Bank Handlowy w Warszawie S.A. (BHW) Earnings Call Transcript & Summary

[Interpreted] Respected Supervisory board, to pursue the agenda, please submit your candidate for Chairman of the Supervisory Board meeting. I think this is recorded. So we need to speak into the microphone. Over to [indiscernible] as a proxy of shareholders, [indiscernible] and a public limited company, I would like to submit [indiscernible], to chair the General Meeting. Thank you very much. [indiscernible], do you agree to serve as Chairman of the meeting. Are there any other motions or proposals in terms of nominations for the Chairman of the General Meeting. I see none. And hence, I would like to put this to a vote. Who is in favor of electing Mr. [indiscernible], as Chairman of the Ordinary General Meeting. Okay, who's in favor? Yes. And we're simply voting. Well, this is a secret ballot vote. It's a personal item. Who has abstained and who is against. In other words, please get your votes. Has everybody had a chance to submit their votes. Yes. I'm not receiving actually a paper version, but I read it from my tablet. That's in favor, 116, 490,259 votes. There have been no votes of against and 203 votes abstention. Hence, I would like to state that Mr. [indiscernible] has been elected as Chairman of the General Meeting -- today's general meeting. And now I hand over the floor to the Chairman of the meeting.

[Interpreted] Good morning, ladies and gentlemen. I thank you very much for your trust and election. From my side, we'll try to ensure that the meeting is conducted efficiently, First of all, I signed the attendance register. And for today's general meeting, we have shareholders who have 116,444,433 shares, which constitutes 89.15% or 89.16% of the shared capital. And now let me move on the substantive issues. Today's annual meeting has been called by the management through the current report 16 by 2025, dated the 29th of May 2025. And in other words, [indiscernible] General Meeting has been convened in accordance with the Commercial Companies Code. And the provisions of the Articles of Association of the Bank and the provisions of the law and private securities. So this meeting has been convened properly and is capable of taking legally binding resolutions. If you allow me, ladies and gentlemen, now just a few organization or housekeeping items. So as information for shareholders. Among management board, we have -- I'm sorry, the Supervisory Board, we have the Chairman; Mr. Sikora, Mr. Kapuscinski, Anna Rulkiewicz and [indiscernible] Smalska present all management board members unpresent as well. I have also been informed that in the deliberations, we also have represent [indiscernible] of the auditors and the statutory auditors of the bank. And now with respect to how we can proceed. In terms of -- general vote will be open ballot and secret ballot will be conducted only with respect to items pertaining to the personal items. But at the request of any shareholders submitted during the general meeting, I will be obliged to organize a secret ballot vote, with respect to any other item that is included in the agenda of the General Meeting. The draft resolutions have been submitted by Board and posted together with the notice of the general meeting. As a rule, I were to put to vote, a resolution in the wording that had been proposed by the Management Board. However, if the shareholders have any proposals with respect to amendment of the text of the resolution, please submit that proposal and then we will be able to proceed in an appropriate manner. First of all, we probably will put to a vote, the so-called alternative versions if there are such and otherwise, those proposed by the shareholders. Every shareholder that had voted against resolution has the right towards the objection. A voice of objection opens the path for such shareholder to actually challenge this resolution in court. But of course, such objection must be recorded in the minutes. So a request to all the shareholders who voted against and want to submit that objection, then your objection will be recorded in the minutes of today's General Meeting. So I do believe that we can now, without further ado, move to other items of the agenda. I see no objections. So let us now proceed on the topics covered by the agenda. So first of all, we have a resolution which is the approval of agenda and also the confirmation of the financial statements ending on the 31st of December 2024 than in consideration and approval of the financial consolidated financial statements, also consideration and approval of the Management Board report, and the capital group which includes also the statements on sustainable development of the Bank and the Capital Group. And granting discharge of members of the management board for reviewing and approval of the Supervisory Board report [indiscernible] activities, the use of revisioning policy and effectiveness of the Supervisory Board operations in 2024 as well as assessment of adequacy of internal regulations in this period of time. And then the approval of Supervisory Board on remuneration of the Management Board, granting a discharge of Supervisory Board members, recreating reserve capital for the purpose of dividend payout, including advanced payments. Distribution of net profit for 2024 and distribution of undistributed profits from previous years, amendments to the Articles of Association, creating an incentive program for the MRT and then the incentive program, which is share based, for selected bank employees, which are not MRTs and the authorization of the management bank -- of the bank to acquire treasury shares and creating a reserve capital for the treasury share buyback program and the conclusion of the general meeting. And so now I simply put to a vote the proposed agenda. And now let me open the vote. [Voting]

[Interpreted] So let me thank you very much [indiscernible] so unanimously, the general meeting had adopted the proposed -- the management board, the agenda that has been proposed by the Management Board. This enables us to simply move forward to strictly substantive issues. So now we have a group of resolutions on the approval of financial statement from the Bank and the Capital Group in last year. So now if I could invite Madam President, Madam CEO to speak about development in the bank in this period. So according to the tradition from the previous years, when presenting the activities of the bank last year, if you could, Madam, present also a proposal of management in terms of the payout of the dividend. And of course, the vote will happen a little bit later when we come to that item in the agenda.

[Interpreted] Ladies and gentlemen, dear shareholders, I would like to welcome you very cordially. I'd like to thank you for your attendance at today's General Meeting of Bank Handlowy. In spite of the fact that today's purpose is to sum up the results and performance of 2024, I would like to use this opportunity and present to you, the most pertinent information about a transaction announced in May this year on exiting the retail banking. I will speak briefly about bank operations in 2024 and the financial results that have been attained. I will sum up the execution of our strategy and we'll speak about strategic directions for subsequent years and I will represent also a proposal with respect to distribution of profits for 2024 and undistributed profit -- distribution of undistributed profits from previous years. So now let's move on to the following slide. The year 2024 has been a year in which there was a clear recovery in investment and greater optimism among our customers. And this translated into higher credit volumes and also maintaining high revenue levels. And the high dynamics were also in the strategic segment, that is corporate segment where the volume of credit has grown by over 20% last year. In the entire institutional banking sector, the balance of loans grew by 8% year-on-year. In 2024, the bank exceeded over [ PLN 5 billion ] and the so-called extended financing to its corporate customers. Citi Handlowy has also taken part in the most important transactions in the Polish market. Among others, the cofinancing of the taking over of Eurozet by the Agora, financing of CCC and financing the debt and playing the role of a global coordination in the accelerated sale of Allegro and Santander. It's also worthwhile mentioning that in 2024, this was a period for the bank of continued to grow in terms of service payments. You can see in the overhead in the slide, the dynamics in transactional banking is also something, to us, very heartening. In retail banking, we are focusing in terms of asset management. And the outcome of that is increased deposits from individual customers. And higher volume of investment products. This was also a record year in terms of the number of high net worth customers. Citi private clients had grown by 7%. These positive business dynamics translated into a very sound performance, financial performance. The revenues of the bank in 2024 had reached nearly PLN 4.5 billion. And we are very short of actually reaching a record level that we had recorded last year. Looking, however, at the revenues and longer time horizon, we can see that revenues have been nearly doubled compared to the year 2021. And we -- in autumn of 2023, reduction of interest rate had an impact on a slight decrease in the income from interest, but, of course, had at the time, also higher commission income. Of course, costs grew mainly due to wage pressure and higher employment and inflation also had an impact on overall admin costs such as advisory services or auditory services. In spite of all of that, Citi Handlowy maintained a very high efficiency in terms of operational activities and had returns higher than the average for the banking sector. We preserve the cost discipline. The cost to income ratio reached 3.5%, ROE 21.1% and ROA, 2.4%. Despite the growth in credits, the quality of the credit portfolio, loan portfolio is very high and the cost of risk is 8 basis points. In 2024, we delivered PLN 1.6 billion in net income. Obviously, we have been affected by one-off events that is the actuarial write-off in retail banking of PLN 432 million point 5,000 (sic) [ 432.5 million ]. At the same time, the equity and liquidity situation of the bank is very strong. Our equity indices remain above -- well above regulatory requirements, which means that we can continue our strategic and business operations as planned. Now let us move to the delivery of the strategy over the years 2022-2024. The year 2024 was the final year of that strategy, and it gives me great pleasure to tell you that the aspirational objectives that we had planned for the term have been delivered in the great majority. In 2024, we have been working very closely with our clients. We have been supporting the aspirations of development, supporting them in efficient liquidity management, delivering funding and advice or counseling services for transactional purposes. This has been reflected in our delivery. In 2022-2024, we have been growing by 15% on average year-on-year. Institutional Banking growth, 8%; retail banking growth 26%. Moreover, we delivered return on investment. The return on equity reached 21.1% at the end of the year in comparison with the 12% planned, ROA 2.4%, and we had actually assumed 1.4%. As a result of inflation, costs have been growing more swiftly than assumed. Nonetheless, we -- despite the 7% growth in expenses, we managed to keep our business efficient. The cost-to-income indice reached 35%, much, much better than assumed in the strategy. Nonetheless, the high interest rate environment and our clients' situation had yielded less demand for credits. In 2025 -- '24, excuse me, we have been working to support client assets in the institutional segment, which has yielded 8% in institutional loans in the year 2024. We were focusing -- we have been focusing on investment banking on its inefficiency as well as on the development of talent, HR and institutional culture. PLN 1.3 billion were actually -- excuse me, we extended PLN 1.3 billion in so-called green asset loans, delivering our fundamental objective concerning sustainable development for the years 2022-2024. According to our dividend policy, we wish to allocate most of our profit to dividends to shareholders. In 2024, given the necessity to meet regulatory MREL requirements and recognizing profit for 2023, we paid 65% out in dividends, whereas with regard to the other arrears, we paid 100% and 75% in 2022, 2023, respectively. Now let me move to the next slide. I would like to now deliver the most important information concerning the transaction of selling our retail banking to VeloBank. PLN 6 billion in loans, PLN 22.1 billion in deposits and approximately PLN 8.9 billion of management assets -- managed assets shall be handed over. We will be handing over the organized part of the company to be transferred to VeloBank in exchange for VeloBank shares to be then bought out by VeloBank shareholders. The value of the transaction has been valued at PLN 1.1 billion, including the fixed price component, i.e., PLN 432 million. The variable price component will reach no more than PLN 100 million. And thirdly, we need to release the equity surplus, which had been associated with the retail banking plus a profit delivered by the transactional object or subject actually entity at PLN 570 million. We obviously need to secure regulatory permits. We are -- as a result, we are going to be releasing part of our equity that we intend to use for loan campaigns in the institutional sector and will allow us to focus on areas where we have the competitive advantage. I would like to emphasize that we are exiting the retail banking segment according to the strategy of our majority shareholder, according to the announcement made in 2021, but that does not necessarily mean that Citi will be limiting its operations in Poland. We are going to remain a publicly listed company on the Warsaw Stock Exchange. Moreover, we have assumed that by 2027, the net income for business for retail banking will be raised to an equal amount in the institutional banking sector, not to mention the fact that we are not going to -- this will not be affecting our dividend, we intend to keep paying the maximum dividend to our shareholders. The transaction will definitely affect the overall operational directions. We have decided to meet our fundamental model and conform to it, including the strategy that I'm going to discuss with the use of the next slide. As you do know, in December 2024, the Supervisory Board had approved our strategy for the years 2025, 2027. Its main financial assumptions have been listed on the left-hand side of the slide. Be that as it may, since we are exiting retail banking as announced in May, our strategic directions have been altered. We have assumed that the transaction will close by mid-2026, and we are then going to be focusing on our key competence areas. We intend to become more swift at developing institutional banking, the most effective and income-producing of all our segments. I would like to remind you that 2024, this particular segment had accounted for over 70% of our income. The equity released will be redirected to the development of institutional banking. We are going to be using market trends and the economic pickup in Poland, not to mention the overall global potential of Citi as such. We see our main opportunities in the areas of -- in such areas as energy transformation, the growing needs for defense investment, not to mention new economy companies as our -- one of our targets. We want to become one of the most effective financial institutions in Poland with a proper ROE of approximately 19% and ROA of 2.6% by 2027. This will translate into higher yields to -- or payouts to our shareholders of approximately 75% to 100%, obviously, having secured the regulators' proper permits. Our intent is also to pay our shareholders in 2026 and special money that is going to be the result of the retail banking sales. Now let me move to the final slide of my presentation. Let me use it to present you with the proposals of the Management Board with regard to the division of profits or allocation of profits for the current year. You can see what was going on to the -- with the Bank's shares over the last years. The shares have dropped as a result of the overall drop in interest rate in Poland. The bank has a very strong equity position, which means that we can be consistent in delivering the dividend policy of the bank and sharing most of our profits with our shareholders. In 2024, the net income of the bank totaled PLN 1.792 million and the regulators permit allows us to pay out up to 75% of that profit, which means that we intend to allocate PLN 1.3 billion to the -- our shareholders, PLN 10.1 per share. This is -- the dividend rates will reach 9%. That is actually going to be the second highest in our history. The dividend payout day will be July -- the dividend date shall be July 7, 2025, the dividend payout day will be July 14. Now with regards to the nonallocated profit, in having talked, having consulted with the regulator, we would -- we wish to pay that unallocated profit in the not-too-distant future. We are going to be establishing dividend equity to include nonallocated profit from previous years. Now the shareholders and regulators' approval and the approval of the Supervisory Board in the area will make us considerably flexible. We will be able to pay out -- pay money out to our shareholders outside of the general assembly, obviously, pending approval by the Supervisory Board and the regulator. In closing, I would like to thank the members of the Management Board and the Supervisory Board for their unquestioned support over last year. Thank you very much for your attention. Now I'm open to questions.

[Interpreted] Any questions from our shareholders? Thank you very much. Let us then vote on resolutions required by the law and associated with the bank's operations in last year. Resolution #3 of the Ordinary General Meeting of Bank Handlowy w Warszawie S.A. on the consideration and approval of the annual financial statements of the bank for the financial year closing on December 31, 2024. Pursuant to Article 395, Paragraph 2, Item 1 of the Commercial Companies Code and Paragraph 9, Section 1, Item 1 of the Bank's Articles of Association, the Ordinary General Meeting having considered the annual financial statements of the bank for the financial year as quoted has resolved to approve the annual financial statement of the bank of Bank Handlowy w Warszawie S.A., comprising the statement of financial position prepared as of December 31, 2024, showing a balance sheet total of PLN 72,569, 193,000. Income statement for the year 2024, showing net profit of PLN 1,791,979,000. The statement of comprehensive income for the year 2024, showing a total comprehensive income of PLN 1,590,792,000. Statement of changes to equity for 2024 of PLN 9,855,483,000. The cash flow statement for the year 2024, showing net cash balance of PLN 5,794,361,000 and additional information and explanatory notes together with the independent auditor's report on the audit of the financial statements. Let us now, ladies and gentlemen, take a vote. [Voting]

Thank you very much. The vote is now closed. 116,470,811 votes for, 193 votes against, 23,458 votes of abstention. I would like to conclude that the ordinary shareholders' meeting has approved the bank's financial statement for the year 2024. The following resolution is with respect to the approval of the annual consolidated financial statement of the capital group of the bank for the financial year 2024. This is resolution #4 in your materials of today's General Meeting pursuant to Article 295, Paragraph 5 of the Commercial Companies Code in connection with Article 55, Paragraph 5 and Article 53 as well as the Accounting Act in consideration of the annual consolidated financial statement of the capital book for the financial year ending on December 2024, has resolved to approve the annual consolidated financial statement of the capital group of Bank Handlowy w Warszawie S.A. for the financial year ending with the 31st of December 2024, comprising, first of all, consolidated financial statement and position prepared for the 31st of December 2024, showing a balance sheet total of PLN 70,478,103,000. The consolidated income statement for the year showing a net profit of PLN 1,769,457,000. Consolidated statement of comprehensive income for the year showing the comprehensive income of PLN 1,559,196 000. Consolidated statement unchanged in equity for the year '24, showing the balance sheet of 9,868,531,000. Consolidated cash flow statement for the year 2024, showing the net cash balance of PLN 5,794,361,000. Additional information and explanatory notes with the independent auditor's report on the audit of the financial statement. I here now open the vote. Please cast your vote in respect to the consolidated financial statements. [Voting]

[Interpreted] I hereby close the vote in favor of the resolution. Consolidated statement has been, for 2024, 116,470,811 votes were cast, against 193 votes and abstentions 23,458 shares. So let me just state that the general meeting has approved the consolidated financial statement of the capital book of the bank for the final -- for the previous fiscal year. The next item is with respect to the approval -- consideration of Royal Bank report and activities of the bank and of the capital group, which include, among others, a sustainability statement of the bank and the bank capital Group for the year 2024. This is resolution #5 in your materials. Pursuant to Article 395, Paragraph 2.1 and Paragraph 5 of the Commercial Companies Code and Paragraph 9, Section 1, Item 1 of the Bank Articles of Association, in connection with the Article 63 of the Accounting Act in the Ordinary General Meeting considers and results to approve the Management Board report on the activities of Bank Handlowy and the capital group in 2024, including, among others, sustainability statement of the bank and the bank capital Group for 2024. I hereby open the vote on this resolution. [Voting]

[Interpreted] Thank you very much. I now close the vote. In favor of the resolution, 116,470,811 votes, 193 votes against 23,435 votes abstaining. So let me just state that the General Meeting has approved and adopted the report of the activities of the Management Board last year. The next item is discharge of duties for the members of the management banks. It's a personal item. Hence, all these resolutions will be voted in secret ballot vote. And the resolution first in this group, and this is resolution #6 of the Ordinary General Meeting on the granting of discharge of the President of the Management Board, Elzbieta Czetwertynska. I now open the vote. Please cast your votes. [Voting]

[Interpreted] Thank you very much. I now close the vote. And let me state that the General Meeting had approved the performance discharge of duties [ 16,445,087 ] votes were cast, against 45,917 and abstentions, 23,458. The following resolution is also the discharge of duties of the Vice President of the bank, Natalia Bozek. This is resolution #7. Please cast your votes. [Voting]

[Interpreted] Thank you very much. I now close the voting. And let me state that the general meeting has deterred the -- approved the discharge of duties of Natalia Bozek. 16,425,087 votes; against, [ 45,000 ] and 23,458 votes abstaining. And now let us move on to the approval of the discharge of duties for the Vice President; Mr. Patrycjusz Wojcik. Please cast your vote. [Voting]

[Interpreted] Thank you very much. I close the voting. And let me state that the general meeting had the approval of performance of duties for Mr. Patrycjusz Wojcik. 116 425,457 in favor; against, 43,917 and 23,458 votes against abstention. The following Resolution, resolution #9 on the performance of duties for the Vice President of the Board, Mr. Maciej Kropidlowski. Please cast your votes. [Voting]

[Interpreted] Thank you very much. I now close the voting. And let me say that the general meeting had extended the granting of discharge of duties of Vice President, Mr. Maciej Kropidlowski. In favor, [indiscernible] votes, against 30 million -- I'm sorry, the results aren't displayed on the screen. And now we will vote on the discharge of duties for the Vice President of the Management Board of the bank, Andrzej Wilk. Please cast your votes. [Voting]

[Interpreted] Thank you very much. I now close the voting. And let me say that the general meeting had given -- granted the discharge of duties for Mr. Andrzej Wilk. In favor of 113,425,087 votes; against, 45,917 votes and 23,458 votes abstention. And now let us move on the discharge of duties for Vice President of the Management Board, Barbara Sobala. Please cast your votes. [Voting]

[Interpreted] Let me now close the voting and say that the general meeting has granted the discharge of duties to the Vice President, Barbara Sobala. In favor; 116,425,087 votes; against, 45,917 votes and abstentions, 23,458. The subsequent resolution, this is #12 in your materials. The granting discharge of duties for Vice President of the Management, Katarzyna Majewska. I hereby open the voting. [Voting]

[Interpreted] Let me now close the vote. And let me just state that the general meeting has granted discharge of duties for Vice President of the Bank, Katarzyna Majewska. In favor, 116,425,087 votes; against 45,917 votes and abstention, 23,458. And now we will be voting on granting discharge of duties for a member of the Management Board, Mr. Ivan Vrhel. Please cast your votes. [Voting]

[Interpreted] Thank you very much. I now close the voting. And let me state the general meeting has granted discharge of duties for Mr. Ivan Vrhel. In favor; 116,425,087 votes; against, 45,917 votes and abstentions, 23,458 votes. I also do believe that in my own name and on behalf of the shareholders, I can congratulate all the members of the Management Board to have this very strong support from the side of the shareholders. And we cannot hear the speaker without a microphone, but I do believe that this was expression of thanks for the vote of confidence. Thank you very much. And now let us move on to the following item. There is consideration and approval of the bank's supervisory board for the 2024 assessment of the remuneration policy applied in the bank, assessment of the effectiveness of the Supervisory Board operations in 2024 and the assessment of the adequacy of internal regulations regarding the functioning of the Supervisory Board in the third period. I would like to now invite the Chairman of the Supervisory Board to take the floor.

Good morning, ladies and gentlemen. Let me begin by telling you that matters, which have been made part of the statutory requirements for the Supervisory Board have been included in this report that was published before some time ago. I would like to point to two items of particular importance that I consider particularly essential non-statutory, which made 2024 quite a special year. Firstly, the Supervisory Board had focused on true matters, which have been presented by the Management Board already. On the one hand, associated with the preparation of the retail exit transaction as discussed by our CEO. And I would like to emphasize that it required us to be deeply, deeply involved in the process. We actually met nine times and so that required four times, and we had also met a number of times, apart from formal meetings in order to clarify matters requiring clarifications, explanations prior to formal meetings. That was very, very intense for us. I would like to emphasize that we paid particular attention to shareholders' interest both in terms of the structure of the transaction as such, economic conditions as well as what the bank is going to do once the retail banking has been exited. We focused on employee and client interest alike. I believe that the transaction discussed by our CEO, has reflected it to the forest. We had also discussed another matter, i.e. the strategy tabled by the Management Board, the strategy of the Global Business Bank. It's absolute pillar or pivot involving focus on the institutional client. I would like to emphasize that according to our traditions, the Bank Handlowy and Citi, the two components, which had merged in 2021 have been present on the Polish market for decades. That goes both for Bank Handlowy and Citi. And what the Citi component had done have definitely been focused on the institutional clients. This means that the strategy presented by the Management Board and discussed by the Supervisory Board had been a revisiting of the absolute routes. The pivot of our operations, our core competence and a sense of delivering best value to all our clients. I would like to emphasize both these issues of particular strategic importance. We had been, as said, before discussing it. I would also like to use this opportunity and extend my most profound thanks to the entire Management Board and the Bank's staff for the extraordinary involvement in the preparation -- in the process of preparing the transaction and related records or documents. And that had been a task, which was totally separate to the day-to-day business of handling our customers and providing service to them. This is something that merits a particular emphasis in our summary of the year 2024. Should you have any questions concerning our report obviously, we are at your disposal. We are all prepared to answer any questions you might have.

Thank you very much. Any questions, ladies and gentlemen? If not, thank you very much. Let us just take a vote on the resolution concerning the consideration and approval of the Bank Supervisory Board report for its activity for 2024 pursuant to Article 382, Paragraph 3.3 and Article 395 Paragraph 5 of the Commercial Companies Code, the Ordinary General Meeting resolved to approve the report on the activity of the Supervisory Board of Bank Handlowy w Warszawie SA in 2024, presented by the Supervisory Board based on an assessment as contained in the report of the activity of the Supervisory Board of Bank Handlowy w Warszawie SA in 2024, states the established remuneration policy contributes to the development and security of bank operations. Based on the Supervisory Board self-assessment as contained in the report on the activity of the Supervisory Board of Bank Handlowy w Warszawie 2024, positively assesses the effectiveness of the Supervisory Board's operations for 2024 and considers the internal regulations regarding the functioning of the Supervisory Board as adequate for the period, i.e. Articles of Association of Bank Handlowy w Warszawie SA, regulations of the Supervisory Board of the Bank. Assessment of the Supervisory Board members and the regulations of the Supervisory Board committees, all published on the bank's website. Let us take a vote. [Voting]

Thank you very much 116,466,608 votes cast in favor; 4,396 against; and 23,458 votes of abstention. I therefore conclude that the general assembly approved the Bank Supervisory Board report on the activity for 2024. The next item is the opinion of the -- concerning the works of the assessment of the Supervisory Board pursuant to articles of association of the bank and the act of law concerning the public offering and the introducing financial instruments to the organized order and company's code, the General Assembly positively assesses the reports concerning the remuneration of the banks of the remuneration of the Management Board members and members of the Supervisory Board of Bank Handlowy w Warszawie SA in 2024 pursuant to all acts as quoted. I would like to now open the voting procedure. [Voting]

Thank you very much. The vote is now closed. I would like to conclude that the resolution has been approved, 110,198,776 votes; against 6,295,493 votes against; 193 votes of abstention. The next item on our agenda involves the vote concerning the discharge for the members of the Supervisory Board of the bank similarly to the discharge to resolutions concerning discharges for Management Board members, we will be voting in secret ballot. We are going to begin by granting discharge to Chairperson of the Supervisory Board of Bank Handlowy w Warszawie, Mr. Slawomir Sikora. [Voting]

Thank you very much. I hereby close the vote. I would like to conclude that the general assembly has approved the resolution and has granted discharge to Mr. Slawomir Sikora, 115,820,384 votes in favor; 650,620 votes against; 23,458 votes of abstention. Now we shall be Voting on the discharge to the Vice Chairman of the Bank Supervisory Board, Mr. Ignacio Gutierrez-Orrantia. Let us vote, please. [Voting]

Thank you. The vote is now closed. I would like to conclude that the general assembly has granted discharge to Mr. Ignacio Gutierrez-Orrantia, 115,820,384 votes for; 650,620 votes against; 23,438 votes of abstention. Now we shall be quoting on the granting of discharge to member of the Bank's Supervisory Board for 2024 Ms. Natalia Bozek. Let us vote. [Voting]

Thank you very much. The vote is now closed. I would like to conclude that the general assembly has granted discharge to Natalia Bozek, member of the Supervisory Board, 115,820,384 votes for, 650,620 votes against, 23,458 votes of abstention. The next resolution concerns the granting of discharge to member of the Bank's Supervisory Board, Mr. Fabio Lisanti. Let us vote. [Voting]

Thank you very much. The vote is now closed. I would like to conclude that the general assembly has granted discharge to member of the Bank Supervisory Board, Mr. Fabio Lisanti, 115,820,384 votes for, 650,620 votes against, 23,458 votes of abstention. The next resolution concerning -- concerns the granting of discharge to member of the Bank's Supervisory Board, Mr. Marek Kapuscinski. Let us vote. [Voting]

Thank you. The vote is now closed. I would like to conclude that the general meeting has granted discharge to Mr. Marek Kapuscinski, Member of the Supervisory Board. 115,820,384 votes in favor, 650,620 votes against, 23,458 votes of abstention. The following resolution is granting the discharge to member of the Supervisory Board, Mr. Andras Reiniger. Please cast your votes. [Voting]

Thank you very much, and I close the vote. And let me say that discharge has been granted to Mr. Andras Reiniger. In favor, 115,820,384 votes, against 650,620 votes, and abstention 23,458 votes. And now the following resolution on the discharging of Anna Rulkiewicz, member of the Management Board -- I'm sorry, Supervisory Board. Please cast your votes. [Voting]

Thank you very much. I call the vote. And let me say that the general meeting had granted discharge of Anna Rulkiewicz of the Supervisory Board. In favor, 115,820,384 votes, against 650,620 votes and abstaining 23,458 votes. And now the subsequent resolution is granting discharge to member of the Supervisory Board, Ms. Barbara Smalska. Please cast your votes. [Voting]

Thank you very much. And I close the vote. And let me say that the general meeting has granted discharge to Ms. Barbara Smalska, Supervisory Board member. In favor 115,820,384 votes, against 650,020 votes, and abstaining 23,458 votes. And now the granting of discharge for member of the board, Ms. Silvia Carpitella. Please cast your votes. [Voting]

Thank you very much, and I'll close the vote. And let me state the general meeting has granted discharge for Silvia Carpitella, member of the Supervisory Board in favor 115,820,348 votes, against 650,620 votes and abstaining 23,438 votes. And final voting in terms of granting discharge for Helen Hale, member of the Supervisory Board. Please cast your votes. [Voting]

Thank you much. I now close the vote. And let me state that Helen Hale, the member of the Supervisory Board received the discharge of duties, in favor 115,820,384 votes, against 650,620 votes, and abstention 23,458. All members of the Supervisory Board has have been received the granting of discharge from the shareholders. So congratulations from me. So we have now completed the block of the so-called regulatory vote and now let's return to financial items. And the subsequent resolution is on the creation of the capital reserve for the purpose of dividend payment, including advance dividend. This is resolution #26. And of today's ordinary general meeting on the creation of capital reserve and for the purpose of dividend payout, including the advance dividend pursuant to Article 396 Paragraph 4 and 5, and Article 349 Paragraph 2 of the Commercial Companies Code in conjunction with Paragraph 30, Section 1, Item 3 and Paragraph 33, Section 2 of the Bank's Articles of Association, the Ordinary General Meeting of the Bank create a capital reserve to be earmarked for the dividend payout, including advance payment called the dividend capital, and hereby authorizes the Management Board to dispose of it for the purpose of paying advance dividend in accordance with Article 349, Paragraph 2 of the Commercial Companies Code. The resolution regarding the authorization of the Management Board on the dividend capital using for and according to Article 349 of Articles of Association. Of course, it comes into force provided that the amendment to the Articles will be registered by the court, and this is, of course, in connection with a decision of 27th of June 2025 on amendment of the Article of Association of Bank Handlowy w Warszawie Company. And now let me open the voting on this resolution. [Voting]

Now I close the voting. Let me state that the General Meeting had expressed its concern to create dividend capital in favor, 116,490,259 votes, against 4,203 votes, and there have been no abstentions. Subsequent resolution and the agenda is distribution of net profit for the year 2024. Pursuing to Article 395, Paragraph 2, Item 2 of the Commercial Companies Code and Paragraph 9, Item 2 of the Articles of Association, and the bank decided to distribute the net profit for the year 2024 amounting to PLN 1,791,978,477.05 and distributed in the following way. Dividend for shareholders PLN 1,342,776,931.65, which signifies the dividend amount and per share it will be PLN 10.29. In the amount of PLN 449,201,545.40 are the undivided. The dividend date is July 7, 2025 and the date of dividend payout date will be July 14, 2025. And the amount of dividend per share has been calculated by dividing the number of the amount of shares divided by number of shares, reduced by the number of Treasury Shares held by the Bank. And hence, there are 130,493,385 shares that are taking part in the distribution. So now let me open to our vote the resolution with respect to the distribution of profits. [Voting]

Thank you very much, and now I close the vote. Let me state that the general meeting has distributed the profit in accordance with the management proposal. In favor, 116,490,259 shares and against 4,203 votes. And now, I think the final resolution within the group financial resolutions and the distribution of undistributed net profits from the previous years. Pursuant to Article 395 Paragraph 2 Item 2 of the Commercial Companies Code and Paragraph 9 Section 1 Item 2 of the Bank's Articles of Association. Ordinary General Meeting decided to distribute the entire undistributed profit from the previous years of PLN 1,091,283,635.71, which consists of undistributed profit from 2018 of PLN 163,279,653.78; Undistributed profit from 2019 PLN 478,802,436.53; and undistributed profit from 2024 to the amount of PLN 449,201,545.40. By allocating to this dividend capital created by the Ordinary General Meeting in the -- with the resolution #26/2025 dated 27th of June 2025, and the creation of capital reserve for the purpose of dividend payout, including advance dividend payment. And now, please cast your votes with respect to this item. [Voting]

Thank you very much, and let me close the voting. And now let me say that the general meeting has taken the decision on distribution of undistributed profit from previous years in accordance with the proposal of the management. In favor, 116,476,470 votes and against 17,992 votes. And now we will move on to Resolution #29, which is regarding the amendments to the Articles of Association of the Bank. Recently we informed you that, in order to adopt this resolution with respect to amendment of the articles, it is necessary to have qualify majority of at least 3/4 of votes present in the general meeting. And this is a resolution in accordance with data voting provided by the management, Ordinary General Meeting, acting pursuant to Paragraph 9, Section 2 of the Articles of Association of the Bank and the Commercial Company agreed to adopt the following changes to Statute. So there are paragraphs -- Paragraph 5, Section 3, Point 6; in Paragraph 5 Section 4, Point 19, and Paragraph 5, Section 4, Point 21, letter f, and Paragraph 5, Section 4, Point 21, Letter l and Paragraph 18, Section 1, Point 7. And the resolution will come into effect on the date registered in the National Court Register, in accordance with Article 430 Paragraph 1 under Commercial Companies code. And the change of“ Statute articles has been also approved by the financial supervisor authority. And the ordinary general meeting adopted the consolidated text of the Bank's “Statute”, including the amendments specified in Paragraph 1, with the comments indicated in the annext to this resolution. So please cast your votes with respect to this specific item. [Voting]

Let me thank you, and I close the vote. Let me just state that the changes to the articles have been adopted by the general meeting in favor 114,496,215 votes, which constitute 98.26% of all votes cast. In other words, it meets the requirement. I'm sorry, this is the required majority and I guess, 1,901,661, the numbers are displayed and abstention 96,586 votes. And now we have also a second resolution on changes in the Articles. Resolution #30/2025 of the ordinary general meeting, acting pursuant to Article 9 Section 2, Point 2 of the Articles of Association of Bank Handlowy w Warszawie Spólka Akcyjna and Article 430 Paragraph 1 of the Commercial Companies Code, decides to adopt the following changes to the Articles of Association. In Article 33, Section 2 of the Statute and in Article 36 of Statute. The resolution enters into force on the day of its adoption with effect from the date of entry of the change in the register of entrepreneurs in accordance with Commercial Companies Code. The amendments to the Statute require the consent of the Polish financial Supervision Authority. The ordinary general meeting adopts the consolidated text of the Bank's Statute includes the amendments specified in Paragraph above. I would -- I was asked to tell you that actually, the financial -- Polish financial Supervision Authority adopted the -- or issued their permit yesterday, we are not going to enter amendments at this point, because the permit has just been granted yesterday. Now let us vote. [Voting]

The including the consolidated text arising from the resolution in question. Thank you very much. The vote is now closed. I wish to conclude that the general assembly has adopted changes to the Articles of Association, 114,742,207 votes, i.e. 98.495% of all votes cast. The majority has been achieved 1,655,669 votes against 96,586 votes of abstention. Now we shall proceed to our next item, i.e. Resolution #31, regarding of the introduction of the share-based incentive plan for persons whose professional activities have a material impact on the Bank's risk profile. As said, resolution #31/2025 on the -- of the Ordinary General Meeting. The title has already been quoted. The Ordinary General Meeting resolves as follows: we have the content of the program that has been included in the resolution. Let us now vote concerning that particular resolution. It does not affect the Articles of Association. All we need is an ordinary majority of votes to be cast in order for the resolution to be approved. [Voting]

Thank you very much. I would like to conclude that the general assembly has introduced the share-based incentive plan for persons whose professional activities have a material impact on the Bank's risk profile. 111,680,514 votes cast in favor. 4,813,755 votes cast against, 193 votes of abstention. The next resolution on our agenda concerns the introduction of a share-based incentive plan for selected bank employees other than persons whose professional activities have a material impact on the bank's risk profile. Resolution #32/2025. The Ordinary General Meeting resolves as follows: the resolution contains the rules of the plan. Ladies and gentlemen, let us vote. [Voting]

Thank you very much. The vote is now closed. I would like to conclude that the general meeting has introduced the share-based incentive plan for selected bank employees other than persons whose professional activities have material impact on the bank's risk profile. 111,680,514 votes cast in favor, 4,813,755 votes cast against, 193 shares of abstention. And now ladies and gentlemen, we have the final material item on our agenda, concerning the Management Board authority to acquire Treasury Shares and create reserve equity for purposes of Treasury Shares buyback programs. Resolution #33/2025. Yes, resolution #33/2025, the ordinary general meeting, Acting pursuant to Article 393 Clause 6 in conjunction with Article 362 Paragraph 1 Clause 8 and Article 362 Para 2 and Article 396 Para 4 and 5 of the Act of the Commercial Companies Code results as follows: the Paragraph 1 in connection with the adoption by the Bank's ordinary general meeting on June 27, 2025 of the resolution concerning the introduction of share-based incentive plans for persons whose professional activities have a material impact on the bank's risk profile. And Resolution #32 on the introduction of share-based incentive plans for selected bank employees other than persons whose professional activities have a material impact on the bank's risk profile, and the introduction based thereof on share-based remuneration schemes for persons specified in each of these resolutions, collectively "Incentive Plans 2", in order for the bank to purchase Treasury stock for purposes of transferring shares to eligible persons under Incentive Plans 2 referred to above as well as to eligible persons under incentive plans introduced by the bank's Extraordinary General Meeting, on 16th December 2022 -- in resolution #3/2022 and #4/2022, the general meeting hereby authorizes the management board to purchase fully paid-up shares of the bank listed on the regulated market operated by the Stock Exchange in Warsaw SE with the nominal value of PLN 4 each bearing ISIN code number as quoted. It will -- and the acquisition of these Treasury Shares will be based on the following rules. The bank may acquire no more than 850,000 Treasury Shares i.e., representing no more than 0.65%. The bank may acquire its Treasury Shares in any manner permitted, subject to applicable rules and regulations, in particular, by way of direct acquisition of Treasury services by the bank, the acquisition of Treasury Shares by an investment firm or in any other manner. Both of your transactions entered into on the regulated market, operated by the Warsaw Stock Exchange and transactions effected outside the regulated market. Item 3, the purchase price of Treasury Shares may not be lower than PLN 4 per share or higher than PLN 180 per Treasury Share. It is being understood that if Treasury Shares are acquired under the Treasury Shares buyback program in compliance with the relevant provisions of regulation number 596/2014 of the European Parliament and of the Council, and repealing Directive 2003/6/EC of the European Parliament of the Council. With regard to regulatory technical standard for the arrangements applicable, the purchase price of Treasury Shares will be determined taking into account all of the above. Treasury Shares will be purchased against cash payment at a purchase price to be paid by the bank out of the capital reserve referred to in Para 3 below, established for the purpose out of the amount, which in accordance may be used for distribution among shareholders. The authorization of the bank's Management Board to acquire Treasury Shares will remain in force for a period of 3 years from January 1 2026 until December 31, 2028. But no longer than until the funds set aside for the acquisition of Treasury Shares as specified above are exhausted. The Management Board may at its own discretion and guided by the bank's interests, discontinue the acquisition of Treasury Shares prior to the end of the authorization period or before all funds at set aside for acquisition of such shares are fully exhausted or may abandon the acquisition of all or part of the Treasury Shares or withdraw at any time from implementing the resolution. Treasury Shares acquired by the bank under the Treasury Shares buyback program may be offered to eligible persons referred to above. Under the terms and conditions specified or referred to in resolutions concerning incentive plans 1 or 2 in the performance of the bank's obligations related to the incentive plans 1 or 2 or if not transferred under the terms and conditions set forth above, may be redeemed in a separate procedure by the bank or may be disposed of by the bank in each case subject to restrictions on such redemption or disposal prescribed by the applicable rules of regulations. Paragraph 3, Financing of Treasury Shares. In order to finance the acquisition of Treasury Shares in accordance with provisions of Article 362 Para 2 Clause 2 in conjunction with Article 348 Para 1 of the Commercial Companies Code. The ordinary general meeting results to establish a reserve capital to be used to finance the acquisition of Treasury Shares by the bank within the framework of the Treasury Shares buyback program. For purposes of the above, the amount of PLN 75 million is being satisfied from the reserve capital created out of profits distributable as dividends to the reserve capital created pursuant to the resolution for purposes of implementing of the program. And the reserve equity created out of profit has been reduced by the amount of reserve capital created pursuant to that to taking into account the requirements set forth in Article 363 Para 6 of the Commercial Companies Code. The general meeting hereby resolves that upon the lapse of the authorization period or an event set forth in Para 2 Section 6 above. The funds collected within the reserve capital established pursuant to this resolution, not used up for the acquisition of Treasury Shares shall be transferred back to capital or funds that contributed funds to the reserve capital created pursuant to this resolution. While the reserve capital created pursuant to this resolution and referred here to, shall be resolved without the need of separate resolutions being passed by this general meeting. Paragraph 4, authorization for the bank's Management Board. In order for the bank to acquire Treasury Shares under the Treasury Shares buyback program purposes of transferring them to eligible persons. Under the Incentive Plans 1 or 2 referred to above the general meeting hereby authorizes the Management Board to acquire Treasury Shares under the terms and conditions set forth herein and to take all legal and factual acts necessary to acquire such shares, in particular, to determine detailed rules for the acquisition of Treasury Shares. To the extent, not specified in this resolution, including the determination for the acquisition of Treasury Shares and to execute an agreement with selected investment firm. All to authorized separate organizational unit of the bank to acquire such shares. Paragraph 5, effectiveness. This resolution challenge or enter into force open its adoption, provided that the acquisition of shares under the Treasury Shares buyback program shall be permitted on condition that the bank first obtains a permit from the Financial Supervision Authority, referred to an Articles 77 and 78 of Regulation EU number 575/2013 of the European Parliament and of the Council. Let us vote. [Voting]

Thank you very much. The vote is now closed. I would like to conclude that the resolution -- the meeting, excuse me, has authorized the Management of Board to acquire Treasury Shares and create reserve equity for purposes of the Treasury Shares buyback program, 112,021,490 votes cast for, 4,472,779 votes cast against 193 votes of abstention. And thus, ladies and gentlemen, we have exhausted the agenda for today's meeting. I would like to therefore conclude the proceedings and thank all shareholders for their attendance and the vote. Thank you.