This document is a translation of a document originally issued in Polish. The only binding version is the original Polish version. The PKO Bank Polski SA Group Directors’ Report for the year 2012 Report publication date: 4 March 2013 This document is a translation of a document originally issued in Polish. The only binding version is the original Polish version. THE PKO BANK POLSKI SA GROUP DIRECTORS’ REPORT FOR THE YEAR 2012 Table of contents 1. Introduction..................................................................................................................................................................................................4 1.1 The PKO Bank Polski SA Group – historical background..................................................................................................................................................................................4 1.2 Selected financial data of the PKO Bank Polski SA Group in years 2009-2012..................................................................................................................................5 1.3 Characteristics of the PKO Bank Polski SA Group activity..............................................................................................................................................................................5 1.4 Selected financial data of the PKO Bank Polski SA Group...............................................................................................................................................................................6 1.5 The PKO Bank Polski SA Group against its peer group.....................................................................................................................................................................................7 2. External business environment..........................................................................................................................................................8 2.1 Macroeconomic environment..........................................................................................................................................................................................................................................8 2.2 Stock market..............................................................................................................................................................................................................................................................................9 2.3 Foreign exchange market...................................................................................................................................................................................................................................................9 2.4 Interest rate market...............................................................................................................................................................................................................................................................9 2.5 The situation of the Polish banking sector................................................................................................................................................................................................................9 2.6 The situation of the Polish non-banking sector...................................................................................................................................................................................................10 2.7 The Ukrainian market.........................................................................................................................................................................................................................................................11 2.8 Regulatory environment...................................................................................................................................................................................................................................................11 3. Financial results of the PKO Bank Polski SA Group ........................................................................................................... 13 3.1 Factors influencing results of the PKO Bank Polski SA Group....................................................................................................................................................................13 3.2 Key financial indicators....................................................................................................................................................................................................................................................13 3.3 Consolidated income statement..................................................................................................................................................................................................................................13 3.4 Consolidated statement of financial position.......................................................................................................................................................................................................17 4. Structure of the PKO Bank Polski SA Group............................................................................................................................ 21 4.1 Entities included in the financial statements.........................................................................................................................................................................................................21 4.2 Changes to the organisation of subordinated entities....................................................................................................................................................................................23 5. Activities and directions of development of the PKO Bank Polski SA Group......................................................... 25 5.1 Directions of development of the PKO Bank Polski SA Group....................................................................................................................................................................25 5.2 Execution of the ‘Lider’ Strategy for the years 2010-2012...........................................................................................................................................................................26 5.3 Market shares of PKO Bank Polski SA.....................................................................................................................................................................................................................27 5.4 Activities of PKO Bank Polski SA – the parent company of the PKO Bank Polski SA Group .....................................................................................................27 5.4.1 Retail segment.......................................................................................................................................................................................................................................................................28 5.4.2 Corporate segment .............................................................................................................................................................................................................................................................31 5.4.3 Investment segment...........................................................................................................................................................................................................................................................32 5.5 International cooperation................................................................................................................................................................................................................................................34 5.6 Activities of other entities of the PKO Bank Polski SA Group......................................................................................................................................................................34 5.7 Issue of securities and amounts due to financial institutions.....................................................................................................................................................................36 5.8 Sponsorship activities of PKO Bank Polski SA ....................................................................................................................................................................................................37 5.9 Charity activities of the PKO Bank Polski SA’s Foundation..........................................................................................................................................................................38 5.10 Promotional activities carried out by other companies of the PKO Bank Polski SA Group .......................................................................................................39 5.11 Prizes and awards granted to entities of the PKO Bank Polski SA Group............................................................................................................................................39 6. Internal environment...........................................................................................................................................................................