Current Report no. 21 (2013)

Disclosure of confidential information - entering into a material agreement.

This announcement is not an offer of securities for sale in the United States, Canada, Japan, Australia or South Africa. Any securities referred to herein may not be offered or sold in the United States, Canada, Japan, Australia or South Africa absent registration or an exemption from registration. No public offering of any securities referred to herein will be made in the United States, Canada, Japan, Australia or South Africa.

The management board of Bank Zachodni WBK S.A. announces that on 22 March 2013, Bank Zachodni WBK S.A. (“BZ WBK”), Banco Santander S.A. (“Banco Santander”), KBC BANK NV (“KBC”, and jointly with Banco Santander the “Selling Shareholder”) and Deutsche Bank AG, London Branch, Citigroup Global Markets Limited, Morgan Stanley & Co. International plc, Merrill Lynch International, Credit Suisse Securities (Europe) Limited, KBC Securities NV, Santander Investment S.A., Goldman Sachs International, UBS Limited, RBC Europe Limited, Powszechna Kasa Oszczędności Bank Polski S.A. also acting through its branch - Powszechna Kasa Oszczędności Bank Polski S.A. Oddział - Dom Maklerski PKO Banku Polskiego w Warszawie, ING Bank N.V., and Société Générale, (jointly the “Underwriters”), as well as Dom Maklerski BZ WBK S.A., Dom Maklerski Banku Handlowego S.A., ING Securities S.A. (together with Underwriters, jointly the “Managers”) entered into the Underwriting Agreement (the “Agreement”).

The Agreement was executed in connection with the offer for the sale of the existing shares of BZ WBK announced by the Selling Shareholders (the “Offering”), information about which was presented to investors in BZ WBK’s current report No. 19/2013 dated 18 March 2013.

Subject to the terms and conditions of the Agreement, each of the Managers committed individually to undertake efforts to procure purchasers for the offer shares in BZ WBK in the Offering (the “BZ WBK Offer Shares”), and in the case of the failure to procure such purchasers, each of the Underwriters committed individually to purchase the number of the BZ WBK Offer Shares specified in the Agreement which will not be paid for by investors as at the date of the settlement of the Offering.

The final selling price of BZ WBK Offer Shares has been set at PLN 245 for one share and the final number of the BZ WBK Offer Shares being sold in the Offering has been set jointly at 19,978,913, whereby 15,125,964 BZ WBK Offer Shares are being sold by KBC and 4,852,949 BZ WBK Offer Shares are being sold by Banco Santander.

Under the Agreement BZ WBK undertook that except to the extent that may be required: (i) under a binding decision of the PFSA requiring BZ WBK to increase its share capital issued pursuant to Articles 138.1.2 or 138a.1.1 of the Banking Law after the date of the Underwriting Agreement; (ii) under a final and binding judgment of a court of competent jurisdiction; or (iii) to satisfy the obligations of BZ WBK under its existing share incentive program (Akcje za Wynik), provided that none of the foregoing exceptions shall apply during the stabilization period, neither BZ WBK nor any person acting on its behalf may, from time to time, from the date of the Agreement until 180 days after the settlement of the Offering (which is expected to occur on or about 27 March 2013), without the prior written consent of the representative banks acting on behalf of the Joint Global Coordinators (which are: Deutsche Bank AG, London Branch, Citigroup Global Markets Limited, Dom Maklerski Banku Handlowego S.A., Morgan Stanley & Co. International plc, Merrill Lynch International, Credit Suisse Securities (Europe) Limited, KBC Securities NV, Santander Investment S.A., Dom Maklerski BZ WBK S.A., jointly the “Joint Global Coordinators”): (a) issue, offer, sell, lend, mortgage, assign, contract to sell, pledge, charge, contract to sell or issue, sell any option or contract to purchase, purchase any option or contract to sell or issue, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of (or publicly announce any such action), directly or indirectly, any ordinary shares in BZ WBK or any securities convertible or exchangeable into or exercisable for, or substantially similar to, any ordinary shares in BZ WBK or any security or financial product whose value is determined directly or indirectly by reference to the price of the underlying securities, including equity swaps, forward sales and options or global depositary receipts representing the right to receive any such securities, or file any registration statement under the U.S. Securities Act (the “U.S. Securities Act”) or publish any prospectus with respect to any of the foregoing; or (b) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the ordinary shares in BZ WBK; or (c) enter into any transaction with the same economic effect as, or agree to, or publicly announce any intention to enter into any transaction described above, whether any such transaction described above is to be settled by delivery of the ordinary shares in BZ WBK or such other securities, in cash or otherwise; the foregoing undertaking shall not apply to the Offer and sale of the BZ WBK Offer Shares.

In addition, the Selling Shareholders obliged themselves towards Underwriters that except to the extent that may be required: (i) under a binding decision of the PFSA issued pursuant to Articles 25l.5 or 25n.4 of the Banking Law after the date of the Agreement; (ii) under a final and binding judgment of a court of competent jurisdiction; (iii) in the case of Banco Santander, in accordance with the undertakings of Banco Santander towards the PFSA; (iv) in the case of KBC for the sale of the stabilization shares in respect of which the condition subsequent included in the Purchase and Stabilization Agreement (the “Purchase and Stabilization Agreement”) has occurred; or (v) under the Purchase and Stabilization Agreement in respect of the stabilization shares (provided that none of the foregoing exceptions above shall apply during the stabilization period), neither the respective Selling Shareholder, nor any of its subsidiaries or other affiliates (except for BZ WBK to which above shall not apply) nor any person acting on its or their behalf will, from the date of the Agreement until 90 days after the settlement of the Offering (which is expected to occur on or about 27 March 2013), without the prior written consent of the representative banks acting on behalf of the Joint Global Coordinators: (a) offer, sell, lend, mortgage, assign, contract to sell, pledge, charge, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of (or publicly announce any such action), directly or indirectly, any ordinary shares in BZ WBK or any securities convertible or exchangeable into or exercisable for, or substantially similar to, any ordinary shares in BZ WBK or any security or financial product whose value is determined directly or indirectly by reference to the price of the underlying securities, including equity swaps, forward sales and options or global depositary receipts representing the right to receive any such securities, or file any registration statement under the Securities Act or publish any prospectus with respect to any of the foregoing, or (b) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of ordinary shares in BZ WBK; or (c) enter into any transaction with the same economic effect as, or agree to, or publicly announce any intention to enter into any transaction described above, whether any such transaction described above is to be settled by delivery of ordinary shares in BZ WBK or such other securities, in cash or otherwise; the foregoing undertaking shall not apply to the Offer and sale of the BZ WBK Offer Shares pursuant to the Agreement or the sale of the stabilization shares to the stabilizing manager for the purpose of stabilization.

Under the Agreement, BZ WBK and the Selling Shareholders made certain representations and warranties stated in the Agreement to the Managers, and subject to the terms of the Agreement undertook to indemnify the Managers and certain other persons indicated in the Agreement against certain liabilities in connection with the Offering and the sale of the BZ WBK Offer Shares, including certain liabilities under the U.S. Securities Act.

In connection with the Offering, Deutsche Bank AG, London Branch, as the stabilizing manager (the “Stabilizing Manager”) will be entitled to acquire on the Warsaw Stock Exchange (the “WSE”) up to 10% of the total number of the BZ WBK Offer Shares allocated to investors under the Offering in order to stabilize the market price of the shares in BZ WBK at a level higher than that which might otherwise prevail. The acquisition of the shares in stabilization transactions will take place on the terms set out in Commission Regulation No. 2273/2003/WE as regards exemptions for buy-back programmes and the stabilization of financial instruments. The Stabilizing Manager may execute the share purchase transactions within no more than 30 days from the date of the allotment of the BZ WBK Offer Shares at a price not exceeding the sale price of the BZ WBK Offer Shares. The Stabilizing Manager will be under no obligation to perform the stabilization transactions and will be able to discontinue such transactions, if commenced, at any time at the Stabilizing Manager’s sole discretion. There is no certainty that if the stabilization actions are undertaken, they will produce the desired results.

Legal basis:
Article 56 section 1.1 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and on Public Companies.

NEITHER THIS ANNOUNCEMENT NOR ANY COPY OF IT MAY BE TAKEN OR TRANSMITTED IN OR INTO THE UNITED STATES (WHICH ENCOMPASSES ITS TERRITORIES AND PROPERTIES OF ANY OF THE STATES AND THE COLUMBIA DISTRICT) (“THE UNITED STATES”), AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA.

This announcement does not comprise a prospectus for the purposes of Directive 2003/71/EC or any other applicable laws, rules or regulations and does not contain or constitute or form part of any offer or invitation, or any solicitation of an offer, for securities referred to herein and should not be relied on in connection with any contract or commitment whatsoever. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Any offer to acquire securities referred to herein pursuant to any potential offering of shares in BZ WBK (the “Offering”) will be made, and any investor should make his investment decision solely on the basis of the appropriate and final offering document which may be made available to the selected investors in due course in connection with the Offering.

The contemplated sale of securities referred to herein and the distribution of this announcement and other information in connection with the contemplated sale of securities referred to herein in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy, any shares in BZ WBK to any person in the United States, Australia, Canada, Japan or South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The BZ WBK Offer Shares referred to herein (the “Shares”) may not be offered or sold in the United States unless registered under the US Securities Act of 1933 or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. The potential offer and sale of the Shares has not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada, Japan or South Africa. Subject to certain exceptions, the Shares may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, Japan or South Africa.

This announcement is directed only at (i) persons who are outside the United Kingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Order”) and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order or (iv) other persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the Offering may lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). Any investment activity to which this announcement relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents. The contemplated sale of securities referred to herein will not be made to the public in the United Kingdom.

This announcement is for promotional purposes only and under no circumstances shall constitute an offer or invitation, or form the basis for a decision, to invest in the securities of BZ WBK.

This announcement does not constitute a recommendation within the meaning of the Regulation of the Polish Minister of Finance Regarding Information Constituting Recommendations Concerning Financial Instruments or Issuers Thereof dated 19 October 2005.

No reliance may be placed for any purpose whatsoever on the information contained in this announcement. Such information is for background purposes only, may be subject to change and may not be complete or accurate.

Acquiring securities to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering investment should consult an authorized person specializing in advising on such investments. This announcement does not constitute a recommendation concerning the Offering. The value of shares can decrease as well as increase.

Potential investors should consult a professional advisor as to the suitability of the Offering for the person concerned.

In the connection with the Offering, Deutsche Bank, Citigroup Global Markets Limited, Dom Maklerski Banku Handlowego S.A., Morgan Stanley, BofA Merill Lynch, Credit Suisse, KBC Securities, Santander Investment, Dom Maklerski BZ WBK, Goldman Sachs International, UBS Investment Bank, Royal Bank of Canada (RBC Europe Limited), Dom Maklerski PKO BP, ING, and Société Générale (the “Managers”) are acting for KBC, Santander and BZ WBK and no one else in connection with the contemplated sale of the Shares, and will not be responsible to anyone other than KBC, Santander and BZ WBK for providing the protections afforded to their clients nor for providing advice in connection with the contemplated sale of the Shares.

This announcement may contain projections or other forward-looking statements regarding future events or the future financial performance of BZ WBK. You can identify forward-looking statements by terms such as ‘expect’, ‘believe’, ‘anticipate’, ‘estimate’, ‘intend’, ‘will’, ‘could’, ‘may’ or ‘might’ or other similar expressions or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. KBC and Santander wish to caution you that these statements are only predictions and that actual events or results may and often do differ materially. Any forward-looking statements reflect KBC and Santander’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to BZ WBK’s business, results of operations, financial position, liquidity, prospects, growth or strategies. Forward-looking statements speak only as of the date they are made and each of KBC, Santander, the Managers and their respective affiliates disclaims any obligation or undertaking to update these statements to reflect events and circumstances occurring after the date hereof; to reflect the occurrence of unanticipated events or as a result of new information or otherwise. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of BZ WBK, including risks specifically related to BZ WBK and its operations.

In connection with the Offering, the Managers and any of their affiliates, acting as investors for their own accounts, may purchase the Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Shares and other securities of BZ WBK or related investments in connection with the Offering or otherwise. Accordingly, references in any applicable offering document, if produced and made available to any investors, to the Shares being offered, subscribed, acquired, placed or otherwise dealt in should be read as including any offer to, or subscription, acquisition, placing or dealing by, the Managers and any of their affiliates acting as investors for their own accounts. The Managers do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

None of the Managers or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to BZ WBK, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

In connection with the Offering, Deutsche Bank AG, London Branch, as the Stabilizing Manager (“Stabilizing Manager”), or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, effect transactions with a view to supporting the market price of the shares in BZ WBK at a higher level than that which might otherwise prevail in the open market. Stabilizing Manager is not required to enter into such transactions and such transactions may be effected on the Warsaw Stock Exchange and may be undertaken at any time during the period commencing on the date of the disclosure of the final offer price and ending no later than 30 calendar days after the allotment of the BZ WBK Offer Shares. However, there will be no obligation on the part of Stabilizing Manager or any of its agents to effect stabilizing transactions and there is no assurance that stabilizing transactions will be undertaken. Such stabilizing measures, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilize the market price of the shares in BZ WBK above the offer price. Save as required by law or regulation, neither Stabilizing Manager, nor any of its agents intends to disclose the extent of any stabilization transactions conducted in relation to the Offering. In connection with the Offering, the Stabilizing Manager may, for stabilization purposes, acquire up to a maximum of 10% of the total number of the BZ WBK Offer Shares offered in the Offering.