FINANCIAL RESULTS AFTER 1Q 2008

FINANCIAL RESULTS AFTER 1Q 2008

RECORD HIGH NET PROFIT, FINALIZING INGEGRATION

Warsaw, 8 May 2008

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FINANCIAL RESULTS AFTER 1Q 2008

1Q 2008

Net income (PLN mil.)

ROE (%)

1 138

22.8

1Q 2007

927

22.4

+22.8%

+0.4p.p.

Change

2007 results restated for comparable purpose

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AGENDA

MACROECONOMIC ENVIRONMENT

Q1 2008 FINANCIAL PERFORMANCE

INTEGRATION UPDATE

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POLISH ECONOMY TRENDS

15,918

16,6

26,2

15,5

5,3

18,520,8

19,8

9

6,4

3,9

1,2

8,6

10,1

3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q08F

GDP (% Y/Y) INVESTMENTS (% Y/Y) CONSUMPTION (% Y/Y)

5,4

4,43,8

5,2

6,9

4,7

5,2

4,4

5,1

5

1,6

2,7

1,4

2,5 2,5


4,8

6,3

6,26,16,6

6,46,46,6

7,2

4,34,0

2,4

3,2

4,45,4


Stable growth driven mainly by investments Still reasonable export growth Consumption boom is still ahead of the economy

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POLISH ECONOMY TRENDS

3

4,2 4,1

443,6

2,3

1,5

2,32,62,3

2,32,5

1,6 1,9

6,155,945,65

5,565,56

5,215,15,034,814,714,44,44,244,22

4,19

5,755,55,25

5,0 5,04,754,754,75

4,54,5

4,254,254,004,004,0

I07 II07 III07 IV07 V07 VI07 VII07 VIII07 IX07 X07 XI07 XII07 I08 II08 III08

Inflation EOP 3M WIBOR REF. RATE CPI NET

CPI growth expected to pick in mid 2008, allowing for finishing tightening

cycle

at 6-6,25% level

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BANKING SECTOR TRENDS

DYNAMIC OF HOUSEHOLDS AND CORPORATE LENDING IN THE POLISH BANKING SECTOR (% Y/Y)

DYNAMIC OF HOUSEHOLDS AND CORPORATE DEPOSITS IN THE POLISH BANKING SECTOR (% Y/Y)

TOTAL SECTOR LENDING (% Y/Y) TOTAL SECTOR DEPOSITS (% Y/Y)

39,6

37,737,7 37,337,933,4

31,125,428,8

26,0

22,018,416,8 25,2

24,424,422,217,5

14,3

9,8

5,23,9

2,51,10,4

-3,7

-10,0

-5,0

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

1Q05

2Q05

3Q05

4Q05

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

Households Corporate

6,1

17,5

8,8

10,7

8,36,4

8,2 10,310,26,65

8,68,8

6,5

19,4

14,4

23,4

29,6

25,9

19,421,8

17,817,1

21,7

14,3

24,5

-2

3

8

13

18

23

28

33

38

1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 07

Households Corporate

29,526,8

30,031,0

29,2

23,4

8,6

19,216,0

13,6

13,310,9

5,6

1

4

7

10

13

16

19

22

25

28

31

34

1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08

15,115,2

15,4

17,7

11,912,6

14,515,2

12,1

10,3

12,6

14,5

12,2

7

9

11

13

15

17

19

1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08

Source: NBP

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POLISH ECONOMY PRESENTS ATTRACTIVE MIX OF GROWTH AND RESILIENCE

-25

-20

-15

-10

-5

0

5

10

15

Cze

ch R

ep.

Po

lan

d

Slo

ven

ia

Hu

ng

ary

Slo

vaki

a

Tu

rkey

Kaz

akh

stan

Lit

hu

ania

Ro

man

ia

Est

on

ia

Bu

lgar

ia

Lat

via

Current Account as % GDP Real GDP gr.

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RELATIVELY LOW SHARE OF EXPORT, SLIGHTLY EXPOSURE TO US ECONOMY

25,8%

6,8%

6,0%

5,9%5,5%4,0%

41,4%

4,6%

Germany Italy France GB

Czech Rep. Russia Ukraine Other

MAIN DIRECTIONS OF EXPORT

Share of export to US at around 2%, limiting direct impact of US slowdown

Export to GDP at 41%, one of the lowest in CEE

EXPORT/GDP

41%

68%

79%

Poland Hungary Czech Rep.

US about 2%

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AGENDA



INTEGRATION UPDATE

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NET INCOME AND OPERATING INCOMENET INCOME (PLN mil.)

927767

1138

1Q 07 4Q 07 1Q 08

+22.8%+48.4%

OPERATING INCOME (PLN mil.)

1218

932

1412

1Q 07 4Q 07 1Q 08

+15.9%+51.5%

2007 results restated for comparable purpose1Q 07 includes ca 144 mil. net gain on sale of CU PTE1Q 08 includes ca 350 mil. net gain on sale of investment banking part of CDM

Net income up +22.8% y/y Net income adjusted for one-off transactions kept at a very good level of Q1 07, despite

adverse capital market conditions Profitability improved further with ROE at 22.8%

ROE (%)

22,822,4

1Q 07 1Q 08

+0,4 p.p.

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REVENUES AND COSTSTOTAL REVENUES (PLN mil.)

2115 1983

2341

1Q 07 4Q 07 1Q 08

+10.7%+18.0%

COST / INCOME RATIO (%)

39,742,4

1Q 07 1Q 08

- 2.7 p.p.

Revenues up by 10.7% y/y, at similar level as Q1 07 on adjusted basis

Cost/income ratio below 40%

2007 results restated for comparable purpose1Q 07 includes ca 178 mil. revenues on sale of CU PTE1Q 08 includes ca 435 mil. revenues on sale of investment banking part of CDM

+3.6%-11.6%

OPERATING EXPENSES (PLN mil.)

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STRUCTURE OF REVENUES

REVENUES (PLN mil.)

1012 1159

708669

395

1137

611

593156

1Q 07 4Q 07 1Q 08

Net interest income Net fee & commission income Other

% ch1Q 08/4Q 07

% ch1Q 08/1Q 07

+50.0%

-13.8%

+12.4%

+280.4%

-8.6%

-1.9%

2 115 1 983 2341

+10.7%

+18.0%

Growing of NII allowed offsetting pressure on fees, impacted by adverse capital market

conditions

2007 results restated for comparable purpose1Q 07 includes ca 178 mil. revenues on sale of CU PTE1Q 08 includes ca 435 mil. revenues on sale of investment banking part of CDM

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NET INTEREST INCOME AND NET INTEREST MARGIN

1 0121 159 1 137

1Q 07 4Q 07 1Q 08

+12.4%

-1.9%

NET INTEREST INCOME (PLN mil.)

3,6%4,0% 4,2%

1Q 07 4Q 07 1Q 08

NET INTEREST MARGIN

NII up by 12.4%y/y, driven by improved net interest margin


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CUSTOMER SAVINGS

CUSTOMERS SAVINGS (PLN mil.)

- savings of retail customers

38 484 39 934

50 007

23 20528 718

45 341

DEC'07 MAR'08

Retail Mutual Funds (*) Corporate

117 208 108 480

-7.4%

-9.3%

-19.2%

+3.8%

-6.0%63 13967 201

* total PPIM mutual funds

Retail deposits up 4,2% YTD, capturing redemptions from mutual funds Corporate deposits reflecting negative market dynamic Zloty strengthening in Q1 affected savings by ca. 1bl. PLN

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MUTUAL FUNDS

10,6%

31,4%

19,1%48,9%

52,9%

19,9%

40,5%

48,7%28,0%

1Q 07 4Q07 1Q 08

Bonds Balanced Equity

22,3% 21,3% 21,2%

1Q 07 4Q 07 1Q 08

45,6%

31,8%

22,6%

MUTUAL FUNDS – VOLUMES (PLN mil.)

MARKET SHARE

1Q 2008 MUTUAL FUNDS ASSETS STRUCTURE

STRUCTURE OF MF SOLD BY PEKAO

Decrease in assets under management, caused by adverse capital markets conditions

Market share stabilized, confirming leading position

26 171

28 718

24 39423 840

23 205

1Q 07 4Q 07 I 08 II 08 III 08

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LENDING

24 34924 236

49 596 50 349

DEC'07 MAR'08

Retail Corporate

73 832 74 698

CUSTOMERS LOANS* (PLN mil.)

+1.2%

+1.5%

+0.5%

* Nominal value

Customers loans up 1.2% YTD

Selective growth in corporate volumes, reflecting focus on return on risk weighted

assets

Policy of zloty denominated mortgages maintained

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FEE AND COMMISSION INCOME

FEE AND COMMISSION INCOME (PLN mil.)

340280 315

88102

93

7381 74

208206 129

1Q 07 4Q 07 1Q 08

Accounts & other Cards Lending Mutual Funds

-8.6%

-37.6%

-8.7%

+12.8%

+1.3%

-38.1%

+6.1%

-7.3%

708 669 611

-13.8%

-8.6%

% ch1Q 08/4Q 07

% ch1Q 08/1Q 07

Fee income coming from mutual funds and brokerage activity impacted by

adverse

market conditions


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COSTS

COSTS (PLN mil.)

456 499 472

344

96

105

100

358448

1Q 07 4Q 07 1Q 08

Personnel costs Non-personnel+BGF Depreciation

-5.2%

-5.4%

-20.1%

+3.5%

+3.4%

+4.1%

897 1051 929% ch

1Q 08/4Q 07% ch

1Q 08/1Q 07

+3.6%

-11.6%

Total costs growth at 3.6%, below inflation


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ASSET QUALITYNPL RATIO

88,5%84,3% 87,1%

MAR'07 DEC'07 MAR'08

PROVISION COVERAGE RATIO0,50% 0,49%

0,28%

1Q07 2007 1Q 08

COST OF RISK

Further improvement of assets quality thanks to effective risk management and

positive macroeconomic scenario

Further increase in coverage ratio to 87.1%

68 574 69 616

5 6045 761

DEC'07 MAR'08

Performing Impaired

7.8% 7.4%

-2.7%

+1.5%

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AGENDA



INTEGRATION UPDATE

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MIGRATION

198 of branches migrated (70%)

80% of retail customers migrated

100% of corporate customers migrated

Migration process in line with timetable, will finish by

the end of May

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START OF OPERATIONAL INTEGRATION DID NOT CHANGE LOW CUSTOMER CHURN OBSERVED SO FAR

Very limited customer churn

Churn of customer accounts

%

Before spin-offannouncement(1)

0.72

After spin-offannouncement(2)

0.77

After DayOne(3)

0.76

(1) Monthly average of period April 2005 – March 2006(2) Monthly average of period April 2006 – November 2007(3) Monthly average of period December 2007 – March 2008

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NEW PEKAO IS ENTERING SECOND PHASE, EXPLOITING POTENTIAL OF JOINT ORGANIZATION

Phase II action plan following IT migration, finalization of 3 years strategic plan

Enhancement of current account offering to increase

acquisition in attractive segments

Competitive savings products to enhance further Bank’s

proposition

Expansion of retail on-line presence

Stepping-up SME distribution model – establishing new

business centers and dedicated corners in selected branches

and new dedicated internet platform for SMEs

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SUMMARY

Record high net profit crossed 1.1 bl PLN with ROE 22.8%

Migration in the last phase with 80% of customers already

on Pekao IT platform, allowing focus on business

development

Three years plan preparation progressing, confirming

focus on 3 dimensions; growth, customers and employees

satisfaction

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APPENDIX

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UNEMPLOYMENT (%) VS. WAGES (gr. y/y)

Source: Central Statistical Office

0

5

10

15

20

25

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

0

2

4

6

8

10

12

Unemployment Wages gr.

POLISH ECONOMY TRENDS (3)

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BANKING SECTOR - MORTGAGE

62,2

56,955,2

5758,6

63,8

66,56765,3

63,5

6260,4

56,558

4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08

MORTGAGE FX/TOTALMORTGAGE / GDP

3,5

10,0

7,3

5,13,92,5

1

3

5

7

9

11

13

2002 2003 2004 2005 2006 2007

Source: NBP

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BANKING SECTOR TRENDS

DYNAMIC OF HOUSEHOLDS LENDING IN THE POLISH BANKING SECTOR (% YTD)

DYNAMIC OF HOUSEHOLDS DEPOSITS IN THE POLISH BANKING SECTOR (% YTD)

DYNAMIC OF CORPORATE DEPOSITS IN THE POLISH BANKING SECTOR (% YTD)

DYNAMIC OF CORPORATE LENDING IN THE POLISH BANKING SECTOR (% YTD)

-2

3

8

13

18

23

28

33

38

I0 II III IV V VI VII VIII IX X XI XII

2004 2005 2006 2007 2008

-3-2-10123456789

101112

I II III IV V VI VII VIII IX X XI XII

2004 2005 2006 2007 2008

-6-4-202468

10121416182022242628


2004 2005 2006 2007 2008

-5

0

5

10

15

20

25

30

35

40


2004 2005 2006 2007 2008

Source: NBP

Documents

FINANCIAL RESULTS AFTER 1Q 2008