FINANCIAL RESULTS FOR NINE MONTHS 2017

Transcription

1 FINANCIAL RESULTS FOR NINE MONTHS 2017 Warsaw,

2 Disclaimer This presentation (the Presentation ) has been prepared by Bank Polska Kasa Opieki Spółka Akcyjna ( Bank ) for the clients, shareholders and financial analysts. The Presentation should not be treated as an offer or invitation to purchase any securities or financial instruments or as advice or recommendation in respect to such securities or financial instruments. The presented data are only general information and does not refer to an offer by the Bank for products or services. In order to take advantage of the services and products of the Bank, one should be thoroughly familiar with the characteristics of the particular service or product, its rules, risks and legal and tax consequences of the use of particular services or products. The strategy presented in the Presentation contains goals which are the ambition of the Management Board and do not constitute any financial results forecast. Rights for the Presentation as a whole are reserved to the Bank. The Presentation is subject to the protection provided by law, in particular: the Act dated 4 February 1994 on Copyright and Related Rights (consolidated text in Journal. Laws of 2006, No. 90, item. 631, as amended); the Act dated 27 July 2001 on the protection of Databases (Journal of Laws No. 128, item. 1402, as amended); the Act dated 16 April 1993 on Combating Unfair Competition (consolidated text in Journal of Laws of 2003, No. 153, item 1503, as amended) and the Act dated 30 June 2000 on Industrial Property Law (consolidated text in Journal. Laws of 2003, No. 119, item. 1117, as amended). The Presentation may include forward looking statements, the Bank s outlook for the future, future plans and strategies or anticipated events that are not historical facts. Since these statements are based on assumptions, expectations, projections and provisional data about future events, the content is inherently uncertain. Factors that could cause or contribute to differences in current expectations include, but are not limited to: (i) general economic conditions, among which the economic conditions of the business areas and the markets in which the Bank and its subsidiaries operate, (ii) the performance of financial markets (iii) changes in laws or regulations and (iv) general competitive conditions locally, regionally, nationally and/or internationally. The Bank does not undertake to publish any updates, modifications or revisions of the information, data or statements contained herein should there be any change in the strategy or intentions of the Bank, or should facts or events occur that affect the Bank s strategy or intentions, unless such reporting obligations arise under applicable laws and regulations. Neither the Bank, nor any of its representatives shall be responsible for any loss or damage that may arise from the use of the Presentation or of any information contained herein or otherwise arising in connection to this Presentation. This presentation is not for distribution in or into countries where the public dissemination of the information contained herein may be restricted or prohibited by law. 1

3 Agenda 1. Nine months of 2017 highlights 2. Detailed financial data for the nine months of Business development 4. Summary 5. Appendix 2

4 Executive summary Continuation of growth Net profit after 9 months at PLN 1 421mln, + 6.2% on comparable terms Continuation of double digit growth of key retail volumes Effective costs and risk management with C/I at 45.2% and CoR 0.42% Success of first issue of subordinated bonds 3

5 Summary of nine months of 2017 results Net profit r/rmln Growth y/y +6.2%* r/r ROE* 8.7% 0.8 pp C/I* 45.2% -1.4 pp Key retail loans 57 bn +13.1% Retail deposits 74 bn +10.0% Record high level new key retail loans 13 bn +29.0% 4 * - on comparable basis

6 Agenda 1. Nine months of 2017 highlights 2. Detailed financial data for the nine months of Business development 4. Summary 5. Appendix 5

7 Net profit PLN mln +6.2% +0.2% +0.2% Comparable Reported M 16 9M 17 Incomparable items (VISA, NPL, BGF, banking tax, deferred tax) 3Q 16 2Q 17 3Q 17 Nine months net profit at PLN mln, +6.2% y/y on comparable terms Comparable ROE at 8.7%, achieved with Core Tier I at 16.5% 6 - Results comparable (with exclusion of the VISA transaction impact of PLN 213 million, and disposal of the NPL portfolio of PLN 121 million, deferred tax of PLN 30 million and including the additional month of PLN 41 million banking tax on year 2016 results and with the exclusion of 1/4 of the fee to the compulsory bank restructuring fund of PLN 45 million affecting the year 2017 results)

8 Gross operating profit Operating income (PLN mln) +3.0% Gross operating profit (PLN mln) % +2.8% +5.7% % +3.6% M 16 9M 17 3Q 16 2Q 17 3Q Operating costs (PLN mln) -0.1% 9M 16 9M 17 3Q 16 2Q 17 3Q % +1.8% M 16 9M 17 3Q 16 2Q 17 3Q 17 Nine months gross operating profit at PLN mln, +5.7% r/r on comparable terms, thanks to income growth by +3.0% y/y and cost control continuation C/I 45.2% 7 - Comparable dynamic (excluding impact of PLN 263 mln VISA transaction and PLN 142 mln NPL sale) Incomparable items (VISA, NPL disposal)

9 Operating income PLN mln % % +2.8% % % M 16 9M 17 3Q 16 2Q 17 3Q 17 Core income Other Incomparable items (VISA, NPLs disposal) Core income growth in last three quarters by 1.8% y/y Total operating income growth by +3.0% y/y on comparable terms 8 - Comparable dynamics (with the exclusion of the impact of VISA transactions of PLN 263 mln and disposal of the NPL portfolio of PLN 150 mln)

10 Net interest income and NIM Net interest income (PLN mln) +4.1% +3.1% +1.4% M 16 9M 17 3Q 16 2Q 17 3Q 17 NIM 2,78% 2,78% 2,81% 2,78% 2,79% 9M 16 9M 17 3Q 16 2Q 17 3Q 17 Net interest income for nine months at PLN mln, +4.1% y/y, thanks to the growth of volumes Stable net interest margin y/y, thanks to improvement of assets mix, fully offsetting the effect of dividend payment and the expiration of high margin bonds in the bank's portfolio 9

11 Loans Retail loans (PLN mln) Corporate loans* (PLN mln) +13.1% +4.9% +3.2% +3.8% Sep 16 Jun 17 Sep 17 Sep 16 Jun 17 Sep 17 Key retail loans Other retail loans Corporates Public sector Sound growth of key retail loans +13.1% y/y with acceleration in the third quarter Corporate loans +4.9% y/y with visible acceleration in the third quarter to +3.8% q/q 10 (*) excl. BSB and reverse repo transactions

12 Savings Retail savings (PLN mln) Corporate deposits* (PLN mln) +10.0% +1.4% +4.5% +1.7% Sep 16 Jun 17 Sep 17 Retail deposits Mutual funds Sep 16 Jun 17 Sep 17 Double digit growth of retail deposits +10.0% y/y 11 (*) excl. BSB and repo transactions

13 Net fees and commissions PLN mln -2.3% % -0.4% M 16 9M 17 3Q 16 2Q 17 3Q 17 Other Lending Capital markets FX commercial fees Cards Nine months net fees and commissions at PLN mln, -2.3% y/y, reflecting lower credit activity and continued migration of customers to the digital channels Stabilization of net fee and commission income in Q3 q/q 12

14 Operating costs PLN mln Costs -0.1% % +1.8% M 16 9M 17 3Q 16 2Q 17 3Q 17 BGF + banking tax Cost incl. BGF, banking tax Personnel costs Non-personnel costs Depreciation Nine months operating costs at PLN mln, -0.1% y/y on comparable basis Cost/Income at 45.2%, pp y/y on comparable basis 13 - Comparable dynamic

15 Assets quality Loans (PLN mln) 6.39% 5.89% 6.03% Cost of risk Sep 16 Jun 17 Sep 17 Performing Non-performing NPL 0,47% 0,42% 0,48% 0,39% 0,46% Provision coverage ratio 9M 16 9M 17 3Q 16 2Q 17 3Q 17 74,3% 75,4% 72,1% Sep 16 Jun 17 Sep 17 Cost of risk after nine months at 0.42%. Non-performing loans ratio at 6.0%, provision coverage ration 72.1% 14 Note: Loans excl. BSB and reverse repo transactions

16 Capital adequacy TCR 18,0% -0,5pp -1,0pp +1,0pp 17,5% 16,5% 16,5% CET1 June 2017 Volumes CCF* September 2017 Subordinated bonds September 2017 proforma TCR decrease due to growth of the business and the new guidelines of KNF for CCF* is almost fully offset by the issuance of subordinated debt First issue of subordinated debt in amount of PLN 1.25 bn for 10 years at record price (6M WIBOR % margin) 15 * CCF - credit conversion factor for off-balance sheet exposure

17 Agenda 1. Nine months of 2017 highlights 2. Detailed financial data for the nine months of Business development 4. Summary 5. Appendix 16

18 PeoPay unique mobile banking application New application for payments and banking operations Fingerprint log in and authorization validation of payments and transactions Payments abroad directly in foreign currency Direct payments in m-commerce Scanning account numbers from invoices After three weeks: mobile banking users + 70% financial operations + 25% payments 17

19 Electronic banking ONLINE ACCESS TO PZU S.A. INSURANCE a joint initiative of Pekao and PZU, providing easy and convenient access to a broad range of insurance services for Customers access to new functionalities after log in on Pekao24, m.pekao24.pl and PeoPay NEW SIMPLIFIED CREDIT PROCESS for customers without "click" offer due to insufficient information short credit application form automatic decision in 30 seconds no need to visit the branch available 24/7 Customers with access to online banking (in ths.) % Sep 16 Jun 17 Sep 17 Customers with access to mobile banking (in ths.) +31% 500+ FOR NEW BENEFIT PERIOD possibility to submit applications for a new period in the Pekao24 more than 72 ths. submitted applications 12% market share Sep 16 Jun 17 Sep 17 18

20 Retail banking New key retail loans (PLN mln) +29.0% +14.1% M 16 9M 17 3Q 16 3Q 17 Record high level of PLN 13.4 bn in new key retail loans PLN 6.9 bn of new mortgage loans 19 Consumer loans Mortgages in PLN

21 Key lending products PLN mln PLN mortgage loans volumes Consumer loans volumes +12.1% +17.7% Sep 16 Sep 17 Sep 16 Sep 17 Market share 17.68% 17.88% 7.30% 7.76% Double digit growth y/y both, PLN mortgage loans volumes and consumer loans 20

22 Strong support of Polish economy growth Dynamic increase of investment financing in 3Q2017 incl. + PLN 2 bln in key corporate segments PLN mln Investment loans * Leasing & Factoring ** +16.1% +19.4% Sep 16 Sep 17 Sep 16 Sep 17 Solid increase (> PLN 2 bn q/q) of financing for Mid and Large-Sized Corporate Clients 16.1% increase y/y of investment loans in the key segments Financing customised to our Clients needs financing through leasing and factoring higher by 19.4% y/y 21 * Total financing includes loans, bonds, leasing and factoring concerning Clients from Mid and Large Corporate Client segments (annual revenues above 20 mln PLN) ** It refers to Clients from Mid and Large Corporate Client segments

23 Leadership position on the capital market long-term bonds issues Arrangers of corporate bonds issues (mln PLN) Market share in new bonds issues (y/y) position in Arrangers of municipal bonds issues (mln PLN) position in Pekao Bank 2 Bank 3 Bank 4 Bank 5 Bank 6 22% +9 pp 31% 9M 16 9M 17 Market share in new bonds issues (y/y) +39 pp Long-term bonds issues arranged in 2017 for total amount of PLN 2.8 bn market leader > 30% market share Strengthened business position and activity in the 3 quarter of 2017 volumes increased by about PLN 1 bn q/q 66 54% % Pekao Bank 2 Bank 3 Bank 4 Bank 5 Bank 6 9M 16 9M 17 Source: Fitch Polska 22

24 Leadership position in investment banking services in Poland selected transactions Investment banking bonds issues, structured and leveraged finance, Pekao Investment Banking 100 mln EUR Bonds issue Arranger, Dealer, Agent 1 bln PLN Financing increase MLA 300 mln PLN Bonds issue Dealer, Payment Agent, Depository 174 mln PLN IPO Joint Bookrunner 117 mln PLN Bonds issue program Arranger, Agent, Guarantor Undisclosed amount Issue of bank securities Dealer, Depository Strategic transactions of corporate financing + comprehensive business service 160 mln EUR 380 mln PLN Syndicated loan Arranger, Original Lender, Agent, Collateral Agent Undisclosed amount Loans leasing limit Group Leading Bank 180 mln PLN Current and long-term financing Major Servicing Bank 264 mln EUR Total financing Loan Agent, Arranger of Financing 170 mln PLN 40 mln USD Credit limits 150 mln PLN Line for guarantees Servicing and Financing Bank Undisclosed amount Total financing Sole Lender 23

25 Agenda 1. Nine months of 2017 highlights 2. Detailed financial data for the nine months of Business development 4. Summary 5. Appendix 24

26 Summary ROA* ROE* Net interest margin 1,12% 1,15% 8,0% 8,7% 2,78% 2,78% 9M 16 9M 17 9M 16 9M 17 9M 16 9M 17 Cost / Income* Cost of risk CET1 46,6% 45,2% 0,47% 0,42% 18,1% 16,5% 9M 16 9M 17 9M 16 9M 17 9M 16 9M 17 * - in comparable basis 25

27 Agenda 1. Nine months of 2017 highlights 2. Detailed financial data for the nine months of Business development 4. Summary 5. Appendix 26

28 Polish economy outlook F GDP, % y/y 2,9 4,3 Consumption, % y/y 3,9 4,7 Investments, % y/y -7,9 4,4 Unemployment, % eop 8,2 6,6 CPI, % avg -0,6 1,9 3M Wibor, % avg 1,73 1,75 Reference rate, % eop 1,50 1,50 Exchange rate EUR, eop 4,42 4,15 Exchange rate USD, eop 4,18 3,61 Public sector balance, % GDP -2,5-2,5 Note: Internal macroeconomic scenario 27

29 Polish banking sector outlook F (2) Loans, % y/y 4,9 5,0 Retail, % y/y 5,2 4,3 Mortgage loans PLN 10,5 10,5 Consumer loans (1) 6,8 6,0 Corporate, % y/y 5,5 6,4 SME loans 4,8 6,7 Savings (3),% y/y 9,3 5,5 Deposits, % y/y 9,2 5,0 Retail, % y/y 9,5 4,9 Corporate, % y/y 7,9 1,9 Mutual Funds (4),% y/y 10,5 9,8 28 (1) all non-mortgage retail loans (2) Internal scenario (3) deposits + assets in mutual funds dedicated to retail cliens (4) assets in mutual funds dedicated to retail clients

30 29 Polish economy trends Key parameters (1) GDP (% YoY) FIXED INVESTMENTS (% YoY) 10 1,9 1,5 7,7 7,3 4,9 3,7 6,9 6,9 8 5,5 1,9 2,7 2,1 4,2 3,6 4 4,8 4,94,8 0,9 3,3 2,3 0,1 0 0,5 5 5,3 1,8 2,6 3,1 3,33,4 3,33,8 3,3 3,6 4,6 2,9 3 2,4 2,5 4,0 3,9 4, Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q10 1Q11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q13 2Q13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q17F -9,3-9,8-4,5-6,7-9,8 5,0 5,3-0,7-4,7-2,9 0,0 0,7 0,1 2,5-0,1-3,2-4,9-2,5-3,5-0,2 0,3 5,4 7,8 10,4 9,6 6,7 6,4 4,3 4,5-0,4 0,8 5,5 13,0 14,5 12,0 9,6 9,7 9,7 12,7 19,2 15,9 24,0 22,6 GDP Pr Consumption contribution Net export contribution Investment contribution Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17F TRADE BALANCE ACCOUNT (bln EUR) PRIVATE CONSUMPTION (% YoY) -6,5-5,2-4,6-5,9-3,3-4,1-3,8-2,1-1,6-0,5-0,3 0,10,8 1,2 1,9 1,1 0,4 1,2-1,6-0,30,7-1,0-1,2-1,7 0,4-0,5-0,6-0,4 0,2 2,3 2,0 2,5 3,1 3,5 3,3 4,1 5 3,4 2,8 2, Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q10 1Q11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17F 0,8 0,2 0 0,2-0,5 0,7 0,7 2,4 2,1 2,6 3 2,2 2,533,1 4 2,6 3,6 3,2 1,7 2,7 2,6 3,1 3,7 3,6 3,3 3,2 2,9 3,4 3,4 4,14,5 4,9 4,7 4,9 4,9 5,9 6,3 6 6,4 6 5,8 8, Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17F Source: Central Statistical Office, internal macroeconomic scenario; March 2007 September 2017

31 30 Polish economy trends Key parameters (2) CORPORATE EMPLOYMENT (ths. eop) AVERAGE CORPORATE WAGES (% YoY) 6 200, , , , , , , ,00 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 2Q 17 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 3,0 2,0 3,7 3,9 3,8 2,8 3,8 2,7 2,8 2,1 2,9 3,3 3,3 4,2 4,1 3,3 3,3 4,0 3,1 3,6 3,4 3,74,4 5,4 4,3 4,1 5,3 5,06,1 4,6 4,2 2,9 4,55,4 7,2 6,3 6,0 7,8 9,010,1 10,1 11,7 12,3 10,4 Avg. Corporate Wages CPI UNEMPLOYMENT (%) RETAIL SALES (real terms, % YoY) 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q ,8 8 8,9 8,7 8,3 8,2 9,4 9,5 4,8 1,0 1,0 3,64,7 10,2 9,7 9,7 9,9 8,4 0,3 1,12,9 7,3 6,0 8,8 7,1 6,9 8,4 2,7 1,9-2,0 0,01,5 3,9 4,2 5,5 5,1 2,6 3,7 4,4 3,5 2,6 4,4 4,4 5,7 5,9 6,5 7,1 6,9 7,2 11,6 12,3 11,2 10,9 11,1 10,6 10,9 12, ,7 11,5 12,4 13,3 11,9 11,8 12,5 13,3 12,3 12,4 13,414, ,4 11,5 11,5 14,0 12,8 12,1 16,1 11,8 17,4 13, ,4 13,5 14,3 Source: Central Statistical Office, internal macroeconomic scenario; March 2007 September 2017

32 31 Polish economy trends Key parameters (3) EXCHANGE RATES INFLATION, INTEREST RATES 8 0,3-0,3-0,7-1,5-0,9-0,7-0,5-0,9-0,8-0,8 1,3 0,5 0,7 0,6 0,2 1,1 2,9 2,0 2,4 2,2 3,0 1,7 1,7 2,0 1,7 1,8 1,7 1,9 2,2 3,6 3,3 3,9 3,2 3,7 2,9 1,9 1,7 1,7 1,7 1,7 1,7 1,7 3,5 4,7 4,3 2,3 2,7 2,7 2,7 2,7 2,7 4,1 3,8 4,6 4,1 4,6 4,1 4,0 3,4 4,1 4,2 4,2 4,0 3,8 3,9 4,1 4,3 4,2 4,4 4,9 5,9 5,1 4,9 5,0 4,8 4,7 4,2 4,7 6,6 6,7 6,2 5,7 5, CPI REF. RATE 3M WIBOR 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 Source: NBP

33 32 Banking sector trends Key parameters - yoy (4) HOUSEHOLDS AND CORPORATE LENDING (% YoY) HOUSEHOLDS AND CORPORATE DEPOSITS (% YoY) Households Corporate Households Corporate 3 4Q 02 4Q 03 4Q 04 4Q 05 4Q 06 4Q 07 4Q 08 4Q 09 4Q 10 4Q 11 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 02 4Q 03 4Q 04 4Q 05 4Q 06 4Q 07 4Q 08 4Q 09 4Q 10 4Q 11 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 TOTAL SECTOR LENDING (% YoY) TOTAL SECTOR DEPOSITS (% YoY) Source: NBP; December 2002 September Q 02 4Q 03 4Q 04 4Q 05 4Q 06 4Q 07 4Q 08 4Q 09 4Q 10 4Q 11 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 02 4Q 03 4Q 04 4Q 05 4Q 06 4Q 07 4Q 08 4Q 09 4Q 10 4Q 11 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17

34 Banking sector trends Key parameters - YTD (5) HOUSEHOLDS LENDING (% YTD) HOUSEHOLDS DEPOSITS (% YTD) 17% 15% 13% 11% 9% 7% 5% 3% 1% -1% -3% -5% XII' I II III IV V VI VII VIII IX X XI XII 17% 15% 13% 11% 9% 7% 5% 3% 1% -1% -3% -5% XII' I II III IV V VI VII VIII IX X XI XII CORPORATE LENDING (% YTD) CORPORATE DEPOSITS (% YTD) 19% 17% 15% 13% 11% 9% 7% 5% 3% 1% -1% -3% -5% I II III IV V VI VII VIII IX X XI XII 15% 13% 11% 9% 7% 5% 3% 1% -1% -3% -5% -7% -9% -11% -13% XII' I II III IV V VI VII VIII IX X XI XII Source: NBP; January 2009 September

35 9,1% 10,0%11,3%13,1% 14,8% 15,8% 16,9% 17,2% 18,0% 17,8% 18,2% 17,8% 18,2% 17,8% 17,9% 17,3% 17,3% 16,1% 15,6% 14,7% 14,4% 14,2% 13,9% 12,8% 13,0% 12,3% 12,2% 12,3% 12,4% 12,2% 12,3% 11,9% 11,8% 12,0% 11,7% 1,2% 1,3% 1,4% 1,5% 1,5% 1,6%1,8% 1,9% 2,0% 2,1% 2,2% 2,3%2,5% 2,6% 2,7% 2,8% 2,9% 3,0% 3,0% 3,1% 3,1% 3,2% 3,2% 3,1% 3,4% 3,4% 3,3% 2,9% 2,9% 2,9% 2,9% 2,9% 2,9% 2,9% 2,9% 34 Banking sector trends Non-performing loans (6) HOUSEHOLDS NPL RATIO 4,5%4,9% 6,0%6,6% 6,7%7,2% 7,2%7,4% 7,2% 7,3% 7,2% 7,5% 7,3% 7,5% 7,4% 7,5% 7,2% 7,1% 7,1% 7,0% 7,0% 6,9% 6,5% 6,8% 6,6% 6,5% 6,2% 6,3% 6,2% 6,2% 6,1% 6,1% 6,2% 6,2% Mar 09 Jun 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Jun 17 Sep 17 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Jun 17 Sep 17 Total retail CORPORATE NPL RATIO Source: NBP Mortgage Cash 7,5% 9,6% 9,7% 9,9% 11,2% 12,4% 14,1% 8,7% 7,7% 7,6% 9,7% 9,8% 9,1% 13,4% 12,6% 12,3% 13,2% 12,2% 9,4% 8,4% 9,0% 9,3% 13,1% 8,8% 12,7% 8,2% 12,3% 12,7% 7,6% 7,4% 7,3% 12,7% 12,4% 12,5% 6,7% 7,2% 6,5% 11,5% 6,0% 11,4% 6,2% 11,3% 11,1% 10,7% 10,2% 9,8% 10,0% 8,3% 8,4% 10,1% 9,6% 11,5% 12,2% 12,2% 12,4% 11,5% 10,9% 10,7% 10,5% 11,1% 10,4% 11,8% 11,7% 11,3% 11,8% 11,5% 11,5% 11,4% 10,7% 11,2% 11,3% 10,9% 10,6% 9,8% 9,7% 9,6% 9,4% 9,0% 8,6% 8,2% Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Jun 17 Sep 17 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 May 16 Jun 16 Sep 16 Dec 16 Mar 17 Jun 17 Sep 17 Total corporate SME Corporate

36 35 Selected data

37 Consolidated balance sheet mln PLN Sep 16 Jun 17 Sep 17 Q/Q % Y/Y % Cash and amounts due from Central Bank % 53% Loans and advances to banks % -11% Loans and advances to customers* % 7% Investment securities % -5% Assets held for sale % 0% Intangible assets % 11% Tangible fixed assets % 0% TOTAL ASSETS ,5% 5,0% Amounts due to the Central Bank % 0% Amounts due to other banks % -21% Financial liabilities held for trading % 26% Amounts due to customers % 7% Debt securities issued % 50% Total liabilities ,3% 6,2% Total Shareholders' equity ,6% -2,1% (*) Including loans and advances from customers and receivables from finance leases 36

38 Consolidated income statement mln PLN 3Q 16 2Q 17 3Q 17 Q/Q% Y/Y% 9M M 2017 Y/Y % Net interest income (1) ,2% 3,2% ,2% Net fee and commission ,4% -2,8% ,3% Operating income ,8% 3,5% ,6% Operating costs (2) ,8% 2,7% ,4% OPERATING PROFIT ,6% 4,2% ,8% Provisions ,6% 3,4% ,6% Guarantee funds charges ,9% -65,5% ,2% Banking tax ,6% 8,3% ,3% PROFIT BEFORE INCOME TAX ,2% 10,0% ,6% Income tax ,5% 41,0% ,6% GROUP NET INCOME (3) ,2% 3,0% ,4% Cost/Income Ratio (%) 45,2% 45,3% 44,9% - 0,0-0,0 43,3% 45,2% 1,9 Cost of Risk (%) 0,48% 0,39% 0,46% 0,2-0,0 0,47% 0,42% - 0,1 ROA (%) 1,3% 1,3% 1,3% - 0,0-0,0 1,4% 1,1% - 0,3 NIM (%) 2,81% 2,78% 2,79% 0,0-0,0 2,78% 2,78% - (1) NII and dividends and other income from equity investments 37 (2) Costs excl. guarantee funds charges (3) Net profit attributable to equity holders of the Bank

39 Selected data Bank Sep 16 Jun 17 Sep 17 Q/Q % Y/Y % Outlets ,1% -2,7% ATM's ,2% 0,4% Employees ,7% -3,4% No of PLN current accounts (ths)* ,9% 2,7% No of mortgage loan accounts (ths)** ,6% 7,9% No of clients holding a consumer loan accounts (ths)*** ,9% 7,8% Number of individuals with an access to electronic banking Pekao24 (ths) ,2% 7,6% Number of individuals with an access to mobile banking (ths) ,7% 31,1% Group Sep 16 Jun 17 Sep 17 Q/Q % Y/Y % Employees**** ,7% -3,4% Outlets**** ,1% -2,7% ATM's**** ,2% 0,4% Number of MF accounts (ths)***** ,8% -4,6% Number of Brokerage accounts (ths)****** ,1% -1,6% (*) Number of accounts including pre-paid card accounts 38 (**) Retail clients accounts (***) Pożyczka Ekspresowa (Express Loan) (****) Credit Union (SKOK) Kopernik included since Dec 2014 (*****) Pioneer Pekao Investment Management S.A. (******) Including: Dom Maklerski Pekao (Dom Maklerski), subsidiarycentralny Dom Maklerski Pekao S.A. (CDM), and associated entity Dom Inwestycyjny Xelion Sp. z o.o. (Xelion)

40 Activity by segments mln PLN Retail Banking Private Banking Corporate&Investment Banking Assets&Liabilities Management & Others Group 9M 16 9M 17 Y/Y % 9M 16 9M 17 Y/Y % 9M 16 9M 17 Y/Y % 9M 16 9M 17 Y/Y % 9M 16 9M 17 Y/Y % Net interest income (1) % % % % % Non-interest income % % % % % Operating income % % % % % Operating costs (2) % % % -7,6 4,3-157% % OPERATING PROFIT % % % % % Net write-downs/provision % % % % % Guarantee funds charges % % % % % Banking tax #ARG! #ARG! #ARG! #ARG! #ARG! #ARG! #ARG! #ARG! #ARG! % % PROFIT BEFORE INCOME TAX % 18,9 24,5 30% % % ,6% (1) Total net interest income, dividends and other income from equity investments 39 (2) Operating cost excluding guarantee funds charges

41 The structure of the Group net profit mln PLN cumulative Group's share in capital % 9M 16 9M 17 Y/Y Y/Y % Bank Pekao S.A. Banking - Poland 1 825, ,5-352,6-19,3% Entities - consolidated under full method 88,1 80,5 #ARG! -9% of which: (*) Pekao Leasing Sp. z o.o. Leasing 100% 27,4 25,4-2,00-7% Centralny Dom Maklerski Pekao S.A. Brokerage 100% 18,2 26,5 8,30 46% Pekao Bank Hipoteczny S.A. Mortgage Bank 100% 6,2 3,9-2,30-37% Pekao Pioneer PTE S.A. Pension Fund 65% 0,9 1,7 0,80 89% Pekao Faktoring Sp. z o.o. Factoring 100% 6,6 8,0 1,40 21% Pekao Investment Banking S.A. Brokerage 100% 20,2 6,6-13,60-67% Centrum Bankowości Bezpośredniej Sp. z o.o. Call Centre 100% 1,8 2,4 0,60 33% Pekao Financial Services Sp. z o.o. Servicing MF/PF 100% 5,9 4,6-1,30-22% Centrum Kart S.A. Cards 100% 0,4 0,6 0,20 50% Pekao Property S.A. Real estate development 100% -0,2 0,2 0,40-200% Entities - valued under the equity method 29,6 31,7 0,5 7% Pioneer Pekao Investment Management S.A. Mutual Funds 49% 28,1 29,6 0,05 5% Dom Inwestycyjny Xelion Sp. z o.o. Financial Advisory 50% 1,5 2,1 0,40 40% Exclusions and consolidation adjustments -158,3-163,7-5,4 3% Group Net Profit (**) 1 784, ,0-363,6-20,4% 40 (*) Entities in liquidation, sold or indirect ownership not presented (**) Group net profit attributable to equity holders of the Bank (reported) NOTE: Data as reported

42 Customers financing mln PLN Sep 16 Jun 17 Sep 17 Q/Q % Y/Y % Loans* ,9% 7,4% retail % 11% corporate % 4% Non quoted securities ,1% -4,3% Other % 11% Nominal value adjustment % -4% Impairment losses % -3% Net loans and advances % 7% Securities issues by non monetary entities** Reverse repo and buy-sell-back transactions ,0% -28,8% #DZIEL/0! #DZIEL/0! TOTAL CUSTOMERS FINANCING*** % 6% (*) Including debt securities eligible for rediscounting at Central Bank, net investments in financial leases to customers 41 (**) Securities issued by non monetary entities including local governments (***) Total customers financing includes Loans and advances at nominal value, Securities issued by non monetary entities, reverse repo transactions and buy-sell-back

43 Loans exposure - sectors SECTOR DESCRIPTION Wholesale and retail trade; repair of motor vehicles and motorcycles 15,2% 15,4% Public administration and defence; compulsory social security 10,9% 10,3% Real estate activities 10,5% 12,4% Electricity, gas, steam and air conditioning supply 8,6% 7,3% Finance and Insurance activity 7,8% 4,1% Transportation and storage 7,2% 6,4% Construction 6,3% 6,8% Mining and quarrying 4,4% 3,2% Manufacture of metals, metal products and machinery 4,0% 5,0% Manufacture of beverages and food products 3,8% 4,4% Manufacture of chemicals, pharmaceuticals and refined petroleum products 2,9% 4,5% Other manufacturing 7,3% 7,6% Other sectors 11,1% 12,6% Total 100% 100% 42

44 Key lending products Stock PLN mortgage loans volumes (mln PLN) Consumer loans volumes (mln PLN) +12.1% +17.7% +2.9% +4.7% Sep 16 Dec 16 Mar 17 Jun 17 Sep 17 Sep 16 Dec 16 Mar 17 Jun 17 Sep 17 43

45 Mutual funds Mutual funds volumes (mln PLN ) +9.4% +3.2% Mutual funds - assets structure (PPIM SA) Sep 16 Jun 17 Sep 17 Third party funds distributed by the Group PPIM SA 15% 14% 71% Market share (%) 17,1% 16,3% 16,1% Equity funds Balance funds Money and bonds funds Sep 16 Jun 17 Sep 17 Note: Market share funds distributed by Pekao Group, compared with the market of retail investment funds available for individuals 44

46 Ratings of Bank Pekao S.A. FITCH RATINGS (*) PEKAO POLAND Long-term rating (IDR) A- A- Short-term rating F2 F2 Viability rating a- - Support rating 2; Credit Watch Negative (*) - Outlook Stable (*) Stable S&P GLOBAL RATINGS PEKAO POLAND Long-term rating BBB+ BBB+ Short-term rating A-2 A-2 Stand-alone bbb+ - Outlook Stable Stable MOODY'S INVESTORS SERVICE LTD PEKAO (unsolicited rating) POLAND Long-term foreign-currency deposit rating A2 A2 Short-term deposit rating Prime-1 Prime-1 BCA baa1 - Outlook Stable Stable 45 (*) On October 20, 2017, Fitch Ratings published a statement on maintaining a Long-term, Short-term, and Viability rating of Bank Pekao S.A. unchanged. At the same time, the following changes were made to the ratings as at 30 September 2017 listed in the table above: (i) Support Rating at "5", while withdrawing this rating category from the credit watch negative, (ii) Outlook Negative. The Outlook Revision for Pekao reflects Fitch's expectation that the bank's capital ratios are likely to gradually moderate. Capitalisation is, in Fitch's view, Pekao's key rating strength relative to some of its direct peers. The change of Support rating reflects the change in ownership of the Bank.

47 Pekao became part of the biggest financial group in CEE Purchase of significant stake by PZU and PFR Powszechny Zakład Ubezpieczeń S.A. 20.0% Polski Fundusz Rozwoju S.A. 12.8% Transaction value PLN 10.6 bn (PLN 123 per share) Shareholders of Bank Pekao S.A. 60,9% 6,3% 12,8% 20,0% PZU SA PFR SA UniCredit Others 46

48 Investor relations team s contact and calendar CONTACT DETAILS Q&A related to the presentation: Dariusz Choryło Executive Director ph.: dariusz.chorylo@pekao.com.pl Wioletta Reimer Director of IR Office ph.: wioletta.reimer@pekao.com.pl Dorota Faszczewska-Ward ph.: dorota.faszczewska-ward@pekao.com.pl Iwona Milewska ph.: iwona.milewska@pekao.com.pl 9 February April May July August October November 2017 FINANCIAL CALENDAR Annual Report 2016 and Webcasting Start of Blackout Period First Quarter Report and Webcasting Start of Blackout Period Semi-annual Report and Webcasting Start of Blackout Period Third Quarter Report and Webcasting Krzysztof Szlichciński ph.: krzysztof.szlichcinski@pekao.com.pl 47 Visit us at: Blackout Period two weeks period before publication of financial statements. During this period we do not organise meetings with investors and analysts