Notes to the consolidated financial statements

Description of the major disputes entered into by the Group

In 2001, the President of the Office of Competition and Consumer Protection (“OCCP President”) initiated anti-monopoly proceedings against card associations (Visa, Europay) and banks (issuers of Visa and Europay/Eurocard/Mastercard cards) concerning anti-competitive practices in the Polish payment card market, which consisted, allegedly, in common determination of the interchange fee for transactions made with Visa and Europay/Eurocard/Mastercard cards.
On 29 December 2006, OCCP President decided that practices consisting in the banks’ common determination of the interchange fee reduced competition in the market of acquiring services relating to payment of consumers’ liabilities to merchants, arising from payments for goods and services purchased by consumers with the use of payment cards in Poland, and ordered their discontinuation, imposing, at the same time, financial penalties on the banks, including the Bank, equal to PLN 2 895 thousand (participating only in the VISA system) (OCCP President’s decision No. DAR 15/2006). The Bank recognized a provision for the full amount of the aforesaid penalty.
An appeal against the abovementioned decision was filed with the Court of Competition and Consumer Protection (“CCCP”) by the Bank and other parties to the proceedings. As a result, in its judgment of 12 November 2008 CCCP reversed the decision concluding that no anti-competitive practices had been followed by the banks in the aforesaid case. Following an appeal filed by OCCP President, the Court of Appeals reversed the judgment in whole on 22 April 2010 and remanded the case for further proceedings at CCCP.
In its judgment of 21 November 2013, CCCP:

• reversed the decision appealed against in respect of the amount of financial penalties imposed on the banks specified in the judgment;
• dismissed the appeals in the remaining scope;
• cancelled the costs of the proceedings.

On 3 February 2014, the Bank appealed against the judgment with respect to dismissal of the appeal. On 12 February 2014, OCCP President filed an appeal against the judgment with respect to the penalties and costs of the proceedings. Considering the appeals filed by OCCP President and some banks, the judgment is not final.
Having considered the assessment of the probability that the lower penalty imposed on the Bank would not be changed and having analyzed the position of OCCP President and CCCP on determination of the amount of the penalties levied, along with the scenarios concerning further course of the proceedings, the Bank estimated the provision for the potential financial penalty assuming that the judgment of the Court of Appeals would be favorable for OCCP President, in the amount of PLN 1 043 thousand as at 31 December 2014.

Key items affecting the provision for retirement and disability benefits
As the Bank estimates its provisions for retirement and disability benefits using actuarial methods, it is exposed to the actuarial risk, including mainly the interest rate, longevity and compensation risk.