Conflict of Interest Management

The Bank Pekao Group’s Conflict of Interest Management Policy in effect sets forth the principles for managing conflicts of interest and defines the circumstances that cause or may cause conflicts of interest in the Bank’s operations.

The identified types of conflicts of interest and the measures to manage them that should be applied by Employees identifying conflicts of interest are included in the Conflicts of Interest Matrix.

Measures used by the Bank to manage potential conflicts of interest are, among others, based on:

• Its organizational structure and consist in:
  • establishing information barriers (Chinese walls),
  • splitting duties by separating various business units of the Bank and Group entities in physical and competence terms in the case of actions that can cause a conflict of interest, including in particular the separation of the Bank’s business units,
  • implementing structural independence by allocating defined competences, method description, types of actions and operations to each business unit of the Bank to let it make independent decision and supervise the Bank’s employees,
  • preventing simultaneous or consecutive involvement of the Bank’s employees in service provision if such involvement can adversely affect the effective management of conflicts of interest,
• Internal regulations providing for remuneration rules in relation to the Bank’s employees by defining:
  • principles for remuneration that do not have a negative impact on the stakeholder’s interest and eliminate direct dependencies between a variable part of remuneration and business goals,
  • entering into proprietary transactions, putting in place procedures to prevent abuse associated with the execution of own transactions on financial instruments by establishing limitations to such transactions in relation to an employee or the Bank,
  • transferring the Bank’s employees to other jobs if a reporting relationship arises between partners or relatives,
• Introducing and adhering to ethics and corporate culture by employees and conducting appropriate training.

The Bank is also governed by the Regulations on Conflict of Interest Management at Bank Pekao S.A.. The Regulations (hereinafter: “Regulations”) define the principles of managing conflicts of interest and define the circumstances that cause or may cause conflicts of interest in the Bank’s activities at all levels of the organization. The Regulations establish a regime of conduct for the Bank, imposing a general obligation to disclose also in situations of sitting on multiple management bodies, capital ties with suppliers and other stakeholders, the existence of controlling shareholders, relationships and transactions with related parties. The Bank ensures public disclosure of relevant information regarding the Conflict of Interest Management Policy adopted at the Bank. These disclosures, in accordance with the Regulations, should include information on how the Bank manages material conflicts of interest and conflicts that could arise due to the Bank’s membership in a capital group or the Bank’s transactions with other entities in the capital group.

Public disclosure may not include protected information: constituting personal data, bank secrecy or business secrecy. The above information, as well as information on the existence of such potential conflicts at the Bank and their extent, should also be reported to the Polish Financial Supervision Authority. In addition, with regard to potential conflicts of interest arising from the existence of controlling shareholders, the Bank has and applies the regulation Principles of Conduct with respect to disclosure obligations related to the acquisition or disposal of significant blocks of shares – Bank Pekao S.A. Group Policy.