Bank Millennium S.A.
October 7, 2022
Current report no. 27/2022
SUBJECT: Significant items impacting 3rd quarter 2022 financial results .
The Management Board of Bank Millennium S.A. (_#8216;the Bank') informs thatit took a decision to create in its 3rd quarter 2022 accounts, PLN 447million of provisions for legal risk connected with FX mortgage loansoriginated by the Bank. Additionally, PLN 51 million worth of provisionswere created against legal risk related to the loan book originated byformer Euro Bank S.A. but without a bottom line impact. The provisionsreflect trends in court decisions, inflow of new court cases andresultant implications for the Bank's legal risk assessment methodology.
As a result, the balance of provisions for this risk reached circa PLN5,270 million at the end of September 2022(of which PLN 4,881 millionfor the portfolio originated by the Bank).
The Bank continued its efforts to reduce the FX mortgage portfoliothrough amicable solutions offered to borrowers. 3rd quarter 2022 wasthe sixth consecutive quarter when the number of amicable settlementsexceeded 2,000 and was higher than the number of new cases filed againstthe Bank in the period. The cost of these settlements was higher than inthe 2nd quarter 2022 due to trends in FX and interest rates. As a resultof amicable solutions and other natural drivers, at end of September2022 the number of active FX mortgage loan agreements originated by theBank fell below the 40,000 mark, while the value of FX mortgagesoriginated by the Bank was 18% lower y/y in CHF terms and excluding theimpact of legal risk provisions.
Additionally, in the 3rd quarter 2022 Bank Millennium S.A. Capital Group(_#8216;the Group') recognised PLN1,423 million (Bank only: PLN1,385 million)upfront cost of credit holidays. As a result of these costs, theBank/Group will post negative net result for the 3rd quarter of 2022, ashad been signalled in the current report 21/2022 dated July 15, 2022.
More information about these factors and 3rd quarter 2022 financialresults will be disclosed in a quarterly financial report scheduled forOctober 24, 2022.
Legal basis: art. 17 section 1 MAR - confidential information