Saving and Investment Products in PolandMajor Developments

Magdalena Jagodzińska

Head of Compliance and Operational Risk Management

KBC TFI SA

Types of products

Term deposits (banks)

Investment funds

Unit-linked insurance products

Direct investment in

securities (investment

firm)

2

Individual Pension Accounts

Investment funds Legal framework

Act of 27 May 2004 on investment funds Aligned with the EU laws Passporting rules

Types of funds Open-end (UCITS and non-UCITS) Closed-end (securitization funds, private equity, real estate

funds, ETFs, private placement funds)

Other Investment fund + deposit Unit-link structures based on investment funds Portfolios of investment funds offered by investment advisors Foreign UCITS

3

4

Source: Own analysis based on data published by Polish Financial Supervision Authority

Value of stocks in funds portfolio

% of capitalization of WSE

Sha

re in

cap

italiz

atio

n

Val

ue

of

stoc

ks (

mln

PLN

)

Jan

May

Sep

t

Jan

May

Sep

t

Jan

May

Sep

t

Jan

May

Sep

t

Jan

May

Sep

t

Jan

Ma

Sep

t

Jan

Investment funds: share in WSE capitalization

Source: FUNDonline FI. Analizy Online

Foreign funds marketed in Poland

First notified in 2004; only UCITS

Barriers to enter (no nominee account structure allowed)

Slow growth and yet marginal share in total investments in funds and total savings of households

Notified UCITS ≠ marketed UCITS

6

Foreign funds: marketing data

7

Source: Own analysis based on data published by Polish Financial Supervision Authority

Foreign funds: recent figures

8

Source: FUNDonline FI. Analizy Online

Distribution of funds and financial products Distribution and advice (banks, investment firms,

specialized investment advisors) Own products (e.g. banks, insurance companies) Products of external entities (e.g. banks, investment

advisory firms, investment firms) Advice and allocation (investment advisory firms, some

banks)

Authorized distribution of investment products – investment funds

Distribution of insurance investment products

Cross-selling

Electronic fund platforms

9

Investment funds’ distributors

10

Source: Own analysis based on data published by Polish Financial Supervision Authority

Investment funds’ distributors

11

Source: Own analysis based on data published by Polish Financial Supervision Authority

Pension funds Legal framework

Act of 28 August 1997 on pension funds Specific construction and limited investment scope

Growing assets of pension funds (2nd Pillar)

Growing role as market players (WSE)

Not yet significant investments abroad

Upcoming reform Possibility to diversify risk exposure (more/less

dynamic products) More exposure to foreign markets

12

13

Source: Own analysis based on data published by Polish Financial Supervision Authority

14

Source: Pension Funds reports. Citi Investment Research/DM Banku Handlowego SA

Structure of household savings

15

Source: FUNDonline FI. Analizy Online

Structure of household credits and deposits

16

Source: Own analysis based on data published by Polish Financial Supervision Authority

Currency structure of mortgage credits for households

17

Source: Own analysis based on data published by Polish Financial Supervision Authority

Demand for investment products

Banking deposits still most important

Increasing demand for investment funds and unit-link products Growing markets Good results of funds skillfully advertised Lower interest rates People better-off, more aware (information not risk)

Recent crisis on global markets Withdrawals from funds, WSE and investment products Return to banks (tempting interest rates)

Sophisticated products for more demanding investors (e.g. structured deposits, tailored investment funds)

18

Prospects Good economic prospects for Poland

High interest rates and recent crisis on stock exchanges – return to safe banking deposits

Good prospects for investment funds in longer time horizon – increased awareness of investors

Future of Individual Pension Accounts unsure (also in view of the tax reform)

Growing popularity of unit-linked products (life insurance + investment fund)

Warsaw Stock Exchange Rich and diversified product offer Functional changes (trading platform, length of session,…)

*Source: „Puls Biznesu” no. 76/2008

19

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Magdalena.Jagodzinska@kbctfi.plKBC Towarzystwo Funduszy Inwestycyjnych SA

www.kbctfi.pl

We belong to KBC Groupwww.kbc.com