Assessment of financial credibility of PKO Bank Polski SA

Currently, the financial reliability ratings of PKO Bank Polski SA are awarded by three meaningful rating agencies:

• rating agencies Moody’s Investors Service (‘Moody’s’) and Standard & Poor’s Ratings Services (‘S&P’) assign a rating to the Bank at a charge, in accordance with its own bank assessment procedure,
• Fitch Ratings agency assigns a free-of-charge rating (not ordered by the Bank), on the basis of publicly available information, including primarily interim and annual reports, and information on the Bank made available during direct contacts of representatives of the agency with the Bank. 

In 2013:

• On 14 June 2013 Standard&Poor’s awarded the ‘A-‘ rating for the Bank’s long term credit rating on the watch list with the possibility of its reduction. In the opinion of S&P this was necessary in order to analyse the impact of share purchase agreements for Nordea Group entities on the Bank’s equity position. In accordance with the information from S&P the Bank’s ‘A-‘ long-term credit rating is unlikely to be decreased by more than one level as a result of this analysis. The potential reduction in the rating, in accordance with S&P criteria, may be effected if the Bank’s forecast risk-adjusted capital adequacy ratio will drop below 10% in a 12 - 24 month perspective. The Bank was to be placed on the watch list for 3 months.
• On 21 June 2013 Moody’s, after PKO Bank Polski SA has published information on concluding the agreement for the purchase of Nordea Group entities’ shares, upheld the long- and short-term bank deposit rating at ‘A2’ and ‘Prime-1’ respectively, and the Bank’s financial strength at ‘C-‘. Negative outlook was maintained in respect of the long-term deposit rating and the financial strength rating of PKO Bank Polski SA. In Moody’s opinion, the above mentioned transaction is unlikely to change the overall credit profile of PKO Bank Polski SA and the factors which have an impact on the current ratings of the Bank, despite the negative impact of the transaction on capital and possible integration challenges. Moody’s anticipates that in consequence of the transaction the initial impact on the capital of PKO Bank Polski SA will be reduced due to stable profitability and high risk-adjusted profits, as it is the Bank’s intention to reduce the anticipated level of dividend after the conclusion of the Nordea Group entities’ acquisition transaction.
• On 20 September 2013, the rating agency S&P sustained Bank's ‘A-‘ long term credit rating removing it from Credit Watch list with a possibility of its decreasing. The outlook for this rating is negative. As a consequences of S&P’s analysis, in its view the conclusion of the agreement concerning the acquisition of Nordea Group entities' shares - entirely financed by the Bank’s funds - will initially weaken Bank’s capital position, but the effect will be partially offset by the Bank’s high earning generation capacity. The Agency informed that the negative outlook reflects the one-in-three chance that S&P would lower the long-term rating on the Bank if the less favourable economic situation in Poland and Bank’s operating environment is likely to weaken the Bank's financial performance and capital position by more than S&P currently anticipates.

Ratings as at 31 December 2013

As at the end of 2013, KREDOBANK SA had the following rating granted by the international agency Standard & Poor’s on 30 December 2013:

• long-term credit rating on the international scale – ’B-’,
• forecast - ’Stable’,
• short-term credit rating on the international scale - ’C’,
• rating on the Ukrainian scale - ’uaBBB-’.

Due to the reduction of the rating of Ukraine on 30 January 2014 and again on 24 February 2014, the above mentioned rating was changed and is as follows:

• long-term credit rating on the international scale – ’CCC’,
• forecast - ’Negative’,
• short-term credit rating on the international scale - ’C’,
• rating on the Ukrainian scale - ’uaCCC’