Approval from the Supervisory Board and Management Board of BRE Bank for the acquisition of shares in BRE Bank Hipoteczny

Approval from the Supervisory Board and Management Board of BRE Bank for the acquisition of shares in BRE Bank Hipoteczny

The Management Board of BRE Bank SA informs that on 14 December 2005, the Supervisory Board and Management Board of BRE Bank SA adopted resolutions permitting the acquisition of 100% of shares in BRE Bank Hipoteczny SA (“BBH”) from Atlas Vermögensverwaltung GmbH, subsidiary company of Commerzbank AG, for the price of PLN 174,540,000.

The agreement on the acquisition of 100% of the shares in BBH should be concluded by the end of 2005, whilst the actual acquisition of the shares in BBH by BRE Bank SA should occur in January 2006.

As a result of this transaction, BRE Bank’s position as a direct shareholder in BBH will strengthen the synergies between both institutions, involving the winning of new customers for BBH via BRE Bank’s corporate banking sales network and an expansion of the BRE Bank Group products range.

As of the end of 2004, the BBH share in credit issued by mortgage banks in Poland is 58.5%, including a 75% share in credits for financing commercial real estate and an 88% share in credits for financing the operations of developer firms.

BBH closed the first half of 2005 with a gross profit of PLN 12 million. At the end of June 2005, the Bank’s total assets were PLN 2 billion, and its total credits portfolio (all signed agreements for credits – paid and unpaid) was PLN 2.4 billion.

BBH is a leader in the issuance of covered bonds. By 30.06.2005, it had issued covered bonds at total value of about PLN 982 million. The Bank’s current share in the market for these instruments is 77%.

The estimated decrease in BRE Bank’s non-consolidated and consolidated solvency ratio as a result of the acquisition of the BBH shares will be about 1 percentage point.

The Management Board of BRE Bank considers the acquisition of the BBH shares as a strategic and long-term investment.