Annual report
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TRANSLATORS’ EXPLANATORY NOTE The English content of this report is a free translation of the statutory auditor’s report of the below-mentioned Polish Company. In Poland statutory accounts as well as the auditor’s report should be prepared and presented in Polish language and in accordance with Polish legislation, and the accounting principles and practices generally adopted in Poland. The accompanying translation has not been reclassified or adjusted in any way to conform to the accounting principles generally accepted in countries other than Poland, but certain terminology current in Anglo-Saxon countries has been adopted to the extent practicable. In the event of any discrepancies in interpreting the terminology, the Polish language version is binding. PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp. k. , ul. Polna 11, 00-633 Warsaw, Poland, T: +48 (22) 746 4000, www.pwc.pl PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp. k. is entered into the National Court Register maintained by the District Court for the Capital City of Warsaw, under KRS number 0000750050, NIP 526 -021-02-28. The seat of the Company is in Warsaw at Polna 11. Independent Statutory Auditor’s Report To the General Shareholders’ Meeting and the Supervisory Board of Alior Bank S.A. Report on the audit of separate financial statements Our opinion In our opinion, the accompanying annual separate financial statements: • give a true and fair view of the separate financial position of Alior Bank S.A. (the “Bank”) as at 31 December 2024 and the Bank’s separate financial performance and the separate cash flows for the year then ended in accordance with the applicable International Financial Reporting Standards as adopted by the European Union and the adopted accounting policies; • comply in terms of form and content with the laws applicable to the Bank and the Bank’s Articles of Association; • have been prepared on the basis of properly maintained books of accounts in accordance with the provisions of Chapter 2 of the Accounting Act of 29 September 1994 (the “Accounting Act”). Our opinion is consistent with our additional report to the Audit Committee of the Bank issued on the date of this report. What we have audited We have audited the annual separate financial statements of Alior Bank S.A. which comprise: • the separate statement of financial position as at 31 December 2024; and the following prepared for the financial year then ended: • the separate statement of profit or loss • the separate other comprehensive income; • the separate statement of changes in equity; • the separate cash flow statement, and • the notes to separate financial statements, comprising material accounting policy information and other explanatory information. Basis for opinion We conducted our audit in accordance with the National Standards on Auditing as adopted by the resolutions of the National Board of Statutory Auditors and the resolution of the Council of the Polish Agency for Audit Oversight (“NSA”) and pursuant to the Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Oversight (the “Act on Statutory Auditors”) and the Regulation ( EU) No. 537/2014 of 16 April 2014 on specific requirements regarding the statutory audit of public interest entities (the “EU Regulation”). Our responsibilities under NSA are further described in the Auditor’s responsibilities for the audit of the separate financial statements section.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Bank in accordance with “the Handbook of the International code of ethics for professional accountants (including International independence standards) (“Code of ethics”) as adopted by resolution of the National Board of Statutory Auditors and other ethical requirements that are relevant to our audit of the separate financial statements in Poland. We have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of ethics. During the audit, the key statutory auditor and the audit firm remained independent of the Bank in accordance with the independence requirements set out in the Act on Statutory Auditors and in the EU Regulation. Our audit approach Overview • The overall materiality threshold adopted for our audit was set at PLN 158 million, which represents ca 5% of the profit before tax. • All material items included in the separate financial statements were subject to our audit procedures. • Estimation of the expected credit losses in the portfolio of loans and advances to customers • Estimation of provisions for litigation, potential claims, complaints, and coverage of other banking business risks Materiality Group scoping Key audit matters
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3 As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the separate financial statements. In particular, we considered where the Bank’s Management Board made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the separate financial statements as a whole, taking into account the structure of the Bank, the accounting processes and controls, and the industry in which the Bank operates. Materiality The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the separate financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the separate financial statements. Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the separate financial statements as a whole, as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstate ments, if any, both individually and in aggregate on the separate financial statements as a whole. Overall materiality PLN 158 million How we determined it Approx. 5% of profit before tax Rationale for the materiality benchmark applied We chose profit before tax as the benchmark because, in our view, it is the benchmark against which the performance of the Bank is most commonly measured by users, and is a generally accepted benchmark. We chose 5% because, based on our professional judgment, it falls within the range of acceptable quantitative materiality thresholds. We agreed with the Audit Committee of the Bank that we would report to them misstatements of the separate financial statements identified during our audit above PLN 7.9 million, as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons. Key audit matters
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4 Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the separate financial statements of the current period. They include the most significant identified risks of material misstatements, including the identified risks of material misstatement resulting from fraud. These matters were addressed in the context of our audit of the separate financial statements as a whole, and in forming our opinion thereon. We do not provide a separate opinion on these matters. Key audit matter How our audit addressed the key audit matter Estimation of the expected credit losses in the portfolio of loans and advances to customers In accordance with International Financial Reporting Standard 9 Financial Instruments (“IFRS 9”), the Management Board is required to determine the value of expected credit losses (“ECL”) that may occur over a 12-month period or in a lifetime horizon of a financial asset, depending on the classification of individual assets into risk categories (“Stages”), taking into account the impact of future macroeconomic conditions on the level of credit risk provisions. The Bank's credit portfolio includes exposures for which the level of expected credit losses is estimated: • individually for individually significant credit exposures and • using the portfolio method using statistical models, for each of the homogeneous portfolios identified by the Bank. Expected credit losses as at 31 December 2024 amounted to PLN 3.063 million in the portfolio of loans and advances to customers with a gross value of PLN 65 681 million. Estimation of the level of allowances for expected credit losses requires a significant degree of judgment regarding the identification of impaired loans and significant increase in credit risk (“SICR”), assessment of the client's credit quality, collateral value, and expected recoveries. Management monitors the performance of the models by comparing the results estimated by the models to actual credit losses (backtesting procedures) to ensure that the level of the allowance for expected credit losses on loans and advances to customers is appropriate. As part of our procedures, we gained an understanding of the internal control policies and procedures relating to the recognition and calculation of expected credit losses, and we verified the effectiveness of selected key controls implemented by the Bank, in particular: • procedures for entering customer data used for the calculation of expected credit losses; • procedures for the timely and complete identification of significant increases in credit risk (Stage 2) and impairment (Stage 3). We also assessed whether the methodology used by the Bank to estimate allowances for expected losses is consistent with the requirements of IFRS 9. In particular, we assessed the Bank’s approach to applying SICR identification criteria, the definition of default, the probability of default (“PD”) parameters, the loss given default (“LGD”) and taking into account forecasted macroeconomic information when calculating expected credit losses. For individually immaterial loans and advances that are assessed for impairment on a portfolio basis, we performed, in particular, the following procedures: • assessment of the Bank’s assumptions and expert adjustments used in the model; • critical analysis of key judgments and assumptions, including macroeconomic scenarios and assumed probabilities of individual scenarios; • independent tests of credit risk parameters; • sample-based verification of the assignment of exposures to the appropriate Stages. We engaged our internal credit risk modelling specialists to perform the above procedures. As part of the work on exposures analysed
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5 In the expected credit loss models, the Bank uses large amounts of data, and therefore the completeness and reliability of the data can significantly impact the accuracy of the expected credit loss calculations. We considered the level of allowances for expected credit losses for the customer receivables portfolio to be a key audit matter because of: • the significant judgment applied by Management in modeling future scenarios and forecasting macroeconomic variables, and in assuming the likelihood of each scenario occurring; • the high degree of uncertainty associated with the estimation of the allowance for expected credit losses; • the complexity of the audit procedures and audit evidence obtained due to the level of complexity of the calculations and the amount of data used to estimate the allowance for expected credit losses. Note 12 Net allowance for expected credit losses, Note 22 Loans and advances to customers, Note 43 Credit risk in the separate financial statements contain detailed information on the methods and models used and the level of expected credit losses in the portfolio of loans and advances to customers. individually, we performed the following procedures: • we applied our professional judgment in selecting the sample, taking into account various risk criteria; • for selected loans and advances, we checked the classification into Stages as at the balance sheet date; • for selected impaired loans and advances (Stage 3), we tested the assumptions used in calculating impairment losses, in particular the anticipated scenarios and their assigned probabilities, and the dates and amounts of expected cash flows, including cash flows from repayments and realisation of collateral. In addition, we performed the following procedures: • reconciled selected input data used to determine default parameters and estimate expected credit losses; • recalculated expected credit losses on a sample of credit exposures; • we performed analytical procedures in the scope of credit portfolio coverage with expected credit losses and their changes during the audited year and transfer of exposures between baskets; • we performed an analysis of events after the balance sheet date in terms of the potential need to make adjustments to the estimates of expected losses at the balance sheet date; • we analyzed the results of the sensitivity analysis conducted by the Management Board of the level of allowances for expected credit losses as a result of deterioration or improvement in risk parameters. We also assessed the adequacy and completeness of disclosures in the separate financial statements in accordance with the applicable accounting standards. Estimation of provisions for litigation, potential claims, complaints, and coverage of other banking business risks The Bank, operating in a highly regulated environment, is exposed to risks related to changes in the interpretation of legal regulations, is sued by clients in court cases concerning In terms of the risk of estimating provisions related to foreign currency mortgage loans, the obligation to refund part of the fees and commissions charged in connection with granted consumer loans, the free credit sanction, and the effects of historical sales of financial instruments, we focused on assessing the Bank's approach to estimating provisions and evaluating its
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6 various aspects of banking activities, and refunds fees and commissions to clients as a result of court judgments and changing interpretations. These issues lead to the necessity of recognizing liabilities and provisions related to both events that have already occurred and future events that may arise as a result of past occurrences. As of December 31, 2024, the balance of provisions created in relation to the aforementioned issues amounted to PLN 318 million. The provisions specifically relate to the effects of: • The judgment of the Court of Justice of the European Union ("CJEU") dated September 11, 2019, concerning consumer credit and the obligation to refund part of the fees and commissions charged to clients in connection with consumer loans if the loan is repaid before the contractual maturity date (provision amounting to PLN 53 million). • Contracts contested in court based on the provisions regarding the so-called free credit sanction resulting from Article 45 of the Consumer Credit Act of May 12, 2011 (provision amounting to PLN 50.6 million). As described in Note 40, the Bank is a defendant in 2746 legal proceedings with a total disputed value of PLN 115.1 million. • Legal disputes initiated by clients challenging foreign currency mortgage loan agreements as containing abusive clauses (aside from write- downs of the gross balance sheet value of these receivables, the risk cost recognized in the balance sheet in the provision line item amounts to PLN 58 million). • Legal disputes initiated by clients challenging the principles of historical sales of financial instruments, as well as other legal disputes (provision amounting to PLN 104.5 million). The Bank estimates probable cash outflows based on an analysis of the foreseeable effects of contentious matters, taking into account the assessment of legal risks associated with the Bank's activities. Provisions are recognized in accordance with International Accounting Standard 37: Provisions, Contingent Liabilities, and Contingent Assets ("IAS 37"), and in the area concerning foreign currency mortgage loan agreements, also in accordance with IFRS 9. compliance with the requirements of the International Financial Reporting Standards approved by the European Union. Our procedures were mainly directed towards a critical assessment of the methodology and individual assumptions adopted by the Management Board, which significantly influence the estimates made. In particular, we conducted the following procedures: • We held discussions with the Management Board and specialists, including the Bank's lawyers responsible for estimating provisions, about the adopted assumptions that considered historical observations, including information on court judgments, concluded court cases, and current numbers of claims. We also discussed past and potential legal resolutions; • We analyzed documentation and legal opinions, as well as historical data concerning past court judgments to estimate the probability of losing court disputes; • Reliability procedures: o We verified the assumptions adopted by the Bank regarding expected court case resolutions and the estimated probability of these outcomes based on the current court rulings and legal opinions; o We verified estimates of the probability of future lawsuits and assessed the scenarios adopted by the Bank regarding the anticipated number of lawsuits; o In collaboration with our legal experts, we analyzed documentation and legal opinions received directly from the Bank's external legal advisors; o We verified assumptions about the estimated amount of losses the Bank might incur in relation to contentious matters and reported complaints; o We confirmed the mathematical accuracy of the models used by the Bank to estimate provisions for the described risks; o We checked the accuracy and completeness of the data forming the basis for the calculations performed in the Bank's models (by applying detailed tests on the completeness and accuracy of the input data
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7 We considered the estimates of provisions created by the Bank to be a key audit matter due to their significant impact on the Bank's results, as well as the complexity and uncertainty of the assumptions used in their estimation. Note 30 Provisions, Note 41 Litigations, and Note 42 Contingent Liabilities in the standalone financial statements provide a detailed description of the factual circumstances, the basis for the provisions created, as well as descriptions of the estimates associated with creating the aforementioned provisions. Note 41 Litigations also presents possible alternative outcomes within the sensitivity analysis of estimates based on selected assumptions. for the models). We also assessed the adequacy and completeness of disclosures in the standalone financial statements in accordance with the applicable accounting standards. Responsibility of the Management of the Bank for the separate financial statements The Management Board of the Bank is responsible for the preparation, based on the properly maintained books of accounts of the annual separate financial statements that give a true and fair view of the Bank financial position and results of operations, in accordance with International Financial Reporting Standards as adopted by the European Union, the adopted accounting policies, the applicable laws and Bank’s Articles of Association, and for such internal control as the Bank’s Management Board determines is necessary to enable the preparation of separate financial statements that are free from material misstatement, whether due to fraud or error. In preparing the separate financial statements, the Bank’s Management Board is responsible for assessing the Bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Bank’s Management Board either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so. The Bank’s Management Board and members of the Supervisory Board are obliged to ensure that the separate financial statements comply with the requirements specified in the Accounting Act. Members of the Supervisory Board are responsible for overseeing the financial reporting process. Auditor’s responsibility for the audit of the separate financial statements Our objectives are to obtain reasonable assurance about whether the separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the NSA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence economic decisions of users taken on the basis of these separate financial statements.
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8 The scope of the audit does not include an assurance on the Bank’s future profitability nor the efficiency and effectiveness of conducting its affairs by the Bank’s Management Board, now or in future. As part of an audit in accordance with NSA, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • identify and assess the risks of material misstatement of the separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank’s internal control; • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Bank’s Management Board; • conclude on the appropriateness of the Bank’s Management Board’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Bank to cease to continue as a going concern; • evaluate the overall presentation, structure and content of the separate financial statements, including the disclosures, and whether the separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation; We communicate with the Audit Committee of the Bank regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Audit Committee of the Bank with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the Audit Committee of the Bank, we determine those matters that were of most significance in the audit of the separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
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9 Other information Other information Other information comprise: • a Report on the operations of the Alior Bank S.A. Group for the financial year ended 31 December 2024 prepared togerther with the report on the operations of Alior Bank S.A. (“the Report on the operations”) and the corporate governance statement which is a separate part of the Report on the operations, • other documents comprising the Annual Report for the financial year ended 31 December 2024 (“the Annual Report”), (together “Other Information”). Other information does not include the standalone financial statements, the consolidated financial statements of the Bank and its subsidiaries (the "Group"), and the auditor's reports thereon. We obtained the annual report before the date of this audit report, except for the Supervisory Board's Statement on the assessment, along with the justification, regarding the report on the issuer's activities and the financial statements in terms of their compliance with records, documents, and the actual state of affairs referred to in Article 71(1)(12) of the Regulation of the Minister of Finance of March 29, 2018, on current and periodic information provided by issuers of securities and the conditions for recognizing information required by the laws of a non-member state as equivalent (the "Regulation on Current Information"), which will be available after this date. Responsibility of the Management and Supervisory Board of the Bank The Management Board of the Bank is responsible for the preparation of the Other Information in accordance with the law. The Bank’s Management Board and the members of the Supervisory Board are obliged to ensure that the Report on the operations including its separate part complies with the requirements of the Accounting Act. Statutory auditor’s responsibility Our opinion on the separate financial statements does not cover the Other Information. In connection with our audit of the separate financial statements, our responsibility under NSA is to read the Other Information and, in doing so, consider whether the Other Information is materially inconsistent with the information in the separate financial statements, our knowledge obtained in our audit, or otherwise appears to be materially misstated. If, based on the work performed, we identified a material misstatement in the Other Information, we are obliged to inform about it in our audit rep ort. In accordance with the requirements of the Act on the Statutory Auditors, we are also obliged to issue an opinion on whether the Report on the operations, to the extent not related to sustainability reporting, has been prepared in accordance with the law, is consistent with information included in annual separate financial statements and to issue a statement as to whether, in the light of the knowledge about the Bank and its environment obtained during the audit, any material misstatements have been identified in the Report on the operations to the extent not related to sustainability reporting, and an indication of what any such material misstatement is. Moreover, we are obliged to issue an opinion on whether the Bank provided the required information in its corporate governance statement.
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10 In addition, we are required to audit the financial information included in item 8 of the Report on the operations in accordance with the scope described in this audit report and the requirements of the act of 29 August 1997 on the banking law (“the Banking Law”). Statement on the Other information We declare, based on the knowledge of the Bank, Group and its environment obtained during our audit, that we have not identified any material misstatements in the Report on the operations, to the extent not related to sustainability reporting, and in the remaining Other information. The Report on the operations, in the area related to sustainability reporting for the financial year ended December 31, 2024, was the subject of our separate assurance service providing limited assurance, for which we issued an unmodified opinion on March 4, 2025. As part of our procedures arising from the International Standards on Auditing (ISA), we also have not identified any material misstatements in the Report on the operations in the area related to sustainability reporting. In the event that, after reviewing the Supervisory Board's Statement on the assessment, including justification, regarding the issuer's activity report and the financial statements in terms of their compliance with records, documents, and the actual state of affairs referred to in Article 71(1)(12) of the Regulation on Current Information, we identify a material misstatement, we are obliged to inform the Bank's Supervisory Board. Opinion on the Report on the operations to the extent not related to sustainability reporting Based on the work we carried out during our audit, in our opinion, the Report on the operations, to the extent not related to sustainability reporting: • has been prepared in accordance with the requirements of Article 49 of the Accounting Act and para. 70 of the Regulation of the Minister of Finance dated 29 March 2018 on current and periodical information submitted by issuers of securities and conditions for considering as equivalent the information required under the legislation of a non-Member State (“Regulation on current information”) and Article 111a(1–2) of the Banking Law; • is consistent with the information in the separate financial statements. Opinion on the corporate governance statement In our opinion, in its corporate governance statement, the Bank included information set out in para. 70.6 (5) of the Regulation on current information. In addition, in our opinion, information specified in paragraph 70.6 (5)(c)–(f), (h) and (i) of the said Regulation included in the corporate governance statement are consistent with the applicable provisions of the law and with information included in the separate financial statements and consolidated financial statements. Report on other legal and regulatory requirements Information on compliance with prudential regulations The Management Board of the Bank is responsible for complying with the applicable prudential regulations set out in separate legislation, and in particular, for correct determination of the capital ratios. The capital ratios as at 31 December 2024 have been presented in Note 42.8 of the separate financial statements and include core Tier 1 capital ratio, Tier 1 capital ratio and the total capital ratio.
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We are obliged to inform in our report on the audit of the separate financial statements whether the Bank has complied with the applicable prudential regulations set out in separate legislation, and in particular, whether the Bank has correctly determined its capital ratios. For the purposes of the said information, the following legal acts are understood as separate legislation: Regulation (EU) no. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, as amended (“CRR”), the Banking Law and the Act of 5 August 2015 on macro-prudential supervision over the financial system and on crisis management in the financial system (“the Act on macro-prudential supervision”). It is not the purpose of an audit of the separate financial statements to present an opinion on compliance with the applicable prudential regulations specified in the separate legislation specified above, and in particular, on the correct determination of the capital ratios, and therefore, we do not express such an opinion. Based on the work performed by us, we inform you that we have not identified: • any cases of non-compliance by the Bank with the applicable prudential regulations set out in separate legislation referred to above, in the period from 1 January to 31 December 2024; • any irregularities in the determination by the Bank of the capital ratios as at 31 December 2024 in accordance with the separate legislation referred to above; which would have a material impact on the separate financial statements. Statement on the provision of non-audit services To the best of our knowledge and belief, we declare that the non-audit services prohibited under Article 5(1) of the EU regulation and Article 136 of the Act on Statutory Auditors were not provided and the non-audit services that we provided to the Bank and its controlled entities within the European Union are in accordance with the applicable laws and regulations in Poland. The non-audit services which we have provided to the Bank and its controlled entities within the European Union during the period from the beginning of the audited period to the date of issuing this report are disclosed in the Report on the Bank’s operations. Appointment We have been appointed to audit the annual separate financial statements of the Bank by the Resolution of the Supervisory Board of the Bank of 3 November 2022. The separate financial statements of the Bank were audited by us for the first time.
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The Key Statutory Auditor responsible for the audit on behalf of PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp.k., a company entered on the list of audit firms with the number 144., is Agnieszka Accordi. Original report is signed in Polish language Agnieszka Accordi Key Statutory Auditor No. in the registry 11665 Warsaw, 4 March 2025
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TRANSLATORS’ EXPLANATORY NOTE The English content of this report is a free translation of the statutory auditor’s limited assurance report on the sustainability statement of the below-mentioned Polish Company. In Poland the sustainability statement as well as the auditor’s report should be prepared and presented in Polish language and in accordance with Polish legislation, and the sustainability standards generally adopted in Poland. The accompanying translation has not been reclassified or adjusted in any way to conform to the accounting principles generally accepted in countries other than Poland, but certain terminology current in Anglo-Saxon countries has been adopted to the extent practicable. In the event of any discrepancies in interpreting the terminology, the Polish language version is binding. PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp. k. , ul. Polna 11, 00-633 Warsaw, Poland, T: +48 (22) 746 4000, www.pwc.pl PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp. k. is entered into the National Court Register maintained by the District Court for the Capital City of Warsaw, under KRS number 0000750050, NIP 526 -021-02-28. The seat of the Company is in Warsaw at Polna 11. Independent statutory auditor's limited assurance report on the sustainability statement To the General Shareholders’ Meeting and the Supervisory Board of Alior Bank S.A. Opinion We have conducted a limited assurance engagement on the “Sustainability statement” issued by Alior Bank S.A. (the „Bank”) prepared as of 31 December 2024 and for the year then ended and included in chapter XIV of the Report on the activities of Alior Bank S.A. Group for the year 2024 (prepared jointly with the Report on the activities of Alior Bank S.A.) (the “Sustainability statement of the capital group”). Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that: • the Sustainability statement of the capital group is not compliant, in all material respects, with Chapter 6c of the Accounting Act of 29 September 1994 (the “Accounting Act”), as well as with the European Sustainability Reporting Standards (the “ESRS”); • the materiality assessment process conducted by the Bank to identify information included in the Sustainability statement of the capital group (“Materiality Assessment Process”) is not compliant, in all material respects, with the ESRS; • the Sustainability statement of the capital group is not compliant, in all material respects, with the reporting requirements set out in Article 8 of 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, amending Regulation (EU) 2019/2088 (the “Taxonomy Regulation”). Basis for opinion We conducted our limited assurance engagement in accordance with National Standard on Assurance Services for Sustainability Reporting 3002PL - Limited assurance engagement on the sustainability statement (the“NSAE 3002PL”) and, where appropriate, with National Standard on Assurance Engagements Other than Audits and Reviews 3000 (R) in the wording of International Standard on Assurance Engagements 3000 (Revised) - Assurance Engagements Other than Audits or Reviews of Historical Financial Information (the “NSAE 3000 (R)”) adopted by the resolutions of the National Board of Statutory Auditors. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibility under NSAE 3002PL and, where applicable, NSAE 3000(R) is further described in the Responsibilities of statutory auditor providing the sustainability statement assurance section. Our independence and quality management We have complied with the independence requirements and other ethical requirements set out in the “Handbook of the International Code of Ethics for Professional Accountants (including International Independence Standards)” (“Code of ethics”) adopted by resolution of the National Board of Statutory
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TRANSLATORS’ EXPLANATORY NOTE The English content of this report is a free translation of the statutory auditor’s limited assurance report on the sustainability statement of the below-mentioned Polish Company. In Poland the sustainability statement as well as the auditor’s report should be prepared and presented in Polish language and in accordance with Polish legislation, and the sustainability standards generally adopted in Poland. The accompanying translation has not been reclassified or adjusted in any way to conform to the accounting principles generally accepted in countries other than Poland, but certain terminology current in Anglo-Saxon countries has been adopted to the extent practicable. In the event of any discrepancies in interpreting the terminology, the Polish language version is binding. 2 Auditors, which is based on the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behavior, as well as with the requirements contained in the Act of 11 May 2017 on Statutory Auditors, Audit Firms, and Public Oversight (the “Act on Statutory Auditors, Audit Firms and Public Oversight”) and in EU Regulation No. 537/2014 of 16 April 2014 on specific requirements regarding statutory audit of public interest entities. We have fulfilled other ethical obligations in accordance with the aforementioned regulations and the Code of ethics. Our firm applies the National Quality Control Standard 1 in the wording of the International Standard on Quality Management (PL) 1 – Quality Management for Companies that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements issued by the International Auditing and Assurance Standards Board and adopted by the resolution of the Council of the Polish Agency for Audit Oversight, as well as the provisions of the Act on Statutory Auditors, Audit Firms and Public Oversight. This standard requires us to design, implement, and operate a system of quality management, including policies or procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements. Responsibilities for the Sustainability statement of the capital group The Management Board of the Bank is responsible for designing and conducting the Materiality Assessment Process in accordance with ESRS, in order to identify the information included in the Group's Sustainability Reporting in line with ESRS, and for disclosing this process in section IRO -1 - Description of the process for identifying and assessing material impacts, risks, and opportunities in the Group's Sustainability Reporting. These responsibilities include, among others: • understanding the context in which the Group's activities and business relationships take place and identifying the stakeholders affected by these activities; • identifying actual and potential impacts (both negative and positive) related to sustainability issues, as well as risks and opportunities that affect or can be reasonably expected to affect the Group's financial position, financial performance, cash flows, access to financing, or cost of capital in the short, medium, or long term; • the assessment of the materiality of identified impacts, risks, and opportunities related to sustainability issues by selecting and applying appropriate materiality thresholds; and • making assumptions that are reasonable under the given circumstances. Management of the Bank is further responsible for preparation of the Sustainability statement of the capital group in accordance with Chapter 6c of the Accounting Act, including, among others, the following; • compliance with the ESRS; • compliance of the Group's Sustainability statement, including disclosures in the subsection Disclosure of Information pursuant to Article 8 of Regulation (EU) 2020/852 (the Taxonomy Regulation) in the Environmental Information section. The Group's Sustainability Reporting in accordance with Article 8 of the Taxonomy Regulation; • designing, implementing, and maintaining internal control that the Bank's management determines is necessary to enable the preparation of the Sustainability statement of the capital group that is free from material misstatements, whether due to fraud or error; and
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3 • the selection and application of appropriate sustainability reporting methods and making assumptions and estimates that are reasonable in the circumstances. The Supervisory Board of the Bank is responsible for overseeing the reporting process of the Sustainability statement of the capital group. Inherent limitations in the preparation of the Sustainability statement of the capital group As discussed in section Disclosures in relation to special circumstances (BP-2) of the Sustainability statement of the capital group, for metrics where access to full actual data is limited, estimates are used to ensure continuity and completeness of the information reported. In reporting forward-looking information in accordance with the ESRS, the management of the Bank is required to prepare the forward-looking information on the basis of disclosed assumptions about events that may occur in the future and possible future actions by the Group. Actual outcomes are likely to be different since anticipated events frequently do not occur as expected. Responsibilities of statutory auditor providing the sustainability statement assurance Our objectives are to plan and perform the assurance engagement to obtain limited assurance about whether the Sustainability statement of the capital group is free from material misstatements, whether due to fraud or error, and to issue a limited assurance report on the Sustainability statement of the capital group containing our opinion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of the Sustainability statement of the capital group as a whole. As part of a limited assurance engagement in accordance with NSAE 3002PL and NSAE 3000 (R), we exercise professional judgment and maintain professional skepticism throughout the engagement. Our responsibilities in respect of the Sustainability statement of the capital group, in relation to the Materiality Assessment Process, include: • obtaining an understanding of the Materiality Assessment Process, but not for the purpose of providing a conclusion on the effectiveness of the Materiality Assessment Process, including the outcome of the Materiality Assessment Process; • considering whether the information identified addresses the applicable disclosure requirements of the ESRS; and • designing and executing procedures to assess whether the Materiality Assessment Process is consistent with the description of the Bank's Materiality Assessment Process presented in section IRO-1 - Description of the process for identifying and assessing material impacts, risks, and opportunities in the Group's Sustainability Reporting. Our other responsibilities in respect of the Sustainability statement of the capital group include: • identifying where material misstatements are likely to arise, whether due to fraud or error; and • designing and performing procedures responsive to where material misstatements are likely to arise in the Sustainability statement of the capital group. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Summary of the work performed A limited assurance engagement involves performing procedures to obtain evidence about the Sustainability statement of the capital group. The procedures in a limited assurance engagement vary
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4 in nature and timing from, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. The nature, timing and extent of procedures selected depend on professional judgement, including the identification of disclosures where material misstatements are likely to arise in the Sustainability statement of the capital group, whether due to fraud or error. In conducting our limited assurance engagement, with respect to the Materiality Assessment Process, we: • obtained an understanding of the Materiality Assessment Process by: ● performing inquiries to understand the sources of the information used by management (e.g., stakeholder engagement, business plans and strategy documents); ● reviewing the Bank’s internal documentation of its Materiality Assessment Process]; and • assessed whether the evidence obtained from our procedures regarding the Materiality Assessment Process implemented by the Bank was consistent with the description of the Materiality Assessment Process included in section IRO-1 - Description of the process for identifying and assessing material impacts, risks, and opportunities in the Group's Sustainability Reporting. In conducting our limited assurance engagement, with respect to the Sustainability statement of the capital group, we: • obtained an understanding of the reporting process relevant to the preparation of the Sustainability statement of the capital group by obtaining understanding of the Group’s control environment, processes, and information system relevant to the preparation of the Sustainability statement of the capital group, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control; • evaluated whether the information identified by the Materiality Assessment Process is included in the Sustainability statement of the capital group; • evaluated whether the structure and the presentation of the Sustainability statement of the capital group is in accordance with the ESRS; • performed inquiries of the Bank’s employees involved in the preparation of the Sustainability statement of the capital group; • performed substantive assurance procedures on selected information in the Sustainability statement of the capital group; • where applicable, compared disclosures in the Sustainability statement of the capital group with the corresponding disclosures in the consolidated financial statements and the management report of the Group; • evaluated the methods assumptions and data for developing estimates and forward-looking information; • obtained an understanding of the Company's process to identify taxonomy-eligible and taxonomy- aligned economic activities and the corresponding disclosures in the Sustainability statement of the capital group.
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5 Other matter The comparative data as of 31 December 2023, and for the year then ended included in the Sustainability statement of the capital group was not subject to sustainability assurance. Our opinion is not modified in respect of this matter. Acting on behalf of PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp.k., a company registered on the list of audit firms under number 144, Original report is signed in Polish language Agnieszka Accordi Key Statutory Auditor providing the sustainability statement assurance No. in the registry 11665 Warsaw, 4 March 2025
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Appendix to Resolution No. 35/2025 of the Supervisory Board of Alior Bank S.A. of March 4, 2025 1 Assessment made by the Supervisory Board of Alior Bank Spółka Akcyjna (“Bank”) regarding the financial statements of the Bank and the Bank’s Capital Group and the Report of the Management Board on the operations for the fiscal year from January 1, 2024, to December 31, 2024, and the Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement as regards their compliance with the books, documents and the actual state of affairs This version of the assessment is a translation from the original, which was prepared in the Polish language. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information,views or opinions, the original language version of our report takes precedence over this translation
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Appendix to Resolution No. 35/2025 of the Supervisory Board of Alior Bank S.A. of March 4, 2025 2 Legal basis: Art. 382.3.1 of the Code of Commercial Companies of September 15, 2000, (consolidated text: Journal of Laws 2024, item 18) ("Commercial Companies Code") and Art. 70.1.14 of the Regulation of the Minister of Finance of March 29, 2018, on ongoing and periodical disclosure by issuers of securities and conditions to recognize as equivalent the information that is required by the law in Non- Member States (Journal of Laws 2018, item 757) (“Regulation on current and periodical disclosures”). 1. Assessment of the financial statements of Bank for the financial year lasting from January 1, 2024, to December 31, 2024, with the assessment of the financial statements of the Bank’s Capital Group for the financial year for the period from January 1, 2024, to December 31, 2024 In compliance with Art. 382.3.1 of the Code of Commercial Companies and Art. 70.1.14 of the Regulation on ongoing and periodic disclosures, the Supervisory Board performed a review of the standalone and consolidated financial statements submitted by the Bank's Management Board for the financial year for the period from January 1, 2024 to December 31, 2024. The financial statements of the Bank include: • statement of the financial position made as at December 31, 2024, with the total assets and liabilities of PLN 93 038 466 thousand, • profit and loss account for the period from January 1, 2024, to December 31, 2024, disclosing a net profit of PLN 2 417 499 thousand, • statement of comprehensive income for the period from January 1, 2024, to December 31, 2024, with a comprehensive income of PLN 2 509 841 thousand, • statement of changes in equity for the fiscal year from January 1, 2024, to December 31, 2024, with an increase of equity by PLN 1 932 793 thousand, • statement of cash flows for the period from January 1, 2024, to December 31, 2024, showing a decrease in cash of PLN 410 501 thousand, • additional notes and information. The financial statements of the Bank’s Capital Group include: • statement of the financial position made as at December 31, 2024, with the total assets and liabilities of PLN 93 293 487 thousand, • profit and loss account for the period from January 1, 2024, to December 31, 2024, disclosing a net profit of PLN 2 445 022 thousand, including a net profit attributable to the shareholders of the parent company in the amount of PLN 2 445 022 thousand,
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Appendix to Resolution No. 35/2025 of the Supervisory Board of Alior Bank S.A. of March 4, 2025 3 • statement of comprehensive income for the period from January 1, 2024, to December 31, 2024, with a comprehensive income of PLN 2 537 301 thousand, • statement of changes in equity for the fiscal year from January 1, 2024, to December 31, 2024, with an increase of equity by PLN 1 957 129 thousand, • statement of cash flows for the period from January 1, 2024, to December 31, 2024, showing a decrease in cash of PLN 415 908 thousand, • additional notes and information. The financial statements of the Bank and the Bank’s Capital Group for the period from January 1 to December 31, 2024, were made in line with the International Financial Reporting Standards (IFRS) applied on a continuous basis, as approved by the European Union as at December 31, 2024. In its audit report, the independent statutory auditor – PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp.k. with its registered office in Warsaw, ul. Polna 11, expressed an opinion that the standalone and consolidated financial statements: • present a reliable and clear view of the economic and financial condition of the Bank and the Bank’s Capital Group as at December 31, 2024, and the standalone and consolidated financial results of activity and standalone and consolidated cash flows for the financial year ended on December 31, 2024, in compliance with the International Accounting Standards, the International Financial Reporting Standards, and the related interpretations published as Regulations of the European Commission and the approved accounting principles (policies), • were made on the basis of properly maintained accounting books in accordance with the provisions of Chapter 2 of the Act of September 29, 1994, on Accounting (the “Accounting Act”), • are compliant in terms of their form and content with the applicable regulations and provisions of the Bank's articles of association. Having reviewed the financial statements of the Bank and the financial statements of the Bank’s Capital Group for the fiscal year ended on December 31, 2024, and having reviewed the relevant audit reports, the Supervisory Board positively assesses the financial statements in terms of their compliance with the underlying account ing books and documents, and confirms they contain information correctly presenting the economic and financial condition of the Bank and the Bank’s Capital Group. Additionally, the Supervisory Board states that the above financial statements were made within the prescribed time frames and in compliance with the International Financial Reporting Standards, as approved by the European Union. The correctness of the reviewed financial statements in terms of their compliance with the underlying accounting books, documents, and facts, raise no concerns and is reflected in the positive opinions of the statutory auditor.
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Appendix to Resolution No. 35/2025 of the Supervisory Board of Alior Bank S.A. of March 4, 2025 4 2. Assessment of the Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In compliance with Art. 382.3 of the Code of Commercial Companies and Art. 70.1.14 of the Regulation on ongoing and periodic disclosures, the Supervisory Board reviewed the Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement („Management Board's Report“). The Supervisory Board states that the Management Board's Report is compliant with the applicable laws and is compliant with the information disclosed in the financial statements. The Management Board's Report presents in a concise manner all material aspects of the Bank's activity in the reporting period. The information disclosed in the Management Board's Report is compliant with the underlying accounting books, documents, and facts. At the same time, the Supervisory Board states that the disclosures presented in the Sustainability Statement are consistent with the guidelines of the Corporate Sustainability Reporting Directive (CSRD), the requirements of the European Sustainability Rep orting Standards (ESRS) and the EU Taxonomy Regulation. 04.03.2025 Deputy Chairperson of the Supervisory Board of Alior Bank Jan Zimowicz (Signed with a qualified electronic signature)
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Separate Financial Statements of Alior Bank Spółka Akcyjna for the year ended 31 December 2024 This version of our report is a translation from the original, which was prepared in Polish language. All possible care has b een taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation o f information, views or opinions, the original language version of our report takes precedence over this translation.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0 ) 2 Table of Contents Separate income statement ...................................................................................................................................................... 3 Separate statement of comprehensive income ............................................................................................................................... 3 Separate statement of financial position ....................................................................................................................................... 4 Separate statement of changes in equity ...................................................................................................................................... 5 Separate cash flow statement ................................................................................................................................................... 6 Notes to the separate financial statements .................................................................................................................................... 7 1 Information about the Bank ................................................................................................................................... 7 2 Basis of preparation of the financial statements ......................................................................................................... 11 3 Description of the material accounting policy information ............................................................................................. 12 4 Changes in accounting principles .......................................................................................................................... 16 5 Operating segments .......................................................................................................................................... 18 Notes to income statement .................................................................................................................................................... 20 6 Net interest income .......................................................................................................................................... 20 7 Net fee and commission income ........................................................................................................................... 23 8 The result on financial assets measured at fair value through profit or loss and FX result ........................................................ 25 9 The result on derecognition of financial instruments not measured at fair value through profit or loss ........................................ 26 10 Result on other operating income and expenses ........................................................................................................ 26 11 General administrative expenses ........................................................................................................................... 27 12 Net expected credit losses .................................................................................................................................. 27 13 The result on impairment of non-financial assets ........................................................................................................ 28 14 Cost of legal risk of FX mortgage loans ................................................................................................................... 29 15 Banking Tax ................................................................................................................................................... 30 16 Income tax ..................................................................................................................................................... 30 17 Earnings per share ............................................................................................................................................ 33 Additional information to the statement of financial position ............................................................................................................ 33 18 Cash and cash equivalents .................................................................................................................................. 33 19 Amounts due from banks .................................................................................................................................... 34 20 Investment financial assets ................................................................................................................................. 35 21 Hedge accounting ............................................................................................................................................ 42 22 Loans and advances to customers ......................................................................................................................... 50 23 Tangible fixed assets and intangible assets ............................................................................................................... 67 24 Investments in subsidiaries.................................................................................................................................. 73 25 Other assets ................................................................................................................................................... 73 26 Assets pledged as colleteral ................................................................................................................................. 74 27 Amounts due to banks ....................................................................................................................................... 75 28 Amounts due to customers ................................................................................................................................. 75 29 Financial liabilities held for trading ......................................................................................................................... 76 30 Provisions ...................................................................................................................................................... 77 31 Other liabilities ................................................................................................................................................ 80 32 Debt securities issued ....................................................................................................................................... 81 33 Subordinated liabilities ....................................................................................................................................... 83 34 Equity .......................................................................................................................................................... 83 Other additional information .................................................................................................................................................. 86 35 Off-balance sheet items ..................................................................................................................................... 86 36 Additional information to the cash flow statement ..................................................................................................... 89 37 Fair value ...................................................................................................................................................... 90 38 Transactions with related entities .......................................................................................................................... 96 39 Benefits for the for senior executives ................................................................................................................... 100 40 Offsetting of financial assets and liabilities ............................................................................................................. 103 41 Legal claims .................................................................................................................................................. 104 42 Contingent liability ......................................................................................................................................... 107 Explanatory notes concerning risk .......................................................................................................................................... 110 43 Credit risk .................................................................................................................................................... 112 44 Interest rate risk ............................................................................................................................................ 127 45 Foreign exchange risk (FX risk) ........................................................................................................................... 134 46 Liquidity risk ................................................................................................................................................. 136 47 Operational risk ............................................................................................................................................. 143 48 Capital Management ....................................................................................................................................... 145 Other ………………………………………………………………………………………………………………………………………………………………………………………….. 148 49 Events significant to the business operations of the Bank ........................................................................................... 148 50 Significant events after the end of the reporting period .............................................................................................. 150
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 3 Separate income statement Note number 01.01.2024 –31.12.2024 01.01.2023 –31.12.2023 Interest income calculated using the effective interest method 6 982 207 7 123 671 Income of a similar nature 137 178 154 009 Interest expense -2 041 653 -2 615 902 Net interest income 6 5 077 732 4 661 778 Fee and commission income 1 192 879 1 666 469 Fee and commission expense -478 371 -956 899 Net fee and commission income 7 714 508 709 570 Dividend income 5 419 11 248 The result on financial assets measured at fair value through profit or loss and FX result 8 32 711 61 373 The result on derecognition of financial instruments not measured at fair value through profit or loss 9 27 477 12 251 measured at fair value through other comprehensive income 26 889 10 346 measured at amortized cost 588 1 905 Other operating income 77 367 94 690 Other operating expenses -152 577 -191 692 Net other operating income and expenses 10 -75 210 -97 002 General administrative expenses 11 -1 984 103 -1 859 725 Net expected credit losses 12 -334 735 -559 905 The result on impairment of non-financial assets 13 -1 655 -2 290 Cost of legal risk of FX mortgage loans 14 -59 355 -53 983 Banking tax 15 -279 667 -263 753 Gross profit 3 123 122 2 619 562 Income tax 16 -705 623 -632 118 Net profit 2 417 499 1 987 444 Weighted average number of ordinary shares 130 553 991 130 553 991 Basic/diluted earnings per ordinary share (in PLN) 17 18.52 15.22 Separate statement of comprehensive income Note number 01.01.2024 –31.12.2024 01.01.2023 –31.12.2023 Net profit 2 417 499 1 987 444 Other comprehensive net income, that may be reclassified to the income statement once the relevant conditions have been met 92 342 1 049 997 Exchange rate differences from the conversion of entities operating abroad -1 996 1 969 Results of the measurement of financial assets (net) -10 260 187 288 Gain/loss from fair value measurement 20 11 520 195 668 Gain/loss reclassified to profit or loss after derecognition 16 -21 780 -8 380 Results on the measurement of hedging instruments (net) 104 598 860 740 Gain/loss from fair value measurement of financial instruments hedging cash flows in the part constituting an effective hedge 21 -243 391 202 717 Gain/loss on financial instruments hedging cash flows reclassified to profit or loss 16 347 989 658 023 Total comprehensive income, net 2 509 841 3 037 441
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 4 Separate statement of financial position ASSETS Note number 31.12.2024 31.12.2023 Cash and cash equivalents 18 2 111 054 2 521 555 Amounts due from banks 19 1 821 581 4 615 420 Investment financial assets: 20 23 586 506 18 803 661 measured at fair value through other comprehensive income 21 201 567 15 469 101 measured at fair value through profit or loss 227 003 408 882 measured at amortized cost 2 157 936 2 925 678 Derivative hedging instruments 21 274 711 336 122 Loans and advances to customers 22 62 617 092 60 822 737 Assets pledged as collateral 26 18 029 46 894 Property, plant and equipment 23 666 230 722 346 Intangible assets 23 450 157 389 028 Investments in subsidiaries 24 222 252 222 252 Income tax asset 16 606 488 765 912 deferred income tax asset 606 488 765 912 Other assets 25 664 366 600 909 TOTAL ASSETS 93 038 466 89 846 836 LIABILITIES AND EQUITY Note number 31.12.2024 31.12.2023 Amounts due to banks 27 42 799 144 991 Amounts due to customers 28 76 979 707 73 107 213 Financial liabilities held for trading 29 196 450 276 463 Derivative hedging instruments 21 450 383 682 631 Change in fair value measurement of hedged items in hedged portfolio against interest rate risk 21 -53 015 -229 Provisions 30 318 906 307 838 Other liabilities 31 1 628 785 2 577 203 Income tax liabilities 16 255 802 282 708 current income tax liabilities 255 802 282 708 Debt securities issued 32 2 087 016 2 109 179 Subordinated liabilities 33 0 1 159 999 Total liabilities 81 906 833 80 647 996 Share capital 1 305 540 1 305 540 Supplementary capital 7 431 101 6 020 705 Revaluation reserve -197 210 -291 548 Other reserves 174 447 174 447 Foreign currency translation differences 256 2 252 Profit for the period 2 417 499 1 987 444 Equity 34 11 131 633 9 198 840 TOTAL LIABILITIES AND EQUITY 93 038 466 89 846 836
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 5 Separate statement of changes in equity 01.01.2023 - 31.12.2024 Share capital Supplementary capital Other reserves Revaluation reserve Exchange differences on revaluation of foreign units Retained earnings Total equity Aa at 1 January 2024 1 305 540 6 020 705 174 447 -291 548 2 252 1 987 444 9 198 840 Dividend paid 0 0 0 0 0 -577 048 -577 048 Transfer of last year's profit 0 1 410 396 0 0 0 -1 410 396 0 Comprehensive income incl. 0 0 0 94 338 -1 996 2 417 499 2 509 841 net profit 0 0 0 0 0 2 417 499 2 417 499 other comprehensive income 0 0 0 94 338 -1 996 0 92 342 As at 31 December 2024 1 305 540 7 431 101 174 447 -197 210 256 2 417 499 11 131 633 01.01.2023 - 31.12.2023 Share capital Supplementary capital Other reserves Revaluation reserve Exchange differences on revaluation of foreign units Retained earnings Total equity As at 1 January 2023 1 305 540 5 401 470 174 447 -1 339 576 283 619 235 6 161 399 Transfer of last year's profit 0 619 235 0 0 0 -619 235 0 Comprehensive income incl. 0 0 0 1 048 028 1 969 1 987 444 3 037 441 net profit 0 0 0 0 0 1 987 444 1 987 444 other comprehensive income 0 0 0 1 048 028 1 969 0 1 049 997 As at 31 December 2023 1 305 540 6 020 705 174 447 -291 548 2 252 1 987 444 9 198 840
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 6 Separate cash flow statement Note number 01.01.2024- 31.12.2024 01.01.2023- 31.12.2023* Operating activities Profit before tax for the year 3 123 122 2 619 562 Adjustments: -113 950 -134 963 Unrealized foreign exchange gains/losses -1 996 1 969 Amortization/depreciation of property, plant and equipment and intangible assets 23 254 296 243 461 Change in property, plant and equipment and intangible assets impairment write-down 1 655 2 290 Net interest income -5 077 732 -4 661 778 Interest income received 6 859 172 6 959 057 Interest expenses paid -2 143 926 -2 668 714 Dividends received -5 419 -11 248 The gross profit after adjustments but before increase/decrease in operating assets/liabilities 3 009 172 2 484 599 Change in loans and receivables 36.2 1 189 604 -5 356 706 Change in financial assets measured at fair value through other comprehensive income -5 793 899 -5 398 265 Change in financial assets measured at fair value through profit or loss 181 879 14 156 Change in assets pledged as collateral 28 865 -5 902 Change in non-current assets held for sale 0 1 611 Change in other assets -63 457 -122 575 Change in deposits 3 883 867 3 057 249 Change in own issue -956 347 476 103 Change in financial liabilities -80 013 20 469 Change in hedging derivative -32 538 8 186 Change in other liabilities 36.2 -1 346 741 749 160 Change in provisions 11 068 40 064 Short-term lease contracts 1 560 70 Cash from operating activities before income tax 33 020 -4 031 781 Income tax paid -595 232 -369 166 Net cash flow from operating activities -562 212 -4 400 947 Investing activities Outflows: -1 339 486 -189 403 Purchase of property, plant and equipment -72 725 -85 674 Purchase of intangible assets -98 609 -67 913 Acquisition of assets measured at amortized cost -1 168 152 -35 816 Inflows: 1 936 923 3 899 121 Disposal of property, plant and equipment 6 511 19 030 Redemption of assets measured at amortized cost 1 930 412 3 880 091 Net cash flow from investing activities 597 437 3 709 718 Financing activities Outflows: -1 395 726 -204 480 Prniciple payments - subordinated lliabilities -1 141 700 0 Interest payments – subordinated and long-term lliabilities -168 517 -114 309 Prniciple payments - lease liabilities -76 637 -80 044 Interest payments - lease liabilities -8 872 -10 127 Inflows: 950 000 851 858 Issue of debt securities - long-term liabilities 950 000 851 858 Net cash flow from financing activities -445 726 647 378 Total net cash flow -410 501 -43 851 incl. exchange gains/(losses) -1 252 -116 871 Balance sheet change in cash and cash equivalents -410 501 -43 851 Cash and cash equivalents, opening balance 2 521 555 2 565 406 Cash and cash equivalents, closing balance 18 2 111 054 2 521 555 *Restated - details at Note 4.2
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 7 Notes to the separate financial statements 1 Information about the Bank 1.1 General information, duration, and the scope of business of Alior Bank SA Alior Bank Spółka Akcyjna with its registered office in Warsaw, Poland, ul. Łopuszańska 38D, was entered to the register of entrepreneurs maintained by the District Court for the Capital City of Warsaw, 1 4th Commercial Division of the National Court Register under KRS number: 0000305178. The Bank was assigned the tax identification number NIP: 107-001-07-31 and the statistical number REGON: 141387142. Since 14 December 2012 the Bank has been listed on the Warsaw Stock Exchange (ISIN number: PLALIOR00045). Alior Bank is a universal deposit and credit bank, providing services to natural and legal persons, and other entities that are domestic and foreign persons. The Bank's core business covers maintenance of bank accounts, granting loans, issue of bank securi ties, and purchase and sale of foreign currencies. The Bank is also involved in stock broking activity, financial advisory, and intermediation services, and provides other financial services. In accordance with the provisions of its Articles of Association , Alior Bank has been operating in the territory of the Republic of Poland and the European Economic Area. The Bank provides its services primarily to customers from Poland. The number of foreign customers in the overall number of the Bank's customers is negligible. As part of its retail banking, in 2016 a foreign branch of Alior Bank was opened in Romania. As at 30 November 2024, the branch ended its operational activities. 1.2 Information on the composition of the Bank’s Management Board and the Bank’s Supervisory Board Compared to the previous reporting period ended on 31 December 202 3, there were changes in the composition of the Bank's Management Board. On 15 May 2024, the Supervisory Board of the Bank adopted the resolutions to recall the following persons from the Management Board: • Mr. Grzegorz Olszewski, • Mr. Paweł Broniewski, • Mr. Szymon Kamiński, • Mr. Rafał Litwińczuk, • Mr. Jacek Polańczyk, • Mr. Paweł Tymczyszyn. Moreover, the Bank’s Supervisory Board delegated Supervisory Board Member Mr. Artur Chołody to perform the duties of Vice President of the Management Board in charge of leading the Management Board, from 15 May 2024 to 14 August 2024, subject to the possibility of an early termination of the delegation. On 1 August 2024, the Bank's Supervisory Board, adopted resolutions on appointing to the Bank's Management Board : • Mr. Piotr Żabski: (i) as of 1 January 2025, as Vice-President of the Bank's Management Board, (ii) as President of the Bank's Management Board, subject to the relevant consent of the Polish Financial Supervision Authority and as of the date of such consent (iii) entrusting him with the management of the Bank's Management Board with effect from 1 January 2025, until the approval of the Polish
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 8 Financial Supervision Authority to appoint him to the position of the President of the Bank's Management Board, • Mr. Jacek Iljin as of 15 August 2024, as Vice President of the Bank's Management Board, • Mr. Zdzisław Wojtera as of 1 September 2024, as Vice President of the Bank's Management Board, • Mr. Wojciech Przybył as of 1 October 2024, as Vice President of the Bank's Management Board, • Mr. Marcin Ciszewski as of 1 November 2024, as Vice President of the Bank's Management Board. From 15 August 2024, until Mr. Piotr Żabski takes up his position, the Bank’s Management Board will be managed by Mr. Jacek Iljin - Vice President of the Bank’s Management Board. On 30 August 2024, the Supervisory Board of the Bank adopted the resolution to recall Mr. Radomir Gibała from the position of the Vice -President of the Bank's Management Board and from the composition of Management Board of the Bank as of 31 August 2024. Moreover, the Bank’s Supervisory Board assigned Mr. Zdzisław Wojtera - Vice President of the Bank’s Management Board to manage the work of the Bank's Management Board during the period from 1 September 2024 to 31 December 2024. On 23 October 2024, the Supervisory Board adopted a resolution amending the resolution of 1 August 2024 on the appointment of the Vice President of the Bank's Management Board - Mr. Piotr Żabski, as regards the date on which Mr. Piotr Żabski is appointed to the Bank's Management Board. Pursuant to the amending resolution, the Supervisory Board of the Bank appoints Mr. Piotr Żabski (I) with effect from 1 November 2024 to the Bank's Management Board for the three -year 6th joint term of office, which began on 1 January 2024, to the position of Vice President of the Bank's Management Board, (II) as President of the Bank's Management Board, subject to the relevant consent of the Polish Financial Supervision Authority and as of the date of such consent, (III) entrusting him with the management of the Bank's Management Board with effect from 1 November 2024, until the approval of the Polish Financial Supervision Authority to appoint him to the position of the President of the Bank's Management Board. In addition, the Supervisory Board of the Bank adopted a resolution according to which the management of the work of the Bank's Management Board by the Vice President of the Management Board of the Bank - Mr. Zdzisław Wojtera will end on 31 October 2024. On 14 November 2024, the Bank's Supervisory Board adopted a resolution to delegate a Member of the Bank's Supervisory Board, Mr. Artur Chołody, to perform the duties of the Vice President of the Bank's Management Board for the period from 18 November 2024, to 17 February 2025, subject to the possibility of early termination of the delegation. On 19 December 2024, the Supervisory Board of the Bank adopted the resolution to recall Mr. Tomasz Miklas from the position of the Vice-President of the Bank's Management Board and from the composition of the Management Board of the Bank as of 19 December 2024. In addition, the Bank's Supervisory Board adopted a resolution to entrust the Vice -President of the Bank's Management Board, Mr. Marcin Ciszewski, subject to obtaining the relevant consent of the Polish Financial Supervision Authority and as of the date of issuing this consent, to perform the function of the Vice - President of the Bank's Management Board supervising the management of risk material to the Bank's operations. On 7 February 2025, the Polish Financial Supervision Authority approved the appointment of Mr. Piotr Żabski as President of the Management Board of the Bank. Composition of the Bank's Management Board as at 31 December 2024 First and last name Function Piotr Żabski Vice-President of the Bank's Management Board, managing the work of the Bank's Management Board
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 9 First and last name Function Artur Chołody Member of the Bank's Supervisory Board delegated to temporarily perform the duties of the Vice-President of the Bank's Management Board Marcin Ciszewski Vice President of the Management Board Jacek Iljin Vice President of the Management Board Wojciech Przybył Vice President of the Management Board Zdzisław Wojtera Vice President of the Management Board Composition of the Bank's Management Board as at the date of preparation of financial statements First and last name Function Piotr Żabski President of the Management Board Marcin Ciszewski Vice President of the Management Board Jacek Iljin Vice President of the Management Board Wojciech Przybył Vice President of the Management Board Zdzisław Wojtera Vice President of the Management Board Composition of the Bank's Management Board as at 31 December 2023 First and last name Function Grzegorz Olszewski President of the Management Board Paweł Broniewski Vice President of the Management Board Radomir Gibała Vice President of the Management Board Szymon Kamiński Vice President of the Management Board Rafał Litwińczuk Vice President of the Management Board Tomasz Miklas Vice President of the Management Board Jacek Polańczyk Vice President of the Management Board Paweł Tymczyszyn Vice President of the Management Board There were changes in the composition of the Bank's Supervisory Board compared to the previous reporting period ended 31 December 2023. On 7 March 2024 Mr. Filip Majdowski, resigned from the position of member of the Supervisory Board of the Bank and all related functions, i.e. chairman of the Supervisory Board of the Bank and committees of the Supervisory Board of the Bank, effective 8 March 2024. Annual General Meeting convened on 26 April 2024, dismissed from the Bank's Supervisory Board: • Mr. Ernest Gerard Bejda, • Mr. Paweł Wojciech Knop, • Ms. Małgorzata Erlich – Smurzyńska, • Mr. Jacek Kij, • Mr. Marek Pietrzak, • Mr. Dominik Mikołaj Witek. In addition, the Annual General Meeting of the Bank, taking into account the assessment of compliance with the requirements of adequacy, appointed the following Members of the Supervisory Board of the Bank for a joint term of office covering the 4 (four) full financial years 2025-2028, specifying that the first full financial year of the term is 2025: • Mr. Artur Chołody from 27 April 2024, on the condition of effective resignation from the functions listed in the statement made by him on 25 April 2024.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 10 • Mr. Radosław Grabowski, • Mr. Maciej Gutowski, • Mr. Artur Kucharski, • Mr. Jarosław Mastalerz, • Mr. Jan Zimowicz. The Extraordinary General Meeting of the Bank on 17 July 2024, taking into account the assessment of compliance with suitability requirements, appointed the following members of the Supervisory Board of the Bank: • Mr. Rafał Janczura, • Mr. Robert Pusz. The resolutions of the Extraordinary General Meeting of the Bank regarding changes in the composition of the Supervisory Board of the Bank came into force upon adoption. On 6 November 2024, Mr. Jarosław Mastalerz, resigned from the mandate of a member of the Supervisory Board of the Bank, position as a member of the Supervisory Board of the Bank and the position of the chairman of the Supervisory Board of the Bank, effective end of 6 November 2024. Extraordinary General Meeting convened on 27 November 2024, taking into account the assessment of compliance with the requirements of adequacy, appointed Mr. Paweł Wajda to the composition of the Bank’s Supervisory Board. On 12 February 2025, Mr. Artur Chołody, for personal reasons, resigned from the position of Member of the Supervisory Board delegated to temporarily perform the duties of Vice President of the Bank's Management Board and from the position of Member of the Bank's Supervisory Board. On 13 February 2025, Mr Paweł Wajda resigned from further performance of the function of Chairman of the Supervisory Board of the Bank and from further performance of the function of Member of the Supervisory Board of the Bank and from the mandate of Member of the Supervisory Board of the Bank. The resignation was submitted with legal effect at the end of the day on 25 February 2025 (i.e. at midnight). On 25 February 2025, Mr. Rafał Janczura resigned from the position of Member of the Supervisory Board of the Bank with effect at the end of 4 March 2025. On 26 February 2025, the Extraordinary General Meeting of the Bank appointed the following persons to the Supervisory Board of the Bank: • Mr. Tomasz Kulik from 5 March 2025, • Mr. Waldemar Maj from 5 March 2025, subject to the condition of submitting effective resignations from the functions performed, listed in the statement of Mr. Waldemar Maj dated 20 February 2025. • Mr. Wojciech Kostrzewa from 5 March 2025, subject to the condition of submitting effective resignations from the functions performed, listed in the statement of Mr. Wojciech Kostrzewa dated 19 February 2025. The composition of the Bank’s Supervisory Board as at 31 December 2024 First and last name Function Paweł Wajda Chairperson of the Supervisory Board Jan Zimowicz Deputy Chairperson of the Supervisory Board Artur Chołody Member of the Supervisory Board Radosław Grabowski Member of the Supervisory Board Maciej Gutowski Member of the Supervisory Board
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 11 First and last name Function Rafał Janczura Member of the Supervisory Board Artur Kucharski Member of the Supervisory Board Robert Pusz Member of the Supervisory Board The composition of the Bank’s Supervisory Board as at the date of preparation of financial statements First and last name Function Jan Zimowicz Deputy Chairperson of the Supervisory Board Radosław Grabowski Member of the Supervisory Board Maciej Gutowski Member of the Supervisory Board Rafał Janczura Member of the Supervisory Board Artur Kucharski Member of the Supervisory Board Robert Pusz Member of the Supervisory Board The composition of the Bank's Supervisory Board as at 31 December 2023 was as follows First and last name Function Filip Majdowski Chairperson of the Supervisory Board Ernest Bejda Deputy Chairperson of the Supervisory Board Małgorzata Erlich – Smurzyńska Member of the Supervisory Board Jacek Kij Member of the Supervisory Board Paweł Wojciech Knop Member of the Supervisory Board Marek Pietrzak Member of the Supervisory Board Dominik Witek Member of the Supervisory Board 2 Basis of preparation of the financial statements 2.1 Coverage and comparable data These financial statements cover the year ended 31 December 2024 and contain comparable data for the year ended o 31 December 20 23. The financial statements were prepared in PLN and all the numbers presented herein are in PLN thousand, unless specified otherwise. 2.2 Compliance statement These financial statements of Alior Bank Spółka Akcyjna have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the European Union as at 31 December 2024. 2.3 Going concern The Bank’s financial statements for the period from 1 January 2024 to 31 December 2024 have been prepared on a going concern basis on the assumption that the Bank will continue its business operations substantially unchanged in scope for a period of at lea st 12 months from the date of preparation. As at the date of approval of this report, the Bank's Management Board does not identify any circumstances that would indicate a threat to the Bank's continued operations in the foreseeable future. 2.4 Presentation of the financial statements In its statement of financial position, the Bank discloses assets and liabilities according to the liquidity criterion.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 12 The principles of netting off financial assets and liabilities are described in Note 40.1. The Bank does not set off income and expenses, unless so required by law or permitted by accounting standards or interpretation. 2.5 Approval of the financial statements These financial statements of Alior Bank SA were approved for publication by the Bank’s Management Board on 3 March 2025. 3 Description of the material accounting policy information The most important accounting policy information , as well as estimates and judgements applied in the preparation of these financial statements are presented in the notes and below. The principles were applied on a continuous basis in all presented years . Below is a specification of accounting policy information and significant estimates and judgements for the specific items of the income statement and the statement of financial position. Income statement Note number Accounting policies* Interest income and expense 6 Y Fee and commission income and expense 7 Y The result on financial assets measured at fair value through profit or loss and FX result 8 Y The result on derecognition of financial assets and liabilities not measured at fair value through profit or loss 9 Y Other operating income and expenses 10 Y General administrative expenses 11 Y Net expected credit losses, 12 Y The result on impairment of non-financial assets 13 Y Cost of legal risk of FX mortgage loans 14 Y Income tax 16 Y Statement of financial position Note number Accounting policies* Significant estimates and judgements * Cash and cash equivalents 18 Y Amounts due from banks 19 Y Inwestment financial assets 20 Y Derivative hedging instruments 21 Y Loans and advances to customers 22 Y Y Property, plant & equipment 23 Y Y Intangible assets 23 Y Y Investments in subsidiaries 24 Y Other assets 25 Y Assets hedging liabilities 26 Y Income tax assets 16 Y Amounts due to banks 27 Y Amounts due to customers 28 Y Financial liabilities held for trading 29 Y Change in fair value measurement of hedged items in portfolio hedge against interest rate risk 21 Y Provisions 30 Y Y Other liabilities 31 Y Debt securities issued 32 Y Subordinated liabilities 33 Y The Bank’s equity and shareholding structure 34 Y * The letter Y means that the notes to the Financial Statements contain significant information regarding the selected accounting policy and significant estimates.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 13 3.1 Transactions in foreign currencies Functional currency and reporting currency The financial statements were prepared in PLN which is the functional currency of the Bank (except for the branch in Romania). Foreign currency denominated transactions and balances Foreign currency denominated transactions (except for transactions and balances of the foreign branch, described in the next point) are initially recognised in the functional currency at the exchange rate of the National Bank of Poland prevailing on the transactional date. On the last day of each reporting period, the Bank translates: • foreign currency denominated monetary assets and liabilities at NBP's mid exchange rate prevailing on that date, • non-monetary items measured at historical cost in foreign currencies at the exchange rates effective as at the date the transaction was initially recognised, • non-monetary items measured at fair value in foreign currency at the exchange rate effective as at the date of fair value determination. Foreign exchange gains and losses resulting from the settlement of transactions and from the year -end translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Transactions and balances of branch in Romania The result and balances of a foreign entity that have a functional currency other than the złoty are valued in złoty in accordance with the following scheme: • assets and liabilities as of the balance sheet date at the average NBP exchange rate applicable on that day, • revenues and costs at the arithmetic mean of the average exchange rates announced by the NBP applicable at the end of each day, • exchange rate differences from the valuation of a foreign entity are recognized as a separate component of equity, they will be settled in the financial result upon disposal of the foreign entity. RON 2024 2023 NBP's avarage exchange rate as of 31 December of the year 0.8589 0.8742 NBP's avarage exchange rates as of the last day of each month 0.8652 0.9145 3.2 Business combination Acquisitions of subsidiaries by the Bank are recognised with the acquisition method in compliance with IFRS 3. There were no business combinations in 2024 and 2023. 3.3 Investments in subsidiaries in subsidary In the separate financial statement, the Bank presents investments in subsidiaries at historical cost , taking into account impairment losses. 3.4 Recognition of financial assets and liabilities in books The Bank recognises financial assets or liabilities in its statement of financial position, when it becomes a party to a contract covering such instrument. Standard purchase and sale transactions of financial assets (securities) are recognised as at the settlement date.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 14 At the initial recognition, all financial instruments are measured at fair value. The Bank classifies financial assets and liabilities at the initial recognition, subject to the purpose, characteristics, and intention vis-a-vis the acquired financial instrument. Financial assets are classified by the Bank on the date of acquisition or arising to the following categories: financial assets measured at fair value through profit and loss, financial assets measured at fair value through comprehensive income , financial assets measured at amortised cost. F inancial liabilities are measured at amortised cost and at fair value through profit and loss. Detailed for the classification and measurement rules of financial instruments are described in Note 20.1. 3.5 Derecognition of financial assets and liabilities from the statement of financial position Financial assets The Bank derecognises financial assets from the statement of financial position when: • contractual rights expire to cash flows from such financial assets, • such financial assets are transferred to another entity, • the financial asset is transfered to off -balance sheet records without resigning from future repayment. When transferring financial assets, the Bank assesses to what extent it retains the risks and benefits related to holding such financial assets. In such case: • if it transfers basically all risks and all benefits related to holding such financial assets, the Bank derecognises such financial assets from its statement of financial position, • if it retains basically all risks and benefits related to holding such financial assets, the Bank continues to recognise such financial assets in its statement of financial position, • if it neither transfers nor retains basically all risks and benefits related to holding such financial assets, the Bank determines if it continues to control such financial assets; when control is retained, such financial assets continue to be recognised i n the statement of financial position , and when there is no control, such financial assets are derecognised from the statement of financial position in the amount resulting from the retained exposure. The decision to stop recognizing a financial asset and transfering the receivables to off-balance sheet records until their repayment, write-off due to irrecoverability, limitation or redemption may be taken, if: • the claim is classified to the lost category (according to tax definition), • there are no reasonable prospects of recovering the financial asset in whole or in part, • The Bank does not identify sources of debt repayment that it could effectively meet. The decision to write off a claim as irrecoverable may be made in a situation where the claim is fully due and its non-recoverability has been documented in accordance with the provisions of the Act on Corporate Income Tax (writing off with documentation of irrecoverability), i.e .: • a decision on irrecoverability recognized by the Bank as being in line with the factual state issued by the competent enforcement authority, • court decision to close bankruptcy proceedings involving the liquidation of assets, • a court decision dismissing an application for declaration of bankruptcy or discontinuing bankruptcy proceedings, when the assets of an insolvent Debtor are insufficient to satisfy the costs of bankruptcy proceedings, • a protocol prepared by the substantive unit, which shows that the expected legal and enforcement costs would be equal or higher than the amount of receivables obtained.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 15 Financial liabilities The Bank derecognises financial liabilities (in whole or in part) from the statement of financial position if a contractual duty has been discharged or redeemed or has expired. Modification The modification of a financial asset measured at amortized cost or at fair value through other comprehensive income and financial liabilities measured at amortized cost is a change in the contractual terms affecting the change in the amount of financing, currency and date of payment, and in the case of assets - also a change in the debtor. Change in cash flows without changing the contractual terms is not a modification (the change is made on the basis of the originally binding contract). A significance assessment is carried out for each modification. A modification deemed as sigificant results in the exclusion of a financial asset or financial liability from the statement of financial position and the recognition of a new financial asset or financial liability with modified cash flows. For the new financial asset or financial liability: • a new effective interest rate should be set or effective interest rate adjusted for credit risk (CAEIR) if the new financial asset recognized as a result of a significant modification is impaired and, • include in the financial result not settled using the effective interest rate method, costs and revenues related to the original contractual terms. The modification of a financial asset deemed not significant does not result in the exclusion from the statement of financial position and gains or losses from this modification are calculated. All costs incurred and fees adjust the carrying amount of the modified financial asset and are depreciated in the period remaining until the maturity date of the modified financial asset using the original interest rate. In order to judge the significance of the modification, the Bank apllied quality criteria, such as : • change of the financing currency, • change of the debtor, • introduction of provisions into the contract resulting in the failure to pass the cash flow characteristics test (SPPI test), including (i) the multiplier in the interest rate formula, (ii) making the interest rate dependent on the price of goods, securiti es or similar (iii) limiting the debtor's contractual liability to selected assets, • change of legal form, including consolidation of two or more loans into one, • change of the type of financial instrument. The Bank also uses quantitative criteria to assess the significance of the modification: 1. for revolving receivables: • significant increase in the exposure amount, • significant extension/shortening of the financing period, • change in the margin. The Bank assumes a 20% change in the exposure amount or margin or extension/shortening of the crediting period by 365 days as the materiality level. 2. for non-revolving receivables (for scheduled receivables) - 10% test. The 10% test for financial assets involves comparing cash flows before and after the modification, discounted at the original effective interest rate. If the difference is equal to or exceeds 10%, the modification is considered material. A material modification of a financial liability is identified if the discounted present value of the cash flows resulting from the new terms, including any fees paid, net of fees received and discounted using the original
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 16 effective interest rate, differs by no less than 10% from the discounted present value of the remaining cash flows from the original financial liability. A modification of a financial liability that is not considered a material modification is an insignificant modification. 4 Changes in accounting principles 4.1 Changes in accounting standards New standards and interpretations and modifications to the existing accounting standards and interpretations that became effective on 1 January 2024 Change Impact on the Bank's report Amendments to IAS 1 Presentation of Financial Statements: Classification of liabilities The amendments affect the requirements of IAS 1 regarding the presentation of liabilities. In particular, they explain one of the criteria for classifying a liability as long-term. The implementation of the change will not have any impact on the financial statements of the Bank. Amendment to IFRS 16 Leases The amendment specifies the requirements that a seller -lessee is obliged to apply when measuring the lease liability arising from a sale and leaseback transaction so as not to recognize a gain or loss related to the right of use that it retains.The implementation of the change will not have any impact on the financial statements of the Bank. Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements The amendments require an entity to disclose information on the impact of agreements to finance liabilities to suppliers on its liabilities and cash flows, including: • the terms of these contracts, • quantitative information on the obligations related to these contracts at the beginning and end of the reporting period, • the type and impact of non-monetary changes in the carrying amounts of financial liabilities arising from these contracts. The implementation of the change will not have any impact on the financial statements of the Bank. Published standards and interpretations that which were not in force as at 31 December 20 24 and were not previously applied by the Bank Change Impact on the Bank's report Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability These changes specify how an entity should assess whether a currency is convertible into another currency and how it should determine the spot exchange rate if it cannot be converted. The change will not have a significant impact on the Bank's financial statements. IFRS 18 Presentation and Disclosure in Financial Statements The standard is intended to replace IAS 1 – Presentation of Financial Statements. The new standard will be effective from 1 January 2027. The new standard includes: the result of taking into account the voice of investors in the work, who indicated that financial statements still do not have a uniform form and often do not present significant information needed to make investm ent decisions. In connection with the new IFRS 18 standard, changes to other standards are also planned to harmonize disclosure requirements. The Bank will analyze the impact of the standard on the financial statements. IFRS 19 Subsidiaries without Public Accountability: Disclosure s IFRS 19 allows eligible entities to elect to apply IFRS 19’s reduced disclosure requirements while still applying the recognition, measurement and presentation requirements in other IFRS accounting standards. An entity may elect to apply this Standard in its consolidated, separate or individual financial statements if, and only if, at the end of the reporting period: (a) it is a subsidiary, (b) it does not have public accountability, and (c) it has an ultimate or intermediate parent that produces consolidated financial statements available for public use that comply with IFRS Accounting Standards. The Bank will analyze the impact of the standard on the financial statements. Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7) The amendments clarify that a financial liability is derecognised on the ‘settlement date’ and introduce an accounting policy choice to derecognise financial liabilities settled using an electronic payment system before the settlement date.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 17 Change Impact on the Bank's report Other clarifications include the classification of financial assets with ESG linked features via additional guidance on the assessment of contingent features. Clarifications have been made to non -recourse loans and contractually linked instruments. Additional disclosures are introduced for financial instruments with contingent features and equity instruments classified at fair value through OCI. The Bank will analyze the impact of the standard on the financial statements. Annual Improvements IFRS Volume 11 The document contains clarifications, simplifications, corrections and changes aimed at improving the consistency of a number of accounting standards (IFRS 1, IFRS 7 and the accompanying "Guidance on the implementation of IFRS 7"; IFRS 9, IFRS 10 and IAS 7 ). The Bank will analyze the impact of the standard on the financial statements. Amendments to IFRS 9 and IFRS 7 Contracts Referencing Nature - dependent Electricity Amendments allow companies to better reflect in the financial statements, the financial effects of nature -dependent electricity contracts, which are often structured as power purchase agreements (PPAs). The amendments include: • clarifying the application of the ‘own-use’ requirements, • permitting hedge accounting if these contracts are used as hedging instruments, • adding new disclosure requirements to enable investors to understand the effect of these contracts on a company’s financial performance and cash flows. The Bank will analyze the impact of the standard on the financial statements. 4.2 Restatement of comparative data and explanation of differences in relation to previously published financial statements Compared to the financial statements prepared as at 31 December 2023, the Bank made the following presentation changes in the Cash Flow Statement, adjusting the balances of individual financial assets and liabilities by interest, which is presented in the Interest received (on assets) or Inte rest paid (on liabilities) item. This change helps to increase transparency of disclosure (IAS 7 p. 31) and is an adjustment to market practice. Cash flow statement items Published 01.01.2023-31.12.2023 change Restated 01.01.2023-31.12.2023 Net interest income 0 -4 661 778 -4 661 778 Interest income received 0 6 959 057 6 959 057 Interest costs paid 0 -2 668 714 -2 668 714 Total adjustments not affecting the change in balance sheet positions 0 -371 435 -371 435 Change in loans and receivables -5 554 529 197 823 -5 356 706 Change in financial assets measured at fair value through other comprehensive income -5 368 408 -29 857 -5 398 265 Change in deposits 3 060 350 -3 100 3 057 250 Change in own issue 505 359 -29 256 476 103 Change in hedging derivative -91 872 100 057 8 185 Change in other liabilities 720 210 28 950 749 160 Total operating activity adjustment -6 728 890 264 617 -6 464 273 Redemption of assets measured at amortized cost 3 773 273 106 818 3 880 091 Total investment activity adjustment 3 773 273 106 818 3 880 091
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 18 5 Operating segments Alior Bank pursues its business activity within segments offering specific products and services addressed to specified customer groups. The split of business segments provides for consistency with the sale management model and for providing customers wit h a comprehensive product offer, covering both traditional banking products and more complex investment products. Banking operations cover three core business segments: • retail segment, • corporate segment, • treasury activities. The core products for retail segment are as follows: • credit products: cash loans, credit cards, current account overdraft facilities, mortgage loans , • deposit products: term deposits, savings deposits, • brokerage products and investment funds, • personal accounts, • transactional services: cash deposits and withdrawals, transfers, • currency exchange transactions. The core products for corporate segment are as follows: • credit products: overdraft limits in current accounts, working capital loans, investment loans, credit cards, • deposit products: term deposits, • current and subsidiary accounts, • transactional services: cash deposits and withdrawals, transfers, • treasury products: FX exchange transactions (also term FX transactions), derivative instruments , • factoring. The analysis covers the profitability of the retail and corporate segments. Profitability covers: • net interest income including internal transfer rates of funds between the bank's units and the Bank's Treasury Department, • net fee and commission income, • the result of treasury transactions and FX transactions by customers, • other operating income and expenses. Income of the retail segment cover s also income from sales of brokerage products (e.g. income for the maintenance of brokerage accounts, brokerage services in securities trading and income from distribution of investment fund units). The item Treasury activity covers management effects of the global position – liquidity and FX position, resulting from the activity of the Bank's units. The measure of the profit of a given segment is the gross profit. Results and volumes split by segment for the year ended on 31 December 20 24 Retail customers Corporate customers Treasury Total operating segments Unallocated items Total External interest income 2 829 190 1 494 676 753 866 5 077 732 0 5 077 732 external income 3 671 739 1 818 811 1 491 657 6 982 207 0 6 982 207 income of a similar nature 0 0 137 178 137 178 0 137 178
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 19 Retail customers Corporate customers Treasury Total operating segments Unallocated items Total external expense -842 549 -324 135 -874 969 -2 041 653 0 -2 041 653 Internal interest income 302 531 -265 418 -37 113 0 0 0 internal income 2 654 258 1 058 428 3 675 573 7 388 259 0 7 388 259 internal expense -2 351 727 -1 323 846 -3 712 686 -7 388 259 0 -7 388 259 Net interest income 3 131 721 1 229 258 716 753 5 077 732 0 5 077 732 Fee and commission income 505 711 689 115 -1 947 1 192 879 0 1 192 879 Fee and commission expense -261 636 -209 598 -7 137 -478 371 0 -478 371 Net fee and commission income 244 075 479 517 -9 084 714 508 0 714 508 Dividend income 0 0 5 419 5 419 0 5 419 The result on financial assets measured at fair value through profit or loss and FX result -9 480 17 869 24 322 32 711 0 32 711 The result on derecognition of financial assets and liabilities not measured at fair value through profit or loss 0 0 27 477 27 477 0 27 477 measured at fair value through other comprehensive income 0 0 26 889 26 889 0 26 889 measured at amortized cost 0 0 588 588 0 588 Other operating income 73 542 3 825 0 77 367 0 77 367 Other operating expenses -126 732 -25 845 0 -152 577 0 -152 577 Net other operating income -53 190 -22 020 0 -75 210 0 -75 210 Total result before expected credit losses, the result on impairment non-financial assets and cost of legal risk of FX mortgage loans 3 313 126 1 704 624 764 887 5 782 637 0 5 782 637 Net expected credit losses -128 161 -206 574 0 -334 735 0 -334 735 The result on impairment of non-financial assets -1 217 -438 0 -1 655 0 -1 655 Cost of legal risk of FX mortgage loans -59 355 0 0 -59 355 0 -59 355 Total result expected credit losses, the result on impairment non-financial assets and cost of legal risk of FX mortgage loans 3 124 393 1 497 612 764 887 5 386 892 0 5 386 892 General administrative expenses -1 664 061 -599 709 0 -2 263 770 0 -2 263 770 Gross loss 1 460 332 897 903 764 887 3 123 122 0 3 123 122 Income tax 0 0 0 0 -705 623 -705 623 Net loss 1 460 332 897 903 764 887 3 123 122 -705 623 2 417 499 Assets 61 634 862 30 797 116 0 92 431 978 606 488 93 038 466 Liabilities 58 158 604 23 492 427 0 81 651 031 255 802 81 906 833 Results and volumes split by segment for the year ended on 31 December 20 23 Retail customers Corporate customers Treasury Total operating segments Unallocated items Total External interest income 2 709 410 1 624 072 328 296 4 661 778 0 4 661 778 external income 3 733 616 1 984 395 1 405 660 7 123 671 0 7 123 671 income of a similar nature 0 0 154 009 154 009 0 154 009 external expense -1 024 206 -360 323 -1 231 373 -2 615 902 0 -2 615 902 Internal interest income 241 470 -457 600 216 130 0 0 0 internal income 2 642 511 1 040 332 3 898 973 7 581 816 0 7 581 816 internal expense -2 401 041 -1 497 932 -3 682 843 -7 581 816 0 -7 581 816 Net interest income 2 950 880 1 166 472 544 426 4 661 778 0 4 661 778 Fee and commission income 476 679 1 186 735 3 055 1 666 469 0 1 666 469 Fee and commission expense -190 109 -758 763 -8 027 -956 899 0 -956 899 Net fee and commission income 286 570 427 972 -4 972 709 570 0 709 570 Dividend income 0 0 11 248 11 248 0 11 248
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 20 Retail customers Corporate customers Treasury Total operating segments Unallocated items Total The result on financial assets measured at fair value through profit or loss and FX result 372 26 545 34 456 61 373 0 61 373 The result on derecognition of financial assets and liabilities not measured at fair value through profit or loss 0 0 12 251 12 251 0 12 251 measured at fair value through other comprehensive income 0 0 10 346 10 346 0 10 346 measured at amortized cost 0 0 1 905 1 905 0 1 905 Other operating income 84 781 9 909 0 94 690 0 94 690 Other operating expenses -168 179 -23 513 0 -191 692 0 -191 692 Net other operating income -83 398 -13 604 0 -97 002 0 -97 002 Total result before expected credit losses, the result on impairment non-financial assets and cost of legal risk of FX mortgage loans 3 154 424 1 607 385 597 409 5 359 218 0 5 359 218 Net expected credit losses -325 394 -234 511 0 -559 905 0 -559 905 The result on impairment of non-financial assets -1 717 -573 0 -2 290 0 -2 290 Cost of legal risk of FX mortgage loans -53 983 0 0 -53 983 0 -53 983 Total result expected credit losses, the result on impairment non-financial assets and cost of legal risk of FX mortgage loans 2 773 330 1 372 301 597 409 4 743 040 0 4 743 040 General administrative expenses -1 592 364 -531 114 0 -2 123 478 0 -2 123 478 Gross profit 1 180 966 841 187 597 409 2 619 562 0 2 619 562 Income tax 0 0 0 0 -632 118 -632 118 Net profit 1 180 966 841 187 597 409 2 619 562 -632 118 1 987 444 Assets 59 094 837 29 986 087 0 89 080 924 765 912 89 846 836 Liabilities 55 797 554 24 567 734 0 80 365 288 282 708 80 647 996 Notes to income statement 6 Net interest income 6.1 Accounting policy information Interest income and expenses include interest on financial instruments measured at amortized cost and instruments measured at fair value through other comprehensive income. Net interest also includes fees and commissions directly related to the origination of financial instruments (both income, including the portion of fees received from insurance companies for distribution of insurance, and costs, including external and internal incremental costs) constituting the integral part of the effective interest ra te. The effective interest rate method consists in accruing the amortised cost of financial assets or financial liabilities and allocation of interest income or expense. The effective interest rate is the interest rate at which estimated future cash payments or receipts over the expected life of the financial asset or financial liability are exactly discounted to the gross carrying amount of the financial asset or to the a mortized cost of the financial liability. When calculating the effective interest rate, the Bank estimates the expected cash flows considering all contractual terms of a given financial instrument, without taking into account the expected credit losses. This calculation includes all commissions and fees paid or received between the parties, which are an integral part of the effective interest rate, as well as transaction costs and all other bonuses or discounts. The Bank calculates interest income using the effective interest rate to the gross carrying amount of the financial asset, except for the financial assets which are affected by the impairment due to credit risk. When a financial asset or a group of similar financial assets is reclassified to Stage 3, interest income is accrued on
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 21 the net value of the financial asset and is shown at the effective interest rate at which future cash flows were discounted for the purposes of measuring impairment. Interest income and expenses of derivative instruments measured at fair value through profit and loss are disclosed under revenues of a similar nature and interest costs and other interest expense. 6.2 Financial data 01.01.2024 - 31.12.2024 01.01.2023- 31.12.2023 Interest income calculated using the effective interest method 6 982 207 7 123 671 term deposits 14 830 13 057 loans 5 432 961 5 625 418 financial assets measured at amortized cost 88 660 174 316 financial assets measured at fair value through other comprehensive income 1 086 166 859 721 receivables acquired 47 177 73 346 repo transactions in securities 91 795 100 392 current accounts 178 544 194 110 overnight deposits 8 474 15 460 other 33 600 67 851 Income of a similar nature 137 178 154 009 derivatives instruments 136 687 154 009 loans measured at fair value through profit or loss 491 0 Interest expense -2 041 653 -2 615 902 term deposits -812 506 -991 540 own issue -185 923 -166 595 repo transactions in securities -108 464 -104 553 cash deposits -5 747 -4 681 leasing -8 872 -10 127 other -1 080 -2 259 current deposits -370 797 -406 852 derivatives -548 264 -929 295 Net interest income 5 077 732 4 661 778 In 2024 and 2023 the amount of interest income on loans with recognised impairment amounted to PLN 337 611 thousand and PLN 385 438 thousand. 6.3 Significant estimates and judgements Recognition of bancassurance income The Bank allocates the received remuneration for distribution of insurance products related to the sale of loans – in accordance with the economic content of the transaction – as remuneration constituting: • an integral part of the remuneration received for the offered financial instruments , • remuneration for agency services, • remuneration for the provision of additional activities performed during the insurance contract (recognised by the Bank over a period when the services are provided). The economic title of the received remuneration determines the way it is disclosed in the Bank's books. The model of “relative fair value” is applied to determine the split of the remuneration related to insurance offered in connection with cash and mortgage loans and insurance sold without any relationship to financial instruments (in terms of provision for customer resigns and administrative costs).
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 22 The “relative fair value” model approved by the Bank consists in estimating the fair value of each element of the overall service of loan sale with insurance in order to determine the proportion of fair value of both services. In accordance with such proportion of fair value, remuneration under the joint loan and insurance transaction is allocated to each component. Additionally, in order to determine the correct amount of income to be recognised over time as interest income, the model provides for the esta blishment and update of provisions for remuneration refund for insurance agency services when the customer resigns from insurance. The provision due to the uncertainty related to the customers’ option to resign from the insurance cover at any time during t he term of the contract is verified periodically by each credit product group. The Bank's remuneration for insurance distribution is reduced by uncertain income related to estimated refunds due to the customers’ resignation from insurance. The remuneration for sale of insurance products offered to the Bank's customers in combination with credit products in line with the periodically updated “loan relative fair value” model is recognised after deferral of a part of the remuneration to cover the anticipated refunds of remuneration due to the customers resigning or withdrawing from insurance contracts. Additionally, the Bank acting as an agent, provides customers with the insurance cover under other insurance products than related to credit products, including accident insurance, motor, housing, travel insurance and investment products (insurance capital funds). Revenues from the distribution of these products are recognized as a one-off in the commission income: • insurance products based on monthly settlements with insurance companies and customers are recognised in the profit and loss account on a monthly basis, • on sale of insurance not related to sales of banking products, including are recognised in full amounts in the profit and loss account when the operation is performed in the part related to the completed sale agency service, and in the part concerning remuneration for subsequent services is recognised over time with a straight-line method. Like in the case of loan-related insurance products, the model for unrelated insurance also covers the establishment and updates of provision for insurance remuneration refunds should customers resign from insurance. Reimbursement of commissions and fees related to the loan prepayment - judgment of the Court of Justice of the European Union ("CJEU") of 11 September 2019 For all early repayments of consumer and mortgage loans made after the date of the Court of Justice of the European Union (CJEU) judgment, the Bank makes refunds on an ongoing basis, and their effect reduces the net interest income. Additional explanations in Note 29. 6.4 Sensitivity analysis of significant estimates and judgements Bancassurance In 2024 and 2023, the Bank used a method of settling the amount of remuneration from insurance offered in connection with cash and mortgage loans over time, based on the "relative fair value" model reflecting the economic content of the transaction. Details in note 6.3. An estimated sensitivity analysis of changes of the income recognised by the Bank in 20 24 with reference to bancassurance is as follows: Type of scenario 2024 2023 increased provision for resignations by 5pp MPLN-9.66 reduced net interest MPLN-9.62 reduced net interest decreased provision for resignations by 5pp MPLN +9.66 increased net interest MPLN +9.62 increased net interest
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 23 7 Net fee and commission income 7.1 Accounting policy information Fee and commission income arises from the provision of financial services offered by the Bank and includes i.a. fees for granting loans without defined repayment schedules , loan commitment fees, card issue fees, cash management services, brokerage services, insurance product services and asset management services. Commission income also includes margins on currency exchange transactions, i.e. margins on currency purchase/sale transactions with delivery on the spot value date. Revenue generated as part of the provision of custody activities is also an element of commission income. The corresponding customer assets are not part of the Bank's assets and therefore are not recognized in the statement of financial position. Fees and commissions (both income and costs) directly related to the creation of financial assets with specific repayment schedules are recognized in the income statement as an element of the effective interest rate and are part of interest income. The Bank includes among others the commissions adjusting the effective interest rate: • commissions for granting a loan • commissions for changing the terms of the loan agreement • commissions for changing the form of financing • loan restructuring commissions • commissions for intermediation in granting credits and loans Fees and commissions (both revenues and costs) related to the creation of assets with undefined schedules of future cash flows are settled on a straight -line basis over the term of the contract and are presented as fee and commission income or expenses. In come settled over time using the straight -line method includes, in particular, commissions received on overdrafts, revolving loans, liabilities granted (guarantees, credit lines), such as: • commissions for limit granting/extension • commissions for increasing the limit • commission for processing a loan application in the case of a positive decision Commitment fees for loans that are likely to be incurred are deferred and accounted for as an element of the effective interest rate or on a straight-line basis when a financial asset arises. Other fees and commissions related to financial services, not related to the creation of assets, are recognized in such a way as to reflect the transfer of promised goods and services to the customer in the amount reflecting the remuneration to which the B ank will be entitled in exchange for these goods and services, in accordance with 5 - stepwise revenue recognition model. Based on the analyzes carried out, the Bank recognizes commission and fee income: • at the time the service is performed, if the obligation to perform the service is fulfilled at a specific time by transferring the promised good or service to the customer, i.e. when the customer obtains control over it, and these are: transaction fees fro m securities transactions, payment services, margins on currency exchange transactions, i.e. margins on currency purchase/sale transactions with delivery on the spot value date, brokerage services, investment advisory services, financial planning, investment banking services • over time, in order to reflect the degree of fulfillment of this obligation, if the provision of services is performed in a specific period of time, these fees and commissions include, among others, commissions for maintaining accounts, servicing insurance , which are received/paid periodically, in periods monthly or quarterly, commissions/fees for cash management services performed as well as fees and commissions related to loans granted, which are not part of the effective interest rate
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 24 (ESP), i.e. administrative commissions and fees for servicing the loan, commissions for commitment charged on funds unused by clients The accounting principles regarding the recognition of commission income from the sale of bancassurance products linked to loans and advances are described in the Note 6 "Net Interest Income". 7.2 Financial data 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Fee and commission income 1 192 879 1 666 469 payment and credit cards service 327 185 776 318 transaction margin on currency exchange transactions 310 804 352 339 maintaining bank accounts 105 192 100 390 brokerage commissions 62 184 55 415 revenue from bancassurance activity 39 831 46 004 loans and advances 149 355 157 846 transfers 60 695 58 257 cash operations 34 802 35 180 guarantees, letters of credit, collection, commitments 14 337 12 665 receivables acquired 4 321 5 022 for custody services 8 134 8 128 repayment of seizure 9 894 7 900 other commissions 66 145 51 005 Fee and commission expenses -478 371 -956 899 costs of card and ATM transactions, including costs of cards issued -264 959 -757 773 commissions paid to agents -47 304 -44 021 insurance of bank products -20 651 -13 532 costs of awards for customers -26 998 -24 327 commissions for access to ATMs -27 595 -27 584 commissions paid under contracts for performing specific operations -28 319 -24 543 brokerage commissions -5 051 -4 710 for custody services -4 062 -4 248 transfers and remittances -25 418 -24 520 other commissions -28 014 -31 641 Net fee and commission income 714 508 709 570 01.01.2024–31.12.2024 Retail customers Coporate customers Treasury Total Fee and commission income 505 711 689 115 -1 947 1 192 879 payment and credit cards service 118 859 208 326 0 327 185 transaction margin on currency exchange transactions 167 534 145 217 -1 947 310 804 maintaining bank accounts 49 591 55 601 0 105 192 brokerage commissions 62 184 0 0 62 184 revenue from bancassurance activity 39 781 50 0 39 831 loans and advances 20 187 129 168 0 149 355 transfers 19 423 41 272 0 60 695 cash operations 15 989 18 813 0 34 802 guarantees, letters of credit, collection, commitments 0 14 337 0 14 337 receivables acquired 0 4 321 0 4 321 custody services 0 8 134 0 8 134
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 25 01.01.2024–31.12.2024 Retail customers Coporate customers Treasury Total repayment of seizure 0 9 894 0 9 894 other commissions 12 163 53 982 0 66 145 01.01.2023 – 31.12.2023 Retail customers Corporate customers Treasury Total Fee and commission income 476 679 1 186 735 3 055 1 666 469 payment and credit cards service 111 633 664 685 0 776 318 transaction margin on currency exchange transactions 156 271 198 283 -2 215 352 339 maintaining bank accounts 47 167 53 212 11 100 390 brokerage commissions 55 415 0 0 55 415 revenue from bancassurance activity 46 004 0 0 46 004 loans and advances 23 041 134 805 0 157 846 transfers 18 446 39 730 81 58 257 cash operations 16 222 18 958 0 35 180 guarantees, letters of credit, collection, commitments 0 12 665 0 12 665 receivables acquired 0 5 022 0 5 022 custody services 0 8 128 0 8 128 repayment of seizure 0 7 900 0 7 900 other commissions 2 480 43 347 5 178 51 005 8 The result on financial assets measured at fair value through profit or loss and FX result 8.1 Accounting policy information The result on financial assets measured at fair value through profit or loss and FX result includes gains and losses arising from the sale and changes in the fair value of assets and liabilities measured and designated for measurement at fair value through the profit and loss account upon initial recognition. This result also includes foreign exchange gains and lo sses, both realized and unrealized, resulting from the valuation of currency assets and liabilities. Additionally, this note presents the result from fair value hedge accounting and the amount of ineffectiveness of cash flow hedging. 8.2 Financial data 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 FX result and net income on currency derivatives, including: 41 462 43 004 FX result -60 064 -27 237 currency derivatives 101 526 70 241 Interest rate derivatives result -28 871 -1 880 Ineffective part of hedge accounting 3 490 6 408 Change in fair value measurement for the hedged risk 17 805 1 292 Net income from other financial instruments -1 175 12 549 The result on financial assets measured at fair value through profit or loss and FX result 32 711 61 373
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 26 9 The result on derecognition of financial instruments not measured at fair value through profit or loss 9.1 Accounting policy information The result on derecognition of financial instruments not measured at fair value through profit or loss includes gains and losses arising on the sale of debt securities valued at fair value through other comprehensive income, measured at amortized cost and gains and losses resulting from the repurchase of own issue. 9.2 Financial data 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Financial assets measured at fair value through other comprehensive income 26 889 10 346 Financial assets measured at amortized cost 588 1 905 The result on derecognition of financial assets and liabilities not measured at fair value through profit or loss 27 477 12 251 10 Result on other operating income and expenses 10.1 Accounting policy information The other operating income and expenses include income and expenses not related directly to core business activities. The other operating income covers primarily income from managing third party assets, damages received, penalties and fines, remuneration u nder contracts with various counterparties, refunded costs related to pursuance of claims. Other operating costs consist mainly of the costs of provisions created for legal claims, also primarily costs of incidents related to the operational risk, pursuant of claims and third - party asset management. 10.2 Financial data 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Other operating income from: 77 367 94 690 income from contracts with business partners 6 847 7 678 reimbursement of costs of claim enforcement 20 326 23 660 received compensations, recoveries, penalties, and fines 722 3 178 management of third-party assets 16 292 12 862 from license fees from Partners 3 049 3 073 due to VAT settlement 0 586 reversal of impairment losses on other assets 2 467 2 313 other 27 664 41 340 Other operating expenses due to: -152 577 -191 692 fees and costs of claim enforcement -41 267 -48 310 provision for legal claims -55 166 -84 074 paid compensations, fines and penalties -3 117 -4 204 management of third-party assets -1 597 -1 644 recognition of complaints -3 356 -3 720 impairment losses on other assets -5 428 -10 903 due to VAT settlement -109 0 other -42 537 -38 837 Net other operating income and expense -75 210 -97 002
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 27 11 General administrative expenses 11.1 Accounting policy information Cost type Description Employee benefits Apart from salaries and social insurance (including premiums for retirement insurance as detailed in the note on “Provisions” ), employee benefits cover the costs of variable components of remuneration for persons in managerial positions with a part being recognised as a payment liability in shares settled in cash in compliance with IFRS 2. Additionally, the Bank establishes a provision for future damages and severance pay due to employees whose employment contracts are terminated for reasons not attributabl e to employees, as well as periodic recognition of costs falling for the current period, including bonuses and unutilised annual leaves, including all outstanding holiday days. General and administrative costs This item covers the following: maintenance and rental costs of fixed assets, (from 2019 due to contracts that have not been classified in accordance with IFRS 16 as lease contracts), IT and telecommunications service costs, administrative expenses, promotion and advertising costs, security services and training costs. Leasing payments in the short-term lease period are recognized on a straight-line basis as costs in the profit and loss account. Costs of Banking Guarantee Fund This item includes mandatory payments to the BFG, including: to the resolution fund and to the bank guarantee fund. Amortisation/depr eciation Depreciation/amortisation of fixed assets, right -of-use assets and intangible assets accrues with a straight -line method at the approved amortisation/depreciation rates over their anticipated economic life and in the case of the right to use, for the shorter of the economic useful lives or the lease period. The amount subject to amortisation/depreciation shall be understood as the purchase price or manufacturing cost of the asset, net of its residual value. Every year the useful economic life is updated, depreciation rates and the residual value of depreciated fixed assets . Taxes and charges The following items are included: real estate tax, municipal and administrative fees and non-deductible VAT. 11.2 Financial data 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Payroll costs -1 146 115 -1 027 110 salaries and other benefits for employees -932 632 -845 586 social security -184 725 -161 334 costs of bonus for senior executives settled in phantom shares -7 082 -6 489 other -21 676 -13 701 General and administrative costs -552 927 -547 883 building maintenance expenses -84 394 -107 161 costs of Banking Guarantee Fund -40 644 -58 872 IT costs -188 227 -162 787 marketing costs -90 099 -78 551 cost of advisory services -26 516 -24 758 external services -29 954 -26 871 training costs -14 371 -17 177 costs of telecommunications services -23 954 -22 089 costs of lease of fixed assets and intangible assets -1 560 -70 other -53 208 -49 547 Amortization and depreciation -254 296 -243 461 property, plant, and equipment -87 466 -83 969 intangible assets -90 438 -75 568 right to use the asset -76 392 -83 924 Taxes and fees -30 765 -41 271 General administrative expenses -1 984 103 -1 859 725 12 Net expected credit losses 12.1 Accounting policy information The net expected credit losses result consists of the creation and release of write-downs on financial assets, including mainly credit receivables, other receivables from customers, debt securities and provisions for off-
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 28 balance sheet liabilities and guarantees subject to the requirement to estimate expected credit losses in accordance with IFRS 9. Recoveries, i.e. amounts received on financial assets previously written off the balance sheet to off-balance sheet records, are also presented here. Detailed accounting policies for impairment and the concept of expected credit losses are described in Note 22. 12.2 Financial data 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Expected credit losses Stage 3 -667 184 -798 829 retail customers -349 184 -465 991 corporate customers -318 000 -332 838 Expected credit losses Stage 1 and 2(ECL) 130 962 127 604 Stage 2 141 967 85 783 retail customers 86 262 68 499 corporate customers 55 705 17 284 Stage 1 -11 005 41 821 retail customers 21 055 33 082 customers -32 060 8 739 POCI -91 589 -176 410 Recoveries 263 371 239 248 Investment securities -2 840 7 035 Off-balance provisions 32 545 41 447 Net expected credit losses -334 735 -559 905 The result on expected credit losses in 2024 was significantly lower compared to 2023. This is due to a series of positive events implemented by the Bank in 2024, including: the sale of the NPL portfolio, the completion of effective restructuring processes and the recording of significantly lower costs related to migration to default, due to the stabilized resilience of customers to the demanding macroeconomic environment (including generally high interest rates). More information on the sale of receivables carried out by the Bank is presented in Note 22 Loans and advances to customers. 13 The result on impairment of non-financial assets 13.1 Accounting policy information Pursuant to IAS 36, the Bank is obliged, if there are indications of possible impairment, to make revaluation write-offs of the value of assets aimed at bringing the value of a given asset, which results from entries in the accounting books, to the level of the recoverable value. The recoverable amount is one of the two following values, depending on which of them is higher: the fair value of a given asset or cash -generating unit, less costs to sell or the value in use determined for individual assets. As defined in IAS 36.6, value in use is the present value of the estimated future cash flows that is expected to be obtained from the continued use of an asset or a cash-generating unit. The occurrence of premises indicating the possible impairment of an asset imposes an obligation on the Bank to conduct an impairment test. The Bank performs a test for impairment of non -financial assets, and in the case of goodwill, the test is carried out at least once a year. As part of the impairment test, the Bank estimates the recoverable amount of a given asset or cash -generating unit (CGU) to which a given asset is
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 29 assigned, e.g. goodwill. If the carrying amount of a given asset or CGU exceeds its recoverable amount, its impairment is recognized, and a write-down is made to the level of its recoverable amount. 13.2 Financial data 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Tangible fixed assets -1 031 -1 444 Intangible assets -624 -846 The result on impairment of non-financial assets -1 655 -2 290 14 Cost of legal risk of FX mortgage loans 14.1 Accounting policy information Bank identified the legal risk that the planned cash flows from the foreign currency indexed mortgage loan portfolio may not be fully recoverable. In connection with the above, the Bank estimated the costs of legal risk and applied the provisions of IFRS 9.B.5.4.6 to its recognition - it treated this estimate as an adjustment to the gross carrying amount of the portfolio of mortgage loans indexed with foreign currencies or created provisions in accordance with the requirements of IAS 37. In accordance with IFRS 9.B.5.4.6, when an entity changes its estimate of payments or receipts the gross carrying amount of the asset or group of financial instruments so that it reflects the actual and changed estimated cash flows under the contract . This estimations includes both an adjustment in relation to the existing court cases to which the Bank is a party, as well as an estimated portfolio adjustment in relation to foreign currency mortgage loan agreements, which are subject to legal risk related to the nature o f these agreements. If the estimated amount of legal risk costs exceeds the gross carrying amount of the credit exposure or the estimated amount concerns repaid foreign currency mortgage loans or when the estimated amount relates to expected legal claims (costs of legal representation and interest), it is recognized in the Provisions item. For additional information on the legal risk of mortgage loans denominated in foreign currencies, see Note 30 Provisions and in Note 41 Legal claims. 14.2 Financial data 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Loans and advances to customers - adjustment decreasing the gross carrying amount of loans -36 305 -23 291 Provisions -23 562 -30 692 Other 512 0 Cost of legal risk of FX mortgage loans -59 355 -53 983 14.3 Significant estimates and judgements The costs of legal risk constituting an adjustment to the gross carrying amount and provision were estimated taking into account a number of assumptions, including the Bank's assumption of an increase in the market scale of claims, e.g. in connection with the position of the Advocate General of the CJEU published on 16 February 2023 and the judgment of the CJEU of 15 June 2023.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 30 These costs were estimated on the basis of: • the pace of the inflow of disputes regarding the legal risk of mortgage loans in foreign currencies and the estimated percentage of the portfolio of FX mortgage loans that will be the subject of litigation, observed so far and forecast by the Bank in future periods, • statistics of the value of the subject matter of the dispute in previous lawsuits, • the percentage of litigations lost by banks, reported by the Polish Bank Association, including the percentage of cases ended with the cancellation of the contract and the percentage of cases ended with the conversion of contracts into PLN. The number of disputed cases so fa r is 215, i.e. 2.3% of all foreign currency loans granted (including those repaid as at the balance sheet date), including 16 8 cases related to disputes that are still pending as at 31.12.2024. The cost of legal risk of FX mortgage loans were estimated assuming that disputes will cover 43.7% of the portfolio of loans denominated in CHF and 3.5% of the portfolio of loans denominated in EUR and 1.7% of the portfolio of loans denominated in other currencies and based on assumptions regarding possible court ruling scenarios. The current level of provisions covers 114.1% of the gross value of the portfolio of loans denominated in CHF and 6.0% of the gross value of the remaining portfolio of loans denominated in other currencies. 14.4 Sensitivity analysis of significant estimates and judgements The Bank conducted a sensitivity analysis of significant judgements constituting the basis for calculating the adjustment of the gross carrying amount, where a change in the level of the parameter indicated below would have the following impact on the amount of legal risk costs of foreign currency mortgage loans: 31.12.2024 31.12.2023 increase in the scale of legal claims by 10% in relation to the estimates adopted by the Bank -21 267 -15 690 15 Banking Tax The Act on Tax from Certain Financial Institutions of 15 January 2016 became effective on 1 February 2016 – the Act applies to banks and insurance companies. The tax accrues on the surplus of assets in excess of PLN 4 billion as detailed in trial balances as at the end of each month. Banks a re entitled to reduce the tax base by, among others, the value of own funds, the value of assets in the form of Treasury securities, the value of assets in the form of securities guaranteed by the State Treasury, the value of assets acquired from the NBP, constituting security for a refinancing loan granted by the NBP. The tax is payable monthly (the monthly rate is 0.0366%) by the 25th day of the month following the month to which it applies and is recognised in the profit and loss account in the period to which it applies. 16 Income tax 16.1 Accounting policy information Income tax covers current tax and deferred tax. Income tax is recognised in the profit and loss account, unless the tax is related to: • transactions recognised in other comprehensive income or directly in equity, • combination of entities.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 31 Current tax Liabilities (receivables) under current income tax for the current and prior periods are measured at the amount expected to be paid to tax authorities (or to refunded from tax authorities at the tax rates (and tax laws) enacted or substantively enacted at the end of the reporting period. Deferred income tax Deferred income tax is calculated as a balance sheet liability based on identification of time differences between the tax value and the carrying value of assets and liabilities. The Bank establishes a deferred income tax provision with reference to all p ositive temporary differences with the exception of the following: • when the deferred income tax provision results from the initial recognition of goodwill or initial recognition of an asset or liability coming from a transaction which is not a combination of entities and when the transaction is executed, it does not affect the gross financial profit or taxable income (tax loss), • the parent entity, investor, or partner in a joint venture are able to control reversal dates of temporary differences and it is likely that the temporary differences are not reversed in the foreseeable future. With reference to all negative temporary differences, the deferred tax asset is recognised in the amount of probable taxable income which will allow for a set-off of negative temporary differences, with the exception of the following: • when the deferred income tax results from the initial recognition of an asset or liability coming from a transaction which is not a combination of entities and when the transaction is executed, it does not affect the gross financial profit or taxable income (tax loss), • when negative temporary differences result from investments in subsidiaries, branches, affiliated entities, and joint ventures outside the extent when it is probable that they will be reversed in the foreseeable future and taxable income will be generated from which such temporary differences can be deducted. The carrying value of the deferred income tax asset is verified at the end of each reporting period. The Bank reduces its carrying value to the extent it is not probable to generate taxable income sufficient to have it realised in full or in part. A deferred income tax asset and a deferred income tax provision are measured according to the tax rates which will be applicable when the asset is realised or provision reversed, assuming the tax rates (and tax laws) legally or actually effective as at the end of the reporting period. Current and deferred income tax is recognised directly in other comprehensive income, if it applies to items that have been recognised in other comprehensive income in the same or another period. A deferred income tax asset and a deferred income tax provision are offset, if a legally enforceable right exists to set off the current income tax receivables or payables and the deferred income tax relates to the same taxable entity and the same taxation authority. 16.2 Financial data 16.2.1 Tax charge disclosed in the profit and loss account 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Current tax 568 326 422 908 Deferred income tax 137 297 209 210 Income tax 705 623 632 118
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 32 16.2.2 Effective tax rate calculation 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Gross profit 3 123 122 2 619 562 Income tax at 19% 593 393 497 717 Non-tax-deductible expenses (tax effect) 128 494 138 974 Impairment losses on loans not deductible for tax purposes 42 177 42 134 Prudential fee to BGF 7 722 11 186 Tax on Certain Financial Institutions 53 118 50 113 Cost of legal risk of FX mortgage loans 11 277 10 257 Other 14 200 25 284 Non-taxable income (tax effect) -6 777 -6 620 Other -9 487 2 047 Income tax recognized in the income statement 705 623 632 118 Effective tax rate 22.59% 24.13% 16.2.3 Deferred tax asset and liability Deferred tax asset 31.12.2023 Changes recognised in financial result Changes recognised in equity Other changes 31.12.2024 Commissions collected in advance 137 269 -60 996 0 0 76 273 Interest accrued on deposits 49 806 -24 196 0 0 25 610 Interest / discount accrued on securities 18 918 14 537 0 0 33 455 Negative valuation of securities 7 716 2 311 6 407 0 16 434 Interest accrued on derivative instruments 52 686 11 744 0 0 64 430 Negative valuation of derivative instruments 158 452 329 -48 038 0 110 743 Premium on options 3 367 -1 321 0 0 2 046 Provision for deferred expenses 97 634 -825 0 0 96 809 Impairment allowances on credit receivables 633 554 -66 165 0 0 567 389 Other provisions 18 287 -7 403 0 0 10 884 Deferred tax asset 1 177 689 -131 985 -41 631 0 1 004 073 Deferred tax liability 31.12.2023 Changes recognised in financial result Changes recognised in equity Other changes 31.12.2024 Interest accrued on loans, deposits and operations with the Central Bank -135 091 16 499 0 0 -118 592 Interest / discount accrued on securities -37 245 -8 054 0 0 -45 299 Positive valuation of securities -21 063 516 -3 999 0 -24 546 Interest accrued on derivative instruments -67 156 -23 514 0 0 -90 670 Positive valuation of derivative instruments -99 066 10 113 23 503 0 -65 450 Difference between balance and tax depreciation -41 590 -1 323 0 0 -42 913 Accrued not received income -10 566 451 0 0 -10 115 Deferred income tax provisions -411 777 -5 312 19 504 0 -397 585 Total effect of temporary differences 765 912 -137 297 -22 127 0 606 488 Deferred tax asset 31.12.2022 Changes recognised in financial result Changes recognised in equity Other changes 31.12.2023 Commissions collected in advance 179 557 -42 288 0 0 137 269 Interest accrued on deposits 51 704 -1 898 0 0 49 806 Interest / discount accrued on securities 33 605 -14 687 0 0 18 918 Negative valuation of securities 54 703 -6 070 -40 917 0 7 716
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 33 Deferred tax asset 31.12.2022 Changes recognised in financial result Changes recognised in equity Other changes 31.12.2023 Interest accrued on derivative instruments 63 220 -10 534 0 0 52 686 Negative valuation of derivative instruments 339 874 -4 542 -176 880 0 158 452 Premium on options 2 585 782 0 0 3 367 Provision for deferred expenses 85 958 11 676 0 0 97 634 Impairment allowances on credit receivables 687 252 -53 698 0 0 633 554 Other provisions 71 494 -53 207 0 0 18 287 Deferred tax asset 1 569 952 -174 466 -217 797 0 1 177 689 Deferred tax liability 31.12.2022 Changes recognised in financial result Changes recognised in equity Other changes 31.12.2023 Interest accrued on loans, deposits and operations with the Central Bank -109 684 -25 407 0 0 -135 091 Interest / discount accrued on securities -35 488 -1 757 0 0 -37 245 Positive valuation of securities -14 908 -1 138 -5 017 0 -21 063 Interest accrued on derivative instruments -58 678 -8 478 0 0 -67 156 Positive valuation of derivative instruments -79 441 5 397 -25 022 0 -99 066 Difference between balance and tax depreciation -40 568 -1 022 0 0 -41 590 Accrued not received income -8 227 -2 339 0 0 -10 566 Deferred income tax provisions -346 994 -34 744 -30 039 0 -411 777 Total effect of temporary differences 1 222 958 -209 210 -247 836 0 765 912 17 Earnings per share 17.1 Accounting policy information In compliance with IAS 33, basic earnings per share are calculated by dividing the net profit attributable to equity holders of the Bank by the weighted average number of the ordinary shares outstanding during the period. Diluted earnings per share are calculated by dividing the net profit attributable to equity holders of the Bank by the weighted caverage number of the ordinary shares outstanding during the given period adjusted for all potential dilution of ordinary shares. As at 31 December 2024 and 31 December 2023 the Bank did not have any diluting instruments. 17.2 Financial data 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Net profit 2 417 499 1 987 444 Weighted average number of ordinary shares 130 553 991 130 553 991 Basic/diluted earnings per ordinary share (PLN) 18.52 15.22 Additional information to the statement of financial position 18 Cash and cash equivalents 18.1 Accounting policy information Cash and cash equivalents include cash and cash in the nostro account s other funds maturing within 3 months from acquisition they are measured at amortized cost. Classification is based on the entity’s business
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 34 model for managing the financial assets and the characteristics regarding the contractual cash flows referred to in Note 20.1. 18.2 Financial data Structure by type 31.12.2024 31.12.2023 Current account with the central bank 1 397 492 667 677 Cash 434 835 453 845 Current accounts in other banks 278 749 1 119 404 Term deposits in other banks 0 280 657 Gross carrying amount 2 111 076 2 521 583 Expected credit losses -22 -28 Carrying amount 2 111 054 2 521 555 By currency structure 31.12.2024 31.12.2023 PLN 1 485 736 671 080 EUR 193 034 568 733 USD 174 941 749 463 CHF 31 672 44 593 Other currencies 225 693 487 714 Gross carrying amount 2 111 076 2 521 583 Expected credit losses -22 -28 Carrying amount 2 111 054 2 521 555 The Bank maintains a mandatory reserve on the current account with the National Bank of Poland. During the day the Bank may use funds in the mandatory reserve account for current cash settlements on the basis of instructions placed with the National Bank of Poland, however, the Bank has to maintain an average monthly balance in the account equivalent to the declared mandatory reserve. The level of the mandatory reserve is determined by the Monetary Policy Council. The mandatory reserve rate has been at: • 3.5 percent for deposits in PLN and foreign currencies and for funds from issuing securities with a maturity of less than two years, • 0.0 percent for funds from repo and sell-buy-back transactions acquired for at least 2 years. The entities that calculate the mandatory reserve deduct the calculated amount by equivalent of EUR 500 thousand. As at 31 December 2024 and 2023 the interest rate on the mandatory reserve was 5.75%. 19 Amounts due from banks 19.1 Accounting policy information Classification is based on the entity’s business model for managing the financial assets and the characteristics regarding the contractual cash flows referred to in Note 20.1.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 35 19.2 Financial data Structure by type 31.12.2024 31.12.2023 Reverse Repo 971 908 3 681 109 Deposits as derivative transactions (ISDA) collateral 725 785 847 887 Other 123 892 86 455 Gross carrying amount 1 821 585 4 615 451 Expected credit losses -4 -31 Carrying amount 1 821 581 4 615 420 By maturity 31.12.2024 31.12.2023 up to 1 month 1 782 742 4 615 327 from 1 month to 3 months 38 843 124 Gross carrying amount 1 821 585 4 615 451 Expected credit losses -4 -31 Carrying amount 1 821 581 4 615 420 By currency structure 31.12.2024 31.12.2023 PLN 1 182 486 3 515 398 EUR 583 815 1 048 618 USD 54 808 51 090 Other currencies 476 345 Gross carrying amount 1 821 585 4 615 451 Expected credit losses -4 -31 Carrying amount 1 821 581 4 615 420 The margin deposits refer to security provided to other banks under CSA agreement (Credit Support Annex). 20 Investment financial assets 20.1 Accounting policy information According to IFRS 9, upon initial recognition, financial assets are classified to the following measurement categories: • financial assets measured at amortized cost, • financial assets measured at fair value through other comprehensive income, • financial assets measured at fair value through profit or loss. Financial capital assets, except to investments in subsidiaries, are measured at fair value through profit or loss, unless the Bank, at the date of first recognition, decides to value other comprehensive income. The classification of debt financial assets depends on the business model under which the financial instrument is managed and on the characteristics of contractual cash flows. The business model is a method for financial assets management. When assessing the business model, Alior Bank follows the following criteria: (i) the adopted investment strategy, (ii) frequency of sale of receivables from the portfolio of homogeneous assets, (iii) risk profile and measurement.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 36 Business models identified at Alior Bank: • in the corporate client and retail client segments, including Kasa Mieszkaniowa: a business model whose objective is to hold financial assets in order to collect contractual cash flows , exposure sales are allowed due to credit risk, • in the portfolio of the Treasury / Financial Risk Management Department: (i ) a business model whose objective is to hold financial assets in order to collect contractual cash flows , (ii) a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and (iii) other business model than business model whose objective is to hold financial assets in order to collect contractual cash flows and business model whose objective is achieved by both collecting contractual cash flows and selling financial assets. • with regard to the portfolio of the Brokerage House: (i)a business model whose objective is to hold financial assets in order to collect contractual cash flows and (ii) other business model than business model whose objective is to hold financial assets in order to collect contractual cash flows and business model whose objective is achieved by both collecting contractual cash flows and selling financial assets. Assigning a product to the business model at Alior Bank is performed at the product analysis level. In the case of realization of cash flows as a result of sales, the motive for which the sale is undertaken is also important for the assessment of the business model. A distinction is made between the sale of financial assets with impaired credit quality due to credit risk management, the sale of assets for the purposes o f financial liquidity and financial risk management, and sales undertaken to generate financial profits. Sale of impaired quality assets does not exclude classification to the cash flow model in accordance with contractual terms. The purpose of the contractual cash flow characteristics assessment of a financial asset is whether the terms of the contract realise cash flows according to schedule, which are only repayment of the principal and interest on the principal amount still to be repaid (the so-called SPPI criterion - solely payments of principal and interest). The main amount for the purposes of the SPPI test is the fair value of the financial asset at the moment of initial recognition. The interest on the principal amount includes payment for the time value of money, remuneration for the credit risk incurred and other basic risks and costs associated with granting loans, as well as a profit margin. Financial assets whose cash flows have the characteristics of solely the repayment of the principal and interest on the principal are classified to the following categories of measurement: • according to amortized cost, if they are maintained in a business model whose purpose is to realize cash flows in accordance with contractual terms, • at fair value through other comprehensive income if they are maintained in a business model whose purpose is to realize cash flows in accordance with contractual terms or through sale. Financial assets whose cash flows are modified in such a way that they have features other than solely repayment of the principal and interest on the principal are classified to the category of measurement at fair value through profit or loss regardless of the business model. This category also classifies financial assets managed in accordance with the business model which involves the sale of assets to generate financial profits, assessment of results based on changes in fair value and sales results.This category also always includes derivative instruments that are not hedging instruments.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 37 20.2 Financial data 31.12.2024 31.12.2023 Financial assets 23 586 506 18 803 661 measured at fair value through other comprehensive income 21 201 567 15 469 101 measured at fair value through profit or loss 227 003 408 882 measured at amortized cost 2 157 936 2 925 678 20.2.1 Financial assets by type Measured at fair value through other comprehensive income 31.12.2024 31.12.2023 Debt instruments 21 064 006 15 352 460 Issued by the central governments 16 846 832 13 818 749 T- bonds 16 633 632 9 569 859 T- bills 213 200 4 248 890 Issued by monetary institutions 4 217 174 1 533 711 eurobonds 251 781 18 139 money bills 3 398 372 950 000 bonds 567 021 565 572 Equity instruments 137 561 116 641 Total 21 201 567 15 469 101 Measured at fair value through profit or loss 31.12.2024 31.12.2023 Debt instruments 1 982 53 402 Issued by the central governments 1 978 53 398 T-bonds 1 978 53 398 Issued by other financial institutions 4 4 bonds 4 4 Equity instruments 12 151 28 264 Derivative financial instruments 212 870 327 216 Interest rate transactions 135 874 180 618 SWAP 134 884 177 758 Cap Floor Options 786 1 804 FRA 197 1 056 Forward 7 0 Foreign exchange transactions 70 431 139 434 FX Swap 35 852 96 237 FX forward 8 447 21 953 CIRS 8 092 13 946 FX options 18 040 7 298 Other options 0 3 179 Other instruments 6 565 3 985 Total 227 003 408 882 Measured at amortized cost 31.12.2024 31.12.2023 Debt instruments 2 157 936 2 925 678 Issued by the central governments 2 056 853 2 395 852
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 38 Measured at amortized cost 31.12.2024 31.12.2023 T- bonds 2 056 853 2 395 852 Issued by other financial companies 101 083 529 826 bonds 101 083 529 826 Total 2 157 936 2 925 678 Expected credit losses for financial assets - debt instruments 31.12.2024 31.12.2023 Carrying amount / Gross carrying amount Expected credit losses Carrying amount / Gross carrying amount Expected credit losses Measured at fair value through other comprehensive income 21 064 006 8 382* 15 352 460 5 632* Measured at amortized cost 2 158 971 1 035 2 926 599 921 *An ECL of debt securities measured at fair value through other comprehensiwve income is included in the “Revaluation reserve” item and does not reduce the carrying amount. Debt instruments measured at amortized cost Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount Gross carrying amount as at 01.01.2024 2 926 462 0 77 60 2 926 599 New / purchased / granted financial assets 1 168 152 0 0 0 1 168 152 Changes due to the sale or expiry of the instrument -1 955 496 0 0 0 -1 955 496 Financial assets written off 0 0 0 0 0 Transfer to Stage 1 0 0 0 0 0 Transfer to Stage 2 0 0 0 0 0 Transfer to Stage 3 0 0 0 0 0 Other changes, including exchange differences 19 716 0 0 0 19 716 Gross carrying amount as at 31.12.2024 2 158 834 0 77 60 2 158 971 Expected credit losses 0 Expected credit losses as at 01.01.2024 844 0 77 0 921 New / purchased / granted financial assets 519 0 0 0 519 Changes due to the sale or expiry of the instrument -329 0 0 0 -329 Financial assets written off 0 0 0 0 0 Transfer to Stage 1 0 0 0 0 0 Transfer to Stage 2 0 0 0 0 0 Transfer to Stage 3 0 0 0 0 0 Other changes, including exchange differences -76 0 0 0 -76 Expected credit lossesas at 31.12.2024 958 0 77 0 1 035 Net carrying amount as at 31.12.2024 2 157 876 0 0 60 2 157 936 Debt instruments measured at amortized cost Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount Gross carrying amount as at 01.01.2023 6 683 709 0 77 55 6 683 841 New / purchased / granted financial assets 35 811 0 0 5 35 816 Changes due to the sale or expiry of the instrument -3 773 273 0 0 0 -3 773 273 Financial assets written off 0 0 0 0 0 Transfer to Stage 1 0 0 0 0 0 Transfer to Stage 2 0 0 0 0 0 Transfer to Stage 3 0 0 0 0 0 Other changes, including exchange differences -19 785 0 0 0 -19 785
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 39 Debt instruments measured at amortized cost Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount as at 31.12.2023 2 926 462 0 77 60 2 926 599 Expected credit losses 0 Expected credit losses as at 01.01.2023 1 922 0 77 0 1 999 New / purchased / granted financial assets 19 0 0 0 19 Changes due to the sale or expiry of the instrument -360 0 0 0 -360 Financial assets written off 0 0 0 0 0 Transfer to Stage 1 0 0 0 0 0 Transfer to Stage 2 0 0 0 0 0 Transfer to Stage 3 0 0 0 0 0 Other changes, including exchange differences -737 0 0 0 -737 Expected credit lossesas at 31.12.2023 844 0 77 0 921 Net carrying amount as at 31.12.2023 2 925 618 0 0 60 2 925 678 Debt instruments measured at fair value through other comprehensive income Stage 1 Stage 2 Stage 3 POCI Total Carrying amount As at 01.01.2024 15 352 460 0 0 0 15 352 460 New / purchased / granted financial assets 201 041 787 0 0 0 201 041 787 Changes due to the sale or expiry of the instrument -195 544 224 0 0 0 -195 544 224 Financial assets written off 0 0 0 0 0 Transfer to Stage 1 0 0 0 0 0 Transfer to Stage 2 0 0 0 0 0 Transfer to Stage 3 0 0 0 0 0 Other changes, including exchange differences 213 983 0 0 0 213 983 As at 31.12.2024 21 064 006 0 0 0 21 064 006 Expected credit losses* As at 01.01.2024 5 632 0 0 0 5 632 New / purchased / granted financial assets 5 394 0 0 0 5 394 Changes due to the sale or expiry of the instrument -2 345 0 0 0 -2 345 Financial assets written off 0 0 0 0 0 Transfer to Stage 1 0 0 0 0 0 Transfer to Stage 2 0 0 0 0 0 Transfer to Stage 3 0 0 0 0 0 Other changes, including exchange differences -299 0 0 0 -299 As at 31.12.2024 8 382 0 0 0 8 382 *An ECL of debt securities measured at fair value through other comprehensiwve income is included in the “Revaluation reserve ” item and does not reduce the carrying amount Debt instruments measured at fair value through other comprehensive income Stage 1 Stage 2 Stage 3 POCI Total Carrying amount As at 01.01.2023 9 753 246 0 0 49 594 9 802 840 New / purchased / granted financial assets 100 846 560 0 0 0 100 846 560 Changes due to the sale or expiry of the instrument -95 382 097 0 0 -39 757 -95 421 854 Financial assets written off 0 0 0 0 0 Transfer to Stage 1 0 0 0 0 0 Transfer to Stage 2 0 0 0 0 0 Transfer to Stage 3 0 0 0 0 0 Other changes, including exchange differences 134 751 0 0 -9 837 124 914 As at 31.12.2023 15 352 460 0 0 0 15 352 460
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 40 Debt instruments measured at fair value through other comprehensive income Stage 1 Stage 2 Stage 3 POCI Total Expected credit losses* As at 01.01.2023 4 374 0 0 15 955 20 329 New / purchased / granted financial assets 3 268 0 0 0 3 268 Changes due to the sale or expiry of the instrument -1 325 0 0 -8 623 -9 948 Financial assets written off 0 0 0 0 0 Transfer to Stage 1 0 0 0 0 0 Transfer to Stage 2 0 0 0 0 0 Transfer to Stage 3 0 0 0 0 0 Other changes, including exchange differences -685 0 0 -7 332 -8 017 As at 31.12.2023 5 632 0 0 0 5 632 *An ECL of debt securities measured at fair value through other comprehensiwve income is included in the “Revaluation reserve ” item and does not reduce the carrying amount 20.2.2 Financial assets by maturity Measured at fair value through other comprehensive income 31.12.2024 31.12.2023 no specified maturity 137 561 116 641 up to 1 month 3 651 932 1 982 333 from 1 month to 3 months 425 469 1 188 178 from 3 months to 1 year 0 2 229 655 from 1 year to 5 years 14 866 159 8 501 370 more than 5 years 2 120 446 1 450 924 Total 21 201 567 15 469 101 Measured at fair value through profit or loss 31.12.2024 31.12.2023 no specified maturity 12 151 28 264 up to 1 month 33 071 112 453 from 1 month to 3 months 34 422 17 454 from 3 months to 1 year 32 119 20 910 from 1 year to 5 years 93 995 152 725 more than 5 years 21 245 77 076 Total 227 003 408 882 Measured at amortized cost 31.12.2024 31.12.2023 up to 1 month 72 832 676 043 from 1 month to 3 months 101 022 428 878 from 3 months to 1 year 302 668 619 from 1 year to 5 years 1 457 472 1 152 138 more than 5 years 526 308 0 Total 2 157 936 2 925 678
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 41 20.2.3 Derivative instruments (nominal value) Derivative transactions are executed for trading purposes and to manage the market risk. The Bank enters into the following types of derivative transactions: FX -Forward, FX -Swap, IRS, CIRS, FRA, commodity Futures, commodity Forward, term transactions in securities, EUA futures transactions. Every day the Bank measures derivative instruments applying the discounted cash flows model. The Bank also enters into option transactions that are measured with option measurement models. The valuation of derivatives is presented in financial assets at fair value through profit or loss (positive valuation) and finan cial liabilities (negative valuation) of the Bank's statement of financial position. 31.12.2024 Derivative instruments (nominal value) Fair value measurement ASSETS Fair value measurement LIABILITIES Interest rate transactions 8 606 291 135 874 138 634 SWAP 6 985 500 134 884 136 642 Cap floor options 450 587 786 786 FRA 1 160 000 197 1 206 Forward 10 204 7 0 FX transactions 8 510 084 70 431 51 592 FX Swap 3 341 193 35 852 15 516 FX forward 755 652 8 447 13 366 CIRS 232 111 8 092 2 383 FX options 4 181 128 18 040 20 327 Other options 186 371 0 0 Other instruments 399 636 6 565 6 224 Total 17 702 382 212 870 196 450 31.12.2023 Derivative instruments (nominal value) Fair value measurement ASSETS Fair value measurement LIABILITIES Interest rate transactions 7 943 525 180 618 142 243 SWAP 6 008 583 177 758 138 861 Cap floor options 434 942 1 804 1 804 FRA 1 500 000 1 056 1 578 FX transactions 6 235 073 139 434 71 441 FX Swap 3 667 806 96 237 44 658 FX forward 1 164 381 21 953 13 846 CIRS 209 886 13 946 2 936 FX options 1 193 000 7 298 10 001 Other options 1 869 421 3 179 3 179 Other instruments 197 142 3 985 3 786 Total 16 245 161 327 216 220 649 BCVA adjustments In its measurement of derivative instruments, Alior Bank SA applies adjustments for the counterparty's credit risk. The amount of the adjustment reflects the risk of insolvency of each party to the transaction (Bilateral Credit Value Adjustment). The adjustment is calculated on the basis of estimates of the following parameters: bilateral likelihood of default, PD (Probability of Default), LGD (Loss Given Default), anticipated positive and negative exposure under transaction ( EE and NEE). PD indicators are estimated based on the Bank's internal ratings using
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 42 market quotations of credit risk . The counterparty’s exposure is calculated at the present valuation and its projection calculated on the basis anticipated changes to market conditions. The total amount of the BCVA adjustment consisted of the CVA adjustment (reflecting the exclusion of the contractor's insolvency risk) and the DVA adjustment (reflecting the Bank's insolvency risk). BCVA adjustment 31.12.2024 31.12.2023 CVA DVA CVA DVA Amount of individual adjustments -1 662 174 -1 027 1 229 Total -1 488 202 21 Hedge accounting 21.1 Accounting policy information Hedge accounting is applied for symmetrical recognition in the profit and loss account of compensating changes to the fair value of the hedging instruments and the hedged item. For the purposes of hedge accounting, the Bank designates hedging instruments so that changes to their fair value or cash flows covered in whole or in part the changes to the fair value or future cash flows of the hedged item. According to IFRS 9 7.2.21, the Bank decided to continue to apply the principles of hedge accounting in accordance with IAS 39. In accordance with IAS 39. 88, hedge accounting may be applied if all the following conditions are met: • when the hedge is established, formal documentation is made of the hedging relationship specifying the hedging purpose and strategy, the type and identification of the hedged and hedging instrument, the nature of the hedged risk and the assessment method of hedging effectiveness , • high hedging effectiveness is expected – high efficiency in compensating changes to the fair value or cash flows, in line with the documented risk management strategy concerning the specific hedging relationship, • it is possible to reliably assess the hedging effectiveness – reliable measurement of the fair value or cash flows of both the hedged item and the hedging item, • in the case cash flows, a high likelihood occurs that a hedged transaction occurs that is exposed to the risk of changing cash flows affecting the profit and loss account, • the hedging is assessed on an ongoing basis and its high effectiveness is confirmed in all reporting periods for which the hedging has been established. 21.2 Types of hedge strategies 21.2.1 Cash flow hedge accounting Cash flow hedges are hedges securing future cash flows fluctuations which can be attributed to a particular kind of risk connected with a given item of assets or liabilities or with a highly probable contemplated transaction, affecting the profit and loss account. Cash flow hedges are recognised in the books as follows: a) a part of profit or loss related to the hedging instrument constituting effective hedge is recognised in other comprehensive income in the lower amount of the following (absolute values): • cumulated until the profit or loss hedge is established on the hedging instrument ,
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 43 • cumulated until the establishment of a hedge to fair value changes (present value) of the anticipated future cash flows, resulting from the hedger item, b) an ineffective part of profit or loss related to the hedging instrument is recognised in the profit and loss account. The effective part of the hedge is transferred to the profit and loss account in the period or in periods when the hedged contemplated transaction affects the profit and loss account. The Bank discontinues to apply hedge accounting when at least one of the following events occurs: • the hedging instrument is sold, expires, is terminated or exercised, • the above requirements of hedge accounting have not been complied with, • the Bank cancels the hedge relationship, • future cash flows are no longer treated as probable. In the case any of the above events occurs, the result on the hedging instrument when the hedge has been effective – continues to be recognised in the revaluation reserve until the contemplated transaction occurs and it is recognised in the profit and loss account. The hedging strategy is aimed at hedging the interest rate risk resulting from changing cash flows from assets with variable interest rates using PLN IRS transactions. In the established hedging relationships, the hedged items include cash flows from PLN loans with variable interest rates, while IRS transactions are the hedging transactions under which the Bank receives fixed interest based on fixed interest rates and pays interest based on variable interest rates. The hedged items are measured at the amor tised cost, while the hedging items at fair value through other comprehensive income, and as interest accrues to the hedged item, the relevant part of the valuation is transferred from other comprehensive income to the income statement. In established hedging relationships, hedged items also include cash flows from floating -rate bonds issued by the bank, and hedging items from IRS transactions under which the Bank receives interest based on a variable rate and pays interest based on a fixed rate. Bank, by establishing hedging links, identifies groups of loans or credits or bonds with the same parameters as hedging transactions, i.e. currency, maturity date, reference index for interest payments and the date of its revaluation. As part of the preliminary assessment of hedge effectiveness through qualitative assessment, the Bank expects a high adjustment of the changes in the valuation of expected interest flows of the secured layer of loans , credits or bonds and the corresponding IRS hedging leg leg due to matching the key parameters of these transactions. The Bank expects a small ineffectiveness of collateral, which may result from the mismatch of the frequency of interest payments from the hedged loan portfo lio or bonds and the IRS hedging transaction. In addition, the poor ineffectiveness of held hedging relationships may be affected by unmatched re-measurement dates of the reference portfolios of the hedged portfolio and part of the IRS transaction variable. The Bank analyzes the effectiveness of hedges monthly on the basis of the accumulated change in the present value of expected interest payments from the secured loan portfolio and interest payments on hedging transactions, using to measure effectiveness the concept of hypothetical derivative. 21.2.2 Fair Value hedge accounting The Bank hedges the risk of changes in the fair value of purchased debt securities with a fixed interest rate measured at fair value through other comprehensive income and measured at amortized cost due to changes in the interest rate swap curve. As part of the above strategy, the Bank creates hedging relationships in which the hedged instrument are fixed coupon debt securities denominated in a given currency, and the hedging instrument is interest rate swaps (IRS) in the same currency. The Bank hedges the risk arising from changes in the interest rate swap curve (ri sk of volatility in market swap interest rates), excluding other
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 44 effects that affect the change in valuation (including asset swap spread). The effectiveness of hedging relationships is tested on a monthly basis as part of prospective and retrospective tests. The effectiveness tests are based on the valuation of the hedging transaction less the value of accrued interest in a given interest period. The Bank expects that the hedging relationship will be highly effective if all of the following criteria are met: • based on a comparison of the basic parameters of the hedged and hedging transactions, it can be expected that the effectiveness of the hedge will be high, • the ratio of the change in fair value of the hedged item and the hedging instrument is in the range [80%, 125% ] or the share of the ineffectiveness amount in the nominal value of the hedging transaction is in the range [-1%, 1%], • in each reporting period, the simulation of the hedge effectiveness ratio in the assumed scenarios of market interest rate evolution ranges from [80%, 125%]. The Bank identifies potential sources of inefficiency: • impact of the counterparty credit risk and own credit risk on the fair value of the hedging transaction - minimized by requiring the counterparty to pay a margin and by clearing derivative transactions involving central clearing houses (CCPs), • different maturities of the hedging transaction and the debt security, • differences in the dates of revaluation and payment of interest coupons of the IRS hedging transaction and the debt security. In addition, the Bank hedges changes in the fair value of deposits (current accounts, savings accounts without a clearly defined revaluation date) due to risks arising from changes in the interest rate curve (risk of market interest rate volatility), excluding other effects affecting the change in valuation (including asset swap spread). As part of the above strategy, the Bank creates hedging relationships in which the hedged instrument is a layer of deposits specified in amount with a security horizon defined in the document establishing the hedging relationship, and the hedging instrument is an IRS/OIS float-to-fixed transaction. To define the deposit layer, the interest rate revaluation replication profile is used, determined in accordance with the methodology used to refine the measurement of interest rate risk in the banking book. The fair value of modeled deposits is subject to change due to changes in the market forward interest rate curve. In order to verify the validity of the established connections, retrospective and prospective effectiveness tests are carried out. The effectiveness of hedging relationships is tested on a monthly basis as part of prospective (ex-ante) and retrospective (ex-post) tests. Effectiveness tests are based on the valuation of the hedging transaction less the value of accrued interest in a given interest period. The Bank tests the effectiveness retrospectively (ex-post) as part of a two-stage procedure. In the first step, the Bank uses the direct compensation method to test effectiveness. If, based on the procedure carried out in the first step, high effectiveness in compensating changes in the valuation of the hedging instrument and the hedged item cannot be established, an additional procedure using linear regression is performed. The ex-ante test includes verification of linear regression and the significance of maximum valuation changes for this regression. The link passes the ex -ante test if the ex -ante regression test is passed or if the measurement of maximum valuation changes included in the regression is not significant. The ex-ante regression test and the ex -post regression test are passed if all of the following conditions are met for each test: • the value of the slope coefficient of the linear regression equation is in the range [ -1.25; -0.8], • the value of the coefficient of determination R^2 of the linear regression equation is >= 0.8,
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 45 • the value of the F test examining the significance of explanatory variables is > 0.05. The Bank has adopted a policy that amortization of the adjustment to the change in fair value resulting from the hedged risk begins on the date the adjustment to the hedged item ceases. 21.3 Assessment of the impact of the IBOR reform on hedge accounting As at 31 December 2024, the Bank maintained cash flow hedging relationships, in which the hedged item is interest flows on loans, the amount of which depends on the WIBOR and EURIBOR ind exes. The hedging position in the above relationships by IRS interest rate exchange transactions, for which the variable legs are based on WIBOR and EURIBOR. The nominal value of cash flow hedging transactions dependent on the WIBOR index as at 31 December 202 4 was PLN 15.95 billion and PLN 812 million for cash flow hedging transactions dependent on the EURIBOR ind ex. The nominal value of cash flow hedging transactions dependent on the WIBOR index as at 31 December 2023 was PLN 17.9 billion and PLN 513 million for cash flow hedging transactions dependent on the EURIBOR index. The Bank maintains relationships hedging the change in the fair value of its fixed -coupon bonds, for which the hedging transactions are interest rate exchange transactions based on the EURIBOR , EUR-ESTR and USD SOFR indexes. The nominal value of the above transactions as at the end of 2024 was was respectively PLN 143 milion, PLN 931 million and PLN 103 million for USD SOFR. As at 31 December 202 3, the Bank maintained relationships hedging the change in the fair value of its fixed -coupon bonds, for which the hedging transactions are interest rate exchange transactions based on the EURIBOR and EUR-ESTR indices. The nominal value of the above transactions was PLN 145 million and PLN 261 million, respectively. The Bank has established a relationship hedging the change in the fair value of its model deposits as part of Fair Value Hedge program for model deposits. Hedging transactions include interest rate exchange transactions based on the WIBOR, EUR -EST and USD SOFR indexes. The nominal value of the above transactions as at the end of 2024 amounted to PLN 2.43 billion for WIBOR, PLN 2.179 billion for EUR ESTR and P LN 1.948 billion for USD -SOFR, respectively. As at 31.12.2023, the Bank maintained relationships hedging the change in the fair value of its model deposits for which the hedging transactions are interest rate exchange transactions based on the WIBOR index with a nominal value of PLN 25 million. The relationships hedging the volatility of the fair value maintained by the Bank are, in the Bank's opinion, resistant to the potential impact of the IBOR reform, due to the fact that the reform covers both the hedged and the hedging position. For relations related to the WIBOR indicator, the Bank identifies uncertainty related to the IBOR reform, however, it assesses the risk of failure to meet effectiveness tests due to changes in the contractual conditions of the hedged item and hedging transactions as low. In the case of relations based on the EURIBOR indicator, the Bank does not identify any uncertainty related to the IBOR reform. 21.4 Financial data 31.12.2024 31.12.2023 Assets Liabilities Assets Liabilities Cash flow hedging instruments 238 954 394 016 322 491 671 573 Fair value hedging instruments 35 757 56 367 13 631 11 058 Total 274 711 450 383 336 122 682 631
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 46 The table below presents fair values and nominal values of hedging instruments and hedged instruments in cash flow hedge accounting (CFH). Interest rate CFH Loans / Bonds 31.12.2024 31.12.2023 Hedging instruments Nominal value 16 761 870 18 455 064 Carrying amount - assets 238 954 322 491 Carrying amount - liabilities 394 016 671 573 The line in the balance sheet in which the hedging instrument was presented Derivative hedge instruments Derivative hedge instruments Changes in the fair value of the hedging instrument being the basis for determining the amount of hedge ineffectiveness -218 524 -394 451 Changes in the fair value of the hedging instrument recognized in other comprehensive income -300 483 250 268 Amount transferred in the period from comprehensive income to profit and loss account 429 616 812 374 Defered tax -24 535 -201 902 The amount of hedge ineffectiveness recognized in the profit and loss statement 3 490 6 408 The profit and loss account line in which the amount of hedge ineffectiveness, as described above, was recognized The result on financial assets measured at fair value through profit or loss and FX result The result on financial assets measured at fair value through profit or loss and FX result Hedged items The amount of change in the fair value of a hypothetical derivative representing the hedged item, which change is the basis for estimating the ineffectiveness of the hedge in a given period 234 418 397 197 CFH equity balance for relationships for which hedge accounting will continue beyond the end of the reporting period 113 960 873 913 Balances remaining in the cash flow hedge reserve for hedging relationships for which hedge accounting has been discontinued -9 362 -13 173 Hedging instruments (nominal value) 31.12.2024 31.12.2023 Interest rate transactions 16 761 870 18 455 064 Total 16 761 870 18 455 064 Distribution profile over time of the notional amounts and the corresponding average interest rates of the hedging instruments 31.12.2024 the nominal value of instruments with a remaining maturity under 1 year from 1 year to 3 years from 3 to 5 years over 5 years nominal (PLN) average % nominal (PLN) average % nominal (PLN) average % nominal (PLN) average % Interest rate swaps (IRS PLN) 4 560 000 3.70 8 980 000 3.20 1 415 000 5.13 995 000 4.84 Interest rate swaps (IRS EUR) 149 555 3.58 448 665 1.81 213 650 2.95 0 0.00 31.12.2023 the nominal value of instruments with a remaining maturity under 1 year from 1 year to 3 years from 3 to 5 years nominal (PLN) average % nominal (PLN average % nominal (PLN) average % Interest rate swaps (IRS PLN) 4 865 000 2.62 9 922 000 2.39 3 155 000 5.90 Interest rate swaps (IRS EUR) 339 144 -0.37 173 920 -0.28 0 0.00
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 47 Financial assets– hedging instruments 31.12.2024 31.12.2023 Level 2 238 954 322 491 Interest rate transactions 238 954 322 491 Total 238 954 322 491 By maturity 31.12.2024 31.12.2023 up to 1 month 0 265 from 1 month to 3 months 2 420 11 371 from 3 months to 1 year 46 976 20 008 from 1 year to 5 years 177 462 290 847 over 5 years 12 096 0 Total 238 954 322 491 Financial liabilities – hedging instruments 31.12.2024 31.12.2023 Level 2 394 016 671 573 Interest rate transactions 394 016 671 573 Total 394 016 671 573 By maturity 31.12.2024 31.12.2023 from 1 month to 3 months 0 1 106 from 3 months to 1 year 74 644 96 598 from 1 year to 5 years 310 554 573 869 over 5 years 8 818 0 Total 394 016 671 573 Other comprehensive income as regards cash flow hedges 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Other comprehensive income at the beginning of period , gross -413 942 -1 476 584 Gains/losses transferred to other comprehensive income in the period -300 483 250 268 Amount transferred in the period from comprehensive income to profit and loss account, including: 429 616 812 374 - net interest income -429 616 -812 374 Accumulated other comprehensive income at the end of period , gross -284 809 -413 942 Tax effect 54 114 78 649 Accumulated other net comprehensive income at the end of period -230 695 -335 293 Ineffective part of cash flow hedges recognised in the profit and loss account in position the result on financial assets measured at fair value through profit or loss and trading result 3 490 6 408 Impact of other comprehensive income in the period , gross 129 133 1 062 642 Deferred tax under cash flow hedges -24 535 -201 902 Impact of other comprehensive income in the period , net 104 598 860 740
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 48 The table below presents fair values and nominal values of hedging instruments and hedged instruments in fair value hedge accounting. FVH IRS BONDS - hedging securities measured at fair value through other comprehensive income 31.12.2024 fair value through other comprehensive income 31.12.2023 Hedging instruments Nominal value 1 176 762 406 103 Carrying amount - assets 17 885 13 631 Carrying amount - liabilities 5 077 10 768 The line in the balance sheet in which the hedging instrument was presented Derivative hedge instruments Derivative hedge instruments The amount of change in the fair value of the hedging instrument 5 069 -17 137 The profit and loss account line in which the change in the fair value of the hedging instrument was recognized The result on financial assets measured at fair value through profit or loss and FX result, change in fair value measurement for the hedged risk The result on financial assets measured at fair value through profit or loss and FX result, change in fair value measurement for the hedged risk Hedged items Carrying amount - assets 1 101 039 404 688 Cumulative amount of the adjustment to the fair value of the hedged item included in the carrying amount of the hedged item recognized in the balance sheet - assets 0 0 The line in the balance sheet in which the hedged item is presented Investment financial assets measured at fair value through other comprehensive income Investment financial assets measured at fair value through other comprehensive income The amount of change in the fair value of the hedged item 2 078 18 479 The profit and loss account line in which the change in the fair value of the hedged item was recognized The result on financial assets measured at fair value through profit or loss and FX result, change in fair value measurement for the hedged risk The result on financial assets measured at fair value through profit or loss and FX result, change in fair value measurement for the hedged risk Hedging instruments (nominal value) 31.12.2024 31.12.2023 Interest rate transactions 1 176 762 406 103 Total 1 176 762 406 103 Financial assets– hedging instruments 31.12.2024 31.12.2023 Level 2 17 885 13 631 Interest rate transactions 17 885 13 631 Total 17 885 13 631 By maturity 31.12.2024 31.12.2023 from 3 months to 1 year 2 211 0 from 1 year to 5 years 7 240 13 631 over 5 years 8 434 0 Total 17 885 13 631 Financial liabilities – hedging instruments 31.12.2024 31.12.2023 Level 2 5 077 10 768 Interest rate transactions 5 077 10 768 Total 5 077 10 768
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 49 By maturity 31.12.2024 31.12.2023 over 5 years 5 077 10 768 Total 5 077 10 768 FVH IRS DEPOSITS 31.12.2024 31.12.2023 Hedging instruments Nominal value 6 558 300 25 000 Carrying amount - assets 17 872 0 Carrying amount - liabilities 51 290 290 The line in the balance sheet in which the hedging instrument was presented Derivative hedge instruments Derivative hedge instruments The amount of change in the fair value of the hedging instrument -42 129 -279 The profit and loss account line in which the change in the fair value of the hedging instrument was recognized The result on financial assets measured at fair value through profit or loss and FX result, change in fair value measurement for the hedged risk The result on financial assets measured at fair value through profit or loss and FX result, change in fair value measurement for the hedged risk Hedged items Carrying amount - liabilities 6 558 300 25 000 The line in the balance sheet in which the hedged item is presented Amounts due to customers Amounts due to customers The amount of change in the fair value of the hedged item - liabilities -53 015 -229 The name of the line in the balance sheet presenting changes in the fair value measurement of the hedged item Changes in fair value measurement for the hedged risk Changes in fair value measurement for the hedged risk The amount of change in the fair value of the hedged item 52 787 229 The profit and loss account line in which the change in the fair value of the hedged item was recognized The result on financial assets measured at fair value through profit or loss and FX result, change in fair value measurement for the hedged risk The result on financial assets measured at fair value through profit or loss and FX result, change in fair value measurement for the hedged risk Hedging instruments (nominal value) 31.12.2024 31.12.2023 Interest rate transactions 6 558 300 25 000 Total 6 558 300 25 000 Financial assets– hedging instruments 31.12.2024 31.12.2023 Level 2 17 872 0 Interest rate transactions 17 872 0 Total 17 872 0 By maturity 31.12.2024 31.12.2023 from 3 months to 1 year 14 536 0 from 1 year to 5 years 3 235 0 over 5 years 101 0 Total 17 872 0
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 50 Financial assets– hedging instruments 31.12.2024 31.12.2023 Level 2 51 290 290 Interest rate transactions 51 290 290 Total 51 290 290 By maturity 31.12.2024 31.12.2023 from 3 months to 1 year 5 082 0 from 1 year to 5 years 4 155 290 over 5 years 42 053 0 Total 51 290 290 22 Loans and advances to customers 22.1 Accounting policy information On 31 December 20 24 and 31 December 20 23 in that category the Bank held receivables und er loans, purchased receivables and other receivables from customers. In addition, the Bank also presents under this item sell-buy transactions in securities, guided by the economic substance of the transaction.The assessment covers if the securities purchase/sale transaction is combined with transfer of risks and benefits under the security. In the transactions so far entered into by the Bank, basically all risks and benefits are retained by the seller of the securities since the risk of change of the present value of net assets is not materially changed as a result of suc h transfer. This means that both reverse repo and buy -sell-back transactions, as well as repo and sell-buy-back transactions are disclosed in the Bank's balance sheet as: securities placed with the securities buyer or deposits received from the securities buyer. Securities subject to a sale with a repurchase agreement are not derecognised from the statement of financial position and are subject to valuation in accordance with the principles set out for individual securities portfolios. A difference between the sale price and the repurchase price is recognised as interest expense or income respectively. Loans and advances to customers are measured at amortized cost because they are maintained in a business model whose purpose is to realize cash flows in ac cordance with contractual terms and contractual cash flows include only repayment of the principal and interest. Detailed of accounting principles regarding the classification of financial assets are described in Note 20.1. The classification and estimation of expected credit losses made by the Bank take into account the requirements of: • IFRS 9 "Financial Instruments" , • Recommendation R of the Polish Financial Supervision Authority on the principles of credit exposure classification, estimation and recognition of expected credit losses and credit risk management issued in April 2021, • EU Regulation No. 575/2013, Art. 178 and EBA / GL / 2016/07 guidelines on the application of the definition of default and the Regulation of the Minister of Finance, Investments and Development of 3/10/2019 on the materiality level of an overdue credit obligation and EU Regulation No. 2021/451, Annex V.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 51 Classification of receivables from customers According to the expected credit loss model the Bank estimates impairment allowance. Principles of estimating expected credit loss include the division the loans and advances to customers into three categories (stages) of quality which influences method and horizon of estimating loss allowance: • Stage 1, receivables without indications of impairment and without a significant increase of credit risk from the moment of initial recognition, • Stage 2, receivables without indications of impairment but with a significant increase of credit risk from the moment of initial recognition, • Stage 3, receivables with indications of impairment. The horizon for estimating the expected credit losses Expected credit losses of receivables classified into Stage 1 are estimated at a 12-month horizon. Losses of receivables classified into Stage 2 and Stage 3 are estimated at the life -time horizon (life -time estimated horizon of expectancy life of receivables). The life-time horizon is also always applied to exposures that were impaired due to credit risk (so -called purchased or originated credit impaired, POCI) as at the acquisition or creation date, regardless of their credit quality as at the valuation date. Moreover the Bank distinguishes a low credit risk group, which are excluded from the assessment of significant credit risk deterioration and are subject to valuation in the horizon of 12 months (or maturity, if shorter). The Bank qualifies for this group: State Treasury exposures (Ministry of Finance, National Bank of Poland, BGK, etc.). Definition of a loss allowances The loss allowances are the difference between the gross exposure value and expected recoveries after taking into account the status / probability of default in the given horizon. For POCI exposures, a loss allowances is a positive or negative difference between their cumulative on estimation date of expected credit losses and the cumulative level set at the acquisition/creation date of the exposure. If financial assets are proven to be uncollectible, the Bank writes - off the receivables or parts thereof against the impairment allowance. The amounts of such written-off receivables that may be recovered in the future reduce the value of the impairment allowances in the income statement. Detailed are described in Note 3.4. 22.2 Principles of classification (credit quality/stages) The Bank assesses the credit quality of receivables and classifies them into the appropriate risk categories (stages) at each balance sheet date. Stage 3, receivables with triggers of impairment The Bank defines the impairment triggers based on supervisory regulations and guidelines : • EU Regulation No. 575/2013, Art. 178 and the EBA/GL/2016/07 guidelines on the application of the definition of default and the Regulation of the Minister of Finance, Investment and Development of 3.10.2019 on the materiality level of overdue credit obligations and EU Regulation No. 2021/451, • Recommendation R of the Polish Financial Supervision Authority regarding the rules for classifying credit exposures, estimating and recognizing expected credit losses and credit risk management issued in April 2021, and taking into account its own experience related to credit risk management. The Bank applies the default definition in line with the definition of credit-impaired exposures (Stage 3) and the definition of non-performing exposures.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 52 The Bank, in accordance with Art. 178 sec. 1, second paragraph of Regulation (EU) No 575/2013: • for retail exposures, it applies the default definition at the level of individual credit instruments (including contagion in the case of significant arrears for the entire relationship), • for non-retail exposures, the definition of default is applied at the obligor level. Key impairment triggers are as follows: • a significant delay in payment, understood as a delay in repayment exists for over 90 days, while the overdue amount meets the materiality criterion of the outstanding amount (i.e. PLN 400 for retail clients and PLN 2 thousand for co rporate clients and 1% of the outstanding amount to the total exposure), • a major deterioration of the customer’s economic and financial condition (including significant deterioration of internal scoring/rating) that can affect that client's is not able to realise contractual terms regarding the liabilities towards the Bank, • restructuring understood as an improvement granted in terms of financing as a result of significant financial difficulties of the borrower, if among others it reduces the NPV of the asset above 1%, introduces a balloon installment or significantly postpones the servicing of capital installments , • business application for restructuring, bankruptcy and liquidation proceedings, • effective termination of the contract, • individual consumer bankruptcy, • death of an individual customer (taking into account the impact on debt service threat in the case of common obligations of many debtors), • lack of information about the whereabouts of an individual client, if it has a negative impact on the timely handling of the engagement, • loss of retail client work (recognized on the basis of an assessment of the customer's inability to pay the debt due to job loss), • initiation of court or enforcement proceedings, • challenging exposure by the debtor, • frauds, • cessation of activities, • writing off/sale at a loss, • implementation of guarantees, • default of an individual client as a result of recognizing a default in his sole proprietorship . The above mentioned list of indicators is an open set. In the case of an event that could be a sign for impairment, not covered by the above mentioned the catalog assesses its significance for the risk of the client defaulting on the basis of the original contractual terms and, if it is reasonable should determing the impairment's indicators. The Bank reviews all client's credit exposures in terms of identifying objective premises for impairment on a daily basis in terms of quantitative and procedural premises and, according to the most recent data on the date of the assessment, in terms of premises relating to the assessment of the client's financial condition. The process of identifying defaults is carried out in a dedicated, centralized system where all debtors of the Bank and the Capital Group are assessed according to uniform criteria. In 2024, despite the occurrence of significant negative external phenomena (post -pandemic period, war in Ukraine, environment of high interest rates and other macroeconomic challenges), the Bank did not identify the validity of the introduction any changes to the rules for recognizing impairment triggers.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 53 Stage 2, without triggers of impairment, with a significant deterioration from the initial recognition As at each balance date, Bank assesses whether the credit risk related to a given financial instrument has significantly increased since the day of its initial recognition. In order to make such an assessment, the Bank compares the estimated life-time default risk for a given financial instrument determined as at the reporting date with the risk of default of that financial instrument in the same period as at the initial recognition date. Starting 31 December 2021, the Bank introduced the requirements of Recommendation R of the Polish Financial Supervision Authority as regards the rules for identifying exposures with a significant deterioration in credit risk. The rules for identifying a significant increase in credit risk from the initial recognition are based on: • qualitative criterias and • quantitative criterias. The Bank includes as qualitative criteria: • occurrence of overdue exceeding 30 days, • classification of the client on the higher risk list ("watch list"), • forbearance (ie customer staying in the post-restructuring period probation), • identification of significant risk (industry, sector or customer group), • no initial or ongoing scoring, • achieving the current scoring or rating above the established masterscale levels, • occurrence of an overdue period exceeding 90 days, which due to insignificance does not constitute a premise for default, • procedural phenomena / events which are not accompanied by arrears/overdue, which do not result in default classification (including e.g. loss of job, lack of information about the debtor's whereabouts), • default on another retail customer account. The Bank includes as quantitative criteria: • increase above the defined materiality thresholds, the cumulative probability of default in the period to maturity as at the measurement date as compared to the corresponding determination at the date of commitment, where the cumulative probability of defa ult is determined using life -time PD models. In determining the significance of the deterioration of credit risk, the Bank applies a relative threshold. Relative materiality thresholds for credit risk deterioration are defined at the moment of exposure and assume a fixed level, which is diversified according to the original credit quality described by the master rating scale, separately for the segment of retail and corporate customers. The deterioration significance thresholds tend to decrease with increasing initial risk levels, where the lowest threshold level (for exposures with the highest initial risk levels) is 1.2, illustrating the scale of deterior ation in the cumulative probability of default by maturity established on the valuation date relative to the same measure and period established on the origination date. In the process of defining the relative materiality thresholds, the Bank uses a wide range of analyzes, which generally include: minimization of classification errors, distribution of credit risk assessments, default rate, concentration of credit risk asse ssments, migration of credit risk assessments, quality of models used to assess credit risk, return on assets, dependence of the default rate on macroeconomic factors, reference to the supervisory backstop, benchmark of the credit risk deterioration materiality thresholds applied by other banks.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 54 Exposures classified to Stage 2 are reclassified to Stage 1 if all events classifying them to Stage 2 have ceased. Observation periods adequate for a given phenomenon are applied for particular types of indications, including e.g. "classification of the client on the high -risk list" periods confirming the stable disappearance of the causes of the event . In particular , after the “restructuring” condition for impairment has expired, the exposure for at least 24 months is classified as forbe arance, which resul ts in this period being classified into Stage 2. Identification of premises for a significant deterioration of credit risk is performed on the level of a single exposure. Stage 1, without indications of impairment, without significant deterioration from the initial recognition Credit exposures of customers for which impairment triggers are not identified and for which the Bank has not identified a significant credit quality deterioration from the initial recognition are classified in Stage 1. Classification forbearance Exposures with facilities granted to clients due to a deteriorated financial situation are classified as forbearance exposures. For the purposes of classification for forbearance, the Bank considers a deteriorated financial situation of the customer when the following occurs at the time of granting the facility: • during three months before the date of granting the facility, the overdue period on the restructured client's account exceeded 30 days or • on the client's restructured account, the quality assessment indicated the occurrence of a deterioration in credit risk since initial recognition within three months before the facility was granted or, • the client was on a watch list in the three months prior to granting the facility. For the purposes of classifying a forbearance exposure as non -performing (resulting in the identification of an impairment trigger), the Bank recognizes an event when at the time of granting the facility at least the following are present: • the exposure is considered non-performing (ie there are other indications of impairment) or • as a result of the application of the facility, the financial liabilities are reduced by the redemption of a significant part of the exposure or the granted facility reduces the NPV of the restructured exposure by more than 1%, or • the applied repayment plan is not based on credible macroeconomic assumptions and the borrower's assessment of the borrower's ability and readiness to repay, or • the amended contract contains significant deferrals as regards the commencement of repayment (for principal over 2 years) or • the amended contract provides for a large lump sum (balloon) payment at the end of the amended repayment schedule. Forbearance exposures are classified to Stage 2, non -performing forbearance exposures constituting a default premise are classified to Stage 3. Rules for classifying exposures covered by key statutory customer support instruments The key statutory customer support tools available, inter alia, due to the macroeconomic situation, include: • Borrowers Support Fund, • moratoriums available to customers who have lost their source of income, • payment moratoria for PLN mortgage portfolios, • moratoriums for customers affected by flooding.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 55 Exposures covered by the Borrowers Support Fund and exposures covered by moratoriums for customers who have lost their source of income are classified by the Bank to forbearance and, consequently, to Stage 2 (unless they meet the impairment / default criteria, which would result in classification to Stage 3). Mortgage exposures covered by payment moratoriums and exposures covered by moratoriums resulting from the effects of flooding are subject to general classification rules, where the use of moratoriums does not meet the conditions of the facility offered due to the worsened financial situation, as it is not a criterion for using the instrument. 22.3 Significant estimates and judgments - allowances for expected impairment losses In accordance with IFRS 9, for all financial instruments measured at amortized cost or at fair value through other comprehensive income, as well as financial guarantees and commitments to provide financing, the Bank estimates allowances for expected credit losses. Principles of estimating loss allowances for exposures without triggers of impairment (Stage 1 and Stage 2) Exposures with no identified impairment indications are grouped in homogeneous groups in terms of the risk profile and a provision is recognised for such group of exposures to cover expected losses (ECL). The estimated expected credit losses for exposures designated for Stage 1 or Stage 2 are based on: • estimated exposure value at the time of default (EAD model), • estimated distribution of risk of default within the life -time of the exposure (life -time PD model based on scoring and rating models), • estimated level of loss in case of default of the client (LGD model). The EAD model shows the expected distribution of exposure of a given financial assets in the period to maturity. The model for products with repayment schedules is based on contractual cash flows adjusted for the effects of prepayment / underpayment. For products without repayment schedules, the model is based on the average expected use of the credit limit in the period until maturity, and for products without defined maturity, additionally on the average expected use of the limit over the behavioral life-time. The life-time PD illustrates the expected, in the life -time horizon, default probability distribution of each exposure. The model uses the following sources of information: • the rating grade determined in the rating system adequate for the client, which is the best estimate of his current standing, • information about the segment / product group, • risk factors that provide information on the timing of exposure over the life cycle. These three sources of information are used to determine homogeneous pools for which the default probability distribution is estimated. The model is used both to determine the initial level of expected credit losses when the asset is initially recognized and to estimate the current level of risk. The LGD model illustrates the expected level of loss from the exposure where the customer defaults. As part of the construction of LGD models, the Bank aims to cover the portfolio of non -working exposures as fully as possible with advanced statistical models that enable the forecast of recovery for individual exposures. The final LGD value takes into account risk factors specific to the exposure risk profile, determining the expected result of the recovery process, taking into account the value of collateral for each transaction.The Bank applies the so-called minimum level of loss (LGD floor), preventing the occurrence of zero write-offs. The estimation of particular parameters is made at the same level of homogeneous groups of exposures indicating common features in the described range.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 56 The estimate horizon covers the period of the next 12 months (or the maturity if shorter) for Stage 1 and the estimated horizon covers the period up to the expected maturity for Stage 2. Principles of estimating impairment allowance for exposures with identified impairment triggers (Stage 3). Impaired exposures are split into those that are measured individually or in groups (collectively). For the purposes of collective measurement, groups are identified with similar credit risk features that are assessed collectively for impairment. Group measurements based on LGD models takes into account, inter alia, behavioral behavior in the field of debt servicing and the time the exposure remains default, and takes into account the specificity of a given group in terms of expected recoveries and the individual value of collateral for each exposure. Depending on the LGD model used by the Bank, the loss allowance parameters are determined: • individually as a recovery level for each account, based on its individual characteristics resulting from historical payments on the account, debt collection process, customer history at the Bank, customer history at BIK and the structure of premises or • pooled based on information on the product segment / duration of the exposure in the state of impairment. The methodology and assumptions of LGD models used to estimate future cash flows are regularly analyzed, calibrated and validated in order to reduce the discrepancy between expected and actual losses. Individual measurement applies to exposures of corporate customers threatened with impairment exceeding the threshold of a total commitment of PLN 3 million. Individual measurement is also allowed to other exposures that may be impaired with respect to which the Bank is not able to identify a group of assets with similar credit risk features or does not have an adequate sample to assess group parameters. Individual assessments are based on an analysis of scenarios. Each scenario has an assigned the likelihood of occurrence and anticipated recoveries reflecting restructuring and debt recovery strategies conducted towards the client. Exposures covered by an individual or group method of estimation for which the Bank does not identify a individual loss, they are grouped into homogeneous populations for which the Bank sets a minimum level of loss (the so-called LGD floor). 22.4 Future macroeconomic factors in the assessment of credit quality and impairment allowances estimation Principles of taking macroeconomic factors In accordance with IFRS 9, the assessment of significant credit quality deterioration and the estimation of write-offs, apart from reflecting the current quality of the loan portfolio, take into account the expected macro-economic factors (FLI, forward-looking-information) that will occur in the future. The Bank ensures that future macroeconomic factors are taken into account in all significant components of the estimation of expected credit losses. FLI adjustments developed for individual risk parameters ensure adjustment of the risk parameter estimates to future macroeconomic factors and are taken into account at the level of individual exposures . As part of individual models of expected loss parameters, the Bank developed econometric solutions and sensitivity analyzes enabling the assessment of the impact of macroeconomic scenarios on the behavior of the loan portfolio. The Bank uses econometric models describing changes in DR (default rate) and LGD (loss given default) parameters depending on macroeconomic scenarios.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 57 In particular, in terms of the methodology used for the PD parameter, the Bank uses: • for the retail customer segment, econometric models making the evolution of the DR level dependent on macroeconomic factors in individual scenarios, • for the corporate client segment that does not keep full accounting, an econometric model forecasting the level of DR depending on macro factors, • for the corporate client segment maintaining full accounting, industry models enabling the simulation of the client's rating assessment, fed with current information on changes in the macroeconomic environment, taking into account the current levels of sal es revenues and margin levels. In the area of the LGD parameter, a solution is used that makes the level of healing dependent on the dynamics of changes in macroeconomic factors such as Gross Domestic Product , remuneration, NBP base rate (the scope and sensitivity to a given factor were adjusted depending on the model segment). As regards collaterals included in the valuation of credit exposures for impairment, the Bank takes into account the risk of negative future macroeconomic factors affecting the value of collaterals and applies an additional haircut over current market valu ations and estimated recovery rates illustrating the economic recoverability of collaterals. The models used in the area of the PD parameter assume the influence of factors such as GDP dynamics, real wage dynamics, reference rate, unemployment rate and EUR /PLN exchange rate on the disposable income of households. In addition, CPI inflation may affect other macroeconomic variables, such as interest rates. Interdependencies between macroeconomic variables are taken into account at the stage of creating scenarios. Macroeconomic scenarios In order to take into account changes in the business environment, the Bank uses macroeconomic scenarios showing possible trajectories of the economic situation. The scenarios used by the Bank are developed internally by the Macroeconomic Analysis Departme nt and consistent with those taken into account in the financing planning process. As at 31 December 2024, the Bank adopts 3 scenarios of the future macroeconomic situation: • base, with a probability of 50%, • negative, with a probability of 25%, • optimistic, with a probability of 25%. The scenario probabilities were selected by the Department of Macroeconomic Analyzes so that their weights correspond to the probability of achieving the state of the economy expressed by all the macroeconomic factors included in the scenarios. As at 31 December 2024, the Bank adopted the following macroeconomic scenarios: 2025 2026 Base scenario GDP growth rate (annual average) 3.7% 3.6% Private consumption (annual average) 3.6% 3.4% NBP base rate (end of period) 5.0% 3.5% Unemployment rate (annual average) 5.3% 5.4% CPI inflation (annual average) 4.5% 3.2% EUR/PLN exchange rate (annual average) 4.25 4.26 Wage growth in the national economy (annual average) 7.7% 7.2%
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 58 2025 2026 Negative scenario GDP growth rate (annual average) 1.7% 2.2% Private consumption (annual average) 0.5% 1.3% NBP base rate (end of period) 6.3% 4.3% Unemployment rate (annual average) 5.6% 6.0% CPI inflation (annual average) 6.9% 4.8% EUR/PLN exchange rate (annual average) 4.54 4.62 Wage growth in the national economy (annual average) 6.0% 4.9% Optimistic scenario GDP growth rate (annual average) 5.1% 5.3% Private consumption (annual average) 5.3% 5.5% NBP base rate (end of period) 4.3% 3.0% Unemployment rate (annual average) 4.8% 4.7% CPI inflation (annual average) 3.4% 2.5% EUR/PLN exchange rate (annual average) 4.23 4.17 Wage growth in the national economy (annual average) 11.5% 9.5% As at 31 December 2023, the Bank adopted the following macroeconomic scenarios: 2024 2025 Base scenario GDP growth rate (annual average) 3.3% 4.1% Private consumption (annual average) 4.5% 2.9% NBP base rate (end of period) 5.00% 4.25% Unemployment rate (annual average) 5.3% 5.4% CPI inflation (annual average) 4.8% 5.4% EUR/PLN exchange rate (annual average) 4.36 4.38 Wage growth in the national economy (annual average) 10.0% 7.9% Negative scenario GDP growth rate (annual average) 0.8% 2.0% Private consumption (annual average) 0.5% 1.7% NBP base rate (end of period) 7.00% 5.50% Unemployment rate (annual average) 5.8% 6.1% CPI inflation (annual average) 7.7% 8.3% EUR/PLN exchange rate (annual average) 4.70 4.59 Wage growth in the national economy (annual average) 7.7% 5.9% Optimistic scenario GDP growth rate (annual average) 5.1% 5.0% Private consumption (annual average) 6.1% 4.5% NBP base rate (end of period) 3.00% 3.00% Unemployment rate (annual average) 4.9% 4.6% CPI inflation (annual average) 2.7% 3.1% EUR/PLN exchange rate (annual average) 4.14 4.10 Wage growth in the national economy (annual average) 11.5% 9.3%
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 59 Key macroeconomic factors for the portfolio The Bank currently considers significant, unprecedented changes in the macroeconomic environment (changes in interest rates, inflation, exchange rates, energy prices) as key risk areas, resulting from the long- term effects of the pandemic and other global challenges, as well as the effect of the war in Ukraine. As at 31 December 2024, the above risk areas – taking into account future expected macroeconomic factors – did not have a significant impact on the deterioration of the quality of credit portfolios. 22.5 Quality and structure of the loan portfolio Key credit portfolio quality indicators as at 31 December 2024 As at 31 December 202 4, despite the negative macroeconomic environment , the Bank does not observe any negative impact on the quality of the loan portfolio. The share of 30 -day overdue loans in the regular portfolio as at 31 December 2024 was 0.35% compared to 0.47% observed as at 31 December 2023. In the Bank's opinion, this situation is largely due to: • insignificant, negative transmission of high interest rates on debt servicing capacity,debt, • insignificant impact on the quality of the loan portfolio of the armed conflict in Ukraine, • the scale of support clients receive in terms of payment moratoriums and the borrowers' support fund. The Bank adapts its lending policies and processes to the current macroeconomic situation and the resulting threats (both in terms of adapting the lending policy and processes to the pandemic environment, high interest rate environment and the geopolitical and economic effects of the war in Ukraine). The changes are aimed at supporting customers (including in the scope of business activities conducted by corporate customers) while at the same time focusing on minimizing the Bank's credit losses. Thanks to all the above circumstances and actions, the quality of the loan portfolio has so far remained resilient to the effects of the current macroeconomic and geopolitical environment. The level of allowance for exposures classified to Stage 1 and Stage 2 as at 31 December 2024 amounts to approx. PLN 914 million and represents a decrease of approx. 13% compared to the level maintained as at 31 December 2023 with the decrease mainly due to the reclassification to Stage 3 of the exposure of one corporate client, who as at 31 December 2023 was maintained in Stage 2 with a high level of allowances. The key credit parameters of the regular portfolio are presented below (non-default): *according to the EBA definition As at 31 December 202 4 and 31 December 202 3, the structure of the portfolio with evidence of impairment, together with the structure of the recoverable amount of collateral, was as follows (in MPLN): Date individual portfolio collective portfolio exposure value % of collateral coverage* % coverage with write-offs exposure value % of collateral coverage* % coverage with write-offs 31.12.2023 1 797 45% 59% 3 240 27% 57% 31.12.2024 1 301 47% 51% 2 655 34% 55% *expressed at the economic recoverable amount Date DPD 30+* PD LGD Stage 2 share in the regular portfolio Coverage of regular portfolio write-offs 31.12.2023 0.47% 2.89% 29.8% 11.9% 1.8% 31.12.2024 0.35% 2.5% 29.8% 11.6% 1.5%
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 60 In 2024 the Bank realized a significant reduction of the collective portfolio with evidence of impairment due to significant NPL portfolio sale processes (which was possible due to the significant demand and favorable price conditions on the market in this regard in 2024) and derecognition processes. The scale of expert judgement In determining the expected credit losses, the Bank aims to make the fullest possible use of statistical solutions that objectify the impact of current and future conditions on the values of credit risk parameters. Expert judgment is used as a tool supporting model management in situations of increased market volatility. Regardless of the scale of application of expert judgment, it is managed in a standardized manner in accordance with the Model Risk Management Policy adopted by the Bank and subject to inde pendent validation. Decisions based on expert judgment are approved at dedicated decision -making levels in the form of the Model Risk Committee and the Bank's Management Board. Parameter changes In 2024, the Bank made changes in parameters, which included calibration to the current profile of customer behavior in terms of payment trends and recoverability trends, as well as adaptation to updated assumptions regarding the future macroeconomic environment and calibration to the adopted scenarios. As a result of changes in parameters, taking into account essentially the effect of assumptions regarding future macroeconomic scenarios, the Bank released allowances for the regular portfolio in the amount of PLN 33 million, and also created allowances for the default portfolio in the amount of PLN 26 million. 22.6 Financial data Loans and advances granted to customers 31.12.2024 31.12.2023 Retail segment 41 083 887 39 718 395 Consumer loans 20 545 323 21 166 149 Mortgage loans 20 538 564 18 552 246 Corporate segment 24 596 651 25 107 505 Gross carrying amount 65 680 538 64 825 900 Expected credit losses -3 063 446 -4 003 163 Carrying amount 62 617 092 60 822 737 Loans and advances granted to customers 31.12.2024 Stage 1 Stage 2 Stage 3 POCI Total Retail segment 37 236 339 2 649 477 1 175 673 22 398 41 083 887 Consumer loans 17 943 094 1 663 438 920 082 18 709 20 545 323 Mortgage loans 19 293 245 986 039 255 591 3 689 20 538 564 Corporate segment 17 105 773 4 468 294 2 779 705 242 879 24 596 651 Gross carrying amount 54 342 112 7 117 771 3 955 378 265 277 65 680 538 Expected credit losses -384 241 -530 133 -2 115 103 -33 969 -3 063 446 Carrying amount 53 957 871 6 587 638 1 840 275 231 308 62 617 092 Loans and advances granted to customers 31.12.2023 Stage 1 Stage 2 Stage 3 POCI Total Retail segment 35 222 693 2 755 743 1 707 963 31 996 39 718 395 Consumer loans 17 881 785 1 854 685 1 404 457 25 222 21 166 149
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 61 Loans and advances granted to customers 31.12.2023 Stage 1 Stage 2 Stage 3 POCI Total Mortgage loans 17 340 908 901 058 303 506 6 774 18 552 246 Corporate segment 17 150 310 4 345 174 3 329 098 282 923 25 107 505 Gross carrying amount 52 373 003 7 100 917 5 037 061 314 919 64 825 900 Expected credit losses -375 688 -678 831 -2 933 497 -15 147 -4 003 163 Carrying amount 51 997 315 6 422 086 2 103 564 299 772 60 822 737 In 20 24 the Bank sold loans with a total gross value amounting to PLN 535 475 thousand, while the impairment allowance recorded for this portfolio amounted to PLN 355 810 thousand. The impact of debt sales on the cost of risk in 2024 amounted to PLN 61 100 thousand (profit). In 20 23 the Bank sold loans with a total gross value amounting to PLN 628 989 thousand, while the impairment allowance recorded for this portfolio amounted to PLN 426 006 thousand. The impact of debt sales on the cost of risk in 2023 amounted to PLN (-) 395 thousand (loss). All risks and benefits related with these receivables have been transferred to the purchaser and there is no further involvement of the Bank in these assets. In 2024 and the Bank wrote off the financial assets amounted to PLN 1 436 840 thousand. The financial assets that are written off concerned both the loan portfolio of retail and corporate customers. In 2023 and the Bank wrote off the financial assets amounted to PLN 769 003 thousand. The financial assets that are written off concerned both the loan portfolio of retail and corporate customers. Loans and advances to customers Stage 1 Stage 2 Stage 3 POCI Total Retail segment Consumer loans Gross carrying amount As at 01.01.2024 17 881 785 1 854 685 1 404 457 25 222 21 166 149 New / purchased / granted financial assets 8 827 144 0 0 7 213 8 834 357 Changes due to the sale or expiry of the instrument -5 046 619 -270 635 -266 015 -6 443 -5 589 712 Transfer to Stage 1 301 961 -288 973 -12 988 0 0 Transfer to Stage 2 -718 276 797 699 -79 423 0 0 Transfer to Stage 3 -233 879 -192 048 425 927 0 0 Valuation changes -2 989 291 -219 636 -56 942 -3 340 -3 269 209 Assets written off the balance sheet 0 0 -483 957 -3 855 -487 812 Other changes, including exchange differences -79 731 -17 654 -10 977 -88 -108 450 As at 31.12.2024 17 943 094 1 663 438 920 082 18 709 20 545 323 Expected credit losses As at 01.01.2024 284 009 345 675 908 104 1 264 1 539 052 New / purchased / granted financial assets 183 844 0 0 9 203 193 047 Changes due to the sale or expiry of the instrument -79 565 -57 955 -247 689 -7 347 -392 556 Transfer to Stage 1 77 706 -71 569 -6 137 0 0 Transfer to Stage 2 -49 221 83 881 -34 660 0 0 Transfer to Stage 3 -35 045 -51 006 86 051 0 0 Change in the estimate of expected credit losses -107 436 -11 999 531 193 13 442 425 200 Net expected credit losses in the income statement -9 717 -108 648 328 758 15 298 225 691 Assets written off the balance sheet 0 0 -483 957 -3 855 -487 812 Fair value evaluation at the moment of initial recognition 0 0 0 -11 335 -11 335 Other changes, including exchange differences -2 348 -4 369 -156 129 -1 915 -164 761
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 62 Loans and advances to customers Stage 1 Stage 2 Stage 3 POCI Total As at 31.12.2024 271 944 232 658 596 776 -543 1 100 835 Carrying amount as at 31.12.2024 17 671 150 1 430 780 323 306 19 252 19 444 488 Loans and advances to customers Stage 1 Stage 2 Stage 3 POCI Total Retail segment Consumer loans Gross carrying amount As at 01.01.2023 17 528 137 1 894 330 1 681 213 12 725 21 116 405 New / purchased / granted financial assets 8 580 234 0 0 17 513 8 597 747 Changes due to the sale or expiry of the instrument -4 260 627 -226 149 -457 570 -1 228 -4 945 574 Transfer to Stage 1 265 734 -252 541 -13 193 0 0 Transfer to Stage 2 -926 582 1 006 911 -80 329 0 0 Transfer to Stage 3 -358 895 -359 215 718 110 0 0 Valuation changes -2 903 046 -206 082 -49 301 -1 013 -3 159 442 Assets written off the balance sheet 0 0 -394 806 -3 365 -398 171 Other changes, including exchange differences -43 170 -2 569 333 590 -44 816 As at 31.12.2023 17 881 785 1 854 685 1 404 457 25 222 21 166 149 Expected credit losses As at 01.01.2023 313 393 412 154 1 110 366 1 951 1 837 864 New / purchased / granted financial assets 241 582 0 0 36 511 278 093 Changes due to the sale or expiry of the instrument -74 105 -93 386 -326 752 -1 368 -495 611 Transfer to Stage 1 77 899 -71 963 -5 936 0 0 Transfer to Stage 2 -106 602 143 038 -36 436 0 0 Transfer to Stage 3 -46 868 -108 768 155 636 0 0 Change in the estimate of expected credit losses -120 813 65 323 645 247 9 124 598 881 Net expected credit losses in the income statement -28 907 -65 756 431 759 44 267 381 363 Assets written off the balance sheet 0 0 -394 805 -3 365 -398 170 Fair value evaluation at the moment of initial recognition 0 0 0 -40 100 -40 100 Other changes, including exchange differences -477 -723 -239 216 -1 489 -241 905 As at 31.12.2023 284 009 345 675 908 104 1 264 1 539 052 Carrying amount as at 31.12.2023 17 597 776 1 509 010 496 353 23 958 19 627 097 Loans and advances to customers Stage 1 Stage 2 Stage 3 POCI Total Retail segment Mortgage loans Gross carrying amount As at 01.01.2024 17 340 908 901 058 303 506 6 774 18 552 246 New / purchased / granted financial assets 3 288 740 0 0 1 842 3 290 582 Changes due to the sale or expiry of the instrument -852 824 -44 071 -91 889 -4 233 -993 017 Transfer to Stage 1 295 863 -287 656 -8 207 0 0 Transfer to Stage 2 -471 250 488 953 -17 703 0 0 Transfer to Stage 3 -53 869 -38 092 91 961 0 0 Valuation changes -224 146 -32 264 -5 322 -207 -261 939 Assets written off the balance sheet 0 0 -16 191 -498 -16 689 Other changes, including exchange differences -30 177 -1 889 -564 11 -32 619 As at 31.12.2024 19 293 245 986 039 255 591 3 689 20 538 564 Expected credit losses
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 63 Loans and advances to customers Stage 1 Stage 2 Stage 3 POCI Total As at 01.01.2024 31 777 22 815 129 309 -308 183 593 New / purchased / granted financial assets 2 913 0 0 768 3 681 Changes due to the sale or expiry of the instrument -2 688 -2 043 -62 708 -2 681 -70 120 Transfer to Stage 1 7 386 -5 395 -1 991 0 0 Transfer to Stage 2 -4 489 9 022 -4 533 0 0 Transfer to Stage 3 -1 006 -2 157 3 163 0 0 Change in the estimate of expected credit losses -13 454 22 957 86 495 4 486 100 484 Net expected credit losses in the income statement -11 338 22 384 20 426 2 573 34 045 Assets written off the balance sheet 0 0 -16 191 -498 -16 689 Fair value evaluation at the moment of initial recognition 0 0 0 -830 -830 Other changes, including exchange differences -40 -86 -22 525 -845 -23 496 As at 31.12.2024 20 399 45 113 111 019 92 176 623 Carrying amount as at 31.12.2024 19 272 846 940 926 144 572 3 597 20 361 941 Loans and advances to customers Stage 1 Stage 2 Stage 3 POCI Total Retail segment Mortgage loans Gross carrying amount As at 01.01.2023 15 163 267 696 756 252 459 868 16 113 350 New / purchased / granted financial assets 3 639 363 0 0 5 970 3 645 333 Changes due to the sale or expiry of the instrument -844 020 -34 004 -38 984 0 -917 008 Transfer to Stage 1 68 535 -62 151 -6 384 0 0 Transfer to Stage 2 -365 242 375 441 -10 199 0 0 Transfer to Stage 3 -70 519 -50 363 120 882 0 0 Valuation changes -45 705 -18 071 -8 402 -64 -72 242 Assets written off the balance sheet 0 0 -3 106 0 -3 106 Other changes, including exchange differences -204 771 -6 550 -2 760 0 -214 081 As at 31.12.2023 17 340 908 901 058 303 506 6 774 18 552 246 Expected credit losses As at 01.01.2023 36 297 25 812 101 105 -320 162 894 New / purchased / granted financial assets 3 305 0 0 4 228 7 533 Changes due to the sale or expiry of the instrument -4 144 -2 619 -25 082 0 -31 845 Transfer to Stage 1 5 468 -4 003 -1 465 0 0 Transfer to Stage 2 -2 863 5 084 -2 221 0 0 Transfer to Stage 3 -1 488 -3 955 5 443 0 0 Change in the estimate of expected credit losses -4 455 2 750 57 558 342 56 195 Net expected credit losses in the income statement -4 177 -2 743 34 233 4 570 31 883 Assets written off the balance sheet 0 0 -3 106 0 -3 106 Fair value evaluation at the moment of initial recognition 0 0 0 -4 478 -4 478 Other changes, including exchange differences -343 -254 -2 923 -80 -3 600 As at 31.12.2023 31 777 22 815 129 309 -308 183 593 Carrying amount as at 31.12.2023 17 309 131 878 243 174 197 7 082 18 368 653 Loans and advances to customers Stage 1 Stage 2 Stage 3 POCI Total Corporate segment Gross carrying amount As at 01.01.2024 17 150 310 4 345 174 3 329 098 282 923 25 107 505
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 64 Loans and advances to customers Stage 1 Stage 2 Stage 3 POCI Total New / purchased / granted financial assets 9 441 046 0 0 53 559 9 494 605 Changes due to the sale or expiry of the instrument -6 612 679 -656 852 -190 096 -9 197 -7 468 824 Transfer to Stage 1 292 499 -280 923 -11 576 0 0 Transfer to Stage 2 -1 991 723 2 081 848 -90 125 0 0 Transfer to Stage 3 -334 532 -546 264 880 796 0 0 Valuation changes -825 860 -462 873 -248 145 -33 311 -1 570 189 Assets written off the balance sheet 0 0 -920 039 -12 300 -932 339 Other changes, including exchange differences -13 288 -11 816 29 792 -38 795 -34 107 As at 31.12.2024 17 105 773 4 468 294 2 779 705 242 879 24 596 651 Expected credit losses As at 01.01.2024 59 902 310 341 1 896 084 14 191 2 280 518 New / purchased / granted financial assets 141 795 0 0 37 476 179 271 Changes due to the sale or expiry of the instrument -20 133 -29 918 -229 368 -8 364 -287 783 Transfer to Stage 1 9 027 -6 994 -2 033 0 0 Transfer to Stage 2 -47 538 93 522 -45 984 0 0 Transfer to Stage 3 -59 114 -68 429 127 543 0 0 Change in the estimate of expected credit losses 8 023 -43 884 467 842 44 606 476 587 Net expected credit losses in the income statement 32 060 -55 703 318 000 73 718 368 075 Assets written off the balance sheet 0 0 -920 039 -12 300 -932 339 Fair value evaluation at the moment of initial recognition 0 0 0 -35 077 -35 077 Other changes, including exchange differences -64 -2 276 113 263 -6 112 104 811 As at 31.12.2024 91 898 252 362 1 407 308 34 420 1 785 988 Carrying amount as at 31.12.2024 17 013 875 4 215 932 1 372 397 208 459 22 810 663 Loans and advances to customers Stage 1 Stage 2 Stage 3 POCI Total Corporate segment Gross carrying amount As at 01.01.2023 16 113 840 4 571 725 3 709 956 216 188 24 611 709 New / purchased / granted financial assets 8 048 908 0 0 103 651 8 152 559 Changes due to the sale or expiry of the instrument -2 881 816 -929 540 -421 147 -1 536 -4 234 039 Transfer to Stage 1 468 241 -461 697 -6 544 0 0 Transfer to Stage 2 -2 030 026 2 129 355 -99 329 0 0 Transfer to Stage 3 -376 863 -398 334 775 197 0 0 Valuation changes -2 104 167 -504 168 -210 409 -24 801 -2 843 545 Assets written off the balance sheet 0 0 -366 851 -874 -367 725 Other changes, including exchange differences -87 807 -62 167 -51 775 -9 705 -211 454 As at 31.12.2023 17 150 310 4 345 174 3 329 098 282 923 25 107 505 Expected credit losses As at 01.01.2023 69 577 329 937 1 891 824 39 403 2 330 741 New / purchased / granted financial assets 136 665 0 0 117 110 253 775 Changes due to the sale or expiry of the instrument -26 624 -29 817 -297 179 -1 072 -354 692 Transfer to Stage 1 11 212 -9 846 -1 366 0 0 Transfer to Stage 2 -38 169 59 536 -21 367 0 0 Transfer to Stage 3 -54 286 -76 246 130 532 0 0 Change in the estimate of expected credit losses -37 535 39 089 522 217 11 535 535 306 Net expected credit losses in the income statement -8 737 -17 284 332 837 127 573 434 389 Assets written off the balance sheet 0 0 -366 851 -875 -367 726 Fair value evaluation at the moment of initial recognition 0 0 0 -138 760 -138 760
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 65 Loans and advances to customers Stage 1 Stage 2 Stage 3 POCI Total Other changes, including exchange differences -938 -2 312 38 274 -13 150 21 874 As at 31.12.2023 59 902 310 341 1 896 084 14 191 2 280 518 Carrying amount as at 31.12.2023 17 090 408 4 034 833 1 433 014 268 732 22 826 987 By maturity 31.12.2024 31.12.2023 up to 1 month 7 927 994 8 529 675 from 1 month to 3 months 2 159 179 1 893 508 from 3 months to 1 year 7 450 765 7 596 697 from 1 year to 5 years 18 786 438 19 064 537 more than 5 years 29 356 162 27 741 483 Gross carrying amount 65 680 538 64 825 900 Expected credit losses -3 063 446 -4 003 163 Carrying amount 62 617 092 60 822 737 By currency 31.12.2024 31.12.2023 PLN 57 352 339 56 457 121 EUR 7 667 579 7 471 980 USD 314 559 371 893 CHF 39 437 62 187 Other 306 624 462 719 Gross carrying amount 65 680 538 64 825 900 Expected credit losses -3 063 446 -4 003 163 Carrying amount 62 617 092 60 822 737 22.7 Sensitivity analysis of material estimates and judgments Impairment allowances under IFRS 9 due to the life -time horizon and using of scenarios, are generally characterized by significant sensitivity. The tables below indicate the main areas at sensitivity with their impact on the level of allowances. • Sensitivity of results to macroeconomic assumptions Estimation of the expected credit losses in the IFRS 9 regime due to the long forecast horizon (life-time) and the dependence of the calculations on macroeconomic scenarios is characterized by a significant sensitivity to the assumptions made. If one of the considered scenarios becomes more probable, the estimates are updated. In particular, the trajectory of changes in the Gross Domestic Product, the impact of interest rates on debt service by clients and the prospects of the labor market will be of key importance for the variability of the estimate. The Bank estimates credit losses based on 3 scenarios of the future macroeconomic environment, where the baseline scenario assumes a 50% probability, and the optimistic and pessimistic scenarios each have a 25% probability.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 66 Below is presented the sensitivity (in relation to the base scenario) of the estimated losses expected for the portfolio of regular exposures, in the case of assuming the implementation of stress scenarios ( MPLN): Changing the probability of scenarios Difference in the share of Stage 2 in the regular portfolio Impact on expected credit losses due to: PD LGD for non- default portfolio LGD for the default portfolio Change in expected losses in the case of the pessimistic scenario with 100% probability +0.27 pp +117 +4 +9 Change in expected losses in the case of the optimistic scenario with 100% probability -0.20 pp -64 -5 -9 • Sensitivity of results to assumptions / estimates Estimation of expected credit losses reflecting the future behavior of credit portfolios (both in terms of customer behavior and the potential of recoverability) processes is subject to uncertainty resulting from the limitations of future modeling. The sensitivity of the expected credit losses estimates for individual components / parameters based on a hypothetical 10% change/deviation in assumptions is presented below. Impact of increasing/decreasing the ECL level in the event of a hypothetical change in PD or LGD risk parameters for the regular portfolio, taking into account the impact on individual buckets (in MPLN): 31.12.2024 31.12.2023 Change Change -/+10% -/+10% Estimated change in the impairment of loans and advances due to a change in the probability of default by +/- 10% or LGD by +/- 10% - Stage 1 +/-37 +/-38 Estimated change in the impairment of loans and advances due to a change in the probability of default by +/- 10% or LGD by +/- 10% - Stage 2 +/-50 +/-63 The impact of increasing / decreasing cash flows (including cash flows from realizing collateral) on impairment for the portfolio classified into Stage 3 and measured by the Bank with the individual method is presented in the table below (in MPLN): 31.12.2024 31.12.2023 Change Change -/+10% -/+10% The estimated change to the impairment of loans as a result of a changed present value of the estimated cash flows under loans measured by the Bank with the individual method +76/-70 +95/-87 The impact of increased/decreased cash flows (including flows from execution of collateral) on impairment of the loan portfolio classified into Stage 3 and measured by the Bank with the portfolio method is presented in the table below (in MPLN ): 31.12.2024 31.12.2023 Change Change -/+10% -/+10% The estimated change to the impairment of loans as a result of a changed present value of the estimated cash flows under loans measured by the Bank with the group method +147/-135 +165/-153
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 67 23 Tangible fixed assets and intangible assets 23.1 Accounting policy information Tangible fixed assets Property, plant and equipment cover assets with the anticipated useful life of over one year, complete and use for service provision. They are initially measured according to their purchase price or construction cost. Following the initial recognition, property, plant and equipment are carried at the purchase cost or construction cost, less any accumulated depreciation and any cumulated impairmen t allowances. Outlays incurred after the initial recognition of property, plant and equipment are recognised as assets only when they increase future economic benefits from the asset. Otherwise, the outlays are recognised in profit and loss as expenses when incurred. The Bank evaluates tangible assets in terms of the existence of premises indicating their impairment. If the carrying amount of a given asset exceeds its recoverable amount, it is considered impaired and an impairment loss is made to the level of its recoverable amount The Bank also includes property, plant and equipment in relation to which it holds the right to use, in accordance with IFRS 16. Intangible assets Intangible assets with a defined useful economic life, including those manufactured internally, following the initial recognition are disclosed at the purchase price or construction cost, less depreciation and impairment allowances. The Bank reviews assets for impairment indications. Should such indications exist, the Bank formally assesses the recoverable value. If the carrying value of an asset is higher than its recoverable value, an impairment is recognised, and an impairment allowance is made to the recoverable value. Goodwill is a surplus of the purchase cost over the fair value of the acquired net assets in a business combination transaction. Following the initial recognition, the goodwill is recognised at the purchase cost, less all accumulated impairment allowances. In the case of sale of a subsidiary entity, the goodwill recognised at acquisition is included in the financial result settling the sale. With reference to goodwill, impairment allowances are determined on the basis of an estimated value of each cash generating centre to which the goodwill has been allocated. When the recoverable value of a cash generating centre is lower than its carrying v alue, an impairment allowance is recognised. The impairment identified in tests is not reversed in subsequent periods. Goodwill is analysed for impairment as at each balance sheet date ending each financial year or more frequently – if impairment indicati ons have been identified. The other intangible assets are identifiable assets without tangible form. Initially, they are measured according to their purchase price or construction cost. The Bank capitalises: • expenses incurred in for the purchase of licences for software and development of licences or modules for the acquired licence, • internal manufacturing costs of assets covering all outlays, including costs of employee benefits that may directly attributed to the manufacturing and preparation of the asset for use in line with its intended use. The cost of an intangible asset acquired under a separate transaction cover: • purchase price, including import duties and non-deductible purchase taxes, reduced by commercial rebates and discounts,
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 68 • outlays directly related to the preparation of an asset for use in line with its intended use. Outlays incurred after the initial recognition of intangible assets are recognised as assets only when they increase future economic benefits from an asset. Internal development costs of a licence or an additional module include all outlays which may be di rectly attributed to creation, production, and adaptation of an asset for the use intended by the management. Otherwise, they are recognised through profit and loss. Depreciation Depreciation accrues on all fixed assets with a determined useful life, with a straight -line method over the estimated useful life of the asset. The approved depreciation method and useful life are verified at least annually. Property, plant and equipment and intangible assets begin to be depreciated/amortised from the first day of the month following the month when such asset has been brought for use, and it ends not later than: • when the depreciation/amortisation charges equal the initial value of the asset, or • when the asset is to be liquidated, or • when it is sold, or • when it is found missing, or • when as a result of verification, it is found that a residual value of the asset is higher than its carrying value (net) subject to the residual value of the asset anticipated at liquidation – the net amount that the Bank expects to obtain at the end of use, net of the anticipated sales costs. Useful time of tangible fixed assets and intangible assets Item Use period in years Property, Plant & Equipment Premises 5-40 Parking, elevation 1-10 Asset due to the right to use land 5-95 Improvements in third-party buildings or structures (economic useful life but not longer than the lease period) 5–16.5 Plant and machinery 4–10 Equipment 2–15 Means of transport 2.5–7 Intangible assets Licenses 2–12.5 Software of IT systems 2–10 Development Costs 2–12.5 Copyright and other intangible assets 2–10 Impairment allowances Impairment occurs when the carrying value of an asset is hig her than its realisable value. The resultant impairment allowance is recognised in profit and loss. The realisable value is the higher of fair value reduced by sales costs and the value in use of the asset. The value in use is determined with a discount of the estimated future cash flows for the asset, at the discount rate before taxes. For assets that do not generate cash flows on their own, the Bank determines their realisable value at the level of the cash generating unit that owns a specific asset.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 69 Impairment allowances may be reversed through profit and loss to the level at which the book value of the assets is not higher than the book value of the asset, assuming that no impairment allowance has been recognised. Impairment allowances in relation to goodwill are not reversed. In the case of other assets, this write -down is reversed provided that there has been a change in the estimates used to determine the recoverable amount. 23.2 Financial data Tangible fixed assets 31.12.2024 Plant and machinery (including IT hardware) Means of transport Fixed assets under construction Owned buildings Leasehold improvements Other Total Value at the purchase price as at 01.01.2024 499 765 11 235 40 528 695 667 239 809 94 397 1 581 401 Gross value of right-of-use assets as at 01.01.2024 0 11 191 0 528 313 0 0 539 504 Change, due to: 18 481 -1 063 -20 344 28 467 -8 233 -10 828 6 480 Purchases 9 0 72 716 0 0 0 72 725 Increases / decreases in right-of-use assets 0 -1 063 0 27 115 0 0 26 052 Sale and liquidation -29 328 0 -6 -1 519 -28 728 -13 623 -73 204 Reclassifications 47 880 0 -74 035 2 865 20 495 2 795 0 Other changes -80 0 -19 019 6 0 0 -19 093 Value at the purchase price as at 31.12.2024 518 246 10 172 20 184 724 134 231 576 83 569 1 587 881 Cumulated depreciation as at 01.01.2024 328 224 8 415 0 347 768 104 357 51 563 840 327 Cumulative depreciation of right-of- use assets as at 01.01.2024 0 8 371 0 309 952 0 0 318 323 Change, due to: 21 631 465 0 51 101 -3 031 -6 958 63 208 Depreciation 50 774 0 0 5 122 24 963 6 607 87 466 Depreciation in relation to right-of- use assets 0 2 312 0 74 080 0 0 76 392 Sale and liquidation -29 073 -1 847 0 -28 187 -27 908 -13 565 -100 580 Other changes -70 0 0 86 -86 0 -70 Cumulated depreciation as at 31.12.2024 349 855 8 880 0 398 869 101 326 44 605 903 535 Impairment allowance as at 01.01.2024 5 663 47 58 1 418 8 463 3 079 18 728 Change, due to: -410 0 226 0 -441 13 -612 Changes to allowances -104 0 232 500 379 24 1 031 Other changes -306 0 -6 -500 -820 -11 -1 643 Impairment allowances as at 31.12.2024 5 253 47 284 1 418 8 022 3 092 18 116 Net value as at 01.01.2024 165 878 2 773 40 470 346 481 126 989 39 755 722 346 Net value as at 31.12.2024 incl: 163 138 1 245 19 900 323 847 122 228 35 872 666 230 Net value of right-of-use assets 0 1 245 0 197 404 0 0 198 649 31.12.2023 Plant and machinery (including IT hardware) Means of transport Fixed assets under construction Owned buildings Leasehold improvements Other Total Value at the purchase price as at 01.01.2023 510 814 12 352 45 269 702 684 262 080 98 640 1 631 839 Gross value of right-of-use assets as at 01.01.2023 0 12 308 0 534 422 0 0 546 730 Change, due to: -11 049 -1 117 -4 741 -7 017 -22 271 -4 243 -50 438
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 70 31.12.2023 Plant and machinery (including IT hardware) Means of transport Fixed assets under construction Owned buildings Leasehold improvements Other Total Purchases 0 0 85 674 0 0 0 85 674 Increases / decreases in right-of-use assets 0 -1 071 0 -6 109 0 0 -7 180 Sale and liquidation -76 609 0 -35 -4 719 -33 350 -11 099 -125 812 Reclassifications 65 560 0 -87 261 3 811 11 080 6 810 0 Other changes 0 -46 -3 119 0 -1 46 -3 120 Value at the purchase price as at 31.12.2023 499 765 11 235 40 528 695 667 239 809 94 397 1 581 401 Cumulated depreciation as at 01.01.2023 354 769 6 359 0 349 736 110 863 56 873 878 600 Cumulative depreciation of right-of- use assets as at 01.01.2023 0 6 315 0 315 862 0 0 322 177 Change, due to: -26 545 2 056 0 -1 968 -6 506 -5 310 -38 273 Depreciation 48 913 0 0 4 922 24 657 5 477 83 969 Depreciation in relation to right-of- use assets 0 3 710 0 80 214 0 0 83 924 Sale and liquidation -75 458 -1 654 0 -87 105 -31 108 -10 850 -206 175 Other changes 0 0 0 1 -55 63 9 Cumulated depreciation as at 31.12.2023 328 224 8 415 0 347 768 104 357 51 563 840 327 Impairment allowance as at 01.01.2023 6 306 47 58 1 360 9 959 3 105 20 835 Change, due to: -643 0 0 58 -1 496 -26 -2 107 Changes to allowances 379 0 35 80 746 204 1 444 Other changes -1 022 0 -35 -22 -2 242 -230 -3 551 Impairment allowances as at 31.12.2023 5 663 47 58 1 418 8 463 3 079 18 728 Net value as at 01.01.2023 149 739 5 946 45 211 351 588 141 258 38 662 732 404 Net value as at 31.12.2023 incl: 165 878 2 773 40 470 346 481 126 989 39 755 722 346 Net value of right-of-use assets 0 2 773 0 216 845 0 0 219 618 The Bank as a lessee Right to use premises perpetual usufruct fees / annual fees parkings elevations means of transport total Value at the purchase price as at 01.01.2024 481 108 26 077 19 416 1 712 11 191 539 504 Change, due to: 25 435 -71 1 313 438 -1 063 26 052 Increase* 49 219 2 686 1 638 642 865 55 050 Decrease* -23 784 -2 757 -325 -204 -1 928 -28 998 Value at the purchase price as at 31.12.2024 506 543 26 006 20 729 2 150 10 128 565 556 Cumulative depreciation as at 01.01.2024 290 712 5 441 12 595 1 204 8 371 318 323 Depreciation 70 231 714 2 885 250 2 312 76 392 Other changes -24 282 -2 742 -297 -203 -1 847 -29 371 Cumulated depreciation as at 31.12.2024 336 661 3 413 15 183 1 251 8 836 365 344 Impairment allowance as at 01.01.2024 1 516 0 0 0 47 1 563 Changes to allowances 0 0 0 0 0 0 Impairment allowances as at 31.12.2024 1 516 0 0 0 47 1 563 Net value as at 31.12.2024 168 366 22 593 5 546 899 1 245 198 649
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 71 Right to use premises perpetual usufruct fees / annual fees parkings elevations means of transport total Value at the purchase price as at 01.01.2023 484 645 27 108 21 473 1 196 12 308 546 730 Change, due to: -3 537 -1 031 -2 057 516 -1 117 -7 226 Increase* 79 021 577 1 861 516 1 122 83 097 Decrease* -82 558 -1 608 -3 918 0 -2 239 -90 323 Value at the purchase price as at 31.12.2023 481 108 26 077 19 416 1 712 11 191 539 504 Cumulative depreciation as at 01.01.2023 297 503 4 166 13 268 925 6 315 322 177 Depreciation 75 378 1 309 3 248 279 3 710 83 924 Other changes -82 169 -34 -3 921 -1 654 -87 778 Cumulated depreciation as at 31.12.2023 290 712 5 441 12 595 1 204 8 371 318 323 Impairment allowance as at 01.01.2023 1 458 0 0 0 47 1 505 Changes to allowances 58 0 0 0 0 58 Impairment allowances as at 31.12.2023 1 516 0 0 0 47 1 563 Net value as at 31.12.2023 188 880 20 636 6 821 508 2 773 219 618 * The "increase" item includes new contracts and modifications. The item "decrease" includes modifications, write-offs. The balance of liabilities due to lease agreements are disclosed in Note 31.2 "Other liabilities - financial data". Interest costs of liabilities due to leasing agreements are disclosed in Note 6.2 "Net interest income - financial data". Costs related to short-term leasing contracts and contracts with low value objects are recognized as general administrative expenses in the profit and loss account. In 2024 and 2023, the Bank incurred costs for short -term contracts and for low -value contracts in the amount of PLN 1 560 thousand and PLN 70 thousand respectively. The Bank did not identify variable leasing payments that would not be part of the measurement of lease liabilities. Information on cash flows related to lease contracts is explicitly included in the cash flow statement. Intangible assets 31.12.2024 Goodwill Capital expenditure Software, licences, R&D works Trademark Other Total Value at the purchase price as at 01.01.2024 116 288 128 813 655 257 3 681 45 704 949 743 Changes to intangible assets due to: 0 100 703 -36 052 0 -482 64 169 Purchases 0 98 307 302 0 0 98 609 Reclassifications 0 -33 022 33 022 0 0 0 Capitalised construction costs 0 32 277 0 0 0 32 277 Liquidations 0 -636 -69 376 0 0 -70 012 Other changes 0 3 777 0 0 -482 3 295 Value at the purchase price as at 31.12.2024 116 288 229 516 619 205 3 681 45 222 1 013 912 Cumulated depreciation as at 01.01.2024 0 0 349 970 14 45 677 395 661 Depreciation 0 0 90 413 0 25 90 438 Other changes 0 0 -63 584 0 -482 -64 066 Cumulated depreciation as at 31.12.2024 0 0 376 799 14 45 220 422 033 Impairment allowance as at 01.01.2024 116 288 10 564 34 835 3 367 0 165 054 Changes to allowances 0 95 271 258 0 624 Other changes 0 -637 -23 319 0 0 -23 956 Impairment allowances as at 31.12.2024 116 288 10 022 11 787 3 625 0 141 722
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 72 31.12.2024 Goodwill Capital expenditure Software, licences, R&D works Trademark Other Total Net value as at 01.01.2024 0 118 249 270 452 300 27 389 028 Net value as at 31.12.2024 0 219 494 230 619 42 2 450 157 31.12.2023 Goodwill Capital expenditure Software, licences, R&D works Trademark Other Total Value at the purchase price as at 01.01.2023 116 288 85 500 596 797 3 681 45 704 847 970 Changes to intangible assets due to: 0 43 313 58 460 0 0 101 773 Purchases 0 67 633 280 0 0 67 913 Reclassifications 0 -59 354 59 354 0 0 0 Capitalised construction costs 0 31 479 0 0 0 31 479 Liquidations 0 -407 -1 063 0 0 -1 470 Other changes 0 3 962 -111 0 0 3 851 Value at the purchase price as at 31.12.2023 116 288 128 813 655 257 3 681 45 704 949 743 Cumulated depreciation as at 01.01.2023 0 0 275 188 12 45 627 320 827 Depreciation 0 0 75 516 2 50 75 568 Other changes 0 0 -734 0 0 -734 Cumulated depreciation as at 31.12.2023 0 0 349 970 14 45 677 395 661 Impairment allowance as at 01.01.2023 116 288 10 419 34 871 3 367 0 164 945 Changes to allowances 0 553 293 0 0 846 Other changes 0 -408 -329 0 0 -737 Impairment allowances as at 31.12.2023 116 288 10 564 34 835 3 367 0 165 054 Net value as at 01.01.2023 0 75 081 286 738 302 77 362 198 Net value as at 31.12.2023 0 118 249 270 452 300 27 389 028 23.3 Material estimates and judgments Accounting estimates are made on the basis of a judgment, based on reliable information, and using methods of estimation appropriate in the given conditions. The subject of the estimate are the useful lives of the following: fixed assets and intangible assets as well as their recoverable amount. In accordance with IAS 36, the Bank assesses non -current assets in terms of the existence of premises indicating their impairment. If there is such evidence, the Bank estimates the asset's recoverable amount. When the carrying amount of a given asset exceeds its recoverable amount, its impairment is recognized, and a write-off is made to adjust its value to the level of its recoverable amount 23.4 Sensitivity analysis of material estimates and judgments The impact of the length of the useful life for depreciated assets in the group of plant and machinery and leasehold improve-ments affecting changes of the profit, is presented in the table below: Impact of changes to the length of useful life of assets for depreciation costs 31.12.2024 31.12.2023 scenario +5 years scenario -5 years scenario +5 years scenario -5 years Plant and machinery 23 898 -193 940 23 100 -180 305 Leasehold improvements 14 176 -57 004 12 696 -38 143 Total 38 074 -250 944 35 796 -218 448
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 73 24 Investments in subsidiaries 24.1 Accounting policy information Investments in subsidiaries is carried at purchase price taking into account impairment allowances. At each balance sheet date, the Bank assesses whether there are any indicators of impairment of investments made in subsidiaries. If there is such evidence, the Bank estimates the value in use of the investment or the fair value less costs to sell an asset, whichever is higher, and if the carrying amount of an asset exceeds its recoverable amount, the Bank recognizes an impairment allowance in the income stat ement. 24.2 Financial data Company name - subsidiaries Share% 31.12.2024 Share value 31.12.2024 Share% 31.12.2023 Share value 31.12.2023 Alior Services sp. z o.o. 100% 5 357 100% 5 357 Alior Leasing sp. z o.o. 100% 146 895 100% 146 895 Meritum Services ICB SA 100% 32 185 100% 32 185 Alior TFI SA 100% 21 453 100% 21 453 Corsham sp. z o.o. 100% 10 205 100% 10 205 RBL_VC sp. z o.o. 100% 30 100% 30 RBL_VC sp. z o.o. ASI spółka komandytowo- akcyjna 100% 6 127 100% 6 127 Total 222 252 222 252 In 2024, there was no change in the Bank's statement of financial position in line Investments in subsidiaries. 25 Other assets 25.1 Accounting policy information Financial assets in th is item are including remuneration from insurance companies for the service of insurance and other receivables. The Bank applied a simplified approach to estimating the allowance for expected credit losses and recognizes an allowance in the amount equal to the expected credit losses over the life-time of the receivable. The level of the allowance is periodically verified. The current applicable rates for each overdue level are presented below:: Bank Brokerage Office current - 1 % current - 1 % 1 - 30 days - 20 % 1 - 30 days - 4 % 31 - 60 days - 30 % 31 - 60 days - 5 % 61 - 90 days - 40 % 61 - 90 days - 8 % 91 - 180 days - 100 % 91 - 180 days - 100 % Non-financial assets are costs settled in time and relate to individual types of expenses, with an initial value exceeding PLN 4 thousand, the settlement of which will be charged to the profit and loss account according to the passage of time in future reporting periods. The components of costs settled over time are mainly: maintenance and support costs of IT systems as well as the Bank's p roperty insurance costs and rents paid in advance (unless they are within the scope of IFRS 16).
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 74 25.2 Financial data 31.12.2024 31.12.2023 Sundry debtors 623 503 603 188 Other settlements 300 997 458 247 Receivables related to sales of services (including insurance) 2 780 6 381 Guarantee deposits 21 988 17 364 Settlements due to cash in ATMs 297 738 121 196 Costs recognised over time 92 224 61 882 Maintenance and support of systems, servicing of plant and equipment 62 881 38 966 Other deferred costs 29 343 22 916 VAT settlements 603 1 494 Other assets (gross) 716 330 666 564 Allowance -51 964 -65 655 Other assets (carring amount) 664 366 600 909 including financial assets (gross) 623 503 603 188 Change in allowances on other financial assets 31.12.2024 31.12.2023 Value at the beginning of the period 65 655 58 647 allowances recorded 5 428 10 903 allowances released -2 467 -2 313 assets written off from the balance sheet -16 696 -1 027 other changes 44 -555 Value at the end of the period 51 964 65 655 26 Assets pledged as colleteral 26.1 Accounting policy information Those assets that secure liabilities the Bank is disclosed separately in the statement of financial position when the receiving party may sell or exchange the assets for other security. 26.2 Financial data 31.12.2024 31.12.2023 Financial assets measured at amortised cost in the EIB 18 029 46 894 Total 18 029 46 894 The Bank concluded a loan agreement with the European Investment Bank (EIB) with its seat in Luxembourg to support the financing of corporate customers activities . In connection with the above, it established a pledge on securities in order to secure the repayment of this liability. Apart from assets that secure liabilities that are disclosed separately in the statement of financial position, the Bank additionally held the following collateral for the liabilities that did not meet the criterion of separate presentation in accordance with IFRS 9: 31.12.2024 31.12.2023 Treasury bonds blocked with BGF 394 681 413 428 Deposits securing derivative transactions (ISDA) 725 785 847 886 Deposit as collateral of transactions performed in Alior Trader 2 16
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 75 31.12.2024 31.12.2023 Total 1 120 468 1 261 330 Treasury bonds blocked with BFG are presented in the statement of financial position in the line Investment financial assets, deposits securing derivative transactions (ISDA) in the line Amounts due from banks and deposit as collateral of transactions performed in Alior Trader in the line Amounts due from customers. 27 Amounts due to banks 27.1 Accounting policy information The liabilities due to banks are measured at amortised cost with the effective interest rate. 27.2 Financial data Structure by type 31.12.2024 31.12.2023 Current deposits 582 4 664 Received loan 1 208 14 582 Other liabilities* 41 009 125 745 Total 42 799 144 991 *In this item, the deposits received at the end of 2024 amounted to PLN 35 million and at the end of 2023 – PLN 116 million. By maturity 31.12.2024 31.12.2023 up to 1 month 41 591 130 409 from 3 months to 1 year 1 208 0 from 1 year to 5 years 0 14 582 Total 42 799 144 991 By currency structure 31.12.2024 31.12.2023 PLN 7 380 24 909 EUR 21 579 100 253 USD 13 840 19 829 Total 42 799 144 991 28 Amounts due to customers 28.1 Accounting policy information Amounts due to customers are measured at amortised cost at the effective interest rate. 28.2 Financial data Structure by type and customer segment 31.12.2024 31.12.2023 Retail segment 54 171 904 50 676 564 Current deposits 38 776 717 36 284 917 Term deposits 15 100 510 14 128 620 Other liabilities 294 677 263 027 Corporate segment 22 807 803 22 430 649 Current deposits 15 055 195 14 248 110
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 76 Structure by type and customer segment 31.12.2024 31.12.2023 Term deposits 7 500 323 7 997 937 Other liabilities 252 285 184 602 Total 76 979 707 73 107 213 By maturity 31.12.2024 31.12.2023 up to 1 month 63 529 068 59 565 917 from 1 month to 3 months 8 105 022 6 492 211 from 3 months to 1 year 5 282 002 6 883 728 from 1 year to 5 years 62 637 164 202 more than 5 years 978 1 155 Tptal 76 979 707 73 107 213 By currency structure 31.12.2024 31.12.2023 PLN 61 967 533 57 935 400 EUR 9 146 348 8 914 948 USD 3 896 164 4 249 248 CHF 460 504 491 403 Other 1 509 158 1 516 214 Total 76 979 707 73 107 213 29 Financial liabilities held for trading 29.1 Accounting policy information The Bank classified derivative instruments and and financial liabilities due to short sales as financial liabilities as at 31 December 2024 and 31 December 2023. Those instruments are measured at fair value through the profit and loss account. Derivative transactions are executed for trading purposes and to manage the market risk. The Bank enters into the following types of derivative transactions: FX -Forward, FX -Swap, IRS, CIRS, FRA, commodity Futures, commodity Forward, term transactions in se curities and EUA futures transactions. Every day the Bank measures derivative instruments applying the discounted cash flows model. The Bank also enters into option transactions that are measured with option measurement models. 29.2 Financial data 31.12.2024 31.12.2023 Short sale of T-bonds 0 55 814 Interest rate transactions 138 634 142 243 SWAP 136 642 138 861 Cap Floor Options 786 1 804 FRA 1 206 1 578 Foreign exchange transactions 51 592 71 441 FX Swap 15 516 44 658 FX forward 13 366 13 846 CIRS 2 383 2 936
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 77 31.12.2024 31.12.2023 FX options 20 327 10 001 Other options 0 3 179 Other instruments 6 224 3 786 Total 196 450 276 463 By maturity 31.12.2024 31.12.2023 up to 1 month 28 484 37 989 from 1 month to 3 months 13 580 23 692 from 3 months to 1 year 25 445 22 719 from 1 year to 5 years 98 431 140 501 more than 5 years 30 510 51 562 Total 196 450 276 463 30 Provisions 30.1 Accounting policy information Provisions are liabilities with an uncertain payment date or an uncertain amount. The Bank establishes provisions when the entity is charged with a (legal or customary) obligation relating to past events, and when it is likely that satisfaction of such obligation shall result in a necessity of an outflow of funds containing economic benefits and the amount of such obligation may be reliably estimated. If the above conditions are not satisfied, no provision is established. Provisions for retirement benefits Provisions for retirement benefits are set up individually for each employee on the basis of actuarial valuation made by an independent actuarial company. The provision is determined on the basis of the anticipated amount of a retirement benefit that the Bank shall pay in line with the remuneration regulations. In compliance with IAS 19, the discount rate to calculate the provisions has been set on the basis of market rates of return on Treasury bonds in the currency and with maturity are congruent with the currency and close to the disbursement of such retirement benefit. Provisions for legal claims This is a provision for disputes with employees, counterparties, customers and external institutions which is created due to the high probability of losing the court case by the Bank. Details are specified in Note 41. Provisions for disputes are established in the amounts of the anticipated outflows of economic benefits. Provisions for granted financial and guarantee obligations The provision for off-balance sheet credit exposures is created in accordance with IFRS 9. Detailed principles of risk assessment are described in Note 22. Off -balance sheet provisions are created based on the EAD model (describing the estimated use of the exposure on the default date), and cover the risk of exposure constituting a surplus of EAD over the balance sheet exposure. In the process of valuation of provisions, the Bank applies risk parameters and estimation principles identical with the valuation of amount due to customers.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 78 Restructuring provision The restructuring provision is established for disbursement of statutory severance pay for termination of employment contracts as a result of group lay -offs and for so -called additional damages resulting from an agreement with the trade unions and a provis ion for restructuring costs of the branch network and abandonment of franchise outlets located too close (the provision covers the costs of damages and expenses related to abandoning of the branch and its restoration to the original condition). Provision for reimbursement of commissions and fees related to the loan prepayment - judgment of the Court of Justice of the European Union (“CJEU”) of 11 September 2019 On 11 September 2019, the Court of Justice of the European Union judgment in case C -383/18 (so-called Lexitor case) was published. In deciding the case, the CJEU ruled that Article 16 (1) 1 of Directive 2008/48 / EC of the European Parliament and of the Council of 23 April 2008 on consumer credit agreements and repealing Council Directive 87/102 / EEC should be interpreted as meaning that the consumer's right to reduce the total cost of credit in the event of an earlier loan repayment includes all costs tha t have been imposed on the consumer. On the basis of the legal interpretations held, the Bank's Management Board decided to apply a linear formula for settling loan costs with borrowers, which proportionality refers to the period between the actual loan repayment date and the repayment date specified in the contract and requires an equal division of the one-off cost into individual payment dates. In the case of prepayments of consumer and mortgage loans made before the date of the CJEU judgment, the Bank estimates the amount of expected payments in accordance with IAS 37 and creates a provision for this purpose, which is charged to other operating costs. The amount of the provision was estimated on the basis of the historically observed trend in the amount of credit costs reimbursement resulting from the complaints of customers' requests received by the Bank and takes into account the scenario of a change in the Bank's approach to communication with customers as a result of the evolution of market practice or the position of the regulator. The provision takes into account the future inflow of clients' instructions regarding the reimbursement of prepaid loans before the date of the CJEU judgment, expected by the Bank. Provision for legal risk related to the FX indexed loan portfolio On 3 October 2019, the Court of Justice of the European Union ( “CJEU”) issued a judgment on a CHF - indexed loan granted by another bank, in which it interpreted the provisions of Council Directive 93/13 / EEC of 5 April 1993 on unfair terms in consumer contracts based on a CHF indexed loan agreement. The judgment was issued in connection with preliminary questions submitted to the CJEU last year by the District Court in Warsaw. When resolving four questions of the Polish Court, the CJEU came to two solutions: • firstly: the court may cancel the loan agreement if it is convinced that after the abusive clauses have been eliminated from its content, it is impossible to maintain it, • secondly: the domestic court may uphold the contract, provided that, after removing the prohibited indexation provisions from its content, further performance of the contract is possible (PLN + LIBOR loan). The ruling of the CJEU constitutes general guidelines for Polish courts. Final decisions made by Polish courts are made on the basis of EU regulations interpreted in accordance with the CJEU judgment, taking into account the provisions of domestic law and the analysis of the individual circumstances of each case. As at 31 December 2024, 168 court proceedings were pending against the Bank concerning mortgage loans granted in previous years in foreign currencies with the total value of the claim amounted to PLN 149 million. As at 31 December 202 3, 86 proceedings were pending against the Bank for the total amount in dispute amounted to PLN 92.1 million. The main cause of the dispute indicated by the plaintiffs concerns the
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 79 questioning of the provisions of the loan agreement as regards the application of conversion rates by the Bank and results in claims regarding the partial or complete invalidity of loan agreements. Until the balance sheet date, i .e. 31 December 202 4, 54 final judgment was issued in disputes regarding mortgage loans granted in previous years in a foreign currency. 30.2 Financial data Provisions for disputes Provisions for retirement benefits Provisions for off- balance sheet liabilities granted Restructuring provision Provision for reimbursement of credit costs (CJEU) Total provisions As at 1 January 2024 153 629 8 221 75 449 894 69 645 307 838 Established provisions 98 855 17 912 108 614 4 574 8 385 238 340 Reversal of provisions -20 127 -8 905 -141 159 -382 -5 019 -175 592 Utilized provisions -19 291 -7 903 0 -5 086 -19 272 -51 552 Other changes 3 0 -131 0 0 -128 As at 31 December 2024 213 069 9 325 42 773 0 53 739 318 906 Provisions for disputes Provisions for retirement benefits Provisions for off- balance sheet liabilities granted Restructuring provision Provision for reimbursement of credit costs (CJEU) Total provisions As at 1 January 2023 51 344 5 365 117 791 1 718 91 556 267 774 Established provisions 121 905 14 698 140 690 0 174 277 467 Reversal of provisions -7 139 -696 -182 137 -149 0 -190 121 Utilized provisions -12 446 -11 146 0 -670 -22 085 -46 347 Other changes -35 0 -895 -5 0 -935 As at 31 December 2023 153 629 8 221 75 449 894 69 645 307 838 Split of the restructuring provision as at 31.12.2024 is presented below: 31.12.2023 establish reversal utilization 31.12.2024 Employee briefings 0 4 574 -382 -4 192 0 Reorganisation of the branch network 894 0 0 -894 0 Total 894 4 574 -382 -5 086 0 30.3 Material estimates and judgments Actuarial provision Provisions for employee benefits are measured with actuarial techniques and assumptions. The calculation covers all retirement benefits potentially disbursable in the future. The provision has been established on the basis of a list of persons with all th e required personal data, including seniority, age, and gender. The accrued provisions are equal to the discounted payments to be made in the future subject to staff rotation The provision is updated annually. Provision for reimbursement of commissions and fees related to the loan prepayment - judgment of the Court of Justice of the European Union ('CJEU') of 11 September 2019 The estimation of the provision for the reimbursement of loan costs required the Bank to adopt a number of expert assumptions as to the future inflow of complaints, which are associated with a significant uncertainty resulting from the risk of changes in customer behavior compared to the historical trend as well as the possible evolution of market practice or the position of the regulator . The amount of the provision was estimated assuming the continuation of the existing trend of declining returns . The amo unt of the provision will be updated in subsequent periods depending on the trend in the amount of returns.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 80 30.4 Sensitivity analysis of material estimates and judgments Actuarial provision The Bank updated the estimates as at 31 December 202 4 using calculations performed by an external independent actuary. An important element influencing the amount of the provision is the adopted financial discount rate, which was adopted by the Bank in 2024 at the level of 5.6% and in 2023 respectively 5.0%. The impact of an increased/decreased discount rate and the fundamental actuarial assumptions by 1 pp on the increase/decrease of the retirement provision as at 31 December 2024 and as at 31 December 2023 is presented in the tables below. Estimated change of provision as at 31.12.2024 Financial discount rate Planned growth of basis Scenario +1pp Scenario -1pp Scenario +1pp Scenario -1pp Provisions for retirement benefits -8 556 +10 209 +10 227 -8 529 Estimated change of provision as at 31.12.2023 Financial discount rate Planned growth of basis Scenario +1pp Scenario -1pp Scenario +1pp Scenario -1pp Provisions for retirement benefits -7 527 +9 023 +9 031 -7 508 Provision for reimbursement of commissions and fees related to the loan prepayment - judgment of the Court of Justice of the European Union ('CJEU') of 11 September 2019 Significant assumptions adopted by the Bank to estimate the provision for reimbursement of credit costs as at 31 December 2024 and 31 December 2023 include: • a change in the pace of decline in the amounts of reimbursement. The table below contains information on how much the balance of the provision for future reimbursement would change if the Bank assumed in its estimates that the historically observed downward trend in returns, on which the Bank's estimates are based, would deepen or weaken by 10%. Change in the pace of decline in the amount of reimbursement 2024 2023 +10% -10% +10% -10% The impact of the change in the rate of decline on the amount of the provision MPLN +4.1 MPLN -4.1 MPLN +2.1 MPLN -2.2 31 Other liabilities 31.1 Accounting policy information The liabilities in this item are accruals, revenues collected in advance and provisions for future payments. Provisions for future payments are measured at the justified, reliably estimated value necessary to fulfill the present obligation at the end of the reporting period. Contract liabilities are measured at the amount of probable liabilities for the current reporting period, resulting from: • services provided for the benefit of the Bank by the Bank's counterparties, if the liability amount can be reliably estimated, • performance obligations related to day -to-day business operations, the amount of which can be estimated, although the date when the obligation arises is not yet known. Income charged in advance comprises mainly commissions settled on a straight-line basis and other income charged in advance which will be settled in the profit and loss account in future reporting periods.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 81 31.2 Financial data 31.12.2024 31.12.2023 Interbank settlements 450 117 1 086 303 Settlements of payment cards 245 137 558 Liability for reimbursement of credit costs 39 325 36 250 Liabilities due to lease agreements 214 674 241 430 Taxes, customs duty, social and health insurance payables and other public settlements 61 258 57 957 Settlements of issues of bank certificates of deposits 236 13 510 Liabilities due to contributions to the Bank Guarantee Fund 204 259 192 066 Accrued expenses 173 785 227 862 Income received in advance 54 362 55 967 Provision for bancassurance resignations 52 132 58 389 Provision for bonuses 127 260 117 090 Provision for unutilised annual leaves 25 227 24 627 Provision for bonuse settled in phantom shares 18 395 11 313 Other employee provisions 14 563 9 695 Other liabilities 192 947 307 186 Total 1 628 785 2 577 203 Change in lease liabilities 31.12.2024 31.12.2023 Value at the beginning of the period 241 430 245 621 Changes resulting from cash flows -85 509 -90 171 Increases 55 050 83 097 Exchange rate differences 1 153 1 432 Other changes 2 550 1 451 Value at the end of the period 214 674 241 430 32 Debt securities issued 32.1 Accounting policy information Debt securities issued are measured at amortized cost using the effective interest rate method. 32.2 Financial data Structure by type 31.12.2024 31.12.2023 Bonds issued liabilities 1 809 233 851 858 Bank securities issued liabilities("BPW") 277 783 1 257 321 Total 2 087 016 2 109 179 By maturity 31.12.2024 31.12.2023 up to 1 month 63 548 29 513 from 1 month to 3 months 146 420 284 213 from 3 months to 1 year 67 815 746 313
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 82 By maturity 31.12.2024 31.12.2023 from 1 year to 5 years 1 809 233 1 049 140 Total 2 087 016 2 109 179 By currency structure 31.12.2024 31.12.2023 PLN 2 001 478 1 920 074 EUR 43 491 62 777 USD 42 047 126 328 Total 2 087 016 2 109 179 Nominal value in the currency 31.12.2024 Nominal value in the currency 31.12.2023 Currency Term Interest Status of liabilities 31.12.2024 31.12.2023 Series M Bonds 400 000 400 000 PLN 26.06.2023- 26.06.2026 WIBOR6M +3.10 400 584 400 584 Series N Bonds 450 000 450 000 PLN 20.12.2023- 15.06.2027 WIBOR6M +2.81 451 800 451 274 Series O Bonds 550 000 0 PLN 27.06.2024- 09.06.2028 WIBOR6M +1.99 552 693 0 Series P Bonds 400 000 0 PLN 14.11.2024- 14.04.2028 WIBOR6M +2,07 404 156 0 BPW 9 950 14 394 EUR 12.2022 – 02.2025 The interest rate is calculated by the BPW Issuer according to the formula described in the final terms and conditions of a given series. The payment and interest rate may be fixed, variable or dependent on the conditions of the valuation of the underlying instrument, such as a stock exchange index or the valuation of company shares. 43 491 62 777 BPW 182 407 1 046 286 PLN 07.2021-04.2025 192 245 1 068 216 BPW 9 884 31 481 USD 07.2021-04.2025 42 047 126 328 Total 2 087 016 2 109 179 Issues in the reporting periods 01.01.2024 – 31.12.2004 Currency Issues - original currency Issues - in PLN Redemptions - original currency Redemptions – in PLN Series O Bonds PLN 550 000 550 000 0 0 Series P Bonds PLN 400 000 400 000 0 0 BPW EUR 9 950 42 956 0 0 BPW PLN 28 256 28 256 8 294 8 294 BPW USD 0 0 115 453 Total 1 021 212 8 747 01.01.2023 – 31.12.2003 Currency Issues - original currency Issues - in PLN Redemptions - original currency Redemptions – in PLN Series M Bonds PLN 400 000 400 000 0 0 Series N Bonds PLN 450 000 450 000 0 0 BPW EUR 4 464 20 153 32 146 BPW PLN 462 450 462 450 17 788 17 788 BPW USD 29 956 131 965 0 0 Total 1 464 568 17 934
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 83 33 Subordinated liabilities 33.1 Description of the instrument Subordinated liabilities are measured at amortised cost at the effective interest rate. Subordinated bonds as approved by the Polish Financial Supervision Authority – classified as the Bank's supplementary capital. 33.2 Financial data Status of liabilities Liabilities classified as the Bank's own funds Nominal value in the currency Currency Term Interest 31.12.2024 31.12.2023 Series F bonds - PLN 26.09.2014-26.09.2024 WIBOR6M +3.14 0 329 215 Series P1B bonds - PLN 29.04.2016-16.05.2024 WIBOR6M +3.00 0 70 754 Series K and K1 bonds - PLN 20.10.2017-20.10.2025 WIBOR6M +2.70 0 609 924 Series P2A bonds - PLN 14.12.2017-29.12.2025 WIBOR6M +2.70 0 150 106 Total 0 1 159 999 On 10 January 2024, the Bank's Management Board adopted resolutions on the early redemption of its own bonds: series P1B issued on 29 April 2016, and series F issued on 26 September 2014, the final redemption date of which was respectively on 16 May 2024 and on 26 September 2024. Early redemption of the above- mentioned bonds took place on 30 January 2024. On 1 October 2024, the Bank's Management Board adopted resolutions on the early redemption of the Bank's own K and K1 series bonds issued on 20 October 2017. Early redemption of the bonds took place on 21 October 2024. In addition, on 5 December 2024, the Bank's Management Board adopted resolutions on the early redemption of the Bank's own P2A series bonds issued on 14 December 2017. Early redemption of the bonds took place on 30 December 2024. The redemption amounts were as follows: Nominal value Series F bonds 321 700 Series P1B bonds 70 000 Series K and K1 bonds 600 000 Series P2A bonds 150 000 34 Equity 34.1 Accounting policy information Equity is composed of the share capital, the supplementary capital, the revaluation reserves, other reserves and profit for the current year and retained profit.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 84 Share capital The share capital is disclosed at its nominal value in line with the Articles of Association and the entry to the National Court Register. Supplementary capital The supplementary capital is established from profit allocations, pursuant to resolutions of the General Meeting. The supplementary capital also includes the share issue agio, net of the issue costs. The supplementary capital may be applied to cover balanc e sheet losses that may result from the Bank's operations. Revaluation reserve The revaluation reserve is established as a result of measurement of: • financial instruments measured at fair value through other comprehensive income, • the effective part of hedge for cash flow hedge accounting programme, • deferred income tax related to the above items. The revaluation reserve is not subject to distribution. Other reserves The other reserves are established from profit allocations. They may be used for the purposes specified in the Bank's Articles of Association or in applicable regulations. Current profit and retained profit Net profit attributable is gross profit in the profit and loss account of the current year adjusted with income tax. On 26 April 2024, the Ordinary General Meeting of the Bank adopted resolution No. 8/2024 on the method of dividing the Bank's profit for the financial year 2023. In accordance with the resolution, the Bank's net profit from operations in the financial year 2023, in the total amount of PLN 1 987 444 136.08, will be allocated as follows: • part of the profit in the amount of PLN 577 048 640.22 to the payment of dividend, • remaining part of the profit in the amount of PLN 1 410 395 495.86 to supplementary capital, including the non-distributable profit achieved on the activities of the Housing Fund in the amount of PLN 17 427 487.36. Dividend A dividend for the year, approved by the General Meeting, not disbursed until the balance sheet date, is disclosed as a dividend liability in other liabilities. 34.2 Financial data Equity 31.12.2024 31.12.2023 Share capital 1 305 540 1 305 540 Supplementary capital 7 431 101 6 020 705 Revaluation reserve -197 210 -291 548 financial assets measured at fair value through other comprehensive income 33 485 43 745 from measurement of hedging instruments -230 695 -335 293 Other reserves 174 447 174 447 Exchange rate differences on revaluation of foreign entities 256 2 252 Current year profit 2 417 499 1 987 444
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 85 Equity 31.12.2024 31.12.2023 Total 11 131 633 9 198 840 Revaluation reserve 31.12.2024 31.12.2023 Valuation of financial assets measured at fair value through other comprehensive income 33 485 43 745 treasury bonds -48 779 -15 692 other debt instruments -13 066 -12 433 equity instruments 103 169 82 117 deferred income tax -7 839 -10 247 Valuation of hedging derivatives -230 695 -335 293 IRS/FRA -284 809 -413 942 deferred income tax 54 114 78 649 Total -197 210 -291 548 34.3 Shareholders of Alior Bank Spółka Akcyjna As at 31 December 2024 and as at the date of preparation of financial statements, the shareholders holding 5% or more of the overall number of votes at the General Meeting were as follows : Shareholder Number of shares Nominal value of shares [PLN] Percentage in the share capital Number of votes Number of votes in the total number of votes 31.12.2024 PZU SA Group* 41 658 850 416 588 500 31.91% 41 658 850 31.91% Nationale-Nederlanden** 12 841 601 128 416 010 9.84% 12 841 601 9.84% Allianz OFE*** 11 526 440 115 264 400 8.83% 11 526 440 8.83% Other shareholders 64 527 100 645 271 000 49.42% 64 527 100 49.42% Total 130 553 991 1 305 539 910 100% 130 553 991 100% *The PZU Group includes entities that have concluded a written agreement regarding the purchase or sale of the Bank's shares and the consistent exercise of voting rights at the Bank's general meetings, i.e.: Powszechny Zakład Ubezpieczeń SA, Powszechny Zak ład Ubezpieczeń Na Życie SA, PZU Specjalistyczny Fundusz Inwestycyjny Otwarty UNIVERSUM, PZU Fundusz Inwestycyjny Closed Non -Public Assets BIS 1 and PZU Closed -End Investment Fund for Non -Public Assets BIS 2. On the conclusion of the above-mentioned agreement, the Bank informed in current report no. 21/2017. **Information on the number of shares and votes held at the Bank's General Meeting by managed entites by Nationale – Nederlanden PTE has been updated based on the Bank's Shareholder Identification Report as at 31 December 2024. ***Based on the Bank's Shareholder Identification Report as at 31 December 2024. As at 31 December 2023, the shareholders holding 5% or more of the overall number of votes at the General Meeting were as follows Shareholder Number of shares Nominal value of shares [PLN] Percentage in the share capital Number of votes Number of votes in the total number of votes 31.12.2023 PZU SA Group* 41 658 850 416 588 500 31.91% 41 658 850 31.91% Nationale-Nederlanden** 12 270 004 122 700 040 9.40% 12 270 004 9.40% Allianz OFE** 11 526 440 115 264 400 8.83% 11 526 440 8.83% Generali OFE** 7 154 708 71 547 080 5.48% 7 154 708 5.48% Other shareholders 57 943 989 579 439 890 44.38% 57 943 989 44.38% Total 130 553 991 1 305 539 910 100% 130 553 991 100% *The PZU Group includes entities that have concluded a written agreement regarding the purchase or sale of the Bank's shares and the consistent exercise of voting rights at the Bank's general meetings, i.e.: Powszechny Zakład Ubezpieczeń SA, Powszechny Zak ład Ubezpieczeń Na Życie SA, PZU Specjalistyczny Fundusz Inwestycyjny Otwarty UNIVERSUM, PZU Fundusz Inwestycyjny Closed Non -Public Assets BIS 1 and PZU Closed -End Investment Fund for Non -Public Assets BIS 2. On the conclusion of the above-mentioned agreement, the Bank informed in current report no. 21/2017. ** Based on published reports at the end of 2023 on the composition of OFE and DFE portfolios managed by PTE.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 86 34.4 Share capital structure Series Type of shares Number of shares Number of shares Nominal value of shares Series value at nominal prices (PLN) 31.12.2024 31.12.2023 31.12.2024 31.12.2023 Series A Ordinary 50 000 000 50 000 000 10 500 000 000 500 000 000 Series B Ordinary 1 250 000 1 250 000 10 12 500 000 12 500 000 Series C Ordinary 12 332 965 12 332 965 10 123 329 650 123 329 650 Series D Ordinary 863 827 863 827 10 8 638 270 8 638 270 Series E Ordinary 524 404 524 404 10 5 244 040 5 244 040 Series F Ordinary 318 701 318 701 10 3 187 010 3 187 010 Series G Ordinary 6 358 296 6 358 296 10 63 582 960 63 582 960 Series H Ordinary 2 355 498 2 355 498 10 23 554 980 23 554 980 Series I Ordinary 56 550 249 56 550 249 10 565 502 490 565 502 490 Series J Ordinary 51 51 10 510 510 Total 130 553 991 130 553 991 1 305 539 910 1 305 539 910 Other additional information 35 Off-balance sheet items 35.1 Accounting policy information In this item, the Bank presents financing and guarantee commitments. In the item of financial liabilities, the Bank has commitments to grant loans. These commitments include approved loans, credit card limits and overdraft limits. In this item, the Bank did not present liabilities resulting from positive credit decisions constituting a unilateral offer of the Bank, of an irrevocable nature, concerning the financing of mortgage loans, which as at 31 December 2024 amounted to PLN 267 million. In the guarantee position, guarantees are presented which secure the performance of the Bank's clients with their obligations towards third parties. The Bank charges commissions for liabilities granted, which are accounted for in accordance with the characteristics of the instrument. The guarantee values as specified in the table above reflect the maximum potential loss that would be disclosed on the balance sheet date if all customers defaulted. 35.2 Financial data Off-balance sheet liabilities granted to customers 31.12.2024 31.12.2023 Granted off-balance liabilities 13 081 987 12 906 604 Concerning financing 12 124 698 12 083 171 Guarantees 957 289 823 433 Performance guarantees 354 471 307 737 Financial guarantees 602 818 515 696 By maturity – concerning financing 31.12.2024 31.12.2023 up to 1 month 5 734 551 5 417 952
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 87 By maturity – concerning financing 31.12.2024 31.12.2023 from 1 month to 3 months 498 420 222 785 from 3 months to 1 year 893 943 1 171 510 from 1 year to 5 years 4 213 628 4 267 677 more than 5 years 784 156 1 003 247 Total 12 124 698 12 083 171 By maturity – guarantees 31.12.2024 31.12.2023 up to 1 month 13 179 11 292 from 1 month to 3 months 138 148 61 160 from 3 months to 1 year 327 745 222 443 from 1 year to 5 years 382 427 397 372 more than 5 years 95 790 131 166 Total 957 289 823 433 31.12.2024 Nominal amount Provisions Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Concerning financing 10 747 653 1 319 895 57 150 18 678 14 196 0 Guarantees 744 767 196 046 16 476 150 462 9 287 Total 11 492 420 1 515 941 73 626 18 828 14 658 9 287 31.12.2023 Nominal amount Provisions Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Concerning financing 10 662 201 1 268 205 152 765 14 817 25 700 1 825 Guarantees 621 161 148 711 53 561 192 324 32 591 Total 11 283 362 1 416 916 206 326 15 009 26 024 34 416 Reconciliations between the opening balance and the closing balance of off-balance sheet liabilities granted to customers and arrangements regarding the value of provisions created in this respect are presented below. Change in off-balance sheet liabilities (nominal value) Stage 1 Stage 2 Stage 3 Total As at 01.01.2024 11 283 362 1 416 916 206 326 12 906 604 New / purchased / granted financial assets 5 729 295 0 0 5 729 295 Changes due to the sale or expiry of the instrument -3 634 951 -526 128 -142 265 -4 303 344 Transfer to Stage 1 124 885 -122 622 -2 263 0 Transfer to Stage 2 -917 732 947 634 -29 902 0 Transfer to Stage 3 -8 225 -23 445 31 670 0 Changing commitment -1 080 235 -175 239 9 424 -1 246 050 Other changes, including exchange rate differences -3 979 -1 175 636 -4 518 As at 31.12.2024 11 492 420 1 515 941 73 626 13 081 987 Change in off-balance sheet liabilities (nominal value) Stage 1 Stage 2 Stage 3 Total As at 01.01.2023 9 304 615 1 128 403 348 191 10 781 209 New / purchased / granted financial assets 5 909 005 0 0 5 909 005
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 88 Change in off-balance sheet liabilities (nominal value) Stage 1 Stage 2 Stage 3 Total Changes due to the sale or expiry of the instrument -2 793 672 -388 332 -204 123 -3 386 127 Transfer to Stage 1 258 486 -258 267 -219 0 Transfer to Stage 2 -850 975 851 677 -702 0 Transfer to Stage 3 -46 250 -5 223 51 473 0 Changing commitment -468 141 92 354 14 110 -361 677 Other changes, including exchange rate differences -29 706 -3 696 -2 404 -35 806 As at 31.12.2023 11 283 362 1 416 916 206 326 12 906 604 Change in the provision for off-balance sheet liabilities Stage 1 Stage 2 Stage 3 Total As at 01.01.2024 15 009 26 024 34 416 75 449 New / purchased / granted financial assets 23 598 0 0 23 598 Changes due to the sale or expiry of the instrument -13 189 -31 668 -34 556 -79 413 Transfer to Stage 1 1 989 -1 975 -14 0 Transfer to Stage 2 -14 101 15 544 -1 443 0 Transfer to Stage 3 -1 404 -2 941 4 345 0 Change in the estimate of the provision for off-balance sheet liabilities 2 116 14 970 6 184 23 270 Other changes, including exchange rate differences 4 810 -5 296 355 -131 As at 31.12.2024 18 828 14 658 9 287 42 773 Change in the provision for off-balance sheet liabilities Stage 1 Stage 2 Stage 3 Total As at 01.01.2023 13 805 9 702 94 284 117 791 New / purchased / granted financial assets 10 946 0 0 10 946 Changes due to the sale or expiry of the instrument -3 762 -1 682 -64 782 -70 226 Transfer to Stage 1 911 -911 0 0 Transfer to Stage 2 -21 831 21 831 0 0 Transfer to Stage 3 -324 0 324 0 Change in the estimate of the provision for off-balance sheet liabilities 17 101 -2 900 4 737 18 938 Other changes, including exchange rate differences -1 837 -16 -147 -2 000 As at 31.12.2023 15 009 26 024 34 416 75 449 The distribution of off-balance sheet liabilities granted to customers according to the aggregated PD scale is presented below. 31.12.2024 31.12.2023 Stage 1 Stage 2 Total Stage 1 Stage 2 Total < 0.28% 2 134 792 126 469 2 261 261 2 467 949 149 043 2 616 992 0.28% - 0.44% 834 684 129 445 964 129 930 709 21 434 952 143 0.44% - 0.85% 1 930 262 191 103 2 121 365 2 403 938 67 267 2 471 205 0.85% - 1.33% 2 398 724 160 699 2 559 423 1 684 320 172 377 1 856 697 1.33% - 2.06% 2 354 068 150 297 2 504 365 1 723 606 382 956 2 106 562 2.06% - 3.94% 1 204 310 342 279 1 546 589 1 261 083 242 422 1 503 505 3.94% - 9.1% 488 887 242 814 731 701 711 761 202 243 914 004 > 9.1% 117 739 172 835 290 574 67 128 179 174 246 302 No scoring 28 954 0 28 954 32 868 0 32 868 Total 11 492 420 1 515 941 13 008 361 11 283 362 1 416 916 12 700 278
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 89 36 Additional information to the cash flow statement 36.1 Accountig policy information The Bank makes its statement of operating cash flows with an indirect method in which the gross profit for the reporting period is adjusted by the effects of cashless transactions and accruals concerning future or past inflows or payments of cash funds concerning operating activities. 36.2 Financial data Operating activity Cash flows from the Bank's operating activities cover primarily lending, deposits, FX exchange transactions, and purchase and sale of securities. In addition, they include dividend payments to shareholders and Bank securities issued liabilities. Change of balances of loans and other receivables 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Change of receivables from customers – statement of financial position -1 604 235 -3 114 949 Change of receivables from banks – statement of financial position 2 793 839 -2 241 757 Total 1 189 604 -5 356 706 Change of other liabilities 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Change of other liabilities – statement of financial position -948 418 596 996 Change of other liabilities – measured at amortised cost – statement of financial position 1 223 -2 911 Liabilities for expenses related to the acquisition of fixed assets 41 390 -2 534 Liabilities for expenses related to the acquisition of intangible assets -53 582 -35 331 Other changes 189 694 192 940 Dividend payment -577 048 0 Total -1 346 741 749 160 Investing activities Investing activities include the acquisition and disposal of intangible assets, tangible fixed assets and equity instruments measured at fair value through other comprehensive income, as well as debt securities measured at amortized cost (excluding short-term treasury bills). Financial activity Cash flows from financing activities include inflows and outflows related to both obtaining and repayment of own and external sources of financing, as well as inflows from the issue of long -term debt financial instruments, subordinated issues and repayment of long-term liabilities, including finance lease liabilities. 31.12.2023 Cash flows Non-cash changes 31.12.2024 Inflows Outflows Accrued interests Exchange rate differences Subordinated and long-term liabilities 2 011 857 950 000 -1 310 217 157 593 0 1 809 233
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 90 31.12.2022 Cash flows Non-cash changes 31.12.2023 Inflows Outflows Accrued interests Exchange rate differences Subordinated and long-term liabilities 1 163 875 851 858 -114 309 110 433 0 2 011 857 37 Fair value 37.1 Accounting policy information and estimates and judgments The fair value is a price receivable in the sale of an asset or payable for transfer of a liability in an arm’s length transaction in the principal (or most advantageous) market as at the measurement date subject to prevailing market conditions (exit price), irrespective of the fact if such price is directly observable or estimated with another measurement technique. Depending on the classification category of financial assets and liabilities to a specific hierarchy fair value level, various methods to measure fair value are applied. Level 1: On the basis of prices quoted in the principal (or most advantageous) market Financial assets and liabilities with fair value measured directly on the basis of quoted prices (not adjusted) from active markets for identical assets or liabilities. This category includes financial and equity instruments measured at fair value through profit and loss for which there is an active market and for which the fair value is determined on the basis of market value being the purchase price: • Treasury debt securities listed on active, liquid financial markets, • debt and equity securities traded in a regulated market, including in the portfolio of the Brokerage Office, • derivative instruments that are traded in a regulated market. Level 2: On the basis of measurement techniques based on assumptions using information coming from the principal (or most advantageous) market Financial assets and liabilities whose fair value is measured with measurement models where all material input data is observable in the market directly (as prices) or indirectly (relying on prices). In that category the Bank classifies financial instruments for which no active market exists: Measurement method (techniques) Material observable input data DERIVATIVE FINANCIAL INSTRUMENTS – CIRS, IRS, FRA, FX, FORWARD, FX SWAP TRANSACTIONS The model of discounted future cash flows based on profitability curves. Profitability curves are built on the basis of market rates, market data of the money market, FRA, IRS, OIS basis swap transaction market. FX instruments are measured using NBP’s fixing rates and market rates of swap points. FX OPTIONS, INTEREST RATE OPTIONS FX options and interest rate options are measured with the use of specific valuation models characteristic for a specific option. For option instruments additionally market quotations are used for market variability quotations of currency pairs and interest rates. NBP MONEY BILLS Profitability curve method Profitability curves are developed on the basis of money market data. COMMODITY FORWARD/SWAP Commodity instruments are measured on the basis of future cash flows calculated on the basis of profitability curves characteristic for specific commodities. Profitability curves are built on the basis of quoted commodity futures contracts. Level 3: For which minimum one factor affecting the price is not observable in the market Financial assets and liabilities with the fair value measured with the measurement models where input data is not based on observable market data (non-observable input data).
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 91 Such instruments include options embedded in certificates of deposit issued by the Bank and options in the interbank market to hedge positions of the embedded options. The fair value is determined on the basis of market prices of those options or an internal model subject to both observable parameters (e.g. price of the base instrument, secondary quotations of options) and non-observable (e.g. variability, correlations between base instruments in options based on a stage). Model parameters are determined on the basis of a statistical analysis. At the end of the reporting period, the position in the above-mentioned instruments was closed on back-to-back basis, which means that the change in valuation of options embedded in structured instruments is offset by changes in the valuation of options concluded on the interbank market. Measurement method (techniques) Material observable input data Factor unobservable Range of unobservable factors Impact on valuation EXOTIC OPTIONS The prices of exotic options embedded in structured products are determined on the basis of market prices or measured with the internal model subject to both observable parameters (e.g. price of the base instrument, secondary quotations of options) and non - observable (e.g. var iability, correlations between base instruments) The prices of exotic options embedded in structured products are acquired from the market Volatility of prices of underlying instruments, correlations of prices of underlying instruments Back-to-back closed options, changes in unobservable factors without affecting the total portfolio valuation none SHARES VISA INC C SERIES The current market value of listed ordinary shares of Visa Inc. subject to the conversion ratio and discount, considering changing prices of the shares of Visa Inc. Market value of the listed ordinary shares of Visa Inc Discount due to the illiquid nature of the securities, c ommon stock conversion factor Discount +/ -19% ; conversion rate < - 0.023;0> +23.5%/-24.4% Shares PSP SA Fair value estimation is based on the current value of the company's forecast results Risk free rate Risk premium, financial performance forecast Risk premium +/ - 25bps. ; Financial forecasts +/- 10% +12,6%/-12,5% Shares RUCH SA Estimating the fair value based on the present value of the company's forecast results Risk-free rate Risk premium, financial performance forecast Risk premium +/ - 25bps. ; Financial forecasts +/- 10% none Fair value valuation is performed directly by the Financial Risk Management Department. It is an entity independent of the entities concluding individual transactions. The fair value valuation methodology, including changes to its parameterization, is subject to approval by the Capital, As sets and Liabilities Management Committee (CALCO). The Financial Risk Management Department assesses the adequacy and significance of risk factors in terms of assigning valuation models to the appropriate level of the fair value valuation hierarchy in accordance with the established classification principles. However, the assessment of the adequacy of valuation methods is subject to cyclical reviews as part of model risk management, and input data is subject to the DQM (Data Quality Management) process. Instruments are transferred between measurement levels as at the end of the reporting period . Transfers are made subject to conditions set forth in the international financial reporting standards, for instance quotation availability of instruments from an active market, availability of quotations of pricing factors, or impact of non-observable data on the fair value. 37.2 Financial data Below there are carrying values of financial assets and liabilities split into measurement categories (levels). Compared to the previous reporting period, there was no change to the classification and measurement principles of the hierarchy levels of the fair value.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 92 31.12.2024 Level 1 Level 2 Level 3 Total Investment financial assets 17 667 648 3 885 891 149 742 21 703 281 Investment financial assets measured at fair value through profit and loss 2 014 212 808 12 181 227 003 SWAP 0 134 884 0 134 884 Cap Floor Options 0 786 0 786 FX Swap 0 197 0 197 FRA 7 0 0 7 Forward 0 35 852 0 35 852 FX forward 0 8 447 0 8 447 CIRS 0 8 092 0 8 092 FX options 0 18 014 26 18 040 Other instruments 29 6 536 0 6 565 Financial deriatives 36 212 808 26 212 870 Treasury bonds 1 978 0 0 1 978 Other bonds 0 0 4 4 Equity instruments 0 0 12 151 12 151 Investments securities 1 978 0 12 155 14 133 Investment financial assets measured at fair value through other comprehensive income 17 665 634 3 398 372 137 561 21 201 567 Money bills 0 3 398 372 0 3 398 372 Treasury bonds 16 633 632 0 0 16 633 632 Treasury bills 213 200 0 0 213 200 Other bonds 818 802 0 0 818 802 Equity instruments 0 0 137 561 137 561 Assets pledged as collateral 18 029 0 0 18 029 Derivative hedging instruments 0 274 711 0 274 711 Interest rate transactions 0 274 711 0 274 711 31.12.2023 Level 1 Level 2 Level 3 Total Investment financial assets 12 510 332 3 555 685 148 088 16 214 105 Investment financial assets measured at fair value through profit and loss 53 398 324 037 31 447 408 882 SWAP 0 177 758 0 177 758 Cap Floor Options 0 1 804 0 1 804 FRA 0 1 056 0 1 056 FX Swap 0 96 237 0 96 237 FX forward 0 21 953 0 21 953 CIRS 0 13 946 0 13 946 FX options 0 7 298 0 7 298 Other options 0 0 3 179 3 179 Other instruments 0 3 985 0 3 985 Financial deriatives 0 324 037 3 179 327 216 Treasury bonds 53 398 0 0 53 398 Other bonds 0 0 4 4 Equity instruments 0 0 28 264 28 264 Investments securities 53 398 0 28 268 81 666 Investment financial assets measured at fair value through other comprehensive income 12 456 934 2 895 526 116 641 15 469 101 Money bills 0 950 000 0 950 000 Treasury bonds 9 569 859 0 0 9 569 859 Treasury bills 2 303 364 1 945 526 0 4 248 890
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 93 31.12.2023 Level 1 Level 2 Level 3 Total Other bonds 583 711 0 0 583 711 Equity instruments 0 0 116 641 116 641 Derivative hedging instruments 0 336 122 0 336 122 Interest rate transactions 0 336 122 0 336 122 Alior Bank made an irrevocable decision to designate investments from the portfolio of equity investments available for sale as being measured at fair value through other comprehensive income. Equity investments, in relation to which the Bank chose the option of fair value valuation by other comprehensive income, were acquired with the goal of long -term and strategic maintenance of their investment portfolio without intending to realize profit on sales in the short or medium time horizon. Issuer Hierarchy level Fair value on 31.12.2024 Fair value on 31.12.2023 PSP SA III 136 715 115 666 SWIFT III 831 960 Other shares III 15 15 RUCH SA III 0 0 Total 137 561 116 641 31.12.2024 Level 1 Level 2 Level 3 Total Financial liabilities held for trading 64 196 267 119 196 450 SWAP 0 136 642 0 136 642 Cap Floor Options 0 786 0 786 FRA 0 1 206 0 1 206 FX Swap 0 15 516 0 15 516 FX forward 0 13 366 0 13 366 CIRS 0 2 383 0 2 383 FX options 0 20 208 119 20 327 Other instruments 64 6 160 0 6 224 Derivative hedging instruments 0 450 383 0 450 383 Interest rate transactions 0 450 383 0 450 383 31.12.2023 Level 1 Level 2 Level 3 Total Financial liabilities held for teading 55 814 217 470 3 179 276 463 Bonds 55 814 0 0 55 814 SWAP 0 138 861 0 138 861 Cap Floor Options 0 1 804 0 1 804 FRA 0 1 578 0 1 578 FX Swap 0 44 658 0 44 658 FX forward 0 13 846 0 13 846 CIRS 0 2 936 0 2 936 FX options 0 10 001 0 10 001 Other options 0 0 3 179 3 179 Other instruments 0 3 786 0 3 786 Derivative hedging instruments 0 682 631 0 682 631 Interest rate transactions 0 682 631 0 682 631
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 94 Reconciliation of changes at level 3 of fair value hierarchry Changes in financial assets and liabilities Assets Liabilities Equity instruments Debt instruments Derivatives Derivatives As at 01.01.2024 144 905 4 3 179 3 179 Acquisitions/Reclassfication of assets 0 0 26 119 Net changes recognized in other comprehensive income 21 049 0 0 0 Net changes recognized in profit and loss 7 427 0 -1 053 -1 053 Exchange rate differences 657 0 0 0 Settlement / redemption -24 326 0 -2 126 -2 126 As at 31.12.2024 149 712 4 26 119 Changes in financial assets and liabilities Assets Liabilities Equity instruments Debt instruments Derivatives Derivatives As at 01.01.2023 135 260 57 600 529 529 Acquisitions/Reclassfication of assets 97 0 1 520 1 520 Net changes recognized in other comprehensive income 26 077 0 0 0 Net changes recognized in profit and loss 6 229 0 1 130 1 130 Exchange rate differences -1 574 0 0 0 Settlement / redemption -21 184 -57 596 0 0 As at 31.12.2023 144 905 4 3 179 3 179 In 2024, the Bank did not reclassify financial instruments between levels of the fair value hierarchy. Below is presented the carrying value and fair value of assets and liabilities that are not disclosed in the statement of financial position at fair value. 31.12.2024 Carrying value Fair value Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents 2 111 054 434 835 1 676 219 0 2 111 054 Amount due from banks 1 821 581 0 1 821 581 0 1 821 581 Loans and advances to customers 62 617 092 0 0 62 740 626 62 740 626 Retail segment 39 806 429 0 0 39 450 565 39 450 565 Consumer loans 19 444 488 0 0 19 421 327 19 421 327 Mortgage loans 20 361 941 0 0 20 029 238 20 029 238 Corporate segment 22 810 663 0 0 23 290 061 23 290 061 Investment securities measured at amortized cost 2 157 936 2 151 387 0 61 2 151 448 Other assets 664 366 0 0 664 366 664 366 Liabilities Amounts due to banks 42 799 0 42 798 0 42 798 Amounts due to customers 76 979 707 0 0 76 979 707 76 979 707 Other liabilities 1 628 785 0 0 1 628 785 1 628 785 Debt securities issued 2 087 016 0 0 2 086 957 2 086 957 31.12.2023 Carrying value Fair value Level 1 Level 2 Level 3 Total Assets
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 95 31.12.2023 Carrying value Fair value Level 1 Level 2 Level 3 Total Cash and cash equivalents 2 521 555 453 845 2 067 710 0 2 521 555 Amount due from banks 4 615 420 0 4 615 420 0 4 615 420 Loans and advances to customers 60 822 737 0 0 59 968 605 59 968 605 Retail segment 37 995 750 0 0 36 833 664 36 833 664 Consumer loans 19 627 097 0 0 18 752 429 18 752 429 Mortgage loans 18 368 653 0 0 18 081 235 18 081 235 Corporate segment 22 826 987 0 0 23 134 941 23 134 941 Asstes pledged as collateral 46 894 46 894 0 0 46 894 Investment securities measured at amortized cost 2 925 678 2 923 603 0 61 2 923 664 Other assets 600 909 0 0 600 909 600 909 Liabilities Amounts due to banks 144 991 0 144 991 0 144 991 Amounts due to customers 73 107 213 0 0 73 107 213 73 107 213 Other liabilities 2 577 203 0 0 2 577 203 2 577 203 Debt securities issued 2 109 179 0 0 2 245 305 2 245 305 Subordinated liabilities 1 159 999 0 0 1 159 999 1 159 999 For many instruments, market values are not available, therefore the fair value is estimated with a number of measurement techniques. Measurement of the fair value of financial instruments has been made with a model based on estimates of the present value of future cash flows by discounting cash flows at appropriate discount rates. All model calculations contain certain simplifications and are sensitive to the underlying assumptions. Below there is a summary of core methods and assumptions used to estimate the fair value of financial instruments that are not measured at fair value. Receivables from customers: In the method applied by the Bank to calculate the fair value of receivables from customers (without overdraft facilities), the Bank compares the margins generated on newly granted loans (in the month preceding the reporting date) with the margin on the to tal loan portfolio. If the margins on newly granted loans are higher than the margins on the portfolio, the fair value of the loan is lower than it’s carrying value. In the opposite situation, i.e. if the margins on newly granted loans are lower than the margins on the existing portfolio, the fair value of the loans is higher than their carrying value. In the case of receivables from customers based on a fixed rate or a periodically fixed rate, in the method of calculating their fair value, in addition to the component based on margins, the Bank also uses a component that takes into account changes in the level of market interest rates. Amounts due from customers were fully classified to level 3 of the fair value hierarchy due to the application of a measurement model with material non -observable input data or current margins generated on newly granted loans. Financial liabilities measured at amortised cost: The Bank assumes that the fair value of customer and bank deposits and other financial liabilities maturing within 1 year is approximately equal to their carrying value. Deposits are accepted on a daily basis and thus their terms and conditions are similar to the prevailing market terms and conditions of identical transactions. The maturities of those items are short and therefore there is no major difference between the carrying value and fair value.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 96 For disclosure purposes, the Bank determines the fair value of financial liabilities with residual maturities (or repricing of the variable rate) in excess of 1 year. That group of liabilities includes the Bank's own issues and subordinated loans. Determi ning the fair value of that group of liabilities, the Bank determines the present value on anticipated payments on the basis of present percentage curves and the original spread of the issue. Other financial assets and liabilities For other financial instruments, the Bank assumes that the carrying value is close to fair value. This applies to the following items: cash and operations with the Central Bank, assets available for sale, other financial assets, and other financial liabilities. 38 Transactions with related entities In accordance with IFRS 10 "Consolidated Financial Statements", the parent entity of Alior Bank SA is Powszechny Zakład Ubezpieczeń SA, of which the State Treasury is a 34.2% shareholder. The entities related to the Bank are PZU SA and its related entities as well as entities related to members of the Management Board and the Supervisory Board of the Bank . Via PZU SA, the Bank is indirectly controlled by the State Treasury. Bank’s subsidiaries are: Name of company – subsidiaries 31.12.2024 31.12.2023 Alior Services sp. z o.o. 100% 100% Alior Leasing sp. z o.o. 100% 100% - AL Finance sp. z o.o. 100% 100% - Alior Leasing Individual sp. z o.o. 90% - Alior Leasing sp.z o.o. 10% - AL Finance sp. z o.o 90% - Alior Leasing sp.z o.o. 10% - AL Finance sp. z o.o Meritum Services ICB SA 100% 100% Alior TFI SA 100% 100% Corsham sp. z o.o. 100% 100% RBL_VC sp. z o.o. 100% 100% RBL_VC sp z o.o. ASI spółka komandytowo-akcyjna 100% 100% The tables below present the type and value of transactions with related entities and subsidiaries. Subsidiaries 31.12.2024 31.12.2023 Loans and advances to customers 6 012 866 5 094 201 Other assets 327 250 Total assets 6 013 193 5 094 451 Amounts due to customers 148 971 121 778 Provisions 354 1 571 Other liabilities 4 435 2 896 Total liabilties 153 760 126 245 Parent company 31.12.2024 31.12.2023 Other assets 5 174 4 431 Total assets 5 174 4 431 Amounts due to customers 4 122 2 387 Other liabilities 356 364
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 97 Parent company 31.12.2024 31.12.2023 Total liabilities 4 478 2 751 Subsidiaries of the parent company 31.12.2024 31.12.2023 Cash and cash equivalents 154 425 Loans and advances to customers 42 051 49 520 Other assets 908 1 149 Total assets 43 113 51 094 Amounts due to customers 30 462 156 617 Provisions 13 6 Other liabilities 6 076 3 551 Total liabilities 36 551 160 174 Subsidiaries 31.12.2024 31.12.2023 Off-balance liabilities granted to customers 440 992 458 904 Relating to financing 440 992 458 904 Subsidiaries of the parent company 31.12.2024 31.12.2023 Off-balance liabilities granted to customers 33 353 28 577 Relating to financing 33 353 28 577 Joint control by persons related to the Bank 31.12.2024 31.12.2023 Loans and advances to customers 4 5 Total assets 4 5 Amounts due to customers 11 2 720 Total liabilities 11 2 720 Joint control by persons related to the Bank 31.12.2024 31.12.2023 Off-balance liabilities granted to customers 0 1 Relating to financing 0 1 Subsidiaries 01.01.2024–31.12.2024 01.01.2023–31.12.2023 Interest income 367 422 335 699 Interest expences -2 001 -2 049 Fee and commission income 11 189 7 336 Fee and commission expense -450 -445 Dividend income 5 097 11 064 The result on financial assets measured at fair value through profit or loss and FX result 144 67 Other operating income 3 060 4 643 Other operating expenses 0 -1 General administrative expenses -8 959 -10 329
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 98 Subsidiaries 01.01.2024–31.12.2024 01.01.2023–31.12.2023 Net expected credit losses -645 7 603 Total 374 857 353 588 Parent company 01.01.2024–31.12.2024 01.01.2023–31.12.2023 Interest income 22 315 20 489 Interest expences -83 -43 Fee and commission income 12 977 15 434 Fee and commission expense -15 577 -7 700 The result on financial assets measured at fair value through profit or loss and FX result -10 5 Net other operating income and expenses 135 59 General administrative expenses -4 500 -5 080 Total 15 257 23 164 Subsidiaries of the parent company 01.01.2024–31.12.2024 01.01.2023–31.12.2023 Interest income 73 730 72 208 Interest expences -2 362 -4 568 Fee and commission income 23 645 27 659 Fee and commission expense -1 102 -1 417 The result on financial assets measured at fair value through profit or loss and FX result 667 125 Net other operating income and expenses 41 20 General administrative expenses -20 868 -10 913 Net expected credit losses -6 28 Total 73 745 83 142 Joint control by persons related to the Bank 01.01.2024–31.12.2024 01.01.2023–31.12.2023 Interest expences 0 -76 Fee and commission income 0 129 Net expected credit losses 0 -2 Total 0 51 Nature of transactions with related entities All transactions with related entities are performed in line with relevant regulations concerning banking products and at market rates. Transactions with the State Treasury and related entities Below there are material transactions with the State Treasury and its related entities with the exception of IAS 24.25. The transactions with the State Treasury mainly concern operations on treasury securities. The remaining transactions presented in the note below concern operations with selected ten entities with the highest exposure.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 99 Transactions with the State Treasury and related entities as at 31 December 2024 Name Loans to customers/debt instruments Interest and commission income State Treasury 14 741 404 783 794 Customer 1 660 736 171 630 Customer 2 201 151 14 045 Customer 3 178 669 1 889 Customer 4 168 107 14 796 Customer 5 97 303 4 710 Customer 6 95 601 6 466 Customer 7 82 238 15 048 Customer 8 60 255 2 061 Customer 9 57 991 5 008 Customer 10 43 934 5 058 Name Amounts due to customers Interest costs Customer 1 151 229 -7 145 Customer 2 139 786 -2 632 Customer 3 81 179 -1 801 Customer 4 48 215 -1 447 Customer 5 45 951 -639 Customer 6 41 584 -643 Customer 7 34 458 -649 Customer 8 34 394 -871 Customer 9 33 580 -276 Customer 10 31 620 -26 Name Off-balance sheet items Commission income Customer 1 614 493 186 Customer 2 200 000 0 Customer 3 189 173 0 Customer 4 100 000 24 Customer 5 85 000 0 Customer 6 69 309 0 Customer 7 50 000 387 Customer 8 47 727 0 Customer 9 33 793 47 Customer 10 33 353 0 Transactions with the State Treasury and related entities as at 31 December 2023 Name Loans to customers/debt instruments Interest and commission income State Treasury 12 066 003 797 335 Customer 1 583 711 48 968 Customer 2 529 764 751 Customer 3 277 110 8 075 Customer 4 253 155 15 783
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 0 0 Name Loans to customers/debt instruments Interest and commission income Customer 5 187 578 16 580 Customer 6 106 213 13 507 Customer 7 128 654 951 Customer 8 81 918 9 207 Customer 9 49 520 5 639 Customer 10 25 161 2 313 Name Amounts due to customers Interest costs Customer 1 144 771 -5 745 Customer 2 95 516 -1 842 Customer 3 55 116 -2 138 Customer 4 46 042 -1 698 Customer 5 43 356 -580 Customer 6 38 892 -127 Customer 7 34 924 -476 Customer 8 31 689 -284 Customer 9 30 810 -1 392 Customer 10 29 998 -53 Name Off-balance sheet items Commission income Customer 1 400 000 0 Customer 2 130 331 32 Customer 3 113 336 0 Customer 4 100 000 25 Customer 5 80 000 0 Customer 6 71 245 0 Customer 7 61 364 0 Customer 8 50 000 138 Customer 9 28 577 0 Customer 10 9 134 0 All transactions with the State Treasury and its related entities were concluded at arm’s length. 39 Benefits for the for senior executives 39.1 Accounting policy information Short-term employee benefits are those that are accounted for within 12 months of the end of the annual reporting period in which the employees have performed work. As a short -term employee benefit, apart from the basic salary, the non -deferred part of the variable remuneration component in the form of cash was recognized. As long -term employee benefits, the Bank recognizes the non -deferred (stopped) part of variable remuneration in phantom shares and the part of variable remuneration deferred for subsequent periods, both in phantom shares and in cash. Principles applicable to the remuneration of persons in managerial positions at the Bank The Bank has a Remuneration Policy covering all employees. The Remuneration Policy is reviewed by the Nomination and Remuneration Committee and adopted by the Management Board and approved by the
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 0 1 Supervisory Board. With respect to people who affect the risk profile , (MRT) identified on the basis of the criteria defined in the Commission Delegated Regulation (EU) No. 2021/923 of 25 March 2021, the Policy has been determined on the basis of the regulation of the Minister of Finance, Funds and Regional Policy of 8 June 2021 on the risk management system and internal control system as well as remuneration policy in banks. The main policy submissions in relation to the MRT: • the remuneration is composed of fixed remuneration and variable remuneration, • not grant MRT unidentified retirement benefits, • MRT's commitment not to use individual hedging strategies or insurance concerning the remuneration and responsibility in order to undermine the effects of risk in the remuneration system applicable to them, • maximum ratio of MRT variable remuneration to fixed remuneration: 100%, • at least 50% of the MRT’s variable remuneration is an incentive to pay special attention to the Bank's long-term good and is therefore composed of financial instruments related to the Bank's shares; the remaining part of the variable remuneration paid in cash as cash variable remuneration, • at least 40% of the variable MRT remuneration, and if the variable remuneration of the MRT amounts to a particularly high amount, at least 60% of the variable remuneration - is deferred remuneration, • variable remuneration of the Management Board is adapted to the provisions of the Act of 9 June 2016 about the principles of determining the remuneration of persons managing certain companies. 39.2 Financial data Below are presented the items of the statement of financial position, which include the balances of the Bank's transactions with the Bank's Management Board and Supervisory Board. All transactions with supervising and managing persons are performed in line with the relevant regulations concerning banking products and at market rates. 31.12.2024 Supervising, managing persons Supervisory Board Bank's Management Board Amounts due to customers 575 355 220 Total liabilities 575 355 220 31.12.2023 Supervising, managing persons Supervisory Board Bank's Management Board Loans and advances to customers 385 4 381 Total assets 385 4 381 Amounts due to customers 219 0 219 Total liabilities 219 0 219 Remuneration of the Supervisory Board and Management Board in reporting period 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Management Board short-term employee benefits 9 761 11 712 long-term employee benefits 5 148 7 543 post-employment benefits 4 529 361 termination benefits 2 715 0 Management Board, total 22 153 19 616 Supervisory Board short-term employee benefits 1 092 1 454
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 0 2 Remuneration of the Supervisory Board and Management Board in reporting period 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Supervisory Board, total 1 092 1 454 The amounts in the table above include remuneration representing the cost of a given period (due or paid). At the end of the reporting period, i.e. 31 December 202 4 and as at the date of publication of the report, members of the Supervisory Board and members of the Management Board of Alior Bank did not hold the Bank's shares. Agreements of members of the Management Board in accordance with the resolution of the Extraordinary General Meeting of the Bank of 5 December 2017 regarding the regulation of remuneration principles for members of the Management Board of Alior Bank (amended by the resolution of the Extraordinary General Meeting of the Bank of 28 June 2019) and the principles adopted by the Supervisory Board: • contracts for time of performing functions, relating to the Act of 9 June 2016 about the principles of determining the remuneration of persons managing certain companies, • Management Board member’s contract for the time of performing functions, • termination period: 1 month in case of performing Management Board member function for less than 12 months effective at the end of calendar month, 3 months in case of performing Management Board member function for at least 12 months, • severance pay in the amount of 3 times the fixed remuneration in the event of termination of the contract or termination of the contract by the Bank for reasons other than the violation of basic duties by the Management Board member, provided that the Management Board member performs the function for a period of at least 12 months before the termination of the contract, • non-compete clause based on which Management Board member is obliged (assuming he performed the function for at least 3 months ) not to perform any activities deemed competitive with reference to the Company for the period of 6 months since the date of contract termination , as a consequence Management Board members are entitled to severance in the amount of six months fixeed salary. 39.3 Bonus system for senior executives Since 2016, the Management Board has been covered by the bonus system for the Management Board. The purpose of the program is to create additional incentive stimuli for its participants to effectively perform the duties entrusted to them, in particular, managing the Bank and making efforts aimed at the continued stable development of the Bank and its capital group, while maintaining appropriate and effective risk management at the Bank, stability of the Bank’s management personnel and realization of long -term interests of the shareholders by bringing about a stable growth of the stock exchange valuation of the Bank’s shares, while maintaining an increase in the net assets of the Bank and its companies . The Management Board's variable remuneration is granted and paid in accordance with the Remuneration Policy described above. The other members of senior executives, with particular emphasis on those having an impact on the Risk Profile (MRT), are covered by an annual bonus. With the exception of persons exercising control functions, the basis for determining the total amount of variable remuneration is the assessment of the MRT and organizational unit results as well as the Bank's results in the area of the person's responsibility, taking into account the results of the entire Bank. In accordance with the Remuneration Policy in force at the time of grant, the variable remuneration of the Management Board and other MRTs in the part granted in the form of phantom shares is a cash -settled programme.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 0 3 Number of phantom shares The average share price for the completed phantom shares Number of phantom shares The average share price for the completed phantom shares 01.01.2024 -31.12.2024 01.01.2023 -31.12.2023 At the beginning of the perid 157 092 - 47 965 - Granted during the period 28 763 - 127 470 - Forfeited during the period 0 - 1 719 - Realized during the period 67 568 0.01 16 624 0.01 At the end of the period 118 287 - 157 092 - Exercisable at end of period 0 - 0 - Phantom shares as at 31.12.2024 Phantom shares as at 31.12.2023 The fair value of the instrument at the end of the period (PLN) 85.98 76.34 The exercise price of the instrument (for instruments outstanding at the end of the period) (PLN) 0.01 0.01 The average maturity date of the instrument occurring at the end of the period 28.09.2026 07.10.2025 The carrying amount of liabilities arising from cash -settled phantom shares amounted to PLN 10.2 million as at 31 December 2024 (as at 31 December 2023 – PLN 12.0 million). The remuneration expenses for 2024 relating to the realized phantom shares amounted to PLN 6.81 million (in 2023 - PLN 0.65 million). Deferred tranches are paid in accordance with the Remuneration Policy after confirming that there were no events causing their reduction or suspension. 40 Offsetting of financial assets and liabilities 40.1 Accounting policy information The Bank offsets financial assets and liabilities and discloses them in the statement of financial position in net value if it is possible to enforce the right to set off the disclosed amounts and an intention to settle them in net amounts or the asset and liability may be realised at the same time. The Bank enters into offset agreements – ISDA agreements (International Swaps and Derivatives Association Master Agreements) and GMRA agreements (Global Master Repurchase Agreement) that provide for: set-off of financial assets and liabilities (close out netting) in the case of a default by any p arty to the agreement. The agreements are of special importance to mitigating the risk related to derivative instruments since they provide for netting of both payable (mitigation of settlement risk) and not yet payable liabilities of the parties (mitigat ion of pre -settlement risk). However, those agreements do not meet the requirements specified in IAS 32 concerning recognition of the set -off effects in the statement of financial condition since the set-off is subject to the occurrence of a specific event in the future (events of default). The exposures under derivative instruments are additionally secured with deposts placed by the counterparties under CSA (Credit Support Annex).
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 0 4 40.2 Financial data 31.12.2024 31.12.2023 Investment finanancial assets Financial derivatives \ reverse repo transactions Carrying amount of items from the statement of financial position 2 013 755 5 247 075 Carrying amount of items that will not be offset, if any 52 833 854 884 Net carrying amount - subject to possible compensation 1 960 922 4 392 191 Potential compensation amounts 460 590 634 624 - financial instruments (includes received collateral on securities) 427 453 557 590 - received cash collateral 33 137 77 034 Net value 1 500 332 3 757 567 Financial liabilities held for trading Financial derivatives \ reverse repo transactions Carrying amount of items from the statement of financial position 646 833 903 280 Carrying amount of items that will not be offset, if any 25 967 43 064 Net carrying amount - subject to possible compensation 620 866 860 216 Potential compensation amounts 601 214 816 189 - financial instruments (includes received collateral on securities) 427 453 557 590 - received cash collateral 173 761 258 599 Net value 19 652 44 027 41 Legal claims In the Bank’s opinion, no single court, arbitration court or public administration body proceedings in progress during the 2024, and none of the proceedings jointly, could pose a threat to the Bank’s financial liquidity. In accordance with IAS 37, the Bank each time assesses whether a past event gave rise to a present obligation. In legal claims, the Bank additionally uses expert opinions. If, based on expert judgment and taking into account all circumstances, the Bank assesses that the existence of a present obligation as at the balance sheet date is more likely than not and the Bank is able to reliably estimate the amount of the obligation in this respect, then it creates a provision. As at 31 December 2024, the Bank crea ted provisions for legal claims brought against the Bank, which, according to the legal opinion, involve the risk of outflow of funds due to fulfillment of the obligation in the amount of PLN 213 069 thousand and as at 31 December 2023 in the amount of PLN 153 629 thousand. The proceedings which according to the opinion of the Management Board are significant are presented below. Cases related to the distribution of certificates of participation in investment funds The Bank, as part of its activities as part of a separate organizational unit - Biuro Maklerskie Alior Bank SA, in the years 2012 - 2016 conducted activities in the field of distribution of certificates of participation in investment funds: Inwestycje Rolne Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych, Inwestycje Selektywne Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych, Lasy Polskie Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych and Vivante Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych (hereinafter collectively referred to as "Funds"). The Bank distributed over 250 thousand investment certificates of the Funds. On 21 November 2017, the Polish Financial Supervision Authority ("PFSA") issued a decision to withdraw the permit to operate by FinCrea TFI SA, which is the managing body of the Funds. The Polish Financial Supervision Authority justified the issuance of a decision found in the course of administrative proceedings for gross violations of the provisions of the Act on investment funds and management of alternative
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 0 5 investment funds. The decision was immediately enforceable. No society has decided to take over the management of the Funds, which, pursuant to Art. 68 sec. 2 in connection with joke. 246 paragraph. 1 point 2 of the Act on Investment Funds and Management of Alternative Investment Funds was the reason for the dissolution of the Funds. The dissolution of an investment fund takes place after liquidation. On 5 June 2024, Raiffeisen Bank International AG with its registered office in Vienna - liquidator of the funds Vivante FIZAN in liquidation and Inwestycje Sele ktywne FIZAN in liquidation paid out the funds obtained from the liquidation in proportion to the number of investment certificates held by the fund participants. Ultimately, PLN 158.39 was paid for one certificate of the Vivante FIZAN fund in liquidation (compared to PLN 95.22 at the opening of the liquidation), and for the Inwestycje Sele ktywne FIZAN fund in liquidation - PLN 927.99 (compared to PLN 641.15, respectively). This payment means the remission of investment certificates held by fund participants. On 31 July 2024, Raiffeisen Bank International AG with its registered office in Vienna - liquidator of the fund Inwestycje Rolne FIZAN in liquidation paid out the funds obtained from the liquidation in proportion to the number of investment certificates held by the fund participants. Ultimately, PLN 980.39 was paid out for one certificate of the Inwestycje Rolne FIZAN fund in liquidation (compared to PLN 789.86 at the opening of liquidation). This payment means the remission of investment certificates held by fund participants. On 21 August 2024, Raiffeisen Bank International AG with its registered office in Vienna - liquidator of the fund Lasy Polskie FIZAN in liquidation paid out the funds obtained from the liquidation in proportion to the number of investment certificates held by the fund participants. Ultimately, PLN 444.16 was paid out for one certificate of the Lasy Polskie FIZAN fund in liquidation (compared to PLN 324.76 at the opening of liquidation). This payment means the remission of investment certificates held by fun d participants. Claims for payment As at 31.12.202 4, the Bank is defendant in 1 70 cases brought by the buyers of the Fund's investment certificates for payment (compensation for damage). The total value of the dispute in these cases is PLN 56.6 milion. In the Bank's opinion, each claims for payment requires an individual approach. The Bank conducted an analysis, selected cases and singled out those with specific risk factors, which the Bank took into account in its approach to the provision created on this account. The Bank has changed the estimate of the provisions held as of the balance sheet date in connection with the cases brought against the Bank by purchasers of the Funds' investment certificates for payment and for determining liability. The Bank will analys e the judgments issued on an ongoing basis, taking into account the impact of the liquidation and payments on this account on court judgments and will shape the amount of provisions . T he Bank also took into account the expected increase in the scale of lawsuits. The total amount of the provision as at 31 December 2024 amounted PLN 72.1 million. Liability claims The Bank is the defendant in 1 collective action brought by a natural person - a representative of a group of 320 natural and legal persons, for determination of the Bank's liability for damage and in 3 individual cases for establishing the Bank's liability for damage. The class action was filed on 5 March 2018 against the Bank to determine the Bank's liability for damage caused by the Bank's improper performance of disclosure obligations towards customers and the improper performance of contracts for the provision of services for accepting and transmitting orders to purchase or sell Fund investment certificates. The court decided to hear the case in group proceedings. On 8 March 2023, the District Court in Warsaw issued a decision to determine the composition of the group. As at the date of this report, this decision is invalid. The value of the subject matter of the class action is
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 0 6 approximately PLN 103.9 million, however, a class action lawsuit has been filed to establish liability (not for payment, i.e. compensation for damage), therefore the Bank does not anticipate any outflow of cash from these proceedings, other than litigation costs, the amount of which the Bank estimates at PLN 600 thousand. Court proceedings of FX mortgage loans As at 31 Decemberr 2024, there were 168 court proceedings pending against the Group (as at 31 December 2023: 86) concerning mortgage loans granted in previous years in foreign currencies with a total value of the subject matter of the dispute of PLN 149 million (as of 31 December 2023: PLN 92.1 million). The main cause of the dispute indicated by the plaintiffs concerns the questioning of the provisions of the loan agreement regarding the Bank's use of conversion rates and results in claims for the partial or total invalidity of the loan agreements. The Bank monitors the state of court decisions on an ongoing basis in cases of loans indexed or denominated in a foreign currency in terms of the formation and possible changes in the lines of case law. The table below presents the cumulative costs of legal risk of FX mortgage loans (in MPLN). 31.12.2024 31.12.2023 Loans and advances to customers - adjustment decreasing the gross carrying amount of loans 133 114 Provisins 58 36 Total 191 150 Court proceedings regarding free credit sanction The banking sector is facing the problem of the growing number of lawsuits filed by consumers or specialized entities purchasing receivables from consumers, covering the reimbursement of consumer credit costs due to defects in the consumer credit agreement. The basic objection of the plaintiffs, present in all cases, is the allegation of the lack of possibility of crediting and charging interest (capital interest) on credit costs, in particular the arrangement fee. On 13 February 2025, the CJEU issued a judgment based on preliminary questions from a Polish court regarding the sanction of a free loan. The theses of the judgment are as follows: • firstly, the CJEU did not rule that the interest rate on credited costs is inadmissible, according to the CJEU, the circumstance according to which the APR would turn out to be excessive does not in itself constitute a breach of the information obligation, • secondly, the CJEU stated that it is for the national court to assess to what extent the average consumer - properly informed and sufficiently observant and prudent - was able to assess, on the basis of the terms of the contract regarding the change of fee s, how the amount of his obligation may change, • thirdly, the Court emphasized that the severity of the sanction provided for in national law should be adequate to the gravity of the infringements and the general principle of proportionality, which results from EU law, should be observed (paragraph 49 of the judgment). In addition, the CJEU confirmed that the sanction of free credit may be considered disproportionate if the breach of information obligations does not affect the consumer's decision to conclude the contract. The CJEU also confirmed that the sanction of free credit cannot be applied automatically, it is up to the national court to assess the gravity of the breached obligat ions by the creditor and their impact on the consumer's decision to conclude the contract. In the Bank's opinion, the CJEU judgment confirms the Bank's previous position that crediting credit costs, in particular commissions, is permissible, even if deemed inadmissible (regardless of the type of sanction),
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 0 7 and does not result in a free credit sanction. The Bank assesses that the CJEU judgment is beneficial for the sector and as such will not negatively affect the previous national case law. As at 31 Decemberr 2024, there were pending 2746 court proceedings against the Bank regarding the sanction of a free loan with the value of the subject matter of the dispute amounting PLN 115.1 million (as at 31 December 2023, 1219 proceedings with the value of the subject matter of the dispute amounting PLN 44.1 million). The total amount of the provision in this respect as at 31 December 2024 is PLN 50.6 million. Significant estimates and judgments Significant assumptions used to estimate the Bank's provision for reimbursement of consumer credit costs due to defects in the consumer credit agreement as at 31 December 2024 and 31 December 2023 include: • the rate of inflow of disputes observed to date and forecasted by the Bank in future periods, • the value of the subject matter of the dispute, • statistics of resolved cases. Sensitivity analysis of significant estimates and judgements The Bank conducted a sensitivity analysis of significant assumptions constituting the basis for calculating the provision. The table below contains information on how much the balance of the provision for future reimbursement of consumer credit costs would change if the Bank assumed in its estimates that the observed inflow of disputes, on which the Bank's estimates are based, would deepen or weaken by 10%. Change in the pace of case inflow 2024 2023 +10% -10% +10% -10% The impact of the change in the rate of case inflow on the amount of the provision MPLN +1.2 MPLN -1.2 MPLN+ 0.7 MPLN -0.7 42 Contingent liability According to IAS 37 contingent liability is: • a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Bank, • a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. Therefore, a contingent liability reflects the effect of fulfilling possible obligations, because only future events will confirm whether the entity has a present obligation, the fulfillment of which could lead to an outflow of resources embodying economic benefits. The Bank presents below a description of the most important proceedings conducted against the Bank as of 31 December 2024, which constitute contingent liabilities. The total value of the subject matter of the disputed claims as at 31 December 202 4 in court proceedings conducted against the Bank is PLN 967 420 thousand and as at 31 December 2023, PLN 621 150 thousand. Case claimed by a client Case claimed by a limited company for a payment of PLN 109 967 thousand in respect of compensation for damage incurred in connection with the conclusion and settlement of treasury transactions. The claim dated 27 April 2017 was brouhgt against Alior Bank SA and Bank BPH SA. In the Bank's opinion, the claim ha s no valid factual and legal basis therefore, the Bank did not create a provision as at 31 December 2023.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 0 8 Proceedings before the President of the Office of Competition and Consumer Protection (UOKiK) Proceeding on provisions of recognizing a standard contract as illegal, the so-called modification clauses On 27 September 2019, the President of the Office of Competition and Consumer Protection (UOKiK) initiated ex officio proceeding against Alior Bank SA to recognize a standard contract as illegal (reference number RPZ.611.4.2019.PG) the subject of which is 11 clauses (the so-called modification clauses) included in contract templates used by the Bank, on the basis of which the Bank made unilateral changes to contracts concluded with consumers. The President of UOKiK questioned the wording of the provisions i n question, among others as imprecise and not allowing consumers to verify the occurrence of premises for the change being made. The Bank corresponds with the President of the Office of Competition and Consumer Protection in this case. The Bank presented to the Office of Competition and Consumer Protection a plan to remove the ongoing effects of the breach from contracts with customers. In a letter dated 2 7 January 2025, the Office of Competition and Consumer Protection decided to extend the deadline for completing the proceedings until 3 0 June 2025. As at 31 December 202 4, the Bank did not identify any reasons to create a provision because, in the Bank's opinion, an outflow of cash in this respect is unlikely. At the sam e time, the Bank is unable to make a reliable estimate of the value of the contingent liability in this respect due to the inability to estimate the potential consequences of the violation and the amount of the potential penalty that may be imposed by the Office of Competition and Consumer Protection. The maximum amount of the financial penalty is 10% of the Bank's turnover achieved in the financial year preceding the year in which the penalty was imposed. Proceeding regarding practices violating the collective interests of consumers regarding unauthorized payment transactions The President of the Office of Competition and Consumer Protection is conducting proceeding against the Bank regarding practices violating the collective interests of consumers (reference number: RWR.610.3.2024.KŚ) consisting of: • failure - after the consumer reports the transaction as unauthorized - to refund the amount of the unauthorized payment transaction or restore the debited payment account to the state that would have existed if the unauthorized payment transaction had not taken place in the manner and within the time limit specified in Art. 46 section 1 of the Act on Payment Services, despite the absence of any grounds entitling the Bank not to perform the above-mentioned. activities, • making a conditional refund to a consumer who is a client of the Bank of the payment transaction amount reported by the consumer as unauthorized, only for the time the Bank considers the complaint, and then, if the Bank finds in the complaint procedure tha t the transaction was authorized by the consumer or, that the consumer is liable for an unauthorized payment transaction, withdrawing a conditional refund and withdrawing this amount from the consumer's savings and current account or credit card account, e xcluding situations in which this amount was simultaneously returned to the consumer as part of a chargeback or the consumer withdrawn the claim, • providing consumers - in responses to their reports regarding the occurrence of unauthorized payment transactions - with information about the correct authorization of the transaction, which was confirmed only after the payment service provider verified th e correct use of the payment instrument, by using individual authentication data in a way that suggests that the Bank's demonstration that correct authentication has occurred excludes the Bank's obligation to refund the amount of the unauthorized transacti on, which may mislead consumers regarding the Bank's obligations under Art. 46 section 1 of the Payment Services Act, as well as regarding the distribution of the burden of proving that the payment transaction has been authorized,
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 0 9 • providing consumers - in responses to their reports regarding unauthorized payment transactions - with information about the correct authentication of the transaction by the user and the Bank's lack of responsibility for its execution, as it occurred as a result of the consumer's breach of the terms of the contract with the Bank, which may mislead consumers into error regarding the Bank's obligations under Art. 46 section 1 of the Payment Services Act, including the distribution of the burden of proof to th e extent that the Bank should demonstrate that the consumer led to the disputed transaction as a result of an intentional or grossly negligent breach of at least one of the obligations referred to in Art. 42 of the Payment Services Act, • providing consumers - in responses to their reports regarding the occurrence of unauthorized payment transactions - with information about the inability to consider card transactions reported after 120 days from the date of the transaction as unauthorized payment transactions and the inability to complain about more than 15 transactions, - which, in the opinion of the President of the Office of Competition and Consumer Protection, may harm the collective interests of consumers and, consequently, constitute practices violating the collective interests of consumers referred to in the Act on Co mpetition and Consumer Protection. The maximum amount of the financial penalty is 10% of the Bank's turnover achieved in the financial year preceding the year in which the penalty was imposed. As at 31 December 2024, the Bank did not create provisions in this respect. Proceedings regarding practices violating collective consumer interests are c urrently pending against 15 other banks whose practices were verified in explanatory proceedings similar to those conducted against the Bank. In a letter dated 29 March 2024, the Bank responded in detail to the above allegations. In further correspondence (letters dated 31 October 2024 and 6 December 2024), the Bank, in response to the expectations of the President of the Office of Competition a nd Consumer Protection, presented a preliminary proposal to undertake specific actions aimed at ending the infringement of which the Bank is accused and removing its effects. As at 31.12.2024, the value of complaints regarding unauthorized transactions that were rejected by the Bank, contrary to the position of the Office of Competition and Consumer Protection, amounts to approximately PLN 50 million. In the Bank's opinion, the above-mentioned complaints rejected so far, if they are to be recognized as part of the performance of a potential obligation in the proceedings of the President of the Office of Competition and Consumer Protection, may then be partially recovered in cour t. In connection with the above, as oat 31 December 2024, the Bank created a provision for this purpose in the amount of PLN 9.8 million. Proceedings in the case of recognizing the provisions of the model agreement regarding the change of interest rates on bank accounts as prohibited On 03.02.2025, the President of the Office of Competition and Consumer Protection issued a decision to initiate proceedings against Alior Bank SA in the case of recognizing the provisions of the model agreement as prohibited (reference number RŁO-2.611.1.2025.PG), the subject of which is the clause on the change of interest rates on bank accounts. The President of the Office of Competition and Consumer Protection questioned the wording of the provisions of paragraph 11, sections 9 and 10 of the model agreem ent "Regulations for savings and settlement accounts, savings and fixed -term savings deposits", among others, as giving the Bank too much freedom in terms of the rights to change the interest rate and not allowing consumers to independently check whether the change in interest rate is in accordance with the agreement. As at 31 December 2024, the Bank did not identify any reasons to create a provision because, in the Bank's opinion, an outflow of cash in this respect is unlikely. At the same time, the Bank is unable to make a reliable estimate of the value of the contingent liability in this respect due to the inability to estimate the potential consequences of the violation and the amount of the potential penalty that may be imposed by the Office
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 1 0 of Competition and Consumer Protection. The maximum amount of the financial penalty is 10% of the Bank's turnover achieved in the financial year preceding the year in which the penalty was imposed. Explanatory notes concerning risk Objectives and principles of risk management Risk management is one of the major processes in Alior Bank SA. Risk management supports Bank’s strategy and proper level of business profitability and safety of activities while assuring control of the risk level and its maintenance within the accepted ri sk appetite in the changing macroeconomic and legal environment. The supreme objective of the risk management strategy is to ensure early detection and adequate management of all kinds of risk inherent to the pursued activity. The objective of risk management within the adopted tolerance level is: • protection of the shareholders’ equity, • protection of customers’ deposits, • support to the Bank in pursuing effective activities. Risk management at Alior Bank is based in particular on the following principles: • The Bank manages all types of risk identified as part of its operations, • organizational structure and method of assigning functions to particular units of the Bank ensure precise division of duties and mitigate the risk of conflicts of interest, • the risk management process and methods are adequate to the scale of the Bank's operations and adjusted to the materiality, scale and complexity of a given risk, • the risk management process is regularly adjusted to new factors and sources of risk as well as the changing economic and regulatory environment, • risk management methods are periodically verified and validated, • risk management is integrated with planning and controlling processes, • the level of risk is continually monitored and referred to the system of Bank’s obligatory limits and the Management Board and Supervisory Board of the Bank receive regular information on the profile and level of risk, • the Bank conducts a periodical process of reviewing the risks identified as part of its operations and regularly evaluates the materiality of respective types of risk. When determining the criteria for recognizing a given type of risk, the impact of a given type of risk on the Bank's activities is taken into account, and three types of risk types are distinguished: • significant risks - subject to active management, • potentially significant risks - for which significance monitoring is performed, • other undefined or non-identifiable risks (irrelevant and unmonitored). The Bank presented details of managing selected risks in the following notes: Risk type Note number Credit risk 43 Market risk* including interest rate risk and the FX risk 44,45 Liquidity risk 46 Operational risk 47 * Market risk is the risk of a negative impact on the current result or the net present value of the Bank's equity as a result of changes in market factors. The Bank distinguishes the following managed market risk factors: exchange rates, interest rate indices, share / index prices, commodi ty prices, credit spread related to the rating of a given issuer, options volatility parameters. A detailed description of the Bank's market risk management can be found in the Management Report.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 1 1 Risk is managed within the risk management policies and covers risk identification, measurement and evaluation, monitoring, reporting and management activities. The above also applies to control of Treasury operations by determining and verifying the principles of executing, organising, and measuring such transactions. Within each function, there is a clear segregation of duties and responsibilities and the rules set forth in internal regulations. The risk management process is supervised by the Bank's Supervisory Board which is kept informed on the risk profile of the Bank and on major activities taken wi th respect to risk management. The Bank's Supervisory Board is supported by the Remuneration and Appointment Committee of the Supervisory Board, the Risk Committee of the Supervisory Board, and the Audit Committee of the Supervisory Board. With respect to risk management, the Management Board of Alior Bank SA designs, implements and ensures the operation of a coherent risk management system tailored to the risk profile at the Bank, including the rules for managing individual risk types, ensuring their consistency with the risk management strategy, and determining the risk appetite. In addition, the Management Board defines the organizational structure of the Bank, ensuring the proper division of key roles f rom the point of view of risk management . In risk management, the Management Board is supported by the following internal committees: • Credit Risk Committee and Business Initiatives (KRK), • Capital, Asset and Liability Committee (CALCO), • Bank’s Credit Committee (KKB), • Operational Risk Committee (KRO), • Model Risk Committee (KRM). The purpose of KRK is to support the Bank's Management Board in the effective management of the Bank's credit risk, including the credit concentration risk and ESG risk. The purpose of the CALCO Committee is to support the Bank's Management Board in the effective management of market risk, liquidity risk, counterparty risk, business risk, capital risk and excessive leverage risk. The subject of KKB's activity is making credit decisions regarding the Bank's on -balance sheet and off - balance sheet exposure up to the amount of the competence limit granted to KKB and recommending credit decisions to the Bank's Management Board for exposures exceeding the limit granted to the committee. KRO was established to support the Bank's Management Board in the effective management of operational risk, including issues related to the maladjustment or unreliability of processes, the operation of people and systems or resulting from external threats, including significant subsidiaries. The Committee monitors the level of exposure to operational risk and assesses the situation with regard to operational risk for the entire Bank. KRM supports the Bank's Management Board in the effective management of model risk, taking into account significant subsidiaries in which model risk has been considered significant under the Internal Capital Adequacy Assessment Process (ICAAP). At the Bank, exposure to the risk is formally mitigated with a system of limits, periodically updated by resolutions of the Supervisory Board or CALCO, covering all risk metrics with the levels thereof monitored and reported by the Bank's organisational units independent of business. There are three types of limits at the Bank that differ in terms of coverage and functioning: core limits (approved b y the Supervisory Board), supplementary limits and additional limits. Risk management is focused on potential changes to the economic result; with the Bank's quality requirements related to the risk management process (internal control system, new product launch, analysis of the legal risk, analysis of the operational risk), non - quantifiable risks are mitigated that are related to treasury operations.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 1 2 43 Credit risk 43.1 Description of the risk Definition of the credit risk The credit risk is understood as a risk of loss due to the customer's default to the Bank or a risk of decreased economic value of the receivables of the Bank as a result of the customer's deteriorated potential to service its debt. Objective of credit risk management The objective credit risk management is to reduce losses in the loan portfolio and to minimise the risk of occurrence of impaired credit exposures, while maintaining the anticipated profitability level and value of loan portfolio. Management of the credit risk and its maintenance at a safe level is of fundamental importance for a stable operation of the Bank. For this purpose, the Bank takes actions to secure credit risk against various internal and external risk factors, including ESG risk (also related to climate), which may have a negative impact on credit risk. The credit risk is controlled by the regulations applicable at the Bank, in particular loan application analysis procedures, lending methodologies and risk valuation models adapted to the customer segment, type of product and transaction, rules for monitor ing customers and the loan portfolio, rules for establishing and monitoring legal collateral for loans as well as monitoring and debt recovery . The Bank takes measures to centralise and optimise the processes within the systemic infrastructure, while relyi ng on available external and internal information on customers. The credit risk management system is comprehensive and integrated with the Bank's operational processes. The core stages of the credit risk management process include the following: • identification, • measurement, • control, • monitorin, • reporting. The Bank has and uses the tools to quickly respond to changes in the economic environment, in particular by adapting its credit risk management processes to the current macroeconomic and legal situation, including the applied credit policies, processes of reduc ing the risk of default and recovery of overdue receivables. In the retail customer segment, the Bank also followed the above approach in 2024 by optimizing the credit risk of transactions based on the customer's exposure and credit risk, while maintaining the Bank's competitive credit policy for preferred segments. In the area of corporate loans, in 2024 the Bank mainly implemented the assumptions of the Bank's Strategy in the field of digitization and transformation of the business customers lending process, aimed at automating, optimizing and increasing the efficiency of the lending process supporting the granting of credit exposures. Additionally, a set of changes was introduced to optimise credit policy, aimed at ensuring high quality of the credit portfolio in the long term.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 1 3 Credit risk measurement and assessment The level of the credit risk is limited in line with the restrictions set forth in external and internal regulations, rules set by the Bank, in particular concerning restrictions for credit exposures to one customer, a group of customers related by capital and organisation and economic sectors. The Bank analyses the risk, both on an individual and portfolio basis, and it takes actions aimed at: • minimising the level of the credit risk of a single loan with an assumed profitability level , • reducing the overall credit risk resulting from holding a specific loan portfolio by the Bank. In the mitigation process of the risk level of individual exposures, when approving a loan or another credit product the Bank: • assesses credibility and creditworthiness, taking into account, among others, a detailed analysis of the exposure's repayment source, • in the field of corporate loans, each transaction involving credit risk is assessed in the context of environmental (including climate risk), social and management risk and, based on the assumptions adopted by the Bank, the level of these risks is determined, • evaluates collateral, including verifying their formal, legal and economic status, taking into account, among others, adequacy of LTV (loan exposure to real estate value) / LTVc (loan exposure to collateral value) adequacy. The assessment of the potential impact of ESG risks on the client is aimed at revealing possible threats resulting from them in the perspective of the assumed lending period of the transaction financed by the Bank. The process of identifying ESG risk facto rs begins at the stage of verification of the loan application, then appropriate procedures are applied on the risk side. To strengthen the risk control of individual exposures, the Bank periodically monitors clients and takes appropriate actions to minimize the risk. In order to mitigate the credit risk level of its portfolio, the Bank: • sets and controls concentration limits, • monitors early warning signals within the EWS system, • regularly monitors the loan portfolio by controlling all relevant credit risk parameters (including PD, LTV, DTI - the ratio of expenses related to the servicing of credit obligations and financial liabilities other than credit obligations to the income of retail customers applying for retail loans, CoR - risk costs understood as the ratio of the sum of the result on provisions from the last 12 months to the average exposure value for the corresponding period of 12 months (13 points over time), LGD - expected loss level for exposures in default, NPL - receivables with identified impairment, Coverage - the ratio of the write-down value to loans with evidence of impairment to their exposure), • regularly carries out stress tests. The Bank grants credit products in line with the lending methodologies appropriate for the customer segment and product type /method of financing . The assessment of the customer's creditworthiness preceding credit decisions is performed with a system supporting the credit process, scoring or rating tools; external information (e.g. CBD DZ, CBD BR, BIK, BIG bases and for Romunia branch CB (Biroul de Credit), CRC (Centrala Riscului de Credit) ), and internal bases of the Bank. Credit products are granted in lin e with the Bank's operational procedures, specifying the steps to take in the lending process, the responsible units of the Bank, and the tools applied. The Bank limits risks related to ESG factors, including financing projects that may have a negative impact on the climate and natural environment or are contrary to the law.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 1 4 The main areas of exclusion include: • funding projects involving harmful or exploitative forms of forced labour, child labour, direct discrimination or practices that prevent workers from lawfully exercising their rights of association and collective bargaining, • enterprises operating contrary to the applicable provisions of Polish law or the law of the country in which they conduct business or do not have licenses, permits or consents or authorizations that are required to conduct a given activity, • activities that have a negative impact on areas protected under national law or international conventions, habitats of rare/endangered species, as well as negatively impacting places of cultural or archaeological importancein the field of products for enterprises, each transaction bearing credit risk is subject to environmental assessment. Credit decisions are taken in accordance with the system of credit competencies in force at the Bank (competence levels adjusted to the level of risk related to the customer and the transaction). In order to regularly assess the assumed credit risk and to mitigate potential losses on the existing loan exposures, during the lending term the Bank monitors the customer's condition by identifying early warning signals and periodic individual reviews of loan exposures. The Bank pursues a policy of dividing the functions related to customer acquisition and sale of credit products from the functions related to the assessment of the credit risk, approving credit decisions, or monitoring of credit exposures. Credit risk monitoring and reporting Regular protection of the quality of the loan portfolio is ensured by: • ongoing monitoring of timely debt servicing, • periodic reviews, in particular of the customers’ financial and economic condition and the value of the accepted collateral. The monitoring of retail customers covers the following areas: • assessment of compliance with the terms of the contract, • assessment of the value of collateral, in particular in relation to the current amount of credit exposure, • assessment of the credibility and assessment of the economic and financial situation of selected customer groups. Monitoring of corporate customers covers in particular: • recognition of symptoms of deterioration of the customer's situation (EWS), • assessment of the client's economic and financial situation,including: • identification of evidence of permanent impairment of exposures and default, • identification of reasons for a significant increase in credit risk (watch list), • assessment of the client's formal and legal situation, • assessment of compliance with the terms of the loan agreement, • assessment of the value of collateral. All credit exposures in the corporate customer segment are additionally subject to portfolio monitoring as follows: • assessment on the basis of a dedicated model of behavioural assessment and • the identification process of early warning signals.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 1 5 All loan exposures of retail and corporate customers are subject to monitoring and ongoing classification to the appropriate process paths. In order to improve the monitoring and control of the operational risk, adequate solutions have been implemented in the Bank's credit systems. Systemic tools have been consolidated to ensure the effective use of the monitoring procedures. Monitoring of exposures classified as a normal and impaired is applied regularly – such exposures could intensify activities at pre -enforcement or collection proceedings. Accounts are subject to the assessment for a possibility to restructure the debt in order to mitigate the Bank's losses due to loan obligations not repaid on time. The monitoring process ends with recommendations concerning the strategy of further co -operation with the customer. Monthly and quarterly reports on the credit risk are prepared at Alior Bank. Credit risk reporting covers periodic information on exposures of the loan portfolio risk. Credit risk management tools The basic tool supporting credit decisions are the acceptance models of risk parameters. They are based on a wide range of information obtained as part of the loan process or processed by the Bank based on internal data. As part of the risk acceptance process, the bank uses PD parameter models, which determine the probability of default by the debtor, and LGD parameter models, which define the percentage of exposure that will be lost in the event of the obligor's default. Using of risk parameter models allow for: • assessment of compliance of the risk level of a given client / credit exposure with the adopted risk appetite, • unification of the criteria underlying credit decisions ensuring impartiality and objectivity , • shortened time of credit decisions and guarantee of more effective assessment of loan applications (increased productivity and reduced handling costs), • monitoring and projection of the loan portfolio quality, • easier assessment of the credit policy and faster modifications to decision processes serving to assess loan applications of corporate and retail customers. The Bank regularly monitors the correct functioning of risk parametr models. The objective of the review is to verify if the applied models appropriately differentiate risks and the estimated risk parameters appropriately reflect the relevant aspects of the client profile. The Bank aims to systematically increase the sophistication of the applied acceptance models by expanding the technological infrastructure for the processes of building and applying models, taking into account a wider range of information and the use of new algorithms. The risk parametr models applied now have been developed internally by the Bank. They are covered by a formal model risk management process, one of the elements of which is independent validation aimed at confirming the compliance of the model quality with the level of the model risk appetite. The models used in the approval processes comply with the acceptability criteria adopted by the Bank, including, inter alia, the level of accuracy of forecasts based on them. The knowledge of potential hazards related to exposure concentration at the Bank supports correct asset and liability management and development of a safe structure of the loan portfolio. In order to prevent adverse events resulting from excessive concentration, the Bank mitigates the concentration risk by setting limits and applying concentration standards resulting from external regulations and internal concentration standards.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 1 6 The Bank has launched: • identification rules of areas at the concentration risk related to lending activities, • a process of limit setting and updating, • a process of limit management with a mode of procedure, if any limit level is exceeded , • a process to monitor the concentration risk, including reporting, • control over the concentration risk management process. In the process of setting and updating the concentration risk, the Bank takes into account: • information on the credit risk level of the limited portfolio segments and their impact on compliance with the assumptions underlying the risk appetite with respect to the quality of the loan portfolio and the capital position of the Bank, • sensitivity of the limited portfolio segments to changes in the macroeconomic environment, reviewed regularly in the stress tests held, • reliable economic and market information concerning each concentration of exposures, in particular macroeconomic, sectoral ratios, information on economic trends, subject to projected interest rates, FX rates, analysis of political risk, sovereign and financial institutions ratings , • reliable information on the economic condition of entities, industries, sectors, general economic information, including the economic and political situation of countries, as well as other information required to assess the concentration risk inherent in the Bank, • interactions between various risk types – credit, market, liquidity, and operational risks, • value of exposures for which ESG risk has been identified. Application of risk mitigation techniques – collateral The Bank establishes collateral to the credit risk to which the Bank is exposed and flexible vis -a-vis customers’ potential. No collateral releases the Bank from its obligation to verify the customer's creditworthiness. Loan collateral is to secure that the Bank will have the loan repaid along with interest and expenses due should the borrower fail to repay on the contractual dates and any restructuring activities fail to generate the anticipated effects. In particular, the Bank accepts the following collateral: • guarantees, re-guarantees, and sureties, • blocked items, • registered pledge, • transfer of title, • assignment of receivables, • assignment of loan insurance, • bill of exchange, • mortgages, • powers of attorney to the bank account, • security deposits. Collateral is verified in the credit process for its effectiveness to secure the Bank, its market value is measured as its realisable value in a potential enforcement process. The dominant collateral for the Bank's credit exposures are mortgages on commercial and residential real estate and BGK guarantees. Both these collaterals as at 31.12.2024 jointly account for over 8 5% of the value of all collateral for credit exposures (as at 31.12.2023 – 82%).
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 1 7 As at 31 December 2024, the Bank had collateral for credit exposures with an estimated recoverable amount of PLN 27.5 billion. As at 31 December 2023, the Bank had collateral for credit exposures with an estimated recoverable amount of PLN 25.2 billion. The amount of the recoverable value of collateral estimated by the Bank is limited to the amount of the exposure. The estimated financial effect of the adopted collateral for credit exposures (understood as the impact on the increase in allowances for expected credit losses in the no-collateral scenario) as at 31 December 2024 was PLN 1.6 billion and concerned the regular portfolio and the portfolio with identified impairment indicators respectively; PLN 0.3 billion and PLN 1.3 billion. The collateral held concerned individual groups of assets in the following values: 31.12.2024 Retail customer segment Corporate customer segment Total Stage 1 11 823 557 10 817 463 22 641 020 Stage 2 709 146 2 552 378 3 261 524 Stage 3 individual method 0 689 508 689 508 Stage 3 group method 225 643 727 814 953 457 Total 12 758 346 14 787 163 27 545 509 31.12.2023 Retail customer segment Corporate customer segment Total Stage 1 9 645 880 10 740 804 20 386 684 Stage 2 551 940 2 455 388 3 007 328 Stage 3 individual method 0 903 016 903 016 Stage 3 group method 249 851 655 703 905 554 Total 10 447 671 14 754 911 25 202 582 The distribution of LTV in particular segments of the Bank's customers for the individual quarters of 202 4 and 2023 is presented below. Customer’s segment 1 Q 2024 2 Q 2024 3 Q 2024 4 Q 2024 MICRO 29% 28% 33% 31% SMALL 36% 44% 47% 48% MID 48% 48% 48% 48% LARGE 46% 47% 50% 50% KB 45% 46% 49% 49% KI HIP 68% 68% 68% 68% Customer’s segment 1 Q 2023 2 Q 2023 3 Q 2023 4 Q 2023 MICRO 31% 31% 31% 30% SMALL 40% 40% 37% 36% MID 49% 48% 48% 49% LARGE 53% 51% 51% 46% KB 49% 48% 48% 46% KI HIP 65% 65% 66% 65%
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 1 8 43.2 Financial data Maximum credit risk exposure Items in the statement of financial position 31.12.2024 31.12.2023 Cash equivalent in other banks 1 676 219 2 067 710 Investment securities 23 586 506 18 803 661 measured at fair value through other comprehensive income 21 201 567 15 469 101 measured at fair value through profit or loss 227 003 408 882 measured at amortized cost 2 157 936 2 925 678 Derivative hedging instruments 274 711 336 122 Amounts due from banks 1 821 581 4 615 420 Loans and advances to customers 62 617 092 60 822 737 Retail segment 39 806 429 37 995 750 Consumer loans 19 444 488 19 627 097 Mortgage loans 20 361 941 18 368 653 Corporate segment 22 810 663 22 826 987 Assets pledged as collateral 18 029 46 894 Other financial assets 623 503 603 188 Granted off-balance liabilities 13 081 987 12 906 604 Total 103 699 628 100 202 336 The value that best represents the maximum credit risk exposure of the balance sheet items presented in the table above is their carrying amount Financial assets Internal rating classes The retail customer segment is covered by a coherent scoring system. The corporate customer segment is covered by a consistent rating system. Uniform rating scales have been introduced for both systems. The scale of PD models of retail segment clients consists of 20 classes. The scale of PD models of corporate segment clients consists of 25 classes. The distribution of assets according to the above models on the aggregated PD scale is presented below . 31.12.2024 31.12.2023 Stage 1 Stage 2 Total Stage 1 Stage 2 Total Retail segment Consumer loans < 0.18% 1 674 207 42 599 1 716 806 1 625 141 29 243 1 654 384 0.18% - 0.28% 1 032 556 21 509 1 054 065 869 240 22 844 892 084 0.28% - 0.44% 1 078 479 28 922 1 107 401 1 299 933 22 808 1 322 741 0.44% - 0.85% 2 277 449 75 666 2 353 115 1 717 869 43 332 1 761 201 0.85% - 1.33% 2 818 097 83 984 2 902 081 1 766 432 37 369 1 803 801 1.33% - 2.06% 2 655 947 93 008 2 748 955 3 392 304 115 083 3 507 387 2.06% - 3.94% 3 152 235 178 120 3 330 355 3 135 733 133 066 3 268 799 3.94% - 9.10% 1 970 716 273 665 2 244 381 2 898 298 244 781 3 143 079 > 9.1% 1 253 404 858 523 2 111 927 1 137 700 1 199 468 2 337 168 No scoring 30 004 7 442 37 446 39 135 6 691 45 826 Gross carrying amount 17 943 094 1 663 438 19 606 532 17 881 785 1 854 685 19 736 470 Mortgage loans < 0.18% 15 514 650 276 088 15 790 738 6 124 349 162 972 6 287 321 0.18% - 0.28% 1 252 815 60 683 1 313 498 5 617 571 186 241 5 803 812 0.28% - 0.44% 83 210 382 83 592 1 461 059 41 728 1 502 787
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 1 9 31.12.2024 31.12.2023 Stage 1 Stage 2 Total Stage 1 Stage 2 Total 0.44% - 0.85% 535 927 48 534 584 461 2 088 289 90 627 2 178 916 0.85% - 1.33% 489 364 50 638 540 002 83 325 0 83 325 1.33% - 2.06% 220 915 18 289 239 204 426 499 32 119 458 618 2.06% - 3.94% 471 859 79 084 550 943 486 133 47 235 533 368 3.94% - 9.10% 594 310 311 600 905 910 274 393 54 437 328 830 > 9.1% 129 603 139 260 268 863 776 375 285 699 1 062 074 No scoring 592 1 481 2 073 2 915 0 2 915 Gross carrying amount 19 293 245 986 039 20 279 284 17 340 908 901 058 18 241 966 31.12.2024 31.12.2023 Stage 1 Stage 2 Total Stage 1 Stage 2 Total Corporate segment < 0.28% 569 660 1 569 661 687 424 16 929 704 353 0.28% - 0.44% 355 894 29 860 385 754 371 302 5 384 376 686 0.44% - 0.85% 6 819 551 40 937 6 860 488 6 606 525 125 652 6 732 177 0.85% - 1.33% 1 559 153 201 121 1 760 274 2 083 792 196 740 2 280 532 1.33% - 2.06% 1 935 451 490 163 2 425 614 1 181 771 389 198 1 570 969 2.06% - 3.94% 2 008 772 590 350 2 599 122 2 289 745 691 788 2 981 533 3.94% - 9.1% 1 925 024 1 659 965 3 584 989 2 137 468 1 457 114 3 594 582 > 9.1% 1 220 922 1 453 449 2 674 371 725 785 1 460 554 2 186 339 No rating 711 346 2 448 713 794 1 066 498 1 815 1 068 313 Gross carrying amount 17 105 773 4 468 294 21 574 067 17 150 310 4 345 174 21 495 484 The maximum risk exposure in the scope of derivative instruments is presented in Note 21.4. External rating classes Portfel/Rating AAA AA- do AA+ A- do A+ BBB- do BBB+ BB- do BB+ B- do B+ no ratingu 31.12.2024 Cash and cash equivalents 0 88 972 1 581 704 2 058 0 0 438 320 2 111 054 Amounts due from banks 0 478 072 1 343 460 49 0 0 0 1 821 581 Financial assets measured at fair value through other comprehensive income, of which: 197 321 3 700 384 17 166 301 0 0 0 0 21 064 006 Debt securities 197 321 3 700 384 17 166 301 0 0 0 0 21 064 006 issued by the Central Bank 0 0 3 398 372 0 0 0 0 3 398 372 issued by the State Treasury 0 3 700 384 13 146 448 0 0 0 0 16 846 832 issued by other banks 197 321 0 621 481 0 0 0 0 818 802 Financial assets measured at amortised cost 0 481 903 1 675 972 0 0 0 61 2 157 936 Assets pledged as collateral 0 0 18 029 0 0 0 0 18 029 Financial assets measured at fair value through profit and loss account, of which: 0 0 1 978 0 0 0 4 1 982 Debt securities 0 0 1 978 0 0 0 4 1 982 issued by the State Treasury 0 0 1 978 0 0 0 0 1 978
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 2 0 Portfel/Rating AAA AA- do AA+ A- do A+ BBB- do BBB+ BB- do BB+ B- do B+ no ratingu 31.12.2024 issued by financial entities 0 0 0 0 0 0 4 4 Derivative instruments 0 15 063 437 511 7 506 0 0 27 501 487 581 Total 197 321 4 764 394 22 224 955 9 613 0 0 465 886 27 662 169 AAA AA- do AA+ A- do A+ BBB- do BBB+ BB- do BB+ B- do B+ bez ratingu 31.12.2023 Cash and cash equivalents 0 356 263 1 438 068 180 409 0 534 546 281 2 521 555 Amounts due from banks 0 275 4 560 101 55 044 0 0 0 4 615 420 Financial assets measured at fair value through other comprehensive income, of which: 798 932 3 449 958 11 103 570 0 0 0 0 15 352 460 Debt securities 798 932 3 449 958 11 103 570 0 0 0 0 15 352 460 issued by the Central Bank 0 0 950 000 0 0 0 0 950 000 issued by the State Treasury 798 932 3 449 958 9 569 859 0 0 0 0 13 818 749 issued by other banks 0 0 583 711 0 0 0 0 583 711 Financial assets measured at amortised cost 0 0 2 925 616 0 0 0 62 2 925 678 Assets hedging liabilities 0 0 46 894 0 0 0 0 46 894 Financial assets measured at fair value through profit and loss account, of which: 0 0 53 398 0 0 0 4 53 402 Debt securities 0 0 53 398 0 0 0 4 53 402 issued by the State Treasury 0 0 53 398 0 0 0 0 53 398 issued by other financial entities 0 0 0 0 0 0 4 4 Derivative instruments 0 0 617 050 7 808 0 0 38 480 663 338 Total 798 932 3 806 496 20 744 697 243 261 0 534 584 827 26 178 747 Loans and advances to customers by overdue periods 31.12.2024 no overdue up to 1 month from 1 to 3 months from 3 months to 1 year from 1 to 5 years more than 5 years Total Stage 1 Retail segment 36 397 009 769 460 65 608 4 262 0 0 37 236 339 Consumer loans 17 455 410 476 610 11 074 0 0 0 17 943 094 Mortgage loans 18 941 599 292 850 54 534 4 262 0 0 19 293 245 Corporate segment 16 907 268 196 128 2 377 0 0 0 17 105 773 Stage 2 Retail segment 1 898 957 503 095 218 981 23 425 3 256 1 763 2 649 477 Consumer loans 1 162 565 359 568 128 238 8 048 3 256 1 763 1 663 438 Mortgage loans 736 392 143 527 90 743 15 377 0 0 986 039 Corporate segment 4 170 053 235 734 57 279 2 487 1 759 982 4 468 294 Stage 3
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 2 1 31.12.2024 no overdue up to 1 month from 1 to 3 months from 3 months to 1 year from 1 to 5 years more than 5 years Total Retail segment 142 904 102 880 172 968 333 627 275 603 147 691 1 175 673 Consumer loans 110 160 86 389 132 889 275 873 211 951 102 820 920 082 Mortgage loans 32 744 16 491 40 079 57 754 63 652 44 871 255 591 Corporate segment 1 080 937 165 536 129 812 496 316 774 435 132 669 2 779 705 POCI Retail segment 6 450 3 297 1 658 1 130 6 360 3 503 22 398 Consumer loans 5 950 3 104 1 389 834 4 363 3 069 18 709 Mortgage loans 500 193 269 296 1 997 434 3 689 Corporate segment 69 599 14 449 25 564 11 791 98 346 23 130 242 879 Total 60 673 177 1 990 579 674 247 873 038 1 159 759 309 738 65 680 538 31.12.2023 no overdue up to 1 month from 1 to 3 months from 3 months to 1 year from 1 to 5 years more than 5 years Total Stage 1 Retail segment 34 285 538 817 289 115 337 4 529 0 0 35 222 693 Consumer loans 17 334 748 525 861 21 049 127 0 0 17 881 785 Mortgage loans 16 950 790 291 428 94 288 4 402 0 0 17 340 908 Corporate segment 17 071 912 74 333 4 065 0 0 0 17 150 310 Stage 2 Retail segment 1 978 477 483 309 261 041 28 656 3 103 1 157 2 755 743 Consumer loans 1 253 323 409 055 179 224 8 823 3 103 1 157 1 854 685 Mortgage loans 725 154 74 254 81 817 19 833 0 0 901 058 Corporate segment 4 016 545 248 886 75 619 2 433 1 509 182 4 345 174 Stage 3 Retail segment 175 183 111 113 212 838 513 040 496 147 199 642 1 707 963 Consumer loans 144 130 94 994 179 167 441 033 406 017 139 116 1 404 457 Mortgage loans 31 053 16 119 33 671 72 007 90 130 60 526 303 506 Corporate segment 964 777 166 602 234 587 536 895 1 148 165 278 072 3 329 098 POCI Retail segment 5 210 2 198 1 760 4 989 9 106 8 733 31 996 Consumer loans 4 899 1 962 1 631 2 930 6 857 6 943 25 222 Mortgage loans 311 236 129 2 059 2 249 1 790 6 774 Corporate segment 117 379 1 246 4 668 125 332 4 326 29 972 282 923 Total 58 615 021 1 904 976 909 915 1 215 874 1 662 356 517 758 64 825 900 Past due more than 90 days do not result in classification to stage 3 due to the intangible amount of overdue. Loans and advances to customers according to the methods of calculating expected credit losses 31.12.2024 Stage 1 Stage 2 Stage 3 POCI Total individual method collective method Retail segment 37 236 339 2 649 477 31 110 1 144 563 22 398 41 083 887 Consumer loans 17 943 094 1 663 438 31 110 888 972 18 709 20 545 323 Mortgage loans 19 293 245 986 039 0 255 591 3 689 20 538 564 Corporate segment 17 105 773 4 468 294 1 269 523 1 510 182 242 879 24 596 651 Total 54 342 112 7 117 771 1 300 633 2 654 745 265 277 65 680 538
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 2 2 Loans and advances to customers according to the methods of calculating expected credit losses 31.12.2023 Stage 1 Stage 2 Stage 3 POCI Total individual method collective method Retail segment 35 222 693 2 755 743 31 110 1 676 853 31 996 39 718 395 Consumer loans 17 881 785 1 854 685 31 110 1 373 347 25 222 21 166 149 Mortgage loans 17 340 908 901 058 0 303 506 6 774 18 552 246 Corporate segment 17 150 310 4 345 174 1 766 328 1 562 770 282 923 25 107 505 Total 52 373 003 7 100 917 1 797 438 3 239 623 314 919 64 825 900 Loans subject to forbearance The Bank treats as forbearance, financing conditions agreed with the client forced by its difficult financial situation (restructuring introducing easements that would not have been accepted otherwise). The objective of forbearance efforts is to restore the debtor’s or issuer's potential to meet their obligations vis -a-vis the Bank and to maximise the effectiveness of irregular loan management – obtaining maximum recoveries, while minimising the related costs. In the restructuring process of retail customers, the Bank applies the following tools (which can be combined): • extension of the lending period. Extended lending periods result in reduced monthly principal and interest instalments and it is possible up to 144 months as a standard (for unsecured products), irrespective of the original lending period. When the lending period is extended, certain restrictions are taken into account as specified in the product features, e.g. the borrower's age , • granting a grace period in repayment (of an instalment in full or in part). During the grace period in repayment of the principal and interest instalments, the borrower is not obliged to make any payments under the agreement. The loan repayment period may be extended by the term of a grace period (this is not identical to the extension of the lending period). A grace period of a full instalment may be applied by up to 6 months as a standard and a grace period of the principal part of instalment – up to 12 months as a standard, • replacement of the limit in the LOR account/unauthorized overdraft in the ROR/KK account into a loan repayable in installments; parameters of the product launched as a result of using a given tool in accordance with the Product Metric: cash loan, • agreement by rescheduling matured exposures (after maturity or termination). It consists in transferring debt from one exposure to a non -renewable account with possible schedule variants: settling the entire debt. In specific instances, other tools may be used. In the restructuring process of corporate customers, no restrictions have been made as to the applied forbearance practices. D ue to the specific nature of the customers, the most frequently applied tools include: • agreement by modifying the repayment schedule of the overdue exposures (after the repayment date or termination). This consists in transfer of the debt from one or more exposures to a non - revolving account with potential repayment schedules: settling the entire debt over time or settling a part of the debt over time with the remaining part repayable at the end of period , • an annex reducing the limit in revolving loans. This consists in a systematic reduction of the credit limit (most often on a monthly basis) by an amount specified in the annex, • an annex modifying the repayment period/instalment amount or grace period for the principal. The Bank considers that the borrower's financial situation deteriorated, resulting in the classification of the granted improvement to forbearance, when:
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 2 3 • within three months before the date of granting the facility, the overdue period on the restructured client's account exceeded 30 days or • a significant deterioration in credit risk has been recognized for the restructured account since initial recognition (classification to Stage 2) or • if the customer was on a watch list in the three months prior to granting the facility. Forbearance practices resulting in a loss (understood as lowering the NPV of an asset below the set thresholds), as well as introducing a balloon payment or a significant deferral of capital payment, result in reclassification to the portfolio with evidence of impairment. Exposure classified as forbearance, against which the trigger of impairment has been identified (default) maintains such a premise for at least 12 months. After this period, the exposure may come out of the default status if there are no significant delays or any other indications of impairment. Such exposure remains in the forbearance status for 24 months yet. In this period, the identification of impairment triggers is carried out according to according to more strict criteria. Loans to customers subject to forbearance 31.12.2024 31.12.2023 Retail segment 657 780 943 107 without identified impairment 552 214 791 648 with identified impairment 299 346 423 763 Expected credit losses -193 780 -272 304 assessed as a portfolio -193 780 -272 304 Corporate segment 749 419 884 538 without identified impairment 222 665 308 031 with identified impairment 997 607 1 148 244 Expected credit losses -470 853 -571 737 assessed individually -372 652 -453 237 assessed as a portfolio -98 201 -118 500 POCI 150 748 196 126 Total 1 557 947 2 023 771 Loans to customers subject to forbearance 31.12.2024 31.12.2023 with identified impairment 681 160 803 958 of which: collateral value 499 414 581 260 without identified impairment 726 039 1 023 687 of which: collateral value 488 658 571 001 not overdue 635 996 903 083 overdue 90 043 120 604 POCI 150 748 196 126 Total 1 557 947 2 023 771 Loans granted to customers subject to forbearance by geographical region 31.12.2024 31.12.2023 Dolnośląski 152 908 169 566 Kujawsko-pomorski 44 218 59 555 Lubelski 55 182 65 831 Lubuski 42 607 49 205 Łódzki 97 656 128 509
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 2 4 Loans granted to customers subject to forbearance by geographical region 31.12.2024 31.12.2023 Małopolski 85 543 118 026 Mazowiecki 425 687 655 793 Opolski 24 922 26 413 Podkarpacki 81 089 85 566 Podlaski 18 091 25 760 Pomorski 138 369 172 215 Śląski 120 738 145 745 Świętokrzyski 16 246 18 844 Warmińsko-mazurski 28 419 36 440 Wielkopolski 181 107 216 745 Zachodniopomorski 45 165 49 558 Total 1 557 947 2 023 771 Change of carrying value of loans to customers that are subject to forbearance 31.12.2024 31.12.2023 Value at the beginning of period 2 023 771 2 143 272 Impairment allowances 179 408 113 631 Gross carrying value of loans and borrowings derecognised in the period -962 307 -562 973 Gross carrying value of loans and borrowings newly recognised in the period 436 082 628 042 Other changes -119 007 -298 201 Value at the end of period 1 557 947 2 023 771 In 2024 and 2023 the amount of interest income on loans were subject to forbearance amounted to PLN 158 938 thousand and PLN 208 694 thousand, respectively. Concentration The table below presents the exposures (capital) towards the bank's ten largest customers. Ten largest borrowers Currency 31.12.2024 Currency 31.12.2023 Customer 1 PLN, EUR 6 005 565 EUR, PLN 5 087 571 Customer 2 PLN 224 091 PLN 250 000 Customer 3 PLN 216 887 PLN 226 585 Customer 4 PLN 202 273 PLN 224 091 Customer 5 EUR, USD 187 156 PLN 198 980 Customer 6 PLN, EUR 178 623 PLN 188 636 Customer 7 PLN 165 000 EUR 170 007 Customer 8 EUR 163 068 EUR, USD 166 918 Customer 9 EUR 149 555 EUR 152 180 Customer 10 PLN 128 175 EUR, PLN 129 458 The table below presents the exposures to the corporate customers of Alior Bank split by sector. Section by PKD 2007 Section name 31.12.2024 balance sheet commitment off-balance sheet commitment Section A Agriculture, forestry, hunting, and fishery 146 167 199 544 Section B Mining and quarrying 3 358 248 Section C Manufacturing 3 332 917 2 799 321 Section D Electricity, gas, steam and air conditioning supply 587 737 766 080
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 2 5 Section by PKD 2007 Section name 31.12.2024 balance sheet commitment off-balance sheet commitment Section E Water supply, sewage and waste management, and remediation 56 285 303 212 Section F Construction 862 008 3 828 033 Section G Wholesale and retail trade; repair of motor vehicles and motorcycles 4 465 538 2 011 194 Section H Transportation and storage 1 506 311 480 945 Section I Accommodation and food service activities 1 041 204 152 978 Section J Information and communication 825 659 255 173 Section K Financial and insurance activities 6 097 960 1 544 890 Section L Real estate activities 2 837 418 391 193 Section M Professional, scientific and technical activities 508 509 257 027 Section N Administrative and support service activities 695 756 473 809 Section O Public administration and defence; compulsory social security 389 19 601 Section P Education 85 112 32 774 Section Q Human health and social work activities 432 222 50 543 Section R Arts, entertainment, and recreation 140 098 83 269 Section S Other service activities 71 471 10 612 Section T Households employing workers; households producing goods and providing services for their own needs 0 0 Section U Activities of extraterritorial organisations and bodies 1 0 Total 23 696 120 13 660 446 Section by PKD 2007 Section name 31.12.2023 balance sheet commitment off-balance sheet commitment Section A Agriculture, forestry, hunting, and fishery 192 909 199 785 Section B Mining and quarrying 28 671 132 540 Section C Manufacturing 3 071 454 3 269 799 Section D Electricity, gas, steam and air conditioning supply 799 245 503 460 Section E Water supply, sewage and waste management, and remediation 57 169 25 484 Section F Construction 958 885 3 235 925 Section G Wholesale and retail trade; repair of motor vehicles and motorcycles 4 846 520 2 252 614 Section H Transportation and storage 1 783 266 591 377 Section I Accommodation and food service activities 1 102 601 108 778 Section J Information and communication 866 718 308 250 Section K Financial and insurance activities 5 233 407 3 002 645 Section L Real estate activities 3 050 008 465 521 Section M Professional, scientific and technical activities 496 232 204 094 Section N Administrative and support service activities 704 843 355 048 Section O Public administration and defence; compulsory social security 477 21 316 Section P Education 82 853 8 830 Section Q Human health and social work activities 439 649 73 334 Section R Arts, entertainment, and recreation 153 683 18 193 Section S Other service activities 87 042 11 892 Section T Households employing workers; households producing goods and providing services for their own needs 0 0 Section U Activities of extraterritorial organisations and bodies 27 2 Total 23 955 659 14 788 887
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 2 6 The above exposures to corporate customers include: • loan amount (on - and off -balance sheet exposure, net of interest and charges and without any expected credit losses) reduced by provided security deposits, • unauthorised current account overdraft, • data for 2023 include treasury limits reduced by deposits paid, taking into account debt securities on the Bank's books issued by an entity from a given section; in the data for 2024, the inclusion of treasury limits within concentration limits was removed. As at the end of 2024, the amount of exposures falling within internal concentration limits amounted to PLN 80 142 294 thousand, of which PLN 37 356 566 thousand were exposures to corporate customers and PLN 42 785 728 thousand to retail customers. As at the end of 2023, the amount of exposures falling within internal concentration limits amounted to PLN 80 567 554 thousand, of which PLN 38 744 546 thousand were exposures to corporate customers and PLN 41 823 008 thousand to retail customers. Country 31.12.2024 balance sheet commitment off-balance sheet commitment Poland 60 690 248 18 710 939 United Kingdom 224 848 28 018 Cyprus 75 334 24 621 Liberia 76 692 0 Germany 57 065 9 676 Luxembourg 50 798 6 798 Ireland 32 865 228 Romania 1 27 325 Netherlands 21 633 3 317 France 5 104 15 786 Other countries 65 267 15 731 Total 61 299 855 18 842 439 Country 31.12.2023 balance sheet commitment off-balance sheet commitment Poland 63 093 111 15 099 298 Germany 61 693 607 528 United Kingdom 244 496 202 656 France 6 467 222 761 Romania 150 454 77 488 The Netherlands 19 949 87 807 Austria 8 962 96 962 Ireland 33 485 71 286 Liberia 100 342 0 Italy 2 578 77 764 Other countries 188 337 114 130 Total 63 909 874 16 657 680
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 2 7 Financial assets subject to modification The table below presents information on financial assets that were subject to modification that did not result in derecognition from the balance sheet and for which the allowance for expected credit losses was calculated as a credit loss over the life of the exposure. 31.12.2024 31.12.2023 Financial assets subject to modification in a given period Carrying amount at amortized cost before modification 795 816 1 064 626 Profit / loss recognized on modification -67 552 -19 658 Financial assets that were subject to modification from the moment of initial recognition Gross carrying amount of financial assets for which the Bank changed the method of calculating the impairment loss in the period - from the life-time horizon to the 12 months 154 604 85 788 44 Interest rate risk 44.1 Description of the risk Definition of the interest rate risk The interest rate risk (including the interest rate risk in the banking book) is defined as the risk of adverse impact of market interest rates on the current results or the net present value of the Bank's equity. The Bank attaches special importance to specific interest rate risk aspects related to the banking book, such as: • mismatch risk, • base risk, or the impact of non -parallel change of various reference indices with a similar repricing time on the Bank's results, • risk of customers’ options, • credit spread risk (CSRBB). Additionally, with respect to the interest rate risk, the Bank pays special attention to modelling repayment of loans with a fixed interest rate and accounts with unspecified maturities and interest rates set by the Bank (e.g. for current deposits), as well as the impact of non -interest items in the risk (e.g. equity, fixed assets). Objective of interest rate risk management The objective of interest rate risk management is to mitigate potential losses due to changes of market interest rates to the acceptable level with an appropriate structure of on- and off-balance sheet items. In order to manage the interest rate risk, the Bank differentiates between trading activity covering securities and derivative instruments, concluded for commercial purposes, and banking activity covering other securities, own issues, loans, deposits, and derivative transactions uses to hedge the risk of the banking book risk. Measurement and assessment of the interest rate risk Interest rate of the banking portfolio is measured and assessed by limiting the volatility of net interest income (NII) and by limiting changes to the economic value of the Bank's equity (EVE). Apart from NII and EVE, in its interest rate measurements the Bank applies BPV and Expected Shortfall and stress tests. BPV identifies the estimated change to the measurement of a transaction/position as a result of a shift of the profitability curve at the relevant point by 1bp. The BPV value is measured on a daily basis at each point of the curve with reference to each currency.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 2 8 Expected Shortfall identifies the potential loss on the existing positions, related to changes of interest rates, while maintaining the assumed confidence level position maintenance period. In order to calculate Expected Shortfall, the Bank applied a 10-day horizon and a confidence level of 97.5%. The value is determined daily for each area responsible for risk assumption and management, individually and jointly. Monitoring and reporting of the interest rate risk Regular reports are made at Alior Bank of the following: • interest rate risk measurement level, • utilisation degree of the internal capital allocated to the interest rate risk, • utilisation degree of internal limits and warning threshold for the interest rate risk, • results of stress tests. Reports concerning the interest rate risk are made on a daily, weekly, monthly, and quarterly basis. Tools for interest rate risk management The core of interest rate risk management tools at Alior Bank are as follows: • internal procedures relating to interest rate risk management, • interest rate risk metrics like NII, EVE, Expected Shortfall, BPV, • limits and threshold values for each interest rate risk metric, • stress tests (including scenario analyses covering, among other, the impact of specified changes to interest rates on future net interest income, the economic value of equity, reverse tests and dynamic forecasts of sensitivity to changes in interest rates). 44.2 Assessment of the impact of the IBOR reform on the Bank's situation As at 1 January 2018, a new standard for the provision of benchmarks applies in the European Union, the legal basis of which is Regulation (EU) 2016/1011 of the European Parliament and of the Council on indices used as benchmarks in financial instruments and fi nancial contracts or for measuring the performance of investment funds (hereinafter: BMR regulation, IBOR reform). The main goal of the EU bodies during the work on the IBOR reform was the need to increase consumer protection. In accordance with the IBOR reform, all benchmarks that are the basis for determining interest on loans or the interest rate for various financial instruments must be calculated and applied according to strictly defined rules, so as to avoid suspicion of any fraud. The benchmark according to the IBOR reform, in particular: • is to be based primarily on transaction data, • is to faithfully reflect the underlying market, the measurement of which is the purpose of the indicator, • is to be verifiable by the administrator, • is to be resistant to manipulation, • it is to be transparent for the recipients of benchmarks. The Bank has undertaken and implemented a number of activities to implement IBOR, i.e .: • the contingency plan was amended, which in particular includes a scheme of actions in the event of a significant change or discontinuation of the development of a given benchmark and a list of benchmarks used with their alternatives, • priorities for annexing contracts to replace expired indicators were adopted, • templates of annexes were prepared and introduced for contracts to which the IBOR relates, • the process of annexing the contracts was carried out, • an information and reminding campaign aimed at clients was conducted, • employee training in the field of IBOR was conducted, • the first OIS transactions based on new reference indicators (ESTR, SOFR) were concluded.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 2 9 The Bank monitors the activities of regulators and benchmark administrators, both at the national, European and global level, in terms of benchmarks. The Bank is involved in the work of the National Working Group for WIBOR reform. In connection with the IBOR reform, the Bank is exposed to the following types of risk: Legal events In particular, this applies to the possibility of questioning the applicable provisions in the client's contract with the Bank and the lack of agreement on the application of fallback provisions regarding benchmarks. Fallback clauses define the action plan that the Bank intends to launch in the event of discontinuation of publication or a significant change in the benchmark. The reason for questioning the contractual provisions may be, in particular, the difference between the values of the benchmarks. The Bank manages the risks resulting from the IBOR reform by actively annexing the agreements with the Bank's customers. The d ifference in the levels of reference ratios is mitigated by the bank by applying appropriate adjustment adjustments, eliminating the economic impact of changing the ratio on the contract with the customer. Interest rate risk It relates to the mismatch of benchmarks between assets, liabilities and derivatives. The Bank manages these risks using the same solutions in individual products, leading to the greatest possible methodological convergence between them. Additionally, the interest rate risk may materialize, especially with regard to the LIBOR EUR rate, in the form of unsuccessful annexes to contracts with customers. As a result, the rate in the customer contract from the last day of LIBOR EUR validity, from the last revaluation date or at zero is maintained. The Bank reduces this risk by actively encouraging clients to add amendments to their contracts and as part of the ongoing management of exposure to interest rate risk in the banking book. As at 31 December 202 4 the IBOR reform in relation to the currencies to which the Bank has exposures was largely completed; in the sense that, apart from the continuation of the annexation processes, no additional activities are envisaged. It should also be taken into account that for objective reasons (each client would have to agree to the annex), it will never be possible to annex every contract covered by this process. The table below presents the status of transition to new benchmarks according to the IBOR reform. Currency Benchmark before reform Benchmark status at 01.01.2025 Benchmark used by the Bank after reform 31.12.2024 31.12.2023 PLN WIBOR Compatible with BMR In accordance with the resolution of the NGR (more information on the website https://www.knf.gov.pl/dla_rynku/ Wskazniki_referencyjne/prace_grupy) Portfolio annexation in progress (in terms of fallback clauses) Portfolio annexation in progress (in terms of fallback clauses) EUR LIBOR EUR Liquidated EURIBOR Portfolio annexation - index change from LIBOR EUR to EURIBOR - isolated cases Portfolio annexation in progress - index change from LIBOR EUR to EURIBOR (currently single cases) EUR EURIBOR Compatible with BMR EURIBOR Portfolio was not annexed Portfolio was not annexed USD LIBOR USD Liquidated 09.2024 SOFR Portfolio annexation - index change from LIBOR USD to SOFR - currently isolated cases The process of annexing the LIBOR USD portfolio started in June 2023. The annexation concerns the change of the index from LIBOR USD to SOFR. CHF LIBOR CHF Liquidated SARON Portfolio annexation completed. The index Portfolio annexing completed
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 3 0 Currency Benchmark before reform Benchmark status at 01.01.2025 Benchmark used by the Bank after reform 31.12.2024 31.12.2023 change was made in accordance with Commission Implementing Regulation (EU) 2021/1847 of 14 October 2021 GBP LIBOR GBP Liquidated 03.2024 SONIA Portfolio annexation – index change from LIBOR GBP to SONIA – currently isolated cases Portfolio annexation in progress - index change from LIBOR GBP to SONIA (currently single cases) All new contracts concluded after 31 December 2021 contain appropriate fallback clauses, mitigating the risk related to the discontinuation of publication of benchmarks. Benchmarks compliant with the BMR are benchmarks that have been approved by the relevant entity defined under the BMR (ESMA register - European Securities and Markets Authority - https://www.esma.europa.eu/policy-rules/benchmarks). As at 31 December 2021, the publication of LIBOR EUR, LIBOR CHF and LIBOR GBP (for most tenors) was suspended. GBP LIBOR was published as a synthetic index until 31.03.2024. In terms of the synthetic LIBOR USD indicator, the indicator was published until the end of September 2024. As regards the substitute for CHF LIBOR, the Bank relies on the Implementing Regulation of the European Commission of 14 October 2021, according to which the replacement for CHF LIBOR are appropriately constructed indicators based on the SARON index. WIBOR (https://gpwbenchmark.pl/dokumentacja) and EURIBOR (https://www.emmi - benchmarks.eu/benchmarks/euribor/) are compliant with the BMR Regulation, the Bank will annex contracts based on the WIBOR index due to the need to include fallback clauses in the contracts. The Steering Committee of the National Working Group (KS NGR), established in connection with the reform of benchmarks, held a discussion at its meetings on 21 November 2024 and 6 December 2024 and made a decision to select the proposal for an index with t he technical name “WIRF” - based on unsecured deposits of Credit Institutions and Financial Institutions, as the target interest rate benchmark, which would replace the WIBOR benchmark. The administrator of “WIRF” - within the meaning of the BMR Regulation will be GPW Benchmark SA, entered in the register of the European Securities and Markets Authority (ESMA). Thus, KS NGR verified and modified its previous decision to select WIRON (originally WIRD based on the premises indicated below, as well as those me ntioned in previous NGR announcements. The next step of the NGR KS will be to update the Road Map as part of the current schedule of actions aimed at replacing the WIBOR reference index with the target “WIRF”– index, the final name of which will be selected in the course of further work. The Bank's exposure by individual IBOR reference ratios as at 31 December 2024 Reference indicator Assets (gross carrying amount) Liabilities (gross carrying amount) Off-balance sheet liabilities – granted (nominal value) Derivatives (nominal value) WIBOR 46 513 631 9 574 038 5 611 18 122 188 LIBOR EUR 14 033 0 0 0 LIBOR USD 3 770 0 0 0 LIBOR CHF 24 961 0 0 0 EURIBOR 6 016 342 3 190 1 286 568 865 LIBOR GBP 1 517 0 0 0
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 3 1 Reference indicator Assets (gross carrying amount) Liabilities (gross carrying amount) Off-balance sheet liabilities – granted (nominal value) Derivatives (nominal value) Total 52 574 254 9 577 228 6 897 18 691 054 as at 31 December 2023 Reference indicator Assets (gross arrying amount) Liabilities (gross carrying amount) Off-balance sheet liabilities - granted (nominal value) Derivatives (nominal value) WIBOR 47 673 934 10 566 283 5 032 16 805 827 LIBOR EUR 15 846 0 0 0 LIBOR USD 79 257 0 0 0 LIBOR CHF 26 554 0 0 0 EURIBOR 5 609 694 2 373 2 561 558 978 LIBOR GBP 268 727 0 0 0 Total 53 674 012 10 568 656 7 593 17 364 805 Bank’s exposure of transactions concluded under hedge accounting broken down by reference ratios as at 31 December 2024 Reference indicator Derivatives (nominal value) WIBOR 18 381 000 EURIBOR 669 152 Total 19 050 152 as at 31 December 2023 Reference indicator Derivatives (nominal value) WIBOR 16 623 000 EURIBOR 658 287 Total 17 281 287 44.3 Financial data Sensitivity metrics Bank’s BPV estimations as at 31 December 2024 and 31 December 2023 are presented in the tables below: BPV at the end of 2024 split into tenors Currency Up to 6 months 6 months to 1 year 1-3 years 3-5 years 5-10 years Total PLN 76.3 -446.3 -1 449.60 -2 221.20 2 323.20 -1 717.60 EUR 4.7 12.2 -286.4 83.8 1 012.30 826.60 USD 14.8 -120.6 -403.6 45 449.3 -15.1 CHF -3.4 0.1 0.1 0 0 -3.2 GBP -6.2 0.5 0.1 0 0 -5.6 RON 0 1.5 0 0 0 1.5 Other -3.5 1.7 0 0 0 -1.8 Total 82.7 -550.9 -2 139.4 -2 092.4 3 784.8 -915.2 BPV at the end of 2023 split into tenors
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 3 2 Currency Up to 6 months 6 months to 1 year 1-3 years 3-5 years 5-10 years Total PLN -68.2 -57.7 -97.9 -264.6 -205.1 -693.5 EUR -87.8 -42.4 -10.6 -58.3 -16 -215.1 USD -35.4 12.2 -0.3 -2.4 2.1 -23.8 CHF -2.5 0.2 0.1 0 0 -2.2 GBP -4.4 0.6 0 0 0 -3.8 RON 2.6 2.6 -0.9 -1.6 -0.1 2.6 Other -1.4 0 0 0 0 -1.4 Total -197.1 -84.5 -109.6 -326.9 -219.1 -937.2 BPV statistics 01.01.2024-31.12.2024 01.01.2023-31.12.2023 Book Minimal Medium Maximum Minimal Medium Maximum Banking book -2 760 -1 653 -802 -1 396 -841 -507 Trading book -86 -24 22 -60 -19 23 CALCO* -1 536 802 2 214 -620 298 2 587 Total -3 883 -875 1 337 -1 394 -562 1 407 *The Calco portfolio includes the equivalents of the NII adjustment - model deposits, NII adjustments, hedge accounting, natural hedge. This reflects the division of appetite into linear NII and making NII more realistic. Bank’s ES values in 2024 and 2023 are presented in the table below (97.5% VaR with a horizon of 10 days). 01.01.2024-31.12.2024 01.01.2023-31.12.2023 Minimal Medium Maximum Minimal Medium Maximum Trading book 624 1 997 3 843 1 150 3 055 6 993 Change to the economic value of capital Use of the change of economic value of equity with a parallel shift of interest rate curves by +/- 200bps and with scenarios specified by the EBA for Alior Bank as at the end of December 2024 and 2023 are presented below: Scenario Change to the economic value of equity 31.12.2024 Change to the economic value of equity 31.12.2023 parallel shift of interest rate curves up (EBA) -429 717 38 276 parallel shift of interest rate curves down (EBA) 50 630 -153 897 steepening the interest rate curve (EBA) 229 222 -32 700 flattening of the interest rate curve (EBA) -541 265 -4 954 increase in short-term interest rates (EBA) -618 039 9 915 decrease in short-term interest rates (EBA) 322 167 -112 046 parallel shift of the curves by 200 bp up -331 880 47 531 parallel shift of the curves by 200 bp down 6 890 -157 312 most adverse scenario -618 039 -157 312 most adverse scenario as %Tier 1 -6.58% -1.85% Net interest volatility The volatility of net interest income over a horizon of up to 1 year with a 100 bp change in interest rates (negative scenario) and the result of the SOT NII supervisory test in two scenarios of parallel shift to the end of 2024 and the end of 2023 are presented below:
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 3 3 31.12.2024 31.12.2023 NII - total, adjusted sensitivity of interest income to interest rate changes in the +/- 100 b.p. scenario -106 601 -218 662 SOT NII - as % of Tier1 capital -3.95% -5.59% Revaluation gap The revaluation gap presents a difference between the present value of assets and liabilities exposed to the interest rate risk, subject to reevaluating within the time interval. The revaluation gap in the following currencies: PLN, EUR and USD at the end of 202 4 and 202 3 is presented below. Revaluation gap in PLN 2024 1M 3M 6M 1Y 2Y 5Y >5Y Total Periodic gap 4 042 286 -2 103 420 -2 114 663 3 466 700 6 304 475 9 530 171 -3 883 357 15 242 192 Cumulated gap 4 042 286 1 938 866 -175 797 3 290 902 9 595 377 19 125 549 15 242 192 2023 1M 3M 6M 1Y 2Y 5Y >5Y Total Periodic gap -15 767 936 10 379 422 -1 576 144 1 897 084 4 930 760 10 248 551 1 111 206 11 222 943 Cumulated gap -15 767 936 -5 388 514 -6 964 658 -5 067 574 -136 814 10 111 737 11 222 943 Revaluation gap in USD 2024 1M 3M 6M 1Y 2Y 5Y >5Y Total Periodic gap -2 147 039 -83 134 -373 247 727 023 1 166 517 1 541 581 -883 033 -51 333 Cumulated gap -2 147 039 -2 230 173 -2 603 420 -1 876 398 -709 881 831 700 -51 333 2023 1M 3M 6M 1Y 2Y 5Y >5Y Total Periodic gap -502 927 45 714 275 843 -52 097 -10 829 3 074 15 -241 206 Cumulated gap -502 927 -457 213 -181 370 -233 467 -244 296 -241 221 -241 206 Revaluation gap in EUR 2024 1M 3M 6M 1Y 2Y 5Y >5Y Total Periodic gap -1 424 667 2 150 030 -527 858 -144 674 271 036 795 339 -1 532 718 -413 512 Cumulated gap -1 424 667 725 363 197 505 52 832 323 868 1 119 206 -413 512 2023 1M 3M 6M 1Y 2Y 5Y >5Y Total Periodic gap -981 523 634 606 281 457 169 481 54 427 70 396 240 333 469 178 Cumulated gap -981 523 -346 917 -65 459 104 022 158 449 228 845 469 178
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 3 4 45 Foreign exchange risk (FX risk) 45.1 Description of the risk Definition of the foreign exchange risk The FX risk is defined as a risk of a loss resulting from changing FX rates. Additionally, the Bank identifies the impact of FX rates on its results over a long -time perspective as a result of conversion of future FX - denominated income and expenses at potentially disadvantageous FX rates. The risk related to future results may be managed within the FX model portfolio. The objective of foreign exchange risk management The core objective of FX risk management is to identify those are as at the Bank's business that may be exposed to the risk and to take measures to mitigate potential related losses as much as possible. The Bank's Management Board identifies the FX risk profile which must be compliant with the Bank's applicable financial plan. Foreign exchange risk measurement and assessment The FX risk is measured and assessed by limiting the FX positions opened by the Bank. In order to measure the FX risk, the Bank uses Expected Shortfall and stress tests. Expected Shortfall identifies the potential loss on existing positions, related to changes of FX rates, while maintaining the assumed confidence level and the position maintenance period. The value is determined daily for each area responsible for risk assumption and management, individually and jointly. Foreign exchange risk monitoring and reporting Alior Bank regularly monitors and reports: • FX risk measure levels, • utilisation degree of the internal limits and warning threshold for the FX risk, • results of stress tests. Reports concerning the FX risk are made on a daily, weekly, monthly, and quarterly basis. FX risk limits are set so that the risk remains at a restricted level. The Bank may also execute transactions to hedge future FX cash flows with adequate realisation certainty (e.g. rental costs, FX currency denominated net interest income). The objective is to mitigate volatility of the results in the current financial year. Foreign exchange risk management tools The core FX risk management tools at Alior Bank are as follows: • internal procedures relating to FX risk management, • internal FX risk models and metrics, • limits and warning threshold for the FX risk, • limitations to allowable FX transactions, • stress tests.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 3 5 45.2 Financial data Sensitivity metrics As at the end of December 2024, the maximum loss on the FX portfolio held by the Bank (managed within the trading book), determined on the basis of Expected Shortfall over a time horiz on of 10 days, could be amounted to PLN 122 thousand with the assumed confidence level of 97.5%. 31.12.2024 31.12.2023 Horizon [days] 10 10 ES [TPLN] 122 26 Expected Shortfall statistics in the Bank's trading book in 2024 and 2023 31.12.2024 31.12.2023 Minimum 10 -24 Medium 643 197 Max 1 969 2 974 On date 122 26 An assumed normal distribution of the values of risk factors in the Expected Shortfall model may in practice result in underestimation of losses in stress scenarios (the phenomenon of “the long tail”). As a result, the Bank performs stress tests. In measuring the exposure of the Alior Bank to the risk of changes in foreign exchange rates, the Bank conducts stress tests. The results of stress tests of the Alior Bank examining the impact of changes to FX rates versus PLN by +/- 30% are presented below: 31.12.2024 31.12.2023 FX rates + 30% 27 797 58 063 FX rates -30% -1 971 9 302 Foreign exchange position The total amounts of FX positions in the Alior Bank as at 31.12.2024 and 31.12.2023 are presented in the table below: Balance sheet item Off -balance sheet item Net position Fx position Long Short Long Short Long Short 31.12.2024 14 481 466 -15 463 472 4 615 054 -3 621 229 19 868 -8 049 31.12.2023 16 597 790 -15 935 982 4 545 840 -5 227 202 11 196 -30 751 The volume of FX positions is the core factor (apart from FX rate volatility) determining the FX risk level to which the Bank is exposed. All concluded FX transactions, both on - and off-balance sheet ones, affect the level of FX positions. The Bank's exposure to the FX risk is low (with reference to equity of Alior Bank), the 10-day Expected Shortfall for the currency portfolio of Bank as at 31 December 2024 was about ca 0.0013 and as at 31 December 2023 ca 0.0003% respectively.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 3 6 46 Liquidity risk 46.1 Description of risk Definition of liquidity risk The liquidity risk means a risk of failure by the Bank to meet – subject to comfortable conditions and at adequate prices – its payment obligations resulting from the Bank's on- and off-balance sheet items. As part of the liquidity risk, the financing risk is distinguished, which is the risk of losing the financing sources and the risk of the lack of the required renewed funding or access denial to new sources of financing. Purpose of liquidity risk management The purpose of liquidity risk management is to provide the necessary amount of financial resources necessary to meet current and future (also potential) liabilities, taking into account the specifics of the business and the needs that may arise as a result of changes in market or macroeconomic conditions. Organization of the liquidity risk management process Assets and liabilities at Bank are managed by the dedicated CALCO. A liquidity risk strategy, including the acceptable risk level, the assumed balance sheet structure and the funding plan, is approved by the Bank's Management Board and further validated by the Bank's Supervisory Board. Interbank treasury transactions are concluded by the Treasury Department, transactions are settled and booked in the Operations and Settlements Division and the liquidity risk is monitored and measured in the Financial Risk Management Department. The competences related to liquidity risk management are segregated in a transparent manner up to the Management Board level which ensures complete independence of operation. Liquidity risk management Thus, the policy of liquidity risk management at the Bank consists of maintaining its own liquidity positions so that payment obligations can be met at any time with the available cash on hand, proceeds from transactions with specific maturities or with sales of marketable assets while minimising the costs of liquidity maintenance. The Bank has a liquidity adequacy assessment process (ILAAP) which comprehensively assesses the adequacy of liquidity risk management and its adjustment to the nature, scale and complexity of the Bank. This process accomplishes the following goals: • ensuring its ability to pay all its obligations when they fall due also in an extreme situation, • maintaining at an adequate level a liquidity buffer that means high quality liquid assets ensuring adequate excess liquidity, • determination of the scale of the Bank's exposure to liquidity risk by setting internal liquidity limits, consistent with the appetite and strategy of the Bank, taking into account the results of stress tests • minimising the risk of trespassing on the liquidity limits defined at the Bank, • monitoring the Bank's liquidity condition regarding the occurrence of an emergency situation in order to launch the Liquidity Maintenance Plan and the Recovery Plan, • ensuring compliance of the processes functioning at the Bank with regulatory requirements concerning liquidity risk management. As part of ILAAP Bank: • identifies risks and significant risk factors, • measures and reports liquidity risk, • works with liquidity procedures and policies, including a financing plan for the subsequent years of the Bank's operations,
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 3 7 • manages Liquidity Contingency Plans and Recovery Plan, • maintains a liquidity buffer consisting of high-quality liquid assets, • develops a system of liquidity limits in line with the risk appetite, monitors liquidity limits and early warning indicators identifying negative trends that may have an impact on the increase of liquidity risk, • conducts liquidity risk stress tests, on the basis of which it assesses the extent to which the Bank is prepared to settle liabilities in a stress situation, • includes in the fund transfer rates system adjustments supporting liquidity risk management . Individual elements of ILAAP are integrated with each other and constitute a coherent whole. Each identified type of liquidity risk is measured using a number of analyzes and defined indicators. Specific ratios are subject to a liquidity limit system, which limits the risk taken by the Bank and provides warning signals to identify a threat situation that could lead to emergency plans or Recovery Plans. When determining the level of limits and the required liquidity buffer, the results of stress tests are taken into account. The contingency and Recovery Plan tests are compared with the results of stress tests and are used to ensure that the Bank is able to maintain liquidity both in a normal and an extreme situation. Such relationships between the individual elements of ILAAP allow for effective management of liquidity risk, limiting it and ensuring access to sufficient sources of liquidity, even in an extreme situation. The components of the ILAAP are consistent with the Bank's overall strategy and risk appetite. Through the ILAAP elements, the Bank defines the liquidity risk tolerance, i.e. the level of risk it intends to bear. Risk tolerance is defined as a system of li mits imposed on liquidity risk, which results from the risk appetite included in the assumptions of the overall strategy of the Bank's operations and is consistent with it, and by setting a survival horizon that takes into account e.g. results of liquidity stress tests. The elements of ILAAP are taken into account when constructing the Bank's financial plan in such a way that the assumptions regarding the future structure of the balance sheet take into account the need to ensure a safe liquidity position of the Bank. Identification, measurement and assessment of liquidity risk As part of the identification of liquidity risk, the Bank recognizes risk factors that significantly determine its ability to maintain an adequate level of liquidity and the ability to finance liabilities arising from its operating activities. The measurement of liquidity risk at the Bank is performed taking into account all material items, both on - balance and off-balance sheet (including in particular derivatives). Among the applied liquidity management metrics, the Bank identifies indicators and related limits to the following liquidity types: • intraday liquidity - the ability to perform all monetary obligations on the current day, • current liquidity – ability to fund assets and timely perform obligations during the Bank's normal business or in other foreseeable conditions, without suffering a loss within the next 7 days , • short-term liquidity – ability to comply with all financial liabilities falling due within a period of the next 30 days, • medium-term liquidity – ability to comply with all financial liabilities falling due within a period of 1 to 12 months, • long-term liquidity – ability to comply with all financial liabilities falling due within a period of over 12 months. The Bank uses a number of indicators and analyzes to measure and analyze the liquidity risk, including: • calculation and monitoring of LCR, NSFR supervisory indicators - assessment of the Bank's compliance with quantitative supervisory requirements,
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 3 8 • forecasts for the development of supervisory liquidity measures - ensuring that the Bank will meet quantitative supervisory requirements in the future, • calculation and monitoring of internal liquidity ratios, including measures of intraday, current, short- term, medium and long-term liquidity, basic surplus and total liquidity buffer, • liquidity gap - allows to estimate the size of the mismatch (difference) between on -balance sheet and off-balance sheet assets and liabilities for each maturity / maturity band (period gap), as well as for the sum of assets and liabilities jointly in all maturity / maturity bands (cumulative gap). The bank determines the contractual and adjusted liquidity gap, • stability analysis of stable external funds - determining on the basis of historical data what part of these liabilities is stable and may, with a high probability, constitute a stable source of financing under normal market conditions, • analysis of renewal / breaking of deposits - the purpose is to verify the behavioral stability of customer behavior, which is the basis for determining the deposit and weights of cash flow realities in the Bank, • analysis of stable external funds concentration - indication of the potential risk of excessive dependence of the Bank on financing sources characterized by an insufficient degree of diversification, which could have a negative impact on the stability of external funds, • analysis of the stability of receivables due to off -balance sheet commitments granted - determination of the level of use of guarantee and credit lines by customers, • long-term liquidity analysis - aimed at determining the risk associated with financing long-term loans (mainly secured by a mortgage or for financing large projects not related to real estate, including industrial investments) with liabilities with shorter maturities, • analysis of the concentration of liquid assets - aimed at limiting the risk of obtaining cash by liquidating the above -mentioned assets when it is necessary to cover the expected as well as unexpected liabilities of the Bank. Liquidity risk control, monitoring and reporting Liquidity risk control involves setting liquidity risk limits adjusted to the scale and complexity of the Bank's operations, in particular the limits of the appetite for liquidity risk. Alior Bank regularly monitors and reports the level of liquidity risk measures and the degree of use of internal limits and threshold values. Liquidity risk reports are prepared on a daily, weekly, monthly, quarterly and annual basis. Their frequency, scope and list of recipients (including CALCO, the Bank's Management Board and the Supervisory Board) is regulated in the Bank's internal regulations. The limits set the boundaries of the Bank's operations, which cannot be exceeded. The selected limits are ext ended by the Bank with warning thresholds, the function of which is to protect against exceeding internal limits by specifying the level of limit utilization (minimum surplus), the achievement of which will mean an increased liquidity risk and a real risk of exceeding the limit within a specified period of time. Liquidity risk stress tests Stress testing is an essential component of liquidity risk management. The main part of stress tests is a scenario analysis, which consists in examining the impact of a given scenario on the Bank's liquidity, taking into account various risk factors and a different level of severity of individual risk factors (while maintaining the overriding principle of a conservative approach to scenario construction). Additionally, the Bank conducts separate scenarios for intraday liquidity. The scenario tests are suppl emented with sensitivity analyzes, where the Bank tests only selected risk factors which, in its opinion, have the greatest impact on the liquidity situation, and reverse tests, where the Bank tests what level of the most important risk factors causes the Bank to lose liquidity. The Bank conducts reverse tests, analyzing two aspects: loss of liquidity, meaning the inability to settle liabilities, and a decrease in liquidity, resulting in non -compliance with supervisory liquidity requirements. The results of the stress tests are accepted by the Supervisory Board.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 3 9 The stress test scenarios adopted by the Bank's Management Board are developed in three basic variants, for which at least two scenarios are constructed: • internal crisis - a situation in which internal-bank factors or other factors are responsible for liquidity problems, but only for the Bank (2 scenarios assuming loss of reputation), • systemic crisis – a situation in which the entire or a significant part of the banking system experiences problems with maintaining liquidity due to an economic or financial crisis (2 scenarios, 1 related to stagflation and 1 being a combination of the glo bal financial crisis, supply shocks and escalation of the war in Ukraine), • combination of an internal crisis and a systemic crisis - a situation that is a combination of elements from the two above variants (2 scenarios assuming simultaneous problems of the Bank and the entire sector). The results of stress tests are used in particular to assess the extent to which the Bank is prepared to settle liabilities in a stressed situation, to assess the adequacy of surplus liquidity by comparing the existing liquidity buffer with the required liquidity buffer in a stressed situation, and to verify the adjustment of the Bank's liquidity profile to the adopted liquidity risk tolerance by checking whether the survival horizon in each scenario is at least equal to that assumed by the Bank. Comparing the demand for liquid funds for each scenario with the values that can be obtained based on the tests of contingency plans allows you to check whether the Bank is able to settle liabilities in longer horizons (beyond the survival horizon) using contingency actions. In addition, the results of stress tests are used to set internal limits, adapt and improve internal regulations, and the daily practice of liquidity risk management by using the results of stress tests to currently assess the Bank's liquidity situation and shape the liquidity continge ncy plan. Liquidity risk contingency plans tests In the event of a liquidity crisis, understood as a hypothetical risk and the real occurrence of a situation in which the Bank will not be able to timely meet its current or anticipated future payment obligations, the Bank has developed liquidity contingen cy plans, the purpose of which is to identify solutions ensuring the survival of the liquidity crisis, including actions corrective. The Bank monitors the liquidity situation on an ongoing basis in terms of identifying a threatening situation by defining a nd monitoring a wide range of indications regarding the situation inside the Bank, as well as the market and macroeconomic environment, which are used to identify situations of increased liquidity risk, high liquidity risk and liquidity risk crisis and enable taking appropriate action , as specified in the contingency plans. The Bank reviews and tests contingency plans at least once a year or when required by changes in market conditions. As part of the tests of contingency plans, the Bank determines: the f easibility and feasibility of actions, decision -making process, competences of individual units, the amount of funds that can be obtained and the time necessary to implement the actions. 46.2 Financial data Contractual cash flows of financial assets and liabilities (excluding derivative financial instruments) The tables below present a summary of undiscounted future cash flows from the Bank's financial assets and liabilities (excluding derivative financial instruments), which means that the presented values include future interest payments. Financial assets a re presented based on contractual maturities. Financial liabilities and off-balance sheet commitments granted are recognized in a time frame consistent with the due date, and in the absence of such a date, these liabilities have been assigned the earliest possible date in which the outflow of funds from the Bank is expected. Contractual cash flows of the Bank's financial assets and liabilities as at 31 December 2024 (in PLN million) 31.12.2024 1M 3M 1Y 5Y 5Y+ Total Financial Assets 8 741 3 343 11 087 48 326 53 984 125 481
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 4 0 31.12.2024 1M 3M 1Y 5Y 5Y+ Total Financial Liabilities -63 652 -8 311 -5 624 -2 302 -53 -79 942 Amounts due to banks -42 0 -1 0 0 -43 Amounts due to customers -63 546 -8 164 -5 389 -75 -1 -77 175 Debt securities issued -64 -147 -214 -2 062 0 -2 487 Subordinated liabilities 0 0 0 0 0 0 Finance lease liabilities 0 0 -20 -165 -52 -237 Balance sheet gap -54 911 -4 968 5 463 46 024 53 931 45 539 Cumulated balance sheet gap -54 911 -59 879 -54 416 -8 392 45 539 Off -balance guarantee lines -12 125 0 0 0 0 -12 125 Off- balance financing lines -957 0 0 0 0 -957 Off-balance sheet gap -13 082 0 0 0 0 -13 082 Total gap -67 993 -4 968 5 463 46 024 53 931 32 457 Total cumulated gap -67 993 -72 961 -67 498 -21 474 32 457 Contractual cash flows of the Bank's financial assets and liabilities as at 31 December 2023 (in PLN million) 31.12.2023 1M 3M 1Y 5Y 5Y+ Total Financial Assets 11 058 4 119 13 736 41 136 51 597 121 646 Financial Liabilities -59 788 -6 846 -8 349 -2 421 -51 -77 455 Amounts due to banks -186 0 0 -15 0 -201 Amounts due to customers -59 572 -6 545 -7 054 -178 -1 -73 350 Debt securities issued -30 -287 -749 -1 052 0 -2 118 Subordinated liabilities 0 -14 -539 -969 0 -1 522 Finance lease liabilities 0 0 -7 -207 -50 -264 Balance sheet gap -48 730 -2 727 5 387 38 715 51 546 44 191 Cumulated balance sheet gap -48 730 -51 457 -46 070 -7 355 44 191 Off -balance guarantee lines -12 083 0 0 0 0 -12 083 Off- balance financing lines -823 0 0 0 0 -823 Off-balance sheet gap -12 906 0 0 0 0 -12 906 Total gap -61 636 -2 727 5 387 38 715 51 546 31 285 Total cumulated gap -61 636 -64 363 -58 976 -20 261 31 285 Contract cash flows from off-balance sheet derivative transactions for which the valuation at the reporting date was negative The Bank includes IRS, FRA transactions, options, including currency and interest rate options, and commodity derivative transactions among derivative financial instruments settled in net amounts. In the case of IRS transactions, undiscounted future cash flows from interest were presented, while in the case of other transactions, the valuation value as at 31 December 2024 and 31 December 2023 was assumed as the cash flow amount, respectively (in PLN million). 1M 3M 1Y 5Y 5Y+ Total 31.12.2024 135 206 166 59 0 566 31.12.2023 93 200 114 114 6 527 The Bank classifies CIRS, FX Swap and FX Forward transactions as derivative financial instruments settled in gross amounts. The tables below present a summary of undiscounted future cash flows from nominal
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 4 1 amounts, and in the case of CIRS transactions, additionally interest, as at 31 December 2024 and 31 December 2023, respectively (in PLN million). 1M 3M 1Y 5Y 5Y+ Total 31.12.2024 inflows 2 272 107 68 29 130 2 606 outflows 2 295 112 74 44 134 2 659 31.12.2023 inflows 1 522 528 89 12 0 2 151 outflows 1 556 545 95 13 0 2 209 Liquidity gap realised The tables below present the cumulative adjusted liquidity gap for the Bank (in PLN million). Adjustment of cash flows is made as a result of applying adjustment weights to contractual cash flows in order to determine the most probable (economic) maturity/due date. Adjustment of values and terms is applied to both balance sheet and off-balance sheet items, including: assets for which there is a possibility of early disposal, items without contractual maturity dates, banking products for which the analysis of trends and customer behavior indicates differences between the contractual maturity date and the actual payment date, off-balance sheet liabilities under granted credit lines and guarantees. 31.12.2024 1D 1M 3M 6M 1Y 2Y 5Y >5Y Total Periodic gap made real 3 992 14 601 -2 415 -149 854 2 864 5 149 -24 813 84 Accumulated gap real 3 992 18 593 16 179 16 030 16 883 19 748 24 897 84 31.12.2023 1D 1M 3M 6M 1Y 2Y 5Y >5Y Total Periodic gap made real 2 936 13 857 -2 726 -166 -77 1 605 5 097 -20 457 69 Accumulated gap real 2 936 16 792 14 066 13 900 13 824 15 428 20 526 69 In all ranges, the Bank's adjusted cumulative liquidity gap showed positive values as at 31 December 2024 and 31 December 2023. This means a surplus of maturing assets over due liabilities. Regulatory liquidity measures and sensitivity measures Regulatory liquidity measures 31.12.2024 31.12.2023 LCR 192% 181% NSFR 143% 140% . Between 31 December 20 23 and 31 December 20 24, the regulatory liquidity measures were above the regulatory limits. The table below presents the components of the net outflow coverage ratio (LCR), i.e. the value of liquidity coverage and net cash outflow. In addition, the excess of liquidity protection was presented, understood as the surplus of liquidity coverage over the period of stress conditions lasting 30 days. 31.12.2024 31.12.2023 Protection against loss of liquidity (MPLN) 24 795 23 027 Total net cash outflows (MPLN) 12 920 12 688 Surplus reserve against liquidity loss (MPLN) 11 875 10 340 LCR 192% 181%
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 4 2 The stability of the deposit base As at 31 December 202 4 the balance of deposits over a 30 -day horizon was about 95.1% of the Bank's deposit base (apart from the interbank market) and 92.8 % for the Bank's own issues. As at 31 December 2023 the balance of deposits over a 30 -day horizon was about 9 4.3% of the Bank's deposit base (apart from the interbank market) and 86.1% for the Bank's own issues. Financing structure The main source of financing for the Bank is the deposit base, which as at 31 December 2024 amounted to approx. PLN 75 billion, which accounts for approx. 80% of the Bank's liabilities. The deposit base is dominated by current accounts (approx. 71% of the base), most of which approx. 73% are accounts of retail customers, compared to 27% of corporate customers. The remaining part of the deposit base, ie approx. 29%, are term deposits, including 69% term deposits of retail cusomers and 31% deposits of corporate customers. Liabilities to financial customers amount to approx. PLN 1.3 billion and constitute approx. 1% of liabilities. Own issues, worth PLN 2 billion , account for approx. 2% of liabilities. In the following years, the Bank assumes a moderate increase in total assets and maintaining customer deposits as the main source of financing (in particular from individual customers). Despite the predominance of current accounts in the deposit base, the diversification of these deposits in terms of the number and type of depositors and the Bank's experience to date indicate that these accounts constitute a long-term and stable source of financing for the Bank’s operations. Concentration On a monthly basis, the Bank analyses concentration of its deposit base in order to identify a potential risk of the Bank's excessive dependence on funding sources characterised with a low diversification level. In order to estimate the concentration leve l, the Bank identifies the WWK ratio (High Concentration Ratio), calculated as a ratio of the funds from the largest depositories to the overall deposit base. As at 31 December 2024, WWK was at 1.03% which shows no conce ntration. As at 31 December 20 23, the ratio was at 1.36%. WWK statistics for 2024 and 2023 are presented in the table below. Minimal Medium Maximum 31.12.2024 1.00% 1.25% 1.55% 31.12.2023 0.63% 1.00% 1.56% In order to mitigate the concentration risk, the Bank diversifies the structure of its deposit base split by retail, corporate, financial customers, central government, and local government institutions, by monitoring and reporting the share of each group in the overall deposit base on a monthly basis. Currency 31.12.2024 Currency 31.12.2023 Customer 1 EUR,PLN,USD 347 067 EUR,PLN,USD 652 895 Customer 2 EUR,PLN 322 778 EUR,PLN,USD 449 727 Customer 3 PLN 217 805 CHF,EUR,GBP,HDK,MXN,PLN,RUB,USD 280 695 Customer 4 CHF,EUR,GBP,HKD,MXN,PLN,RUB,USD 195 745 EUR,PLN 230 123 Customer 5 CHF,CZK,EUR,GBP,PLN,USD 191 028 EUR,PLN 219 169 Customer 6 EUR,PLN 179 667 CHF,CZK,EUR,GBP,PLN,USD 215 623 Customer 7 CHF,EUR,GBP,PLN,USD,DKK,SEK,AUD 172 661 EUR,PLN,USD 175 366 Customer 8 EUR,PLN,USD 151 229 CZK,EUR,PLN 159 794 Customer 9 EUR,PLN,USD 139 786 EUR,PLN 145 609 Customer 10 PLN 127 552 EUR,PLN,USD 145 190
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 4 3 In 2024 the Bank’s liquidity condition was at a safe level. The situation was closely monitored and maintained at a level adequate to the needs by adjusting the level of the deposit base and launching additional sources of financing depending on the development of lending and other liquidity needs, taking into acco unt changing market and macroeconomic conditions (including as a result of increased inflation, high interest rates or the ongoing armed conflict in Ukraine). 47 Operational risk 47.1 Description of risk Definition of the operational risk The operational risk is a risk of a potential loss occurrence due to inappropriateness or failure of internal processes, humans, and systems or external events. The operational risk covers the legal risk but does not include the reputational risk and the strategic risk. The objectives of operational risk management The objective of operational risk management in the Bank is to maintain the operational risk at a safe and adequate level for the Bank's business, objectives, strategy and development, as well as acceptable by the Bank's Management Board and Supervisory Board. Operational risk management The Bank has a formalised operational risk management system within which it prevents the occurrence of operational events and incidents and mitigates losses should the risk materialise. Operational risk management includes identification, measurement and assessment of operational risk, control, monitoring, reporting and management activities. Identification of operational risk As part of the identification of operational risk, the Bank recognizes risk factors that significantly affect its level. At the identification stage, various methods of obtaining information are used, including: • data on internal events and losses at the Bank in a dedicated IT system, • risk identification in processes, products, systems, contracts and business requests , • analysis of external operational risk events. Measurement and assessment of operational risk Measurement and assessment of operational risk is carried out using quantitative and qualitative measures and includes, among others: • the Bank has been calculating equity requirements for the operational risk in line with the advanced method (AMA) for the Bank, while excluding the Branch in Romania for which the standard method applies (TSA), • estimation of internal capital for the Bank for operational risk using the results of the AMA model, for the Branch in Romania - using the standardized approach (TSA), • the target and limit for operational risk costs (including the revision of their level) and determining the level of their use, • business target for operational risk costs, • Scenario Analysis, • operational risk self- assessment of products, processes, systems, contracts and business requests, • valuation of actual and potential losses related to the identified ones events, • key risk indicators (KRI),
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 4 4 • Stress Testing. In 2024, the Bank implemented a project to implement a new method of calculating the regulatory requirement for operational risk SMA. The reason for changing the calculation method are the changes to the provisions of Regulation (EU) No 575/2013 of the Eur opean Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (“CRR 3”), which enter into force on 1 January 2025. The changes concern, among others, Part Three of Title III of the CRR, i.e. own funds requirements for operational risk. The new SMA standardised approach will replace all the methods of calculating the requirement for operational risk that have been in force so far (including TSA, AMA). Operational risk control The purpose of the control is to maintain the operational risk at the level acceptable to the Bank. Operational risk control is performed on several levels: organizational units responsible for operational risk management in their areas, the Operational Ri sk Management Department, the Operational Risk Committee, the Management Board, the Risk Committee of the Supervisory Board and the Supervisory Board. Risk control includes, inter alia, development, implementation and use of tools as part of the operational risk management system, collecting information on operational risk, exercising supervision over operational risk management and its level, accepting the results of operational risk management and implementing the adopted assumptions, analyzing cyclical reports in the area of operational risk and accepting the most important assumptions and verification of their implementation. Monitoring and reporting of operational risk Monitoring of operational risk is aimed at diagnosing areas requiring management actions. Monitoring enables the monitoring of the operational risk profile and ensures that the necessary information on operational risk is regularly provided to the Management Board and S upervisory Board. It is carried out on a continuous basis at the level of individual organizational units and by the Operational Risk Management Department as part of the ongoing analysis and supervision of the operational risk management process. The duty to monitor and mitigate operational risk in daily work applies to all employees and organisational units of the Bank. On an ongoing basis, the Bank's employees control the level of the operational risk in their processes and actively mitigate the risk, taking actions to avoid/mitigate operational losses. They are responsible for ongoing registration of events and financial operational effects concerning their are as at operation and report the values of Key Risk Indicators (KRIs) for processes expos es to the operational risk. The results of operational risk monitoring are presented in reports addressed to the Operational Risk Committee, the Management Board, the Risk Committee of the Supervisory Board and the Supervisory Board. The reports present the level of operational risk and are prepared on a monthly, quarterly and annual basis. Reporting information on events and consequences of operational risk is performed for internal and external purposes. Information on operational risk supports the Bank's management system by taking it into account when making business decisions. The scope of management reporting on operational risk is wide and cross- sectional, which makes it possible to properly assess the implementation of the risk management and control system and to take actions supporting this process. Management activities Based on the conducted identification, measurement and assessment, the Bank undertakes adequate management actions aimed at shaping the operational risk management process and the level of this risk. Management activities include: • setting acceptable risk levels in the form of limits to reduce the risk,
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 4 5 • making decisions on the use of tools supporting risk management, • issuing internal regulations regarding operational risk management, • organizational and procedural changes, including changes to existing processes or introduction of new ones, employee training necessary for the proper performance of operations, raising awareness of operational risk and methods of limiting its impact, • limitation of operational risk, including transfer, outsourcing and risk insurance, • avoiding operational risk, • follow-up – actions to mitigate the identified risks along with monitoring. In connection with the application of the advanced operational risk measurement method (AMA), in accordance with the requirements of Article 454 of CRR, the Bank, seeking to limit the risk of materialization of the effects of rare but potentially severe op erational events, purchased a number of insurance policies. Mentioned policies included insurance in the scope of property (including electronic equipment), civil liability, fiscal liability and professional liability. The terms of individual policies were adapted to the scale and scope of the risk incurred. Those policies are not used as a mechanism limiting the amount of own funds requirements for operational risk or as a mitigating factor for the amount of internal capital for operational risk. 48 Capital Management Definition of the capital adequacy Capital adequacy is a process aimed at ensuring that the level of risk taken by the Bank as part of its operations remains covered with own funds and Tier 1 capital at a level consistent with the risk appetite and long-term capital objectives .The capital adequacy management process includes in particular: setting, monitoring and planning capital adequacy levels, including compliance with applicable regulations of supervisory authorities. Within its risk appetite, the Bank determines the anticipated coverage levels of a potential unexpected loss for various risks, with equity and Tier 1 capital, as specified in Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms amending Regulation (EU) No. 648/2012 (as amended) (CRR Regulation), as well as individual risk types identified within the internal capital adequacy assessment process (ICAA P). The potential unexpected loss is determined with the regulatory capital with the methodology specified in the CRR Regulation and with the internal capital determined with the methods specified below. The process of capital management is supervised by the Bank's Supervisory Board, Management Board, Risk Committee of the Supervisory Board and the Capital, Assets and Liabilities Management Committee. Capital adequacy metrics The core measures used in the Bank for capital management are as follows: • total capital ratio and Tier 1 capital ratio, • value of regulatory capital requirement, • internal capital (ICAAP) and a coverage ratio of the internal capital with own funds. Total capital adequacy ratio As at 31 December 20 24, the total capital adequacy ratio and Tier 1 ratio were calculated in accordance with CRR Regulation and other regulations implementing “national options”, among other, the Banking Act of 29 August 1997 and the Regulation of the Minister of Development and Finance on higher weight risk for mortgage-backed exposures.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 4 6 Equity for the purposes of the capital adequacy 31.12.2024 31.12.2023 Total equity for the capital adequacy ratio 9 387 242 8 872 745 Tier I core capital (CET1) 9 387 242 8 538 709 Paid-up capital 1 305 540 1 305 540 Supplementary capital 7 431 101 6 020 705 Other reserves 174 447 174 447 Current year's reviewed by auditor 917 479 1 409 309 Revaluation reserve – unrealised losses -187 076 -163 231 Intangible assets measured at carrying value -406 479 -326 942 Revaluation reserve – unrealised profit 220 816 209 227 Additional value adjustments - AVA -22 598 -17 447 Other adjustments items -45 988 -72 899 Tier II capital 0 334 036 Subordinated liabilities 0 334 036 Capital requirements 3 751 224 3 657 906 Total capital requirements for the credit, counterparty risk, adjustment to credit measurement, dilution and deliver of instruments to be settled at a later date 3 370 204 3 315 417 Total capital requirements for prices of equity securities, prices of debt securities, prices of commodities and FX risk. 4 115 3 831 Capital requirement relating to the general interest rate risk 13 231 17 388 Total capital requirements for the operational risk 363 674 321 270 Tier 1 ratio 20.02% 18.67% Total capital adequacy ratio 20.02% 19.41% Leverage ratio 9.44% 9.08% As at 31.12.2024, the Bank's capital ratios remain at levels exceeding the minimum regulatory requirements and allow the Bank to operate safely. The Alior Bank decided to apply the transitional provisions provided for in Regulation 2020/873 with regard to certain adjustments in response to the COVID -19 pandemic, which means that for the purposes of assessing the Bank's capital adequacy, the full impact related to the created COVID -19 provisions will not be taken into account. MREL The minimum requirements set by the Bank Guarantee Fund regarding own funds and liabilities subject to write-down or conversion ("MREL") applicable to the Bank from 31.12.2023 are as follows: • in relation to TREA 15.36% (of the total risk exposure) • in relation to TEM 5.91% (of total exposure measure) As at 31 December 2024, the Bank met the MREL requirements set out by the Bank Guarantee Fund. Analysis of regulatory capital requirement In the calculation process of its capital adequacy ratio, the Bank analyses the level of regulatory capital requirement and the relation of equity to internal capital. The analysis consists of a comparison of actual values with the budgeted values and identification of reasons of potential differences (the scale of operations of the Bank different than planned, in particular the volume of the loan portfolio or an assets risk profile different than planned). The equity of the Bank exceeded the total capital requirement throughout 2024.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 4 7 Internal capital Within the ICAAP process, the Bank identifies and assesses the materiality of all types of risk to which it is exposed in connection with its business. Material risk types as at 31 December 2024: • Credit risk – insolvency • Credit risk – sectoral concentration • Credit risk – concentration to customers • Credit risk – currency concentration • Credit risk - collateral concentration • Operational Risk • Liquidity risk • Interest rate risk in the banking book • Market risk • Settlement/delivery risk with a deferred settlement date • Model risk • Reputational risk • Business risk • Capital risk • Leverage risk. For each risk identified as material . the Bank allocates the internal capital with the use of the internal risk estimation models. The internal capital is estimated: • for the credit risk using the portfolio methodology of loss distribution in the loan portfolio, • on the basis of the ES methodology for the market risk, • for interest rate risk based on the economic value of capital measure, • on the basis of a liquidity gap model for the liquidity risk assuming a stress scenario , • on the basis of the AMA model for the operational risk. The designated total internal capital is secured with the value of the available capital subject to appropriate security buffers. CRD IV/ CRR packet As at 31 December 20 24 the Bank fully complied with the CRR Regulation in the sphere of capital management. including the calculations of equity and capital requirements for each type of risks. CRR3 Regulation On 1 January 2025, Regulation (EU) No 2024/1623 of the European Parliament and of the Council of 31 May 2024 amending Regulation (EU) No 575/2013 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the minimum capital threshold ("CRR3") entered into force. The amendments concern, among others: Part Three of Title II and Title VI, i.e. capital requirements for credit risk and credit valuation adjustment risk (CVA), respectively. The biggest changes in credit risk include: • calculating the capital requirement for contractual arrangements offered by the institution but not yet accepted by the client, • changing the CCF conversion factor (division into 5 stages, new CCF value 40%),
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 4 8 • changing the method of assigning weights in the class of exposures secured by mortgages on real estate and separating exposures related to the acquisition, development and construction of land (ADC exposures), • assigning a 150% multiplier to exposures to individuals with a currency mismatch between loan installments and income. In the CVA risk framework, the formula for determining regulatory capital has changed, and a differentiation of risk weights has been introduced depending on the counterparty's industry. As a result of all changes related to the implementation of CRR3, the total capital ratio as at 1 January 2025 on a separate basis decreased by 1.49 percentage points. Other 49 Events significant to the business operations of the Bank Closing the branch in Romania As at 30 November 2024, the branch in Romania ended its operating activities. The Bank decided to close the branch due to: • the negative financial results of the branch and the increasing cumulative net loss from year to year required taking decisive steps to diagnose the condition of the branch and the possibility of implementing various strategic options, • analyses conducted in 2021 by consulting companies indicated that the termination and closure of the business is a justified strategic option for the branch in Romania, • all analyses conducted in relation to the strategic options indicated two potential scenarios for closing the branch: Scenario 1: sale of the portfolio and closure of the business (the fastest option) or Scenario 2: accelerated termination and closure of the business. Preparation for the termination of operational activity required taking a number of legal and organizational actions: • an accelerated market exit scenario was adopted (through the sale of the portfolio), • in 2022, lending in Romania was suspended, which was a decisive step towards starting to phase out unprofitable operations in Romania, • restructuring of operations and employment took place, • cooperation with advisors was initiated in 2023, which was to lead to the preparation and implementation of the formal process of closing the branch, • it was assumed that a buyer would be found and the Romanian portfolio would be sold and the operations in Romania would be closed by the end of 2024. In June 2024, the Bank concluded an agreement with Romanian Patria Bank SA for the sale of the portfolio of cash loans granted by the Bank's branch in Romania. In connection with the above, the Bank reclassified the above assets in accordance with the prov isions of IFRS 9 4.4.1. On 7 September 2024, the branch of Alior Bank in Romania transferred the loan portfolio to Patria Bank SA in accordance with the agreement. The final settlement with the buyer took place on 7 October 2024. On the loan portfolio sale transaction, the Bank recognized a loss of PLN 13.4 million, which was charged to the result of the third quarter of 2024.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 4 9 PFSA Recommendation regarding the Long-Term Financing Ratio (WFD Recommendation) On 15 July 2024, the Polish Financial Supervision Authority adopted a resolution on issuing a Recommendation regarding the Long-Term Financing Ratio ("WFD Recommendation"). The purpose of introducing the WFD Recommendation is to reduce the risk associated with the current structure of mortgage financing and to change this structure by increasing the share of long -term debt instruments in banks' liabilities in relation to the value of mortgage loans granted. The introduction of the WFD Recommendation is to ensure an increase in the financing of long-term mortgage loans primarily with long-term debt instruments that cannot be redeemed within a period of at least one year. In acc ordance with the WFD Recommendation, starting from 31 December 2026, the Bank should maintain the Long - Term Financing Ratio at a level of at least 40%. In the Bank's opinion, the introduction of the WFD Recommendation will result in a significant increase in the value of debt instrument issues by banks covered by this recommendation in the coming years, which may translate into the price and availability of mortgage loans offered to customers. The increase in the value of debt instrument issues may also affect the structure of banks' deposit offer and increase exposure to currency risk (in the event that the scale of debt instrument issues exceeds the financial capabilities of the domestic market). International Tax Reform - Pillar II Model Rules The Pillar II tax reform introduces the concept of a global minimum tax ("equalization tax"), which is the result of work at the OECD forum as part of the BEPS 2.0 project. The equalization tax is a new type of taxation aimed at counteracting tax optimizations aimed at shi fting profits to low-tax jurisdictions. It is levied if the effective tax rate of an international (or domestic) group in a given jurisdiction is lower than 15%. The equalization tax was introduced into the Polish legal system from 1 January 2025, by the Act of 6 November 2024 on equalization taxation of components of international and domestic groups (Journal of Laws of 2024, item 1685) implementing into the Polish legal system the provisions of Council Directive (EU) 2022/2523 on ensuring a global minimum level of taxation of international groups of enterprises and large domestic groups in the EU ("GloBE Directive"). The Act regulates the taxation of equalisation tax in the form of: • global equalisation tax - as a rule, it applies to the parent entity of the highest level of an international group, • domestic equalisation tax - calculated by a taxpayer who is a low -taxed component unit of an international group or a domestic group, • equalisation tax on under -taxed profits - the taxpayer of this tax is a component unit of an international group located in the territory of the Republic of Poland, when the parent entity of this group is located in a country other than Poland. The provisions of the Act apply to component units of an international group or a domestic group, if they have achieved minimum group income for at least 2 out of 4 tax years directly preceding the tax year. Minimum group income is understood as the annual income of the international group or the domestic group shown in the consolidated report of the group, amounting to at least EUR 750.000.000. For the first two years, the provisions of the Act include the possibility of applying special solutions for taxpayers, which are aimed at reducing the administrative and financial burdens related to the introduction of equalisation tax, including, among o thers: temporary safe haven CBC -R, which is in force in the years 2024-2026. The parent entity of the Bank and the ultimate parent entity of the Group is Powszechny Zakład Ubezpieczeń SA.
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S e p a r a t e F i n a n c i a l S t a t e m e n t s o f A l i o r B a n k S A f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 2 4 ( i n P L N ‘ 0 0 0) 1 5 0 In the Bank's opinion: • The PZU Capital Group, together with the Bank and the Group entities, will be taxpayers of the domestic equalization tax, • The Bank and other entities from the Group will not be obliged to calculate the global equalization tax or the tax on undertaxed profits, • The Group will be obliged to calculate and pay the domestic equalization tax in a situation where the effective tax rate calculated for the PZU Group (within the meaning of the Pillar II regulations) is lower than 15%. The Bank is in the process of analysing how the implementation of the regulations will affect the tax burden of the Bank and the Group entities, including assessing to what extent it can be expected that it will be possible to use the temporary safe havens CBC-R. The final confirmation of the possibility of using the temporary CBC-R safe harbors in 2025 and subsequent tax years will be possible after determining the consolidated financial data of the PZU Group for these years. The Bank has applied an exception allowing not to recognize in the report for 2024 deferred tax assets and liabilities related to Pillar II income taxes and not to disclose information on these assets and liabilities (IAS 12 88A). Information required in connection with Article 35 Section 1b of the Bonds Act The Bank as the issuer, pursuant to Article 35 Section 1b of the Bonds Act, is required to indicate and explain in each annual financial report published in the period from the date of issue to the date of redemption of bonds any significant differences be tween the published information concerning the forecast of financial liabilities as of the last day of the financial year and the financial liabilities of the issuer resulting from the issuer's accounting records as of that day. Estimation 31.12.2024 Realization 31.12.2024 The value of Alior Bank's financial liabilities 78 931 307 81 906 833 Alior Bank's financing structure (value and percentage share of liabilities under credits and loans, issue of debt securities, leasing in total liabilities of the Issuer's balance sheet) 3 093 878 3.5% 2 302 898 2.5% The value of Alior Bank's financial liabilities was higher than estimated, mainly due to a higher level of amounts due to customers. The value of liabilities under credits and loans, issuance of debt securities and leasing of Alior Bank was lower than estimated, mainly due to a lower level of issuance of debt securities. 50 Significant events after the end of the reporting period No significant events occurred after the end of the reporting period, except those described in these financial statements.
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REPORT OF THE MANAGEMENT BOARD ON THE ACTIVITIES OF ALIOR BANK S.A. CAPITAL GROUP IN 2024 INCLUDING THE REPORT OF THE MANAGEMENT BOARD ON THE ACTIVITIES OF ALIOR BANK S.A. AND SUSTAINABILITY STATEMENT This version of our report is a translation from the original, which was prepared in the Polish language. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.
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2 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Table of content I. Letter of the President of the Management Board ................................ ................................ ................................ ................ 4 II. Letter of the Chairman of the Supervisory Board ................................ ................................ ................................ ................. 6 III. Summary of activities of Alior Bank in 2024 ................................................................ ................................ ......................... 8 Summary of Strategic Initiatives in 2024 ................................ ................................ ................................ ................................ ..... 9 Strategy Implementation ................................ ................................ ................................ ................................ ............................... 10 Basic financial data for 2024 ................................ ................................ ................................ ................................ ........................ 14 Distribution network and headcount ................................ ................................ ................................ ................................ .......... 15 Assessment of activities pursued by the Alior Bank Capital Group ................................ ................................ .............................. 16 IV. External environment of the Bank’s operations ................................ ................................ ................................ ................. 18 War in Ukraine ................................ ................................ ................................ ................................ ................................ ................. 18 Poland’s Economic Growth ................................ ................................................................ ................................ ........................... 18 Labour Market Situation ................................ ................................................................ ................................ ................................ 19 Inflation and Interest Rates ................................ ................................................................ ................................ ........................... 20 Global Economy ................................ ................................ ................................ ................................ ................................ .............. 21 Exchange Rate ................................ ................................ ................................ ................................ ................................ ................. 22 Banking Sector ................................ ................................ ................................ ................................ ................................ ................. 23 V. Financial results of the Alior Bank Capital Group ................................ ................................ ................................ ................ 26 Income statement ................................ ................................................................ ................................ ................................ ........... 26 Net expected credit losses ................................ ................................ ................................ ................................ ............................ 30 Net impairment charges on non-financial assets ................................ ................................ ................................ ...................... 31 Balance Sheet ................................ ................................ ................................ ................................................................ .................. 31 Off-balance sheet liabilities................................ ................................................................ ................................ ........................... 35 Financial projections ................................ ................................................................ ................................ ................................ ....... 36 Factors that may have an impact on Alior Bank’s activities in the perspective of subsequent quarters ...................... 37 VI. Business activities of Alior Bank ................................ ................................ ................................ ................................ ............ 38 Activities pursued by Alior Bank ................................ ................................ ................................................................ .................. 38 Retail Segment ................................ ................................ ................................ ................................ ................................ ................. 38 Business Segment ................................ ................................................................ ................................ ................................ ........... 49 Treasury activity ................................ ................................ ................................ ................................ ................................ .............. 55 Online and Mobile Banking ................................ ................................................................ ................................ ........................... 57 Equity investments of the Alior Bank Capital Group ................................ ................................ ................................ ............... 61 Strategic Partnerships ................................ ................................ ................................ ................................ ................................ .... 61 VII. Operations of companies from the Alior Bank Capital Group ................................ ................................ ........................ 65 VIII. Major events in the activity of the Alior Bank S.A. Capital Group ................................ ................................ ............... 69 Major events post balance-sheet date ................................................................ ................................ ................................ ....... 70 IX. Issuance of Own Bonds, Alior Bank Securities and Structured Products ................................ ................................ ...... 71 X. Report concerning the risk of Alior Bank ................................ ................................ ................................ .............................. 73 Credit risk ................................................................ ................................................................ ................................ ......................... 74 Operational risk ................................ ................................ ................................ ................................ ................................ ............... 83 Liquidity risk ................................................................ ................................ ................................ ................................ ..................... 85 Market risk................................................................ ................................ ................................ ................................ ........................ 87 Interest rate risk in the banking book ................................................................ ................................ ................................ ......... 87
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3 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Market risk in the trading book ................................ ................................ ................................ ................................ .................... 88 Model risk ................................................................ ................................................................ ................................ ......................... 89 Capital risk ................................................................ ................................ ................................ ................................ ........................ 90 XI. Internal control system ................................ ................................ ................................ ................................ ............................ 92 Control system in the process of preparing the financial statement ................................ ................................ .................... 93 XII. Statement of application of corporate governance ................................ ................................ ................................ .......... 95 Scope of corporate governance ................................ ................................ ................................ ................................ ................... 95 Management Board statement on compliance with the principles of corporate governance ................................ ........ 95 Assessment and verification of internal governance at the Bank by the Management Board, its implementation and compliance ................................................................ ................................ ................................ ................................ ........................ 97 Structure of share capital ................................ ................................ ................................ ................................ ........................... 102 Alior Bank Share Prices on the Warsaw Stock Exchange in 2024 ................................ ................................ ..................... 103 Investor Relations ................................ ................................................................ ................................ ................................ ........ 104 Current Bank Ratings ................................ ................................ ................................ ................................ ................................ .. 104 Alior Bank Shareholders ................................ ................................................................ ................................ ............................. 105 Alior Bank shares held by the Bank’s governing body................................ ................................ ................................ .......... 106 Significant agreements and obligations ................................ ................................ ................................ ................................ ... 106 Governing bodies of Alior Bank ................................ ................................ ................................ ................................ ................ 107 General Meeting of the Bank ................................ ................................................................ ................................ .................... 107 Supervisory Board of the Bank ................................ ................................ ................................ ................................ ................. 110 Bank’s Management Board ................................ ................................................................ ................................ ........................ 127 Remuneration policy ................................ ................................................................ ................................ ................................ .... 135 Diversity policy ................................ ................................ ................................ ................................ ................................ ............. 141 XIII. Auditor information ................................ ................................................................ ................................ ............................. 143 Compensation for the auditor ................................ ................................ ................................ ................................ ................... 143 XIV. Sustainability Statement ................................ ................................................................ ................................ .................... 144 XV. Representations of the Management Board ................................ ................................ ................................ ................... 268 Signatures of all Members of the Management Board................................ ................................ ................................ ......... 269
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4 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement I. Letter of the President of the Management Board Ladies and Gentlemen, Another successful year, full of change, is now behind us at Alior Bank. Through the consistent execution of our strategy and effective risk management, we have made significant progress in many key areas of our operations and once again delivered record-breaking financial results. What do the numbers say? In 2024, our risk costs fell by 35% compared to 2023, amounting to PLN 404 million. The improvement in the quality of our loan portfolio led to a further decline in the NPL ratio, which decreased by 1.77 percentage points year -on-year. Alior Bank Group’s net profit for the year reached PLN 2 ,445 billion, an increase of PLN 415 million compared to the previous year. As a result, we achieved ROE of 23.9% in 2024. In Q4 2024 alone, we achieved a net profit of PLN 615 million — an increase of PLN 28 million compared to the same period in 2023 — while the net interest margin (NIM) reached 6.00%. Total revenues for the year amounted to PLN 6.06 billion, marking a year-on-year growth of 8%. Importantly, our assets also recorded an increase, reaching PLN 93 billion by the end of 2024, with an annual growth rate of 4%. Our capital ratios remain at very high levels, significantly exceeding regulatory minimums. At the end of 2024, the Tier 1 ratio exceeded requirements by 976 basis points (PLN 5.0 billion), while the TCR was 776 basis points above the required level (PLN 4.0 billion). The expansion of our business scale and successful execution of strategic goals enabled us to distribute the first dividend in the Bank’s history, amounting to approximately PLN 570 million. Our stable financial performance and strong capital surplus allow us to confidently position Alior Bank as a dividend -paying institution. We continue to transform our credit risk management strategy, making our portfolio more resilient to challenging macroeconomic conditions. Our cost of risk (CoR) ratio stood at 0.62% in 2024, confirming the effectiveness of our approach. In the mortgage segment, we achieved strong results, with total sales reaching PLN 3.7 billion in 2024. At the same time, we pursue a conservative sales plan, preparing for further loan volume growth with an increasingly competitive offering. Being among Poland’s leading banks is not only an achievement but also a responsibility to provide top -tier banking services. That is why we continue to invest in technology, delivering modern and convenient products to our customers. Our refreshed mobile app, now used by nearly 1.3 million customers, has seen a 17% year - on-year increase in users. We have integrated with key e -commerce platforms, enabling the expansion of instalment payment systems and achieving record online cash loan sales (75.4 thousand in 2024). Additionally, in partnership with Teradata and Microsoft, we successfully migrated Alior Bank’s Data Warehouse to a public cloud, significantly enhancing the efficiency of our analytical processes and, more importantly, enabling faster responses to customer needs.
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5 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In the business banking segment, we saw dynamic growth in the number of accounts opened and doubled our online customer acquisitions. We are developing a new digital banking platform for businesses, which will replace the current BusinessPro system and better meet the needs of small and medium-sized enterprises. Last year marked a significant step forward in our offering for individual customers. We introduced the Jakże Osobiste Account (Highly Personal Account) account with the Alior Kids app, designed to support financial education for children aged 7–12, with full parental control via Alior Mobile. We also expanded our e-commerce offering by partnering with the Shoper platform, enabling onl ine stores to provide customers with seamless financing through Alior Raty (Alior Instalments). We are also making progress in corporate social responsibility and ESG. In H2 2024, we developed a methodology for calculating the carbon footprint of our loan portfolio, joined the Responsible Business Forum, and became a signatory of the Diversity Charter. Our initiatives included support for those affected by floods and donations to the G reat Orchestra of Christmas Charity (WOŚP). We have implemented reporting in line with the Corporate Sustainability Reporting Directive (CSRD) and EU taxonomy and continue working on the Sustainable Development Framework. Alior Bank is also strengthening its reputation as an employer of choice. Among the HR awards we received is the prestigious Top Employer title. This is awarded to companies around the world based on audit participation and results from the HR Best Practices Survey. Our commitment to employees is reflected in rising engagement and satisfaction levels — our employee engagement index increased again in 2024 and is now over 10 percentage points higher than the national average in Poland. In 2024, Alior Bank maintained a strong and stable position while continuing on its growth path. The increase in the number of primary relationship customers (up by 65 thousand year -on-year) and the rising adoption of our mobile app (an additional 189 thou sand users year -on-year) clearly demonstrate the effectiveness of our strategy. I would like to extend my sincere gratitude to our customers for their trust and to our employees for their daily dedication and professionalism, which form the foundation of our organisation. We look to the future with optimism, shaping a strategy that will allow us to further develop the Bank and strengthen its market position. I am confident that the experience we have gained will enable us to achieve even more record-breaking results in the years ahead. Kind Regards, Piotr Żabski President of the Management Board of Alior Bank S.A.
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6 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement II. Letter of the Chairman of the Supervisory Board Ladies and Gentlemen, The past year was marked by operating in a demanding market environment in many respects. Ongoing geopolitical uncertainty, escalating international tensions, persistent global economic challenges, and the rapid development of new technologies required Alior Bank to demonstrate flexibility and exceptional determination in executing its strategic plans. Despite thes e difficulties, the Bank maintained a strong growth trajectory throughout 2024, delivering impressive financial results and further strengthening its position as one of the leaders in Poland’s banking sector. The past year will go down in Alior Bank’s history as a period of outstanding financial and strategic achievements. The net profit of Alior Bank Group increased by PLN 415 million compared to 2023, reaching a record-high level of PLN 2.45 billion, while th e return on equity stood at 23.9%. As of the end of 2024, the Group’s Total Capital Ratio (TCR) reached 18.27%, resulting in a capital surplus of approximately PLN 5 billion, exceeding the regulatory minimum by 976 basis points. Over the past year, the Bank once again improved the risk parameters of its loan portfolio. The cost of credit risk ratio stood at 0.62% in 2024 (compared to 0.92% in 2023), while the share of non -performing loans (NPL) decreased from 8.58% at the end of 2023 to 6.81% at the end of 2024. The Bank’s balance sheet total grew by 4% over the course of the year, reaching PLN 93.3 billion. Another notable achievement was the increase in the number of customers who regularly use the Bank’s services (so -called primary relationship customers) by 65 thousand (+7%), bringing the total to 1.045 million. A particularly significant milestone was the payment of the first-ever dividend in the Bank’s history, amounting to PLN 577 million, reaffirming our financial stability and commitment to shareholder value. As a result of a quarterly index review, Alior Ban k was included in the prestigious MSCI Poland Global Standard Index, which features companies of key importance to the Polish economy. Once again, the Bank distinguished itself through its innovative approach to technology, earning recognition both domestically and internationally. Our solutions were acknowledged in prestigious industry competitions. The Innovation and Fintech Partnership s Department (iLab) was named once again the World’s Best Financial Innovation Labs at the Global Innovation Lab Award 2024, while our voice assistant, InfoNina, received an award in the “Champions of Hyperautomation & AI Inspiration. 2024 Edition” competi tion – a testament to Alior Bank’s success in leveraging artificial intelligence to enhance customer service. Our innovation efforts extend beyond technology alone. We signed a letter of intent with NASK SA, initiating cooperation in cybersecurity and the development of best practices to ensure business continuity. Additionally, we introduced significant enhancements to the Alior Mobile app, offering greater personalisation and flexibility. These efforts are part of our commitment to creating a more user -friendly, modern, and secure banking environment for our customers. Beyond delivering value to customers and shareholders, the Bank remains committed to employee engagement. In 2024, we continued efforts to support the development and motivation of our Banking Professionals. Alior Bank was recognised with the HR Najwyższej Jakości (Top Quality HR) certification, awarded by the Polish
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7 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Human Resources Management Association, as well as the prestigious Top Employer title, confirming our commitment to best practices in human capital management. The Bank also ran multiple initiatives to support the development and well -being of employees, including the Czwartki z Rozwojem (Thursdays for Growth) programme and Alior University. To encourage social engagement, we organised our fourth charity sports challenge, while our blood donation campaign once again saw bloodmobiles stationed outside the Bank’s headquarters. Meanwhile, through the “Two Hours for Family, Two Hours for Humanity” campaign, employees could shorten their working day to spend more time with loved ones. These various initiatives reflect our dedication to professional development, employee well -being, and the communities and environment in which we operate. The past year brought further confirmation of Alior Bank’s strong position in the financial market, as reflected in the high ratings awarded by leading credit rating agencies. Standard & Poor’s Global Ratings upgraded the Bank’s rating outlook from “stable ” to “positive”, while maintaining its long -term rating at BB+ and its short - term rating at B. Additionally, Fitch Ratings Ltd. upgraded the Bank’s long-term rating to BB+ and its long-term national rating to A -(pol). The Viability Rating (VR), which refle cts its stand -alone financial stability, was also raised to BB+. These ratings confirm that Alior Bank is effectively executing its growth strategy while remaining a stable and trusted financial partner. I would like to express my gratitude to the Management Board and all our employees for their daily dedication, which directly contributes to the increasing value of Alior Bank. It is through the collective efforts of our dedicated team that the Bank contin ues to earn the trust of customers, investors, and business partners. I am confident that our ambitious plans for 2025 will be successfully implemented, benefiting all of the Bank’s stakeholders. Kind Regards, Jan Zimowicz Deputy Chairman of the Supervisory Board of Alior Bank S.A.
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8 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement III. Summary of activities of Alior Bank in 2024 A relatively stable macroeconomic environment, combined with a 2.9% GDP growth rate and an unchanged NBP reference rate, provided a solid foundation for further expansion and stronger financial results: • In 2024, Alior Bank delivered a substantial increase in net profit, with Alior Bank Group reporting PLN 2.45 billion in net earnings, achieving a return on equity (ROE) of 23.9%. • The Group maintains a highly secure capital structure, with Tier 1 and TCR capital ratios at the end of 2024 significantly exceeding regulatory minimums by 976 basis points (PLN 5.0 billion) and 776 basis points (PLN 4.0 billion), respectively. • The cost of risk (CoR) for 2024 stood at 0.62%, while the non-performing loan (NPL) ratio decreased substantially from 8.58% at the end of 2023 to 6.81% at the end of 2024. • The Bank’s operating expenses rose by PLN 140 million year-on-year, reaching PLN 2 118 million. The main drivers of this increase were higher personnel costs (+ PLN 129 million YoY) and rising IT expenses (+ PLN 28 million YoY). • In 2024, Alior Bank continued to enhance the stability and security of its loan portfolio by increasing its exposure to residential mortgage loans granted to retail customers. The share of these loans (in gross value terms) grew from 28.5% at the end of 20 23 to 31.2% at the end of 2024, supported in part by the Bank’s participation in the Bezpieczny Kredyt 2% (2% Safe Mortgage) programme.
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9 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Summary of Strategic Initiatives in 2024 In 2024, Alior Bank continued the implementation of its business strategy, “Bank for Everyday Life, Bank for the Future” (2023 -2024), focusing on key areas within its defined strategic pillars. Since the strategy was announced in 2023, the organisational structure has remained unchanged, with three core pillars still in effect: Higher Mobility Culture, Support for Entrepreneurship and Modern Bank, developed in 8 strategic directions – each further developed across eight strategic directions. Strategic Pillars and Directions The Bank’s activities under the 2023 strategy were designed to enhance everyday banking, ensuring customer convenience while driving business growth. Despite a challenging market environment, the Bank has been expanding dynamically and successfully delivering on its business objectives. Higher Mobility Culture We are committed to building a primary digital relationship through: • Maintaining our leading position in purchase financing and developing the most convenient payment solutions, • Creating a new, inclusive mobile banking application (Alior Mobile), • Offering personalised communication, leveraging our deep customer insights and hyper - personalisation capabilities. Support for Entrepreneurship We have a strong foundation for growth in the business customer segment, built on: • Expanding technologies to strengthen customer acquisition for micro-enterprises via both remote and traditional channels, • Implementing an advanced technological system to streamline all credit processes, • Enhancing service speed and quality for higher -tier business customers through automated remote systems, • Developing a new digital banking ecosystem and product platforms.
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10 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Modern Bank We remain committed to advancing our technology, capabilities, and corporate responsibility to position ourselves as a truly modern Bank. Our key areas of focus include: • IT development aimed at efficiency and security, leveraging agile methodologies, cloud computing (both private and public), and cybersecurity enhancements as a solid foundation for digital transformation, • Expanding the use of artificial intelligence, process automation, and robotics to enhance the customer experience, • Fostering employee skills and engagement through a personalised approach, a stimulating work environment, and a distinctive corporate culture, • Strengthening our capital base and mitigating credit risk, • Addressing contemporary environmental and climate challenges, with sustainable development now permanently embedded in our strategic goals and organisational structure. Strategy Implementation We remain a universal bank focused on building a digital-first relationship with our customers. Our objective is to maintain our leadership position in purchase financing by providing and developing the most convenient payment solutions in the Consumer Finance sector. In line with our strategy, the Bank prioritises the enhancement of remote customer service channels. One of the key initiatives aimed at maximising personalisation for individual customers is the update of the Alior Mobile application. Alior Bank continues to develop the application, with a strong emphasis on enhancing security and introducing new features and conveniences to improve user experience (e.g., implementing widgets for more intuitive navigation). Leveraging PUSH functionality, increasingly in Re al-Time mode (when the customer requires interaction with the Bank), the Bank communicates effectively with its customers. At the beginning of Q4, Alior introduced several updates to the mobile application. Users can now benefit from the “My Affairs” feature, which allows them to submit applications and ask product-related questions directly from Alior Mobile, to name but a few. Additionally, the transaction history function has been expanded, and payment limits have been integrated into a single interface. To simplify everyday banking and create a more user-friendly application for all customers, the Bank introduced a new functionality – the simple mode in Alior Mobile – at the end of 2024. This feature allows customers to tailor the application interface t o their individual needs by choosing between two usage modes: simple and classic. These improvements have contributed to the continuous growth in the popularity of the mobile application, with an average of 1.4 million customer logins per month and a total of 1.9 million unique logins over the past year. Alior Bank’s comprehensive product and service offering also includes currency exchange platforms that enable customers to exchange currencies independently, without the need to visit a branch or contact a currency dealer. Alior Bank believes that finance should be accessible to everyone, regardless of age – in November 2024, the Bank launched the Alior Kids application along with a dedicated child account, opening the door to the world of finance for young users. Parents ca n now open a Jakże Osobiste Account (Highly Personal Account) for children aged 7 to 12, granting them access to a payment card and application. Through the application, both children and parents can manage the account.
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11 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement To offer instalment payment options to customers of the Shoper e-commerce platform, the Bank, in partnership with the Partner, introduced the Alior Raty plugin. This solution enables online merchants using the platform to offer their customers the ability to spread purchase costs into convenient instalments directly through Alior Bank, significantly increasing payment flexibility and product accessibility for a wider customer base. To respond more quickly to evolving market and customer needs, the Bank implemented an innovative cloud - based insurance sales and service system on the Azure platform. Designed to optimise sales processes, automate customer service, and simplify insurance product management, this system was also adapted to comply with the revised Recommendation U regulations governing insurance sales and distribution. In response to the hardships faced by individuals affected by flooding, the Bank introduced an option to apply for temporary deferral of loan instalment payments for cash loans and instalment credit. Mortgage borrowers impacted by the floods can also seek support from the Borrowers’ Support Fund through Alior Bank. Amid rising housing prices in Poland’s primary and secondary markets, the Bank launched the Własne M w Wielkim Mieście mortgage loan, tailored for purchasing properties in major cities and metropolitan areas under favourable financial conditions, featuring an extended repayment period and additional insurance protection. This offer is available between October 2024 and January 2025. Alior Bank continues to strengthen long -term customer relationships and enhance digital products, ensuring customers can manage their finances conveniently and securely. A key achievement was the successful digitisation of the loan initiation process acros s both branch and remote channels, reducing paper -based documentation. These initiatives align with the Bank’s commitment to sustainable development. To safeguard customer security and comply with legal obligations, in June, the Bank introduced a restricted PESEL number verification service linked to the register maintained by the Ministry of Digital Affairs. This measure aims to prevent unauthorised use of PESEL numbers and enhance data security for customers. We are committed to developing digital relationships with business customers by launching a new online and mobile banking platform, fostering sustainable credit portfolio growth, and supporting the energy transition. Alior Bank continuously focuses on deepening relationships with business customers while actively acquiring new ones by tailoring its transactional product and service offerings to evolving needs. Notable initiatives include the introduction of an online account opening process for sole proprietors, online business registration applications with a linked business account in CEiDG, and identity verification for online processes via the mObywatel (mCitizen) system. In 2024, the Bank recorded an 89% increase in online account openings compared to 2023, with over 1,200 new accounts opened in December alone. Alior Bank introduced a new product: a deposit for new funds available in PLN or USD. This deposit ranks among the highest-yielding savings options in the market. As part of its collaboration with Envirly, the Bank offers businesses preferential conditions for purchasing a CO 2 emissions calculator, supporting companies in fulfilling their carbon f ootprint measurement obligations under the EU’s CSRD directive. The Bank continuously enhances its credit system functionalities for business customers, leading to faster application processing and improved service efficiency. These developments enabled the introduction of a global credit limit for medium and large ent erprises, treasury limits, receivables limits, InvestMax guarantees, and electronic statement signing via SMS by applicants. Through ongoing collaboration with Bank Gospodarstwa Krajowego, the Bank launched Biznesmax Plus and Ekomax products to help customers secure capital for growth and environmentally friendly investments. In H2
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12 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 2024, Alior made the Investmax guarantee from the InvestEU Programme available to customers. This public aid-backed guarantee facilitates access to working capital and investment funding. Alior Bank is advancing the implementation of its new corporate banking platform – Alior Business and Alior Business Mobile – designed to replace the current BusinessPro online banking system used primarily by SMEs and corporations. The new platform is bui lt on four key pillars: self -service, mobile application, online banking service, and integrated ERP-class tools. The objective is to create a comprehensive, multi -channel, and flexible ecosystem that provides businesses with professional support for their operations and growth. In October, the Bank successfully migrated its first customers to the new banking system and commenced a pilot phase under the Friends & Family initiative. The Bank has established KB Remote Relationship Centres for post-sales corporate customer service, allowing business customers of all corporate banking centres to execute transactions via phone, email, or online banking in a quick and convenient fashion. C urrently, over 91% of customer orders are handled remotely without advisor involvement. We strive to achieve organisational efficiency through agile technologies, expertise, and corporate culture, ensuring stability through risk and capital management while maintaining our social responsibility commitments. With a strong focus on customer -centric service, Alior Bank is continuously enhancing its intelligent virtual assistant, InfoNina, expanding chatbot capabilities. The assistant is available in electronic banking (Alior Online), on the Bank’s website, and, as of the first half of the year, in Alior Mobile. The chatbot assists users with inquiries, transaction execution, and product information. On the other hand, the voicebot additionally facilitates credit-related services, including instalment repayment and repayment schedule generation. These bots handle approximately 11,000 daily customer interactions (8,000 via voicebot, 3,000 via chatbot). Furthermore, Alior Bank has implemented outbound bots, which conduct over 2 million conversations annually to assess customer satisfaction, send reminders about loan repayments, or request overdue payments. These bots also facilitate marketing consent updates (supporting subsequent sales initiatives) and no tify customers about upcoming ID document expiry dates, prompting them to update their details. Alior Bank continues to drive automation and robotics in its business processes. In 2024, the Bank introduced over 40 new robots, developed by the Robotics Team and through a citizen development model under the Robotics Academy training programme These implementations primarily support operations, risk management, and customer service for both individual and business customers. Over the past year, th ese robots have completed 6.4 million tasks, performing the workload equivalent to 110 full-time employees each month. The automation efforts have significantly enhanced post -sales service efficiency, empowering customers with more self -service options. The Bank’s post -sales service catalogue now includes over 120 available forms, covering instructions such as adding or re voking account authorisation, ordering recordings of phone conversations and email correspondence (for treasury transactions), submitting requests to amend loan support agreements under the Borrower Support Fund, applying for 2024 mortgage payment holidays , and closing IKE/IKZE accounts. As a result of these advancements, 50% of post -sales service requests submitted via the system now require no manual intervention from Bank employees. Public cloud technology remains a fundamental pillar of the Bank’s IT strategy, providing a foundation for innovative services and a scalable, automated IT infrastructure. The volume of data processed in the cloud continues to rise, while long-term backup storage costs decrease. The Bank is actively working to maximise its use of cloud technology, including offering online services directly through the cloud. This approach enables immediate and automatic scalability in response to real -time service demand. In line with its Multi -Cloud
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13 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Architecture strategy, the Bank has adapted its infrastructure and is now fully prepared to launch internal production systems with an additional cloud service provider. Optimising the organisation of development teams is another key focus of the Bank’s strategy. Agile approach is continuously being refined to create a customer-centric organisation and build highly engaged teams. A new performance monitoring tool has been implemented for IT development teams, with the insights gained informing targeted efficiency -improvement initiatives. The main benefits of these efforts include delivering valuable solutions to customers, a modern workplace, and creating opportunities for professional development through challenging business projects. Alior Bank’s transformation towards an Agile organisation aligns with its core values: #openness, #responsibility, #innovation, and #customer -focus (#otwartość, #odpowiedzialność, #innowacyjność i #zorientowanie na klienta) . The Bank has actively promoted these values among employees through inspiring webinars and development training sessions. Additionally, the #Leadership of Tomorrow (#Przywództwo Jutra) programme, launched in 2023, has strengthened leadership capabilities across the organisation. This in itiative includes mentoring processes, internal training for future leaders, and Action Learning workshops, with 462 participants taking part to date. Employee well-being and healthy lifestyle remain a priority for Alior Bank. The Bank offers a variety of initiatives, such as the “Two Hours for Family , for Human ” campaign, allowing employees to shorten their workday to spend time with loved ones, and the Alior University programme, which supports professional development across diverse skill sets. Employees are also encouraged to participate in sports events, blood donation campaigns, and volunteer work, with the Bank granting two days of paid leave for community engagement. These initiatives have earned Alior Bank widespread recognition, including the Top Employer title and the “Friendly Workplace 2024” certification. Additionally, the Responsible Business Forum’s report, “Responsible Business in Poland. Best Practices”, has for the first time highlighted five initiatives carried out by Alior Bank. This underscores the Bank’s strong commitment to fostering an ESG culture and effectively implementing actions aligned with this policy. The 22nd edition of the aforesaid report features projects such as ESG Awareness Week, designed to enhance employee understanding of sustainability issues; Alior University; ONA – an initiative launched by female employees to support those looking to help others and engage in meaningful social causes; the Alior Bank Olympiad; and the Bank’s broader social engagement efforts aimed at improving the quality of life in local communities. Moreover, Alior Bank has joined the group of signatories of the international Diversity Charter. In the field of risk, the Bank is executing a long-term project to transition from the Standardised Approach (SA) to the Internal Ratings-Based (IRB) Approach for calculating credit risk capital requirements. Implementing this advanced methodology will provide a more precise reflection of the Bank’s actual risk exposure while enhancing risk management capabilities. The project is currently undergoing a three-year Experience Test, after which the Bank will seek regulatory approval from the Polish Financial Supervision Authority (KNF) to adop t the new calculation method. Advanced analytics initiatives are also progressing, with the introduction of a real-time data component that enhances immediate access to up -to-date information (Real-Time). This component has been integrated into a newly developed anti-fraud model for Consumer Finance products in the Individual Customer segment. As a result, the Bank’s loan portfolio continues to improve, with a steady decline in the Non - Performing Loan (NPL) ratio, contributing to reduced risk costs.
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14 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Basic financial data for 2024 The increase in net profit (PLN 2.45 billion in 2024 vs. PLN 2.03 billion in 2023) was driven by several key factors: 1. A stronger loan portfolio, leading to a sharp decline in provisions for expected credit losses, 2. Excess liquidity in the banking sector, which helped lower the cost of deposit funding, 3. A stable yet high NBP reference rate, which remained at 5.75% throughout 2024. Meanwhile, the average WIBOR3M rate, the key benchmark for the Bank’s loan pricing, declined to 5.86% from 6.53% a year earlier. Combined with a PLN 364 million YoY reduction in interest rate hedging costs, this contributed to an increase in the Bank’s net interest margin (NIM) from 5.89% in 2023 to 5.98% in 2024. Only a few one-time factors had a material impact on the Bank’s performance last year, including: • Inflationary pressures, which drove up operating expenses, particularly in personnel costs, • Legal risk costs related to foreign currency mortgage loans, which amounted to PLN 59 million, • The impact of credit holidays, which reduced net interest income by PLN 62 million. At the end of 2024, the Alior Bank Group’s capital position remained robust, with Tier 1 and TCR ratios at 18.27%, providing a solid buffer above regulatory requirements (by 976 basis points and 776 basis points, respectively). The Group also maintained a Tier 1 capital surplus of approximately PLN 5.0 billion above the required thresholds. Alior Bank’s liquidity position remained at a secure level throughout 2024. Liquidity was closely monitored and adjusted as needed by optimising the deposit base and securing additional funding in response to loan portfolio expansion and other liquidity ne eds. At the end of 2024, the Liquidity Coverage Ratio (LCR) of the Alior Bank Group stood at 202%, while the Net Stable Funding Ratio (NSFR) reached 147%. The regulatory minimum for both liquidity ratios is 100%. ROE 23.9% NET PROFIT PLN 2.45 billion NIM 5.98% C/I 34.9% COR 0.62% EQUITY Y/Y PLN +2 billion
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15 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Distribution network and headcount Distribution network At the end of December 2024, we had 51 6 outlets (157 traditional branches, 7 Private Banking branches, 1 2 Corporate Banking Centres, 9 Microenterprise Centres and 331 partner outlets). We also distributed our products through 10 Mortgage Centres and a network of approx. 2 200 credit intermediaries. Until November 30, 2024, the Bank also operates through the Branch in Romania, where customer service was provided via remote channels. By end of 2024, we modernised 91 branches to a “new format”. The role of the new outlets is, above all, to digitise customers and outlet processes, ensure convenience and privacy to our customers, as well as to improve the comfort of work for bankers. The branches in the new format are characteri sed by innovative design and utilise new technologies. At the time of modernisation, we focused on the potential of local suppliers. We used recycled raw materials (e.g. table tops were manufactured from processed yoghurt cups, upholstery and ceilings - from recycled PET bottles). Part of the equipment is made up of wood of fast-growing plants. We also use distribution channels based on a modern IT platform (including online banking, mobile banking, telephone service centres and DRONN technology). Headcount As at 31 December 202 4, the employment in the Alior Bank S.A. Capital Group (as the number of full-time equivalents, including maternity leaves, parental leaves and other long- term absences), was 7 106 FTEs, compared to 7 229 FTEs as at 31 December 2023. A decline in employment was recorded following the closure of the Bank’s Romanian branch and the adjustment of its business model to evolving market conditions.
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16 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Full-Time Equivalents (FTEs) Assessment of activities pursued by the Alior Bank Capital Group The stability of the NBP reference rate had the most significant impact on the Alior Bank Group’s operations. After a period of rate hikes between Q4 2021 and Q3 2022, followed by rate cuts starting in Q3 2023, the NBP reference rate remained steady at 5.75% throughout 2024. As a result of cost -reduction initiatives undertaken between 2020 and 2022, a tighter credit policy, product portfolio expansion, and the rise in market interest rates, Alior Bank Group posted a net profit of PLN 2.45 billion in 2024, with a return on equity (ROE) of 23.9%. For comparison, the net profit in 2023 stood at PLN 2.03 billion, with an ROE of 26.3%. Efficiency Ratio (C/I) – improved to 34.9% in 2024, down from 35.1% in 2023, driven primarily by a rise in net interest income by PLN 0.41 billion year-on-year, which resulted from a reduction in interest expenses by PLN 0.57 billion, from PLN 2.62 billion in 2023 to PLN 2.05 billion in 2024. This improvement further boosted the net interest margin (NIM), increasing from 5.89% in 2023 to 5.98% in 2024. In 2020, the Bank reviewed and optimised the credit portfolio, focusing primarily on reducing credit risk (including by reduc ing exposure to the industries most affected by the pandemic and tightening the lending policy). This had a positive impact on the Bank’s financial result in 2024. The improvement of the overall financial situation of customers also contributed to the reduction of the costs of risk. By improving financial performance, the Bank maintains capital adequacy ratios at safe levels, well above the minimum regulatory levels. They permit stable operation and a further increase in lending activity. The range of products was adapted to the curre nt level of interest rates and the effects of the CJEU judgement (concerning the partial return a commission in the event of early repayment of a consumer loan by the customer). In addition, despite the growing inflationary pressure, the Bank continues to continuously improve efficiency. 7 106 7 194 7 247 7 271 7 229 Q4 2024 Q3 2024 Q2 2024 Q1 2024 Q4 2023
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17 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The Management Board of the Bank is positive about the operations of the Alior Bank S.A. Group in 202 4 and its financial performance. Impact of war in Ukraine on the operations of Alior Bank In view of the pending armed conflict in Ukraine, which has been on -going since 24 February 2022, the Bank constantly reviews its impact on the Bank’s macroeconomic environment. The Alior Bank Capital Group intensively monitors the impact of the geopolitical situation related to the war in Ukraine on its operations and the quality of the credit portfolio and does not identify any significant threats in that regard.
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18 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement IV. External environment of the Bank’s operations War in Ukraine The outbreak of war in Ukraine in 2022 significantly disrupted the stability of financial markets. Russian aggression increased risk aversion in the region, disrupted supply chains, and threatened the stability of the energy system, which was highly depend ent on Russian resources. As a result, energy prices surged in 2022, partially stabilising in 2023, although they remained at elevated levels. In 2024, energy commodity prices underwent further normalisation. Despite the ongoing conflict, the Polish złoty appreciated against the euro and the dollar in 2023 and continued to strengthen against the euro in 2024. The WIG20 index recorded year-on-year growth in both years. Market risk related to the war remained elevated; however, the limited exposure of Polish banks to assets from Russia, Belarus, and Ukraine, along with the absence of conflict escalation, mitigated its negative impact on financial markets. In 2024, the most pessimistic war scenarios did not materialise. Throughout the year, financial markets did not experience significant effects of the conflict, although the associated risks persist. Poland’s Economic Growth According to the preliminary estimate by Statistics Poland (GUS), Poland’s GDP growth rate increased from 0.1% year-on-year in 2023 to 2.9% in 2024. The economic recovery accelerated in H1 2024 but slowed down in H2 due to, among other factors, the negative impact of rising energy prices on consumer spending. In 2024, the expected shift in the GDP growth structure took place. Private consumption returned to a growth path amid a significant weakening of investments (down to 1.3% YoY). However, considering th e solid real wage growth, we assess that the consumption recovery was moderate. Its increase was constrained by savings rebuilding due to the positive real interest rate. The substantial weakening of investment dynamics was largely attributable to the cyclical nature of EU fund expenditures. In 2023, projects from the “old” 2014-2020 financial perspective were being finalised, while in 2024, this stimulus was still very weak. Additionally, the delay in the National Recovery Plan (KPO) further deepened the d eficit in EU budget expenditures. Over the first three quarters of 2024, it is also worth noting the normalisation of inventory and net export contributions to the annual GDP growth rate, following the positive contribution of net exports and negative inve ntory changes in 2023. During this period, GDP growth was also significantly supported by public consumption. For 2025, we expect a further acceleration of GDP growth to 3.7% YoY. We anticipate moderate private consumption growth (3.6% YoY) and a marked acceleration in investments (to 6.8% YoY), supported by the intensification of projects implemented under the National Recovery Plan (KPO) and the EU budget, as well as an improvement in external demand.
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19 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement GDP Growth Rate */ Source: Statistics Poland (GUS) Labour Market Situation In 2024, the labour market situation remained relatively favourable, despite a decline in employment within businesses. With the economic recovery underway, the registered unemployment rate remained fairly stable. According to Statistics Poland (GUS), it stood at 5.1% at the end of December 2 024, unchanged from the previous year, and remained at historically low levels. Among EU countries, Poland continues to be the in headlines of the leaders with the lowest unemployment rates. Despite a recovery in demand, there was persistent pressure on wage growth, even as inflation declined, leading to the optimisation of employment in the enterprise sector. In 2024, the average monthly employment in the enterprise sector decreased by 25,000 jobs, and the annual employment growth rate stood at 0.4% in December 2024. According to the Labour Force Survey (BAEL – Badanie Aktywności Ekonomicznej Ludności), the number of employed persons during 2024 declined by -0.6% year-on-year, marking the weakest result in recent years. Throughout 2024, the number of foreigners supporting the Polish labour market steadily increased. According to the Social Insurance Institution (ZUS), by the end of December 2024, the number of insured foreign nationals reached 1.19 million, an increase of 65.2 thousand compared to the end of 2023. In 2024, the annual growth rate of average monthly wages in the enterprise sector was 11.0%, which, alongside a noticeable decrease in inflation compared to 2023, resulted in a substantial increase in the real income of workers. As a result, household cons umption increased significantly in comparison to the decline in 2023, although it was simultaneously constrained by a greater propensity to save. The wage fund in the enterprise sector, despite some reductions in employment, grew in real terms by approxima tely 7.0% year -on-year in 2024, representing the best result in about five years. In 2024, the nominal wage growth in the national economy accelerated to 13.6% year-on-year, driven in part by significant pay increases in the public sector and a strong rise in the minimum wage. In 2025, we expect the wage growth rate to weaken, averaging 7.7% year -on-year, amid a slight increase in employment following a decrease in 2024 and a modest reduction in the unemployment rate. The demographic 0,3 12,2 6,7 8,7 8,9 6,3 4,1 2,5 -0,5 -0,6 0,5 1,0 2,1 3,2 2,7 3,2 -10,0 -5,0 0,0 5,0 10,0 15,0 Private consumption Public consumption Investment Inventories Net export GDP
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20 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement situation, resulting in a decline in the labour force, alongside the continuation of the economic recovery, will put pressure on wage growth, supporting a recovery in consumption. GDP Growth Rate and Unemployment Rate */ Source: Statistics Poland (GUS) Inflation and Interest Rates In 2024, inflation saw a significant drop, from 11.4% the previous year to 3.6%, supported by a recovery in economic activity and global disinflationary trends. After reaching its lowest point in March 2024 (2.0% YoY), inflation gradually picked up again, peaking at 5.0% YoY in October. In the final two months of the year, it stabilised at 4.7% YoY. This inflation rebound (starting in April) was partly driven by increased domestic demand and the return of the 5% VAT on food. In the second half of the year, inflation was further accelerated by the phasing out of energy price shields (electricity and gas prices). Core inflation (excluding food and energy) hit its lowest level in June 2024 at 3.6% YoY, and stood at 4.0% YoY in December. While core inflation had significantly decreased from 10.2% YoY in 2023 to 4.3% YoY, it remained above the National Bank of Poland’s (NBP) target of 2.5% (+/- 1 percentage point). After cuts totalling 100 basis points in H2 2023, interest rates in Poland remained unchanged throughout 2024, in line with the trend of monetary policy easing by major central banks, including in the euro area and the United States. By December 2024 and January 2025, the NBP reference rate stood at 5.75%. Looking ahead to 2025, we expect inflation to rise to 4.5% YoY. In the first half of the year, CPI will stay above 5% YoY, peaking in the first quarter, largely due to the low base effects from 2024. In the second half, we anticipate a drop below 4% YoY, though th e likely adjustment of energy prices for households by the government means the CPI will probably remain above the inflation target. With inflation expected to slow from the second quarter onwards, we foresee cautious interest rate cuts by the NBP (totalling 75 basis points), most likely in the second half of the year. 4,3 4,8 5,3 5,8 6,3 6,8 7,3 -2,0 -1,0 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 11,0 12,0 13,0 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 4Q'24 GDP (YoY, la) Unemployment rate (%, ra)
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21 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Global Economy In 2024, there were varying rates of GDP growth across countries. The US economy showed signs of slowing compared to 2023, although performance still exceeded expectations. The GDP growth rate in the US slowed to 2.8% YoY1 in 2024, down from 2.9% the previous year. For the second year in a row, US consumers showed resilience despite high interest rates. Meanwhile, the eurozone economy entered a phase of weak recovery after stagnating in 2023, with its industrial sector stil l in crisis. According to Eurostat, GDP growth in the eurozone for 2024 was 0.7% YoY, up from 0.4% in 2023. By contrast, China’s economic growth in 2024 stood at a strong 5.0% 2, in line with the government’s target. However, this growth was not balanced, with positive activity in industry and external demand, but weaker internal demand. Despite fiscal and monetary stimulus, efforts to stimulate domestic demand were inadequate, m aking it a priority for China in 2025. In 2024, key sources of uncertainty included the ongoing conflicts in Ukraine and the Middle East, as well as political developments in both the US and the eurozone. Oil prices remained resilient despite these geopoli tical disruptions, gradually decreasing throughout the year. In 2024, the disinflationary process continued in Western economies, although it was held back by persistent core inflation, particularly in the services sector. Inflation rates remained above the targets of the major central banks (2.0%), including the EC B and the Fed. In the eurozone, HICP inflation, after peaking at 10.6% YoY in October 2022, fell to a low of 1.7% YoY in September 2024, but then rose again, reaching 2.4% YoY in December. Similarly, in the US, CPI inflation, after peaking at 9.1% YoY in J une 2022, followed a downward trend until hitting 2.4% YoY in September 2024, before edging up to 2.9% YoY in December. At the same time, the labour market in the eurozone remained strong, with moderate cooling in the US job market. The relatively strong labour market conditions in both regions posed challenges for monetary policy of major central banks and delays in its transmission. Against this backdrop, major central banks began gradually easing monetary policy. From June to December 2024, the ECB cut rates by 100 basis points, including reducing the deposit rate to 3.00% in December. The Fed began its rate cuts later, in September, but by year-end had also lowered rates by 100 basis points, bringing them to a range of 4.25-4.50% in December. Communication from both central banks suggests the possibility of continued cautious monetary easing in 2025, with the Fed being more cautious in this regard compared to the ECB. Looking ahead to 2025, projections for the eurozone and the US economy diverge slightly. According to the ECB’s December forecast, GDP growth in the eurozone in 2025 is expected to accelerate slightly to 1.1%, with HICP inflation nearing the ECB’s target o f 2.0%. For the US economy, the Fed’s December forecast indicates that broad PCE inflation is expected to edge up to 2.5% in 2025, alongside a further slowdown in GDP growth and additional, though smaller than in 2024, interest rate cuts (around 50 basis p oints). The Fed’s cautious approach to further monetary easing is also influenced by inflation risks stemming from the implementation of President D. Trump’s election promises. 1Bureau of Economic Analysis 2National Bureau of Statistics of China
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22 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Exchange Rate The year 2024 was marked by heightened volatility in the primary currency pair. The EUR -USD exchange rate fluctuated within an approximate range of 1.03 to 1.12. Financial markets throughout 2024 remained influenced by the monetary policies of major centra l banks, global economic recovery, and geopolitical and political factors. Up until April, the US dollar appreciated due to strong macroeconomic data from the US, a more hawkish stance by the Fed compared to the ECB, and escalating conflicts in the Middle East. Between May and September, the euro strengthened against the dollar, primarily due to a significant deterioration in US labour market data and heightened concerns over recessionary risks in the United States. From October onwards, the dollar regained strength against the euro amid improving US economic data and increasing prospects of D. Trump’s victory in the presidential elections, with EUR-USD ending the year around 1.035, the lowest level since H2 2022. Several factors contributed to the dollar’s appreciation in late 2024, including intensified conflict in the Middle East, a softening of expectations regarding further Fed rate cuts in response to robust US economic data, continued geopolitical uncertainty surrounding the Iran -Israel conflict, tarif f- related threats from US President-elect D. Trump, and growing political instability in Europe (Germany, France). Overall, in 2024, EUR -USD declined by 6.2% year -on-year. In 2025, the primary currency pair’s performance will largely depend on the ongoing monetary policies of major central banks, particularly the ECB and the Fed, as well as geopolitical and political developments. After demonstrating resilience to external conditions in 2023, the Polish zloty exhibited a mixed response in 2024. It appreciated against the euro while depreciating against the U.S. dollar. The zloty was supported by the disbursement of National Recovery Plan (KPO) funds, improved macroeconomic conditions, and the absence of an adverse war scenario in Ukraine. A crucial factor was the stabilisation of the National Bank of Poland’s (NBP) interest rates amidst monetary policy easing by major central banks. By the end of 2024, the EUR/PLN exchange rate was 1.5% lower, while the USD/PLN rate was 4.9% higher compared to the end of 2023, reaching 4.28/EUR and 4.13/USD, respectively.3 3 Source: Bloomberg
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23 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement EUR/PLN and USD/PLN Exchange Rates Against CPI Inflation and Reference Rate */Source: Bloomberg Banking Sector Throughout 2024, the banking sector’s performance continued to be fostered by high interest rates. The most significant increase in lending activity was observed in the household sector, while corporate lending showed a more moderate improvement. Despite the continued growth in interest income, banking sector profitability remained constrained by legal risk provisions. The total capital ratio of the banking sector stood at 21.3% at the end of September 2024, lower than at the end of 2023, while the Tier I capital ratio was 20.0%. Key Profit and Loss Account Figures4 Between January and December 2024, the banking sector generated a net profit of PLN 42.2 billion, compared to PLN 27.9 billion in the same period of the previous year, reflecting a 50.9% year-on-year increase. Total 4 Source: Monthly data for the banking sector, Polish Financial Supervision Authority 0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0 16,0 18,0 20,0 3,50 3,70 3,90 4,10 4,30 4,50 4,70 4,90 5,10 Dec-21 Dec-22 Dec-23 Dec-24 USD/PLN (la) EUR/PLN (la) NBP reference rate (%, ra) Inflation CPI (%, ra)
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24 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement interest income during the period under review amounted to PLN 173.7 billion, up from PLN 166.5 billion in the previous year (+4. 3% YoY). Net profit was also positively impacted by fee and commission income, which rose by 4.6% YoY to PLN 19.6 billion. The largest negative impact on the banking sector’s net profit stemmed from interest expenses between January and December 2024, which, although lower by 6.2% YoY, still amounted to PLN 66.6 billion. Additionally, operating and depreciation costs increased by 10.9% YoY to PLN 56.4 billion. Provisions and impairment charges, including those for legal risks associated with foreign currency mortgage loans, also weighed on net profit, amounting to PLN 18.8 billion, a growth of 15.8% YoY. Wage pressures significantly influenced banks’ operating costs in 2024. Furthermore, from June onwards, the banking sector’s performance was affected by the costs associated with loan repayment holidays, which, although less extensive than in 2023, remained a notable factor for the banking sector’s profitability in 2024.5 Banking Sector Financial Performance (January–December 2024, PLN billion) Source: Own elaboration based on data of the Polish Financial Supervision Authority Between January and December 2024, banking sector margins increased. Amid elevated interest rates, the net interest margin reached 3.64% at the end of December, compared to 3.57% at the end of December 2023. Profitability, as measured by ROA and ROE 6, also improved in 2024. Return on equity (ROE) reached 15.66% by the end of December 2024, up from 11.73% in December 2023, while return on assets (ROA) increased to 5 In 2024, borrowers will be able to suspend credit and interest instalments for 2 months between 01.06.24 -31.08.24 and for 2 months between 01.09.24 - 31.12.2024 6 ROA and ROE – the ratio of the sum of the financial result from 12 consecutive months to accordingly: average assets and average equity in the same period 173,7 - 66,6 2,0 19,6 2,5 - 56,4 - 18,8 - 13,4 42,2 - 0,4 0 20 40 60 80 100 120 140 160 180 200
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25 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 1.33% from 0.97% over the same period. The R/I 7 ratio declined from 15.1% in December 2023 to 14.3% in December 2024. Rising operating income, coupled with controlled cost growth, led to a decrease in the C/I 8 ratio to 43.0% by the end of December, down from 47.26% in December 2023. Loans and Deposits9 Deposits from the non -financial sector remained the primary source of bank funding between January and December 2024. By the end of December, the total value of non-financial sector deposits reached PLN 1 957 billion (+7.8% YoY). Household deposits grew at a faster pace (+9. 7% YoY to PLN 1 377 billion) compared to corporate deposits (+ 3.6% YoY). The higher growth rate in household deposits was driven by a relatively favourable labour market and positive real interest rates that encouraged savings. The banking sector’s total assets stood at PLN 3,335 billion at the end of December 2024, reflecting a 10.8% YoY increase. Credit activity in 2024 exhibited gradual growth, with the annual growth rate of non -financial sector 10 loans increasing by 4.5% YoY to PLN 1,145 billion throughout the January–December period. Corporate loans rose by 3.3% YoY to PLN 401.6 billion, while household loans expanded to PLN 735.2 billion (+5.2% YoY). Consumer lending showed notable improvement, while mortgage loan growth in 2024 was constrained by the absence of a government housing support programme following the discontinuation of the “Safe 2% Mortgage” scheme. Corporate lending activity remained weak in operational loans, while investment loans grew at a slow pace due to subdued investment activity in 2024. Liquidity conditions in the banking sector remained stable in H1 2024. The Liquidity Coverage Ratio (LCR) remained above the required minimum (100%) throughout the January –December period, reaching 228% for commercial banks (excluding associating banks) at the end of November, compared to 215% in December 2023. The Net Stable Funding Ratio (NSFR) also remained above the required 100% threshold, standing at 167% in September 2024 versus 162% in December 2023. 7 R/I – the ratio of provisions and impairment allowances for 12 consecutive months to total net operating income for the same period 8 C/I ratio – the ratio of expenses for 12 consecutive months to total net operating income for the same period 9 Source: Monthly data for the banking sector, Polish Financial Supervision Authority 10 Gross non-performing receivables from non-financial sector – portfolio B, KNF data
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26 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement V. Financial results of the Alior Bank Capital Group Income statement Detailed items of the income statement of Alior Bank Capital Group are presented in the table below: 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Change Change (in PLN ‘000) (in PLN ‘000) (in PLN ‘000) (%) Interest income calculated using the effective interest method 6 663 692 6 814 190 -150 498 -2.2% Income of a similar nature 570 025 581 779 -11 754 -2.0% Interest expense -2 050 006 -2 623 599 573 593 -21.9% Net interest income 5 183 711 4 772 370 411 341 8.6% Fee and commission income 1 352 300 1 822 077 -469 777 -25.8% Fee and commission expense -485 291 -964 565 479 274 -49.7% Net fee and commission income 867 009 857 512 9 497 1.1% Dividend income 322 185 137 74.1% The result on financial assets measured at fair value through profit or loss and FX result 33 998 63 776 -29 778 -46.7% The result on derecognition of financial instruments not measured at fair value through profit or loss 27 477 12 251 15 226 124.3% measured at fair value through other comprehensive income 26 889 10 346 16 543 159.9% measured at amortized cost 588 1 905 -1 317 -69.1% Other operating income 110 184 128 819 -18 635 -14.5% Other operating expenses -162 664 -202 719 40 055 -19.8% Net other operating income and expenses -52 480 -73 900 21 420 -29.0% General administrative expenses -2 117 647 -1 977 199 -140 448 7.1% Net expected credit losses -403 762 -625 292 221 530 -35.4% The result on impairment of non-financial assets -1 729 -4 912 3 183 -64.8% Cost of legal risk of FX mortgage loans -59 355 -53 983 -5 372 10.0% Banking tax -279 667 -263 753 -15 914 6.0%
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27 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Gross profit 3 197 877 2 707 055 490 822 18.1% Income tax -752 855 -676 930 -75 925 11.2% Net profit 2 445 022 2 030 125 414 897 20.4% Net profit attributable to equity holders of the parent 2 445 022 2 030 125 414 897 20.4% The gross (pre-tax) profit in 2024 reached PLN 3 197.9 million, marking a year-on-year increase of PLN 490.8 million (18.1%). Income tax increased by 11.2%, totalling PLN 752.9 million. The Alior Bank Group’s net profit (attributable to shareholders of parent company) stood at PLN 2 445.0 million in 2024, reflecting a year -on- year increase of PLN 414.9 million, or 20.4%. Return on Equity (ROE) and Return on Assets (ROA): ROE was 23.9%, while ROA stood at 2.7%. Total income (in PLN million) – consolidated data Interest income reached PLN 5 184 million, representing the primary revenue component of Alior Bank Group, accounting for approximately 85.5% of total revenues in 2024. Compared to 2023, net interest income increased by 8.6%, despite persistently lower interest rates, which remained relatively high throughout 2024. An additional factor supporting the improvement in net interest income was lower hedging costs, which had a positive impact on profitability. Furthermore, the inc rease in the net loan portfolio al so contributed to higher interest income. It is also worth noting the decline in funding costs, both for current and term deposits in the retail and business segments. The Monetary Policy Council (RPP), after cutting interest rates by 75 basis points in September 2023 and an additional 25 basis points in October 2023, decided to pause further reductions, maintaining the NBP reference rate at 5.75% throughout 2024. The WIBOR3M rate, which serves as the Bank’s primary benchmark for loan pricing, averaged 5.86% in 2024, slightly lower than the 6.53% average recorded in 2023. Despite the decline in the average WIBOR3M rate, the Bank’s net interest margin (NIM) increased from 5.89% in 2023 to 5.98% in 2024. 4 772 5 184 858 8672 9 2023 2024 Net interest income Net fee and commission income Other income 5 632 6 060
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28 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Interest rates used by the Bank, broken down by individual credit products and the average interest rate on deposits, has been presented in the table below: 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 (%) (%) LOANS Retail segment, including: Consumer loans 10.33 10.72 Housing loans 7.83 7.51 Business segment, including: Investment loans 8.33 9.40 Operating loans 8.64 9.65 DEPOSITS Retail segment, including: Current deposits 1.10 1.34 Term deposits 3.90 5.29 Business segment, including: Current deposits 0.86 1.04 Term deposits 4.12 5.48 Net fee and commission income increased by 1.1% in 2024 compared to 2023, reaching PLN 867.0 million. The largest revenue component came from foreign exchange transactions, generating PLN 310.8 million, which represented a 11.8% decline compared to 2023. This decrease was primarily due to accounting methodology changes – in 2023, FX transaction income included allocations from trading income, whereas from 2024 onwards, it is reported exclusively under fee and commission income. Another key component of fee and commission income was loan, leasing, and acquired receivables -related commissions, which generated PLN 239.8 million, reflecting a 4.5% year-on-year decrease. Growth in fee and commission income was recorded in account maintenance, transfers, and cash handling fees, which increased by 3.5% to PLN 175.1 million in 2024, compared to PLN 169.2 million in 2023. The fee income from payment and credit card services also rose, reaching PLN 62.2 million in 2024, compared to PLN 18.5 million in 2023. The present ation of brokerage fees was adjusted, and these fees are now reported under “Fee and Commission Income” instead of “Other Operating Income”. This change increased 2023 commission income by PLN +20 million and added PLN 19.9 million to the 2024 total. Taking these changes into account, brokerage fees grew by 10.9% year -on-year, reaching PLN 72.8 million in 2024. Other fee and commission-related revenues and expenses amounted to PLN -72.4 million, marking a PLN 13.8 million increase compared to 2023.
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29 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Net fee and commission income (in PLN million) – consolidated data In 2024, operating expenses amounted to PLN 2 118 million, representing a year-on-year increase of PLN 140 million (7.1%). The rise in costs was primarily driven by higher personnel expenses, which grew to PLN 1 238 million, up by PLN 129 million compared to 2023. General administrative expenses, adjusted for BFG (Bank Guarantee Fund) contributions but including taxes and fees, amounted to PLN 568 million in 2024, marking a 3.2% increase compared to the previous year. The main drivers of higher administrative costs included higher IT expenses (+PLN 28.0 million), increased marketing costs (+PLN 11.3 million), and higher ext ernal service costs (+PLN 3.6 million). Other operating expenses rose by PLN 5.2 million, reaching PLN 60.7 million. Meanwhile, property maintenance costs declined by PLN 21.7 million, amounting to PLN 86.7 million. The BFG contribution in 2024 was PLN 18.2 million lower compared to 2023. Due to effective cost control and revenue growth in 2024, the Cost-to-Income (C/I) ratio improved to 34.9%, marking an improvement of 0.2 percentage points compared to 2023, when the ratio stood at 35.1%. 352,3 310,8 251,1 239,8 169,2 175,1 65,6 72,8 - 86,2 - 72,4 86,9 78,7 18,5 62,2 2023 2024 Payment and credit cards service (net) Bancassurance (net) Other fee/commission revenue and expenses (net) Brokerage fees (net) Account maintenance, transfers, and cash handling fees (net) Loan, leasing, and acquired receivables FX transactions 867,0857,5
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30 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Operating expenses (in PLN million) – consolidated data Net expected credit losses Net allowances for expected credit losses amounted to PLN -403.8 million in 2024, compared to PLN -625.3 million in 2023, representing an 35.4% improvement. The cost of risk (CoR) ratio stood at 0.62% in the reporting period, compared to 0.98% in 2023. Net expected credit losses (in PLN thousand) – consolidated data 01.01.2024 - 31.12.2024 01.01.2023 - 31.12.2023 Change r/r (%) Expected credit losses Stage 3 -736 631 -853 926 -13.7% retail customers -349 184 -465 991 -25.1% business customers -387 447 -387 935 -0.1% Expected credit losses 1 and 2 (ECL) 128 521 116 441 10.4% Stage 2 140 776 81 477 72.8% retail customers 86 262 68 499 25.9% business customers 54 514 12 978 320.0% Stage 1 -12 255 34 964 - retail customers 21 055 33 082 -36.4% business customers -33 310 1 882 - POCI -91 589 -176 410 -48.1% Recoveries from off-balance sheet 267 447 239 448 11,7% Investment securities -2 840 7 035 - 1 109 1 238 550 568 259 27059 41 2023 2024 Costs of Banking Guarantee Fund Amortization General and administrative costs Employee expenses 1 977 2 118
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31 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Off-balance provisions 31 330 42 120 -25.6% Net expected credit losses -403 762 -625 292 -35.4% Net impairment charges on non-financial assets Net impairment charges on non-financial assets amounted to PLN -1.7 million in 2024. Balance Sheet As of 31 December 2024, the Alior Bank Group’s balance sheet total reached PLN 93.3 billion, representing a PLN 3.2 billion increase (+ 3.5%) compared to the end of December 2023. The largest asset component remained loans to customers, totalling PLN 62.7 billion. Their share of balance sheet total at the end of December 2024 stood at 67.2%, marking a decline of 0.4 percentage points compared to the end of December 2023. The second -largest asset category as of 31 December 2024 was investment financial assets, which amounted to PLN 23.6 billion, accounting for 25.3% of total assets (compared to PLN 18.8 billion or 20.9% of assets at the end of December 2023). The primary source of funding for the Alior Bank Group’s operations remains customer deposits, which totalled PLN 76.9 billion at the end of December 2024, representing 82.5% of the Bank’s consolidated balance sheet total. Customer deposits increased by PLN 3.9 billion (+5.3%) compared to the end of December 2023. The second-largest source of funding – equity – amounted to PLN 11.2 billion at the end of December 2024, representing 12.0% of the Bank’s balance sheet total. In the customer deposit structure, the largest share came from the retail segment, which accounted for 70.4% of the customer deposit portfolio at the end of December 2024. Compared to 31 December 2023, this share increased by 1.1 percentage points. The tables below present detailed items of assets, liabilities and equity as at 31 December 2024 along with comparable data. ASSETS 31.12.2024 31.12.2023 Change Change (in PLN ‘000) (%) Cash and cash equivalents 2 123 351 2 539 259 -415 908 -16.4% Amounts due from banks 1 821 581 4 615 420 -2 793 839 -60.5% Investment financial assets: 23 602 885 18 820 432 4 782 453 25.4% measured at fair value through other comprehensive income 21 204 007 15 471 615 5 732 392 37.1% measured at fair value through profit or loss 240 942 423 139 -182 197 -43.1% measured at amortized cost 2 157 936 2 925 678 -767 742 -26.2% Derivative hedging instruments 274 711 336 122 -61 411 -18.3% Loans and advances to customers 62 735 968 60 965 097 1 770 871 2.9% Assets pledged as collateral 18 029 46 894 -28 865 -61.6% Property, plant and equipment 697 757 743 497 -45 740 -6.2% Intangible assets 471 899 412 070 59 829 14.5% Investments in subsidiaries and associates 0 0 0 - Non-current assets held for sale 0 0 0 -
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32 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Income tax asset 823 185 983 992 -160 807 -16.3% current income tax asset 0 1 340 -1 340 -100.0% deferred income tax asset 823 185 982 652 -159 467 -16.2% Other assets 724 121 671 351 52 770 7.9% TOTAL ASSETS 93 293 487 90 134 134 3 159 353 3.5% LIABILITIES AND EQUITY 31.12.2024 31.12.2023 Change Change (in PLN ‘000) (%) Amounts due to banks 160 125 288 318 -128 193 -44.5% Amounts due to customers 76 936 600 73 078 072 3 858 528 5.3% Financial liabilities held for trading 196 450 276 463 -80 013 -28.9% Derivative hedging instruments 450 383 682 631 -232 248 -34.0% Change in fair value measurement for hedged risk -53 015 -229 -52 786 23050.7% Provisions 321 794 309 976 11 818 3.8% Other liabilities 1 708 435 2 653 900 -945 465 -35.6% Income tax liabilities 278 980 326 235 -47 255 -14.5% current income tax liabilities 277 359 324 207 -46 848 -14.5% deferred income tax liabilities 1 621 2 028 -407 -20.1% Liabilities from the issue of debt securities 2 087 016 2 109 179 -22 163 -1.1% Subordinated liabilities 0 1 159 999 -1 159 999 -100.0% Total liabilities 82 086 768 80 884 544 1 202 224 1.5% Share capital 1 305 540 1 305 540 0 0.0% Supplementary capital 7 438 105 6 027 552 1 410 553 23.4% Revaluation reserve -197 164 -291 439 94 275 -32.3% Other reserves 161 792 161 792 0 0.0% Foreign currency translation differences 256 2 252 -1 996 -88.6% Accumulated losses 53 168 13 768 39 400 286.2% Profit for the period 2 445 022 2 030 125 414 897 20.4% Equity 11 206 719 9 249 590 1 957 129 21.2% TOTAL LIABILITIES AND EQUITY 93 293 487 90 134 134 3 159 353 3.5% Loans granted within the retail segment (Individual Customers – KI) included consumer loans and mortgage loans. As of 31 December 2024, their total net volume amounted to PLN 39.8 billion, representing a 4.8% increase compared to the end of December 2023. The balance of mortgage loans increased by 10.9% year-on- year, while consumer loans recorded a slight decline of 0.9% compared to the net volume at the end of 2023, reaching a net value of PLN 19.4 billion. In the business segment, receivables from finance lease agreements increased by 7.7% year-on-year, reaching a net value of PLN 5.6 billion. Other loans and borrowings, which accounted for 75.4% of the business segment, recorded a slight decrease of 2.5%, reaching PLN 17.2 billion.
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33 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The total net loan portfolio of the Bank amounted to PLN 62.7 billion as of 31 December 2024, compared to PLN 61.0 billion at the end of 2023. Receivables from customers (in PLN billion) Territorial structure of receivables from customers as at 31 December 2024 and 31 December 2023 18,4 20,4 19,6 19,4 5,2 5,6 17,7 17,3 31 December 2023 31 December 2024 Other loans and advances (CS) Finance lease receivables (CS) Consumer loans (RS) Loans for residential properties (RS) 61,0 62,7
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34 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Current deposits are the main component of liabilities to customers. They accounted for 69.9% of all liabilities towards customers as at December 31, 2024 (an increase of 0.8 p.p. compared to the share as the end of 2023). Term deposits were the second largest item of liabilities towards customers, which accounted for 29.2% of all liabilities towards customers as at the end of December 2024 (a decrease in share by 0.9 p.p. compared to the end of 2023). As at December 31, 2024, the recoverable amount of the collateral established on accounts and assets of borrowers under Alior Bank amounted to PLN 27 545 million (including retail customers: 12 758 and business customers: 14 787). Structure of amounts due to customers (in PLN billion) Structure of amounts due to customers (in PLN billion) – by segments 50,5 53,8 22,0 22,5 0,5 0,7 31 December 2023 31 December 2024 Other liabilities Term deposits Current deposits 73,1 76,9 50,7 54,2 22,4 22,8 31 December 2023 31 December 2024 Corporate segment Retail segment 73,1 76,9
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35 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Territorial structure of deposits as at 31 December 2024 and 31 December 2023 Off-balance sheet liabilities In this area, the Bank presents financing and guarantee liabilities. In the item of liabilities of a financial nature, the Bank has commitments to grant loans, which include: approved loans, credit card limits, overdraft limits. Guarantees are presented in the guarantee position, which constitute a collateral for the fulfilment of the Bank's customers' obligations towards third parties. The guarantee values reflect the maximum possible loss that would be disclosed on the balance sheet date if all customers did not satisfy their obligations. As at 31 December 2024, Alior Bank granted 1042 active guarantees for a total amount of PLN 957,289,000. As at 31 December 2023, this number amounted to 1024 for a total amount of PLN 823,433,000. The Bank makes sure that the time structure of the guarantees is appropriate. Active guarantees with less than two years to maturity (829 items) amounted to PLN 707,198,000. The total value of off-balance-sheet liabilities granted to customers as at 31 December 2024 amounted to PLN 12,640,995,000. This amount consisted of PLN 11,683,706,000 off-balance-sheet contingent liabilities related to financing and PLN 957,289,000 off-balance-sheet guarantee liabilities. The total value of off-balance-sheet liabilities granted to customers as at 31 December 2023 amounted to PLN 12,447,700,000. This amount consisted of PLN 11,624,267,000 off-balance-sheet contingent liabilities related to financing and PLN 823,433,000 off-balance-sheet guarantee liabilities.
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36 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Off-balance-sheet liabilities granted (in PLN ‘000) Off-balance-sheet contingent liabilities granted to customers 31.12.2024 31.12.2023 Off-balance-sheet liabilities granted 12 640 995 12 447 700 Financing 11 683 706 11 624 267 Guarantee 957 289 823 433 Off-balance-sheet liabilities granted to customers – guarantees – by entity (in PLN ‘000) Breakdown by entity 31.12.2024 31.12.2023 Entity 1 107 448 60 000 Entity 2 60 000 60 000 Entity 3 60 000 50 000 Entity 4 50 000 50 000 Entity 5 50 000 46 862 Entity 6 42 825 35 547 Entity 7 39 982 35 000 Entity 8 35 000 33 970 Entity 9 30 172 27 620 Entity 10 30 000 24 000 Other 451 862 400 434 Off-balance-sheet liabilities granted to customers – by product (in PLN ‘000) Broken down by product 31.12.2024 31.12.2023 Lines of credit 11 639 317 11 486 522 Credit commitments 44 389 137 745 Guarantees 957 289 823 433 Toral 12 640 995 12 447 700
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37 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Financial projections Alior Bank did not publish any projections of financial results. Factors that may have an impact on Alior Bank’s activities in the perspective of subsequent quarters The Bank has identified the following factors that may influence its financial performance over the next 12 months: • The scale of demand for banking services from Customers, • Customers’ ability to meet their financial obligations on time, • The overall macroeconomic situation in the country, as reflected by key indicators such as inflation levels, unemployment rate, and GDP growth rate, • The economic situation within the European Union, which, among other aspects, determines the volume of Polish enterprises’ exports, • The pace of implementation of projects co-financed by EU funds, particularly within the framework of the National Recovery Plan (KPO), • Decisions of the Monetary Policy Council, especially the timing and extent of anticipated interest rate cuts, • Geopolitical events, including the ongoing armed conflict in Ukraine, conflicts in the Middle East, and migration movements, • The expansion of banking service offerings by unregulated entities, • The introduction of a government programme aimed at supporting the housing market, • Ongoing consolidation and restructuring processes within the banking sector, • Potential rulings by the Court of Justice of the European Union, the Supreme Court, or other state institutions, particularly concerning foreign currency mortgage loans, cost -free credit sanctions, and cash loans, • The reform of the reference rate, i.e., the replacement of the WIBOR benchmark with a new index.
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38 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement VI. Business activities of Alior Bank Activities pursued by Alior Bank Alior Bank is a universal credit and deposit bank providing services to natural persons and legal entities (including foreign persons and entities). Our core activities include maintaining bank accounts, providing loans and advances, issuing bank securitie s, and buying and selling foreign exchange. We also pursue brokerage, financial advisory and intermediation services and provide other financial services. We operate in Poland. In the years 2017 – 2024, we conducted deposit and lending activities in Romania. The termination of the operational activities of the Branch in Romania took place on November 30, 2024. We have segmented the market as follows: Retail customer (retail segment) Business customer (business segment) Treasury activity Detailed information on the Bank’s business segments is presented in the Consolidated financial statements of the Alior Bank S.A. Capital Group the year ended 31 December 2024 (Note No. 5). Retail Segment As of December 2024, we served 4.4 million individual customers. The Bank employs a modern behavioural segmentation model that categorises the portfolio into two main groups of individual customers: • those actively using our banking services, • those financing their instalment purchases through us (though Alior Bank is not their primary bank of choice). Beyond segmentation, the Bank identifies so-called “lifestyle” groups based on an analysis of customers’ transactional behaviour and shopping baskets. These insights provide valuable information on customer values, expectations, attitudes, and service-product needs. Segmentation enables the Bank to tailor appropriate communication, contact channels, product packages, and personalised Value Added Services. These elements complement the core functionalities
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39 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement of the Bank’s products and services. Through segmentation, we enhance the quality and effectiveness of sales communication targeted at Consumer Finance customers and offer instalment customers access to other professional banking products. Regardless of the behavioural segmentation, there are the following operational segments among retail customers: Retail Customers Personal Banking Customers (holding assets worth at least PLN 200,000 or PLN 100,000 and monthly inflows to personal accounts in the amount of at least PLN 10,000) Private Banking Customers (holding assets worth more than PLN 1 million or an Elite Account) Cash Loans Cash loans remain the primary product for individual customers, available through a comprehensive range of distribution channels, including own branches, partner outlets, telephone sales, online and mobile sales, as well as online and offline intermediaries. These loans can be used for any purpose or for debt consolidation. In 2024, we continuously adjusted the loan pricing strategy to maintain both profitability and competitiveness against other market offerings. Similar to the previous year, fixed -rate products remained the most popular, providing consumers with cost predic tability and financial security. Responding to market demand, the Bank primarily offered fixed -rate loan products, while still providing customers with the option of variable-rate loans. In 2024, we launched a multi-channel marketing campaign for our new “Pożyczka na mi się” loan offer in two phases: spring and autumn. Our campaign spanned various customer outreach channels, including Products
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40 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement television, VOD, the Internet, social media, and retail network displays. Additionally, we utilised internal communication channels such as Alior Online, Alior Mobile, emails, SMS, and push notifications. The offer gained significant interest, attracting new customers. Notably, the flagship “Pożyczka na mi się” was fully available in Alior Online and Alior Mobile through an efficient and entirely remote process. Simultaneously, the Bank remained focused on online processes and offerings. We continued offering the “Rezygnacja” (Cancellation) product for customers who had abandoned their loan application process. For mobile banking users, we provided a dedicated Mobile Loan offer. To foster strong customer relationships, we introduced the competitively priced “Birthday Loan” via online channels. Additionally, online sales were supported by temporary price promotions, such as “Weekend Deals”. Our emphasis on developing online processes and products translated into growing customer interest in digital loan application channels, resulting in outstanding sales performance. In 2024, we recorded impressive loan sales growth. In October, we achieved a historic record in monthly cash loan sales, reaching a gross volume of PLN 765 million. Meanwhile, in November, we celebrated a record-breaking monthly online sales volume of PLN 62 million. Each consecutive year sets a new annual record for online sales, with 2024 reaching PLN 489 million, marking a 25.4% year -on-year increase. Overall, cash loan sales grew by 11.9% year-on-year. Alior Pay Alior Pay’s overdraft facility service enables customers to defer and convert previously executed transactions from their Alior Bank personal accounts into instalments. In December 2022, we became the first financial institution in Poland to introduce this service, and we have been continuously enhancing it. In 2024, we introduced a new feature within Alior Pay’s overdraft facility, “Top-Up Account”. This feature allows customers to transfer funds from their Alior Pay overdraft facility to their checking and savings account free of charge for 30 days. If the full amount is not repaid within this period, it is automatically converted into 11 instalments with interest. The minimum top -up amount is PLN 500, while the maximum cannot exceed the assigned overdraft facility of PLN 3,000. We conducted an NPS survey for this new feature, with customers rating it highly at 96%. Sales were further boosted through promotions, including partnerships with Mastercard and Legimi. In 2024, we issued approximately 50,000 Alior Pay overdraft facilities, representing a 168% year -on- year increase. On average, nearly 17% of Alior Pay customers opted to convert their payments into instalments, with over 58,000 transactions being split into instalments. Alior Pay serves as a key tool for increasing transaction activity and deepening customer relationships. This is evident in a more than 16% increase in customer transactions and a 4% growth in primary banking relationships.
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41 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Credit Cards Credit cards with overdraft facility for various purposes remain a core product for individual customers, accessible across all distribution channels: in -branch, via telephone, and through Alior Mobile and Alior Online. In 2024, we continued promoting our credit card offerings : Mastercard OK! and Mastercard TU i TAM , which provide cashback benefits: • Mastercard OK! offers cashback at selected retail and service outlets (a universal credit card option), • Mastercard TU i TAM provides cashback for transactions in currencies other than PLN. Additionally, the Mastercard TU i TAM card offers favourable currency conversion conditions, enabling transactions in over 150 currencies without exchange rate markups from the Bank. Between July and October 2024, the Mastercard OK! credit card offer was further enhanced through promotional campaigns, “Karta na 6+” in physical channels and “Karta na 6+ na klik” online. These promotions rewarded customers with cashback of up to PLN 100 per month and PLN 600 over six months – each cashless transaction of at least PLN 50 was eligible for a PLN 5 cashback reward. For Private Banking customers, we offer the World Elite card, which comes with a higher limit and a concierge service (dedicated assistance helpline), travel insurance, and Priority Pass, granting access to airport lounges during travel. Additionally, as p art of the “No Issuance Fee for New Cards” promotion, the World Elite card is available with no issuance fee. The ability to make contactless payments using a credit card via Apple Pay, Google Pay ™, Garmin Pay, Fitbit Pay ™, SwatchPAY!, or Xiaomi Pay is a major convenience for cardholders. Furthermore, we introduced instant digital activation of credit cards through “tokenisation on the go” , allowing customers to add their card to mobile payment services immediately after signing the contract, even before receiving the physical card – an option widely appreciated by customers. The Bank offers credit cards in close cooperation with its key partner, Mastercard, which provides an loyalty programme, Priceless Specials. To enhance customer convenience, the Mastercard Priceless Specials programme is integrated into the Bank’s mobile a pplication, and customers can enrol via Alior Mobile, Alior Online, or at bank branches. Customers could also take advantage of additional promotions under the Mastercard Priceless Specials Programme, which included: • “Shopping with Alior” – a promotion running from 15 May 2024 to 31 July 2024, during which customers could receive PLN 200 vouchers for Allegro, • “Shopping with Alior 2” – a similar promotion offering PLN 200 Allegro vouchers from 1 August to 31 August 2024, • “Score on Friday” – a promotion running from 30 August 2024 to 31 October 2024, rewarding Friday purchases with vouchers worth up to PLN 50, • “Join and Take What’s Yours” – a promotion running from 16 September 2024 to 23 October 2024, in which customers received vouchers worth PLN 100.
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42 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The above promotions were aimed at increasing transactional activity on credit cards, just like the “Embrace 100 Thousand” lottery, which was addressed to customers holding Alior Bank Mastercard payment cards and actively using the Alior Mobile application. At the same time, we focused on actively promoting the #ECO rewards category within the Mastercard® Priceless® Specials programme and the second “green” offer, which was the promotional benefit for the credit card “Cashback for Eco-Purchases with a Credit Card – Second Edition”. In 2024, we continued the development of credit card sales through electronic and mobile banking (Alior Online and Mobile), where customers receive personalised limit offers with the option to participate in promotions: • “Extra PLN 150 with a Credit Card na klik” – a promotion active throughout H1 2024; • “Karta na 6+ na klik” – a promotion covering the entire H2 2024. Through Alior Online and Alior Mobile, customers can also activate an instalment plan using their existing credit card, with real-time communication reminding them of the option to spread their transactions into convenient instalments. Overdraft Facilities The overdraft facility is a frequently chosen product among customers holding personal accounts with the Bank. This product enables multiple borrowings up to the overdraft limit, with each deposit into the account reducing or repaying the debt. Customers can obtain overdraft facilities ranging from PLN 500 to PLN 150,000. While promoting the Jakże Osobiste Account (Highly Personal Account), we offer customers the possibility to activate a dedicated benefit (10 interest -free days for amounts up to PLN 1,000). Simultaneously, we continued developing overdraft facility sales across all distribution channels through personalised offer communication with an attractive PLN 0 fee for granting the facility. Mortgage Loans Despite unfavourable market conditions, the volume of new mortgage loan sales exceeded the planned acquisition targets in 2024. As the market decline deepened and uncertainty surrounding the future of the #Mieszkanie na Start (Housing for Start) programme increased, a series of product changes were introduced in the second half of the year to counter negative sales trends. The Bank initially focused on enhancing the appeal of the fixed-rate offer, maintaining its flagship special offer Własne M w wielkim mieście (Your Own Place in the Big City), which was extended to include additional major urban areas, and optimising the interest rate determination model by incorporating additional covenants. As a result of these measures, the Bank exceeded its plans by more than 10 percentage points, further increasing the share of fixed -rate loans for another consecutive year. By the end of 2024, the share of fixed -rate loans rose by 10 percentage points compared to 2023, reaching nearly 90% of new sales volume. The Bank’s offering includes mortgage loans with both variable and 5-year fixed interest rate options. In 2024, the residential purpose segment dominated, accounting for over 95% of total sales.
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43 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Savings Accounts One of the key acquisition products in the savings segment in 2024 was the Konto Mega Oszczędnościowe (Mega Savings Account). We continued attracting deposit volumes by introducing subsequent editions of this offer. By depositing new funds and meeting the conditions specified in the respective edition’s regulations, customers were eligible for promotional interest rates. Holders of these accounts benefit from flexible savings options, with free and unlimited transfers to their personal accounts at Alior Bank via Alior Online and Alior Mobile. In March 2024, we introduced a new version of the Konto Mega Oszczędnościowe (Mega Savings Account) with an attractive interest rate for new the Jakże Osobiste Account (Highly Personal Account) holders, contributing to increased account acquisition. The sale of the Konto Mega Oszczędnościowe (Mega Savings Account) was supported by marketing campaigns. Additionally, Konto Mega Oszczędnościowe (Mega Savings Account) holders could still activate the benefit of higher interest rates on their savings accounts. The portfolio of savings accounts with promotional interest rates was complemented by: • The “Family 800+” variant, dedicated to customers who applied for the child benefit via Alior Online or received an 800+ programme payment into their personal account at the Bank; • The “Bonus for Youth” variant, available to Konto Jakże Osobiste Account (Highly Personal Account) holders aged 13-17 and, from November 2024, also for children aged 7-12. Housing Account The Bank offers a Konto Mieszkaniowe (Housing Account), enabling customers to save long -term for housing purposes while also qualifying for a housing bonus from the Government Housing Fund managed by Bank Gospodarstwa Krajowego Term Deposits In 2024, we offered individual customers term deposits with fixed interest rates in PLN, USD, and EUR. Customers could choose their preferred savings period and open a deposit via various distribution channels (including Alior Online and Alior Mobile The m ost popular option was the promotional term deposit for new funds in PLN with an attractive interest rate. In line with our digitalisation strategy, we introduced a mobile-exclusive deposit available only in Alior Mobile for new users of the application. A t the same time, the Bank expanded its retention offer both through digital channels and at outlets. Current and Savings Accounts The Jakże Osobiste Account (Highly Personal Account) was the Bank’s primary personal banking account offering in 2024. Recognised by market experts, it secured third place in the “Golden Banker” ranking organised by Puls Biznesu and Bankier.pl in the “Personal Account” category. The Jakże Osobiste Account (Highly Personal Account) offering includes 11 benefits (e.g., free ATM withdrawals nationwide and abroad, cashback for mobile payments, a package of free instant transfers), allowing customers to tailor their accounts to their individual needs.
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44 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The Jakże Osobiste Account (Highly Personal Account) is available in several variants targeting different segments, including: the standard version for the mass -market customer; the Personal Banking Jakże Osobiste Account (Highly Personal Account) for Premium customers with assets over PLN 100,000 at the Bank; the Youth Jakże Osobiste Account (Highly Personal Account) for teenagers aged 13 -17; the Jakże Osobiste Account (Highly Personal Account), dedicated to gaming enthusiasts, featuring a Mastercard debit card with an image of Renekton, Lulu, or Ashe – characters from the game League of Legends. In December 2024, the Jakże Osobiste Account (Highly Personal Account) was made available to children under 12, accompanied by the Alior Kids mobile application, accessible from the age of 7. The portfolio of current and savings accounts is complemented by: the Konto Elitarne (Elite Account) (for Private Banking customers), the Online Account, the Basic Payment Account, and Foreign Currency Accounts (offered in USD, EUR, CHF, and GBP). Holders of foreign currency accounts can also use the multi-currency service, allowing them to link USD, EUR, and GBP accounts to their debit cards issued for the Jakże Osobiste Account (Highly Personal Account) or Konto Elitarne (Elite Account). Transactional Services The Bank provides a wide range of transactional services. Alior Online enables customers to make payments via mobile (BLIK, BLIK contactless, Android Pay, Apple Pay) and smartwatches (Fitbit Pay, Garmin Pay, Swatch PAY!). Currency Exchange Transactions Our outlets offer currency exchange services for PLN, EUR, USD, GBP, and CHF, accessible via online and mobile banking, international transfers, and card transactions abroad. For individual customers, we also provide self-service currency exchange through our currency exchange platforms – Kantor Walutowy (Currency Exchange Office) and Autodealing. The Kantor Walutowy (Currency Exchange Office) offers 21 currencies, operates fre e of charge, and is available 24/7. Autodealing is integrated into the Bank’s online banking system, allowing transactions in five currencies. Customers with a Jakże Osobiste Account (Highly Personal Account) debit card can also utilise the multi- currency service, linking USD, EUR, and GBP accounts, while users of the Kantor Walutowy (Currency Exchange Office) can benefit from a dedicated multi -currency card (one for all accounts with Kantor Walutowy (Currency Exchange Office)), which automatically selects the appropriate currency account for payments.
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45 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Bancassurance Products In 2024, bancassurance activities were driven primarily by insurance products from the PZU Group, linked to cash loans and mortgage loans. The Bank adjusted its product offering in this regard, primarily to accommodate regulatory changes (the amended Recommendation U effective from 1 July 2024) and system changes (the implementation of a new integrated insurance sales and servicing system by an external provider). Investment and savings insurance products also played a significant role, with premium volumes increasing by approximately 75% compared to the previous year. Standalone insurance products, not tied to banking products (such as travel, car, and property insurance available online), maintained a growth trend. The sale of these insurance products was supported by marketing campaigns, promotions, and discounts. Notably, travel insurance saw a 41% increase in policies sold compared to the previous year. Online insurance sales remain a strategic development direction for the bancassurance segment. Through sales of insurance for individual customers, the Bank generated over PLN 0.5 billion in gross premium revenue for the PZU Group, representing a 25% year-on-year increase. Q3 2024 marked intensive collaboration within the PZU Group to define new strategic directions for bancassurance development. The Bank’s primary insurance distribution model is the individual model, in which the Bank acts as an insurance distributor. Consumer Finance As part of its retail segment, the Bank also offers instalment loans. The Bank continued to develop this segment and implemented initiatives that contributed to the dynamic growth of instalment lending, maintaining its market leadership in this respect. In 2024, we responded proactively to changing market conditions and incr easing demands from customers and business partners. We introduced an identity verification process via the mObywatel app for online instalment loan applications, allowing customers to finance purchases quickly. To enhance customer security, we revised the content of electronic correspondence in favour of static content to mitigate fraud risks. Additionally, Retail segment areas
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46 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement we introduced safeguards for electronic documents sent to customers and strengthened application processes against identity theft by requiring PESEL verification as a mandatory step for signing credit agreements. We also focused on maintaining our leadership in the instalment loan market by optimising processes in both online and in-branch channels in line with the Bank’s Strategy and expanding our online sales channel with new Partners, tailoring processes to their business needs. Private Banking The Private Banking programme is designed for the most affluent individual customers with assets exceeding PLN 1 million entrusted to the Bank. Customers are served in seven specialised Private Banking branches in Katowice, Poznań, Kraków, Gdańsk, Wrocław, and two locations in Warsaw. The flagship product for this segment is the Konto Elitarne (Elite Account), which is free for customers with assets of at least PLN 1 million. The account provides numerous benefits, including personalised advisory from a Private Banking professional, account balance confidentiality, and the free -of-charge prestigious Mastercard World Elite multi-currency debit card with extensive additional services (such as travel insurance, Concierge support, and Priority Pass programme). Private Banking customers also enjoy exclusive access to cultural and sporting events. The Bank offers to these customers an open investment product architecture, a unique Investment Advisory service with individual strategies, and a broad range of credit solutions tailored to customers’ circumstances and needs. Brokerage Activities The Bank conducts brokerage activities through Alior Bank’s Brokerage House, an organisationally separate unit. Brokerage services are provided via selected Bank branches and remote distribution channels, including the Brokerage House helpline, the Alior Online banking system, the Alior Giełda mobile application, and the Alior 4 Trader trading platform. The Brokerage House consistently prioritises technological advancements in its service offerings. In 2024, within the Alior Online platform, the “New Investment” module was expanded to include tabs for foreign stocks, ETFs, and CFD contracts. Additionally, customers with an active investment questionnaire gained the ability to view only the products relevant to their profile. Moreover, the Alior Bank website (aliorbank.pl) introduced new online applications for brokerage accounts, Alior Trader accounts, investment funds, investment advisory services, and brokerage pension accounts, for customers without an existing record at Alior Bank. The Alior Mobile application was also enhanced to include descriptions of Brokerage House products under the “Offers/Investments” section, redirecting customers to detailed information and application instructions on the bank’s website. At the beginning of the year, the Alior Giełda application was made available on the AppGallery store for Huawei device users who do not have full access to Google Play services. In March, customers were given the option to submit additional brokerage account service instructions (including IKE/IKZE) via online banking. Alior Giełda users also gained the ability to switch to a light theme interf ace, which improves text readability through high contrast levels. A range of UX enhancements was also introduced, such as the display of shortened instrument names, bidirectional instrument sorting, simplified dashboard card configuration, and
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47 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement significantly reduced login time. Furthermore, the Alior Mobile application was updated to allow customers to submit Brokerage House instructions and applications via the “My Cases” tab. In 2024, the Brokerage House also implemented various communication, marketing, and educational initiatives. We became a partner of the “How to Invest?” project run by the Atlas ETF portal, with a Brokerage House representative hosting a webinar on investm ent portfolio management incorporating ETFs. Once again, Alior Bank was the Main Partner of Poland’s largest individual investor conference, WallStreet 28, organised by the Individual Investors Association, held from 7 -9 June in Karpacz. During the event, participants had the opportunity to attend lectures, panel discussions, and debates featuring Brokerage House representatives. At the end of May, a marketing campaign was launched on social media and YouTube, promoting brokerage accounts and Alior Trader through four short (10 -second) commercials. The campaign aimed to highlight the diverse range of instruments available through brokerage products, accompanied by the slogan: “Make the right choice. Invest with Alior Bank’s Brokerage House and decide what you care about”. From 1 July to 31 August, an Airport TV campaign ran across selected Polish airports (Warsaw Modlin, Kraków, Gdańsk, Katowice, Wrocław), promoting the Brokerage House’s offerings on airport screens. At the beginning of September, Alior Bank’s Brokerage Hou se also became the main partner of the third edition of the Squaber Invest Day event. On 1 October, a digital campaign was launched under the slogan “PLN 400 extra for your retirement”, promoting IKE/IKZE brokerage accounts, which ran until the end of 2024. On 29-30 November, the Brokerage House once again served as the Main Partner of the ForFin 2024 (Finance and Investment Forum) conference, organised by the Individual Investors Association at the PGE Narodowy stadium in Warsaw. Throughout the year, Alior Bank’s social media channels continued to promote investment -related content as part of the #ABCInwestowania (#ABCInvesting) initiative. Towards the end of the year, fees for purchasing and selling ETFs available on the Warsaw Stock Exchange were reduced to 0%, and a special promotion was extended concerning the minimum transaction fees for foreign markets, set at 0.29% with a minimum of EUR/USD/GBP 5. In 2024, the Brokerage House also participated in two IPOs on the Warsaw Stock Exchange, accepting public subscription applications for shares in Żabka Group (2 -9 October) and Studenac Group (20 -27 November), although the latter offering was ultimately not completed. The past twelve months also brought numerous awards for Alior Bank’s Brokerage House. In February, it secured a silver ranking in the “Best Brokerage Accounts” category by Money.pl. In June, it was once again recognised (2nd place) in the “Best Brokerage A ccounts 2024” ranking compiled by Puls Biznesu magazine.
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48 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Investment Funds The Brokerage House distributes units of 1 2 domestic and foreign Investment Fund Companies (TFIs). Customers have full access to a broad range of over 550 sub-funds through Private Banking branches and remote distribution channels, including the Brokerage House helpline and online banking (for selected funds, handling fees for orders placed via Online Banking are 25% lower than the standard Fee Schedule). Other Bank branches enable customers to purchase sub-fund units offered by entities within the capital group, namely Alior TFI and PZU TFI. The ALIOR Specialist Open -End Investment Fund comprises eight dedicated sub -funds, while customers can also purchase units in 19 sub-funds of the PZU Open -End Investment Fund Umbrella. Additionally, for the duration of the promotional period, we have reduced the handling fee to 0% for all Alior TFI funds. Our offering includes funds focused on investments in specific asset groups (debt securities, equities), as well as geographic regions (emerging markets, Asia, the USA) or particular industries (energy, medicine, biotechnology). Also available are funds th at promote environmental or social aspects and invest in accordance with ESG principles, as defined under Article 8 or Article 9 of the EU Regulation 2019/2088 of 27 November 2019 on sustainability -related disclosures in the financial services sector (Sust ainable Finance Disclosure Regulation – SFDR). Our portfolio includes over 270 sub-funds that meet the “green” SFDR criteria. The Brokerage Office House also facilitates customer agreements with Alior TFI for the management of Individual Retirement Accounts (IKE) and Individual Retirement Security Accounts (IKZE). Alior Bank Branch in Romania In June 2024, the Bank signed an agreement with Romanian Patria Bank S.A. for the sale of a portfolio of cash loans granted by the Bank’s Romanian branch, valued at RON 97 million (as of 30 April 2024), approximately PLN 84.5 million. The sold portfolio included around 4,000 retail customers and consisted of performing, unsecured consumer loans. The transaction was completed in September 2024. Between the first and second half of 2024, the Bank also conducted the sale of its Romanian non - performing loan portfolio. The portfolio was acquired by Invest Capital LTD, part of the KRUK Capital Group, under an agreement signed in August 2024. The total value of the debt packages sold amounted to RON 7,872,072.95, approximately PLN 6,752,663.36. The execution of both agreements, along with the efficiently conducted process of terminating deposit agreements and closing relationships with Romanian customers, led to the discontinuation of banking services and the cessation of the operational activities of the Romanian Branch on 30 November 2024. The formal deregistration of the Branch from the Romanian Trade Register took place on 6 December 2024 in Romania and on 23 December 2024 in Poland (removal from the National Court Register). The National Bank of Romania and the Polish Financial Supervisio n Authority were informed about the final cessation of Alior Bank S.A.’s banking activities in Romania.
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49 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Business Segment The year 2024 was marked by the implementation of key projects that define the development trajectory of the business customer segment. In response to evolving market conditions and increasing expectations from entrepreneurs, we focused on executing strategic priorities that will establish a solid foundation for further growth while ensuring the security and profitability of our operations. Key initiatives included the expansion of renewable energy financing, the launch of a new online banking system, and the automation and development of digital processes. These efforts reinforce our position as a trusted business partner, providing our customers with access to modern solutions and supporting the growth of their companies. Small, Medium-Sized Enterprises and Corporations According to BIK S.A. data, in 2024, the Bank achieved a record market share in sales, reaching 4.1% (+0.4 percentage points year-on-year). The share in the performing loan portfolio in the market stood at 2.7% as of the end of 2024. At the end of 2024, the Bank was servicing 13.8 thousand SMEs with a primary account, with a total credit balance of PLN 5.2 billion, as well as over 1.8 thousand corporate customers with a primary account, with a total credit balance of PLN 7.7 billion. As of 31 December 2024: • Regularly serviced assets increased by 3.4%, • Assets in irregular service declined by 17.7%, • New sales limits decreased by 14% year -on-year, while the NPL ratio improved by 2.8 percentage points year-on-year. Micro-Enterprises According to BIK S.A. data, in 2024, Alior Bank achieved a market share in sales of 5.9%, while maintaining a high 9% share in the performing loan portfolio. At the end of 2024, the Bank was servicing over 167 thousand micro-enterprises with a primary account, with a total credit exposure of PLN 4.6 billion. The value of new credit limits granted in 2024 amounted to PLN 1 020 million. Technology, Process Automation, Remote Services Online Banking System In collaboration with Comarch S.A., we have been working intensively on the new digital banking platform – Alior Business and Alior Business Mobile.
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50 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In October 2024, we launched a family and friends pilot, granting access to a selected group of customers, accompanied by a satisfaction survey. Initial feedback from entrepreneurs has been highly positive, with particular appreciation for the transparency, intuitiveness, and customisation capabilities of the new solution. In H1 2025, we will commence the mass migration of customers to Alior Business. The Alior Business online banking system will be based on a self -service module, a native mobile application, a modern service portal, and integrated ERP -class tools. This comprehensive and flexible ecosystem will provide entrepreneurs with professional support in building and expa nding their businesses. The project is scheduled for completion by the end of 2025. BankConnect Within the transaction banking sector, we have observed a dynamic increase in the sale of the BankConnect service. This service is designed for companies processing a high volume of transactions and expecting full process automation and real-time financial information. Through the online integration of corporate financial and accounting systems with the BusinessPro onl ine banking platform, BankConnect automates processes and enables us to build long-term relationships with entrepreneurs. Centralisation of Post-Sales Processes In 2024, we launched a pilot initiative for centralising post-sales service for micro-enterprises. In the next phase, we plan to implement this process across all Microenterprise Centres and transfer most transaction handling to the Central Remote Relations Team. By the end of 2024, we remotely processed 91% of cases in the small and medium-sized enterprises (SME) and large corporate segments, compared to 66% in 2023. We also expanded the scope of services handled by the Credit Monitoring Documents Team, which now obtains monitoring documentation from micro, small, medium, and large enterprises alike. Through collaboration with Alior Leasing and the implementation of deposit product sales via telephone channels, we have increased x-sell and customer acquisition, securing 1 012 new business customers for the bank and launching PLN 160 million in new credit volume. Credit Process Automation By the end of 2024, the automation of credit processes covered: • 94% of loans granted to micro-enterprises, • 63% of loans granted to small businesses. We have introduced new automated solutions, enabling sole proprietors to: • Quickly apply online for working capital loans via the Alior Bank website. After entering personal data and the company’s NIP number, automatic verification is performed in the CEIDG and REGON databases. The Remote Service Team manages further customer con tact and loan processing.
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51 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • Remotely sign consents and declarations required for a business loan application. This module has been implemented across various sales channels, allowing customers to sign these documents via SMS. • Submit financial documents for the previous financial year remotely. This fully automated process is available in the Alior Online and BusinessPro banking platforms. Automation of Business Account Applications In 2024, we acquired 12,510 business accounts through online acquisition. The fastest process took just three minutes from the start of the online application. This efficiency is made possible through automatic data retrieval from CEIDG/REGON, modern identity verification methods (via the mObywatel [mCitizen] application and banking profile [AIS PSD2]), electronic agreement signing, and SMS approval. We are automating and developing omnichannel deposit processes. We have implemented a real -time support solution for customers applying for account openings and introduced the option to open a business account in a branch based on an online-submitted application. This solution enhances business customer acquisition, even in cases requiring additional verification. Promotional Offers New customers from the micro-enterprise and small business segments had access to attractive pricing promotions, including: • 0% commission for granting an overdraft facility and Business Loan, • A margin reduced by up to 50% and no arrangement fee for refinancing a loan from another bank for micro - enterprises, • 10% cashback on social security (ZUS) contributions and fuel station purchases (up to PLN 200 per month and up to PLN 2,000 over the entire promotion period) for active holders of a business account with a Mastercard debit card with Plus, • PLN 0 for using a Mastercard debit card with Plus, • PLN 0 for personal accident insurance (NNW) and healthcare coverage for one insured person, • Welcome points in the Mastercard® Priceless® Specials programme equivalent to PLN 300 (for holders of a business Mastercard debit card with Plus) and PLN 400 (for holders of a business Mastercard Business Gold credit card), • PLN 800 to spend on Allegro for entrepreneurs who open an account with Alior Bank and register a Business Account on Allegro, • A start-up bonus with a promotional code for customers opening an iKonto Business Account or a 4x4 Account (from PLN 300 to PLN 800, depending on the promotion period). Customers could receive discounts and rebates upon meeting the conditions specified in the promotion regulations.
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52 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Deposits for Business Customers We introduced the “New Funds Deposit”. Entrepreneurs who held or opened a business current account with Alior Bank and deposited new funds in PLN or USD were eligible for attractive fixed deposit interest rates. Deposits could be opened remotely via Busine ssPro online banking or at an Alior Bank branch. Businesses could earn: 4% interest on a 182-day deposit, 3.50% interest on a 92 -day deposit, 3% interest on a 62 -day deposit – for deposits in PLN. For deposits in USD, interest rates were as follows: 1.8% for a 182-day deposit, 2% for a 92-day deposit, 1% for a 62-day deposit. Structured Financing We offer a wide range of financing transactions for project finance initiatives, commercial real estate projects, object/asset finance, leveraged financing, and investment project financing, including investments related to renewable energy sources. Depending on the type and structure of the financing, we support both corporate customers and special- purpose vehicles (SPVs) established to execute specific projects. Transactions are structured to accommodate the individual needs of the customer, busines s and market conditions, and the creditworthiness of the company or project. We conclude agreements both bilaterally and through syndicated loans. Structured financing is available in PLN and foreign currencies. Structured transactions concluded in 2024 focused on commercial real estate, corporate and investment financing for the service, transport, financial, fuel and energy, and manufacturing sectors. ESG and Green Transition The green transition and ESG are among the priorities of our strategy. We support customer projects related to sustainable development that enable emission reductions and increase electricity generation from renewable sources. Financing of Pro-Environmental Investments We offer a broad range of financial instruments supporting the energy transition of businesses and the housing sector. Our financing covers: • Infrastructure enabling companies to produce energy for their own needs, • Projects by professional energy producers, • Solutions improving the energy efficiency of the housing sector. In December 2024, we revised our financing offer for RES (Renewable Energy Sources) projects for professional energy producers. As a result, we now finance RES projects not only under the auction model but also under the market model through energy sales a greements with licensed trading companies (PPA – Power Purchase Agreement).
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53 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Our offer is aimed at special-purpose vehicles (SPVs) implementing projects such as: • Wind farms, • Photovoltaic power plants, • Hybrid installations combining wind and photovoltaic technologies. For all types of projects, we also provide financing for energy storage facilities. For projects operating under the market model, we introduced an extended loan repayment period of up to 20 years (for auction-financed projects, the repayment period is up to 15 years from the date of first energy sale). We offer comprehensive financing for SPVs. In addition to investment loans, we provide VAT loans, guarantees, and letters of credit. In cooperation with BGK, we expanded our offering for housing associations and cooperatives by introducing a new variant of investment loans with a renovation grant (floods). Building owners or managers of multi-family residential buildings damaged by floo ds may apply for this grant. The support amounts to: • 60% of project costs – if the residential building is listed as a historic monument or located within a registered historic area, • 50% of project costs – for other multi-family residential buildings. Leasing In 2024, Alior Leasing financed a total volume of 3.080 billion PLN, an increase of 8% compared to 2023. The share of machinery and equipment financing in the overall business grew by 2 percentage points year-on-year (from 17% to 19%). Alior Leasing closed 2024 with a new sales volume of 3 520 million PLN (based on asset value). The company also achieved its objectives related to asset structure changes in sales. Well -planned operational initiatives and consistent strategy implementation resulted in a significant increase in sales volume. These measures also positively impact credit risk mitigation. Alior Leasing introduced several initiatives under its 2023 -2025 strategy, which is based on three key pillars: • A universal offer for financing and leasing fixed assets, tailored to the needs of all customer segments and covering all asset categories, • Collaboration with Alior Bank and fixed asset suppliers, as well as digital communication with customers, • Digitalisation and automation of processes to ensure cost efficiency and the highest level of customer service.
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54 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Alior Leasing continues to expand its offer for financing machinery and equipment, including RES investments. It is also implementing pre -approved limit initiatives aimed at significantly increasing the number of Alior Bank business customers using leasing services. At the end of 2024, Alior Leasing served 60,000 customers and managed 90,000 agreements . Trade Finance In 2024, the value of receivables purchased and financed by Alior Bank amounted to PLN 2.5 billion. We actively utilise the option of securing reverse factoring agreements with repayment guarantees from KUKE (Export Credit Insurance Corporation). This solution serves as an alternative to BGK’s aid programmes that ended in 2023. To meet entrepreneurs’ expectations, we offer universal multi -product solutions that allow convenient management of financing limits and flexible use of funds. For the confirmation and discounting of letters of credit, we cooperate with KUKE and BGK. European Funds and National Aid Programmes In 2024, we participated in public programmes funded by national and EU sources, allowing us to expand our offer and provide favo urable financing conditions for companies. During this period, we granted 6 450 loans secured by BGK guarantees under: • The National Guarantee Fund (continuation of the de minimis programme), • The European Fund for Modern Economy 2021-2027 FG FENG, • The European Investment Fund InvestEU (Investmax guarantee). The total guarantee amount for newly granted loans was PLN 1.94 billion. In Q1 2024, we launched the Biznesmax Plus and Ekomax guarantees for SMEs. These are free loan repayment guarantees with the possibility of receiving a subsidy in the form of interest or capital support. They are granted as de minimis aid or regional investment aid and cover both investment and working capital loans. In Q4 2024, we introduced the Investmax guarantee for micro, small, and medium -sized enterprises, securing up to 80% of the loan amount for ongoing operations or investments. Additionally, we joined the second edition of the green credit competition under the European Funds for Modern Economy (FENG) 2021-2027 programme, enabling our customers to finance infrastructure modernisation (e.g., buildings, machines, and equipment).
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55 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement We build relationships with entrepreneurs Business Mornings with Alior Bank We organised a series of business breakfasts for existing and new bank customers. Our experts discussed macroeconomic conditions as well as topics related to cybersecurity, taxonomy, and ESG. The meetings provided an excellent opportunity to establish direct relationships, engage in inspiring conversations, and exchange experiences. Awards and Distinctions 2nd Place in the 17th Edition of the Polish Association of Developers’ Bank Ranking In April 2024, we received recognition for our speed of decision-making, high organisational culture, and effective development of partnership relations with developers. This distinction confirms the highest quality of service we provide to demanding customers in the development sector, which represents a significant area of Alior Bank’s financing structure. The Polish Association of Developers is an employer organisation working to improve the legal environment for investors in the development industry. Treasury activity The Bank executes customers’ orders in the telephone service channel and in digital channels by concluding transactions with them for its own account with regard to: • spot foreign exchange (FX) and forward instruments – serving to mitigate foreign exchange risk, • interest rate instruments – serving customers to stabilise financing costs and mitigate interest rate risk, • derivatives to limit commodity price movements, • forward instruments for the purchase of greenhouse gas emission allowances, • investment instruments – used by customers to manage surplus cash. The Bank also actively enters into transactions on the interbank market arising from its own initiative as dictated by the Bank’s management of: • Bank’s liquidity, • currency risk and interest rate risk, • currency options portfolio risk,
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56 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • trading activity on the OTC market in foreign exchange and interest rate instruments, including the portfolio of Treasury bonds or bonds guaranteed by the Treasury and government Eurobonds denominated in foreign currencies. As part of liquidity management, the Bank’s surplus liquid funds are invested primarily in treasury bonds – both Polish and foreign – and treasury bills denominated in PLN and foreign currencies. These investments also include short -term debt securities issued by the NBP, as well as debt securities with State Treasury guarantees. We managed the market risk position in such a way as to ensure that Alior Bank’s capital levels remain at the current safe level and to protect the Bank from potential systemic risk associated with limited market liquidity. The Bank was an active participant in the interbank market. Liquidity was provided for foreign exchange transactions for other professional market players, thus maintaining the existing position in the interbank FX market. Alior participated in the provision of data for the quotation of POLONIA reference rates. Currency Exchange Platforms One of the primary foreign exchange service channels available at Alior Bank is its online currency exchange platforms, enabling customers to exchange currencies independently without leaving their homes or contacting a dealer. The Bank offers three platforms: Kantor Walutowy (Currency Exchange), Autodealing, and eFX Trader. Each of these platforms offer s unique functionalities and is designed for a different customer segment. The flagship platform in Alior Bank’s portfolio is Kantor Walutowy (Currency Exchange). Established in 2012, it was the first fully online, bank -operated currency exchange platform. Kantor Walutowy (Currency Exchange) is dedicated to Individual Customers a nd all Business Customer segments. Access to the platform is available via the website https://kantor.aliorbank.pl/ and a mobile application for iOS and Android. Kantor Walutowy (Currency Exchange), customers can open and maintain checking and savings in 21 currencies (including PLN) free of charge, exchange funds at competitive rates around the clock, seven days a week, and make both domestic and international transfers. Individual Customers can also apply for a free multi-currency card, which allows payments in nearly 160 currencies (including PLN). The card automatically recognises the payment currency and debits the appropriate account without requiring manual currency selection in the mobile app.
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57 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement To enhance the appeal of Kantor Walutowy (Currency Exchange) for our customers, we organised two competitions in H2 2024, rewarding the most active participants. During the summer months, we launched the “Summer with Kantor Walutowy” competition, offering e -vouchers for the largest auction platform and cash prizes. The total prize pool exceeded PLN 330,000. The second competition was aligned with the shopping holiday season, including Black Friday, Cyber Monday, and Christmas shopping. Prizes included the l atest smartphones and e -vouchers for an online shopping platform, with a total prize pool of over PLN 160,000. Since its inception, Kantor Walutowy (Currency Exchange) has set market trends and enjoyed widespread customer recognition. This is reflected in the growing number of users and increasing foreign exchange turnover. Currently, over 600,000 customers use Kantor Walutowy (Currency Exchange). The second platform offered by the Bank is Autodealing, which, although available to both Individual and Business Customers, is particularly designed for small enterprises. Autodealing enables currency exchange with a flexible settlement period and allows the establishment of deposits in PLN and foreign currencies with negotiable interest rates and flexible maturity terms. A key feature of Autodealing is its full integration with the customer’s banking systems, allowing transactions to be executed directly via BusinessPro or Alior Online banking. The most advanced currency exchange platform in the Bank’s offering is eFX Trader, dedicated to Business Customers. This platform supports transactions in over 60 currency pairs. eFX Trader allows transactions with flexible settlement terms: same -day, next -day, or Spot (settlement in two business days). Customers with a treasury limit can also execute forward contracts, enabling transactions at a future date (e.g., to hedge currency risk in planned business activities). eFX Trader users can also place conditional currency orders, eliminating the need for constant exchange rate monitoring. Additionally, they have access to daily foreign exchange market analyses. Transactions on the platform are available during the operational hours of the interbank currency market (24 hours a day, five days a week), which serves as the platform’s direct pricing source. Online and Mobile Banking In 2024, as in previous years, efforts focused on optimising existing solutions and introducing new features in Alior Online and Alior Mobile. These initiatives contributed to the Bank’s strategy implementation and increased revenue from mobile and online channels. Alior Bank provides customers with cutting-edge technological solutions, ensuring a simple, secure, and functional banking experience.
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58 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Personalisation Following user expectations, new personalisation options were introduced in Alior Mobile. The application now features a refreshed home screen design. Customers can customise their dashboard by adding, removing, and rearranging visible elements. A new “Don’t Forget” widget has been added to remind customers about upcoming credit or card payments and standing orders. The “Shortcuts” section has been expanded with additional services, allowing customers to add features such as “Motorways” or “Tickets and Parking” for easier access. Customers can now view their products directly on the home screen, decide which products are displayed, change their order, or hide selected items. Moreover, the “Products” tab has been reorganised into two sections: “My Products” and “My Cards”, allowing Alior Mobile users to conveniently browse their products in a list format. The “Payments and Services” tab now includes a “Saved Recipients” function, consolidating recipients for quick domestic transfers without the need to re-enter their details. Additionally, benefits linked to the Konto Jakże Osobiste (Highly Personal Account) have been categorised, with improved descriptions for greater clarity. We introduced a simplified view of the Alior Mobile app’s home dashboard Presenting enlarged shortcut tiles and key functions simplifies access to applications for less demanding customers. Functionalities A new section, “My Cases”, has been added to the Contact tab, allowing customers to independently submit instructions, apply for opinions, or make inquiries. “My Cases” consists of three modules: “Instructions and Documents”, “Complaints”, and “Questions and Suggestions”. In the “My Matters” module, customers can submit complaints or other instructions using the refreshed complaint form and track the status of their submissions. If they notice a suspicious transaction, they can report it via a detailed complaint form. Customers can now manage their finances even more conveniently with the improved transaction history. The latest transactions section has been redesigned and enhanced with new functionalities. Customers can now select which products they wish to display in the condensed history on the main dashboard. Financial management is further streamlined through the transaction filtering feature, which allows filtering by date, amount, or currency. Additionally, a helpful new option enables customers to summarise their income and expenses. The details of individual transactions and the transaction history for specific products have also been updated. In the latest version of the application, customers have all their payment limits readily accessible. In Alior Mobile, they can manage their card limits.
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59 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Communication “What’s New” screens have been introduced, providing customers logging into the latest version of the app for the first time with a stories -style presentation of the updates in Alior Mobile. These screens appear only once, upon the first login. A chatbot has also been made available, offering real -time answers to frequently asked questions. Customers can access it via the “Contact” tab in the top menu of Alior Mobile. We have additionally introduced a dedicated notification placement within the Alior Mobile app to inform users about system outages, technical issues, and other important service-related announcements. Payments A new feature allowing international and foreign currency transfers has been implemented in Alior Mobile for individual customers. This functionality is available in the “Payments and Services” tab. The “Saved Recipients” option has been added to the Alior Mobile app, enabling users to view a list of their saved recipients for domestic transfers, tax payments, top -ups, and foreign currency transfers. Customers can review details or delete any saved payment types and initia te domestic transfers or top- ups directly from the recipient’s details. As part of the Housing Account service, customers now have access to transaction summaries in both Alior Online and Alior Mobile. Security Since 1 June 2024, Alior Bank has implemented mandatory verification to check whether an individual’s PESEL (Polish Personal Identification Number) is listed in the PESEL protection register before signing a loan or bank account agreement. If a PESEL is registered as protected, customers cannot enter into deposit or loan agreements or withdraw cash above the statutory limit. This requirement stems from the Act of 7 July 2023 amending various laws to reduce the impact of identity theft and the Act of 24 September 2010 on population records. Additional security measures include transaction restrictions for customers with expiring or expired identity documents. Furthermore, the application’s functionality has been limited when using remote desktop support tools on iOS devices. To protect customer data from accidental exposure, screen recording and sharing within our application are now blocked.
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60 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Alior KIDS Application In 2024, Alior Bank introduced a new offer: Konto Jakże Osobiste (Highly Personal Account) for children aged 0 -12, along with a dedicated low-limit transaction card for children aged 7-12. A new Alior Kids application has been launched for children aged 7 - 12, providing a safe and engaging introduction to finance. A child can learn how to save with the piggy bank feature, which can be personalised with custom names and images. Additionally, children can choose from four themes: classic, ocean, space, and jungle. The app offers access to multiple features, including a wallet, piggy bank, dedicated card, and fund transfer requests. The Alior Mobile app now includes a Parent Panel, allowing guardians to manage the Alior Kids app. Parents can set up recurring transfers to their child’s account, approve transfer requests, activate BLIK, and manage financial products for children aged 0-12. Sales in Remote Channels Alior Bank is systematically expanding its offering for the sale of products through online processes. The implemented solutions are designed to convey essential information to the customer in the simplest and most comprehensible manner. Customers have been provided with the option to declare social benefits under the 800+ programme on cash loan applications. In H1 2024, a new functionality within the Alior Pay overdraft facility, “Top-Up Account”, was introduced for customers. This feature enables customers to transfer an amount ranging from PLN 500 up to the available balance of their Alior Pay limit to their savings and checking account with Alior Bank. The account top-up is free of charge, and the transferred amount, which is deducted from the granted Alior Pay overdraft facility constitutes an Al ior Pay Transaction, subject to the same repayment terms as deferred transactions. An end-to-end consolidation process has been implemented, allowing for the consolidation of external and internal liabilities based on the existing algorithmic process available in Alior Online and Alior Mobile channels. The process enables the full repaym ent of designated credit liabilities at Alior Bank as well as other liabilities registered with BIK (Credit Information Bureau), provided the customer has the creditworthiness to cover them under the pre-approved offer. Additionally, a new “Investments” tab has been added to the store within the Alior Mobile app, featuring dedicated offer placements. The best measure of the effectiveness of these solutions is their growing popularity and the noticeable increase in digital sales performance in 2024. All initiatives, including system and application updates, have contributed to the improved results of product sales through digital channels.
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61 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Equity investments of the Alior Bank Capital Group They are presented in the table below. All securities were purchased using the Bank’s own funds. • The shares/stocks comprise: - trading securities bearing equity rights, admitted to public trading on WSE and NYSE, - trading securities bearing equity rights, not admitted to public trading. • Bonds: corporate bonds issued by domestic and foreign issuers. • Investment certificates: certificates of a “private equity” closed -end investment fund, and units of an open-ended investment fund. 31.12.2024 31.12.2023 Volume Market/ nominal value (in PLN thousand) Volume Market/ nominal value (in PLN thousand) Stocks 28 520 408 164 791 7 343 596 151 682 Quoted 252 922 12 110 252 922 19 460 Non-quoted 28 267 486 152 681 7 090 674 132 222 Bonds 638 600 818 806 586 252 583 715 Investment certificates 11 257 1 300 32 034 9 994 Strategic Partnerships The role of strategic partnerships is to deliver additional value and non -financial services to both customers and Alior Bank employees. Acquiring new partners from outside the banking sector provides numerous opportunities for a unique approach to customer engagement. The Bank is introducing services and benefits that complement banking products and create added value by leveraging synergies across various sectors. The focus is not only on traditional partnership benefits, such as discounts, vouchers, and special offers, but also on initiatives related to digital security, process modifications, and customer digitalisation. Collaboration with external entities yields broad benefits for both internal and external stakeholders, ranging from reputational advantages to financial gains. Strategic partnerships allow the Bank to develop and offer unique value propositions that enhance its market differentiation.
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62 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In the bancassurance segment, the product portfolio was primarily dominated by insurance solutions from PZU Group. Throughout 2024, the following products were actively offered: • Life insurance linked to cash loans (PZU Życie SA), • Insurance against job loss for cash loans (PZU SA), • Life insurance linked to mortgage loans (PZU Życie SA), • Property, household contents, and liability insurance for mortgage loans (PZU SA), • Financial insurance for mortgage loans (PZU SA), • PZU Wojażer travel insurance (PZU SA), • Personal accident insurance (NNW) and health care insurance for Business Customers (PZU SA), • Investment and savings-oriented life insurance (PZU Życie SA), • Motor and property insurance available online (Link4 TU SA) Examples of strategic partnerships in 2024: • Mastercard – Under an eight -year agreement with Mastercard, multiple joint marketing initiatives were implemented to acquire new cardholders and increase card transaction volume. Continuous marketing campaigns, customer lotteries, and sales competitions were conducte d. • Ministry of Digital Affairs / KPRM (Chancellery of the Prime Minister) – In line with the “mObywatel Application Act”, on 1 September 2023, Alior Bank, in cooperation with the Ministry of Digital Affairs, introduced identity verification using the new mDowód digital ID. Additionally, from 1 June 2024, Alior Bank has been integrated with the Register of Protected PESEL Numbers, allowing customers to protect their PESEL, thereby enhancing their security. • Legimi – Several joint promotions were launched, offering customers access to e -books, audiobooks, and synchrobooks through Legimi’s platform. Examples include promotions rewarding customers for opening Alior Pay with an e-book, audiobook or synchrobook for Legimi from a selection of titles and a book for Legimi as a guaranteed prize in the bank’s autumn lottery entitled “Embrace 100 Thousand”. These initiatives demonstrated significant customer interest in literary benefits, encouraging the Bank to continue supporting reading culture through future campaigns. • WeSub / RentUp – The Bank continues to develop its partnership with RentUp in consumer leasing. This new form of product acquisition is gaining recognition among individual customers. Since 2023, the leasing option has been available at retailers such as Komputronik S.A ., with plans to expand into other industries. • Frisco – A joint initiative with an online grocery retailer provided Alior Bank employees with shopping discounts. This campaign aimed to reward employee loyalty and bankability while offering financial relief amid high inflation. Ongoing projects focus on increasing transaction volume, expanding mobile functionalities, and enhancing benefit offerings for both customers and ext ernal stakeholders. A new promotion have been planned for the beginning of 2025 will introduce a brand new sports-related benefit to encourage active lifestyles among customers. We sincerely hope to see a lot of interest in it.
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63 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Innovation Development and Collaboration with the FinTech Ecosystem Alior Bank continuously develops and implements innovative solutions to enhance customer satisfaction and improve internal efficiency. The Innovation Lab (Innovation and Fintech Partnerships Department) supports business units in executing modern projects by leveraging expertise in trend analysis , UX/UI design, user research, FinTech collaboration, open banking, and digital process development. Innovation Lab’s competencies were utilised in key business projects at the Bank in 2024. The UX and Product Research Team conducted market studies and usability tests to evaluate critical aspects of Alior Bank’s strategic initiatives. The Team contributed to fostering awareness and understanding of trends and customer needs in the organisation , including the development of a repository of reports (external and internal research, among others) focused on customer -centric products. The User Experience Design team accompanied the Bank during the implementation of new solutions, designing and proto typing screens and processes for new features and redesigning existing ones. The Team’s efforts revolved around enhancing customer satisfaction by designing accessible and usable Bank processes and responding to current market trends. In Q4 2024, the Bank also intensified efforts to enhance digital service and channel accessibility. Since September, accessibility audits (e.g., for Alior Mobile and Alior Giełda) and training sessions for UX designers, researchers, developers, analysts, a nd product owners were conducted in collaboration with Kinaole. Alior Bank actively collaborates with the FinTech ecosystem and innovative service providers to enhance customer and employee experiences, automate processes, and drive further innovation. In 2024, the Bank signed five agreements with FinTech partners and actively tested solutions through pilot programmes. The Bank’s engagement with the FinTech sector includes initiatives such as: • Collaboration with Huge Thing, an official operator of the Startup Booster acceleration programme funded by the Polish Agency for Enterprise Development, supporting the startup ecosystem and fostering the implementation of cutting-edge solutions. • Partnership with FinTech Poland, actively contributing to the dynamic development of Poland’s FinTech ecosystem through participation in working groups and industry events. • Cooperation with Wrocław University of Economics and the inQUBE University Business Incubator, supporting the development of innovative student initiatives. A key focus in 2024 was the further enhancement of digital sales channels and customer service quality. The H1 saw the introduction of an automated customer satisfaction survey for telephone loan applications, while H2 marked the deployment of a chatbot supporting loan retention processes. The Bank also continued to develop the Identity Verification Centre, implementing in Q1 2024 a new identity verification method using the mObywatel app in remote sales processes. This solution is now successfully applied in online instalment loans and account openings for micro -enterprises. The Innovation and Fintech Partnerships Department also fosters an organisational culture of innovation through inspiration-driven initiatives. Market trend monitoring is conducted via the cyclical Innovation Newsletter and proprietary Innovation Reports. In Q2 2024, the “Innovation Month” initiative featured webinars on emerging social and technological trends. In December 2024, Alior Bank held an “Innovation Day” and the internal “Innovator of the Year” competition, awarding outstanding innovative project s in
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64 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement the past year, across three categories: Major Innovation, Minor Innovation, and the Employees’ Choice Award. Notably, the Department’s efforts were once again recognised internationally – in 2024, Alior Bank’s Innovation Lab was acknowledged by Global Finance as one of the world’s leading innovation labs for the third time.
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65 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement VII. Operations of companies from the Alior Bank Capital Group Structure of the Alior Bank Capital Group as at 31 December 2024
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66 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In the reporting period, there were no changes in the structure of the Capital Group of the Bank. Alior Leasing Sp. z o.o. It has been operating since October 2015. It offers operational and financial leases as well as lease loans. Entrepreneurs have easy and quick access to means of transport as well machines and equipment. Alior Leasing has an extensive sales network and collaborates with a broad network of business partners, dealers and vendors, as well as with the sales network of Alior Bank. The company mainly targets sole traders and SME companies. The company plans to gradually develop new sales to business customers in the higher segments and in the industrial processing and healthcare sectors. On the basis of the Alior Leasing decision-making engine, Alior Leasing launched the function of automatic lease decision, which allowed to optimize the transaction risk assessment process and introduce new functionalities in the Customer Portal. The new strategy for the years 2023 – 2025, which is new and consistent with the Strategy of Alior Bank, is currently being continuously implement and its core pillars are: • universal offer of financing and leasing of fixed assets, meeting the needs of any customer, including consumers, and covering all types of assets; • multi-channel distribution, including the use of synergies within the Group, cooperation with Alior Bank and cooperation with asset providers, and distribution in digital channels with customers; • digitization and automation of processes, ensuring cost efficiency of the organization and the highest level of customer experience when working with Alior Bank. Alior Leasing is also capitalizing on the potential of its existing customer portfolio, pursuing pre -approved actions and expanding its machinery and equipment lease offer. AL Finance Sp. z o.o. The Company established in 2021 from the merger of NewCommerce Services Sp. z o.o. (“Bancovo” brand) and Serwis Ubezpieczeniowy Sp. z o.o. and it is a subsidiary of Alior Leasing Sp. z o.o. AL Finance specializes in offering insurance to customers with financing agreements and loans. The offer concerns mainly motor and property insurance. It cooperates with leading Insurance Companies, such as: PZU, ERGO Hestia, Warta, InterRisk, AXA IPA. The service focuses on current financing agreements, providing policy renewal options and selling additional products available through the leasing channel. If the leasing agreement is terminated, the Company focuses on flexible conditions and customer retent ion. It offers comprehensive insurance coverage through its fully digitized insurance sales platform of its own creation. This way, it may reach new segments of customers who do not have signed lease contracts. The operations of AL Finance are based primarily on: • sales of insurance for financing agreements in Alior Leasing, • renewals of policies from the contract/agreement portfolio and negotiating with customers in the renewal process,
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67 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • remote sales of insurance to Alior Leasing’s customer portfolio and negotiations with customers in the renewal process, • remote insurance sales in the multi -agency channel (outside the financing agreement in Alior Leasing) to customers and assets not covered by financing. The company is continuously expanding its range of insurance products in terms of Insurance Companies with which it cooperates and insurance products. Alior Leasing Individual Sp. z o.o. The company was established in third quarter 2023 by Alior Leasing Sp. z o.o., which holds 90% of the shares, and AL. Finance Sp. z o.o., which holds the remaining 10%. Alior Leasing Individual Sp. z o.o. was established in order to implement the Strategy of Alior Leasing regarding consumer-oriented products. Its core activity will be the rental of cars (so -called Car Subscription). The core object of activity will also b e the rental of electronic household appliances (gaming sets, smartphones, etc.). Distribution will take place through both remote sales channels and with the help of Alior Bank’s Business Partners. Full implementation is planned for the second quarter of 2025. This will be carried out in close cooperation with Alior Leasing and Alior Bank. The launch of these products will be an important addition to the product portfolio of Alior Leasing and the Bank. Alior TFI S.A. The company was established in 2010, originally as a brokerage house, and focused primarily on asset management services. In 2015, the Company was transformed into an investment fund company, at the same time taking over the ALIOR SFIO investment fund, which was under its management. The company was also listed on the NewConnect market. ALIOR Bank had been gradually increasing its capital involvement in the Company, eventually taking over 100% of the Company’s shares and removing it from public trading. Currently, the Company’s primary activity is the management of the ALIOR SFIO investment fund, with the distribution of its units being carried out through ALIOR Bank S.A., however, the Company still holds a license to manage portfolios that include one or more financial instruments. The year 2024 marked a record increase in the value of assets under management, which exceeded PLN 3 billion. This growth was primarily driven by the inflow of new assets into the Alior SFIO Fund, mainly into low - risk sub-funds investing in debt instruments. The number of customers of the Fund also increased significantly. Alior Services Sp. z o.o. It operates as an insurance agent for seven insurance companies and manages insurance contracts on behalf of and for the benefit of insurers.
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68 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Meritum Services ICB S.A. Provides information and computer technology services and other information technology activities. In 2024, the Company generated revenue from the provision of software for Alior Bank S.A. provided in the Software as a Service model and in the sub-licence model (approximately 99% of revenue). Corsham Sp. z o.o. Alior Bank has been the owner of the Company since February 2019, when it acquired 100% of its shares. Through that Company, the Bank completed two investments: in PayPo Sp. z o. o. and Autenti Sp. z o.o. In January 2021, Corsham divested all its PayPo shares. In December 2019, the Company acceded to the Autenti Sp. z o.o., which is a comprehensive platform for authorizing documents and concluding contracts online. So far, the company has acquired the following key customers: BNP Paribas, Vienna Life, Credit Agricole, PGE Lumi, and Medicover. The Company intends to strengthen its competitive advantage by acquiring customers on the domestic market and expanding into European markets, especially in the DACH and BNL region. The current share of Alior Bank Group comp anies in the share capital of Autenti Sp. z o.o. is 9.2%. RBL_VC Sp. z o.o. Established in 2019, in 2020 it was entered into the register of managers of alternative investment companies kept by the Polish Financial Supervision Authority. It is a general partner of RBL_VC Spółka z ograniczoną odpowiedzialnością ASI S.K.A., entrusted with its management. RBL_VC Spółka z ograniczoną odpowiedzialnością ASI S.K.A. Created in 2019, it is an externally managed alternative investment company, as defined in the Act on Investment Funds and Alternative Investment Fund Management (Ustawa o funduszach inwestycyjnych i zarządzaniu alternatywnymi funduszami inwestycyjnymi). Together with RBL_VC Sp. z o.o., being the General Partner of the Company, they form a target investment vehicle through which Alior Bank intends to conduct venture capital (VC) investments.
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69 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement VIII. Major events in the activity of the Alior Bank S.A. Capital Group Early redemption of bonds On 10 January 2024, the Management Board of the Bank adopted resolutions on the early redemption of the Bank’s own bonds: series P1B issued on 29 April 2016, and series F issued on 26 September 2014, which had a final redemption date of 16 May 2024 and 26 September 2024, respectively. The early redemption of the aforementioned bonds took place on 30 January 2024. On 1 October 2024, the Management Board of the Bank adopted resolutions on the early redemption of the Bank’s own bonds: series K and K1 issued on 20 October 2017, which had a final redemption date of 20 October 2025. The early redemption of the aforementioned bonds took place on 21 October 2024. On 5 December 2024, the Management Board of the Bank adopted resolutions on the early redemption of the Bank’s own bonds series P2A issued on 14 December 2017, which had a final redemption date of 29 December 2025. The early redemption of the aforementioned bonds took place on 30 December 2024. Loan repayment holidays In connection with the entry into force of the Act of 12 April 2024 amending the Act on support for borrowers who have taken out a home loan and are in financial difficulty and the Act on community financing for economic undertakings and assistance to borr owers (Journal of Laws 2024, item 696 and the resulting possibility for consumers to suspend the execution of mortgage loan agreements vested in them in relation to the agreements already concluded in order to meet their own housing needs, The Bank made an adjustment due to modifications reflected in the financial result as a reduction in interest income, amounting to approximately PLN 62 million. The credit holiday application period ended on 31 December 2024. Payment of dividend On 26 April 2024, the Bank’s Annual General Meeting adopted a resolution on the manner of distribution of the Bank’s profit for the financial year 2023, based on which, on 24 May 2024, the Bank paid the first dividend in its history in the amount of PLN 577,048,640.22. The amount of dividend per share is PLN 4.42. Confirmation of Credit Rating and Outlook Upgrade by Standard & Poor’s Global Ratings On 17 May 2024, S&P Global Ratings confirmed the Bank’s long -term and short -term credit ratings at the existing level and upgraded the rating outlook from “Stable” to “Positive”. Detailed information is provided in Chapter XII of the Report under “Current Bank Ratings” section.
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70 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Series O Bond Issuance On 11 June 2024, the Bank’s Management Board decided to issue Series O Bonds (“Bonds”) with a total nominal value of up to PLN 550,000,000 at an issue price of PLN 500,000. Detailed information is provided in Chapter IX of the Report. Alior Bank Included in MSCI Poland On 12 August 2024, Alior Bank was included in the prestigious MSCI Poland index. Inclusion in the MSCI index is a recognition of the Bank’s standing among investors and is expected to increase interest, particularly from international investors. Approval of the Base Prospectus for the Bank’s Derivative Securities Issuance Programme up to PLN 5 Billion On 1 October 2024, the Polish Financial Supervision Authority (KNF) approved the Bank’s base prospectus, prepared in connection with the establishment of the Bank’s derivative securities issuance programme (“BPP”). Detailed information is provided in Chapter IX of the Report. Series P Bond Issuance On 29 October 2024, the Bank’s Management Board decided to issue Series P Bonds (“Bonds”) with a total nominal value of up to PLN 400,000,000 at an issue price of PLN 500,000. Detailed information is provided in Chapter IX of the Report. Fitch Ratings Ltd. Credit Rating Upgrade On 30 October 2024, Fitch Ratings Ltd. (“Fitch”, “the Agency”) upgraded the Bank’s long -term credit rating to ‘BB+’ and maintained the short -term credit rating at ‘B’. Additionally, Fitch upgraded the Bank’s long -term national rating to ‘A -(pol)’ from ‘BBB +(pol)’ and raised the Viability Rating (VR) to ‘bb+’. The outlook for the Bank’s long-term credit rating and national long-term rating remains stable. Detailed information is provided in Chapter XII of the Report under “Current Bank Ratings” section. Major events post balance-sheet date There were no significant events after the reporting period, except for those described in this Management Board Report.
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71 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement IX. Issuance of Own Bonds, Alior Bank Securities and Structured Products Based on a resolution by the Supervisory Board dated 5 August 2019, the Bank established a Multiannual Bond Issuance Programme with a total maximum nominal value of PLN 5,000,000,000. In October 2023, key assumptions of this programme were revised. Notably, its validity period was extended until 31 December 2028, and the requirement to conduct bond offerings exclusively in Poland based on base prospectuses was lifted. Under this programme, the Bank conducted two bond issuances in 2024. On 27 June 2024, 1,100 bearer bonds of series O were issued, each with a nominal value of PLN 500,000, amounting to a total nominal value of PLN 550,000,000. This issuance was carried out based on a resolution by the Bank’s Management Board dated 11 June 2 024, approving the issuance of series O bonds and setting their terms. Series O bonds bear interest at a floating rate, calculated as the sum of the 6 -month WIBOR and a margin of 1.99% per annum. The maturity date for these bonds is 9 June 2028, with the Bank retaining the right to early redemption from 9 June 2027 onwards. Series O bonds have been registered with KDPW S.A. and assigned the ISIN code PLALIOR00276. On 20 June 2024, the Management Board of the Warsaw Stock Exchange (GPW) resolved to introduce these bonds to the Catalyst alternative trading system. Subsequently, on 2 July 2024, a resolution was passed setting the first trading day for 4 July 2024, with continuous trading under the abbreviated name ALR0628. On 14 November 2024, 800 bearer bonds of series P were issued, each with a nominal value of PLN 500,000, amounting to a total nominal value of PLN 400,000,000. This issuance was carried out based on a resolution by the Bank’s Management Board dated 29 October 2024, approving the issuance of series P bonds and setting their terms. Series P bonds bear interest at a floating rate, calculated as the sum of the 6 -month WIBOR and a margin of 2.07% per annum. The maturity date for these bonds is 14 April 2028, with the Bank retaining the right to early redemption from 14 April 2027 onwards. Series P bonds have been registered with KDPW S.A. and assigned the ISIN code PLALIOR00284. On 6 November 2024, the Management Board of the Warsaw Stock Exchange (GPW) resolved to introduce these bonds to the Catalyst alternative trading system. Subsequently, on 19 November 2024, a resolution was passed setting the first trading day for 21 November 2024, with continuous trading under the abbreviated name ALR0428. The issuances of series O and series P bonds were conducted as public offerings under Article 33(1) of the Bonds Act and in conjunction with Article 1(4)(a) of the Prospectus Regulation.
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72 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In line with Article 97a(1)(2) of the Act of 10 June 2016 on the Bank Guarantee Fund, Deposit Guarantee Scheme, and Compulsory Restructuring, the series O and P bonds qualify as the Bank’s eligible liabilities (so - called MREL bonds). Additionally, the series O bonds were issued as Senior Preferred bonds, meaning that their nominal value constitutes liabilities classified under category three, subcategory four, as per Article 440(2)(3)(d) of the Bankruptcy Law, while bond interest payme nts are classified under category four, subcategory one, as per Article 440(2)(4)(a) of the same law. The series P bonds were issued as Senior Non -Preferred bonds, classified under category six of Article 440(2)(6) of the Bankruptcy Law. The Bank did not specify the purpose of these bond issuances in the bond terms, in accordance with Article 32 of the Bonds Act. In 2024, the Bank carried out early redemptions of four bond series: • On 30 January 2024, the Bank carried out early redemption of: 321,700 subordinated bearer bonds of series F, with a total nominal value of PLN 321,700,000, issued on 26 September 2014 and assigned the ISIN code PLALIOR00094; 70,000 subordinated bearer bonds of series P1B, with a total nominal value of PLN 70,000,000, issued on 29 April 2016 and assigned the ISIN code PLALIOR00169. • On 21 October 2024, 600,000 subordinated bearer bonds of series K and K1, with a total nominal value of PLN 600,000,000, issued on 20 October 2017 and assigned the ISIN code PLALIOR00219. • On 30 December 2024, 375 subordinated bearer bonds of series P2A, with a total nominal value of PLN 150,000,000, issued on 14 December 2017 and assigned the ISIN code PLALIOR00235. Bank Securities, Derivative Rights, and Structured Products Alior Bank issues Debt Securities under the First Bank Securities Issuance Programme in a non -prospectus- based offering. In August 2023, the base prospectus approved by the Polish Financial Supervision Authority expired in connection with the opening of the Second Issuance Programme. On 17 October 2024, the Polish Financial Supervision Authority approved the Bank’s base prospectus related t o its derivative rights issuance programme (“BPP”), under which the Bank’s outstanding and unredeemed BPP liabilities c annot exceed PLN 5,000,000,000. The programme also includes plans for public offerings in Poland and, for selected BPP series, applications for admission to trading on the regulated market operated by the Warsaw Stock Exchange. Meanwhile, structured products issued by external entities continue to be offered in parallel. Issuance of Bank Debt Securities and Structured Products In 2024, Alior Bank carried out three issuances of Bank Debt Securities (BPW) under the First Issuance Programme, totalling PLN 28.3 million and EUR 10 million. Additionally, twelve subscriptions for structured products with capital protection were organised, amounting to a total nominal value of PLN 225.3 million. At the same time, for selected Private Banking customers, structured products with limited capital protection and/or conditional early redemption were offered. In 2024, the Bank conducted twelve subscriptions of such products in the form of autocall certificates, with a total nominal value of PLN 328.46 million.
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73 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement X. Report concerning the risk of Alior Bank Risk management is one of the most important internal processes. The overarching goal of the risk management policy is to ensure early recognition and adequate management of all material risks related to the Bank’s activities. The risk management system supports the delivery of the strategy and is aimed at ensuring an adequate level of profitability and security of business activity by effectively controlling the risk level and keeping it within the boundaries of the adopted risk appetite. ESG risks are included in the risk management framework, as cross-cutting risks, and they affect the individual risks recognized in the Bank. The Bank identifies the following risks as significant: The risk management system in force at Alior Bank S.A is based on three independent lines of defence: First: implemented in the Bank’s operating units and by process owners who, among other things, design and ensure compliance with control mechanisms in the processes. Second: operates in organisational units responsible for managing particular risks (including measurement, monitoring, control, and reporting of risks). It fulfils a managerial function whereby risk management is delivered at dedicated stations or organisational units independently from the first line.
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74 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Third: provide the senior management and the Supervisory Board with assurances that the activities of the first and second lines are in line with their expectations. The third line of defence is the activities of the Internal Audit Unit. The Bank supervises the risk management related to the activities of subsidiaries and foreign branches, which have commenced deposit and credit activities and takes into account the risk level of activities of specific subsidiaries and foreign branches as part of the risk monitoring and reporting system at the level of the Group, (as of 30 November 2024, the operational activities of the Bank’s Romanian Branch were officially terminated). The following types of risk are of particular importance in the Bank’s operations: • credit risk, • operational risk, • liquidity risk, • market risk, including interest rate risk in the banking book and market risk in the trading book, • model risk, • capital risk. Credit risk The management of credit risk and maintaining it at a secure level defined by the risk appetite is fundamental for stable operation and growth of the Bank. Credit risk control is delivered by our comprehensive credit risk management system which is integrated into the Bank’s operational processes. The description of how the risk control system operates is reflected in the regulations applicable at the Bank, in particular, in the procedures for analysing loan applications, credit methodologies and in the risk valuation models adapted to the customer segment, type of product and transaction, the rules for monitoring customers and the loan portfolio, the rules for establishing and monitoring legal securities for loans, and by debt monitoring , restructuring and collection processes.
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75 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The Bank, when managing risk (both at the exposure level, portfolio level and taking into account stress testing), takes measures that lead to: minimising the level of credit risk of a single loan at the adopted profitability level, reduction of the total credit risk resulting from the Bank’s holding of a specific credit portfolio As part of measures to minimise the risk level of a single exposure, the Bank assesses each time when originating a new loan product: • the customer’s credibility and creditworthiness taking into account, among other things, a detailed analysis of the source of repayment, assessment with scoring/rating models of the exposure and the level of ESG risks (environmental, social and governance risks), based on the Bank’s assumptions, • the reliability of the collateral accepted, including verification of their formal, legal and economic status, taking into account their adequacy, • takes effective monitoring and collection measures adequately defined on the level of a single customer based on the segmentation models applied. To keep credit risk on the level defined in its risk appetite, the Bank has applied the following measures: • establishes and controls concentration limits, • monitors the structure and quality of a new credit exposure in relation to defined objectives and EWS signals, • analyses the evolution of internal and market factors and the sensitivity of the loan portfolio, in particular with regard to negative events identified as potential risks, • regularly monitors the loan portfolio, by controlling all major parameters of credit risk (including PD, LGD, LTV, DTI, COR, NPE, NPL, Coverage, loss rate of particular generations), • regularly conducts stress tests. In terms of credit risk management in the individual customer segment, the Bank continued its policy of building a portfolio that is resilient to economic downturns. In the previous reporting periods, the Bank thoroughly optimized the criteria and conditions for granting housing and consumer loans, which, with the stabilization of the macroeconomic environment in the 202 4, enabled further development of the individual customer portfolio, including through products of a relational nature and with a low credit risk profile, such as the housing loan and the Alior Pay Credit Limit. The improvement in the Bank’s credit risk profile over recent quarters contributed to Fitch Ratings Ltd.’s decision on 30 October 2024 to upgrade the Bank’s long -term credit rating to BB+ and to Standard & Poor’s Global Ratings maintaining its rating on 17 May 2024. In the area of cash loan, the Bank continues to maintain a stable market share in new sales and the market quality of these sales. In 2024, the Bank carried out a slight tightening of the lending policy envisaged for this product, aimed at maintaining the long-term profitability of selected segments of it. In the area of low-risk mortgage loans, the Bank recorded a 9% year-on-year decline in lending volume following the withdrawal of the “Bezpieczny Kredyt 2%” programme. However, the Bank’s total loan origination volume exceeded the planned target by 11%.
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76 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In addition, the Bank continued to implement changes to the lending process which resulted in its increased automation and efficiency. In the area of instalment loans, the Bank continued its strategy of optimising its lending policy by, inter alia, adjusting the parameters, the granting process and the approval strategy to the dynamically changing market environment. The Bank recorded a 3% increase in lending activity in 2024 compared to 2023. It also further developed its scoring models using Machine Learning techniques, significantly enhancing the accuracy of risk forecasting within the rating system. These improveme nts contributed to in creased lending activity while maintaining the existing credit risk profile. In the retail customer area, further functionalities and optimisations have been implemented in product - the Alior Pay Credit Limit. The product’s design is intended to encourage customers to build an ongoing relationship with the bank and to transfer their salary to Alior Bank (the preferred customer profile due to low loss ratio). In the area of corporate lending, in 2024 the Bank mainly continued to implement the Bank’s Strategy on the digitisation and transformation of the KB lending process aimed at automating and increasing the efficiency of the lending process supporting the granting of credit commitments. Among other things, automatic calculation of the level of ESG risks in the system decision process was implemented, and a set of credit policy optimisation changes were introduced to ensure high quality of the loan portfolio in the long term. As part of its product offering development, the Bank introduced products and financing solutions supporting the energy transition process, including: • In February 2024, a dedicated investment loan for Housing Associations to finance the modernisation of shared property, • In December 2024, a renewable energy financing offer based on the market PPA (Power Purchase Agreement) model. Additionally, the Bank continues to advance technologies and methodologies for building scoring and rating models to improve risk prediction for its financial products. Risk assessment in the loan origination process The Bank takes decisions to award credit products in accordance with: • applicable legislation and KNF Board recommendations, • credit risk management policies, • loan origination methodologies appropriate for the respective customer and type of product, • operational procedures defining the appropriate activities to be carried out under the loan origination process, the Bank’s units responsible for them, and the tools to be used, • loan responsibility rules whereby responsibility levels are adapted to the level of risk involved in the customer and transaction. Customer credit rating prior to issuing a decision to award a credit product is conducted using our loan support system, rating tools, external information (including databases of CBD DZ, CBD BR, BIK, economic information bureaus) and the Bank’s in-house databases. With regard to a business customer, the Bank, as a rule, does not finance projects that may have a negative impact on the climate and the natural environment or are prohibited by Polish legislation or international conventions. In its relations with customers, the Bank adheres to standards of professional ethics and uses solutions to ensure the protection and security of data provided during the lending process.
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77 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Main areas of exclusion include: • the financing of projects involving harmful or exploitative forms of forced labor, child labor, direct discrimination or practices that prevent the workforce from exercising their legal rights of affiliation and collective bargaining, • enterprises operating in breach of the applicable regulations of the Polish law or of the law of the country where activities are pursued, or holding no licenses, authorizations, permits or rights which are required to operate the respective business, • activities with a negative impact on areas protected under national law and international conventions, habitats of rare/endangered species, or such as would have adverse effect on places of cultural or archaeological significance. Environmental (including climate), social or governance risks means risks of negative consequences for the Bank arising from the current or future impact of environmental factors, social policy or corporate governance on the situation of clients or accepte d collateral for loans. The level of environmental, social, and governance (ESG) risk is assessed for each loan application, and a high ESG risk rating triggers additional requirements and steps in the credit process, particularly in terms of in-depth ESG risk factor analysis. The results of the analysis of risk factors (ESG) are entered on the forms used in the lending process and in systems supporting that process. The verification of ESG risk factors takes also place in the process of individual monitoring. Separation of responsibilities The Bank implements a policy consisting in the separation of functions related to Customer acquisition and sale of credit products from functions related to the assessment of credit risk, making loan decisions, and monitoring loan exposures. Concentration risk management Concentration risk is analysed at the Bank with regard to credit activity and is defined as a threat resulting from the Bank’s excessive exposures in: • exposures to single customers or groups of related customers, • exposures subject to common or correlated risk factors (including high ESG risk), having a potential to generate losses to the extent that may pose threats to the Bank’s financial condition. The Bank identifies and assesses concentration risk by analysing the portfolio structure against various factors (exposure features) important for credit risks, and on this basis defines exposure groups, the excessive concentration of which is undesirable and in extreme conditions may generate losses that exceed the Bank’s credit risk appetite. The awareness of the scale of potential threats related to exposure concentration allows us to create a secure structure of the credit portfolio. In order to prevent unfavourable events resulting from excessive concentration, the Bank restricts this risk by complying with concentration limits under laws and regulations and by applying in -house limits and standards.
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78 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Impairment and provisions The Bank assesses all on -balance-sheet and off-balance-sheet credit exposures to identify objective evidence of impairment, according to information most current as at the value adjustment date. If there is no objective evidence of impairment of the carrying amount of credit exposures, they are aggregated to a group of assets with a similar credit risk profile and assessed in terms of material deterioration of credit quality since initial recognit ion. The assessment of deteriorated credit quality is based on a set of qualitative and quantitative evidence. Qualitative prerequisites include: achievement by the exposure of material overdue exceeding 30 days, classification of the customer into the Wat ch List category, exposures remaining in the forborne category, occurrence of other risks (e.g. industry, regional risks). Quantitative evidence is the material deterioration of the current aggregate probabilities of default in the period leading to expected maturity against aggregate probabilities of default for that period at the time of exposure generation (i.e., release or major modification). For exposures for which there is no evidence of impairment, the Bank uses impairment estimation models for the following horizons: • the model of expected losses estimated within 12 months for exposures classified as Bucket/Stage 1 (or LCR [Low Credit Risk]) and • the model of expected losses estimated at the time maturity horizon for exposures classified as Bucket/Stage 2 (including POCI [Purchased or Originated with Credit Impairment]). When valuating expected losses, the Bank takes into account future macroeconomic factors using multi - scenario models. In 2024, the Bank did not identify the need nor did it implement changes in the principles of credit portfolio valuation, while the Bank actively adjusted the FLI (forward -looking-information) component in order to optimally include the current and future macroeconomic environment in the valuation. Impairment evidence The Bank assesses impairment evidence by classifying and differentiating events related to: • • • • • • Customer • Account • Exposure to banks • Exposure to bonds Impairment is identified automatically in a central system that covers the customer’s way of conduct towards all entities of the Bank’s Capital Group. The assessment covers a wide range of features assessing the payment regime, the customer’s behavioural and procedural features and their financial standing.
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79 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Exposures for which evidence of impairment has been established are divided into individually measured exposures and valued collectively. Individual valuation is valid for exposures of business customers at risk of impairment exceeding the following materiality thresholds (calculated at the level of total customer exposure): Materiality thresholds qualifying customer exposures for individual valuation (as at 31 December 2024): Customer segment Threshold value in PLN Business customer 3,000,000 Individual valuation is based on the analysis of potential scenarios (business customers). Each scenario is assigned a probability of implementation and expected recoveries. The assumptions adopted for individual valuations are described in detail by those conducting the analysis. The values of recoveries expected under individual valuations are compared to the realised recoveries on a quarterly basis. Group valuation is based on a wide range of characteristics tailored to the different populations, including essentially behavioural features of recoveries and recovery processes, as well as the duration of the exposure in default. Security is incorporated on the exposure level. Since December 2021, in the scope of credit portfolio classification and valuation processes, the Bank implemented the requirements of Recommendation R of the KNF Board concerning the principles of classification of credit exposures, estimation and recognition of expected credit losses and credit risk management. Security Legal security is a secondary source of repayment of a secured debt (if unfavourable circumstances occur within the lifetime of a credit product). Credit security also increases the probability of Borrowers meeting their obligations. If the Borrower fails to pay the debt by the dates defined in the loan agreement and restructuring measures fail to bring the expected result, the security is to enable the Bank to get reimb ursed for the loan along with any interest and costs. The Bank establishes the security method taking into account: • expected workload of the Bank and the cost of establishing the security, • type and amount of the secured debt and the lending period, • viable possibility of meeting the Bank’s claims in the shortest time possible from the adopted security, • any pre-existing charges on the security, for security in kind, • financial and business circumstances of the person providing guarantees to the customer, and their personal and ownership relationships with other entities (in the event of personal securities), • estimated cost of potential materialisation of the security. Management of the assets taken over due to debt In justified cases, the Bank takes over any assets providing a security in order to satisfy the debt. Such operations are conducted based on an approved plan of management of the asset to be taken over.
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80 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Scoring/rating The Bank strives to systematically develop credit risk management methods and tools. A priority area of work is the management of credit risk models used in the risk acceptance process. The Bank is developing both credit scoring methods to support credit d ecisions for individual customers and credit rating as an instrument to support decision-making in the micro, small, medium and large enterprise segments. Segments important to the Bank from the perspective of credit development have models built using sta tistical methods. They are based on the sources of information available in the lending processes. Model development is carried out by conducting processes to build new models tailored to the changing risk profile of the Bank’s customers. In order to ensure the adequacy of the models, a process of monitoring them is carried out by the entity that owns t he solutions. Its purpose is to determine whether the models used appropriately differentiate risk among individual borrowers, and the estimates of risk parameters reflect current and expected changes in the risk level of loan portfolios. In addition, the quality of the data used in determining risk parameters is verified during dedicated studies. The credit risk models currently in use were built internally at the Bank. In order to strengthen the risk management process of models used at the Bank, there is a team acting as an independent validation unit. In the mortgage lending loan segment, the Bank implemented a rating system incorporating four new scoring models that forecast PD and LGD parameters based on the product life cycle. These models were developed internally in compliance with the IRB framework. Monitoring of credit risk for consumers and businesses All credit exposures of consumers and business customers are subject to monitoring and current classification to adequate processing paths. To streamline the monitoring and control of the operational risk, adequate solutions in the Bank’s lending systems were implemented. The system tools were consolidated to conduct the monitoring procedures effectively, and covers all accounts. At the same time, the Bank intensively develops the use of early warning signals in the on -going monitoring of credit exposures. They are based both on internal/transaction data and on external information. The Bank implemented the Heron system, which enables faster and more accurate analysis of applications in the EWS process. Continuous control of the quality of the credit portfolio is ensured by: on-going monitoring of the timely handling of loans and early warning signals (EWS), periodic reviews, in particular the economic and financial situation of customers, transaction risk and values of accepted collaterals,
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81 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Monitoring of business customers is also carried out: • individual monitoring, which is carried out on a quarterly basis. The analysis includes both an assessment of the economic and financial situation of the business and all aspects related to the structure of products, collateral or contractual clauses. In Q1 of 2024, the Bank implemented the individual monitoring process in the new Heron system, which enables faster and more accurate analysis and provides a wider range of data than before for reporting and managing the monitoring process. The result of the review is an update of the customer’s economic and financial assessment classification, as well as the preparation and implementation of recommendations regarding further development of relations with the customer in order to mitigate the identified risks and improve the quality of the credit portfolio. • automatic monitoring, which is carried out once a year and covers periodical risk analysis of credit exposures on the basis of financial documentation, taking into account: the customer’s financial situation, behavioural assessment and timeliness of repayments. The review results in an update of the customer’s economic and financial assessment. Forbearance practices The Bank uses the following tools in the process of restructuring of individual customers: • extension of the lending period resulting in lower amounts of monthly principal and interest to be repaid. If the lending period is extended, any restrictions resulting from the product characteristics are taken into account, for instance, the age of the borrower, • grace periods for repayment (applied to a part of or the entire instalment depending on the risk assessment on the single exposure level). During the period of complete grace period for the repayment of principle and interest, the borrower is not required to make any payments under the agreement concluded. The period of loan repayment may be extended to adapt the amount of the instalment to the borrower’s payment capacity (in accordance with the restrictions resulting from the product’s metrics), • replacement of the limit in the LOR account/unauthorised overdraft in the ROR/KK account into a loan repayable in instalments; parameters of the product launched as a result of applying the respective tool are consistent with the products metrics: cash advance, • agreement by rescheduling matured exposures (after maturity or termination). It consists in transferring debt from one exposure to a non-renewable account with possible schedule variants: settling the entire debt, • statutory repayment holidays of up to 3 months (in this period, the entire instalment is subject to a grace period and no interest is charged). Tools can be combined if such a solution increases the likelihood that the restructuring will be effective. In particularly justified circumstances, there is a possibility of applying other tools.
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82 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In the business customer segment, the Bank applies the following main solutions: • extension of the lending period resulting in lower amounts of monthly principal and interest to be repaid, • change of the repayment schedule in order to adjust payments to the current financial standing of the customer, • granting consent to sell (in consultation with the customer) a part of securities and adequately reduce the customer’s liabilities, • changing the nature of the product to a non -renewable product, while establishing a repayment schedule (with partial reduction of non-renewable product), • lowering the interest rate, • change in the priority of repayments (crediting repayments to principal first), • changing the loan currency in connection with the change of currency exposure. Monitoring of Risks Involved in Forbearance Practices As part of reporting activities concerning the portfolio of restructured loans, the following is subject to detailed analysis: • application process (number of applications, number of decisions issued, types of decision, time to decision, time to decision implementation, tools), • quality of the portfolio of restructured lending (by particular form of arrears, forms of restructuring, , restructuring tools, according to DPD as at the date of submitting the application), with particular attention to delayed loss ratios. Assessment of impairment for exposures subject to forbearance practices All such exposures are subject to impairment over the life-time horizon. Forbearance practices: • affecting the asset value reduction; or • where the repayment plan used is not based on reliable assumptions (macroeconomic and/or customer standardisation); or • where the amended agreement contains significant deferrals as regards the commencement of repayment; or • where the amended agreement provides for a large lump sum (balloon) payment at the end of the revised repayment schedule are evidence of impairment and are classified under “Stage 3”. An exposure for which an impairment has been identified (as a result of it being classified as forbearance) (default) maintains such status for at least 12 months. Following that period, the exposure may leave the default status (if there are no major delays or any other impairment evidence). Such exposure remains under the forbearance status for another 24 months. After that period, the identification of impairment evidence is conducted against the stricter criteria.
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83 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Risk control in loan origination processes As part of the 2nd line of defence in Risk, the operational activity is conducted by a dedicated unit (Risk Control Unit), performing control functions based on automated control mechanisms in key areas and credit processes. The scope of control covers the stages of the credit process from granting financing, through monitoring to debt collection activities. The results of the inspections carried out, along with the relevant recommendations, are regularly reported to the Heads of Units, and owing to the adequate placement of individual control mechanisms in processes, the identified errors are corrected on an on-going basis, thus minimising the lack of compliance of the operational processes performed with internal and external regulations. Operational risk Operational risk means the possibility of a loss resulting from an incongruity or failure of internal processes, people, systems, or from external events, it shall be identified as a material risk. Operational risk includes legal risk, but does not include reputation and strategic risks. The purpose of managing operational risk connected with the Bank and the Alior Bank S.A. Capital Group is to maintain operational risk at a safe and adequate level in relation to the activities, objectives, strategies and development of the Bank, approved by the Management Board and the Supervisory Board of the Bank, as well as to develop quantitative methods and expand the extent to which they are used in managing t he organisation using the Advanced Management Approach (AMA). The Bank has in place a formalised operational risk management system within which it prevents operating events and incidents and minimises loss in case of risk materialization. The operational risk management system and the internal control system at the Bank and the Capital Group are based on three lines of defence. Since 2016, the Bank has been actively using the Advanced Measurement Approach (AMA method) tools to calculate both supervisory requirements and operational risk management. For the calculation of own funds requirements for operational risk, the Group uses: • AMA method (with regard to the activity of Alior Bank, without taking into account the activity of the branch in Romania), • standard method (for the branch in Romania and Alior Leasing Sp. z o.o.). In 2024, the Bank implemented a project to introduce a new method for calculating the regulatory capital requirement for operational risk – SMA. This change was driven by the amendments to Regulation No. 575/2013 of the European Parliament and of the Council (EU) of 26 June 2013 on prudential requirements for credit institutions and investment firms, amending Regulation (EU) No. 648/2012, which took effect on 1 January 2025 (“CRR 3”). The regulatory changes impact Part Three, Title III of CRR, concerning ow n funds requirements for operational risk. The new SMA methodology replaces all previously used methods for calculating operational risk capital requirements, including TSA and AMA. In January 2024, a new IT system was implemented for, among other things, the collection of data on operational incidents and losses and the monitoring of key operational risk indicators.
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84 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The operational risk management structure in place at the Bank includes: Supervisory Board, Risk Committee of the Supervisory Board, Management Board of the Bank, Operational Risk Committee, Operational Risk Management Department and Operational Risk Coordinators. The level of operational risk costs in 2024 was within the adopted target and limit for the Bank. Market and liquidity risks The main principles of managing these risks are defined in the Assets and Liabilities Management Policy. The Bank has a clear division of competencies in place in regard to the management of market and liquidity risks, which includes: Entering into treasury deals Measurement, monitoring, and reporting of market and liquidity risks, including how the market and liquidity risks management policy is implemented Transactions settlements process Operational handling and operational support for business processes. including management on the Bank’s Nostro accounts Supervision of these activities connected with transactions and independent measurement activities and risk reporting has been distributed at the Bank to the level of the Member of the Management Board (this guarantees full independence of their operation). Apart from individual organisational units, an active role in the market risk and liquidity risk management process is played by the Supervisory Board, the Management Board of the Bank and the Capital, Assets and Liabilities Management Committee (CALCO). Exposure to market and liquidity risk is limited by the system of limits (periodically updated, introduced by a resolution of the Supervisory Board or CALCO), covering all risk measures the level of which is monitored and reported by organisational units of the Bank independent of business. Three types of limits exist in the Bank, differing in scope and mode of operation: • basic limits (determined at the level of the Supervisory Board), • supplementary limits determined by the Management Board of the Bank or CALCO (when the process of setting limits has been delegated to CALCO), • additional limits.
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85 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Liquidity risk Means the risk of inability to meet payment obligations arising from balance sheet and off-balance sheet items held by the Bank. This risk distinguishes the risk of financing (there is a risk of losing the sources of funding held) and the risk of inability to renew the funds due or to lose access to new sources of funding. Purpose of liquidity risk management It is intended to provide the necessary financial resources to meet the current and future (including potential) liabilities, taking into account the specific features of the activity and the needs that may emerge as a result of changing market or macroeconomic conditions. Liquidity risk management process The Bank has in place an internal liquidity adequacy assessment process (ILAAP) consisting in effective management of liquidity risk (to ensure that the Bank holds stable funding and adequate liquidity buffers to meet obligations on time), including in str ess conditions, and to ensure the compliance with regulatory requirements for liquidity. Through ILAAP elements, the Bank defines the liquidity risk tolerance (i.e. the liquidity risk level) it intends to bear. It is consistent with the risk appetite and t he overall strategy of the Bank. Organisation of the liquidity risk management process The Bank has appointed a CALCO (committee to manage capital, assets and liabilities). The liquidity risk strategy (acceptable level of risk, assumed balance sheet structure, financing plan) is approved by the Management Board of the Bank and then accepted by the Supervisory Board. Concluding treasury interbank transactions rest with the Treasury Department. Settlement and posting of transactions takes place in the Operations Settlements Division. Liquidity risk is monitored and measured at the Financial Ris k Management Department. The allocation of liquidity risk management competences is transparent and ensures that they are separated to the level of the Member of the Management Board (which guarantees full independence of their operation). Management of liquidity risk at the Bank’s foreign branch In 2024, the Bank operated one foreign branch in Romania, which engaged in deposit and lending activities. The Branch’s liquidity position was continuously monitored by dedicated organisational units within both the Branch and the Bank’s Head Office. As of 30 November 2024, the operational activities of the Romanian Branch were terminated. Liquidity risk management in subsidiaries In 2024, Alior Leasing was considered an important company in the Group's liquidity risk management. Liquidity risk in the company is monitored, controlled and reported on the basis of internal liquidity risk management principles (liquidity risk appetite, liquidity contingency plans, regular reports are prepared). The
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86 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement reports prepared by Alior Leasing concerning the liquidity risk in the company constitute, a starting point for making decisions on liquidity management of the company and are used to consolidate the liquidity risk at the level of the Capital Group. Measurement and assessment of liquidity risk Liquidity risk is measured at the Bank taking into account all significant positions – both on and off balance sheet (including, in particular, derivatives). The liquidity management metrics at the Bank include ratios and the related limits of the following liquidity types: Risk monitoring and reporting The Bank regularly monitors, reports the level of liquidity risk measures and the degree of use of supervisory and internal limits and thresholds. The Bank maintains a liquidity buffer at a high level by investing in government debt securities and enterprises with the highest ratings (characterised by quick liquidation), maintaining funds on the current account with NBP and other banks (nostro accounts). It also maintains cash at the Bank’s cash desks and invests funds as part of interbank deposits (within the limits set). The adequacy of the liquidity buffer is controlled by comparing it with the established minimum liquidity buffer (necessary to sur vive a stress scenario for up to and including 7 days and for 30 days). As at the end of December 2024, the total liquidity buffer was PLN 22 519 million as compared to a minimum level of PLN 9 028 million under the shock scenario. To calculate the liquidity buffer, the Bank uses appropriate reductions of particular components of that buffer to take into account market liquidity risk (product). The main source of financing of the Bank’s operations, including the portfolio of liquid assets, is the funds acquired as part of the deposit base (the level of which as at 31 December 2024 was approx. 80% of liabilities). In addition, the Bank conducts liquidity stress tests taking into account an internal, external, and mixed crisis (including it prepares a plan of acquisition of funds in emergency situations, as well as it defines and verifies the rules for the sale of liquid assets, taking into account the cost of maintaining liquidity). The results of stress tests are used, in particular, to assess the extent to which the Bank is prepared to settle liabilities in a stress situation, to assess the adequacy of excess liqui dity, as well as to verify the adjustment of the Bank’s liquidity profile to the adopted liquidity risk tolerance. The comparison of the demand for liquid funds for each scenario (with the values that can be obtained on the basis of the tests of contingency plans) allows to check whether the Bank is able to settle liabilities in longer horizons (beyond the horizon of survival) using emergency actions. Moreover, the results of stress tests serve to establish internal limits, adjust and improve internal regulations, everyday practice in managing liquidity ri sk through using the results of stress tests to assess the Bank’s day -to-day liquidity situation, as well as to shape a liquidity emergency plan. intraday liquidity current liquidity short-term liquidity mid-term liquidity long-term liquidity
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87 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In 2024, the liquidity of the Capital Group was at a safe level, which was reflected by levels of liquidity ratios significantly above the limits. As at 31 December 2024, the LCR was 202%, whereas NSFR was 147% compared to the required level of 100% for both measurements. Market risk The Bank has identified the following market risks to be managed: • interest rate risk in the banking book, • market risk in the trading book. Interest rate risk in the banking book It is defined as the risk of negative impact of the level of market interest rates on the current result or net present value of the Bank’s capital. Due to its policy of limiting risks in the trading book, the Bank has attached special importance to specific aspects of interest rate risk related to the banking book, such as: • mismatch risk, • basis risk, • customer option risk. • credit spread risk (CSRBB). In addition, for interest rate risk, the Bank pays special attention to the modelling of prepayments of fixed-rate loans and products with undefined maturity and the amount of interest determined by the Bank (e.g., for current deposits), and the effect of non-interest items risk (e.g., equity, fixed assets). The purpose of interest rate risk management is to limit potential losses due to changes in market interest rates (to an acceptable level) by adequate composition of balance sheet and off-balance sheet items. Interest rate risk is measured and mitigated by monitoring the volatility of net interest income (NII) and changes in economic value of equity (EVE) of the Bank. Apart from NII and EVE the Bank measures interest rate risk using BPV, VaR, Expected Shortfall measures, overestimation gap, and stress tests. The Bank conducts scenario analysis which covers, among other things, the effect of specific interest rate changes on the future net interest income and economic value of equity. Under these scenarios, it maintains internal limits whose use is measured daily.
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88 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement As at the end of December, 2024, and December, 2023 the interest rate risk measures for the Capital Group are presented below (in PLN thousand): Scenario 31.12.2024 31.12.2023 The most unfavourable scenario for changes in the economic value of capital (EVE) -617 971 -156 916 The most unfavourable scenario for changes in the economic value of capital (EVE) as % of Tier 1 -6.56% -1.84% Supervisory test result for net interest income (SOT NII, negative scenario) -370 246 -475 948 Supervisory test result for net interest income (SOT NII, negative scenario) as % of Tier 1 -3.93% -5.58% Market risk in the trading book Currency risk is a particularly significant risk in the trading book. Defined as the risk of loss due to exchange rate changes. Additionally, the Bank distinguishes the impact of the exchange rate on its results in the long term, as a result of the conversion of future foreign exchange revenues and costs at potentially unfavourable exchange rates. The primary purpose of currency risk management is to identify the areas of activity of the Bank that can be exposed to that risk and take measures to limit as far as possible any losses occurring out of it. The Bank’s Management Board defines the currency risk profile which must be characterised by compliance with the applicable financial plan of the Bank. Alior Bank regularly monitors and reports on: Level of currency risk metrics Level of utilisation of internal limits and thresholds for currency risk Stress test results Currency risk limits are determined in such a way as to keep the risk at a limited level. The Bank’s main currency risk management tools include: • internal procedures for currency risk management,
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89 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • internal models and metrics of currency risk, • limits and warning thresholds for currency risk, • restrictions on admissible currency transactions, • stress tests. Currency risk is measured and assessed by limiting currency positions taken by the Bank. For measurement, the Bank uses Expected Shortfall, and stress tests. The ES measure determines the average loss on foreign exchange positions held related to changes in exchange rates, maintaining the assumed confidence level and the retention period. The metric is established on a daily basis for each area responsible for risk taking and management, individually and collectively. As at the end of December, 2024 and December, 202 3, the maximum loss on the currency portfolio held by the Bank (managed in the trading book), determined on the basis of ES within a time horizon of 10 days (in PLN thousand) has been presented below: 31.12.2024 31.12.2023 ES 976 186.2 In measuring the exposure of the Capital Group to the risk of changes in exchange rates, the Bank carries out stress tests. Presented below are the results of stress tests examining the impact of changes in exchange rates relative to PLN by +/ - 30% (in PLN thousand) 31.12.2024 31.12.2023 rates +30% 30 113 56 511 rates -30% -4 287 10 854 Model risk The purpose of model risk management is to make it possible to achieve business goals with at least an acceptable level of uncertainty resulting from the application of models in the Bank’s activities. The Bank strives for the widest possible use of models in its processes with the simultaneous development of modelling methods and applied technologies. The actions taken result in high automation of the decision-making process, adequate valuation of assets, objectification of estimates of key risk measures, and minimisation of the role of the human factor. The model risk management process assesses compliance of the model risk level with the adopted risk appetite, and measures are taken in order to limit this level. The stages of the process are: identification, measurement, monitoring, control and reporting of the model risk. The model risk management process is carried out at the level of individual models as well as at the level of the model portfolio. The actions and techniques used are adjusted to the importance of the model in the bank’s operations. Eac h model is subject to strict monitoring and data quality tests, whereas models recognised as significant are additionally regularly validated by an independent unit. These actions ensure control and continuous measurement of model risk.
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90 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Capital risk Alior Bank manages its capital in such a way as to ensure safe and effective operations. In order to ensure safe operation, the Bank determines (as part of the risk appetite) appropriate levels of coverage by own funds (as well as Tier1 capital) of potential unexpected loss due to material risks determined as part of the ICAAP process, as well as risks identified as part of the regulatory capital calculation process. Under the ICAAP process, the Bank identifies and evaluates the materiality of all risks it is exposed to in doing its business. For particular risks identified as material risks, the Bank estimates internal capital requirement using its in-house risk estimation models. Internal capital is estimated for the following risks: • credit risk based on the VaR portfolio method, • operational risk based on AMA approach, • liquidity risk based on liquidity gap models taking into account a stress scenario, • market risk based on the Expected Shortfall method, • interest rate risk in the banking book based on EVE method, • reputation risk based on VaR method, • business risk based on the outcome of stress tests, • model risk based on the outcome of stress tests, • collateral concentration risk based on the results of stress tests. The total internal capital so determined (and the calculated regulatory capital) is secured with the amount of own funds (as well as Tier1) taking into account appropriate security buffers. Capital ratios of the Capital Group: 31.12.2024 30.06.2024 31.12.2023 Total capital ratio 18.27% 17.53% 17.83% Tier 1 18.27% 17.12% 17.15% Ratio of internal capital coverage by available capital 2.97 2.73 2.66 As of 1 January 2025, amendments to Regulation No. 575/2013 of the European Parliament and of the Council (EU) of 26 June 2013 on prudential requirements for credit institutions and investment firms, amending Regulation (EU) No. 648/2012 (“CRR 3”) came into effect, introducing changes to capital requirements for credit risk and Credit Valuation Adjustment (CVA) risk under Part Three, Title II and Title VI of CRR. The most significant changes in credit risk regulations include: calculation of capital requirements for contractual arrangements offered by an institution but not yet accepted by the customer, modification of CCF – now divided into five buckets with a new CCF value of 40%, revision of risk weight assignments for mortgage- backed exposures, including the separate classification of ADC exposures, changes in risk weights for rated institutions, differentiated treatment of exposures to unrated institutions, a 1 50% multiplier applied to exposures of individuals with currency mismatches between loan repayments and income, and a 45% risk weight assigned to exposures to transactors.
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91 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In the area of CVA risk, the capital calculation formula has been revised, introducing differentiated risk weights based on the counterparty’s industry sector. These regulatory changes were implemented by the Bank in 2024 and have been in effect since 1 January 2025.
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92 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement XI. Internal control system The internal control system in place at Alior Bank is the entirety of solutions and measures to ensure that the internal control system objectives defined by law are met, and at the same time to support Bank management, contribute to effective performance of tasks, and ensure the security and stable operations of the Bank. The Bank’s internal control system comprises: control function, compliance unit, and independent internal audit unit. The internal control system operated at the Bank is built around the model of three lines of defence: On all three lines of defense, the Bank’s employees, to the extent of their assigned job duties, carry out relevant tasks related to ensuring the achievement of internal control system targets, including the application of control mechanisms or independent monitoring of compliance through on-going verification and testing. The scope of control activities performed by an employee shall be adequate to the function performed in the Bank by that employee, the experience and qualifications they possess, and the duties and responsibilities assigned to them.
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93 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The Bank’s authorities attach special importance to ensuring the quality and correctness of operation of the internal control system. The Bank’s Management Board is responsible for designing, introducing and ensuring the operation of an adequate and effective internal control system, in particular, it approves the criteria for separation of material processes, the list of material proces ses, and their connection to the goals of the internal control system, and defines and overseas any corrective action taken to remove the most significant inadequacies. The Supervisory Board’s Audit Committee deals with, among other things, current monitoring and annual review of the quality and effectiveness of the internal control system. The Supervisory Board in particular approves the rules of operation of the internal control system and evaluates the adequacy and effectiveness of that system. In 2024, the Bank undertook initiatives to further enhance the efficiency of its internal control system. The Bank has been developing and optimising its IT solutions for automating selected control functions, including updating the Control Function Matrix, which documents the internal control system. Throughout the year, the Bank conducted a series of training sessions for employees across the first, second, and third lines of defence, aimed at enhancing their knowledge of control functions, particularly i n the areas of designing and implementing control mechanisms and ensuring their independent monitoring, planning and executing testing procedures, and reporting test results, including irregularities and corrective, remedial, and disciplinary actions. Internal regulations concerning internal control were also updated to strengthen the Bank’s governance framework. Control system in the process of preparing the financial statement It is implemented through: • Group-wide application of standardised accounting policies for valuation, recognition and disclosures, in accordance with International Financial Reporting Standards, • use of internal control mechanisms (allocation of responsibilities within the reporting department, at least two-stage authorisation of data, verification of correctness of data received), • definition of responsibilities and formalising the financial statement preparation process, • definition of the roles and control of compliance with the circulation of financial and accounting documents, and verification in the substantive, formal and accounting terms, • keeping a record of business events in an integrated financial and accounting system, the configuration of which corresponds to the accounting policies applicable at the Bank and which contains instructions and controls to ensure the coherence and integrity of data, • independent assessment of financial statements conducted by an independent external auditor. The process of financial reporting is subject to ongoing verification. The integrated financial and accounting system plays an important role in the control process for accounting and financial reporting. It not only allows for checking the correctness of the recorded operations, but also allows for the identification of persons entering into and accepting individual transactions. Access to financial information is restricted by the privilege
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94 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement system. System access privileges are provided depending on the assigned role and scope of responsibility of the individual. They are subject to strict control. The Bank’s Accounting Principles contain provisions aimed at ensuring compliance of accounting and prepared financial statements with the applicable regulations, including in particular: overriding principles and quality features of financial statements, correctness of valuation and classification of events, mechanisms for securing data sets. To ensure the compliance of our Accounting Principles with updated regulations, including, in particular, with International Financial Reporting Standards, they are re gularly updated. The last update took place in December 2024. The risk of preparation of the financial statements is mitigated by the Accounting Department (e.g. through supervision over the quarterly process of monitoring the reconciliation of balances on accounts in the Bank's general ledger, by assigning these acc ounts to relevant substantive units). In addition, the process of entering into contracts and launching new products by individual organisational units of the Bank has been tightened up by introducing mandatory review by the Accounting Policy Team. In addition, risk connected with the preparation of financial statements is limited by subjecting the financial statements to a semi -annual review and an annual audit by an independent auditor. The procedure for the selection of the independent auditor as applied by the Bank ensures its independence in delivery of the tasks entrusted to them (the selection is made by the Supervisory Board) and high standard of service. The outcomes of reviews and audits are presented by the auditor to the Supervisory Board’s Audit Committee. On 3 November 2022, the Supervisory Board of Alior Bank S.A. selected PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp.k. as the auditor of the annual and semi -annual financial statements of the Bank and the Bank Group for the three fiscal years: 2024-2026, with an option to extend the agreement for two two-year consecutive periods: fiscal years 2027-2028 and fiscal years 2029-2030.
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95 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement XII. Statement of application of corporate governance Scope of corporate governance Pursuant to the Rules of the Warsaw Stock Exchange, the Bank, as a public company, is obliged to comply with Good Practices for Companies Listed on the Warsaw Stock Exchange 2021 (“Good Practices”), which constitute a set of rules of conduct which apply in particular to the bodies of companies listed on the Warsaw Stock Exchange (GPW) and their shareholders. Best Practices were adopted for application by virtue of Resolution No. 35/2022 of the Annual General Meeting of Alior Bank Spółka Akcyjna held on 31 M ay 2022. The Document is available on GPW’s website at https://www.gpw.pl/dobre-praktyki. Pursuant to the resolution of the Supervisory Board of the Bank of 29 December 2014, Corporate Governance Principles for Supervised Institutions published on the website of the KNF Board were also adopted for application: https://www.knf.gov.pl/dla_rynku/regulacje_i_praktyka/zasady_ladu_korporacyjnego („Zasady Ładu Korporacyjnego dla instytucji nadzorowanych (“Corporate Governance Principles”), as confirmed in the Resolution no. 25/2015 of the Ordinary General Meeting of the Bank of 25 May 2015, with the proviso that in the event of a conflict between Corporate Governance Principles and Good Practices, the latter shall be prevail. Management Board statement on compliance with the principles of corporate governance The Management Board of the Bank, in scope of the competences assigned to it by the Articles of Association and universally binding legislation, intends to implement at the Bank all the principles provided for in Best Practices and in the Principles of Governance. According to the statement published on 27 April 2022, which remains valid as at the date of publication of this Report, Alior Bank applied the principles laid down in the Best Practices in 2024 with the following reservations, updated with information on the Annual General Meetings of the Bank held in 2022 - 2024 and their adoption of relevant resolutions: • Principle 2.1 is not applied. The Policy of Selection and Suitability Assessment of Members of the Management Board was adopted by the Supervisory Board of the Bank. The Policy of Selection and Suitability Assessment of Members of the Supervisory Board was adopted on 31 May 2022 by the Annual General Meeting of the Bank and updated by Resolution s No. 28/2023 of the Annual General Meeting of Alior Bank Spółka Akcyjna of 10 May 2023 and No. 10/2024 of the Annual General Meeting of Alior Bank Spółka Akcyjna of 26 April 2024. Both documents incorporate the objectives and criteria for diversity of members of the Bank’s governing bodies in line with Principles 2.1 and 2.2 and set the gender diversity ratio at no less than 30% minority participation , to which the Bank strives for.
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96 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement According to the current state of the Bank’s bodies, the specified level of gender diversity has not been achieved. • Principle 2.2 is not applied. Management Board members are selected and evaluated by the Nomination and Remuneration Committee of the Supervisory Board in cooperation with the HR Division. Supervisory Board members are evaluated by the shareholder who has recommended the appointment. The Policy of Selection and Suitability Assessment of the Members of the Management Board was adopted by the Supervisory Board of the Bank. The Policy of Selection and Suitability Assessment of Members of the Supervisory Board was adopted on 31 May 2022 by the Annual General Meeting of the Bank and updated by Resolutions No. 28/2023 of the Annual General Meeting of Alior Bank Spółka Akcyjna of 10 May 2023 and No. 10/2024 of the Annual General Meeting of Alior Bank Spółka Akcyjna of 26 April 2024.. Both documents incorporate the objectives and criteria for diversity of members of the Bank’s governing bodies in line with Rules 2.1 and 2.2 and set the gender diversity ratio at no less than 30% minority participation , to which the Ba nk strives for. According to the current state of the Bank’s bodies, the specified level of gender diversity has not been achieved. • Principle 4.1 is not applied. Given the need to perform multiple technical and organizational measures and the involved costs and risks, as well as little experience of the market in this regard, the Bank has not currently opted for providing the sharehold ers with real -time communication capability whereby shareholders would be able to speak at a General Meeting from a location other than the place of deliberations. The following principles of Best Practice are applied by the Bank in the indicated scope: • Principle 4.8 is applied. The Bank shall immediately publish draft resolutions upon their receipt, together with a set of materials concerning them on the Bank’s website. • Principle 4.9.1 is applied. The Bank shall immediately publish candidacies upon their receipt, together with a set of materials concerning them on the Bank’s website. • Principle 6.3 is applied. There are no incentive programmes at the Bank in accordance with the principles described above. • Principle 6.4 is applied. The rule is applied to the extent compliant with the Act on Remuneration of the Management of Certain Entities of 9 June 2016. The Bank's Management Board accepted the assessment of the Bank's application of the Corporate Governance Principles for Supervised Institutions in 2024, carried out by the Compliance Department, as expressed in Resolution No. 65/2025 of February 24, 2025.As a result of the analysis, it was found that in 2023 the Bank applied the Corporate Governance Principles, with the exception of: • § 8.4 – Principle is not applied. The convening and holding of the General Meetings of Alior Bank S.A. complies with the regulations applicable to public companies and Good Corporate Governance Practices and Principles to the extent consistent with the expectatio ns of the Bank's shareholders. Given the need to perform multiple technical and organisational measures and the involved costs and risks, as well as small experience of the market in this regard, the Bank has not currently opted to provide the shareholders with real-time communication capability whereby shareholders would be able to speak at a General Meeting of Shareholders from a location other than the place of deliberations. • § 49.4 – not applicable. The Audit Department and the Compliance Department are separated from the Bank.
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97 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • § 52.2 – not applicable. The Audit Department and the Compliance Department are separated from the Bank. • § 53 - § 57 – not applicable. The Bank does not conduct activities consisting in managing assets at customer risk. Assessment and verification of internal governance at the Bank by the Management Board, its implementation and compliance The Management Board positively assesses the internal governance implemented at the Bank, as well as its compliance. The assessment of the Management Board gives account to both the internal situation and the environ of the Bank. The assessment relies upon information obtained in the course of actions falling within the competence of the Management Board, arising from the provisions of the Code of Commercial Companies, the Banking Law Act, the Bank’s Articles of Association, resolutions of the General Meeti ng of the Bank , resolutions of the Supervisory Board, the Regulations of the Management Board, and other applicable legal acts and internal regulations under which the Management Board manages the Bank and represents the Bank externally in all matters, except for matters reserved for other statutory bodies of the Bank. The operations of the Management Board are also supported by standing or ad -hoc committees appointed by the Management Board in order to perform specific functions or coordinate the work of organizational units of the Bank, as well as by reports received under the management information principles in place at the Bank. In addition, the Management Board of the Bank took note of the results from the review of the Bank’s compliance with the principles of internal governance, carried out by the Compliance Department. The assessment of internal governance in individual areas of Recommendation Z on the principles of internal governance in banks (hereinafter referred to as “Recommendation Z”), adopted by the Polish Financial Supervision Authority, has been presented below. General principles of internal governance at the Bank In the opinion of the Management Board, the Bank has in place a transparent and effective internal governance that complies with the law. It is defined in the Bank’s Articles of Association and the hierarchical system of internal regulations adopted by the Bank. The internal governance includes, in particular, the Bank’s management system, the Bank’s organization, principles of operation, powers, duties, and responsibilities as well as mutual relations between the Supervisory Board, the Management Board and Bank’s key function holders. As the parent entity in the Alior Bank S.A. Capital Group, the Bank ensures proper internal governance throughout the group, appropriate to the structure, operations, and risk of the group and its constituent entities, as well as exe rcises appropriate ownership supervision over subsidiaries. The appropriate framework for cooperation within the group was defined primarily in the Ownership Supervision Policy of Alior Bank S.A., in the Risk Management Strategy of the Alior Bank S.A. Group. and in Agreements on Cooperation and Exchange of Information concluded with subsidiaries. The organizational structure of the Bank contributes to ensuring effective and prudent management of the Bank, both individually and at the Group level. The organizational structure of the Bank is reflected in the organizational structure of the Bank specified in internal regulations, which covers the entire area of the Bank’s operations and explicitly distinguishes each key function. This applies both to the division of tasks, powers, duties, and responsibilities between members of the Management Board (fo llowing the resolution specifying the internal division of competences in the Management Board of the Bank), and to the division of tasks,
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98 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement powers, duties, and responsibilities between organizational units, organizational cells, and organizational positions. The most important internal regulations ensuring effective and prudent management of the Bank include: Regulations of the Management Board of Alior Bank S.A., Regulations of the Supervisory Board of Alior Bank S.A., Organizational Regulations of Alior Bank S.A., Organizational Regulations of the Head Office of Alior Bank S.A. The acquisition of information that is necessary to understand the general objectives of the group and the types of risk to which it is exposed from the parent entity within the PZU SA Group is possible under the agreement concluded between the Bank and Po wszechny Zakład Ubezpieczeń SA on cooperation and exchange of information, including through the establishment of a Strategic Committee under that agreement. In its business strategy, the Bank has identified key directions of responsibility under the 3 pillars of E, S and G, understood as responding to key environmental and climate challenges, being responsible for surrounding social processes and applying the highest management standards. Principles of operation, powers, duties, responsibilities as well as mutual relations of the Supervisory Board and the Management Board and suitability of members of these bodies and persons holding key functions in the Bank The system of internal regulations applicable at the Bank ensures a clear assignment of responsibilities to the Management Board and the Supervisory Board. The tasks of both bodies are coordinated to ensure their effective operation for the purpose of impl ementing the Bank’s management strategy and risk management strategy. Meetings of the Management Board of the Bank were held in 202 4 with a frequency that allows the Bank to be properly managed, represented before third parties and to fulfill other statutory powers of this body. The Bank has standing and ad-hoc committees of consultative, advisory and decision-making nature, established under the resolutions of the Management Board of the Bank. The standing committees include, in particular the Capital, Assets and Liabilities Management Committee (CALCO) and the Bank’s Credit Committee. The principles of management information are set out in the document titled “Principles of the Management Information System”, which defines a set of reports used to manage the Bank at all basic management levels: Supervisory Board, Supervisory Board Commi ttees, Management Board, Bank’s Committees, Regional Directors, Divisions, Compliance Department, Data Protection Officer, Risk Area. The Bank, through the applied solutions, ensures that positions with a significant impact on the direction of the Bank’s operations are held by persons with appropriate characteristics and qualifications. They are defined primarily in: the Policy of Select ion and Assessment of Members of the Supervisory Board of Alior Bank S.A., the Policy of Selection and Assessment of Members of the Management Board of Alior Bank S.A., the Policy of Assessment of the Suitability of Members of the Authorities of the Brokerage House of Alior Bank S.A. and the Policy of Selection and Assessment of Key Function Holders at Alior Bank S.A. In 2024, the Bank saw changes in the composition of its Supervisory Board, Management Board, and key function holders. At the same time, the Bank has implemented measures aligned with Recommendation Z to manage turnover risk, including succession planning and maintaining a pool of reserve candidates for key positions.
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99 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Standards of conduct of the Bank, conflicts of interest and anti-corruption measures at the Bank level The Bank has established appropriate standards of conduct, conflict of interest management and corruption prevention. The Code of Ethics, the Conflict of Interest Management Policy and Corruption Prevention Policy were adopted by the Management Board and approved by the Supervisory Board. In 2024, the Bank updated its Code of Ethics, reaffirming its commitment to the highest ethical standards – a fundamental pillar of its operations. This revision aligns with the Bank’s mission and core values, including responsibility, openness, innovation, and customer orientation. In its revised form, the Code of Ethics highlights the responsibility of managers to promote, implement, and uphold ethical principles. It also incorporates ESG considerations, reflecting the Bank’s commitment to governance, social responsibility, and envi ronmental sustainability. The updated Code also emphasises equal treatment of employees, explicitly stating that all employees must be treated without prejudice, discrimination, or preferential treatment based on any characteristic. The Code of Ethics const itutes a collection of the most important principles and ethical standards specifying the standards of conduct of the Bank to be followed by members of its statutory bodies, all Bank employees and persons engaged by the Bank to performing banking activities. The principles for managing conflicts of interests have been described in the Conflict of Interest Management Policy. The Corruption Prevention Policy, on the other hand, sets forth the rules of conduct aimed at preventing corruption in internal relations or relations with Customers, Trading Partners, business partners of the Bank or Alior Bank S.A. Group entities. The Bank has adequate internal procedures and operational solutions in place to ensure proper conflict of interest management and prevent corrup tion, in particular specifying the method of identifying, preventing, monitoring, eliminating, and minimizing the effects of a conflict and combating any signs of corruptions in all areas of activity of the Bank. Of the above regulations are available on the Bank’s website. Outsourcing policy, principles of remuneration at the Bank and dividend policy The Bank developed the outsourcing principles and implemented the comprehensive guidelines on outsourcing of the European Banking Authority, referred to in document EBA/GL/2019/02 of 25 February 2019 (hereinafter referred to as: the “Outsourcing Guidelines”) as well as in the position of the Office of the Polish Financial Supervision Authority of 16 September 2019. The Bank has in place: the Purchasing Policy of Alior Bank, the Rules for Concluding Agreements, the Policy for Managing Relations with IT Service Providers as well as the Policy of Managing Outsourcing, Insourcing and Sensitive Services of Alior Bank S.A. (hereinafter referred to as the “Outsourcing Policy”), which governs the entrustment of activities pursuant to Articles 6a to 6d of the Banking Law Act and the Outsourcing Guidelines. The provisions of the Outsourcing Policy cover such aspects as risk assessment as well as monitoring and control of Outsourcing Agreements. The Bank conducts periodic assessment of Critical Outsourcing Agreements an d Sensitive IT Services (semi -annual) and assessment of Outsourcing, Insourcing and Sensitive Agreements (annual). Assessment reports are subject to approval by the Bank’s Operational Risk Committee and then submitted to the Management Board and the Supervisory Board. The Bank has in place the “Remuneration Policy of Alior Bank S.A.”, which is the basic document in the field of policy and rules for determining the remuneration of the Bank’s employees. It includes the rules for the remuneration of individuals who, due to their special role in the Bank’s risk management system, have bee n covered by a separate regulatory regime in this regard.
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100 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The Bank also has in place a Nomination and Remuneration Committee of the Supervisory Board of Alior Bank Spółka Akcyjna (hereinafter referred to as: “Remuneration Committee ”), which is an advisory committee reporting to the Supervisory Board. Advising the Supervisory Board and the Management Board of the Bank on the implementation of provisions laid down in the “Remuneration Policy of Alior Bank S.A.” and the “Remuneration Policy for Members of the Management Board and Supervisory Board of Alior Bank S.A.” – in relation to Material Risk Take rs and preparing opinions, assessments or recommendations in matters specified in the Policy of Selection and Assessment of Management Board Members of Alior Bank S.A. and Policy of Selection and Assessment of Supervisory Board Members of Alior Bank S.A. The Dividend Policy of Alior Bank S.A. adopted by the Bank aims to establish rules for stable dividend payment in the long-term perspective while observing the principle of prudential capital management as well as any and all regulatory requirements whereto the Bank ha s been obligated. In particular, the Dividend Policy of Alior Bank S.A. takes into account elements resulting from Recommendation Z, and is subject to regular update under the annual review of internal procedures. Risk management The risk management system in force at the Bank utterly takes into account the essence of the Bank’s exposure to risk and covers all significant types of risk. The main document to ensure that the Bank’s risk is maintained at an acceptable level in accorda nce with the adopted risk appetite while achieving the Bank’s long -term financial goals is the Risk Management Strategy of the Alior Bank S.A. Group. The strategy prevails over the policies and rules for managing individual significant types of risk. The Bank has implemented an ESG risk strategy for its internal risk management framework. ESG, i.e. environmental, social and governance risks, have been defined as cross -cutting risks that affect the individual types of risks identified in the Bank. The risk management system in place at the Bank takes into consideration the impact of ESG risk factors on the following material types of risks: credit, operational, market, liquidity, reputation and compliance. In addition, the impact of ESG factors is taken into account in the internal capital adequacy assessment process (ICAAP). The Bank regularly reviews the strategy and procedures for estimating and maintaining internal capital on a regular basis. In accordance with the Internal Capital Adequacy Assessment Process (ICAAP) regulation in effect in Alior Bank S.A., in order to ensure that the ICAAP process is adequate to the scale of the Bank’s operations, the said process is subject to regular reviews. These reviews take place once a year or at the time of significant changes in the internal or external environment of the Bank. The review of the internal capital adequacy assessment process in the Bank was completed on 7 July 2024. The review was carried out for the period from 31 March 2023 to 31 March 2024. No recommendations were issued as part of the review. By way of a resolution, the Management Board approved the “Report on the review of the ICAAP process in Alior Bank S.A. and in the Alior Bank S.A. Group” and submitted the report for information purposes to the Supervisory Board via the Risk Committee of the Supervisory Board. The level of risk appetite determined by the Management Board of the Bank in the form of limits for individual risks was subject to approval by the Supervisory Board after prior review by the Risk Committee of the Supervisory Board. The Bank monitored the level of limit utilization on a monthly and quarterly basis. The results of monitoring activities were presented monthly to the CALCO Committee and quarterly to the Management Board of the Bank, the Risk Committee of the Supervisory Board, and the Supervis ory Board.
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101 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In the opinion of the Management Board, the Bank applies appropriate standards with regard to the introduction of new products, services, starting new activities, starting activities on a new market, or to the introduction of products or services to new ma rkets and significant changes to the above in accordance with the provisions of Recommendation Z. The “Policy for the Approval of New Products at Alior Bank S.A.”, updated in 2024, introduced an assessment of potential greenwashing risks in the process of identifying and evaluating significant risks associated with new products. Disclosures The Bank has in place the Information Policy on Capital Adequacy and Other Information Subject to Disclosure in Alior Bank S.A. (hereinafter referred to as ”Information Policy”). The document entered into force in the Bank by way of a resolution of the Management Board and then was approved by a resolution of the Supervisory Board. The Information Policy defines the scope of information subject to disclosure, the frequency and date of information disclosure, and the form and place of information disclosure. The Information Policy shall be reviewed at least once a year. When releasing any information to the public, including information subject to the Information Policy, the Bank adheres to the principle that all information being disclosed must accurately, reliably and clearly present the material and financial situation of the Bank and the financial result of the Bank to the applicable extent and in accordance with the law. For this reason, the Information Policy sets forth rules for verifying and approving disclosed information. The contents of the disclosures are subject to approval by the Management Board of the Bank and the Supervisory Board. In the opinion of the Management Board, the extent of disclosed information takes into account the Bank’s size, risk profile, and complexity of its operations. The Information Policy is available on the Bank’s website. In line with Recommendation Z, in particular Recommendation 8.9 regarding the adequacy of internal regulations relating to the operation of the Supervisory Board and the Management Board as well as the effectiveness of these bodies, taking into account the above assessment of internal governance, its implementation and compliance, the Management Board of the Bank positively assesses the adequacy of internal regulations relating to the operation of the Management Board of the Bank and the effectiveness of its operation. The Management Board of the Bank, in its self -assessment, indicates that internal regulations relating to the operation and effectiveness of the Management Board of the Bank are adequate, i.e.: Articles of Association of Alior Bank S.A., Regul ations of the Management Board of Alior Bank S.A., Organizational Regulations of Alior Bank Spółka Akcyjna, Organizational Regulations of the Head Office of Alior Bank S.A. These regulations are adequate, compliant with the law and the requirements of supervisory authorities. Their comprehensiveness allows the Management Board to act effectively and efficiently. The Bank is organized in a transparent and structured manner that takes into account its size and risk profile as well as the n ature and scale of its operations. Such organization ensures the achievement of the adopted business goals and proper response to changing external conditions or sudden and unexpected events, as well as effective flow and protection of information enabling the effective performance of tasks by the Management Board of the Bank. The duties of the Management Board of the Bank ensure that the body can operate effectively to implement the adopted management strategy. The solutions adopted in the internal regulat ions guarantee the Members
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102 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement of the Management Board access to all information as well as the possibility of using external advisors and expert opinions. Structure of share capital The Bank’s share capital is PLN 1,305,539,910 and is divided into 130,553,991 ordinary shares with nominal value of PLN 10.00 each. All shares of the Bank are bearer ordinary shares to which equal rights and obligations attach. The Articles of Alior Bank do not restrict the shareholders’ rights for exercising voting rights and disposal of shares. One share gives the right to one vote at the Bank’s General Meeting. The increase or reduction of the share capital, as well as the redemption of shares and the determination of the detailed terms and conditions of such redemption require, pursuant to § 17.2 (5) and (7) of the Articles of Assoc iation of Alior Bank, a resolution of the Bank’s General Meeting. There was no change in the structure of the Bank’s share capital in the reporting period. Structure of the Bank’s share capital according to a series of issued shares (as at 31 December 2024): Share series Number of shares Value of the series as per nominal price (PLN) A 50,000,000 500,000,000 B 1,250,000 12,500,000 C 12,332,965 123,329,650 D 863,827 8,638,270 E 524,404 5,244,040 F 318,701 3,187,010 G 6,358,296 63,582,960 H 2,355,498 23,554,980 I 56,550,249 565,502,490 J 51 510 Total 130,553,991 1,305,539,910
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103 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Alior Bank Share Prices on the Warsaw Stock Exchange in 2024 Alior Bank made its debut on the Warsaw Stock Exchange (“WSE”) on 14 December 2012. At present, the Bank’s shares are included in the following WSE indices: WIG, WIG -BANKI, WIG20, WIG20TR, WIG.MS -FIN, WIG30, WIG30TR, WIG-Poland, WIG-ESG, CEEplus. In August 2024, Alior Bank shares were included in the MSCI Poland Global Standard index. In 2024, nearly 966 thousand transactions on Alior Bank shares were concluded, which represents growth by 66% compared to nearly 5 87 thousand transactions in 202 3. The volume of trade (the number of shares that changed hands) in 2024 amounted to nearly 85 million shares, which means a increase by 27% compared to 66 million shares in 202 3. In turn, the total value of trading in the Bank’s shares in 202 4amounted to PLN 7.98 billion compared to PLN 3. 38 billion in 2023 (increase in turnover by 136% y/y). The growth in trade resulted primarily from a higher price of the Bank’s shares and higher average number of transactions executed on the WSE each day. The average price of one share of the Bank at the close of the trading session in 2024 was PLN 92.16, which was 79% higher compared to 202 3 (PLN 51.518). In 202 4, trading in Alior Bank shares represented 2.41% of trading in all shares of companies listed on the WSE. As at the end of 202 4, the Bank’s share price amounted to PLN 85.98, up by 12.6% compared to the end of 2023, whereas the P/BV Bank’s ratio was 1 .1x. The change in share price and the volume of trading in the Bank’s shares in the period from January 2024 to December 2024 is presented on the chart below. 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 45 55 65 75 85 95 105 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Million Alior Bank shares' price performance in Jan 2024 - Dec 2024 Volume - rh axis Share price (PLN) - lh axis
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104 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Investor Relations The Bank is actively working to meet the information needs of capital market participants. As a public and supervised company, it cares about universal and equal access to information. Communication with shareholders, investors, and other capital market participants is based on corporate governance principles and is carried out in accordance with the Bank’s Information Policy and in compliance with the highest mark et standards and applicable laws. Members of the Management Board and representatives of the Bank’s executives participate in regular meetings with capital market participants, including investors and analysts, organized by the investor relations team and by Polish and foreign brokerage ho uses. During the meetings the current financial and operational situation of the Bank is discussed, the operating strategy is presented and plans for the direction of further development are made. In addition, these meetings address topics related to the current macroeconomic situation, general condition of the financial sector, and the Bank’s competitive environment. In 2024, meetings took place with approximately 150 foreign and domestic investors, which took place both in the form of a teleconference and in a stationary form. Approximately 60 talks were held with analysts from brokerage houses. These talks addressed trends in the banking sector in individual quarters and the current financial standing of the Bank. Furthermore, on the day of publication of interim reports, result conferences are held for journalists, investors, and stock market analysts, during which members of the Bank’s Management Board present financial results and discuss the most significant events that took place during the period. A transcript of the conference is made available on the Bank’s website. In 2024, meetings were also held between Bank representatives and analysts from rating agencies S&P Global Ratings and Fitch Ratings Ltd. Current Bank Ratings Agency Award date Long-term rating Short-term rating Outlook 30 October 2024 BB+ B stable 17 May 2024 BB+ B positive Ocena Fitch Ratings Ltd On 30 October 2024, Fitch Ratings published a report announcing the upgrade of Alior Bank’s long-term credit rating to BB+ while maintaining its short-term rating at B Additionally, Fitch Ratings upgraded the Bank’s long-term national rating to ‘A-(pol)’ from ‘BBB+(pol)’ and raised the Viability Rating (VR) to ‘bb+’. The outlook for the Bank’s long -term credit rating and national long -term rating remains stable. According to Fitch, this upgrade reflects continued improvements in the Bank’s financial and business
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105 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement profile. Fitch also highlighted that the transformation of the Bank’s loan portfolio, with a greater focus on secured lending and stricter credit policies in the non-retail segment, has led to improvements in asset quality and concentration indicators. Full rating of the Bank awarded by Fitch Ratings is as follows: • Long-Term IDR: BB+ with stable outlook, • Short-Term IDR: B, • National Long-Term Rating: A- (pol) with stable outlook, • National Short-Term Rating: F1(pol), • Viability Rating (VR): bb+, • Government support rating: ns. Definitions of Fitch ratings are available on the agency’s website at www.fitchratings.com, which also publishes rating scales, criteria and credit rating methodologies. Standard & Poor’s Global Ratings Assessment On 17 May 2024, S&P Global Ratings confirmed the Bank’s long -term and short-term credit ratings at the existing level and upgraded the rating outlook from “Stable” to “Positive”. S&P noted that this outlook revision is driven by improvements in the Bank’s loan portfolio structure, stricter lending standards, and an active reduction in non -performing loans. Additionally, the Agency emphasised the Bank’s strong internal capital generation capacity, which supports its ability to distribute profits to shareholders and facilitates further loan portfolio growth. Full rating assessment of the Bank awarded by Standard & Poor’s Global Ratings is as follows: • Long-Term Issuer Credit Rating at “BB+” with positive outlook, • Short-Term Issuer Credit Rating at “B”. • Resolution Counterparty Rating was confirmed at BBB/A-2. Definitions of S&P ratings are available on the agency’s website at www.standardandpoors.com, which also publishes rating scales, criteria, and credit rating methodologies Alior Bank Shareholders Due to the Bank’s status as a public company within the meaning of the Public Offering Act (Ustawa o ofercie publicznej) and the fact that the Bank’s shares are listed on a regulated market (primary market) operated by the Warsaw Stock Exchange , the Bank according to the best of knowledge, provides the following information on the shareholders who hold at least 5% of the share capital of the Bank and the overall number of votes at the General Meeting as at the date of 31 December 202 4, the date of submission of the periodic report. From the date of submission of the previous periodic report to the date of the publication of this report, the Bank's Management Board did not received notifications pursuant to Art. 69 of the Act of 29 July 2005 on Public Offering and Conditions for Introducing Financial Instruments to Organized Trading and on Public Companies.
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106 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The information regarding the number of shares and voting rights by entities managed b y Nationale- Nederlanden PTE at the General Meeting of Shareholders was updated based on the Bank’s Shareholder Identification Report as of 31 December 2024. Ownership structure of the Bank's share capital as at 31 December 2024 and the date of submission of the periodic report: Shareholder Number of shares Nominal value of shares (PLN) Percentage of share capital Number of votes Votes as proportion of overall votes PZU Group* 41 658 850 416 588 500 31.91% 41 658 850 31.91% Nationale-Nederlanden** 12 841 601 128 416 010 9.84% 12 841 601 9.84% Allianz OFE** 11 526 440 115 264 400 8.83% 11 526 440 8.83% Other shareholders 64 527 100 645 271 000 49.42% 64 527 100 49.42% T otal 130 553 991 1 305 539 910 100% 130 553 991 100% *PZU Group is comprised of entities which have entered into a written agreement concerning the acquisition or disposal of Ban k shares and the consistent exercise of voting rights at the General Meetings of the Bank, i.e.: Powszechny Zakład Ubezpieczeń SA, Powszechny Zakład Ubezpieczeń Na Życie SA, PZU Specjalistyczny Fundusz Inwestycyjny Otwarty UNIVERSUM, PZU Fundusz Inwestycyjny Zamknięty Aktywów Niepublic znych BIS 1, and PZU Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych BIS 2. Conclusion of the above-mentioned agreement was announced by the Bank in Current Report No. 21/2017. ** Based on the Bank's shareholder identification report as at December 31, 2024. Alior Bank shares held by the Bank’s governing body At the end of the reporting period and as at the date of publication of the report, the Members of the Supervisory Board and members of the Management Board of Alior Bank did not hold shares of the Bank. Since the date of publication of the last periodic report, there have been no transactions in the Bank’s shares to which Members of the Management Board or the Supervisory Board of the Bank would be a party. Significant agreements and obligations As at December 31, 2024, Alior Bank did not hold: • obligations towards the central bank, • significant agreements on loans, sureties and guarantees not related to operational activities, apart from the annex to the agreement on periodical provision of insurance guarantees constituting unfunded credit protection concluded with the Powszechny Zakł ad Ubezpieczeń SA, • financial support agreements referred to in Art. 141t section 1 of the Banking Law.
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107 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In the reporting period, the Bank had obligations resulting from the securities issued, including, in particular bonds and Banking Securities, and other financial instruments. The Bank did not enter into and did not terminate any loan and advance agreements outside of the normal scope of the Bank’s business activity. The entities comprising the Bank’s Capital Group did not grant loans or guarantees together to a single entity or to a subsidiary of that entity, the value of which would exceed 10% of the Bank’s equity outside of normal business activity. As at 31 December 202 4, Alior Bank granted 10 42 active guarantees for a total amount of PLN 957,289,000. The Bank makes sure that the time structure of the guarantees is appropriate. Active guarantees with less than two years to maturity (829 items) amounted to PLN 707,198,000. The total value of off-balance-sheet liabilities granted to customers as at 31 December 2024 amounted to PLN 12, 640,995,000. This amount consisted of PLN 11, 683,706,000 off-balance-sheet contingent liabilities related to financing and PLN 957,289 off-balance-sheet guarantee liabilities. During the reporting period, no significant transactions were made as part of the Bank ’s Capital Group with affiliates otherwise than on arm’s length principles. Detailed information regarding transactions with related entities is available in the Consolidated Financial Statements of Alior Bank S.A. Capital Group for the year ended 31 December 2024 (Note No. 37). The Bank holds no information about any contracts whereby changes to the proportion of shares or bond held by the existing shareholders and bond holders would be made. Pekao SA concerning collaboration on the reorganisation of banking assets within PZU Capital Group. This was disclosed in PZU’s Current Report No. 38/2024 dated 2 December 2024. One of the scenarios under consideration involves Bank Pekao SA acquiring, for cash, the Alior Bank shares currently held by PZU SA. The aforementioned current report indicates that the letter of intent is non-binding for the parties and does not create any obligation to carry out the reorganisation or implement any specific scenario. Furthermore, the parties to the letter of intent have not yet made any binding decisi ons regarding a potential transaction in which Bank Pekao SA would acquire Alior Bank shares from PZU SA. Alior Bank did not issue any securities to provide special control rights towards the Bank. There are also no limitations regarding the exercise of voting rights from the Bank’s shares and restrictions concerning the transfer of ownership rights to the Bank’s securities. No single court, arbitration court or public administration body proceedings in progress during the 2024, and none of the proceedings jointly, could pose a threat to the Group’s financial liquidity. The proceedings which according to the opinion of the Management Board are significant are presented in Consolidated financial statements of the Alior Bank SA Capital Group the year ended 31 December 2024 (Note No. 40). Governing bodies of Alior Bank General Meeting of the Bank Rules governing the General Meeting The activities of the General Meeting, its principal rights, the rights of shareholders, and how these rights are to be exercised have been defined
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108 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement in: Rules of Procedure of the General Meeting (adopted by way of Resolution No. 3/2013 of the Annual General Meeting of 19 June 2013, as amended by way of Resolution No. 29/2017 of the Annual General Meeting of the Bank of 29 June 2017 and Resolution No. 3/2020 of the Annual General Meeting of the Bank of 21 May 2020 – consolidated text of the Rules of Procedure including all amendments has been published on the Bank’s website), Articles of Association of the Bank, and the applicable legislation including Act of 15 September 2000 Code of Commercial Companies (Dz. U. [Polish Journal of Laws] of 2024, item 18,96) and the Act of 29 August 1997 Banking Law (Dz. U. of 2024, item 1646,1685). The General Meeting of the Bank shall be convened by means of a notice made on the Bank’s website and ina manner specified for the provision of current information in accordance with generally applicable law. The notice should be given at least 26 days in advance of the date of the General Meeting. Since the date of convening the General Meeting, the Bank posts information required by the provisions of the Code of Commercial Companies on its website at https://www.aliorbank.pl/dodatkowe- informacje/relacje-inwestorskie/walne-zgromadzenie.html. Only the Bank’s shareholders registered as such 16 days prior to the General Meeting (registration date) are eligible to participate in the General Meeting of the Bank. Shareholder(-s) representing at least one -twentieth of the share capital may request that certain business be put on the agenda of the next General Meeting and submit draft resolutions on matters put on the agenda. The resolutions of the General Meeting require incl.: • the review and approval of: Management Board’s Report on the activities of the Bank, as well as the financial statements for the previous financial year, report on the activities and the financial statements of the Bank's Capital Group for the previous financial year, report of the Bank's Capital Group concerning non -financial information for the previous financial year – if a separate report concerning non-financial information is drawn up, • expressing an opinion on the Supervisory Board's annual remuneration report, • adoption of a resolution on profit distribution or loss coverage, • acknowledgement of the fulfilment of duties by members of the bodies of the Bank, • amendment to the Articles of Association of the Bank, • provision regarding claims for damages caused in the course of establishment of the Bank or its management and supervision, • disposal or lease of the enterprise or its organized part and establishment of a limited property right thereon, • acquisition or disposal of real estate or share in real estate or the right of perpetual usufruct or share in perpetual usufruct, the value of which is equal to or higher than PLN 20,000,000 (twenty million zlotys) and the performed activity is not related to satisfying the claim of the Bank against the debtor or securing the Bank’s claims, • increase or decrease of the Bank’s share capital, • issuance of convertible bonds and senior bonds, as well as subscription warrants, • redemption of shares and determination of specific conditions of said redemption, • merger, division or liquidation of the Bank, selection of liquidators and the manner of executing the liquidation, • appointment and dismissal of members of the Supervisory Board, • determination of the Remuneration Policy for the members of the Supervisory Board,
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109 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • establishing the rules for determination of the Remuneration Policy for the members of Management Board. General Meetings of the Bank in 2024 1. The Annual General Meeting of the Bank held on 26 April 2024 and (after announcing a break and resuming the meeting) on May 24, 2024 . In addition to resolutions concerning organisational affairs, it also adopted resolutions on matters related to the closing of the financial year 202 3 concerning: • approval of the report on the operations of the Supervisory Board of the Bank, • approval of the financial statements of the Bank and of the Capital Group of the Bank, • approval of the Report on the operations of the Capital Group of the Bank, including the Report of the Management Board on the operations of the Bank and the Report of the Capital Group of the Bank on non-financial information, • method for distribution of profit for the financial year 2023, • granting a discharge to all Members of the Management Board and Supervisory Board of the Bank. In addition, the General Meeting of the Bank adopted resolutions on: • the position of the Annual General Meeting of the Bank regarding the assessment of the functioning of the Remuneration Policy in effect at the Bank, • approval of the updated “The Policy of Selection and Suitability Assessment of Members of the Supervisory Board of Alior Bank Spółka Akcyjna”, • the assessment of the collective suitability of the Supervisory Board of Alior Bank Spółka Akcyjna, • expressing an opinion on the “Report on the remuneration of the members of the Management Board and the Supervisory Board of Alior Bank S.A. for the year 2023” as submitted by the Supervisory Board of the Bank, • assessment of the adequacy of internal regulations concerning the functioning of the Supervisory Board of Alior Bank S.A. and its effectiveness, • amendments to the Articles of Association of Alior Bank, • changes in the composition of the Bank's Supervisory Board, including appointments to the Bank's Supervisory Board. 2. The Extraordinary General Meeting of the Bank, convened at the request of a shareholder of the Bank, which was held on July 17, 2024, apart from resolutions concerning organisational affairs, adopted resolutions on changes in the composition of the Supervisory Board of the Bank consisting in the appointment of members of the Supervisory Board. 3. The Extraordinary General Meeting of the Bank, convened at the request of a shareholder of the Bank, which was held on November 27, 2024, apart from resolutions concerning organisational affairs, adopted resolution on appointment of member of the Supervisory Board. Description of the rules for amending the Bank’s Articles of Association and amendments to the Articles of Association made in 2024 According to Article 415 § 1 of the Code of Commercial Companies, an amendment to the Articles of Association of the Bank requires the adoption of an appropriate resolution by the General Meeting of the Bank, by a qualified majority of three quarters of votes. The amendment of the Articles of Association
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110 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement also requires the authorization of the Polish Financial Supervision Authority and the registration of the adopted amendment in the register of entrepreneurs of the National Court Register. On 29 July 2024, the amendment to Alior Bank’s Articles of Association was registered in the National Court Register (KRS). The amendment was adopted by Resolution No. 14/2024 of the Bank’s Annual General Meeting on 26 April 2024 and involved: - The revision of § 7(2)(5) of the Articles of Association, which previously read: “5) Conducting brokerage activities” The new wording is: “5) Conducting brokerage activities, including: a) Receiving and transmitting orders for the purchase or sale of financial instruments, b) Executing such orders on behalf of customers, c) Trading financial instruments on the Bank’s own account, d) Providing investment advisory services, e) Offering financial instruments, f) Safekeeping or recording financial instruments, including maintaining securities accounts, derivatives accounts, omnibus accounts, and cash accounts.” Alior Bank obtained approval from the Polish Financial Supervision Authority (KNF) for these amendments. Supervisory Board of the Bank Composition of the Supervisory Board as at 31.12.2024 Composition of the Supervisory Board as at 31.12.2023 Paweł Wajda Chair of the Supervisory Board Filip Majdowski Chair of the Supervisory Board Jan Zimowicz Deputy Chair of the Supervisory Board Ernest Bejda Deputy Chair of the Supervisory Board Artur Chołody Member of the Supervisory Board delegated to temporarily perform the duties of Vice President of the Bank’s Management Board Małgorzata Erlich- Smurzyńska Supervisory Board Member Radosław Grabowski Supervisory Board Member Jacek Kij Supervisory Board Member Maciej Gutowski Supervisory Board Member Paweł Knop Supervisory Board Member
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111 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Rafał Janczura Supervisory Board Member Marek Pietrzak Supervisory Board Member Artur Kucharski Supervisory Board Member Dominik Witek Supervisory Board Member Robert Pusz Supervisory Board Member 2024 marked the final year of the Supervisory Board’s fourth joint four-year term, which commenced in 2020, as well as the start of its fifth term on 26 April 2024. • On 7 March 2024, Mr Filip Majdowski submitted his resignation from his position as a member of the Bank’s Supervisory Board and all related functions, including Chairman of the Supervisory Board and the Board’s committees, with effect from 8 March 2024 inclusive. • On 18 March 2024 , the Bank’s Supervisory Board adopted resolutions on the election of the Chairman and Deputy Chairman of the Supervisory Board, appointing Mr Ernest Bejda as Chairman of the Supervisory Board and Mr Paweł Knop as Deputy Chairman of the Supervisory Board. • On 26 April 2024, the Annual General Meeting of the Bank: dismissed the following members of the Supervisory Board: - Mr Ernest Bejda, - Mr Paweł Knop, - Ms Małgorzata Erlich-Smurzyńska, - Mr Jacek Kij, - Mr Marek Pietrzak, - Mr Dominik Witek. to accommodate the assessment of compliance with suitability requirements, appointed the following members to the Supervisory Board for a joint four-year term covering the financial years 2025-2028, with 2025 designated as the first full financial year of the term: - Mr Artur Chołody, with effect from 27 April 2024 (subject to the submission of effective resignations from the functions listed in the statement he submitted on 25 April 2024) , - Mr Radosław Grabowski, - Mr Maciej Gutowski, - Mr Artur Kucharski, - Mr Jarosław Mastalerz, - Mr Jan Zimowicz. • On 7 May 2024 , the Supervisory Board adopted resolutions on the election of the Chairman and Deputy Chairman of the Supervisory Board, appointing Mr Jarosław Mastalerz as Chairman of the Supervisory Board and Mr Jan Zimowicz as Deputy Chairman of the Supervisory Board. • On 17 May 2024 , the Extraordinary General Meeting of the Bank, to accommodate the assessment of compliance with suitability requirements, appointed the following members to the Supervisory Board: - Mr Rafał Janczura,
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112 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement - Mr Robert Pusz. • On 6 November 2024 , Mr Jarosław Mastalerz submitted his resignation as a member of the Supervisory Board, from his position as a Supervisory Board member, and as Chairman of the Supervisory Board, with effect at the end of the day on 6 November 2024. • On 27 November 2024, the Extraordinary General Meeting of the Bank, to accommodate the assessment of compliance with suitability requirements, appointed Mr Paweł Wajda to the Supervisory Board. • On 19 December 2024 , the Supervisory Board adopted a resolution on the election of the Chairman of the Supervisory Board, appointing Mr Paweł Wajda as Chairman of the Supervisory Board. Following the reporting period, the composition of the Bank’s Supervisory Board changed as follows: • Mr Artur Chołody resigned from his position as a Member of the Supervisory Board, including his temporary delegation to perform the duties of the Vice President of the Management Board, as of February 12, 2025, • Mr Paweł Wajda resigned from his role as Chairman of the Supervisory Board, as well as from his membership in the Supervisory Board. The resignation was submitted with legal effect at the end of February 25, 2025. • Mr Rafał Janczura resigned from membership in the Supervisory Board of the Bank with effect as of the end of March 4, 2025. • On February 26, 2025, the Extraordinary General Meeting of the Bank appointed the following members of the Supervisory Board of the Bank: - Mr. Tomasz Kulik as of March 5, 2025, - Mr. Waldemar Maj as of March 5, 2025, on condition that Mr. Waldemar Maj effectively resigns from the functions he performs, listed in Mr. Waldemar Maj’s statement from February 20, 2025, - Mr. Wojciech Kostrzewa as of March 5, 2025, on condition that Mr. Wojciech Kostrzewa effectively resigns from the functions he performs, listed in Mr. Wojciech Kostrzewa’s statement from February 19, 2025. The composition of the Supervisory Board as of the date of this Report is presented in the table below: Supervisory Board of the Bank Jan Zimowicz Deputy Chair of the Supervisory Board Radosław Grabowski Supervisory Board Member Maciej Gutowski Supervisory Board Member Rafał Janczura Supervisory Board Member Artur Kucharski Supervisory Board Member Robert Pusz Supervisory Board Member
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113 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The following table presents detailed information on the members of the Bank’s Supervisory Board, including their functions as of 31 December 2024. Paweł Wajda (Chairman of the Supervisory Board) – Professor at the Faculty of Law and Administration of the University of Warsaw, Department of Administrative Law and Administrative Proceedings, attorney-at-law. Since May 2024, he has been a Management Board Member of PZU Życie SA. Paweł Wajda is also a graduate of Szkoła Główna Handlowa (Warsaw School of Economics) in Warsaw (Finance and Banking). His expertise includes regulatory matters, banking law, insurance law, capital markets law, administrative law, administrative proceedings, and proceedings before administrative courts. He has provided legal services to large enterprises in regulatory matters, compliance issues, and representation of financial institutions in administrative proceedings and administrative court cases. Paweł Wajda is recommended in rankings such as Chambers Global, Chambers Europe, and Legal 500 in the categories of Banking & Finance (Insurance). Jan Zimowicz (Deputy Chairman of the Supervisory Board) – A manager with nearly 15 years of experience in executive and board roles at leading insurance companies and banks within international capital groups, including Aegon, Nationale-Nederlanden, and Credit Agricole. In 2023 -2024, he was a supervisory board m ember of a financial advisory company. Since April 2024, he has been a Management Board Member of PZU S.A. Jan Zimowicz specialises in sales and marketing management, insurance product development, and M&A processes. He has experience in developing business strategies for large companies, digitalisation, and implementing complex IT systems, gained at Oracle and Accenture. He is an author of industry publications, a frequent panellist at discussion forums, and a member of the Programme Council of the Insurance Forum. He has in-depth expert knowledge and experience in the functioning of the insurance market, legal regulations, and supervisory guidelines. He has been a long-standing member of the Life Insurance Committee at Polska Izba Ubezpieczeń (Polish Chamber of Insurance). Jan Zimowicz is a graduate of Szkoła Główna Handlowa (SGH Warsaw School of Economics) (International Economic and Political Relations) and Politechnika Warszawska (Warsaw University of Technology) (Faculty of Electronics and Information Technology). He holds an Executive MBA degree issued by the Warsaw University of Technology Business School in collaboration with HEC Paris, London Business School, and NHH Norwegian School of Economics. He also completed an executive programme at Singularity University in Mountain View, California. Artur Chołody (Member of the Supervisory Board delegated to temporarily perform the duties of Vice President of the Bank’s Management Board) – Doctor of Economic Sciences, law graduate from Adam Mickiewicz University in Poznań. He completed his legal counsel apprenticeship at the District Chamber of Legal Counsels in Poznań, passing the final examination and obtaining the t itle of legal counsel. He is a graduate of postgraduate MBA HR Management studies at Franklin University Ohio / WSB Poznań and postgraduate studies in Management Psychology, Non -Governmental Organ isation Management, Internet Entrepreneurship, and Economic Sciences Methodology. For nearly 20 years, he has been a partner at Wielkopolska Legal Group sp.k., specialising in public procurement and servicing companies applying for international public contracts. He has served on the management boards of industrial sector companies and succes sfully restructured Fabryka Narzędzi Specjalnych sp. z o.o., laying the foundations for the creation of a Polish capital group in the tools industry. Artur Chołody has been a member of supervisory boards for approximately five years. He has overseen public entities, holding positions such as Deputy Chairman of the Supervisory Board of Zarząd Komunalnych Zasobów Lokalowych sp. z o.o. in Poznań and Chairman of the Supervisory Board of Zakład Energetyki Cieplnej sp. z o.o. in Ostrzeszów. Radosław Grabowski (Independent Member of the Supervisory Board) – Professor, PhD in Legal Sciences, academic lecturer, legal counsel, and researcher specialising in constitutional and comparative law. Initially (since 1997) associated with the Branch of Maria Curie-Skłodowska University in Rzeszów, he is now affiliated with University of Rzeszów. He is employed at the Institute of Legal Sciences at University of Rzeszów and currently heads the Department of Constitutional Law. He acts as a reviewer in habilitation and doctoral proceedings and supervises doctoral and master’s theses. He is the author, co-author, and editor of nearly 200 academic publications, including monographs, collective studies, articles, reviews, and case commentaries. He has provided expert opinions and authored several dozen legal analyses for numerous central institutions, including the Sejm, Senate, President of the Republic of Poland, and the Supreme Audit Office. He actively participates in nu merous national and international research projects and is currently leading an initiative aimed at creating a public ly accessible Online Civic Education Service. He is a co-founder and scientific secretary of the Przegląd Prawa Konstytucyjnego (Constitutional Law Review) journal.
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114 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Maciej Gutowski (Independent Member of the Supervisory Board) – Professor of Legal Sciences, attorney-at-law, and managing partner at GWALEGAL Law Firm. He is affiliated with the Department of Civil, Commercial, and Insurance Law at the Faculty of Law and Administration at Adam Mickiewicz University in Poznań. For years, he has combined academic expertise with extensive practica l experience in providing legal advice to domestic and international businesses, including those in the financial, banking, investment fund, FMCG, chemical, construction, infrastructure, and logistics sectors, as well as in crisis management. He supports business en tities in making strategic, including investment, decisions and represents them in commercial disputes before courts and other institutions. He also acts as an arbitrator in domestic and international arbitration proceedings (ICC, FAI, VIAC) and is a permanent arbitrat or at the SAKiG (Court of Arbitration at the Polish Chamber of Commerce in Warsaw). He has received multiple awards, including recognition in the Forbes Professionals ranking and the Golden Paragraph award for Best Lawyer in 2015. His law firm, GWALEGAL, has twice won the Forbes Diamonds award. He has authored approximately 400 academic publications in civil, commercial, business, and constitutional law, as well as the organisation of the judiciary. He holds a Master of Laws in international commercial l aw. Since 2024, he has been a member of the KKPC (Codification Commission of Civil Law) and Chairman of the Sta nding Commercial Law Committee within the Commission, where he contributes to shaping the foundations and directions of private law reform. Rafał Janczura (Member of the Supervisory Board) – A graduate of the Faculty of Law and Administration at the University of Warsaw. He also studied at the Faculty of Law at Saarland University. He is a legal counsel and a member of the District Chamber of L egal Counsels in Warsaw, with managerial experience in legal services, legislation, and compliance within the financial market sector. He has been involved in the banking and insurance industries for many years, working for institutions such as Raiffeisen Bank Polska S.A., BRE Bank S.A., PKO BP S.A., BPH S.A., Generali Group, and Concordia Group. As Counsel at Bird & Bird Law Firm, he was responsible for the insurance sector. Since July 2024, he has served as the Managing Director for Legal Affairs at the PZU Group. Artur Kucharski (Independent Member of the Supervisory Board) – For 14 years, he has served as an independent supervisory board member, including in publicly traded companies on the Warsaw Stock Exchange. In this capacity, he has chaired audit committee s in four listed companies (including Alior Bank) and has participat ed in supervisory board advisory committees on risk, nominations and remuneration, and strategy and development. He graduated from Politechnika Warszawska (Warsaw University of Technology) and the University of Westminster and has experience in auditing, advisory, and supervisory service. In 2000, he obtained an ACCA diploma and, in 2011, an Executive MBA degree. Currently, he holds supervisory board positions at: Asseco South Eastern Europe S.A. (since 2016), Budimex S.A. (since 2020), Asseco Data Systems S.A. (since 2022), and Grupa Azoty S.A. (since 2024). Previously, from 2002 to 2010, he worked in the advisory division of PwC Polska sp. z o.o., and between 1995 and 2002, he was an auditor at PricewaterhouseCoopers sp. z o.o., specialising in financial statement audits. Robert Pusz (Member of the Supervisory Board) – Director of the Risk Office at PZU SA and PZU Życie SA, responsible for developing and implementing risk management strategies, policies, and risk management principles within the PZU Financial Conglomerate, covering insurance companies and banks. He has been involved in the actuarial and risk management fiel d since the beginning of his career. He has been professionally engaged in the insurance market for 26 years, with over 20 years at the PZU Group. For the past six years, he has served as Director of the PZU Group’s Risk Office. Previously, for 2 years he managed risk at Aegon TU na Życie SA and Aegon Powszechne Towarzystwo Emerytalne SA (including as a management board member) and, before that for three years, at TUiR Allianz SA and TU Allianz Życie Polska SA. Within the PZU Group, he is a Supervisory Board Member at TUW Polski Zakład Ubezpieczeń Wzajemnych and Chairman of the Supervisory Boards of Polski Gaz Towarzystwo Ubezpieczeń Wzajemnych and Polski Gaz Towarzystwo Ubezpieczeń Wzajemnych na Życie. He previously served as a Supervisory Board Member at Alior Bank SA, chairing the Risk Committee. He is a licensed actuary and a graduate of the Faculty of Mathematics, Computer Science, and Mechanics at the University of Warsaw, with postgraduate studies in Business Insurance at the Cracow University of Economics and Geographic Information Systems at Politechnika Warszawska (Warsaw University of Technology). He obtained an Artificial Intelligence Professional Certificate from Stanford University. In his capacity as representative of the Polish Actuarial Association in the Actuarial Association of Europe for several years and as chairman of the Solvency II Sub -Committee of Polska Izba Ubezpieczeń (Polish Chamber of Insurance), he helped to implement Solvency II. Awarded for meritorious service to the insurance sector (Polish Chamber of Insurance). The appointed Members of the Supervisory Board do not engage in any business activity that competes with the Bank, nor do they participate in competing companies as partners in civil or personal partnerships, or as members of governing bodies of capital companies or other competing legal entities. Furthermore, they meet all the requirements set out in Article 22aa of the Banking Law Act of 29 August 1997 (consolidated text: Journal of Laws of 2023, item 2488).
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115 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Rules governing the Supervisory Board The Supervisory Board of the Bank acts in particular on the basis of the Act of 29 August 1997 Banking Law (Dz. U. [Polish Journal of Laws] of 2024, item 1646, 1658 ), the Act of 15 September 2000 Code of Commercial Companies (Dz. U. of 2024, item 18 ,19) and the Articles of Association and Regulations of the Supervisory Board of the Bank, the content of which is available on the Bank’s website. The Supervisory Board exercises continuous oversight of the Bank’s activities in all its aspects. In accordance with the Articles of Association, responsibilities of the Supervisory Board, in addition to other rights and responsibilities provided for by mandatory legislation, include, among other things: • consideration of the Management Board’s report on representation expenses, as well as expenditure on legal services, marketing services, public relations services and social communication, or management advisory services, • examining the report on best practice mentioned in Article 7(3) of the Act on the Principles of Property Management, • assessment of periodic information on internal control, • applying to the KNF Board for acceptance of the appointment of two members of the Management Board of the Bank, including the President of the Management Board, • adopting the Rules of Procedure of the Supervisory Board and approving the Rules of Procedure of the Management Board established by the Management Board of the Bank, • determination of the rules for remuneration of Members of the Management Board and their remuneration, conclusion, termination, and amendment of agreements with Members of the Management Board, taking into account the principles defined by the General Meet ing, in accordance with § 17 (2) (10a) of the Articles, and representation of the Bank in matters between members of the Management Board and the Bank, • suspending the activity, for major reasons, of particular or all members of the Management Board of the Bank, • providing opinions on requests of the Management Board for the establishment and for the Bank’s accession as member or shareholder to companies and to dispose of shares where such investments are long-term and strategic, • providing opinions to multi-annual Bank development programmes and Bank’s annual financial plans, • adopting, at the request of the Management Board, the rules governing the creation and use of the funds provided for in the Bank’s Articles, • approving requests of the Management Board of the Bank for acquisition, charge or disposal of real property or interest in real property, or perpetual usufruct, if its value is more than PLN 5,000,000. In other cases, the decision is taken by the Managemen t Board of the Bank without the need to obtain the authorisation from the Supervisory Board, subject to the matters decided by the General Meeting under § 23a of the Bank’s Articles of Association, • approval of the requests of the Bank’s Management Board for making a commitment or dispose of assets, the total value of which with regard to a single entity exceeds 5% of the Bank’s own funds, • exercising supervision over the introduction and monitoring of the management system at the Bank, including in particular, supervising compliance risk management and assessing, at least once a year, the adequacy and effectiveness of that system,
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116 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • approval of the rules of conducting internal control and procedures related to the estimation of internal capital, capital management, and capital planning, • approving the Bank’s business strategy, and the rules of prudent and stable management of the Bank, • approving the Organisational Rules of the Bank and the overall organisational structure of the Bank established by the Management Board of the Bank, adapted to the size and profile of risks taken, • accepting the overall level of risk taken by the Bank, • approving the assumptions of the Bank’s policy for compliance risk, • approving the Bank’s Information Policy, • selection of an auditor, • approval of the Remuneration Policy formulated by the Management Board and overseeing its introduction and operation, • drawing up an annual remuneration report, • providing opinions on all matters submitted by the Management Board to the General Meeting of Shareholders of the Bank. The Supervisory Board is responsible for overseeing the Bank’s internal governance and conducts at least an annual review of its adequacy and effectiveness. The following requires the approval of the Supervisory Board: • conclusion and amendment of a contract for legal services, marketing services, public relations and social communication services, and management consultancy services, if the amount of remuneration for the services provided in the contract or contracts with the same entity exceeds PLN 500,000 net, on an annual basis or the maximum amount of remuneration is not provided for, • conclusion of an agreement for: donations or other agreement with similar effect with a value exceeding PLN 20,000 or 0.1% of the sum of assets within the meaning of the Accounting Act of 29 September 1994, determined based on the last approved financial statement, exemption from debt or other agreement having a similar effect with a value exceeding PLN 50,000 or 0.1% of the sum of assets within the meaning of the Accounting Act of 29 September 1994, determined based on the last approved financial statement. • subject to § 17 (2) (4) of the Articles of Association, regulation of fixed assets within the meaning of the Accounting Act of 29 September 1994, classified as non-material and legal values, tangible fixed assets or long-term investments, including making contributions to a company or cooperative, if the market value of these assets exce eds 5% of the sum of assets within the meaning of the Accounting Act of 29 September 1994, determined on the basis of the last approved financial statements, as well as the transfer of these components for use to another entity, for a period longer than 180 days in a calendar year, on the basis of a legal transaction, if the market value of the object of the legal transaction exceeds 5% of the sum of assets, with the proviso that in the case of: rent, lease and other agreements under which asset components are made available to other entities for use against a fee – the market value of the subject of the legal transaction shall be deemed to be equal to the value of payments for:
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117 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement ⎯ a year - if handing over of the asset took place under agreements concluded for an indefinite period of time, ⎯ an entire term of the agreement - in the case of agreements concluded for a finite period; lend and other agreements under which asset components are made available to other entities for use, free of charge – the market value of the subject of the legal transaction shall be deemed to be equal to the value of payments that would be due if a rent or lease agreement had been concluded, for: ⎯ a year - if handing over of the asset took place under agreements concluded for an indefinite period of time, ⎯ an entire term of the agreement - in the case of agreements concluded for a finite period; • subject to § 17 (2) (4) of the Articles of Association, purchase of fixed assets within the meaning of the Accounting Act of 29 September 1994, of a value exceeding: PLN 100,000,000 or 5% of the sum of assets within the meaning of the Accounting Act of 29 September 1994, determined based on the last approved financial statement, • takeover, acquisition, or disposal of shares of another company with a value exceeding: PLN 100,000,000 or 10% of the sum of assets in the meaning of the Accounting Act of 29 September 1994, determined based on the last approved financial statement, The Supervisory Board appoints from among its Members: the Audit Committee, Risk Committee, and other committees required by law, it may also appoint standing or ad hoc committees to perform specific activities. Committees of the Supervisory Board Audit Committee of the Supervisory Board Composition of the Committee as at 31.12.2024 Composition of the Committee as at 31.12.2023 Artur Kucharski Committee Chair Paweł Knop Committee Chair Radosław Grabowski Committee Member Ernest Bejda Committee Member Robert Pusz Committee Member Filip Majdowski Committee Member Marek Pietrzak Committee Member Jacek Kij Committee Member During the reporting period, changes were made to the composition of the Audit Committee of the Supervisory Board. In connection with personnel changes within the Bank’s Supervisory Board, and following the recommendation of the Nomination and Remuneration Committee, on 18 March 2024, the Supervisory
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118 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Board established the following composition of the Audit Committee: Chairman: Paweł Knop and Members: Ernest Bejda, Marek Pietrzak, and Jacek Kij. The following individuals were identified as meeting the independence criteria based on their submitted declarations: • Mr Paweł Knop, • Mr Ernest Bejda, • Mr Marek Pietrzak, • Mr Jacek Kij. The following individuals were identified as possessing knowledge and skills in accounting or financial auditing: • Mr Paweł Knop, • Mr Jacek Kij. The following individuals were identified as possessing knowledge and expertise in the industry in which the Bank operates: • Mr Paweł Knop, • Mr Ernest Bejda, • Mr Marek Pietrzak, • Mr Jacek Kij. Following further personnel changes within the Supervisory Board made by the Annual General Meeting of the Bank and following the recommendation of the Nomination and Remuneration Committee, on 7 May 2024, the Supervisory Board established the following co mposition of the Audit Committee: Chairman: Artur Kucharski and Members: Jarosław Mastalerz, Radosław Grabowski. The following individuals were identified as meeting the independence criteria based on their submitted declarations: • Mr Artur Kucharski, • Mr Radosław Grabowski. The following individuals were identified as possessing knowledge and skills in accounting or financial auditing: • Mr Artur Kucharski, • Mr Radosław Grabowski, • Mr Jarosław Mastalerz. The following individuals were identified as possessing knowledge and expertise in the industry in which the Bank operates: • Mr Artur Kucharski, • Mr Radosław Grabowski, • Mr Jarosław Mastalerz. Subsequently, on 4 June 2024, following further personnel changes and taking into account the recommendation of the Nomination and Remuneration Committee, the Supervisory Board established the following composition of the Audit Committee: Chairman: Artur Kucharski and Members: Radosław Grabowski and Jan Zimowicz.
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119 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The following individuals were identified as meeting the independence criteria based on their submitted declarations: • Mr Artur Kucharski, • Mr Radosław Grabowski. The following individuals were identified as possessing knowledge and skills in accounting or financial auditing: • Mr Artur Kucharski, • Mr Radosław Grabowski, • Mr Jan Zimowicz. The following individuals were identified as possessing knowledge and expertise in the industry in which the Bank operates: • Mr Artur Kucharski, • Mr Radosław Grabowski, • Mr Jan Zimowicz. Due to the resignation of Jan Zimowicz from the Audit Committee of the Supervisory Board, and following the recommendation of the Nomination and Remuneration Committee, on 14 November 2024, the Supervisory Board established the following composition of the Audit Committee: Chairman: Artur Kucharski and Members: Radosław Grabowski and Robert Pusz. The following individuals were identified as meeting the independence criteria based on their submitted declarations: • Mr Artur Kucharski, • Mr Radosław Grabowski. The following individuals were identified as possessing knowledge and skills in accounting or financial auditing: • Mr Artur Kucharski, • Mr Radosław Grabowski, • Mr Robert Pusz The following individuals were identified as possessing knowledge and expertise in the industry in which the Bank operates: • Mr Artur Kucharski, • Mr Radosław Grabowski, • Mr Robert Pusz Members of the Supervisory Board serving on the Audit Committee confirmed their knowledge and expertise in accounting, financial auditing, and the Bank’s sector through their professional experience, including holding managerial and supervisory positions, education, and professional qualifications. These factors were considered in the suitability assessment process for Supervisory Board members, conducted by the Bank in accordance with the guidelines of the “Methodology for Assessing the Suitability of Memb ers of Bodies of Entities Under Supervision by the Polish Financial Supervision Authority”. The “Policy of Selection and Suitability Assessment of Members of the Supervisory Board of Alior Bank S.A.” aligns with the above Methodology. Under this policy, th e Nomination and Remuneration Committee and the Supervisory Board assess candidates for Supervisory Board committees, with both the Bank’s supervisory body and the advisory committee adopting relevant resolutions in this regard.
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120 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Activities of the Audit Committee of the Supervisory Board The Audit Committee of the Supervisory Board was established by Resolution No. 61/2013 of the Supervisory Board on 30 July 2013. The Audit Committee supports the Bank’s Supervisory Board in the performance of its statutory duties. The main tasks of the Audit Committee arise from Article 130(1) of the Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Supervision. The key responsibilities of the Audit Committee of the Supervisory Board include, in particular: • Monitoring the financial reporting process, • Monitoring the effectiveness of the internal control system, risk management system, and internal audit, • Monitoring the performance of financial audit activities, • Controlling and monitoring the independence of the statutory auditor and audit firm. During the reporting period, the Audit Committee of the Supervisory Board also began preparations for monitoring the Bank’s sustainability reporting process. In the financial year 2024, the Audit Committee held 14 meetings (including one joint meeting with the Risk Committee of the Supervisory Board and three joint meetings with the Bank’s Supervisory Board), during which it carried out its responsibilities, in cluding monitoring the financial reporting process, assessing the effectiveness of the internal control system, risk management system, and internal audit, overseeing financial audit activities, controlling, monitoring, and evaluating the independence of t he statutory auditor and audit firm, and granting approval for the provision of permissible non-audit services by the audit firm. Furthermore, the Committee informed the Supervisory Board of the results of the financial audit, explained how the audit contr ibuted to the reliability of the Bank’s financial reporting, and outlined the Committee’s role in the audit process. During the reporting period, the Audit Committee issued a recommendation to the Bank’s Supervisory Board regarding the selection of an enti ty authorised to provide the Bank with an additional assurance service concerning the sustainability reporting of the Alior Bank Group. Policy for the selection of an audit firm to conduct audits and reviews of financial statements and Policy for the provision of permitted non-audit services by the audit firm performing the audit, entities related to that audit firm and by a member of that audit firm’s network In order to control and monitor the independence of the statutory auditor and the audit firm, the Committee developed the “Policy for the selection of an audit firm to conduct audits and reviews of financial statements” and the “Policy for the provision of permitted non-audit services by the audit firm performing the audit, entities related to that audit firm and by a member of that audit firm’s network ”. The main objective of the “Policy for the selection of the entity authorised to audit and review financial statements in Alior Bank S.A. ” is to ensure the adequacy and legal compliance, including to avoid any conflict of interest when selecting the audit firm. The Bank is guided by the principles consistent with business ethics, aiming at transparent relations with the counterparty. The Pol icy defines the rules of proceeding when selecting the audit firm. The selection is conducted taking into account the p rinciples of impartiality and independence of the auditor company and the analysis of the work conducted by it at the Bank. Differences of opinions for the application of accounting policies or auditing standards are not sufficient to terminate the financi al statements auditing agreement. Rules for the rotation of the audit firms and of the key auditor, including any waiting periods are defined.
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121 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The main objective of the “Policy of the provision by audit firm, its affiliates and a member of the audit firm network of admissible services not being an audit in Alior Bank S.A. ” is to control and monitor the independence of the audit firm and of the independent auditor, including to avoid any conflict of interest. The Policy allows for the provision of admissible services mentioned in Article 136(2) of the Act of 11 May 2017 on statutory auditors, audit firms and public supervision. The provision of admissible services is possible after the analysis of independence and consent to the provision of such services by the Audit Committee. The selection of the entity authorized to audit the financial statements is carried out in accordance with the procedure applicable at the Bank: “Selection of the entity authorized to audit the financial statements at Alior Bank S.A.”. In accordance with t he rules of the above procedure, the Audit Committee submits recommendations to the Supervisory Board on the selection of an audit firm to audit and review the financial statements of Alior Bank SA and Alior Bank S .A. Group entities. The Audit Committee’s recommendation must contain at least two audit firm selection options, along with a statement of reasons and an indication of the Committee’s justified preference towards one of them. The entity authorised to audit financial statements, conducting the audit of annual financial statements of Alior Bank Group and annual financial statements of Alior Bank S.A. was selected in accordance with legal provisions. That entity as well as statutory auditors conducting the audit of those statements have met the requirements for being able to express their impartial and independent opinion on the audited interim financial statements of the Bank Group and financial statements of the Bank, in accordance with the applicable legislation and professional standards. In financial year 2024, the audit firm auditing the financial statements provided to Alior Bank S.A. certain admissible services other than audit. The independence of the audit firm was assessed and the consent for the provision of such services was granted each time. Nomination and Remuneration Committee of the Supervisory Board: Composition of the Committee as at 31.12.2024 Composition of the Committee as at 31.12.2023 Jan Zimowicz Committee Chair Małgorzata Erlich-Smurzyńska Committee Chair Maciej Gutowski Committee Member Marek Pietrzak Committee Member Paweł Wajda Committee Member Dominik Witek Committee Member Filip Majdowski Committee Member Jacek Kij Committee Member During the reporting period, changes were made to the composition of the Nomination and Remuneration Committee of the Supervisory Board. Following the resignation of Mr Filip Majdowski, on 18 March 2024, the Bank’s Supervisory Board established the following composition of the Committee: Chairman: Małgorzata Erlich -Smurzyńska and Members: Dominik Witek, Marek Pietrzak, and Jacek Kij.
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122 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Following personnel changes within the Supervisory Board made by the Annual General Meeting of the Bank, on 7 May 2024, the Supervisory Board established the following composition of the Audit Committee: Mr Jarosław Mastalerz, Mr Maciej Gutowski, and Mr Jan Zimowicz. On the same day, Mr Jarosław Mastalerz was appointed Chairman of the Committee. Following Mr Mastalerz’s resignation, the Supervisory Board appointed Mr Rafał Janczura to the Committee on 14 November 2024, and Mr Jan Zimowicz took over as Chairman. Due to personnel changes in the Supervisory Board and the appointment of Mr Paweł Wajda to its composition, on 19 December 2024, the Bank’s Supervisory Board adopted a Resolution regarding changes in the Committee’s composition, appointing Mr Paweł Wajda as a Committee Member in place of Mr Rafał Janczura. Activities of the Nomination and Remuneration Committee of the Supervisory Board The Remuneration Committee was established by Resolution No. 87/2011 of the Supervisory Board on 7 December 2011. On 21 December 2016, the Remuneration Committee was transformed into the Nomination and Remuneration Committee of the Supervisory Board of Alior Bank Spółka Akcyjna. The key responsibilities of the Committee include: • Reviewing the remuneration policy to ensure compliance with regulations, primarily the Regulation of the Minister of Finance, Funds and Regional Policy of 8 June 2021 on the risk management system, internal control system, and remuneration policy in banks, • Reviewing the classification of positions subject to the remuneration policy concerning Material Risk Takers (“MRT”), evaluating their annual objectives and performance, and monitoring variable remuneration for MRT, • Preparing opinions, assessments, or recommendations regarding candidates for the Bank’s Management Board, the conclusion, amendment, and termination of agreements with Management Board Members, the structure, size, composition, and effectiveness of the Management Board as a body, as well as the knowledge, skills, and experience of individual Management Board Members, • Preparing opinions, assessments, or recommendations on other personnel matters for which the Supervisory Board or Committee is responsible under internal regulations and applicable laws. In 2024, the Committee held 13 meetings, during which it assessed the achievement of objectives by the Bank’s Management Board members and Material Risk Takers (MRT) for 2023. Additionally, the Committee recommended the payout of deferred variable compensa tion tranches from previous years and addressed the allocation of variable compensation for 2023 for MRT who are not members of the Management Board. The Committee recommended postponing the decision on granting variable compensation to the Bank’s Manageme nt Board members for 2023 and continuing the evaluation process, deferring the decision on the eligibility for deferred variable compensation tranches for 2021 - 2022. The Committee also conducted the identification of MRT . In response to changes in the composition of management and supervisory bodies, the Committee conducted secondary individual suitability assessments of Supervisory Board and Management Board Members, primary individual suitability assessments of candidates f or these positions, collective s uitability assessments of both bodies, and prepared recommendations regarding the composition of the Supervisory Board’s advisory committees. Regarding regulatory matters, due to changes and updates in external regulations, the Committee reviewed and recom mended updates to the Bank’s remuneration and suitability policies to the Supervisory Board. During its 2024 meetings, the Committee reviewed and recommended the
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123 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement following reports for approval by the Supervisory Board: the Report on Remuneration of the Members of the Management Board and Supervisory Board of Alior Bank S.A. for 2023 and the Report on the Functioning of the Remuneration Policy in Alior Bank S.A. in 2023. Risk Committee of the Supervisory Board Composition of the Committee as at 31.12.2024 Composition of the Committee as at 31.12.2023 Robert Pusz Committee Chair Ernest Bejda Committee Chair Artur Kucharski Committee Member Małgorzata Erlich-Smurzyńska Committee Member Jan Zimowicz Committee Member Paweł Knop Committee Member Dominik Witek Committee Member Jacek Kij Committee Member During the reporting period, changes were made to the composition of the Risk Committee of the Supervisory Board. On 7 May 2024, following personnel changes and taking into account the recommendation of the Nomination and Remuneration Committee, the Supervisory Board established the following composition of t he Audit Committee: Chairman: Jan Zimowicz and Members: Jarosław Mastalerz and Artur Chołody. On 24 May 2024, following the delegation of Mr Artur Chołody to temporarily perform the duties of Vice President of the Bank’s Management Board, responsible for managing the work of the Management Board, the Supervisory Board of the Bank established the fo llowing composition of the Committee: Chairman: Jan Zimowicz and Members: Jarosław Mastalerz and Artur Kucharski. As a result of the expansion of the Supervisory Board of the Bank by the Extraordinary General Meeting on 17 July 2024, and considering the recommendation of the Nomination and Remuneration Committee, on 20 August 2024, the Supervisory Board of the Bank es tablished the following composition of the Committee: Chairman: Robert Pusz and Members: Artur Kucharski, Jarosław Mastalerz, and Jan Zimowicz. Following the resignation of Mr Jaros ław Mastalerz, on 18 December 2024, the Bank’s Supervisory Board established the following composition of the Committee: Chairman: Robert Pusz and Members: Artur Kucharski and Jan Zimowicz. Activities of the Risk Committee of the Supervisory Board The Risk Committee of the Supervisory Board of Alior Bank S.A. was established on 22 December 2015 by Resolution No. 81/2015 of the Supervisory Board to support the Supervisory Board of the Bank in overseeing the risk management system in the Bank. The Committee operates based on the Rules of Procedure of the Risk Committee of the Supervisory Board of Alior Bank, as approved by the Supervisory Board.
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124 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The Committee’s tasks arise from the Regulation of the Minister of Finance, Funds and Regional Policy of 8 June 2021 on the risk management system and internal control system, as well as the remuneration policy in banks and the Banking Law. The primary tasks of the Risk Committee of the Supervisory Board include, in particular: • Supporting the Supervisory Board of the Bank in overseeing the risk management system within the Bank, • Providing opinions on the Bank’s risk-taking capacity, as quantified in the risk appetite framework, • Reviewing the Bank’s risk management strategy and analysing reports submitted by the Management Board regarding its implementation, including periodic reports on capital adequacy, credit risk, operational risk, market risk, liquidity risk, model risk, compliance risk, and reputational risk, • Monitoring issues related to the implementation of the audit plan and recommendations issued by the Audit Department, • Issuing opinions/conclusions on materials concerning the risk management system, including the annual reports of the Risk Strategy Department, Compliance Department, and Audit Department, to enable the Supervisory Board to assess the adequacy and effective ness of the internal control system and risk management system, • Supporting the Supervisory Board of the Bank in overseeing the implementation of the Bank’s risk management strategy by senior management, • Verifying the alignment of the pricing of liabilities and assets offered to customers with the Bank’s business model and risk strategy, and, in the event of misalignment, presenting proposals to the Management Board to ensure that the pricing of liabilitie s and assets is adequate to the respective risk types, • Reviewing regulations defining the Bank’s strategy and policies governing its approach to risk - taking, which fall within the competencies of the Supervisory Board for approval , • Analysing periodic reports on the implementation of the aforementioned strategies and policies. During the reporting period, the Risk Committee of the Supervisory Board held nine meetings and one joint meeting of the Risk Committee of the Supervisory Board and the Audit Committee of the Supervisory Board. During the meetings of the Risk Committee of the Supervisory Board, key risk -related issues were discussed, particularly concerning the implementation of the risk appetite framework, the Bank’s capital position, the quality of the loan portfolio, the largest credit exposures/capital groups, and issues related to the identification and analysis of key risks that could impact the Bank’s operations. As part of the ongoing monitoring of the Bank’s risk management system, the Committee received periodic risk reports containing information on credit risk, capital ratios (capital adequacy), market risk, liquidity risk, operational risk, model risk, as wel l as compliance and reputational risk, which included data regarding the Bank and its significant subsidiaries. The Committee also reviewed the periodic assessment of the mortgage -backed loan portfolio covered by Recommendation S and the retail exposures portfolio covered by Recommendation T. The Committee’s work also included matters related to credit concentration risk, the treasury transactions portfolio risk, and counterparty limits portfolio, as well as the results of the review of the adequacy of asset and liability pricing. The results o f the Bank’s stress tests and the internal capital adequacy assessment process (ICAAP) review were discussed.
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125 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In the context of monitoring issues related to the implementation of the audit plan and recommendations issued by the Audit Department, the Committee reviewed periodic reports from the Audit Department. The Committee provided opinions and recommended that t he Supervisory Board approve key regulations defining the Bank’s strategy and policies in the area of risk management. The Committee’s recommendations also covered proposals regarding updates to the risk appetite in terms of capital adequacy, interest rate risk, as well as the update of strategic limits for key risk types, including internal capital allocation limits for 2024, and the Strategy and Risk Appetite for 2025. During the reporting period, the Committee reviewed informational materials, which included, among others, issues related to compliance with IRRBB EBA requirements concerning Supervisory Outlier Tests Net Interest Income (SOT NII), as well as management ch allenges arising from the need to meet two opposing measures: NII and Economic Value of Equity (EVE). During the joint meeting of the Risk Committee of the Supervisory Board and the Audit Committee of the Supervisory Board, the members of both Committees issued appropriate recommendations concerning materials related to the risk management system, includin g the annual reports of the Risk Strategy Department, Compliance Department, and Audit Department, to enable the Supervisory Board of the Bank to assess the adequacy and effectiveness of the internal control system and risk management system. Depending on the matters discussed, representatives of the Bank were invited to Committee meetings, while the Director of the Audit Department and the Director of the Compliance Department are permanent attendees of the Committee’s meetings. The Committee presented its recommendations to the Supervisory Board in the form of resolutions. Based on the periodic reports received, the Committee regularly monitored the effectiveness of the risk management system in the Bank. Strategy and Development Committee of the Bank’s Supervisory Board Composition of the Committee as at 31.12.2024 Composition of the Committee as at 31.12.2023 Jan Zimowicz Committee Chair Filip Majdowski Committee Chair Rafał Janczura Committee Member Małgorzata Erlich-Smurzyńska Committee Member Radosław Grabowski Committee Member Dominik Witek Committee Member Paweł Knop Committee Member During the reporting period, the composition of the Bank’s Strategy and Development Committee underwent several changes. Following the resignation of Mr Filip Majdowski from the Supervisory Board on 7 March 2024, on 18 March, the Supervisory Board established the following composition of the Committee: Chairman: Dominik Witek and Members: Małgorzata Erlich – Smurzyńska and Paweł Knop. Following further personnel changes within the Supervisory Board made by the Annual General Meeting of the Bank and following the recommendation of the Nomination and Remuneration Committee, on 7
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126 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement May 2024, the Supervisory Board established the following composition of the Committee: Chairman: Jan Zimowicz and Member: Jarosław Mastalerz. On 20 August 2024, following additional personnel changes in the Supervisory Board, the Committee’s composition was adjusted again: Chairman: Jan Zimowicz and Members: Rafał Janczura and Jarosław Mastalerz. Finally, after the resignation of Mr Jarosław Mastalerz on 6 November 2024, the Supervisory Board, on 19 December, taking into account the recommendation of the Nominations and Remuneration Committee, established the following composition of the Committee: Chairman: Jan Zimowicz and Members: Rafał Janczura and Radosław Grabowski. Activities of the Strategy and Development Committee The Strategy and Development Committee serves as an advisory and consultative body, supporting the Supervisory Board in overseeing its decisions. Its primary objective is to enhance the effectiveness of supervisory activities, particularly in evaluating key strategic documents submitted by the Management Board, such as the Bank’s development strategy. Additionally, the Committee assesses proposed investments that could significantly impact the Bank’s assets. Key responsibilities of the Committee include reviewing and issuing recommendations to the Supervisory Board on: • Approval of the Bank’s long-term development plans prepared by the Management Board, • Implementation of multi-year development programmes, including reports on ongoing projects, • Management Board proposals regarding the establishment of, or participation in, companies as a shareholder, as well as the sale of shares, when such investments are of strategic and long - term significance. During the reporting period, the Strategy and Development Committee held four meetings. Discussions focused on: periodic reviews of progress in implementing the Bank’s strategy, the status of the new strategic plan for 2025 -2027, updates on the implementation of new mortgage processes under the SWK Exit project. Furthermore, a workshop with a consulting firm, supporting the development of the new strategy, was delivered. Committee members also received quarterly Reports on the status of the strategy’s implementation and project portfolio for Q1 and Q2 2024. Additionally, the Strategy and Development Committee adopted a resolution expressing a positive opinion on its updated Rules of Procedure and recommended its approval by the Supervisory Board. The revised document was officially adopted on 23 October 2024, aligning with the recommendations of the Polish Financial Supervision Authority (KNF), notably regarding the selection criteria for committee members (Recommendation Z 10.3) and meeting documentation standards (Recommendation Z 10.4).
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127 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Bank’s Management Board Bank’s Management Board as of 31 December 2024* Piotr Żabski Vice President of the Management Board, acting as the Chairman of the Management Board11 President of the Management Board of Alior Bank S.A. since 7 February 202512 Piotr Żabski is a graduate of Management and Finance at the Faculty of Computer Science and Management of Politechnika Wrocławska (Wrocław University of Technology). He also completed Project Management at Ecole Nationale Superieure des Mines de Saint -Etienne, Strategy and Innovation at MIT, and Health Promotion at the Wrocław University of Physical Education. He is an experienced manager with nearly 30 years of professional experience in the banking sector. He has served as Vice President of the Management Board of Santander Consumer Bank, responsible for strategy and innovation, IT development, cybersecurity, retail credit sales and marketing, debt collection, Agile transformation, PMO, legal and compliance, HR development, and administration. Previously, he worked for 11 years at Lukas Bank, where he held positions such as Director of the Key Accounts Department, Sales Director, and Managing Director of the Consumer Finance division. As President of the Management Board of Santander Consumer Bank, he obtained positive authorisation from the Polish Financial Supervision Authority to hold this position, and his work underwent various regulatory audits, all of which yielded positive results. Piotr Żabski is acting as the Chairman of the Bank’s Management Board until the Polish Financial Supervision Authority grants approval for his appointment as President of the Bank’s Management Board. He oversees the organisational units of the Bank’s Head Office responsible for HR, PR, communication and CSR, personal data protection, corporate governance, and strategy. He supervises the Bank’s subsidiaries and oversees operations conducted in other countries. Additionally, he coordinates the work of the organisational units of the Bank’s Head Office responsible for internal audit and compliance risk management. However, until the appointment of the President of the Management Board, decisions w ithin the scope of internal audit and compliance risk management are taken collectively by the Management Board, with no right to make individual decisions regarding these areas. Piotr Żabski is also responsible for the day -to-day operation of procedures f or reporting breaches of legal regulations, the Bank’s internal procedures, and business ethics rules. He also receives reports on such matters in accordance with the Bank’s internal regulations. Artur Chołody Artur Chołody holds a PhD in Economics and is a law graduate from Adam Mickiewicz University in Poznań. He completed his legal counsel apprenticeship at the District Chamber of Legal Counsels in Poznań, passing the final examination and obtaining the title of legal counsel. He is a graduate of postgraduate MBA HR Management studies at Franklin University Ohio / WSB Poznań and postgraduate studies in Management Psychology, Non -Governmental Organisation Management, Internet Entrepreneurship, and Economic Sciences Methodology. For nearly 20 years, he has been a partner at Wielkopolska Legal Group sp.k., specialising in public procurement and servicing companies applying for international public contracts. He has served on the management boards of industrial sector companies and successfully restructured Fabryka Narzędzi Specjalnych sp. z o.o. , laying the foundations for the creation of a Polish capital group in the tools industry. 11 On 1 August 2024, the Supervisory Board appointed Mr Piotr Żabski (i) to the position of Vice President of the Management Boa rd of the Bank, effective from 1 January 2025, (ii) to the position of President of the Management Board of the Bank, subject to th e appropriate approval by the Polish Financial Supervision Authority and on the date of such approval, (iii) to be entrusted with the management of the activities of the Bank’s Management Board, effective from 1 January 2025, until the approval by the Polish Financial Supervision Authority for his app ointment to the position of President of the Management Board of the Bank. On 23 October 2024, the Bank’s Supervisory Board adopted a resolution amending the resolution regarding the appointment of Mr Piotr Żabski to the position of Vice President of the Management Board, in rel ation to the timing of his appointment to the Bank’s Management Board. Pursuant to the amending resolution, the Bank’s Supervisory Board appointed Mr Piotr Żabski to the position of President of the Management Board of the Bank, effective from 1 November 2024, subject to the appropriate approval by the Polish Financial Supervision Authority and on the date of such approval. Furthermore, the Bank’s Supervisory Boar entrusted Mr Piotr Żabski with the management of the activities of the Bank’s Management Board, effective from 1 November 2024, until the approval by the Polish Financial Supervision Authority for his appointment to the position of President of the Management Board of the Bank. 12 On February 7, 2025, the Polish Financial Supervision Authority approved the appointment of Mr. Piotr Żabski to the position of President of the Bank's Management Board.
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128 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Member of the Supervisory Board delegated to temporarily perform the duties of Vice President of the Management Board Artur Chołody has been a member of supervisory boards for approximately five years. He has overseen public entities, holding positions such as Deputy Chairman of the Supervisory Board of Zarząd Komunalnych Zasobów Lokalowych sp. z o.o. in Poznań and Chairm an of the Supervisory Board of Zakład Energetyki Cieplnej sp. z o.o. in Ostrzeszów. Since 27 April 2024, he has been a member of the Supervisory Board of Alior Bank S.A. From 15 May 2024 to 14 August 2024, he was delegated to temporarily perform the duties of Vice President of the Management Board acting as the Chairman of the Management Board. From 18 November 2024 to 17 February 2025, he was again delegated to temporarily perform the duties of Vice President of the Management Board. Artur Chołody oversees the organisational units of the Bank’s Head Office responsible for legal affairs. Marcin Ciszewski Vice President of the Management Board13 A manager with over 20 years of experience in finance and risk management. He served as vice president at Ultimo TFI S.A., overseeing the risk management system. He was with Euro Bank S.A. for more than 18 years, where he held the position of vice president of the management board for 9 years, including two and a half years as Chief Risk Officer (CRO). Prior to this, he worked as Chief Financial Officer (CFO) and Director of the Controlling Department. He also gained experience at Volkswagen Bank Polska S.A. and Lukas Bank S.A. Marcin Ciszewski graduated in Finance and Banking from the Cracow University of Economics and compl eted postgraduate studies in Risk Management in Financial Institutions at Szkoła Główna Handlowa (SGH Warsaw School of Economics). Additionally, he completed the Strategic Leadership Academy course at the ICAN Institute, organised by Harvard Business Review. Until the approval of the Polish Financial Supervision Authority for the appointment of Mr Marcin Ciszewski to the position of Vice President of the Management Board responsible for overseeing the management of significant risk in the Bank’s operations, the supervision of significant risk in the Bank’s activities, including ESG risks, will be carried out collectively by the Bank’s Management Board. Jacek Iljin Vice President of the Management Board He graduated from the Faculty of Economics and Sociology at the University of Łódź, specialising in Finance and Banking. He continued his education with postgraduate studies, obtaining an EMBA title from the University of Łódź, Towson University, and the U niversity of Baltimore. He also developed his managerial skills through the HPL and Advanced HPL programmes at the International Institute for Management Development (IMD) in Switzerland. He has extensive experience in banking, primarily in retail banking. In 2002, he joined mBank, where he co-shaped the institution’s development, starting as an innovative start -up under the umbrella of the then BRE Bank, and growing it into one of the largest retail banks in Poland, also operating in the Czech and Slovak markets. Jacek Iljin is an experienced manager. Throughout his career at mBank, he held various supervisory roles in mBank Group companies and managerial positions in strategy, marketing, product management, sales and direct marketing, and distribution model development. Most recently, as Managing Director of mBank’s Retail Banking Sales and Business Processes, he focused on busines s growth, digital transformation, and building a distribution model that combines the strengths of digital channels with the most valuable asset for any bank: people. Jacek Iljin oversees the units responsible for products and sales in the retail customer segment (individual customer, including partner branches), brokerage activities, marketing, and customer relations. Before joining Alior Bank, he spent 22 years with the Credit Agricole Group, beginning his career at EFL SA, a leader in investment financing for the SME sector. Initially, he served as Deputy Director of the Customer Service Department, later advancing to Director, actively participating in centralisation and quality improvement projects in post-sales service. In 2009, he founded a new entity within the group responsible for insurance business and leasing loans – EFL Finance S.A. In 2018, he was 13 On 19 December 2024, the Bank’s Supervisory Board adopted a resolution regarding the appointment of Mr Marcin Ciszewski, Vice President of the Management Board, to the position of Vice President of the Management Board responsible for overseeing the manag ement of significant risk in the Bank’s operations, subject to obtaining the appropriate approval from the Polish Financial Supervision Authority and o n the date of such approval. The Supervisory Board entrusted the Management Board, acting collectively, with the responsibility for overseeing the managem ent of significant risk in the Bank’s operations, until the approval by the Polish Financial Supervision Authority for the appointment of Mr Marcin Ciszewski to the position of Vice President of the Management Board overseeing the management of significant risk in the Bank’s operati ons.
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129 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Wojciech Przybył Vice President of the Management Board responsible for building the innovation sector for the EFL Group. Since 2020, he has been a member of the EFL management board, responsible for marketing, ESG, insurance, and innovation, which are crucial to the strategic development of the EFL Group. He holds a degree from the Faculty of Law and Administration at the University of Wrocław and an MBA from Nottingham Trent University. Wojciech Przybył oversees the units responsible for products and sales in the business customer and micro-enterprise segments. * On 20 December 2024, the Bank’s Management Board adopted Resolution No. 449/2024 regarding the internal division of compete ncies within the Management Board of Alior Bank S.A., which was approved by the Bank’s Supervisory Board on 23 December 2024. As a result, a new and current division of competencies within the Management Board came into effect as of the date of this report. Bank’s Management Board as of 31 December 2023 Grzegorz Olszewski President of the Management Board Areas of responsibility: internal audit, compliance risk management, HR, communication and PR, corporate governance support, and strategy. He is also responsible for the ongoing operation of procedures for reporting legal violations, adherence to the Bank’s interna l regulations and business ethics rules, as well as receiving notifications in this regard in accordance with the Bank’s internal policies. Paweł Broniewski Vice President of the Management Board Areas of responsibility: operational area, including business continuity management, cybersecurity, and security. Radomir Gibała Vice President of the Management Board Areas of responsibility: finance, accounting and financial reporting, controlling, investor relations, as well as oversight of subsidiaries and international operations. Szymon Kamiński Vice President of the Management Board Areas of responsibility: products and sales for business customers and micro-enterprises. Rafał Litwińczuk Vice President of the Management Board Areas of responsibility: products and sales for retail customers (individual customers), brokerage, and treasury operations. Tomasz Miklas Vice President of the Management Board Areas of responsibility: supervision of significant risk management within the Bank’s operations and ESG risk management. Jacek Polańczyk Vice President of the Management Board Areas of responsibility: marketing, logistics, and procurement. Paweł Tymczyszyn Vice President of the Management Board Areas of responsibility: legal affairs, IT, and data protection. The year 2024 marked the continuation of the VI joint three-year term of the Bank’s Management Board, which commenced on 1 January 2024. During the reporting period, the following changes were made to the composition of the Management Board: • 15 May 2024 The Bank’s Supervisory Board adopted resolutions to dismiss the following individuals from the Management Board:
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130 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement - Mr Grzegorz Olszewski, - Mr Paweł Broniewski, - Mr Szymon Kamiński, - Mr Rafał Litwińczuk, - Mr Jacek Polańczyk, - Mr Paweł Tymczyszyn. The Supervisory Board also adopted a resolution to initiate and conduct an open recruitment procedure for the positions of President and Members of the Management Board. Additionally, the Supervisory Board adopted a resolution to delegate Mr Artur Chołody, a member of the Supervisory Board, to temporarily perform the duties of Vice President of the Management Board resp onsible for overseeing the work of the Management Board from 15 May 2024 to 14 August 2024, with the possibility of earlier termination of the delegation. • 23 May 2024 , in light of the above changes, the Management Board adopted Resolution No. 164/2024 concerning the internal division of responsibilities, which was subsequently approved by the Supervisory Board on 24 May 2024, thereby implementing a new allocation of responsibilities among the Members of the Management Board. • 1 August 2024 Following the open recruitment procedure and an assessment of suitability, the Supervisory Board appointed the following individuals for the VI joint three -year term, which commenced on 1 January 2024: - Mr Piotr Żabski (i) to the position of Vice President of the Management Board of the Bank, effective from 1 January 2025, (ii) to the position of President of the Management Board of the Bank, subject to the appropriate approval by the Polish Financial Supervision Authority and on the date of such approval, (iii) to be entrusted with the management of the activities of the Bank’s Management Board, effective from 1 January 2025, until the approva l by the Polish Financial Supervision Authority for his appointment to the position of President of the Management Board of the Bank. - Mr Jacek Iljin as Vice President of the Management Board, effective from 15 August 2024, - Mr Zdzisław Wojtera as Vice President of the Management Board, effective from 1 September 2024, - Mr Wojciech Przybył as Vice President of the Management Board, effective from 1 October 2024, - Mr Marcin Ciszewski as Vice President of the Management Board, effective from 1 November 2024. Moreover, the Supervisory Board assigned Mr Jacek Iljin, Vice President of Management Board, the role of overseeing the work of the Management Board from 15 August 2024 until the Polish Financial Supervision Authority approval is granted for the appointmen t of the President of the Management Board. • 27 August 2024, in light of the above changes, the Management Board adopted Resolution No. 260/2024 concerning the internal division of responsibilities, which was subsequently approved by the Supervisory Board on 29 August 2024, thereby implementing a new allocation of responsibilities among the Members of the Management Board.
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131 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • 30 August 2024 The Bank’s Supervisory Board adopted a resolution to dismiss Mr Radomir Gibała from the position of Vice President of the Bank’s Management Board and from the Bank’s Management Board, effective from 31 August 2024. Furthermore, the Bank’s Supervisory Board appointed Vice President of the Bank’s Management Board, Mr Zdzisław Wojtera, to oversee the work of the Management Board from 1 September 2024 to 31 December 2024. Pursuant to the resolution of the Bank’s Supervisory Board dated 1 August 2024, Mr Piotr Żabski will assume responsibility for overseeing the work of the Bank’s Management Board from 1 January 2025. • 3 September 2024, in light of the above changes, the Management Board adopted Resolution No. 273/2024 concerning the internal division of responsibilities, which was subsequently approved by the Supervisory Board on 5 September 2024, thereby implementing a new allocation of responsibilities among the Members of the Management Board. • 1 October 2024 , the Management Board adopted Resolution No. 323/2024 concerning the internal division of responsibilities, which was subsequently approved by the Supervisory Board on 4 October 2024, thereby implementing a new allocation of responsibilities among the Members of the Management Board. • 23 October 2024 The Bank’s Supervisory Board adopted a resolution amending the resolution regarding the appointment of Mr Piotr Żabski to the position of Vice President of the Management Board, in relation to the timing of his appointment to the Bank’s Management Board. P ursuant to the amending resolution, the Supervisory Board appointed Mr Piotr Żabski to the Bank’s Management Board as Vice President of the Management Board, effective from 1 November 2024, for the VI joint three -year term, which commenced on 1 January 202 4. Taking into account the above -mentioned effective date of his appointment, the Bank’s Supervisory Board appointed Mr Piotr Żabski as President of the Bank’s Management Board, subject to the appro priate approval by the Polish Financial Supervision Authority and on the date of such approval. Furthermore, the Bank’s Supervisory Boar entrusted Mr Piotr Żabski with the management of the activities of the Bank’s Management Board, effective from 1 November 2024, until the approval by the Polish Financial Supervision Authority for his appointment to the position of President of the Management Board of the Bank. According to the original wording of the Bank’s Supervisory Board resolution dated 1 August 2024, Mr Piotr Żabski’s appointment was initially scheduled to take effect from 1 January 2025. The Bank’s Supervisory Board also adopted a resolution stipulating that Mr Zdzisław Wojtera, Vice President of the Bank’s Management Board, would conclude his oversight of the Management Board’s work from 31 October 2024. • 6 November 2024, in light of the above changes, the Management Board adopted Resolution No. 368/2024 concerning the internal division of responsibilities, which was subsequently approved by the Supervisory Board on 12 November 2024, thereby implementing a new allocation of responsibilities among the Members of the Management Board. • 14 November 2024 The Supervisory Board adopted a resolution to delegate Mr Artur Chołody, a member of the Supervisory Board, to temporarily perform the duties of Vice President of the
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132 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Management Board from 18 November 2024 to 17 February 2025, with the possibility of earlier termination of the delegation. Furthermore, the Bank’s Supervisory Board adopted a resolution to initiate and conduct a recruitment procedure for the positions of: a) Member of the Management Board responsible for managing the logistics area, b) Member of the Management Board responsible for managing the legal area. • 19 November 2024, in light of the above changes, the Management Board adopted Resolution No. 376/2024 concerning the internal division of responsibilities, which was subsequently approved by the Supervisory Board on 21 November 2024, thereby implementing a new allocation of responsibilities among the Members of the Management Board. • 19 December 2024 The Bank’s Supervisory Board adopted a resolution to dismiss Mr Tomasz Miklas from the position of Vice President of the Bank’s Management Board and from the Bank’s Management Board, effective from 19 December 2024. Furthermore, the Bank’s Supervisory Board adopted a resolution regarding the appointment of Mr Marcin Ciszewski, Vice President of the Management Board, to the position of Vice President of the Management Board responsible for overseeing the management of significant risk in the Bank’s operations, subject to obtaining the appropriate approval from the Polish Financial Supervision Authority and on the date of such approval. The Supervisory Board entrusted the Management Board, acting collectively, with the responsibility for overseeing the management of significant risk in the Bank’s operations, until the approval by the Polish Financial Supervision Authority for the appointment of Mr Marcin Ciszewski to the position of Vice President of the Management Board overseeing the management of significant risk in the Bank’s operations. • 20 December 2024, in light of the above changes, the Management Board adopted Resolution No. 449/2024 concerning the internal division of responsibilities, which was subsequently approved by the Supervisory Board on 23 December 2024, thereby implementing a new allocation of responsibilities among the Members of the Management Board. Following the reporting period, the composition of the Bank’s Management Board changed as follows: • On 7 February 2025 , the Polish Financial Supervision Authority (KNF) approved the appointment of Mr Piotr Żabski as President of the Management Board. • On 12 February 2025 , Mr Artur Chołody resigned from his position as a Member of the Supervisory Board, including his temporary delegation to perform the duties of the Vice President of the Management Board.
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133 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The composition of the Management Board as of the date of this Report is presented in the table below: Bank’s Management Board Piotr Żabski President of the Management Board Marcin Ciszewski Vice President of the Management Board Jacek Iljin Vice President of the Management Board Wojciech Przybył Vice President of the Management Board Zdzisław Wojtera Vice President of the Management Board Members of the Management Board of the Bank are not engaged in any competitive activity towards the Bank and do not participate in competitive partnerships as partners or members of governing bodies of limited companies or other competitive legal persons. Information on how Members of the Management Board of the Bank comply with the requirements provided for in Article 22aa of the Banking Law is available on the Bank’s website: https://www.aliorbank.pl/dodatkowe-informacje/o-banku/zarzad.html. Description of the principles regarding the appointment and dismissal of managing persons and their rights, in particular the right to decide on the issue or redemption of shares According to Article 22a (1) of the Banking Law Act of 29 August 1997 (uniform text, Dz. U. [Poland’s Journal of Laws] of 2023, item 2488) and § 24 (1) and (2) and § 25 (1) of Alior Bank’s Articles of Association, the Management Board of the Bank comprises at least 3 members appointed and dismissed by the Supervisory Board of Alior Bank, taking into account the assessment of compliance with the requirements referred to in Article 22aa of the Banking Law Act. The number of members of the Management Board is determined by the Supervisory Board. Members of the Management Board are appointed for a joint term of office of 3 years, following a qualification procedure as part of the selection process conducted on the basis of the Policy of Selection and Assessment the suitability of Management Board M embers of Alior Bank, prepared to meet the requirements set out in the Methodology for assessing the suitability of members of bodies of entities supervised by the Polish Financial Supervision Authority. Pursuant to Art. 369 § 1 of the Commercial Companies Code, the term of office of Members of the Bank's Management Board is calculated in full financial years. Under Article 22b (1) of the Banking Law Act and § 25 (2) in connection to § 27 (3) of Alior Bank’s Articles of Association, the President of the Management Board and the Member of the Management Board overseeing the management of major risks in the Bank’s activity shall be appointed with the consent of the KNF Board. The Supervisory Board shall put forward the motion regarding the consent. Pursuant to § 25a of the Articles of Association of Alior Bank, Members of the Management Board of Alior Bank were also obliged to meet the requirements referred to in Article 22 of the Act of 16 December 2016 on the Principles of State Property Management (Dz. U. [Polish Journal of Laws] of 2023, item 973, 1859).
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134 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Pursuant to § 27 (1) of the Articles of Association of Alior Bank, the Management Board represents the Bank in relation to third parties and conducts matters not regulated by law or by the provisions of the Articles of Association to the competences of oth er bodies of the Bank. In particular, the Management Board draws up Alior Bank’s development strategy and annual financial plans for Alior Bank S.A. The Management Board of Alior Bank S.A. operates on the basis of the Regulations of the Management Board of Alior Bank, which determines the organisation of the work of the Management Board and detailed competences of the President of the Management Board. Pursuant to § 8 (1) of the Rules of Procedure of the Management Board of Alior Bank, the Management Board in the form of a resolution: • determines long-term activity plans and strategic goals of the Bank, • determines short-term and long-term financial plans of the Bank and monitor their execution; • monitors the Bank’s management system, including the risk management and internal control system, taking into account the management reporting system used to control the Bank’s operations on an ongoing basis, • accepts the principles, policies, and regulations regarding the Bank’s activities, in particular with regard to prudent and stable management of the Bank, risk, credit and investment activities, asset and liability management, accounting, Bank funds, personnel, and in ternal control principles, • determines the amount of the bonus pool for the Bank’s employees, and its overall distribution; • appoints commercial representatives of the Company, • makes decisions regarding the issue of bonds by the Bank, except for convertible bonds or bonds with pre-emptive rights, • accepts the take-up, acquisition and disposal by the Bank of shares of companies, • makes decisions regarding the commitments, disposal of assets, charges on and lease (including rental and leasing) of assets, the combined value of which towards a single entity exceeds one - hundredth of the share capital of the Bank, subject to § 8 (2) of the Rules of Procedure of the Management Board, • approves the investment plan and accepts each own investment of the Bank (acquisition or disposal of fixed assets or proprietary rights) the value of which exceeds one -hundredth of the share capital of the Bank, subject to § 8 (2) of the Rules of Procedure of the Management Board, • approve the organisational structure of the Bank’s Head Office, including the establishment and liquidation of the Bank’s organisational units, • decides on the establishment and liquidation of Bank branches, • takes decisions as to payment to shareholders of dividend advances, upon acceptance of the Supervisory Board, • accepts all documents presented to the Supervisory Board or to the General Meeting, in the scope of its competence, • examines other matters submitted thereto by the Supervisory Board, General Meeting, Members of the Management Board, organisational units of the Bank, or any committees or teams established under the Bank’s internal regulations, • makes decisions in all other matters related to the Bank's activities, provided that separate regulations so require or that such decisions may have a significant impact on the financial situation or the image of the Bank, • exercises corporate governance over the group companies.
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135 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The Management Board is responsible for implementing and maintaining corporate governance within the Bank, ensuring its compliance and conducting periodic (at least annual) reviews and assessments to align governance with internal and external developments. At least once a year, the Management Board submits a report to the Supervisory Board, detailing the findings of its assessments and any significant events that may impact the Bank’s internal governance framework. In other matters, pursuant to § 3 (5) of the Rules of Procedure of the Management Board of Alior Bank, each Member of the Management Board shall make their own decisions concerning the subordinated area assigned to it. Pursuant to § 5 (4) of the Rules of Procedure of the Management Board of Alior Bank, the Management Board of the Bank may, by way of resolutions, appoint permanent or ad hoc committees in order to perform specific functions or coordinate the work of the Bank’s organisational units. Decisions regarding share issuance or buybacks fall under the authority of the General Meeting of Shareholders. According to § 17(2)(5) and (7) of the Bank’s Articles of Association, any capital increase or reduction, share buybacks, and related conditions require a resolution by the General Meeting of Shareholders. The Management Board of the Bank believes that the Regulations of the Management Board of Alior Bank Spółka Akcyjna as a regulation defining the functioning of the Management Board are adequate and consistent with the law and the requirements of supervisor y authorities. Members of the Management Board of the Bank coordinate and supervise the activity of the Bank, pursuant to the delegation of competences adopted by the Management Board of the Bank and approved by the Supervisory Board. Remuneration policy The Remuneration Policy applicable at Alior Bank is the core document for the policy and rules of the remuneration of the Bank’s staff. It includes the rules for the remuneration of individuals who, due to their special role in the Bank’s risk management system, have been covered by a separate regulatory regime in this regard, i.e.: • Material Risk Takers (MRT), including the Management Board, • individuals exercising Control Functions, • staff of the Compliance Department and Audit Department, • staff involved in the offering or distribution of banking, investment and insurance products and services. Objectives of the Policy: • to promote correct and effective management of risks, and discourage from taking excessive risks (exceeding the risk levels acceptable to the Bank) in order to maintain a solid equity base and having regard to the long -term interests of the Bank – its shar eholders and customers, • to promote the Bank’s strategy for sustainable development and prudent risk management policy, • to mitigate conflict of interest,
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136 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • to maintain transparent relationship between individual results and individual remuneration by focusing on goals linked to responsibilities and actual influence, • to prevention application of designs or methods intended to avoid application Policy, • to ensure that the Bank’s staff act in the best interests of their customers, including provide them with clear and transparent information on services and products offered by the Bank and favoring their own interests or those of the Bank to the detriment of the legitimate interests of clients. The Remuneration Policy is gender neutral. Particularly important for the achievement of the above -mentioned goals is how the Policy addresses MRTs. Main assumptions of the Policy as regards MRTs: • remuneration composed of fixed and variable parts, • avoidance of awarding pension benefits which are not defined in advance to MRTs, • committing MRTs to avoid using individual hedging strategies or insurance regarding remuneration and liability in order to alleviate the consequences of incorporation of risks in the remuneration system applicable to them, • except for staff exercising control functions, the total amount of the variable remuneration is based on the assessment of the results of MRT and of their respective organisational unit, as well as results of the Bank within the area of responsibility of t hat person, taking into account the results of the Bank as a whole, • maximum ratio of variable remuneration of MRTs to fixed remuneration: 100%, • at least 50% of variable remuneration of MRTs is an incentive for special care about the long -term welfare of the Bank and consists of financial instruments related to the shares of the Bank. The remaining part of variable remuneration is paid out in cash as Cash Variable remuneration, • at least 40% of MRT variable remuneration, and if MRT variable remuneration is for a particularly high amount, at least 60% of the variable remuneration – is deferred remuneration, • the variable remuneration of the Management Board is adapted to the provisions of the Act of 9 June 2016 on the rules of remuneration of executives of certain companies. Agreements with Members of the Management Board Agreements with Management Board Members, in accordance with the resolution No. 6/2017 of the Extraordinary General Meeting of Shareholders of the Bank of 5 December 2017 on the principles of remunerating Management Board Members (amended by Resolution No. 37/2019 of the Extraordinary General Meeting of the Bank of June 28, 2019), and with the regulations adopted by the Supervisory Board, are: • agreements for the provision of services corresponding to the Act of 9 June 2016 on the rules of remuneration of executives of certain companies, • agreements entered into for the term of service in the Management Board, • agreements with termination notice of: one month, if the Member of the Management Board holds the function for less than 12 months with effect at the end of the calendar month,
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137 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement three months, if the Member of the Management Board holds the function for at least 12 months. • with severance pay at three times the fixed pay if the agreement is cancelled or if terminated by the Bank otherwise than for breach of core responsibilities by the Member of the Management Board, provided that the Member of the Management Board has held t he function for at least 12 months prior to cancellation of agreement, with a non -competition clause on the basis of which a Member of the Management Board undertakes that after the termination of the agreement, provided that the Member of the Management B oard performs their functions for at least 3 months, within 6 months from the date of cessation of their duties or termination of the agreement, they shall not engage in any competitive activity, and therefore they shall be entitled to compensation in the total amount calculated as 6 times the monthly fixed salary. Remuneration policy The Remuneration Policy applicable at Alior Bank is the core document for the policy and rules of the remuneration of the Bank’s staff. It includes the rules for the remuneration of individuals who, due to their special role in the Bank’s risk management s ystem, have been covered by a separate regulatory regime in this regard, i.e.: • Material Risk Takers (MRT), including the Management Board, • individuals exercising Control Functions, • staff of the Compliance Department and Audit Department, • staff involved in the offering or distribution of banking, investment and insurance products and services. Objectives of the Policy: • to promote correct and effective management of risks, and discourage from taking excessive risks (exceeding the risk levels acceptable to the Bank) in order to maintain a solid equity base and having regard to the long -term interests of the Bank – its shar eholders and customers, • to promote the Bank’s strategy for sustainable development and prudent risk management policy, • to mitigate conflict of interest, • to maintain transparent relationship between individual results and individual remuneration by focusing on goals linked to responsibilities and actual influence, • to prevention application of designs or methods intended to avoid application Policy, • to ensure that the Bank’s staff act in the best interests of their customers, including provide them with clear and transparent information on services and products offered by the Bank and favoring their own interests or those of the Bank to the detriment of the legitimate interests of clients. The Remuneration Policy is gender neutral. Particularly important for the achievement of the above -mentioned goals is how the Policy addresses MRTs. Main assumptions of the Policy as regards MRTs: • remuneration composed of fixed and variable parts,
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138 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • avoidance of awarding pension benefits which are not defined in advance to MRTs, • committing MRTs to avoid using individual hedging strategies or insurance regarding remuneration and liability in order to alleviate the consequences of incorporation of risks in the remuneration system applicable to them, • except for staff exercising control functions, the total amount of the variable remuneration is based on the assessment of the results of MRT and of their respective organisational unit, as well as results of the Bank within the area of responsibility of t hat person, taking into account the results of the Bank as a whole, • maximum ratio of variable remuneration of MRTs to fixed remuneration: 100%, • at least 50% of variable remuneration of MRTs is an incentive for special care about the long -term welfare of the Bank and consists of financial instruments related to the shares of the Bank. The remaining part of variable remuneration is paid out in cash as Cash Variable remuneration, • at least 40% of MRT variable remuneration, and if MRT variable remuneration is for a particularly high amount, at least 60% of the variable remuneration – is deferred remuneration, • the variable remuneration of the Management Board is adapted to the provisions of the Act of 9 June 2016 on the rules of remuneration of executives of certain companies. Agreements with Members of the Management Board Agreements with Management Board Members, in accordance with the resolution No. 6/2017 of the Extraordinary General Meeting of Shareholders of the Bank of 5 December 2017 on the principles of remunerating Management Board Members (amended by Resolution No. 37/2019 of the Extraordinary General Meeting of the Bank of June 28, 2019), and with the regulations adopted by the Supervisory Board, are: • agreements for the provision of services corresponding to the Act of 9 June 2016 on the rules of remuneration of executives of certain companies, • agreements entered into for the term of service in the Management Board, • agreements with termination notice of: one month, if the Member of the Management Board holds the function for less than 12 months with effect at the end of the calendar month, three months, if the Member of the Management Board holds the function for at least 12 months. • with severance pay at three times the fixed pay if the agreement is cancelled or if terminated by the Bank otherwise than for breach of core responsibilities by the Member of the Management Board, provided that the Member of the Management Board has held the function for at least 12 months prior to cancellation of agreement, • with a non -competition clause on the basis of which a Member of the Management Board undertakes that after the termination of the agreement, provided that the Member of the Management Board performs their functions for at least 3 months, within 6 months fr om the date of cessation of their duties or termination of the agreement, they shall not engage in any competitive activity, and therefore they shall be entitled to compensation in the total amount calculated as 6 times the monthly fixed salary.
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139 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Remuneration of Members of the Management Board and the Supervisory Board of Alior Bank in 2024. Remuneration of Members of Alior Bank’s Management Board paid or payable in 2024: (in thousands of PLN) Cash benefits Share-based payments cleared in cash Other benefits Remuneration charges paid, including ECP Total Specification Period Remuneration paid and payable Other paid Remuneration potentially payable** Remuneration paid and payable Other paid Remuneration potentially payable** Grzegorz Olszewski 01.01.2024 - 15.05.2024 629 1 049 0 481 0 0 2 91 2 251 Radomir Gibała 01.01.2024 - 31.08.2024 1 002 788 225 465 0 0 20 108 2 609 Szymon Kamiński 01.01.2024 - 15.05.2024 608 1 014 0 115 0 0 12 73 1 822 Rafał Litwińczuk 01.01.2024 - 15.05.2024 608 1 014 0 465 0 0 14 89 2 189 Paweł Broniewski 01.01.2024 - 15.05.2024 598 1 014 0 0 0 0 19 87 1 718 Tomasz Miklas 01.01.2024 - 19.12.2024 1 411 338 676 169 0 0 55 127 2 776 Jacek Polańczyk 01.01.2024 - 15.05.2024 608 1 014 0 465 0 0 55 98 2 239 Paweł Tymczyszyn 01.01.2024 - 15.05.2024 608 1 014 0 465 0 0 33 75 2 195 Artur Chołody * 15.05.2024 – 14.08.2024 515 0 0 0 0 0 5 0 520 18.11.2024 – 31.12.2024 Jacek Iljin 15.08.2024 – 31.12.2024 517 0 0 0 0 0 16 98 631 Zdzisław Wojtera 01.09.2024 – 31.12.2024 458 0 0 0 0 0 5 33 497 Wojciech Przybył 01.10.2024 – 31.12.2024 338 0 0 0 0 0 20 33 391 Marcin Ciszewski 01.11.2024 – 31.12.2024 225 0 0 0 0 0 9 26 261 Piotr Żabski 01.11.2024 – 31.12.2024 233 0 0 0 0 0 10 27 270 Bank Management Board (total) 8 357 7 243 901 2 623 0 0 275 968 20 368 Members of the Management Board who ceased to perform their duties before 1.01.2024 0 0 0 385 0 0 0 57 442 Total 8 357 7 243 901 3 008 0 0 275 1 025 20 810 * Artur Chołody – Member of the Supervisory Board temporarily delegated to perform the duties of Vice President of the Management Board (15.05.2024 – 14.08.2024) and Vice President of the Management Board (18.11.2024 – 31.12.2024). ** In the case of variable remuneration, this applies only to potential entitlements granted in 2024 for the year 2023. Employer contributions have been factored into the actual amount.
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140 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Remuneration of Members of Alior Bank’s Supervisory Board in 2024 (in thousands of PLN) Specification Period Remuneration * Remuneration overhead2** Total Filip Majdowski 01.01.2024 - 07.03.2024 53 11 63 Ernest Bejda 01.01.2024 - 26.04.2024 49 16 65 Małgorzata Erlich - Smurzyńska 01.01.2024 - 26.04.2024 91 21 112 Jacek Kij 01.01.2024 - 26.04.2024 83 17 100 Paweł Knop 01.01.2024 - 26.04.2024 91 18 109 Marek Pietrzak 01.01.2024 - 26.04.2024 83 11 95 Dominik Witek 01.01.2024 - 26.04.2024 6 1 7 Artur Kucharski 26.04.2024 – 31.12.2024 189 21 210 Artur Chołody *** 27.04.2024 – 14.05.2024 75 15 90 15.08.2024 – 17.11.2024 Jarosław Mastalerz 26.04.2024 – 06.11.2024 - - - Jan Zimowicz 26.04.2024 – 31.12.2024 - - - Maciej Gutowski 26.04.2024 – 31.12.2024 174 18 192 Radosław Grabowski 26.04.2024 – 31.12.2024 174 30 204 Robert Pusz 17.07.2024 – 31.12.2024 - - - Rafał Janczura 17.07.2024 – 31.12.2024 - - - Paweł Wajda 27.11.2024 – 31.12.2024 - - - Bank Supervisory Board (total) 1 067 180 1 247 * Remuneration does not include reimbursement of travel costs ** Remuneration overhead paid, including ECP *** Artur Chołody – Member of the Supervisory Board temporarily delegated to perform the duties of Vice President of the Management Board (15.05.2024 – 14.08.2024) and Vice President of the Management Board (18.11.2024 – 31.12.2024).
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141 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Diversity policy Being aware that the policy of diversity and equal treatment is a fundamental value of modern society and with respect for a multicultural and diverse society, and in connection with Alior Bank’s respect for the principle of an open and tolerant work environmen t at the Bank are in force: “Human Rights Policy of Alior Bank S.A.” and “Diversity Policy of Alior Bank S.A.”. Alior Bank recognizes the value resulting from diversity, which affects the innovativeness of the organization, which is why it promotes the process of building a diverse group of employees. In implementing the diversity policy, the Bank strengthens innova tion and versatility resulting from balanced and objective views of all employees working for the organization. The Bank endeavors to ensure diversity of the Supervisory Board, in particular in terms of education and professional experience, gender and age of employees, to the extent that ensures a broad spectrum of competencies and views. “Policy of Selection and Suitability Assessment of Members of the Management Board of Alior Bank S.A.” and “Policy of Selection and Suitability Assessment of Members of the Supervisory Board of Alior Bank S.A.” define diversity targets and criteria, includ ing in areas such as education, know -how, age, gender and professional experience. When assessing the suitability of candidates for the Management Board and the Supervisory Board, the Bank takes into account a wide range of characteristics and competences required to perform functions in both bodies of the Bank. When assessing the diversity of Members of the Management Board and Supervisory Board in terms of their education and professional experience, criteria such as: place (country, region) in which educ ation or professional experience is obtained, education profile, university degree, specialization in a specific field, type of entities in which the candidate has held the function or has been employed and employment time may be taken into consideration. The Bank makes efforts to ensure diversity of the Management Board and the Supervisory Board, in particular in terms of education and professional experience, gender and age of the members. It is important to ensure that there is a wide spectrum of views among memb ers of the governing and supervisory bodies. When selecting the composition of the Management Board and the Supervisory Board, the Bank strives to achieve a balance in the area of gender representation in the Company’s bodies, taking into account the minimum share of a minority by gender at the level of 30%. Bank informs about the participation of women and men respectively in the Management Board and in the Supervisory Board of the Bank in the last five years. In 2020-2024, the participation of women and men in the aforementioned statutory bodies of the Bank is as follows: Management Board of Alior Bank 31.12.2020 31.12.2021 31.12.2022 31.12.2023 31.12.2024 Female 2 0 0 0 0 Male 4 7 7 8 5 Supervisory Board of Alior Bank 31.12.2020 31.12.2021 31.12.2022 31.12.2023 31.12.2024 Female 1 2 1 1 0 Male 6 6 7 6 8
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142 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement In line with the provisions of the Policy of Working Environment Free from Undesirable Behaviour, rules in force at the Bank pertain to: counteracting mobbing and harassment, equal treatment of employees irrespective of their sex, age, disability, race, religion, nationality, political opinions, trade union membership, ethnic origin, beliefs, sexual orientation, employment for a definite or indefinite period, full-time or part-time employment, etc. Any action or behavior indicated above is unacceptable and is not tolerated by the Bank.
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143 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement XIII. Auditor information Management Board’s Notice prepared under § 70(1)(7) of the Ordinance of the Minister of Finance of 29 March 2018 on current and periodic notices ... (Journal of Laws 2018, item 757) The Management Board of the Bank hereby notifies, based on the statement of the Supervisory Board of the Bank of February, 17, 2025, that that the selection of PricewaterhouseCoopers Polska Spółka z ograniczoną odpowiedzialnością Audyt Sp.k. as an audit company auditing the annual financial statements of the Bank and the Bank's Capital Group for the financial year ended on December 31, 2024, was carried out in accordance with applicable law and that: • the audit firm and the members of the team conducting the audit have met the requirements for being able to prepare their impartial and independent report on annual audit of financial statements in accordance with the mandatory legislation, professional standards and principles of professional ethics, • the mandatory legislation related to the rotation of the audit firm and of the key independent auditor as well as the mandatory waiting times are complied with, • The Bank has in place a policy for the selection of the audit firm and a policy for the provision to the company by an audit firm, and affiliate thereof, or a member of its network of additional services other than auditing, including services conditionally exempted from the prohibition of provision by the audit firm. Compensation for the auditor The net compensation of the Bank’s auditors PricewaterhouseCoopers Polska Spółka z ograniczoną odpowiedzialnością Audyt Sp.k. for 2024 and KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. for 2023 are presented in the table below: 2024 2023 Auditing of the standalone and consolidated financial statements of Alior Bank 1 281 550 1 080 497 Review of the Financial Statements 451 250 532 087 Verification of consolidation packages 72 200 154 713 other attestation services 1 124 090 598 000 Auditing and other attestation services performed for subsidiaries of Alior Bank 417 750 411 737 Total 3 346 840 2 777 034
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144 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement XIV. Sustainability Statement General disclosures – ESRS 2 BP-1 – General basis for preparation of sustainability statements This sustainability statement for the Alior Bank Group consolidated under the full method covers the period from 1 January 2024 to 31 December 2024. The scope of consolidation is consistent with the consolidated financial statements of the Alior Bank Group. The statement forms part of the management board’s business report in accordance with the Act of 6 December 2024 amending the Accounting Act, the Act on Statutory Auditors, Audit Firms and Public Supervision, and Other Related Acts. This amendment modified the Accounting Act of 29 September 1994 (uniform text, Journal of Laws of 2023, item 120, as amended). The Act implements Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting (Official Journal of the European Union L 322 of 16 December 2022, p. 15). The contents of this statement (hereinafter the “ESG 2024 report” or “report”) comply with the Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU of the European Parliament and of the Council as regards sustainability reporting standards (Official Journal of the European Union of 2023, item 2772, as amended), Annex I, European Sustainability Reporting Standards (ESRS). Alior Bank is the parent company of the Alior Bank Capital Group. Within the Group, subsidiaries carry out leasing activities aimed at business customers at Alior Leasing, individual customers at Alior Leasing Individual. AL Finance specialises in offering insurance to customers with financing and loan agreements. Alior Services Sp. conducts insurance agent activities for eight insurance companies and administers insurance contracts in the name and on behalf of the insurers. Within the Alior Bank Capital Group there is also Alior TFI, whose main activity is the management of the ALIOR SFIO investment fund, the distribution of participation units of which is carried out through Alior Bank S.A. However, the Company is still licensed to manage portfolios which include one or more financial instruments. The remaining companies provide information and computer technology services or are companies that provide services to Group companies. A detailed description of the activities of the Alior Bank Group's subsidiaries can be found in the Alior Bank Group Management Report in section ESRS 2. Structure of the Alior Bank Group as at 31 December 2024 As at 31 December 2024, the Alior Bank SA Capital Group consists of Alior Bank SA as the parent company and subsidiaries in which the Bank holds a majority stake. There was no change in the structure of the Alior Bank SA Capital Group during the reporting period. Subsidiary companies The Bank has assessed its control in accordance with the regulations of IFRS 10 and has determined its status as a parent company to the following entities. All subsidiaries are consolidated using the full
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145 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement method. For a description of the principles for consolidation of subsidiaries, see note 3.2 of the Financial Statement. Company name Description of activity Alior Services sp. z o.o. insurance agent services to 7 insurance companies (contract administration) Alior Leasing sp. z o.o. financing of fixed assets through operational and financial leasing as well as leasing loans Meritum Services ICB SA information and computer technology services and other IT -related activities provision of IT software services Alior TFI SA asset management the Bank's cooperation with its subsidiary Alior TFI concerns mainly distribution of participation units of ALIOR SFIO the company continues to hold a licence to manage portfolios that include one or more financial instruments Corsham sp. z o.o. a company dedicated to venture capital investments includes, as part of its equity investments, minority stakes in entities operating in the area of new solutions on the financial and peri -financial market RBL_VC sp. z o.o. a company dedicated to venture capital investments, was entered in the register of Alternative Investment Company Managers (ZASI) RBL_VC sp. z o.o. ASI spółka komandytowo - akcyjna is an investment vehicle dedicated to making venture capital investments by Alior Bank SA The statement covers the upstream and downstream value chain, as well as own transactions. Each of these levels has been considered in the assessment of impacts, risks, and opportunities. The scope also includes policies, actions, aims, and disclosed measures; however, not all of them apply to or affect each level of the value chain equally. The undertaking has not used the option to omit a specific piece of information corresponding to intellectual property, know -how or the results of innovation, nor the exemption from disclosure of impending developments or matters in course of negotiation u nder Article 19a(3) and Article 29a(3) of Directive 2013/34/EU. The double materiality assessment contains forward -looking information and, as such, assumptions, judgements, projections and forecasts have been used in the identification and measurement of risks, in particular climate risks, and are therefore subject to uncertainty and may be subject to change in the future.
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146 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The sustainability statement has been attested with limited assurance in accordance with the National Standard on Attestation Engagements for Sustainability Reporting 3002 PL and the National Standard on Assurance Engagements Other than Audits and Reviews 3000 (Z) as set out in the International Standard on Assurance Engagements 3000 (revised) ‘Assurance Engagements Other than Audits and Reviews of Historical Financial Information’ based on which the attestation was performed. BP-2 – Disclosures in relation to specific circumstances Pursuant to the ESRS standard, the Alior Bank Group has adopted the following time horizons: • short-term time horizon that coincides with the reporting period (1 year), • medium-term time horizon – 1 to 5 years, • long-term time horizon –5 to 30 years14 • and a perspective that includes all time horizons. No indirect measures have been used for determination of the upstream and downstream value chain. Scope 3 greenhouse gas emissions was determined based on estimated sources disclosed in this statement, including those reported under the SBM -3: Material impacts, risks and opportunities and their interaction with strategy and business model. The sustainability statement has been prepared for the first time in accordance with the ESRS guidelines - no data on changes in the preparation or presentation of information or reporting errors in previous periods can therefore be indicated. In previous years, sustainability data was disclosed based on the GRI standard. The Alior Bank Group includes in this statement information disclosed under Article 8 of Regulation (EU) 2020/852 of the European Parliament and of the Council (8), and Commission delegated regulations that specify this information and the methods of its d isclosure. The Group incorporates information by reference to specific sections of the Management Board’s 2024 Business Report, of which this statement is a part, as well as the Consolidated Financial Statement of Alior Bank Group for the year ended on 31 December 2024. GOV-1 – The role of the administrative, management and supervisory bodies In 2024, the Alior Bank Group was managed and supervised by the bodies of its parent company, i.e. Alior Bank which is a listed company supervised by the Polish Financial Supervision Authority (KNF). The Group is part of the PZU Conglomerate. The Supervisory Board exercises supervision over the operations of the Bank across all areas. The Board oversees the implementation of internal governance at the Bank and assesses its adequacy and effectiveness at least annually. The Board may request info rmation from the Management Board and employees of the Bank on any aspect of the Bank’s activities and may require the Management Board 14 Alior Bank's long-term risk assessment is prepared over a 30-year horizon, so the same perspective is adopted for sustainability impacts, risks and opportunities.
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147 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement to prepare expert reports and opinions in this regard. In order to ensure that its tasks are carried out effectively, the Supervisory Board has the option of using the services of external experts. In addition, the Board is responsible for the approval and supervision of the Alior Group’s strategy and has a supervisory role over the work of the Bank’s Strategy and Development Committee. Alior Bank's Management Board and Supervisory Board oversee the implementation of the sustainability objectives in the business strategy. The President of the Management Board oversees the ESG area and the Vice-President in charge of the risk area is respo nsible for the ESG risk oversight. In addition, the organisation has a Sustainability Committee within which the President of the Management Board and the Vice -President responsible for the risk area are permanent members. The purpose of the Sustainability Committee is to build a platform for dialogue, decision -making and to provide recommendations to the Bank's Management Board regarding the implementation of ESG regulatory requirements and the impact of the Bank's activities on environmental, social and corporate governance issues. In 2024, Members of the Management Board also participated in the double materiality assessment process, being responsible for the valuation of risks and opportunities. The Management Board and the Supervisory Board also reviewed the entire process and the conclusions and results of the double materiality assessment. A standing item was introduced into the cyclical Management Board meetings regarding the monitoring of the preparations for the publication of the Alior Bank Group Sustainability Statement. (The topic is discussed once every fortnight). The Supervisory Board has an Audit Committee, which accepted the results of the double materiality assessment of sustainability issues in January 2025. The Audit Committee was also responsible for selecting the audit firm performing the attestation of sustainability reporting The Board Member responsible for ESG risks was directly involved in the double materiality assessment process. The members of the Management Board and the Supervisory Board did not undertake any additional sustainability learning. As part of the division of its responsibilities, the Supervisory Board appoints an Audit Committee, a Risk Committee, an Appointments and Remuneration Committee and a Strategy and Development Committee from among its members. Alior Bank also establishes permanent or ad hoc advisory, opinion- giving, and decision-making committees through resolutions of the Management Board. The Bank’s key permanent committees include the Capital, Assets, and Liabilities Management Committee (CALCO) and the Credit Committee. The Management Board is responsible for implementing internal governance at the Bank and ensuring compliance. It must also assess and review internal governance at least once a year to adapt it to changes in the Bank’s internal environment and external con ditions. The Management Board reports to the Supervisory Board on the results of its assessment and any significant events that may impact the Bank’s internal governance. Number of Management Board members1 5 Number of executive members 5 Number of non-executive members 0 Number of female members 0 Percentage of female members 0%
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148 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Number of Supervisory Board members 8 Number of executive Supervisory Board members 0 Number of non-executive Supervisory Board members 8 Number of independent Supervisory Board members 3 Percentage of independent Supervisory Board members 38% Number of female Supervisory Board members 0 Percentage of female Supervisory Board members 0% Employee representatives in the Management and Supervisory Boards 0 As of 31 December 2024, the Alior Group Management Board consisted of six members, including a Supervisory Board member temporarily delegated to serve as Vice President of the Bank’s Management Board. The Supervisory Board comprised eight members. The roles and responsibilities of the Management Board and Supervisory Board members are detailed in Section one of this Management Report. Sustainability matters were overseen by the following individuals. The Vice President of the Bank’s Management Board, Mr Piotr Żabski, is responsible for overseeing the Bank’s Head Office units related to HR, PR, communications, CSR, personal data protection, support for the Bank’s governing bodies, strategy, supervision of the Bank’s subsidiaries. He also coordinates the work of the Head Office units responsible for internal audit and compliance risk management. He is also responsible for the day-to-day management of procedures for reporting legal violations, breaches of the Bank’s policies, and business ethics rules, as well as for receiving related reports. In August 2024, Piotr Żabski assumed the position on the Bank’s Management Board previously held by Grzegorz Olszewski until May 2024. Since December 2024, Mr Marcin Ciszewski, Vice President of the Bank’s Management Board, has been coordinating the work of the Bank’s business units in managing material risks in operations and ESG risks. Prior to December 2024, Tomasz Miklas was responsible for ESG risks. There were no employee representatives on the management or supervisory bodies of the Alior Bank Group in 2024. In 2024, the Alior Bank Group did not have a system in place for monitoring and managing material sustainability topics. The parent company’s management board approved the results of the double materiality assessment, and the risks identified in the proces s will be incorporated into Alior Bank’s standard risk assessment system. The organisation has not yet implemented a formal division of responsibilities among the members of the Management Board regarding the material topics identified during the double ma teriality assessment, nor mechanisms for reporting these topics to management and supervisory bodies. Furthermore, in 2024, there was no formal mechanism in place for the Management Board to oversee the setting of objectives related to material impacts, ri sks, and opportunities. Alior Bank’s Management Board and Supervisory Board have continuous access to internal and external development activities to enhance their knowledge and skills in performing their duties. Training and other development methods are utilised to help members understand the Bank’s internal governance, including its organisation, business model, risk profile, and their individual roles in these areas. These development activities are not limited to the business areas for which
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149 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement members are directly responsible. The Bank allocates time, budget, and other resources to support training and development initiatives. Training recommendations are prepared by the HR Division. Sustainability topics were covered in a training course organised in the first months of 2024. This training course was also conducted for new members of the Management Board and Supervisory Board in January 2025. GOV-2 – Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies Supervision of sustainability issues within the Alior Bank Group is the responsibility of the Management Board of the parent company, Alior Bank. Elected members of the Bank’s Management Board are directly responsible for the ESG area and ESG risks. They also chair the Sustainability Committee, which serves as a platform for dialogue within the organisation, uniting sustainability perspectives across various departments. In 2024, Alior Bank also had an ESG Strategy Team (subsequently transformed into the ESG Strategy Unit) within the Strategy Department. Its responsibilities included activating, inspiring, and collaborating with all units across the organisation on sustainability topics, preparing the organisation for sustainability reporting disclosures, and coordinating related regulatory implementations. Furthermore, within the Bank's risk area, the Credit Risk Department is responsible for managing ESG risks, while the Operational Risk Management Department is tasked with identifying and calculating ESG risks within operational risks. In 2024, a double materiality assessment was carried out for the first time at Alior Bank Group. Alior Bank plans to incorporate the material risks identified during the double materiality assessment into the standard risk system. The identified opportunit ies will be considered in the Bank’s strategy for the coming years. It is also planned to introduce processes for monitoring performance and assessing the effectiveness of actions taken in terms of sustainable development. In 2024, the Group conducted its first double materiality assessment to identify material impacts, risks and opportunities. In 2024, Alior Group's Management Board was informed of the results of the double materiality assessment and approved it in December 2024. A member of the Bank's Management Board was directly involved in the process of agreeing the methodology and valuing the risks and opportunities in the double materiality assessment. As part of the double materiality assessment, a workshop on the due diligence process was conducted. Its outcome was communicated to the Management Board as part of the presentation of the results of the double materiality assessment. The Management Board and members of the Supervisory Board are committed to ensuring tha t the Sustainability Statement meets the legal requirements and the sustainability reporting standards, ESRS. A summary of the double materiality assessment process was presented to the Audit Committee and representatives of the employee unions at Alior Bank in January 2025. Moreover, the Supervisory Board will issue an assessment in the form of a resolution on the Financial Statement covering the Management Board Report of the Alior Bank Group for 2024, including the Management Board Report and the Sustainability Statement.
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150 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement GOV-3 – Integration of sustainability -related performance in incentive schemes In 2024, the Alior Bank Group did not implement any incentive programmes or remuneration policies related to sustainability issues, including climate (in terms of greenhouse gas reduction targets), for members of the administrative, management, and supervisory bodies. The Bank’s detailed remuneration policy is designed to support the implementation of its sustainability strategy and promote prudent risk management. Selected managers overseeing specific organisational units at the Bank’s Head Office had defined objectives within particular ESG areas. GOV-4 – Statement on due diligence Basic elements of the due diligence process Section of the sustainability statement Incorporation of due diligence in corporate governance, strategy, and business model GOV-1 – The role of the administrative, management and supervisory bodies GOV-2 – Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model Cooperation with stakeholders impacted by the Alior Group at all key stages of the due diligence process SBM-2 – Interests and views of stakeholders GOV-2 – Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies IRO-1 – Description of the processes to identify and assess material impacts, risks and opportunities Identification and assessment of adverse impacts SBM-2 – Interests and views of stakeholders SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model IRO-1 – Description of the processes to identify and assess material impacts, risks and opportunities Taking actions to mitigate the identified adverse impacts E1-3 – Actions and resources in relation to climate change policies S1-4 – Taking action on material impacts on own workforce, adopting approaches to managing material risks and pursuing material opportunities related to own workforce, and the effectiveness of these actions S2-4 – Taking action on material impacts on workers in the value chain, adopting approaches to managing material risks and pursuing material opportunities related to workers in the value chain, and the effectiveness of these actions S4-4 – Taking action on material impacts on consumers and end- users, adopting approaches to managing material risks and pursuing material opportunities related to consumers and end - users, and the effectiveness of these actions Monitoring the effectiveness of these efforts and reporting on the results SBM-2 – Interests and views of stakeholders
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151 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement GOV-5 – Risk management and internal controls over sustainability reporting The Alior Bank Group has not implemented formal procedures for risk management and internal controls over sustainability reporting. All reporting within the Group is overseen by the Compliance Department, which also periodically monitors compliance with the regulatory requirements of sustainability reporting. The information prepared by the Group for this statement was reviewed in two stages by the data owners, with additional verification in the context of compliance with the definitions carried out by the ESG Strategy Department. In addition, the sustainabili ty statement is submitted to the Bank's Management Board for signature and approved by the Supervisory Board. The organisation is in the process of formalising all control issues within the full ESG reporting area. SBM-1 – Strategy, business model and value chain The Alior Bank Group is a savings and loan institution that offers services to natural and legal persons (including foreigners). It provides services and products across three main segments: business, retail, and treasury operations. Basic products categorised by segment and client Business segment • credit products: • overdraft facilities • working capital facilities • investment loans • operating loans • credit cards • deposit and saving products: • time deposits • transaction and auxiliary accounts • payment services: • cash deposits and withdrawals • bank transfers • treasury products: • currency exchange transactions (including currency forwards) • derivatives • leasing Retail segment • credit products: • cash loans • credit cards • overdraft facilities • real estate loans • deposit and saving products: • time deposits • savings accounts • brokerage products and investment funds • personal accounts
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152 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • payment services: • cash deposits and withdrawals • bank transfers • currency exchange transactions Treasury operations • effects of managing global liquidity and currency positions resulting from the operations of the Group entities In 2024, there were no material changes to the Group’s client groups or the markets it serves. The only change in the markets served in 2024, which does not qualify as material in relation to the scale of operations, was the closure of the branch in Romani a, which employed 52 people. The Group operates in the Republic of Poland, where it employs 7051 people. In 2024, the parent company continued to implement the “Bank for Every Single Day, Bank for the Future” strategy, which has a two -year operational timeline (2023 -2024) and an open strategic perspective. The strategy focuses on business development in line with ESG principles, which the bank plans to integrate into its operations and promote with its partners and clients. The ESG areas included in the Strategy are: • Responsibility for the social processes surrounding the organisation • Readiness to respond to environmental and climate challenges • Application of the highest governance standards. In particular, Alior Bank declares a commitment to: • Ensuring full compliance with sustainability regulations • Implementing a detailed assessment of corporate clients' portfolios in terms of ESG factors • Providing products enabling the use of EU and public administration funds for energy efficiency improvements. In terms of stakeholder relations, the strategy aims for personalised communication based on a deep understanding of the client. This includes, among other things, • a new and inclusive mobile app, with versions tailored to specific audience groups (such as seniors, children, and non-native speakers) • real-time responses to client-generated events • thousands of personalised message variants in active 1:1 communication. One of the expected outcomes of these measures is to build secure digital habits among clients. The development of technology aims to enhance client acquisition across both remote and traditional channels through improved online accessibility, multichannel integration, increased sales efficiency, and reduced credit risk costs. In terms of developing responsibility, the strategy includes, among other things, harnessing high IT efficiency, supported by one of the largest IT teams among Polish banks. One of the key pillars of the technological transformation is security, covering b usiness continuity, trusted technology partnerships, and resilience. Cybersecurity is recognised as a fundamental element of innovative digital banking. Alior Bank acknowledges that the automation of processes and the increasing use of AI could potentially lead to digital exclusion for some clients. Although this issue is not part of the strategy, it is being closely monitored. However, the organisation expects that AI modelling will have a positive impact on clients by improving service quality and ensuring a better alignment of products with client needs.
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153 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement As part of the New Production Model, the IT transformation will be aligned with ESG principles, and employees will be offered “Jobs of the Future” with flexible hybrid working as a key component. The strategy also aims for 52% female representation in mana gement positions. Additionally, it seeks to foster a culture of development by implementing leadership, internship, and talent programmes to nurture individual talent. The organisation aims to take responsibility for the social processes around it by prioritising the health of its employees and clients (facilitating access to co-funded health and psychological support, wellbeing programmes, and promoting preventive healt hcare). Additionally, the organisation is committed to helping Ukrainian citizens in response to Russia’s ongoing aggression against their country. It also plans to address environmental and climate challenges. Supporting clients in the transformation process: • implementing the evaluation of corporate client portfolios for ESG risks • expanding the offering with sustainable banking products • adding products that facilitate the use of EU and public funds. Reducing the Bank’s negative impact on the environment: • developing the Bank’s own zero-carbon energy source: a solar power system by the Data Centre in Krakow • reducing the consumption of energy, paper, and plastics • continuing measurements of scope 1 and 2 emissions, and initiating calculations for scope 3 • engaging employees in building an environment-friendly bank. In its strategy the organisation committed to upholding the highest management standards. Consequently, as stated in the strategy, it plans to: • improve its ESG ratings • maintain high ratings for diversity policies • provide ESG training for all employees • develop ESG competencies in the bank’s key areas • publish its ESG policies and documents, including sustainability reports • formulate a human rights policy and incorporate the Supplier Code of Ethics 15 into the procurement process • strengthen internal ESG risk management and ensure full compliance with sustainability regulations. All of these targets were achieved by the end of 2024. Additionally, Alior Bank joined the Responsible Business Forum partnership and became a signatory of the Diversity Charter. The ‘Bank for Every Single Day, Bank for the Future’ strategy was developed several months before the completion of the double materiality assessment process and therefore does not directly address the material risks, opportunities and impacts identified in the process. 15 Supplier Code of Ethics is available on the bank's website at: https://www.aliorbank.pl/dam/jcr:684db6f4 -da46-4c6e-8bca- 5f22022d2afc/kodeks-etyki-dostawcow-alior-bank.pdf
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154 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Non-financial success metrics: • NPS >45 • employee engagement >65 Significant services (and examples of associated products) offered by companies from the Alior Bank Group Entity and its clients Products and services Alior Bank S.A. Individual clients • Maintaining personal accounts tailored to the needs of specific client groups (e.g. Account for the Young, currency account). • Offering savings accounts and deposits (e.g. Housing Account, Savings Account under the 800+ Family programme). • Extending loans, i.e. offering clients financing and charging interest (e.g. Any Purpose Loan, consolidation loan). • Mortgage lending – providing clients with financing for real estate purchases and related facilities (e.g. garage space) while charging interest, fees, and commissions (e.g. Mega -Mortgage loan, Own Flat in a Great City loan, credit bureau services). • Additional services, including intermediation in the purchase of products and services, as well as handling administrative matters (e.g. e-Office). Micro and small businesses • Day-to-day business services, including account management, transaction processing, intermediation in official processes, and cash services (e.g. iKonto Biznes, business account with payment terminal). • Extending loans – providing clients with financing, credit card insurance, and refinancing (e.g. Business Credit, Selfie Loan). • Servicing deposits, capitalising interest and providing security (e.g. time deposit for new funds for business clients). Businesses • Day-to-day business services, including account management, transaction processing, intermediation in official processes, cash services, solutions for entrepreneurs (e.g. Business Account: Optymalny, Komfort 45, Agrokomfort). • Extending loans, including financing RES projects and agribusiness, comprehensive credit agreement. Housing cooperatives and associations • Account management, extending loans, bulk transaction processing (e.g. Loan with Thermo-modernisation or Renovation Bonus, Investment Loan, Association Account). Others • Trade finance, including guarantees, factoring, lending, and residential escrow accounts. • Treasury products, including hedging clients’ financial performance against fluctuations in market conditions. • Issuing securities and raising capital on their market (e.g. shares listed on the WSE, bonds listed on the Catalyst market). • Foreign currency transactions (e.g. foreign currency account, the eFX Trader platform). Alior Bank S.A. – Brokerage Department • Brokerage account management, intermediation of transactions on the WSE, New Connect, over-the-counter (OTC) market, foreign exchanges. • Individual and bulk investment advice. • Deferred payment services. • Examples of products: Alior Exchange, Alior Trader 2 Platform, Online Quotes 3 and Quotes 5 Pro, Investor Dashboard).
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155 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Alior Bank S.A. – Logistics Department • Sale of real estate through a competitive bidding process without a minimum price. Alior Leasing Sp. z o.o. • Enabling clients to use various assets without requiring immediate purchase, including cars, machinery, equipment, photovoltaic systems, and assets in the agricultural sector. • Providing loans for the purchase of leased items. • Auctions of post-lease vehicles. • Providing a comprehensive monitoring system for the client’s fleet (e.g. Asystent GPS Alior Leasing platform). AL Finance Sp. z o. o. • Intermediation in insurance contracts for leased assets. The Alior Bank Group does not provide products or services that are banned in other EU markets, nor does it conduct business in the fossil fuel sector. More information on expenditure and results in terms of present and anticipated benefits for clients, investors, and other stakeholders is provided in the Consolidated Financial Statement of Alior Bank Group for the year ended on 31 December 2024. The Alior Bank Group provides a range of financial services, which may vary between its member companies.
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156 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Simplified value chain Supply chain: Own business: Business banking: Retail banking: Leasing: Investment funds: Own investments: • Relations with suppliers, such as IT companies, data providers, cloud technologies, cards and payment systems • Employee benefits • Equipment - electronic equipment, furniture, payment terminals • Natural resources/media - water, electricity, renewable energy, fossil fuels • Car fleet • Physical security • Equipment servicing, property protection, facility cleaning • Credit agents • Human resources management • Investor relations and communication with capital market participants (fulfilment of disclosure obligations), • Rental/lease of premises, management and modernisation, granting of property loans • Offering and selling products and services and taking customer instructions • Conducting debt collection activities in relation to customers • Data processing • Day-to-day business services, including account management, transaction processing, intermediation of official processes, cash handling, tools to facilitate business • Trade finance, including guarantees, factoring, lending, housing trust accounts • Currency operations • Risk management • Customer relationship building • Account and account management, lending and borrowing bulk transaction processing • Treasury products, including hedging of clients' financial performance against fluctuating market factors • Brokerage account management, trade intermediation, investment advice: individual and bulk, OTP service • Deposit processing, interest capitalisation, security provision • Currency operations • Risk management • Customer relationship building • Intermediation of insurance contracts for leased assets • Provision of a comprehensive monitoring system for the customer's fleet • Leasing services, including granting loans and organising post-lease auctions • Building customer relationships • Creation of commentaries, forecasts, reports and analyses concerning the economy and financial markets • Asset management • Currency operations • Issuing securities and raising capital on the securities market • Investment in renewable energy from own sources
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157 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement SBM-2 – Interests and views of stakeholders The Alior Bank Group engages with stakeholders according to the Alior Bank S.A. Disclosure Policy governing communication with clients, capital market participants, and the media. In its communication with clients, it also adheres to Responsible Marketing Practices 16. The Group complies with all legal disclosure requirements for listed companies and strives to communicate regularly, timely, and effectively to meet stakeholder expectations. Stakeholder identification was facilitated by the Group’s value chain development, while dialogue (conducted through surveys and in -depth interviews) helped identify and assess impacts, risks, and opportunities as part of the double materiality process. Key stakeholders: • (Existing and future) business and retail clients • Employees • Shareholders • Suppliers and subcontractors • Regulatory and supervisory authorities • Media representatives Clients Clients represent a key stakeholder group for the Group. Their needs and expectations shape the business model and strategies related to products and services, which is why the organisation regularly conducts NPS surveys and has set a related target in its strategy. The Group respects the confidentiality of client information and manages this issue through measures such as its Security Policy, as well as ongoing technological advancements and safeguards. Client communication channels: • Helpline – it provides daily support for the bank’s existing and potential clients (both individual and business clients), offering information and transaction services, including the acceptance of complaints and suggestions. It operates with full availability during selected hours, while support for security-related issues and unlocking access to online banking or the mobile application is available 24/7. • Email – a contact form available on the website and dedicated mailbox; also used for informative purposes. • CIB – messages in the electronic channels Alior Online and Alior Mobile, as well as Alior Kantor and Alior Kantor Mobile; information and transaction services for existing Alior Bank clients. This channel is used for responding to enquiries following a pri or offline analysis of the issue, and accepting product service requests from clients. • Social media – specifically, Facebook, Messenger and X. Social media are used to provide information to existing and potential clients. 16 Responsible marketing practices are available on the bank's website at: https://www.aliorbank.pl/dam/jcr:88d545df -dbed-46d9-9a54- d76c85cd8775/zasady-odpowiedzialnego-marketingu.pdf
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158 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • CzatBOT – available on both www.aliorbank.pl and after logging into Alior Online and Alior Mobile – serves an informative function for current and potential Alior Bank clients. • BOT (voice) – streamlines information processes (e.g. branch opening hours, unblocking banking access) and transaction processes (e.g. loan repayment, loan overpayment, account balance/history). Employees The Bank conducts employee opinion and engagement surveys to reinforce the positive aspects of the jobs created and identify areas for improvement. Employee communication channels: • monthly one -hour meetings with President at the bank’s head office, which employees can attend either in person or remotely. During these meetings, employees have the opportunity to ask questions directly to President. • Company newsletter and intranet. • Representatives of the HR division, empowered to handle matters related to social dialogue, take positions on behalf of the bank and mitigate related risks. They also keep the Management Board informed of ongoing discussions with employees. The HR division is equipped with the necessary tools to collect employee feedback on an ongoing basis, communicate Board decisions to staff, and conduct training, including on applicable policies. • The e-NPS surveys provide valuable insights that enable fact-based decisions to be made about necessary measures in the employee area. • Trade unions – Alior Bank is home to six trade unions, including two company -level and four inter-company organisations, which represent employees and advocate for their interests. Communication with the unions is conducted with respect for the principles of social coexistence, good faith, and legal compliance. Both parties are guided by mutual trust, aiming to reach compromises during negotiations. In cases of significant differences, they seek consensus on at least the most fundamental issues. The ongoing dialogue between the trade unions and the bank, as an employer, focuses on reaching agreements on matters that are economically and socially important, both on a macro and micro scale. Shareholders and media The Investor Relations and Corporate Governance Department is responsible for ensuring transparent and reliable communication with capital market participants. The Group acknowledges the critical importance of providing equal access to information for these stakeholders. Shareholders and media communication channels: • The website, available in both Polish and English, provides information that may impact the Bank’s share price. Stakeholders can access current, interim, quarterly, and annual reports, performance presentations, and download editable files containing the most relevant data about the Bank at any time. • Performance conferences – organised on the day of the publication of interim reports by the Investor Relations and Corporate Governance Department, in collaboration with the Communications and CSR Department. The main participants are journalists, investor s, and stock market analysts. During these conferences, members of the Bank’s Management Board
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159 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement present the financial results, discuss the most significant events of the period, and answer any questions. The Bank publishes recordings of the conferences on its website. • Meetings, teleconferences, and videoconferences with investors and analysts – attended by members of the Management Board and representatives from departments responsible for risk management, capital strategy, controlling, and other areas. The goal is to d iscuss Alior Bank’s current financial and operational situation, present the operating strategy, and outline the planned directions for further development. • Investor conferences – attended by representatives of the Bank serve a similar informative function to other such meetings. Suppliers and subcontractors Relationships with suppliers are business -oriented, and communication primarily takes place through bank representatives. This is particularly true for the Supplier Qualification process, which introduces the organisation’s cooperation standards and expect ations while collecting necessary information to verify factors such as financial stability, so -called red flags (publicly available information), checklists (including the Polish Financial Supervision Authority’s Public Warning List), taxpayer status, and any incidents that may threaten banking activities. When entering into a partnership, suppliers sign a Statement of Business Ethics, committing to adhere to certain ethical standards. Like other stakeholders, business partners can also use the bank’s website as a communication channel. Regulatory and supervisory authorities The Alior Bank Group submits all legally required information to the regulatory authorities. This is a special category of stakeholders for whom the documents published by the Ban, such as policies, regulations, reports, procedures, and standards (including ethical standards), are crucial for verifying the implementation of the guidelines provided to the organisation. Key stakeholders In 2024, the Alior Bank Group was working on a new organisational strategy and did not have data to report regarding the extent to which stakeholder views had been incorporated into the document. The double materiality assessment process involved a dialogue with stakeholders, including bank staff. They provided feedback on their perception of Alior Bank’s environmental, social, and corporate governance impact through a questionnaire. A human rights due diligence workshop was also conducted with representatives from various employee groups. Through these efforts it was possible to identify the organisation's impacts, risks, and opportunities across the three ESG pillars. The most relevant topics and sub-topics for reporting were selected for inclusion in the sustainability disclosures within this statement, which is part of the Alior Bank S.A. Group Business Report prepared by the Management Board. The outcomes of this process were presented to the M anagement Board and received its approval. The results of the materiality analysis and the reporting topics were communicated to trade union representatives. The publication of this statement serves as a means of informing all stakeholders (both internal and external) about Alior Bank’s sustainability efforts.
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160 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model The Alior Bank Group, through its business activities in the financial sector, identified 57 impacts (both issues that are materially affected by the Group and issues that materially affect the Group's operations) positive and negative, of which 19 were co nsidered material. 4 time perspectives were used to assess the impacts: • short (1 year) • medium (1 to 5 years) • long (from 5 years to 30 years) or • all time horizons. The following were also defined: • their type: positive or negative • the timing of their impact: actual or potential (i.e. likely to occur in the future) • place in the value chain: downstream, upstream, own operations, entire value chain and • related stakeholders. 278 risks were identified, of which 10 were categorised as material, including 4 in area E, 5 in area S and 1 as an own indicator in G, not included in the ESRS. Each risk was measured over the following horizons: one year, five years and 30 years, assuming balance sheet constancy. Two parameters were assigned to each risk: the total amount of potential loss/cost and the probability of occurrence. Three significant opportunities were identified in Area E. The Group identifies material impacts, risks, and opportunities in the following areas: • climate change in relation to greenhouse gas emissions and their mitigation in connection with the business model and strategy • own employees and those in the value chain, such as in the areas of information processing, privacy rights, whistleblowing, and health and safety • consumers and end users (clients) with a focus on protecting their consumer rights • ethical business conduct, especially regarding anti-corruption, which also plays a significant role in the organisation’s business model. Due to the Group's business sector and strategy, an own indicator - cybersecurity - was also added.
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161 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Material impacts, risks, and opportunities identified by the Alior Bank Group in the double materiality assessment process Sustainability matters Impacts Type of impact Location in the value chain Time perspective Risks and opportunities Type Location in the value chain Time perspective Topic Sub-topic Sub-sub-topics E1 Climate change Climate change adaptation No material impacts - - - Threats of violent events caused by extreme weather and long -term climate change, potentially leading to reduction in asset value (primarily mortgage-backed real estate), increase in production costs, and disruptions to business operations (physical risks) Risk Whole value chain Long E1 Climate change Climate change adaptation No material impacts - - - Incurring costs and allocating resources for emissions reporting, particularly across all scope 3 categories (political and legal transition risks) Risk Whole value chain Medium E1 Climate change Climate change adaptation No material impacts - - - A need to replace products and services in the supply chain with low - carbon alternatives Risk Whole value chain Long E1 Climate change Climate change adaptation No material impacts - - - Costs associated with implementing low-emission technologies in own operations Risk Lower level Long E1 Climate change Climate change adaptation No material impacts - - - Increase in revenue through expanding the range of green products, including issuing green bonds and offering green financing Opportunity Lower level Medium E1 Climate change Climate change adaptation No material impacts - - - Increase in revenue through developing an ESG investment fund Opportunity Lower level Medium
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162 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Sustainability matters Impacts Type of impact Location in the value chain Time perspective Risks and opportunities Type Location in the value chain Time perspective Topic Sub-topic Sub-sub-topics E1 Climate change Climate change adaptation No material impacts - - - Expanding ESG advisory services within the brokerage department Opportunity Lower level Medium E1 Climate change Climate change mitigation Impact on climate change through greenhouse gas emissions resulting from the Group’s operations Actual negative Whole value chain Long No material risks or opportunities - - - E1 Climate change Climate change mitigation environmental impact through offering green loans to micro businesses, small and medium -sized enterprises, housing cooperatives and associations, planning to enhance energy efficiency through infrastructure upgrades Potential positive Lower level Long No material risks or opportunities - - - E1 Climate change Climate change mitigation Impact on improving air quality, reducing the carbon footprint, and contributing to the fight against climate change through making available the opportunity to apply for a Clean Air Programme loan or grant Potential positive Lower level Long No material risks or opportunities - - - E1 Climate change Climate change mitigation Financing the purchase of equipment and installations designed to reduce energy consumption and produce Potential positive Lower level Long No material risks or opportunities - - -
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163 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Sustainability matters Impacts Type of impact Location in the value chain Time perspective Risks and opportunities Type Location in the value chain Time perspective Topic Sub-topic Sub-sub-topics renewable energy through Ekorata offering S1 Own workforce Working conditions Secure employment No material impacts Additional costs of recruiting and onboarding new staff due to employee turnover Risk Own operations Short S1 Own workforce Working conditions Social dialogue Impact on labour law compliance due to insufficient communication regarding the possibility of reporting violations Potential negative Own operations Short No material risks or opportunities - - - S1 Own workforce Working conditions Freedom of association, the existence of works councils and the information, consultation and participation rights of workers Impact on good working conditions through regular employee satisfaction surveys, which help identify and address employee needs and areas for improvement, fostering a more engaged and satisfied team Actual positive Own operations Short No material risks or opportunities - - - S1 Own workforce Working conditions Health and safety Impact on occupational health and safety through the development and implementation of internal health and safety regulations, building awareness of safe behaviour in the workplace Actual positive Own operations Medium No material risks or opportunities - - -
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164 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Sustainability matters Impacts Type of impact Location in the value chain Time perspective Risks and opportunities Type Location in the value chain Time perspective Topic Sub-topic Sub-sub-topics and premedical assistance skills S1 Own workforce Equal treatment and opportunities for all Diversity Impact on equal development opportunities regardless of gender due to the lack of representation of women at the highest levels of management Actual negative Own operations Medium Reputational risks related to the lack of diversity among members of the highest management Risk Own operations Medium S1 Own workforce Other work-related rights Privacy Impact on privacy rights due to data breaches and the misuse of client or employee information Potential negative Own operations Medium No material risks or opportunities - - - S2 Workers in the value chain Working conditions Social dialogue Impact related to breaches by partner facility staff and intermediaries due to a lack of (initial and refresher) training on the Whistleblowing and Whistleblower Protection Policy and the Code of Ethics Potential negative Higher level Short No material risks or opportunities - - - S4 Consumers and end- users Information-related impacts for consumers and/or end-users Privacy Impact on the privacy of client information through the development and implementation of a Security Policy and other applicable procedures Actual positive Lower level All time horizons No material risks or opportunities - - -
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165 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Sustainability matters Impacts Type of impact Location in the value chain Time perspective Risks and opportunities Type Location in the value chain Time perspective Topic Sub-topic Sub-sub-topics S4 Consumers and end- users Information-related impacts for consumers and/or end-users Access to (quality) information Impact on access to information through the development and implementation of a Disclosure Policy which, with regard to communication with clients, capital market participants and the media, sets out the principles of safe and friendly communication and defines its terms and forms Actual positive Lower level All time horizons Risk related to increased consumer protection in the future in terms of access to information, including in relation to the construction of contractual clauses (such as free credit sanctions, mortgage contracts indexed to foreign currencies) Risk Lower level Medium S4 Consumers and end- users Personal safety of consumers and/or end-users Security of a person Impact on the financial security of customers through measures related to customer complaints Potential negative Lower level Short No material risks or opportunities - - - S4 Consumers and end- users Social inclusion of consumers and/or end-users Access to products and services Impact on greater social inclusion in financial services through the creation of no-fee bank accounts, microcredit and microfinance available to all, including low-income and young people Actual positive Lower level Short Portfolio risk related to failures in transmission infrastructure Risk Whole value chain All time horizons S4 Consumers and end- users Social inclusion of consumers and/or end-users Access to products and services Impact related to digital exclusion from customer financial services through over-automation of Potential negative Lower level Short No material risks or opportunities - - -
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166 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Sustainability matters Impacts Type of impact Location in the value chain Time perspective Risks and opportunities Type Location in the value chain Time perspective Topic Sub-topic Sub-sub-topics customer service processes and use of AI S4 Consumers and end- users Social inclusion of consumers and/or end-users Responsible marketing practices Impact on responsible marketing practices through the development and implementation of an Anti-Misselling Policy that prevents misselling practices Actual positive Lower level All time horizons The risk of increased consumer protection in the future in terms of responsible marketing practices, such as the way in which investment fund participation certificates are distributed Risk Lower level Medium S4 Consumers and end- users Social inclusion of consumers and/or end-users Responsible marketing practices Impact on the protection of customers' rights through the Client Ombudsman, who independently assesses the bank's actions and ensures reliable verification of compliance with contracts, which builds trust and transparency in customer relations Actual positive Lower level All time horizons No material risks or opportunities - - - G1 Business conduct Protection of whistle- blowers Impact on the right to report violations and the protection of whistleblowers, ensured by the Whistleblowing and Whistleblower Protection Policy and its complementary Procedures for Reporting Unwanted Behaviour at Alior Bank Actual positive Whole value chain Short No material risks or opportunities - - -
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167 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Sustainability matters Impacts Type of impact Location in the value chain Time perspective Risks and opportunities Type Location in the value chain Time perspective Topic Sub-topic Sub-sub-topics S.A., regulating in detail the employer's actions upon receiving reports of irregularities in the work environment G1 Business conduct Corruption and bribery Prevention and detection including training Iimpact on preventing corruption and bribery through employee training in anti-fraud procedures and ethical conduct Potential positive Own operations All time horizons No material risks or opportunities - - - Entity specific Cyber security No material impacts Cybersecurity risk from a DDoS attack, which could result in system unavailability for clients Risk Whole value chain All time horizons
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168 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Material risks identified through the double materiality assessment will be integrated into Alior Bank’s standard risk assessment system. Additionally, the identified opportunities will be incorporated into the bank’s new strategy. The Group did not have the data to report the ongoing financial impact of material risks and opportunities on its financial position, performance, and cash flows for 2024. There was also no analysis of the resilience of the strategy and business model in terms of addressing material impacts and risks, as well as leveraging material opportunities. An analysis of the resilience of the strategy and business model to climate -related risks was conducted in Q2 2024 as part of a double materiality assessment to identify risks and opportunities. All risks identified through this process, along with their respective positions in the value chain, were considered. A high emissions climate scenario based on the Intergovernmental Panel on Climate Change's Climate Change 2021 The Physical Science Basis and the International Energy Agency's Net Zero Emissions by 2050 climate scenario were analysed in detail. Based on the resilience analysis, climate change -related physical and transition risks have been identified. The Group is aware of its potential impact on climate change and the associated risks and opportunities. The resilience analysis highlighted relevant climate risks, including the potential impact of sudden weather events such as floods, fires, and storms. These events could damage or destroy mortgage - backed properties or disrupt the operations of borrowers through damage to transmission infrastructure, leading to a decrease in the value of collaterals and an increase in credit risk. Such situations will necessitate additional loan loss provisions. Moreover, the financial sector faces specific challenges and responsibilities regarding the GHG Protocol. While direct emissions are generally lower in the financial sector compared to industrial sectors, indirect emissions can be significant due to the financing of various projects and economic activities. Investment is a key Scope 3 emission category for the financial sector. Banks, investment funds, and other financial institutions must account for emissions rela ted to investments in companies and projects. Adapting to climate change under a net -zero scenario it is necessary to acknowledge the risks associated with accurately calculating and reporting the carbon footprint, ensuring the effective implementation of low-carbon technologies by borrowers, and adapting products and services across the value chain to a low -carbon model. At the same time, opportunities related to the development of sustainable products and ESG advisory services are also recognised. The analysis was based on data such as: • Net Zero Emissions by 2050 Scenario of the International Energy Agency (although it is one of several available scenarios, it was selected because UE law aims for its implementation) • High Emissions Scenario (SSP5 -8.5 ‘Fossil Fuel Driven Development’) IPCC Climate Change 2021 Report: The Physical Science Basis • specific guidance for the financial sector under the GHG Protocol (Accounting and Reporting Standard for the Financial Industry), which helps financial institutions measure and manage emissions associated with their investment activities. It includes metho dologies for assessing emissions in investment and credit portfolios • specific guidance for corporations under the GHG Protocol (Corporate Accounting and Reporting Standard) • Partnership for Carbon Accounting Financials database.
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169 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement This statement applies to all individuals employed with the Alior Bank Group. The Group recognises the following categories of employees within own workforce: • individuals employed by the Bank on at least a 0.4 FTE basis (“employees”), • individuals who are not employees but perform specific tasks or work for the Bank (“contracted individuals” – service providers). Additionally, Alior Bank S.A. recognises the category of partners – sole traders. Alior Bank considers individual clients to be the end -users significantly impacted by the organisation, and categorises them into deposit clients and credit clients. This group may include financially disadvantaged individuals who are particularly vulnerable to privacy issues or impacts of marketing and sales strategies. Value chain employees who may be significantly impacted by Alior Bank are the employees of the Bank’s partner facilities. They are included within the scope of this statement. In accordance with its Human Rights Policy, Alior Bank S.A. firmly opposes all forms of modern slavery, forced labour, or torture. The Bank strictly adheres to minimum age regulations for its employees and ensures that all rights related to personal dignity are protected. The Alior Bank Group has identified four risks arising from its impacts and dependencies related to own workforce, including two material: the risk of additional costs associated with recruiting and onboarding new staff due to employee turnover (employee r esignations), and the reputational risk of insufficient diversity among members of senior management in the short term. The latter is linked to the negative impact on equal development opportunities, particularly the lack of female representation in the se nior management, which could affect gender equality in the medium term. The Alior Bank Group did not identify any opportunities or risks arising from the impact or dependence on employees within the value chain. The organisation also did not identify any m aterial impacts on its own workforce resources that may result from transition plans. The Bank operates exclusively in Poland, in accordance with applicable regulations, and does not engage in activities deemed to carry significant risk of forced, compulsory, or child labour. The Bank is not aware of any exposure to harm for individuals wit h specific characteristics, working in particular contexts, or engaged in certain activities. The Alior Bank Group did not identify child labour, forced or compulsory labour, including those associated with specific geographic areas or services offered, as a material issue. The double materiality assessment identified one potential negative impact related to employees within the value chain: the possibility of violations by employees of partner facilities and intermediaries due to a lack of training on the Whistleblowing and Whistleblower Protection Policy and the Code of Ethics (insufficient initial and refresher training). The topic has been identified as material. The double materiality assessment identified three consumer -related risks: risk associated with increased consumer protection in the future in terms of access to information, including those associated with the design of contractual clauses (such as free c redit sanctions, mortgage contracts indexed to foreign currencies), portfolio risks associated with transmission infrastructure failures and risks associated with increased consumer protection in the future in terms of responsible marketing practices, such as the way in which investment fund participation certificates are distributed. No material opportunities related to clients and end -users were identified. As for consumers, the double materiality assessment identified two potential negative impacts:
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170 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • related to digital exclusion of clients from financial services due to excessive automation of the customer service process and the use of AI, which can be considered systemic. This includes deaf individuals (who encounter barriers when trying to open an account with the Bank due to an IVR message and the abse nce of an online sign language interpreter), and blind individuals (who face challenges in managing their accounts through digital channels or, while they may be able to manage their accounts, they experience significant difficulties due to the lack of an internal policy requiring technology production units to adhere to accessibility guidelines during the implementation phase of digital services) • impact on the financial security of customers through customer complaints handling The following actual positive impacts of the Bank were identified: • impact on access to information through the development and implementation of a Disclosure Policy governing communication with clients, capital market participants, and the media which sets out the principles for safe and friendly communication and defines its terms and forms • impact on the protection of clients’ rights through a Client Ombudsman, who independently evaluates the Bank’s actions and verifies compliance with agreements, fostering trust and transparency in client relationships • impact on greater social inclusion in financial services by offering free bank accounts, microloans, and microfinance solutions accessible to all, including low -income individuals and young people; • impact on responsible marketing practices by developing and implementing Anti -Unfair Sales Policy to prevent misselling practices, in a continuous perspective. Actions taken by the Alior Bank Group companies that enable the above positive impacts include: • ensuring transparent and understandable communication by simplifying the texts of agreements and regulations, • establishing a dedicated unit within the company to address service accessibility issues, alongside conducting research on user needs and exploring ways to adapt the offer accordingly, • introducing new functionalities in Alior Leasing’s online Client Zone. In 2024, Alior Bank implemented measures to help the organisation identify and better understand selected groups of vulnerable clients. The bank conducted research on how children aged 7 -13 and seniors use its mobile app. The analysis of the results highli ghted security concerns within both groups. Alior Bank did not conduct analyses on other groups of vulnerable consumers. No similar research was carried out at Alior Leasing in 2024. As this statement is the first to be prepared in accordance with the ESRS standards, it is not possible to identify changes in the entity’s material impacts, risks, and opportunities compared to the previous reporting period. In this statement the Alior Bank Group reports one entity specific disclosure (not covered by the ESRS) related to ESRS G1 business conduct concerning cybersecurity risks, going beyond the topics covered in AR1 16 ESRS.
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171 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement IRO-1 – Description of the processes to identify and assess material impacts, risks and opportunities In 2024, the Alior Bank Group identified material sustainability issues through a double materiality assessment process. In preparing the assessment, the Group examined its activities within the context of key impact areas, risks and opportunities. Interna l documents, ongoing and planned activities, organisational practices, as well as legal regulations and other sources indicating potential topics, were reviewed. To determine the scope of impact, the Group also developed its value chain with input from representatives of various departments. The resources and activities mapped in the chain were expanded to include key stakeholder relationships. As this was the first time this process was conducted, it is not possible to identify changes from previous assessments. The assessment covered the full list of sustainability issues included in the ESRS requirements, including these related to climate change, biodiversity and ecosystems, water, pollution, the circular economy, business conduct, own workforce, workers in the value chain, affected communities, and consumers and end-users. The impact workshop on due diligence looked at the impact on human rights along the value chain. The impact materiality perspective examined four parameters: the scale of the impact (how significant the impact is), its extent, probability, and irreversibility. Meanwhile, the risks and opportunities materiality perspective focused on two parameters: the financial scale (potential loss or gain) and probability. The parameters were assessed based on quantitative or qualitative thresholds, determined from a variety of sources, using a five-step scale. For risks and opportunities, the assessment was adjusted to align with the Group’s existing evaluation system. Issues that were identified as being “on the borderline” of these thresholds were analysed individually, and the organisation then decided whether to include them in the catalogue of material issues or not. The assessment involved representatives from management responsible for ESG, strategy, risk, compliance, human resources, health and safety, sales, purchasing, products, partner relations. A Client Ombudsman and a trade union representative were also engag ed throughout the process. Additionally, external experts in environmental protection, social impact, and non -financial reporting supported the Group in conducting the materiality assessment. To identify and assess impacts, risks, and opportunities, the Group’s portfolio, including investments, loans, and other financial assets, was specifically analysed. This analysis enabled the Group to determine the extent to which its financial activities contribute to positive or negative impacts, such as greenhouse gas emissions, biodiversity impacts, or working conditions in the value chain. Additionally, environmental and social issues can directly affect the value of the bank’s portfolio, presenting bo th risks and opportunities. Regulatory changes, climate -related risks, and evolving customer and investor expectations can influence asset valuation, credit risk levels, and the bank’s reputation. The analysis focused on the 20 business activities (accordi ng to the codes in the Polish Classification of Business Activities) in which the Group has the largest share of funding, as well as the scale of the mortgage and leasing business. For the Group, an essential element in identifying negative impacts is dialogue with stakeholders, primarily employees and key stakeholders, as part of the due diligence process. Ensuring the completeness of the stakeholder list involved several steps. The process began with reviewing the list of stakeholders identified in the previous reporting process. In the next step, stakeholders were identified across various stakeholder groups.
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172 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Anonymous questionnaires and in-depth interviews were used to gather feedback and draw conclusions from stakeholders, helping to better understand the Group’s impacts as well as associated risks and opportunities. The surveys included both closed and open -ended questions, covering all areas of sustainability. The issues addressed were identified based on the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. Primarily, human rights outlined in the Universal Declaration of Human Rights and the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work were considered. During the analysis, special attention was given to considering issues relevant from an environmental per spective. A total of 249 responses were analysed from employees of the Alior Bank Capital Group. The 143 responses from external stakeholders included business and retail customers, shareholders, representatives of regulatory bodies, and representatives of non-governmental organisations. To deepen the analysis, five interviews were conducted with representatives from the business partners, suppliers, and employees. Based on the results of the surveys and interviews, both negative and positive impacts of the bank, along with associated risks and opportunities, were identified. In the assessment of criteria such as scale, scope, irreversibility, and probability, particular attention was given to the relationship with specific human rights. Individual clients were not included in the survey due to restrictions imposed by the Polish Financial Supervision Authority and GDPR. However, their interests were considered during the analysis through various methods, including the involvement of the Cl ient Ombudsman, the analysis of issues reported to the complaints department, and the review of penalties imposed on the bank or investigations initiated by the Competition and Consumer Protection Office due to violations of consumer interests. The Group is aware of its potential impact on climate change, biodiversity, and ecosystems, as well as the associated risks and opportunities, primarily through its financial products. A high-emissions climate scenario based on the Intergovernmental Panel on Climate Change’s “Climate Change 2021: The Physical Science Basis” and the International Energy Agency’s “Net Zero Emissions by 2050” scenario was analysed in detail. Based on this analysis, both physical and transition climate -related risks were identified. The time horizons for these risks are outlined in the table “Material Risks and Opportunities Identified by the Alior Bank Group in the Double Materiality Process” (for further information, including the scenario analysis, see SBM-3). The Group assessed the identified environmental and social impacts based on criteria aligned with established standards: severity and probability for negative impacts, and scale, scope, and probability for positive impacts. A hierarchy of materiality was established using qualitative and quantitative thresholds. To determine these thresholds, the Group relied on studies by international organisations (e.g. the World Bank), industry best practices (primarily in the financial sector), competitor non -financial reports, sector studies, academic research, regulatory standards, and various analytical tools (e.g. Wage Indicator, Aqueduct Water Risk Atlas). Additionally, statistical data from sources such as the Central Statistical Office of Poland and Eurostat was considered. IRO-2 – Disclosure requirements in ESRS covered by the undertaking’s sustainability statement The entity identified information requiring disclosure on material impacts, risks, and opportunities by assigning them to thematic units during the double materiality assessment process and applying predefined thresholds.
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173 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement List of the Disclosure Requirements complied with in preparing the sustainability statement DR No. Disclosure Requirement Page No. BP-1 General basis for preparation of the sustainability statements 146 BP-2B Disclosures in relation to specific circumstances 148 GOV-1 The role of the administrative, management and supervisory bodies 148 GOV-2 Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies 151 GOV-3 Integration of sustainability- related performance in incentive schemes 152 GOV-4 Statement on sustainability due diligence 153 GOV-5 Risk management and internal controls over sustainability reporting 153 SBM-1 Market position, strategy, business model(s) and value chain 153 SBM-2 Interests and views of stakeholders 159 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model(s) 162 IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities 173 IRO-2 Disclosure requirements in ESRS covered by the undertaking’s sustainability statement 175 E1-1 Transition plan for climate change mitigation 229 E1 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 160 E1 IRO-1 Description of the processes to identify and assess material climate -related impacts, risks and opportunities 173 E1-2 Policies related to climate change mitigation and adaptation 229 E1-3 Actions and resources in relation to climate change policies Metrics and targets 229 E1-4 Targets related to climate change mitigation and adaptation 230 E1-5 Energy consumption and mix 230 E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions 232 E1-7 GHG removals and GHG mitigation projects financed through carbon credits 235 E1-8 Internal carbon pricing 235 E1-9 Anticipated financial effects from material physical and transition risks and potential climate-related opportunities omitted (236 explanation) S1 SBM-2 Interests and views of stakeholders 159
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174 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement DR No. Disclosure Requirement Page No. S1 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 162 S1-1 Policies related to own workforce 236 S1-2 Processes for engaging with own workers and workers’ representatives about impacts 240 S1-3 Processes to remediate negative impacts and channels for own workers to raise concerns 241 S1-4 Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions 242 S1-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities 243 S1-6 Characteristics of the undertaking’s employees 243 S1-7 Characteristics of non-employee workers in the undertaking’s own workforce 245 S1-8 Collective bargaining coverage and social dialogue omitted S1-9 Diversity metrics 245 S1-10 Adequate wages 246 S1-11 Social protection omitted S1-12 Persons with disabilities omitted S1-13 Training and skills development metrics 246 S1-14 Health and safety metrics 247 S1-15 Work-life balance metrics 247 S1-16 Compensation metrics (pay gap and total compensation) 248 S1-17 Incidents, complaints and severe human rights impacts omitted S2 SBM-2 Interests and views of stakeholders 159 S2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 162 S2-1 Policies related to value chain workers 249 S2-2 Processes for engaging with value chain workers about impacts 252 S2-3 Processes to remediate negative impacts and channels for value chain workers to raise concerns 252
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175 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement DR No. Disclosure Requirement Page No. S2-4 Taking Action on material impacts, and approaches to mitigating material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions and approaches 253 S2-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities 254 S3-1 Policies related to affected communities omitted S3-2 Processes for engaging with affected communities about impacts omitted S3-3 Processes to remediate negative impacts and channels for affected communities to raise concerns omitted S3-4 Taking action on material impacts, and approaches to mitigating material risks and pursuing material opportunities related to affected communities, and effectiveness of those actions and approaches omitted S3-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities omitted S4 SBM-2 Interests and views of stakeholders 157 S4 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 160 S4-1 Policies related to consumers and end-users 254 S4-2 Processes for engaging with consumers and end-users about impacts 257 S4-3 Processes to remediate negative impacts and channels for consumers and end- users to raise concerns 258 S4-4 Taking action on material impacts on consumers and end -users, and approaches to managing material risks and pursuing material opportunities related to consumers and end users, and effectiveness of those actions 261 S4-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities 262 G1 GOV-1 The role of the administrative, supervisory and management bodies 148 G1 IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities 170 G1-1 Corporate culture and business conduct policies and corporate culture 262 G1-2 Management of relationships with suppliers omitted G1-3 Prevention and detection of corruption and bribery 267 G1-4 Confirmed incidents of corruption or bribery 269 G1-5 Political influence and lobbying activities omitted
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176 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement DR No. Disclosure Requirement Page No. G1-6 Payment practices omitted G1 Entity - specific Cybersecurity 269
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177 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Disclosure Requirement Datapoint No. Datapoint SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page No. ESRS 2 GOV-1 21 d Board's gender diversity x x 150 ESRS 2 GOV-1 21 e Percentage of board members who are independent x 150 ESRS 2 GOV-4 30 Statement on due diligence x 153 ESRS 2 SBM-1 40 d (i) Involvement in activities related to fossil fuel activities x x x Not applicable ESRS 2 SBM-1 40 d (ii) Involvement in activities related to chemical production x x Not applicable ESRS 2 SBM-1 40 d (iii) Involvement in activities related to controversial weapons x x Not applicable ESRS 2 SBM-1 40 d (iv) Involvement in activities related to cultivation and production of tobacco x Not applicable ESRS E1-1 14 Transition plan to reach climate neutrality by 2050 x 230 ESRS E1-1 16 g Undertakings excluded from Paris-aligned Benchmarks x x Not applicable ESRS E1-4 34 GHG emission reduction targets x x x 231 ESRS E1-5 38 Energy consumption from fossil sources disaggregated by x Not applicable List of datapoints in cross-cutting and topical standards that derive from other EU legislation
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178 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Disclosure Requirement Datapoint No. Datapoint SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page No. sources (only high climate impact sectors) ESRS E1-5 37 Energy consumption and mix x 231 ESRS E1-5 40–43 Energy intensity associated with activities in high climate impact sectors x Not applicable ESRS E1-6 44 Gross Scope 1, 2, 3 and Total GHG emissions x x x 233 ESRS E1-6 53–55 Gross GHG emissions intensity x x x 233 ESRS E1-7 56 GHG removals and carbon credits x 236 ESRS E1-9 66 1. Exposure of the benchmark portfolio to climate-related physical risks x Not applicable ESRS E1-9 66 a Disaggregation of monetary amounts by acute and chronic physical risk x Not applicable ESRS E1-9 66 c Location of significant assets at material physical risk x Not applicable ESRS E1-9 67 c Breakdown of the carrying value of its real estate assets by energy-efficiency classes x Not applicable List of datapoints in cross-cutting and topical standards that derive from other EU legislation
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179 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Disclosure Requirement Datapoint No. Datapoint SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page No. ESRS E1-9 69 Degree of exposure of the portfolio to climate- related opportunities x Not applicable ESRS E2-4 28 Amount of each pollutant listed in Annex II of the E- PRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil x Not applicable ESRS E3-1 9 Water and marine resources x Not applicable ESRS E3-1 13 Dedicated policy x Not applicable ESRS E3-1 14 Sustainable oceans and seas x Not applicable ESRS E3-4 28 c Total water recycled and reused x Not applicable ESRS E3-4 29 Total water consumption in m 3 per net revenue on own operations x Not applicable ESRS 2 SBM 3- E4 16 a (i) biodiversity sensitive areas x Not applicable ESRS 2 SBM 3- E4 16 b Impact on terrestrial ecosystems x Not applicable List of datapoints in cross-cutting and topical standards that derive from other EU legislation
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180 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Disclosure Requirement Datapoint No. Datapoint SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page No. ESRS 2 SBM 3- E4 16 c Endangered species x Not applicable ESRS E4-2 24 b Sustainable land / agriculture practices or policies x Not applicable ESRS E4-2 24 c Sustainable oceans / seas practices or policies x Not applicable ESRS E4-2 24 d Policies to address deforestation x Not applicable ESRS E5-5 37 d Non-recycled waste x Not applicable ESRS E5-5 39 Hazardous waste and radioactive waste x Not applicable ESRS 2 SBM-3- S1 14 f Risk of incidents of forced labour x 238 ESRS 2 SBM-3- S1 14 g Risk of incidents of child labour x 251 ESRS S1-1 20 Human rights policy commitments x 237 ESRS S1-1 21 2. Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8 x 237 List of datapoints in cross-cutting and topical standards that derive from other EU legislation
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181 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Disclosure Requirement Datapoint No. Datapoint SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page No. ESRS S1-1 22 processes and measures for preventing trafficking in human beings x 237 ESRS S1-1 23 workplace accident prevention policy or management system x 237 ESRS S1-3 32 c grievance/complaints handling mechanisms x 242 ESRS S1-14 88 b, c Number of fatalities and number and rate of work- related accidents x x 248 ESRS S1-14 88 e Number of days lost to injuries, accidents, fatalities or illness x 248 ESRS S1-16 97 a Unadjusted gender pay gap x x 249 ESRS S1-16 97 b Excessive CEO pay ratio x 250 ESRS S1-17 103 a Incidents of discrimination x Not applicable ESRS S1-17 104 a Non-respect of UNGPs on Business and Human Rights and OECD Guidelines x x Not applicable ESRS 2 SBM-3- S2 11 b Significant risk of child labour or forced labour in the value chain x 163 List of datapoints in cross-cutting and topical standards that derive from other EU legislation
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182 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Disclosure Requirement Datapoint No. Datapoint SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page No. ESRS S2-1 17 Human rights policy commitments x 250 ESRS S2-1 18 Policies related to value chain workers x 250 ESRS S2-1 19 Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines x x 251 ESRS S2-1 19 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8 x 251 ESRS S2-4 36 Human rights issues and incidents connected to its upstream and downstream value chain x 254 ESRS S3-1 16 Human rights policy commitments x Not applicable ESRS S3-1 17 Non-respect of UNGPs on Business and Human Rights, ILO principles or OECD guidelines x x Not applicable List of datapoints in cross-cutting and topical standards that derive from other EU legislation
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183 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Disclosure Requirement Datapoint No. Datapoint SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page No. ESRS S3-4 36 Human rights issues and incidents x Not applicable ESRS S4-1 16 Policies related to consumers and end-users x 255 ESRS S4-1 17 Non-respect of UNGPs on Business and Human Rights and OECD guidelines x x 257 ESRS S4-4 35 Human rights issues and incidents x 261 ESRS G1-1 10 b United Nations Convention against Corruption x 267 ESRS G1-1 10 d Protection of whistle- blowers x 264 ESRS G1-4 24 a Fines for violation of anti- corruption and anti-bribery laws x x 269 ESRS G1-4 24 b Standards of anti- corruption and anti- bribery x 270 List of datapoints in cross-cutting and topical standards that derive from other EU legislation
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184 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Environmental information Disclosures pursuant to Article 8 of the Regulation (EU) 2020/852 (Taxonomy Regulation) 0. Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation PLN million Total environmentally sustainable assets by reference to turnover KPI by reference to turnover (%) KPI by reference to capital expenditure (%) % coverage (over total assets) % of assets excluded from the numerator for GAR calculation (Article 7(2) and (3) and Section 1.1.2 of Annex V) % of assets excluded from the denominator for GAR calculation (Article 7(1) and Section 1.2.4 of Annex V) Main KPI Green asset ratio (GAR) stock 389,40 0,55% 0,60% 72,78% 22,31% 25,22% Total environmentally sustainable activities by reference to turnover KPI by reference to turnover (%) KPI by reference to capital expenditure (%) % coverage (over total assets) % of assets excluded from the numerator for GAR calculation (Article 7(2) and (3) and Section 1.1.2 of Annex V) % of assets excluded from the denominator for GAR calculation (Article 7(1) and Section 1.2.4 of Annex V) Additional KPIs GAR (flow)* 0,00 0,00% 0,00% 0,00% N/A N/A Trading book N/A N/A N/A Financial guarantees 9,87 0,00% 0,00% Assets under management N/A N/A N/A Fees and commissions income N/A N/A N/A * The key performance indicators were calculated as gross carrying amount of new exposure, i.e. new GAR assets.
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185 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 1. Assets for the calculation of GAR by reference to turnover a b c d e f g h i j k l m n o p q r Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds 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 49823,71 20863,75 386,48 0,00 0,00 3,45 26,62 2,92 0,00 2,92 0,00 0,00 0,00 0,00 0,16 0,00 0,00 0,00 2 Financial 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 0,00 0,00 3 Credit institutions 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 4 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 0,00 0,00 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 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 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 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 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 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 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 0,00 12 of which asset 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 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 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 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 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 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 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 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 0,00 20 Non-financial undertakings 766,71 89,31 25,69 0,00 0,00 3,45 26,62 2,92 0,00 2,92 0,00 0,00 0,00 0,00 0,16 0,00 0,00 0,00 21 Loans and advances 766,71 89,31 25,69 0,00 0,00 3,45 26,62 2,92 0,00 2,92 0,00 0,00 0,00 0,00 0,16 0,00 0,00 0,00 22 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 0,00 0,00 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 0,00 24 Households 49057,00 20774,44 360,79 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 25 of which loans collateralised by residential immovable property 21221,74 20405,13 360,79 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 26 of which building renovation loans 369,31 369,31 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 28 Local governments 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 0,00 0,00 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 0,00 0,00 30 Other local governments 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 0,00 0,00 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 0,00 0,00 32 Other assets excluded from the numerator for GAR calculation (covered in the denominator) 21185,40 33 Financial and Non-financial undertakings 17253,40 34 SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations 17103,78 35 Loans and advances 17103,78 36 of which loans collateralised by commercial immovable property 0,00 37 of which building renovation loans 0,00 38 Debt securities 0,00 39 Equity instruments 0,00 40 Non-EU country counterparties not subject to NFRD disclosure obligations 149,62 41 Loans and advances 149,62 42 Debt securities 0,00 43 Equity instruments 0,00 44 Derivatives 275,00 45 On demand interbank loans 287,00 46 Cash and cash-related assets 435,00 47 Other assets (e.g. goodwill, commodities etc.) 2935,00 48 Total GAR assets 71009,11 20863,75 386,48 0,00 0,00 3,45 26,62 2,92 0,00 2,92 0,00 0,00 0,00 0,00 0,16 0,00 0,00 0,00 49 Other assets not covered for GAR calculation 23945,00 50 Central governments and Supranational issuers 18928,00 51 Central banks exposure 4795,00 52 Trading book 222,00 53 Total assets 94954,11 20863,75 386,48 0,00 0,00 3,45 26,62 2,92 0,00 2,92 0,00 0,00 0,00 0,00 0,16 0,00 0,00 0,00 55 Financial guarantees 988,18 47,87 31,45 0,00 0,02 0,00 27,54 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,31 0,00 0,00 0,00 56 Assets under management N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 57 Of which debt securities N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 58 Of which equity instruments N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 31.12.2024 Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations Water and marine resources (WMR)Climate Change Adaptation (CCA) Total [gross] carrying amount Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy- aligned) Climate Change Mitigation (CCM) 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) PLN million Circular economy (CE) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which environmentally sustainable (Taxonomy- aligned)
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186 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement s t u v w x z aa ab ac ad ae af Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of PProceeds 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 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 20890,53 389,40 0,00 0,00 6,37 2 Financial 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 3 Credit institutions 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 4 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 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 6 Equity instruments 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 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 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 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 11 Equity instruments 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 12 of which asset 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 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 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 15 Equity instruments 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 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 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 19 Equity instruments 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 20 Non-financial undertakings 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 116,09 28,61 0,00 0,00 6,37 21 Loans and advances 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 116,09 28,61 0,00 0,00 6,37 22 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 23 Equity instruments 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 24 Households 20774,44 360,79 0,00 0,00 0,00 25 of which loans collateralised by residential immovable property 20405,13 360,79 0,00 0,00 0,00 26 of which building renovation loans 369,31 0,00 0,00 0,00 0,00 27 of which motor vehicle loans 0,00 0,00 0,00 0,00 0,00 28 Local governments 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 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 30 Other local governments 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 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 32 Other assets excluded from the numerator for GAR calculation (covered in the denominator) 33 Financial and Non-financial undertakings 34 SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations 35 Loans and advances 36 of which loans collateralised by commercial immovable property 37 of which building renovation loans 38 Debt securities 39 Equity instruments 40 Non-EU country counterparties not subject to NFRD disclosure obligations 41 Loans and advances 42 Debt securities 43 Equity instruments 44 Derivatives 45 On demand interbank loans 46 Cash and cash-related assets 47 Other assets (e.g. goodwill, commodities etc.) 48 Total GAR assets 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 20890,53 389,40 0,00 0,00 6,37 49 Other assets not covered for GAR calculation 50 Central governments and Supranational issuers 51 Central banks exposure 52 Trading book 53 Total assets 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 20890,53 389,40 0,00 0,00 6,37 55 Financial guarantees 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 75,71 31,45 0,00 0,02 0,00 56 Assets under management N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 57 Of which debt securities N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 58 Of which equity instruments N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations Of which environmentally sustainable (Taxonomy-aligned) Of which towards taxonomy relevant sectors (Taxonomy-eligible)PLN million Pollution (PPC) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which environmentally sustainable (Taxonomy- aligned) Biodiversity and Ecosystems (BIO) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which environmentally sustainable (Taxonomy- aligned) TOTAL (CCM + CCA + WMR + CE + PPC + BIO)
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187 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement ag ah ai aj ak al am an ao ap aq ar as at au av aw ax Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds 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 48636,80 18903,10 197,27 0,00 0,00 41,01 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 Financial 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 0,00 0,00 3 Credit institutions 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 4 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 0,00 0,00 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 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 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 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 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 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 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 0,00 12 of which asset 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 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 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 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 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 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 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 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 0,00 20 Non-financial undertakings 807,80 122,91 44,14 0,00 0,00 41,01 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 21 Loans and advances 807,80 122,91 44,14 0,00 0,00 41,01 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 22 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 0,00 0,00 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 0,00 24 Households 47829,00 18780,18 153,13 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 25 of which loans collateralised by residential immovable property # # 18258,54 153,13 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 26 of which building renovation loans # # 521,65 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 28 Local governments 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 0,00 0,00 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 0,00 0,00 30 Other local governments 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 0,00 0,00 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 0,00 0,00 32 Other assets excluded from the numerator for GAR calculation (covered in the denominator) 15496,96 33 Financial and Non-financial undertakings 10508,96 34 SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations 10281,11 35 Loans and advances 10281,11 36 of which loans collateralised by commercial immovable property 0,00 37 of which building renovation loans 0,00 38 Debt securities 0,00 39 Equity instruments 0,00 40 Non-EU country counterparties not subject to NFRD disclosure obligations 100,70 41 Loans and advances 100,70 42 Debt securities 0,00 43 Equity instruments 0,00 44 Derivatives 336,00 45 On demand interbank loans 1136,00 46 Cash and cash-related assets 454,00 47 Other assets (e.g. goodwill, commodities etc.) 3189,16 48 Total GAR assets 64133,76 18903,10 197,27 0,00 0,00 41,01 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 49 Other assets not covered for GAR calculation 18274,00 50 Central governments and Supranational issuers 16263,00 51 Central banks exposure 1618,00 52 Trading book 393,00 53 Total assets 82407,76 18903,10 197,27 0,00 0,00 41,01 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 55 Financial guarantees 129,91 27,70 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 56 Assets under management N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 57 Of which debt securities N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 58 Of which equity instruments N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations 31.12.2023 Total [gross] carrying amount Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Water and marine resources (WMR) Circular economy (CE) 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 towards taxonomy relevant sectors (Taxonomy-eligible) Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) PLN million
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188 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement ay az ba bb bc bd be bf bg bh bi bj bk Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of PProceeds 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 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 18903,10 197,27 0,00 0,00 41,01 2 Financial 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 3 Credit institutions 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 4 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 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 6 Equity instruments 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 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 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 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 11 Equity instruments 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 12 of which asset 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 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 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 15 Equity instruments 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 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 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 19 Equity instruments 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 20 Non-financial undertakings 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 122,91 44,14 0,00 0,00 41,01 21 Loans and advances 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 122,91 44,14 0,00 0,00 41,01 22 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 23 Equity instruments 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 24 Households 18780,18 153,13 0,00 0,00 0,00 25 of which loans collateralised by residential immovable property 18258,54 153,13 0,00 0,00 0,00 26 of which building renovation loans 521,65 0,00 0,00 0,00 0,00 27 of which motor vehicle loans 0,00 0,00 0,00 0,00 0,00 28 Local governments 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 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 30 Other local governments 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 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 32 Other assets excluded from the numerator for GAR calculation (covered in the denominator) 33 Financial and Non-financial undertakings 34 SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations 35 Loans and advances 36 of which loans collateralised by commercial immovable property 37 of which building renovation loans 38 Debt securities 39 Equity instruments 40 Non-EU country counterparties not subject to NFRD disclosure obligations 41 Loans and advances 42 Debt securities 43 Equity instruments 44 Derivatives 45 On demand interbank loans 46 Cash and cash-related assets 47 Other assets (e.g. goodwill, commodities etc.) 48 Total GAR assets 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 18903,10 197,27 0,00 0,00 41,01 49 Other assets not covered for GAR calculation 50 Central governments and Supranational issuers 51 Central banks exposure 52 Trading book 53 Total assets 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 18903,10 197,27 0,00 0,00 41,01 55 Financial guarantees 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 27,70 0,00 0,00 0,00 0,00 56 Assets under management N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 57 Of which debt securities N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 58 Of which equity instruments N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations 31.12.2023 Pollution (PPC) Biodiversity and Ecosystems (BIO) TOTAL (CCM + CCA + WMR + CE + PPC + BIO) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy-aligned) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which environmentally sustainable (Taxonomy- aligned) PLN million
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189 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 1. Assets for the calculation of GAR by reference to capital expenditure a b c d e f g h i j k l m n o p q r Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds 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 49823,71 20986,35 423,41 0,00 19,14 10,22 27,48 0,78 0,00 0,00 0,00 0,00 0,00 0,00 0,78 0,00 0,00 0,00 2 Financial 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 0,00 0,00 3 Credit institutions 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 4 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 0,00 0,00 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 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 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 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 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 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 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 0,00 12 of which asset 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 0,00 0,00 13 Loans and advances 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 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 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 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 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 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 0,00 20 Non-financial undertakings 766,71 211,91 62,62 0,00 19,14 10,22 27,48 0,78 0,00 0,00 0,00 0,00 0,00 0,00 0,78 0,00 0,00 0,00 21 Loans and advances 766,71 211,91 62,62 0,00 19,14 10,22 27,48 0,78 0,00 0,00 0,00 0,00 0,00 0,00 0,78 0,00 0,00 0,00 22 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 0,00 0,00 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 0,00 24 Households 49057,00 20774,44 360,79 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 25 of which loans collateralised by residential immovable property 21221,74 20405,13 360,79 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 26 of which building renovation loans 369,31 369,31 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 28 Local governments 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 0,00 0,00 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 0,00 0,00 30 Other local governments 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 0,00 0,00 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 0,00 0,00 32 Other assets excluded from the numerator for GAR calculation (covered in the denominator) 21185,40 33 Financial and Non-financial undertakings 17253,40 34 SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations 17103,78 35 Loans and advances 17103,78 36 of which loans collateralised by commercial immovable property 0,00 37 of which building renovation loans 0,00 38 Debt securities 0,00 39 Equity instruments 0,00 40 Non-EU country counterparties not subject to NFRD disclosure obligations 149,62 41 Loans and advances 149,62 42 Debt securities 0,00 43 Equity instruments 0,00 44 Derivatives 275,00 45 On demand interbank loans 287,00 46 Cash and cash-related assets 435,00 47 Other assets (e.g. goodwill, commodities etc.) 2935,00 48 Total GAR assets 71009,10 20986,35 423,41 0,00 19,14 10,22 27,48 0,78 0,00 0,00 0,00 0,00 0,00 0,00 0,78 0,00 0,00 0,00 49 Other assets not covered for GAR calculation 23945,00 50 Central governments and Supranational issuers 18928,00 51 Central banks exposure 4795,00 52 Trading book 222,00 53 Total assets 94954,10 20986,35 423,41 0,00 19,14 10,22 27,48 0,78 0,00 0,00 0,00 0,00 0,00 0,00 0,78 0,00 0,00 0,00 55 Financial guarantees 988,18 30,54 9,87 0,00 0,00 0,00 19,11 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,03 0,00 0,00 0,00 56 Assets under management N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 57 Of which debt securities N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 58 Of which equity instruments N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations 31.12.2024 PLN million Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Water and marine resources (WMR) Circular economy (CE) Total [gross] carrying amount Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) 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 towards taxonomy relevant sectors (Taxonomy-eligible)
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190 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement s t u v w x z aa ab ac ad ae af Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of PProceeds 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 0,04 0,00 0,00 0,00 0,08 0,00 0,00 0,00 21014,72 424,19 0,00 19,14 10,22 2 Financial 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 3 Credit institutions 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 4 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 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 6 Equity instruments 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 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 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 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 11 Equity instruments 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 12 of which asset 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 13 Loans and advances 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 15 Equity instruments 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 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 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 19 Equity instruments 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 20 Non-financial undertakings 0,04 0,00 0,00 0,00 0,08 0,00 0,00 0,00 240,29 63,40 0,00 19,14 10,22 21 Loans and advances 0,04 0,00 0,00 0,00 0,08 0,00 0,00 0,00 240,29 63,40 0,00 19,14 10,22 22 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 23 Equity instruments 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 24 Households 20774,44 360,79 0,00 0,00 0,00 25 of which loans collateralised by residential immovable property 20405,13 360,79 0,00 0,00 0,00 26 of which building renovation loans 369,31 0,00 0,00 0,00 0,00 27 of which motor vehicle loans 0,00 0,00 0,00 0,00 0,00 28 Local governments 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 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 30 Other local governments 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 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 32 Other assets excluded from the numerator for GAR calculation (covered in the denominator) 33 Financial and Non-financial undertakings 34 SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations 35 Loans and advances 36 of which loans collateralised by commercial immovable property 37 of which building renovation loans 38 Debt securities 39 Equity instruments 40 Non-EU country counterparties not subject to NFRD disclosure obligations 41 Loans and advances 42 Debt securities 43 Equity instruments 44 Derivatives 45 On demand interbank loans 46 Cash and cash-related assets 47 Other assets (e.g. goodwill, commodities etc.) 48 Total GAR assets 0,04 0,00 0,00 0,00 0,08 0,00 0,00 0,00 21014,72 424,19 0,00 19,14 10,22 49 Other assets not covered for GAR calculation 50 Central governments and Supranational issuers 51 Central banks exposure 52 Trading book 53 Total assets 0,04 0,00 0,00 0,00 0,08 0,00 0,00 0,00 21014,72 424,19 0,00 19,14 10,22 55 Financial guarantees 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 49,68 9,87 0,00 0,00 0,00 56 Assets under management N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 57 Of which debt securities N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 58 Of which equity instruments N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations 31.12.2024 PLN million Biodiversity and Ecosystems (BIO)Pollution (PPC) Of which environmentally sustainable (Taxonomy-aligned)Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) TOTAL (CCM + CCA + WMR + CE + PPC + BIO) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
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191 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement ag ah ai aj ak al am an ao ap aq ar as at au av aw ax Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds 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 48636,80 19114,31 352,82 0,00 0,02 173,91 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 Financial 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 0,00 0,00 3 Credit institutions 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 4 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 0,00 0,00 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 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 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 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 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 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 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 0,00 12 of which asset 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 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 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 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 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 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 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 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 0,00 20 Non-financial undertakings 807,80 334,13 199,68 0,00 0,02 173,91 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 21 Loans and advances 807,80 334,13 199,68 0,00 0,02 173,91 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 22 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 0,00 0,00 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 0,00 24 Households 47829,00 18780,18 153,13 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 25 of which loans collateralised by residential immovable property # # 18258,54 153,13 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 26 of which building renovation loans # # 521,65 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 28 Local governments 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 0,00 0,00 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 0,00 0,00 30 Other local governments 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 0,00 0,00 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 0,00 0,00 32 Other assets excluded from the numerator for GAR calculation (covered in the denominator) 15496,96 33 Financial and Non-financial undertakings 10508,96 34 SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations 10281,11 35 Loans and advances 10281,11 36 of which loans collateralised by commercial immovable property 0,00 37 of which building renovation loans 0,00 38 Debt securities 0,00 39 Equity instruments 0,00 40 Non-EU country counterparties not subject to NFRD disclosure obligations 100,70 41 Loans and advances 100,70 42 Debt securities 0,00 43 Equity instruments 0,00 44 Derivatives 336,00 45 On demand interbank loans 1136,00 46 Cash and cash-related assets 454,00 47 Other assets (e.g. goodwill, commodities etc.) 3189,16 48 Total GAR assets 64133,76 19114,31 352,82 0,00 0,02 173,91 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 49 Other assets not covered for GAR calculation 18274,00 50 Central governments and Supranational issuers 16263,00 51 Central banks exposure 1618,00 52 Trading book 393,00 53 Total assets 82407,76 19114,31 352,82 0,00 0,02 173,91 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 55 Financial guarantees 129,91 32,03 0,74 0,00 0,07 0,35 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 56 Assets under management N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 57 Of which debt securities N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 58 Of which equity instruments N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations 31.12.2023 PLN million 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 towards taxonomy relevant sectors (Taxonomy-eligible) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Total [gross] carrying amount Climate Change Mitigation (CCM) Circular economy (CE) Of which environmentally sustainable (Taxonomy-aligned) Climate Change Adaptation (CCA) Water and marine resources (WMR)
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192 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement ay az ba bb bc bd be bf bg bh bi bj bk Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of PProceeds 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 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 19114,31 352,82 0,00 0,02 173,91 2 Financial 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 3 Credit institutions 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 4 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 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 6 Equity instruments 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 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 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 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 11 Equity instruments 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 12 of which asset 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 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 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 15 Equity instruments 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 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 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 19 Equity instruments 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 20 Non-financial undertakings 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 334,13 199,68 0,00 0,02 173,91 21 Loans and advances 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 334,13 199,68 0,00 0,02 173,91 22 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 23 Equity instruments 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 24 Households 18780,18 153,13 0,00 0,00 0,00 25 of which loans collateralised by residential immovable property 18258,54 153,13 0,00 0,00 0,00 26 of which building renovation loans 521,65 0,00 0,00 0,00 0,00 27 of which motor vehicle loans 0,00 0,00 0,00 0,00 0,00 28 Local governments 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 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 30 Other local governments 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 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 32 Other assets excluded from the numerator for GAR calculation (covered in the denominator) 33 Financial and Non-financial undertakings 34 SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations 35 Loans and advances 36 of which loans collateralised by commercial immovable property 37 of which building renovation loans 38 Debt securities 39 Equity instruments 40 Non-EU country counterparties not subject to NFRD disclosure obligations 41 Loans and advances 42 Debt securities 43 Equity instruments 44 Derivatives 45 On demand interbank loans 46 Cash and cash-related assets 47 Other assets (e.g. goodwill, commodities etc.) 48 Total GAR assets 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 19114,31 352,82 0,00 0,02 173,91 49 Other assets not covered for GAR calculation 50 Central governments and Supranational issuers 51 Central banks exposure 52 Trading book 53 Total assets 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 19114,31 352,82 0,00 0,02 173,91 55 Financial guarantees 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 32,03 0,74 0,00 0,07 0,35 56 Assets under management N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 57 Of which debt securities N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 58 Of which equity instruments N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations 31.12.2023 PLN million Of which environmentally sustainable (Taxonomy-aligned)Of which environmentally sustainable (Taxonomy- aligned) Of which environmentally sustainable (Taxonomy- aligned) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Pollution (PPC) Biodiversity and Ecosystems (BIO) TOTAL (CCM + CCA + WMR + CE + PPC + BIO)
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193 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 2. GAR sector information by reference to turnover a b c d e f g h i j k l m n o p PLN million Of which environmentally sustainable (CCM) PLN million Of which environmentally sustainable (CCM) PLN million Of which environmentally sustainable (CCA) PLN million Of which environmentally sustainable (CCA) PLN million Of which environmentally sustainable (WMR) PLN million Of which environmentally sustainable (WMR) PLN million Of which environmentally sustainable (CE) PLN million Of which environmentally sustainable (CE) 1 C20.14 0,91 0,00 0,00 0,00 0,00 0,00 0,00 0,00 2 C21.20 0,04 0,00 0,00 0,00 0,00 0,00 0,00 0,00 3 D35.11 20,44 1,50 0,28 0,00 0,00 0,00 0,03 0,00 4 D35.12 9,79 3,25 0,00 0,00 0,00 0,00 0,13 0,00 5 E38.12 2,36 0,00 0,00 0,00 0,00 0,00 0,00 0,00 6 F41.20 31,36 1,32 0,00 0,00 0,00 0,00 0,00 0,00 7 F42.11 23,42 18,88 23,42 0,00 0,00 0,00 0,00 0,00 8 J60.10 0,94 0,73 2,92 2,92 0,00 0,00 0,00 0,00 9 M72.19 0,04 0,01 0,00 0,00 0,00 0,00 0,00 0,00 Breakdown by sector - NACE 4 digits level (code and label) Carrying amount [gross] Water and marine resources (WMR) Non-financial corporations (subject to NFRD) Circular economy (CE) Non-financial corporations (subject to NFRD) SMEs and other NFCs not subject to NFRD Carrying amount [gross] Carrying amount [gross] SMEs and other NFCs not subject to NFRD Non-financial corporations (subject to NFRD) SMEs and other NFCs not subject to NFRD Climate Change Mitigation (CCM) Carrying amount [gross] Carrying amount [gross] Carrying amount [gross] Carrying amount [gross] Carrying amount [gross] Climate Change Adaptation (CCA) Non-financial corporations (subject to NFRD) SMEs and other NFCs not subject to NFRD q r s t u v w x y z aa ab PLN million Of which environmentally sustainable (PPC) PLN million Of which environmentally sustainable (PPC) PLN million Of which environmentally sustainable (BIO) PLN million Of which environmentally sustainable (BIO) PLN million Of which environmentally sustainable (CCM + CCA + WMR + CE + PPC + BIO) PLN million Of which environmentally sustainable (CCM + CCA + WMR + CE + PPC + BIO) 1 C20.14 0,00 0,00 0,00 0,00 0,91 0,00 2 C21.20 0,00 0,00 0,00 0,00 0,04 0,00 3 D35.11 0,00 0,00 0,00 0,00 20,76 1,50 4 D35.12 0,00 0,00 0,00 0,00 9,91 3,25 5 E38.12 0,00 0,00 0,00 0,00 2,36 0,00 6 F41.20 0,00 0,00 0,00 0,00 31,36 1,32 7 F42.11 0,00 0,00 0,00 0,00 46,85 18,88 8 J60.10 0,00 0,00 0,00 0,00 3,86 3,65 9 M72.19 0,00 0,00 0,00 0,00 0,04 0,01 Breakdown by sector - NACE 4 digits level (code and label) TOTAL (CCM + CCA + WMR + CE + PPC + BIO) Non-financial corporations (subject to NFRD) SMEs and other NFCs not subject to NFRD Carrying amount [gross] Carrying amount [gross] Biodiversity and Ecosystems (BIO) Non-financial corporations (subject to NFRD) SMEs and other NFCs not subject to NFRD Carrying amount [gross] Carrying amount [gross] Pollution (PPC) Non-financial corporations (subject to NFRD) SMEs and other NFCs not subject to NFRD Carrying amount [gross] Carrying amount [gross]
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194 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 2. GAR sector information by reference to capital expenditure a b c d e f g h i j k l m n o p PLN million Of which environmentally sustainable (CCM) PLN million Of which environmentally sustainable (CCM) PLN million Of which environmentally sustainable (CCA) PLN million Of which environmentally sustainable (CCA) PLN million Of which environmentally sustainable (WMR) PLN million Of which environmentally sustainable (WMR) PLN million Of which environmentally sustainable (CE) PLN million Of which environmentally sustainable (CE) 1 C20.14 42,57 30,08 0,45 0,45 0,00 0,00 0,05 0,00 2 C21.20 0,02 0,00 0,00 0,00 0,00 0,00 0,00 0,00 3 D35.11 99,68 9,68 0,60 0,33 0,00 0,00 0,08 0,00 4 E38.22 1,08 0,38 1,08 0,00 0,00 0,00 0,64 0,00 5 F42.11 25,36 8,19 25,36 0,00 0,00 0,00 0,00 0,00 6 F43.22 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 7 H49.32 3,33 0,01 0,00 0,00 0,00 0,00 0,00 0,00 8 L68.10 29,18 14,28 0,00 0,00 0,00 0,00 0,00 0,00 9 M72.19 10,70 0,00 0,00 0,00 0,00 0,00 0,00 0,00 Non-financial corporations (subject to NFRD) SMEs and other NFCs not subject to NFRD Non-financial corporations (subject to NFRD) SMEs and other NFCs not subject to NFRD Non-financial corporations (subject to NFRD) SMEs and other NFCs not subject to NFRD Non-financial corporations (subject to NFRD) SMEs and other NFCs not subject to NFRD Climate change mitigation (CCM) Climate change adaptation (CCA) Water and marine resources (WMR) Circular economy (CE) Breakdown by sector - NACE 4 digits level (code and label) Carrying amount [gross] Carrying amount [gross]Carrying amount [gross] Carrying amount [gross] Carrying amount [gross] Carrying amount [gross] Carrying amount [gross] Carrying amount [gross] q r s t u v w x y z aa ab PLN million Of which environmentally sustainable (PPC) PLN million Of which environmentally sustainable (PPC) PLN million Of which environmentally sustainable (BIO) PLN million Of which environmentally sustainable (BIO) PLN million Of which environmentally sustainable (CCM + CCA + WMR + CE + PPC + BIO) PLN million Of which environmentally sustainable (CCM + CCA + WMR + CE + PPC + BIO) 1 C20.14 0,04 0,00 0,00 0,00 43,10 30,53 2 C21.20 0,00 0,00 0,00 0,00 0,02 0,00 3 D35.11 0,00 0,00 0,08 0,00 100,44 10,01 4 E38.22 0,00 0,00 0,00 0,00 2,80 0,38 5 F42.11 0,00 0,00 0,00 0,00 50,72 8,19 6 F43.22 0,00 0,00 0,00 0,00 0,00 0,00 7 H49.32 0,00 0,00 0,00 0,00 3,33 0,01 8 L68.10 0,00 0,00 0,00 0,00 29,18 14,28 9 M72.19 0,00 0,00 0,00 0,00 10,70 0,00 TOTAL (CCM + CCA + WMR + CE + PPC + BIO)Pollution (PPC) Non-financial corporations (subject to NFRD) Carrying amount [gross] Carrying amount [gross] Non-financial corporations (subject to NFRD) SMEs and other NFCs not subject to NFRD Non-financial corporations (subject to NFRD) SMEs and other NFCs not subject to NFRD Breakdown by sector - NACE 4 digits level (code and label) SMEs and other NFCs not subject to NFRD Biodiversity and ecosystems (BIO) Carrying amount [gross]Carrying amount [gross] Carrying amount [gross] Carrying amount [gross]
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195 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 3. GAR KPI stock by reference to turnover a b c d e f g h i j k l m n o p q Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling GAR - covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not for trading, eligible for GAR calculation 41,88% 0,78% 0,00% 0,00% 0,01% 0,05% 0,01% 0,00% 0,01% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 2 Financial undertakings - - - - - - - - - - - - - - - - - 3 Credit institutions - - - - - - - - - - - - - - - - - 4 Loans and advances - - - - - - - - - - - - - - - - - 5 Debt securities, including UoP - - - - - - - - - - - - - - - - - 6 Equity instruments - - - - - - - - - - - - - 7 Other financial corporations - - - - - - - - - - - - - - - - - 8 of which investment firms - - - - - - - - - - - - - - - - - 9 Loans and advances - - - - - - - - - - - - - - - - - 10 Debt securities, including UoP - - - - - - - - - - - - - - - - - 11 Equity instruments - - - - - - - - - - - - - 12 of which asset management companies - - - - - - - - - - - - - - - - - 13 Loans and advances - - - - - - - - - - - - - - - - - 14 Debt securities, including UoP - - - - - - - - - - - - - - - - - 15 Equity instruments - - - - - - - - - - - - - 16 of which insurance undertakings - - - - - - - - - - - - - - - - - 17 Loans and advances - - - - - - - - - - - - - - - - - 18 Debt securities, including UoP - - - - - - - - - - - - - - - - - 19 Equity instruments - - - - - - - - - - - - - 20 Non-financial undertakings 11,65% 3,35% 0,00% 0,00% 0,45% 3,47% 0,38% 0,00% 0,38% 0,00% 0,00% 0,00% 0,00% 0,02% 0,00% 0,00% 0,00% 21 Loans and advances 11,65% 3,35% 0,00% 0,00% 0,45% 3,47% 0,38% 0,00% 0,38% 0,00% 0,00% 0,00% 0,00% 0,02% 0,00% 0,00% 0,00% 22 Debt securities, including UoP - - - - - - - - - - - - - - - - - 23 Equity instruments - - - - - - - - - - - - - 24 Households 42,35% 0,74% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 25 of which loans collateralised by residential immovable property 96,15% 1,70% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 26 of which building renovation loans 100,00% 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 - - - - - 28 Local governments financing - - - - - - - - - - - - - - - - - 29 Housing - - - - - - - - - - - - - - - - - 30 Other local governments financing - - - - - - - - - - - - - - - - - 31 Collateral obtained by taking possession: residential and commercial immovable properties - - - - - - - - - - - - - - - - - 32 Total GAR assets 29,38% 0,54% 0,00% 0,00% 0,00% 0,04% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 31.12.2024 Climate Change Adaptation (CCA) Water and marine resources (WMR) % (compared to total covered assets in the denominator) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) 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) Climate Change Mitigation (CCM) Circular economy (CE) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)
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196 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement r s t u v w x z aa ab ac ad ae Of which Use of Proceeds Of which enabling Of which Use of Proceeds 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 for trading, eligible for GAR calculation 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 41,93% 0,78% 0,00% 0,00% 0,01% 2 Financial undertakings - - - - - - - - - - - - - 3 Credit institutions - - - - - - - - - - - - - 4 Loans and advances - - - - - - - - - - - - - 5 Debt securities, including UoP - - - - - - - - - - - - - 6 Equity instruments - - - - - - - - - - 7 Other financial corporations - - - - - - - - - - - - - 8 of which investment firms - - - - - - - - - - - - - 9 Loans and advances - - - - - - - - - - - - - 10 Debt securities, including UoP - - - - - - - - - - - - - 11 Equity instruments - - - - - - - - - - 12 of which asset management companies - - - - - - - - - - - - - 13 Loans and advances - - - - - - - - - - - - - 14 Debt securities, including UoP - - - - - - - - - - - - - 15 Equity instruments - - - - - - - - - - 16 of which insurance undertakings - - - - - - - - - - - - - 17 Loans and advances - - - - - - - - - - - - - 18 Debt securities, including UoP - - - - - - - - - - - - - 19 Equity instruments - - - - - - - - - - 20 Non-financial undertakings 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 15,14% 3,73% 0,00% 0,00% 0,83% 21 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 15,14% 3,73% 0,00% 0,00% 0,83% 22 Debt securities, including UoP - - - - - - - - - - - - - 23 Equity instruments - - - - - - - - - - 24 Households 42,35% 0,74% 0,00% 0,00% 0,00% 25 of which loans collateralised by residential immovable property 96,15% 1,70% 0,00% 0,00% 0,00% 26 of which building renovation loans 100,00% 0,00% 0,00% 0,00% 0,00% 27 of which motor vehicle loans - - - - - 28 Local governments financing - - - - - - - - - - - - - 29 Housing - - - - - - - - - - - - - 30 Other local governments financing - - - - - - - - - - - - - 31 Collateral obtained by taking possession: residential and commercial immovable properties - - - - - - - - - - - - - 32 Total GAR assets 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 29,42% 0,55% 0,00% 0,00% 0,01% 31.12.2024 % (compared to total covered assets in the denominator) 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) Biodiversity and ecosystems (BIO) TOTAL (CCM + CCA + WMR + CE + PPC + BIO)Pollution (PPC) 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)
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197 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement af ag ah ai aj ak al am an ao ap aq ar as at au av aw Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling GAR - covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not for trading, eligible for GAR calculation 52,47% 37,94% 0,40% 0,00% 0,00% 0,08% 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 Financial undertakings 0,00% - - - - - - - - - - - - - - - - - 3 Credit institutions 0,00% - - - - - - - - - - - - - - - - - 4 Loans and advances 0,00% - - - - - - - - - - - - - - - - - 5 Debt securities, including UoP 0,00% - - - - - - - - - - - - - - - - - 6 Equity instruments 0,00% - - - - - - - - - - - - - 7 Other financial corporations 0,00% - - - - - - - - - - - - - - - - - 8 of which investment firms 0,00% - - - - - - - - - - - - - - - - - 9 Loans and advances 0,00% - - - - - - - - - - - - - - - - - 10 Debt securities, including UoP 0,00% - - - - - - - - - - - - - - - - - 11 Equity instruments 0,00% - - - - - - - - - - - - - 12 of which asset management companies 0,00% - - - - - - - - - - - - - - - - - 13 Loans and advances 0,00% - - - - - - - - - - - - - - - - - 14 Debt securities, including UoP 0,00% - - - - - - - - - - - - - - - - - 15 Equity instruments 0,00% - - - - - - - - - - - - - 16 of which insurance undertakings 0,00% - - - - - - - - - - - - - - - - - 17 Loans and advances 0,00% - - - - - - - - - - - - - - - - - 18 Debt securities, including UoP 0,00% - - - - - - - - - - - - - - - - - 19 Equity instruments 0,00% - - - - - - - - - - - - - 20 Non-financial undertakings 0,81% 16,03% 5,76% 0,00% 0,00% 5,35% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 21 Loans and advances 0,81% 16,03% 5,76% 0,00% 0,00% 5,35% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 22 Debt securities, including UoP 0,00% - - - - - - - - - - - - - - - - - 23 Equity instruments 0,00% - - - - - - - - - - - - - 24 Households 51,66% 38,28% 0,31% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 25 of which loans collateralised by residential immovable property 22,35% 86,04% 0,72% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 26 of which building renovation loans 0,39% 141,25% 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% - - - - - 28 Local governments financing 0,00% - - - - - - - - - - - - - - - - - 29 Housing 0,00% - - - - - - - - - - - - - - - - - 30 Other local governments financing 0,00% - - - - - - - - - - - - - - - - - 31 Collateral obtained by taking possession: residential and commercial immovable properties 0,00% - - - - - - - - - - - - - - - - - 32 Total GAR assets 74,78% 29,47% 0,31% 0,00% 0,00% 0,06% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 31.12.2023 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-eligible) Climate Change Adaptation (CCA) Water and marine resources (WMR) 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) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Climate Change Mitigation (CCM) Circular economy (CE) % (compared to total covered assets in the denominator) Proportion of total covered assets
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198 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement ax ay az ba bb bc bd be bf bg bh bi bj bk Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which transition al Of which enabling GAR - covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not for trading, eligible for GAR calculation 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 37,94% 0,40% 0,00% 0,00% 0,08% 59,02% 2 Financial undertakings - - - - - - - - - - - - - 0,00% 3 Credit institutions - - - - - - - - - - - - - 0,00% 4 Loans and advances - - - - - - - - - - - - - 0,00% 5 Debt securities, including UoP - - - - - - - - - - - - - 0,00% 6 Equity instruments - - - - - - - - - - 0,00% 7 Other financial corporations - - - - - - - - - - - - - 0,00% 8 of which investment firms - - - - - - - - - - - - - 0,00% 9 Loans and advances - - - - - - - - - - - - - 0,00% 10 Debt securities, including UoP - - - - - - - - - - - - - 0,00% 11 Equity instruments - - - - - - - - - - 0,00% 12 of which asset management companies - - - - - - - - - - - - - 0,00% 13 Loans and advances - - - - - - - - - - - - - 0,00% 14 Debt securities, including UoP - - - - - - - - - - - - - 0,00% 15 Equity instruments - - - - - - - - - - 0,00% 16 of which insurance undertakings - - - - - - - - - - - - - 0,00% 17 Loans and advances - - - - - - - - - - - - - 0,00% 18 Debt securities, including UoP - - - - - - - - - - - - - 0,00% 19 Equity instruments - - - - - - - - - - 0,00% 20 Non-financial undertakings 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 16,03% 5,76% 0,00% 0,00% 5,35% 0,98% 21 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 16,03% 5,76% 0,00% 0,00% 5,35% 0,98% 22 Debt securities, including UoP - - - - - - - - - - - - - 0,00% 23 Equity instruments - - - - - - - - - - 0,00% 24 Households 38,28% 0,31% 0,00% 0,00% 0,00% 58,04% 25 of which loans collateralised by residential immovable property 86,04% 0,72% 0,00% 0,00% 0,00% 23,42% 26 of which building renovation loans 141,25% 0,00% 0,00% 0,00% 0,00% 0,63% 27 of which motor vehicle loans - - - - - 5,12% 28 Local governments financing - - - - - - - - - - - - - 0,00% 29 Housing - - - - - - - - - - - - - 0,00% 30 Other local governments financing - - - - - - - - - - - - - 0,00% 31 Collateral obtained by taking possession: residential and commercial immovable properties - - - - - - - - - - - - - 0,00% 32 Total GAR assets 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 29,47% 0,31% 0,00% 0,00% 0,06% 77,82% 31.12.2023 Proportion of total covered assets Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Biodiversity and ecosystems (BIO) TOTAL (CCM + CCA + WMR + CE + PPC + BIO) 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) Pollution prevention and control (PPC) % (compared to total covered assets in the denominator)
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199 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 3. GAR KPI stock by reference to capital expenditure a b c d e f g h i j k l m n o p q Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling GAR - covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not for trading, eligible for GAR calculation 42,12% 0,85% 0,00% 0,04% 0,02% 0,06% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 2 Financial undertakings - - - - - - - - - - - - - - - - - 3 Credit institutions - - - - - - - - - - - - - - - - - 4 Loans and advances - - - - - - - - - - - - - - - - - 5 Debt securities, including UoP - - - - - - - - - - - - - - - - - 6 Equity instruments - - - - - - - - - - - - - 7 Other financial corporations - - - - - - - - - - - - - - - - - 8 of which investment firms - - - - - - - - - - - - - - - - - 9 Loans and advances - - - - - - - - - - - - - - - - - 10 Debt securities, including UoP - - - - - - - - - - - - - - - - - 11 Equity instruments - - - - - - - - - - - - - 12 of which asset management companies - - - - - - - - - - - - - - - - - 13 Loans and advances - - - - - - - - - - - - - - - - - 14 Debt securities, including UoP - - - - - - - - - - - - - - - - - 15 Equity instruments - - - - - - - - - - - - - 16 of which insurance undertakings - - - - - - - - - - - - - - - - - 17 Loans and advances - - - - - - - - - - - - - - - - - 18 Debt securities, including UoP - - - - - - - - - - - - - - - - - 19 Equity instruments - - - - - - - - - - - - - 20 Non-financial undertakings 27,64% 8,17% 0,00% 2,50% 1,33% 3,58% 0,10% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,10% 0,00% 0,00% 0,00% 21 Loans and advances 27,64% 8,17% 0,00% 2,50% 1,33% 3,58% 0,10% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,10% 0,00% 0,00% 0,00% 22 Debt securities, including UoP - - - - - - - - - - - - - - - - - 23 Equity instruments - - - - - - - - - - - - - 24 Households 42,35% 0,74% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 25 of which loans collateralised by residential immovable property 96,15% 1,70% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 26 of which building renovation loans 100,00% 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 - - - - - 28 Local governments financing - - - - - - - - - - - - - - - - - 29 Housing - - - - - - - - - - - - - - - - - 30 Other local governments financing - - - - - - - - - - - - - - - - - 31 Collateral obtained by taking possession: residential and commercial immovable properties - - - - - - - - - - - - - - - - - 32 Total GAR assets 29,55% 0,60% 0,00% 0,03% 0,01% 0,04% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 31.12.2024 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) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) 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) Circular economy (CE) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) % (compared to total covered assets in the denominator) Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Water and marine resources (WMR)
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200 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement r s t u v w x z aa ab ac ad ae Of which Use of Proceeds Of which enabling Of which Use of Proceeds 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 for trading, eligible for GAR calculation 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 42,18% 0,85% 0,00% 0,04% 0,02% 2 Financial undertakings - - - - - - - - - - - - - 3 Credit institutions - - - - - - - - - - - - - 4 Loans and advances - - - - - - - - - - - - - 5 Debt securities, including UoP - - - - - - - - - - - - - 6 Equity instruments - - - - - - - - - - 7 Other financial corporations - - - - - - - - - - - - - 8 of which investment firms - - - - - - - - - - - - - 9 Loans and advances - - - - - - - - - - - - - 10 Debt securities, including UoP - - - - - - - - - - - - - 11 Equity instruments - - - - - - - - - - 12 of which asset management companies - - - - - - - - - - - - - 13 Loans and advances - - - - - - - - - - - - - 14 Debt securities, including UoP - - - - - - - - - - - - - 15 Equity instruments - - - - - - - - - - 16 of which insurance undertakings - - - - - - - - - - - - - 17 Loans and advances - - - - - - - - - - - - - 18 Debt securities, including UoP - - - - - - - - - - - - - 19 Equity instruments - - - - - - - - - - 20 Non-financial undertakings 0,00% 0,00% 0,00% 0,00% 0,01% 0,00% 0,00% 0,00% 31,34% 8,27% 0,00% 2,50% 1,33% 21 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,01% 0,00% 0,00% 0,00% 31,34% 8,27% 0,00% 2,50% 1,33% 22 Debt securities, including UoP - - - - - - - - - - - - - 23 Equity instruments - - - - - - - - - - 24 Households 42,35% 0,74% 0,00% 0,00% 0,00% 25 of which loans collateralised by residential immovable property 96,15% 1,70% 0,00% 0,00% 0,00% 26 of which building renovation loans 100,00% 0,00% 0,00% 0,00% 0,00% 27 of which motor vehicle loans - - - - - 28 Local governments financing - - - - - - - - - - - - - 29 Housing - - - - - - - - - - - - - 30 Other local governments financing - - - - - - - - - - - - - 31 Collateral obtained by taking possession: residential and commercial immovable properties - - - - - - - - - - - - - 32 Total GAR assets 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 31.12.2024 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-eligible) Pollution (PPC) Biodiversity and ecosystems (BIO) TOTAL (CCM + CCA + WMR + CE + PPC + BIO) 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-eligible) % (compared to total covered assets in the denominator)
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201 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement af ag ah ai aj ak al am an ao ap aq ar as at au av aw Of which Use of Proceeds Of which transition al Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling GAR - covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not for trading, eligible for GAR calculation 52,47% 39,30% 0,73% 0,00% 0,00% 0,36% 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 Financial undertakings 0,00% - - - - - - - - - - - - - - - - - 3 Credit institutions 0,00% - - - - - - - - - - - - - - - - - 4 Loans and advances 0,00% - - - - - - - - - - - - - - - - - 5 Debt securities, including UoP 0,00% - - - - - - - - - - - - - - - - - 6 Equity instruments 0,00% - - - - - - - - - - - - - 7 Other financial corporations - - - - - - - - - - - - - - - - - - 8 of which investment firms - - - - - - - - - - - - - - - - - - 9 Loans and advances - - - - - - - - - - - - - - - - - - 10 Debt securities, including UoP - - - - - - - - - - - - - - - - - - 11 Equity instruments 0,00% - - - - - - - - - - - - - 12 of which asset management companies - - - - - - - - - - - - - - - - - - 13 Loans and advances - - - - - - - - - - - - - - - - - - 14 Debt securities, including UoP - - - - - - - - - - - - - - - - - - 15 Equity instruments 0,00% - - - - - - - - - - - - - 16 of which insurance undertakings - - - - - - - - - - - - - - - - - - 17 Loans and advances - - - - - - - - - - - - - - - - - - 18 Debt securities, including UoP - - - - - - - - - - - - - - - - - - 19 Equity instruments 0,00% - - - - - - - - - - - - - 20 Non-financial undertakings 100,00% 43,58% 26,04% 0,00% 0,00% 22,68% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 21 Loans and advances 100,00% 43,58% 26,04% 0,00% 0,00% 22,68% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 22 Debt securities, including UoP - - - - - - - - - - - - - - - - - - 23 Equity instruments 0,00% - - - - - - - - - - - - - 24 Households 51,66% 39,27% 0,32% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 25 of which loans collateralised by residential immovable property 22,35% 94,59% 0,79% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 26 of which building renovation loans 0,39% 100,00% 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% 28 Local governments financing 0,00% - - - - - - - - - - - - - - - - - 29 Housing 0,00% - - - - - - - - - - - - - - - - - 30 Other local governments financing 0,00% - - - - - - - - - - - - - - - - - 31 Collateral obtained by taking possession: residential and commercial immovable properties 0,00% - - - - - - - - - - - - - - - - - 32 Total GAR assets 74,78% 123,34% 2,28% 0,00% 0,00% 1,12% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 31.12.2023 Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) Water and marine resources (WMR) Circular economy (CE) 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) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) Proportion of total covered assets Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) % (compared to total covered assets in the denominator)
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202 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement ax ay az ba bb bc bd be bf bg bh bi bj bk Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which transition al Of which enabling GAR - covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not for trading, eligible for GAR calculation 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 39,30% 0,73% 0,00% 0,00% 0,36% 59,02% 2 Financial undertakings - - - - - - - - - - - - - 0,00% 3 Credit institutions - - - - - - - - - - - - - 0,00% 4 Loans and advances - - - - - - - - - - - - - 0,00% 5 Debt securities, including UoP - - - - - - - - - - - - - 0,00% 6 Equity instruments - - - - - - - - - - 0,00% 7 Other financial corporations - - - - - - - - - - - - - 0,00% 8 of which investment firms - - - - - - - - - - - - - 0,00% 9 Loans and advances - - - - - - - - - - - - - 0,00% 10 Debt securities, including UoP - - - - - - - - - - - - - 0,00% 11 Equity instruments - - - - - - - - - - 0,00% 12 of which asset management companies - - - - - - - - - - - - - 0,00% 13 Loans and advances - - - - - - - - - - - - - 0,00% 14 Debt securities, including UoP - - - - - - - - - - - - - 0,00% 15 Equity instruments - - - - - - - - - - 0,00% 16 of which insurance undertakings - - - - - - - - - - - - - 0,00% 17 Loans and advances - - - - - - - - - - - - - 0,00% 18 Debt securities, including UoP - - - - - - - - - - - - - 0,00% 19 Equity instruments - - - - - - - - - - 0,00% 20 Non-financial undertakings 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 43,58% 26,04% 0,00% 0,00% 21,53% 0,98% 21 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 43,58% 26,04% 0,00% 0,00% 21,53% 0,98% 22 Debt securities, including UoP - - - - - - - - - - - - - 0,00% 23 Equity instruments - - - - - - - - - - 0,00% 24 Households 39,27% 0,32% 0,00% 0,00% 0,00% 58,04% 25 of which loans collateralised by residential immovable property 94,59% 0,79% 0,00% 0,00% 0,00% 23,42% 26 of which building renovation loans 100,00% 0,00% 0,00% 0,00% 0,00% 0,63% 27 of which motor vehicle loans 0,00% 0,00% 0,00% 0,00% 0,00% 5,12% 28 Local governments financing - - - - - - - - - - - - - 0,00% 29 Housing - - - - - - - - - - - - - 0,00% 30 Other local governments financing - - - - - - - - - - - - - 0,00% 31 Collateral obtained by taking possession: residential and commercial immovable properties - - - - - - - - - - - - - 0,00% 32 Total GAR assets 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 123,34% 2,28% 0,00% 0,00% 1,12% 18,81% 31.12.2023 TOTAL (CCM + CCA + WMR + CE + PPC + BIO) Proportion of total covered assets 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-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) Pollution prevention and control (PPC) Biodiversity and ecosystems (BIO) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) % (compared to total covered assets in the denominator)
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203 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 4. GAR KPI flow by reference to turnover a b c d e f g h i j k l m n o p q Circular economy (CE) Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling GAR - covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not for trading, eligible for GAR calculation 26,92% 0,48% 0,00% 0,00% 0,00% 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 Financial undertakings - - - - - - - - - - - - - - - - - 3 Credit institutions - - - - - - - - - - - - - - - - - 4 Loans and advances - - - - - - - - - - - - - - - - - 5 Debt securities, including UoP - - - - - - - - - - - - - - - - - 6 Equity instruments - - - - - - - - - - - - - 7 Other financial corporations - - - - - - - - - - - - - - - - - 8 of which investment firms - - - - - - - - - - - - - - - - - 9 Loans and advances - - - - - - - - - - - - - - - - - 10 Debt securities, including UoP - - - - - - - - - - - - - - - - - 11 Equity instruments - - - - - - - - - - - - - 12 of which asset management companies - - - - - - - - - - - - - - - - - 13 Loans and advances - - - - - - - - - - - - - - - - - 14 Debt securities, including UoP - - - - - - - - - - - - - - - - - 15 Equity instruments - - - - - - - - - - - - - 16 of which insurance undertakings - - - - - - - - - - - - - - - - - 17 Loans and advances - - - - - - - - - - - - - - - - - 18 Debt securities, including UoP - - - - - - - - - - - - - - - - - 19 Equity instruments - - - - - - - - - - - - - 20 Non-financial 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% 0,00% 21 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% 0,00% 22 Debt securities, including UoP - - - - - - - - - - - - - - - - - 23 Equity instruments - - - - - - - - - - - - - 24 Households 27,18% 0,49% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 25 of which loans collateralised by residential immovable property 98,46% 1,89% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 26 of which building renovation loans 100,00% 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 - - - - - 28 Local governments financing - - - - - - - - - - - - - - - - - 29 Housing - - - - - - - - - - - - - - - - - 30 Other local governments financing - - - - - - - - - - - - - - - - - 31 Collateral obtained by taking possession: residential and commercial immovable properties - - - - - - - - - - - - - - - - - 32 Total GAR assets 26,92% 0,48% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 31.12.2024 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) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) % (compared to flow of total eligible assets) Climate Change Mitigation (CCM) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) Climate Change Adaptation (CCA) Water and marine resources (WMR) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)
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204 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement r s t u v w x z aa ab ac ad ae af Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which transitiona l Of which enabling GAR - covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not for trading, eligible for GAR calculation 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 26,92% 0,48% 0,00% 0,00% 0,00% 100,00% 2 Financial undertakings - - - - - - - - - - - - - - 3 Credit institutions - - - - - - - - - - - - - - 4 Loans and advances - - - - - - - - - - - - - - 5 Debt securities, including UoP - - - - - - - - - - - - - - 6 Equity instruments - - - - - - - - - - - 7 Other financial corporations - - - - - - - - - - - - - - 8 of which investment firms - - - - - - - - - - - - - - 9 Loans and advances - - - - - - - - - - - - - - 10 Debt securities, including UoP - - - - - - - - - - - - - - 11 Equity instruments - - - - - - - - - - - 12 of which asset management companies - - - - - - - - - - - - - - 13 Loans and advances - - - - - - - - - - - - - - 14 Debt securities, including UoP - - - - - - - - - - - - - - 15 Equity instruments - - - - - - - - - - - 16 of which insurance undertakings - - - - - - - - - - - - - - 17 Loans and advances - - - - - - - - - - - - - - 18 Debt securities, including UoP - - - - - - - - - - - - - - 19 Equity instruments - - - - - - - - - - - 20 Non-financial 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% 100,00% 21 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% 100,00% 22 Debt securities, including UoP - - - - - - - - - - - - - - 23 Equity instruments - - - - - - - - - - - 24 Households 27,18% 0,49% 0,00% 0,00% 0,00% 100,00% 25 of which loans collateralised by residential immovable property 98,46% 1,89% 0,00% 0,00% 0,00% 100,00% 26 of which building renovation loans 100,00% 0,00% 0,00% 0,00% 0,00% 100,00% 27 of which motor vehicle loans - - - - - - 28 Local governments financing - - - - - - - - - - - - - - 29 Housing - - - - - - - - - - - - - - 30 Other local governments financing - - - - - - - - - - - - - - 31 Collateral obtained by taking possession: residential and commercial immovable properties - - - - - - - - - - - - - - 32 Total GAR assets 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 26,92% 0,48% 0,00% 0,00% 0,00% 100,00% 31.12.2024 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- 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) % (compared to flow of total eligible assets) Pollution (PPC) Biodiversity and ecosystems (BIO) TOTAL (CCM + CCA + WMR + CE + PPC + BIO) Proportion of total covered assets
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205 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 4. GAR KPI flow by reference to capital expenditure a b c d e f g h i j k l m n o p q Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling GAR - covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not for trading, eligible for GAR calculation 26,94% 0,48% 0,00% 0,00% 0,00% 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 Financial undertakings - - - - - - - - - - - - - - - - - 3 Credit institutions - - - - - - - - - - - - - - - - - 4 Loans and advances - - - - - - - - - - - - - - - - - 5 Debt securities, including UoP - - - - - - - - - - - - - - - - - 6 Equity instruments - - - - - - - - - - - - - 7 Other financial corporations - - - - - - - - - - - - - - - - - 8 of which investment firms - - - - - - - - - - - - - - - - - 9 Loans and advances - - - - - - - - - - - - - - - - - 10 Debt securities, including UoP - - - - - - - - - - - - - - - - - 11 Equity instruments - - - - - - - - - - - - - 12 of which asset management companies - - - - - - - - - - - - - - - - - 13 Loans and advances - - - - - - - - - - - - - - - - - 14 Debt securities, including UoP - - - - - - - - - - - - - - - - - 15 Equity instruments - - - - - - - - - - - - - 16 of which insurance undertakings - - - - - - - - - - - - - - - - - 17 Loans and advances - - - - - - - - - - - - - - - - - 18 Debt securities, including UoP - - - - - - - - - - - - - - - - - 19 Equity instruments - - - - - - - - - - - - - 20 Non-financial undertakings 2,43% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 21 Loans and advances 2,43% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 22 Debt securities, including UoP - - - - - - - - - - - - - - - - - 23 Equity instruments - - - - - - - - - - - - - 24 Households 27,18% 0,49% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 25 of which loans collateralised by residential immovable property 98,46% 1,89% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 26 of which building renovation loans 100,00% 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 - - - - - 28 Local governments financing - - - - - - - - - - - - - - - - - 29 Housing - - - - - - - - - - - - - - - - - 30 Other local governments financing - - - - - - - - - - - - - - - - - 31 Collateral obtained by taking possession: residential and commercial immovable properties - - - - - - - - - - - - - - - - - 32 Total GAR assets 26,94% 0,48% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 31.12.2024 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) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) % (compared to flow of total eligible assets) Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Water and marine resources (WMR) Circular economy (CE) 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-eligible)
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206 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement r s t u v w x z aa ab ac ad ae af Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which transitiona l Of which enabling GAR - covered assets in both numerator and denominator 1 Loans and advances, debt securities and equity instruments not for trading, eligible for GAR calculation 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 26,94% 0,48% 0,00% 0,00% 0,00% 100,00% 2 Financial undertakings - - - - - - - - - - - - - - 3 Credit institutions - - - - - - - - - - - - - - 4 Loans and advances - - - - - - - - - - - - - - 5 Debt securities, including UoP - - - - - - - - - - - - - - 6 Equity instruments - - - - - - - - - - - 7 Other financial corporations - - - - - - - - - - - - - - 8 of which investment firms - - - - - - - - - - - - - - 9 Loans and advances - - - - - - - - - - - - - - 10 Debt securities, including UoP - - - - - - - - - - - - - - 11 Equity instruments - - - - - - - - - - - 12 of which asset management companies - - - - - - - - - - - - - - 13 Loans and advances - - - - - - - - - - - - - - 14 Debt securities, including UoP - - - - - - - - - - - - - - 15 Equity instruments - - - - - - - - - - - 16 of which insurance undertakings - - - - - - - - - - - - - - 17 Loans and advances - - - - - - - - - - - - - - 18 Debt securities, including UoP - - - - - - - - - - - - - - 19 Equity instruments - - - - - - - - - - - 20 Non-financial undertakings 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 2,43% 0,00% 0,00% 0,00% 0,00% 100,00% 21 Loans and advances 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 2,43% 0,00% 0,00% 0,00% 0,00% 100,00% 22 Debt securities, including UoP - - - - - - - - - - - - - - 23 Equity instruments - - - - - - - - - - - 24 Households 27,18% 0,49% 0,00% 0,00% 0,00% 100,00% 25 of which loans collateralised by residential immovable property 98,46% 1,89% 0,00% 0,00% 0,00% 100,00% 26 of which building renovation loans 100,00% 0,00% 0,00% 0,00% 0,00% 100,00% 27 of which motor vehicle loans - - - - - - 28 Local governments financing - - - - - - - - - - - - - - 29 Housing - - - - - - - - - - - - - - 30 Other local governments financing - - - - - - - - - - - - - - 31 Collateral obtained by taking possession: residential and commercial immovable properties - - - - - - - - - - - - - - 32 Total GAR assets 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 26,94% 0,48% 0,00% 0,00% 0,00% 100,00% 31.12.2024 Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) % (compared to flow of total eligible assets) Pollution (PPC) Biodiversity and ecosystems (BIO) TOTAL (CCM + CCA + WMR + CE + PPC + BIO) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) Proportion of total covered assets 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- eligible)
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207 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 5. KPI off-balance sheet exposures by reference to stock by reference to turnover a b c d e f g h i j k l m n o p q Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling 1 Financial guarantees (FinGuar KPI) 4,84% 3,18% 0,00% 0,00% 0,00% 2,79% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,03% 0,00% 0,00% 0,00% 2 Assets under management (AuM KPI) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 31.12.2024 Circular economy (CE) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) Water and marine resources (WMR) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) % (compared to total eligible off-balance sheet assets) Climate Change Mitigation (CCM) Climate Change Adaptation (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-aligned) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) r s t u v w x z aa ab ac ad ae Of which Use of Proceeds Of which enabling Of which Use of Proceeds 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% 7,66% 3,18% 0,00% 0,00% 0,00% 2 Assets under management (AuM KPI) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 31.12.2024 Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) % (compared to total eligible off-balance sheet assets) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) TOTAL (CCM + CCA + WMR + CE + PPC + BIO) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Biodiversity and ecosystems (BIO) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) Pollution (PPC) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)
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208 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 5. KPI off-balance sheet exposures by reference to stock by reference to capital expenditure a b c d e f g h i j k l m n o p q Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling 1 Financial guarantees (FinGuar KPI) 3,09% 1,00% 0,00% 0,00% 0,00% 1,93% 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) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 31.12.2024 % (compared to total eligible off-balance sheet assets) Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Water and marine resources (WMR) Circular economy (CE) 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-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) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) r s t u v w x z aa ab ac ad ae Of which Use of Proceeds Of which enabling Of which Use of Proceeds 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% 5,03% 1,00% 0,00% 0,00% 0,00% 2 Assets under management (AuM KPI) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 31.12.2024 Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) % (compared to total eligible off-balance sheet assets) Pollution (PPC) Biodiversity and ecosystems (BIO) TOTAL (CCM + CCA + WMR + CE + PPC + BIO) 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)
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209 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 5. KPI off-balance sheet exposures by reference to flow by reference to turnover a b c d e f g h i j k l m n o p q Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling 1 Financial guarantees (FinGuar KPI) 9,18% 6,51% 0,00% 0,00% 0,00% 6,65% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,07% 0,00% 0,00% 0,00% 2 Assets under management (AuM KPI) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A % (compared to total eligible off-balance sheet assets) Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Water and marine resources (WMR) Circular economy (CE) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) 31.12.2024 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) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) r s t u v w x z aa ab ac ad ae Of which Use of Proceeds Of which enabling Of which Use of Proceeds 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% 18,30% 7,60% 0,00% 0,00% 0,00% 2 Assets under management (AuM KPI) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) % (compared to total eligible off-balance sheet assets) Pollution (PPC) Biodiversity and ecosystems (BIO) TOTAL (CCM + CCA + WMR + CE + PPC + BIO) 31.12.2024 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)
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210 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 5. KPI off-balance sheet exposures by reference to flow by reference to capital expenditure a b c d e f g h i j k l m n o p q Of which Use of Proceeds Of which transitional Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling Of which Use of Proceeds Of which enabling 1 Financial guarantees (FinGuar KPI) 7,29% 2,36% 0,00% 0,00% 0,00% 4,62% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,01% 0,00% 0,00% 0,00% 2 Assets under management (AuM KPI) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A % (compared to total eligible off-balance sheet assets) Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Water and marine resources (WMR) Circular economy (CE) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) 31.12.2024 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) Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) r s t u v w x z aa ab ac ad ae Of which Use of Proceeds Of which enabling Of which Use of Proceeds 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% 12,01% 2,38% 0,00% 0,00% 0,00% 2 Assets under management (AuM KPI) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) % (compared to total eligible off-balance sheet assets) Pollution (PPC) Biodiversity and ecosystems (BIO) TOTAL (CCM + CCA + WMR + CE + PPC + BIO) 31.12.2024 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)
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211 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Disclosures of Indicators Related to Nuclear Energy and Natural Gas Activities in Accordance with Annex XII to Regulation 2021/2178 Below, the Group presents disclosures related to activities described in sections 4.26 - 4.31 of Annexes I and II to Delegated Regulation (EU) 2021/2139, in accordance with the scope defined in Templates 1- 5 of Annex XII to Regulation 2021/2178. Template 1. Activities Related to Nuclear Energy and Natural Gas Nuclear Energy Activities 1.1 The undertaking is engaged in, funds, or is exposed to, research, development, demonstration, and deployment of innovative power generation facilities based on nuclear processes to produce energy with minimal fuel cycle waste. NO 1.2 The undertaking is engaged in, funds, or is exposed to, construction and safe operation of new nuclear facilities for generation of electricity and/or process heat, including for district heating and industrial applications such as hydrogen production, and upgrades them using cutting-edge technology. NO 1.3 The undertaking is engaged in safe operation and safety upgrading of, funds, or is exposed to, existing nuclear facilities that generate electricity or process heat, including for district heating and industrial applications such as hydrogen production from nuclear energy. NO Natural Gas Activities 1.4 The undertaking is engaged in, funds, or is exposed to, construction or operation of power generation facilities using gaseous fossil fuels. NO 1.5 The undertaking is engaged in, funds, or is exposed to, construction, upgrading and operation of combined heat/cooling energy and power generation facilities using gaseous fossil fuels. YES 1.6 The undertaking is engaged in, funds, or is exposed to, construction, upgrading and operation of heat/cooling energy generation facilities using gaseous fossil fuels. YES
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212 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Template 2. Taxonomy-Aligned Business Activities (Denominator) [PLN million] Type of Business Activity Amount and share (monetary amount and percentage share) CCM + CCA Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Amount % Amount % Amount % 2.1 Amount and share of taxonomy - aligned economic activities referred to in 4.26 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2.2 Amount and share of taxonomy - aligned economic activities referred to in 4.27 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2.3 Amount and share of taxonomy - aligned economic activities referred to in 4.28 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2.4 Amount and share of taxonomy - aligned economic activities referred to in 4.29 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2.5 Amount and share of taxonomy - aligned economic activities referred to in 4.30 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2.6 Amount and share of taxonomy - aligned economic activities referred to in 4.31 of Annex I and II to Delegated Regulation (EU) 0,00 0,00% 0,00 0,00% 0,00 0,00%
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213 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 2021/2139 in the denominator of applicable KPI 2.7 Amount and share of other taxonomy-aligned economic activities not listed in 1 –6 above in the denominator of applicable KPI 389,40 0,55% 386,48 0,54% 2,92 0,00% 2.8 Total applicable KPI 389,40 0,55% 386,48 0,54% 2,92 0,00% Template 2. Taxonomy-Aligned Business Activities (Denominator) [PLN million] Type of Business Activity Amount and share (monetary amount and percentage share) CCM + CCA Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Amount % Amount % Amount % 2.1 Amount and share of taxonomy - aligned economic activities referred to in 4.26 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2.2 Amount and share of taxonomy - aligned economic activities referred to in 4.27 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2.3 Amount and share of taxonomy - aligned economic activities referred to in 4.28 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2.4 Amount and share of taxonomy - aligned economic activities referred to in 4.29 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00%
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214 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 2.5 Amount and share of taxonomy - aligned economic activities referred to in 4.30 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2.6 Amount and share of taxonomy - aligned economic activities referred to in 4.31 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 2.7 Amount and share of other taxonomy-aligned economic activities not listed in 1 –6 above in the denominator of applicable KPI 424,19 0,00% 423,41 0,00% 0,78 0,00% 2.8 Total applicable KPI 424,19 0,00% 423,41 0,00% 0,78 0,00% Template 3. Taxonomy-Aligned Business Activities (Numerator) [PLN million] Type of Business Activity Amount and share (monetary amount and percentage share) CCM + CCA Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Amount % Amount % Amount % 3.1 Amount and share of taxonomy-aligned economic activities referred to in 4.26 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the numerator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3.2 Amount and share of taxonomy-aligned economic activities referred to in 4.27 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the numerator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3.3 Amount and share of taxonomy-aligned economic activities referred to in 4.28 of 0,00 0,00% 0,00 0,00% 0,00 0,00%
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215 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Annex I and II to Delegated Regulation (EU) 2021/2139 in the numerator of applicable KPI 3.4 Amount and share of taxonomy-aligned economic activities referred to in 4.29 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the numerator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3.5 Amount and share of taxonomy-aligned economic activities referred to in 4.30 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the numerator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3.6 Amount and share of taxonomy-aligned economic activities referred to in 4.31 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the numerator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3.7 Amount and share of other taxonomy-aligned economic activities not listed in 1 –6 above in the numerator of applicable KPI 389,40 100,00% 386,48 100,00% 2,92 100,00% 3.8 Total amount and total share of taxonomy-aligned economic activities in the numerator of applicable KPI 389,40 100,00% 386,48 100,00% 2,92 100,00%
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216 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Template 3. Taxonomy-Aligned Business Activities (Numerator) [PLN million] Type of Business Activity Amount and share (monetary amount and percentage share) CCM + CCA Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Amount % Amount % Amount % 3.1 Amount and share of taxonomy-aligned economic activities referred to in 4.26 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the numerator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3.2 Amount and share of taxonomy-aligned economic activities referred to in 4.27 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the numerator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3.3 Amount and share of taxonomy-aligned economic activities referred to in 4.28 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the numerator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3.4 Amount and share of taxonomy-aligned economic activities referred to in 4.29 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the numerator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3.5 Amount and share of taxonomy-aligned economic activities referred to in 4.30 of Annex I and II to Delegated Regulation (EU) 2021/2139 in 0,00 0,00% 0,00 0,00% 0,00 0,00%
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217 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement the numerator of applicable KPI 3.6 Amount and share of taxonomy-aligned economic activities referred to in 4.31 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the numerator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 3.7 Amount and share of other taxonomy-aligned economic activities not listed in 1 –6 above in the numerator of applicable KPI 424,19 100,00% 423,41 100,00% 0,78 100,00% 3.8 Total amount and total share of taxonomy-aligned economic activities in the numerator of applicable KPI 424,19 100,00% 423,41 100,00% 0,78 100,00% Template 4. Taxonomy-Eligible but Not Taxonomy-Aligned Business Activities [PLN million] Type of Business Activity Amount and share (monetary amount and percentage share) CCM + CCA Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Amount % Amount % Amount % 4.1 Amount and share of taxonomy-eligible taxonomy - non-aligned economic activities referred to in 4.26 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4.2 Amount and share of taxonomy-eligible taxonomy - non-aligned economic activities referred to in 4.27 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00%
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218 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 4.3 Amount and share of taxonomy-eligible taxonomy - non-aligned economic activities referred to in 4.28 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4.4 Amount and share of taxonomy-eligible taxonomy - non-aligned economic activities referred to in 4.29 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4.5 Amount and share of taxonomy-eligible taxonomy - non-aligned economic activities referred to in 4.30 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 1,32 0,01% 1,11 0,01% 0,21 0,89% 4.6 Amount and share of taxonomy-eligible taxonomy - non-aligned economic activities referred to in 4.31 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,07 0,00% 0,07 0,00% 0,00 0,00% 4.7 Amount and share of other taxonomy-eligible taxonomy - non-aligned economic activities not listed in 1 –6 above in the denominator of applicable KPI 20499,58 99,99% 20476,09 99,99% 23,49 99,11% 4.8 Total amount and total share of taxonomy-eligible taxonomy - non-aligned economic activities in the denominator of applicable KPI 20500,97 100,00% 20477,27 99,88% 23,70 0,12%
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219 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Template 4. Taxonomy-Eligible but Not Taxonomy-Aligned Business Activities [PLN million] Type of Business Activity Amount and share (monetary amount and percentage share) CCM + CCA Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Amount % Amount % Amount % 4.1 Amount and share of taxonomy-eligible taxonomy- non-aligned economic activities referred to in 4.26 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4.2 Amount and share of taxonomy-eligible taxonomy- non-aligned economic activities referred to in 4.27 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4.3 Amount and share of taxonomy-eligible taxonomy- non-aligned economic activities referred to in 4.28 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,00 0,00% 0,00 0,00% 0,00 0,00% 4.4 Amount and share of taxonomy-eligible taxonomy- non-aligned economic activities referred to in 4.29 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 7,12 0,03% 7,12 0,03% 0,00 0,00%
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220 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 4.5 Amount and share of taxonomy-eligible taxonomy- non-aligned economic activities referred to in 4.30 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 3,27 0,02% 3,27 0,02% 0,00 0,00% 4.6 Amount and share of taxonomy-eligible taxonomy- non-aligned economic activities referred to in 4.31 of Annex I and II to Delegated Regulation (EU) 2021/2139 in the denominator of applicable KPI 0,80 0,00% 0,80 0,00% 0,00 0,00% 4.7 Amount and share of other taxonomy-eligible taxonomy- non-aligned economic activities not listed in 1 –6 above in the denominator of applicable KPI 20578,46 100,38% 20551,75 100,36% 26,71 112,67% 4.8 Total amount and total share of taxonomy -eligible taxonomy-non-aligned economic activities in the denominator of applicable KPI 20589,65 100,00% 20562,94 99,87% 26,71 0,13% Template 5. Non-Taxonomy-Eligible Business Activities [PLN million] Type of Business Activity Amount Percentage share 5.1 Amount and share of the economic activities referred to in Line 1 of Template 1, which is taxonomy-non-eligible activity under 4.26 of Annex I and II to Delegated Regulation (EU) 2021/2139, in the denominator of applicable KPI 0,00 0,00% 5.2 Amount and share of the economic activities referred to in Line 2 of Template 1, which is taxonomy-non-eligible activity under 4.27 of Annex I and II to Delegated Regulation (EU) 2021/2139, in the denominator of applicable KPI 0,00 0,00%
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221 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 5.3 Amount and share of the economic activities referred to in Line 3 of Template 1, which is taxonomy-non-eligible activity under 4.28 of Annex I and II to Delegated Regulation (EU) 2021/2139, in the denominator of applicable KPI 0,00 0,00% 5.4 Amount and share of the economic activities referred to in Line 4 of Template 1, which is taxonomy-non-eligible activity under 4.29 of Annex I and II to Delegated Regulation (EU) 2021/2139, in the denominator of applicable KPI 0,00 0,00% 5.5 Amount and share of the economic activities referred to in Line 5 of Template 1, which is taxonomy-non-eligible activity under 4.30 of Annex I and II to Delegated Regulation (EU) 2021/2139, in the denominator of applicable KPI 0,00 0,00% 5.6 Amount and share of the economic activities referred to in Line 6 of Template 1, which is taxonomy-non-eligible activity under 4.31 of Annex I and II to Delegated Regulation (EU) 2021/2139, in the denominator of applicable KPI 0,00 0,00% 5.7 Amount and share of other taxonomy -non-eligible economic activities not listed in 1–6 above in the denominator of applicable KPI 50118,58 70,58% 5.8 Total amount and total share of taxonomy-non-eligible economic activities in the denominator of applicable KPI 50118,58 70,58% Template 5. Non-Taxonomy-Eligible Business Activities [PLN million] Type of Business Activity Amount Percentage share 5.1 Amount and share of the economic activities referred to in Line 1 of Template 1, which is taxonomy-non-eligible activity under 4.26 of Annex I and II to Delegated Regulation (EU) 2021/2139, in the denominator of applicable KPI 0,00 0,00% 5.2 Amount and share of the economic activities referred to in Line 2 of Template 1, which is taxonomy-non-eligible activity under 4.27 of Annex I and II to Delegated Regulation (EU) 2021/2139, in the denominator of applicable KPI 0,00 0,00% 5.3 Amount and share of the economic activities referred to in Line 3 of Template 1, which is taxonomy-non-eligible activity under 4.28 of Annex I and II to Delegated Regulation (EU) 2021/2139, in the denominator of applicable KPI 0,00 0,00%
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222 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 5.4 Amount and share of the economic activities referred to in Line 4 of Template 1, which is taxonomy-non-eligible activity under 4.29 of Annex I and II to Delegated Regulation (EU) 2021/2139, in the denominator of applicable KPI 0,00 0,00% 5.5 Amount and share of the economic activities referred to in Line 5 of Template 1, which is taxonomy-non-eligible activity under 4.30 of Annex I and II to Delegated Regulation (EU) 2021/2139, in the denominator of applicable KPI 0,00 0,00% 5.6 Amount and share of the economic activities referred to in Line 6 of Template 1, which is taxonomy-non-eligible activity under 4.31 of Annex I and II to Delegated Regulation (EU) 2021/2139, in the denominator of applicable KPI 0,00 0,00% 5.7 Amount and share of other taxonomy -non-eligible economic activities not listed in 1–6 above in the denominator of applicable KPI 49994,38 0,00% 5.8 Total amount and total share of taxonomy-non-eligible economic activities in the denominator of applicable KPI 49994,38 0,00% The 2024 disclosures for the EU Taxonomy templates have been prepared based on the following regulations: • Regulation 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment (“EU Taxonomy”), • Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or climate chan ge adaptation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives, • Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 supplementing Regulation 2020/852 by specifying the content and presentation of information on sustainable economic activity to be disclosed by undertakings subject to Articles 19a or 29a of Dir ective 2013/34/EU, and specifying the methodology to comply with that disclosure obligation (“Disclosures Regulation”), • Commission Delegated Regulation (EU) 2023/2485 of 27 June 2023 amending Delegated Regulation (EU) 2021/2139 establishing additional technical screening criteria for determining the conditions under which certain economic activities qualify as contributing substantially to climate change mitigation or climate change adaptation and for determining whether those activities cause no significant harm to any of the other environmental objectives, • Commission Delegated Regulation (EU) 2023/2486 of 27 June 2023 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 acti vity qualifies as contributing substantially to the sustainable use and protection of water and marine resources, to the transition to a circular economy, to pollution prevention and control, or to the protection and restoration of biodiversity and ecosyst ems and for determining whether that economic activity causes no significant harm to any of the other environmental objectives and amending
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223 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Commission Delegated Regulation (EU) 2021/2178 as regards specific public disclosures for those economic activities. The above regulations impose a variety of reporting obligations on credit institutions. In 2024, the Bank for the first time made full disclosures for 2023 under the EU Taxonomy in compliance with the guidelines set out in the Disclosures Regulation (2021/2178). In preparing this year's disclosures, the Bank took into account the guidelines and interpretations contained in all published EU Commission Notices. However, the implementation of some of the new guidelines was not possible due to the short period between their publication and the release of this Statement. In its disclosures, the Alior Bank Group considered the following environmental objectives: • Climate Change Mitigation (CCM) • Climate Change Adaptation (CCA) • Sustainable use and protection of water and marine resources (WMR) • Transition to a circular economy (CE) • Prevention and control of pollution (PPC) • Protection and restoration of biodiversity and ecosystems (BIO) The Green Asset Ratio (GAR) represents the percentage of assets related to EU Taxonomy-compliant business activities in relation to total covered assets. The Bank discloses the relevant key performance indicators based on the scope of prudential consolidation defined in accordance with Title II, Chapter 2, Section 2 of Regulation (EU) No. 575/2013. As of December 31, 2024, the Bank's scope of prudential con solidation includes Alior Bank S.A. and Alior Leasing sp. z o.o. Group, whose loans and advances are reported under the heading “SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations,” according to the classification of leasing clients . The Bank did not have any exposures from credit/loan, debt or equity instruments to financial institutions subject to sustainability reporting obligations under the Directive on Corporate Sustainability Reporting (CSRD). Exposures from credit/loan, debt or equity instruments tn the context of financing provided to clients required to publish non -financial information under the Directive on Corporate Sustainability Reporting (CSRD), the list of these clients in the banking system was verified by comparing it with data from the BIK ESG Platform and the Instrat Foundation’s list of companies subject to the CSRD. Additionally, data from the BIK ESG Platform was used for analysis. The assessment of financing in terms of taxonomy eligibility and taxonomy alignment was based on indicators disclosed in clients’ sustainability reports. In its analysis, the Bank relied on the latest available sustainability reports published by its clients in 2023. The exposure size to financial and non -financial enterprises not subject to the obligation to publish information on sustainability reporting has been determined based on an analysis of internal data. The definition of households used in calculating the EU Taxonomy indicators was consistent with that used for financial reporting purposes. Disclosures of taxonomy -eligible financing were prepared based on the characteristics of the products offered to cli ents. When classifying mortgage loans as aligned with the EU Taxonomy, those that met the established criteria for significant impact (for activity 7.7 Acquisition and ownership of buildings) were considered, based on an analysis of data included in the ce ntral register of building energy performance, thresholds for primary energy demand, in accordance with information published by the Ministry of Development and Technology, and in line with the principle of "do no significant
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224 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement harm" to climate change adaptation, based on data from the Cenatorium database. The analysis did not cover compliance with minimum safeguards. The Bank did not separately report exposure to financing activities related to local authorities. As defined in Section 1.2.1.4 of Annex V to the Disclosures Regulation (2021/2178), the Bank’s business model does not significantly rely on public housing fi nancing. Additionally, in reference to Section 15 of the Commission Notice of 21 December 2023, local government financing is excluded from the numerator for GAR calculation. The Bank does not hold collaterals obtained by taking possession of residential o r commercial properties. Pursuant to the Disclosures Regulation, assets excluded from the calculation of the Green Asset Ratio include: exposures to central governments and supranational issuers, exposures to central banks, and the trading book. The Bank’s trading book does not contain debt securities or equity instruments that must be reported by (i) financial corporations, (ii) non -financial corporations, and (iii) financial and non -financial corporations, including SMEs and non-financial corporations, and non-EU country counterparties. The Bank did not independently verify the minimum safeguards within the taxonomy disclosures for 2024 due to the absence of reported target -financed activities classified as aligned with the Taxonomy in the business client sector. The assessment of minimum safeguards in the context of individual clients should focus on producers and suppliers of goods and services they purchase. These guidelines were issued on 8 November 2024 in the Commission Notice C/2024/6691, and as a result, the Group did not have the required information to assess minimum safeguards for this portfolio. Due to the lack of available information and the insufficient time to adapt to the new guidelines in the 2024 reporting, the verification of minimum safeguards was not conducted for mortgage loans secured by residential real estate for individual clients. Therefore, the Group applied the same approach as in the previous year to the retail portfolio, as the available guidelines indicated that the assessment of minimum safeguards does not apply to individual clients. • Explanations regarding the nature and objectives of the business activities in line with the EU Taxonomy and the development of these activities over time: • The Group's activities in line with the EU Taxonomy primarily involved providing loans to households secured by residential real estate (over 90% of the eligible assets), and, to a lesser extent, loans to non-financial enterprises. • This report includes a correction of an error regarding the position in Template 1, where exposures of companies within the Bank Group were reported. In last year's report, loans and advances provided by Alior Leasing Sp. z o.o. Group were reported under t he "Financial undertakings" section. The change in presentation has no impact on the reported green assets ratio for 2023. • Additionally, this report includes a change resulting from the interpretation of the EU Taxonomy requirements. In last year's report, under Template 1, Box 55 "Financial Guarantees" included guarantees granted to companies subject to the sustainability rep orting obligation under the NFRD directive. In this year’s report, the “total [gross] carrying amount” section includes all guarantees provided by the Bank, categorised by environmental purpose, based on guarantees issued to companies covered by the CSRD. • Compared to the previous year, no changes were made to the approach for qualifying activities in line with the EU Taxonomy. The principles, methodology, and areas covered by the EU Taxonomy remain unchanged, and the Bank has not introduced any modification s or expansions to these activities compared to the previous period.
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225 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Alior Bank has not specified detailed objectives regarding the financing that qualifies as compliant with the EU Taxonomy. Alior Bank’s objectives under the “Bank for Every Single Day, Bank for the Future” business strategy are pursued in the following three ESG areas: 1. Responsibility for social processes around us (S) 2. Readiness to address environmental and climate challenges (E) 3. Adherence to the highest governance standards (G) We focus particularly on: • Ensuring full compliance with sustainability regulations • Implementing thorough evaluation of corporate client portfolios for ESG risks • Providing products that facilitate the use of EU and public funds to improve energy efficiency. Only a small portion of the Bank’s loan portfolio consists of large companies subject to the CSRD. The business client segment is predominantly composed of sole proprietorships and small and medium -sized enterprises. In the individual client segment, Alior Bank’s distinctive feature is its consumer finance segment. In addition to the data required by the EU Taxonomy, the exposure within households will be reported under the voluntary indicators disclosed above. In line with the European Banking Federation’s January 2024 letter, the Bank has prepared voluntary disclosures to demonstrate its commitment to financing climate change mitigation in 2023. For consistency, disclosures have been made on a gross carrying am ount basis. Data was sourced from the Data Warehouse based on banking reports. In terms of mortgages in the individual client segment, in accordance with Commission Delegated Regulation (EU) 2021/2139, for residential buildings built before 31 December 202 0 this is 15% of the most energy -efficient buildings, as per the information provided by the Ministry of Development and Technology. For residential buildings constructed after 31 December 2020, the criterion is primary energy consumption which must be 10% lower than the threshold set for near-zero energy buildings. Voluntary disclosure for the consumer finance segment: • Financing of solar power systems in the Consumer Finance segment: PLN 237,962,214 Voluntary disclosure for mortgage financing: • Mortgage loans in the individual client segment intended to finance properties that meet the energy efficiency criterion: PLN 176,253,598.47 Voluntary disclosure of renewable energy (RES) financing in the business customer segment: • RES financing in the business client segment: PLN 164,078,479.78
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226 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Climate change – ESRS E1 E1-1 – Transition plan for climate change mitigation In 2024, the Alior Bank Group did not have a transformation plan in place to mitigate climate change. However, the Group plans to develop and publish a decarbonisation plan for its operations in the coming years. E1-2 – Policies related to climate change mitigation and adaptation In 2024, the Alior Bank Group companies did not have uniform policies related to climate change mitigation and adaptation. Alior Bank Alior Bank has been implementing its 2023-2024 strategy. The highest level responsible for implementing the strategy is the management board. The environmental section of the document outlines the following objectives: • developing the Bank’s own zero emission energy sources, including a solar power system by the Data Centre in Krakow • reducing the consumption of energy, paper, and plastics • measuring Scope 1 and Scope 2 emissions, and initiating calculations for Scope 3. In Q4 2024, the Alior Bank S.A. Sustainable Financing Policy, which defines the Framework for Sustainable Financing at Alior Bank S.A., was adopted by a resolution of the Management Board. Sustainable financing provided by the Bank is allocated to projects that contribute to achieving specific environmental including: climate change mitigation; climate change adaptation; sustainable use and protection of water and marine resources; transition to a circular economy; pollution prevention and control; and prot ection and restoration of biodiversity and ecosystems or social objectives. The Bank aims to ensure that the projects financed do not negatively impact sustainability factors and that the companies receiving sustainable financing adhere to good management and corporate governance practices. The Bank is commit ted to publishing annual allocation reports and will strive to publish annual reports on the expected and achieved impact (effect) of financing, ensuring that impact reports include qualitative indicators. Where possible, the Bank will disclose quantitative metrics along with a description of key assumptions and methodologies used for measurement. In 2024, Alior Bank required its suppliers to comply with the Alior Bank S.A. Supplier Code of Ethics. The Code sets out the Bank’s expectations that suppliers, in specific cases related to the scale and nature of their business, systematically manage the environmental impact of their activities, including greenhouse gas emissions. Alior Leasing Alior Leasing plans to develop an ESG strategy that will address, among other aspects, climate-related issues. Work on the ESG strategy and decarbonisation plan is scheduled to begin in Q1 2025. E1-3 – Actions and resources in relation to climate change policies In 2024, the Alior Bank Group did not take any action related to climate change mitigation and adaptation. Its member companies did not incur significant operating or investment expenses for such actions.
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227 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement E1-4 – Targets related to climate change mitigation and adaptation In 2024, the Alior Group did not have any common targets for climate change mitigation and adaptation. Alior Bank Alior Bank’s targets in this regard are outlined in the 2023 -2024 Strategy and disclosed in this statement under the “Policies related to climate change mitigation and adaptation” section. The Bank has not adopted specific metrics for these targets. Key p erformance indicators for ESG areas will be included in the new strategy that Alior Bank plans to publish in 2025. Simultaneously, the Bank intends to set targets for the decarbonisation of its operations. Alior Leasing Alior Leasing has not established any climate change mitigation and adaptation targets. E1-5 – Energy consumption and mix Information on energy consumption and energy mix • Energy consumption and energy mix • Unit • 2024 Fuel consumption from coal and coal products MWh 0 Fuel consumption from crude oil and petroleum products MWh 13619 Fuel consumption from natural gas MWh 1,307.66 Fuel consumption from other fossil sources MWh 0 Consumption of purchased or acquired electricity, heat, steam, and cooling from fossil sources MWh 22,809.06 T otal fossil energy consumption MWh 37735.36 Share of fossil sources in total energy consumption % 100 Consumption from nuclear sources MWh 0 Share of consumption from nuclear sources in total energy consumption % 0 Fuel consumption for renewable sources, including biomass (also comprising industrial and municipal waste of biologic origin, biogas, renewable hydrogen, etc.) MWh 0 Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources MWh 0 Consumption of self-generated non-fuel renewable energy MWh 0 T otal renewable energy consumption MWh 0 Share of renewable energy in total energy consumption % 0 T otal energy consumption MWh 37,735.36
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228 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement E1-6 – Gross Scopes 1, 2, 3 and Total GHG emissions In 2024, the Alior Bank Group calculated its carbon footprint for the first time. The process applied two calculation methodologies: PCAF and GHG Protocol, and employed emission databases, including KOBIZE, Defra and PCAF for the calculation of the portfolio emissions. The analysis of the assets and activities of the companies within the Group, as well as their estimated contribution to the total carbon footprint in Scope 1 and 2, indicated the possibility of excluding companies other than the largest ones, namely the Alior Bank and Alior Leasing, from the emission calculation. Both the energy consumption and the estimated emissions of the other companies represent an insignificant portion of the total emissions (below 5%). Scope 1 and Scope 2 cover all activities related to direct and indirect emissions from Alior Bank and Alior Leasing. For Scope 3, emissions were estimated for all categories deemed relevant to the Group. Similar to Scope 1 and 2, in Scope 3, the value chain of Alior Bank and Alior Leasing was considered, with the proportional contribution of other entities within the Gro up to Scope 3 emissions being estimated as immaterial. Within the material categories of Scope 3, namely category 15 Investments and category 13 Leasing by lessors, the other companies in the Group do not generate any emissions, as they do not have investm ent, credit, or leasing portfolios (in these categories, the emission calculation includes all relevant assets of the Group). Other categories within Scope 3 were excluded as immaterial based on the estimated share of emissions below 5% of the Group's total emissions. An additional qualitative criterion was the low quality of the data used for the emission estimates or the irrelevance of the category to the nature of the Group’s activities. The calculation did not include assets within the value chain, particularly assets/investments managed by the Group but not recognized on the Group's balance sheet, such as assets managed by the Group's investment funds.
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229 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Alior Bank Group’s 2024 carbon footprint Scope 1 Direct emissions Emissions [tCO2] Fuel consumption in buildings 382.61 Refrigerant consumption 68.96 Fleet 3,288.66 Scope 2 Indirect emissions Emissions [tCO2] Electricity (location-based method) 11,041.81 Electricity (market-based method) 11,075.25 District heating 1,765.29 Scope 1 + 2 [location-based method] 16,547.33 Scope 1 + 2 [market-based method] 16,580.77 Scope 3 Other indirect emissions Emissions [tCO2] Category 13 Leased assets 4,687,504.21 Category 13 Biogenic emissions 377.73 Category 15 Investments 3,409,240.49 Business Loans 1,819,144.71 Project Finance 182,736.05 Commercial Real Estate 18,226.49 Mortages 200,343.27 Motor vehicle loans 223,866.28 Sovereign debt 964,923.70 Scope 3 8,096,744.70 Scope 1 + 2 + 3 [location-based method] 8,113,292.03 Scope 1 + 2 + 3 [market-based method] 8,113,325.47 Scope 1 + 2 + 3 Emission intensity [location- based method] [tCO2/mln PLN] 944.91
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230 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Scope 1 + 2 + 3 Emission intensity [market- based method] [tCO2/mln PLN] 944.91 The Alior Bank Group has established a carbon footprint calculation methodology aligned with regulations, guidelines, and standards. The regulatory framework considered in this methodology is continuously reviewed and validated. Scope 1 carbon footprint includes: • natural gas consumption – the calculation considers data on the number of facilities using natural gas and the volume consumed. CO2 emissions are determined using physical conversion factors and data from the National Centre for Emissions Management (KOBIZE). • heating oil consumption – emissions from diesel combustion in buildings, primarily for power generator operation. Calculations are based on density values specified in the current Regulation of Minister of Climate and Environment on Quality Requirements fo r Liquid Fuels, along with fuel type and emissions data from the latest KOBIZE reports. • refrigerant usage – emissions from refrigerant leakage are based on the volume of refrigerant refilled or replaced. The calculation considers the quantity of refrigerant used and its corresponding Global Warming Potential (GWP) values. • Fuel consumption from company cars - the amount of fuel consumed (gasoline, diesel and LPG) and the corresponding KOBIZE and DEFRA indices are used to calculate emissions. Scope 2 carbon footprint includes: • electricity consumption – emissions from electricity use are calculated based on the emission intensity of Poland’s power system. This is based on the current data provided by KOBIZE. • district heating consumption – emissions from district heating are determined using the benchmark for the national district heating system. The benchmark is calculated by dividing CO2 emissions (kg) and the volume of heat produced, based on data from the KOBIZE database. Emissions from electricity and district heating are calculated using two methodologies: a location -based approach which uses benchmarks from the KOBIZE database, and a market -based approach which relies on benchmarks provided by the energy supplier and district heating provider. Data for calculating scope 3 in the context of the primary data: • Category 13: In this category, data on average annual mileage, fuel type, vehicle make and model and number of contracts were obtained from Alior Leasing's systems. • Category 15 by asset class: • Business Loans - data on the amount owed on the last day of the year and sector codes were obtained from the banks' internal systems. • Project Finance - data on the amount of debt as at the last day of the year and sector codes were obtained from internal banking systems. • Mortages - information on property type, debt amount as at the last day of the year, property valuation, area, primary energy were mostly taken from internal banking systems. • Commercial Real Estate - information on property type, amount owed on the last day of the year, property valuation and area was taken from internal banking systems.
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231 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • Motor Vehicle Loans - data on the value of assets and the amount of debt as at the last day of the year was taken from Alior Leasing's internal systems. • Sovereign Debt - information on the nominal values of government bonds was extracted from internal banking systems. Primary data: Asset class Emissions [tCO2e] Total Scope 3 emissions [tCO2] % of Scope 3 emissions Business Loans CSRD 264,058 8,096,744.70 3.26% Mortgages 200,343.27 2.47% Commercial Real Estate 18,226.49 0.23% Contribution of primary data [%] 5.96% Scope 3 includes: • Category 13: Leased Assets. This category covers Alior Leasing’s portfolio of vehicles, machinery, and equipment. The portfolio includes both internal combustion and electric vehicles. As for machinery and equipment, the majority run on electric power, wit h some using combustion engines. Vehicle emissions were calculated based on annual mileage, average fuel consumption, and the type of fuel used. • For machinery and equipment, emissions were calculated based on fuel consumption or estimated electricity usage derived from operating power, depending on the type of machine. Emissions in this category were calculated in accordance with the GHG Protocol methodology and benchmarks specified in the National Inventory Report. Data on operating power or average fuel consumption was sourced from publicly available sources. • Category 15: Investments. Calculations were performed in accordance with the PCAF methodology and its set of indicators. The following asset groups were included in this category: • Business Loans (Working Capital Facilities): This group includes all credit limits granted to finance day-to-day operations. The calculation is based on the debt amount on the last day of the year. The emission benchmark for each credit limit was sourced f rom the PCAF database by matching it to the indebted entities based on PKD (Polish Classification of Business Activities) codes. For clients subject to the CSRD from 2024 onwards, data for the calculation was sourced from the BIK ESG Platform, and the calculation was based on the debt amount on the last day of the year and EVIC. • Project Finance (Investment Loans): The calculation considers the amount of debt as of the last day of the year and emission benchmarks sourced from the PCAF database, matched to the indebted entities based on PKD codes.
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232 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • Mortgages (Mortgage Loans): The calculation is based on the debt amount on the last day of the year and the value of the property. To calculate the final emissions from the loan, the energy consumption of the property and its associated carbon emissions were considered. The indicators were taken from the PCAF database. • Commercial Real Estate (Commercial Real Estate Loans): The calculation is based on the debt amount as of the last day of the year, the value of the property, its energy consumption and emissions. The indicators were taken from the PCAF database. • Motor Vehicle Loans: This category covers all loans granted for motor vehicles. The calculation considers the amount of debt as of the last day of the year, the value of the asset in question, and emissions estimated internally based on Alior Leasing’s portfolio. • Sovereign Debt: This category includes all government bonds by issuer from different countries. The nominal value of the bonds converted into USD and issuance rates were used for the calculation. GDP data were taken from the World Bank website, while country-specific issuances were taken from the EDGAR database. All emission values are expressed in tonnes of CO2 -equivalent, taking into account all greenhouse gases as defined in the Kyoto Protocol. For the calculation of emissions for exposures denominated in foreign currencies, the average NBP exchange rates as at 31.12.2024 were used. For the calculation of GHG intensity on the basis of the Alior Bank Group's net income, net income defined as net income from: interest, commissions and dividends (values are consistent with the Alior Bank Group Financial Statement for 2024). Interest income calculated using the effective interest rate method [PLN K] 6.663.692 Income of a similar nature [PLN K] 570.025 Fee and commission income [PLN K] 1.352.300 Dividend income [PLN K] 322 Total [PLN K] 8.586.339 E1-7 – GHG removals and GHG mitigation projects financed through carbon credits The entity, as a financial services business, does not conduct or plan greenhouse gas removal and storage projects as part of its own operations. It has not participated or is not participating in upstream or downstream projects in its value chain. E1-8 – Internal carbon pricing As a financial services provider, the entity does not use internal carbon pricing systems.
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233 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement E1-9 – Anticipated financial effects from material physical and transition risks and potential climate-related opportunities Alior Bank CG uses the option to omit disclosure of this information in accordance with Appendix C of the Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023, as the entity is reporting for the first time in accordance with the ESRS requirements. Social information Information on Alior Bank Group employees and employees in the value chain includes data on the parent company, Alior Bank S.A. and Alior Leasing Sp. z o.o. and do not include employees of other group companies. This simplification is due to the lack of detailed employment data for the other group companies. The average employment in FTEs in 2024 at Alior Bank and Alior Leasing represents 98% of the value of the average employment in FTEs in 2024 at the entire Alior Bank Group. Own workforce – ESRS S1 S1-1 – Policies related to own workforce In the Alior Group material impacts, risks and opportunities related to own employees are managed individually by members of the group. At Alior Bank and Alior Leasing, the management boards of each company are responsible for the implementation of relevant policies. The policies are publicly available on the respective entities’ websites. Alior Bank adopted the following policies: • Human Rights Policy17 applicable to employees and the Bank’s other stakeholders • Policy for an Unwanted-Behaviour-Free Workplace18 • Diversity Policy19 Alior Bank recognises respect for human rights and dignity as a fundamental societal value and an essential condition for the company’s development. The company is aware of the growing importance of human rights for employees, shareholders, suppliers, clie nts, and the community. This commitment is reflected in the Human Rights Policy adopted in 2023. This policy stipulates the following: 17 Alior Bank’s Human Rights Policy is available at: https://www.aliorbank.pl/dam/jcr:77c76b39 -0f28-4ed9-b21c- 17dac4850b35/polityka-praw-czlowieka-alior-banku.pdf 18 The Diversity Policy and Policy for an Unwanted -Behaviour-Free Workplace apply to all employees bound to the Bank by an employment contract, commission contract, or other similar agreements. 19 Alior Bank’s Diversity Policy is available at: https://www.aliorbank.pl/dam/jcr:460f2f52 -e3ca-43c2-92b2-4fc87960b2d3/polityka- roznorodnosci-alior-bank.pdf
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234 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • Supporting and respecting human rights as recognised by the international community and eliminating any human rights violations by the company • Respecting freedom of association • Effectively combating discrimination in employment • Adopting a preventive approach to environmental issues and promoting an environmentally responsible attitude • Countering corruption in all its forms, including extortion and bribery • Utilising and promoting environmentally friendly technologies. The policy also expresses Alior Bank’s categorical opposition to all forms of modern slavery, forced labour, and torture. The parent company strictly complies with regulations on the legal working age, ensuring that child labour is not accepted in any form. The policy aligns with the Minimum Guarantees for Compliance with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights outlined in the eight fundamental convention s specified in the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work, as well as those set forth in the International Bill of Human Rights and the Ten Principles of the UN Global Compact. The policy is accessi ble to all employees of the Bank and applies to every individual employed by the organisation. Employees may report any suspected violations of this policy through the channels specified in the Whistleblowing and Whistleblower Protection Policy. The Diversity Policy at Alior Bank establishes the conditions for strengthening corporate culture values and fostering a work environment where every employee feels respected, valued, and empowered to reach their full potential. The company affirms its com mitment to diversity by upholding fundamental human rights and freedoms and preventing discrimination. The organisation ensures equal treatment, fair and equitable remuneration, and safe, ergonomic working conditions for all employees. Additionally, employ ees have the right to freedom of association, privacy, and freedom of speech and expression. The provisions of the Unwanted-Behaviour-Free Workplace Policy emphasise the company’s commitment to mutual respect in business relations, equal opportunities and its firm opposition to any actions or statements that violate the rights and dignity of others. In line with this policy, bullying, discrimination, harassment, sexual harassment, and any other undesirable behaviour that contravenes the law or principles of social coexistence are deemed unacceptable and will not be tolerated by Alior Bank. Discrimination means unequal treatment of Employees with regard to the establishment and termination of the employment relationship, terms and conditions of employment, promotion and access to training to improve professional qualifications, in particular on the basis of gender, age, disability, race, religion, nationality, political opinion, union membership, ethnic origin, religion, sexual orientation, employment for a definite or indefinite period of time, full -time or part-time employment. The Policy for an Unwanted -Behaviour-Free Workplace also outlines the preventive measures implemented by Alior Bank. These include providing employees with access to the policy regulations, mandatory e-learning training on undesirable behaviour, and ongoin g monitoring of employee relations. Any employee within the organisation can report breaches of the policy, either stating their name or anonymously, to their HR Business Partner, manager, or via a dedicated email. The procedure for conducting investigatio ns is detailed in the Procedures for Reporting Unwanted Behaviour at Alior Bank, as outlined under the Information Related to Corporate Governance section of this statement. The employer (either alone or in consultation with the trade
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235 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement unions), assesses every six months the effectiveness of the measures taken as a result of the Policy for an Unwanted-Behaviour-Free Workplace. These regulations have been adopted in the company by the Board of Directors and are available to employees on the company's intranet. The Human Rights Policy is also published on Alior Bank's website. Updates to the procedures are communicated to employees through internal information channels. The Bank guarantees equal treatment for both external and internal candidates, particularly in the establishment of employment relationships. The primary criteria for candidate selection are professional experience and skills. The criteria for selecting in dividuals for the most important positions at Alior Bank, as well as members of the bodies of the Brokerage Department, are outlined in the Selection and Assessment Policy for Persons Holding Key Functions at Alior Bank and the Suitability Assessment Policy for Members of the Bodies of the Brokerage Department of Alior Bank, respectively. The criteria for assessing the suitability of members of the Management Board and Supervisory Board are specified in the Selection and Suitability Assessment Policy for Me mbers of the Management Board of Alior Bank and the Selection and Suitability Assessment Policy for Members of the Supervisory Board of Alior Bank. The rules regarding members of the Management Board, individuals performing key functions, and members of th e bodies of the Brokerage Department are implemented by the Supervisory Board of Alior Bank. The rules concerning the Supervisory Board are implemented by the General Meeting. Alior Bank’s ambition is to foster employee engagement, which is understood as a positive attitude of employees toward the organisation and its values. The company strives to build and nurture commitment, which requires a two-way relationship between the employee and the employer. The employer is responsible for creating working conditions that foster such commitment. Efforts in this area are directed at all employees, and a diagnostic tool used to build proper support is, among other things, a periodic eng agement survey directed to all or selected units and organisational departments of Alior Bank. Based on the results, the company draws conclusions and makes decisions about necessary actions. • 96%: percentage of Alior Bank’s employees who took part in the 2024 Engagement Survey • 64%: engagement index Alior Bank has not implemented a separate policy specifically to prevent workplace accidents. At Alior Leasing, material risks, impacts, and opportunities related to own employees are addressed, among other areas, in: • Human Rights Policy that, like at Alior Bank, also applies to the company’s other stakeholders • Alior Leasing’s Policy for an Unwanted-Behaviour-Free Workplace • Code of Ethics • Diversity Policy These regulations have been adopted at Alior Leasing by the Management Board and are available to employees on the company’s intranet. The Human Rights Policy is also published on Alior Leasing’s website. Updates to the procedures are communicated to employees through internal channels.
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236 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Alior Leasing’s Human Rights Policy20 aims to ensure the following for employees: • open and tolerant working environment • employer’s commitment to the wellbeing of employees, including their psychological, social, and health-related needs • freedom of association and cooperation with social partners • equality in employment • disapproval of forced and child labour • prevention of discrimination, harassment (mobbing), and other irregularities in the workplace. The provisions of the Policy align with the human rights standards outlined in the UN International Bill of Human Rights, which includes the Universal Declaration of Human Rights, the International Covenant on Economic, Social, and Cultural Rights, and the International Covenant on Civil and Political Rights. The policy also acknowledges the core labour standards set by the International Labour Organization and commits Alior Leasing to adhere to the recommendations on responsible business conduct outlined in the OECD Guidelines for Multinational Enterprises and the Ten Principles of the UN Global Compact. Employees may report violations of the company’s Human Rights Policy in accordance with Alior Leasing’s Whistleblowing and Whistleblower Protection Policy 21 and the Policy for an Unwanted -Behaviour-Free Workplace. The provisions of Alior Leasing’s Policy for an Unwanted -Behaviour-Free Workplace, Code of Ethics, and Diversity Policy follow the regulations adopted by its parent company. In both the Code of Ethics, the Policy for an Unwanted -Behaviour-Free Workplace, and the Human Rights Policy, Alior Leasing broadly defines discrimination and outlines its prevention. Alior Leasing understands discrimination as unequal treatment of employe es in relation to the establishment and termination of the employment relationship, terms and conditions of employment, promotion, and access to training for improving professional qualifications. Discrimination also includes encouraging or directing another person to violate the principle of equal treatment in employment. According to the company’s rules, the owner of the regulation is required to review it annually and update it if necessary. These matters are monitored by the Compliance Unit. Incidents of discrimination, mobbing, or other unwanted behaviour can be reported at Alior Leasing in accordance with the provisions of the Policy for an Unwanted-Behaviour-Free Workplace, as outlined in this statement under the Information Related to Corporate Governance section. Alior Leasing does not have specific policy commitments regarding the inclusion of individuals from vulnerable groups within own workforce. Employee engagement activities undertaken by Alior Leasing in 2024 include: 20 Alior Leasing’s Human Rights Policy is available at: https://aliorleasing.pl/wp -content/uploads/2024/06/zal-nr-1-do-UZ.62.2024_- Polityka-Praw-Czlowieka.pdf 21 Alior Leasing’s Whistleblowing and Whistleblower Protection Policy https://aliorleasing.pl/wp -content/uploads/2024/09/Polityka- zglaszania-naruszen-i-ochrony-sygnalistow.pdf
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237 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • the Give a Gift campaign, in which staff had the opportunity to help fulfil the dreams expressed in letters from seniors who lost their possessions in the 2024 floods • the Littles’ Grand Tour campaign, aimed at raising money for children affected in road accidents • Two Hours for the Family, a campaign designed to promote family bonding, allowing employees to take an extra two hours off work to spend with their families or loved ones. The company has not implemented a separate policy specifically to prevent workplace accidents. S1-2 Processes for engaging with own workforce and workers’ representatives about impacts At the Alior Bank Group, interactions with own workforce are governed by regulations adopted individually by specific member companies. Alior Bank Cooperation with Alior Bank’s own workforce occurs both directly and indirectly, contributing to the improvement of working conditions and the implementation of various initiatives. Direct cooperation includes annual employee engagement surveys, analysis o f onboarding and offboarding interview surveys, and addressing complaints and requests. Indirect cooperation takes place through the bank’s active trade union organisations. The bank consults with union representatives on key employee matters in line with the Trade Union Act. In 2024, 18 meetings were held with unions. Additionally, the company has appointed a representative for cooperation with trade unions. In 2024, this role was held by Managing Director of the HR Division. At Alior Bank S.A., there are no existing agreements that can be interpreted as global framework agreements with employee representatives. The agreements concluded have resolved collective disputes, and their scope addresses employee rights and issues related to remuneration principles, including measures against gender - based pay discrimination. Alior Bank views the results of the Engagement Survey as a measure of the effectiveness of its collaboration with own workforce. The agreements reached by Alior Bank through its cooperation with employees include: • Agreements on base salary raises, • Agreements regarding the establishment of bonus rules for employees of the Head Office, Audit Department, and Compliance Department, • Agreements concerning amendments to the Regulations of the Company Social Benefits Fund. In 2024, Alior Bank has not taken steps to gain insight into the opinions of members of its own workforce who may be particularly vulnerable or marginalised. Alior Leasing Alior Leasing has not established any general process for engaging with own workforce.
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238 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement S1-3 – Processes to remediate negative impacts and channels for own workforce to raise concerns Alior Bank takes preventive measures to avoid material negative impacts on its employees. The company, with particular emphasis on the role of managers and the HR department, supports initiatives aimed at fostering positive working relationships based on legal compliance and the principles of social coexistence. This applies to employer-employee relations as well as interactions between employees and with business partners and clients. The Bank expects all employees to adhere to the principle of mutual resp ect in their business relationships, meaning their behaviour and statements must not violate the rights or personal dignity of others. Any action or behaviour that constitutes mobbing, discrimination, harassment, sexual harassment, or any other unwanted be haviour violating the law or social coexistence principles is unacceptable and will not be tolerated by Alior Bank. In the event of a negative impact on an employee or staff member, remedial measures are recommended within the framework of the Procedure fo r dealing with complaints of undesirable behaviour, described in the chapter Information related to corporate governance, and the timely implementation of these recommendations is verified through email communication to the units responsible for their implementation. Within the Alior Bank Group, channels for employees to raise concerns or issues, and the methods for addressing them, have been established for individual companies separately. At the parent company, Alior Bank, these are outlined in the Whistleblowing and Whistleblower Protection Policy and the Policy for an Unwanted-Behaviour-Free Workplace. At Alior Leasing, this is governed by the Alior Leasing Whistleblowing and Whistleblower Protection Policy. More information on the policies implemented in the companies is provided in the Information Related to Corporate Governance section of this statement. This section also includes details on the whistleblower protection policies in place across individual Group companies. The Alior Bank Group does not have specific procedures to assess employees' awareness of reporting channels. However, employees are informed about their operation during mandatory training sessions, and their knowledge is updated annually. Additionally, al l new hires are required to complete whistleblowing training. S1-4 – Taking action on material impacts on own workforce, adopting approaches to managing material risks and pursuing material opportunities related to own workforce, and the effectiveness of these actions Alior Bank addresses the material negative impact identified during the double materiality assessment regarding the lack of female representation in the senior management. In 2024, Alior Bank became a signatory to the Diversity Charter, committing to prohi bit discrimination in the workplace and promote diversity. The Charter also reflects the company’s commitment to involving all employees, as well as business and social
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239 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement partners, in these efforts. Following the adoption of the Charter, Alior Bank updated its Diversity Policy 22, which includes recruitment standards aligned with the EU Directive on equal treatment in employment, diversity in development, interests, and communication, as well as equality in pay and benefits. The policy also outlines the channels through which employees can report any violations (non-compliance with the provisions of the Policy or suspected non -compliance). Alior Bank joined the Diversity and Inclusion Committee of the Polish Bank Association in January 2025. In 2024, Alior Bank did not use leverage in its business relationships to address material adverse impacts on employees. In accordance with the company’s policies for selecting and assessing the suitability of Management Board and Supervisory Board members, the company strives to ensure diversity on both boards, including in terms of gender. The Appointments and Remuneration Committee of the Supervisory Board ensures that both genders are considered in the selection process, with a minimum gender minority of 30%. At the Group’s parent company, measures to create a positive impact on employees are developed based on regular engagement surveys. This enables the identification and addressing of their needs and areas for improvement. Alior Bank also periodically evalua tes the effectiveness of its actions through satisfaction surveys conducted after development activities and organised events. The company identifies the necessary and appropriate actions in response to the impact on its employees and tracks and evaluates their effectiveness through periodic Engagement Surveys. At Alior Leasing, plans, actions, and resources to manage material impacts, risks, and opportunities related to own employees are identified and implemented by the Health and Safety, Internal Audit, Compliance, and HR units. In 2024, the company did not implement actions related to identified material adverse impacts on own workforce. To ensure a positive material impact, the company conducted regular health and safety training, operational risk training, and educational activities related to AML. The effec tiveness of these initiatives is tracked and evaluated through knowledge tests conducted after training sessions. The company does not have a formal process in place for identifying activities related to actual or potential negative impacts on employees. The Alior Bank Group has not identified any material opportunities related to own workforce, nor has it identified any negative impact on employees resulting from its transition to a greener, climate -neutral economy. The Alior Bank Group has no information to report on planned or ongoing measures to mitigate material risks arising from its influence and dependence on own employees, nor on how their effectiveness is monitored. The Group also does not have data on the resources allocated to managing its impact on employees. In 2024, Alior Leasing did not implement additional measures specifically aimed at ensuring a positive impact on its employees. 22 Alior Bank’s Diversity Policy is available at https://www.aliorbank.pl/dam/jcr:460f2f52 -e3ca-43c2-92b2-4fc87960b2d3/polityka- roznorodnosci-alior-bank.pdf
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240 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement S1-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities The Alior Bank Group has not set targets for managing material employee -related impacts, risks, and opportunities. The double materiality assessment process concluded in December 2024, and the Group did not establish performance-related targets during the reporting period. S1-6 – Characteristics of the undertaking’s employees Characteristics of Alior Bank Capital Group employees include consolidated data for the companies: Alior Bank S.A., Alior Leasing Sp. z o.o., Alior TFI SA, Alior Services sp. z o.o. Other companies of the Alior Bank Capital Group do not have a significant impact on the presented data. Number of employees by gender Gender Alior Bank S.A. Alior Bank Group Men 2,475 2,661 Women 4,164 4,415 Others 0 0 Undisclosed 0 0 Total employees 6,639 7,076 Employees by contract type and gender Women Men Others Undisclosed Total Alior Bank S.A. Employees (total number) 4,164 2,475 0 0 6,639 Indefinite-term employees (total number) 3,525 2,076 0 0 5,601 Fixed-term employees (total number) 639 399 0 0 1,038 Employees with no guaranteed hours (total number) 0 0 0 0 0 Full-time employees (total number) 4,054 2,455 0 0 6,509 Part-time employees (total number) 110 20 0 0 130 Alior Bank Group
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241 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Employees (total number) 4,416 2,664 0 0 7,080 Indefinite-term employees (total number) 3,748 2,234 0 0 5,982 Fixed-term employees (total number) 667 427 0 0 1,094 Employees with no guaranteed hours (total number) 0 0 0 0 0 Full-time employees (total number) 4,296 2,636 0 0 6,932 Part-time employees (total number) 119 25 0 0 144 Number of employees who left the organisation during the reporting period and employee turnover rate 2024 Alior Bank S.A. Number of employees who left the organisation during the reporting period 1,017 2024 turnover rate 15.5% Alior Bank Group Number of employees who left the organisation during the reporting period 1,181 2024 turnover rate 15.65% S1-7 – Characteristics of non -employees in the undertaking’s own workforce In 2024, the Alior Bank Group had no data to report on the aggregate characteristics of individuals who are not employees but qualify as own workforce. The largest number of people belonging to this category are employed in Alior Bank's IT Division, through external companies under employee leasing. In December 2024, Alior Bank had agreements with 11 such intermediaries and used the services of 97 specialists under the employee leasing formula. S1-9 – Diversity metrics At Alior Bank, “senior management” for the purposes of this statement refers to employees leading the Bank’s Head Office units and organisational units, up to two reporting levels below a member of the Bank’s Management Board. Alior Leasing has adopted the same definition, considering employees up to two reporting levels below a Management Board member as senior management. Gender diversity in the senior management
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242 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement 2024 Women Men Others Undisclosed Alior Bank S.A. Number of senior management members 32 59 0 0 Proportion of genders in senior management (%) 35.16% 6.84% 0.00% 0.00% Alior Bank Group Number of senior management members 44 84 0 0 Proportion of genders in senior management (%) 34.38% 65.63% 0.00% 0.00% Age structure of the workforce of Alior Bank and AliorBank Group Total number of employees, including: 2024 Number % Alior Bank S.A. Age group: under 30 1,102 16.6 Age group: 30-50 4,843 72.9 Age group: over 50 694 10.5 Alior Bank Group Age group: under 30 1,154 16.31 Age group: 30-50 5,170 73.06 Age group: over 50 752 10.63 S1-10 – Adequate wages In 2024, the Alior Bank Group did not pay any employees below the legal minimum wage threshold. At the Group’s parent company, the minimum wage, excluding bonuses and employee benefits, was PLN 700 higher than the legal minimum and amounted to PLN 5,000 gross 23. 23 Since September 2024
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243 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Employees who receive fair pay 100% Percentage of employees who receive remuneration below the adequate pay 0% S1-13 – Training and skills development metrics Percentage of employees who took part in regular performance reviews and career development programmes Alior Bank Number of employees Number of performance review and career development programme participants Percentage Women 4,164 3,779 90.75% Men 2,475 2,442 98.67% Total 6,639 6,221 93.70% Alior Bank Group Number of employees Number of performance review and career development programme participants Percentage Women 4,415 4,029 91.26% Men 2,661 2,627 98.72% Total 7,076 6,656 94.06% Average number of training hours by gender Alior Bank S.A. Women 32,5 Men 32 Alior Bank Group Women 31,10 Men 30,64 Average number of training hours per person
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244 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Alior Bank 32 Alior Bank Group 30,63 S1-14 – Health and safety metrics The Alior Bank Group has not implemented a unified Health and Safety Management System covering employees across all companies within the Group. Instead, this matter is regulated at the individual company level. At Alior Bank, the management of occupational health and safety is based on the provisions of the Labour Code and secondary legislation concerning working conditions. In 2024, there were no fatal accidents or cases of occupational diseases at the bank. However, 9 occupational accidents were recorded, resulting in 79 days of employee absenteeism. Alior Leasing has not implemented an OSH management system, however, all employees are covered by the Management Board’s resolution approving an OSH policy. In 2024, Alior Leasing: • had no fatalities due to work-related injuries or illnesses • had no fatalities as a result of work-related injuries or ill-health among other workers on the premises • recorded two work-related accidents involving its own employees • had no cases of work-related ill-health among workers • recorded 8 days of absence due to work-related injuries • had no cases of work-related ill-health among former employees. The accident rate at Alior Leasing in 2024 was 0.4%. In total, there were 11 work -related accidents among Alior Bank Group's own employees. In both group companies, there were no fatalities as a result of work -related injuries and ill -health of other employees working on the premises. S1-15 – Work-life balance metrics All employees of the Alior Bank Group are entitled to family leave, which includes maternity, paternity, and parental leave. Percentage of entitled employees who have used family leave Alior Bank Total 10.94 Women 12.99 Men 7.47
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245 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Alior Bank Group Total 10.77 Women 12.81 Men 7.37 S1-16 – Remuneration metrics (pay gap and total remuneration) Starting with the 2023 reporting, the Bank calculates the pay gap in accordance with the methodology for calculating the indicators in Part 6 of the Guideline of 30 June 2022 on benchmarking of remuneration practices, the gender pay gap and approved higher ratios of variable to fixed components of remuneration under Directive 2013/36/EU (EBA/GL/2022/06). According to the current guidelines, the gender pay gap is calculated among all employees including the Executive Board, based on total remuneration. For the analysis of the data, exclusions have been applied in accordance with EBA/GL/2022/06 Part 6, point 51 and, for consistency of analysis, acting in accordance with the best effort principle, employees in positions of less than 0.4 full-time equivalents have been excluded. Below we present data for the wage gap for the Bank and on a consolidated basis for the Alior Bank Group calculated on the basis of average salaries. Remuneration metrics (pay gap and total remuneration) 2023 (after the variable remuneration update for 2023 in June 2024) 2024 (as at as of December 2024) Unadjusted gap Alior Bank Group * N/A 25.74% Unadjusted gap Alior Bank S.A. 28.45% 25.74%** * The consolidated ratio for the Alior Bank Group was calculated by applying the employee-weighted average for the companies: Alior Bank and Alior Leasing. ** The pay gap calculation will be updated in June 2025 to include all paid variable remuneration components earned and payab le for 2024, which have not yet been awarded as at the date of the report. Updated pay gap data including variable components in te rms of the EBA/GL/2022/06 methodology will be provided by the Bank to the NBP in accordance with the set reporting deadlines. In 2024, the unadjusted wage gap between women and men was 25.74% The reported ratio is lower by approximately 5 p.p. than the ratio calculated for the CSO section - Financial and Insurance Activity (Alior Bank S.A.'s own calculations according to CSO data : remuneration measures by PKD section and gender in July 2024, on the basis of average salaries). In addition, at the Bank we monitor the weighted pay gap, which compares salaries in homogeneous groups, comparing the amount of remuneration for work of the same or similar value (calculation on the basis of basic salary taking into account grade levels a nd job families). The pay gap at Alior Bank, expressed as a weighted average of women's base salaries to men's base salaries, was 1.9% in December 2024.
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246 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Pay Ratio - ratio of annual total remuneration 2024 Alior Bank Group * Alior Bank S.A. Ratio of annual total remuneration for the top earner in the organisation to the median annual total remuneration for all employees (excluding the top earner) 10.62 10.59 * The consolidated ratio for Alior Bank Group was calculated by applying the employee-weighted average for the companies: Alior Bank and Alior Leasing. Due to changes in the Bank's Management Board in 2024, the highest total remuneration in the organisation was calculated by compiling the remuneration amounts of the highest paid position in a given month of the year, even if other people worked in this position in particular months. Workers in the value chain – ESRS S2 S2-1 – Policies related to value chain workers In the Alior Bank Group, policies related to individuals working within the value chain, i.e. employees and female employees of partner offices, are adopted at the company level for each entity within the organisation. Alior Bank At Alior Bank, the principles for managing the material impact related to workers in the value chain are not addressed in the company’s existing policies. In 2024, the bank’s partner facilities did not have access to the IT banking network for e -learning. However, Alior Bank has begun analysing the technical feasibility of providing access, with plans to complete the work in the first half of 2025. Alior Bank’s human rights obligations concerning workers in the value chain are outlined in the company’s Supplier Code of Ethics24, adopted by the Alior Bank Management Board. The company requires suppliers to: • provide their employees with pay and benefits that meet or exceed applicable legal provisions and ensure these are settled on time and regularly, • guarantee other employee benefits, such as days off and holidays, • not benefit in any way from slavery, forced labour, human trafficking, or child labour, • uphold the right of workers to freely associate, in accordance with or exceeding legal requirements, • provide a workplace that is free from discrimination and harassment, respecting rules where abuse is unacceptable, particularly regarding age, disability, social or ethnic origin, gender, gender identity, nationality, race, sexual orientation, marital status, political opinion, religion, trade union membership, and family status, 24 Alior Bank’s Supplier Code of Ethics https://www.aliorbank.pl/dam/jcr:684db6f4 -da46-4c6e-8bca-5f22022d2afc/kodeks-etyki- dostawcow-alior-bank.pdf
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247 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • Guarantee appropriate working conditions, including a hygienic, safe, and hazard -free environment, and have plans in place to ensure the safety of workers. Alior Bank also expects its suppliers to implement mechanisms that raise awareness among their employees about the human rights outlined in the Supplier Code of Ethics. Additionally, the company encourage suppliers to promote diversity, inclusion, and integration within both the workplace and the supply chain. Alior Bank’s Supplier Code of Ethics reserves the right to audit or inspect suppliers to ensure compliance with the Code. This issue is addressed in the majority of contracts concluded, although in exceptional cases contracts are signed to the exclusion of the right of inspection. Within the scope of applicable legislation, the supplier is obligated to provide necessary information and documents confirming compliance with the human rights outlined in the Code. The Company also allows workers in the value ch ain to report violations of the Code by sending information to the dedicated email address: naruszenia@alior.pl. The human rights-related document applicable to Alior Bank is also the Alior Bank Human Rights Policy, 25 as described in this statement in section S1 - Own workforce. Its provisions apply both to the company’s own workforce and to other stakeholders, particularly employees of partner facilities. Any violations resulting from suspected non-compliance with the provisions of the Human Rights Policy can be reported by employees of these outlets in accordance with the Whistleblowing and Whistleblower Protection Policy. The Alior Bank Supplier Code of Ethics and Human Rights Policy align with key international standards, including the OECD Guidelines for Multinational Enterprises, the human rights standards defined in the Universal Declaration of Human Rights which consists of the Universal Declaration of Human Rights and the two covenants implementing it, as well as the ILO Declaration on Fundamental Principles and Rights at work and the fundamental conventions that form its basis. In 2024, the company did not record any instances of non-compliance with these regulations with respects to workers in the value chain. Alior Bank has not adopted any regulations regarding a general approach to the engagement of workers in the value chain. Alior Leasing At Alior Leasing, the principles for managing the material impact related to workers in the value chain have not been formalised. However, in 2024, the company took steps to establish and monitor access to training for workers in the value chain. Alior Leasing’s obligations regarding human rights for workers in the value chain are outlined in the Business Ethics – Supplier’s Statement document, which is published on the company’s website. The company considers the submission of any offer as accepta nce of its terms. Regarding human rights for workers in the value chain, the Business Ethics rules are aligned with the company’s Human Rights Policy. Alior Leasing expects its suppliers to: • refrain from employing minors, 25 Alior Bank’s Human Rights Policy is available at: https://www.aliorbank.pl/dam/jcr:77c76b39 -0f28-4ed9-b21c- 17dac4850b35/polityka-praw-czlowieka-alior-banku.pdf
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248 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • ensure no discrimination against employees on any grounds, particularly based on gender, age, race, disability, nationality, ethnic origin, sexual orientation, political views, trade union membership, or religion, • comply with legal requirements regarding minimum wages and working hours, • provide employees with safe and hygienic working conditions. The text of the Business Ethics – Supplier’s Statement document has been approved by the Management Board of Alior Leasing, and it does not refer to any international standards. The company has no additional Supplier Policy. Requirements for business partners, identical to those outlined in the Business Ethics – Supplier’s Statement document, are also included in Alior Leasing’s Human Rights Policy. This policy aligns with key international standards, including the OECD Guidel ines for Multinational Enterprises, the human rights standards defined in the Universal Declaration of Human Rights, and the core labour principles established by the International Labour Organization. The company also provides workers in the value chain w ith a mechanism to report suspected violations of the Human Rights Policy, in accordance with the Whistleblowing and Whistleblower Protection Policy26 and the Policy for Unwanted-Behaviour-Free Workplace. Alior Leasing has not adopted any regulations regarding a general approach to the engagement of workers in the value chain. S2-2 – Processes for engaging with value chain workers about impacts Within the Alior Bank Group, the processes for engaging with workers in the value chain about impacts are established for each company individually. The policies of parent companies are cascaded down to subsidiary companies. Alior Bank At Alior Bank, the departments responsible for ensuring cooperation with value chain workers include the External Network Department and the HR Division, supported by other organisational units at the company’s head office. The parent company of the Group ensures that agents and their employees receive onboarding training through signed agency agreements. This training covers banking products, legal regulations, security principles, and regulatory guidelines necessary for age ncy operations. Additionally, the company provides development training for them. Every three months, partner facilities undergo inspections and employee knowledge assessments. If the results are unsatisfactory or serious irregularities are detected, this may result in the employee being blocked from working at the facility. Alior Bank uses post -training surveys to assess participant satisfaction with training sessions at partner facilities. The survey results are analysed, and if areas requiring improvement are identified, the company 26 Alior Leasing’s Whistleblowing and Whistleblower Protection Policy is available at: https://aliorleasing.pl/wp - content/uploads/2024/09/Polityka-zglaszania-naruszen-i-ochrony-sygnalistow.pdf
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249 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement develops appropriate actions. The company does not take separate measures to gain insight into the perspectives of value chain workers who are particularly vulnerable to impacts or marginalised. Alior Bank is not a party to global framework agreements or other contracts with global trade unions regarding the respect for human rights of workers in the value chain. The company also does not have regulations in place for considering the opinions of v alue chain workers when making decisions about their working conditions. Alior Leasing In 2024, Alior Leasing had no processes in place for engaging value chain workers, and the company has no plans to develop or implement such processes. S2-3 – Processes to remediate negative impacts and channels for value chain workers to raise concerns The double materiality assessment identified one potential negative impact related to workers in the value chain: the possibility of violations by employees of partner facilities and intermediaries due to a lack of training on the Whistleblowing and Whistleblower Protection Policy and the Code of Ethics. In 2024, Alior Bank began offering training on this subject to employees at partner facilities. The companies within the Alior Bank Group provides value chain workers with channels through which they can directly report their concerns or needs to the company. These channels are described in the Whistleblowing and Whistleblower Protection Policies, wh ich are implemented in Alior Bank and Alior Leasing. The regulations specify that any person providing work under the supervision and direction of a contractor, subcontractor, or supplier has the right to report information via a dedicated phone number ensuring anonymity, in writing to a dedicated email address, by traditional mail, or orally to designated employees, President of the Management Board or the Supervisory Board. Under the procedures implemented in the company, whistleblowers are protected from retaliatory actions. Investigations conducted in accordance with the procedures outlined in the Policy are subject to confidentiality requirements regarding all information determined both during and after the investigation. The procedure is described in detail in the chapter Business conduct - ESRS G1. In the event of a negative impact on an employee or employee in the value chain, remedial measures are recommended within the framework of the Procedure for dealing with complaints about the occurrence of undesirable behaviour, as described in the chapter Information related to corporate governance, and the timely implementation of these recommendations is verified through email communication to the units responsible for their implementation. The Policy is accessible to all workers in the value chain, including on the websites of Alior Bank and Alior Leasing. The companies have not implemented regulations to assess the extent to which value chain workers are aware of and trust the processes that allow them to report their concerns or needs and receive responses.
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250 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement S2-4 – Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those action Actions related to impacts on value chain workers are taken individually by each company within the Alior Bank Group. The Group has not identified any material risks or opportunities resulting from the impact or dependence on value chain workers. Alior Bank In 2024, the actions of Alior Bank that involved potential negative impact on workers in the value chain concerned the way training on ethics and reporting channels was provided to employees at partner facilities. The scope of training on security and data protection is the same as the training provided to the company’s employees. These trainings are conducted at all partner facilities. Alior Bank evaluates the effectiveness of these actions through monitoring of the partner facilities carried out by their supervisors – Sales Directors. Additionally, facilities may be subject to inspections by the Structured Credit Department and the Security Division. The company does not have data to determine the resources allocated in 2024 to manage material impacts on value chain workers. A potentially negative impact on workers in the value chain was identified during the double materiality assessment completed in December 2024. Alior Bank plans to review the results of the analysis in 2025 and determine whether, and if so to what extent, the company will take additional actions in response to the identified impact. At the same time, Alior Bank provides its employees with comprehensive ethics training and does not identify any situations in which its own practices would cause or contribute to a material negative impact on employees of partner facilities. In 2024, Alior Bank also implemented actions aimed at exerting a positive impact on workers in the value chain, including competitions and special initiatives. In 2024, Alior Bank did not record any incidents related to human rights concerning workers in the value chain. Alior Leasing In 2024, Alior Leasing did not take any actions related to negative impacts on workers in the value chain due to the absence of partner facilities.
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251 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement S2-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities The Alior Bank Group has not set measurable goals related to managing the material impact on value chain workers identified in December 2024: the lack of initial and refresher training on the Whistleblowing and Whistleblower Protection Policy and the Code of Ethics. The bank is working on implementing training in this area for employees at partner facilities and intermediaries. Consumers and end-users – ESRS S4 S4-1 – Policies related to consumers and end-users The companies within the Alior Bank Group have not yet adopted consistent polices for the monitoring and management of material impacts, risks and opportunities related to consumers and end -users. Alior Bank The double materiality assessment, completed within the Alior Bank Group in December 2024, revealed these impacts, risks, and opportunities. During the reporting period, the parent company did not begin updating or developing regulations to directly address its results. However, the policies in force within the Group in 2024 covered some of the identified impacts, risks, and opportunities. Areas not covered by these regulations will be analysed in the near future to determine whether additional regulations are needed. Impact Rules and regulations Impact on access to information through the development and implementation of a Disclosure Policy governing communication with clients, capital market participants, and the media. The Alior Bank Disclosure Policy27 defines the rules for secure and consumer -friendly communication and specifies the deadlines and methods of communication. The Bank positively contributes to the protection of clients’ rights through a Client Ombudsman, who independently evaluates the Bank’s actions and verifies compliance, fostering trust and transparency in client relationships. The appointment and role of a Client Ombudsman, who operates independently from other customer service functions within the Bank. This enables assessment of any irregularities in Alior Bank’s operations, reported by clients. 27 Alior Bank Disclosure Policy is available at: https://www.aliorbank.pl/dam/jcr:9a2e129c -0c6e-4d20-ad42-28f6885adcf7/Polityka informacyjna Alior Bank SA w zakresie komunikacji z klientami, uczestnikami rynku kapita%C5%82owego i mediami.pdf
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252 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Impact on greater social inclusion in financial services by offering free bank accounts, microloans, and microfinance solutions accessible to all, including low-income individuals and young people. No policy Impact on responsible marketing practices by developing and implementing Anti -Unfair Sales Policy to prevent misselling practices. The Anti -Unfair Sales Policy and Responsible Marketing Practices28 prevent misselling. Alior Bank has established rules for the proper development and distribution of its products. Certain products may only be distributed through authorised channels and by employees with the necessary expertise. Impact on clients’ financial security through effective complaint handling procedures The establishment of procedures for filing complaints and ensuring their investigation and resolution in accordance with the law and internal regulations. Digital exclusion of clients from financial services due to excessive automation of the customer service process and the use of AI Alior Bank SA Disclosure Policy governing communication with clients, capital market participants, and the media Risk Overview Risks related to increased consumer protection in the future in terms of access to information, including in relation to the construction of contractual clauses (such as free credit sanctions, mortgage contracts indexed to foreign currencies) Lawsuits concerning the reimbursement of credit costs due to defects in a consumer credit agreement. The primary cause of dispute identified by the plaintiffs concerns the provisions of the loan agreements concerning the Bank’s use of conversion rates, leading to claims for the partial or total invalidity of the loan agreements. Information on this risk is provided in the Consolidated Financial Statement of Alior Bank Group for the year ended on 31 December 2024 (note no. 40). The risk of increased consumer protection in the future in terms of responsible marketing practices, such as the way in which investment fund participation certificates are distributed. The court is adjudicating on the Bank’s liability for damage caused by its failure to properly fulfil its disclosure obligations to clients and its improper execution of agreements for accepting and transmitting orders to purchase or sell investment certificates of the funds. More information on this risk is provided in the Consolidated Financial Statement of Alior Bank Group for the year ended on 31 December 2024 (note no. 40). 28 Responsible Marketing Practices are available at: https://www.aliorbank.pl/dam/jcr:88d545df -dbed-46d9-9a54- d76c85cd8775/zasady-odpowiedzialnego-marketingu.pdf
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253 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Additionally, Alior Bank is a member of the Polish Bank Association (ZBP) and follows the Guidelines of the Good Banking Practice developed by ZBP. At Alior Bank, respect for the human rights of consumers is upheld through the Human Rights Policy29 and the Bank’s commitment to adhere to the Universal Declaration of Human Rights adopted by the United Nations. The Bank recognises recommendations for responsible business conduct included in the OECD Guidelines for Multinational Enterprises, and the Ten Principles of the UN Global Compact. Alior Bank is guided by the principle of reliability and honesty in the services it provides to its customers. It complies with Polish banking law protecting the interests of its customers through internal regulations adopted and implemented for use. Alior Bank's customers are guaranteed, among other things: access to complete and clear information at every stage of concluding an agreement; the right to withdraw from an agreement; and the right to access and protect the ir personal data. The Human Rights Policy adopted by the company designates Alior Bank’s Compliance Unit as the entity responsible for receiving reports of potential violations. In 2024, Alior Bank did not register any violations of these standards with respect to consumers and end-users. The relationship with consumers is governed primarily by Alior Bank’s Disclosure Policy. According to this Policy, the Bank aims to present information about its products and services in an approachable, effective, and convenient manner, while considering the impact of communication on reputation risk. In this Policy the Bank commits to responding to enquiries, client complaints, and appeals to the Client Ombudsman in a fair and objective manner, upholding the highest ethical standards in communication, and respecting clients’ privacy. Additionally, the Bank promises thorough analysis of clients’ comments, applications, and complaints, and to implement solutions aimed at continuously improving quality. Alior Leasing Alior Leasing’s services are not aimed at individual clients; the company serves exclusively corporate clients. S4-2 – Processes for engaging with consumers and end-users about impacts Within the Alior Bank Group, the process for engaging with individual clients about impacts is established for each company separately. Alior Bank At Alior Bank, the relationship with clients is not formalised by any internal regulations. In 2024, client engagement was shaped by the decisions of individual business units. Alior Bank has no plans to adopt regulations in this regard. The consumer engagement area is overseen by Director of the Marketing and Client Relationships Department, Managing Director of the Operations and Settlements Division, and Department Directors. 29 Human Rights Policy is available at: https://www.aliorbank.pl/dam/jcr:77c76b39 -0f28-4ed9-b21c-17dac4850b35/polityka-praw- czlowieka-alior-banku.pdf
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254 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The perspectives of consumers and end -users of the Group’s parent company are identified through a Net Promoter Score (NPS) survey. The survey allows the company to assess client loyalty in long-term and short- term perspectives, identify the company’s stre ngths and weaknesses, and respond to identified client needs. It is primarily conducted by telephone across a selected group of clients and includes: • relationship analysis that focuses on clients’ overall perception of the brand, • transaction analysis that focuses on individual transactions. In addition to the NPS survey, Alior Bank conducts focus group interviews, client satisfaction surveys, and dedicated client surveys. Moreover, the company regularly conducts interviews with its partners directly involved in the sales process and client interactions. Client responses help the company understand the key factors affecting client satisfaction and provide appropriate recommendations for process improvements and client segmentation. [S4-2_03] The preparation of qualitative and quantitative research, along with result analysis, is handled by the product owners, business process owners, and the UX Design Team, particularly the UX and Product Research Team. The results are taken into consideration at the stage of: • definition of new functionalities of the systems, • implementation of new business ideas as part of idea validation (quantitative research), or client needs analysis (in-depth interviews), • verification of project’s alignment with clients’ expectations and its usability (usability testing before and after the implementation of a service / interface). Feedback from Alior Bank’s clients is not considered when setting goals for individual units, defining key performance indicators, or shaping the company’s strategic vision. Clients can contact Alior Bank using the following communication channels: • bank outlets and branches, • helpline, • electronic banking, • email, • contact form on Alior Bank’s website, • e-Doręczenia platform, • traditional post. Every piece of information provided to Alior Bank is considered by the company to be an essential part of the client relationship. The Bank addresses each report individually, ensuring high communication standards and using plain language. Client reports o n the accessibility of digital services are forwarded to the relevant unit responsible for accessibility, which then engages in further dialogue with clients on the matter. In 2024, Alior Bank implemented special measures to gain insight into the perspectives of clients who may be at a higher risk of being impacted or marginalised. The company conducted a series of studies on children aged 7 to 13 and seniors over 80. The stu dies on children aged 7 to 13 involved in -depth interviews and usability testing. A parent was present throughout the whole meeting. The studies were conducted remotely and in person. Every session required parent’s written consent for the child’s particip ation in the study. In 2025, the Bank plans to conduct research and consultations involving disabled individuals, people diagnosed with dementia, and legally incapacitated individuals. These plans are linked to the enactment of the Polish Accessibility Act.
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255 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Additionally, in 2024, Alior Bank launched a series of training sessions on the accessibility of products and services, delivered by a specialised third-party firm. The sessions are aimed at designers, researchers, analysts, product owners, and production teams involved in developing the Alior Mobile and Currency Exchange apps. In 2024, Alior Bank introduced the role of Digital Accessibility Manager. The role of Digital Accessibility Manager is to advocate for individuals with special needs, including those with disabilities, and to promote inclusive design. This includes ensuring that various Alior Bank units consider the perspectives of individuals with special needs when developing products and services. The company does not have a formal procedure for assessing the effectiveness of consumer and end -user engagement. In certain cases client loyalty and satisfaction are evaluated on the basis of NPS surveys and, for the mobile app, user reviews posted on app platforms. Alior Leasing Alior Leasing’s services are not aimed at individual clients; the company serves exclusively corporate clients. S4-3 – Processes to remediate negative impacts and channels for consumers and end-users to raise concerns The processes for remediating negative impacts and channels for consumers and end-users to raise concerns are established individually for each company within the Alior Bank Group. Alior Bank Alior Bank’s clients can file complaints concerning products and services in the following ways: • by visiting any bank branch and raising concerns orally or in writing, • by calling the helpline, • though the electronic banking system, • by traditional post, • electronically at the address for electronic service. In addition to the dedicated complaint channels, Alior Bank also offers clients the option to contact the Bank via email and a contact form on the website. Clients are informed about these contact options on the website, in product terms and conditions, and through written correspondence. As a rule, the reports received by Alior Bank pertain to identified clients. If the Bank receives an anonymous report, each report is handled individually, depending on whether Alior Bank’s procedures allow for a response. The total number of complaints in 2024 was 63,741, which were reported by 50,346 customers. This means that 1.1% of all the bank's customers made a complaint in the last year. In recent years, the bank has seen a consistent downward trend in the number of complaints. Over the last five years, their number has decreased by 25%, which is the result of continuous efforts to improve the quality of service and process improvements. The Bank's priority is to create the best possible customer experience and minimise the number of complaints through continuous service improvements. In 2024, some communication channels failed to meet accessibility requirements. The Bank failed to provide an option to contact the helpline with the assistance of a sign language interpreter. Some clients who called the helpline were advised to visit a bank branch, including:
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256 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • individuals who were fully or partially incapacitated, or their guardians, • individuals who were under 18, whose legal guardian lodged an objection in the CES system, • individuals acting as attorneys -in-fact, including for those with special needs, whose power of attorney was not found in the CES system, • individuals declared bankrupt. The standard procedure at Alior Bank is to handle complaints no later than 15 working days for payment services or 30 calendar days for other cases 30. The response to the complaint is provided in writing, in paper form. Upon the client’s request, the reply may also be delivered via Internet Banking or SMS. Each complaint is thoroughly reviewed, and when responding to rejected complaints, Alior Bank provides a detailed explanation of its position, referencing, for example, the content of agreements, terms and conditions, or the fee and commission schedule. If , despite the provided explanations, the client disagrees with Alior Bank’s decision, they may appeal the response by submitting a new complaint to the Bank or by lodging an appeal with the Alior Bank Client Ombudsman. A client who is dissatisfied with how a complaint has been resolved is also entitled to approach the Bank Consumer Arbitration at the Polish Bank Association or the Financial Ombudsman. If the Alior Bank Client Ombudsman agrees with the client and identifies faults in the product, processes, or service quality, the issue must be addressed and brought into compliance with the agreements, terms and conditions, and fee schedules. If the Ombu dsman determines that the issue may affect a larger group of clients, they issue a special recommendation addressed to the Change Recommendations Committee. If the complaint review reveals a significant operational risk, the issue is referred to the Operational Risk Committee. Additionally, the Change Recommendations Committee and the Operational Risk Committee may receive information and recommendations from the Complaints Team, based on the analysis of individual cases as well as broader trends and client reports. Alior Bank identifies issues and monitors the effectiveness of corrective measures through NPS surveys that assess client loyalty and satisfaction. A low NPS indicates a potentially dissatisfied client, which could negatively impact client loyalty and the company’s image. By implementing remedial measures in areas identified by clients, the Bank can improve its performance and strengthen client trust. The survey provides valuable feedback needed for planning measures in specific business areas. Alior Leasing Alior Leasing’s services are not aimed at individual clients; the company serves exclusively corporate clients. 30 In exceptionally complex situations this period may be extended.
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257 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement S4-4 – Taking action on material impacts on consumers and end - users, and approaches to managing material risks and pursuing material opportunities related to consumers and end -users, and effectiveness of those actions Actions related to material impacts on consumers are developed and implemented separately for each member of the Alior Bank Group. Following the double materiality assessment completed at the end of the reporting period, actions related directly to the identified material impacts will be implemented by the Group members in the coming years. Accordingly, no resources have been allocated for the management of significant impacts in 2024. The activities related to material risks are described in the Consolidated Financial Statements of the Alior Bank Group for the year ended 31 December 2024 (note 40). Alior Bank Alior Bank analyses client complaints and reports, identifies their causes, and implements corrective actions to improve product quality. The company focuses on: • monitoring the number of complaints • developing detailed reports in the case of multiple complaints about a specific product or process • developing recommendations for corrective actions and forwarding them to product, process, and IT system owners • controlling the implementation of corrective actions and linking the complaints to the business targets set by the product or service owners • mystery shopping and customer service quality surveys. Alior Bank prevents the negative effects of its products by ensuring compliance with legal requirements, supervisory authority recommendations, industry best practices, and internal regulations. When developing new products and services, the Bank prioritis es protection of clients’ interests, specifically by consulting relevant company units to maintain the highest standards of regulatory compliance. The company regularly conducts NPS surveys and uses the results to formulate recommendations for its business units, aiming to enhance positive impacts on clients. Every quarter survey findings are reviewed in a meeting of the Management Board, Managing Di rectors, and Product Owners to help guide future development. Marketing materials are prepared in consultation with product departments and relevant organisational units of the Head Office. Additionally, marketing campaign assumptions are reviewed to identify potential events that could negatively impact the Bank’s reputation. More information on actions addressing identified risks concerning consumers is provided in the Consolidated Financial Statement of Alior Bank Group for the year ended on 31 December 2024 (note no. 40). Alior Leasing Alior Leasing’s services are not aimed at individual clients; the company serves exclusively corporate clients.
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258 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement S4-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities In 2024, the Alior Bank Group companies did not have consistent targets, compliant with the ESRS minimum disclosure requirements, related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities. Alior Bank When it comes to managing material impacts, the goal of Alior Bank is to: • support clients in resolving complex and multidimensional issues at every stage of their relationship with Alior Bank. To achieve this goal, the company has appointed the Alior Bank Client Ombudsman • ensure fair and simple communication with clients, as well as education on digitisation, security, and financial services. To achieve this goal, the company has adopted Responsible Marketing Practices • ensure that all products and processes align with clients’ needs and expectations while maintaining compliance with legal requirements and internal procedures. To achieve this goal, Alior Bank has adopted Procedures for Launching, Modifying, and Withdrawing Products and Services at Alior Bank S.A. These procedures define client needs, market depth analysis, revenue model, and other variables. When developing products and processes, the Bank considers client expectations and needs, maintaining compliance with legal requirements and internal procedures. The Bank has not defined any metrics for assessing the achievement of its targets. Consumers were not involved in target setting, however, Alior Bank takes their feedback into account when developing new banking products. Information on client needs comes from focus group interviews, surveys, reports from internal units responsible for customer service, and insights from Alior Bank’s external partners. Alior Leasing Alior Leasing’s services are not aimed at individual clients; the company serves exclusively corporate clients. Governance information Business conduct – ESRS G1 G1-1 – Business conduct policies and corporate culture Development of corporate culture The development of the corporate culture within the Alior Bank Group is aligned with the unique characteristics of its member companies. At Alior Bank, the HR strategies that underpin its corporate culture are aligned with the company’s business strategy. In 2024, the Bank pursued a strategy titled “Bank for Every Single Day, Bank for the Future”, with
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259 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement the employee-focused area built on three pillars: an individualised approach to employees, an engaging work environment, and a distinctive organisational culture. Alior Bank’s corporate culture and strategic pillars Individualisation #YouAreIMPORTANT Engaging work environment #AliorIsYOU Distinctive organisational culture #AliorIsUS • Nurturing employee’s potential: • programmes designed to develop talent, • managing generations • Healthy lifestyle: • physical and mental wellbeing of the employee and their family, • outstanding medical care • Personalised benefits • Market-aligned remuneration policy • Development culture: • Reskilling and Alior University to guarantee broad access to knowledge and science, • transparent development prospects • Technological transformation: • Digital work environment, • digital learning, • corporate TV channel • Agile: • agile work culture • Values that underpin the identity of Alior Bank: • supporting effectiveness at work, • performance and engagement • Leadership: • leadership programmes • EVP: • internships and talent programmes, • partnerships with universities, • scholarships, • new Employer Branding campaigns Employee-centred workplace Competencies that support business goals Preferred employer As part of the #AliorIsYOU pillar, the company offers its employees an engaging work environment and supports them through technological transformation and a digital work environment. The company provides, e.g. digital learning opportunities and a corporat e TV channel along with a professional recording studio for broadcasting internal and external events (e.g. performance conferences). In line with the #AliorIsYOU pillar, Alior Bank aims to provide agile work methods, clearly defined development perspectives for employees, and broad access to knowledge and science through reskilling programmes and Alior University. The #YouAreIMPORTANT pillar emphasises the value of a personalised approach and employee potential, with programmes designed to develop individual talent, foster intergenerational management, and promote initiatives that support the physical and mental wel lbeing of employees and their families. Alior Bank offers comprehensive medical insurance packages, personalised employee benefits, and a market -aligned remuneration policy. The #AliorIsUS pillar is aimed at both current and prospective employees. Through #AliorIsUS, the company promotes effective work, performance, and engagement, while strengthening leadership with dedicated programmes. The pillar supports prospective employ ees by partnering with higher education institutions, offering internships, talent programmes, and scholarships. An important part of Alior Bank’s corporate culture are its corporate values: responsibility, openness, innovation, and client orientation. These values shape the relationships with the Bank’s clients and partners and guide employee interactions. In 2024, to promote and strengthen these values, Alior Bank organised initiatives such as:
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260 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement • Development Festival Week of Values: A series of 18 inspiring lectures and activities promoting the pillars of corporate culture. The online meetings gathered 7,248 participants • Alior Summer Chill: A series of picnics for employees and their families organised in Gdańsk, Katowice, Kraków, Rzeszów, and Warsaw • Make a Gift: A Christmas charity event where Alior Bank employees prepare gifts by children and seniors in need, as depicted in their letters to Santa. • Blood donation events and registration of bone marrow donors • Activities promoting health and a healthy lifestyle, such as vision and skin examinations, along with access to the Mindgram platform • Facilitating voluntary work: The option to use 16 hours for volunteering with full compensation for that time • A paid day off for medical examinations, excluding preliminary or periodic exams • A tree-planting campaign in which the Brokerage's employees planted more than 1,000 trees. Alior Bank’s corporate culture and values are reinforced and promoted through the online platform, Alior University. Every employee of the company can access the platform to find information on: • current training opportunities, • development and educational programmes, • reskilling and development initiatives implemented in partnership with particular business units of the Academy (e.g. Risk Academy, Investment Academy, Robotisation Academy), • language courses, • specialised training opportunities and development programmes aimed at managerial staff. As part of its corporate culture, Alior Bank’s strategy includes assessing engagement. The company aspires to exceed the national average. At the end of 2024, employee engagement was at 64%, with a turnout rate of 94%. Another metric used to evaluate the implementation of the Bank’s values is the growth in client loyalty, assessed based on NPS, with a target score exceeding 45. At Alior Leasing, the corporate culture is built and developed through the company’s Diversity Policy and Human Rights Policy. Raising concerns Each member of the Alior Bank Group has its own defined mechanisms for identifying, reporting, and analysing concerns related to unlawful conduct or violations of internal policies. Both Alior Bank and Alior Leasing are subject to whistleblowing protection requirements. All Alior Bank employees are subject to the Whistleblowing and Whistleblower Protection Policy 31 and the Procedures for Reporting Unwanted Behaviour at Alior Bank. 31 The whistleblower reporting and protection policy is available at: https://www.aliorbank.pl/dam/jcr:277cc48e -4572-414b-8c16- d84d5b48dfd4/polityka-zglaszania-naruszen-i-ochrony-sygnalistow.pdf
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261 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The purpose of the Whistleblowing and Whistleblower Protection Policy is to prevent irregularities in the workplace as specified in the Labour Code, the Workplace Regulations of Alior Bank SA, the Code of Ethics32, and the Directive (EU) of the European Parliament and of the Council on the protection of persons who report breaches of Union law. The Policy defines internal channels for submitting non -anonymous or anonymous reports of alleged breaches, ensuring safe reporting, including confidentiality and anonymity. Employees can report concerns through the following channels: • dedicated phone number, ensuring safe reporting, including confidentiality and anonymity, • internal ICT system, • traditional written report, • face-to-face meeting or a report to President of Management Board. The ultimate decision rests with the employee. If the potential violation involves a member of the Management Board, the report should be submitted in writing and addressed specifically to the Supervisory Board. According to the Policy, upon receiving a report, President of the Management Board of Alior Bank designates employees or organisational units responsible for investigating the report and taking follow -up steps. The President is supported in this process b y the Regulatory Compliance Department. Employees of this Department conduct an initial review of the report and recommend further actions. The Ethics Team or Committee, appointed to coordinate the proceedings, has a maximum of three months from the date o f receipt to investigate the report. In justified cases, this timeframe may be extended. The Policy requires employees of the Regulatory Compliance Department to remain fair and objective, conduct and document interviews, gather necessary evidence, and formulate an opinion that includes an analysis of events, an assessment of whether the repor t is justified, and conclusions with recommendations for further action. The Department’s final report is submitted to designated members of the managerial staff, with recipients selected based on the specific circumstances of the case. The review proceedings and all disclosed information remain confidential both during and after the process. The Whistleblowing and Whistleblower Protection Policy 33 explicitly prohibits any form of retaliation against whistleblowers or witnesses. The protection extends to employees who assisted the whistleblowers in making a report, as well as anyone connected to the report or involved in the review proceedings. The prohibition of retaliation remains in effect even if, upon investigation, it is determined that the report made in good faith was unjustified. Alior Bank has posted the Policy on its website and educates employees on its contents. Employees receive training on the reporting channels and methods, as well as the protections available to them. Each new 32The Code of Ethics is available at: https://www.aliorbank.pl/dam/jcr:8ed0db4d -92da-4130-85be-39fb16c36876/kodeks-etyki-alior- banku.pdf 33 The Whistleblowing and Whistleblower Protection Policy is available at: https://www.aliorbank.pl/dam/jcr:277cc48e -4572-414b- 8c16-d84d5b48dfd4/polityka-zglaszania-naruszen-i-ochrony-sygnalistow.pdf
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262 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement employee is required to complete the “Management of Non -Compliance Risk” training and formally acknowledge that they have read the Whistleblowing and Whistleblower Protection Policy. In addition to the above Policy, the Procedures for Reporting Unwanted Behaviour at Alior Bank outline how the Ethics Committee should proceed upon receiving a complaint concerning unwanted behaviour, including discrimination, mobbing, harassment, or sexual harassment. The procedure does not provide training on how to receive notifications for those who receive them. In its proceedings, the Committee adheres to the principle of impartiality. Its role is to conduct an objective review of the reported circumstances and, if necessary, issue appropriate decisions to ensure the work environment complies with both external and internal regulations. As outlined in the Procedures, unwanted behaviour may be reported through the channels specified in the Whistleblowing and Whistleblower Protection Policy, as well as by email at naruszenia@alior.pl or by post to Alior Bank’s address. Upon initial review, each compliant is investigated by a dedicated Ethics Committee appointed by Managing Director of the HR Division, Regulatory Compliance Director, and Director of the relevant HR BP Department (depending on the origin of the complaint). The Committee consis ts of representatives from the Regulatory Compliance Department and HR Division, who are responsible for employer-employee relationships, Network HR BP Department, and Head Office HR BP Department (depending on the origin of the complaint). After completing the review process, the Ethics Committee determines whether the complaint is justified and prepares a final report with case analysis and recommendations. This report is presented to President of the Management Board and the Member of the Management Board responsible for the complaint before any recommended follow-up steps are taken. The bank plans to introduce a survey for those using the internal whistleblowing channel in 2025 to monitor its effectiveness. At Alior Leasing, the procedures for identifying, reporting, and investigating concerns about unlawful conduct or violations of internal regulations are set out in the Alior Leasing Whistleblowing and Whistleblower Protection Policy, the Code of Ethics, an d the Instructions for Managing Conflicts of Interest. According to these regulations, Alior Leasing employees can report violations of ethical rules in the following ways: • via email at: etyka@aliorleasing.pl • by post to the Compliance Department • in person to employees of the Compliance Department. If the report involves a member of the Management Board, the report should be submitted in writing and addressed specifically to the Supervisory Board. As outlined in the Alior Leasing Whistleblowing and Whistleblower Protection Policy, reports can be reviewed through one of the following procedures: • simplified procedure: reports are reviewed by two Compliance employees. Reports reviewed through this procedure involve compliance issues, including violations of the Alior Leasing Compliance Policy, the Alior Leasing Code of Ethics, and the Alior Leasing Policy for Managing Conflicts of Interest, • basic procedure: reports are reviewed by a Review Team with a standard personal composition, • expert procedure: reports are reviewed by a Review Team comprising representatives from areas related to the subject matter of the report. This procedure is used for complex reports, where the review requires expertise in the relevant area. When reviewing reports, members of the Review Team are required to maintain confidentiality and remain objective, impartial, and independent. The role of the Team is to conduct a thorough analysis of events,
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263 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement objectively determine whether the report is justified, and prepare a report for the Alior Leasing Management Board with its findings and recommendations for further actions. Similar to Alior Bank, Alior Leasing’s regulations prohibit any form of retaliation against whistleblowers, witnesses, or members of the Review Team. The Alior Leasing Whistleblowing and Whistleblower Protection Policy is available on the company website, as well as on the AL Net intranet, alongside the Code of Ethics and procedures for preventing conflicts of interest. Animal welfare The Alior Bank Group is not engaged in any activities related to animal welfare. As a result, this area is not covered in any of the company’s strategic documents or reports. The Group has no plans to introduce policies addressing such issues. G1-3 – Prevention and detection of corruption and bribery Within the Alior Bank Group, the prevention of corruption is regulated separately for each company. Alior Bank has adopted an Anti -Corruption Policy that sets out the rules to be followed in internal relationships and interactions with clients, business partners, and members of the Alior Bank Group. Additionally, the Policy outlines the procedures to be followed in the event Alior Bank becomes aware of any act of corruption in internal or external relationships. The company enforces a strict ‘zero tolerance for corruption’ policy, with no tolerance for acts of corruption, and actively combats all forms of corruption across its operations. The Policy explicitly prohibits employees from offering, promising, or accepting, directly or indirectly, any financial or personal gains, as well as from granting or receiving financial, personal, or other non-financial forms of gratification. Any form of retaliation against an individual who refuses to accept or grant an undue benefit is strictly prohibited. Moreover, the Anti -Corruption Policy outlines the rules to be followed in interactions with clients and business p artners regarding business gifts granted or accepted by employees of the Bank, and also governs sponsorships and donations. The Bank manages potential and actual conflicts of interest according to the Policy for Managing Conflicts of Interest. According to this Policy, the managerial function must be separate from the control function. Reports to the competent bodies are submitted according to Alior Bank’s Management Information System. There is no direct reference to the UN Convention against Corruption in the Policy. All Alior Bank employees are required to read the Policy and complete anti -corruption training, repeated annually. The company has not identified any roles that are exposed to a higher risk of corruption. The Bank has one training on anti-corruption in the form of e-learning, which has been made available at the Bank in October 2024. In accordance with the provisions of the Anti-Corruption Policy, the Bank recognises that all persons working for the Bank, irrespective of the form of employment/cooperation and the place occupied in the Bank's organisational structure, should be equally familiar with all the anti -corruption principles referred to in the policy, which is why the training is dedicated to all employees.
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264 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement The training defines the principles of conduct aimed at counteracting corruption in internal relations or in relations with Clients, Contractors, the Bank's business partners or entities from the Alior Bank S.A. Group and applies to every activity undertaken by the Bank. The training defines the basic concepts of activities of a corrupt nature, such as economic corruption, personal benefit, paid patronage, extortion, fraud, among others, and includes numerous examples of circumstances indicating a possible risk of corrupti on in the framework of: cooperation with contractors, gift policy, sponsoring and donations, the Bank's participation in public procurement or conduct in internal relations. Every employee of the Bank is equally responsible for counteracting the phenomenon of corruption and is obliged, in the event of a suspected case of corruption or attempted corruption, to immediately inform the Anti-Corruption Coordinator at naruszenia@alior.pl. Upon completion of the training, the employee declares that he/she has familiarised himself/herself with the Anti-Corruption Policy and undertakes to adhere to it unconditionally and to report any suspected violation of the Anti-Corruption Policy in accordance with the content of the Policy. Since the launch of the e-learning on the platform, 2049 employees have completed the training. Prior to the launch of the training focused exclusively on corruption, the area of corruption was part of the compliance risk management training, which addressed issues such as the gift policy, giving and accepting gifts, inviting Customers/Contractors to meals and events and attending events at the invitation of a Customer/Contractor. As part of the regular initial training on compliance risk management, 1,050 new employees of the Bank were trained and 2,389 employees (in the group dedicated to renewal) completed renewal training. The Anti-Corruption Policy is available on the company website and can also be accessed by employees on the company intranet. Additionally, Alior Bank regularly reinforces the rules for corruption prevention. Employees can report violations of the Policy t hrough the channels specified in the Whistleblowing and Whistleblower Protection Policy. The provisions of that Policy also govern the review proceedings. In the review process, Alior Bank separates the control functions from the managerial functions in line with the principles outlined in the Policy for Managi ng Conflicts of Interest. Reports detailing the findings from the review of alleged corruption involving administrative, managerial, or supervisory bodies are prepared according to the company’s Management Information System. The Anti -Corruption Policy inc ludes control mechanisms, and the Bank conducts independent monitoring of these mechanisms through compliance testing. The anti-corruption training must also be completed by members of the managerial and supervisory bodies of Alior Bank. Members of the Management Board and Supervisory Board receive the training materials in electronic form. As for business conduct training, Alior Bank has adopted a Training and Development Policy. This Policy sets out the rules for cooperation between the business unit requesting training and the production unit responsible for delivering training materials. According to this Policy, the responsibility for the execution, contents, and settlement of the training rests with the business unit that requested it. The relevant areas are supported by Alior University through developmental events aimed at promoting and reinforcing Alior Bank’s values.
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265 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement At Alior Leasing, the rules governing interactions with business partners, granting or accepting gifts, participation in events, and cooperation with public authorities and institutions are outlined in the Instructions for Managing Conflicts of Interest. In this respect, ‘Compliance’ training is mandatory in the Company. In 2024 in Alior Leasing an Anti-Corruption Policy has been prepared but not implemented. In February 2025, it was being processed for resolution by the Supervisory Board. The Policy outlines general rules aimed at preventing corruption in internal and external relationships, including guidelines for sponsorships and procedures to be followed in the event of any corrupt practices. Employees of the company are obliged to report suspicions of corruption according to the Alior Leasing Whistleblowing and Whistleblower Protection Policy.34 The Review Team is appointed in accordance with the Policy and consists of employees designated on an ad hoc basis. A separate team is appointed for managerial functions as it cannot include any members of the managerial staff. Additionally, members of th e team formally acknowledge that there is no conflict of interest. The company believes that this ensures there is no unwanted connection to the case under review. According to the Alior Leasing Whistleblowing and Whistleblower Protection Policy, as with any other case handled by Review Teams, information on closed corruption proceedings is forwarded to the Management Board and the Supervisory Board. Training on anti -corruption matters, including rules for granting and accepting gifts, inviting to and participating in events, reporting irregularities or violations, is provided in electronic form by the Compliance Unit and can be accessed by employees on the training platform. The training is mandatory for all employees, including members of the Management Board, senior-level officers, and the Supervisory Board35. The level of achievement is assessed through a final knowledge test. The training is the same for all roles and functions, as Alior Leasing has not identified any roles exposed to a higher risk of corruption or bribery. In addition to anti-corruption tra ining, the Compliance Unit also conducts training on non -compliance, ethical issues, preventing conflicts of interest, and reporting violations. Employees can access the anti -corruption documents (Alior Bank Whistleblowing and Whistleblower Protection Policy and Instructions for Managing Conflicts of Interest) on the company intranet. Additionally, the Alior Leasing Whistleblowing and Whistleblower Protection Policy is available on the company website. Once the company adopts an Anti-Corruption Policy, it plans to publish it on its website. G1-4 – Incidents of corruption or bribery In 2024, no incidents of corruption or bribery were recorded in the Alior Bank Group. Number of convictions and amounts of fines for violations of anti-corruption and anti-bribery legislation the number of convictions 0 the amount of fines 0 PLN 34 Alior Leasing Whistleblowing and Whistleblower Protection Policy is available at: https://aliorleasing.pl/wp- content/uploads/2024/09/Polityka-zglaszania-naruszen-i-ochrony-sygnalistow.pdf 35 Members of the Management Board and Supervisory Board of Alior Leasing receive the training materials in electronic form.
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266 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement actions taken to address breaches in procedures and standards of anti-corruption and anti-bribery Not applicable Entity-specific disclosure – Cybersecurity The Alior Bank Group’s digital security is managed across the organisation to ensure IT security, in line with industry best practices. The individual solutions used by Group entities are tailored to the specific nature of each company’s activities. Alior Bank Through its implemented cybersecurity processes, Alior Bank ensures the security of client data and funds. The Bank has up -to-date information on the security of its IT environment and is able to take systematic measures to mitigate risks in this area. In accordance with the National Cybersecurity System Act, Alior Bank holds the status of Key Service Operator. The company fully complies with all cybersecurity requirements set by law and the recommendations of the Polish Financial Supervision Authority (KNF). The Bank ensures comprehensive and effective protection against cyber threats. The company has a comprehensive information security management system (ISMS) in place, including metrics such as the number of cyber -attacks carried out and blocked, which are not disclosed in detail by the parent company in the Alior Bank Group. The Company has internal targets related to cyber security. These were adopted prior to the date of the European Sustainability Reporting Standards and are therefore not aligned with the requirements of these standards. In 2024, Alior Bank implemented cybersecurity risk estimation tools and established procedures to ensure the early detection and effective management of risks. The company has also developed IT incident response plans designed to minimise the impact of cyb erattacks on critical services and prevent identity theft. Additionally, cybersecurity information is reported periodically to the Management Board. All of Alior Bank’s key IT systems that process client data and facilitate financial transactions undergo thorough external and internal manual security tests. Every three months, the Bank also conducts an automated vulnerability scan for cyberattacks, wit h the results providing comprehensive insights into the security state of the IT environment and enabling systematic risk mitigation. In addition, Alior Bank’s team of specialists monitors the security of banking infrastructure and clients’ financial transactions 24/7. The company’s experts also track emerging threats and analyse cybersecurity trends, making necessary adjustments to internal security systems. All Alior Bank employees regularly undergo mandatory training to raise awareness of IT security risks. The training materials are reviewed annually and updated as needed. Additionally, training courses, which conclude with a knowledge test, are mandatory f or every new employee. Cyber threat awareness is further promoted through email communications and information provided on the intranet platform. Each year, Alior Bank’s IT teams conduct controlled phishing tests targeting employees. Those who fail to meet the required standards must retake dedicated training in this area. The results of these tests are analysed and incorporated into training materials.
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267 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Alior Bank is also committed to raising awareness about security and IT threats among its clients. Materials on potential threats are regularly published on the Bank’s homepage, social media platforms, newsletters, and mobile app. Additionally, Alior Bank has launched a dedicated website for cybersecurity, Phishing -Stop. The Bank also collaborates with the Polish Bank Association and engages in media partnerships to carry out further activities in this area. Alior Bank plans to expand its educational initiatives aimed at clients. Alior Leasing Alior Leasing has implemented cybersecurity protection systems and comprehensive procedures to ensure the early detection of threats. The company also utilises cybersecurity risk estimation tools. Similar to Alior Bank, Alior Leasing does not disclose deta ils regarding its methods for protecting IT assets or information about the number and types of attacks carried out and blocked on its digital systems. Cybersecurity issues are regularly reported to Alior Leasing’s Management Board. All of Alior Leasing’s key systems undergo static security tests before installation in test environments and dynamic tests after installation. If necessary, additional tests are conducted by external firms. The company performs quarterly vulnerability sca ns of its IT environment, and the knowledge of potential security gaps allows Alior Leasing’s IT teams to respond effectively to emerging threats. The company’s digital security unit also monitors emerging threats in the market and analyses trends in the activities of cybercrime groups. Based on its observations, IT protection systems are updated and optimised. Everyone at Alior Leasing is familiar with cyber threats and the basic methods for minimising cyber risks. Information on this topic is provided to all new employees, and the training materials are reviewed and updated annually as needed. In addition, training videos and information on IT threats are available to all staff on an intranet subpage managed by the cybersecurity unit. If there is an increase in phishing campaigns or identified attempts at social engineering attacks, Alior Leasing employees recei ve relevant alerts via email.
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268 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement XV. Representations of the Management Board The Management Board of Alior Bank S.A. hereby represents that: • to the best of its knowledge, the Consolidated financial statements of the Alior Bank S.A. Capital Group and Financial statements of Alior Bank S.A. for the year ended on 31 December 2024 and the comparative data were prepared in compliance with the applicable accounting policies and provide a true, fair and clear view of the assets and financial standing of the Bank and the Alior Bank S.A. Capital Group and their financial result, • the Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024 including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement presents a true image of growth, achievements and circumstances (along with a description of primary threats and risks) related to the Alior Bank Capital Group in 2024.
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269 Report of the Management Board on the activities of Alior Bank S.A. Capital Group in 2024, including the Report of the Management Board on the activities of Alior Bank S.A. and Sustainability Statement Signatures of all Members of the Management Board Date Signature 4.03.2025 Piotr Żabski President of the Management Board Signed with a qualified electronic signature 4.03.2025 Marcin Ciszewski Vice-President of the Management Board Signed with a qualified electronic signature 4.03.2025 Jacek Iljin Vice-President of the Management Board Signed with a qualified electronic signature 4.03.2025 Wojciech Przybył Vice-President of the Management Board Signed with a qualified electronic signature 4.03.2025 Zdzisław Wojtera Vice-President of the Management Board Signed with a qualified electronic signature
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Appendix No. 1 to Resolution No. 25/2025 of the Supervisory Board of Alior Bank S.A. of March 3, 2025 Statement of the Supervisory Board of Alior Bank S.A. on the Bank’s compliance with the applicable laws relating to the establishment and operations in the financial year 2024 of the Audit Committee of the Supervisory Board of the Bank This version of the statement is a translation from the original, which was prepared in the Polish language. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation
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Appendix No. 1 to Resolution No. 25/2025 of the Supervisory Board of Alior Bank S.A. of March 3, 2025 Legal basis: § 70.1.8 a) and c) of the Regulation of the Minister of Finance of March 29, 2018, on ongoing and periodical disclosure by issuers of securities and conditions to recognize as equivalent the information that is required by the law in Non -Member States (Journal of Laws 2018, item 757). Statement: With respect to the reporting period ended on December 31, 2024, the Supervisory Board of Alior Bank S.A. (“Bank”) declares that Alior Bank S .A. complied with the applicable regulations related to the establishment, composition, and operations of the Audit Committee of the Bank’s Supervisory Board, including regulations related to compliance by members of the Committee with independence criteria and the requirements concerning their knowledge and skills in the sector in which the Bank operates, as well as in the areas of accounting and review of financial statements. Additionally, the Bank’s Supervisory Board declares that in the reporting period ended on December 31, 2024, the Audit Committee of the Bank’s Supervisory Board performed its tasks as set forth in the applicable laws. 03.03.2025 Deputy Chair of the Supervisory Board of Alior Bank Jan Zimowicz (Signed with a qualified electronic signature)