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BANK PEKAO S.A. GROUP Financial results after 2 Q 200 6

BANK PEKAO S.A. GROUP Financial results after 2 Q 200 6. Growth creating value CA IB’s Annual Emerging Europe Conference. Istanbul , 5-6 October , 2006. DISCLAIMER. Forward looking statement

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BANK PEKAO S.A. GROUP Financial results after 2 Q 200 6

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  1. BANK PEKAO S.A. GROUP Financial results after 2Q 2006 Growth creating value CA IB’s Annual Emerging Europe Conference Istanbul, 5-6October, 2006

  2. DISCLAIMER Forward looking statement This presentation contains certain forward-looking statements with respect to the financial condition, results of operations, and businesses of Bank Pekao S.A. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements and forecasts. The statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. Nothing in this announcement should be construed as a profit forecast.

  3. AGENDA • Macro scenario • Second quarter consolidated results • Integration process 3

  4. POLISH ECONOMY TRENDS GDP(%Y/Y) INVESTMENTS (% Y/Y) EXPORT (EUR bn) CONSUMPTION (% Y/Y) 4 Source: Central Statistical Office, National Bank of Poland

  5. BANKING SECTOR TRENDS DYNAMIC OF HOUSEHOLDS AND CORPORATE DEPOSITS IN THE POLISH BANKING SECTOR (% Y/Y) DYNAMIC OF HOUSEHOLDS AND CORPORATE LENDING IN THE POLISH BANKING SECTOR (% Y/Y) TOTAL SECTOR LENDING (%Y/Y) TOTAL SECTOR DEPOSITS (%Y/Y) 5 Source: National Bank of Poland

  6. AGENDA • Macro scenario • Second quarter consolidated results • Integration process 6

  7. +13.2% +6.8% +13.4% +7.9% NET INCOME UP BY 19.3% Y/Y, DRIVEN BY SOUND OPERATING INCOME GROWTH (+15.8% Y/Y), CONFIRMING CAPABILITY TO DELIVER SUSTAINABLE RESULTS. ROE IMPROVED TO 20.5% NET INCOME (PLN mil.) +19.3% ROE (%) +1.8 p.p. OPERATING INCOME (PLN mil.) +15.8% 7

  8. +1.0% +0.2% REVENUES UP BY 7.9% Y/Y, OPERATING EXPENSES UNDER CONTROL. COST/INCOME RATIO IMPROVED TO 50.4% TOTAL REVENUES (PLN mil.) +7.9% +6.9% +4.0% COST / INCOME RATIO (%) -3.4 p.p. OPERATING EXPENSES (PLN mil.) +1.1% 8

  9. +6.9% +4.0% HEALTHY STRUCTURE OF REVENUES WITH GROWTH DRIVEN BY NET FEE AND COMMISSION (+24.2%) REVENUES (PLN mil.) +7.9% 2 144 2 313 % ch 2Q 06/1Q 06 % ch 2Q 06/2Q 05 -13.6% 1103 1134 1179 +32.0% +0.2% +24.2% +1.9% +23.0% +2.1% +0.7% -2.0% 9

  10. -2.0% +0.7% NET INTEREST INCOME INCREASE BY2.1 % Y/Y DRIVEN BY FURTHER IMPROVEMENT OF ASSETS MIX. NIM ALMOST STABLEAT 4.1% NET INTEREST INCOME (PLN mil.) +2.1% NET INTEREST MARGIN* 10 *excluding sell buy back and buy sell back

  11. TOTAL SAVINGS UP BY 12% Y/Y, WITH CONTRIBUTION OF BOTH RETAIL AND CORPORATE CUSTOMERS SAVINGS (PLN mil.) +12.0% +4.0% % ch JUN06/JUN05 % ch JUN06/DEC05 60 538 65 251 67 830 +31.3% +7.7% +5.1% +23.2% -6.1% +0.2% 44 036 45 132 46 164 +4.8% +2.3% - savings of retail customers 11 * total PPIM mutual funds, ** Bank only

  12. RESILIENT MUTUAL FUNDS, +5.1% YTD DESPITE DIFFICULT MARKET IN Q2. MARKET SHARE STARTED TO STABILISE. FURTHER IMPROVEMENT IN ASSETS MIX +23.2% +5.1% 2Q 2006 MUTUAL FUNDS ASSETS STRUCTURE* MUTUAL FUNDS – VOLUMES (PLN mil.) 33.7% 51.3% 15.0% STRUCTURE OF MF SOLD BY PEKAO (%) MARKET SHARE Bonds MF Balanced MF Equity MF 12 * all Pioneer funds - domestic and international

  13. TOTAL LOANS UP BY 8.2% Y/Y WITH „POŻYCZKA EKSPRESOWA” AND PLN MORTGAGE LOANS AS MAIN DRIVERS IN RETAIL LENDING (+21.1% Y/Y) CUSTOMERS LOANS* (PLN mil.) +8.2% +3.0% 31 645 33 235 34 229 % ch JUN06/JUN05 % ch JUN06/DEC05 +1.2% +4.3% +21.1% +8.3% 13 * Nominal value

  14. SUCCESSFUL SALE OF „POŻYCZKA EKSPRESOWA” ALLOWED TO BUILD A STOCK OF PLN 1.8 BLN STOCK VOLUME (in PLN mil.) VOLUME SOLD (in PLN mil.) +32.2% +208.1% 14

  15. CONTINUOUSLY IMPROVING SALES (+35% 2Q/2Q) ALLOWED FOR 41% INCREASE IN STOCK OF PLN MORTGAGE LOANS VOLUME OF MORTGAGES SOLD (PLN mil) +28.6% +34.9% VOLUME OF PLN MORTGAGES STOCK (PLN mil) VOLUME OF FX MORTGAGES STOCK (PLN mil) +41.4% +16.5% -24.7% -10.9% 15

  16. +23.0% +1.9% STRONG GROWTH OF FEE AND COMMISSION INCOME (+24.2% Y/Y), WITH MUTUAL FUNDS (+68.1%) AND LENDING (+42.7%) AS MAIN DRIVERS FEE AND COMMISSION INCOME (PLN mil.) +24.2% 748 929 % ch 2Q 06/1Q 06 % ch 2Q 06/2Q 05 381 460 469 +68.1% -8.3% +59.1% +42,7% +16.0% +35.6% +6.5% +9.4% +7.7% +6.8% +4.0% +8.9% 16

  17. COSTS UNDER CONTROL, CONFIRMING GROUP EXCELLENT COST MANAGEMENT COSTS (PLN mil.) +1.1% +1.0% +0.2% 1154 1166 % ch 2Q 06/1Q 06 % ch 2Q 06/2Q 05 -1.8% 578 582 584 -2.0% -2.0% +1.1% +0.1% +1.5% +1.8% +0.8% +1.4% 1Q 06 2Q 06 2Q 05 16 161 15 917 15 891 Headcount 17

  18. FURTHER IMPROVEMENT OF COST OF RISK, DOWN TO 0.65%, THANKS TO BETTER MACROECONOMIC CONDITIONS AND EFFICIENT RISK MANAGEMENT NPL RATIO* 15.6% 15.4% 14.8% % ch JUN06/MAR06 % ch JUN06/DEC05 -2.0% -2.4% COST OF RISK +2.2% +3.6% PROVISION COVERAGE RATIO 18 * In accordance with IFRS

  19. SUMMARY • Best ever profit • Growth volume both retail and corporate • Further improvement of the commercial effectiveness throughout the Group • Efficient cost control and risk management 19

  20. AGENDA • Macro scenario • Second quarter consolidated results • Integration process 20

  21. INTEGRATION PROJECT SET UP • Integration project launched on 22 May and proceeding at full speed • 14 Task Forces were created, with ~300 people involved in the integration planning • Proper integration governance process in place, with bi-weekly Program Leader reviews and monthly Steering Committees, managed by Project Management Office on daily basis 21

  22. PROJECT APPROACH REFLECTING AMBITIOUS TIMETABLE New Bank fully in place Phase 2 Phase 3 Phase 4 Phase 1 • Integration • implementation - „As is” assessment of operating models - Evaluation of spin off options - Preparation to disposal - Preparation of high level integration plan - Pre-closingintegrationactivities October 2006 December 2007* July 2006 Completed 22 * final deadline from IT perspective to be validated

  23. UniCredit sponsorship Steering Committee Program Leadership PROJECTORGANISATION Pekao • Supervisory Board BPH • Supervisory Board Pekao • Management Board BPH • Management Board • UniCredit • BPH • Pekao Focused on supporting other teams in the first phase Project Management Office Communication • PR, HR, Legal, IR Spin-off/ integration Target outlets Compliance/Legal /Tax Business assessment Financials M&A Accounting Corporate and Treasury Retail HR IT/Operations Subsidiaries Subsidiaries Logistics Risk 23 Working teams

  24. TASK FORCES ACHIEVED SIGNIFICANT PROGRESS, IN LINE WITH EXPECTATIONS • Methodology for outlets selection developed • „As is” comparison of the operating models completed, with high level aspirations for the New Bank close to completion • Retention plan for key resources prepared, program to exchange of middle management planned • Comprehensive communication program in place 24

  25. Appendix 25

  26. BANKING SECTOR TRENDS DYNAMIC OF HOUSEHOLDS DEPOSITS IN THE POLISH BANKING SECTOR (% YTD) DYNAMIC OF HOUSEHOLDS LENDING IN THE POLISH BANKING SECTOR (% YTD) DYNAMIC OF CORPORATE LENDING IN THE POLISH BANKING SECTOR (% YTD) DYNAMIC OF CORPORATE DEPOSITS IN THE POLISH BANKING SECTOR (% YTD) 26

  27. AVER. EMPLOYMENT IN ENTERPRISES SECTOR (THS.) INFLATION, INTERVENTION RATE, 3MWIBOR 27 Source: Central Statistical Office, National Bank of Poland

  28. Dynamics of USD and EURO rates (average in month) 28

  29. PROFIT AND LOSS ACCOUNT 29

  30. BALANCE SHEET 30

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