MANAGEMENT BOARD REPORT ON THE ACTIVITIES IN THE FIRST HALF OF 2020 BNP Paribas Bank Polska S.A. Group This document is a translation of a document originally issued in Polish. The only binding version is the original Polish version. MANAGEMENT BOARD REPORT ON THE ACTIVITIES OF BNP PARIBAS BANK POLSKA S.A. CAPITAL GROUP IN THE FIRST HALF OF 2020 CONTENTS 1. CAPITAL GROUP OF BNP PARIBAS BANK POLSKA S.A. .................................................................................................................................... 4 1.1. Brief overview of the Group ....................................................................................................................................................................................................................................... 4 1.2. Structure of the Group and consolidated entities .............................................................................................................................................................................................. 5 1.3. Business model ............................................................................................................................................................................................................................................................. 5 1.4. Major events in Capital Group of BNP Paribas Bank Polska S.A. in the first half of 2020 ........................................................................................................................7 1.5. Awards and distinctions ............................................................................................................................................................................................................................................. 9 2. EXTERNAL ENVIRONMENT AFFECTING THE BANK’S OPERATIONS IN THE FIRST HALF OF 2020 AND PERSPECTIVE FOR THE DEVELOPMENT ....................................................................................................................................................................................................................10 2.1. Macroeconomic conditions...................................................................................................................................................................................................................................... 10 2.2. Performance of the banking sector ........................................................................................................................................................................................................................ 13 2.3. Stock market and investment situation ............................................................................................................................................................................................................... 17 2.4. Strategy of BNP Paribas Bank Polska S.A. ............................................................................................................................................................................................................ 19 2.5. Execution of the strategy in the first half of 2020 .............................................................................................................................................................................................. 19 2.6. Impact of the COVID-19 pandemic on the activity of BNP Paribas Bank Polska S.A. .............................................................................................................................. 23 2.7. Factors which may affect the performance and operations of the Bank’s Capital Group .................................................................................................................... 27 3. FINANCIAL STANDING OF THE BNP PARIBAS BANK POLSKA S.A. CAPITAL GROUP IN FIRST HALF 2020 ....................................... 30 3.1. Consolidated statement of profit and loss .......................................................................................................................................................................................................... 30 3.2. Statement of comprehensive income ................................................................................................................................................................................................................... 41 3.3. Statement of financial position .............................................................................................................................................................................................................................. 42 3.4. Own funds and capital ratios ................................................................................................................................................................................................................................... 48 3.5. Financial ratios.............................................................................................................................................................................................................................................................. 51 4. OPERATIONS OF BNP PARIBAS BANK POLSKA S.A. CAPITAL GROUP IN THE FIRST HALF OF 2020 ................................................... 52 4.1. Distribution channels ................................................................................................................................................................................................................................................ 52 4.2. Retail and Business Banking ................................................................................................................................................................................................................................... 59 4.3. Personal Finance ......................................................................................................................................................................................................................................................... 67 4.4. Operations of the Brokerage Office of BNP Paribas Bank Polska S.A. ......................................................................................................................................................... 70 4.5. SME Banking ................................................................................................................................................................................................................................................................. 70 4.6. Corporate Banking ...................................................................................................................................................................................................................................................... 75 4.7. Agro area ........................................................................................................................................................................................................................................................................ 79 4.8. Corporate and Investment Banking ...................................................................................................................................................................................................................... 82 4.9. Other banking activity ............................................................................................................................................................................................................................................... 82 4.10. Cooperation with financial institutions ............................................................................................................................................................................................................... 83 4.11. HR management .......................................................................................................................................................................................................................................................... 84 4.12. Information technology and cybersecurity ........................................................................................................................................................................................................ 87 4.13. Operations and business support area ................................................................................................................................................................................................................ 90 4.14. Bank’s Transformation Program .............................................................................................................................................................................................................................. 91 5. DESCRIPTION OF THE ACTIVITIES OF BNP PARIBAS BANK POLSKA S.A. GROUP IN THE FIRST HALF OF 2020 .............................. 93 5.1. BNP Paribas Towarzystwo Funduszy Inwestycyjnych S.A. ........................................................................................................................................................................... 93 5.2. BNP Paribas Leasing Services Spółka z o.o. ......................................................................................................................................................................................................