Current Report No. 2/2012

28 February, 2012

The intended merger of the Issuer – agreements on commencing works aimed at merging Bank Zachodni WBK S.A. with Kredyt Bank S.A.

Bank Zachodni WBK S.A. ("Issuer") hereby gives notice that it received information on the execution on 27 February 2012 of the investment agreement by the shareholders of the Issuer and Kredyt Bank S.A. ("Kredyt Bank S.A."), i.e. Banco Santander S.A. and KBC Bank NV (hereinafter jointly referred to as the "Shareholders of the Banks"), in which the parties expressed their intention to merge Kredyt Bank S.A. and the Issuer. The content of the press release publically announced by KBC Bank NV and Banco Santander S.A. constitute attachment to this release.

The Issuer would like to emphasise the fact that the share exchange ratio specified in the attached press release was set by the Shareholders of the Banks for the purpose of the above-mentioned investment agreement. The final share exchange ratio will be set following a formal valuation of the merging banks in accordance with the Commercial Companies Code.

The Issuer hereby informs that on 27 February 2012, Issuer, Kredyt Bank S.A., Banco Santander S.A. and KBC Bank NV signed an agreement on commencing works aimed at merging the Issuer with Kredyt Bank S.A.

Pursuant to the signed agreement, the merger of the two banks is to be made in accordance with art. 492 § 1 point 1 of the Commercial Companies Code, through the transfer of all assets of Kredyt Bank S.A. to the Issuer (merger through acquisition) in exchange for newly issued shares of the Issuer, which will be offered and rendered to all of the current Kredyt Bank S.A. shareholders. As a result of the merger, those shareholders will become the shareholders of the Issuer as of the merger date, i.e. the day on which the merger is entered into a register relevant for the Issuer registered office.

The exchange ratio of Kredyt Bank S.A. shares to the Issuer shares will be established based on the commissioned valuations.

The completion of the merger is subject to:

(1) obtaining the approval of the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego) for the merger pursuant to Art. 124 section 1 of the Banking Law Act;

(2) obtaining the approval of the Komisja Nadzoru Finansowego, for the amendments to the BZ WBK Statutes pursuant to Art. 34 section 2 in relation to Art. 31 section 3 of the Banking Law Act;

(3) issuing by the European Commission a decision declaring the concentration of the Issuer and Kredyt Banku compatible with the common market;

(4) obtaining the statement of the Komisja Nadzoru Finansowego on the equivalency of the information contained in the Issuer's information memorandum in terms of form and content to the information required in an issue prospectus, in accordance with the provisions of the Act dated 29 July 2005 on public offering and conditions of introducing financial instruments to organized trading system and on public companies;

(5) Komisja Nadzoru Finansowego not objecting to the acquisition of shares of KBC TFI S.A. by KBC Asset Management NV;

(6) adopting by the Issuer General Meeting a resolution on the merger with Kredyt Bank;

(7) adopting by Kredyt Bank General Meeting a resolution on the merger with the Issuer.

The planned merger is aimed at the creation of a bank that offers a more extensive product proposition, both in terms of financing and investing, as well as saving. The merger of the two banks will allow to offer to both, retail and corporate customers, a wider range of additional services to be accessible through the different distribution channels , including traditional banking outlets and internet platform.

The combination of the market know-how held by the two banks as well as the recognition of particular areas of operations will allow to achieve synergies, both operational – elimination of duplicating processes, optimization of actions based on the combined experience of both banks, as well as financial – achieving higher efficiency owing to the economies of scale, higher profitability of products and services and primarily consolidating the market position that will imply higher returns for shareholders.

The Issuer is a universal bank, one of the top three largest banks in Poland in terms of branch network and revenue. The Bank was founded in 1989, and in 2001 as a result of the merger of Bank Zachodni and Wielkopolski Bank Kredytowy, the Issuer was created. The Issuer has been a member of Santander Group since April 2011.

As of end of 2011, the Issuer had a total assets worth PLN 59.873 billion, a total loan portfolio of PLN 38.017 billion, total deposits of PLN 46.829 billion. The Bank employs 9 383 staff and has a network of 622 branches (including 96 franchise outlets). The Issuer reported gross profit of PLN 1.631 billion in 2011 with ROE at 21.2%.

The Issuer has stable financial foundations with a liquid balance sheet, strong capital position, a growing market share and a reputable universal brand, recognized, distinctive and attractive across Poland. The strategy of the Bank is to strengthen its market position as a universal institution, offering a full range of financial services in the retail, business and investment banking sectors. the Issuer's Group also includes BZ WBK Brokerage House, Finanse&Leasing, Asset Management, Fund Management (TFI) and Aviva-BZ WBK insurance JV.

Kredyt Bank S.A. was established in 1990. Kredyt Bank S.A. is one of the ten banks in Poland with respect to value of assets, as well as loan and deposit portfolio. Strategic investor of Kredyt Bank S.A. is bancassuarnce KBC capital Group.

Kredyt Bank S.A. is a universal bank providing banking services tailored to the needs of all customer groups. The bank addresses a wide range of services to personal customers, businesses and local administration units. The Bank provides its customers with a convenient access to the offered services through an expanded network of branches and cash machines as well as an internet banking system.

The assets of Kredyt Bank S.A. as at 31 December 2011 amounts to PLN 42,003 billion, the total loan portfolio amounts to PLN 30,494 billion, and the total value of deposits is equal to PLN 28,043 billion.

Kredyt Banks S.A.'s group profit amounts to PLN 327,2 million.

As at the end of 2011 Kredyt Bank S.A. had a network of 373 branches, located evenly in Poland and the employment in Kredyt Banks S.A.'s group was at the level of 4.963 employees.

Legal base:
art. 56 sec.1 point 1 the Act dated 29 July 2005 on public offering and conditions of introducing the financial instruments to organized trading system and on public companies and § 5 sec. 1 point 13 and § 19 sec. § 1 it. 1 of the Ordinance of the Minister of Finance dated 19 February 2009 on the current and periodic reports published by the issuers of securities and the rules of equal treatment of the information required under the laws of non-member states.

Santander Bank Polska S.A. with its registered office in Warsaw, al. Jana Pawła II 17, 00-854 Warszawa, registered by the District Court for the capital city of Warsaw, 12th Commercial Division, set up under regulation of the Council of Ministers of 11 April 1988 on setting up Bank Zachodni in Wrocław (Journal of Laws of 1 July 1988, No. 21, item 142), registered under KRS number 0000008723, REGON 930041341, NIP 896 000 56 73, share capital of PLN 1,020,883,050 paid-up in full. Helpline: 1 9999 – fee as per the operator’s tariff.

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