Current reports

Current report no. 7/2009 - Information on ratings

Legal basis: § 5 section 1 item 26 of the Ordinance of the Minister of Finance on current and periodical information provided by issuers of securities dated 19 October 2005

Bank Handlowy w Warszawie S.A. (hereinafter referred to as the "Bank") announces that on 3 March 2009 Moody's Investors Service Ltd (hereinafter referred to as “Moody’s”) downgraded local and foreign currency deposit ratings of the Bank to A3 from A2 on rating under review for possible downgrade. The short-term deposit ratings were downgraded to P-2 from P-1. Bank Financial Strength Rating (BFSR) of C- was not affected and remains on review for possible downgrade.

The rating action on the Bank follows Moody's rating actions taken on parent Citigroup and Citibank N.A. on 27 February.

As noted in Moody's research, the Bank’s deposit rating benefits from Moody's assessment of parental support from Citibank Overseas Investment Corporation (hereinafter referred to as the “Group”), which currently holds 75% of the Bank's share capital. According to Moody’s the support probability from the Group remains high and the brand association is still valuable. Moody’s considers that the dependence on the Group is relatively low given that the Bank remains a net lender to the interbank market and its funding is principally domestic driven.

The Bank's BFSR of C- remains on review for possible downgrade which reflects the worsening in the Bank's operating environment, potential deterioration in asset quality and lower capacity for revenue generation. In addition, the level of internal capital creation will be assessed in light of the potential payment of dividends to the shareholders.