When global crises bring financial strife to the doors of once-renowned institutions, investors look for a sure place to protect their assets. PKO Bank Polski – the leader of the Polish banking market and a rising star of European finance – can be considered a safe haven for such investors’ money. For more than 90 years it has been the symbol of the Polish banking sector, and its widely recognised brand is valued by specialists at over $1bn.

It has the highest asset value in the Polish banking sector, and constant initiatives to maintain good customer relationships and persistent upgrades to product quality help the bank maintain its leading position. As a result its financial results have systematically improved: net profit in 2010 exceeded $1bn, and despite continuing volatility this is expected to grow in 2011.

“Our excellent financial results are the foundation for stable business development,” says Zbigniew Jagie??o, President of the Management Board of PKO Bank Polski. “We systematically increase our market share in all main market segments. Total focus on customer needs along with constant modernisation are the main sources of our business success.”

The bank is also making very efficient use of its equity. This is accompanied by increasing employment efficiency – measured by the level of profit, liabilities and receivables per employee – and improving cost-effectiveness.

The current market strength of the bank has been built for many decades, since its founding in 1919. Its brand prestige has grown thanks to generations of effectively handling clients’ financial matters with deep understanding of their needs. The bank’s strong and stable market position is reflected in various prestigious international rankings. Goldman Sachs experts estimated the bank’s market capitalisation at €13.4bn, placing it 23rd among European banks, while according to Interlace researchers, PKO Bank Polski is the leader in Central and Eastern Europe in terms of asset value.

The position of PKO Bank Polski as a major player in Europe is confirmed by the awards granted by World Finance; the bank has been designated Corporate Broker of the Year 2011 in Eastern Europe, Online Broker of the Year 2011 in Eastern Europe and Advisory Brokers of the Year 2011 in Eastern Europe. This success has become possible by effective and fast reaction to the changing expectations of client groups and best customer service. In 2010 the investment banking arm of PKO Bank Polski participated in all major projects in Poland and thus became the leader in terms of the value of conducted IPOs.

“Last year we ran leading roles in major IPO, SPO and ABB deals in Poland – including IPO of PZU and Warsaw Stock Exchange itself, where we acted as inter alia arranger,” says Jakub Papierski, Deputy CEO for Investment Banking of PKO Bank Polski. “These plus Tauron, PGE and other deals make us visible not only in Poland but also in European league tables.”

2010 was also the year when – six years after its IPO – PKO Bank Polski debuted on the international debt markets and placed its first ever tranche of Eurobonds of €800m. This issue, listed in Luxembourg, was the best ever priced deal by a Polish non-government issuer and represents a very important attempt by the bank to supplement its traditional funding sources also by the instruments offered by international debt capital markets.

According to research by MillwardBrown SMG/KRC, PKO Bank Polski is the most trusted financial institution in Poland. Three out of four Polish people trust its financial stability. Thus, PKO Bank Polski with its prudent credit policy is perceived as the guarantor of the stabilisation of Polish financial system. The share of non-performing loans in PKO Bank Polski is kept below market average. The strength and stability of the biggest bank in Poland was also confirmed in the European stress test conducted in July 2010. PKO Bank Polski was the only Polish bank directly participating in the exercise and achieved third place out of 91 EU banks from 20 member states.

Leading market position and excellent stable financial results are appreciated by investors, on both a domestic and international level. In 2010 the price of PKO Bank Polski shares quoted on Warsaw Stock Exchange was on average 40 per cent higher than in the corresponding period a year earlier. Moreover, the Eurobonds issued in 2010 by the bank as a part of the European Medium-Term Notes programme were priced at 185 basis points over the midswap rate, which is the best price in history obtained by a Polish corporate bond issuer.

Solid foundations
The core activity of PKO Bank Polski is retail banking. Despite strong competition in the Polish market, PKO Bank Polski is a leader in Poland in terms of the number of current accounts (more than six million) and issued payment cards (more than seven million). The largest sales network in Poland allows the bank to offer tailor-made products and provide quality services for retail clients in the most effective way. At present the bank runs more than 1,200 of its own branches, almost 2,000 agencies and nearly 2,400 ATMs.

PKO Bank Polski also dynamically develops its offer for customers who prefer carrying out financial operations by themselves. Electronic banking services offered under its iPKO brand as well as under the leading internet banking logo of Inteligo allow the client to have unlimited access to his current account and other types of banking products via the internet at any time of day and night. The online brokerage service, fully integrated under both platforms, allows the bank to match the changing need of the equity investors in Poland and gain prestigious awards. The quality of the bank’s services offered through this distribution channel is confirmed in various prestigious rankings. According to the bank’s strategy for the years 2010-12 the goal for Inteligo is to gain one million clients in the next two years.

PKO Bank Polski is also an important partner for corporations, providing services for small and medium enterprises as well as for large corporations. During the economic slowdown PKO Bank Polski was the main source of capital for Polish companies. The bank did not refrain from developing its lending activities, in spite of the stagnation in the corporate loan market. The company also enjoys a substantial share in the market of LGU services offered to local government units, such as communes, counties and provinces. It is also the leading arranger of municipal bond issues.

The Polish market, which dynamically changes due to growing competition, consolidation processes and changing legal regulations, creates new challenges for PKO Bank Polski. Its 2010-12 strategy is intended to address these challenges and add additional quality to current excellent operational performance.

In 2011 the positive changes planned will mostly affect retail clients, with plans to introduce new current accounts and continue the process – started in September 2010 – of replacing the traditional technology in its debit cards with microchip and near-field communication functionality. It also plans to modernise its private banking branch to attract new wealthy customers. These changes in product offer, along with innovative solutions implemented in the internal organisation and customer service, will allow PKO Bank Polski to strengthen solid relationships with clients and meet their widely understood financial needs.

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