BANK PEKAO S.A. GENERAL PICTURE.

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1 BANK PEKAO S.A. GENERAL PICTURE

2 Disclaimer This presentation (the Presentation ) has been prepared by Bank Polska Kasa Opieki Spółka Akcyjna ( Bank ) for the clients, shareholders and financial analysts. This presentation should not be treated as an offer or invitation to purchase any securities or financial instruments or as an advice or recommendation in respect to such securities or financial instruments. The presented data are only general information and does not refer to the offered by the Bank 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, risk and legal and tax consequences of the use of particular service or product. The strategy presented in this 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 entitled to the Bank. Presentation is a subject to the protection provided by the law, in particular: the Act dated on February 4th, 1994 on Copyright and Related Rights (consolidated text in Journal. Laws of 2006, No. 90, item. 631, as amended); the Act dated on July 27th, 2001 on the Databases protection(journal of Laws No. 128, item. 1402, as amended); the Act dated on April 16, 1993 on Combating Unfair Competition (consolidated text in Journal of Laws of 2003, No. 153, item 1503, as amended) and the Act dated on June 30, 2000 on Industrial Property Law (consolidated text in Journal. Laws of 2003, No. 119, item as amended). This presentation may include forward looking statements, 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 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 arises under applicable laws and regulations. Bank, nor any of its representatives shall not be responsible for any loss or damage it may arise from the use of this Presentation or of any information contained herein or otherwise arising in connection to this Presentation. This presentation is not for the distribution, in or into countries where the public dissemination of the information contained herein may be restricted or prohibited by law. 1

3 New Management Board of the Bank MICHAŁ KRUPIŃSKI Vice President of Bank Pekao S.A. s Management Board coordinating the work of Management Board Vice Presidents ROKSANA CIURYSEK-GEDIR* Private Banking ANDRZEJ KOPYRSKI CIB TOMASZ KUBIAK CFO MICHAŁ PIOTR LEHMANN Support functions, Logistics Division MAREK LUSZTYN CRO TOMASZ STYCZYŃSKI SME MAREK TOMCZUK Retail Banking o Board Members with average 15-year experience in financial sector o Half of new Management comes from Pekao and half from other financial institutions o Upgraded role of SME segment: new Division and new Vice President in charge of this market segment * - from January 1st,

4 Agenda 1. General picture Outlook 3. Appendix 3

5 Bank Pekao snapshot Key financial and non-financial highlights as at June 2017 ( ) Assets 40.3bl Loans Retail PLN loans Corporate loans Public sector loans 31.0bl 13.0bl 13.2bl 3.3bl Retail clients Corporate & SME clients Mobile banking customers Internet banking customers No of branches No of ATM s New payment cards 5.0m 0.3m 1.7m 3.5m th 6M Deposits 32.1bl Retail deposits 17.3bl Corporate deposits 14.7bl Pekao share in Polish banking sector Total revenues Operating profit Net profit 12.5% 12.5% 15.7% Banking leader in corporate loans and deposits and loans for public sector. 4 NOTE: Financial data as at June 30th, 2017 NOTE: Corporate loans and deposits excl. respectavly, BSB and reverse reo transactions and SBB and repo transactions 1EUR = PLN

6 Solid Pekao fundamentals CT 1 ROE 18,0% 16,5% 8,9% 7,1% Pekao Sector Pekao Sector L/D RATIO C/I RATIO 90,9% 93,9% 56,3% 56,4% Pekao Sector Pekao Sector ROA CoR 0,59% 1,2% 0,40% 0,8% Pekao Sector Pekao Sector 5 Data as of June 30th, 2017 or 1H2017 Source: NBP, KNF reports, Pekao non consolidated data (CT1 and CoR consolidated) C/I ratio for commercial banks incl. banking tax

7 Market share - Retail Market share Retail lending Retail deposits 9.5% 10.2% PLN MORTGAGES (%) CONSUMER LOANS - PEX(%) 16,3% pp pp 17,9% 8,4% 9,7% Dec 10 Jun 17 Dec 10 Jun 17 Source: Calculation based on adjusted NBP reporting; Dec 2010 Jun

8 Market share - Corporate Market share Market leader in corporate lending Market leader in corporate deposits Project finance & Leveraged finance Debt capital market Corporate bonds Leader in cash management service Trade finance market 13% 13% 30% 16% 26% 17% 17% NOTE: Market share as at June 30th,

9 Market position - Bank Pekao vs peers Deposits Loans PKO 49,0 PKO 48,4 Pekao 31,8 Pekao 28,8 BZWBK 25,8 BZWBK 24,9 ING 23,1 ING 20,6 MBank 20,9 MBank 19,7 Millennium 13,5 BGŻBNPP 13,3 BGŻBNPP 13,0 Alior 11,6 Alior 12,2 Millennium 11,2 GetinNoble 12,2 GetinNoble 10,6 Note: Consolidated data in bln EUR as at June 30th,

10 Bank Pekao history 1929 Creation of the Bank 1998 Merger with 3 regional banks 1998 IPO Pekao listed on WSE 1999 UniCredit as a strategic investor 2007 BPH spin-off 2012 Rebranding 2017 Acquisition by PZU and PFR 9

11 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 10

12 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 11

13 Agenda 1. General picture Outlook 3. Appendix 12

14 Polish economy outlook F GDP, % y/y 2,7 4,1 Consumption, % y/y 3,8 4,3 Investments, % y/y -7,9 4,0 Unemployment, % eop 8,3 6,9 CPI, % avg -0,6 1,8 3M Wibor, % avg 1,73 1,73 Reference rate, % eop 1,5 1,5 Exchange rate EUR, eop 4,42 4,15 Exchange rate USD, eop 4,18 3,46 Public sector balance, % GDP -2,4-2,6 Note: Internal macroeconomic scenario 13

15 Polish banking sector outlook F (2) Loans, % y/y 4,9 4,9 Retail, % y/y 5,2 4,4 Mortgage loans PLN 10,5 10,7 Consumer loans (1) 6,9 6,0 Corporate, % y/y 5,5 6,2 SME loans 4,8 6,7 Savings (3), % y/y 9,3 5,9 Deposits, % y/y 9,2 5,8 Retail, % y/y 9,5 5,1 Corporate, % y/y 7,9 1,9 Mutual Funds (4), % y/y 10,5 7,0 14 (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

16 Agenda 1. General picture Outlook 3. Appendix 15

17 Selected data Bank Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Jun 17 Oaatlets ATM's Employees No of PLN current accounts (ths)* No of mortgage loan accounts (ths)** No of clients holding a consumer loan accounts (ths)*** Number of individuals with an access to electronic banking Pekao24 (ths) Number of individuals with an access to mobile banking (ths) Number of business clients (SME) with an access to electronic banking systems (ths) Group Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Jun 17 Employees**** Outlets**** ATM's**** Number of MF accounts (ths)***** Number of Brokerage accounts (ths)****** (*) Number of accounts including pre-paid card accounts 16 (**) 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)

18 Consolidated income statement (1/2) in PLN mln PLN H 2017 Share in income or cost (%) Net interest income (1) % Net fee and commission % Operating income % Operating costs (2) % Payroll costs % Other administrative expenses % Depreciation % OPERATING PROFIT Provisions Guarantee funds charges PROFIT BEFORE INCOME TAX Income tax GROUP NET INCOME (3) Cost/Income Ratio (%) (4) 49,2% 45,9% 44,4% 44,6% 44,7% 45,6% 43,7% 45,4% Cost of Risk (%) 0,68% 0,63% 0,72% 0,71% 0,56% 0,49% 0,45% 0,39% NIM (%) 3,5% 3,7% 3,7% 3,4% 3,2% 2,8% 2,8% 2,77% (1) NII and dividends and other income from equity investments 17 (2) Costs excl. guarantee funds charges (3) Net profit attributable to equity holders of the Bank (4) Operating cost excluding guarantee funds charges

19 Consolidated income statement (2/2) in EUR mln EUR H 2017 Share in income or cost (%) Net interest income (1) % Net fee and commission % Operating income % Operating costs (2) % Payroll costs % Other administrative expenses % Depreciation % OPERATING PROFIT Provisions Guarantee funds charges PROFIT BEFORE INCOME TAX Income tax GROUP NET INCOME (3) Cost/Income Ratio (%) (4) 49,2% 45,9% 44,4% 44,6% 44,7% 45,6% 43,7% 45,4% Cost of Risk (%) 0,68% 0,63% 0,72% 0,71% 0,56% 0,49% 0,45% 0,39% NIM (%) 3,5% 3,7% 3,7% 3,4% 3,2% 2,8% 2,8% 2,77% (1) NII and dividends and other income from equity investments 18 (2) Costs excl. guarantee funds charges (3) Net profit attributable to equity holders of the Bank (4) Operating cost excluding guarantee funds charges

20 The structure of the Group net profit (1/2) in PLN mln PLN cumulative Share in entitiy % M 2017 Bank Pekao S.A. Banking - Poland Entities - consolidated under full method of which: (*) Pekao Leasing Sp. z o.o. Leasing 100% 4,8 42,0 41,9 40,6 54,6 53,9 40,0 17,2 Centralny Dom Maklerski Pekao S.A. Brokerage 100% 51,5 46,0 30,5 39,3 42,4 44,2 25,3 17,4 Pekao Bank Hipoteczny S.A. Mortgage Bank 100% 17,5 17,3 15,7 12,7 10,0 5,0 8,7 2,6 Pekao Pioneer PTE S.A. Pension Fund 65% 12,4 12,0 11,4 13,8 15,4 2,9 1,4 0,6 Pekao Faktoring Sp. z o.o. Factoring 100% 11,3 10,7 10,2 10,1 8,2 9,3 9,7 5,4 Pekao Investment Banking S.A. Brokerage 100% , ,8 24,4 2,1 Centrum Bankowości Bezpośredniej Sp. z o.o. Call Centre 100% 1,1 3,7 3,2 3,9 2,4 2,7 3,4 1,7 Pekao Financial Services Sp. z o.o. Servicing MF/PF 100% 9,8 7,4 3,9 6,6 7,2 8,0 7,5 3,0 Centrum Kart S.A. Cards 100% 4,6 3,7 2,5 1,7 2,6 0,6 0,3 0,3 Pekao Fundusz Kapitałowy Sp. z o.o. in liquidation Business consulting 100% 2,8 1,3 1,2 0,6 0,3 0,2 0,3 0,2 Pekao Property S.A. Real estate development 100% ,6-0,4-0,9-0,2-0,3 0,2 Entities - valued under the equity method Pioneer Pekao Investment Management S.A. Mutual Funds 49% 57,1 62,3 45,2 48,3 51,8 44,6 36,4 19,1 Krajowa Izba Rozliczeniowa S.A. Clearing Services 34% 8,4 10,9 7,4 10,0 10,0 5, Dom Inwestycyjny Xelion Sp. z o.o. Financial Advisory 50% 0,8 0,7 0,7 1,1 1,5 2,0 2,2 1,4 Exclusions and consolidation adjustments Group Net Profit (**) (*) Entities in liquidation, sold or indirect ownership not presented (**) Group net profit attributable to equity holders of the Bank (reported) NOTE: Data as reported

21 The structure of the Group net profit (2/2) in EUR mln EUR cumulative Share in entitiy % M 2017 Bank Pekao S.A. Banking - Poland Entities - consolidated under full method of which: (*) Pekao Leasing Sp. z o.o. Leasing 100% 1,1 9,9 9,8 9,5 12,8 12,6 9,0 4,1 Centralny Dom Maklerski Pekao S.A. Brokerage 100% 12,1 10,8 7,2 9,2 9,9 10,4 5,7 4,1 Pekao Bank Hipoteczny S.A. Mortgage Bank 100% 4,1 4,1 3,7 3,0 2,3 1,2 2,0 0,6 Pekao Pioneer PTE S.A. Pension Fund 65% 2,9 2,8 2,7 3,2 3,6 0,7 0,3 0,1 Pekao Faktoring Sp. z o.o. Factoring 100% 2,7 2,5 2,4 2,4 1,9 2,2 2,2 1,3 Pekao Investment Banking S.A. Brokerage 100% , ,6 5,5 0,5 Centrum Bankowości Bezpośredniej Sp. z o.o. Call Centre 100% 0,3 0,9 0,8 0,9 0,6 0,6 0,8 0,4 Pekao Financial Services Sp. z o.o. Servicing MF/PF 100% 2,3 1,7 0,9 1,5 1,7 1,9 1,7 0,7 Centrum Kart S.A. Cards 100% 1,1 0,9 0,6 0,4 0,6 0,1 0,1 0,1 Pekao Fundusz Kapitałowy Sp. z o.o. in liquidation Business consulting 100% 0,7 0,3 0,3 0,1 0,1 0,0 0,1 0,0 Pekao Property S.A. Real estate development 100% ,4-0,1-0,2 0,0-0,1 0,0 Entities - valued under the equity method Pioneer Pekao Investment Management S.A. Mutual Funds 49% 13,4 14,6 10,6 11,3 12,2 10,5 8,2 4,5 Krajowa Izba Rozliczeniowa S.A. Clearing Services 34% 2,0 2,6 1,7 2,3 2,3 1,3 #ARG! #ARG! Dom Inwestycyjny Xelion Sp. z o.o. Financial Advisory 50% 0,2 0,2 0,2 0,3 0,4 0,5 0,5 0,3 Exclusions and consolidation adjustments Group Net Profit (**) (*) Entities in liquidation, sold or indirect ownership not presented (**) Group net profit attributable to equity holders of the Bank (reported)

22 Consolidated balance sheet (1/2) in PLN mln PLN Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Jun 17 Share in balance sheet (%) Cash and amounts due from Central Bank % Loans and advances to banks % Loans and advances to customers* % Investment securities % Assets held for sale % Intangible assets % Tangible fixed assets % TOTAL ASSETS % Amounts due to the Central Bank % Amounts due to other banks % Financial liabilities held for trading % Amounts due to customers % Debt securities issued % Total liabilities % Total Shareholders' equity % (*) Including loans and advances from customers and receivables from finance leases 21

23 Consolidated balance sheet (2/2) in EUR mln EUR Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Jun 17 Share in balance sheet (%) Cash and amounts due from Central Bank % Loans and advances to banks % Loans and advances to customers* % Investment securities % Assets held for sale % Intangible assets % Tangible fixed assets % TOTAL ASSETS % Amounts due to the Central Bank % Amounts due to other banks % Financial liabilities held for trading % Amounts due to customers % Debt securities issued % Total liabilities % Total Shareholders' equity % (*) Including loans and advances from customers and receivables from finance leases 22

24 Bank Pekao on the Warsaw Stock Exchange Bank Pekao S.A. on the Warsaw Stock Exchange (WSE) Bank Pekao SA is listed on the Warsaw Stock Exchange and London Stock Exchange (GDRs program) The third largest bank on WSE in terms of market capitalisation (7.8 bln EUR) The biggest bank in terms of value of turnovers and share in turnover among banks WIGBanki, WIG 20, WIG 30, MSCI, CEERIUS Sustainability Index, RESPECT Index Note: Data as at 30 th of June