45. Related party transactions

The transactions between the Bank and related parties are typical transactions arising from current operating activities conducted by the Bank. Such transactions mainly include loans, deposits, foreign currency transactions and guarantees.

According to the Banking Act, credit transactions with Members of the Bank’s Management Board and Supervisory Board, persons holding managerial positions at the Bank, with the entities related financially or organizationally therewith, shall be effected according to Regulation adopted by the Supervisory Board of the Bank.

The Regulation provides detailed decision-making procedures, applicable to transactions with such persons and entities, also defining the decision-making levels authorized to take decisions. In particular, the transactions with the Members of the Bank’s Management Board or Supervisory Board or with an entity related therewith financially or organizationally, are subject to decisions taken by the Bank’s Management Board and Supervisory Board.

Members of the Bank’s Management Board and entities related therewith financially or organizationally may take advantage of credit products offered by the Bank on standard terms and conditions of the Bank. In particular, the Bank may not offer more advantageous credit interest rates to such persons or entities.

Credit risk assessment is performed using the methodology applied by the Bank, tailored to the client’s segment and type of transaction.

In case of entities related to the Bank, the standard credit procedures are applied, with transaction-related decisions taken exclusively at level of the Bank’s Head Office.

Related party transactions as at 31 December 2023

NAME OF ENTITY	RECEIVABLES FROM LOANS AND PLACEMENTS	SECURITIES	RECEIVABLES FROM REVALUATION OF DERIVATIVES	OTHER RECEIVABLES	LIABILITIES FROM LOANS AND DEPOSITS	LIABILITIES FROM REVALUATION OF DERIVATIVES	OTHER LIABILITIES
PZU S.A. – the Bank‘s parent entity	–	–	–	3	289	–	25
Entities of PZU S.A. Group excluding of Bank Pekao S.A. Group entities	12	–	–	12	399	7	1
Associates of Bank Pekao S.A Group entities
Krajowy Integrator Płatności S.A.	–	–	–	–	39	–	–
Key management personnel of the Bank Pekao S.A.	2	–	–	–	11	–	–
Total	14	–	–	15	738	7	26

Related party transactions as at 31 December 2022

NAME OF ENTITY	RECEIVABLES FROM LOANS AND PLACEMENTS	SECURITIES	RECEIVABLES FROM REVALUATION OF DERIVATIVES	OTHER RECEIVABLES	LIABILITIES FROM LOANS AND DEPOSITS	LIABILITIES FROM REVALUATION OF DERIVATIVES	OTHER LIABILITIES
PZU S.A. – the Bank‘s parent entity	–	–	4	4	185	–	5
Entities of PZU S.A. Group excluding of Bank Pekao S.A. Group entities	5	–	3	5	235	2	2
Associates of Bank Pekao S.A Group entities
Krajowy Integrator Płatności S.A.	–	–	–	–	37	–	–
Key management personnel of the Bank Pekao S.A.	1	–	–	–	9	–	–
Total	6	–	7	9	466	2	7

Income and expenses from transactions with related parties for the period from 1 January 2023 to 31 December 2023

NAME OF ENTITY	INTEREST INCOME	INTERES EXPENSE	FEE AND COMMISSION INCOME	FEE AND COMMISSION EXPENSE	POSITIVE VALUATION OF DERIVATIVES AND OTHER INCOME	NEGATIVE VALUATION OF DERIVATIVES AND OTHER EXPENSES
PZU S.A. – the Bank ‘s parent entity	(2)	(21)	53	–	2	(9)
Entities of PZU S.A. Group excluding of Bank Pekao S.A. Group entities	1	(18)	61	–	1	(67)
Associates of Bank Pekao S.A Group entities
Krajowy Integrator Płatności S.A.	–	(1)	–	–	–	–
Key management personnel of the Bank Pekao S.A.	–	–	–	–	–	–
Total	(1)	(40)	114	–	3	(76)

Income and expenses from transactions with related parties for the period from 1 January 2022 to 30 December 2022

NAME OF ENTITY	INTEREST INCOME	INTERES EXPENSE	FEE AND COMMISSION INCOME	FEE AND COMMISSION EXPENSE	POSITIVE VALUATION OF DERIVATIVES AND OTHER INCOME	NEGATIVE VALUATION OF DERIVATIVES AND OTHER EXPENSES
PZU S.A. – the Bank ‘s parent entity	(2)	(9)	46	–	–	(4)
Entities of PZU S.A. Group excluding of Bank Pekao S.A. Group entities	–	(12)	53	–	1	(51)
Associates of Bank Pekao S.A Group entities
Krajowy Integrator Płatności S.A./td>	–	–	–	–	–	–
Key management personnel of the Bank Pekao S.A.	–	–	–	–	–	–
Total	(2)	(21)	99	–	1	(55)

Off-balance sheet financial liabilities and guarantees as at 30 December 2023

NAME OF ENTITY	GRANTED		RECEIVED
NAME OF ENTITY	FINANCIAL	GUARANTEES	FINANCIAL	GUARANTEE
PZU S.A. – the Bank‘s parent entity	3	15	–	–
Entities of PZU S.A. Group excluding of Bank Pekao S.A. Group entities	13	10	–	–
Associates of Bank Pekao S.A Group entities
Krajowy Integrator Płatności S.A.		2	–	–
Key management personnel of the Bank Pekao S.A.	–		–	–
Total	16	27	–	–

Off-balance sheet financial liabilities and guarantees as at 31 December 2022

NAME OF ENTITY	GRANTED		RECEIVED
NAME OF ENTITY	FINANCIAL	GUARANTEES	FINANCIAL	GUARANTEE
PZU S.A. – the Bank‘s parent entity	3	15	–	–
Entities of PZU S.A. Group excluding of Bank Pekao S.A. Group entities	10	10	–	–
Associates of Bank Pekao S.A Group entities
Krajowy Integrator Płatności S.A.	–	2	–	–
Key management personnel of the Bank Pekao S.A.	1	–	–	–
Total	14	27	–	–

The Bank’s transactions with the State Treasury were mostly related to treasury securities and banking services. These transactions are concluded and settled on terms obtainable by customers who are not related parties. Significant transactions with the State Treasury and its related entities in accordance with the exception contained in IAS 24.25 are presented below.

In relation to significant transactions with entities related to the State Treasury, the following presents the exposure, liabilities and off-balance sheet liabilities, as well as the impact on the income statement for clients who appear in at least one of the groups: 20 largest clients on the assets side, 20 largest clients on the liabilities side and the 20 largest clients with off-balance sheet financial and guarantee commitments granted.

Significant balance sheet transactions with the State Treasury and its related entities as at 31 December 2023

NAME OF ENTITY	RECEIVABLES FROM LOANS, ADVANCES AND PLACEMENTS	SECURITIES	RECEIVABLES FROM REVALUATION OF DERIVATIVES	LIABILITIES FROM LOANS AND DEPOSITS	LIABILITIES FROM REVALUATION OF DERIVATIVES
State Treasury	–	43,004	17	99	–
Entities related to the State Treasury	6,253	18,889	232	18,192	272
Total	6,253	61,893	249	18,291	272

Significant balance sheet transactions with the State Treasury and its related entities as at 31 December 2022

NAME OF ENTITY	RECEIVABLES FROM LOANS, ADVANCES AND PLACEMENTS	SECURITIES	RECEIVABLES FROM REVALUATION OF DERIVATIVES	LIABILITIES FROM LOANS AND DEPOSITS	LIABILITIES FROM REVALUATION OF DERIVATIVES
State Treasury	–	32,772	–	28	15
Entities related to the State Treasury	3,472	16,200	407	18,679	541
Total	3,472	48,972	407	18,707	556

Income and expenses from significant transactions with the State Treasury and its related entities for the period from 1 January to 31 December 2023

NAME OF ENTITY	INTERES EXPENSE	FEE AND COMMISSION INCOME	INCOME FROM DERIVATIVES AND OTHER	KFEE AND COMMISSION EXPENSE	EXPENSES FROM DERIVATIVES AND OTHER	EXPENSES FROM DERIVATIVES AND OTHER
State Treasury	1,168	(13)	54	–	9	(25)
Entities related to the State Treasury	807	(1,075)	81	–	670	(728)
Total	1,975	(1,088)	135	–	679	(753)

Income and expenses from significant transactions with the State Treasury and its related entities for the period from 1 January to 31 December 2022

NAME OF ENTITY	INTERES EXPENSE	FEE AND COMMISSION INCOME/th>	INCOME FROM DERIVATIVES AND OTHER	FEE AND COMMISSION EXPENSE	EXPENSES FROM DERIVATIVES AND OTHER	EXPENSES FROM DERIVATIVES AND OTHER
State Treasury	702	(94)	6	–	176	(175)
Entities related to the State Treasury	612	(616)	63	–	1,003	(829)
Total	1,314	(710)	69	–	1,179	(1,004)

Significant off-balance sheet financial commitments and guarantees with the State Treasury and its related entities as at 31 December 2023

NAME OF ENTITY	GRANTED		RECEIVED
NAME OF ENTITY	FINANCIAL	GUARANTEES	FINANCIAL	GUARANTEES
State Treasury	200	–	–	–
Entities related to the State Treasury	6,346	744	–	–
Total	6,546	744	–	–

Significant off-balance sheet financial commitments and guarantees with the State Treasury and its related entities as at 31 December 2022

NAME OF ENTITY	GRANTED		RECEIVED
NAME OF ENTITY	FINANCIAL	GUARANTEES	FINANCIAL	GUARANTEES
State Treasury	200	–	–	–
Entities related to the State Treasury	17,148	1,363	5	–
Total	17,348	1,363	5	–

Remuneration expenses of the Bank’s Management Board and Supervisory Board Members

	VALUE OF BENEFITS
	2023	2022
Management Board of the Bank
Short-term employee benefits (*)	16	14
Post-employment benefits	–	–
Long-term benefits (**)	1	1
Share-based payments (***)	8	4
Total	25	19
Supervisory Board of the Bank
Short-term employee benefits (*)	2	1
Total	2	1

(*) Short-term employee benefits include: base salary, bonuses and other benefits due in next 12 months from the date of the balance sheet.
(**) The item ‘Other long-term benefit’ includes: provisions for deferred bonus payments.
(***) The value of share-based payments is a part of Personnel Expenses, recognized according to IFRS 2 during the reporting period in the income statement, representing the settlement of fair value of shares, including phantom shares, granted to the Members of the Bank’s Management Board.

The Bank’s Management Board and Supervisory Board Members did not receive any remuneration from subsidiaries and associates in 2023 and 2022.

Remuneration expenses of Supervisory Boards and Management Boards of subsidiaries

	VALUE OF BENEFITS
	2023	2022
Subsidiaries’ Management Boards
Short-term employee benefits	20	16
Post-employment benefits	1	2
Long-term benefits	2	1
Paid termination benefits	–	–
Total	23	19
Subsidiaries’ Supervisory Boards
Short-term employee benefits	2	1
Total	2	1

The credit granting process applicable to the Bank’s management and entities related to the Bank

Related party transactions