39. Subordinated liabilities
Accounting policies
Subordinated liabilities are measured at amortized cost using the effective interest rate method.
2018
Financial information
| Nominal amount | Interest rate | Currency | Period | Special terms | Balance in PLN | ||
| 31.12.2018 | 31.12.2017 | ||||||
| Subordinated bonds | 1 700 | 3,34 | PLN | 28.08.2017 – 28.08.2027 | right to early redemption within 5 years from the issue date | 1 720 | 1 720 |
| Subordinated bonds | 1 000 | 3,29 | PLN | 05.03.2018 -06.03.2028 | right to early redemption within 5 years from the issue date | 1 011 | – |
| Total | 2 731 | 1 720 | |||||
The subordinated bonds were designated on the approval of the Polish Financial Supervision Authority for increasing the Group’s supplementary funds
On 28 February 2018 the Group placed an issue of subordinated bonds with a total nominal value of PLN 1 000 million. The nominal value of one bond was PLN 500 000, and the issue price of one bond was equal to its nominal value. The bonds bear interest in semi-annual interest periods, and interest on the bonds is assessed on the nominal value at a variable interest rate of WIBOR 6M increased by a margin of 150 pb. over the entire issue period. On 8 March 2018 the Polish Financial Supervision Authority 2018 gave its approval to designate the proceeds from the issue of subordinated loans to increase the Bank’s Tier 2 capital.