mBank S.A. — Capital/Financing Update 2016

Oct 21, 2016

Decision of Polish Financial Supervision Authority concerning the amountof an additional capital requirement for mBank S.A. related to FXmortgage loan portfolio

The Management Board of mBank S.A. ("Bank") informs that it received thedecision of the Polish Financial Supervision Authority ("PFSA") on 20October related to fulfilling the amount of an additional capitalrequirement by the Bank over the amount calculated in accordance withdetailed rules defined in Regulation of the European Parliament and ofthe Council (EU) No 575/2013 of 26 June 2013 on prudential requirementsfor credit institutions and investment firms, amending Regulation (EU)No. 648/2012 (OJ L 176 of 27 June 2013, p. 1 with additional amendments,"Regulation No. 575/2013").

The PFSA recommended to mBank S.A. to fulfil the additional capitalrequirement for covering the risk related to the foreign currencymortgage loans for households at 3,81 p.p. on the individual basis, overthe amount calculated in accordance with article 92 item 1 letter c ofthe Regulation No. 575/2013, which should be covered at least in 75% byTier 1 capital (equivalent to own funds requirement of 2,86 p.p. overthe amount calculated in accordance with article 92 item 1 letter b ofthe Regulation No. 575/2013) and at least in 56% by Common Equity Tier 1capital (equivalent to own funds requirement of 2,13 p.p. over theamount calculated in accordance with article 92 item 1 letter b of theRegulation No. 575/2013). This decision, based on the article 11.2 item21 of the Banking Law, is immediately in force.

Previously, as the Bank informed in the report no 86/2015 published on24 of October 2015, mBank S.A. was obliged to maintain own funds for thecoverage of additional capital requirement at the level of 4,39 p.p. onthe individual basis, which consists of at least 75% of Tier 1 capital(equivalent to 3,29 p.p.).

At the date of this current report, mBank S.A. fulfils the PFSArequirements related to the minimum capital ratios on both theindividual and consolidated levels.