Ladies and gentlemen, welcome to the presentation of preliminary results of Q4 2025 of Santander Bank Polska. Here with Michał Gajewski, CEO; Maciej Reluga, CFO; and Wojciech Skalski, Financial Controller.

I'm in charge of Investor Relations at the bank. Throughout the presentation, you can send your questions using the link, or you can send them directly to my email address: [email protected].

Michał, over to you.

Ladies and gentlemen, welcome. Welcome to the Erste Group.

We've just come through an intense period of communicating some of the most important milestones in our bank's history. We have finalized the sale of SCB to the Santander Group, which took place on the 25th of December.

We've changed our shareholder to Erste Group, that happened on the 9th of January. On the 22nd of January, our extraordinary general meeting approved the change of our name to Erste Bank Polska.

The next step will be the KRS registration planned for the second quarter, and once that happens, we will begin with the rebranding process. For our bank, 2026 marks a significant development opportunity.

Erste Group's entry into the Polish market is a clear sign that the banking sector in Poland remains attractive to international investors. More broadly, it confirms that Poland is viewed as a country with solid economic fundamentals and very good growth prospects.

This creates a supportive environment for long-term strategic investment, and that is exactly the nature of the transaction by Erste Group. For ourselves, for our bank, being part of a strong international banking group active across Central and Eastern Europe will allow to make better use of the corporation's potential within our region to share know-how and to tap into a wide base of business experience in the region.

In particular, of course, in the corporate segment, new opportunities are opening up for us. A lot of our customers are starting their international expansion.

Or they already have branches in Central and Eastern Europe. Regardless of the change in our main shareholders, we remain fully focused on our customers and continually improving the quality of our services to generate value for our shareholders.

Coming back to the results, today we're presenting unaudited financial results for the four quarters of the year, and just like last quarter, we are referring only to continuing operations, meaning without SCB. Let me start with the key figures: profit before tax from continuing operations, 8 billion 260 million złoty; tax and regulatory charge for this period was almost 3 billion; the group generated net profit of 6 billion 463 million; in Q4 alone, that was 1 billion 571 million.

Slide 7: key operating data. Just to remind you, we serve over 6 million customers, 3.9 million digital customers, almost 5% more than a year ago; when it comes to the number of mobile customers, that is up by 8% year-on-year.

At year end, customer deposits stood at 230 million złoty; our total assets were 380 billion złoty. Slide 8: key financial results, continuing operations only.

Net profit from continuing operations, 6 billion 463 million; net interest income reached 12 billion 703 million złoty, that's up 4% year-on-year; in the fourth quarter, it was nearly 3.2 billion złoty, broadly in line with the previous quarter. Fee income amounted to 2.95 billion złoty, an increase of 6% year-on-year; Q4 alone brought in 752 million złoty, 4% more than in the previous quarter, that was a record quarter for this item.

Total income exceeded 16 billion złoty, up 4% year-on-year, with the fourth quarter delivering 4 billion złoty, that's higher than in the previous quarter. Our capital position remained strong, around 20%; return on equity, 23.6%; excellent liquidity, LCR at the end of December, 290%; good cost to income ratio, 30.3%.

Now about the offer, new products and initiatives, let me just give you the highlights: we introduced the new investment fund Prestige Dollar Debt Fund; we expanded Lock & Comfort Insurance; we're running a pilot for international euro transfers using BLIK; for young customers, we launched a referral program, a dedicated communication platform, and an education campaign under the slogan [Jest Twoja Dobrze Się Zaczyna?] ; for SME customers, we enabled deposits via Euronet cash deposit machines; we launched new insurance products, Moja Ochrona, My Cover; we have strongly focused on digitizing in this segment, that includes remote document signing and digital prelimits.

Throughout last year, we continued enhancing our customer experience not only in the app, we rolled out our first euro cash machines, customers were very much interested in that rollout; we also introduced the new Samsung Pay digital wallet. We are the leader when it comes to payment solutions, it remains our priority.

We now have 3 million active cards in digital wallets generating almost 43 million transactions per month, so that is very popular among our customers. Slide 13: starting from retail banking, we manage 4.8 million current accounts in PLN.

When it comes to cash loans, we granted 12.6 billion złoty in cash loans, 10% more than last year; Q4 alone reached 3.2 billion złoty, a record year for cash loan sales, which we're of course very happy about. In mortgage, we're back on a growth path now; new mortgage lending reached 10.3 billion złoty; for the full year, nearly 96% of new production was on a temporarily fixed rate, and the share of temporarily fixed-rate loans in the total złoty mortgage portfolio rose to almost 60% at the end of December.

Retail investment funds reached over 30 billion, growing 28% year-on-year and 8% quarter-on-quarter; our market share stands at 10.2%. SME segment, we granted 1.3 billion złoty in loans to SME customers.

Digital lending is accelerating; the volume of fully digital SME loans increased by 87%, this of course impacts the cost of the process. Leasing, again, performed very strongly: 4.5 billion złoty in sales, up 8% year-on-year; in Q4 alone, that was 1 billion złoty in sales.

Business and corporate banking: credit volumes increased by 8%, FX income by 10%; customer activity in digital channels continues to grow. Corporate and investment banking: revenues from capital market services up 40%; trade finance revenues grew 23%; institutional revenues of the brokerage office were 30% higher year-on-year.

Very good performance of the CIB brings very good business to our bank. Now let's turn to the balance sheet, slide 15: gross loans, 167 billion złoty, 4% up year-on-year.

On slide 25 in the appendix, we show a continuation of the strong performance in new lending, as I mentioned earlier, very good cash loan performance, mortgage sales; we add more detail in the annex. Customer funds, slide 16: total customer funds as at the end of December, 261 billion, an increase of 5%; customer deposits, 230 billion złoty, up 7% year-on-year; in Q4, we saw a slight increase in balances both in current accounts and in term deposits compared with the end of the previous quarter.

Corporate deposits grew by 8%; here within this, we see term deposits increased by over 5%, while current deposits rose by 11%. Public sector deposits with an increase of 7%.

I've already mentioned investment funds, very good performance, the value of almost 31 billion złoty. Slide number 17: profit and loss.

Net interest income, 12.7 billion złoty, 4% up year-on-year. Interest income grew by 3% year-on-year, while interest expense by 2%.

Looking at quarterly results, you can see that across each quarter in 2025, this was the same level despite six interest rate cuts. Net interest margin on continued operations was 4.64% in quarter two and declined by 24 basis points, both of course as a result of changes in market interest rates.

Now let's talk about the net fee income, that slide number 18. I've already mentioned that this was all-time high in quarter four, 6% of growth year-on-year.

We saw really good growth in fees and from asset management, insurance, and brokerage activities. Quarter-on-quarter, we were very happy with the card fees, which grew by 15% quarter-on-quarter, and brokerage fees, which grew by 21%.

Slide number 19: total income, 16 billion here and growth by 4% year-on-year. Let me highlight that when it comes to income from other operations, that is non-interest income, non-fee income, that income grew nearly by 1/3.

Slide number 20: operating costs. Total costs at 4.9 billion złoty.

As you might remember, we had higher costs related to contribution to the banking guarantee fund. If we exclude regulatory costs, total overall grew by 7% driven by inflation, salary costs, accruals for performance-related bonuses, as well as due to integration costs posted in quarter four.

If we strip off regulatory costs, administrative expenses grew by 5% year-on-year and 4% quarter-on-quarter. We can see that the administrative costs are close to the inflation growth, and of course I can assure you that we do control this cost item.

Our cost to income ratio, as I've already mentioned at the beginning, is slightly above 30%. Slide number 21: loan loss provision.

Here we also have a reason to boast a little bit. At the end of quarter four, the net balance of provisions for expected credit losses on a consolidated basis was 586 million złoty, while the average cost of risk was 70 was 37 basis points, which is the historical lowest in our history.

The low net balance of provisions and the decline in that balance was driven on the one hand from the good and stable quality of the loan portfolios, that was also supported by good economic landscape that actually impacted the parameters we use to calculate provisions. The net balance of provisions declined also because we modified the criteria defining the material growth of risk, we had to increase our charges last year by roughly 130 million złoty.

The non-performing loans account for 3.7% of our loan book, which is a good ratio, and this is specifically important when we are talking about dividend policy. In accordance with our process, we also reviewed our parameters and models we use to estimate expected credit loss.

As a result, we wrote back 27 million worth of provisions, and this confirms the good quality of our loan books. We haven't recorded any major one-off events in quarter four that could impact the net balance of our provisions.

On the next slide, you can see that we sold non-performing debts worth 568 million złoty and which gave us the gross gain of 112 million złoty. Slide number 22: summary of the banking tax and regulatory costs.

As I said, these costs this year were nearly 3 billion złoty; in quarter four, 480 million. Slide number 23, where we summarize our performance in quarter four and the year.

Let me highlight that our standalone profit after tax, which is the basis for paying out the dividend, was even higher than the one we report, that is we report 6.4 billion, and the standalone net profit that will be the basis for paying dividend was 6.7 billion. In the table, we also show the cost related to legal risk, and that was 1.6 billion this year, and that's 29% less than a year before.

Our effective tax rate was 20.9%, and that was impacted by the regulatory costs and the cost of legal risk attached to FX mortgages, as well as the recalculation of the deferred tax base on the new corporate income tax rate, and that was 173.5 million. When it comes to our business performance, I am happy with our results.

We had record-high net fee income as it reflects our clients are very active that they use remote channels. We can see the growth in the number of mobile banking transactions, and we increased the number of customers in the segments that are important for us, that is SME by 4% and wealth management segment by 18%.

The net interest income in quarter four is close to what we saw last year despite six interest rate cuts, this means that we prepared ourselves very well for this falling interest rate environment, and even though its impact was negative, it was much restrained. We have made our balance sheet strongly resilient to interest rate falls, and that bodes well for 2026.

Wrapping up, we closed a very important stage in our history of Santander Group, recording solid results. We are ahead of a new chapter, and I do believe that we will be even more effective when working with our new Austrian shareholder.

That's all from myself, and the floor is yours.

Good morning, Maciej Reluga here. We will try to group the questions asked during our CEO presentation.

Please send your questions. Let me start with the question related with Erste Group: "Have you noticed any business areas that Erste focuses more than you used before?"

Yes, you know very well that we are a universal bank. We've been actually servicing all customer segments, and this gives us the advantage because if something does not work in one segment, then we can offset that by performance in another segment.

Just like before, in our strategy we want to stay and keep the nature of our bank as a universal bank. We have very good growth in the customer segments which are most profitable.

I mentioned SMEs and wealth customers. These are definitely the segments that we would like to grow further, leveraging the experience of Erste Group.

Also in the corporate segment, large corporate segment, we notice the potential because investments have been accelerating. There is also a big difference between debt financing, private debt financing between us and the rest of Europe.

In our opinion, this gives us a chance to grow further financing we extend. We've always been doing that in a profitable way.

We know what is the cost of capital. We do not take part in the race just to grow the market share without profitable growth.

We've been tracking what our competitors do, and they write loans below the banking tax level. We still are able to grow in a profitable way, building relationships with our clients, and we can notice that these relationships gives them value.

Wealth customers, SME, corporations, these are the areas that we will keep focusing on. If you look at the mass segment, we focus on most profitable products, that is funds in current accounts, and we also sell more and more insurance and cash loans.

Thank you. This refers to capital.

The CET is nearly 20%, and what is the plan for using that? The related question: what is the planned dividend payout in 2026?

We meet conditions to pay out 75% of profit in dividend. As this is the starting point.

We have not taken a decision yet. Our history.

That in recent years, we've always paid out dividend, solid one. It's always been preceded by arrangements made with financial supervision.

This time, if we are to do anything, we have to talk to financial supervisor, but we meet the conditions for paying out 75% of the profit. Of course, we have quite a bit capital surplus, more than 9 billion złoty.

You might remember that in previous years, we were given approval for paying part of the retained profits for the years when we met dividend requirements. We will be talking to the banking supervisor, and we will be thinking how to use it best, and I mean the surplus.

There is one more question about the growth in balance sheet and the loans. The expected growth in loans in 2026, what is our opinion about it?

What do we think about the mix of growth? What segments are we going to grow in?

Are we particularly interested in any segments? When it comes to corporate loans, are there any specific sectors?

As I said, we've noticed a big potential for the growth in lending. We notice there is a growing demand.

We notice the growth in investments. We also compared ourselves to the share of debt in corporate financing, business financing.

All those indicators are good, and they indicate a potential. Polish companies face the challenge, which is growing their productivity and effectiveness.

Without automation, digitization of processes, which require capital outlays, this will not be possible to improve their effectiveness. When talking to our clients, we can see they are more and more interested in investment loans.

We expect even bigger demand. This refers also to the SME market.

We've done quite a lot there in recent years, not only talking about digitization, but also when it comes to excelling our models of financing, especially for micro and medium-sized companies. We have record low cost of risk.

This is a difficult segment. You really have to get knowledge.

When it comes to personal, individual clients, we had record-high growth in cash loans, and we will continue to develop that product. It is very important to reduce unit costs in this case, the cost of processes.

Across the market, we can see there is a lot of competition price-wise. We are not going to be part of that race.

We are going to always mind the cost of capital and to stay profitable, financing the transformation. We've been good at that in recent quarters, that is financing of the defense sector and all sort of initiatives related to automation and digitization of processes in enterprises.

We will also finance the expansion of our clients to the Eastern and Central Europe. We view it as a big chance, as a big potential because the vast majority of our clients have much more business there than in Western Europe, where Santander has a strong footprint.

We have a strategic collaboration agreement with Santander, there will be still support for the development of the business of our clients.

Now about deposits and our strategy to attract and maintain retail deposits, especially in savings accounts beyond special offers. What do we think about deposit mix going into 2026?

Let me answer this question. Our strategy is to provide good savings and investment offering for our customers, not only in terms of deposits.

Even in the performance for 2025, you see the inflows to TFI, and that is likely to be continued. We will have, and we have a strategy review with the new shareholder.

In terms of deposits, our strategy recently was to do three things simultaneously. They're quite difficult.

That was to maintain customer satisfaction, the depositor satisfaction, maintain relatively low cost of deposit, and after three quarters, we had the best ratio in that respect on the market, and simultaneously we wanted to maintain our market share. We succeeded, as you can see in the figures today.

You don't see we're not presenting here customer experience, satisfaction. You don't see the NPS, but the three elements that I've mentioned, we have delivered them.

We will continue. We'll put more pressure to boost current deposits.

The market is growing fast, and we want to grow fast, too. The factor current versus term on our part compared to market, it looks quite good, but I think we can improve it because current deposits are growing faster than term deposits, especially with lower interest rates.

In terms of term deposits, again, you know that the beta how we reprice term deposits in relationship to the scale of reference rate cuts or WIBOR, that ratio was very high at the beginning of the cut cycle. That was much be- above 100%.

Now we're getting to the end of the cycle, and its ratio is going down. However, it is still close to 100%.

In 2026, the strategy that brought about the results you see today will be continued with focus on current deposits. In relation to this, we have the question about net interest income and net interest margin and our outlook for 2026, our outlook for the rate and sensitivity in 2026.

Nothing to add to what we said before during the conferences. The sensitivity is the same: 100 basis points of sensitivity is about 250 million-ish.

The balance sheet is growing. The sensitivity is relatively lower than it was in the years past.

We've been working on our resilience. The share of temporarily fixed rate is almost 30- sorry, 60% at the end of December 2025.

It's no surprising that our NII has been stable over the last quarters despite the interest rate cuts. In terms of rates in 2026, we're expecting two cuts by 25 points, and we will continue with our strategy here.

Now the cost side. We have quite a few questions here.

Let's start with a more general one, or the one-off maybe, and then we'll give you a more general overview. Fourth quarter cost of integration about 70 million.

What sort of integration costs can we expect in 2026? A few questions about the same thing really, let's take this quickly from our Financial Controller and I.

The last question is about specifying the cost of rebranding, as I understand, 250 million impact on the results of the gross cost before tax, that's about 300 million złoty. How will that be distributed per quarter?

What will happen in 2026, 2027? We're not presenting that on the slides.

Our intention was to show you the impact on the result in gross terms, 250 million is the estimated cost of rebranding before tax. What will happen in time?

As we said, we're planning to rebranding in the second quarter, and the cost of rebranding costs the cost physical rebranding, changing the logos, changing the colors, changing the names in various IT systems, they need to happen relatively fast, this element of rebranding cost will be made in the second quarter, the bulk of it. This year now promotion media campaign that's already happening, this is the cost that will be distributed throughout the year, and some of it, relatively small, may still appear at in early 2027.

That's about rebranding. Beyond rebranding, will there be any more cost related to the integration?

Yes, of course. Because this is quite complex, and because we're talking about elements that will require further procurement to continue to provide services in collaboration with Erste Group, some alignment when it comes to systems with the new group or alignment with local suppliers, we're not yet ready to give you a reliable figure, and we'll be coming back with that when we present the results for the first quarter of this year.

There is a question whether the 250 million that's the impact- I've said that already, that's how I started to answer. Most of it will be made in 2026 when it comes to the brand promotion.

When you leave the one-offs, what about the cost dynamics in 2026? We had a comment to that.

Our distinctive feature, the strict cost discipline, nothing changes in this respect. Our target is to maintain cost to income at the excellent level around 30%.

The guidance for total costs, we can say today that we don't want to differentiate from the CPI expected in 2026. Now the cost of risk, our outlook here.

Are there any specific macro factors that you closely monitor for potential shifts in credit quality?

Let me take that that one. There was a time a few quarters back when we were observing some variations when it comes to our customers' financial standing, whether they were importers or exporters.

This was related to the strong PLN and the demand and the situation in Europe. We had stagnation without any serious rebound when it comes to volume or demand for export products.

This is when we closely monitored the situation, whether that was likely to persist. I can say that the situation is stable with we're getting out of the trough.

The PLN remains strong, but we see some rebound in Europe, particularly in Germany. In my opinion, this also shows that the adjustability of our customers, exporters, are amazing, and we can safely say that this particular area does not require close monitoring.

The situation here is stable. That one answer.

Now the first part of the question: cost of risk 2026. You probably remember in our strategy the cost of risk, we had guidance for three years.

We did that in 2023, that's three years back. That was 70-90 together with SCB, but as we're presenting in slide 21, historically SCB gives us about 10 or 15 points, we need to subtract that in the first...

but it was quite a wide bracket because it was for three years. Now we're talking about guidance for one year.

When it comes to economic cycle, this year is actually being forecasted as a quite quite a good one. 2025 in terms of cost of risk was unique, very low levels, it would be difficult to give guidance with improvement.

I would say that this will be stable. If we had to give you some brackets, that would be about 40, 10% 10 points up, not more than 50.

That's how I would put it. Next question: FX mortgage legal risks and the cost, our assessment of the remaining exposure related to FX mortgage legal risks.

The first thing, our provisions reflect the situation. In the balance sheet, you see slight minor for portfolio about half a billion złoty.

We're not giving any guidance here. This is the end of the story.

Positive result: the last ruling from the European Court of Justice, we see it as a positive sign. Here we see on the asset and liabilities side, we see fewer lawsuits.

The ruling from the 22nd of January confirmed that banks may use set-offs in the same proceedings. They confirmed that we can raise a set-off defense even in the same case when the borrower is challenging the validity of the loan agreement.

As I said, this is the end of this story. There will be other regulatory aspects that are likely to get more attention attention in the future.

Let me just add, this does not mean that we won't be raising any provisions for Swiss franc loans. This is the end of this story, which means we're at the statistical tail of this, but this financial impact will be phasing out, but it's not quite the very end.

There are a few detailed questions about ratios: 799 and 70EV at the end of 2025. Yes, I think this question results from the context of dividend.

I can tell you that they were below the levels required for dividend payment, there is a big buffer. NII before 4 and 70EV below 10, close to 10, and most likely in our annual report, we'll give you the more exact figures.

There's also a question of the long-term funding ratio requirement. Have we met it at the end of Q4?

This requirement formally was not in force. It is to come into force, but yes, we were below this threshold.

In the second half of the year, in Q4, we very effectively priced our issues that we conducted in order to meet TR-PFR, and that will help us. There was a question: balance sheet part-hedged against interest rate risk?

I think we've already asked that. That's the question about the balance sheet.

Nearly 58% of our loans are at temporarily fixed rate, we've already said that. I think these have been all the questions that have been sent and asked.

Thank you very much for this. We are starting the new year, the first month has passed.

We are very optimistic when it comes to the future and the collaboration with the new shareholder. I do believe that this is going to be another year of growth and really good performance.

Thank you very much. Thank you.