Current Report 

Drafted on:

30.03.2015

Current report No

20/2015

Abbreviated issuer’s name

mBank

Contents: 

The Management Board of mBank S.A. (the "Bank") announces that the Supervisory Board of the Bank adopted the uniform text of the By-Laws of the Bank, including the amendments made based on Resolution no. 26 of the 28th General Meeting of mBank S.A. of 30 March 2015.

The aforesaid amendments to the Bank's By-Laws will enter into force as of the date of their registration by the registry court, which will be communicated by the Management Board in a separate announcement.

BY-LAWS

MBANK SPÓŁKA AKCYJNA

I. GENERAL PROVISIONS

Article 1

mBank Spółka Akcyjna is a bank acting on the basis of the present By-laws, the Banking Law, and the Code of Commercial Partnerships and Companies.

Article 2

1. The registered business name of the Bank is: mBank Spółka Akcyjna.

2. The Bank may use the following abbreviation: "mBank S.A."

3. The activity of the Bank extends throughout the territory of the Republic of Poland and abroad. The registered office of the Bank is the Capital City of Warsaw.

Article 3

(deleted)

Article 4

The Bank may hold foreign-currency values and engage in activities of trading in foreign-currency values, and is authorised to purchase foreign currencies.

II. ACTIVITIES OF THE BANK

Article 5

1. The Bank's business purpose is to provide banking services, as well as consulting and advisory services in financial matters, and to perform economic activity within the scope defined in § 6 of the By-laws.

2. The Bank may open and operate accounts both in Polish and foreign banks.

Article 6

In order to accomplish its tasks specified in § 5, the Bank performs the following:

1. Banking operation:

1) receiving cash deposits payable on request or within due time limits and operating the accounts of such deposits,

2) operating other bank accounts,

3) performing bank financial settlements,

4) granting credits and cash loans,

5) performing bills of exchange and cheque operations and operations in warrants,

6) granting and confirming sureties,

6a) granting and confirming bank guarantees, opening and confirming letters of credit,

7) intermediation in effecting money transfers and settlements made in foreign exchange dealings,

8) issuing bank securities,

9) performing operation ordered by third parties related to issuing of securities,

10) taking into deposit valuables and securities, and making safe deposit boxes available,

11) performing forward financial transactions,

12) purchasing and selling of monetary receivables,

13) performing the functions of a representative bank as stipulated in the Bonds Law,

14) purchasing and selling foreign exchange values,

15) issuing payment instruments, including payment cards and performing operations using such cards,

16) issuing electronic money.

2. Other operation:

1) providing consulting and advisory services in financial matters,

2) purchasing or acquiring shares and rights, shares of another legal entity and purchasing participatory units and investment certificates in investment funds,

3) acting as depository in the sense of the provisions of the Law on the Organization and Operation of Pension Funds,

4) acting as depository in accordance with the provisions of the Law on Investment Funds,

5) performing activities consisting in accepting purchase and re-purchase orders and subscriptions for participation units or certificates of investment in investment funds,

6) managing registers of members of the pension funds and investment funds,

7) operating as an insurance agent,

8) acquisition and disposal of real estate,

9) converting debt into the debtor's assets, under terms and conditions arranged with the debtor,

10) trading in securities, providing custody services, including maintaining securities accounts, and executing activities related to providing custody services,

11) issuing securities other than bank securities,

12) providing leasing and factoring services, and performing the activities of an intermediary with respect to those services,

13) acting as agent within the meaning of the act on investment funds,

14) acting as acquiring agent,

15) providing certification services within the meaning of the electronic signature regulations, excluding the issue of qualified certificates used by the Bank in the activities to which the Bank is a party,

16) providing settlement and reporting services within the meaning of provisions concerning derivative instruments, central counterparties and trade repositories.

3. Brokerage activity.

4. Activity performed based on Article 70 (2) of the Act on trading in financial instruments, consisting in:

1) accepting and transferring orders to buy or sell financial instruments,

2) buying or selling financial instruments on one's own behalf,

3) providing investment advice,

4) offering financial instruments,

5) providing services in execution of investment underwriting or placing agreements or in conclusion or execution of other agreements of this kind, provided that the agreements involve financial instruments.

5. The Bank may perform the activities referred to in (1) and (2) at the request of other banks, credit institutions, financial institutions or related entities, as long as those activities are covered by the scope of operation of the requesting entities.

III. ORGANISATION OF THE BANK

Article 7

1. The Bank together with selected affiliates may act as a group and co-operate with such affiliates in order to provide financial service.

2. In order to pursue the objective set out in (1), the Bank may undertake various ventures, including the provision of specialized service to selected affiliates.

3. The Management Board sets the rules and forms of undertaking the ventures.

Article 8

1. In order to perform its statutory activities, the Bank may open and close down branches and other offices in Poland and abroad.

2. The organisational structure of the Bank is set by the Management Board in the Organisational Rules, subject to Article 22(1) letter a.

3. The Bank may form advisory groups in order to obtain opinions, establish and maintain contacts with business communities. The Management Board may appoint members of such advisory groups, issue regulations for them and set the amount of remuneration due to their members.

Article 8a

1. The Bank’s organisational structure is composed of:

a/ Headquarters,

b/ branches.

2. The basic organizational units of the Headquarters are departments and offices.

3. The Management Board may appoint Standing Committees or teams for the purpose of performance of specific functions or coordination of work of the Bank’s organizational units, as well as teams for implementation of specific tasks.

4. Members of the Management Board and Managing Directors may appoint teams and working groups in order to perform ad hoc tasks.

Article 9

The authorities of the Bank are:

1. General Meeting,

2. Supervisory Board,

3. Management Board.

ANNUAL GENERAL MEETING

Article 10

1. A General Meeting is convened under ordinary or extraordinary procedure by the Management Board. The Ordinary General Meeting is convened once a year, in June at the latest.

2. The Supervisory Board may convene the Ordinary General Meeting if the Management Board fails to convene it within the timeframe stipulated in the By-Laws, and the Extraordinary General Meeting if the Supervisory Board deems it necessary.

3. The shareholders representing at least one-half of the share capital or at least one-half of the total number of votes in the Company may convene an extraordinary general meeting. The shareholders appoint the chairman of such meeting.

4. A shareholder or shareholders representing at least one-tenth of the share capital may demand that an Extraordinary General Meeting be convened, and that particular issues be included in the agenda for the coming General Meeting. The request for convening the Extraordinary General Meeting must be submitted to the Management Board in writing or electronically. The request for convening the Extraordinary General Meeting should contain proposals of:

a) the General Meeting agenda,

b) the draft resolutions along with rationale for those resolutions.

5. If the General Meeting is convened by parties other than the Management Board, the Management Board is obliged to take necessary actions to convey the General Meeting.

Article 11

The following matters require a resolution of the General Meeting in addition to other matters set out in the Code of Commercial Partnerships and Companies:

a) examination and approval of the report of the Management Board on the Bank's operation and financial statements for the previous financial year,

b) adoption of resolutions governing the distribution of profits or coverage of losses,

c) granting discharge to the members of the Bank's authorities for the performance of their duties,

d) election and dismissal of Members of the Supervisory Board,

e) amendments to the By-Laws,

f) increase or reduction of the Bank's share capital,

g) adoption of resolutions concerning the redemption of shares and resolutions to redeem shares, in particular establishment of principles concerning redemption of shares not set in the By-Laws;

h) creation and winding up of special purpose funds,

i) issue of convertible bonds or preferred bonds,

j) establishment of the principles of remuneration for Members of the Supervisory Board,

k) liquidation of the Bank or its merger with another bank,

l) appointment of liquidators,

ł) issues raised by the Supervisory Board,

m) issues raised by the shareholders under the procedure established in the By-Laws,

n) selection of the entity qualified to audit financial statements as a statutory auditor of the Bank.

Article 12

All the matters submitted to the General Meeting should be previously submitted to the Supervisory Board for consideration.

Article 13

Shareholders may participate in the General Meeting and cast their votes either in person or by proxies. In order to be valid, the powers of attorney for participation in the General Meeting must be made in writing or in electronic form and attached to the minutes.

Article 14

1. Shares of the Bank are registered or bearer shares. Each share of the Bank represents one vote. Subject to the cases defined in the Code of Commercial Partnerships and Companies, the General Meeting is valid regardless of the number of shares represented at the General Meeting.

2. Resolutions of the General Meeting are passed by a simple majority of votes cast, unless the Code of Commercial Partnerships and Companies or the By-Laws stipulate more stringent conditions on passing resolutions on specific issues.

3. A resolution to refrain from reviewing an issue listed in the agenda of the General Meeting may be passed if there are important, material reasons. A motion on this matter must include a detailed justification. Decisions to remove items from the agenda for the General Meeting or to abandon items on the agenda upon request from the shareholders require a resolution of the General Meeting, preceded by consent from all the present shareholders who tabled the motion, supported by a 75% majority of votes at the General Meeting.

Article 15

Voting is held in an open ballot. A secret ballot is required in the case of elections and motions to dismiss members of the Bank's authorities or liquidators, motions to call members of the Bank's authorities or liquidators to account, and motions concerning personal issues. In addition, a secret ballot is required if requested by at least one shareholder present or represented at the General Meeting.

Article 16

1. The General Meeting is opened by the Chairman of the Supervisory Board or by the Deputy Chairman of the Supervisory Board. If due to obstacles neither of them can open the meeting, the meeting is opened by a Member of the Supervisory Board.

2. The General Meeting elects a Chairman from among the persons authorized to participate in the General Meeting.

SUPERVISORY BOARD

Article 17

1. The Supervisory Board is composed of not less than five Members elected by the General Meeting for a joint term of office of three years. At least half of the Supervisory Board Members, including the Chairperson, must hold Polish citizenship, be habitually resident in Poland, speak Polish and have experience on the Polish market which can be used while supervising the Bank's operation.

2. The terms of Members of the Supervisory Board expire at the latest on the day of the General Meeting approving the financial statements of the Bank for the last full year of the term of office of the Members of the Supervisory Board.

3. The term of a Member of the Supervisory Board also expires in the case of death, resignation, or recalling of the Member.

4. The number of Members of the Supervisory Board is determined by the General Meeting subject to (5) and (6). The Supervisory Board Members may be re-elected. The Supervisory Board elects its Chairman and Deputy Chairmen from among the Supervisory Board Members.

5. At least two Supervisory Board Members should be Independent Supervisory Board Members, unless the General Meeting decides otherwise in a resolution to appoint Members of the Supervisory Board or in a resolution adopted pursuant to Article 19(3) of the By-Laws.

6. The criteria of independence of a Supervisory Board Member are laid down in a separate resolution of the General Meeting.

Article 18

The Supervisory Board acts according to the Rules which it adopts.

Article 19

1. A Member of the Supervisory Board whose mandate expired in the course of the joint term of the Supervisory Board may be replaced with another person, elected by the Supervisory Board.

2. The term of a Member of the Supervisory Board elected before the end of the term of office of the Supervisory Board expires on the expiration of the terms of the other Members of the Supervisory Board.

3. Appointment of Supervisory Board Members in the course of the duration of the common term of office of the Supervisory Board is confirmed by the next General Meeting. If the General Meeting refuses to approve any of the Members of the Supervisory Board elected during the joint term of office, the General Meeting elects a new Supervisory Board Member in lieu of the person whose appointment was not approved.

4. If the number of the Supervisory Board Members is lower than five due to expiration of mandates of the Supervisory Board Members during the joint term of office, the Supervisory Board is obliged to appoint new Supervisory Board Members to replace the Members whose mandates have expired.

Article 20

1. The Supervisory Board may pass resolutions provided that at least half of its Members are present at the meeting while all the Members have been invited.

2. In exceptional cases, the Supervisory Board Members may participate in passing resolutions by casting their votes in writing through the agency of other Supervisory Board Members. Casting votes in writing must not concern issues introduced to the agenda during the meeting of the Supervisory Board.

3. The Supervisory Board may adopt resolutions in writing or with the use of means of direct remote communication. A resolution is valid if all the Members of the Supervisory Board were informed of the draft.

4. Resolutions of the Supervisory Board are passed by an ordinary majority of votes and in case of an equal number of votes, the vote of the Chairman of the Supervisory Board prevails.

5. No resolution should be passed without the consent of the majority of the Independent Members of the Supervisory Board on the following matters:

a) any benefits provided by the Bank or any entities associated with the Bank to the benefit of Members of the Management Board,

b) consent for the Bank to enter into a significant agreement with an entity associated with the Bank, a Member of the Supervisory Board or the Management Board, and entities associated with them.

6. Adoption of a resolution in contravention of the requirements set in (5) does not affect its validity if the resolution was adopted in accordance with Article 20(1)-(4). The provisions of (5) do not apply if the General Meeting elects a Supervisory Board where there are fewer Independent Members than described in Article 17 (5) of the By-laws.

Article 21

Supervisory Board Members may only perform their duties in person.

Article 22

1. In addition to the rights and obligations prescribed by law and the By-laws, the responsibilities of the Supervisory Board include in particular:

a) approval of the proposal of the Management Board concerning the general organisational structure of the Bank which is construed as separated structurally and organizationally basic areas of the Bank's operation reporting to particular Members of the Management Board,

b) approving the annual financial plans and multi-annual development plans of the Bank,

c) considering all the motions and matters subject to the resolutions of the General Meeting,

d) issuing or approving the Rules provided for in the By-Laws,

e) setting the terms of contracts and remuneration for the Management Board Members,

f) receiving, in advance, information on developing, acquiring, closing and disposing of branches, permanent representations and parts of the enterprise, and initiating and terminating undertakings and fields of operation,

g) approving the conclusion of or amendments to any major agreements or arrangements with the Management Board Members or the Supervisory Board Members,

h) approving the conclusion of, amendments to or termination of any significant affiliation agreements or co-operation agreements,

i) receiving information on the expected deviations from the annual budget,

j) issuing general guidelines for the Management Board regarding the level and structure of remuneration for the Bank's senior management,

k) approval of the policy of variable items of remuneration of the persons holding managerial positions at the Bank,

l) issuing opinions concerning transactions concluded with affiliated entities, if the planned total value of a single transaction exceeds 20% of the Bank's own funds as defined in § 33, as per December 31 of the preceding year. The opinion of the Supervisory Board will not be required in the case of transactions in derivative instruments, in which the risk is limited by an established collateral; however, the the Supervisory Board will inform of such transactions.

2. The Supervisory Board may appoint Standing Committees whose Members perform their functions as Members of the Supervisory Board delegated to carry out specific supervision activities at the Bank. The scope of authority of a Committee is determined in a resolution of the Supervisory Board.

3. In particular, the Supervisory Board may appoint the following Standing Committees:

1) Executive Committee responsible among others for:

a) exercising ongoing supervision over the operation of the Bank in the periods between the Supervisory Board meetings,

b) authorizing the Management Board to acquire, encumber, and sell real estate, perpetual usufruct or share in real estate, and shares and stocks in companies and other fixed assets, if the value of the said transactions exceeds 1% of the Bank's own funds as at 31 December of the preceding year, as defined in Article 33. Such authorisation is not required if the aforesaid acquisition took place as part of enforcement or bankruptcy proceedings, including the bankruptcy proceeding with the possibility to make an arrangement or other settlement with the Bank's debtor or in the case of the sale of assets so acquired. In the case when real estate, perpetual usufruct or share in real estate, shares or stocks in companies are acquired as a result of the aforesaid proceedings or settlements with the Bank's debtors or in the case when assets so acquired are disposed of, the Management Board is obliged to inform the Executive Committee of any such activity.

2) Audit Committee responsible among others for:

a) issuing opinions on selecting the Bank's statutory auditor by the General Meeting,

b) recommending the approval or rejection of the financial statements to the Supervisory Board,

c) exercising constant supervision over the internal control system at the Bank,

d) approving changes in the position of the head of Internal Audit Department and the head of Compliance Department proposed by the Management Board.

3) Risk Committee responsible among others for:

a) exercising constant supervision over credit risk, market risk and operational risk, liquidity risk, and recommending the approval for individual counterparty risk in accordance with the parameters defined by the Supervisory Board at a given time,

b) issuing recommendations to the Supervisory Board concerning the approval or disapproval of transactions between the Bank and the Members of the Bank’s authorities, as provided for in the Banking Law.

The Supervisory Board is entitled to define the aforesaid parameters, further entitlements and scope of activity of the Risk Committee.

4) The Remuneration Committee, who is responsible among others for:

a) consideration of matters concerning the rules and amounts of remuneration of Members of the Management Board, including determination of the rates thereof,

b) issuing opinions concerning approval for Members of the Management Board to engage in competitive activity,

c) issuing recommendations to the Supervisory Board regarding general guidelines for the Management Board on the level and structure of remuneration for the senior management of the Bank, as well as the policy of variable items of remuneration of the persons holding managerial positions at the Bank,

d) monitoring the level and structure of remuneration of the senior management.

4. The composition of the Audit Committee includes at least one Independent Member of the Supervisory Board holding qualifications and experience in finance and accounting.

5. The Standing Committees of the Supervisory Board submit annual reports on their operation to the Supervisory Board. The Bank makes the reports available to the shareholders prior to the General Meeting.

Article 23

The Supervisory Board appoints and dismisses the President of the Management Board, vice-presidents, and other Members of the Management Board in accordance with the Banking Law.

Article 24

Meetings of the Supervisory Board are held as required, at least three times each financial year.

MANAGEMENT BOARD

Article 25

1. The Management Board is composed of at least three Members appointed for a joint term of office of 5 years. At least half of the Management Board Members, including the President of the Management Board, must hold Polish citizenship, be habitually resident in Poland, speak Polish and have experience on the Polish market which can be used while managing the Bank.

2. The Management Board consists of the President of the Management Board and other Members of the Management Board. The Supervisory Board may entrust the function of the first Deputy President or Deputy President of the Management Board to the Management Board Members.

3. The mandate of a Member of the Management Board expires at the latest on the day of the General Meeting that approves the financial statements for the last full financial year of the term of that Management Board Member.

4. The term of a Member of the Board of Management also expires in the case of death, resignation, or recalling of the Member from the Board of Management.

5. The mandate of a Management Board Member appointed prior to the end of a given term of office expires at the same time as the mandates of the remaining Management Board Members.

Article 26

1. The Management Board directs the Bank's business and represents the Bank, including decisions regarding the acquisition, encumbering or disposal of real estate, a perpetual usufruct or part of real estate, subject to Article 22 (3).1 letter b). The Management Board defines the guidelines for the activity of the Bank, especially as activities subject to risks, such as the credit policy, the investment policy, assets and liabilities management and the guarantee policy, are concerned.

2. The resolutions of the Management Board are passed by a simple majority of votes cast by the Management Board Members present at the Management Board meeting, while if there is an equal number of votes, the President of the Management Board has the casting vote.

3. In exceptional cases, Members of the Management Board may pass resolutions by casting their votes in writing, via the agency of another Member of the Management Board. Casting a vote in writing must not concern issues introduced to the agenda during the meeting of the Management Board.

4. The Management Board may adopt resolutions in writing or using direct long-distance means of communication. A resolution is valid provided all the Members of the Management Board have been notified of the contents of the draft resolution.

5. The Management Board operates pursuant to its Rules approved by the Supervisory Board. The Rules determine among others the issues which require consideration of the Management Board as a collegial body and adoption of a resolution of the Management Board.

Article 27

1. The President of the Management Board manages the work of the Management Board. The responsibilities of the President include, among others:

1) presiding over the Management Board,

2) representing the Bank to third parties,

3) issuing internal regulations and instructions, Rules, and other regulations that govern the Bank's operation; however, the internal regulations and instructions, Rules, and other regulations should be issued based on a prior resolution of the Management Board in the case when law or the Bank's internal regulation so requires,

4) dividing powers among Members of the Management Board and their subordinate Managing Directors, on the basis of a resolution of the Management Board; however, no resolution in this respect can be passed without the consent of the President of the Management Board; information on the division of powers among the Members of the Management Board and their subordinate Managing Directors and any changes in this respect is forwarded forthwith to the Executive Committee of the Supervisory Board.

2. The Management Board Member responsible for the development and implementation of the Bank’s credit policy and for the management of the Bank’s credit and financial risk is appointed upon approval from the Polish Financial Supervision Authority.

Article 28

1. The Management Board Members manage the Bank's operation in accordance with the Rules of the Management Board.

2. The President of the Management Board may entrust the supervision over specific areas of the Bank's operation to the Management Board Members.

Article 29

1. The appointment of a commercial proxy holder requires consent from all the Management Board Members.

2. A proxy is granted by two Members of the Management Board acting jointly or by one Management Board Member acting jointly with the commercial proxy holder or by two commercial proxy holders acting jointly.

3. A commercial proxy may be revoked by every Management Board Member acting independently. A proxy may be revoked by two Members of the Management Board acting jointly or by one Management Board Member acting jointly with the commercial proxy holder.

Article 30

1. The following persons are entitled to make statements with respect to property rights and obligations of the Bank:

1) within the powers of the Management Board, two Management Board Members acting jointly, whereas the signature of one Management Board Member may be replaced by the signature of a commercial proxy holder or a proxy holder acting in accordance with the proxy granted;

2) commercial proxy holders – acting in accordance with the law on commercial proxy, jointly with a Management Board Member or another commercial proxy holder;

3) proxy holders – under general proxies, proxies applicable to a specific type of actions, and proxies applicable to specific actions. Proxies act independently or jointly within the limits of the power granted to them.

2. Persons authorized to act on behalf of the Bank are not be personally liable to third parties for the obligations assumed on behalf of the Bank, provided that they act within their powers.

Article 30a

1. The making of decisions on the assumption of obligations or disposal of assets of which total value with respect to a single entity exceeds 5% of the Bank’s own funds requires resolutions of the Management Board, subject to (2) below.

2. Acting under resolutions it has adopted, the Management Board may authorize the Standing Committees appointed under Article 8a (3) or competent persons at the Bank to make decisions on the assumption of obligations or disposal of assets falling within the scope of the Bank’s day-to-day business, of which total value with respect to a single entity exceeds 5% of the Bank’s own funds. The scope of authorization and the manner of decision-making by the authorized committees or appropriate persons will be specified in a relevant resolution of the Management Board.

3. Subject to fulfilment of other requirements stipulated in the By-laws, acquiring, encumbering, and selling real estate, a perpetual usufruct or part of real estate and stock and participatory shares in companies as well as other fixed assets, require a resolution of the Management Board, if the value of the said transactions exceeds 1% of the Bank's own funds as defined in Article 33, as per December 31 of the preceding year, unless such acquisition results from execution, bankruptcy, or negotiation procedures, or other settlements with the Bank's debtors, or in the case of sale of assets so acquired.

Article 30b

1. The Bank’s internal regulations are issued in the form of:

a) policies – by Standing Committees appointed under Article 8a (3), by the Management Board or by the Management Board and the Supervisory Board,

b) orders – by the President of the Management Board,

c) circular letters – by the Members of the Management Board, Managing Directors or directors of the Bank's organisational units,

d) organisational Rules of the Bank's organisational units – by Members of the Management Board or Managing Directors,

e) work procedures – by the Members of the Management Board, Managing Directors or directors of the Bank's organisational units.

2. Detailed rules of issuing internal legislation of the Bank are specified in a relevant regulation on internal legislation.

Article 31

1. The annual balance sheet and profit and loss account are audited by a certified auditing firm, elected of the General Meeting.

2. The certified auditing firm presents its report and recommendations to the Supervisory Board which presents them to the General Meeting.

Article 31a

1. The Bank has its internal control system aimed at ensuring security and stability of the Bank's operation, supporting the Bank's management, and facilitating the performance of the Bank’s tasks.

2. The internal control covers the activities of all the organizational units of the Bank.

3. As a part of the internal control system, the Bank has an Internal Audit Department subordinate to the President of the Management Board. The tasks of the Internal Audit Department include, in particular:

a) independent assessment and review of the compliance with the process implementation procedures applicable at the Bank,

b) review and assessment of the mechanisms of exercising internal control,

c) review and assessment of risk management at the Bank,

d) operational risk assessment.

4. The Internal Audit Department prepares periodic reports on its activity for the Management Board and the Supervisory Board. Notwithstanding any specific internal regulations to this effect, every report on the internal audit carried out by the Internal Audit Department should be sent also to the Chairman of the Supervisory Board for information.

5. The detailed principles of internal control are specified in the relevant Rules introduced by an order of the President of the Management Board based on a resolution of the Management Board.

IV. PRINCIPLES OF THE BANK'S FINANCIAL MANAGEMENT

Article 32

The Bank conducts independent financial management based on annual financial plans approved by the Supervisory Board. The Management Board sets detailed principles of financial management.

Article 33

1. The Bank's own funds are:

1) Basic funds, including:

a) share capital,

b) supplementary capital,

c) reserve capital,

d) general risk reserve.

2) The supplementary funds are formed pursuant to the Banking Law.

2. The Bank creates specific funds, including the Company Social Benefits Fund.

Article 4

The share capital amounts to PLN 168,840,628 (one hundred sixty-eight million eight hundred forty thousand six hundred twenty-eight) and is divided into 42,210,157 (forty-two million two hundred ten thousand one hundred fifty-seven) registered and bearer shares with a nominal value of PLN 4 (four) per share.

Article 34a

The Bank has effected the following conditional share capital increases:

a) pursuant to the resolution on issuing A-series bonds with the pre-emptive right and the conditional share capital increase by shares issue excluding the subscription right, adopted by the General Meeting on May 21, 2003, the Bank’s share capital has been conditionally increased by PLN 1,918,000 (one million nine hundred eighteen thousand) by issuing 479,500 (four hundred seventy-nine thousand five hundred) ordinary bearer shares with a nominal value of PLN 4 (four) per share;

b) pursuant to the resolution on issuing B-series bonds with the pre-emptive right and the conditional share capital increase by shares issue excluding the subscription right, adopted by the General Meeting on May 21, 2003, the Bank’s share capital has been conditionally increased by PLN 2,000,000 (two million) by issuing 500,000 (five hundred thousand) ordinary bearer shares with the nominal value of PLN 4 (four) per share.

c) pursuant to the resolution on issuing C1, C2, C3, C4, C5, C6, C7, C8, C9, C10-series bonds with the pre-emptive right and the conditional share capital increase by shares issue excluding the subscription right, adopted by the General Meeting on 14 March 2008, the Bank’s share capital has been conditionally increased by PLN 2,200,000 (two million two hundred thousand) by issuing 550,000 (five hundred fifty thousand) ordinary bearer shares with the nominal value of PLN 4 (four) per share.

d) pursuant to the resolution on issuing D-series bonds with the pre-emptive right and the conditional share capital increase by shares issue excluding the subscription right, adopted by the General Meeting on 27 October 2008, the Bank’s share capital has been conditionally increased by PLN 2,800,000 (two million eight hundred thousand) by issuing 700,000 (seven hundred thousand) ordinary bearer shares with the nominal value of PLN 4 (four) per share.

Article 35

The share capital may be increased by a new shares issue or by raising the nominal value of the existing shares.

Article 35a

(deleted)

Article 35b

1. The Banks' shares may be redeemed following their purchase by the Bank with the approval of the shareholder (voluntary redemption) or without the approval of the shareholder in accordance with the principles established in the Code of Commercial Partnerships and Companies.

2. Voluntary cancellation of shares of the Bank can be made with or without compensation.

3. Upon a motion of the Management Board approved by the Supervisory Board, the General Meeting adopts a resolution concerning the cancellation of shares, a resolution to cancel shares, a resolution to reduce the share capital, and a resolution concerning relevant amendments of the Bank’s By-laws. The powers not reserved for other authorities of the Bank under a resolution of the General Meeting or the By-laws rest with the Management Board.

4. The General Meeting adopts a resolution concerning the redemption, establishing the rules of purchasing the shares by the Bank, in particular the amounts allotted for purchasing the shares for redemption and funding sources. Following the purchase of shares, the General Meeting adopts resolutions to redeem shares and reduce the share capital in accordance with Article 360(1) of the Code of Commercial Partnerships and Companies.

5. The reduction of the share capital of the Bank by means of redemption of some of its shares is not allowed if the share capital after the reduction is lower than the amount stipulated by law as the minimum share capital required to establish a bank with its registered office in the Republic of Poland.

Article 36

The supplementary capital is built from the net profit generated in the financial year and from the surplus produced due to the issue of shares above the nominal value that remains when the cost of the issue is covered; its purpose is to cover balance-sheet losses which may arise in connection with the Bank's operation.

Article 37

Reserve capital is built from a part of the annual net profit, separate from the supplementary capital, with the purpose of covering specific losses and expenses of the Bank or for other purposes.

Article 38

The General Meeting decides on utilization of the supplementary capital and reserve capital; however, a part of the supplementary capital, amounting to one third of the share capital, may be used only to cover balance sheet losses.

Article 39

Other funds included in own funds are created and used pursuant to the principles set forth by the Polish Financial Supervision Authority.

Article 40

The general risk reserve is formed from amounts written off from the annual profit for unidentified risks in banking operation.

Article 41

The principles of forming and using the company social benefits fund are set forth in separate regulations. In addition, allocations made on the basis of net profit can also add to the fund.

Article 42

The net profit may be allocated to:

a) supplementary capital, reserve capital, general risk reserve and other, in an amount stipulated every year by the General Meeting for each capital and fund separately,

b) dividend for shareholders in an amount stipulated every year by the General Meeting,

c) other purposes as per resolutions adopted by the General Meeting.

Article 43

1. The payment of dividend, if any, takes place on dates fixed by the General Meeting.

2. The Bank does not pay interest on dividends not collected in due time to shareholders.

V. ACCOUNTANCY OF THE BANK

Article 44

The Bank keeps accounting books in accordance with the accounting principles set out in separate regulations. The detailed principles and organisation of accountancy are determined by the Management Board.

Article 45

The annual financial statements and the annual report of the Management Board on the Bank's operation is drafted no later than within three months following the end of the financial year. The financial year is the calendar year.

Article 46

The annual financial statements, the report of the Management Board on the Bank's operation, and motions of the Management Board regarding the allocation of profit or coverage of loss are submitted by the Management Board to the Supervisory Board for assessment, and then to the General Meeting for review and approval. The Supervisory Board submits a written report on its assessment to the General Meeting.

Article 47

Official copies of the annual financial statements, the report of the Management Board, the official copy of the report of the Supervisory Board, and the statutory auditor's opinion are distributed to the shareholders at their request no later than fifteen days prior to the General Meeting.

VI. FINAL PROVISIONS

Article 48

To all the issues not provided for in the By-Laws, the Banking Law and the Code of Commercial Partnerships and Companies apply.

Article 49

The following acted as the Bank's founders:

1. Minister of Foreign Trade and the Minister of Finance, acting on behalf of the State Treasury – Warsaw,

2. The National Bank of Poland, domiciled in Warsaw,

3. Bank Gospodarki Żywnościowej, domiciled in Warsaw,

4. Bank Handlowy w Warszawie S.A. – Warsaw,

5. Bank Polska Kasa Opieki S.A. – Warsaw.

President of the Management Board

Cezary Stypułkowski 03.30.2015