At least three mid-size banks are currently on offer, as their foreign owners, including: Carlo Tassara, GE Corporation and Raiffeisen seek to divest their operations in Poland. The recent acceleration in M&A deals has been encouraged not only by a need for freeing up capital but also by the uncertain outlook on future banks' revenues. While mid-term forecasts for banking volumes in Poland remain highly positive, the profitability of banks in years to come is very difficult to foresee. Unfavorable and unexpected regulatory developments eating into revenues, falling margins and increasing costs of risk could negatively affect banks' bottom line. Nevertheless, banking sector in Poland is likely to benefit from favourable developments in the economy. In 2014, Gross Domestic Product (GDP) advanced at 3.4% annual rate and the 2015 growth rate is expected to be even higher. Key drivers of economic growth are accelerating domestic consumption and fixed investments. The rebounding economy resulted in unemployment rate decreasing to 11.7% in March 2015 from 13.5% a year earlier. The consumer price index (CPI) fell into negative territory in mid-2014 and reached a record -1.5% YoY level in March 2015. As a consequence of falling consumer prices, real income of employees has been improving quickly and consumer confidence, as measured by BWUK index, increased to the highest level in five years, showing a -10.9 points print in April 2015. For more information on recent developments in the Polish banking sector, please refer to the publication “Banking Market in Poland, 2015–2017” at: http://www.inteliace.com/en/00134_Banking_market_in_Poland_2015-2017.html About The Report “Banking Market in Poland, 2015–2017” is the latest update of our comprehensive publication about the banking sector in Poland. It describes the present market structure and recent trends in the market and also provides short-term estimates of key banking through 2017. Compared to the previous edition, it has been upgraded with new analyses and revised content. When preparing this report, Inteliace Research responded to feedback received from its clients and incorporated several improvements that make this new issue even more reader-friendly and informative. Sample pages from the report can be found directly at Inteliace Research’s webpage. About Inteliace Research Inteliace Research is an independent consulting company that focuses on the financial markets in Central and Eastern Europe. Inteliace Research specializes in management consulting and custom research services, including market-entry strategies, product launches, and performance and benchmarking analyses. During 2005–2015, Inteliace Research provided its products and services to more than 60 clients, including major CEE banks and several “The Banker” top world banks. To learn more about the company, visit Inteliace Research’s webpage: www.inteliace.com. Inteliace Research

1. BANKING MARKET IN POLAND 2015-2017
CEE BANKING SERIES
by Inteliace Research
May 2015
Version: 2015/5.7
http://www.inteliace.com/en/00134_Banking_market_in_Poland_2015-2017.html

2. Inteliace Research
BankingMarketinPoland2015–2017
2
TABLE OF CONTENTS (1/4)
Slide 1: Executive summary
1. Macroeconomic overview
Slide 2: Poland - General overview
Slide 3: Key macroeconomic indicators, 2008-2014
Slide 4: Foreign trade statistics, C/A balance, FDIs, 2008-2014
Slide 5: Unemployment and salaries, 2008-2014
Slide 6: Disposable income in households, 2008-2014; income distribution 2013
Slide 7: Consumer confidence Index evolution, 2009-1Q/2015
Slide 8: Warsaw Stock Exchange - Turnover, Market cap and indexes, 2008-2014
2.1. Banking market - General trends
Slide 9: CEE banking markets: Size vs. growth matrix, 2012-2014
Slide 10: CEE banking penetration benchmarks - International comparison, 2014
Slide 11: Structure of the Polish Banking System, 2014
Slide 12: Polish Banking System ERA analysis, 1989-2015
Slide 13: Evolution of banking assets by groups of owners (domestic/foreign), 2002-2014
Slide 14: Top 10 foreign investors in the Polish banking market, 2014
Slide 15: Banking assets evolution (LCU, EUR), 2008-2014
Slide 16: Banking assets evolution by groups of banks, 2008-2014
Slide 17: Top 12 commercial banks, market shares, ownership, 2014
Slide 18: Evolution of market shares for top commercial banks, 2011-2014
Slide 19: Concentration of the banking market, 2013 /2014 (Assets, Branches, ATMs, HH Index)
Slide 20: Deposits by customer segment evolution, 2008-2014
Slide 21: Loans by customer segment evolution, 2008-2014
Slide 22: Foreign funding evolution, 2008-2014
Slide 23: Non-performing loans value and NPL ratios by type of business segment, 2009-Feb.2015
Slide 24: Non-performing retail loans, ratios by type of product, 2005-2014
2.2. Banking market - Regulatory overview
Slide 25: Regulatory overview: Regulatory bodies in the Polish banking market
Slide 26: BFG - Deposit Insurance Fund
Slide 27: BIK - Credit Information Bureau
Slide 28: BIG - Regulated commercial/consumer information providers
Slide 29: Central Bank interest rates and mandatory reserve policy, 2000-2014
Slide 30: Inter-bank yield curves, 2010-2014 (WIBOR 3M, Polonia O/N)
Slide 31: Basel II/CRD implementation status, Capital requirement, own funds and CAR ratio for banks, 2009-2014
Slide 32: Consumer and mortgage lending – regulatory changes

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TABLE OF CONTENTS (2/4)
2.3. Banking market - Banking Infrastructure
Slide 33: Bank outlets by type of bank, 2008-2014
Slide 34: Employment in commercial banks, bank assets per employee evolution, 2008-2014
Slide 35: Direct employee costs evolution, 2009-2014
Slide 36: ATM number and transaction value evolution 2008-2014, ATM players, 2014
Slide 37: POS number and transaction value evolution 2008-2014, POS players, 2012
3. Retail banking
Slide 38: Demographic trends determining future number of bank clients, 2007-2020F
Slide 39: Demographic and social trends influencing future number of bank accounts
Slide 40: Retail banking clients by segment - pyramid (mass market, affluent, personal and private banking), 2014
Slide 41: Households deposits by sub-segments, 2008-2014
Slide 42: Cash in circulation, cash vs. deposits ratio, 2008-2014
Slide 43: Household loans by sub-segments evolution, 2008-2014
Slide 44: TOP banks serving households sector, market shares, 2014
Slide 45: Deposits of private individuals, structure by currency, 2008-2014
Slide 46: Deposits of private individuals, structure by maturity, 2008-2014
Slide 47: Current account penetration in Poland, Bank account holders demography, 2012
Slide 48: Bank account penetration gap: Poland vs. Europe, 2014
Slide 49: Current accounts of individuals (ROR) at major banks, 2012-2014
Slide 50: Internet and PC penetration in Polish households and in corporate sector, shopping online, 2014
Slide 51: Number of accounts with online access and number of online accounts actively used, 2008-2014
Slide 52: Online Banking - new entrants: ING and Citibank and perspectives for standalone internet projects
Slide 53: Mobile Banking - availability of mobile account access , top banks and number of users, 2014
Slide 54: Innovation in payments – PKO IKO, BLIK, PeoPay, iKasa, SkyCash, mPay, Orange Cash, T-mobile , MyWallet , Visa V.me , etc.
Slide 55: Investment funds assets evolution, domestic and foreign funds, 2008-2014
Slide 56: Investment funds - top 10 players, 2014
Slide 57: Personal Financial Assets (PFA) structure and evolution, 2011-2014
Slide 58: Loans to private individuals by type evolution, 2008-2014
Slide 59: Mortgage to private individuals by currency evolution, 2008-2014
Slide 60: Mortgage to private individuals – new sales, outstanding contracts, 2008-2014
Slide 61: Consumer lending market, volumes and values, 2012-2014
Slide 62: Dedicated car loans market, 2009-2014
Slide 63: Financial intermediaries: Value and number of loans and investment products sold, 2013
3.1. Payment cards
Slide 64: Cards issued by type, 2008-2014
Slide 65: Cards payments: Poland vs. Europe, Growth vs. market development, 2013
Slide 66: Cards payments: International comparison, Card payments value, volume, cards issued, 2013

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TABLE OF CONTENTS (3/4)
Slide 67: Card transactions by type (cashless, cash), share of cash transactions, 2009-2014
Slide 68: Credit card transactions , values, volumes, per card evolution, 2009-2014
Slide 69: Top players in credit cards business, co-branding partners, 2014
4. Corporate banking
Slide 70: Corporate subjects by size, number, employment, revenues and profits, 2013
Slide 71: Corporate subjects, revenue and profit evolution, 2008-2014
Slide 72: Number of firms by turnover (with 10+ employees), 2013
Slide 73: Corporate subjects, regional distribution, 2014
Slide 74: Corporate deposits and loans evolution, 2008-2014
Slide 75: Top players in the corporate banking market, market shares in deposits and loans , 2014
Slide 76: Brokerage business, top players, shares of investors groups, 2009-2014
Slide 77: Leasing market, structure by industry, top players, 2009-2014
Slide 78: Factoring market, top players, 2009-2014
Slide 79: Non-treasury debt securities market, 2009-2014
5. Banks' profitability
Slide 80: Nominal rates on loans and deposits by segment, implied margins, 2011-Mar.2015
Slide 81: Commercial banks - profitability tree, 2011-2014
Slide 82: Commercial banks - revenue, costs and profits composition, 2014
Slide 83: Top 5 commercial banks profitability tree – peers comparison, 2014
Slide 84: Segment reporting (1/2): volumes, revenues and profit by segment (retail, corporate, other), 2014
Slide 85: Segment reporting (2/2): volumes, revenues and profit by segment (retail, corporate, other), 2014
6. Banks' valuation and M&A activity
Slide 86: Share price performance in the stock market for key listed banks in Poland, 2013-2015
Slide 87: Market multiples for major listed banks in Poland, 3/2015
Slide 88: Strategic control map for major listed banks in Poland, Apr.2, 2015
Slide 89: Efficiency of top banks in Poland - Cost to income, Assets/Personnel/Branches benchmarks, 12/2014
Slide 90: Acquisition transactions in the Polish banking market (1/3), 2005-2008
Slide 91: Acquisition transactions in the Polish banking market (2/3), 2009-2011
Slide 92: Acquisition transactions in the Polish banking market (3/3), 2012-2015
Slide 93: New entrants, 2014-2014
Slide 94: Mergers in the Polish banking market, 2009-2014
Slide 95: Announced M&A deals – banks put on sale as of Q1 2015
.

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TABLE OF CONTENTS (4/4)
7. Top 5 banks - Profiles
Slide 96-97: Bank profiles: PKO Bank Polski
Slide 98-99: Bank profiles: Bank Pekao
Slide 100-101: Bank profiles: mBank
Slide 102-103 Bank profiles: ING Bank Śląski
Slide 104-105: Bank profiles: BZ WBK
8. Mid-term forecasts
Slide 106: Banking assets forecast, 2015-2017
Slide 107: Forecast – retail loans & retail deposits, 2015-2017
Slide 108: Forecast – corporate loans & corporate deposits, 2015-2017
9. Notes on methodology

6. Inteliace Research
BankingMarketinPoland2015–2017
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THE GROWTH IN BANKING ASSETS ACCELERATED IN 2014
CAGR*
Total
* Compound Annual Growth Rate
** Banks registered in Poland
Source: NBP, Inteliace Research
Banking assets by group of banks, 2008-2014
Foreign bank branches
1,042 1,057
1,159
1,295 1,350 1,406
1,532
2008 2009 2010 2011 2012 2013 2014
929 940 1,034
1,188 1,236 1,277
1,395
2008 2009 2010 2011 2012 2013 2014
56.1 55.7 54.7 28.5 28.1 32.0 32.9
2008 2009 2010 2011 2012 2013 2014
in PLN billion
56.5 61.7 70.4 78.4 85.8 96.5 104.8
2008 2009 2010 2011 2012 2013 2014
IN PLN
+9%
Domestic commercial banks**
Cooperative banks
% change in
the period
+7
+7
+9%
+3%
+9%
-9
+11

7. Inteliace Research
BankingMarketinPoland2015–2017
IN A RELATIVELY SHORT PERIOD UP TO 2020, POLAND'S POPULATION WILL GET
SIGNIFICANTLY OLDER AND WILL ALSO SHRINK SLIGHTLY
7
-0.53
-1.20
-0.85
2.29
60+/65+
45-59/64
18-44
0-17
38.4 38.5 38.4 38.2 -0.29
Population by age groups forecast*, 2007-2020
in million
∆ 2007-2020
(in million)
• In the long-term perspective
(up to 2020) the group of
today's core banking clients
will fall by ~2 million people or
8% (vs.2007).
• The only growing group in
the population will be seniors.
• Banks will need to
increasingly adjust their
product offers and distribution
channels to serve more and
more seniors.
-2.05
* Forecast by GUS
Source: GUS, Inteliace Research
Within the years 2005-2020 the
number of young people at the
age of 18 will almost halve from
0.6m to 0.34 m
FORECAST
BY GUS

8. Inteliace Research
BankingMarketinPoland2015–2017
660
438
224
130
109
104
100
69
72
58
56
55
40
33
32
28
12
11
8
6
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Source: ECB,SNB,NB,Eurostat, Inteliace Research
Poland
Average annual growth in card payments value (CAGR), 2009–2013, in %
Card payments in Europe, 2013
xx
Total annual card
payments value,
2013, in EUR billion
AdvancedEarlystage
Annualcardpaymentsvaluepercapita,2013,inEUR`000
POLAND IS STILL AT AN EARLY STAGE IN TERMS OF CARD PAYMENTS
Slovakia
Poland
Czech Rep.
RomaniaHungary
Switzerland
Norway
Sweden
Denmark UK
France
GermanyAustria
Italy
Spain
Netherlands
Ireland
Portugal
Belgium
Finland
Developed
Fast growing CEE markets
The most advanced markets
8

9. Inteliace Research
BankingMarketinPoland2015–2017
9
ALIOR, CITIBANK AND PEKAO ENJOY HIGHEST VALUATION PREMIUMS
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28
Equity*
(PLN billion)
Market to
book value*
Constant market
cap curves
* Based on consolidated results for 2014, ratios as of April 2, 2015
Source: banks, press, Inteliace Research
• Quickly growing banks like
Alior or highly profitable
banks like BZ WBK enjoy
significantly higher valuation
multiples (price-to-book
ratio) than their peers.
• A correlation of market cap
with equity could be still
observed.
CONSOLIDATED
ACCOUNTS
48 billion
PLN
8 billion
PLN
Strategic control map (April 2, 2015)
16 billion
PLN

10. Inteliace Research
BankingMarketinPoland2015–2017
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FURTHER M&A ACTIVITY COULD BE EXPECTED IN 2015 AS AT LEAST THREE MID-SIZE
BANKS ARE ON SALE IN POLAND FOR THE MOMENT
*Market capitalisation as of April 2, 2015, in the Warsaw Stock Exchange
Source: Banks, press, Inteliace Research
Bank (Ownership)
Banks available to buy, as of Q1 2015
Description
Raiffeisen Polbank
(owned by Raiffeisen Int.)
• In February 2015, unofficial rumours have been
confirmed by the statement of Raiffeisen Sup.
Board, that part of Raiffeisen retail business,
including: Poland, Slovenia branch and Zuno bank
are to be disposed.
Assets, PLN billion 2014
(market share %)
Market cap*
(PLN billion)
53.5
30.7
30.2
Raiffeisen
BPH
Alior
Bank BPH
(owned by GE Corp.)
Alior Bank
(owned by C.Tassara & other)
n/a
3.4
6.2
3.7%
2.2%
2.1%
• In October 2015, General Electric admitted that it
wants to divest its Polish subsidiary.
• Unsatisfactory results of the bank, high level of
costs, a big portfolio of fx-denominated mortgage
loans are among key reasons.
• Key shareholders of Alior bank have been seeking to
dispose their stake already for few years. However,
unsatisfactory valuation and high growth rates of the bank
prohibited finding a convenient transaction price.
• In 2015, sale process accelerated and transaction is
expected to be closed soon. Société Générale as well as
local Investors including PZU and Leszek Czarnecki are
among the most likely winners.

11. Inteliace Research
BankingMarketinPoland2015–2017
NOTES ON METHODOLOGY (1/2)
FX rates:
• As a general rule all “end of year” balances like: assets, deposits, loans and similar volumes have been converted from
the local currency into Euro using end of year exchange rate
• All results achieved during a period of time like: profits, revenues, new sales etc. have been converted from the local
currency into Euro using average exchange rate
• Exchange rates used in the report:
Estimates and Forecasts:
• In some cases, recent or verified data was not available. Therefore, necessary short-term estimations have been done
to fill the gaps. Estimates are always indicated with the letter “E”
• When preparing forecasts “F” we have built models using latest observed trends, available forecasts of main economic
indicators, seasonal changes observed in the past and other specific factors considered important.
Multiple sources:
• In some cases multiple sources of similar data exist. In this situation we always try to select the most appropriate one
/in our view/. The source is indicated in the footer area of each slide. Nevertheless in specific cases, before
interpreting the data it is recommended to get a good understanding on the methodology of data collection by
contacting the authors.
EUR / PLN 2008 2009 2010 2011 2012 2013 2014
End of year 4.17 4.11 3.96 4.42 4.09 4.15 4.26
Average 3.52 4.33 3.99 4.12 4.19 4.20 4.19
11
Source: NBP

12. Inteliace Research
BankingMarketinPoland2015–2017
About this report
This report has been prepared using Inteliace
Research proprietary research and publicly available
sources, including: financial reports, press
publications, industry magazines, directories,
financial databases and expert opinions.
Views presented in this report reflect solely the
independent and unbiased opinion of Inteliace
Research and authors.
All due care has been taken in the production of this
report. However, Inteliace Research does not accept
any responsibility or liability for any omissions or
inaccuracies of the information contained in this
publication.
This report is copyrighted. Any distribution, storage,
replication and usage is restricted to Inteliace
Research clients only. In case of any doubt please
contact us at: info@Inteliace.com
About Inteliace Research
Inteliace Research is an independent and privately
owned research firm based in the heart of Eastern
Europe in Warsaw / Poland.
Our company specializes in value-added research
services and tailored business intelligence solutions.
Through our customized research services we help our
clients to better understand their customers,
competitors and overall market dynamics.
The lead researcher and founder of Inteliace Research
is Marcin Mazurek.
Our contact details:
Inteliace Research
Foksal 17B / 31,
00-372 Warszawa, Poland
Tel. +48 22 408 66 20, Tel. +48 502 512 178
Fax. +48 22 349 21 40
mail: info@Inteliace.com
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Visit http://www.inteliace.com for more details
Recent Reports:
2014
• February - Mortgage Lending in Poland ’14
• May - Banking Market in Poland ’14
• May - Bank outlets database ’14
• June - Insurance Market in Poland ’14
• September - Top 200 CEE banks ’14
• November- Investment Funds and Asset Mgmt. ’14
2015
• February - Mortgage Lending in Poland ’15
• May - Bank outlets database ’15
upcoming
• June - Insurance Market in Poland ’15
• September - Top 200 CEE banks ’15
• December - Investment Funds and Asset Mgmt. ’15
and many other ...
RECENT PUBLICATIONS BY INTELIACE RESEARCH
Inteliace Research
BAZAPLACÓWEKBANKOWYCHWPOLSCEISTATYSTYKAPOWIATÓW,2011
1
BANK OUTLETS DENSITY IN POLAND (1/3)
GĘSTOŚĆ SIECI PLACÓWEK BANKOWYCH W POLSCE (1/3)
37
59
75
176
35
28
38
48
88
52
56
44
59
28
67
66
40-60
< 40
>60
Liczba/Number
Number of bank outlets per 1000 sq km, by region, 2011
Liczba placówek na 1000 km2 powierzchni wg. województw, 2011r.
The Southern and Central Poland have
the largest density of bank outlets
Południowa oraz centralna Polska są
najgęściej pokryte siecią placówek
bankowych na km2
Źródło/Source: Inteliace Research
Średnia / Average
= 58
Inteliace Research
BAZAPLACÓWEKBANKOWYCHWPOLSCEISTATYSTYKAPOWIATÓW,2011
1
BANK OUTLETS DENSITY IN POLAND (3/3)
GĘSTOŚĆ SIECI PLACÓWEK BANKOWYCH W POLSCE (3/3)
Źródło/Source : Inteliace Research
Number of outlets per 1 million inhabitants, by county „powiat”, 2011
Liczba placówek bankowych na 1 milion mieszkańców, wg. powiatów, 2011r.
Minimum: 126
Maximum: 947
Mediana
Median (443) Number of bank outlets per 1 million
inhabitants varies a lot on county level
Na poziomie powiatów gęstość placówek
jest bardzo zróżnicowana
100 200 300 400 500 600 700 800 900 1000
379powiatów
Inteliace Research
GE MONEY BANK – OVERVIEW
7.4 8.3 9.1
2003 2004 2005
10.9
1.6
Assets
PLN billion
* Although Expander is distributing products from various banks, GE offer / for example mortgage/ is reported to be favoured
** Compound Annual Growth Rate
Source: Inteliace Analysis
CAGR**
Concept Description Results
1.6 1.7
Timeline
History & Background
Loans
PLN billion
Net Profit
PLN billion
Target Clients
Products
Channels
20.4 26.7 22.8ROE (%)
Market
share
(%)
6.6 7.6 8.6
2003 2004 2005
0.14
0.30 0.32
2003 2004 2005
14.2
51.2
• Affluent individualsand professionals
lookingfor mortgage. Valuing quick
processing and flexibility,sometimes not
fulfillinglending criteria set by other
banks (for example job contract or own
funds level)
• Mass market clients looking for simple
and quick consumer loans
Only lending products on offer:
• mortgage
• refinancingloan
• credit cards
• installment loans
• cash loans
• car loans
• GE money bank - 48 branches
• GEpard, ~200 used car dealers
• Dobry Kredyt consumer finance – 12
outlets and ~1000 POS
• Expander - 33 branches - financial
products distributor*
• In 1995, GE group purchased a small regional
bank: „Solidarność Chase D.T. Bank”. Bank was
rebranded soon to GE Capital Bank.
• In 1998, GE group purchased another small bank
(PAMBank)andconverted it to a mortgage
specialist:GE Bank Mieszkaniowy
• In 2004, GE group acquired POS lending
specialist:Chrobry with a network of ~1000 POS.
Chrobry was renamed to: Dobry Kredyt
• In 2004 , a used car dealers network was created
under the GEpard brand, being the main channel
for car loans sales
• As of Jan. 2005, all GE activitiesin Poland were
consolidatedunder one roof: GE Capital bank
Shareholders
• Top notch risk management and collection
• High performing sales staff
• Fast loan processing and flexibility
• High margins
• Control over distributors (GEpard,Expander,
Dobry Kredyt)
• Advanced cross-sellingbetween segments
As of March 2006
99
1
General Electric
Company
Other