if the mandate was not renewed) the preference of the Audit Committee, presented a proposal to the General Meeting regarding the appointment of an audit firm. The audit firm was selected by the General Meeting, specifying the years for which the Bank's financial statements and the consolidated financial statements of the Bank's Capital Group were subject to statutory audit by the selected audit firm. On 11 June 2021, the Ordinary General Meeting of the Bank, after reviewing the Supervisory Board's proposal, selected KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. (hereinafter "KPMG") as an audit company to audit the financial statements of the Bank and the consolidated financial statements of the Bank's Capital Group for the years 2021-2023, which resulted in the extension of the contract for the audit of financial statements with KPMG. On 7 November 2023, the Supervisory Board of the Bank adopted a resolution on the selection of PricewaterhouseCoopers Polska Spółka z ograniczoną odpowiedzialnością Audyt Sp.k. as an audit company authorized to audit the Bank's financial statements and the consolidated financial statements of the Bank's Capital Group for the period of five financial years from 2024 to 2028 with the option to extend the contract for two further financial years: 2029 and 2030. The service provision policy specifies that the provision of permitted services other than audit by the audit firm conducting the audit, entities related to this audit firm and a member of the audit firm's network to the Bank requires the consent of the Audit Committee. Moreover, the Audit Committee consents to the provision of permitted non-audit services to the Bank's subsidiaries based on the company's request. A necessary element of such an application is the consent of the Audit Committee of the Bank's subsidiary requesting consent. Entities belonging to the Bank's Capital Group are also obliged to obtain consent from the Audit Committee of the parent entity (PZU S.A.) to purchase a permitted service that is not an audit. In 2023, the KPMG audit company provided permitted non-audit services to the Bank and its subsidiaries. Before concluding an agreement for the provision of permitted non-audit services, the Audit Committee, the Audit Committee of the subsidiary being a public interest entity and the Audit Committee of the Bank's parent entity assessed the independence of the audit firm and agreed to the provision of these services. 116 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Nomination and Remuneration Committee The Nomination and Remuneration Committee operates on the basis of the Regulations of the Supervisory Board adopted by Resolution of the Supervisory Board of the Bank No. 10/22 of 24 January 2022 and the Resolution of the Supervisory Board of the Bank No. 116/23 of 18 October 2023 and the Regulations of the Nomination and Remuneration Committee of the Supervisory Board of Bank Polska Kasa Opieki Spółka Akcyjna, adopted by Resolution of the Supervisory Board of the Bank No. 161/22 of 2 November 2022 and Resolution of the Supervisory Board of the Bank No. 117/23 of 18 October 2023. The purpose of the Nomination and Remuneration Committee is to support the Supervisory Board in fulfilling its tasks related to, among others: shaping the composition of the Bank's Management Board and supervising the policy of the Bank's Management Board in relation to the selection and appointment of people holding managerial positions in the Bank. The Committee's activities are guided by prudent and stable management of risk, capital and liquidity as well as special attention to the long-term good of the Bank and the interests of the Bank's shareholders. The tasks of the Nomination and Remuneration Committee include: 1) adopting a diversity policy in the composition of the Bank's Management Board and the Supervisory Board, taking into account a wide set of features and competences required for people serving as members of the Management Board; 2) recommending candidates to the Bank's Management Board, taking into account the necessary knowledge, competences and experience of the Management Board as a whole, necessary to manage the Bank, and taking into account the diversity in the composition of the Bank's Management Board; 3) determining the scope of responsibilities of the candidate for the Bank's Management Board, as well as the requirements in terms of knowledge and competences as well as the expected commitment in terms of time spent, necessary to perform the function; 4) determining the target value for the representation of underrepresented gender in the Bank's Management Board and the Supervisory Board and developing a diversity policy in the composition of the Bank's Management Board and the Supervisory Board aimed at achieving this target value; 5) periodically assessing, at least once a year, the structure, size, composition and effectiveness of the Bank's Management Board and recommending changes in this respect to the Supervisory Board; 6) periodically assessing, at least once a year, the knowledge, competences and experience of the Bank's Management Board as a whole and individual members of the Bank's Management Board, and informing the Bank's Management Board about the results of this assessment; 7) periodically reviewing the policy of the Bank's Management Board in relation to the selection and appointment of people holding managerial positions in the Bank and presenting recommendations in this regard to the Bank's Management Board; 8) submitting recommendations to the Supervisory Board regarding: a) assessing the individual suitability of candidates for members of the Bank's Management Board and members of the Supervisory Board at the stage of appointment to these bodies and members of these bodies in the course of performing their duties in the situations specified in the "Policy on the assessment of the suitability of proposed and appointed members of the Management Board, the Supervisory Board and people performing Key Functions in Bank Polska Kasa Opieki Spółka Akcyjna", b) assessment of the collective suitability of the Bank's Management Board and the Supervisory Board in order to ensure an appropriate level of collective management or supervision of the Bank, c) succession plans for members of the Bank's Management Board in order to ensure continuity of management. In 2023, the Nomination and Remuneration Committee held 9 meetings. As at 1 January 2023, the composition of the Nomination and Remuneration Committee was as follows: Beata Kozłowska-Chyła Chairman of the Committee, Małgorzata Sadurska Secretary of the Committee, Sabina Bigos-Jaworowska Committee Member, Joanna Dynysiuk Committee Member, Marian Majcher Committee Member, Stanisław Ryszard Kaczoruk Committee Member, Michał Kaszyński Committee Member and remained unchanged until 31 December 2023. 117 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Risk Committee The Risk Committee operates on the basis of the Regulations of the Supervisory Board adopted by Resolution of the Supervisory Board of the Bank No. 10/22 of 24 January 2022 and the Resolution of the Supervisory Board of the Bank No. 116/23 of 18 October 2023 and the Regulations of the Risk Committee of the Supervisory Board of Bank Polska Kasa Opieki Spółka Akcyjna, adopted by Resolution of the Bank's Supervisory Board No. 12/22 of 24 January 2022 and Resolution of the Bank's Supervisory Board No. 119/23 of 18 October 2023. The mission of the Committee is to support the Supervisory Board in fulfilling its duties regarding: supervising the risk management system and assessing the adequacy and effectiveness of this system. The Committee's activities are guided by prudent and stable management of risk, capital and liquidity as well as special attention to the long-term good of the Bank and the interests of shareholders. The tasks of the Risk Committee include, among others: expressing its opinions on: a) the overall current and future readiness of the Bank to take risk expressed in the form of risk appetite, b) the risk management strategy in the Bank's operations developed by the Bank's Management Board, including policies in the area of credit, financial and operational risk, c) reports on the risk profile and implementation of the risk management strategy, presented by the Bank's Management Board. Moreover, the Risk Committee supports the Supervisory Board in supervising the implementation of the risk management strategy in the Bank's activities and verifies whether the general level of prices of liabilities and assets offered to customers fully takes into account the Bank's business strategy and risks. In 2023, the Risk Committee held 12 meetings. As at 1 January 2023, the composition of the Risk Committee was as follows: Stanisław Ryszard Kaczoruk Chairman of the Committee, Marcin Izdebski Secretary of the Committee, Michał Kaszyński Committee Member, Marian Majcher Committee Member, Małgorzata Sadurska Committee Member and remained unchanged until 31 December 2023. 10. Description of the Bank's diversity Policy applied to governing, managing and supervising bodies with respect in particular to such factors as age, gender or education and professional experience, aims of the diversity policy, manner of its realisation and results in the given reporting period 25 On 3 November 2020, the Management Board adopted by way of a Resolution and the Supervisory Board on 4 November 2020 approved by way of a Resolution the "Gender Equality and Diversity Policy with regard to the Bank's employees, including Members of the Supervisory Board, members of the Management Board and persons performing key functions in Bank Polska Kasa Opieki Spółka Akcyjna" (hereinafter referred to as the "Policy"). By Resolution No. 34, the Ordinary General Meeting of the Bank on 15 June 2022 adopted the Policy to the extent that it applies to members of the Supervisory Board of Bank Polska Kasa Opieki Spółka Akcyjna, with the exception of § 8 of the Policy. The Resolution of the Ordinary General Meeting referred to above in § 2 states that: "In order to ensure sufficient diversity in the Supervisory Board in terms of gender, the Bank will strive to achieve the 30% ratio as the target minimum value of the share of representatives of each of both sexes in the Supervisory Board. The Bank will always strive to achieve this ratio as soon as possible, but not earlier than the expiry of the term of office of the Supervisory Board." This Policy defines the Bank’s strategy of for managing the diversity of the Bank's employees , including diversity in reference to appointment the Supervisory Board members, Management Board members and Key Function Holders in the Bank, and defines guidelines aimed at ensuring that the Bank's employees are able to manage their careers, achieve success and evaluate their work on the basis of individual achievements, regardless of gender. The purpose of diversity strategy of the Bank is to provide high quality of tasks execution by its employees, including selection of qualified people to hold function in the Supervisory Board, the Management Board and Key Function Holders in the Bank, using as the first objective criteria and taking into account the benefits of diversity. 25 Par. 70.6.5.m of the ordinance of the Minister of Finance of 29 March 2018 118 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The diversity strategy includes and uses to achieve the best outcome differences, which in addition to knowledge, skills and work experience result from educational background, geographical origin, gender and age. The diversity strategy, with regard to the selection of members of the Supervisory Board/ members of the Management Board / persons performing a key function in the Bank, is also conducted in the processes of selection, suitability assessment and succession. The current share of women in managerial positions in the Bank is > 54,6% and in senior management positions > 35,1%. Application of diversity policy takes place in decision making processes in scope of: external selection, internal appointment, succession planning, taking into account provisions on equal treatment in the field of establishing an employment relationship, which include principle of gender equality. Due to the regulations adopted in this regard and the importance that the Management Board pays for the values presented in the Policy, it is subject to constant review. In 2021-2023, the share of women and men in the Bank's Management Board was following: 31.12.2021 31.12.2022 31.12.2023 No. of persons % No. of persons % No. of persons % Women 1 11% 1 11% 1 11% Men 8 89% 8 89% 8 89% Sum 9 100% 9 100% 9 100% In the –2021-2023, the share of women and men in the Supervisory Board was following: 31.12.2021 31.12.2022 31.12.2023 No. of persons % No. of persons % No. of persons % Women 5 55,5% 5 55,5% 5 55,5% Men 4 44,5% 4 44,5% 4 44,5% Sum 9 100% 9 100% 9 100% 119 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13. Statement of Bank Pekao S.A. Group on Non-financial Data 13.1 About Bank Pekao Bank Polska Kasa Opieki S.A., established in 1929, is one of the largest financial institutions in the Central and Eastern European region and the second largest universal bank in Poland with over PLN 295 billion in assets. 13.1.1 Basic information GRI 2-1 Organizational data Bank Polska Kasa Opieki Spółka Akcyjna (hereinafter: “Bank”, “Bank Pekao”) is a bank organized in the form of a joint stock company, operating on the basis of applicable laws, in particular the Banking Law and the provisions of the Commercial Companies Code and the provisions of the Articles of Association of Bank Polska Kasa Opieki Pekao Spółka Akcyjna (hereinafter: “Articles of Association of Bank Pekao” - consolidated text available at https://www.pekao.com / About the Bank / Corporate Governance). The Bank operates in the territory of the Republic of Poland. The registered office is located in Warsaw, at ul. Żubra 1 (postal code 01-066). The activities of Bank Pekao are supervised by the Polish Financial Supervision Authority (hereinafter: “PFSA”). Since 1998, Bank Pekao is listed on the Warsaw Stock Exchange. Since 2017, Bank Pekao S.A. has been a member of the PZU S.A. Capital Group (hereinafter: “PZU Group”), the largest financial institution in Central and Eastern Europe. Shareholding structure as of the date of the report : In current report No. 23/2023, Bank Pekao S.A. announced that on October 10, 2023 it received a notice from BlackRock, Inc. that its shareholding had fallen below 5% of the total number of votes at the Bank‘s General Meeting of Shareholders. The Bank offers customers a wide network of branches and ATMs with convenient access throughout the country, as well as a professional call center and an online and mobile banking platform for individual, corporate, and small and micro business customers. In 2023, Bank Pekao had 574 establishments (493 establishments of its own retail network and 81 partner establishments), as well as 1,306 ATMs located in all voivodeships. Number of accounts As of the end of December 2023, the Bank maintained 7,977.7 thousand current accounts in PLN, 366.3 thousand mortgage accounts and 583.8 thousand Express Loan accounts. PEKAO GROUP BANK PEKAO SCALE OF OPERATIONS (31.12.2023) PLN MILLION PLN MILLION Net interest income 11,923 11,588 Net fee and commission income 2,786 2,346 Total assets 305,723 294,477 Total equity 30,342 29,896 Amounts due to customers 232,078 232,307 SHAREHOLDER’S NAME NUMBER OF SHARES AND VOTES AT GENERAL MEETING AND THE TOTAL NUMBER OF VOTES AT THE GENERAL MEETING Powszechny Zakład Ubezpieczeń S.A. 52,494,007 20.00% Polski Fundusz Rozwoju S.A. 33,596,166 12.80% Funds managed by Nationale - Nederlanden Powszechne Towarzystwo Emerytalne S.A. 16,800,000 6.40% Funds managed by Powszechne Towarzystwo Emerytalne Allianz Polska S.A. 15,500,051 5.91% Other shareholders (under 5%) 144,079,810 54.89% Total 262,470,034 100.00% 120 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.1.2 Business model The Bank’s business model is based on customer segmentation where the following areas are distinguished: RETAIL AND PRIVATE BANKING – servicing individual customers, including affluent private banking customers and micro- enterprises. Private banking customers are offered investment advice through private banking centers and remote channels, whereas all individual customers and micro-enterprises are serviced by means of a wide own network of branches and partner establishments supported by leading remote service channels on the market, including digital channels. BUSINESS BANKING – providing financial services to customers in the small and medium-sized business sector, who are serviced by advisors with the support of product specialists. The service is provided in specialized Business Customer Centres, Corporate Centres and universal retail branches. Customers are offered products and services tailored to their individual needs, based on solutions proven in corporate banking and adjusted to the enterprise segment. CORPORATE AND INVESTMENT BANKING – providing financial services to large corporate customers, public sector entities, financial institutions, and entities from the commercial real estate funding sector. Corporate and investment banking customers are serviced by consultants with the support of product specialists. For more information on the business model and sales network, see Report on the activities of Bank Pekao S.A. Group for the year 2023 in note 7.4. 13.1.3 Financial results GRI 201-1 Direct economic value generated and distributed DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED * (PLN million) PEKAO GROUP BANK PEKAO Operating income 14, 733 14,283 Operating cost (including contributions to the BGF) (4, 821) (4,418) Expenses / income (including contributions to the BGF) 32.7% 30.9% Net allowances for expected credit losses (559) (427) Tax on certain financial institutions (879) (879) Income tax expense (1,900) (1,841) Customer financing 171,057 157,322 Amounts due to customers 232,078 232,307 Net profit 6,580 6,718 Dividend 1,423 () Retained economic value is not reportable in accordance with GRI Standards, because the Bank recognizes required items differently, such as payments to the state, social investments, and has other items generating costs that are not included in the GRI standard, such as risk costs. 121 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.1.4 Bank Pekao S.A. Capital Group The Bank Pekao S.A. Capital Group (hereinafter: “Pekao Group”) comprises Bank Pekao as the parent company as well as subsidiaries and indirect subsidiaries: financial institutions operating in the banking, asset management, brokerage services, transaction consulting, leasing and factoring markets. In addition, the Bank holds shares in affiliates, as well as minority interests. In 2023, the Pekao Group included Bank Pekao and the following subsidiaries and indirect subsidiaries: NAME REGISTERED OFFICE SCOPE OF ACTIVITY Pekao Bank Hipoteczny S.A. Warsaw Banking Centrum Kart S.A. Warsaw Auxiliary financial services Pekao Direct Sp. z o.o. Kraków Call center services Pekao Faktoring Sp. z o.o. Lublin Factoring services Pekao Financial Services Sp. z o.o. Warsaw Transfer agent Pekao Investment Banking S.A. Warsaw Brokerage services Pekao Investment Management S.A., including: Warsaw Holding activity Pekao TFI S.A. Warsaw Asset management Pekao Leasing Sp. z o.o., including: Warsaw Lease services PEUF Sp. z o.o. Warsaw Insurance services Pekao Fundusz Kapitałowy Sp. z o.o. in liquidation Warsaw Does not carry out operational activities Pekao Property S.A. in liquidation, including: Warsaw Does not carry out operational activities FPB - Media Sp. z o.o. in bankruptcy Warsaw Does not carry out operational activities 13.1.5 Business profile GRI 2-6 Operations, value chain and other business relationships GRI 2-28 Membership in associations and organizations Bank Polska Kasa Opieki S.A. conducts operations both in Polish zlotys and foreign currencies and actively participates in trading on domestic and foreign financial markets. It offers a full range of banking services to retail and institutional customers. As a corporate bank, Bank Pekao services every second corporation in Poland. The Bank is well established as a market leader in private banking, asset management and brokerage activities. The diversified business profile of Bank Pekao is supported by a strong capital and liquidity position, while maintaining the highest risk management standards. The Bank offers products and services that are highly competitive on the Polish market. It also guarantees a high level of customer service and owns a well-developed distribution. The Bank’s broad product portfolio, innovative solutions and individual customer approach ensure comprehensive financial services, while its integrated service model provides top-quality services to customers and ensures optimal adaptation to changing needs. The Bank is steadily strengthening its market position in strategic business areas. A detailed list of activities performed in domestic and foreign trade is included in section 6 of the Bank’s Articles of Association. Bank Pekao is active in trade associations and organizations. The Bank’s involvement in this regard can be broken down into four main fields:  Polish Bank Association along with Committees and Councils, including: The Banking Cybersecurity Centre Committee, Real Estate Funding Committee, Payment Card Processor Committee, Bank Card Issuer Council, Electronic Banking Council,  International associations and organizations, including: International Swaps and Derivatives Association (ISDA), International Project Finance Association (IPFA), United Nations Global Compact,  Nationwide associations and organizations, including: Stowarzyszenie Emitentów Giełdowych [Polish Association of Listed Companies], Izba Domów Maklerskich [Brokerage House Chamber], Polskie Stowarzyszenie Zarządzania Kadrami [Polish Staff Management Association], Stowarzyszenie Dealerów Bankowych ACI Polska [ACI Poland Bank Dealer Association], Polskie Stowarzyszenie Inwestorów Kapitałowych [Polish Private Equity and Venture Capital Association],  Local associations and organizations: Lubelski Klub Biznesu [Lubelskie Business Club], Podkarpacki Klub Biznesu [Podkarpackie Business Club]. ACTIVITY OF THE BANK IN TRADE ASSOCIATIONS AND ORGANIZATIONS IN THE RELEVANT YEAR (NUMBER OF MEMBERSHIPS) 2023 2022 2021 Polish Bank Association as well as Committees and Councils associated therewith 13 14 14 International associations and organizations 14 14 14 Nationwide associations and organizations 6 6 6 Local associations and organizations 2 2 2 122 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.1.6 Organizational and management structure GRI 2-9 Composition and structure of the highest governing body GRI 2-10 Appointment and election of the highest governing body GRI 2-11 Chairperson of the highest governing body Bank Pekao and entities of the Pekao Group have an organizational structure adapted to the size and nature of their activities. The scope of powers of the companies’ bodies is defined in the provisions of law, and in particular the Commercial Companies Code, the Banking Law Act, in supervisory recommendations of the supervisory bodies, in the Articles of Association of the Bank, and in the Articles of Association/Partnership of companies and partnerships and internal regulations of entities of the Pekao Group. General Meeting of Shareholders The highest authority of Bank is the General Meeting which operates on the basis of the Commercial Companies Code and the Articles of Association of the Bank. The scope of powers of the General Meeting is specified by the provisions of law, in particular the Commercial Companies Code and the Banking Law Act, in supervisory recommendations of the supervisory bodies and in the Articles of Association of the Bank. Resolutions are adopted by an absolute majority of votes, subject to the provisions of the Commercial Companies Code and the Articles of Association of the Bank. Supervisory Board of the Bank The Supervisory Board of the Bank exercises continuous supervision over the activities of Bank Pekao S.A. The Supervisory Board consists of between seven and nine members appointed by the General Meeting for a common term of office of 3 full financial years. The organization and operation of the Supervisory Board of the Bank are defined in the Rules of Procedure of the Supervisory Board of Bank Polska Kasa Opieki Pekao Spółka Akcyjna. The composition of the Bank’s Supervisory Board was as follows: AS OF THE DATE OF SUBMISSION OF THE REPORT FOR 2023 31.12.2023 AS OF THE DATE OF SUBMISSION OF THE REPORT FOR Q3 2023 Beata Kozłowska-Chyła Chairwoman of the Supervisory Board Beata Kozłowska-Chyła Chairwoman of the Supervisory Board Beata Kozłowska-Chyła Chairwoman of the Supervisory Board Małgorzata Sadurska Deputy Chairwoman of the Supervisory Board Joanna Dynysiuk Deputy Chairwoman of the Supervisory Board Joanna Dynysiuk Deputy Chairwoman of the Supervisory Board Stanisław Ryszard Kaczoruk Secretary of the Supervisory Board Małgorzata Sadurska Deputy Chairwoman of the Supervisory Board Małgorzata Sadurska Deputy Chairwoman of the Supervisory Board Sabina Bigos-Jaworowska Member of the Supervisory Board Stanisław Ryszard Kaczoruk Secretary of the Supervisory Board Stanisław Ryszard Kaczoruk Secretary of the Supervisory Board Michał Kaszyński Member of the Supervisory Board Sabina Bigos-Jaworowska Member of the Supervisory Board Sabina Bigos-Jaworowska Member of the Supervisory Board Marian Majcher Member of the Supervisory Board Justyna Głębikowska-Michalak Member of the Supervisory Board Justyna Głębikowska-Michalak Member of the Supervisory Board Marcin Izdebski Member of the Supervisory Board Michał Kaszyński Member of the Supervisory Board Michał Kaszyński Member of the Supervisory Board Marian Majcher Member of the Supervisory Board Marian Majcher Member of the Supervisory Board Marcin Izdebski Member of the Supervisory Board Marcin Izdebski Member of the Supervisory Board On November 13, 2023, Ms. Joanna Dynysiuk tendered her resignation from the position of Vice-Chairperson of the Bank's Supervisory Board and from membership in the Bank‘s Supervisory Board, effective December 31, 2023. The resignation did not include information on the reasons. On December 22, 2023, Ms. Justyna Głębikowska-Michalak resigned from the Bank's Supervisory Board, effective December 31, 2023. The resignation did not include information on the reasons. The Supervisory Board of the Bank performs its collective duties, however, in order to perform specific activities or to streamline the work, it may appoint committees and teams from among its members. In addition, the Supervisory Board of the Bank may delegate one or more of its members to independently perform supervision within the scope specified thereby. The following operate within the structures of the Supervisory Board of Bank Pekao: Audit Committee, Nomination and Remuneration Committee, and Risk Committee. The committees appointed by the Supervisory Board of the Bank submit annual activity reports to the Supervisory Board and should inform the Supervisory Board of the Bank at least once per quarter of the financial year about the supervisory activities undertaken as well as about their results. 123 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Management Board of the Bank The Management Board of Bank Pekao manages the Bank’s affairs and represents the Bank. All matters not reserved to the competence of other bodies by law or the Bank’s Articles of Association are the responsibility of the Management Board of the Bank. The Management Board of the Bank is composed of five to nine members, appointed for a joint term of office of three full fiscal years. The Supervisory Board of the Bank, acting on the basis of the Commercial Companies Code and taking into account the assessment of compliance with the suitability requirements, on June 14, 2022 unanimously appointed, as of the day following the Ordinary General Meeting of the Bank approving the Bank’s financial statements for the financial year 2021, members of the Management Board of the Bank for a new joint term of office of 3 years. The following persons were appointed to the Management Board of the Bank for another three-year joint term of office: 1) Leszek Skiba as President of the Management Board of the Bank, 2) Marcin Gadomski as Vice President of the Management Board of the Bank supervising the management of significant risk in the Bank’s operations, 3) Jarosław Fuchs as Vice President of the Management Board of the Bank, 4) Jerzy Kwieciński as Vice President of the Management Board of the Bank, 5) Paweł Strączyński as Vice President of the Management Board of the Bank, 6) Błażej Szczecki as Vice President of the Management Board of the Bank, 7) Wojciech Werochowski as Vice President of the Management Board of the Bank, 8) Piotr Zborowski as Vice President of the Management Board of the Bank, 9) Magdalena Zmitrowicz as Vice President of the Management Board of the Bank. The Supervisory Board of the Bank, as a result of its assessments, concluded that all members of the Management Board of the Bank and the Management Board of the Bank as a whole meet the requirements referred to in Article 22aa Act of August 29, 1997 – Banking Law and the suitability requirements referred to in the Policy of selection of candidates for the function of a member of the Management Board and Key Function Holders and assessment of the suitability of the proposed and appointed members of the Management Board, Supervisory Board and Key Function Holders at Bank Polska Kasa Opieki Spółka Akcyjna. None of the above persons appointed to the Management Board of the Bank, in accordance with the submitted declarations, conducts activities competitive to the Bank, is involved in a competitive company as a partner in a civil law partnership, partnership or capital company, nor is it involved in a competitive legal person as a member of its governing body. Furthermore, none of the appointed persons is listed in the Register of Insolvent Debtors kept pursuant to the Act of August 20, 1997 on the National Court Register. 124 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The composition of the Bank’s Management Board was as follows: As at December 31, 2023, the division of competencies between members of the Management Board of the Bank looked as follows:  Leszek Skiba, President of the Management Board of the Bank – convenes and chairs the meetings of the Management Board of the Bank, presents the position of the Management Board of the Bank to the Bank’s bodies and in external relations, in particular to public authorities. The President of the Management Board of the Bank coordinates the work of Members of the Management Board of the Bank, issues dispositions in accordance with the provisions laid down in internal regulations in force at the Bank. President of the Management Board of the Bank oversees the following areas of the Bank’s operations: internal audit, compliance risk, corporate communications, investor relations, security, legal risk, strategic projects, human resources management, and macroeconomic analysis and digital transformation. The President of the Management Board of the Bank is appointed as the Member of the Management Board responsible for implementing the obligations set forth in the Law on Prevention of Money Laundering and Financing of Terrorism.  Marcin Gadomski, Vice President of the Management Board of the Bank supervises the activities of the Risk Management Division and is responsible for overseeing the risk management process of the bancassurance business.  Paweł Strączyński, Vice President of the Management Board of the Bank, supervises the operations of the Financial Division and was appointed as a Member of the Management Board to whom infringements will be reported and who will be responsible for the on-going functioning of the Whistleblowing procedure.  Jerzy Kwieciński, Vice President of the Management Board of the Bank, supervises the operations of the Corporate Banking, Markets and Investment Banking Division.  Wojciech Werochowski, Vice President of the Management Board of the Bank, supervises the operations of the Retail Banking Division.  Magdalena Zmitrowicz, Vice President of the Management Board of the Bank, supervises the operations of the Business Banking Division.  Jarosław Fuchs, Vice President of the Management Board of the Bank, supervises the operations of the Private Banking and Investment Products Division.  Piotr Zborowski, Vice President of the Management Board of the Bank, supervises the operations of the Strategy Division.  Błażej Szczecki, Vice President of the Management Board of the Bank, supervises the activities of the Technology and Operations Division and coordinates activities aimed at proper management of the risk related to the security of the ICT environment. For more information on the Bank’s organizational and management structure, see “Bank Pekao S.A. Group Management Report 2023” in sub-chapter 7.4. AS OF THE DATE OF THE 2023 REPORT 31.12.2023 Leszek Skiba President of the Management Board of the Bank Leszek Skiba President of the Management Board of the Bank Jarosław Fuchs Vice President of the Management Board of the Bank Jarosław Fuchs Vice President of the Management Board of the Bank Marcin Gadomski Vice President of the Management Board of the Bank Marcin Gadomski Vice President of the Management Board of the Bank Jerzy Kwieciński Vice President of the Management Board of the Bank Jerzy Kwieciński Vice President of the Management Board of the Bank Paweł Strączyński Vice President of the Management Board of the Bank Paweł Strączyński Vice President of the Management Board of the Bank Błażej Szczecki Vice President of the Management Board of the Bank Błażej Szczecki Vice President of the Management Board of the Bank Wojciech Werochowski Vice President of the Management Board of the Bank Wojciech Werochowski Vice President of the Management Board of the Bank Piotr Zborowski Vice President of the Management Board of the Bank Piotr Zborowski Vice President of the Management Board of the Bank Magdalena Zmitrowicz Vice President of the Management Board of the Bank Magdalena Zmitrowicz Vice President of the Management Board of the Bank 125 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Suitability Assessment GRI 2-18 Evaluation of the highest governing body’s performance The Bank has a Policy of selection of candidates for the function of a member of the Management Board and Key Function Holders and assessment of the suitability of the proposed and appointed members of the Management Board, Supervisory Board and Key Function Holders at Bank Polska Kasa Opieki Spółka Akcyjna , approved by the Supervisory Board of the Bank on December 30, 2020. It is aimed at ensuring an optimal and uniform process of selecting candidates for the position of a member of the Management Board and Key Function Holders so as to ensure the performance of tasks related to the implementation of plans and business strategy of the Bank by persons who have the necessary knowledge, experience, and skills, and enjoy good reputation. The Selection and Suitability Assessment Policy also specifies the criteria for assessing the individual and collective suitability of candidates and members of the Management Board, the Supervisory Board, and key function Holders at the stage of appointment and in the course of performance of the function, as well as events resulting in the need to assess the suitability, the course of the suitability assessment process, including roles and tasks in the process and the effects of the assessment, including corrective measures applicable to ensure compliance with the suitability requirements. In 2023, a re-assessment of the individual and collective suitability of the members of the Supervisory Board of the Bank and a re-assessment of the individual and collective suitability of the members of the Management Board of the Bank were carried out, as well as suitability assessments resulting from changes in the additional functions performed by members of the Bank’s governing bodies. Subsidiaries have implemented Suitability Assessment Policies in accordance with applicable laws and regulations. 13.1.7 Strategic approach to ESG issues GRI 2-12 Role of the highest governing body in overseeing influence management On June 25, 2021, the ESG Strategy “Responsible Bank supporting sustainable development” was announced, adopted by the Management Board and reviewed by the Supervisory Board of the Bank. The document is in line with Bank Pekao’s business strategy for 2021-2024 and is an extension of its fourth pillar: “Responsibility”. The ESG strategy is a comprehensive document governing the Bank’s approach to sustainability; in its three pillars - Environment, Engagement and Governance - it defines the issue of environmental responsibility, the social environment and policies within the organization. In each of these areas, the Bank has set specific goals, and identified initiatives that will support the strategy. The document was developed with the involvement of representatives of the Bank’s key ESG units, including the ESG Council. GRI 2-13 Delegation of responsibility for influence management Appropriate assignment of responsibility in the organizational structure is crucial in the process of managing ESG topics. Coordination of issues related to ESG topics is within the competence of the ESG Council, an advisory body to the Management Board of the Bank, established by a Resolution of the Management Board of the Bank in 2020. The main task of the ESG Council is to support decision-making on ESG issues, strategic directions and the Bank’s involvement in social responsibility and sustainability projects. At the same time, the ESG Council serves to consult on the direction of development of sustainable banking products and services. The purpose of the ESG Council is to provide an opinion on the processes for the involvement of the Bank’s subsidiaries in ESG projects, taking into account the specific activities carried out by the bank’s subsidiaries and their autonomous nature. The Council is composed of members of the Management Board and representatives of the Bank’s key ESG units (both business and support). ESG Council meetings are held at least once a quarter. In 2023, the Bank introduced a new organizational model for managing the ESG area, concentrating most of the ESG competencies in a dedicated unit in the Risk Management Division. In addition, the Group also has a Sustainable Financing Committee ensuring that funds from the proceeds of green Eurobonds issued under the medium-term Eurobond program (i.e. EMTN Program) are used in accordance with the eligibility criteria set forth in the Sustainable Finance Framework . The Bank’s goal is to integrate ESG in all key areas of operation, so the ESG Strategy addresses issues such as increasing the Bank’s commitment to financing sustainable projects, supporting customers’ energy transition and low-carbon transition, its own climate neutrality, commitment to sustainable socioeconomic development, and attention to employee equality. The Bank incorporates ESG in its lending, investment and advisory process, purchasing, incentive system, and product offerings, among others. Transparency of ESG policies and non-financial reporting remains a priority, especially in the context of recent regulations. The Bank is actively working to build an ESG ecosystem. Responsibility for objectives linked to the ESG Strategy has been articulated in an incentive system dedicated to the members of the Management Board of the Bank and all material risk takers 26. In addition, 208 managers included in the MBO system had ESG issues addressed in individual quality objectives. 26 Material risk takers (MRT) – employees whose professional activities have a significant impact on the risk profile of investment institutions or the assets they manage. 126 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. GRI 2-17 Collective knowledge of the highest governing body In its daily communication with employees, the Management Board of Bank Pekao emphasizes the role of ESG in building a sustainable organization, including by maintaining high standards of corporate governance, ethical approach to business, social and environmental activities, support of development of human capital. In numerous statements to the media, appearances in expert debates and content shared on social media profiles, as well as official speeches, Bank representatives stressed the importance of participating in the energy transition and financing green projects, expanding product offerings that take ESG factors, environmental education and responsibility to customers and counterparties into account. In 2023, representatives of the Management Board took part in important events thematically related to environmental, social and governance aspects. These included: World Economic Forum in Davos, European Economic Congress in Katowice, Economic Forum in Karpacz, Euro POWER & RES POWER; Krynica Forum, Impact’23, or Corporate and Investment Banking Congress. 13.1.8 Sustainable development strategy GRI 2-22 Statement on sustainable development strategy ESG is one of Bank Pekao’s key priorities, which is why the Bank takes a comprehensive approach to managing sustainability issues. In 2021, the ESG Strategy “Responsible Bank supporting sustainable development” was adopted, which defines Bank Pekao’s goals and ambitions related to the environment, social engagement and corporate governance. The ESG strategy is divided into three pillars. The Strategy’s first pillar - “Environment” is associated with increasing funding for sustainable projects, supporting the energy transition and the transition to a low-carbon economy, and striving to achieve our own climate neutrality by 2030. The second one - “Commitment” - focuses on helping, equalizing opportunities and preventing social exclusion, including through charitable activities and employee volunteering. The third pillar - “Corporate Governance” - refers to an ethical approach to business that takes into account ESG issues, as well as to the development, diversity and equality of employees. 127 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Bank’s efforts to implement the Sustainable Development Agenda Bank Pekao actively engages in the implementation of the 2030 Sustainable Development Agenda. The activities included in the ESG Strategy undertaken by the Bank are in line with most of the 17 Goals of the initiative, which give direction to the Bank’s activities: UN GOAL ACTIONS TAKEN BY THE BANK • Activities for the benefit of local communities within the framework of Employee Volunteering aimed at helping the needy, equalizing opportunities, preventing exclusion and education, health promotion • Cooperation with non-governmental organizations, including the Polish Red Cross, SOS Children’s Villages Association • Loans for medical studies • Bank Pekao S.A. Foundation activities • Voluntary blood donation campaigns • Health promotion campaigns among Bank employees and externally, among others “MiLOVE activities”, “Take Health by the Horns” ESG Strategy - Pillar 2. • Bank Pekao S.A. Foundation activities • Financial Education for Youth “BAKCYL - Bankers for Youth Financial Education.” • Financial education for the elderly “SeniorON” • Employee volunteering - educational campaigns • PEOPAY Kids – education about finances for the youngest ESG Strategy - Pillar 3. • Equality and diversity policy • Reducing the pay gap • Maintaining equal number of men and women in managerial positions, succession plans • “Sugar-Free” program for women ESG Strategy - Pillar 1. • Supporting the transformation of Poland’s energy and coal regions; offering green products, supporting the development of a low-carbon economy • Purchase of green energy to reduce carbon footprint (guarantees of origin) Bank’s business strategy: Pillar of Responsibility - Supporting Economic Development • Commercial and operational activities even more based on sustainability factors • Effective human resources management • Developing employees’ competencies, aspiring to be an employer of first choice Bank’s business strategy: Pillar of Responsibility - Supporting Economic Development • Support for the development of innovation of Polish companies • Digitization and digitalization • A wide range of corporate loans to support real economy entities, including industry and construction ESG Strategy - Pillar 3. • Employee volunteer work program • Charity policy, Bank Pekao S.A. Foundation activities • Pekao without Barriers program • Diversity management policy • Activities in the area of respect for human rights, high standards of ethics and corporate governance 128 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Bank’s business strategy: Pillar of Responsibility - Supporting Economic Development • Comprehensive services for the public finance sector • Financing of public sector and municipal projects • Public-Private Partnership Activities • Supporting the issuance of customer social bonds ESG Strategy - Pillar 1. • Reduction of the consumption of raw and other materials • Modernization of the vehicle fleet, including purchase of electric cars, reduction of paper consumption • Purchase of renewable energy, energy conservation • Calculating own emissions and aiming for reductions of CO 2 ESG Strategy - Pillar 1. • Supporting the development of a low-carbon economy • Financing of sustainable projects • Supporting the issuance of customer ESG bonds • Systematic reduction of balance sheet exposure to carbon-intensive activities • Calculation of financed emissions and reduction targets ESG Strategy - Pillar 2. • Environmental education of employees • Bee and bison conservation programs • Employee volunteer work program • “Ekologia na BANK” (Ecology at the Bank) program • Support for citizens and companies from Ukraine - special solutions for individual and corporate customers, including free account maintenance, free transfers to and from Ukrainian banks • Policy not to fund controversial weapons • Membership in the United Nations Global Compact • Membership in the “Climate Positive” United Nations Global Compact Poland program • Cooperation with the UNEP/GRID Center - Warsaw, Poland, Partnership “Razem dla środowiska” • Membership in the Polish Bank Association - active participation in the creation of good market practices for sustainable development in the banking sector 13.1.9 Changes in the regulatory environment for sustainable finance GRI 3-3 Management of topics identified as material Bank Pekao systematically monitors and analyzes new regulations in the ESG area. In the area of sustainable finance, it carries out tasks to ensure compliance with the following external regulations:  Commission Implementing Regulation (EU) 2022/2453 of November 30, 2022, amending the implementing technical standards set forth in Implementing Regulation (EU) 2021/637 with regard to the disclosure of information on environmental, social and corporate governance risks in accordance with Article 449a of Regulation (EU) No. 575/2013 of June 26, 2013 on prudential requirements for credit institutions and investment firms, amending Regulation (EU) No. 648/2012,  Regulation EU 2020/852 of the European Parliament and of the Council of June 18, 2020 on the establishment of a framework to facilitate sustainable investment, amending Regulation (EU) 2019/2088 together with delegated regulations. In response to the rapidly changing regulatory and business environment, in October 2022 the Bank launched a comprehensive project to fill regulatory gaps related to the ESG area (hereinafter: “ESG Project”), which it continued through 2023. The work on the ESG Project was carried out as part of 10 streams involving about 40 units from each division. In 2023, the work on the ESG Project was primarily focused on the following objectives:  developing a target process-system architecture for methods of collecting data directly from the customer, analyzing the data and further using them in processes and reporting, based on the EP and Council Regulation (EU) 2020/852 on the so-called taxonomy and the CRR Regulations,  implementing a comprehensive risk management system in accordance with EBA/REP/2021/18, 129 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A.  calculating the carbon footprint in Scope 3 according to the Greenhouse Gas Protocol for the financing portfolio (subcategory 15),  creating a data repository for ESG risks, including climate risks,  creating an ESG advisory model for the Bank’s customers. 13.2 Climate and environment The Bank continues to pursue sustainable financing activities including green and social projects and supports the issuance of ESG bonds of its customers in line with the 2021 ESG strategy. The Bank’s superior intention is to significantly reduce the financing of carbon-intensive projects in its loan portfolio. Individual goals from the first Pillar of the ESG Strategy “Environment” are systematically monitored and reported to the ESG Council. GRI 3-3 Management of topics identified as material GRI 2-23 Commitments included in policies Own indicators in the “Environment” area 1. PILLAR - ENVIRONMENT IMPLEMENTATION 2021 IMPLEMENTATION 2022 IMPLEMENTATION TARGET FOR 2024 (PLN million) Financing sustainable projects 929 4 278 8 994 > 8 000 Supporting the issuance of customer ESG bonds 5 934 7 970 15 700 > 22 000 Share of green financing 4,1% 4,6% 7,21% > 4,0% Share of carbon-intensive financing 1,2% 1,4% 1,04% < 1,0% The methodology for disclosing ESG indicators in Pillar 1 of the ESG Strategy Environment was based on the following assumptions:  Financing sustainable projects means realization of financings in the form of green or social loans based on contracts concluded during the ESG Strategy period (cumulative indicator),  Supporting the issuance of ESG bonds of customers are financed green bonds, social bonds or KPI-linked bonds based on contracts concluded during the ESG Strategy period (cumulative indicator),  The share of green financing is the share of green loans and covered green bond issues as of 31.12.2023 in the Bank’s gross financing,  The share of carbon-intensive financing is the share of carbon-intensive financing (either loans or covered bond issues) as of 31.12.2023 in the Bank’s gross financing. 13.2.1 Green and sustainable products In 2023, Bank Pekao published the Sustainable Finance Framework. It defines the eligibility of investments financed with the proceeds of EMTN bonds issued by Bank Pekao. In order to be fully transparent, it also includes a description of the process of review and selection of projects, management of funds and allocations of resources, and rules for reporting allocations and environmental and social impacts. Projects funded under the Sustainable Finance Framework include the following categories: renewable energy, sustainable construction, clean transportation, energy efficiency, sustainable water and wastewater management, pollution prevention and control, accessible basic infrastructure, access to basic services: health care. The document was prepared in accordance with applicable international standards published by ICMA and LMA. The framework has also received an independent party’s opinion (SPO) issued by Sustainalytics, which confirms its credibility and positive impact. One of the Bank’s key tasks in supporting environmental protection and sustainable development activities is to issue payment cards on eco-friendly plastic. As of March 28, 2023, the Bank is issuing the MasterCard Corporate Debit FX card on eco- friendly plastic. The MasterCard multi-currency card is made from 99% recycled PVC from post-industrial waste. As a result, its production reduces total energy consumption by 54%, while its carbon footprint by 75%. By reusing plastic, it also reduces the use of non-recycled materials by 98%. The Bank now also offers a Credit Card with Bison made of recycled plastic. In line with the Bank’s ESG strategy, the Bank will continue to increase the share of cards on eco-friendly plastic in 2024. In September 2023, the first loan agreement was signed with the European Bank for Reconstruction and Development (EBRD) for EUR 150 million for Pekao Leasing, secured by a guarantee from Bank Pekao. The funds will be used to support Polish micro, small and medium-sized enterprises affected by the Russian invasion of Ukraine. About 60% of the loan will finance green investments, in line with the EBRD’s approach to the green transformation of the economy, including, among other things, improvements in energy, resource and water efficiency, renewable energy and waste minimization, supporting Polish companies in increasing the use of efficient technologies. The Bank was the coordinator and guarantor in the transaction. 130 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In 2023, Bank Pekao was involved in a number of projects aimed at improving the energy efficiency of business customers, implementing green projects, financing renewable energy sources (such as wind farms, photovoltaic installations or low- emission urban transportation) and social projects. Major ESG projects financed by the Bank in this area in 2023 include:  consortium financing linked to the sustainable development for an energy company in the amount of PLN 600 million,  consortium financing linked to the sustainable development goals of one of the largest groups in the media and telecommunications industry in the amount of PLN 1.2 billion,  investment financing for the construction of a wind farm in the amount of PLN 95 million,  consortium financing of financial institutions of a loan linked to sustainable development for a total of PLN 1.65 billion,  financing of the construction of a 1.2 GW offshore wind farm as part of a consortium of financial institutions loan for a total of PLN 3.9 billion,  joining an international consortium that will finance the construction of a tramway line in Kraków as part of a public-private partnership formula. The Bank’s share of financing exceeds PLN 0.5 billion. In addition, Bank Pekao:  served as co-organizer and co-bookrunner of a PLN 3.49 billion issue of 7-year sustainability-linked bonds for Poland’s largest provider of integrated media and telecommunications services,  served as sole arranger for the issuance of green Eurobonds (Climate Awareness Bonds) for an international financial institution for an amount of PLN 400 million,  was the co-organizer and dealer of a green bond issue of a company belonging to an international real estate development group in the amount of PLN 180 million,  was the co-organizer and dealer of 3.5-year green bond issue of a company belonging to an international real estate development group in the amount of PLN 340 million,  was the organizer of social impact bond issues for local governments: Lublin (PLN 150 million), Toruń (PLN 140 million) and Łódź (PLN 160 million),  issued EUR 500 million worth of 4-year green senior non-privileged Eurobonds under EMTN’s EUR 5 billion medium-term Eurobond issuance program; the funds raised from the issue will be used to provide financing or refinance eligible projects in accordance with the Bank’s Sustainable Finance Framework. In 2023, the Bank continued its special Express Loan offer for individual customers, supporting the financing of consumer investments for environmental purposes. Funds granted on promotional terms could be used for expenses associated with the purchase or installation of:  renewable energy sources (solar collectors, solar panels/cells),  central heating boilers (excluding coal and eco-pea boilers), heat pumps and using geothermal heating,  roofs, windows, doors, and home insulation materials,  electric or hybrid passenger cars and electric motorcycles and scooters, electric bicycles.  domestic bio-treatment plants,  ventilation with heat recovery, domestic water treatment plants from own intakes,  rainwater recovery system. As part of the Express Loan, we maintain a high share of sales with document acceptance in electronic channels, i.e. Pekao24 online banking and PeoPay mobile application. In 2023, as many as 83% of the transactions were conducted as part of the “paperless” option. Supporting environmentally friendly solutions for individual customers was the EKO Housing Loan, under which loans were available for primary or secondary market properties equipped with solar panels, photovoltaic panels or cells, or heat pumps. Pekao TFI offers the Pekao Ekologiczny sub-fund, aimed at supporting sustainable investments. Companies from environmentally friendly and pro-environmental sectors (renewable energy, electromobility, energy efficiency, recycling and waste management) are selected for its portfolio. In analyzing their selection, in addition to financial factors, ESG issues, i.e. environmental, social and corporate governance aspects, were equally important. 131 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.2.2 Climate risks and opportunities Bank Pekao has identified climate risk as part of its identification of environmental, social and corporate governance risks (ESG risk). In 2023, the Bank analyzed its financing portfolio to identify exposures subject to physical risk. As of December 31, 2023, exposure to the following physical risk hazards was analyzed: river flood, urban flood, and landslide. The analysis used data from the ThinkHazard online database. Disclosure in this regard is available in the “Bank Pekao S.A. Group’s Capital Adequacy Information as of December 31, 2023”. In terms of transformational risks, the Bank has identified sectors that are particularly vulnerable to the transition to a low-carbon economy. As part of its assessment of the market risk profile, the Bank conducts stress tests examining the impact of materialization of ESG risk factors on earnings and capital in a scenario of changes in credit spreads for individual sectors of debt securities issuers. The results are reported monthly to the Assets, Liabilities and Risk Committee and quarterly to the Bank’s Management Board and Supervisory Board. In terms of operational risk, the scenario analysis includes a greenwashing scenario, which aims to estimate potential operational losses under the hypothetical assumption that the information presented by the Bank in the ESG area is not sufficiently precise. In order to optimize the operational risk management process, the Bank has developed classification rules, reviewed and appropriately flagged operational events and key risk indicators related to ESG factors. 132 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.2.3 ESG risks in the credit business Bank Pekao supports environmentally-friendly projects and takes into consideration ESG issues in the process of analyzing credit risk connected with transactions being executed and in the process of monitoring those transactions. The Bank, together with the assessment of creditworthiness and credit risk in the strict sense, carefully assesses the specific risk of transactions, in particular legal, reputation, political, environmental risks, the risk of customer’s failure to comply with the principles of corporate social responsibility, money laundering and terrorist financing (e.g. by identifying the customer and verifying his identity, establishing the ownership and control structure and identifying and verifying the identity of the beneficial owner, establishing the purpose and nature of the business relationship) conflict of interest risk. In the ESG risk assessment, the Bank takes into account climate, environmental, social and corporate governance risks. It takes particular care of the risks arising, i.a., from the transition to an economy that is low-carbon and “resilient” to climate change, and threats arising from the so-called risks of physical climate change. In its day-to-day operations, Bank Pekao has a special commitment to environmental protection issues. The assessment of the ESG risks is one of the integral elements of the assessment of credit transactions made with business entities. Its aim is to promote informed credit decision-making and appropriate relationship management with customers who operate in areas that significantly affect the environment. Wherever possible, negative environmental, social and climate impacts should be avoided. If avoidance is not possible, negative impacts should be reduced, mitigated or compensated accordingly. Should environmental hazards connected with the type of business activities carried out by borrowers occur, the Bank cooperates with customers in order to mitigate potential consequences of environmental risks. The purpose of such cooperation is to identify, assess and mitigate environmental, social, and climate risk and takes place during the assessment of credit risk and is based on methodologies and relevant trade guidelines of the European Bank for Reconstruction and Development and the European Banking Authority (hereinafter: EBA). If the customer is found incapable of mitigating the ESG risks, the Bank defines conditions for particular environmental actions during the transaction and may activate environmental clauses in the credit facility agreement, among other possible solutions. The Bank aims to change the balance sheet structure of its loan portfolio by gradually reducing its financial exposure to carbon- intensive activities, while increasing its commitment to financing green or sustainable projects. The Bank recognizes as socially desirable infrastructure investments that have low CO2 emissions and are resilient to climate change and disasters, and supports the transformation of the Polish energy sector by, among other things, financing projects aimed at improving energy efficiency, changing the energy mix (implementing low-carbon and energy-efficient solutions) and adapting to growing environmental requirements. Due to ESG risks, the Bank, as a rule, does not finance:  new coal and lignite mining projects, and new energy projects based on coal and lignite, excluding projects supporting the transformation of the Polish energy sector,  activities generating a material threat to the natural environment and social issues. The customer is evaluated for compliance with corporate social responsibility, taking into account such negative aspects of its operations as corruption, failure to comply with health and safety regulations, exploitative forced labor, employment of minors in violation of the law, discriminatory practices, exploitation of scarce natural resources, testing of products on animals and cruelty to animals, unethical actions toward contractors or competitors, legitimate local protests related to the customer’s operations, manufacture of products or offering of services harmful to consumers. Committed to the highest standards of corporate governance, the Bank is committed to an ethical approach to business by considering ESG issues in all key areas. Declares transparency in sustainable reporting and promotion of employee development, diversity and equality. The Bank has also adopted the Code of Ethics for suppliers of Bank Pekao S.A. According to its provisions, conducting business in a responsible, transparent and sustainable manner, taking into account ESG criteria, is one of the most important principles for operating in the market environment. In terms of protecting specific groups of stakeholders, contractors and customers, the Bank has and applies the Rules for the sale of credit and payment products to consumers at Bank Polska Kasa Opieki Spółka Akcyjna and Policy for the sale of investment products. The Bank also adheres to the highest standards in handling confidential information within the meaning of the Regulation of the European Parliament and of the Council of April 16, 2014 on Market Abuse. 13.2.4 Reduction of the consumption of raw materials and resources GRI 3-3 Management of topics identified as material In its day-to-day operations, Bank Pekao is guided by a desire to reduce its negative impact on the climate. Both at the Bank’s head office, branches and other premises used, measures are being taken to reduce the consumption of raw materials and resources, such as paper, water and electricity. 133 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Paper Activities aimed at significantly reducing paper consumption are implemented in the current operations of the Pekao Group and the Bank. Starting in 2021, the Bank intensified its efforts to reduce paper correspondence. Among the most important elements of these activities are combining correspondence sent to the same address and promoting electronic receipt of information such as bank statements and regulations. As a result, it was possible to reduce the number of customers using traditional mail by 450,000 people, including 160,000 in 2023, and the number of letters sent in 2023 was reduced by 2 million per year. In the case of bulk mail, the year-on-year decline in paper consumption was 23.1%, and in envelopes by 26.7%. In addition, only paper with certificates, among others FSC, EU Ecolabel, PEFC, is used in daily work, including printouts to customers. Water During ongoing repairs and renovations, in an effort to reduce water consumption in the Bank’s facilities, water pressure limiters or aerators are installed and household appliances are replaced with new and energy-efficient ones. Electricity In 2023, implementation of green solutions continued with special attention to projects reducing electricity consumption and reducing negative environmental impacts. These included, inter alia:  the gradual replacement of older-type lighting with energy-efficient LED lighting,  optimization of power consumption (reduction of so-called ordered capacity),  replacing emergency UPSes with new ones of a higher maximum efficiency,  liquidation of unnecessary backup power supplies,  installation of energy-efficient air conditioning systems,  analyses aimed at installing reactive power compensation devices (and consequently eliminating unnecessary energy expenditure),  switching electrical devices at night to “standby mode”. In 2023, 23 full renovations of retail outlets were carried out. Energy-efficient electrical solutions were used in the renovated premises, LED lighting was installed, and ventilation and air conditioning equipment was replaced with equipment having, among other things, controls that reduce electricity consumption. In addition, work has been done to modernize and optimize lighting at the Bank’s 175 branches nationwide. In 2023, the Bank entered into a one-year contract to purchase electricity while purchasing renewable energy guarantees of origin for the entire contracted volume. The Bank has received Certificate RGP_ENERGAOB_2023-11-16_0010 for the first half of 2023, certifying the introduction of 16,500 MWh of electricity generated from wind sources in a renewable energy facility into the grid. New location of the Bank’s headquarters In April 2023, the Bank’s headquarters moved to the Pekao Tower headquarters in the Forest complex at 1 Żubra Street in Warsaw, near the traffic circle of Zgrupowania AK Radosław. The excellent location is conducive to reducing car traffic for commuting and provides excellent connections to every part of the city. Near the building there is a bike path, bus stops, streetcars and light rail (Warsaw Powązki), and within a 10-minute walk there is the Dworzec Gdański subway station. The new headquarters are located in a modern building that has been designed to consume as little energy and raw materials as possible (including the ability to recycle rainwater). The building is covered with solar control glass, and the floor-to-ceiling tall windows are equipped with a special triple silver coating to guarantee employees a clear view and optimal thermal comfort. Lower energy consumption is ensured by the building’s facade, which guarantees above-standard access of daylight to the interiors, while providing a barrier to the sun’s overly intense rays. As a result, the Bank will reduce the energy consumption required for heating in winter, air conditioning in summer and for artificial lighting at its new headquarters. The building has the relevant environmental and energy efficiency certificates: BREEAM on Excellent level, as well as the WELL certificate. 400 trees and shrubs have been planted in the open courtyard, recreational terraces and roof of the building. The new energy-efficient headquarters consolidated the Warsaw units of the Bank’s Head Office, reducing the office space used by 48%. 134 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Multi-Branch-Poland Project In 2023, the Bank launched the Multi-Branch-Poland project, which consists of concentrating business divisions in multi-branch and universal outlets that are modern, user-friendly and have eco-friendly solutions. Important goals include the continued implementation of the new standard, including rotational work, and the reduction of floor space, and the savings associated with it. In 2023, 5 Multi-Branch branches were launched: in Gdańsk, Katowice, Kraków, Lublin and Łódź, in place of the current 31 branches. The headquarters (except for the one in Lublin) are BREEAM-certified at the Excellent level, additionally the branches in Gdańsk and Łódź boast the WELL Health and Safety certificate. A variety of pro-environmental solutions have been used in the buildings housing Multi-Banch branches, including: the use of energy-efficient materials, low-carbon light sources, green energy power, infrastructure for cyclists, energy-efficient ventilation systems, and a design that ensures maximum daylight. Car fleet In 2023, Bank Pekao continued the measures of previous years by successively reducing emissions into the atmosphere. The Management Board of the Bank has approved the leasing of 35 hybrid cars and 145 reduced-emission cars to replace high- emission cars. Replacement of part of the fleet began in Q4 2023 and will continue into 2024. Thermal energy The Bank is also taking steps to reduce thermal energy consumption. These include replacing thermostatic heads, upgrading heating systems or replacing inefficient heat sources in facilities. GRI 302-1 Energy consumption in the organization PEKAO GROUP BANK COMPANIES Energy consumption GigaWatt-Hour [GWh] 2023 2022 2023 2022 2023 2022 Consumption of electricity purchased for consumption purposes 54.87 55.42 53.57 54.18 1.30 1.24 Electricity purchased while working remotely 0.93 0.84 0.73 0.59 0.20 0.25 Thermal energy generated by the organization (natural gas) 11.21 12.14 11.20 12.11 0.01 0.04 Thermal energy purchased for consumption purposes 43.02 60.21 50.82 59.95 0.74 0.26 Total energy consumption inside the organization 110.04 128.61 116.32 126.82 2.25 1.79 Revision of GRI 302-1 Energy consumption in the organization presented in the Statement of Non-Financial Information of the Bank Pekao S.A. Group for 2022. In the Statement of Non-Financial Information of the Bank Pekao S.A. Group for 2022, as a result of a mistake, incorrect values of electricity consumption for the Pekao Group, Bank Pekao and the Companies for 2022 were disclosed in error. The value presented in the disclosure was as follows: consumption of electricity purchased for consumption purposes 55.23 GWh for the Pekao S.A. Group and 1.05 for the Companies, while the correct values should be 55.42 GWh for the Pekao S.A. Group and 1.24 GWh for the Companies. The table below shows the correct values for 2022. PEKAO GROUP BANK COMPANIES Energy consumption GigaWatt-Hour [GWh] 2022 2021 2022 2021 2022 2021 Consumption of electricity purchased for consumption purposes 55,42 54.80 54.18 53.50 1,24 1.40 Electricity purchased while working remotely 0,84 1.20 0.59 0.80 0,25 0.40 Thermal energy generated by the organization (natural gas) 12,14 13.80 12.11 13.80 0,04 0.04 Thermal energy purchased for consumption purposes 60,21 78.90 59.95 77.80 0,26 1.10 Total energy consumption inside the organization 128,61 148.70 126.82 145.90 1,79 2.90 135 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.2.5 Pekao Group carbon footprint calculation GRI 3-3 Management of topics identified as material In 2023, the Bank calculated the Pekao Group’s greenhouse gas emissions in accordance with the GHG Protocol methodology. Calculations concerned Scope 1, i.e., direct emissions generated at facilities owned or supervised by the Group, and Scope 2, i.e. indirect emissions from purchased electricity, steam, heat and cooling from third-party suppliers. The calculation of emissions in the value chain (GHG Protocol Scope 3) is planned to be carried out in 2024 . In the coming years, the Bank intends to continue with emission reduction activities - the goal by 2024 is to reduce its own emissions compared to 2020, including by rationalizing business travel, environmental improvements at the Bank’s locations (reducing face-to-face visits to customers in favor of remote contact, gradually replacing the vehicle fleet with models that emit less exhaust fumes into the atmosphere; changing the heating method of its facilities, optimizing processes to use less paper). The Bank monitors the consumption of raw materials and materials and conducts activities to promote less waste. It also plans to engage in offset activities in the future. GRI 305-1 Direct greenhouse gas emissions (Scope 1.) PEKAO GROUP BANK Companies CATEGORY OF EMISSION SOURCE [t CO2e] 2023 2022 2023 2022 2023 2022 VEHICLES Gasoline 5 ,07 5,420 4,284 4,229 823 1,191 Diesel oil 275 243 178 165 97 78 Liquefied Petroleum Gas (LPG) 18 6 0 0 18 6 TOTAL 5,400 5,668 4,462 4,394 939 1,275 % WITHIN SCOPE 1 0 0 62% 58% 100% 0% REAL PROPERTIES Natural gas for central heating and hot water 2,235 2,419 2,233 2,412 2 7 Heating oil for central heating and hot water 415 555 415 555 0 0 Diesel for emergency power supply 0 1 0 1 0 0 Refilling of refrigerants in own installations 70 155 70 155 0 0 TOTAL 2,720 3,129 2,718 3,122 2 7 % WITHIN SCOPE 1 33% 36% 38% 42% 10% 13% TOTAL SCOPE 1 8,121 8,797 7,180 7,515 941 1,282 % TOTAL SCOPE 1+2 19% 19% 18% 18% 42% 50% Revision of GRI 305-1 Direct Greenhouse Gas Emissions (Scope 1) presented in the Statement of Non-Financial Information of the Bank Pekao S.A. Group for 2022. In the Statement of Non-Financial Information of the Bank Pekao S.A. Group for 2022, an incorrect value of gasoline and diesel consumption for the Pekao Group and Companies for 2022 was disclosed in error. The value presented in the disclosure was, respectively: 5,321 t CO2 E and 232 t CO2 E for the Pekao S.A. Group and 1,092 t CO2 E and 67 t CO2 E for the Companies, while the correct values should be 5,420 t CO2 E and 243 t CO2 E for the Pekao S.A. Group and 1,091 t CO2 E and 78 t CO2 E for the Companies. The following table shows the correct values for 2022. PEKAO GROUP BANK COMPANIES CATEGORY OF EMISSION SOURCE [t CO2 E ] 2022 2021 2022 2021 2022 2021 VEHICLES Gasoline 5,420 4,211 4,229 3,586 1,191 625 Diesel oil 243 360 165 270 78 90 Liquefied Petroleum Gas (LPG) 6 1 0 0 6 1 TOTAL 5,668 4,572 4,394 3,856 1,275 715 % WITHIN SCOPE 1 0 56% 58% 52% 0% 99% REAL PROPERTIES Natural gas for central heating and hot water 2,419 2,760 2,412 2,751 7 9 Heating oil for central heating and hot water 555 672 555 672 0 0 Diesel for emergency power supply 1 0 1 0 0 0 Refilling of refrigerants in own installations 155 101 155 101 0 0 TOTAL 3,129 3,533 3,122 3,524 7 9 % WITHIN SCOPE 1 36% 44% 42% 48% 13% 1% TOTAL SCOPE 1 8,797 8,104 7,515 7,380 1,282 724 % TOTAL SCOPE 1+2 19% 11% 18% 11% 50% 32% 136 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. GRI 305-2 Indirect greenhouse gas emissions (Scope 2). PEKAO GROUP BANK COMPANIES CATEGORY OF EMISSION SOURCE [t CO2 E ] 2023 2022 2023 2022 2023 2022 Total electricity consumption for the property () 14,094 13,313 13,249 12,503 845 810 Total electricity consumption to power vehicles 7 2 7 2 0 0 Total consumption of thermal energy 18,727 22,389 18,440 22,081 287 309 Remote work 608 547 478 384 130 163 Refilling of fuel used for emergency power supply of the generator 0 19 0 19 0 0 Refilling of refrigerants in rented facilities 93 62 63 56 31 6 TOTAL SCOPE 2 33,529 36,332 32,236 35,044 1,293 1,289 % TOTAL SCOPE 1+2 81% 81% 82% 82% 58% 50% TOTAL SCOPE 1+2 41,650 45,129 39,416 42,560 2,234 2,571 * According to the location-based method, the average rate for Poland was used as the indicator of greenhouse gas emissions associated with the generation of a unit of electricity. Revision of GRI 305-2 Indirect Greenhouse Gas Emissions (Scope 2) presented in the Statement of Non-Financial Information of the Bank Pekao S.A. Group for 2022. In the Statement of Non-Financial Information of the Bank Pekao S.A. Group for 2022, an incorrect value of the total consumption of electricity for real estate and thermal energy for the Pekao Group, Bank Pekao and the Companies was disclosed in error. The value presented in the disclosure was as follows, respectively 13,188 t CO2 E and 24,951 t CO2 E for the Pekao Group, 12,503 t CO2 E and 24,654 t CO2 E for the Bank, 685 t CO2 E and 297 t CO2 E for the Companies, while the correct values should be 13,313 t CO2 E and 22,389 t CO2 E for the Pekao S.A. Group, 12,503 t CO2 E and 22,081 t CO2 E for Bank Pekao S.A. and 810 t CO2 E and 309 t CO2 E for the Companies. The following table shows the correct values for indirect greenhouse gas emissions ( Scope 2) for 2022. PEKAO GROUP BANK COMPANIES CATEGORY OF EMISSION SOURCE [t CO2 E ] 2022 2021 2022 2021 2022 2021 Total electricity consumption for the property () 13,313 35,750 12,503 34,853 810 898 Total electricity consumption to power vehicles 2 0 2 0 0 0 Total consumption of thermal energy 22,389 27,407 22,081 27,024 309 384 Remote work 547 766 384 534 163 232 Refilling of fuel used for emergency power supply of the generator 19 1 19 1 0 0 Refilling of refrigerants in rented facilities 62 229 56 223 6 6 TOTAL SCOPE 2 36 332 64,153 35,044 62,634 1,289 1,520 % TOTAL SCOPE 1+2 81% 89% 82% 89% 50% 68% TOTAL SCOPE 1+2 45,128 72,257 42,560 70,014 2,570 2,244 * According to the location-based method, the average rate for Poland was used as the indicator of greenhouse gas emissions associated with the generation of a unit of electricity. 13.3 Social commitment The second pillar of the Bank’s ESG Strategy is “Engagement”, under which the Bank envisions undertaking pro-social activities to bring relief, level the playing field and prevent exclusion. The Bank also focuses on education and raising environmental awareness through partnerships with community organizations and providing digital tools to customers. It is important to provide customers with convenient and easy access to services that are also environmentally friendly. The Bank’s strategy is to successively increase spending on socio-environmental purposes and employee involvement in volunteer activities for the benefit of society and the environment. In addition, the Bank is taking steps to support the development and innovation of Polish enterprises. 13.3.1 Mission, values and corporate culture In line with Bank Pekao’s Business Strategy for 2021-2024, the Bank continues its efforts to build strong relationships with entrepreneurs and provide security to customers. Bank Pekao invariably aspires to be a leader that not only offers cutting- edge services, but is also an inspiring and conscious workplace of choice. An important aspect of the Bank’s operations is its corporate culture and specifically the actions that make it perceived as a responsible partner and reliable financial institution. One of the key elements of the culture are the Bank’s 2021 stated values of #straightforward, #together, #boldly, #responsibly. They set standards of conduct for Bank employees and build commitment around common goals. In 2023, a number of cultural initiatives were implemented at the Bank to promote value-driven behavior and, as a result, build an even better working environment. 137 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In the second quarter, Bank’s employees were invited to participate in the Four Values Tournament, a series of four challenges, each centered around a different value. The tournament was based on competitive principles - what mattered was both the employees’ knowledge of the Bank’s values, but also perceptiveness and speed. Each of the 4 challenges ended with the selection of the winners - the best received, among other things, the opportunity to participate in a workshop related to a given value and an invitation to a meeting with an exceptional guest (a recognized authority in his field), who addressed topics directly related to a given value. The Tournament recorded 2,349 entries from nearly 1,200 employees, which gives confidence that such initiatives make sense and are positively received by employees. Since monitoring the level of employee engagement and job satisfaction is one of the key elements of Bank Pekao’s corporate culture, the employee engagement survey was conducted twice in the past year. Both the first “pulse” survey, which took place at the beginning of the year, and the second full survey, conducted in late June and early July, recorded not only a significant increase in attendance, but also in the results themselves. This means that the measures implemented in the Bank have the desired effect and positively influence the perception of employees. The engagement survey, as an indispensable part of the Bank’s culture, will also be implemented in 2024. On October 20, Bank Pekao celebrated the World Values Day for the first time. The event was attended by more than 700 employees - 300 in the stationary format and more than 400 employees participated in the online format. More than 50% of the participants were representatives of the sales network. In order to engage participants in active celebrations and learn more about the Bank’s values, they were offered unusual and unconventional forms of rediscovering the 4 values. The unique atmosphere and very good evaluation of the event itself, contributed to its permanent inclusion in the calendar of holidays celebrated by the Bank. In December 2023, the Management Board of the Bank approved the “ŻubRady”, a document containing a set of principles that every Bank employee should follow on a daily basis. “ŻubRady” represent the detailing of attitudes and behaviors that stem from the Bank’s values and that will facilitate daily communication and cooperation. More than 60 employees from different structures of the Bank and working in different positions – from a specialist to a director - actively participated in the process of creating the principles. This made it possible to create a universal document that will safeguard the needs of all employee groups of such a large organization as the Bank. The process of cascading information and promotion of “ŻubRady” is scheduled for the first half of 2024. Bank Pekao’s mission as formulated in its Business Strategy 2021-2024 reads: “Simple and secure world of banking”. This means that the Bank wants to set standards in the market, while being a responsible partner in the daily lives of millions of Poles. It understands its activities as positively influencing the development of the economy, building strong relationships with entrepreneurs and providing security for customers. The Bank’s vision, encapsulated in the slogan “Let’s be the best together”, is the aspiration to be a leader on the Polish banking market, i.e. the fastest growing, modern bank with an offer that goes beyond traditional services. Bank Pekao wants to strengthen the power of domestic brands, as well as be an inspiring place to work. 13.3.2 Employee Volunteer Work Program GRI 3-3 Management of topics identified as material GRI 2-23 Commitments included in policies GRI 413-1 Establishments with local community engagement programs, impact assessments and development programs in place Own indicators in the “Engagement” area: Systematic increase in volunteer hours worked. Other non-financial indicators on volunteering and partnerships The idea of helping those in need, involvement in numerous charitable, educational, sports or health-oriented campaigns has become a permanent part of Bank Pekao’s organizational culture. A comprehensive employee volunteer program is implemented in accordance with the Bank’s Strategy 2021-2024, where volunteer activities are in line with the 4th pillar of the Bank’s Business Strategy: “Responsibility”, including primarily the area of “Society”, and in accordance with the ESG Strategy, based on the goals indicated in the 2nd pillar of the ESG Strategy “Commitment”. Participation of Bank Pekao employees in volunteering is governed by the Rules for Participation of Bank Pekao S.A. Employees in the Employee Volunteer Program . An employee of any unit (facility) of the Bank throughout the country, regardless of location and size, can participate in employee volunteer program. He/she has 16 hours available per calendar year. The Office of Volunteer Services and Corporate Culture is responsible for managing volunteer activities at the central level. In each action, a volunteer action leader is appointed - responsible for the course and implementation of a particular action. Each volunteer action is documented - volunteer action leaders are required to provide the Bank with a factual report including, among other things, photos, video footage of the course and information on the number of members of the volunteer action team, the number of beneficiaries of the action, the number of hours spent by the team on the volunteer project. The Bank’s intranet features a “Volunteering” portal with information on relief actions and a calendar of actions. Volunteer leaders attend meetings to prepare for this role. They share their experience in an internal publication called “Volunteer Aces”, in the 138 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. “Promote and Help with the Heart” challenge, and in brochures summarizing volunteering for the year. Volunteer actions were promoted consecutively at all Bank locations in 2023 and were popular with employees. Volunteer activities in 2023 were aimed at education, relief, equalizing opportunities and preventing exclusion, as well as maintaining and disseminating national traditions and cultural heritage. An important element of the program were educational activities aimed at children, teenagers and adults. The main forms of volunteering organized at the Bank are: volunteering with community partners, the “We are Close” grant competition and donation collections. Members of the Management Board of the Bank are also involved in volunteer actions. Information on key initiatives is presented in volunteer brochures available on the Bank’s website . The Bank is eager to engage in partnerships in volunteer actions. The opportunity to learn about the knowledge and experience of experts from foundations, associations or NGOs is an additional motivation for volunteer workers, while at the same time guaranteeing the comprehensiveness, timeliness and relevance of the program to be implemented. In 2023, the Bank’s volunteer partners were: UNEP/GRID-Warsaw Center - Department of the National Foundation for Environmental Protection, the Apiterra Foundation, the Warsaw Institute of Banking Foundation, Healthy Movement Foundation, Warsaw Uprising Museum, the Polish Red Cross, the Anthill Association, the SOS Children’s Villages Association, and the Polish Animal Welfare Society. To express gratitude for the care and attention that volunteers give to those in need, an event was held to mark the International Volunteer Day. The community of volunteer leaders from all over Poland integrated and celebrated under the motto “Without elegance of heart, there is no real elegance”, taking part in workshops related to professional business image: workshops with a business stylist, an image photo shoot preceded by workshops with a make-up artist, and creative textile art workshops on painting sweatshirts with the image of a Bank bison. The volunteers present were thanked by representatives of the Management Board of the Bank and the Bank’s Foundation. At the end, all participants had the opportunity to listen to a special guest during a speech, titled “The Power of Motivation” and a mini violin recital. 2. PILLAR – COMMITMENT IMPLEMENTATION 2021 IMPLEMENTATION 2022 IMPLEMENTATION 2023 TARGET FOR 2024 (number of hours) Systematic increase in volunteer hours worked. 6,531 8,432 9,365 >5 500 BANK PEKAO 2021 2022 2023 Number of volunteer partner organizations 6 6 9 Number of employees involved in volunteer initiatives 1,170 1,230 1,747 “We Are Close” Grant Competition One of the forms of employee volunteering is the “We are close” competition, targeted at employees working for the benefit of local communities in their area, recognizing their needs. A distinguishing feature of this form of employee involvement in social activity is the variety of volunteer areas and ideas for helping. Direct beneficiaries of the competition are members of recipient organizations, wards of care and educational institutions, participants in workshops and thematic classes, patients in medical institutions, members of sports clubs, music centers, animals in shelters. In 2023, 120 local aid actions were carried out in 100 localities. Nearly 18,000 people were the beneficiaries of the volunteering, including: children and young people, people with disabilities, refugees from Ukraine, sports people, recipients of actions in the area of health and life protection, and animals under the care of shelters and havens. Voluntary blood donations In addition to the “We are close” grant competition, Bank Pekao has successfully engaged in numerous actions based on the idea of employee volunteering. An example is the long-running action of honorary blood donation with employees. Initiatives were held locally at the Bank’s facilities, with adequate preparation of the venue to accommodate blood donors from outside the workforce as well. Financial education Volunteers from the Bank conducted classes for schoolchildren in the BAKCYL financial education program under the auspices of the Warsaw Banking Institute at the Polish Bank Association. The program targets children and adolescents between the ages of 12 and 16. Experts from the Bank also prepared and conducted thematic classes on-line for schools cooperating with WIB, titled: - AI in a nutshell. Artificial Intelligence in 2023 - with the participation of Bank Pekao S.A. President Leszek Skiba in which about 5,500 students and teachers from more than 200 classrooms and 110 primary and secondary schools took part. - Labor market and competencies of the future - in which a record-breaking 8,500 students and teachers from more than 300 classrooms and 200 elementary and secondary schools took part. 139 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. As the main patron of the “EduActive” educational program, implemented by the Warsaw Institute of Banking Foundation, the Bank became involved in a project aimed at expanding the financial knowledge of young people. The goal of the initiative was to equip children and teachers with inspiring materials - based on the ideas in Janusz Korczak’s book “Bankruptcy of Little Jack”. Its author introduced children to basic commercial and economic concepts and showed them what skills and qualities are needed in entrepreneurial activity. There is also an entire section on the Bank’s website with interestingly designed and age-appropriate materials to introduce children to the world of finance. There are downloadable videos, coloring pages, games and activities, as well as materials for parents on how to encourage their child to save money, teach entrepreneurship and resourcefulness 27 . The Bank’s volunteers were also involved in a unique educational project, which was a project under the banner “Small Town” of the “Now YOU” Foundation. More than 108 children from the municipality of Białe Błota learned 18 professions, learned what it is to earn first money and what the bank’s role is in managing personal finances. An important part of the initiative was the provision of financial education and a “small bank” by volunteers from under the Bison sign, as well as assistance in settling the earnings and taxes of young residents. The event was organized under the patronage of, among others, the Ministry of Finance. Environmental education The Bank continued its environmental education program for employees titled EKOlogia na bank!, launching the second edition, during which experts from the UNEP/GRID-Warsaw Center - Department of the National Environmental Foundation introduced the Bank’s employees to issues related to the topic: “Biodiversity in our environment. Trees. Birds. Insects”. In addition, since 2021, the Bank has been participating in the UNEP/GRID Partnership for Achieving the Environmental Sustainable Development Goals “Together for the Environment” initiative, which aims to build the best possible conditions for achieving the Sustainable Development Goals (SDG's). Together with the Apiterra Foundation, an urban apiary was opened on the terrace of the ninth floor in the new headquarters of the Bank - Pekao Tower, consisting of 5 beehives - 5 bee families, or about 250 thousand of these beneficial insects. The project is a continuation of the “Bank miodem płynący” [A bank of Honey] initiative. The event was accompanied by an educational workshop titled the ABCs of Urban Beekeeping, during which participants could explore the life of these beneficial insects, as well as receive advice on how to run an apiary in the city center. In addition, there was an opportunity to learn about the materials and accessories used to run an apiary. Bank volunteers also participated in environmental initiatives in cooperation with the Anthill Association: in New Grove, they made outdoor flower, herb and fruit pots, which were then donated to the SOS Children’s Village in Kraśnik; as part of the Beekeeping Culture Festival in Lublin, they prepared, among other things, two educational demonstration beehives, which, as a donation in kind, were given to the Beekeeping Technical School in Pszczela Wola. Meanwhile, volunteers from the Human Resources Division prepared a campaign to renovate the fence at the bison enclosure in the Białowieża National Park. The Bank’s employees also took part in eco-volunteer efforts to clean up forests in several forest districts across Poland. The problem of trash in forests is still very common. The trash left behind not only disfigures the forest landscape, but also poses a threat to the environment. Every year, forest districts take measures to preserve the sustainability of the forest and increase its natural resilience to damage-causing factors, so the Bank’s volunteers were eager to join forestry initiatives. Helping kids Children’s aid campaigns are one of the most popular forms of volunteering chosen by employees. Renovations in care facilities, organization of cultural events or promotion of sports among young people are examples of local volunteer initiatives. In 2023, two campaigns were organized to prepare gifts for children under the care of the SOS Children’s Villages Association. In this way, volunteers joined in Children’s Day and Operation Santa Claus. Volunteers also participated in actions for children under the care of the SOS Children’s Villages Association in Poland. They undertook the organization of a sports event, i.e. Krasnik’s 27th “Run for a Smile”, with the Bank as a strategic partner. They also participated in the educational project “Small town” organized by the Now You Foundation for children from the municipality of Białe Błota. Volunteers also undertook the organization of educational events following renovations at care facilities. Humanitarian aid for Ukraine In response to the emergency situation of Ukraine and its citizens seeking safe haven in our country, the Bank enabled its employees to participate in nationwide and local volunteer work for Ukrainian refugees. As part of a campaign to help children in Ukraine, organized by the Uniters Foundation, titled “Christmas in the Dark”, thanks to the commitment of bank volunteers and the Pekao Foundation, Ukrainian children received 9,500 flashlights and more than 10,000 chocolates. 27 https://www.pekao.com.pl/info/edukids 140 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Dissemination of national tradition and cultural heritage Bank volunteers were eager to get involved in actions to uphold and promote national traditions. Together with the Warsaw Uprising Museum, employees took part in the “Freedom Unites” campaign, handing out pins with the symbol of Fighting Poland to Warsaw residents. At the “W” hour, they performed a guard of honor at memorials in 7 locations in Warsaw at memorials located near the Bank’s facilities. It was a unique opportunity to deepen knowledge of Polish history and spread the memory of the Warsaw Uprising. Volunteers also engaged in educational projects related to the history of art, including, among others, based on the heritage of the Old Powązki Cemetery, and volunteering at the cemetery was a living history lesson and an affirmation of the Bank’s social responsibility and concern for cultural heritage. In the immediate vicinity of the Bank’s headquarters, volunteers donated their time and strength to clean up around tombstones, historic artworks in a large area in the old part of the Cemetery. The Bank volunteers were then invited by the Old Powązki Foundation to tour the Cemetery with a guide from the Warsaw Circle of PTTK City Guides. Helping animals Volunteers also helped the four-legged friends of man under the care of shelters and havens. They participated in cleaning and caring for animals at facilities of the Company for the Care of Animals in Poland in Kiczarowo and Celestynów. In 2023, a Charity Ball was held for the Bank’s employees to raise money, as well as food and medicine for the Zwierzolandia Foundation. In addition, as part of the campaign, six dogs under the care of the Zwierzolandia Foundation were given new homes. Challenge on Idea Crowd “Help and promote with the heart” Bank Volunteers are a community that, in an effort to share experience and motivate each other’s volunteer efforts, took part in a holiday contest - a challenge on Idea Crowd # “Help and promote with the heart”. Those who completed the online training about volunteering joined the challenge and went on holiday trips with a Heart of Volunteerism T-shirt as part of the promotion of volunteering. The result of the contest were 44 photos with “Heart of Volunteerism” and posts about helping, many comments and nearly 1,500 reactions, as well as a prize-giving ceremony during an inspiring meeting with the winners. With the armed conflict in Ukraine still ongoing, Bank Pekao is continuing the steps it has taken in this area. In 2023, the Bank not only maintained products dedicated to Ukrainian citizens, but expanded its offerings for business customers. 13.3.3 Community service, charity and sponsorship GRI 3-3 Management of topics identified as material GRI 415-1 Total financial and in-kind donations to political parties, politicians and institutions of a similar nature Indicator 1.5 Best Practice for WSE Listed Companies 2021 Bank Pekao S.A. Foundation The Bank’s charitable activities are mainly carried out through the Bank Pekao S.A. Foundation (hereinafter: Foundation). In addition to the initiatives carried out through it, the Bank directly cooperates with selected public benefit organizations, to which it makes donations to support their statutory activities. The key internal regulation of the Bank defining guidelines in this area are the Rules for Donation and Sponsorship by Bank Polska Kasa Opieki Spółka Akcyjna . The regulation includes, among other things, the establishment of a Sponsorship and Donations Committee to support the Management Board of the Bank in the Bank’s decision-making process regarding involvement in sponsorship projects or in the Bank’s allocation of donations. In accordance with the Policy of Counteracting Corruption in the Pekao Group in force, a risk analysis (due diligence) is carried out before the donation or conclusion of the sponsorship agreement, which makes it possible to minimize the risk of corruption and reputation risk. The activities of the Bank Pekao S.A. Foundation are part of its corporate social responsibility strategy. In its activities, the Foundation is guided by the broader interests of society, the needs of the environment, and concern for employees and a proper corporate culture in the workplace. All the above-mentioned areas of activity have an impact on the positive reputation of the Foundation, which translates directly into a positive perception of Bank Pekao S.A. as an institution that acts responsibly and responds to the needs of society. Beginning in August 2022, the objectives of the Foundation as stated in its Articles of Incorporation include supporting activities in: - science, higher education, education, schooling and upbringing, especially in the field of economic education, - economic development, including the development of entrepreneurship, - the development of technology, invention and innovation, and the dissemination and implementation of new solutions in economic practice, - culture, art, protection of cultural property and national heritage, 141 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - sustaining and disseminating national tradition, cultivating Polishness and developing national, civic and cultural awareness, - activities for veterans and repressed persons, - charity and social welfare activities, - promoting and organizing volunteer work, - health protection and promotion, - assisting victims of catastrophes, natural disasters, armed conflicts and wars at home and abroad, - supporting and disseminating physical culture and sports, - ecology and animal protection and protection of natural heritage. The Management Board of the Foundation continuously monitors incoming applications for funding and decides whether to support specific aid initiatives, guided by the statutory objectives of the Foundation and the assumptions that: - the mission of the Bank Pekao S.A. Foundation is to help those in need in difficult situations, - the measures taken are intended to meet public expectations. In 2023, the Foundation made 128 targeted donations. The areas covered by the requested projects were consistent with the Foundation’s statutory goals and included mainly: charitable, cultural and educational activities, health care and the development of physical culture and sports. The Foundation has also supported initiatives to promote volunteerism, as well as activities in the field of ecology and animal protection. The socially responsible image is seen primarily in its charitable activities, which include helping needy people of different age groups. The donation was received by, among others, “Caritas Poland” and “Association for the Care of Abandoned Children” in Toruń for the purchase of school supplies for children. Organizations such as the “House of the Guardian Angels” in Katowice, the “Children’s Fantasy Foundation” and the “Michael Educational and Prophylactic Centre” from Warsaw received funds for aid activities for children and young people from poor families. The elderly and abandoned were not left out either, with a donation to the “Don’t forget about us” Foundation to organize a nationwide campaign to prepare and deliver packages of Christmas products for Polish Veterans. Support was also given to the “Association of Friends of the Social Welfare Home” in Stróże and the “Just One Smile” Association from Elbląg to support their charges, as well as the St. John of Jerusalem Foundation for the organization of the “Maltese Wafer” charity event in Warsaw. As in the previous year, in 2023 the Foundation provided financial support to a number of organizations providing social assistance to refugees from Ukraine and those in need who remained in the country at war. Donations were received by such entities as “Caritas of the Białystok Archdiocese”, “Semper Fidelis Foundation” and “Uniters Foundation”. Funds were also donated to support the education of children of Polish descent and the Polish community of Lviv. The Bank Pekao Foundation also supports projects that engage local communities while promoting education, including financial education, culture and historical heritage. Among the Foundation’s beneficiaries were entities active in supporting science and education, including Socio-Educational Association “White Eagle - Sagittarius” in Mielec, Association “Science and Development” in Jarosław, “Foundation for Multicultural Centre” in Warsaw, and “Association of Friends of St. Brother Albert Elementary School” in Studzian, which received funds to support educational activities among elementary and secondary school students. The Foundation has also supported the scholarship program for students of the Catholic University of Lublin, the trip of Queen Hedvig Scholarship 2023 recipients to Silicon Valley, the educational project for missionary volunteers of the “Pallotinian Missionary Foundation Salvatti.pl” and the educational project for seniors SeniorON, organized by the “Polish Red Cross”. A significant group of projects funded by the Foundation in 2023 were initiatives combining education and culture. The donation was received by, among others, “Museum of Polish History” to support the organization of a multimedia mobile exhibition on the occasion of the 160th Anniversary of January Uprising “Insurgents 1863-1864”, “Józef Szaniawski Foundation” for the organization of educational classes with children and young people on the heroes and history of the Cold War, and “Old Powązki Foundation” for a project to disseminate knowledge in the field of history and art history based on the heritage of Old Powązki. The Roman Catholic Parish of the Collegiate Church of the Assumption of the Blessed Virgin Mary in Głogów received a donation for the development of an educational and cultural pathway that includes an exhibition of historical artifacts. The Foundation’s beneficiaries also included entities that organize celebrations of anniversaries of important historical events. The donation was received by, among others, the Warsaw Uprising Museum to support an event marking the 79th anniversary of the outbreak of the uprising, the “Centre for Modern Education Foundation” to organize the “Desired Freedom” concert to commemorate Poland’s regaining of independence, and the “Rekonstruktorzy.pl Foundation” to support the “Remembrance Watch - a nationwide event commemorating Soviet aggression in September 1939” project. Also noteworthy is a grant to the 142 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. “Movement of Solidarity of Families” Foundation for the construction of 65 bronze plaques as part of a project to commemorate Polish citizens of Jewish origin murdered by the Germans in 1942-1943 in Operation Reinhardt. In addition, in support of cultural activities, the Foundation subsidized, among other things, the publication of several publications, the production of a feature film on the January Uprising, the organization of many musical and local cultural events, such as festivals, family picnics and harvest festivals. The donation was received by such entities as “Polish Economic Society”, “Only Eagles Foundation”, “Foundation for the Protection of Monuments of Mazovia”, the Cultural Centre in Zakliczyn and the Sochaczew District. With the support of the “Caritas of the Przemyśl Archdiocese” Foundation, it organized a unique cultural and charitable event - a review of artistic creativity for people with disabilities. The Foundation also provided funds for educational trips and excursions for children and young people and the organization of conferences to promote education and culture. In the area of health care, the main group of beneficiaries are units of the “Volunteer Fire Brigades” from all over Poland, which have been provided with support for the purchase of personal protective equipment for firefighters, in order to improve the protection of their life and health during work full of danger. In addition, the Foundation supported the Warsaw-based “I Am” Foundation for the Support of Terminally and Chronically Ill, donating funds for the purchase of rehabilitation equipment for oncology patients. The Foundation also supported the development and dissemination of physical culture and sports, especially among children and young people, as well as ecology and the protection of animals and natural heritage. The Foundation’s latest initiative is the Grant Program to Support Rural Women’s Circles. Its first edition was launched on June 5, 2023. The purpose of the Program is to support by financing or subsidizing the activities of applicants in the field of culture, art, protection of cultural assets and national heritage, as well as maintenance and dissemination of national tradition, cultivation of Polishness and development of national, civic and cultural awareness. Between June 5 and August 31, 2023, Rural Women’s Circles registered in the National Register of Rural Women’s Circles maintained by the Agency for the Restructuring and Modernization of Agriculture could apply for a grant up to the amount specified in the Program. A total of 1,192 applications were received by the Foundation. The commission selected 267 winning projects. 6 Circles resigned from the grant. A total of 261 projects were funded. The grants were specifically earmarked for: - purchase or rental of devices, or equipment directly related to the implemented project such as: regional, folk and folklore costumes, musical instruments, sound and stage equipment, tents, sets of necessary furniture for cultural events (including picnic furniture), - purchase of services directly related to the organization of harvest festivals, fairs, picnics, etc. of a cultural nature, - purchase of goods and services directly related to patriotic activities of a cultural nature. According to the Regulations of the Program, the deadline for implementing the projects could not exceed the date of November 30, 2023, and the end date of the Program was set for December 31, 2023. Due to the large scale of requests, applications and diagnosed needs, the Bank Pekao S.A. Foundation is diversifying the areas of assistance and beneficiaries with which it cooperates in order to make the most of the opportunities for support and assistance. The key considerations in deciding on a beneficiary are the Foundation’s statutory goals and the ability to engage and satisfy Bank employees who devote their time and resources to selfless activities. The Bank Pekao S.A. Foundation also financially supports projects in the grant competition “We are close” which involve local communities and serve to promote education, culture, historical heritage, among others. As a result, it was possible to provide equipment and necessary materials to schools, childcare facilities and people with disabilities, local associations and homeless animal shelters. Volunteers helped children from childcare centers, senior citizens, and people with disabilities. They also supported animals under the care of shelters. They promoted youth sports activities, as well as culture and Polish history. In addition, the volunteer leaders carried out a number of health-promoting actions on such topics as preventive health care, taking care of mental health. They were involved in activities to counteract the social exclusion of various groups of people at risk of functioning outside society. The Foundation also focuses on areas of activity: financial education and the promotion of volunteer work. To promote the idea of volunteering, the Foundation prepares brochures summarizing activities in bank volunteering. The publication presents good practices in the area of volunteering in the Bank in connection with the values of #straightforward, #together, #boldly and #responsibly . 143 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The Foundation also provided financial support to non-profit organizations that invited volunteers from the Bank in 2023 to undertake volunteer work in the areas of economic education, charity and social welfare, ecology and environmental protection, animals and protection of natural heritage. Financial assistance was received, among others, by: UNEP/GRID-Warsaw Center - Department of the National Foundation for Environmental Protection, the Apiterra Foundation, the Warsaw Institute of Banking Foundation, Healthy Movement Foundation, Warsaw Uprising Museum, the Polish Red Cross, the Anthill Association, the SOS Children’s Villages Association, and the Polish Animal Welfare Society. Sponsorship activities The policy implemented by the Bank and the Pekao Group in the area of sponsorship and charitable activities is aimed at strengthening the image of the Bank and entities of the Pekao Group as open and modern institutions close to customers and communities in which the Bank and the Pekao Group operate. There is no single policy at the level of the Pekao Group in the charity and sponsoring area. However, in 2023, the Bank introduced the Policy on Cooperation in the Field of Communication and Marketing within the Bank Polska Kasa Opieki Spółka Akcyjna Capital Group , which is addressed to all subsidiaries and which defines cooperation within the Bank Pekao S.A. Capital Group also with regard to sponsorship and charity activities. This approach not only strengthens cooperation and ensures consistency across the Pekao Group in the areas of sponsorship and charity, but also makes it possible to develop synergies and identify good practices in building the Pekao Group brand. When selecting initiatives, the Bank departs from activities based on one-off donations and a reactive response to requests for support to the benefit of long-term social involvement based on partnership with respectful organizations with social trust. In particular, the Bank gets involved in projects in such areas like: responsible economic development, promotion of national brand and Polish values, support for culture, sport, aid to children in need, or environmental protection. The Bank provides its support at two levels: nation-wide, where the Bank sponsors events having a material impact on Polish culture, and locally to support initiatives dedicated to local communities. In 2023 the Bank was engaged in a number of projects organized on a country-wide basis which have significantly maintained the continuity of multi-annual initiatives and have provided important support to the community during this full period of challenges. In 2023 we continued cooperation with the Polish Basketball Association (PZKosz) and the Polish Basketball League S.A. (PLK), and we also supported the Polish National Basketball Team and youth games. The Bank decided during 2023 to sign a new agreement with PZKosz and PLK, so it will be present in Polish basketball until at least mid-2026. Thanks to the new agreement, the Bank’s promotional benefits have significantly intensified, as evidenced, among other things, by the appearance of the Bank’s logo on the jerseys of the Polish national team. In addition, continuing its commitment to basketball, the Bank sponsored the Red Bull Half Court international basketball competition, and the tournament itself was very popular with basketball fans in our country. We also provided sports excitement for music fans by sponsoring the event JIMEK and Guests - History of Polish Hip-Hop II, which took place at the Silesian Stadium in Chorzów. During the event, we built a basketball court in the Bank’s special zone, where event participants could combine their passion for music and sports. In 2023, we also supported initiatives of an economic nature. We were present at Impact’23, the Corporate and Investment Banking Congress, the Karpacz Economic Forum and the Krynica 2023 Forum, among others. In January, Bank representatives were also present at the World Economic Forum in Davos, Switzerland. Virtual art gallery The Bank, which since the beginning of its history not only cares about the finances of Poles, but also aims to promote Polish cultural heritage at home and abroad, made its art collection available to the general public in November 2021 through the virtual Art Gallery. In 2023, we published interviews with artists, interesting facts about Polish artists and works of art, and information about cultural events that the Bank organizes or is involved in as a sponsor. In cooperation with the Academy of Fine Arts in Warsaw, we produced four documentaries about artists whose works the Bank has in its collection. The heroes of the films were: Józef Mehoffer, Wojciech Kossak, Franciszek Maśluszczak and Adam Myjak, creator of the bison sculpture. The short documentary forms can be viewed in the virtual Art Gallery and on the Bank’s YouTube channel. In April 2023, we organized the “Color of Variety” exhibition at the Czapski Palace, during which the Bank made works from its collection available, free of charge, for viewing. The exhibition featured 51 works of art. The exhibition was quite successful and, according to data obtained from the Academy of Fine Arts, it was visited by about 4,000 people. As part of this project, we also engaged in the “Night of the Museums”, an annual cultural event to promote the arts. The second major art project was an outdoor exhibition combined with an art picnic called “Picnic with Art”. Printed reproductions of works from the Bank’s collection could be admired during picnics in as many as nine Polish cities. 144 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The Bank is also committed to the artistic activation of young talents, which is why in 2023 two stages of the competition “Pekao Art. Stories” were organized. Thanks to our collaboration with Professor Hanna Jelonek, winner of the prestigious J. Sanford Saltus Medal Award 2023, we created the “Distinguished Service to the Bank” medal. Bison protection For many years Bank Pekao S.A. has also been involved in the protection of Polish bisons. The financial support provided by the Bank is earmarked, inter alia, for the diversification and development of the population, caring for herds and subsidizing scientific and educational undertakings promoting the protection of this exceptional and unique endangered species. Bank Pekao has supported the implementation of the statutory tasks of the Białowieża National Park for two decades, as a sponsor and partner of the park. The funds donated by the Bank cover part of the park’s expenses for monitoring bisons in the wilderness, buying food for the winter and winter inventory. Thanks to Bank Pekao’s support, it was possible to modernize the Bison Show Reserve - the most visited tourist site in the Białowieża National Park - and retrofit the educational pavilion that is part of it. The Bank also supports the activities of other facilities that provide care for bison, including, among others, the Pszczyna Demonstration Bison Enclosure. Nature lessons are held at the facility, and there is a chance to learn about the bison family and other animal species during a walk. Another place where the Bank directs financial assistance is the Warsaw Zoo. Pekao donates funds to the Panda Foundation, which operates at the facility and helps care for the Warsaw bison herd, which numbers nine individuals. Another entity supported by the Bank is the Bison Lovers Association, which promotes knowledge about the bison species and carries out a number of initiatives in this regard. In 2022, the Bank began cooperation with the VARIA Foundation for the Humanities of the University of Warsaw to support the foundation’s publication titled “Protection of the European bison in Poland in the interwar period. Role of the National Natural History Museum”. The purpose of the study is to collect scientific, popular science information and documents that contributed to the establishment of institutional protection of the bison in Poland and Europe. The book is also a contribution to the discussion of the need for a National Natural History Museum in Poland. Bank Pekao and entities of the Pekao Group, as responsible organizations and active participants in social life, also comply with the guidelines included in the “Best Practice for WSE Listed Companies 2021” issued by the Warsaw Stock Exchange in 2021, including principle 1.5 to the extent of undertaken charitable and sponsorship activities. In 2023 Bank Pekao and entities from the Pekao Group implemented a number of initiatives to support culture, sports, charitable institutions, media and social organizations. The list below shows expenditures borne in this respect in 2023 and mentions key initiatives. The expenditures of the Bank by areas included in recommendation 1.5 of the Best Practice for WSE Listed Companies in 2021 (gross): - Support for culture: PLN 3,363 thousand, including: a) sponsorship of the Royal Castle, b) sponsorship of the Academy of Fine Arts in Warsaw, c) sponsorship of the Academy of Fine Arts in Cracow, d) sponsorship of PGE Narodowy, e) sponsorship of the concert JIMEK & Guests - History of Polish Hip-Hop II, - Support for sports: PLN 7,460 thousand, including: a) Sponsorship of the Polish Basketball League, b) Sponsorship of the Polish Basketball Association c) Sponsorship of PGE Narodowy, d) Sponsorship of Red Bull Half Court, e) Sponsorship of Gdynia Sailing Day, - Support for charitable institutions, - Support for public benefit organizations, - Support for social organizations: PLN 272 thousand, including: a) Support for the protection of the species of European bison, 145 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - Support for the media: PLN 1,553 thousand, including: a) A number of activities related to galas, contests and economic discussions, such as CEO Summit London, Polska 200tka WPROST, - Support for trade unions – PLN 0. As a general rule, Bank Pekao does not provide support in the form of sponsorship or charitable activity for politi cal parties, politicians and similar institutions. The provisions of the Principles for granting donations and sponsoring by Bank Polska Kasa Opieki Spółka Akcyjna do not provide for involvement in events that raise ethical questions, are contrary to applicable law, harm human rights or are not consistent with the activities carried out to enhance the Bank’s image. The Bank is not involved in lobbying activities. The total value of support for political parties, lobbying activities in 2023 was PLN 0. 13.3.4 Bank’s response to armed conflict in Ukraine Business relations Due to the ongoing war in Ukraine, the Bank has taken steps to end or limit cooperation with entities that do business with sanctioned countries. By order of the President in July 2022, the “List of Sanctioned Countries in Connection with the Aggression against Ukraine” was created (hereinafter: “List of countries”). In the purchasing process, the Bank verifies the entities invited to purchase procedures based on the list of entities published by the Yale School of Management University, where individual entities are given categories from A to F. Category F is given to entities that continue their business relationships with countries on the “List of countries”. In 2023, the Yale list included 1,589 entities. Based on negative verification, the Bank has terminated cooperation with 1.32% of the entities identified on the Yale list, in addition, entities that have received an F category are not allowed to participate in the procurement process. An analogous analysis was carried out in the credit process. Offer for customers In 2023, Bank Pekao has consistently supported Ukrainian citizens. On offer for Ukrainian citizens is Konto Pomocne [Helpful Account], which is an option for those who do not have the documents needed to set up Konto Przekorzystne [Advantage Account]. When setting up a Helpful Account, the procedure is simpler - documents other than a passport are accepted, including, among others, an internal passport - a Grazhdan Ukrainian passport, a certificate of confirmation of legal residence in Ukraine for a citizen of another country, a Polish identity document for a foreigner or a temporary Polish travel document for a foreigner, a certificate issued by a Consulate, a certificate of assignment of a PESEL number or the mObywatel [mCitizen] application. The account makes it possible to meet financial needs efficiently – receipts from aid benefits received, making ongoing payments by cards or through electronic banking. It is important to note that Bank Pekao does not charge fees for operating them. The Bank has abolished - for Ukrainian citizens - both the fee for operating the account card and making cash withdrawals with it at ATMs in Poland and abroad. With an Advantage account there is also an additional possibility to have a sub-account in 4 different currencies (USD, EUR, CHF, GBP) and exchange currencies at favorable rates. The Bank also does not charge a foreign exchange commission/margin on account card transactions abroad. The special offer to waive account, card and ATM withdrawal fees with the Advantage Account has been extended until the end of 2025. In addition, the Bank has extended in time the possibility of making free transfers from and to Ukraine for all individual customers of the Bank, including citizens of that country, until 31.12.2025. Starting in 2022, Ukrainian citizens can apply for 500+(800+) and Good Start benefits using the PeoPay app and Pekao24 online banking. Both the PeoPay mobile app and Pekao24 online banking are available in Ukrainian. In addition, the Bank has also provided service in Ukrainian by hotline consultants. In 2023, a wide offer for PLN 0 has been prepared for companies registered in Ukraine or Poland, establishing a relationship with Bank Pekao S.A., where a citizen of Ukraine runs a sole proprietorship, civil partnerships or partnerships, one of whose partners is a citizen of Ukraine. The Bank has decided not to charge fees for business accounts, debit cards, and domestic and foreign exchange transfers (electronic and paper), as well as e-banking services for the first 12 months of the account agreement. 146 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.4 Responsible sales, quality management 13.4.1 Caring for good customer experience GRI 3-3 Management of topics identified as material Own indicator: NPS index calculated by internal survey method In 2023, we focused on improving customer satisfaction and identified priority directions and an action plan that will put us among the leaders in Net Promoter Score. We did a comprehensive review of all areas that customers indicated to us as needing attention. We identified elements for improvement and designed activities to improve the customer experience as soon as possible. We designed a modern customer experience management model that covers all business segments. The model sets the direction in which we will develop to make our customers the most satisfied of all those using banking services. We aim to make them even more appreciative of our offerings and service and more willing to recommend our bank to others. We are gaining more and more knowledge about customers’ expectations in order to tailor solutions to their needs even better. We are consulting them on the solutions we are planning. That’s why in 2023 we expanded our existing research scope to include new processes and customer groups. A greater number of opinions collected allows us to conduct analyses in conjunction with other data sources and eliminate potential problems more quickly. We regularly conduct surveys on customers’ satisfaction with cooperation with caregivers and their satisfaction after using remote channels, self-service, in- branch service and post-processing. We have accelerated the process of responding to customer dissatisfaction in various segments. This was made possible by improving the system of quick notifications to the employees who serve them. Starting in 2023, our customers can more effectively evaluate the work of our branches. In Google Business Profile, we get ongoing information from them about their experience visiting the facilities. We respond to all customer feedback. Customers appreciate our bank and our work to improve their experience, as reflected in survey results and industry rankings. - We recorded one of the highest NPS increases in the banking market in the survey of individual customers by 10 p.p. in Q4 2023 compared to Q4 2022. - In the overall Golden Banker ranking, we moved up one place from the previous year and ranked 5th. We saw the biggest increase in service at the branch from 8th to 4th place. - In Newsweek’s Friendly Bank ranking in the category of Bank for the Average Individual, we rose from 8th to 5th place. - In the Forbes ranking in the category of Company Friendly Bank 2023, we continue to be among the leaders, taking 3rd place. - In the overall ranking of Institution of the Year 2023, we ranked 3rd on the podium, up three places from the previous year. Culture of plain language We consistently make sure that we quickly introduce a culture of simple communication in our bank. All the activities implemented in 2023 are part of an ongoing process of simplifying the language. We constantly strive to make the language we use every day friendly and understandable to all customers. We perpetuate standards of plain language among employees. The goal of these activities is to strengthen a culture of communication devoid of official distance, communication based on language that all customers can understand. In 2023 in our bank, we: - introduced new simplified sample regulations and contracts, - we strengthened the team of plain language consultants with more people working in the bank’s organizational units, whose work has a significant impact on building a good customer experience. The consultants support employees daily in simplifying documents, letters, handouts and communications, - trained several hundred new employees in the basics of creating simple and correct texts, - conducted a number of training workshops for those who conduct correspondence with customers, - as part of the “Simple Polish” program, we run an intranet compendium of simple language knowledge. 147 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Representatives of our Bank are active participants in the working group on simple communication at the Polish Bank Association. Within this group, we share experience and co-create standards for banking communication. 13.4.2 Complaint process GRI 3-3 Management of topics identified as material GRI 2-16 Communicating relevant issues 2-25 Remedial processes for negative impacts Own indicator: complaints handling The process of handling complaints from the Bank’s customers is one of the important elements of the Pekao Group’s operation, affecting not only the maintenance of the institution’s positive image, but also customer satisfaction. The main regulation defining the Bank’s complaint procedure is the Order Process of handling customer complaints of Bank Polska Kasa Opieki Spółka Akcyjna. Pekao Group companies handle complaints in-house on the basis of implemented and executed procedures for receiving and handling customer complaints. These procedures have been defined in the form of internal regulations, included in the rules and regulations and contracts concluded with customers, or result from generally applicable laws. Customers, in the course of resolving disputes that may arise in connection with the services offered, may seek the assistance of a Customer Ombudsman. The Ombudsman deals with the most difficult and non-standard matters that require an individual approach and additional legal opinions. Each Customer may contact the Ombudsman if they do not agree with the decision concerning the submitted complaint, they believe that the case is complicated and requires an individual approach or if they want to submit remarks as to the operation of the Bank. In addition, the Customer who is a consumer of the Bank may apply for out-of-court proceedings before the Bank Arbitrator operating at the Polish Bank Association or before the Financial Ombudsman. Efficiency and responsiveness The efficiency of the complaint handling process plays a key role in maintaining customer confidence in the bank. Prompt and efficiently resolved complaints help minimize potential image damage and maintain customer loyalty. In this regard, ensuring an effective complaints handling process requires continuous improvement of systems and business processes, introduction of automation, as well as effective cooperation between different units of the bank. Thanks to the optimization measures taken and ensuring an efficient process for handling requests, more than 42% of the complaints registered in 2023 were resolved in no more than 7 days. Compared to 2022, this is an improvement of 10 pp. Customer satisfaction Customer satisfaction with the complaint handling process has a direct impact on the bank’s overall reputation. Customers who experience professional and efficient handling of their complaints are more likely to remain customers and recommend the Bank’s services to others. Therefore, regular monitoring of customer satisfaction with the complaint handling process is essential for the Bank. Analyzing opinions, collecting customer feedback and making appropriate improvements based on these data are key to maintaining high standards of complaint handling. In 2023, the Bank continued its integrated customer satisfaction and loyalty research program, which covered key business processes and points of contact in the area of complaint management. The group also includes the complaint handling process itself. A customer feedback survey on service conducted in Q3 2023 showed that: - 82% of customers filing a complaint during a visit to a branch and 73% of customers filing a complaint via the bank’s hotline have a positive opinion of the employee, - compared to the same survey in Q3 2022, satisfaction with the complaint handling process has increased significantly (by 16 points), satisfaction with the time taken to process complaints (by 23 points), satisfaction with the ease of the complaint process (by 14 points), and satisfaction with the readability and clarity of responses (by 11 points). Bank Pekao Customer Ombudsman educational program In 2023, Bank Pekao Customer Ombudsman launched a podcast series focused on raising customer awareness in the financial area. Interactive audiovisual content is created to educate customers in the area of financial security, providing valuable information on cyber-security, financial fraud and general safe financial management practices. The podcast series is an innovative step toward building ties with customers and enriching their knowledge, highlighting Bank Pekao’s commitment to financial education and protecting customer interests. 148 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.4.3 Principles for the fair design and sale of financial products and services GRI 3-3 Management of topics identified as material GRI 417-2 Cases of non-compliance regarding information and labelling of products and services In accordance with generally applicable laws and regulations, both Bank Pekao and the Bank Pekao Group companies engaged in the business of offering financial products and services have numerous regulations that define the standard of their operations, as well as establish rules of conduct to protect the interests of customers, minimize compliance and reputation risks in the sale of products and services to consumers. At the Bank, this area is comprehensively governed by the New Product Implementation Process Policy at Bank Pekao S.A. (hereinafter: “New Product Implementation Policy”), Principles of creating marketing communication of Bank Polska Kasa Opieki Spółka Akcyjna (hereinafter: “Principles of creating marketing communication”) and Principles of publishing information on the website of Bank Polska Kasa Opieki Spółka Akcyjna (hereinafter: Principles of publishing information on the website) . The standards for offering and selling are further specified by: Rules for the sale of credit and payment products to consumers at Bank Polska Kasa Opieki Spółka Akcyjna and Rules for the sale of investment products. The risk of misleading a customer about a product’s designation is managed ex ante through ongoing verification of product documentation and marketing materials by dedicated Second Line of Defense units, and in the case of investment products also ex post in the form of listening to investment calls, where the Bank identifies whether misselling or greenwashing has occurred. The process of reviewing marketing materials and product documentation is covered by the Bank’s Internal Control System. In 2023, the Bank had no cases of non-compliance with regulations on information and labelling of products and services. 13.4.4 Responsible marketing GRI 3-3 Management of topics identified as material GRI 417-3 Cases of non-compliance with regulations and voluntary codes concerning marketing communication In accordance with the applicable internal regulations, marketing and advertising activities conducted at the Bank and the Pekao Group take into account the generally applicable laws and guidelines of supervisory authorities, the principles of fair financial market trading, good practices and statements of intent of the customer concerning these activities. In addition, they are carried out in compliance with the Bank’s communication strategy, the Bank’s visual identity and image, adopted internal regulations and in a way that maintains the intelligibility of the message being communicated. The Bank complies with the principles of the Code of Banking Ethics of the Polish Bank Association and the Canon of Good Financial Market Practices adopted by the Polish Financial Supervision Authority. The Pekao Group Code of Conduct, meanwhile, emphasizes that each employee is an ambassador of products and services offered by both the Bank and other entities of the Pekao Group. Professional promotion of products and services strengthens customer confidence and helps build relationships based on mutual respect and trust. Responsible promotion of the Bank is based on reliable and transparent knowledge of products, including possible risks arising from changing macroeconomic conditions or the activities of regulators. The key regulations relating to this area of compliance risk assessment are: the New Product Implementation Policy and the Principles for Creating Marketing Communication , which were drawn up in connection with the decision of the Management Board of the Bank to adopt the Principles of Corporate Governance for Supervised Institutions, issued by the Polish Financial Supervision Authority. This regulation takes into account, i.a., basic requirements applicable to the content of marketing and advertising materials, including the nature and specification of the relevant product, including: consumer loans, mortgage loans, bank accounts (in particular savings accounts, savings and settlement accounts, or term deposit accounts), insurance products, as well as investment products. In view of the growing role of Internet communication, and to ensure the reliability, completeness and timeliness of the information published on the Bank’s websites, the Principles of publishing information on the website of Bank Polska Kasa Opieki Spółka Akcyjna were developed in 2023 as an appendix to the Principles of creating marketing communication of Bank Polska Kasa Opieki Spółka Akcyjna , which provide guidelines for all organizational units regarding the process of publishing and updating information made available on the Bank’s portal, and define the responsibilities of the Bank’s organizational units participating in the process of publishing and updating information made available on the Bank’s portal. The Bank also has an Order Principles of communication of Bank Polska Kasa Opieki Spółka Akcyjna in social media relating comprehensively to communication, as well as promotional activities conducted with the Bank’s stakeholders through social media. In 2023, the Policy on Cooperation in the Field of Communication and Marketing within the Bank Polska Kasa Opieki Spółka Akcyjna Capital Group was introduced, which, together with the Pekao Group Brand Architecture Management Policy , is addressed to all subsidiaries and which defines cooperation within the Bank Pekao S.A. Group with regard to the following communication and marketing processes: 1) brand management, 2) recommendations for creating marketing communications, 3) social media communications, 4) guidelines for donations and sponsorships, 5) external communications, including media communications, 6) internal communications. 149 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Bank Pekao makes every effort to ensure that advertising messages do not undermine public confidence in advertising activities, do not contain content or images that offend generally applicable customs, do not abuse customer confidence by taking advantage of their lack of experience or knowledge, do not take advantage of a sense of fear, do not contain elements that could lead to or encourage acts of violence, and finally do not accept discrimination, in particular on grounds of race, religion or gender. In 2023, in line with previous years covered by non-financial reporting at the Bank, there were no cases of non-compliance with regulations or non-compliance in the area of marketing communications. Let’s be CYBERcautious together In 2023, Bank Pekao continued its efforts focused on cyber security by publishing a proprietary report titled “Do you feel safe on the Internet?”. The report indicated how much Internet users in Poland care about their online safety, how they evaluate their knowledge and where they most often get it from. In addition, along with the report, we provided a test so that, by answering a few questions, the person completing it could find out what group of network users he or she belongs to. Upon completion, the filler was given some tips on what he/she should pay special attention to in order to take even better care of his/her online safety. The report along with the test was made available on the Bank’s website: https://www.pekao.com.pl/badania-i- raporty/raporty.html . The publication of the study was supported by a communication campaign called “”Cyberczujni 2.0.” [Cyber cautious]. As part of promoting cyber security awareness and informing about the Bank’s report, we invited recipients to #CYBERThursdays. Each week on selected profiles of the Bank we presented: statistics, types of attitudes of Internet users towards cyber security, described the threats that lurk online and ways to avoid them. Communication took place on Facebook, Instagram, Twitter and Linkedin. In addition to social media, the report appeared in widely read Internet portals (e.g. Wirtualnemedia.pl, Antyweb.pl, Biznes.interia.pl, Pap.pl) and the press (e.g. “My Company Polska”, “Tygodnik Niedziela”, “Parkiet”) 28 . Report on physical activity of children in grades 4-8 Bank Pekao S.A., as a sponsor of Polish basketball, in addition to financially supporting teams competing at the highest level, pays attention to the issue of physical activity among children. As many as 90% of parents agree with the statement that children spend too much time on the Internet and social media. The conclusions of our publication emphasize the important role of parents in developing the right attitudes among the youngest. As we show, parents’ time spent together with their children effectively competes with “screens”. In families where many things are done together, the time spent in front of the screen is reduced, which at the same time provides an excellent gateway to physical activity. We also supported the report with valuable advice from experts: sports psychologists and academics, who emphasized the beneficial effects of physical activity on the development and physical as well as mental health of children. The report was made available on the Bank’s website: https://www.pekao.com.pl/badania-i-raporty/raporty.html and also published on the Bank’s social media as part of the “Active Parent, Active Child” campaign (Facebook, Instagram, Twitter or Linkedin). In addition, its publication took place on numerous Internet portals (e.g. Interia.pl) and in the press. The report was also available and downloadable for parents when logging into the Librus portal, as part of a specially designed awareness campaign. 13.4.5 Bank’s image Reputational risk is understood as the current or anticipated risk to revenue and capital resulting from a negative perception of a financial institution’s image by customers, counterparties, shareholders/investors or regulatory authorities. Protection of reputation is crucial for the Bank due to the potential impact of this risk on the Bank’s financial results and capital, but also due to the role of the Bank as a public trust institution. In accordance with the guidelines of the Risk management strategy and the Principles of internal capital assessment, the Bank implemented a separate regulation addressing this type of risk ( Principles of Reputation Risk Management at Bank Polska Kasa Opieki Spółka Akcyjna ), which was updated in December 2022, due to the need to adapt to changing standards and guidelines from regulators, as well as to account for new material risks affecting reputation, such as ESG issues. Reputation risk is another qualitative type of risk considered significant. This is due to the widespread recognition of reputation as a fundamental asset of any financial institution. Reputation is an assessment of the Bank’s image, i.e. the perception of the Bank at any given time by the environment, which is the stakeholders. The image is not only a marketing, but also a business issue. The acceptance of the Bank by market participants and resulting support for the sale of the Bank’s products and services is dependent on the image. This consequently translates into the ability to earn adequate margins and supports the potential to expand our offerings to new markets and customer groups. Reputation is widely recognized as a fundamental asset of any financial institution, on which financial performance depends. 28 https://www.pekao.com.pl/cyberczujni.html 150 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The reputation risk is strictly connected with other types of risk connected with the Bank’s everyday activities, like credit, operational, market, liquidity, compliance risks, ESG. Actions with a potential impact on reputational risk have been defined for each of these risks. The most important of these actions include: - in terms of credit risk: a) financing enterprises in sensitive sectors of the economy, b) financing political organizations, c) financing activities generating a material threat to the natural environment, d) financing authoritarian states, states that violate international regulations, states with inadequate protection of human rights or states subject to embargo, e) financing sports clubs (companies or associations). - in terms of operational risk: a) internal and external frauds, b) non-compliance with employment and workplace safety rules, c) incidents connected with unequal treatment, discrimination, mobbing or employee disputes, d) irregularities in customer service, product construction and unfair operating practices, e) incorrect settlement of transactions, supplies and incorrect operating process management, f) occurrence of a cyber security incident that may lead to a breach of confidentiality, integrity and availability of information and information systems, including data leakage, g) disturbances in the activity and failures of systems that influence customer service. - in terms of compliance risk: a) applying business practices prohibited or inconsistent with the principles of good practices, b) Bank’s operation that does not comply with legal regulations, c) incorrect implementation or failure to implement recommendations of control and supervision bodies, d) conflicts of interest, e) market abuse, - in terms of market risk: a) dominant positions and monopolistic practices, b) improper risk management resulting in significant losses for the Bank. Given its nature, the reputation risk is classified as difficult to measure. In accordance with the Risk management strategy and the Principles of internal capital assessment , it is not subject to quantitative measurement. Ongoing management of the Bank’s reputational risk is limited to the management of original types of risk, supported by qualitative assessment, monitoring, reporting, and reduction of reputational risk by the Bank. Bank Pekao consistently reduces the risk of reputation loss, including by: - applying an appropriate credit policy (including those sectors of the economy which the Bank does not involve itself in), - implementing and applying best practices and ethical rules, e.g. Principles of Best Practices in Banking of the Polish Banks Association, Charter of Best Practices in the Financial Market, Best Practices of Companies Listed at the Warsaw Stock Exchange 2021, Principles of Corporate Governance for Supervised Institutions issued by the Polish Financial Supervision Authority and the Code of Conduct of the Pekao Group, which provides for a set of key values and standards of conduct for the Bank’s employees to ensure top standards of service and reputation protection, - disseminating knowledge about regulations, ethical and corporate governance rules, as well as principles for their appropriate application among the Bank’s employees, holding training on compliance risk, - managing conflicts of interest, 151 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - preventing corruption, - counteracting the use of the Bank’s operations for purposes connected with money laundering or terrorism financing, - managing frauds (including in particular internal frauds) by preventing, discovering and fighting frauds, minimizing fraud consequences and taking actions aimed at discovering perpetrators, as well as, if justified, notifying law enforcement authorities, - ensuring a relevant level of information security, in particular including personal data of customers, as well as providing access to such information solely to authorized entities, - taking actions and initiatives aimed at increasing customer satisfaction level; - managing the customer complaint handling process, - managing through objectives (defining objectives for the Bank’s employees in sales and managerial positions regarding the quality of service and customer satisfaction), - analyzing new products and services, as well as marketing campaigns in terms of the reputation risk, - managing the business continuity of critical processes carried out in the Bank, taking into account the reputational factor in assessing their criticality, - managing processes, - undertaking activities and initiatives to implement and disseminate the Bank’s ESG Strategy, as well as monitoring and analyzing regulations in the ESG area, - consulting actions that are important for the Bank’s reputation with the Management Board of the Bank and the Supervisory Board. The management of the Bank’s reputation is a continuous process which is actively attended by all business units and employees. A special role in this process is played by statutory bodies of the Bank and organizational units directly responsible for the original types of risk, in accordance with competences arising from separate internal regulations of the Bank. Regular observation of Bank Pekao’s brand indicators and the company’s image profile, carried out on behalf of the Bank since 2020, indicates a stable position against the competition. Bank Pekao is among the top banking brands with the best spontaneous awareness; and its image profile defines it as a traditional, Polish and trust-inspiring bank. Reputation surveys are conducted at Bank Pekao on a regular basis, with the participation of an external research institute, at an interval of 2-3 years. The latest reputation survey was conducted in Q4 2022 and presented at the April 2023 meeting of the Management Board. The study was carried out in cooperation with the research agency Maison&Partners, which has been measuring reputation continuously since 2006. The study makes it possible to determine the level of the Bank’s reputation (based on the index: reputation index), define the Bank’s strengths and areas that pose challenges, and determine the Bank’s position in relation to the most important competitors (8 competing banks). The reputation index is defined based on five key dimensions: brand trust, references, media atmosphere around the brand, CSR and perception of the brand as an employer. Bank Pekao was rated as a high reputation brand, being among the six banks with the highest indicators. Bank Pekao enjoys relatively high consumer confidence, not standing out from its competitors in this dimension. On other dimensions as well, Bank Pekao is among the best perceived brands, nevertheless with greater aspirations for its market position as the second largest bank. In this regard, it is important for Bank Pekao to undertake communication activities in the long term and to influence the area of customer experience, with a particular focus on: building awareness of the Bank’s CSR activities, intensifying the area of brand recommendation and strengthening the perception of the Bank as a good employer. 13.4.6 Consumer protection GRI 3-3 Management of topics identified as material GRI 206-1 Legal actions for anti-competitive behavior and monopoly practices The Bank and its subsidiaries are bound by the Bank Pekao S.A. Group’s policy on counteracting practices restricting competition and practices that violate the collective interests of consumers . The policy defines the basic rules for the Bank’s employees to act in accordance with antitrust and unfair market practice regulations and the main tasks of the Bank’s organizational units in this regard. In 2023, the Bank did not pay penalties for violation of collective consumer rights and violation of free competition rules. The companies that are part of the Pekao S.A. Group in 2023 also had their own regulations in this area, including: Pekao Direct’s policy against restrictive practices and practices that violate the collective interests of consumers, Pekao Bank Hipoteczny S.A.’s policy against restrictive practices and practices that violate the collective interests of consumers, Antitrust Procedure, Counteracting practices restricting competition and violating the collective interests of consumers (Pekao Leasing). 152 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In a final judgment dated August 31, 2023, the Court of Appeals in Warsaw ended the proceedings concerning the appeal against the decision of the President of the Office of Competition and Consumer Protection No. RLU-1/2020 dated July 10, 2020. The decision concerned the recognition as abusive of the provisions of Idea Bank S.A.’s template agreements in force with consumers with regard to the prerequisites authorizing the bank to unilaterally change these templates (so-called modification clauses). Since the products affected by the decision were taken over by the Bank as a result of the forced restructuring of Idea Bank S.A., the Bank became a party to these proceedings. The cited judgment for the most part upheld the challenged decision, which, however, did not impose an obligation on the Bank to pay a financial penalty, and the contractual templates that included the challenged provisions were not used by the Bank in offering the Bank’s products (they were only included in the agreements taken over from Idea Bank S.A.). In connection with the final judgment, the Bank performed its obligations arising from the decision to inform consumers, but at the same time filed a cassation complaint against the judgment (the proceedings are pending). Legal risk issues related to CHF foreign currency mortgage loans are included in Bank Pekao S.A. Group’s Consolidated Financial Statements for the year ended December 31, 2023, in sub-chapter 46.3. 13.4.7 Customer safe online GRI 3-3 Management of topics identified as material GRI 418-1 Justified complaints concerning the violation of customer privacy and loss of data Mobile banking The safety of our customers is one of the key elements we take care of in our business. We want our customers to feel safe when they call the bank. Bank Pekao S.A. is committed to even greater security and convenience for its customers, protecting them from spoofing, i.e. attempts to impersonate bank employees or hotline phone numbers. Therefore, we implemented a new solution. The customer can verify the identity of the calling employee in the PeoPay app or in the Pekao24 web service. During the call, the contacting bank employee sends the customer a push notification in the PeoPay app or information in the Pekao24 web service. After logging in, the customer receives an electronic business card with detailed employee data. Then the customer asking for these data makes sure that he or she is actually talking to a bank employee. At the same time, the bank employee can ask the customer to authorize the business card sent to him, so that he can freely continue the conversation without verifying additional customer data. To increase financial security, we have also made changes to online banking that allow customers to update their ID card. Customers whose ID card expires are prompted when logging in to enter details of a new document under pain of being blocked from accessing electronic channels. A customer who fails to update his or her data within the specified period may not use electronic banking until the data are updated. We implement communication activities to support customer education on security topics. Initiatives undertaken in this area are implemented through various tools: - Communication via Pekao24 e-banking - throughout the year, we systematically provide our customers with content containing reminders of security rules and educational content to sensitize customers to situations that may put their data and funds at risk. The content deals, for example, with phishing, vishing and safe online shopping. - Content on the website pekao.com.pl - we attach great importance to ensuring that on our website everyone can always find up-to-date information on security rules and recommendations (also in English and Ukrainian), as well as current announcements about possible risks. The security subpages are the ones whose page views have steadily increased year after year and are among the most visited on our website. - Educational game in the PeoPay KIDS app - in a new module, which is an educational game in the app for children aged 6 to 12, one of the seasons is devoted entirely to security issues, so that our youngest group of customers can learn the basics of taking care of their money and data. - The #CYBERczujni campaign on social media - social media users can learn about the most common scam methods and how to protect themselves from them in posts published as part of the “#CYBERczujni - don’t be fooled” campaign. An additional website dedicated to the campaign introduces Internet users to security issues in a creative and accessible way. All activities implemented in the area of security communication and education boil down to one key denominator: how our customers and Internet users should keep their data and funds safe. Personal data The Bank and entities of the Pekao Group comply with generally applicable laws and principles specified in Regulation (EU) 2016/679 of the European Parliament and of the Council of April 27, 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC - General Data Protection Regulation (hereinafter: GDPR). Personal data are processed at Bank Pekao in accordance with the provisions of law and with due diligence in order to protect the interests of data subjects. 153 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Bank Pekao is both a data controller and a processor within the meaning of the GDPR and bears full responsibility for compliance with personal data protection regulations, in particular taking into account the principles concerning the processing of personal data specified in GDPR, such as: - The principle of lawfulness, fairness, transparency and accuracy of personal data processing in accordance with the law and reliably, fairly and in a transparent manner in relation to the data subject (Art. 5.1 (a) and (d) of the GDPR), - The principle of purpose limitation by ensuring that the data is collected for specified, explicit, and legitimate purposes (Art. 5.1 (b) of the GDPR), - The principle of data minimization by ensuring that the data are adequate, relevant, and limited to what is necessary in relation to the purposes for which they are processed (Art. 5.1 (c). the GDPR), - The principle of integrity and confidentiality by ensuring that the data controller uses appropriate technical and organizational measures to ensure the appropriate security of the data (Art. 5.1 (f) of the GDPR). To warrant comprehensive actions in relation to personal data protection, the Bank implemented a project to prepare the organization to meeting the GDPR requirements. As a result of the project, the Bank’s operations were analyzed in terms of their compliance with the GDPR requirements for IT systems, processes, internal regulations, operations and specimens of documents. The Bank has a number of internal regulations pertaining to specific areas of the Bank’s operation to ensure the security of customers, including their data. These regulations include: - Information Security Policy with detailed information security documents, - Methodology for managing the risk of violation of rights and freedoms of natural persons at Bank Pekao S.A. (PIA Methodology), - The Principles for personal data protection and obtaining consents to take actions for direct marketing purposes at Bank Polska Kasa Opieki Spółka Akcyjna, - The Register of processing activities and the Register of categories of processing activities kept by Bank Polska Kasa Opieki Spółka Akcyjna, - The Principles for authorizing persons employed by the Bank to process personal data and access the Bank’s information, - The Procedure for handling requests made by data subjects under the GDPR at Bank Polska Kasa Opieki Spółka Akcyjna, - The Personal data retention policy of Bank Polska Kasa Opieki Spółka Akcyjna, - The Procedure for managing personal data breaches at Bank Pekao S.A., - The Principles and procedures to be adopted by Bank Polska Kasa Opieki Spółka Akcyjna in connection with the outsourcing of services involving the processing of personal data, - Principles for information protection and management at Bank Polska Kasa Opieki Spółka Akcyjna, - Electronic Information Protection at Bank Polska Kasa Opieki S.A. The heads of the Bank’s business units and information owners are fully liable for the organization, security, and processing of personal data in their reporting units. In turn employees must process personal data in accordance with their authorization arising from their job description. To this end, Bank Pekao develops and implements mandatory training programs for employees on personal data protection, systematically monitoring the progress of completed training. The personal data protection aspect is also taken into account in the current activities of the Data Protection Officer’s Department (hereinafter: “DPO”) when issuing opinions on new processes, designs and initiatives, as well as analyzing internal regulations or agreements concluded by the Bank in terms of personal data. The Data Protection Officer, the Data Protection Officer’s Department, and the Bank Security Department verify new technological solutions in order to ensure compliance with requirements and principles set out in the GDPR and the highest possible level of security of processed personal data. In addition, the Bank has decided to implement data protection principles for the application of technical and organizational measures to ensure the protection of processed data. An Operational Security Center (OSC) has been established, a unit watching over unauthorized access to data (including personal data), and (through systems in place at the Bank) preventing the leakage of such data. 154 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. GRI 418-1 Justified complaints concerning the violation of customer privacy and loss of data BANK PEKAO 2022 2023 Complaints received from external parties and supported by the organization 0 0 Complaints from regulatory bodies 47 new complaints (without continuation) 31 new complaints (without continuation) Total number of identified leaks, theft or loss of customer data 17 25 13.4.8 Development of innovation in business operations GRI 3-3 Management of topics identified as material Own indicator: Digitization index The number of initiatives related to the digitization of organizations requires continuous monitoring of the innovation market, cooperation with fintechs and testing of solutions that are in the implementation phase. Bank Pekao’s Innovation Laboratory (hereinafter: Laboratory, LAB), established for these tasks, focuses on four areas: - designing innovations, - partnership in innovation, - building an innovation culture, - research and development. In its activities, the Lab is particularly focused on innovations to build modern banking and align products and services with customer expectations. The Innovation Lab draws on both market and non-market practices, as well as trend research, crowdsourced ideas and technology provided by young companies. The Innovation Lab also plays a key role in the manufacturing process of new features planned for implementation as part of the Bank’s mobile application development strategy - PeoPay. As part of building a culture of innovation among the Bank’s employees and engaging them in creating new solutions and submitting ideas, the Innovation Lab conducted 17 crowdsourcing campaigns in 2023, which collected a total of 5,136 ideas and submissions from Bank employees, including those developing business projects and supporting innovative initiatives. There has been an increase in the activity and size of the community of banking innovators who joined the internal crowdsourcing platform IdeaCrowd, a tool implemented by the Innovation Lab in May 2021. The IdeaCrowd community grew by 1,647 employees in 2023 - thus the ranking of active innovators was 5,510 people from various units of the Bank (a 42.6% year-on-year increase in the number of active employees). Commitment can be seen among both the employees of the sales network and support units. The Innovation Lab has launched a dedicated innovation manufacturing process under all customer segments called the Innovation Factory. It allows the Bank to seek and verify ideas for innovative solutions for its customers. In addition to this, we sustainably support the organization in the development of ongoing solutions (e.g. for SMEs, JDG, Private or Retail Customer) to support the Bank’s current Strategy. In 2023, the LAB continued to actively collaborate with the startup ecosystem in Poland and abroad. Thanks to its participation in the Poland Prize program of the Polish Agency for Enterprise Development, Bank Pekao has carried out accelerations and pilots of startups - including Nexus, Global Changer, Kareer. Additionally, in 2023, the Innovation Lab: - analyzed more than 150 startups based on a proprietary system - SRM (Startup Relationship Manager), - after the acceleration and piloting of Getpin (a platform for managing the Bank’s presence in map services), the Bank decided to implement the solution commercially, - a new procurement strategy for innovative startup solutions was developed, with the piloting of innovations (PoC - Proof of Concept) as an integral part of the procurement process, - an internal Startup Manual describing the process from business need to pilot implementation of new technologies and startup solutions was also created, - a pilot of a carbon footprint calculator for the Bank’s business customers was implemented with the participation of a foreign platform, - in response to the identified areas of interest of the business units, numerous scoutings of technology solutions were carried out - including technologies for analyzing branch traffic, Web 3.0 solutions (among others, NFT and Metaverse) and others. A total of 20 surveys were conducted for Business Owners from various units of the Bank. BANK PEKAO 2022 2023 Digitization index (%) 69 84 155 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.5 Human capital Pekao Group’s goal is to nurture employee development while respecting diversity and creating an attractive place. In April 2021, in parallel with the new business strategy, the Bank adopted the values developed jointly with employees: #straightforward, #together, #boldly, #responsibly. They are the pillars of the organizational culture, setting the course of action and style of work. In parallel with the identification of the four new values, their definitions and the behaviors assigned to them, 10 principles for managers - the Value Principles of Team Management - were also created. They are guideposts for executives on how to work with their teams based on new values. 13.5.1 Information on employment structure GRI 2-7 Employees GRI 2-8 Persons providing work for the organization who are not employees of the organization GRI 401-1 Newly hired employees and departures 2023 PEKAO GROUP BANK Total number of employees Full-time positions 14,798 12,447 Persons 14,935 12,470 FTPs/persons active and inactive, employed more than 0.1 FTP under a contract of employment, excluding management boards. PEKAO GROUP BANK 2023 HEAD OFFICE ESTABLISHMENTS TOTAL HEAD OFFICE ESTABLISHMENTS TOTAL Number of contracted employees by place of employment Full-time positions 8,914 5,883 14,798 6,749 5,698 12,447 Persons 9,044 5,889 14,935 6,771 5,699 12,470 PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of contracted employees (per person) by FTPs and gender Full-time 9,656 4,707 14,363 8,459 3,926 12,385 Part-time 372 200 572 54 31 85 Total 10,028 4,907 14,935 8,513 3,957 12,470 PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of contracted employees (per FTP) by duration of employment and gender Fixed period 1,338 891 2,228 854 555 1,409 Indefinite period 8,609 3,961 12,569 7,645 3,392 11,037 Total 9,946 4,851 14,798 8,499 3,948 12,447 PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of associates (per person) by contract type and gender Employed on the basis of civil law contracts (contract for work and commission) 69 75 144 15 23 38 Employed on the basis of a trainee contract 0 0 0 0 0 0 Self-employed 34 84 118 0 0 0 Total 103 159 262 15 23 38 * Associates persons employed on the basis of contracts other than employment contracts. ** Self-employed are cooperators (with an active contract at the end of the reported year) who run their own business. 156 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of employees at the end of the reporting period (in terms of FTEs) by employment area and gender at the company’s headquarters 5,160 3,754 8,914 3,811 2,938 6,749 at the company’s establishments 4,787 1,097 5,883 4,688 1,010 5,698 Total 9,946 4,851 14,798 8,499 3,948 12,447 PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of employees at the end of the reporting period (in terms of FTEs) by age and gender <30 793 663 1,456 393 359 753 30-50 5,424 2,952 8,376 4,560 2,481 7,041 >50 3,729 1,237 4,966 3,546 1,107 4,653 Total 9,946 4,851 14,798 8,499 3,948 12,447 PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Average annual employment in terms of FTEs by gender FTEs 9,185.20 4,243.75 13,428.94 8,553.87 3,825.48 12,379.35 PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of employees newly hired in the reporting period (in terms of FTEs) by employment area and gender at the company’s headquarters 948 884 1,832 412 459 871 at the company’s establishments 325 139 464 315 131 446 Total 1,273 1,023 2,296 727 590 1,317 PERCENTAGE (%) OF NEWLY HIRED EMPLOYEES at the company’s headquarters 18% 24% 21% 11% 16% 13% at the company’s establishments 7% 13% 8% 7% 13% 8% PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of employees newly hired in the reporting period (in terms of FTEs) by age and gender <30 586 483 1,069 230 188 418 30-50 627 478 1,104 453 359 812 >50 60 62 123 44 43 87 Total 1,273 1,023 2,296 727 590 1,317 PERCENTAGE (%) OF NEWLY HIRED EMPLOYEES <30 74% 73% 73% 59% 52% 56% 30-50 12% 16% 13% 10% 14% 12% >50 2% 5% 2% 1% 4% 2% 157 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of employees who terminated their cooperation with the organization during the reporting period (in terms of FTEs) by employment area and gender at the company’s headquarters 650 498 1,148 221 193 414 at the company’s establishments 544 131 675 537 126 663 Total 1,194 628 1,823 758 319 1,077 PERCENTAGE (%) OF EMPLOYEE DEPARTURES at the company’s headquarters 13% 13% 13% 6% 7% 6% at the company’s establishments 11% 12% 11% 11% 12% 12% * As a result of own resignation or termination by the employer as a result of planned layoffs, budget cuts, elimination of a position or non-renewal of a contract. PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of employees who terminated their cooperation with the organization during the reporting period (in terms of FTEs) by age and gender <30 367 275 642 123 81 204 30-50 543 287 830 369 186 555 >50 284 67 351 266 51 317 Total 1,194 628 1,823 758 319 1,077 PERCENTAGE (%) OF EMPLOYEE DEPARTURES <30 46% 41% 44% 31% 23% 27% 30-50 10% 10% 10% 8% 8% 8% >50 8% 5% 7% 8% 5% 7% * As a result of own resignation or termination by the employer as a result of planned layoffs, budget cuts, elimination of a position or non-renewal of a contract. PEKAO GROUP BANK SP3 - WSE’s employment turnover rate WOMEN MEN TOTAL WOMEN MEN TOTAL Number of voluntary departures during the reporting period (in terms of FTEs) 666 364 1,030 353 179 531 Number of forced departures () 528 254 782 406 140 546 Total voluntary and forced departures 1,194 618 1,813 758 319 1,077 Voluntary employment turnover rate 7% 7% 7% 4% 5% 4% Forced employment turnover rate 5% 5% 5% 5% 4% 4% Total employment turnover rate 12% 13% 12% 9% 8% 9% * In case of termination of the contract by the employer as a result of planned layoffs, budget cuts, elimination of a position or non-renewal of a contract. Revision SP-3 WSE’s employment turnover rate In the Statement of Non-Financial Information of the Bank Pekao S.A. Group for 2022, an incorrect value for the number of forced layoffs by gender (women - 725, men - 330) and total (1054) at Bank Pekao S.A. was disclosed in error. The following table shows the correct values for forced layoffs in 2022 for Bank Pekao S.A. PEKAO GROUP BANK SP3 - WSE’s employment turnover rate WOMEN MEN WOMEN MEN WOMEN MEN Number of voluntary departures during the reported period (in terms of FTEs) 1,045 574 1,618 725 330 1,054 Number of forced layoffs () 415 208 624 347 158 505 Total voluntary and forced departures 1,460 783 2,243 1,072 488 1,560 Voluntary employment turnover rate 11% 13% 11% 9% 9% 9% Forced employment turnover rate 4% 5% 4% 4% 4% 4% Total employment turnover rate 15% 18% 16% 13% 13% 13% * In the case of termination of the contract by the employer as a result of planned layoffs, budget cuts, elimination of the position or non-renewal of the contract. The average age of employees was 45.8 years, 76.6% of employees had a university education (75.5% in 2022), women accounted for 67.9% of all employees. 158 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.5.2 Core employment regulations Work Regulations Work regulations of Bank Polska Kasa Opieki Spółka Akcyjna (hereinafter referred to as: “Work Regulations”) set out the organization and structure of work at Bank Pekao as well as rights and obligations of the Bank and its employees. The Work Regulations apply to all employees of the Bank, regardless of the nature of their work, position or basis of employment relationship. In particular, the Work Regulations: - precisely define basic obligations of employees and the Bank, - describe the Bank’s work time systems and work start and end time, - set out principles for recording work time, monthly working schedules for settlement periods, - regulate the issue of OHS training, medical examination to be undergone by employees, informing employees about work hazards, rules for the allocation of workwear and personal protective equipment. The Bank informs employees of the amount of annual leave to which they are entitled in their employment contracts and, with regard to parental leave, this information is provided to employees on an ongoing basis in accordance with current common law. In accordance with the amended provisions of the Labor Code, on March 30, 2023, the Bank entered into an “Agreement on the Principles of Remote Work” with the Trade Unions operating at the Bank, defining the organization and order of the remote work process and the related rights and obligations of the Bank and employees. The Bank applies notice periods arising from the Labor Code or employment contracts, provided that they are not less favorable than those arising from Labor law. Consultation concerning the termination of employment contracts are conducted at the Bank in accordance with Polish legal regulations. In 2023, the Bank mostly used one- or three-month notice periods. In line with applicable regulations, the Pekao Group and the Bank must prevent discrimination in the process of entering into and terminating employment contracts, terms of employment, promotion and access to training to improve professional qualifications, including in particular discrimination against gender, age, disability, race, religion, nationality, political opinions, membership to trade unions, ethnic origin, faith, sexual orientation and employment for an unlimited, or limited time or full-time or part-time employment. Collective Labor Agreement GRI 2-30 Collective agreements The Collective Labor Agreement (hereinafter: “CLA”) sets out terms and conditions of the Bank’s HR and remuneration policy, including remuneration for the Bank’s employees and principles for awarding other work-related benefits, in, inter alia: - principles of the HR policy, - working time, - principles of the remuneration policy, - principles for basic pay, - bonus fund, - incentive award fund, - bonuses, - pension and annuity severance fees, - gratuities connected with termination of employment for reasons independent of employees. The CLA currently in force was concluded on December 15, 2005 between Bank Polska Kasa Opieki S.A. and company trade unions operating at the Bank. Amendments to the CLA in the form of an Additional Protocol were concluded successively in 2007, 2022 and 2023. The amendment to the CLA in 2022 and 2023 concerned the agreement of new bonus rules for sales network employees in the Retail Banking Division. The 2023 Additional Protocol was registered by the State Labor Inspectorate on December 21, 2023. Thus, the said bonus rules became an integral part of the CLA. The Bank does not use any additional pension schemes, apart from the universal ones. As an employer, the Bank fulfils all its obligations arising in relation to the universal pension scheme and is not in arrears with any contributions payable from employees’ remuneration and the employer’s contributions. The Bank makes additional pension and retirement severance payments for employees entitled to such benefits under the universal pension and retirement insurance scheme. 159 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In 2023 at Bank Pekao, similar to the previous 12 months, the percentage of employees covered by a collective labor agreement was at 77%. There are no collective labor agreements in Pekao Group companies. In relation to employees excluded from the regulations of the CLA, all provisions of the CLA are applied with regard to remuneration and the granting of other work-related benefits, with the exception of bonus rules. Bonus rules for this group of employees derive directly from provisions of individual employment contracts (management contracts). The Bank plans to start negotiations with trade unions to include this group of employees in the CLA. Employment restructuring and group layoffs The Bank, in the event of a decision to conduct collective layoffs, acts in accordance with the applicable provisions of generally applicable law and the CLA. The Bank’s decision is communicated to all employees, as well as to trade union organizations. In accordance with the law, the Bank consults its intention to carry out group layoffs with trade unions in accordance with the Act of March 13, 2003 on special rules for termination of employment relations with employees for reasons not related to employees. The Bank seeks to ensure that consultations of its intention to carry out group layoffs with the trade unions are concluded with the conclusion of a group layoff agreement. The following, among other things, are established in the concluded agreement: - the number of employees with whom the employment contract will be terminated, - criteria for selecting employees for dismissal, whose employment contracts will be terminated and whose terms and conditions of employment will be changed, - the terms of severance payments and additional benefits, e.g., extended medical care, social assistance rules, - the scope of the program to help laid-off workers, including financial assistance to acquire new skills or professional training opportunities if they find work in another area. Pursuant to the CA, in the event of termination of employment contracts for reasons not related to employees, employees are entitled to cash severance payments of three times the amount to which they are entitled under generally applicable laws. The amount of severance pay may not exceed 36 times the minimum salary in effect on the date of termination of employment. In addition, the Bank seeks to conclude an agreement with the Labor Office on labor activation of laid-off employees in each case. In 2023, the Bank did not initiate employment restructuring or layoffs. Benefits from the Company Social Benefits Fund GRI 3-3 Management of topics identified as material GRI 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees The Bank’s social activities are organized in accordance with generally applicable laws and ensure the social security of its employees. The Regulations of the Company Social Benefits Fund set out the rules and conditions for the use of services and benefits financed from the Fund, as well as the rules for the allocation of the Fund’s resources for various purposes and types of social activities. According to Polish legislation, the amount of the basic allowance per employee is 37.5% of the average monthly salary in the national economy in the previous year or in the second half of the previous year, if the average salary of that period was a higher amount. The Bank’s Company Social Benefits Fund is created from an annual basic allowance, in accordance with the provisions of the Collective Labor Agreement - per employee the allowance is 50% of the average monthly salary in the national economy in the previous year or in the second half of the previous year, if the average salary of that period was a higher amount. The Bank does not charge the deduction for pensioners or retirees, however, it does take care of them. Bank Pekao’s social fund is earmarked for: - subsidies for holiday leave of employees, children of employees under 17 years of age, as well as bank’s pensioners and retirees, - individual financial and material aid, - housing loans, - cultural and educational and sports and recreational activities. The expenditure plan of the Fund is agreed on an annual basis by trade unions under terms and conditions set out in the Regulations. Subsidies from the Company Social Benefits Fund cover the Bank’s employees who are employed exclusively under an employment contract regardless of their full-time position. People with a minimum of two years of service with the Bank can apply for the housing loan benefit. 160 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Most Pekao Group companies offer employees a variety of social benefits, including sports card and vacation leave subsidies, Christmas vouchers, financial support in difficult life situations, and a wide range of insurance. The companies, with few exceptions, provided the same access to benefits to all employees, regardless of the duration of employment. Issues related to remuneration GRI 2-19 Remuneration policy GRI 2-20 The process of determining remuneration The remuneration strategy developed in accordance with operating standards and values constituting the basis of the Bank’s mission is reflected in internal regulations and makes it possible to develop and protect the Bank’s reputation and create permanent values for all stakeholders. The Remuneration Policy of Bank Polska Kasa Opieki Spółka Akcyjna is a key regulation in this area. The policy reflects the Bank’s mission and values in its approach to remuneration systems, in particular, it: - defines remuneration pillars, the management of the Bank’s structure as well as corporate and organizational processes; - confirms requirements related to the compliance of remuneration systems with generally applicable laws, - defines principles for monitoring market practices and the Bank’s approach to remuneration systems ensuring the continuity of the Bank’s operations. In the remuneration structure, remuneration is directly connected with performance, which guarantees financial stability and variable remuneration adjusted to the Bank’s financial capacity. The policy also provides for incentive systems including the minimum performance of the Bank below which a bonus is not paid. Variable remuneration includes all remuneration components which are dependent on performance and the payment of such remuneration is directly dependent on individual achievements and the Bank’s results adjusted by risk. Sustainable results contributing to long-term value creation for stakeholders refer to the actual results achieved and the way in which they are achieved, with a view to measuring results consistent with shareholders’ interests and profitability principles based on a safe level of risk, sustainable risk management practices and multidimensional analysis of results and quality of activity. Base salary is a fixed element of remuneration paid for the position, duties and responsibilities covered, which reflects the level of experience, skills and competencies required for the position, as well as the overall quality of commitment to the Bank’s performance. The fixed remuneration component makes up such a large enough part of total remuneration that flexible remuneration policies are possible. To ensure that the remuneration structures are competitive and transparent and the remuneration system is effective and fair, the Bank monitors market trends in relation to remuneration forms and levels. Decisions concerning the remuneration system at the Bank are made taking into account the data on market trends in the area of fixed remuneration, as well as incentive systems. Such data are obtained from consultancy firms offering analyses of the financial sector. In 2023, the analysis of consistency in salaries between men and women in identical positions continued, in order to make efforts to equalize the pay gap that exists in the Bank. The Bank also has a Remuneration Policy for Members of the Bank’s Supervisory Board and the Management Board of Bank Polska Kasa Opieki Spółka Akcyjna , which sets forth framework principles and rules for establishing, monitoring and controlling the Bank’s remuneration principles and practices for members of its Supervisory Board and Management Board. The Remuneration Policy for Members of the Supervisory Board and the Management Board of Bank Polska Kasa Opieki Spółka Akcyjna supports proper and effective risk management and does not encourage excessive risk taking beyond the acceptable overall risk level approved by the Bank’s Supervisory Board; implementation of the Bank management strategy and risk management strategy; mechanisms for managing and mitigating conflicts of interest in the Bank’s activities; ensuring that remuneration and any associated terms and conditions of employment that affect remuneration, including conditions for awarding and paying remuneration, are gender-neutral, i.e. not differentiated in terms of gender. Solutions adopted in this Policy contribute to the implementation of the business strategy, long-term interests and stability of the Bank as well as aim to support the sustainable growth of the Bank, including to ensure that the Policy is consistent with the strategy for the introduction of risks to sustainable growth in the investment decision-making process into the Bank’s operations. Due to the special function and generally applicable regulations governing relations between members of corporate bodies and the company, the Bank does not conclude employment contracts with Members of the Supervisory Board of the Bank and Members of the Management Board of the Bank, whereas it concludes Contracts for management services with Members of its Management. 161 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Members of the Supervisory Board are entitled to remuneration in a fixed monthly amount and are not entitled to any variable remuneration. The total remuneration of a Member of the Management Board consists of a fixed part constituting the basic monthly remuneration and a variable part, representing supplementary remuneration for the Bank’s fiscal year. The variable remuneration of a Member of the Bank’s Management Board depends on the level of achievement of the established management objectives (among other things, growth in the Bank’s value and improvement of economic and financial indicators) and may not exceed 100% of the fixed remuneration of that Member of the Bank’s Management Board in the previous fiscal year for which the calculation of the amount of the variable remuneration to be paid is made. Should the contract be dissolved or terminated by the Bank for reasons other than a breach of basic obligations, a Member of the Management Board may be awarded a severance pay in the amount not higher than three times the fixed remuneration, provided that they have discharged the office for at least twelve months prior to the termination of the contract. It is also possible to conclude a non-compete agreement with a member of the Bank’s Management Board that is effective after the termination of his or her position. Members of the Supervisory Board and members of the Bank’s Management Board have the right to join Employee Capital Plans (ECPs) on the terms and conditions in force at the Bank. Based on the remuneration system, employees are offered non-financial benefits that ensure just treatment and consistency of the remuneration system. Every year, a report on the functioning of the remuneration policy of the Bank is prepared, while the Bank’s Supervisory Board, taking into account the opinion of the Nomination and Remuneration Committee of the Bank’s Supervisory Board, provides an assessment of the functioning of the Remuneration Policy at the General Meeting of Shareholders to assess whether the remuneration policy favors the development and safety of the Bank’s operations. Companies of the Pekao Group have remuneration policies adapted to the size and nature of their activities and remuneration principles. Incentive systems The Bank has three main incentive systems in place: A Variable Remuneration System for Management Staff, Management by Objective (MBO) System, and a system based on the Collective Agreement providing, in particular, for a quarterly bonus, bonus for retail sales force and an incentive award. Top management is subject to the variable remuneration system dedicated to persons having a significant impact on the Bank’s risk profile. The aim of the system is to support the implementation of the Bank’s strategy and to reduce excessive risk and conflicts of interest. In this system, a participant may obtain variable remuneration based on the bonus pool concept. The system provides for a comprehensive measurement of performance by individuals, business units and the whole Bank, including the evaluation of the participant’s compliance with law and the Bank’s standards and risk assessment. In order to strengthen care for the construction of a durable value of the Bank in the long term under the system, at least 50% of the bonus is implemented in phantom shares based on the value of the Bank’s shares and at least 40% of the bonus is deferred and paid after the end of the assessment period for which it is entitled. The annual targets set for the Bank’s top management under the incentive system ensure consistency with the strategy of incorporating risks for sustainable development into the business in the investment decision-making process, are consistent with the objectives of the Bank’s business and risk strategy, including environmental, social and governance risks (ESG risks), are consistent with the Bank’s corporate culture and values, risk culture, including with regard to the long-term interests of the institution, as well as with the measures in place to prevent conflicts of interest, and should not encourage excessive risk- taking. The variable remuneration system is prepared by the HR Division with involvement and participation of other organizational units of the Bank. This is to ensure that the system complies with the Bank’s regulations, articles of association, and ethical standards or other standards of conduct that apply to the Bank in a way that legal, compliance and reputation risks that are mostly connected with customer relationships are duly monitored and managed. Variable remuneration systems implemented in the Bank’s subsidiaries have similar schemes for the division of remuneration into cash and financial instruments, taking into account general provisions and guidelines of market regulators concerning sectors in which companies operate. The MBO system is addressed to employees hired on the basis of a management contract, including in particular sales functions and management functions having a significant impact on the achievement of the Bank’s planned commercial objectives. As part of the MBO system, employees receive individual objectives that result from the Bank’s financial plan and key objectives adopted for a given year. The amount of the annual bonus is determined by the level of performance of these tasks, as well as the result achieved by the Bank. Sales employees periodically, each quarter, can receive an advance on their annual bonus when they meet targets. 162 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The system based on the Collective Labor Agreement applies to all employees subject to the Agreement. Pursuant to the Collective Labor Agreement, the system is based on a quarterly discretionary bonus the amount of which is conditioned on the evaluation of an employee’s performance and commitment and the Bank’s results in a given year. It also provides for an incentive award which is granted for special professional achievements. In 2023, there were guidelines for variable remuneration, i.e., quarterly bonuses for sales network employees covered by the CLA. According to the Guidelines, employees’ bonuses were awarded based on the employee’s individual sales performance with a quality component. Determination of the final amount of variable remuneration for employees covered by the Guidelines depended on the results of the evaluation of the employee’s compliance with the goals or objectives. GRI 2-21 Annual total remuneration index 2023 BANK PEKAO Ratio of annual total remuneration for the top earner in the organization to the median annual total remuneration for all employees (excluding the top earner) 17.0 Ratio of the percentage increase in total annual compensation for the top earner in the organization to the percentage increase in median total annual compensation for all employees (excluding the top earner) -0.16 13.5.3 Bank as an employer Pekao Group is nurturing its position as an employer of first choice. We are building a modern Pekao, so we are creating a culture in which we value initiative and boldness in taking on challenges. We are committed to acting as one strong team: to support one another with our knowledge and experience, so that together we can create a dynamic and responsible bank that moves with the times and actively influences the environment. Our priority is to attract talented candidates with the right professional profile from the market and to retain the Bank’s best collaborative, entrepreneurial and innovative employees who will lead the Bank through change and chart new directions. To make this possible, the Bank conducts structured activities to ensure appropriate working conditions conducive to increasing employee motivation, satisfaction and commitment. An important goal of the Bank’s HR policy is to invest in the development of the skills of all employees with a strong emphasis on developing the competencies of the future. The identification, review, verification and development of current and future leaders remains a priority for development programs. The Pekao Group and the Bank create opportunities for individual professional development of employees by investing in training and improving competences and skills. In creating a friendly work environment, the Bank conducts employee engagement and satisfaction surveys, cooperation surveys and other forms of effective dialogue with employees to continuously improve working conditions, communication and employee relations. At the same time, the Bank supports employee well-being by implementing a number of pro-health activities, motivating employees to be physically active, eat properly, take up stress management and preventive care. The Pekao Group and the Bank provide employees with equal treatment, personal and professional development, respect and deference for civil liberties. Training and professional development GRI 3-3 Management of topics identified as material GRI 404-1 Average number of training hours per employee The Pekao Group and the Bank create educational opportunities and provide access to various forms of training for their employees. The Bank’s educational programs include local training and general development webinars, international training and programs, mentoring, internal and external coaching, certification training (among others, CFA/ACCA/CIA). The main internal regulation in this area is the Policy on the Training and Raising of Professional Qualifications of Employees of Bank Polska Kasa Opieki Spółka Akcyjna adopted by the Bank’s Management Board. It defines procedures relating to the course of processes related to employee participation in various forms of professional qualification improvement, such as: - procedure for classroom group training, remote training and e-learning, - procedure for individual training, national training, certification courses, language courses, postgraduate studies and MBAs, - training needs survey. PEKAO GROUP BANK 2023 WOMEN MEN ALL EMPLOYEES WOMEN MEN ALL EMPLOYEES Number of training hours per employee Total number of training hours by gender 340,947 144,702 485,649 263,926 89,742 353,668 Average number of training hours per employee by gender 34 30 33 31 23 28 163 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 2023 PEKAO GROUP BANK Total number of training hours by category of employees Members of the Management Board 1,043 317 Managers 62,302 52,431 Others 311,878 300,921 Total 375,222 353,668 2023 PEKAO GROUP BANK Average number of training hours per employee by job level Members of the Management Board 29 35 Managers 22 36 Others 26 27 All employees 25 28 Formation of competencies and skills In 2023, the Bank’s major training priorities were as follows: - dissemination of specialist knowledge among the Bank’s employees, in particular development of future competencies, - development of sales skills, - implementation of cyber security training, - leadership development - training for managers, - implementation of mandatory training programs arising from internal and external regulations. The Bank thus continued to implement training projects connected with the enforcement of its business strategies. Training targeted at high-potential employees and introductory training for new employees was held. In 2023, the Bank implemented more than 227,000 hours of synchronous training (classroom and virtual classrooms), in which nearly 11,000 employees participated. The courses and training in the e-learning formula were provided at the level of 279,000 hours. Key initiatives The Bank has been investing in the development and education of its employees for years, enabling them to improve their competencies by offering participation in a wide range of educational programs with a strong focus on developing the competencies of the future and supporting innovation. Key initiatives that were conducted in 2023 include: - Academy of the Future - a comprehensive training project focused on the development of key competencies that will become the foundation for success in the modern work environment. The next edition, prepared by an experienced staff of experts, includes a series of webinars and workshops, as well as dedicated materials to expand selected future competencies. - Banking School of Sales - including such training courses as: SPIN® Selling - Understanding the Customer, PREMIUM Relational Selling Model, Advanced Business Negotiation, Business Advisor Academy, Credit Academy, Sandler Academy for SME, and Relational Selling Model to Strategic Customers. The aim of the project is to support the implementation of proven and effective sales behaviors, improve competencies in the area of up-selling, reaching new customers, conducting meetings and dealing with difficult situations. The knowledge and skills acquired are perfected during practical workshops. - Omnicash - the purpose of the training is to acquire the ability to conduct customer cash service and cash handling at the cash register using the OmniCash system, in which it will be possible to handle customer cash transactions, as well as other cashiering activities. - Moto Project - aimed at incorporating a motor insurance product into the Bank’s offerings. - Recognizing the Authenticity of Money Marks - training addressed to Sales and Customer Service Specialists. During the training, employees have the opportunity to acquire, verify or deepen their knowledge of the possibility of recognizing the authenticity of Polish and foreign currency signs. Employees will learn methods of securing Polish and foreign currencies and the current legal regulations on the circulation of means of payment. - Robotization Academy - a continuation of the program that makes it possible to develop digital competencies, use automation on a daily basis, that teaches how to build robots on one’s own for one’s own needs. A proprietary training program developed and delivered by our practitioners in cooperation with a partner - the world’s largest provider of automation solutions. 164 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - Forge of Agility - a series of training courses through which any employee can learn the necessary agile competencies and process optimization through two paths: Agile and Lean. Each path supports competencies and makes it possible to bring out potential and gain efficiencies in one’s specific role related to process improvement and optimization. The program of training, exchange of practical knowledge and coaching is aimed both at people working in Product Teams and all employees, potential stakeholders of agile methods. - Safe on the Web - a series of trainings aimed at increasing awareness in the area of Cyber Security, safe use of modern technologies. The program is carried out in cooperation with experienced market specialists who discuss specific real-life examples and methods to counter various cyber security incidents. We have completed the implementation of development activities within the development path of the 1st edition of Talents Up, including mastermind sessions, job crafting sessions - group and individual, individual coaching sessions, a series of workshops “How to consciously navigate emotions and thoughts using development techniques”, project/job rotation, Agile in theory and practice - a specialized course. Leadership development - training for managers The Bank’s priority is to continuously develop and expand the competencies of its executives so that they can meet the challenges of the changing reality, both in business and social terms. In 2023, the Bank continued training and development programs such as: - Leadership Academy and Retail Manager’s Academy - training programs designed for the Bank’s managers, who play an important role in the organization’s operations and have a direct impact on the effectiveness of business objectives, organizational culture, the Bank’s market position and customer relations. The programs make it possible to acquire knowledge in a systematic way and translate it into concrete skills on an ongoing basis. The 5th edition of both programs ended in 2023. - Leader of change - the program aims to introduce managers to what it means to build a position as an inspiring leader of change in a VUCA (Volatile, Uncertain, Complex and Ambiguous) environment. The training program makes it possible to understand what authentic and natural leadership and management is and develop a practical, personal leadership and management style. It is designed for those who have completed the Leadership Academy or Retail Manager’s Academy. Development programs and initiatives The priority of the Bank’s development program is to identify, review, verify and develop present and future leaders. Employees can benefit from development initiatives aimed at supporting professional development, skills, knowledge and competencies, as well as take part in initiatives to strengthen commitment. In 2023, the Bank continued development programs and initiatives for its employees to provide support in terms of interpersonal and management skill development: - Succession plans which are of fundamental importance to ensure the continuity of employment at strategic positions, the implementation of long-term projects and the minimization of operating risks, - annual evaluation system: the process of evaluating the Bank’s employees, which includes the evaluation of competencies and potential as well as the planning of individual development and business goals, - assessment Centre/Development Centre sessions – an evaluation of professional potential; its results are used in decision-making processes related to employment, promotion, and employee development. - team Atmosphere Survey - the survey makes it possible to make an in-depth diagnosis of the factors affecting the atmosphere, cooperation and organization of work. The purpose of the survey is to learn about areas that still need to be strengthened and to plan activities that are appropriate to the specific challenges of a particular team. 13.5.4 Recruitment, internship and apprenticeship programs The Bank, as a reliable and responsible employer, treats all issues connected with both internal and external recruitment of employees in a comprehensive way and provides support in the systematic development of persons employed by the Bank. The recruitment policy in the Pekao Group is aimed at acquiring the best external candidates, while promoting internal talents. Thanks to this, the Pekao Group employs people with various professional experiences and competences. The Bank conducts activities encouraging employees to participate in internal recruitment (throughout the Pekao Group) as part of professional development in other business areas. The basic regulation in this regard is the Procedure for External and Internal Recruitment . The regulation guarantees optimal and uniform selection of persons to perform tasks in accordance with the HR policy and the Bank’s business plans and strategy. The recruitment is always focused on the identification and verification of the best candidate that meets the job requirements and those defined in the recruitment demand, has a relevant approach and key skills from the point of view of the organization in accordance with the Bank’s Competence Model. 165 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. One of the annual goals of the Bank is to attract a specific number of graduates from the best universities in Poland and abroad and offer them professional development opportunities within the organization: in branches or units of the Bank’s Head Office. With this in mind, the Bank targeted three internship/trainee programs for university students and graduates in 2023. Banking Champions, IT Banking Champions and the Bison Academy summer internship program. Under the programs, 71 interns and 31 apprentices found employment at the Bank. Banking Champions is a program that allowed trainees to gain unique competencies and practical experience in the field of finance and banking. Participants in the program were able to expand their skills in areas such as risk management, corporate and investment banking, data science, data analytics and big data, and new technology and development. IT Banking Champions made it possible to gain experience in the IT field. The interns worked on projects aimed at transforming Bank Pekao into one of the most omnichannel-developed banks in Poland. The interns were employed based on a fixed-term employment contract. The Bison Academy Summer Internship Program was designed to provide participants with subject matter expertise in a particular area and the support of a mentor, who will be an experienced employee or unit manager. During the Program, trainees had a chance to see from behind the scenes what work looks like in Retail Banking Branches, SME and Corporate Business Centers across Poland. Cooperation with the Bank was based on a fixed-term employment contract. Bank Pekao’s already proven dimension of interaction with job candidates was recruitment as part of the Jobicon Job Festival. This is a place to meet candidates in a safe virtual reality and a customized development environment for young people, created at the intersection of knowledge, technology and entertainment. Jobicon Online provided a space for engaging meetings with thousands of candidates. During the events, the following took place: - live interactive and personal meetings with online candidates - meetings in private rooms to which participants signed up beforehand, - group sessions, - webinars for wider audiences. Through Jobicon’s practice, the most desirable job candidates from all over Poland were successfully and quickly acquired, long-term relationships with candidates were established and built. The internship made it possible to share knowledge and experience with young people entering the labor market. 13.5.5 Employer branding activities In 2023, the Bank continued its branding efforts implemented as part of its employer brand strategy, promoting the opportunity for career development in a place where real change can be made. Key initiatives in 2023 include: - A new recruitment and image spot aimed at showing work at Pekao as attractive and far from the stereotype of rigid banking and corporate work. We invited our company’s employees to participate in the film. People who create our brand every day and infect others with their energy. On the visual side, the film refers to the idea of art branding, with the help of which we currently communicate with our customers. Maintaining the main message with which the Bank goes out to candidates “You too can make a difference”. - Participation in image and recruitment events, building the Bank’s image as an employer among potential candidates. During events aimed at professionals, such as IT Job Fair, Jobicon, Warsaw IT Days, Data Science Summit where visitors had the opportunity to talk to Bank representatives about new job opportunities and what the day-to-day work of each position looks like. - Image campaign to promote traineeship and internship offers - our goal is to show that our Paid Traineeship and Internship Programs are a great option for the younger generation who are taking their first professional steps. We are committed to attracting ambitious, committed and out-of-the-box thinking students and graduates and convincing them that at Bank Pekao S.A. they can develop and achieve their career goals. A campaign based on a variety of channels - digital on social media, universities, job fairs and student portals. - Recruitment messages under the slogan “You change banking for the better, we change your career for the better” emphasizing the opportunity to realize your potential at Bank Pekao S.A. A very important group of recipients of employer branding activities are employees employed by the Bank, regardless of their position or functional area. These people not only directly benefit from the Bank’s offerings as an employer, but also contribute to the organization itself and its culture, as well as build the employer’s image in their environment. 166 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Cooperation with universities A focus on cooperation, exchange of information and experience between the organization and the academic world is an important area of activity for the Bank, which works with the country’s leading universities. The Bank’s representatives actively participate in key events organized by career offices and student organizations, during which students and graduates have the opportunity to learn about internship and apprenticeship opportunities, consult their resumes, and learn more about the recruitment process and the requirements for sought-after employees. For those interested in developing in a specific area, individual consultations were organized with experts from the Bank. We carry out dedicated development events for students and share knowledge at student-organized events like B in Banking - the largest student job fair dedicated exclusively to leaders in the banking and finance sector. In addition, for the fifth time, Bank Pekao was a partner of the Warsaw School of Economics Master’s Degree Dean’s Award while involving many of the Bank’s experts in evaluating the best master’s theses of students at the Warsaw School of Economics. 13.5.6 Inclusive organization GRI 3-3 Management of topics identified as material GRI 405-1 Composition of supervisory bodies and staff broken down by categories of employees by gender, age and other diversity indicators The Bank has a Gender Equality and Diversity Policy for members of the Supervisory Board, members of the Management Board and persons performing Key Functions at Bank Polska Kasa Opieki Spółka Akcyjna (hereinafter: “Gender Equality and Diversity Policy”) which defines the strategy for managing the diversity of the Bank’s employees, including diversification with regard to the selection of members of the Supervisory Board, members of the Management Board and Key Functions Holders at the Bank. The Gender Equality and Diversity Policy defines guidelines aimed at ensuring that the Bank’s employees are able to manage their careers, achieve success and assess their work on the basis of individual achievements, regardless of gender. The aim of the Bank’s diversity strategy referred to in the Gender Equality and Diversity Policy is to ensure high quality performance of tasks by the Bank’s employees, including the selection of competent persons to perform their functions in the Supervisory Board, Management Board and Key Functions at the Bank, applying first and foremost objective substantive criteria and taking into account the benefits of diversity. Gender equality ensures the Bank’s employees the opportunity to manage their careers, achieve success, and assess their work on the basis of individual achievements, regardless of gender. The gender equality guidelines apply to all personnel processes and specify: - assuring of representation of both genders in external recruitment processes by preparing lists of recommended candidates including at least one candidate of each gender, - seeking to ensure representation of both genders in internal recruitment processes, by drawing up lists of recommended candidates for a given post, which contain at least one candidate of each gender, - eliminating of discriminating criteria in relation to genders while preparing job offers and descriptions, - informing external partners operating in the areas of recruitment and training (temporary employment agencies, employment agencies, public labor agencies/labor offices, head-hunter agencies) about the scope and content of the implemented Gender Equality and Diversity Policy and the Bank’s involvement in achieving the objectives of this policy, - assuring equal professional development opportunities to all Bank employees (training, coaching, mentoring, and other development actions at work) of any gender, accounting for professional duties, effectiveness, professional potential in accordance with the Bank’s organizational needs, standards and criteria defined in separate internal regulations, - ensuring equal treatment of the Bank’s employees in terms of remuneration and additional benefits, regardless of gender, in accordance with the Remuneration Policy of Bank Polska Kasa Opieki Spółka Akcyjna and generally applicable provisions of law in this regard, - promoting balance in professional and private life of employees by taking advantage of possibilities provided for in relevant regulations in this field and such available facilities like: a) offering flexible working models (part-time employment, etc.) in a manner consistent with the applicable provisions of law, in particular the provisions of Labor and social security law and internal regulations, taking into account business and organizational requirements and needs, b) supporting employees during and after long-term absence (e.g. after parental leave, unpaid leave, sickness and any other long-term absence) by avoiding discrimination during and after long-term absence, enabling employees to remain in contact with the company during long-term absences and facilitating return after a long-term absence in accordance with applicable law, in particular: Labor and social security law and internal regulations of the Bank, 167 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. c) incorporating issues related to gender equality in training programs, including, without limitation, those addressed to management staff, adaptation programs and other forms of training and communication. The Gender Equality and Diversity Policy, in accordance with the legislative process in force at the Bank, was adopted by the Management Board of the Bank and approved by the Supervisory Board and the General Meeting of Shareholders. The Gender Equality and Diversity Policy also applies to eight subsidiaries: Pekao Direct Sp. z o.o., Centrum Kart S.A., Pekao Bank Hipoteczny S.A., Pekao Financial Services Sp. z o.o., Pekao Investment Banking S.A., Pekao Leasing Sp. z o.o., Pekao TFI S.A. and Pekao Faktoring Sp. z o.o. PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of members of the Supervisory Board by age category and diversity <30 1 0 1 0 0 0 30-50 15 28 43 2 1 3 >50 5 13 18 3 3 6 Total 21 41 62 5 4 9 PEKAO GROUP BANK 2023 WOMEN MEN TOTAL % PERCENTAGE BY AGE WOMEN MEN TOTAL % PERCENTAGE BY AGE Percentage of members of the Supervisory Board by age category and diversity <30 2% 0% 2% 0% 0% 0% 30-50 24% 45% 69% 22% 11% 33% >50 8% 21% 29% 33% 33% 67% Total % percentage by gender 34% 66% 100% 56% 44% 100% PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of members of the Management Board by age category and diversity <30 0 0 0 0 0 0 30-50 3 20 23 1 6 7 >50 4 11 15 0 2 2 Total 7 31 38 1 8 9 PEKAO GROUP BANK 2023 WOMEN MEN TOTAL % PERCENTAGE BY AGE WOMEN MEN TOTAL % PERCENTAGE BY AGE Percentage of members of the Management Board by age category and diversity <30 0% 0% 0% 0% 0% 0% 30-50 8% 53% 61% 11% 67% 78% >50 11% 29% 39% 0% 22% 22% Total % percentage by gender 18% 82% 100% 11% 89% 100% PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of employees by age category and diversity <30 793 663 1,456 393 359 753 30-50 5,424 2,951 8,375 4,560 2,481 7,041 >50 3,732 1,235 4,967 3,546 1,107 4,653 168 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Total 9,949 4,849 14,798 8,499 3,948 12,447 PEKAO GROUP BANK 2023 WOMEN MEN TOTAL % PERCENTAGE BY AGE WOMEN MEN TOTAL % PERCENTAGE BY AGE Percentage of employees by age category and diversity <30 5% 4% 10% 3% 3% 6% 30-50 37% 20% 57% 37% 20% 57% >50 25% 8% 34% 28% 9% 37% Total % percentage by gender 67% 33% 100% 68% 32% 100% PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Number of employees by employment structure and diversity Managerial positions 927 798 1,725 792 664 1,456 Other employees 9,019 4,054 13,072 7,707 3,283 10,990 Total 9,946 4,851 14,798 8,499 3,948 12,447 PEKAO GROUP BANK 2023 WOMEN MEN TOTAL % PERCENTAGE BY CATEGORY WOMEN MEN TOTAL % PERCENTAGE BY CATEGORY Percentage of employees by employment structure and diversity Managerial positions 6% 5% 12% 6% 5% 12% Other employees 61% 27% 88% 62% 26% 88% Total % percentage by gender 67% 33% 100% 68% 32% 100% PEKAO GROUP BANK 2023 <30 30-50 > 50 TOTAL <30 30-50 > 50 TOTAL Number of employees by employment structure and age Management positions 7 1,195 522 1,724 3 1,000 454 1,456 Other employees 1,449 7,176 4,448 13,073 750 6,042 4,199 10,990 Total 1,456 8,372 4,970 14,798 753 7,041 4,653 12,447 PEKAO GROUP BANK 2023 <30 30-50 > 50 TOTAL <30 30-50 > 50 TOTAL Number of employees by employment structure and age Management positions 0% 8% 4% 12% 0% 8% 4% 12% Other employees 10% 49% 30% 88% 6% 49% 34% 88% Total 10% 57% 34% 100% 6% 57% 37% 100% Activities promoting diversity The Pekao Group and the Bank are implementing numerous initiatives offering support for diversity addressed to all employees, including reporting their initiatives and active use of existing projects. The primary goal of these activities is to: - fully exploit the potential of all employees in the process of managing the company’s intellectual capital and building an organizational culture based on sharing knowledge and experience, - improve employees’ commitment and satisfaction across all age groups, inter alia, through development programs, incentive targets, succession plans or remuneration systems, - improve HR management strategy by developing leadership, 169 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - develop an employee-friendly organization. Employees may participate in the following initiatives: - workshops promoting the diversity of operation and communication styles among employees, which include a discussion on the types of personality and corresponding differences in the process of communication and relations development, as well as preferred methods of operation, based on Insight Discovery methodology, - “Insight Discovery-based Team Management” training for managers. The purpose of those workshops is to educate managers in diversity management, turn their attention to diversified needs and methods used to motivate employees depending on their age, experience, skills and competences. At the training, issues related to diversity management, challenges faced by managers of diversified teams, including generational differences, diversified experience of employees, and their individual needs and motivators, are discussed. The Bank also has initiatives to strengthen diverse leadership and develop women in managerial positions. On the Bank’s website there is a separate section “Women Leaders at the Bank” devoted to this topic, which presents, among others, stories of women being Bank managers who succeeded in achieving their professional goals. An important measure taken by the Bank in favor of open dialogue with women and discussion of the needs of this group of employees (women make up nearly 70% of the Bank’s workforce), was the launch of the “Sugar Free” program in 2020 under the auspices of Vice President Magdalena Zmitrowicz. Weekly meetings and webinars, on the development of personal and professional competencies, were very popular in 2023. In total, we organized 36 webinars as part of the Program, which were attended by more than 5,000 people. The “Sugar Free” program implemented projects related to the development of technological competence, i.e. the “Closer to Technology” project - 7 webinars were attended by more than 1.3 thousand people and 6 closed-door training courses on Excel and SQL, 84 ladies. More than 100 people took part in the “Excel doesn’t bite” training project implemented in 7 major cities in Poland. The Sugar Free Program also includes a development program for Local Women Leaders, during which the ladies participate in workshops to develop leadership skills, as well as implement activities in local communities. A major event in 2023 was the joint celebration of the Program’s 2nd Birthday, attended by nearly 250 ladies stationary and 100 through the streaming platform. The program is not indifferent to the topics of ecology, which is why it has organized an independent competition within the framework of the “Ecology at the Bank” action titled “Let’s be #EKO together. Challenge for #EKOvacation.” There were 44 entries in the competition, which attracted a lot of interest among employees. Participants in the competition demonstrated not only creativity in their submissions, but above all a willingness to promote environmentally friendly attitudes. There were also publications in the media and press, where women working at Bank Pekao were promoted. The industry magazine “My Company Polska” published an article “Why the world needs women’s leadership” and a report “Women in IT. We do impossible things right away.” Closing the pay gap GRI 3-3 Management of topics identified as material GRI 405-2 Ratio of basic and total salary (remuneration) of men and women by category of employees According to the ESG Strategy, the Bank’s priority is to integrate ESG factors into the incentive system of the Bank’s key management personnel and to strengthen gender equality. The Bank intends to achieve this by including ESG factors in the incentive system of the Bank’s Management Board and key managers, an annual performance evaluation based on goal achievement, an annual salary review, and a succession plan and development programs to support women’s professional development. The Bank says it will develop networking activities and mentoring programs for women, while continuing to narrow the gender pay gap. Pekao’s priority will be to maintain a balanced level of men and women in managerial positions. Providing flexible work arrangements and supporting work-life balance will remain important. In fulfillment of the obligation referred to in Article 9ca par. 5 item 1 of the Banking Law of August 29, 1997, and having regard to the letter of the Office of the Polish Financial Supervision Authority DBK-DBK6B.7111 .1.2024. MS dated January 10, 2024, the Bank provides the Polish Financial Supervision Authority with information for 2023 on the gender pay gap, using the ratio of the average pay of women to the average pay of men based on the GRI 405-2 reporting standard on the basis of employment as of December 31, 2023, based on total remuneration [1] as of December 31, 2023, and including those classified as active excluding those on sick leave of 92 days or more as of December 31, 2023, those employed between October 1 and December 31, 2023, and those employed 0.1 FTE or less as of December 31, 2023: - the gender pay gap ratio for the Bank as a whole, understood as the ratio of the average pay of women to the average pay of men working at the Bank, is 34.8% for total remuneration; 170 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - the gender pay gap ratio, calculated as a weighted average for subgroups of employees taking into account job levels, business lines, and performance at the Bank's headquarters or in the network, is 8.0% for total remuneration; - the share of women in the workforce is 67.9%. STRATEGY EXECUTION INDICATOR ESG 3. PILLAR – GOVERNANCE 2021 2022 2023 CEL NA 2024 Pay gap between men and women 37,9% 35,9% 34,8% <35% (-5%) Maintaining a balanced level of the number of men and women in managerial positions 43% (men) 46% (men) 46% (men) 50% (men) () The indicated pay gap between the average salary of men and women reflects the ratio of total remuneration between men and women at the Bank. The level of the pay gap is influenced by the overall structure of the workforce, where in areas including technology and data analytics (big data), where the market competitiveness of nominal salaries is at a high level, the majority of employees are men which reflects the availability of candidates and affects the average salaries of men at the Bank relative to the average salaries of women at the Bank, who dominate the workforce in other areas. The Bank is attentive to ensuring equal treatment with regard to remuneration and non-salary benefits regardless of age, race, culture, gender, disability, sexual orientation, religion, nationality, political beliefs or views, union affiliation, ethnic origin, religion, marital status, employment for a definite or indefinite period of time, full-time or part-time employment, and ensures that remuneration and any related terms and conditions of employment that affect remuneration, including those relating to the terms of award and payment of remuneration, are gender-neutral, i.e. are not differentiated on the basis of gender. In its activities, the Bank analyzes factors that may affect differences and takes measures to eliminate them. 2023 PEKAO GROUP BANK PEKAO Ratio of average () basic salary of women to average basic salary of men at the Bank’s headquarters or company headquarters Members of the Management Board 0.48 1.00 Managers 0.76 0.76 Others 0.74 0.76 Ratio of average () total salary of women to average total salary of men at the Bank’s headquarters or company headquarters Members of the Management Board 0.49 1.14 Managers 0.75 0.75 Others 0.73 0.76 Ratio of average () basic salary of women to average basic salary of men at the Bank’s establishments or company establishments Managers 0.89 0.89 Others 0.86 0.84 Ratio of average (*) total salary of women to average total salary of men at the Bank’s establishments or company establishments Managers 0.90 0.91 Others 0.85 0.82 * Weighted average of the number of employees of a certain gender in a given category in each company. ** Applies to Pekao Group companies, which have both headquarters and outlets. 171 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.6 Health and safety 13.6.1 OHS issues GRI 3-3 Management of topics identified as material GRI 403-2 Hazard identification, risk assessment and incident investigation Bank Pekao and the Pekao Group, as institutions aware of the responsibility for the safety and health protection of employees, are primarily obliged to: - prevent accidents at work, occupational diseases and potential accidents, - meet the requirements of the applicable provisions of law, - aim at continuous improvement of occupational health and safety, - conduct occupational risk assessments, - improve actions relating to occupational health and safety to avoid losses arising from accidents at work, - improve employees’ qualifications and involvement in OHS initiatives, - provide necessary technical and financial resources and competent personnel to carry out duties connected with the protection of employees’ safety and health. The basic regulations in the area of Occupational Health and Safety at Bank Pekao are the “Principles of occupational health and safety and fire protection” and the “Policy of Bank Pekao S.A. Group on occupational health and safety”. The principles were developed based on the provisions of generally applicable law, on the basis of which internal instructions for conduct and employee handbooks were prepared. The tasks of the Occupational Health and Safety Bureau are regulated by the Council of Ministers’ Regulation on the Occupational Health and Safety Service. Implementation of the provisions contained therein is carried out through a systematic inspection of working conditions, taking into account: the organization of processes and their impact on working conditions, the technical condition of the premises, as well as the reported requests relating to health and safety requirements. Another important element of the Health and Safety Service’s operation is the verification of compliance with health and safety regulations and rules, including the opinion of arrangement projects in terms of health and safety, and the acceptance of newly built and modernized banking facilities. The Occupational Health and Safety Service has a significant role in carrying out occupational risk assessments, the primary goal of which is to ensure that employees are effectively protected from the hazards present in the work environment. The purpose of an occupational risk assessment is to determine what hazards can cause injury or deterioration of employees’ health, and to answer the question of whether it is possible to eliminate them and what measures should be taken in this regard. Identified risks are discussed during meetings of the Health and Safety Committee, which, in addition to employer representatives, is also attended by the social side. Employees are familiarized with the hazards at the Bank during their initial health and safety training. The Bank’s occupational risk assessment process has been completely digitized and all its steps are done through a dedicated application. Initial and periodic training sessions are conducted to raise the level of awareness of the Bank’s employees regarding occupational health and safety. Initial training consists of general instruction by an employee of the Occupational Health and Safety Service and on-job instruction by the employee’s supervisor. Periodic training is conducted entirely on an e-learning platform. The Bank periodically organizes training in pre-medical first aid. Training courses are conducted by qualified paramedics through which they provide employees with an adequate dose of both theoretical and practical knowledge. A dedicated page has been set up on the Bank’s intranet pages to provide the necessary occupational health and safety information, applicable guidelines and instructions. Employees also have the opportunity to report potential hazards through the Occupational Health and Safety email box. The Bank has had an Occupational Health and Safety Committee for 23 years, which includes employer representatives, including the doctor providing preventive care for employees and employees of the Occupational Health and Safety Service, as well as employee representatives. During the meetings, which are held every quarter, current occupational health and safety issues and initiatives are discussed. 172 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. GRI 403-9 Type and rate of work-related injuries In 2023, the number of accidents at Bank Pekao SA was 34. In terms of the characteristics of the injuries sustained, the following should be mentioned first and foremost: sprains, contusions, and fractures of limbs, spinal injuries, and surface wounds. In each of the cases mentioned, the circumstances and causes of the accidents were determined and post-accident recommendations were made. No fatal or serious injuries were reported. PEKAO GROUP BANK 2023 WOMEN MEN TOTAL WOMEN MEN TOTAL Total number of occupational accidents, including: 31 7 38 27 7 34 Number of light accidents 31 7 38 27 7 34 Number of serious accidents 0 0 0 0 0 0 Number of fatal accidents 0 0 0 0 0 0 2023 PEKAO GROUP BANK Total number of people injured in accidents 38 34 Total accident frequency rate (IR, calculated as total number of people injured in accidents/employment x 1000) 2.54 2.73 Accident severity rate (calculated as number of days of disability due to accident/number of accidents) 28 29 Total number of days missed due to occupational injuries (LDR, calculated as the ratio of the total number of days missed to the number of employees’ scheduled working hours in the reported period x 200,000) 8.4 5.7 Absenteeism rate (AR, calculated as the total number of unexpected days absent from work/number of days worked per year x 100) 8.9 7.1 Absences due to illness (not only associated with work-related accidents) and possibly other unscheduled absences (such as days off for childcare) excluding leaves of absence (vacation, maternity, paternity). 13.6.2 Medical care and health-promoting activities GRI 403-6 Promoting employee health Bank Pekao S.A. offers all Bank employees medical care provided since April 2020 by PZU Zdrowie. Bank employees may take advantage of the package of basic medical services with the possibility of extending them. The wide range of medical services negotiated by the Bank may also be used by family members indicated by the employee, i.e. children, children over 26 years of age, spouses, partners, parents, parents-in-law, and senior citizens. The medical care offer is also addressed to retirees of Bank Pekao as part of a specially negotiated package. Under medical care, the insurer covers or provides discounts on medical consultations, outpatient procedures, prescription visits, laboratory diagnostics, pregnancy management, immunizations, home visits, imaging, endoscopic and functional tests, rehabilitation and dentistry. Taking into account the expectations of employees and market benchmarks, changes have been implemented as of November 1, 2022, which affect the satisfaction associated with the use of medical care services. This includes a preventive package available to all employees, as part of occupational medicine - consultations for selected specialties: ophthalmologist, orthopedist, neurologist, rheumatologist, and a package of laboratory tests. In addition, the Bank has introduced the possibility of reimbursement for medical services provided outside the provider’s network into the contract with the medical provider as of April 1, 2023. It increased or eliminated benefit limits, increased the availability of GPs to 24H and the amount of rehabilitation treatments in some packages. In addition, in October 2023, the Bank carried out “Health Zones” - a series of oncology prevention examinations - in cooperation with a health care provider. The examinations were carried out in five Polish cities, and a total of 160 patients were examined. In two cases, the examination detected significant lesions that required immediate intervention, and more than a dozen lesions were recommended for further diagnostics. In addition, the Bank promotes various health-promoting initiatives (e.g., flu vaccinations) and runs an educational series via its intranet “The Health Pill”, which supports employees in developing health-promoting habits and introduces them to important elements of medical care. The average monthly number of packages held by Bank employees and their family members was 14,422, and the average monthly number of packages financed or co-financed by the Bank was 10,261. Pekao Group companies also provide medical care for their employees. 173 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The “Take Health by the Horns” program has become a permanent fixture in the range of activities designed to motivate employees to be physically active, eat properly, undertake stress management and preventive care. In 2023, further editions of the MiLOVE activities with Bison were implemented. One in spring, the other in autumn. Both were aimed at combining outdoor movement with activities for the benefit of others. In both, we encouraged activity from both the “on wheels” and “on foot” categories, so both running, walking and cycling were welcome. The events were very popular. During these campaigns, the “virtual” miles collected by employees were used for a good cause. Thanks to the involvement of more than 1,200 people in each campaign and the more than 363,200 miles they covered, the Bank Pekao Foundation provided financial support to the young scholarship recipients of the Run into the Future Program. In terms of healthy eating, menus in two calorie versions and recipes for dishes in healthier versions were systematically published, along with information on how to adapt a given menu or recipe in case of allergies or other lifestyle diseases. In addition, a webinar was held on whether, what and how the diet of men and women should differ, and articles were published on interesting facts and dietary news, such as immunity, supplementation, and the role of collagen. In addition, employees who share feedback on the proposed activities as part of the pro-health audit (which has already become a permanent part of the pro-health calendar) were offered an e-book, which is a compendium of knowledge on the pursuit of normal body weight - what it should be, how to calculate it and how to achieve it. In mental health issues, meanwhile, the ABCs of mental well-being program was implemented, in which we touched on the skills of resting, managing time so as not to rush, strengthening one’s willpower and dealing with what is beyond one’s control. In addition, meetings were held to optimize work and family tasks and provide information on neuroplasticity and tips on how to take care of your brain. The topic of caring for brain fitness was also covered during the open lecture held at the Training Centre’s opening event. The event also featured a lecture on caring for mental well-being. For managers, on the other hand, we offered a meeting on how to take care of yourself so that you can support others. Also permanently available is the possibility of a one-on-one conversation with a psychologist, both bank and medical provider specialists, which, thanks to special codes, allows the service to be provided anonymously and free of charge. The above activities were complemented by two series of meetings in line with the prevention campaign. One was conducted with an insomnia therapist, who told employees about the role sleep plays in recovery and regeneration, what our sleep should look like, what affects it and how to take care of it. For the second one, we invited doctors with different specialties (decided by the employees themselves). The goal of those meetings was to make employees aware of the possible first signs of various medical conditions and to encourage further diagnostics if identified. As part of these events, employees had the opportunity to meet with doctors with specialties such as a hepatologist, urologist, gynecologist, physiotherapist, nephrologist, urogynecological physiotherapist, neurologist or speech therapist. 13.7 Business ethics and corporate governance The Bank operates in a responsible, transparent and sustainable manner, taking into account ESG criteria. In its ESG Strategy, the Bank pledged to strive to maintain the highest standards of corporate governance and develop an ethical approach to business. Corporate governance activities are aimed at creating tools to support effective management, efficient supervision, respect for shareholders’ rights and transparent communication of the company with the market. GRI 2-23 Commitments included in policies GRI 2-24 Implementation of commitments included in policies GRI 2-27 Compliance with laws and regulations In its day-to-day operations, the Bank face ever-increasing challenges related to the rapidly changing regulatory environment. In the area of corporate governance, a key activity remains the prevention of violations and protection of the Bank from any improper conduct, in compliance with applicable laws, regulations and accepted ethical standards. The corporate governance applied at the Bank derives from the provisions of the law (in particular, the Commercial Companies Code, the Banking Law and the regulations governing the functioning of the capital market), as well as from the principles contained in the “Best Practice for WSE Listed Companies 2021”, the “Corporate Governance Principles for Supervised Institutions” issued by the Polish Financial Supervision Authority and the “Code of Banking Ethics” of the Polish Bank Association. Pekao Group’s Code of Conduct, which is available to the public, is the primary regulatory act on ethical conduct (hereinafter: “Code of Conduct”). The principles of ethical conduct apply to all employees of the Bank. The Code of Conduct addresses the most important issues to watch out for in the performance of official duties. The principles contained therein should be a guideline in the decision-making process. 174 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In 2021, the Management Board of Bank Pekao S.A. adopted a resolution, also effective in 2023, for the Bank to adopt the Best Practices for WSE Listed Companies 2021 (hereinafter: “Best Practices”) issued by the Stock Exchange. The Best Practices replaced the Best Practices of WSE Listed Companies 2016 , which the Bank applied until June 30, 2021. The Best Practices are a set of corporate governance principles to which issuers of shares listed on the WSE’s Main Market have been subject since 2021, based on the provisions of the Regulations of the Warsaw Stock Exchange. The Best Practices take into account the current state of the law and the latest trends in the area of corporate governance, as well as the demands of market participants interested in increasingly better corporate governance in listed companies. The Best Practices also include requirements related to the ESG area, including issues of sustainability, diversity in the composition of company bodies and equal pay. The Best Practices are an important element in building the competitive position of companies and significantly contribute to strengthening the attractiveness of the Polish capital market. The Bank makes every effort to ensure that the Best Practices are applied in full. In accordance with the requirements of the Regulations of the WSE, information on the current status of application of corporate governance principles is published, including explanations of the reasons for not applying the principles in accordance with the comply or explain principle. The benefit of implementing the Best Practices was to raise the standards and transparency of the Bank’s operations. In terms of protecting specific groups of stakeholders, contractors and customers, the Bank has and applies the Rules for the sale of credit and payment products to consumers at Bank Polska Kasa Opieki Spółka Akcyjna and Rules for the sale of investment products . The Bank adheres to the highest standards in handling confidential information within the meaning of the Regulation of the European Parliament and of the Council of April 16, 2014 on Market Abuse (hereinafter: MAR). A precise regulation has been implemented that clearly defines the rules for handling confidential information within the meaning of MAR and protecting it from unauthorized disclosure or use. The regulation sets out the rules related to the execution of transactions on financial instruments by the Bank’s employees, including employees with access to insider information within the meaning of MAR. For the Bank, it is very important that persons discharging managerial responsibilities and persons closely related to them observe restrictions on transactions in financial instruments related to the so-called “closed periods” preceding the publication of the Bank’s periodic reports. For this reason, in addition to the information received due to applicable laws, persons discharging managerial responsibilities regularly receive information about any upcoming closed period and related restrictions on transactions in the Bank’s financial instruments. Any information about the execution of a transaction by a person discharging managerial responsibilities or a person closely related to him/her is reported in accordance with applicable laws. The Bank constantly monitors employee activity in financial instrument transactions. Code of Conduct of the Pekao Group The Pekao Group operates in accordance with applicable laws and market standards, and promotes ethical business behavior, i.e. conduct based on accepted values and principles. The current Code of Conduct of the Pekao Group (hereinafter: “Code of Conduct”) adopted by a Resolution of the Management Board of the Bank of December 3, 2021 and by a Resolution of the Supervisory Board of the Bank of December 13, 2021 contains the most important principles to be followed by all employees of the Pekao Group, regardless of their position or basis of employment. The Code of Conduct contains statements of values, the Bank’s mission and vision for the business covering key principles and standards of conduct, shaping employees’ ethical choices and behavior. In the Code of Conduct, the Pekao Group expresses its support for sustainable economic and social development and environmental protection and climate change efforts. The Code of Conduct refers to the adopted ESG Strategy, which summarizes the Bank’s environmental, social and corporate governance approach and priorities, declaring the Bank’s development with high standards of corporate governance and an ethical approach to business. The Code of Conduct evokes the values of #straightforward, #together, #boldly and #responsibly that shape the Bank’s organizational culture. The Code of Conduct contains the most important rules of conduct for all persons in an employment or other legal relationship of a similar nature with Bank Pekao or another legal entity of the Bank Pekao Group, including members of the statutory bodies of the Bank or other Bank Pekao Group entities. The above principles apply to interactions with stakeholders: customers, business partners, representatives of local communities, the business environment and colleagues. They apply to all areas of Pekao Group operations so as to ensure the highest standards of service delivery. Compliance with the provisions of the Code of Conduct is the primary obligation of each employee of the Bank and each employee of other entities of the Pekao Group. Newly hired employees are required to familiarize themselves with the contents of the Code of Conduct and confirm this in writing or through the information system before starting work and performing their duties. Completion of e-learning training on the Code is mandatory for all employees. Any amendments to the provisions of the Code of Conduct are communicated immediately to the employees of the Bank and other Pekao Group entities. 175 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The Code of Conduct commits employees to acting ethically, adhering to the values that shape Pekao Group’s organizational culture, honesty, integrity, and professionalism. Its provisions indicate the need to: - act in accordance with the provisions of law, internal regulations, recommendations of supervisory and control authorities and generally accepted market standards, - strive to improve the quality of work and standards in order to achieve the intended objectives, - build long-term relationships with customers based on mutual trust and transparent rules of cooperation, provide high quality services tailored to the specifics and needs of each customer, - have knowledge of the risk culture, i.e. the risk limits relating to the activities carried out, as defined by the Bank Pekao or other Pekao Group entities. Those in management positions at all levels are expected to promote ethical attitudes among employees and point out the required standards, thereby building a comprehensive Pekao Group culture based on ethical values. The Code of Conduct shapes the attitude of an employee who is aware that his or her conduct, both in the course of his or her duties and in his or her free time, can affect the way the Pekao Group is perceived. Everyone should act in a way that does not expose the Pekao Group to reputational risk - when performing official duties, representing companies or claiming employment with them. The Code of Conduct addresses the following issues: - compliance with the law, - ethical culture, - values, - ethical activities, - proper principles of conduct for Pekao Group employees, - treating others with dignity and respect, - work culture, - respect for human rights, - ethical product offerings, - consumer protection, - principles of handling customer complaints, - responsible marketing and promotional activities, - protecting reputation, - communication standards, - financial reporting, - protection of information protected by law, - bank secrecy, - personal data, - company secrecy, - professional secrecy within the meaning of the Act on Trading in Financial Instruments (so-called brokerage secrecy), - professional secrecy within the meaning of the Act on Investment Funds and Management of Alternative Investment Funds, - preventing monopoly practices and assuring fair competition, - confidential information and market abuse, - policy for managing conflicts of interest, - counteracting money laundering and financing of terrorism, - prevention of corruption, - accepting or offering gifts and entertainment, 176 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - using the services of brokers and counterparties, - property protection, - occupational health and safety, - reporting breaches (whistleblowing), - activities promoting sustainable development, ESG strategy. The Code of Conduct contains examples of acceptable and unacceptable behaviors and actions (case studies), developed on the basis of the Recommendations of the Committee on Banking Ethics at the Polish Bank Association on the formation of ethical culture in banks. Superiors who manage employees are to pay attention to compliance and reputational risks in their area of responsibility, according to the Code of Conduct, and ensure that subordinate employees act appropriately in this regard. The Code of Conduct also includes provisions for conducting periodic review and evaluation of compliance with ethics principles in order to adapt them to the changing internal situation and the Bank’s environment. The contents of the Code of Conduct in Polish and English versions have been published on the Bank’s website. Link to the Code of Conduct in Polish version: Polityki i procedury (pekao.com.pl) Link to the Code of Conduct in English version: Policies and procedures - ESG website - Bank Pekao S.A. 13.7.1 Preventing corruption GRI 3-3 Management of topics identified as material GRI 205-1 Operations assessed for risks related to corruption GRI 205-3 Confirmed incidents of corruption and actions taken Bank Pekao decisively combats all forms of corruption and situations that may contribute to corruption. The Bank does not tolerate any actions that may constitute corruption by the Bank’s employees or other persons or units having any relationships with the Bank. Employees who refuse to take part in corruptive practices or employees who disclose such practices or attempts at such practices by other persons/entities are fully protected. Moreover, the Bank does not tolerate offering, promising, demanding, giving or accepting any payments ( facilitation payments ) aimed at accelerating any issues by the Bank employees or other persons or entities having relationships with the Bank. No cases of corruption were reported in the Pekao Group in 2023. Corruption Prevention Policy of the Bank Pekao S.A. Group (hereinafter: “Corruption Prevention Policy”) covers all aspects of the Bank’s operations. In accordance with its guidelines, the Bank has adopted a Corruption Prevention Program. It consists of the following elements: - Rules and procedures concerning: a) cooperation with intermediaries, b) gifts and entertainment, c) recruitment process, d) cooperation with counterparties, e) donations and sponsoring (including donations to political parties), f) mergers and acquisitions, g) significant investments; h) the Bank’s participation in public procurement procedures. - Training and information programs for Bank employees on preventing corruption. - Designing and supervising the implementation of inspection mechanisms aimed at preventing corruption, applying and monitoring the compliance with such mechanisms by other business units of the Bank in accordance with the Bank’s internal regulations. - Estimation of compliance risk for the “Anti-Corruption Process”. 177 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - Establishing safe and easily accessible communication channels to be used by the Bank’s employees and other persons to report attempted corruption or actions regarded as corruption in a confidential way. - Reporting the progress in the implementation of the corruption prevention program to the Management Board of the Bank in the form of a quarterly report on the operations of the Compliance Department. - Precise and fair registration of all transactions in the books and documents of the Bank and avoiding undisclosed or unregistered accounts, funds, assets or transactions. The Bank’s Corruption Prevention Policy applies to every activity undertaken by the Bank, to all Bank employees, and to the prevention of corruption in the Pekao Group companies. Corruption Prevention Officer In the Bank Pekao’s Compliance Department, the functions of the Corruption Prevention Officer are carried out, to whom information about attempted corruption or activities that have the appearance of corruption should be reported. The Corruption Prevention Officer has the right to examine suspected or actual actions regarded as corruption and request a person that is suspected of corruption to submit documents, as well as to review such documents and report such circumstances in accordance with the applicable procedures. Detailed duties of the Corruption Prevention Officer, including the development, implementation and supervision of the effective Corruption Prevention Program, as well as the enforcement of the Bank’s internal regulations on corruption prevention, are set out in the Corruption Prevention Policy. In 2023, both Bank Pekao and Bank Pekao Group companies analyzed the risk of corruption. Bank Pekao has defined the main areas of corruption risk associated with its activities, which are: - using agent services, - gifts and entertainment, - recruitment policy, - services provided by business partners, - donations and sponsoring (including donations to political parties), - mergers and acquisitions, - significant investments, - the Bank’s participation in public procurement procedures. The corruption risk analysis for the major corruption risk areas supplements the Bank’s due diligence applicable to other types of risk in these areas. In the corruption prevention area, subsidiaries are guided by the Code of Conduct and the same principles as the Bank. The vast majority of companies have appropriate corruption prevention regulations tailored to the size and nature of their operations. Some companies have positions responsible for anti-corruption activities. The following were cited as potential areas of corruption risk: cooperation with intermediaries and contractors, conclusion and renewal of contracts with contractors, the process of giving gifts and invitations, the recruitment process, donations and sponsorships, merger and acquisition transactions, and participation in public procurement procedures. No significant corruption risks were identified in the subsidiaries. The Compliance Department, in accordance with the Bank’s internal regulations, identifies, evaluates, controls, monitors and reports on corruption risks at the Bank. The Corruption Prevention Policy is mandatorily communicated to the Bank’s intermediaries, contractors and counterparties. Includes due diligence on new business partners in a comprehensive form. Intermediaries are examined for corruption risks prior to the start of cooperation and periodically. The Bank provides employees, intermediaries or contractors with the opportunity to report information about attempted corruption or corrupt activities that have occurred - to the email address: PrzeciwdzialanieKorupcji@pekao.com.pl (including anonymous submissions). Information in this regard is retained for the attention of the staff analyzing the case and reported within the management information system. Bank Pekao cares about the confidentiality of information reported in the context of anti-corruption. The Corruption Prevention Policy is communicated to employees at each update. The Bank provides Bank employees with access to knowledge in the form of training on compliance with anti-corruption regulations. Each employee is also required to familiarize himself with the content of the anti-corruption training, which is mandatory for all employees and culminates in a test to verify the knowledge acquired. Training is organized directly at the workplace for on-the-job training or by the Human Resources Division in the case of electronic training. Information on the Bank’s basic anti-corruption policies may be presented to customers and other interested persons or entities. 178 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.7.2 Whistleblowing procedure and Compliance Policy GRI 2-16 Communicating relevant issues GRI 2-26 Mechanisms for seeking advice and raising concerns (potential irregularities) On December 26, 2023 the Whistleblowing Procedure at Bank Pekao S.A. (hereinafter: “Whistleblowing Procedure”) came into force, which replaced the existing Whistleblowing Policy of Bank Pekao S.A. The Whistleblowing Procedure is an expression of the Bank’s commitment to promoting a corporate culture that supports ethical behavior. Its purpose is to create secure channels for signaling any unlawful acts or omissions or those intended to circumvent the law, violating the Bank’s internal regulations or ethical standards, covering both existing and potential violations that have occurred or are likely to occur at the Bank, including attempts to conceal such violations. Any early discovery of a violation and remedial actions taken in consequence of that violation contribute to the reduction or elimination of the Bank’s reputation risk. The culture of openness and honesty, contrary to the “culture of silence”, contributes to the growth of trust in the Bank’s transparent operation and constitutes a clear message that the Bank does not tolerate any illegal or unethical conduct. According to the Whistleblowing Procedure, a whistleblower can be an individual who, in a work-related context , has obtained knowledge of a violation. The work-related context is construed to mean: past, present, or future work-related actions arising out of an employment or other legal relationship underpinning the rendering of work or services, or the performance of functions in or for the Bank, in the course of which information about the violation has been obtained, and thereby there is a chance of suffering retaliation. Violation, in particular, can therefore be reported by: - an employee, - a temporary employee, - a person rendering work on a basis other than an employment relationship, including under a civil law contract, - member of the Bank’s statutory body, - shareholder, - intern, - apprentice, - volunteer, - an agent or a sales partner of the Bank, - Bank’s outsourcer, - Bank’s supplier, - any other person acting for the Bank, - an individual referred to above, prior to the commencement of the employment relationship or any other legal relationship underpinning the rendering of work or services or the performance of functions in or for the Bank, or where such relationship has already come to an end. The whistleblowing process implemented at the Bank allows reports to be made through special and independent communication channels. In case of reasonable suspicion that a violation has occurred, the designated member of the Management Board should be contacted, and in special cases (when the report concerns a member of the Management Board) the Supervisory Board. Submissions can be made verbally, electronically or in writing through special communication channels, such as an anonymous telephone hotline, a special email box, a meeting with a Compliance Department employee or traditional correspondence. All submissions are treated with the utmost care by the Bank and are reviewed in accordance with the Whistleblowing Procedure. The notice of violation can be submitted anonymously or not. If the applicant reveals his identity, the data are protected. The information concerning the filed report of a violation is classified as “Confidential” and stored with the use of appropriate security measures in accordance with applicable laws and the Bank’s information classification and management principles. The verification officer, while informing the person to whom the report pertains - in accordance with the Whistleblowing procedure - about the report, at the same time reminds the person of the Bank’s rules on not tolerating retaliation and the obligation to apply them. 179 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Number of cases of reported violations (whistleblowing) 2021 2022 2023 Bank Pekao 8 24 10 Group’s companies 0 0 1 As a result of the verification of notifications, repair and disciplinary measures are taken. Reports of violations are a source of important information on how to improve or seal the various processes implemented at the Bank. In accordance with the Whistleblowing Procedure, the “Whistleblowing Mechanism” training is mandatory for every new Bank employee. There is a 3-month time limit from the start date for its completion. In addition, the Bank is required to conduct regular refresher training on the whistleblowing procedure, at least once every 2 years. As required by law, which is reflected in the Whistleblowing Procedure at Bank Pekao S.A., the Management Board of the Bank is responsible for the adequacy and effectiveness of the procedures for anonymous reporting of violations by employees, and the Supervisory Board evaluates their adequacy and effectiveness, as required, at least once a year. The member of the Management Board to whom, in accordance with the established internal division of powers, violations are reported, who is responsible for the day-to-day operation of the procedures for anonymous reporting of violations, provides, at least once every six months, the Supervisory Board with information on significant reports of violations received. Remedial processes for negative impacts With regard to negative impacts and the occurrence of compliance risks, the Bank has and applies Bank Pekao S.A.’s Compliance Policy (hereinafter: “Compliance Policy”). Responsibility for ensuring compliance is borne by the Bank’s statutory bodies, all organizational units of the Bank, as well as all Bank employees, in their areas of operation. The Management Board actively promotes a culture (hereafter referred to as compliance culture) in which every employee of the Bank will feel responsible for the compliance of their actions with laws, internal regulations and market standards. The Management Board makes the Bank’s business units aware of the importance of this issue and supports the activities of the Compliance Department. If irregularities are found in the application of the Policy, the Management Board takes corrective or disciplinary measures. In any case concerning the possible application of disciplinary measures referred to in separate internal regulations, the Human Resources Division is the organizational unit competent to apply such measures. The Compliance Coordinator reports on a quarterly basis on the quality of the compliance risk management processes (self- assessment), applicable internal regulations, and actions taken to cover compliance risks in the Bank’s unit or organizational unit. Reports are sent to the Compliance Department by the tenth day of the first month of the quarter following the quarter covered by the reporting period, regardless of whether compliance risk events occurred in the quarter. Pursuant to the Compliance Policy, any employee of the Bank who has come into possession of information about the possibility of a material compliance risk is obliged to promptly communicate such information to the Compliance Department. A Bank employee who has become suspicious of the possibility of a compliance risk in the intended conduct or event should consult the Compliance Department. 13.7.3 Conflict of Interest Management GRI 2-15 Conflict of interest The current Pekao Group conflict of interest management policy (hereinafter: “Policy”) sets out the principles for managing conflicts of interest and defines the circumstances that cause or may cause conflicts of interest in the Bank’s operations. The Policy should be applied together with the detailed rules of conduct set forth in the Regulations for Managing Conflicts of Interest in the Pekao Group (hereinafter: “Regulations”). The Bank applied the methodology for managing conflicts of interest that makes it possible to identify and assess compliance risk connected with a specific conflict, choose appropriate measures to prevent or minimize negative consequences, eliminate conflicts of interest and monitor them. The Bank defines circumstances in which conflicts of interest are most frequently identified, taking into consideration both areas potentially at risk of a conflict of interest and types of relations concerning the Bank, employees, entities from the Pekao Group and third parties, especially customers and trading partners of the Bank. The identified types of conflicts of interest and the measures to manage them that should be applied by Employees identifying conflicts of interest are included in the Conflicts of Interest Matrix. Measures used by the Bank to manage potential conflicts of interest are, among others, based on: - Its organizational structure and consist in: a) establishing information barriers (Chinese walls), 180 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. b) splitting duties by separating various business units of the Bank and Group entities in physical and competence terms in the case of actions that can cause a conflict of interest, including in particular the separation of the Bank’s business units, c) implementing structural independence by allocating defined competences, method description, types of actions and operations to each business unit of the Bank to let it make independent decision and supervise the Bank’s employees, d) preventing simultaneous or consecutive involvement of the Bank’s employees in service provision if such involvement can adversely affect the effective management of conflicts of interest. - Internal regulations providing for remuneration rules in relation to the Bank’s employees by defining: a) principles for remuneration that do not have a negative impact on the stakeholder’s interest and eliminate direct dependencies between a variable part of remuneration and business goals, b) entering into proprietary transactions, putting in place procedures to prevent abuse associated with the execution of own transactions on financial instruments by establishing limitations to such transactions in relation to an employee or the Bank, c) transferring the Bank’s employees to other jobs if a reporting relationship arises between partners or relatives, - Introducing and adhering to ethics and corporate culture by employees and conducting appropriate training. If, despite of the application of all possible measures to manage conflicts of interest, there is a risk that the interests of the stakeholder to which the conflict refers to will be violated or there is a significant reputation risk, the conflict of interest is disclosed to the stakeholder. The disclosure always includes the description of the underlying conflict of interest adjusted to the stakeholder’s knowledge and experience, which enables the stakeholder to make a well-informed decision concerning a specific service, as well as information about measures applied by the Bank to manage the conflict of interest and limit related risks. The disclosure of the conflict of interest does not release the Bank from its obligation to apply all possible measures connected with the management of conflicts of interest. The Regulations set out the principles for managing conflicts of interest and define the circumstances that cause or may cause conflicts of interest in the Bank’s activities at all levels of the organization. The Regulations establish a regime of conduct for the Bank, imposing a general obligation to disclose in situations of sitting on multiple management bodies, capital ties with suppliers and other stakeholders, the existence of controlling shareholders, the relationship of transactions with related parties. The Bank ensures public disclosure of relevant information regarding the Policy adopted at the Bank . These disclosures, in accordance with the Regulations, should include information on how the Bank manages material conflicts of interest and conflicts that could arise due to the Bank’s membership in a capital group or the Bank’s transactions with other entities in the capital group. Public disclosure may not include protected information: constituting personal data, bank secrecy or business secrecy. The above information, as well as information on the existence of such potential conflicts at the Bank and their extent, should also be reported to the Polish Financial Supervision Authority. In addition, with regard to potential conflicts of interest arising from the existence of controlling shareholders, the Bank has and applies the regulation Principles of Conduct with respect to disclosure obligations related to the acquisition or disposal of significant blocks of shares. Conflict of interest management training is mandatory training for all Bank employees and includes new employees. 13.7.4 Counteracting crime and countering money laundering and terrorist financing Bank Pekao has an Ordinance - Fraud Management Process introducing the Company Instruction - Fraud Management Process at Bank Polska Kasa Opieki S.A. The Business Instruction specifies: - what is fraud and what categories of fraud may affect the Bank in the course of its business; - who (which organizational unit of the Bank and which employee of this unit) is obliged to implement actions in the event of a fraud incident; - how exactly fraud should be countered (catalog of activities to be carried out). The Fraud Management Process and the implemented Business Instruction impose duties and powers on each Bank employee related to countering financial crime to the detriment of the organization itself and the Bank’s customers. 181 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In accordance with the requirements of the Act of March 1, 2018 on Anti-Money Laundering and Countering the Financing of Terrorism, the Bank performs activities to counter financial crimes and terrorism. The key regulation in this regard is the Procedure for Prevention of Money Laundering and Financing of Terrorism at Bank Polska Kasa Opieki Spółka Akcyjna and the Procedure for Application of Financial Sanctions at Bank Polska Kasa Opieki Spółka Akcyjna. These procedures specify, in particular: the principles of recognizing and assessing the risk of money laundering and terrorist financing, the principles of applying financial security measures, reporting and providing information to the General Inspector of Financial Information and the Head of the National Fiscal Administration, conducting analysis of transactions, training, conducting inspections. In 2023, the financial sanctions compliance processes were particularly affected by Russia’s aggression against Ukraine, which significantly affected the process of analyzing transactions and customers linked to Russia and Belarus. 13.7.5 Control and repair mechanisms The Bank’s Management Board is responsible for designing, implementing and ensuring the operation of an independent, adequate and effective Internal Control System in all of the Bank’s business units and organizational units, which includes the Control function, the Compliance Department and the Internal Audit Department. The Bank’s Management Board, when taking Internal Control actions, takes into account: - degree of complexity of the processes in place at the Bank and its subsidiaries; - resources available to the Bank; - risk of irregularities in individual processes, including, in particular, significant processes; - an assessment of the adequacy and effectiveness of all lines of defense to date. The Bank’s Management Board approves the rules for categorizing irregularities and establishes the criteria for evaluating and the effectiveness of the Internal Control System, and determines the actions to be taken to rectify irregularities detected by the Internal Control System, including certain corrective and disciplinary (including punitive) measures. In addition, the Bank’s Management Board ensures the functioning of the Internal Control System in the Bank’s subsidiaries. Control mechanisms are designed in all processes in place at the Bank. The organizational cell responsible for a given process designs appropriate controls to mitigate the risk of failure to achieve the objectives of the Internal Control System in its process. When designing control mechanisms, consideration is given to: - changes in the market and regulatory environment, - adequacy of a particular type of control mechanism with respect to particular processes, - effectiveness of a particular type of control mechanism in the past, - ability to independently monitor a given control mechanism. Control mechanisms are applied across all lines of defense and across all processes in the Bank for the purpose of: - preventing irregularities, - detecting irregularities, - adjusting irregularities. The Bank ensures independent monitoring of compliance with control mechanisms in all processes functioning at the Bank through: - horizontal monitoring as part of the first line of defense and vertical monitoring of the first line of defense by the second line of defense, - horizontal monitoring as part of the second line of defense, - horizontal monitoring as part of the third line of defense, by performing activities under the quality assurance and improvement program. Significant or critical irregularities detected in the first line of defense should be immediately reported to the Compliance Department, the Bank’s Security Department and the Internal Audit Department. It is the responsibility of the head of the cell or organizational unit that identified the irregularity to promptly report the above information. The Compliance Department immediately forwards information on detected irregularities to the relevant organizational unit of the second line of defense responsible for independent monitoring of the process under which the significant or critical irregularity occurred. 182 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The Director of the Internal Audit Department decides to immediately inform the Bank’s Management Board and Supervisory Board of critical irregularities detected within the first line of defense. Significant or critical irregularities detected in the second line of defense should be immediately reported to the Compliance Department and the Internal Audit Department. It is the responsibility of the head of the second line of defense unit that found the irregularity in question to promptly report the above information. Critical irregularities should be reported by the second line of defense unit that identified the irregularity, in addition to the Bank’s Management Board and the Audit Committee of the Supervisory Board. Critical irregularities detected as part of the third line of defense should be immediately reported for information to the Compliance Department, the Bank’s Management Board and the Audit Committee. 13.7.6 Compliance culture 2-26 Mechanisms for seeking advice and raising concerns The Bank promotes a culture in which compliance with laws, the Bank’s internal regulations and market standards is seen as an integral part of doing business. The Code of Conduct addresses the most important issues that all Bank employees pay attention to in the course of their duties. The principles contained therein are unambiguous and apply to all areas of the Bank’s operations. The Code of Conduct gives guidance on how to deal with the many situations that employees face on a daily basis, but does not provide a solution for every circumstance. When in doubt about how to handle situations that may raise ethical concerns, the Code of Conduct indicates employees should ask themselves the following questions: • Am I following the law? • Am I proceeding in an ethical and honest manner? • Can my action expose my organization or the Pekao Group to the risk of reputational loss? • Can my action undermine customer or stakeholder confidence in my organization? If the answer to these questions raises doubts, the Code of Conduct instructs each employee to contact his or her superiors or the compliance unit to clarify any doubts. The request for compliance opinion is available on the Bank’s intranet site. The Bank, considering the necessity of popularizing ethical issues, promotes appropriate ethical role models and attitudes of all employees by pointing out examples of good practices of communicating ethical principles operating in the Bank by updating materials on the Bank’s intranet and website encouraging employees to participate in initiatives related to building awareness and ethical compliance culture. In addition, an employee noticing a violation of the law, internal procedures or ethical standards may make a report under the Whistleblowing Procedure at Bank Pekao S.A. 13.7.7 Approach to risk management Bank Pekao has a risk management strategy described in the document Risk Management Strategy and Internal Capital Estimation Principles (hereinafter “Strategy”), adopted by the Bank’s Management Board and approved by the Bank’s Supervisory Board. This document defines major elements of the Pekao’s comprehensive approach to risks connected with its operations and arising from its business strategy, both at the level of the Bank and the whole Pekao Capital Group. The strategy defines the identified risks and the criteria for their recognition as material, indicating the objectives and associated risk management principles, the target risk structure associated with the activities carried out and the acceptable level and structure of risks, as defined in the adopted risk appetite. Each identified risk is assessed in terms of its significance. If the risk is recognized as significant, it is measured (provided that it is classified as measurable) or evaluated (for risks that are difficult to measure) and monitored and controlled in accordance with methods and procedures applicable to a given type of risk. The purpose of risk assessment and measurement methods is to comply with applicable legal requirements, regulator guidelines and best practices. The Bank uses formal risk reduction limits in accordance with its risk appetite and defines principles for handling situations when limits are exceeded. The Bank’s management information system makes it possible to monitor risk levels. The Bank’s organizational structure is adjusted to the size and profile of the Bank’s risks. While managing the risk of the Capital Group, the Bank supervises risks associated with the activities of its subsidiaries. 183 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In the risk management systems in place at the Bank, the Management Board is responsible for developing, implementing and effective operation of risk management processes and an internal capital estimation process adjusted to the size and profile of the risk appetite, including the risk of the Bank’s subsidiaries. The Management Board of the Bank is regularly informed about the current risk profile of the Bank, about the largest exposures and concentrations of credit exposures. The Bank’s Supervisory Board, supported by the Risk Committee, supervises the assess risk management system and its adequacy and effectiveness. In addition, the Supervisory Board supervises the compliance of the Bank’s risk management policy with the strategy and financial plan of the Bank. The risk management strategy (including risk appetite) and system of the Bank are reviewed and updated on a regular basis to keep them adequate in terms of their scale and complexity of the Bank’s operations. Risk management improves decision- making processes while ensuring that decisions are in line with best market practices and applicable regulatory requirements. An integral element of the Bank’s risk management process are the Principles of Risk Culture of Bank Polska Kasa Opieki Spółka Akcyjna , adopted by a Resolution of the Bank’s Management Board and approved by the Supervisory Board, which define the Bank’s standards, attitudes and behaviors relating to its risk awareness, risk taking and risk management, as well as control mechanisms shaping risk decisions within the Bank’s risk appetite. The principles of risk culture specifically refer to: - development of desirable attitudes in this regard by presenting relevant examples, - the responsibility of employees related to their function in the context of promoting core values and adhering to the risk appetite adopted by the Bank, - incentive systems of more than just financial nature, - mode of communication, - employee training to include employee responsibilities for risk taking and management. Due to the nature of the Bank’s operations, all risks identified as significant and resulting from guidelines of regulatory bodies, including types of risks related to social, employee, environment, respect for human rights, anti-corruption, related to products and relations with external environment, including counterparties, have been appropriately defined and included in separate regulations. Selected regulations in this field have been cited in this Statement on non-financial information of the Bank Pekao S.A. Capital Group for the year 2023. In 2023, the Bank continued the development of risk management competencies and took actions related to the optimization of credit processes in all business segments by simplifying procedures and implementing modern tools improving processes, including the implementation of automatic tools supporting credit decision making. At the end of 2023, the Bank’s cost of risk excluding the provision for legal risk on foreign currency loans was 0.37%. As a risk management leader, the Bank has maintained its cost of risk at one of the lowest levels in the sector. 13.8 Observance of human and worker rights, responsibility in the supply chain Pekao Group companies and the Bank comply with applicable laws and ethical standards in respecting human rights. The key comprehensive regulation articulating these principles is the Pekao Group’s Code of Conduct, and Bank Pekao S.A.’s Code of Ethics for Suppliers, adopted by the Management Board of the Bank by Resolution of October 4, 2023. The Code of Ethics for Suppliers has been translated into English. It is available in Polish and English versions on the Bank’s website, the Procurement Department’s website, the Supplier Zone and the Bank’s ESG Service. In the Integrated Purchasing Tool (ZNZ), suppliers acknowledge that they have read the Code and agree to abide by it. The Code was also included in the model General Terms and Conditions (GTCs). On October 9, 2023, a message was sent to the Bank’s employees about the adoption of the Code by the Management Board of the Bank. The Code clearly defines the rules related to ESG criteria, Bank Pekao S.A. The Bank expects compliance with the provisions of the Code by Suppliers. The CSR Form created for the Procurement Department to obtain information on Suppliers’ compliance with business responsibility is also a document that takes into account the issues of sustainability, and the prevention of human rights violations by the Bank’s business partners. The obligation to respect human rights rests with all employees of the Pekao Group regardless of their position, seniority, place and working time. The Bank is focused on building employee awareness and continuously improving conduct in the protection of human rights in internal and external relations. By responsibly shaping a work environment free of practices that violate human rights, the Bank builds a system of values directed to shareholders, customers, investors, contractors, suppliers, local communities and other stakeholders. The above standards are promoted as part of efforts to ensure an ethical, fair and sustainable value chain. 184 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.8.1 Bank regulations in line with the 10 Principles of the United Nations Global Compact As a member of the United Nations Global Compact, Bank Pekao fully identifies with the 10 Principles of Global Compact, supports the efforts of that organization towards sustainable development and undertakes numerous initiatives promoting respect for human rights, improvement of working conditions, environmental protection and the fight against corruption. The individual principles of the UN Global Compact are reflected in the policies and internal regulations of the Bank and the Pekao Group referred to in this Statement. 10 Principles of the Global Compact: 1. Support and respect the protection of internationally proclaimed human rights, 2. Ensure that the company does not participate in any way in the violation of human rights, 3. Respect the freedom of association, 4. Eliminate all forms of forced or compulsory labor, 5. Eradicate all forms of child labor, 6. Effectively combat discrimination in the workplace, 7. Take a preventive approach to environmental protection, 8. Develop initiatives and practices aimed at promoting environmental responsibility, 9. Use and disseminate environmentally responsible technologies, 10. Fight corruption in all of its forms, including extortion and bribery. Among the most important regulations relating to the above principles are: - Code of Conduct of the Pekao Group, - Bank Pekao S.A. Code of Ethics for Suppliers, - ESG Strategy 2021-2024, - Collective Labor Agreement, - Bank Pekao S.A.’s compliance policy, - Policy of corporate governance of Subsidiaries and with participation of Bank Polska Kasa Opieki Spółka Akcyjna, - Corruption Prevention Policy of the Bank Pekao S.A. Group, - Whistleblowing Procedure at Bank Pekao S.A., - Mobbing Prevention Policy of Bank Polska Kasa Opieki Spółka Akcyjna, - Credit Risk Policy, - Policy and procedure for the selection of an audit firm to conduct the statutory audit of the financial statements of Bank Pekao S.A. and the rules of cooperation with the audit firm, the statutory auditor and the supervisory authority, - Gender equality and diversity policy with regard to the Bank’s employees, including Members of the Supervisory Board, Members of the Management Board and persons holding Key Functions at Bank Polska Kasa Opieki Spółka Akcyjna, - Policy of selection of candidates for the function of a member of the Management Board and Key Function Holders and assessment of the suitability of the proposed and appointed members of the Management Board, Supervisory Board and Key Function Holders at Bank Polska Kasa Opieki Spółka Akcyjna, - Bank Pekao S.A.’s capital management policy, - Procurement Policy of Bank Polska Kasa Opieki Spółka Akcyjna, - Bank Pekao S.A. Group’s policy on counteracting practices restricting competition and practices that violate the collective interests of consumers, - Procedure for prevention of money laundering and financing of terrorism at Bank Polska Kasa Opieki Spółka Akcyjna, - Procedure for applying financial sanctions at Bank Polska Kasa Opieki Spółka Akcyjna, - Procedure and process of periodic evaluation of employees of Bank Polska Kasa Opieki Spółka Akcyjna, - Principles for Granting Donations and Sponsoring by Bank Polska Kasa Opieki Spółka Akcyjna. 185 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In addition, in its activities, the Bank adheres to: - Best Practices of WSE Listed Companies 2021, - Code of Banking Ethics (Principles of Best Banking Practices), - Charter of Best Practices in the Financial Market. 13.8.2 Prevention of mobbing and discrimination GRI 3-3 Management of topics identified as material GRI 406-1 Total number of incidents of discrimination and corrective actions taken Caring for the formation of proper relations between Bank Employees, building a positive atmosphere in the work environment and in view of the lack of tolerance for any actions or behaviors of a mobbing nature towards Employees, the “Mobbing Prevention Policy of Bank Polska Kasa Opieki Spółka Akcyjna” was implemented. This regulation fulfills the obligation under the Labor law against mobbing. It defines the principles for the prevention of conduct and behavior considered as mobbing. According to the provisions of the Policy, each application is considered by the Commission, which is a collegial body appointed by the Employer. The Commission, after hearing the complainant, the potential perpetrator and the identified witnesses, prepares a written position for the Director of the Human Resources Division, including the resolution of the complaint with reasons. If a Bank Employee is found to have committed actions indicative of mobbing, the Employer makes appropriate personnel decisions using Labor laws. In November 2023, the Bank launched a legislative process to update the existing “Mobbing Prevention Policy of Bank Polska Kasa Opieki Spółka Akcyjna”. The purpose of the updated Policy is to strengthen the Bank’s organizational culture based on mutual respect, cooperation and the Bank’s values, and to counteract behavior indicative of mobbing, discrimination, harassment and other undesirable behavior. The Bank’s subsidiaries conducting operations, i.e.: 1. Pekao Bank Hipoteczny S.A., 2. Pekao Direct Sp. z o.o., 3. Pekao Investment Banking S.A., 4. Pekao Leasing Sp. z o.o., 5. Pekao Faktoring Sp. z o.o., 6. PeUF Sp. z o.o., 7. Pekao TFI S.A., 8. Pekao Financial Services Sp. z o.o., 9. Centrum Kart S.A., have internal procedures governing prevention of mobbing. Bank Pekao NON-FINANCIAL PERFORMANCE RATIOS 2023 2022 2021 Number of cases reported and handled under the Mobbing Prevention Policy 8 4 4 Other Pekao Group Companies NON-FINANCIAL PERFORMANCE RATIOS 2023 2022 2021 Number of cases reported and handled under the Mobbing Prevention Policy 2 1 0 186 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.8.3 Relations with the trade unions GRI 3-3 Management of topics identified as material GRI 407-1 Establishments, locations of organization where right to freedom of association and collective bargaining may be violated The Bank respects employees’ freedom of association and conducts dialogue with trade unions operating at the Bank, which is based on respect for fair interests of the parties. The Bank documents the conducted social dialogue and provides trade union organizations with dedicated intranet websites for communication with employees. In 2023, the Bank cooperated with trade unions in the form of consultations, negotiations and arrangements under terms and conditions set out by Labor law and with respect for the parties’ interests and principles of social dialogue - 24 meetings were held between the Bank and trade union organizations. The meetings were mainly devoted to negotiations and arrangements resulting from internal labor law and generally applicable regulations, changes in in-house labor laws, arrangements for the use of the Company Social Benefits Fund, and other topics related to collective employee rights. In addition, in 2023, the Bank, together with four trade unions, Parties to the Company Collective Labor Agreement, agreed on and signed, in the form of Additional Protocol No. 3 to the Company Collective Labor Agreement, the “Rules of awarding bonuses to employees of the sales network of the Retail Banking Division.” All Trade Union Organizations operating at the Bank were involved in the bargaining process. In 2023, there were three collective disputes initiated successively in 2016, 2019 and 2021 by one of the Bank's trade union organizations. Regarding the collective dispute initiated in 2016, a Memorandum of Divergence was signed by the Bank and the trade union organization, ending the mediation stage. GRI 407-1 Establishments, locations of organization where right to freedom of association and collective bargaining may be violated The Bank, in its mutual relations with trade union organizations, has been guided by the principle of good faith in developing the best collective Labor law solutions for both employees and the Bank. The right to freedom of association and collective bargaining is not violated or threatened to be violated at any of the Pekao Group’s establishments and locations. Employee Council GRI 402-1 Minimum periods for announcing operational changes The Employee Council is a body of employee representation, and the rules of its election, its purpose and its powers are defined by the Act of April 7, 2006 on Informing Employees and Conducting Consultations . The Council is independent in its operations, has its own internal structure and acts independently towards the employer. Pursuant to Article 13 of the Act of April 7, 2006 on Informing Employees and Conducting Consultations, the Employer conveys information to the Council regarding: - the employer’s activities and economic situation, as well as anticipated changes in this regard, - the status, structure and projected changes in employment and measures to maintain employment levels, - activities that may cause significant changes in work organization or employment bases. The employer conveys information to the Council in the event of anticipated changes or intended actions and at the written request of the Employee Council within a time, form and scope that will enable the Employee Council to become familiar with the matter, analyze the information and prepare for consultation, if required. The Employee Council has an intranet site on which it posts its messages addressed to Bank employees. In 2023, a total of four meetings were held with the Employee Council. DATA ON TRADE UNIONS AT BANK PEKAO 2021 2022 2023 Number of trade union organizations operating at Bank Pekao 9 9 8 Number of members of Bank Pekao’s Employee Council 7 7 7 Unionization at Bank Pekao 53% 52.3% 51.6% Number of days lost due to strike 0 0 0 13.8.4 Responsible purchasing process GRI 3-3 Management of topics identified as material The Bank and Pekao Group entities know that for the purchasing process to be responsible, it is essential to ensure impartiality and objectivity to guarantee fairness in business relationships. Therefore, when selecting suppliers of goods, services and construction works, they follow internal procedures that are in line with best market practices and applicable legal regulations. It is important that suppliers also demonstrate a high level of ethics and follow best practices. 187 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The Bank’s purchasing processes are governed by three key documents effective from 2018: - Purchasing policy at Bank Polska Kasa Opieki Spółka Akcyjna, - Principles for Procurement by the Procurement Department of Bank Polska Kasa Opieki Spółka Akcyjna, - Principles for Procurement without the participation of the Procurement Department of Bank Polska Kasa Opieki Spółka Akcyjna. Policies are reviewed regularly, the last review was performed in 2022. In the same year, the Procurement Policy was also updated to bring the regulations in line with the ongoing transformation of the Bank’s procurement function, which included, among other things, digitalization of purchasing processes and communication conducted with bidders at the stage of procurement procedures and orders placed. As a result of the work, the Integrated Procurement Tool was implemented. A comprehensive system upgrade was carried out in 2023, providing new functionality for internal and external users. In the interest of ensuring fair competition, the subject matter of the contract is always defined equally for all contractors. Any company that meets the Bank’s internal requirements and submits a bid may be invited to participate. Bidders to be considered for procurement procedures are registered in the supplier database and considered when constructing the list of potential suppliers. As of 2022, Bank Pekao’s Supplier Zone 29 is available online. Information on selected procurement proceedings planned to be launched is published there. The Supplier Zone also includes a dedicated link to register in the Integrated Procurement Tool, where contractors can indicate the assortments in which they would like to be invited to the procurement processes being launched. Entities invited to take part in the process can ask questions concerning the specification provided. Information on the final decision is sent to all bidders. To ensure unbiased selection of suppliers of goods and services, the Bank establishes procurement teams which must ensure that the supplier selection process is transparent and recommend the most advantageous bid. In accordance with the principles applicable to the Bank’s ordering procedures, most ordering procedures are based on negotiations in an electronic form, which definitely streamlines procedures with Polish and international partners. One of the advantages of such a solution is the high effectiveness and transparency of the negotiation process. For the Bank, it is very important to act in accordance with business ethics, which is why bidders are vetted for corruption risks and for sanction lists (US, EU, UN and domestic sanction lists) and public warnings from the PFSA. Companies that provide products or services for the Bank are informed about the abuse prevention process and material provisions of the corruption prevention policy in force at the Bank. GRI 414-1 Percentage of new suppliers that were evaluated for their labor practices In the case of procurement procedures whose value exceeds net PLN 1 million, suppliers are subject to the obligation to fill out a “Social and Environmental Responsibility (CSR) Form”. In this way, the Bank undertakes actions aimed at sustainable development, protection of the environment, and prevention of violations of human rights by the Bank’s business partners. The Form includes questions on the incorporation of environmental regulations and issues of respect for human rights in the daily operations of a supplier or contractor. The Form was updated in 2022 and the scope of its issues includes: - as regards the environment: a) compliance with environmental regulations, inspections and criminal cases connected with the violation of applicable regulations in this regard, b) the implementation of innovative environment-friendly new technologies; c) the organization of training and information meetings on environmental issues for employees. - as regards social issues and human rights: a) a ban on forced labor, b) a ban on children labor, c) respect for legal regulations on working time, d) respect for legal regulations on OHS, - compliance with regulations of Labor law, including the payment of remuneration habitually applied in a given sector for all employees, - violations of anti-corruption laws. 29 https://www.pekao.com.pl/dostawcy.html 188 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Bank Pekao S.A. Code of Ethics for Suppliers The Bank, acting in accordance with the value of #responsibly, prepared a Code of Ethics for Suppliers of Bank Pekao S.A. On October 4, 2023, the Code was adopted by the Management Board of the Bank. The Code is used in procurement procedures to promote the Bank’s values while indicating to our counterparties the expectations, principles and standards of Bank Pekao S.A. The Code includes provisions on environmental and natural resource protection, compliance with social factors and corporate governance principles. We want to show our contractors the Bank’s benchmarks and development directions. To ensure proper communication, the Code has been translated into English and posted on the Bank’s website, on the ESG portal under Policies and Procedures - Corporate Governance, in the dedicated Supplier Zone, on the Procurement Department’s website, and in the Integrated Procurement Tool, where potential suppliers acknowledge that they have read the Code and agree to abide by it. Provisions about the Supplier’s familiarity with the Code of Ethics and commitment to abide by it were also included in the revised GTCs. As a responsible financial institution, the Bank expects suppliers and subcontractors to adhere to standards and principles that allow it to conduct its business in a responsible, transparent and sustainable manner with ESG criteria in mind. As a result, the Bank is open to relationships with suppliers that incorporate environmental, social and corporate governance criteria into their business operations. Environmental responsibility is of paramount importance to the Bank, so in its business operations, the Bank is constantly developing its commitment to energy and environmental transformation, as well as striving to achieve climate neutrality. It is an active participant in government and EU reconstruction and transformation programs. The Bank’s lending policy is increasingly focused on financing sustainable projects. The Bank is a signatory to the 10 Principles of the United Nations Global Compact. Bank Pekao S.A.’s Code of Ethics for Suppliers clearly defines environmental expectations for suppliers. The Bank’s Code of Ethics for Suppliers also expects suppliers to comply with social factors and corporate governance principles. It fully supports the development of Polish businesses and is eagerly involved in social initiatives - preventing exclusion, leveling the playing field, providing assistance. The Code is used in procurement procedures to promote the Bank’s values and ethical principles, indicating to the Bank’s counterparties the Bank’s expectations, principles and standards. GRI 2-6 Operations, value chain and other business relationships The Bank, through its Procurement Department , cooperates with external contractors within the framework of: ongoing procurement procedures (2063 bidders were invited to participate in procurement procedures resolved in 2023), concluded contracts (274 contractors) and placed orders (928 contractors). More than 98% of suppliers are contractors doing business in Poland. The supplier base is managed through the Integrated Procurement Tool. The contents of the Code of Ethics for Suppliers in Polish and English versions have been published on the Bank’s website. Link to the Code of Ethics for Suppliers in the Polish version: Polityki i procedury (pekao.com.pl) Link to the Code of Ethics for Suppliers in the English version: Policies and procedures - ESG website - Bank Pekao S.A. 189 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.9 Mandatory disclosures under the Taxonomy Regulation30 GRI 3-3 Management of topics identified as material Taxonomic indicators - Disclosures required by Regulation (EU) 2020/852 of the European Parliament and of the Council Disclosures on key performance indicators In accordance with the Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (Taxonomy Regulation, hereinafter referred to as “Taxonomy” or “EU Taxonomy”) and its implementing acts: - Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and presentation of information to be disclosed by undertakings subject to Articles 19a or 29a of Directive 2013/34/EU concerning environmentally sustainable economic activities, and specifying the methodology to comply with that disclosure obligation (Regulation 2021/2178), - Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or climate change adaptation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives, amended by Commission Delegated Regulation (EU) 2023/2485 of 27 June 2023, In its 2023 disclosures, Pekao S.A. Group (“Group”), as a capital group whose controlling entity is a credit institution, is obliged to disclose Key Performance Indicators (KPIs) for alignment with systematics in relation to the two climate objectives: - CCM - climate change mitigation, - CCA - climate change adaptation. Contextual information in support of the quantitative indicators, including the scope of assets and activities covered by key performance indicators, information on data sources and limitation Green asset ratio The green asset ratio shows the proportion of assets related to taxonomy-aligned economic activities in relation to total covered assets. Pursuant to the Regulation 2021/2178, in the green asset ratio calculation, the following were included in the numerator: - exposures from loans or advances, debt and equity instruments to financial undertakings subject to NFRD disclosure obligations, - exposures from loans or advances, debt and equity instruments to non-financial undertakings subject to NFRD disclosure obligations, - exposures to households, including: a) loans collateralised by residential immovable property, b) building renovation loans, - local governments financing. It should be noted that in accordance with Regulation 2021/2178, the following are excluded from the numerator and included in the denominator of the green asset ratio: - exposure towards non-financial undertakings not subject to the NFRD (including SMEs) - all entities to which the Group provides financing or holds instruments not subject to NFRD disclosure obligations and engage non-financial activities; - exposures towards non-financial, non-NFRD, non-EU undertakings; - gross carrying amount of: a) derivatives, b) on-demand interbank loans, - cash and cash-related assets; 30 Regulation (EU) 2020/852 of the European Parliament and of the Council of June 18, 2020 on the establishment of a framework to facilitate sustainable investment. 190 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - other categories of assets (goodwill, commodities etc.); The following are not included in the calculation of the green asset ratio: - exposures to central governments and supranational issuers, - exposures to central banks, - trading portfolio. Key performance indicators for off-balance sheet exposures Key performance indicators for off-balance sheet exposures are supplementary metrics that illustrate the extent to which off-balance sheet positions of the Group, such as: - financial guarantees backing loans and advances, as well as debt securities towards undertakings subject to NFRD disclosure obligations, - assets under management (equity and debt instruments) from undertakings subject to NFRD disclosure obligations, are taxonomy-aligned. The green ratio for financial guarantees to undertakings is the proportion of financial guarantees supporting loans, advances and debt securities financing taxonomy-aligned economic activities compared to all financial guarantees supporting loans, advances and debt securities to undertakings. The green ratio for assets under management is the proportion of assets under management (equity and debt instruments) from undertakings financing taxonomy-aligned economic activities, compared to total assets under management (equity instruments, debt instruments and other assets). Financing of undertakings subject to non-financial information reporting obligations according to the Directive on Non-Financial Reporting For the purpose of disclosing key performance indicators, the Bank and its subsidiaries analyzed their exposures to financial and non-financial undertakings to identify which of them are subject to an obligation to publish non-financial information as required by Directive 2014/95/EU of the European Parliament and of the Council (hereinafter “NFRD”), and determined the gross carrying amount of exposures from loans and advances, debt securities and equity instruments in the banking book separately for each identified entity as of 31.12.2023. With respect to general-purpose financing, the Group determined the gross carrying amount of taxonomy-eligible and taxonomy-aligned exposures for undertakings required to report under the NFRD based on key performance indicators published by the Group’s customers as part of their taxonomy disclosures for 2022. With regard to financings with a specific purpose of use of proceeds, the Group, based on an analysis of the purpose of the financing, identified taxonomy-eligible financings, which it further evaluated for alignment with the Taxonomy. The taxonomy- alignment assessment included an analysis of the fulfillment of the technical screening criteria, DNSH (Do Not Significant Harm) principle and the fulfillment of the minimum safeguards. With regard to the assessment of the technical screening criteria and DNSH, the Group has developed internal instructions for assessing alignment with technical screening criteria for selected activities that are the most common object of corporate financing. The assessment process was carried out based on data and information held by the Group, obtained in the process of providing financing and monitoring, as well as additional information obtained from the Bank’s customers for this purpose at the stage of developing disclosures. With regard to assessing compliance with the minimum safeguards, the Group based its assessment on information disclosed by customers in Taxonomy disclosures. In the absence of adequate data to reliably assess the fulfillment of the technical screening criteria, the Bank assessed the eligibility for the Taxonomy of a given exposure. The Group is working to implement appropriate changes to its credit processes to enable the acquisition of relevant data to assess taxonomy-eligibility and taxonomy-alignment at the stage of financing in subsequent periods. Financing of households For the purpose of calculating the green asset ratio, the Group classified its portfolio of residential real estate loans (collateralised by residential immovable properties) granted to households as taxonomy-eligible and assessed taxonomy- alignment by verifying compliance with the criteria set forth in Section 7.7. (Acquisition and ownership of buildings) of the technical screening criteria for the climate change mitigation objective contained in Annex I to Regulation 2021/2139. 191 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. The assessment of taxonomy-alignment included verification of compliance with the technical screening criteria for climate change mitigation objective and the criteria for the DNSH principle. In order to assess the fulfillment of the technical screening criteria for buildings constructed before 31 st of December 2020, the Group assessed whether the collateralised building is among the 15% most energy efficient buildings in the country or region in terms of primary energy demand (PED), i.e. whether the building has a primary energy demand of less than 76.59 kWh/(m2*year), according to a communication from the Ministry of Development and Technology 31 . The Group used data from the Central Register of Energy Performance of Buildings, maintained by the Minister of Development and Technology, as a source of information on the primary energy demand of buildings securing mortgages. In order to assess the fulfillment of the technical screening criteria for buildings constructed after 31 st of December 2020, the Group assessed whether the collateralised building demonstrates a primary energy demand at least 10% lower than the threshold set for the requirements for nearly-zero energy buildings, i.e. the requirements set forth in the Regulation of the Minister of Infrastructure of 12 th of April 2002 on technical conditions to be met by buildings and their location. The requirements of the Regulation specify the maximum levels of primary energy demand for nearly-zero energy buildings separately for multi- family and single-family buildings in terms of partial energy values (separately for energy for heating and ventilation, domestic hot water and cooling). Therefore, the assessment was made on the basis of the partial energy values indicated in the energy performance certificate. Exposures from contracts for which the Group did not hold certificates were disclosed as taxonomy- eligible but taxonomy-non-aligned For properties that were classified as meeting technical screening criteria as a result of the above assessment process, the Group conducted an analysis of meeting the criteria for the DNSH principle by analyzing the properties’ exposure to physical risks (which includes flood and landslide risks) and the materiality of these risks in accordance with the Group’s methodology. As part of the assessment, the Group took into account such issues as the property’s address, year of construction, floor of the premises, and type of building. Buildings were considered to meet DNSH criteria if the analysis results indicated no exposure to physical risks or if the exposure to physical risks was deemed low according to the adopted methodology. Local government financing For the purpose of disclosing key performance indicators, the Bank reviewed its portfolio of exposures to local governments, from which it selected financings with a specific use of proceeds that fall within the scope of the green asset ratio. Based on the analysis of the purpose of the financing, the Group identified selected financings for local governments taxonomy- eligible, which it further evaluated for alignment with the Taxonomy. The alignment assessment included an analysis of the fulfillment of the technical screening criteria, the DNSH principle criteria, and the fulfillment of the minimum safeguards. In relation to the assessment of technical screening criteria and DNSH, the Group developed internal compliance assessment instructions with technical qualification criteria for activities constituting the most common subject of financing granted for local government entities. The assessment process based on data and information held by the Group, obtained during the credit and monitoring processes, as well as additional detailed information obtained from the Bank's clients for this purpose during the disclosure development stage. The actions taken allowed the identification of a portfolio of exposures potentially taxonomy- aligned. However, due to the need to obtain documentation confirming the information held and the results of the assessment, the Bank did not disclose the aforementioned financing as taxonomy-aligned in the 2023 disclosure, listing them solely as exposures eligible for the Taxonomy. In the absence of adequate data to reliably assess the fulfillment of the technical screening criteria, the Bank limited the analysis to the assessment of eligibility for the Taxonomy of a given exposure. The Bank is working to implement appropriate changes to its credit processes to enable the acquisition of relevant data to assess eligibility and alignment with the Taxonomy at the stage of financing in subsequent periods. As of 31 December 2023, the Group has not identified in its financing portfolio exposures to local governments related to public housing. Disclosures of key performance indicators in accordance with Annex VI to Regulation 2021/2178 Below, the Group presents disclosures of key performance indicators in accordance with the scope of mandatory disclosures for the year 2023 as set forth in Templates 1-5 of Annex VI to Regulation 2021/2178. In accordance with point 1.1.1 of Annex V to Regulation 2021/2178, the disclosures have been presented on a consolidated basis in line with the prudential consolidation scope of the Group. The value of total assets presented in the following disclosures is equal to the gross carrying amount of total assets as of 31 December 2023. The exposure value in the disclosures below has been converted using the average exchange rate of the National Bank of Poland as of December 31, 2023. 31 https://www.gov.pl/web/rozwoj-technologia/Taksonomia-zrownowazonego-finansowania-inwestycji-budynki 192 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Disclosure based on Turnover KPI of counterparty Template 0: Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation (in mln EUR) Total environmentally sustainable assets KPI % coverage (over total assets) % of assets excluded from the numerator of the GAR (Article 7(2) and (3) and Section 1.1.2. of Annex V) % of assets excluded from the denominator of the GAR (Article 7(1) and Section 1.2.4 of Annex V) Main KPI Green asset ratio (GAR) stock 237 0,47% 69,36% 38,36% 30,64% Total environmentally sustainable activities KPI % coverage (over total assets) % of assets excluded from the numerator of the GAR (Article 7(2) and (3) and Section 1.1.2. of Annex V) % of assets excluded from the denominator of the GAR (Article 7(1) and Section 1.2.4 of Annex V) Additional KPIs GAR (flow) 45 0,30% 75,06% 48,32% 24,94% Financial guarantees 0 0,00% Assets under management 12 3,17% 193 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 1: Assets for the calculation of GAR (in mln EUR) a b c d e f g h i j k l m n o p 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Million EUR Total (gross) carrying amount Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling GAR - Covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation 22 508 14 287 232 0 3 45 568 5 0 0 5 14 287 237 0 3 50 2 Financial undertakings 218 34 0 0 0 0 34 0 0 0 0 34 0 0 0 0 3 Credit institutions 218 34 0 0 0 0 34 0 0 0 0 34 0 0 0 0 4 Loans and advances 218 34 0 0 0 0 34 0 0 0 0 34 0 0 0 0 5 Debt securities, including UoP 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 Equity instruments 0 0 0 0 0 0 0 0 0 0 0 0 0 7 Other financial corporations 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8 of which investment firms 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9 Loans and advances 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10 Debt securities, including UoP 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 11 Equity instruments 0 0 0 0 0 0 0 0 0 0 0 0 0 12 of which management companies 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 13 Loans and advances 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 14 Debt securities, including UoP 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 15 Equity instruments 0 0 0 0 0 0 0 0 0 0 0 0 0 16 of which insurance undertakings 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 17 Loans and advances 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 18 Debt securities, including UoP 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 19 Equity instruments 0 0 0 0 0 0 0 0 0 0 0 0 0 20 Non-financial undertakings 2 085 282 81 0 3 45 282 5 0 0 5 282 86 0 3 50 21 Loans and advances 1 744 245 53 0 2 26 245 5 0 0 5 245 58 0 2 31 22 Debt securities, including UoP 339 35 28 0 0 19 35 0 0 0 0 35 28 0 0 19 23 Equity instruments 2 1 0 0 0 1 0 0 0 1 0 0 0 24 Households 19 850 13 719 151 0 0 0 0 0 0 0 0 13 719 151 0 0 0 25 of which loans collateralised by residential immovable property 13 721 13 719 151 0 0 0 0 0 0 0 0 13 719 151 0 0 0 26 of which building renovation loans 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 194 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. a b c d e f g h i j k l m n o p 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Million EUR Total (gross) carrying amount Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling 27 of which motor vehicle loans 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 28 Local governments financing 356 252 0 0 0 0 252 0 0 0 0 252 0 0 0 0 29 Housing financing 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 Other local government financing 356 252 0 0 0 0 252 0 0 0 0 252 0 0 0 0 31 Collateral obtained by taking possession: residential and commercial immovable properties 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32 Assets excluded from the numerator for GAR calculation (covered in the denominator) 27 847 33 Financial and Non-financial undertakings 19 996 34 SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations 19 685 35 Loans and advances 16 830 36 of which loans collateralised by commercial immovable property 4 450 37 of which building renovation loans 0 38 Debt securities 2 737 39 Equity instruments 118 40 Non-EU country counterparties not subject to NFRD disclosure obligations 311 41 Loans and advances 237 42 Debt securities 26 43 Equity instruments 48 44 Derivatives 185 45 On demand interbank loans 130 46 Cash and cash-related assets 918 47 Other categories of assets (e.g. Goodwill, commodities etc.) 6 619 48 Total GAR assets 50 356 14 287 232 0 3 45 568 5 0 0 5 14 287 237 0 3 50 49 Assets not covered for GAR calculation 22 241 50 Central governments and Supranational issuers 13 331 51 Central banks exposure 6 431 52 Trading book 2 479 195 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. a b c d e f g h i j k l m n o p 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Million EUR Total (gross) carrying amount Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling 53 Total assets 72 596 14 287 232 0 3 45 568 5 0 0 5 14 287 237 0 3 50 Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations 54 Financial guarantees 7 067 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55 Assets under management 391 38 11 0 0 6 33 1 0 1 0 71 12 0 1 6 56 Of which debt securities 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 57 Of which equity instruments 389 38 11 0 0 6 33 1 0 1 0 39 0 0 0 6 196 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 2: GAR sector information (in mln EUR) a b c h i n o Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Non-Financial corporates (Subject to NFRD) Non-Financial corporates (Subject to NFRD) Non-Financial corporates (Subject to NFRD) [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount Breakdown by sector - NACE 4 digits level (code and label) Mn EUR Of which environmentally sustainable (CCM) Mn EUR Of which environmentally sustainable (CCA) Mn EUR Of which environmentally sustainable (CCM + CCA) 1 B05.10 10 0 10 0 10 0 2 B07.29 460 5 460 0 460 5 3 C10.11 16 0 16 0 16 0 4 C10.13 5 0 5 0 5 0 5 C15.20 0 0 0 0 0 0 6 C16.10 3 0 3 0 3 0 7 C17.12 5 0 5 0 5 0 8 C19.20 77 1 77 0 77 1 9 C20.15 109 0 109 0 109 0 10 C20.16 0 0 0 0 0 0 11 C20.30 13 0 13 0 13 0 12 C22.11 1 0 1 0 1 0 13 C23.20 6 0 6 0 6 0 14 C23.51 0 0 0 0 0 0 15 C23.61 8 0 8 2 8 2 16 C24.42 11 3 11 0 11 3 17 C25.93 7 0 7 0 7 0 18 C26.11 14 0 14 0 14 0 19 C27.12 0 0 0 0 0 0 20 C28.21 2 0 2 0 2 0 21 C28.41 0 0 0 0 0 0 22 C28.92 35 3 35 0 35 3 23 C29.20 0 0 0 0 0 0 24 C33.20 0 0 0 0 0 0 25 D35.11 82 9 82 0 82 9 26 D35.14 345 33 345 0 345 33 27 F41.20 6 0 6 0 6 0 28 F42.11 3 0 3 0 3 0 29 F42.12 2 0 2 0 2 0 30 F43.39 3 0 3 0 3 0 31 F43.99 0 0 0 0 0 0 32 G45.31 146 0 146 0 146 0 197 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. a b c h i n o Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Non-Financial corporates (Subject to NFRD) Non-Financial corporates (Subject to NFRD) Non-Financial corporates (Subject to NFRD) [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount Breakdown by sector - NACE 4 digits level (code and label) Mn EUR Of which environmentally sustainable (CCM) Mn EUR Of which environmentally sustainable (CCA) Mn EUR Of which environmentally sustainable (CCM + CCA) 33 G46.32 0 0 0 0 0 0 34 G46.42 0 0 0 0 0 0 35 G46.46 94 0 94 0 94 0 36 G46.72 0 0 0 0 0 0 37 G46.75 35 0 35 2 35 2 38 G46.90 77 0 77 0 77 0 39 G47.11 26 0 26 0 26 0 40 G47.41 1 0 1 0 1 0 41 G47.71 67 0 67 0 67 0 42 G47.72 21 0 21 0 21 0 43 H49.20 68 17 68 0 68 17 44 H53.20 17 1 17 0 17 1 45 I56.10 69 0 69 0 69 0 46 J61.30 49 1 49 0 49 1 47 J62.01 8 0 8 0 8 0 48 K64.20 93 3 93 0 93 3 49 M70.10 48 5 48 0 48 5 50 M72.11 30 1 30 0 30 1 51 N77.40 0 0 0 0 0 0 52 N82.91 8 0 8 0 8 0 53 Q86.22 2 0 2 0 2 0 54 S96.09 0 0 0 0 0 0 198 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 3: GAR KPI stock (%) a b c d e f g h i j k l m n o p 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) % (compared to total covered assets in the denominator) Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Proportion of total assets covered GAR - Covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation 28,37% 0,46% 0,00% 0,01% 0,09% 1,13% 0,01% 0,00% 0,00% 0,01% 28,37% 0,47% 0,00% 0,01% 0,10% 31,00% 2 Financial undertakings 0,07% 0,00% 0,00% 0,00% 0,00% 0,07% 0,00% 0,00% 0,00% 0,00% 0,07% 0,00% 0,00% 0,00% 0,00% 0,30% 3 Credit institutions 0,07% 0,00% 0,00% 0,00% 0,00% 0,07% 0,00% 0,00% 0,00% 0,00% 0,07% 0,00% 0,00% 0,00% 0,00% 0,30% 4 Loans and advances 0,07% 0,00% 0,00% 0,00% 0,00% 0,07% 0,00% 0,00% 0,00% 0,00% 0,07% 0,00% 0,00% 0,00% 0,00% 0,30% 5 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 6 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 7 Other financial corporations 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 8 of which investment firms 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 9 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 10 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 11 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 12 of which management companies 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 13 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 14 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 15 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 16 of which insurance undertakings 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 17 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 18 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 19 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 20 Non-financial undertakings 0,56% 0,16% 0,00% 0,01% 0,09% 0,56% 0,01% 0,00% 0,00% 0,01% 0,56% 0,17% 0,00% 0,01% 0,10% 2,87% 21 Loans and advances 0,49% 0,10% 0,00% 0,00% 0,05% 0,49% 0,01% 0,00% 0,00% 0,01% 0,49% 0,11% 0,00% 0,00% 0,06% 2,40% 22 Debt securities, including UoP 0,07% 0,05% 0,00% 0,00% 0,04% 0,07% 0,00% 0,00% 0,00% 0,00% 0,07% 0,05% 0,00% 0,00% 0,04% 0,47% 23 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 24 Households 27,24% 0,30% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 27,24% 0,30% 0,00% 0,00% 0,00% 27,34% 25 of which loans collateralised by residential immovable property 27,24% 0,30% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 27,24% 0,30% 0,00% 0,00% 0,00% 18,90% 26 of which building renovation loans 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 27 of which motor vehicle loans 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 28 Local governments financing 0,50% 0,00% 0,00% 0,00% 0,00% 0,50% 0,00% 0,00% 0,00% 0,00% 0,50% 0,00% 0,00% 0,00% 0,00% 0,49% 29 Housing financing 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 30 Other local government financing 0,50% 0,00% 0,00% 0,00% 0,00% 0,50% 0,00% 0,00% 0,00% 0,00% 0,50% 0,00% 0,00% 0,00% 0,00% 0,49% 31 Collateral obtained by taking possession: residential and commercial immovable properties 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 32 Total GAR assets 28,37% 0,46% 0,00% 0,01% 0,09% 1,13% 0,01% 0,00% 0,00% 0,01% 28,37% 0,47% 0,00% 0,01% 0,10% 69,36% 199 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 4: GAR KPI flow (%) a b c d e f g h i j k l m n o p 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) % (compared to flow of total eligible assets) Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Proportion of total new assets covered GAR - Covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation 8,30% 0,28% 0,00% 0,02% 0,13% 1,58% 0,02% 0,00% 0,00% 0,02% 8,30% 0,30% 0,00% 0,02% 0,15% 26,74% 2 Financial undertakings 0,15% 0,00% 0,00% 0,00% 0,00% 0,15% 0,00% 0,00% 0,00% 0,00% 0,15% 0,00% 0,00% 0,00% 0,00% 0,80% 3 Credit institutions 0,15% 0,00% 0,00% 0,00% 0,00% 0,15% 0,00% 0,00% 0,00% 0,00% 0,15% 0,00% 0,00% 0,00% 0,00% 0,80% 4 Loans and advances 0,15% 0,00% 0,00% 0,00% 0,00% 0,15% 0,00% 0,00% 0,00% 0,00% 0,15% 0,00% 0,00% 0,00% 0,00% 0,80% 5 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 6 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 7 Other financial corporations 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 8 of which investment firms 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 9 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 10 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 11 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 12 of which management companies 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 13 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 14 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 15 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 16 of which insurance undertakings 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 17 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 18 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 19 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 20 Non-financial undertakings 0,97% 0,18% 0,00% 0,02% 0,13% 0,97% 0,02% 0,00% 0,00% 0,02% 0,97% 0,20% 0,00% 0,02% 0,15% 5,74% 21 Loans and advances 0,92% 0,17% 0,00% 0,02% 0,13% 0,92% 0,02% 0,00% 0,00% 0,02% 0,92% 0,19% 0,00% 0,02% 0,14% 5,54% 22 Debt securities, including UoP 0,03% 0,01% 0,00% 0,00% 0,01% 0,03% 0,00% 0,00% 0,00% 0,00% 0,03% 0,01% 0,00% 0,00% 0,01% 0,19% 23 Equity instruments 0,01% 0,00% 0,00% 0,00% 0,01% 0,00% 0,00% 0,00% 0,01% 0,00% 0,00% 0,00% 0,01% 24 Households 6,72% 0,10% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 6,72% 0,10% 0,00% 0,00% 0,00% 19,65% 25 of which loans collateralised by residential immovable property 6,47% 0,10% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 6,47% 0,10% 0,00% 0,00% 0,00% 4,86% 26 of which building renovation loans 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 27 of which motor vehicle loans 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 28 Local governments financing 0,47% 0,00% 0,00% 0,00% 0,00% 0,47% 0,00% 0,00% 0,00% 0,00% 0,47% 0,00% 0,00% 0,00% 0,00% 0,54% 29 Housing financing 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 30 Other local government financing 0,47% 0,00% 0,00% 0,00% 0,00% 0,47% 0,00% 0,00% 0,00% 0,00% 0,47% 0,00% 0,00% 0,00% 0,00% 0,54% 31 Collateral obtained by taking possession: residential and commercial immovable properties 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 32 Total GAR assets 8,30% 0,28% 0,00% 0,02% 0,13% 1,58% 0,02% 0,00% 0,00% 0,02% 8,30% 0,30% 0,00% 0,02% 0,15% 75,06% 200 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 5: KPI off-balance sheet exposures (%) (stock) a b c d e f g h i j k l m n o 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) % (compared to total eligible off-balance sheet assets) Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling 1 Financial guarantees (FinGuar KPI) 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 2 Assets under management (AuM KPI) 9,77% 2,85% 0,00% 0,00% 1,48% 8,37% 0,32% 0,00% 0,30% 0,02% 18,15% 3,17% 0,00% 0,30% 1,50% Template 5: KPI off-balance sheet exposures(%) (flow) a b c d e f g h i j k l m n o 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) % (compared to flow of total eligible off-balance sheet assets) Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling 1 Financial guarantees (FinGuar KPI) 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 2 Assets under management (AuM KPI) 9,01% 4,62% 0,00% 0,00% 2,09% 6,40% 0,65% 0,00% 0,63% 0,03% 9,40% 0,00% 0,00% 0,05% 2,12% 201 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Disclosure based on CAPEX KPI of counterparty Template 0: Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation (in EUR mln) Total environmentally sustainable assets KPI % coverage (over total assets)*** % of assets excluded from the numerator of the GAR (Article 7(2) and (3) and Section 1.1.2. of Annex V) % of assets excluded from the denominator of the GAR (Article 7(1) and Section 1.2.4 of Annex V) Main KPI Green asset ratio (GAR) stock 474 0,94% 69,36% 38,36% 30,64% Total environmentally sustainable activities KPI % coverage (over total assets) % of assets excluded from the numerator of the GAR (Article 7(2) and (3) and Section 1.1.2. of Annex V) % of assets excluded from the denominator of the GAR (Article 7(1) and Section 1.2.4 of Annex V) Additional KPIs GAR (flow) 120 0,81% 75,06% 48,32% 24,94% Financial guarantees 0 0,00% Assets under management 27 6,79% 202 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 1: Assets for the calculation of GAR (in mln EUR) a b c d e f g h i j k l m n o p 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Million EUR Total (gross) carrying amount Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling GAR - Covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation 22 508 14 679 434 0 5 189 960 40 0 0 40 14 679 474 0 5 229 2 Financial undertakings 218 30 0 0 0 0 30 0 0 0 0 30 0 0 0 0 3 Credit institutions 218 30 0 0 0 0 30 0 0 0 0 30 0 0 0 0 4 Loans and advances 218 30 0 0 0 0 30 0 0 0 0 30 0 0 0 0 5 Debt securities, including UoP 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 Equity instruments 0 0 0 0 0 0 0 0 0 0 0 0 0 7 Other financial corporations 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8 of which investment firms 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9 Loans and advances 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10 Debt securities, including UoP 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 11 Equity instruments 0 0 0 0 0 0 0 0 0 0 0 0 0 12 of which management companies 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 13 Loans and advances 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 14 Debt securities, including UoP 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 15 Equity instruments 0 0 0 0 0 0 0 0 0 0 0 0 0 16 of which insurance undertakings 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 17 Loans and advances 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 18 Debt securities, including UoP 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 19 Equity instruments 0 0 0 0 0 0 0 0 0 0 0 0 0 20 Non-financial undertakings 2 085 678 283 0 5 189 678 40 0 0 40 678 323 0 5 229 21 Loans and advances 1 744 549 179 0 4 103 549 40 0 0 40 549 219 0 4 143 22 Debt securities, including UoP 339 128 104 0 0 86 128 0 0 0 0 128 104 0 0 86 23 Equity instruments 2 1 0 0 0 1 0 0 0 1 0 0 0 24 Households 19 850 13 719 151 0 0 0 0 0 0 0 0 13 719 151 0 0 0 25 of which loans collateralised by residential immovable property 13 721 13 719 151 0 0 0 0 0 0 0 0 13 719 151 0 0 0 26 of which building renovation loans 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 27 of which motor vehicle loans 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 28 Local governments financing 356 252 0 0 0 0 252 0 0 0 0 252 0 0 0 0 29 Housing financing 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 Other local government financing 356 252 0 0 0 0 252 0 0 0 0 252 0 0 0 0 203 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. a b c d e f g h i j k l m n o p 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Million EUR Total (gross) carrying amount Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling 31 Collateral obtained by taking possession: residential and commercial immovable properties 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32 Assets excluded from the numerator for GAR calculation (covered in the denominator) 27 847 33 Financial and Non-financial undertakings 19 996 34 SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations 19 685 35 Loans and advances 16 830 36 of which loans collateralised by commercial immovable property 4 450 37 of which building renovation loans 0 38 Debt securities 2 737 39 Equity instruments 118 40 Non-EU country counterparties not subject to NFRD disclosure obligations 311 41 Loans and advances 237 42 Debt securities 26 43 Equity instruments 48 44 Derivatives 185 45 On demand interbank loans 130 46 Cash and cash-related assets 918 47 Other categories of assets (e.g. Goodwill, commodities etc.) 6 619 48 Total GAR assets 50 356 14 679 434 0 5 189 960 40 0 0 40 14 679 474 0 5 229 49 Assets not covered for GAR calculation 22 241 50 Central governments and Supranational issuers 13 331 51 Central banks exposure 6 431 52 Trading book 2 479 53 Total assets 72 596 14 679 434 0 5 189 960 40 0 0 40 14 679 474 0 5 229 Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations 54 Financial guarantees 7 067 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55 Assets under management 391 55 23 0 0 8 50 3 0 0 0 104 27 0 0 9 56 Of which debt securities 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 57 Of which equity instruments 389 55 23 0 0 8 50 3 0 0 0 55 0 0 0 9 204 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 2: GAR sector information (in EUR mln) a b c h i n o Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Non-Financial corporates (Subject to NFRD) Non-Financial corporates (Subject to NFRD) Non-Financial corporates (Subject to NFRD) [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount Breakdown by sector - NACE 4 digits level (code and label) Mn EUR Of which environmentally sustainable (CCM) Mn EUR Of which environmentally sustainable (CCA) Mn EUR Of which environmentally sustainable (CCM + CCA) 1 B05.10 10 9 10 0 10 9 2 B07.29 460 1 460 0 460 1 3 C10.11 16 0 16 0 16 0 4 C10.13 5 0 5 0 5 0 5 C15.20 0 0 0 0 0 0 6 C16.10 3 0 3 0 3 0 7 C17.12 5 1 5 0 5 1 8 C19.20 77 4 77 0 77 4 9 C20.15 109 1 109 2 109 3 10 C20.16 0 0 0 0 0 0 11 C20.30 13 0 13 0 13 0 12 C22.11 1 0 1 0 1 0 13 C23.20 6 0 6 0 6 0 14 C23.51 0 0 0 0 0 0 15 C23.61 8 0 8 2 8 2 16 C24.42 11 2 11 0 11 2 17 C25.93 7 0 7 0 7 0 18 C26.11 14 0 14 0 14 0 19 C27.12 0 0 0 0 0 0 20 C28.21 2 0 2 0 2 0 21 C28.41 0 0 0 0 0 0 22 C28.92 35 2 35 0 35 2 23 C29.20 0 0 0 0 0 0 24 C33.20 0 0 0 0 0 0 25 D35.11 82 39 82 0 82 39 26 D35.14 345 164 345 0 345 164 27 F41.20 6 0 6 0 6 0 28 F42.11 3 0 3 0 3 0 29 F42.12 2 0 2 0 2 0 30 F43.39 3 0 3 0 3 0 31 F43.99 0 0 0 0 0 0 32 G45.31 146 22 146 0 146 22 33 G46.32 0 0 0 0 0 0 34 G46.42 0 0 0 0 0 0 35 G46.46 94 0 94 0 94 0 36 G46.72 0 0 0 0 0 0 37 G46.75 35 0 35 35 35 35 38 G46.90 77 0 77 0 77 0 205 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. a b c h i n o Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Non-Financial corporates (Subject to NFRD) Non-Financial corporates (Subject to NFRD) Non-Financial corporates (Subject to NFRD) [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount Breakdown by sector - NACE 4 digits level (code and label) Mn EUR Of which environmentally sustainable (CCM) Mn EUR Of which environmentally sustainable (CCA) Mn EUR Of which environmentally sustainable (CCM + CCA) 39 G47.11 26 0 26 0 26 0 40 G47.41 1 0 1 0 1 0 41 G47.71 67 0 67 0 67 0 42 G47.72 21 0 21 0 21 0 43 H49.20 68 15 68 0 68 15 44 H53.20 17 0 17 0 17 0 45 I56.10 69 0 69 0 69 0 46 J61.30 49 0 49 0 49 0 47 J62.01 8 0 8 0 8 0 48 K64.20 93 1 93 0 93 1 49 M70.10 48 21 48 0 48 21 50 M72.11 30 0 30 0 30 0 51 N77.40 0 0 0 0 0 0 52 N82.91 8 0 8 0 8 0 53 Q86.22 2 0 2 0 2 0 54 S96.09 0 0 0 0 0 0 206 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 3: GAR KPI stock (%) a b c d e f g h i j k l m n o p 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) % (compared to total covered assets in the denominator) Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Proportion of total assets covered GAR - Covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation 29,15% 0,86% 0,00% 0,01% 0,38% 1,91% 0,08% 0,00% 0,00% 0,08% 29,15% 0,94% 0,00% 0,01% 0,45% 31,00% 2 Financial undertakings 0,06% 0,00% 0,00% 0,00% 0,00% 0,06% 0,00% 0,00% 0,00% 0,00% 0,06% 0,00% 0,00% 0,00% 0,00% 0,30% 3 Credit institutions 0,06% 0,00% 0,00% 0,00% 0,00% 0,06% 0,00% 0,00% 0,00% 0,00% 0,06% 0,00% 0,00% 0,00% 0,00% 0,30% 4 Loans and advances 0,06% 0,00% 0,00% 0,00% 0,00% 0,06% 0,00% 0,00% 0,00% 0,00% 0,06% 0,00% 0,00% 0,00% 0,00% 0,30% 5 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 6 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 7 Other financial corporations 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 8 of which investment firms 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 9 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 10 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 11 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 12 of which management companies 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 13 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 14 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 15 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 16 of which insurance undertakings 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 17 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 18 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 19 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 20 Non-financial undertakings 1,35% 0,56% 0,00% 0,01% 0,38% 1,35% 0,08% 0,00% 0,00% 0,08% 1,35% 0,64% 0,00% 0,01% 0,45% 2,87% 21 Loans and advances 1,09% 0,36% 0,00% 0,01% 0,20% 1,09% 0,08% 0,00% 0,00% 0,08% 1,09% 0,43% 0,00% 0,01% 0,28% 2,40% 22 Debt securities, including UoP 0,25% 0,21% 0,00% 0,00% 0,17% 0,25% 0,00% 0,00% 0,00% 0,00% 0,25% 0,21% 0,00% 0,00% 0,17% 0,47% 23 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 24 Households 27,24% 0,30% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 27,24% 0,30% 0,00% 0,00% 0,00% 27,34% 25 of which loans collateralised by residential immovable property 27,24% 0,30% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 27,24% 0,30% 0,00% 0,00% 0,00% 18,90% 26 of which building renovation loans 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 27 of which motor vehicle loans 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 28 Local governments financing 0,50% 0,00% 0,00% 0,00% 0,00% 0,50% 0,00% 0,00% 0,00% 0,00% 0,50% 0,00% 0,00% 0,00% 0,00% 0,49% 29 Housing financing 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 30 Other local government financing 0,50% 0,00% 0,00% 0,00% 0,00% 0,50% 0,00% 0,00% 0,00% 0,00% 0,50% 0,00% 0,00% 0,00% 0,00% 0,49% 31 Collateral obtained by taking possession: residential and commercial immovable properties 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 32 Total GAR assets 29,15% 0,86% 0,00% 0,01% 0,38% 1,91% 0,08% 0,00% 0,00% 0,08% 29,15% 0,94% 0,00% 0,01% 0,45% 69,36% 207 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 4: GAR KPI flow (%) a b c d e f g h i j k l m n o p 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) % (compared to flow of total eligible assets) Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Proportion of total new assets covered GAR - Covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation 9,29% 0,78% 0,00% 0,03% 0,45% 2,57% 0,03% 0,00% 0,00% 0,03% 9,29% 0,81% 0,00% 0,03% 0,48% 26,74% 2 Financial undertakings 0,12% 0,00% 0,00% 0,00% 0,00% 0,12% 0,00% 0,00% 0,00% 0,00% 0,12% 0,00% 0,00% 0,00% 0,00% 0,80% 3 Credit institutions 0,12% 0,00% 0,00% 0,00% 0,00% 0,12% 0,00% 0,00% 0,00% 0,00% 0,12% 0,00% 0,00% 0,00% 0,00% 0,80% 4 Loans and advances 0,12% 0,00% 0,00% 0,00% 0,00% 0,12% 0,00% 0,00% 0,00% 0,00% 0,12% 0,00% 0,00% 0,00% 0,00% 0,80% 5 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 6 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 7 Other financial corporations 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 8 of which investment firms 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 9 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 10 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 11 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 12 of which management companies 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 13 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 14 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 15 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 16 of which insurance undertakings 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 17 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 18 Debt securities, including UoP 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 19 Equity instruments 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 20 Non-financial undertakings 1,98% 0,68% 0,00% 0,03% 0,45% 1,98% 0,03% 0,00% 0,00% 0,03% 1,98% 0,71% 0,00% 0,03% 0,48% 5,74% 21 Loans and advances 1,95% 0,66% 0,00% 0,03% 0,44% 1,95% 0,03% 0,00% 0,00% 0,03% 1,95% 0,68% 0,00% 0,03% 0,46% 5,54% 22 Debt securities, including UoP 0,03% 0,02% 0,00% 0,00% 0,02% 0,03% 0,00% 0,00% 0,00% 0,00% 0,03% 0,02% 0,00% 0,00% 0,02% 0,19% 23 Equity instruments 0,01% 0,00% 0,00% 0,00% 0,01% 0,00% 0,00% 0,00% 0,01% 0,00% 0,00% 0,00% 0,01% 24 Households 6,72% 0,10% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 6,72% 0,10% 0,00% 0,00% 0,00% 19,65% 25 of which loans collateralised by residential immovable property 6,47% 0,10% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 6,47% 0,10% 0,00% 0,00% 0,00% 4,86% 26 of which building renovation loans 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 27 of which motor vehicle loans 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 28 Local governments financing 0,47% 0,00% 0,00% 0,00% 0,00% 0,47% 0,00% 0,00% 0,00% 0,00% 0,47% 0,00% 0,00% 0,00% 0,00% 0,54% 29 Housing financing 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 30 Other local government financing 0,47% 0,00% 0,00% 0,00% 0,00% 0,47% 0,00% 0,00% 0,00% 0,00% 0,47% 0,00% 0,00% 0,00% 0,00% 0,54% 31 Collateral obtained by taking possession: residential and commercial immovable properties 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 32 Total GAR assets 9,29% 0,78% 0,00% 0,03% 0,45% 2,57% 0,03% 0,00% 0,00% 0,03% 9,29% 0,81% 0,00% 0,03% 0,48% 75,06% 208 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 5: KPI off-balance sheet exposures (%) (stock) a b c d e f g h i j k l m n o 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) % (compared to total eligible off-balance sheet assets) Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling 1 Financial guarantees (FinGuar KPI) 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 2 Assets under management (AuM KPI) 14,01% 5,91% 0,00% 0,04% 2,10% 12,67% 0,88% 0,00% 0,00% 0,11% 26,68% 6,79% 0,00% 0,04% 2,21% Template 5: KPI off-balance sheet exposures(%) (flow) a b c d e f g h i j k l m n o 31.12.2023 Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) % (compared to flow of total eligible off-balance sheet assets) Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which transitional Of which enabling 1 Financial guarantees (FinGuar KPI) 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 2 Assets under management (AuM KPI) 15,12% 7,15% 0,00% 0,11% 2,72% 12,63% 0,99% 0,00% 0,00% 0,13% 15,47% 0,00% 0,00% 0,20% 2,84% 209 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Disclosures of indicators for nuclear and fossil gas related activities in accordance with Annex XII of Regulation 2021/2178 Below, the Group presents disclosures of the amount and proportion of taxonomy -eligible and taxonomy-aligned activities in the denominator and numerator of its key performance indicators, as well as, non-eligible activities in the denominator of its key performance indicators for the activities referred to in Section 4.26 - 4.31 of Annexes I and II to Delegated Regulation (EU) 2021/2139 in accordance with the scope set forth in Templates 1-5 attached to Annex XII to Regulation 2021/2178. Disclosures on fossil gas and nuclear activities have been made in relation to exposures of non-financial undertakings subject to non-financial data publication requirements under the NFRD. They were prepared based on data published by the Group’s customers as part of their 2022 Taxonomy disclosures. Disclosures have been presented on a consolidated basis in accordance with the Group’s scope of prudential consolidation. Disclosures based on counterparty key performance indicator for turnover (KPI Turnover) – GAR KPI stock as on 31.12.2023 Template 1: Nuclear and fossil gas related activities Nuclear energy related activities 1. The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. NO 2. The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. NO 3. The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. NO Fossil gas related activities 4. The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. YES 5. The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. YES 6. The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. YES 210 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 2: Taxonomy-aligned economic activities (denominator) Amount and proportion CCM + CCA Climate change mitigation (CCM) Climate change adaptation (CCA) Economic activities Amount % Amount % Amount % 1. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 5. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 6. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 7. Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI 237 0,47% 232 0,46% 5 0,01% 8. Total applicable KPI 237 0,47% 232 0,46% 5 0,01% 211 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 3: Taxonomy-aligned economic activities (numerator) Amount and proportion CCM + CCA Climate change mitigation (CCM) Climate change adaptation (CCA) Economic activities Amount % Amount % Amount % 1. A mount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 5. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 6. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 7. Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the numerator of the applicable KPI 237 100,00% 232 97,80% 5 2,20% 8. Total amount and proportion of taxonomy-aligned economic activities in the numerator of the applicable KPI 237 100,00% 232 97,80% 5 2,20% 212 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 4: Taxonomy-eligible but not taxonomy-aligned economic activities Amount and proportion CCM + CCA Climate change mitigation (CCM) Climate change adaptation (CCA) Economic activities Amount % Amount % Amount % 1. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KP 0,38 0,00% 0,00 0,00% 0,38 0,00% 5. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 3,49 0,01% 3,49 0,01% 0,00 0,00% 6. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,15 0,00% 0,15 0,00% 0,00 0,00% 7. Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI 14 045 27,89% 14 051 27,90% 562 1,12% 8. Total amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI 14 050 27,90% 14 055 27,91% 563 1,12% 213 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 5: Taxonomy non-eligible economic activities Economic activities Amount Percentage 1. Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 2. A mount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 3. Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 4. Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 5. Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 6. Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 7. Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI 8 222 16,33% 8. Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI 8 222 16,33% 214 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Disclosures based on counterparty key performance indicator for capex (KPI Capex) - GAR KPI stock as on 31.12.2023 Template 1: Nuclear and fossil gas related activities Nuclear energy related activities 1. The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. NO 2. The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. NO 3. The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. NO Fossil gas related activities 4. The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. YES 5. The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. YES 6. The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. YES Template 2: Taxonomy-aligned economic activities (denominator) Amount and proportion CCM + CCA Climate change mitigation (CCM) Climate change adaptation (CCA) Economic activities Amount % Amount % Amount % 1. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 5. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 6. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 7. Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI 474 0,94% 434 0,86% 40 0,08% 8. Total applicable KPI 474 0,94% 434 0,86% 40 0,08% 215 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 3: Taxonomy-aligned economic activities (numerator) Amount and proportion CCM + CCA Climate change mitigation (CCM) Climate change adaptation (CCA) Economic activities Amount % Amount % Amount % 1. A mount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 5. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 6. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 7. Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the numerator of the applicable KPI 474 100,00% 434 91,63% 40 8,37% 8. Total amount and proportion of taxonomy-aligned economic activities in the numerator of the applicable KPI 474 100,00% 434 91,63% 40 8,37% 216 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 4: Taxonomy-eligible but not taxonomy-aligned economic activities Amount and proportion CCM + CCA Climate change mitigation (CCM) Climate change adaptation (CCA) Economic activities Amount % Amount % Amount % 1. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KP 30,78 0,06% 30,53 0,06% 0,25 0,00% 5. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 11,15 0,02% 11,15 0,02% 0,00 0,00% 6. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,38 0,00% 0,38 0,00% 0,00 0,00% 7. Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI 14 163 28,13% 14 202 28,20% 920 1,83% 8. Total amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI 14 205 28,21% 14 245 28,29% 920 1,83% 217 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 5: Taxonomy non-eligible economic activities Economic activities Amount Percentage 1. Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 2. A mount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 3. Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 4. Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 5. Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 6. Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 7. Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI 7 829 15,55% 8. Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI 7 829 15,55% 218 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Disclosures based on counterparty key performance indicator for turnover (KPI Turnover) – GAR KPI Flow as on 31.12.2023 Template 1: Nuclear and fossil gas related activities Nuclear energy related activities 1. The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. NO 2. The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. NO 3. The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. NO Fossil gas related activities 4. The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. YES 5. The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. YES 6. The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. YES 219 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 2: Taxonomy-aligned economic activities (denominator) Amount and proportion CCM + CCA Climate change mitigation (CCM) Climate change adaptation (CCA) Economic activities Amount % Amount % Amount % 1. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 5. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 6. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 7. Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI 45 0,30% 42 0,28% 3 0,02% 8. Total applicable KPI 45 0,30% 42 0,28% 3 0,02% 220 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 3: Taxonomy-aligned economic activities (numerator) Amount and proportion CCM + CCA Climate change mitigation (CCM) Climate change adaptation (CCA) Economic activities Amount % Amount % Amount % 1. A mount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 5. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 6. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 7. Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the numerator of the applicable KPI 45 100,00% 42 93,90% 3 6,10% 8. Total amount and proportion of taxonomy-aligned economic activities in the numerator of the applicable KPI 45 100,00% 42 93,90% 3 6,10% 221 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 4: Taxonomy-eligible but not taxonomy-aligned economic activities Amount and proportion CCM + CCA Climate change mitigation (CCM) Climate change adaptation (CCA) Economic activities Amount % Amount % Amount % 1. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KP 0,38 0,00% 0,00 0,00% 0,38 0,00% 5. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 2,40 0,02% 2,40 0,02% 0,00 0,00% 6. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,10 0,00% 0,10 0,00% 0,00 0,00% 7. Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI 1 183 7,97% 1 187 7,99% 231 1,56% 8. Total amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI 1 186 7,99% 1 189 8,01% 232 1,56% 222 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 5: Taxonomy non-eligible economic activities Economic activities Amount Percentage 1. Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 2. A mount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 3. Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 4. Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 5. Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 6. Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 7. Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI 4 056 27,33% 8. Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI 4 056 27,33% 223 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Disclosures based on counterparty key performance indicator for turnover (KPI Capex) – GAR KPI Flow as on 31.12.2023 Template 1: Nuclear and fossil gas related activities Nuclear energy related activities 1. The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. NO 2. The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. NO 3. The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. NO Fossil gas related activities 4. The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. YES 5. The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. YES 6. The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. YES 224 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 2: Taxonomy-aligned economic activities (denominator) Amount and proportion CCM + CCA Climate change mitigation (CCM) Climate change adaptation (CCA) Economic activities Amount % Amount % Amount % 1. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 5. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 6. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/ 2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 7. Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI 120 0,81% 116 0,78% 4 0,03% 8. Total applicable KPI 120 0,81% 116 0,78% 4 0,03% 225 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 3: Taxonomy-aligned economic activities (numerator) Amount and proportion CCM + CCA Climate change mitigation (CCM) Climate change adaptation (CCA) Economic activities Amount % Amount % Amount % 1. A mount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 5. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 6. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/ 2139 in the numerator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 7. Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the numerator of the applicable KPI 120 100,00% 116 96,46% 4 3,54% 8. Total amount and proportion of taxonomy-aligned economic activities in the numerator of the applicable KPI 120 100,00% 116 96,46% 4 3,54% 226 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 4: Taxonomy-eligible but not taxonomy-aligned economic activities Amount and proportion CCM + CCA Climate change mitigation (CCM) Climate change adaptation (CCA) Economic activities Amount % Amount % Amount % 1. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KP 20,04 0,13% 19,79 0,13% 0,25 0,00% 5. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 7,59 0,05% 7,59 0,05% 0,00 0,00% 6. Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,25 0,00% 0,25 0,00% 0,00 0,00% 7. Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI 1 231 8,29% 1 235 8,32% 377 2,54% 8. Total amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI 1 259 8,48% 1 263 8,51% 378 2,54% 227 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Template 5: Taxonomy non-eligible economic activities Economic activities Amount Percentage 1. Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 2. A mount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 3. Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 4. Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 5. Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 6. Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI 0,00 0,00% 7. Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI 3 909 26,34% 8. Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI 3 909 26,34% Disclosure on additional activities eligible for the Taxonomy for climate change mitigation and adaptation objectives According to Commission Delegated Regulation (EU) 2023/2485 and Commission Delegated Regulation (EU) 2023/2486, in its Taxonomy disclosure for year 2023, the Group is obliged to disclose the proportion of total assets covered of non-eligible and eligible exposures against a specific list of additional activities listed in Sections 3.18-3.21 and 6.18-6.20 of Annex I to Delegated Regulation (EU) 2021/2139 and Sections 5.13, 7.8, 8.4, 9.3, 14.1 and 14.2 of Annex II to Delegated Regulation (EU) 2021/2139 expanding the list of activities that qualify as making a substantial contribution to climate change mitigation or adaptation. In order to comply with the above requirement, the Group analyzed its corporate financing portfolio to identify customers subject to the obligation to publish non-financial information in accordance with the NFRD. Then, for the identified list of customers, the Bank verified that the NACE code of the main activity carried out by the customer in question was listed in the aforementioned technical screening criteria. Bearing in mind that references to NACE codes in the technical screening criteria are only indicative in cases where the NACE code of a customer’s activities was indicated for at least one of the activities described in the technical screening criteria, the Bank, based on the information it had about the nature of the customer’s activities, performed additional verification. It was intended to verify that the activities carried out by a particular customer meet the detailed definition of economic activity contained in its description in the technical screening criteria. Based on the analysis, the Group determined the gross carrying amount of eligible and non-eligible exposures to the above additional activities. As of 31.12.2023, the proportion of are taxonomy-eligible activities pursuant to sections 3.18-3.21 and 6.18-6.20 of Annex I to Delegated Regulation (EU) 2021/2139 and sections 5.13, 7.8, 8.4, 9.3, 14.1 and 14.2 of Annex II to Delegated Regulation (EU) 2021/2139 in total covered assets was 0%, and the proportion of non-eligible activities in total covered assets was 100%. 228 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Disclosure regarding subsequent four environmental objectives Pursuant to Commission Delegated Regulation (EU) 2023/2486, in its Taxonomy disclosure for 2023, the Group is required to disclose the proportion in total covered assets in of exposures to taxonomy–non-eligible and taxonomy-eligible economic activities with respect to the following four environmental objectives, i.e.: - WMR – sustainable use and protection of water and marine resources; - CE – transition to a circular economy; - PPC – pollution prevention and control; - BIO – protection and restoration of biodiversity and ecosystems. In order to comply with the above requirement, the Group analyzed its corporate financing portfolio to identify customers who are subject to the obligation to publish non-financial information in accordance with the NFRD. Then, for the identified list of customers, the Group verified that the NACE code of the customer’s main activity was listed in the technical screening criteria set for the subsequent four objectives. Bearing in mind that references to NACE codes in the technical screening criteria are only indicative in cases where the NACE code of a customer’s activities was indicated for at least one of the activities described in the technical screening criteria for subsequent four objectives, the Group, based on the information it had about the nature of the customer’s activities, performed additional verification. It was intended to verify that the activities carried out by a particular customer meet the detailed definition of economic activity contained in its description in the technical screening criteria. Based on its analysis, the Bank determined the gross carrying amount of taxonomy-eligible exposures for subsequent four environmental objectives and their proportion in total covered assets. As of 31 December 2023, the proportion of taxonomy-eligible activities for subsequent four environmental objectives in total covered assets was 0,14 %, and the proportion of taxonomy non-eligible- activities in total covered assets was 99,86% , respectively. Explanations of the nature and objectives of taxonomy-aligned economic activities and the evolution of the taxonomy- aligned economic activities over time, starting from the second year of implementation, distinguishing between business-related elements and methodological and data-related elements The largest proportion in the value of the green asset ratio was demonstrated by the Group’s exposures to non-financial undertakings related to general-purpose financing and households in the form of loans collateralized by residential immovable property. Sustainable activities demonstrated by non-financial undertakings subject to NFRD identified in the Group’s portfolio primarily supported the achievement of the CCM (climate change mitigation) objective. The highest gross balance value of environmentally sustainable activities was identified among undertakings in the Group’s portfolio operating in the sectors of: - Electricity generation, distribution and trade; - Automotive; - Chemical. Description of compliance with Regulation 2020/852 in the Bank’s business strategy , product design processes and engagement with clients and counterparties Regulation 2020/852 on the so-called Taxonomy was developed by the European Commission as part of the European Green Deal, and is an important tool to classify and define environmentally sustainable investments, thereby supporting the achievement of the European Union’s 2030 climate and energy objectives. According to the Taxonomy, environmentally sustainable investments are those that: - make a significant contribution to one or more of the six environmental objectives, - do not cause significant harm to any of the remaining environmental objectives, - conduct business in accordance with minimum safeguards. Requirements for making a significant contribution and not causing significant harm have been set for the following environmental objectives: - climate change mitigation, - climate change adaptation, - sustainable use and protection of water and marine resources, - transition to a circular economy, 229 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. - pollution prevention and control, - protection and restoration of biodiversity and ecosystems. A responsible approach to business and sustainable development is also a strategic goal for Bank Pekao, it pointed this out in its business strategy, Bank Pekao’s Strategy 2021-2024 and further clarified in Bank Pekao’s ESG Strategy 2021-2024 (hereinafter: ESG Strategy), in which it considered the following directions in the area of the environment to be strategic: - financing of sustainable projects, - supporting customers’ energy transformation and transition to a low-carbon economy, and - striving for climate neutrality of own business operations by reducing own emissions and those of business partners. In line with its ESG Strategy, Bank Pekao supports customers in their energy transition and adaptation to climate change, finances the development of renewable energy sources and entities in new technology industries. Supporting the green transformation of the economy, it focuses environmental investment financing on activities related to, among other things: - green building, - low-emission transportation, - photovoltaic installations, - wind farms, - biogas plants, which are activities that support the first two environmental objectives included in the Taxonomy – climate change mitigation and climate change adaptation. In preparing its credit offer, the Bank engages in a dialogue with customers to structure its offerings in such a way as to support them in implementing their environmental and climate transformation plans and achieving the environmental and climate goals set in their business strategies. In accordance with the Bank’s Credit Risk Policy, the customer is evaluated for compliance with corporate social responsibility, taking into account such negative aspects of its operations as corruption, failure to comply with health and safety regulations, exploitative forced labor, employment of minors in violation of the law, discriminatory practices, exploitation of scarce natural resources, testing of products on animals and cruelty to animals, unethical actions toward contractors or competitors, legitimate local protests related to the customer’s operations, manufacture of products or offering of services harmful to consumers. Additional or complementary information in support of the Bank’s strategy and the weight of the financing of taxonomy-aligned economic activities in the overall activity In 2021, the Bank adopted and published an ESG Strategy for 2021-2024 “Responsible Bank supporting sustainable development”, defining goals in terms of environmental care, supporting the development of the economy and society, and the Banks’ sustainable development. The strategy consists of three pillars: ”Environment”, “Engagement” and “Governance”. In each of them, indicators were set for implementation in each year of the ESG Strategy. Under the “Environment” pillar, the Bank declares that it will achieve the following goals by the end of 2024: - the share of high-carbon financing in the financing portfolio is less than 1.0%, - financing sustainable projects worth more than PLN 8 billion in 2021-2024, - supporting the issuance of customer ESG bonds worth more than PLN 22 billion between 2021 and 2024, - share of green financing in the financing portfolio above 4.0%. The Bank distinguishes between green, social and brown exposures according to definitions included in the Bank’s ESG Strategy and clarified in an internal document. In 2023, the Bank exceeded the 4% target for green financing set in the ESG Strategy and continues activities aimed at increasing this indicator. The difference between the value of the green financing share indicator and the reported GAR indicator results, among other things, from a different approach to the inclusion of selected assets. The GAR scope excludes a large range of undertakings, covering only enterprises subject to NFRD, households, and local government financing, while the green financing share indicator relates to the Bank's entire financing portfolio. 230 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.10 Disclosure to the extent specified by the Principle Adverse Impacts under the SFDR Regulation for Pekao Group as an investee 1 Principle Adverse Impacts indicators - in accordance with the Regulation of the European Parliament and of the Council (EU) 2019/2088 Table 1 Statement concerning key adverse effects of investment decisions on sustainable development factors INDICATOR OF ADVERSE IMPACTS ON SUSTAINABILITY FACTORS 2023 Greenhouse gas emissions scope 1 8,121 t CO 2 e according to GHG Protocol methodology Greenhouse gas emissions scope 2 33,529 t CO 2 e according to GHG Protocol methodology Greenhouse gas emissions scope 3 Calculation of greenhouse gas emissions for scope 3 GHG Protocol (subcategory 15) will be made in 2024. Greenhouse gas emissions Total greenhouse gas emissions 41,650 t CO 2 e (scope 1+2) Exposure towards fossil fuel companies Pekao Group companies do not operate in the fossil fuel sector and do not generate revenues from fossil fuel activities (as defined in Article 2, item 62 of Regulation (EU) 2018/1999 of the European Parliament and of the Council of December 11, 2018 on the Governance of the Energy Union and Climate Action). Share of consumed and produced energy from non-renewable sources Share of non-renewable energy consumed and produced in relation to renewable energy resources, expressed as a percentage of total energy resources 62% Energy intensity per sector with significant climate impact Energy consumption expressed in GWh Pekao Group companies do not operate in sectors with a significant impact on the climate, i.e. those listed in Sections A through H in Appendix 1 to Regulation (EC) No. 1893/2006 of the European Parliament and of the Council of December 20, 2006 establishing the statistical classification of economic activities NACE Revision 2 Activities that adversely affect biodiversity-sensitive areas Companies with facilities/operations in or near biodiversity-sensitive areas, where the activities of such companies have an adverse impact on such areas Pekao Group companies do not conduct activities in or near biodiversity-sensitive areas that would adversely affect such areas (as defined by SFDR ‘biodiversity-sensitive areas: are Natura 2000 areas, UNESCO World Heritage Areas and so-called Key Biodiversity Areas, and others listed in Appendix D of Annex No. 2 to Commission Delegated Regulation (EU) 2021/2139 of June 4, 2021 Emissions of substances into the water Tons of emissions of substances into the water Pekao Group companies do not generate emissions of priority substances and certain other pollutants to water, as listed in Part A of Annex I to Directive 2008/105/EC of the European Parliament and of the Council of December 16, 2008 on environmental quality standards in the field of water policy. Indicator of hazardous waste and radioactive waste Tons of hazardous waste and radioactive waste Pekao Group companies do not generate hazardous waste, i.e. waste that exhibits one or more of the hazardous properties listed in Annex III of Directive 2008/98/EC of the European Parliament and of the Council of November 19, 2008 on waste; and radioactive waste as defined in Article 3(7) of Council Directive 2011/70/Euroatom of July 19, 2011 establishing a Community framework for the responsible and safe management of spent nuclear fuel and radioactive waste. 1 Regulation (EU) No. 2019/2088 of the European Parliament and of the Council of November 27, 2019 on sustainability ‐ related disclosures in the financial services sector. 231 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. INDICATORS ON SOCIAL AND LABOR ISSUES, HUMAN RIGHTS ISSUES AND ANTI-CORRUPTION AND ANTI-BRIBERY ISSUES 2023 Violations of initiative rules Global Compact and the Organization for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises Currently, Pekao Group companies do not have processes and controls in place to oversee compliance with the Global Compact principles. The planned start of work in this area: 2024. Lack of processes and controls to oversee compliance with the principles of the Global Compact and the OECD Guidelines for Multinational Enterprises Currently, Pekao Group companies do not have processes and controls in place to oversee compliance with the Global Compact principles. The planned start of work in this area: 2024. Unadjusted pay gap between men and women Gender wage gap, defined as the difference between men’s and women’s average gross hourly earnings, expressed as a percentage of men’s average gross hourly earnings 32% Gender diversity of Management Board members Average ratio of women to men on management boards of companies, expressed as a percentage of all management board members 18% Exposure towards controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological weapons) Pekao Group companies are not involved in the production or sale of the controversial weapons mentioned in: (1) the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction of September 18, 1997; (2) the Convention on the Prohibition of Cluster Munitions, which entered into force on August 1, 2008; and (3) the Chemical Weapons Convention, which entered into force on April 29, 1997. Revision of the disclosure to the extent specified by the Principle Adverse Impacts in accordance with the SFDR Regulation for the Pekao Group as an investee presented in the Statement of Non-Financial Information of the Bank Pekao S.A. Group for 2022. In the Statement of Non-Financial Information of the Bank Pekao S.A. Group for 2022, an incorrect value of the indicator presenting greenhouse gas emissions was disclosed in error. The following table presents the correct values of all indicators in Table 1 for 2022. Table 1 Statement concerning key adverse effects of investment decisions on sustainable development factors INDICATOR OF ADVERSE IMPACTS ON SUSTAINABILITY FACTORS 2022 Greenhouse gas emissions scope 1 8 797 t CO 2 e according to GHG Protocol methodology Greenhouse gas emissions scope 2 36 332 t CO 2 e according to GHG Protocol methodology Greenhouse gas emissions scope 3 Calculation of greenhouse gas emissions for scope 3 GHG Protocol (subcategory 15) will be made in 2023. Greenhouse gas emissions Total greenhouse gas emissions 45 129 t CO 2 e (scope 1+2) Exposure towards fossil fuel companies Pekao Group companies do not operate in the fossil fuel sector and do not generate revenues from fossil fuel activities (as defined in Article 2, item 62 of Regulation (EU) 2018/1999 of the European Parliament and of the Council of December 11, 2018 on the Governance of the Energy Union and Climate Action). Share of consumed and produced energy from non-renewable sources Share of non-renewable energy consumed and produced in relation to renewable energy resources, expressed as a percentage of total energy resources 63% 232 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Energy intensity per sector with significant climate impact Energy consumption expressed in GWh Pekao Group companies do not operate in sectors with a significant impact on the climate, i.e. those listed in Sections A through H in Appendix 1 to Regulation (EC) No. 1893/2006 of the European Parliament and of the Council of December 20, 2006 establishing the statistical classification of economic activities NACE Revision 2 Activities that adversely affect biodiversity-sensitive areas Companies with facilities/operations in or near biodiversity-sensitive areas, where the activities of such companies have an adverse impact on such areas Pekao Group companies do not conduct activities in or near biodiversity-sensitive areas that would adversely affect such areas (as defined by SFDR ‘biodiversity-sensitive areas: are Natura 2000 areas, UNESCO World Heritage Areas and so-called Key Biodiversity Areas, and others listed in Appendix D of Annex No. 2 to Commission Delegated Regulation (EU) 2021/2139 of June 4, 2021 Emissions of substances into the water Tons of emissions of substances into the water Pekao Group companies do not generate emissions of priority substances and certain other pollutants to water, as listed in Part A of Annex I to Directive 2008/105/EC of the European Parliament and of the Council of December 16, 2008 on environmental quality standards in the field of water policy. Indicator of hazardous waste and radioactive waste Tons of hazardous waste and radioactive waste Pekao Group companies do not generate hazardous waste, i.e. waste that exhibits one or more of the hazardous properties listed in Annex III of Directive 2008/98/EC of the European Parliament and of the Council of November 19, 2008 on waste; and radioactive waste as defined in Article 3(7) of Council Directive 2011/70/Euroatom of July 19, 2011 establishing a Community framework for the responsible and safe management of spent nuclear fuel and radioactive waste. INDICATORS ON SOCIAL AND LABOR ISSUES, HUMAN RIGHTS ISSUES AND ANTI-CORRUPTION AND ANTI-BRIBERY ISSUES 2022 Violations of initiative rules Global Compact and the Organization for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises Currently, Pekao Group companies do not have processes and controls in place to oversee compliance with the Global Compact principles. The planned start of work in this area: 2024. Lack of processes and controls to oversee compliance with the principles of the Global Compact and the OECD Guidelines for Multinational Enterprises Currently, Pekao Group companies do not have processes and controls in place to oversee compliance with the Global Compact principles. The planned start of work in this area: 2024. Unadjusted pay gap between men and women Gender wage gap, defined as the difference between men’s and women’s average gross hourly earnings, expressed as a percentage of men’s average gross hourly earnings 34% Gender diversity of Management Board members Average ratio of women to men on management boards of companies, expressed as a percentage of all management board members 18% Exposure towards controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological weapons) Pekao Group companies are not involved in the production or sale of the controversial weapons mentioned in: (1) the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction of September 18, 1997; (2) the Convention on the Prohibition of Cluster Munitions, which entered into force on August 1, 2008; and (3) the Chemical Weapons Convention, which entered into force on April 29, 1997. 233 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Table 2 Additional climate and other environmental indicators INDICATOR OF ADVERSE IMPACTS ON SUSTAINABILITY FACTORS 2023 Emissions of inorganic pollutants Pekao Group companies do not emit inorganic pollutants in accordance with the definitions contained in Article 3(13) of Directive 2010/75/EU of the European Parliament and of the Council of November 24, 2010 on industrial emissions (integrated pollution prevention and control) Emissions of air pollutants Due to the nature of their operations, Pekao Group companies do not calculate emissions of anthropogenic air pollutants such as sulfur dioxide, nitrogen oxides, non-methane volatile organic compounds, ammonia and PM 2.5 fine particulate matter. Emissions of ozone-depleting substances Due to the nature of their operations, Pekao Group companies do not calculate the ozone-depleting emissions listed in the Montreal Protocol. Pekao Group companies have data on the consumption of refrigerants used in air-conditioning equipment, expressed in kilograms for the purpose of calculating GHG Protocol Scope 1 and 2 carbon dioxide emissions. Investments in companies not implementing carbon reduction initiatives Bank Pekao is implementing initiatives to reduce carbon emissions, as mentioned in the “Climate and Environment” section of this report. Distribution of energy consumption by type of non-renewable energy sources Consumption of fuel from coal and coal products: 0 Consumption of fuel derived from oil and petroleum products): 21,499 MWh Consumption of fuel derived from natural gas: 64 MWh Consumption of fuel from other non-renewable sources: 0 Consumption of nuclear products: 0 Water reuse and recycling Estimated water consumption: 110 785,11 cubic meters. Pekao Group companies do not calculate the share of recycled and reused water. Investments in companies without water policies Pekao Group companies do not have water management policies. Exposure towards areas of significant water scarcity Pekao Group companies do not have facilities located in areas of significant water scarcity according to the Aqueduct Water Risk Atlas methodology, i.e. risk areas: “High” (3-4) and “Extremely High” (4- 5). Investments in chemical manufacturing companies The activities of Pekao Group companies are not covered by Chapter 20.2 in Appendix 1 to Regulation (EC) No. 1893/2006 of the European Parliament and of the Council of December 20, 2006 establishing the statistical classification of economic activities NACE Revision 2 Land degradation, desertification, soil sealing Pekao Group companies are not engaged in activities that affect land degradation, desertification or soil sealing. Investments in companies that do not use sustainable agricultural practices/sustainable land management practices Pekao Group companies do not operate in the agricultural sector and do not manage land and are not obligated to use sustainable agricultural practices or strategies/practices or strategies for sustainable land management. Investments in companies that do not follow sustainable marine and ocean practices Pekao Group companies do not operate in the marine and ocean sector and are not obligated to follow sustainable marine and ocean practices. Non-recycled waste indicator Pekao Group companies do not calculate non-recycled waste. Natural species and protected areas Pekao Group companies do not carry out activities that affect endangered species included in the Red Book of Threatened Species (IUCN). Pekao Group companies do not have a biodiversity conservation policy covering operational sites owned, leased or managed in or adjacent to a protected area or an area of high biodiversity outside protected areas. Deforestation Pekao Group companies do not have a policy to prevent deforestation. 234 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Table 3 Additional indicators on social and labor issues, human rights issues, and anti-corruption and anti-bribery issues INDICATOR OF ADVERSE IMPACTS ON SUSTAINABILITY FACTORS 2023 Investments in companies that do not have an occupational accident prevention policy Bank Pekao Group companies have a Bank Pekao S.A. Group Policy on Occupational Health and Safety. Accident incidence rate 38 Number of days lost due to injuries, accidents, fatalities or illnesses 1,153 No supplier code of conduct Bank Pekao has the Code of Ethics for Suppliers of Bank Pekao S.A. (in the context of hazardous working conditions, precarious employment, child labor and forced labor). Lack of a mechanism for handling complaints regarding employee issues The mechanism for handling complaints regarding employee issues is included in the Mobbing Prevention Policy of Bank Polska Kasa Opieki Spółka Akcyjna and relevant separate regulations developed by subsidiaries. Inadequate protection of whistleblowers No occurrence of such cases. Whistleblower protection issues are covered in Bank Pekao S.A.’s Whistleblowing Policy. Instances of discrimination Number of instances of discrimination: 1 Number of incidences of discrimination leading to sanctions: 1 Remuneration of the CEO Value of the indicator for the Bank: 16.0 The Bank has a regulation called Remuneration policy for members of the Supervisory Board and Management Board of Bank Polska Kasa Opieki Spółka Akcyjna. No policy on respect for human rights Pekao Group companies do not have a comprehensive policy on respect for human rights. No due diligence process Pekao Group companies do not conduct due diligence to identify, mitigate or eliminate adverse human rights impacts. Lack of procedures and measures to prevent human trafficking Pekao Group companies do not have procedures and measures in place to prevent human trafficking. Activities and suppliers at significant risk of child labor incidents Bank Pekao has internal policies in this area, including in particular the Bank’s Compliance Policy, the Pekao Group Code of Conduct, the Code of Ethics for Suppliers of Bank Pekao S.A. The HR Strategy Division carrie s out activities to ensure compliance with generally applicable laws. Activities and suppliers at significant risk of forced labor incidents Bank Pekao has internal policies in this area, including in particular the Bank’s Compliance Policy, the Pekao Group Code of Conduct. The HR Strategy Division carries out activities to ensure compliance with generally applicable laws. Number of identified cases of serious human rights issues and incidents No cases of serious human rights issues or incidents have been identified in Pekao Group companies. No policy against corruption and bribery Bank Pekao Group companies are bound by the Bank Pekao Group’s Corruption Prevention Policy. Cases of not taking sufficient action on violations of anti-corruption and bribery standards No cases of violations of anti-corruption and anti-bribery procedures and standards have been reported in Pekao Group companies. Number of convictions and amount of fines for violations of anti-corruption and anti-bribery laws No convictions for violations of anti-corruption and anti-bribery laws were recorded at Pekao Group companies. The amount of fines for violations of anti-corruption and anti-bribery laws is PLN 0. Revision of the disclosure to the extent specified by the Principle Adverse Impacts in accordance with the SFDR Regulation for the Pekao Group as an investee presented in the Statement of Non-Financial Information of the Bank Pekao S.A. Group for 2022. In the Statement of Non-Financial Information of the Bank Pekao S.A. Group for 2022, as a result of an obvious mistake, an incorrect value of the indicator presenting the level of remuneration of the CEO was disclosed. The value presented in the disclosure was 21.4 while the actual value of the indicator was 18.2. The following table presents the correct values of all indicators in Table 3 for 2022. 235 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Table 3 Additional indicators on social and labor issues, human rights issues, and anti-corruption and anti-bribery issues INDICATOR OF ADVERSE IMPACTS ON SUSTAINABILITY FACTORS 2022 Investments in companies that do not have an occupational accident prevention policy Bank Pekao Group companies have a Bank Pekao S.A. Group Policy on Occupational Health and Safety. Accident incidence rate 23 Number of days lost due to injuries, accidents, fatalities or illnesses 547 No supplier code of conduct Pekao Group companies do not have a code of conduct for suppliers (in the context of hazardous working conditions, precarious employment, child labor and forced labor). Lack of a mechanism for handling complaints regarding employee issues The mechanism for handling complaints regarding employee issues is included in the Mobbing Prevention Policy of Bank Polska Kasa Opieki Spółka Akcyjna and relevant separate regulations developed by subsidiaries. Inadequate protection of whistleblowers No occurrence of such cases. Whistleblower protection issues are covered in Bank Pekao S.A.’s Whistleblowing Policy. Instances of discrimination Number of instances of discrimination: 0 Number of incidences of discrimination leading to sanctions: 0 Remuneration of the CEO Value of the indicator for the Bank: 18.2. The Bank has a regulation called Remuneration policy for members of the Supervisory Board and Management Board of Bank Polska Kasa Opieki Spółka Akcyjna . No policy on respect for human rights Pekao Group companies do not have a comprehensive policy on respect for human rights. No due diligence process Pekao Group companies do not conduct due diligence to identify, mitigate or eliminate adverse human rights impacts. Lack of procedures and measures to prevent human trafficking Pekao Group companies do not have procedures and measures in place to prevent human trafficking. Activities and suppliers at significant risk of child labor incidents Bank Pekao has internal policies in this area, including in particular the Bank’s Compliance Policy, the Pekao Group Code of Conduct. The HR Strategy Division carries out activities to ensure compliance with generally applicable laws. Activities and suppliers at significant risk of child labor incidents Bank Pekao has internal policies in this area, including in particular the Bank’s Compliance Policy, the Pekao Group Code of Conduct. The HR Strategy Division carries out activities to ensure compliance with generally applicable laws. Number of identified cases of serious human rights issues and incidents No cases of serious human rights issues or incidents have been identified in Pekao Group companies. No policy against corruption and bribery Bank Pekao Group companies are bound by the Bank Pekao S.A. Group’s Corruption Prevention Policy Cases of not taking sufficient action on violations of anti-corruption and bribery standards No cases of violations of anti-corruption and anti-bribery procedures and standards have been reported in Pekao Group companies. Number of convictions and amount of fines for violations of anti-corruption and anti-bribery laws No convictions for violations of anti-corruption and anti-bribery laws were recorded at Pekao Group companies. The amount of fines for violations of anti-corruption and anti-bribery laws is PLN 0. 236 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.11 Non-financial reporting process 13.11.1 Communication with stakeholders GRI 2-29 Approach to stakeholder engagement Bank Pekao attaches great importance to managing its relations with stakeholders, taking into account their needs and providing them with equal access to information. Therefore, the Bank is actively, transparently and effectively communicating with all Bank stakeholders using a variety of communication tools. The main groups of stakeholders include: • investors, market analysts and rating agencies, • customers, • employees, • suppliers, • general public, • media, • supervisory institutions, such as: the Financial Supervision Committee, the Bank Guarantee Fund, the Office of Competition and Consumer Protection, the National Bank of Poland, the Financial Stability Committee, the National Securities Depository. As a result of the analysis, it is these stakeholder groups that have been identified as particularly important, given the Bank’s business model, strategy implementation and future development. The “Principles of the Bank’s information policy regarding contacts with investors, securities market analysts, media and customers” regulate how communication with the external environment is carried out, with the goal of ensuring that communication is effective and provides universal and equal access to information while maintaining high standards. The principles of the Bank’s information policy are published on the website 2 . The Bank’s list of important stakeholders has not changed in 2023. STAKEHOLDER GROUP COMMUNICATION TOOLS COMMUNICATION FREQUENCY REPORTED TOPICS ACTIONS TAKEN BY THE BANK General Meeting of Shareholders At least once a year Conferences A dozen or so times a year Meetings and teleconferences Several hundred per year Stock exchange and press releases On an on-going basis Financial statements, data compilations and presentations of results Quarterly Bank’s website and online information channels On an on-going basis Meetings with rating agencies At least once a year Permanent cooperation of the Investor Relations and ESG Strategy Department (institutional and individual investors, financial analysts and capital market organizations); On an on-going basis Online ESG Report On an on-going basis Investors (shareholders, bondholders, and purchasers of other securities issued by the Bank, market analysts and rating agencies) Branches, online and mobile banking On an on-going basis • Implementation of strategies, building of value, organizational changes • Macroeconomic and market forecasts • Distribution of profits to shareholders Transparent operation, easy and fast access to information about the Bank, enforcement of external regulations and market standards. Bank’s website and online information channels On an on-going basis Online and mobile banking platform On an on-going basis Infoline On an on-going basis Complaints On an on-going basis Customers Satisfaction surveys on products and services and quality of customer service On an on-going basis • High quality of offered products and services, • Fair consumer practices • Security of entrusted funds • Ease of communication with the Bank • Offering competitive, high-quality products and services tailored to the needs of Customers; applying procedures that ensure fair and 2 https://www.pekao.com.pl/relacje-inwestorskie/raporty-i-sprawozdania/odpowiedzialny-biznes.html 237 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Advertising campaigns and marketing activities On an on-going basis Product offers, mailing On an on-going basis Participation in fairs Where possible Internal communication On an on-going basis safe management of Customers’ funds; ensuring a number of access channels; creating transparent • terms and conditions of offers and agreements; collecting information on expectations and opinions of • customers; contributing to the development of good practices and standards for advertising financial services and complying with them. Intranet, chats, discussion forum On an on-going basis Meetings with the participation of the Management Board Several times a year Trips to attend competitions, olympiads At least once a year Employee volunteer work program On an on-going basis Webinars On an on-going basis Employee evaluation At least once a year Internal publications On an on-going basis Thematic questionnaires, evaluation questionnaires, employee opinion surveys Several times a year Whistleblowing system On an on-going basis Employees Meetings with employer representatives, negotiations, consultations At least a dozen times or so a year • Employment stability and opportunities for professional growth • Attractive remuneration system • Bank’s strategy and its key goals • Transparent organizational structure • Balance between professional and private life Listening to employees’ opinions (chats, satisfaction surveys), providing employees with opportunities for growth (promotions, training), clear, measurable targets subject to monitoring, adequate wage and benefits policy, meetings with employees and on-going communication with employees, ensuring a friendly workplace: including through the implementation of remote work opportunities and pro-health and preventive measures. Intranet site On an on-going basis • Provisions of CA • Employee matters Dialogue with trade unions operating at the Bank, based on respect for fair interests of the parties. Trade union organizations Meetings with suppliers, negotiations On an on-going basis Detailed information on the social partners can be found on the individual intranet pages. • Trade Unions • Employee Council • Social Labor Inspection Providing the social side with opportunities to communicate with employees. Special procurement platform, telephone number, e-mail On an on-going basis On-going cooperation and execution of contracts On an on-going basis Suppliers Charity and sponsoring activities, actions on climate On an on-going basis • Transparent rules for the selection of and cooperation with suppliers Transparent supplier selection procedures; timely performance of the provisions laid down in the contract, promotion of good procurement practices. Employee volunteer work program On an on-going basis Meetings with students, student internships At least once a year Social and natural environment Press conferences A dozen or so times a year • Social and environmental projects • Reduction of negative impact on the environment, environmental education of • Implementing sponsorship and charity projects; supporting community development; encouraging employees to 238 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. Customers and Employees • Work and growth opportunities for students participate in social and environmental actions, reducing negative environmental impacts. Press releases On an on-going basis Social media On an on-going basis Interviews, expert statements On an on-going basis Participation in economic conferences, etc. Several dozen times a year Permanent cooperation of the Communications Office (journalists, media) On an on-going basis Media Reports, correspondence, inspections, non-reporting studies On an on-going basis • Implementation and promotion of the bank’s strategy • Release of accurate information on measures / condition of the bank to all groups of stakeholders through media • Building the position of a leader / expert in the financial sector Transparent operation, easy and fast access to information about the Bank. Regulators • Compliance with requirements and regulations; • Supporting the creation of new market principles, including good practices. Compliance with requirements, regulations and good practices, ongoing cooperation with the Regulators. 13.11.2 Information about the report GRI 2-2 Entities covered by the organization’s sustainability reporting Sustainability data for 2023 were provided by the following entities: Bank Pekao, Pekao Bank Hipoteczny S.A.; Centrum Kart S.A.; Pekao Direct Sp. z o.o.; Pekao Faktoring Sp. z o.o.; Pekao Financial Services Sp. z o.o.; Pekao Investment Banking S.A.; Pekao Investment Management S.A. (including: Pekao TFI S.A.) and Pekao Leasing Sp. z o.o. (including PEUF Sp. z o.o.). The data were consolidated using the full method. GRI 2-3 Reporting period, reporting frequency and contact information The non-financial statement was prepared in accordance with GRI Standards (GRI 1: Foundation 2021) for the period from 01.01.2023 to 31.12.2023. Pekao Group reports non-financial data on an annual basis. Contact regarding the report: • Iwona Zaremba, Manager of the ESG Team in the Department of Investor Relations and ESG Strategy • Anna Chada, ESG Expert at the Department of Investor Relations and ESG Strategy • Karolina Kołodziejska, ESG Expert at the Department of Investor Relations and ESG Strategy E-mail address: esg@pekao.com.pl GRI 2-4 Changes in reported information There were no significant changes during the reporting period. GRI 2-5 External verification The Statement was not subject to external verification or audit. The statement for the previous fiscal year was published on March 2, 2023. GRI 2-14 Role of the highest governing body in reporting on sustainability issues The statement on non-financial information is part of the report on Company’s activities, and is therefore submitted to all members of the Management Board of the Bank for review and approval. 13.11.3 Significance of topics GRI 3-1 Process of identifying material topics 239 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. In the Statement, the Bank presented relevant information on its strategy, management, performance and future plans. At the stage of identifying the environmental, economic and social impacts of its operations, the Bank took into account not only the provisions of the ESG Strategy and the business strategy, but also analyzed feedback from stakeholders (including: shareholders, investors, financial analysts, rating agency analysts and stock market analysts). In addition, guidelines for the financial sector were also taken into account to identify relevant topics, including: • requirements of Directive 2014/95/EU of the European Parliament and of the Council of October 22, 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups (implemented into Polish law in the form of amendments to the Accounting Act), • requirements of the Regulation (EU) No. 2019/2088 of the European Parliament and of the Council of November 27, 2019 on sustainability ‐ related disclosures in the financial services sector, • Best Practices of WSE Listed Companies 2021, • ESG reporting guidelines issued by the WSE, • European Securities and Markets Authority (ESMA) guidelines, • requirements arising from reporting rules within the PZU Group. GRI 3-2 List of material topics As a result of analyzing the aforementioned documents, legal acts and comments, the list of topics of importance in 2023 has not changed and is as follows: • factors affecting the Bank’s operations, • support for energy transition, • “green” and “sustainable” products, • regulatory changes in the area of “sustainable finance”, • reduction of the carbon footprint, protection of environmental resources, • social commitment, • responsible sales, service quality management, • human capital, working conditions and employee development, • business ethics and corporate governance, • inclusive organization - development, diversity and equality, • observance of human and worker rights, responsibility in the supply chain, • development of innovation in business operations, The above topics have been singled out in the Statement according to the principle of double significance, i.e. as topics that significantly affect Bank Pekao’s business (1) and as topics through which Bank Pekao exerts influence on its stakeholders’ environment (2). Each topic deemed significant is described from the perspective of the approach to its management, including the indicators corresponding to the process. In doing so, the Bank has taken into account potential and actual ESG risks and opportunities that may be material to the Bank’s operations. 240 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 13.12 Bank’s position in ESG ratings and indices The Bank’s involvement in ESG activities is assessed by the market in international rankings and indices. The Bank aims to increase its position in the environmental, social and corporate governance statements by systematically undertaking and disclosing ESG activities. RATING 2021 2022 2023 CONTEXTUAL INFORMATION MSCI ESG Ratings A BBB BBB MSCI ESG measures the resilience of companies to long-term risks in terms of environmental protection, corporate social responsibility and corporate governance. FTSE4Good Russell 3.1 3.3 3.1 FTSE Russell ESG assesses approximately 4,100 companies in 47 developed and developing countries. The purpose of the FTSE assessment is to facilitate investment in companies that meet internationally recognized corporate liability standards and is the basis for the inclusion of the company in the FTSE4Good index. FTSE4Good index companies have met strict environmental, social and corporate governance criteria and are able to exploit the benefits of responsible business practices. WIG-ESG (data as of 12.01.2024) Share of shares in the index: 5.6% Share of shares in the index: 5.9% Share of shares in the index: 6% The WIG-ESG index has been published since September 2019, based on the value of the portfolio of shares of companies recognized as socially responsible. The base value of the index was determined as at December 28, 2018 and amounted to 10,000.00 points. WIG-ESG is an income index, which means that both the prices of transactions concluded therein and the income from dividends are taken into account in its calculation. The share of a single company in the index is limited to 10%, whereas the aggregate share of companies the share of which exceeds 5% is limited to 40%. Bloomberg Gender Equality-Index 73/100 79/100 79,9/100 The Bloomberg Gender-Equality Index may include large listed companies actively seeking gender equality in the work environment. Globally in 2022, 418 companies from 45 countries and representing 11 sectors of the economy were included in the index. Index participants were selected from stock exchange companies with a capitalization of more than USD 1 billion. In order to be entered in the index, a sufficiently high result should be obtained in a survey based on four areas: leadership, development path, remuneration, gender equality. In the Bloomberg GEI rating, issues of respect for diversity and gender equality are analyzed in terms of employment conditions, educational activities, employee benefits and perks, professional development opportunities, promotion paths and salaries, among others. Sustainalitycs 29.1 medium risk 26.5 medium risk 23.4 medium risk The ESG risk assessments issued by Sustainalytics focus on the financially significant risks of ESG and cover more than 20,000 companies from 172 countries. The Agency’s methodology includes an analysis of the exposure of undertakings to significant risks related to ESG issues and an assessment of how companies manage those risks. Risk factors are determined on the basis of the industry and are determined on the basis of an analysis of 20 factors specific to each industry. Moody’s Analytics (formerly: Vigeo Eiris) 47/100 47/100 49/100 The Moody’s Analytics score presents the extent to which companies integrate environmental, social and management factors into their strategies and operations. Entities from 40 different industries from around the world participate in the index. During the ESG assessment, 38 issues are verified. Carbon Disclosure Project (CDP) D D C Carbon Disclosure Project is a non-profit organization that operates a global disclosure system for investors, companies, cities, states and regions to manage their environmental impact. Companies can disclose information through CDP’s corporate questionnaires on climate change, water management and strategies to prevent deforestation. S&P Global CSA n/a 43 49 S&P Global is a global organization that, among other things, publishes the S&P Global Corporate Sustainability Assessment rating, which measures the level of sustainability of participating companies. CSA rating performance is one of the key factors qualifying companies for inclusion in the S&P Dow Jones Sustainability Index. Every year, S&P examines some 13,000 companies. 241 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. List of indicators included in the report INDICATOR NUMBER TITLE OF THE GRI STANDARD INDICATOR NAME PLACE IN THE REPORT ORGANIZATION AND ITS REPORTING PRACTICES 2-1 GRI 2: General Disclosures 2021 Organizational data About Bank Pekao 2-2 GRI 2: General Disclosures 2021 Entities covered by the organization’s sustainability reporting Non-financial reporting process 2-3 GRI 2: General Disclosures 2021 Reporting period, reporting frequency and contact information Non-financial reporting process 2-4 GRI 2: General Disclosures 2021 Changes in reported information Non-financial reporting process 2-5 GRI 2: General Disclosures 2021 External verification Non-financial reporting process OPERATIONS AND EMPLOYEES 2-6 GRI 2: General Disclosures 2021 Operations, value chain and other business relationships About Bank Pekao 2-7 GRI 2: General Disclosures 2021 Employees Human capital 2-8 GRI 2: General Disclosures 2021 Persons providing work for the organization who are not employees of the organization Human capital CORPORATE GOVERNANCE 2-9 GRI 2: General Disclosures 2021 Composition and structure of the highest governing body About Bank Pekao 2-10 GRI 2: General Disclosures 2021 Appointment and election of the highest governing body About Bank Pekao 2-11 GRI 2: General Disclosures 2021 Chairperson of the highest governing body About Bank Pekao 2-12 GRI 2: General Disclosures 2021 Role of the highest governing body in overseeing influence management About Bank Pekao 2-13 GRI 2: General Disclosures 2021 Delegation of responsibility for influence management About Bank Pekao 2-14 GRI 2: General Disclosures 2021 Role of the highest governing body in reporting on sustainability issues About Bank Pekao 2-15 GRI 2: General Disclosures 2021 Conflict of interest Business ethics and corporate governance 2-16 GRI 2: General Disclosures 2021 Communicating relevant issues Responsible sales, quality management, business ethics and corporate governance 2-17 GRI 2: General Disclosures 2021 Collective knowledge of the highest governing body About Bank Pekao 2-18 GRI 2: General Disclosures 2021 Evaluation of the highest governing body’s performance About Bank Pekao 2-19 GRI 2: General Disclosures 2021 Remuneration policies Human capital 2-20 GRI 2: General Disclosures 2021 The process of determining remuneration Human capital 2-21 GRI 2: General Disclosures 2021 Annual total remuneration index Human capital STRATEGY, POLICIES (AND PRACTICES) 2-22 GRI 2: General Disclosures 2021 Statement on sustainable development strategy About Bank Pekao 2-23 GRI 2: General Disclosures 2021 Commitments included in policies Climate and environment Social commitment Business ethics and corporate governance 2-24 GRI 2: General Disclosures 2021 Implementation of commitments included in policies Business ethics and corporate governance 2-25 GRI 2: General Disclosures 2021 Remedial processes for negative impacts Responsible sales, quality management 2-26 GRI 2: General Disclosures 2021 Mechanisms for seeking advice and raising concerns (potential irregularities) Business ethics and corporate governance 2-27 GRI 2: General Disclosures 2021 Compliance with laws and regulations Business ethics and corporate governance 2-28 GRI 2: General Disclosures 2021 Membership in associations and organizations About Bank Pekao STAKEHOLDER ENGAGEMENT 2-29 GRI 2: General Disclosures 2021 Approach to stakeholder engagement Non-financial reporting process 2-30 GRI 2: General Disclosures 2021 Collective labor agreements Human capital II. MATERIAL TOPICS: 2021 3-1 GRI 3: Material topics 2021 Process of identifying material topics Non-financial reporting process 3-2 GRI 3: Material topics 2021 List of material topics Non-financial reporting process MATERIAL TOPIC OF REPORTING: FACTORS AFFECTING THE BANK’S OPERATIONS 3-3 GRI 3: Material topics 2021 Management of topics identified as material About Bank Pekao 201-1 GRI 201: Economic performance: 2016 Direct economic value generated and distributed About Bank Pekao 242 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. INDICATOR NUMBER TITLE OF THE GRI STANDARD INDICATOR NAME PLACE IN THE REPORT ESG Strategy: Environment MATERIAL TOPIC OF REPORTING: SUPPORT FOR ENERGY TRANSITION 3-3 GRI 3: Material topics 2021 Management of topics identified as material Climate and environment Own indicator Share of carbon-intensive financing Climate and environment Own indicator Share of green financing Climate and environment Own indicator Financing of sustainable projects Climate and environment Own indicator Supporting the issuance of customer ESG bonds Climate and environment MATERIAL TOPIC OF REPORTING: GREEN AND SUSTAINABLE PRODUCTS 3-3 GRI 3: Material topics 2021 Management of topics identified as material Climate and environment Own indicator Financing of sustainable projects Climate and environment Own indicator Supporting the issuance of customer ESG bonds Climate and environment Own indicator Share of green financing Climate and environment MATERIAL TOPIC OF REPORTING: REDUCTION OF THE CARBON FOOTPRINT, PROTECTION OF ENVIRONMENTAL RESOURCES 3-3 GRI 3: Material topics 2021 Management of topics identified as material Climate and environment 302-1 GRI 302: Energy 2016 Energy consumption (electricity, heat, cooling, steam) inside the organization - from renewable and non-renewable sources Climate and environment 305-1 GRI 305: Emissions 2016 Direct greenhouse gas emissions (scope 1) Climate and environment 305-2 GRI 305: Emissions 2016 Indirect greenhouse gas emissions (scope 2) Climate and environment MATERIAL TOPIC OF REPORTING: REGULATORY CHANGES IN THE AREA OF SUSTAINABLE FINANCE 3-3 GRI 3: Material topics 2021 Management of topics identified as material Mandatory disclosures under the Taxonomy Regulation CAPEX and OPEX ratios derived from Taxonomy, Principle Adverse Impacts Mandatory disclosures under the Taxonomy Regulation; Disclosure to the extent specified by the Principle Adverse Impacts under the SFDR Regulation for Pekao Group as an investee ESG Strategy: Engagement MATERIAL TOPIC OF REPORTING: OBSERVANCE OF HUMAN AND WORKER RIGHTS, RESPONSIBILITY IN THE SUPPLY CHAIN 3-3 GRI 3: Material topics 2021 Management of topics identified as material Observance of human and worker rights, responsibility in the supply chain 402-1 GRI 402 Employee-management relations 2016 Minimum notice periods in connection with operational changes, including information on whether they are specified in collective agreements Observance of human and worker rights, responsibility in the supply chain 406-1 GRI 406: Counteracting discrimination 2016 Total number of incidents of discrimination and corrective actions taken Observance of human and worker rights, responsibility in the supply chain 407-1 GRI 407: Freedom of association and collective labor agreements 2016 Establishments, locations of organizations where the right to freedom of association and collective labor agreements may be violated Observance of human and worker rights, responsibility in the supply chain 414-1 GRI 414: Social evaluation of suppliers 2016 Percentage of new suppliers that were evaluated for their labor practices Observance of human and worker rights, responsibility in the supply chain MATERIAL TOPIC OF REPORTING: HUMAN CAPITAL, WORKING CONDITIONS AND EMPLOYEE DEVELOPMENT 3-3 GRI 3. Material topics: 2021 Management of topics identified as material Human capital 401-1 GRI 401: Employment 2016 Newly hired employees and departures Human capital 401-2 GRI 401: Employment 2016 Benefits provided to full-time employees that are not provided to temporary or part-time employees Human capital 403-2 GR 403I: OHS 2018 Identification of hazards, risk assessment and incident investigation Health and safety 403-6 GRI 403: OHS 2018 Health promotion of employees Health and safety 403-9 GRI 403: OHS 2018 Type and rate of work-related injuries Health and safety 243 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. INDICATOR NUMBER TITLE OF THE GRI STANDARD INDICATOR NAME PLACE IN THE REPORT 404-1 GRI 404: Training and education 2016 Average number of training hours per employee Human capital MATERIAL TOPIC OF REPORTING: SOCIAL ENGAGEMENT 3-3 GRI 3: Material topics 2021 Management of topics identified as material Social engagement 413-1 GRI 413: Local communities 2016 Establishments with local community engagement programs, impact assessments and development programs in place Social engagement 415-1 GRI 415: Public engagement 2016 Total financial and in-kind value of donations to political parties, politicians and institutions of a similar nature Social engagement Own indicator Systematic increase in volunteer hours worked Social engagement Own indicator Number of partner organizations in volunteerism Social engagement Own indicator Number of employees involved in volunteer activities Social engagement Index of Good Practices of Companies Listed on the WSE 2021 At least once a year, the company discloses the expenses incurred by it and its group in supporting culture, sports, charitable institutions, the media, social organizations, labor unions, etc. If the company or its group incurred expenses for such purposes during the year under review, the disclosure includes a summary of such expenses. Social engagement MATERIAL TOPIC OF REPORTING: RESPONSIBLE SALES, SERVICE QUALITY MANAGEMENT 3-3 GRI 3: Material topics 2021 Management of topics identified as material Responsible sales, quality management 206-1 GRI 206: Violation of free competition 2016 Legal steps taken against organizations for violations of free competition and monopolistic practices Responsible sales, quality management Own indicator Complaint management Responsible sales, quality management 417-2 GRI 417: Marketing and labeling of products and services 2016 Cases of non-compliance with regulations and voluntary codes concerning the labelling of products and services and information about them Responsible sales, quality management 417-3 GRI 417: Marketing and labeling of products and services 2016 Cases of non-compliance with regulations and voluntary codes concerning marketing communication Responsible sales, quality management 418-1 GRI 418: Customer privacy 2016 Justified complaints concerning the violation of customer privacy and loss of data Responsible sales, quality management ESG Strategy: Governance MATERIAL TOPIC OF REPORTING: INCLUSIVE ORGANIZATION - DEVELOPMENT, DIVERSITY, EQUALITY 3-3 GRI 3: Material topics 2021 Management of topics identified as material Human capital 405-1 GRI 405: Diversity and equal opportunities 2016 Composition of supervisory bodies and staff by gender, age and other diversity indicators Human capital 405-2 GRI 405: Diversity and equal opportunities 2016 Ratio of basic and total salary (wages) of men and women by category of employees Human capital Own indicator Maintaining similar number of men and women in managerial positions Human capital MATERIAL TOPIC OF REPORTING: BUSINESS ETHICS AND CORPORATE GOVERNANCE 3-3 GRI 3: Material topics 2021 Management of topics identified as material Business ethics and corporate governance 205-1 GRI 205: Anti-corruption 2016 Activities assessed for corruption risks Business ethics and corporate governance 205-3 GRI 205: Anti-corruption 2016 Confirmed cases of corruption and actions taken Business ethics and corporate governance MATERIAL TOPIC OF REPORTING: DEVELOPMENT OF INNOVATION IN BUSINESS OPERATIONS 244 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. INDICATOR NUMBER TITLE OF THE GRI STANDARD INDICATOR NAME PLACE IN THE REPORT 3-3 GRI 3: Material topics 2021 Management of topics identified as material Responsible sales, quality management Own indicator Digitization indicator Responsible sales, quality management Table of Compliance with the Accounting Act REQUIREMENTS OF THE ACCOUNTING ACT FOR DISCLOSURE OF NON-FINANCIAL DATA HAS THE REQUIREMENT LAID DOWN IN THE ACT BEEN MET? REFERENCE IN THE REPORT PAGE NUMBER Description of the entity’s business model and key performance ratios Yes About Bank Pekao 120 Description of management of risk classified as significant Yes Business ethics and corporate governance 182 Description of policies, due diligence procedures and performance ratios connected with the entity’s activity in relation to the prevention of corruption Yes Business ethics and corporate governance 176 Description of policies, due diligence procedures and performance ratios connected with the entity’s activity in relation to the respect for human rights Yes Observance of human and worker rights, responsibility in the supply chain 183 Description of policies, due diligence procedures and performance ratios connected with topics relevant in consumer/customer relations, quality Yes Responsible sales, quality management 146 Description of policies, due diligence procedures and performance ratios connected with the entity’s activity in relation to employee issues Yes Human capital 155 Description of policies, due diligence procedures and performance ratios connected with the entity’s activity in relation to the natural environment Yes Climate and environment 129 Description of policies, due diligence procedures and performance ratios connected with the entity’s activity in relation to the social issues Yes Social commitment 136 245 Report on the activities of Bank Pekao S.A. Group for the year 2023 rok Bank Pekao S.A. 20.02.2024 Leszek Skiba President of the Management Board The original Polish document is signed with a qualified electronic signature Date Name/Surname Position/Function Signature 20.02.2024 Jarosław Fuchs Vice President of the Management Board The original Polish document is signed with a qualified electronic signature Date Name/Surname Position/Function Signature 20.02.2024 Marcin Gadomski Vice President of the Management Board The original Polish document is signed with a qualified electronic signature Date Name/Surname Position/Function Signature 20.02.2024 Jerzy Kwieciński Vice President of the Management Board The original Polish document is signed with a qualified electronic signature Date Name/Surname Position/Function Signature 20.02.2024 Paweł Strączyński Vice President of the Management Board The original Polish document is signed with a qualified electronic signature Date Name/Surname Position/Function Signature 20.02.2024 Błażej Szczecki Vice President of the Management Board The original Polish document is signed with a qualified electronic signature Date Name/Surname Position/Function Signature 20.02.2024 Wojciech Werochowski Vice President of the Management Board The original Polish document is signed with a qualified electronic signature Date Name/Surname Position/Function Signature 20.02.2024 Piotr Zborowski Vice President of the Management Board The original Polish document is signed with a qualified electronic signature Date Name/Surname Position/Function Signature 20.02.2024 Magdalena Zmitrowicz Vice President of the Management Board The original Polish document is signed with a qualified electronic signature Date Name/Surname Position/Function Signature