Letter from Michał Gajewski – CEO of Santander Bank Polska S.A.

The international security crisis, the abrupt reaction of the financial markets, soaring commodity prices and rising inflation have been the major challenges of the past several months. We will probably have to deal with them for a long time to come. In difficult and volatile conditions, it is necessary to act quickly and flexibly, which is why at Santander Bank Polska Group we responded to the war in Ukraine instantly. We launched a number of initiatives to support refugees, our Ukrainian employees and bank customers, including financial assistance, Polish language courses and a special offer of banking products. We dedicated our 2022 charity fundraiser „We Will Double Your Impact” specifically to helping Ukraine. More than 26,500 people took part in the campaign. Together with our clients, we raised more than PLN 4.25m, which we donated to organizations coordinating aid to the victims of the war, such as PAH, UNICEF, Polish Red Cross and the City of Przemyśl. We also entered into cooperation with the UN Refugee Agency (UNHCR). Our bank developed a unique technological solution that made it possible to distribute financial aid quickly and securely to refugees from Ukraine. Thanks to this, the UNHCR Cash Assistance program based on the BLIK check system was created.

Despite new challenges and the adverse environment, our long-term goals remain the same. The climate is changing at an ever faster rate, so we have less and less time to stop these changes. In 2022, the importance of energy transition and moving away from fossil fuels has increased. These issues are related to global warming and the energy security of Poland and Europe. Under the challenging conditions, as a socially engaged bank that consistently pursues its ESG strategy, we will continue to actively support our customers, business partners and employees.

As part of our Responsible Banking agenda, we have implemented an internal Sustainable Finance Classification System (SFCS). It allows us to classify, track and report on green financing. It is based on internationally recognized industry guidelines, such as the ICMA Social and Green Bond Principles, Climate Bond Standards and the EU Taxonomy. Green finance provided by Santander Group companies in Poland in 2022 in line with SFCS amounted to more than PLN 2,668 million. We have been consistently involved in large financing projects for the construction of wind and photovoltaic farms.

We also made a number of internal changes. Santander Leasing has implemented a biometric signature as the first company in the leasing industry. Electronic documents and the use of tablets instead of paper allowed us to significantly reduce the consumption of paper. This solution is already being used by more than 80 percent of Santander Leasing customers. Santander TFI offers now two sub-funds that take ESG criteria into account in their investment processes.

Our activities also address areas related to diversity, equity and inclusion (DEI). The bank was listed for the second time on the Diversity IN Check list of the most advanced employers in Poland in terms of managing diversity and creating inclusive workplaces. Ten good practices followed by the bank and the Santander Foundation were also highlighted in the „Responsible Business in Poland. Good practices” report.

We are also engaged in educational programs and projects aimed at both children and young people, as well as professionals who want to develop their competencies. Under the Santander Universidades project, together with a number of universities, we provide opportunities for free continuing education, acquiring new skills and deepening knowledge. We offer people the opportunity to learn from experienced practitioners and obtain certificates from prestigious universities. More than 95,000 individuals from Poland have already benefited from free courses and scholarships, including almost 6,000 last year. In 2023, we plan to increase our support and award 12,000 scholarships.

Our services, solutions, but also outreach activities were recognized and awarded in 2022. The prestigious international financial magazine Euromoney recognized Santander Bank Polska as the Best Bank for Corporate Responsibility in Central and Eastern Europe. The Awards for Excellence recognized the support we provided to those seeking refuge in Poland as a result of the war in Ukraine. In 2022, Santander Bank Polska won for the second time the 1st place in the Golden Bank – Best Multichannel Service Quality category of Newsweek’s Golden Banker ranking. For another year running, we also topped the Forbes ranking in the Company Friendly Bank category.

At the beginning of 2022, the Polish economy was growing at a rapid pace, fuelled by a post-Covid rebound. However, the Russian invasion of Ukraine caused a marked deterioration in the business environment. Geopolitical risks increased. International trade was disrupted. There was a strong increase in energy commodity prices, and the level of uncertainty about global economic developments rose. These factors were reflected in a gradual reduction in GDP growth in subsequent quarters of the year. The NBP reference rate reached 6.75%, the highest since 2002. The hike in the central bank’s rates was followed by an increase in interest rates on loans and deposits. As a result, the situation of the banking sector became difficult and fraught with economic, geopolitical and market challenges. Under such conditions, it is hardly possible to build sufficient equity capital to support the development of the economy and finance key projects such as those related to the energy transition.

Despite this, we have once again proven that we are a stable and high-performing bank and our business model is resilient to unforeseen events and delivers the expected results.

In 2023, business conditions should gradually improve, although they may initially remain unfavourable. There are still many challenges ahead for the Polish banking sector. But regardless of them, the Santander Bank Polska Group will continue to consistently pursue its Responsible Banking agenda with ambitious and advanced ESG projects. I am convinced that this is the only right path we want to follow while thinking about our common future.