The Management Board of Bank Pekao S.A. withdrews from further negotiations regarding a possible merger with Alior Bank

Bank Pekao S.A. has concluded the process of very detailed feasibility analysis and evaluation of potential forms of cooperation, including the potential merger, with Alior Bank S.A. The process of analyses has enabled the Bank to narrow down potential forms of cooperation to the option of merger with Alior Bank, involving the issuance of merger shares of Bank Pekao S.A. directed at Alior’s shareholders. The Management Board of Pekao has recognized this solution as one that provides an opportunity to generate potentially the highest value added for the Bank’s shareholders.

During the negotiations, the Bank did not reach an agreement with Alior Bank concerning the terms of the merger of both banks. The Bank took into consideration primarily the financial terms of the transaction, as well as – in this context – the stage of the economic cycle, increased volatility of financial markets and Alior’s business model. Therefore, on the 7th of August 2018, the Management Board of the Bank withdrew from further negotiations with Alior.

The recent quarters of record high growth, the Bank’s strong financial standing and business development show the commitment of Bank Pekao S.A. to execution of its “Power of the Polish Bison” Strategy, thus repositioning the Bank as the leader of smart growth.

This year, in retail banking, Bank Pekao S.A. has demonstrated a significant increase in current account sales, thus presenting a new quality of customer acquisition through the new “Konto Przekorzystne” account and the PeoPay mobile banking application. The Bank has successfully implemented a new offer for both affluent and business clients. Effective branch utilization and focus on remote channels and advanced analytics have allowed the Bank to achieve very good increase in the sales of key products – cash loans, mortgage loans, investment products and insurance.

Moreover, by creating a new, dynamically growing and profitable SME division, also this year Pekao focused on comprehensive customer relationship development in this segment, achieving a strong growth in the number of new customers. In a short time, the Bank has developed a new sales network, dedicated service model, as well as an extensive product offering.

Thanks to the deepening of client relationships and selective growth in the most attractive areas, Bank Pekao S.A. remains the leader in corporate and investment banking while focusing on profitability growth. The Bank already achieves impressive results in terms of structured transactions and cross-selling.

Bank Pekao S.A. consistently continues to implement initiatives aimed at technological modernization and increasing operational efficiency. The Bank has introduced a number of business initiatives, including in the field of innovation, aimed at further development of the offering and quality of services and products. As part of business development, Bank Pekao S.A. continues and strengthens its cooperation with PZU Group entities.

The Bank maintains a disciplined policy of integrated risk management which is characterized by one of the lowest cost of risk in the sector and high coverage of non-performing assets.

At the same time, the Bank maintains its readiness to consider the inorganic growth options which are aligned with the execution of the Bank's current strategy and can increase the value generated for shareholders.