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2nd Quarter Results

1st Aug 2008 10:24

RNS Number : 4406A

Bank Pekao SA

01 August 2008

BANK

POLSKA KASA OPIEKI

SPOLKA AKCYJNA

Interim financial statements

of Bank Pekao S.A. Group

for the second quarter of 2008

prepared according to

International Financial Reporting Standards

Selected financial statements translated into EUR

		in PLN ths		in EUR ths
	Position	2 Quarters of 2008	2 Quarters of 2007	2 Quarters of 2008	2 Quarters of 2007
I.	I. Net interest income	2 265 142	1 213 801	651 352	315 388
II.	II. Net fee and commission income	1 229 587	1 108 522	353 573	288 033
III.	III. Operating profit	2 351 774	1 215 867	676 264	315 924
IV.	Profit before income tax	2 419 972	1 294 156	695 874	336 267
V.	Net profit (loss)	1 974 059	1 043 205	567 650	271 061
VI.	Net profit (loss) attributable to equity holders of the Company	1 967 263	1 041 246	565 696	270 552
VII.	Net profit (loss) attributable to minority interest	6 796	1 959	1 954	509
VIII.	Net cash from operating activities	(595 733)	2 765 106	(171 306)	718 471
IX.	Net cash used in investing activities	(1 338 314)	(731 612)	(384 838)	(190 098)
X.	Net cash from financing activities	(2 656 401)	(1 472 014)	(763 860)	(382 480)
XI.	Net increase / decrease in cash and cash equivalents	(4 590 448)	561 480	(1 320 005)	145 892
XII.	Total assets	121 653 040	71 191 123	36 268 869	18 904 648
XIII.	Amounts due to the Central Bank	1 360 105	1 606 898	405 493	426 708
XIV.	Amounts due to other banks	9 935 949	6 486 233	2 962 241	1 722 405
XV.	Amounts due to customers	88 062 596	52 139 609	26 254 426	13 845 560
XVI.	Minority interest	82 943	15 396	24 728	4 088
XVII.	Equity attributable to the Company's equity holders	13 879 731	8 144 272	4 138 015	2 162 694
XVIII.	Share capital	262 213	167 103	78 175	44 374
XIX.	Number of shares	262 212 629	167 103 098	262 212 629	167 103 098
XX.	Book value per share (in PLN/EUR)	52,93	48,74	15,78	12,94
XXI.	Diluted book value per share (in PLN/EUR)	52,90	48,68	15,77	12,93
XXII.	Earnings per 1 ordinary share (in PLN/EUR)	7,50	6,23	2,16	1,62
XXIII.	Diluted earnings per 1 ordinary share (in PLN/EUR)	7,50	6,23	2,16	1,62
XXIV.	Paid dividend per share (in PLN/EUR)	9,60	9,00	2,54	2,31
XXV.	Capital adequacy ratio	10,65	14,66	x	x
XXVI.	Risk weighted assets (*)	103 713 184	42 690 888	30 920 394	11 336 472
XXVII.	Core funds (Tier I)	11 040 808	6 257 951	3 291 637	1 661 785
XXVIII.	Supplementary funds (Tier II)	-	-	-	-
	(*) Data as at 30th June 2008 are disclosed in accordance with the Resolution 1/2007 of Banking Supervisory Commission Basel II.

1 Summary

2 Accounting principles adopted in the preparation of the quarterly report

3 Consolidated financial information - prepared in a comparable basis

4 Financial statements

5 Additional information

5.1 Completion of Operational Integration

5.2 The Group

5.3 Results achieved in the first half of 2008 and factors which influenced these results

5.3.1 Results of the Group

5.3.2 The structure of the net profit

5.3.3 Achievements of Bank Pekao S.A.

5.3.4 Achievements of subsidiaries

5.4 Segment reporting

5.5 Adjustments for provisions, deferred tax provision and assets

5.6 Write-offs for revaluation of assets

5.7 Information on contingent assets and liabilities

5.8 Post balance sheet events

5.9 Seasonality or cyclical nature of the Bank's activity

5.10 Issuance, redemption and repayment of debt securities

5.11 Dividend paid

5.12 Effects of changes in the Group's structure

5.13 The position of the Management Board regarding the possibility of achieving previously published forecasts

5.14 Information regarding shareholders owning at least 5% of the total number of votes at the General Meeting of Bank Pekao S.A.

5.15 The Issuer's shares held by the Management and Supervisory Board Members

5.16 Pending litigations

5.17 Changes in the Management Board

5.18 Assessment of the financial credibility of Bank Pekao S.A.

5.19 Transactions of related entities

5.20 Factors which will affect the results of at least the next quarter

1 Summary

In order to provide better comparability, the financial statements in respect of the first half of 2007 (hereafter referred to as "combined data" or "combined result") are presented as a "combination" of the financial results of the Bank Pekao Group and Pekao285, i.e. that part of Bank BPH S.A. merged with Bank Pekao S.A. through the division of Bank BPH S.A. as registered on 29th November 2007".

In the first half of 2008 Bank Pekao S.A. Group is reporting net profit attributable to equity holders of PLN 1,967.3 million, i.e. PLN 143.9 million (7.9%) higher than combined result in first half of 2007.

The results for the first half of 2008 were under pressure of the difficult situation in the international financial markets and Warsaw Stock Exchange. As a result, the decrease of shares prices was accompanied by redemptions of mutual funds and substantial decrease of mutual funds assets. Another negative factor influencing results was the slowdown in the market of mortgage loans denominated in PLN.

Factors mentioned above influenced negatively results of the Bank as well as results of some subsidiaries.

Despite that and with continued efforts in the last phase of the integration process, the Group achieved good results. Growth of net financial result was supported by strong commercial activity, thanks to which the decrease of commissions related to investment products was partially compensated for by the growth in net interest income. At the same time operating costs were kept under control and cost of risk has substantially decreased.

In the first half of 2008, the Group's total income amounted to PLN 4,367.2 million, PLN 119.5 million (2.8%) higher than combined income in the first half of 2007.

·; Group income in first half of 2008 remained under pressure of continuously unfavourable situation on stock exchange and connected with this subsequent mutual funds redemptions and decrease of assets valuation. Fee and commission income decreased by PLN 296.5 million (19.4%) in comparison to combined income in the first half of 2007, mainly due to lower commissions on investment products. As a result of significant decline in demand, lower sales of mutual funds translated into lower up-front fees while the decrease of mutual funds assets under management additionally impacted management commissions. Additionally lower activity on Warsaw Stock Exchange caused a decrease of fees and commissions related to shares turnover of retail customers.

·; Growth in net interest income by PLN 222.3 million (10.7%) allowed to partially compensate for the decrease in net fees and commissions income.

·; Total overhead costs (including depreciation) in the first half of 2008 amounted to PLN 1,893.6 million, i.e. were higher in comparison with the combined costs in the first half of 2007 only by PLN 47.0 million (2.5%), i.e. below the inflation rate.

·; In the first half of 2008, impairment losses on loans and advances amounted to PLN 121.8 million and were PLN 84.7 million (41.0%) lower than the combined result for the first half of 2007, thanks to effective credit risk management and a good macroeconomic situation. At the end of June 2008, the ratio of impaired receivables to total receivables amounted to 7.1% compared to 7.8% at the end of 2007. The ratio decreased due to the increased volume of total loans and a reduced volume of impaired loans.

·; At the end of June 2008, total volume of savings of the Group’s clients (customer deposits, structured certificates of deposits and mutual funds) amounted to PLN 103,885.4 million and were PLN 13,322.6 million lower than at the end of 2007. The reduction was due to a decrease in mutual funds of PLN 8,439.5 million (significantly impacted by negative valuation), partially offset by an increase in retail deposits of PLN 2,003.1 million, and a decrease in corporate deposits of PLN 6,955.2 million.

·; The volume of Group’s loans as at the end of June 2008 amounted to PLN 75,748.4 million, of which corporate loans PLN 51,558.3 million and retail loans PLN 24,190.1 million. The growth of PLN 1,916.2 million was driven by an increase in corporate loans and PLN mortgage loans and was supported by growth in commercial activity of UniCredit Bank Ltd.

2. Accounting principles adopted in the preparation of the quarterly report

The interim consolidated report of the Capital Group of Bank Pekao S.A. and the stand alone report of Bank Pekao S.A. were prepared in compliance with International Financial Reporting Standards (IFRS), published by the International Accounting Standards Board.

The presented report meets the requirements of International Accounting Standard 34 relating to interim financial reports and of the Decree of the Council of Ministers dated 19th October 2005 on current and periodic information submitted by the issuers of securities.

The consolidated interim financial statements of the Group and enclosed interim financial statements of the Bank have been prepared in accordance with the accounting principles applied for the purpose of asset and liabilities valuation and measurement of financial results, as disclosed in the consolidated financial statements of the Capital Group of the Bank Pekao S.A. and the standalone financial statement of the Bank Pekao S.A. ended as at 31st December 2007 and published on 21st March 2008.

In the interim report no changes were made to accounting principles in relation to accounting principles described in the reports mentioned above.

Data presented in the interim consolidated financial statements have been prepared in a manner assuring their comparability, with the exception of historical data relating to spin-off transactions made between Bank Pekao S.A. and Bank BPH S.A., realized by a transfer of the part of BPH S.A. property in the form of an organized part of the enterprise to Bank Pekao S.A.

For illustrative purposes financial information presented in the chapters 3 and 5 of this report have been prepared on a comparative basis. In order to achieve comparability the historical information regarding the income statement for two quarters of 2007 and the balance sheet statement as at 30th June 2007 have been restated by combining the income statement and balance sheet items of Pekao Group and Pekao285.

3. Consolidated financial information - prepared in a comparable basis

The tables below present financial information prepared on a comparable basis. In order to achieve comparability the historical information regarding the income statement for two quarters of 2007 and the balance sheet statement as at 30th June 2007 have been restated by combining the income statement and balance sheet items of Pekao Group and Pekao285. Such combined data has been adjusted by the elimination of transactions made between Bank Pekao and Pekao285 during that period.

The combined financial information has been prepared for illustrative purposes only as it includes results of Pekao285 that were generated as part of Bank BPH operations. Accordingly it does not purport to be indicative of what the operating results or financial position would have been had Pekao285 operations been integrated with Bank Pekao during that period. The combined financial information for two quarters of 2007 does not reflect the strategy and organizational structure under which Pekao285 has been operating since its merger with part of Bank Pekao.

QUARTERLY FINANCIAL REPORT

CONSOLIDATED INCOME STATEMENT - combined data (in '000 PLN)	2 Quarters 2008 period from 08-01-01 to 08-06-30	2 Quarters 2007 period from 07-01-01 to 07-06-30

Net interest income	2 265 142	2 073 315
Net fee and commission income	1 229 587	1 526 075
Other income	436 322	648 337
Gain on sale of discontinued operations	436 172	-
Total income	4 367 223	4 247 727
Overhead costs	(1 893 635)	(1 846 563)
Net operating income	2 473 588	2 401 164
Net impairment losses on financial assets and net provisions for guarantees and commitments	(121 814)	(206 512)
Share of profit (loss) of associates and joint venture entities valued at the equity method	68 198	78 289
Profit before income tax	2 419 972	2 272 941
Income tax expense from	(362 505)	(444 592)
Income tax expense on gain on sale of discontinued operations	(83 408)	-
Net profit	1 974 059	1 828 349

1. Attributable to equity holders of the Company	1 967 263	1 823 381
2. Attributable to minority interest	6 796	4 968

	CONSOLIDATED BALANCE SHEET - combined data (in PLN '000)	30.06.2008	31.12.2007	30.06.2007
ASSETS
	Cash and amounts due from Central Bank	7 224 209	5 121 210	5 518 499
	Debt securities eligible for rediscounting at the Central Bank	2 618	1 108	19 648
	Loans and advances to banks	7 857 455	16 960 034	13 857 361
	Financial assets as held for trading	2 990 764	3 165 113	3 023 584
	Derivative financial instruments	2 183 171	1 922 958	2 206 249
	Other financial instruments at fair value through profit or loss	3 873 184	3 777 729	10 490 204
	Loans and advances to customers	68 910 184	66 658 037	64 894 214
	Net investment in the finance lease	3 241 221	3 043 768	2 743 063
	Derivatives used for hedging	24 312	40 672	138 581
	Investment securities	18 651 449	17 620 419	15 136 815
	1. Available for sale	17 894 834	17 033 529	14 706 235
	2. Held to maturity	756 615	586 890	430 580
	Assets of disposal group classifield as held for sale	145 893	65 068	10 547
	Investments in associated undertakings	328 109	388 169	289 050
	Intangible assets	686 685	688 559	656 860
	Tangible fixed assets	1 874 353	2 021 052	1 997 098
	Investment property	56 964	58 559	60 400
	Income taxes	519 519	421 486	391 094
	1. Current tax assets	6 165	2 493	27
	2. Deferred income tax assets	513 354	418 993	391 067
	Other assets	3 082 950	2 142 210	1 159 014
TOTAL ASSETS		121 653 040	124 096 151	122 592 281

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
	Amounts due to the Central Bank	1 360 105	1 485 921	1 606 898
	Amounts due to other banks	9 935 949	8 456 191	10 060 589
	Financial liabilities as held for trading	239 324	491 382	132 610
	Derivative financial instruments	2 160 165	1 661 282	1 904 000
	Amounts due to customers	88 062 596	89 944 078	89 593 555
	Derivatives used for hedging	126 057	28 965	88 052
	Debt securities in issue	3 482 302	3 716 778	3 061 332
	Liabilities directly associated with assets classified as held for sale	-	55 291	916
	Current income tax liabilities	250 056	53 169	124 613
	Provisions for deferred income tax	3 666	324	350
	Provisions	357 861	379 828	325 466
	Other liabilities	1 712 285	3 075 647	2 526 065
Total liabilities		107 690 366	109 348 856	109 424 446

Shareholders' equity
Capital and reserves attributable to the Company's equity holders		13 879 731	14 666 788	13 094 859
	Share capital	262 213	261 867	261 867
	Other capital and reserves	11 781 659	12 393 624	11 153 203
	Prior and current year profits	1 835 859	2 011 297	1 679 789
Minority interest		82 943	80 507	72 976
Total Shareholders' equity		13 962 674	14 747 295	13 167 835
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		121 653 040	124 096 151	122 592 281

INCOME STATEMENT - combined data (in '000 PLN)		2 Quarters 2008 period from 08-01-01 to 08-06-30	2 Quarters 2007 period from 07-01-01 to 07-06-30

	Net interest income	2 073 672	1 924 899
	Net fee and commission income	1 087 317	1 300 770
	Other income	751 956	904 127
	Overhead costs	-1 714 595	-1 690 492
	Net operating income	2 198 350	2 439 304
	Net impairment losses on financial assets and net provisions for guarantees and commitments	-94 875	-186 246
	Profit before income tax	2 103 475	2 253 058
	Income tax expense	-336 994	-403 621
	Net profit	1 766 481	1 849 437

BALANCE SHEET (in PLN '000) - combined data		30.06.2008	31.12.2007	30.06.2007
ASSETS
	Cash and amounts due from Central Bank	7 188 245	5 082 829	5 499 708
	Debt securities eligible for rediscounting at the Central Bank	2 618	1 108	19 648
	Loans and advances to banks	9 000 572	17 551 065	13 694 114
	Financial assets held for trading	2 842 790	2 828 802	2 597 442
	Derivative financial instruments	2 186 208	1 917 960	2 207 728
	Other financial instruments at fair value through profit or loss	3 873 138	3 777 679	10 490 152
	Loans and advances to customers	65 773 107	63 955 254	63 023 464
	Derivatives used for hedging	24 312	40 672	138 581
	Investment securities	18 681 716	17 715 886	15 244 036
	1. Available for sale	17 925 101	17 128 996	14 813 456
	2. Held to maturity	756 615	586 890	430 580
	Non-current assets held for sale	137 393	514	3 913
	Shares in subsidiaries	1 631 876	1 631 694	1 597 151
	Shares in associates	56 755	56 530	51 129
	Intangible assets	665 660	668 183	634 823
	Tangible fixed assets	1 757 580	1 908 424	1 906 745
	Investment property	54 266	55 730	57 775
	Income taxes	440 244	349 412	349 217
	1. Current tax assets	-	-	-
	2. Deferred income tax assets	440 244	349 412	349 217
	Other assets	2 951 677	2 026 814	784 779
TOTAL ASSETS		117 268 157	119 568 556	118 300 405

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
	Amounts due to the Central Bank	1 360 105	1 485 921	1 606 898
	Amounts due to other banks	8 104 868	6 884 279	8 417 074
	Financial liabilities held for trading	239 324	491 382	128 865
	Derivative financial instruments	2 194 956	1 683 306	1 923 666
	Amounts due to customers	87 646 648	89 160 124	88 840 367
	Derivatives used for hedging	126 057	29 083	88 052
	Debt securities in issue	2 136 837	2 097 070	1 690 494
	Current income tax liabilities	173 501	51 793	117 242
	Provisions for deferred income tax	-	-	-
	Provisions	353 422	374 998	321 834
	Other liabilities	1 530 344	2 932 216	2 209 726
Total liabilities		103 866 062	105 190 172	105 344 218

Shareholders' equity
	Share capital	262 213	261 867	261 867
	Profit for the year and retained earnings	1 766 481	2 006 600	1 849 437
	Other capital and reserves	11 373 401	12 109 917	10 844 883
TOTAL SHAREHOLDERS' EQUITY		13 402 095	14 378 384	12 956 187
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		117 268 157	119 568 556	118 300 405

4. Financial statements

Quarterly financial statements
	II Quarter 2008			2 Quarters 2008			II Quarter 2007			2 Quarters 2007
	period from 08-04-01 to 08-06-30			period from 08-01-01 to 08-06-30			period from 07-04-01 to 07-06-30			period from 07-01-01 to 07-06-30

CONSOLIDATED INCOME STATEMENT (in '000 PLN)	Continuing operations	Discontinued operations	Total	Continuing operations	Discontinued operations	Total	Continuing operations	Discontinued operations	Total	Continuing operations	Discontinued operations	Total

Interest income	2 054 869	-	2 054 869	4 025 211	-	4 025 211	1 069 096	-	1 069 096	2 055 485	-	2 055 485
Interest expense	(912 446)	-	(912 446)	(1 759 956)	(113)	(1 760 069)	(447 594)	(769)	(448 363)	(840 205)	(1 479)	(841 684)
Net interest income	1 142 423	-	1 142 423	2 265 255	(113)	2 265 142	621 502	(769)	620 733	1 215 280	(1 479)	1 213 801
Fee and commission income	761 781	-	761 781	1 488 027	556	1 488 583	639 103	24 700	663 803	1 212 315	32 036	1 244 351
Fee and commission expense	(143 065)	-	(143 065)	(258 884)	(112)	(258 996)	(71 189)	(1 238)	(72 427)	(133 055)	(2 774)	(135 829)
Net fee and commission income	618 716	-	618 716	1 229 143	444	1 229 587	567 914	23 462	591 376	1 079 260	29 262	1 108 522
Dividend income	5 153	-	5 153	5 240	-	5 240	1 953	66	2 019	1 995	66	2 061
Result on financial instruments at fair value	(10 568)	-	(10 568)	(6 816)	(30)	(6 846)	19 384	61	19 445	44 427	676	45 103
Result on investment securities	79 568	-	79 568	80 741	-	80 741	7 764	-	7 764	11 162	-	11 162
Foreign exchange result	170 711	-	170 711	273 584	-	273 584	71 513	-	71 513	137 651	-	137 651
Other operating income	43 630	-	43 630	130 272	1	130 273	30 536	-	30 536	62 848	-	62 848
Other operating expenses	(23 740)	-	(23 740)	(46 571)	(99)	(46 670)	(15 511)	-	(15 511)	(31 798)	-	(31 798)
Net other operating income	19 890	-	19 890	83 701	(98)	83 603	15 025	-	15 025	31 050	-	31 050
Gain on sale of discontinued operations	-	572	572	-	436 172	436 172	-	-	-	-	-	-
Net impairment losses on financial assets and net provisions for guarantees and commitments	(71 560)	-	(71 560)	(121 814)	-	(121 814)	(48 786)	-	(48 786)	(92 339)	-	(92 339)
Overhead costs	(964 444)	-	(964 444)	(1 892 992)	(643)	(1 893 635)	(642 101)	(4 760)	(646 861)	(1 232 251)	(8 893)	(1 241 144)
Operating profit	989 889	572	990 461	1 916 042	435 732	2 351 774	614 168	18 060	632 228	1 196 235	19 632	1 215 867
Share of profit (loss) of associates and joint venture entities valued at the equity method	30 839	-	30 839	68 198	-	68 198	44 520	-	44 520	78 289	-	78 289
Profit before income tax	1 020 728	572	1 021 300	1 984 240	435 732	2 419 972	658 688	18 060	676 748	1 274 524	19 632	1 294 156
Income tax expense	(187 462)	-	(187 462)	(362 561)	56	(362 505)	(132 966)	(3 685)	(136 651)	(246 832)	(4 119)	(250 951)
Income tax expense on gain on sale of discontinued operations	-	(644)	(644)	-	(83 408)	(83 408)	-	-	-	-	-	-
Net profit	833 266	(72)	833 194	1 621 679	352 380	1 974 059	525 722	14 375	540 097	1 027 692	15 513	1 043 205

1. Attributable to equity holders of the Company	829 816	(72)	829 744	1 614 883	352 380	1 967 263	524 785	14 375	539 160	1 025 733	15 513	1 041 246
2. Attributable to minority interest	3 450	-	3 450	6 796	-	6 796	937	-	937	1 959	-	1 959


Earnings per share (in PLN per share)
- basic for the period						7,50						6,23
- diluted for the period						7,50						6,23

	SKONSOLIDOWANY BILANS (w tys. zł)	30.06.2008	31.12.2007	30.06.2007
AKTYWA
	Kasa, należności od Banku Centralnego	7 224 209	5 121 210	4 344 853
	Weksle uprawnione do redyskontowania w Banku Centralnym	2 618	1 108	2 147
	Należności od banków	7 857 455	16 960 034	10 379 991
	Aktywa finansowe przeznaczone do obrotu	2 990 764	3 165 113	1 793 669
	Aktywa z tytułu pochodnych instrumentów finansowych	2 183 171	1 922 958	690 577
	Pozostałe instrumenty finansowe wyceniane do wartości godziwej przez rachunek zysków i strat	3 873 184	3 777 729	1 509 962
	Kredyty i pożyczki udzielone klientom	68 910 184	66 658 037	33 945 092
	Należności z tytułu leasingu finansowego	3 241 221	3 043 768	1 148 570
	Instrumenty zabezpieczające	24 312	40 672	-
	Inwestycyjne (lokacyjne) papiery wartościowe	18 651 449	17 620 419	13 862 639
	1. Dostępne do sprzedaży	17 894 834	17 033 529	13 432 059
	2. Utrzymywane do terminu zapadalności	756 615	586 890	430 580
	Aktywa przeznaczone do sprzedaży	145 893	65 068	3 771
	Inwestycje w jednostki podporządkowane	328 109	388 169	208 192
	Wartości niematerialne	686 685	688 559	597 694
	Rzeczowe aktywa trwałe	1 874 353	2 021 052	1 424 207
	Nieruchomości inwestycyjne	56 964	58 559	60 400
	Aktywa z tytułu podatku dochodowego	519 519	421 486	332 110
	1. Aktywa dotyczące bieżącego podatku dochodowego	6 165	2 493	27
	2. Aktywa z tytułu odroczonego podatku dochodowego	513 354	418 993	332 083
	Inne aktywa	3 082 950	2 142 210	887 249
AKTYWA RAZEM		121 653 040	124 096 151	71 191 123

ZOBOWIĄZANIA I KAPITAŁY
Zobowiązania
	Zobowiązania wobec Banku Centralnego	1 360 105	1 485 921	1 606 898
	Zobowiązania wobec innych banków	9 935 949	8 456 191	6 486 233
	Zobowiązania finansowe przeznaczone do obrotu	239 324	491 382	129 974
	Zobowiązania z tytułu pochodnych instrumentów finansowych	2 160 165	1 661 282	676 310
	Zobowiązania wobec klientów	88 062 596	89 944 078	52 139 609
	Instrumenty zabezpieczające	126 057	28 965	-
	Zobowiązania z tytułu emisji dłużnych papierów wartościowych	3 482 302	3 716 778	43 717
	Zobowiązania związane z aktywami przeznaczonymi do sprzedaży	-	55 291	916
	Bieżące zobowiązanie z tytułu podatku dochodowego	250 056	53 169	87 887
	Rezerwa z tytułu odroczonego podatku dochodowego	3 666	324	350
	Rezerwy	357 861	379 828	219 486
	Pozostałe zobowiązania	1 712 285	3 075 647	1 640 075
Zobowiązania razem		107 690 366	109 348 856	63 031 455

Kapitały
Kapitał własny (przypisany akcjonariuszom Banku):		13 879 731	14 666 788	8 144 272
	Kapitał zakładowy	262 213	261 867	167 103
	Pozostałe kapitały	11 781 659	12 393 624	7 079 515
	Zysk z lat ubiegłych i roku bieżącego	1 835 859	2 011 297	897 654
Udziały mniejszości		82 943	80 507	15 396
Kapitały razem		13 962 674	14 747 295	8 159 668
PASYWA RAZEM		121 653 040	124 096 151	71 191 123

Współczynnik wypłacalności		10,65	12,12	14,66
Wartość księgowa		13 879 731	14 666 788	8 144 272
Liczba akcji		262 212 629	261 866 657	167 103 098
Wartość księgowa na jedną akcję ( w zł)		52,93	56,01	48,74
Rozwodniona liczba akcji		262 354 950	262 061 017	167 290 662
Rozwodniona wartość księgowa na jedną akcję (w zł)		52,90	55,97	48,68

	SKONSOLIDOWANY BILANS (w tys. zł)	30.06.2008	31.12.2007	30.06.2007
AKTYWA
	Kasa, należności od Banku Centralnego	7 224 209	5 121 210	4 344 853
	Weksle uprawnione do redyskontowania w Banku Centralnym	2 618	1 108	2 147
	Należności od banków	7 857 455	16 960 034	10 379 991
	Aktywa finansowe przeznaczone do obrotu	2 990 764	3 165 113	1 793 669
	Aktywa z tytułu pochodnych instrumentów finansowych	2 183 171	1 922 958	690 577
	Pozostałe instrumenty finansowe wyceniane do wartości godziwej przez rachunek zysków i strat	3 873 184	3 777 729	1 509 962
	Kredyty i pożyczki udzielone klientom	68 910 184	66 658 037	33 945 092
	Należności z tytułu leasingu finansowego	3 241 221	3 043 768	1 148 570
	Instrumenty zabezpieczające	24 312	40 672	-
	Inwestycyjne (lokacyjne) papiery wartościowe	18 651 449	17 620 419	13 862 639
	1. Dostępne do sprzedaży	17 894 834	17 033 529	13 432 059
	2. Utrzymywane do terminu zapadalności	756 615	586 890	430 580
	Aktywa przeznaczone do sprzedaży	145 893	65 068	3 771
	Inwestycje w jednostki podporządkowane	328 109	388 169	208 192
	Wartości niematerialne	686 685	688 559	597 694
	Rzeczowe aktywa trwałe	1 874 353	2 021 052	1 424 207
	Nieruchomości inwestycyjne	56 964	58 559	60 400
	Aktywa z tytułu podatku dochodowego	519 519	421 486	332 110
	1. Aktywa dotyczące bieżącego podatku dochodowego	6 165	2 493	27
	2. Aktywa z tytułu odroczonego podatku dochodowego	513 354	418 993	332 083
	Inne aktywa	3 082 950	2 142 210	887 249
AKTYWA RAZEM		121 653 040	124 096 151	71 191 123

ZOBOWIĄZANIA I KAPITAŁY
Zobowiązania
	Zobowiązania wobec Banku Centralnego	1 360 105	1 485 921	1 606 898
	Zobowiązania wobec innych banków	9 935 949	8 456 191	6 486 233
	Zobowiązania finansowe przeznaczone do obrotu	239 324	491 382	129 974
	Zobowiązania z tytułu pochodnych instrumentów finansowych	2 160 165	1 661 282	676 310
	Zobowiązania wobec klientów	88 062 596	89 944 078	52 139 609
	Instrumenty zabezpieczające	126 057	28 965	-
	Zobowiązania z tytułu emisji dłużnych papierów wartościowych	3 482 302	3 716 778	43 717
	Zobowiązania związane z aktywami przeznaczonymi do sprzedaży	-	55 291	916
	Bieżące zobowiązanie z tytułu podatku dochodowego	250 056	53 169	87 887
	Rezerwa z tytułu odroczonego podatku dochodowego	3 666	324	350
	Rezerwy	357 861	379 828	219 486
	Pozostałe zobowiązania	1 712 285	3 075 647	1 640 075
Zobowiązania razem		107 690 366	109 348 856	63 031 455

Kapitały
Kapitał własny (przypisany akcjonariuszom Banku):		13 879 731	14 666 788	8 144 272
	Kapitał zakładowy	262 213	261 867	167 103
	Pozostałe kapitały	11 781 659	12 393 624	7 079 515
	Zysk z lat ubiegłych i roku bieżącego	1 835 859	2 011 297	897 654
Udziały mniejszości		82 943	80 507	15 396
Kapitały razem		13 962 674	14 747 295	8 159 668
PASYWA RAZEM		121 653 040	124 096 151	71 191 123

Współczynnik wypłacalności		10,65	12,12	14,66
Wartość księgowa		13 879 731	14 666 788	8 144 272
Liczba akcji		262 212 629	261 866 657	167 103 098
Wartość księgowa na jedną akcję ( w zł)		52,93	56,01	48,74
Rozwodniona liczba akcji		262 354 950	262 061 017	167 290 662
Rozwodniona wartość księgowa na jedną akcję (w zł)		52,90	55,97	48,68

ZESTAWIENIE ZMIAN W SKONSOLIDOWANYM KAPITALE WŁASNYM	Rok 2008	Rok 2007	Rok 2007
(w tys. zł)	okres od 01.01.2008 do 30.06.2008	okres od 01.01.2007 do 31.12.2007	okres od 01.01.2007 do 30.06.2007
Kapitał własny na początek okresu (BO)	14 747 295	8 892 627	8 892 627
a) korekty związane z wprowadzeniem MSSF/MSR	-	-	-
b) zmiana konsolidacji Grupy	-	-	-
c) korekty błędów podstawowych	-	-	-
Kapitał własny na początek okresu, po uzgodnieniu do danych porównywalnych (BO)	14 747 295	8 892 627	8 892 627
1. Kapitał akcyjny na początek okresu	261 867	166 808	166 808
a) zwiększenia (z tytułu)	346	95 059	295
- emisji akcji	346	95 059	295
b) zmniejszenia (z tytułu)	-	-	-
- umorzenia akcji	-	-	-
1. Kapitał zakładowy na koniec okresu	262 213	261 867	167 103
2. Niepodzielony wynik finansowy na początek okresu	2 011 297	1 680 938	1 680 938
a) zwiększenia ( z tytułu)	-	-	-
- niepodzielony zysk z lat ubiegłych	-	-	-
- pozostałe	-	-	-
b) zmniejszenia (z tytułu)	-2 142 700	-1 825 119	-1 824 530
- odpis z zysku na fundusz ryzyka ogólnego	-	-100 000	-100 000
- odpis z zysku na kapitał rezerwowy	-626 661	-158 756	-158 756
- odpis z zysku na kapitał zapasowy	-31 155	-27 856	-27 856
- dywidendy wypłacone	-1 484 884	-1 503 928	-1 503 928
- pozostałe	-	-34 579	-33 990
2. Niepodzielony wynik finansowy na koniec okresu	-131 403	-144 181	-143 592
3. Pozostałe kapitały na początek okresu	12 393 624	7 028 137	7 028 137
a) zwiększenia (z tytułu)	701 417	5 807 664	320 168
- podziału zysku	657 816	286 612	286 612
- emisji akcji powyżej wartości nominalnej	42 229	5 516 702	31 657
- wyceny portfela papierów wartościowych dostępnych do sprzedaży (netto)	-	-	-
- wyceny instrumentów finansowych zabezpieczających (netto)	-	-	-
- wycena opcji menadżerskich	1 372	4 350	1 899
- różnic kursowych z przeliczenia jednostek zagranicznych	-	-	-
- pozostałe	-	-	-
b) zmniejszenia (z tytułu)	-1 313 383	-442 177	-268 790
- koszty emisji akcji	-204	-96 414	-34
- dywidendy wypłacone	-1 032 357	-	-
- wyceny portfela papierów wartościowych dostępnych do sprzedaży (netto) z tego:	-211 080	-212 958	-117 713
zyski/straty z wyceny portfela papierów wartościowych
dostępnych do sprzedaży	-260 605	-262 878	-145 249
zobowiązania z tytułu podatku odroczonego wyceny portfela papierów	49 525	49 920	27 536
- wyceny instrumentów finansowych zabezpieczających (netto)	-57 957	-50 495	-
- różnic kursowych z przeliczenia jednostek zagranicznych	-5 812	-10 901	-8 039
- pozostałe	-5 973	-71 409	-143 004
3. Pozostałe kapitały na koniec okresu	11 781 658	12 393 624	7 079 515
4. Wynik netto roku bieżącego	1 967 263	2 155 478	1 041 246
Kapitał własny na koniec okresu (BZ )	13 879 731	14 666 788	8 144 272
Udział mniejszości (BO)	80 507	16 744	16 744
a) zmiany (z tytułu)	2 436	63 763	-1 348
- wynik netto roku bieżącego	6 796	6 999	1 959
- pozostałe	-4 360	56 764	-3 307
Udział mniejszości (BZ)	82 943	80 507	15 396
Kapitały razem na koniec okresu (BZ)	13 962 674	14 747 295	8 159 668

SKONSOLIDOWANY RACHUNEK PRZEPŁYWU ŚRODKÓW PIENIĘŻNYCH	II kwartał 2008	2 kwartały 2008	II kwartał 2007	2 kwartały 2007
	okres	okres	okres	okres
(w tys. zł)	od 01.04.2008 do 30.06.2008	od 01.01.2008 do 30.06.2008	od 01.04.2007 do 30.06.2007	od 01.01.2007 do 30.06.2007
Przepływy środków pieniężnych z działalności operacyjnej - metoda pośrednia
Zysk (strata) netto	829 744	1 967 263	539 160	1 041 246
Korekty razem:	459 169	-2 562 996	-955 772	1 723 860
Amortyzacja	103 498	203 200	80 391	160 717
Udział w zyskach (stratach) jednostek stowarzyszonych	-30 839	-68 198	-44 520	-78 289
Zyski/straty z tytułu różnic kursowych	97 766	155 018	79 483	100 301
(Zysk) strata z tytułu działalności inwestycyjnej	-42 788	-79 202	-8 647	-21 407
Utrata wartości aktywów finansowych	-	-	-	-
Odsetki i dywidendy	-10 185	-106 440	-230 170	-391 942
Zmiana stanu należności od banków	2 317 971	2 409 131	-66 066	-72 563
Zmiana stanu aktywów finansowych przeznaczonych do obrotu oraz pozostałych instrumentów finansowych wycenianych w wartości godziwej	-476 006	78 894	1 139 068	700 936
Zmiana stanu pochodnych instrumentów finansowych	-309 603	-260 213	-139 320	-163 935
Zmiana stanu pożyczek i kredytów udzielonych klientom	-1 504 415	-2 253 657	-617 863	-2 166 593
Zmiana stanu należności z tytułu leasingu finansowego	-71 968	-197 453	-74 485	-181 963
Zmiana stanu papierów wartościowych dostępnych do sprzedaży	-19 248	-16 260	-3 938	-39 672
Zmiana stanu aktywów z tytułu odroczonego podatku dochodowego	594	-44 836	820	-18 016
Zmiana stanu pozostałych aktywów	-789 962	-964 279	209 601	-277 590
Zmiana stanu zobowiązań wobec banków	1 200 443	1 353 942	2 455 837	4 037 877
Zmiana stanu zobowiązań przeznaczonych do obrotu	-205 687	-252 058	-407 994	-81 399
Zmiana stanu pochodnych instrumentów finansowych oraz pozostałych zobowiązań finansowych wycenianych do wartości godziwej	232 916	498 883	146 678	172 110
Zmiana stanu zobowiązań wobec klientów	1 031 251	-1 881 482	-3 040 450	346 026
Zmiana stanu zobowiązań z tytułu emisji dłużnych papierów wartościowych	6 553	6 553	-	-
Zmiana stanu rezerw	-15 777	-21 967	-4 457	-4 457
Zmiana stanu pozostałych zobowiązań	-1 225 943	-1 321 288	-247 738	-177 566
Zapłacony podatek dochodowy (znak ujemny)	-129 154	-279 621	-299 800	-369 759
Bieżące obciązenie podatkowe	299 752	478 337	117 798	251 044
Środki pieniężne netto z działalności operacyjnej	1 288 913	-595 733	-416 612	2 765 106

Przepływy środków pieniężnych z działalności inwestycyjnej
Wpływy z działalności inwestycyjnej	5 256 885	10 876 999	15 809 467	23 190 608
Zbycie udziałów lub akcji w jednostkach zależnych i stowarzyszonych	-	-	-	-
Zbycie inwestycyjnych papierów wartościowych	5 137 205	10 744 227	15 477 509	22 747 876
Zbycie wartości niematerialnych i prawnych oraz rzeczowych aktywów trwałych	-	13 092	462	599
Inne wpływy inwestycyjne	119 680	119 680	331 496	442 133
Wydatki z działalności inwestycyjnej	-5 508 610	-12 215 313	-15 239 365	-23 922 220
Nabycie udziałów lub akcji w jednostkach zależnych i stowarzyszonych	-5 182	-5 182	-	-
Nabycie inwestycyjnych papierów wartościowych	-5 407 968	-12 052 545	-15 139 847	-23 785 774
Nabycie wartości niematerialnych i prawnych oraz rzeczowych aktywów trwałych	-95 460	-157 586	-99 518	-136 446
Inne wydatki inwestycyjne	-	-	-	-
Środki pieniężne netto z działalności inwestycyjnej	-251 725	-1 338 314	570 102	-731 612

Przepływy środków pieniężnych z działalności finansowej
Wpływy z działalności finansowej	975 420	1 770 737	-3	31 918
Z tytułu kredytów i pożyczek otrzymanych od banków	-	-	-	-
Z tytułu kredytów i pożyczek otrzymanych od innych podmiotów	-	-	-	-
Emisja dłużnych papierów wartościowych	969 786	1 728 162	-	-
Zwiększenie stanu zobowiązań podporządkowanych	-	-	-	-
Z tytułu emisji akcji zwykłych	5 634	42 575	-3	31 918
Sprzedaż akcji własnych	-	-	-	-
Inne wpływy finansowe	-	-	-	-
Wydatki z działalności finansowej	-3 534 484	-4 427 138	-1 503 928	-1 503 932
Spłaty kredytów i pożyczek od banków	-	-	-	-
Spłaty kredytów i pożyczek na rzecz innych podmiotów	-	-	-	-
Wykup dłużnych papierów wartościowych	-1 017 243	-1 909 897	-	-4
Zmniejszenie stanu zobowiązań podporządkowanych	-	-	-	-
Z tytułu innych zobowiązań finansowych	-	-	-	-
Płatności zobowiązań z tytułu umów leasingu finansowego	-	-	-	-
Dywidendy i inne wpłaty na rzecz właścicieli	-2 517 241	-2 517 241	-1 503 928	-1 503 928
Inne, niż wpłaty na rzecz właścicieli, wydatki z tytułu podziału zysku	-	-	-	-
Nabycie akcji własnych	-	-	-	-
Inne wydatki finansowe	-	-	-	-
Środki pieniężne netto z działalności finansowej	-2 559 064	-2 656 401	-1 503 931	-1 472 014

Przepływy pieniężne netto, razem	-1 521 876	-4 590 448	-1 350 441	561 480
Bilansowa zmiana stanu środków pieniężnych	-1 521 876	-4 590 448	-1 350 441	561 480
Środki pieniężne na początek okresu	13 189 743	16 258 315	12 545 258	10 633 337
Środki pieniężne na koniec okresu	11 667 867	11 667 867	11 194 817	11 194 817

QUARTERLY INDIVIDUAL REPORT

INCOME STATEMENT (in '000 PLN)	II Quarter 2008 period from 08-04-01 to 08-06-30	2 Quarters 2008 period from 08-01-01 to 08-06-30	II Quarter 2007 period from 07-04-01 to 07-06-30	2 Quarters 2007 period from 07-01-01 to 07-06-30

Interest income	1 912 706	3 749 088	1 001 163	1 967 746
Interest expense	(870 244)	(1 675 416)	(438 485)	(837 950)
Net interest income	1 042 462	2 073 672	562 678	1 129 796
Fee and commission income	688 915	1 334 892	525 053	1 004 291
Fee and commission expense	(137 623)	(247 575)	(63 971)	(117 621)
Net fee and commission income	551 292	1 087 317	461 082	886 670
Dividend income	300 336	337 623	90 706	243 055
Result on financial instruments at fair value	(7 884)	(8 671)	19 138	44 380
Result on investment securities	79 448	80 495	7 253	10 651
Foreign exchange result	164 767	265 252	71 214	136 883
Other operating income	42 440	115 340	23 748	51 953
Other operating expenses	(22 461)	(38 083)	(13 016)	(28 094)
Net other operating income	19 979	77 257	10 732	23 859
Net impairment losses on financial assets and net provisions for guarantees and commitments	(57 160)	(94 875)	(35 267)	(76 668)
Overhead costs	(879 298)	(1 714 595)	(573 668)	(1 112 462)
Operating profit	1 213 942	2 103 475	613 868	1 286 164
Profit before income tax	1 213 942	2 103 475	613 868	1 286 164
Income tax expense	(174 044)	(336 994)	(116 546)	(217 920)

Net profit	1 039 898	1 766 481	497 322	1 068 244




Earnings per share (in PLN per share)
- basic for the period		6,74		6,39
- diluted for the period		6,73		6,39

BALANCE SHEET (in PLN '000)		30.06.2008	31.12.2007	30.06.2007
ASSETS
	Cash and amounts due from Central Bank	7 188 245	5 082 829	4 329 485
	Debt securities eligible for rediscounting at the Central Bank	2 618	1 108	2 147
	Loans and advances to banks	9 000 572	17 551 065	10 051 184
	Financial assets held for trading	2 842 790	2 828 802	1 326 580
	Derivative financial instruments	2 186 208	1 917 960	690 340
	Other financial instruments at fair value through profit or loss	3 873 138	3 777 679	1 509 910
	Loans and advances to customers	65 773 107	63 955 254	33 350 465
	Derivatives used for hedging	24 312	40 672	-
	Investment securities	18 681 716	17 715 886	13 847 516
	1. Available for sale	17 925 101	17 128 996	13 416 936
	2. Held to maturity	756 615	586 890	430 580
	Non-current assets held for sale	137 393	514	2 777
	Shares in subsidiaries	1 631 876	1 631 694	1 143 827
	Shares in associates	56 755	56 530	51 092
	Intangible assets	665 660	668 183	579 699
	Tangible fixed assets	1 757 580	1 908 424	1 361 472
	Investment property	54 266	55 730	57 775
	Income taxes	440 244	349 412	305 650
	1. Current tax assets	-	-	-
	2. Deferred income tax assets	440 244	349 412	305 650
	Other assets	2 951 677	2 026 814	512 104
TOTAL ASSETS		117 268 157	119 568 556	69 122 023

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
	Amounts due to the Central Bank	1 360 105	1 485 921	1 606 898
	Amounts due to other banks	8 104 868	6 884 279	5 400 281
	Financial liabilities held for trading	239 324	491 382	126 230
	Derivative financial instruments	2 194 956	1 683 306	676 290
	Amounts due to customers	87 646 648	89 160 124	51 581 437
	Derivatives used for hedging	126 057	29 083	-
	Debt securities in issue	2 136 837	2 097 070	8
	Current income tax liabilities	173 501	51 793	81 180
	Provisions for deferred income tax	-	-	-
	Provisions	353 422	374 998	216 107
	Other liabilities	1 530 344	2 932 216	1 333 409
Total liabilities		103 866 062	105 190 172	61 021 840

Shareholders' equity
	Share capital	262 213	261 867	167 103
	Profit for the year and retained earnings	1 766 481	2 006 600	1 068 244
	Other capital and reserves	11 373 401	12 109 917	6 864 836
TOTAL SHAREHOLDERS' EQUITY		13 402 095	14 378 384	8 100 183
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		117 268 157	119 568 556	69 122 023

Capital adequacy ratio		9,71	11,13	12,84

STATEMENT OF CHANGES IN EQUITY		2008	2007	2007
(in PLN '000)		period from 08-01-01 to 08-06-30	period from 07-01-01 to 07-12-31	period from 07-01-01 to 07-06-30
Shareholders equity at the beginning of the period		14 378 384	8 620 165	8 620 165
a) adjustment related to IFRS/IAS introduction		-	-	-
b) adjustment due to fundamental errors		-	-	-
Adjusted shareholders equity at the beginning of the period		14 378 384	8 620 165	8 620 165
1. Share capital at the beginning of the period		261 867	166 808	166 808
a) Increase		346	95 059	295
- new shares issue		346	95 059	295
b) Decrease		-	-	-
- redemptions		-	-	-
1. Share capital at the end of the period		262 213	261 867	167 103
2. Retained earnings (loss) from previous years at the beginning of the period		2 006 600	1 728 539	1 728 539
a) Increase		-	-	-
- profit for previous year		-	-	-
b) Decrease		(2 006 600)	(1 728 539)	(1 728 539)
- appropriation to legal capital		-	(15 000)	(15 000)
- appropriation to general banking risk fund		-	(100 000)	(100 000)
- appropriation to reserve capital		(521 716)	(109 611)	(109 611)
- dividends		(1 484 884)	(1 503 928)	(1 503 928)
2. Retained earnings (loss) at the end of the period		-	-	-
3. Other capital at the beginning of the period		12 109 917	6 724 818	6 724 818
a) Increase		565 165	5 745 663	258 164
- appropriation of net profit		521 716	224 611	224 611
- issue of shares under its' nominal value		42 229	5 516 702	31 654
- valuation of securities available for sale (net);		-	-	-
in which
gains/losses from valuation of securities available for sale		-	-	-
provision for deferred income tax		-	-	-
- valuation of hedging financial instruments (net); in which:		-	-	-
hedging financial instrument valuation		-	-	-
provision for deferred income tax of the hedging financial instrument valuation		-	-	-
- valuation of management options		1 220	4 350	1 899
b) Decrease		(1 301 681)	(360 564)	(118 146)
- cost of issues		(204)	(96 414)	(31)
- dividends		(1 032 357)	-	-
- valuation of securities available for sale (net); in which:		(210 744)	(212 878)	(117 830)
gains and losses from valuation of securities
available for sale		(260 190)	(262 778)	(145 405)
provision for deferred income tax of the securities portfolio valuation		49 446	49 900	27 575
- valuation of hedging financial instruments (net); in which:		(57 957)	(50 039)	-
hedging financial instrument valuation		(71 552)	(61 776)	-
provision for deferred income tax of the hedging financial instrument valuation		13 595	11 737	-
- foreign exchange differences on branches abroad		(419)	(1 233)	(285)
3. Other capital at the end of the period		11 373 401	12 109 917	6 864 836
4. Net profit		1 766 481	2 006 600	1 068 244
Shareholders' equity at the end of the period		13 402 095	14 378 384	8 100 183


CASH FLOW STATEMENT	II Quarter 2008	2 Quarters 2008	II Quarter 2007	2 Quarters 2008
(in PLN '000)	period from 08-04-01 to 08-06-30	period from 08-01-01 to 08-06-30	period from 07-04-01 to 07-06-30	period from 07-01-01 to 07-06-30
Cash flow from operating activities - indirect method
Net profit (loss)	1 039 898	1 766 481	497 322	1 068 244
Adjustments:	538 644	(3 130 575)	(562 154)	1 725 737
Depreciation	92 627	183 259	75 605	151 400
Foreign exchange differences	79 304	169 251	114 166	106 874
(Profit) loss on investing activities	(79 403)	(80 586)	(8 161)	(20 858)
Impairment	-	-	2 002	2 002
Interest and dividend	(311 737)	(440 509)	(318 223)	(631 541)
Change in loans and advances to banks	2 680 360	1 622 653	(7 635)	(125 993)
Change in financial assets as held for trading and other financial instruments at fair value through profit or loss	(511 302)	(109 447)	1 206 710	827 533
Change in derivative financial instruments	(304 312)	(268 248)	(139 295)	(163 697)
Change in loans and advances to customers	(1 105 616)	(1 819 363)	(563 766)	(997 778)
Change in investment securities available for sale	(2 080)	(1 141)	(3 942)	(3 979)
Change in deferred income tax assets	17 950	(27 791)	15 508	(3 252)
Change in other assets	(894 175)	(1 020 391)	382 978	(80 228)
Change in amounts due to banks	922 063	1 094 773	2 381 088	3 034 902
Change in liabilities as held for trading	(203 261)	(252 058)	(384 819)	(77 178)
Change in derivative financial instruments	244 027	511 650	146 677	172 096
Change in amounts due to customers	909 163	(1 513 476)	(3 160 431)	(229 813)
Change in debt securities in issue	25 614	25 614	-	-
Change in provisions	(15 343)	(21 576)	(5 204)	(4 905)
Change in other liabilities	(1 101 145)	(1 307 442)	(117 233)	(110 362)
Income tax paid	(105 926)	(240 533)	(279 215)	(340 657)
Current tax	201 836	364 786	101 036	221 171
Net cash from operating activities	1 578 542	(1 364 094)	(64 832)	2 793 981

Cash flows from investing activities
Investing activity inflows	5 477 368	11 044 852	15 786 750	23 254 617
Sale of subsidiaries and associates	-	-	-	-
Sale of investment securities	5 064 994	10 581 061	15 438 783	22 650 230
Sale of intangible assets and tangible fixed assets	166	382	199	271
Other investing inflows	412 208	463 409	347 768	604 116
Investing activity outflows	(5 463 231)	(12 091 780)	(15 419 043)	(24 291 341)
Purchase of subsidiaries and associates	(5 182)	(5 182)	(148 621)	(474 729)
Purchase of investment securities	(5 379 883)	(11 962 351)	(15 190 201)	(23 708 784)
Purchase of intangible assets and tangible fixed assets	(78 166)	(124 247)	(80 221)	(107 828)
Other investing outflows	-	-	-	-
Net cash used in investing activities	14 137	(1 046 928)	367 707	(1 036 724)

Cash flows from financing activities
Financing activity inflows	164 030	200 971	(3)	31 918
Loans received from banks	-	-	-	-
Loans received from other financial institutions	-	-	-	-
Issue of debt securities	158 396	158 396	-	-
Increase in subordinated liabilities	-	-	-	-
Issue of ordinary shares	5 634	42 575	(3)	31 918
Sale of own shares	-	-	-	-
Other inflows	-	-	-	-
Financing activity outflows	(2 552 337)	(2 612 372)	(1 503 928)	(1 503 932)
Repayment of bank loans	-	-	-	-
Repayment of loans received from other financial institutions	-	-	-	-
Redemption of debt securities	(35 096)	(95 131)	-	(4)
Decrease of subordinated liabilities	-	-	-	-
Repayment of other financial liabilities	-	-	-	-
Repayment of pricipal amounts under finance lease agreements	-	-	-	-
Dividends and other payments to shareholders	(2 517 241)	(2 517 241)	(1 503 928)	(1 503 928)
Outflows from profi appropriation other than payments to shareholders	-	-	-	-
Purchase of own shares	-	-	-	-
Other financing outflows	-	-	-	-
Net cash from financing activities	(2 388 307)	(2 411 401)	(1 503 931)	(1 472 014)

Total net cash flow	(795 628)	(4 822 423)	(1 201 056)	285 243
Net change in cash and cash equivalents	(795 628)	(4 822 423)	(1 201 056)	285 243
Cash and cash equivalents at the beginning of the period	12 787 403	16 814 198	12 063 704	10 577 405
Cash and cash equivalents at the end of the period	11 991 775	11 991 775	10 862 648	10 862 648

5. Additional information

5.1. Completion of Operational Integration

On 29th November 2007 the legal integration of Bank Pekao S.A. with the part of Bank BPH S.A. transferred as an organized part of enterprise was completed.

Since the beginning of 2008, intensive efforts have been undertaken relating to the migration of accounts and data of clients handled by Pekao285 outlets from Bank BPH's IT platform to Bank Pekao's IT platform. The operational integration has been successfully completed in May.

It has been the biggest operation of this kind in the history of Polish banking. Branches were integrated and customer data were migrated as scheduled just during 6 months after the legal merger. Retail and corporate branches were integrated in 12 groups, each including 20 to 30 branches in a given region. Because of the application of a new IT system, almost 7,000 new employees of Bank Pekao S.A. were trained. To minimise inconveniences for customers, works in the network were carried out on weekends. Corporate customers data were integrated during one of April weekends. Such a success was possible thanks to the joint effort of all employees involved in the project.

Operational merger was a great challenge for the Bank. It has required involvement of almost all employees and close cooperation of all divisions throughout the Bank. The Bank managed to complete the whole process in accordance with the plan and eliminate appearing difficulties. Operational risk was effectively managed during entire migration process.

In terms of operations, Bank Pekao S.A. is now a single organism, which allows, after many months of very intensive integration efforts, to focus on everyday work and further development of business activity, concentrating on improving customers' satisfaction.

5.2 The Group

The Bank Pekao S.A. Capital Group as at 30th June 2008 consists of Bank Pekao S.A as the parent entity and 25 subsidiary entities.

The following entities are included in the consolidated financial report as at 30th June 2008:

Company's name	Core activity	% of shareholder's share capital	Status
Parent entity
Bank Pekao S.A.	Banking	-	-
Entities fully consolidated
UniCredit Bank Ltd.	Banking	100.00	full
Centralny Dom Maklerski Pekao S.A.	Brokerage	100.00	full
Pekao Fundusz Kapitałowy Sp. z o.o.	Financial	100.00	full
Pekao Leasing Sp. z o. o.	Leasing	100.00	full
Pekao Faktoring Sp. z o.o.	Financial	100.00	full
Pekao Pioneer Powszechne Towarzystwo Emerytalne S.A.	Financial	65.00	full
Pekao Telecentrum Sp. z o. o. (former Drukbank Sp. z o.o.)	No activities performed	100.00	full
Centrum Kart S.A.	Financial	100.00	full
Pekao Financial Services Sp. z o. o.	Financial	100.00	full
BPH Bank Hipoteczny S.A.*	Banking	100.00	full
Pekao Leasing Holding S.A. (former BPH PBK Leasing S.A.)	Leasing	80.10	full
Finanse plc *	Financial agency	100.00	full
Indirect subsidiary - subsidiary of Pekao Leasing Holding S.A.
Pekao Leasing i Finanse S.A. (former BPH Leasing S.A.)	Leasing	80.10	full
Pekao Auto Finanse S.A. (former BPH Auto Finanse S.A.)	Car lease and fleet management	80.10	full
Indirect subsidiary - subsidiary of UniCredit Bank Ltd.
BDK Consulting Sp. z o. o.	Consulting, hotels, transportation	99.99	full
Subsidiary entities non-consolidated
Final Holding Sp. z o. o.	Holding management	100.00	non- consolidated
BPH Real Estate S.A.	Real estate	100.00	non- consolidated
Centrum Usług Księgowych Sp. z o.o.	Accounting service	100.00	non- consolidated
Property Sp. z o. o. (in liquidation)	Real estate	100.00	non- consolidated
Centrum Bankowości Bezpośredniej Sp. z o. o.	Call-center	100.00	non- consolidated
Indirect subsidiary - subsidiary of Final Holding Sp. z o. o.
PBKL S.A. (in bankruptcy)	N/A	84.51/84.79	non- consolidated
Final S.A.	Aluminum profiles manufacture	99.82/99.84	non- consolidated
Indirect subsidiary - subsidiary of Property Spółka z o.o. (in liquidation)
FBP Media Sp. z o. o.	Real estate	100.00	non- consolidated
Indirect subsidiary - subsidiary of BPH Real Estate S.A.
Metropolis Sp. z o. o.	Real estate - venture capital	100.00	non- consolidated
Jana Kazimierza Development Sp. z o. o.	Real estate - venture capital	100.00	non- consolidated
Associated with Bank Pekao S.A.
Central Poland Fund LLC	Financial brokerage	53.19	Equity
Xelion. Doradcy Finansowi Sp. z o.o.	Supporting, financial and insurance	50.00	Equity
Pioneer Pekao Investment Management S.A.	Financial brokerage	49.00	Equity
Pirelli Pekao Real Estate Sp. z o.o	Real estate	25.00	Equity
Krajowa Izba Rozliczeniowa S.A.	Clearing House	34.44	Equity
CPF Management	Financial brokerage no activities performed	40.00	not valuated under equity method
Bankowe Doradztwo Podatkowe Sp. z o. o.	Tax Advisory	74.00/48.68	not valuated under equity method
Polish Banking System S.A.. (in liquidation)	In liquidation	48.90	not valuated under equity method
PPP Budpress Sp. z o. o. (in liquidation)	In liquidation	36.20	not valuated under equity method

* Percentage shares of entities which make up the Pekao S.A. Capital Group at the General Shareholders Meeting/General Partner sMeeting are as follows:

Final Holding Sp. z o. o. - a subsidiary of Bank Pekao S.A. - holds 0.04 % share in BPH Bank Hipoteczny S.A. Total share of the Group in BPH Bank Hipoteczny S.A. equity is 100%,

Final Holding Sp. z o. o. - a subsidiary of Bank Pekao S.A. - holds 0.02 % share in equity of Finanse plc. Total share of the Group in Finanse plc equity is 100%.

As at 30th June 2008 the composition of the Capital Group was unchanged as compared to 31st March 2008.

As at 30th June 2008 the Group exposure at subsidiary and associated entities non-consolidated or not valued under the equity method were included at the cost of purchase. Financial data of these companies are immaterial and have no influence on Group consolidated financial report.

5.3 Results achieved in the first half of 2008 and factors which influenced these results

In order to assure better comparability of dynamics of the main components of the profit and loss statement, data covering the first half of 2007 are presented as "combined data (hereafter referred to as "combined data" or "combined result") of Pekao Group and Pekao285, i.e. the part of Bank BPH S.A. merged with Bank Pekao S.A. as a result of the Spin-off of Bank BPH S.A. registered on 29th November 2007".

5.3.1 Results of the Group

The results for the first half of 2008 were under pressure of the difficult situation in the international financial markets and Warsaw Stock Exchange. As a result, the further decrease of shares prices was accompanied by redemptions of mutual funds and substantial decrease of mutual funds assets. Another negative factor influencing results was the slowdown in the market of mortgage loans denominated in PLN .

Factors mentioned above influenced negatively results of the Bank as well as results of some subsidiaries.

High efficiency of Pekao Group is confirmed by return on average equity (ROE), which in the first half of 2008 stood at 24.1%*.

The structure of P&L both in first half of 2007 and first half of 2008 was influenced by one-off transactions:

in the first half of 2007 the sale of shares in Commercial Union PTE with impact of transaction on pre-tax profit of PLN 178.0 million and on net profit of PLN 144.2 million,

in the first half of 2008 the sale of part of enterprise of CDM conducting corporate brokerage and investment banking services with impact of transaction on pre-tax profit of PLN 435.7 million and on net profit of PLN 352.4 million.

The consolidated profit and loss account for the first half of 2008 and combined data for the first half of 2007 are presented below:

(PLN million)

	1H 2008	1H 2007 combined	Change
Net interest income **	2,298.4	2,076.1	10.7%
Fee and commission income	1,229.6	1,526.1	(19.4%)
Dividend income	5.2	6.6	(21.2%)
Trading income / FX gains	314.2	583.9	(46.2%)
Other operating income / cost net	83.6	55.1	51.7%
Gain on sale of discontinued operations	436.2	0.0	x
Total income	4,367.2	4,247.7	2.8%
Overhead costs (including depreciation)	(1,893.6)	(1,846.6)	2.5%
Operating income	2,473.6	2,401.1	3.0%
Impairment losses on loans and advances	(121.8)	(206.5)	(41.0%)
Share in net profit (loss) of the associates	68.2	78.3	(12.9%)
Pre-tax profit	2,420.0	2,272.9	6.5%
Tax charge	(445.9)	(444.6)	0.3%
Net profit	1,974.1	1,828.3	8.0%
Attributable to equity holders of the Company	1,967.3	1,823.4	7.9%
Attributable to minority interest	6.8	5.0	36.0%

** Including income on SWAP transactions.

The Group's income

In the first half of 2008, the Group's total income amounted to PLN 4,367.2 million, PLN 119.5 million (2.8%) higher than combined income in the first half of 2007.

Group income in the first half of 2008 remained under pressure of continuously unfavourable situation on stock exchange and connected with this subsequent mutual funds redemptions and decrease of assets valuation. Fee and commission income decreased by PLN 296.5 million (19.4%) in comparison to combined income in the first half of 2007, mainly due to lower commissions on investment products. As a result of significant decline in demand, lower sales of mutual funds translated into lower up-front fees while the decrease of mutual funds assets under management additionally impacted management commissions. Additionally lower activity on the Warsaw Stock Exchange caused a decrease of fees from retail customers share trading activities.

A growth in net interest income by PLN 222.3 million (10.7%) allowed to partially compensate for the decrease in net fees and commissions income.

* For the purpose of calculation of that ratio, result of one-off transaction i.e. gain on sale of part of the enterprise of CDM Pekao S.A. conducting corporate brokerage and investment banking services was included in the result of the first quarter of 2008, however it was not annualized.

The Group's overhead costs (including depreciation)

Total overhead costs (including depreciation) in the first half of 2008 amounted to PLN 1,893.6 million, i.e. were higher in comparison with the combined costs in the first half of 2007 only by PLN 47.0 million (2.5%), i.e. below the inflation rate.

(PLN million)

	30.06.2008	31.12.2007	Change
Overhead costs (including depreciation)	(1,893.6)	(1,846.6)	2.5%
Personnel costs	(949.2)	(952.2)	(0.3%)
Non-personnel costs	(741.2)	(702.9)	5.4%
Depreciation	(203.2)	(191.5)	6.1%

Overhead costs were kept under control, the increase was connected mainly with the costs of the integration and also expansion in the Ukrainian market.

In the first half of 2008, the Group's cost / income ratio amounted to 43.4%, in comparison with 43.5% in the first half of 2007.

As at the end of June 2008, the Bank had 20,396 employees, compared to 20,636 as at the end of December 2007. The Group had 22,785 employees, compared to 22,926 as at the end of December 2007.

Impairment losses on loans and advances

In the first half of 2008, impairment losses on loans and advances amounted to PLN 121.8 million and were PLN 84.7 million (41.0%) lower than the combined result for the first half of 2007, thanks to effective credit risk management and a good macroeconomic situation.

(PLN million)

	30.06.2008	31.12.2007	Change
Gross receivables*	76,803.8	74,334.9	3.3%
not impaired	71,380.0	68,574.4	4.1%
impaired	5,423.8	5,760.5	(5.8%)

* Including impaired loans classified as assets for sale, debt securities eligible for rediscounting at the Central Bank, net investment in the finance lease, non quoted securities and Buy Sell Back transactions.

At the end of June 2008, the ratio of impaired receivables to total receivables amounted to 7.1% compared to 7.8% at the end of 2007. The ratio decreased due to the increased volume of total loans and a reduced volume of impaired loans.

Loans

(PLN million)

	30.06.2008	31.12.2007	Change
Gross loans (principal)*	75,748.4	73,832.2	2.6%
corporate (principal)	51,558.3	49,595.9	4.0%
retail (principal)	24,190.1	24,236.3	(0.2%)

* Including impaired loans classified as assets for sale, debt securities eligible for rediscounting at the Central Bank and net investment in the finance lease, excluding non quoted securities and BSB transactions.

The volume of loans of Group's clients as at the end of June 2008 amounted to PLN 75,748.4 million, of which corporate loans PLN 51,558.3 million and retail loans PLN 24,190.1 million.

The growth PLN 1,916.2 million was driven by an increase in corporate loans and PLN mortgage loans, and was supported by growth in commercial activity of UniCredit Bank Ltd.

Savings

(PLN million)

	30.06.2008	31.12.2007	Change
Deposits (principal)	81,488.8	86,440.9	(5.7%)
corporate (principal)	43,051.7	50,006.9	(13.9%)
retail (principal)	38,437.1	36,434.0	5.5%
Structured Certificates of Deposits	2,118.6	2,049.6	3.4%
Pioneer Pekao TFI mutual funds	20,278.0	28,717.5	(29.4%)
incl. distributed through the Group's network	18,848.8	27,000.3	(30.2%)
Total savings	103,885.4	117,208.0	(11.4%)
incl. retail	60,833.7	67,201.1	(9.5%)

At the end of June 2008, total volume of savings of the Group's clients (customer deposits, structured certificates of deposits and mutual funds) amounted to PLN 103,885.4 million and were PLN 13,322.6 million lower than at the end of 2007. The reduction was due to a decrease in mutual funds of PLN 8,439.5 million (significantly impacted by negative valuation), partially offset by an increase in retail deposits of PLN 2,003.1 million, and a decrease in corporate deposits of PLN 6,955.2 million.

5.3.2 The structure of the net profit

The structure of the net profit of the Group is shown in the following table:

(PLN million)

	1H 2008	1H 2007 combined
Net profit of Bank Pekao S.A.	1,765.5	1,849.4
Entities consolidated under full method
Centralny Dom Maklerski Pekao S.A.*	396.0	113.9
Pekao Leasing Holding S.A.**	19.8	15.1
BPH Bank Hipoteczny S.A.	12.1	15.5
Pekao Leasing Sp. z o.o.	8.8	10.0
UniCredit Bank Ltd.	8.7	(20.6)
Pekao Pioneer PTE S.A.	8.2	5.7
Pekao Financial Services Sp. z o.o.	7.8	7.2
Pekao Faktoring Sp. z o.o.	4.4	3.2
Centrum Kart S.A.	4.1	1.2
Pekao Fundusz Kapitałowy Sp. z o.o.	1.7	2.5
Drukbank Sp. z o.o.	0.2	0.0
Finanse plc. (d. BPH Finance plc.)	-	1.0
Pekao Access Sp. z o.o.	-	(0.1)
Komercyjny Bank HVB Bank Ukraina S.A.	-	15.2
Entities valued under the equity method
Pioneer Pekao Investment Management S.A.	59.8	66.7
Pirelli Pekao Real Estate Sp. z o.o.	4.8	12.0
Krajowa Izba Rozliczeniowa S.A.***	6.8	2.5
Central Poland Fund LLC	0.0	0.0
Xelion. Doradcy Finansowi Sp. z o.o.	(3.5)	(4.2)
Exclusions and consolidation adjustments ****	(338.2)	(272.8)
Net profit of the Group attributable to shareholders	1,967.3	1,823.4

* The result of the first half of 2008 includes the effect of sale of corporate brokerage and investment banking services part of the company.

** The result of the subsidiary includes results of it's subsidiaries Pekao Leasing i Finanse S.A and Pekao Auto Finanse S.A.

*** The Bank's share in the net profit of the subsidiary amounted to 22,96% till 29.11.2007, and 34,44% since 30.11.2007.

**** Includes transactions within the Group, including dividends from subsidiaries for the year 2007 paid in 2008, opening balance amendments and net profit attributable to minority interest.

The results of Bank Pekao S.A.

The main items from the profit and loss account of the Bank for the first half of 2008 and combined data for the first half of 2007 are as follows:

(PLN million)

	1H 2008	1H 2007 combined	Change
Net interest income*	2,106.9	1,927.7	9.3%
Non-interest income	1,806.0	2,202.1	(18.0%)
Total income	3,912.9	4,129.8	(5.3%)
Overhead costs (including depreciation)	(1,714.5)	(1,690.5)	1.4%
Operating income	2,198.4	2,439.3	(9.9%)
Impairment losses on loans and advances	(94.9)	(186.2)	(49.0%)
Pre-tax profit	2,103.5	2,253.1	(6.6%)
Net profit	1,766.5	1,849.4	(4.5%)

* Including income on SWAP operations.

The combined net profit and combined total income of the Bank in the first half of 2007 includes a one-off transaction comprising the sale of shares in Commercial Union PTE with an impact on the combined total income of PLN 178,0 million and on combined net profit of PLN 144.2 million.

The income of the Bank in the first half of 2008 in comparison with combined data for the first half of 2007 was influenced by:

an increase in net interest income of PLN 179.2 million,

lower fees and commissions income - by PLN 213.5 million, mainly due to unfavorable market conditions impacting income on investment products.

At the same time operating costs were kept under control while the cost of risk has decreased substantially.

The main items of the Bank's balance sheet at the end of June 2008 in comparison with the end of December 2007 are as follows:

	30.06.2008	31.12.2007	Change
Total gross loans in PLN million*	69,050.3	67,701.6	2.0%
Impaired receivables to total receivables in %	7.1	7.7	0.6 p.p.
Total deposits in PLN million**	81,066.3	85,658.8	(5.4%)
Total assets in PLN million	117,268.2	119,568.6	(1.9%)
Structured Certificates of Deposits in PLN million	2,118.6	2,049.6	3.4%
Mutual funds distributed through the Bank's network in PLN million	16,954.9	24,153.9	(29.8%)
Capital adequacy ratio in %	9.7	11.1	(1.4 p.p.)

* The nominal value, including impaired loans classified as assets for sale.

** The nominal value.

The volume of Bank's loans as at the end of June 2008 amounted to PLN 69,050.3 million, of which corporate loans PLN 45,951.0million and retail loans PLN 23,099.3 million. In the first half of 2008 gross loans volumes increased by PLN 1 348.7 million (2.0%).

At the end of June 2008, savings of the Bank's clients amounted to PLN 100,139.8 million and were PLN 11,722.5 million lower than at the end of 2007. The reasons of such changes in savings are described above.

5.3.3 Achievements of Bank Pekao S.A.

Bank Pekao S.A. is a universal, commercial bank, offering a full range of banking services to both individual and corporate clients, operating in Poland and abroad. Pekao Group's subsidiary financial institutions operate in banking, asset management, pension funds, brokerage, leasing and factoring markets.

In the first half of 2008 in Bank Pekao, there were intensive works conducted connected with data migration from branches of Pekao285. These activities were completed in May with migration of all of the data from Pekao285 branches to Bank Pekao IT system. At the same time the further intensification of business activity was carried on. The continuous efforts were focused on offering key products, in particular PLN mortgage loans, consumer loans and mutual funds. The Bank continued its policy of offering PLN mortgage loans.

	30.06.2008	31.12.2007
Total number of PLN current accounts (in thousand) *	4,299.7	4,179.7
of which packages (in thousand)	3,188.4	3,205.1
Number of mortgage loans accounts (in thousand) **	181.2	181.0
of which PLN mortgage loans accounts (in thousand)	121.1	117.1
Number of customers with consumer loans accounts (in thousand) ***	591.9	605.3
Total number of outlets (in items)	1,050	1,058
Total number of ATMs (in items)	1,887	1,885

* Number of accounts including accounts of pre-paid cards.

** Retail customers accounts.

*** Includes "Pożyczka Ekspresowa" and "Pożyczka od ręki".

The Bank has a superior physical distribution available to its clients, with a comprehensive and convenient countrywide network. The distribution network is supplemented with teams of Relationship Managers and a network of the Private Banking offices. The number of customers using alternative distribution channels such as the call centre and internet banking platform is growing systematically. Pekao24 service (for the retail clients), PekaoBiznes24 (for corporate clients) and PekaoFIRMA24 (for SME clients) facilitate the management of financial assets, and the scope of services is being systematically extended.

In the second quarter of 2008, the functionality of Pekao24 service was extended with an option of foreign currency transfers to domestic and foreign banks, processing of applications for credit cards handled under the Cams system, cancellation of a password defined for logging in PekaoInternet as well as change and re-generation of PIN codes.

The Bank's offer was extended in June with a new family of "Pakiety Mój Biznes" ("My Business Packages") dedicated to small and medium-sized enterprises. New packages are special sets of banking products and services offered jointly for a monthly fee under a single contract. This product is equipped with the best in the market solutions, including access to the state-of-the-art Internet banking system PekaoFIRMA24. Packages are addressed to business customers at different stage of development and tailored to their individual needs. The family of "Pakiety Mój Biznes" comprises: "Mój Biznes Startowy", "Mój Biznes", "Mój Biznes Dynamiczny", "Mój Biznes FX" and "Mój Biznes Premium".

Bank Pekao S.A. participated in organization of conferences for entrepreneurs regarding EU funds availability for enterprises in Poland within the framework of EU budget for the years 2007-2013. The aim of these conferences is to present possibilities of utilizing support funds and to indicate the Bank's instruments supporting process of gathering EU funds for projects realization.

Bank Pekao S.A. is offering an unique instrument on the Polish market, the Internet search engine for information about the EU funds - a tool supporting the provision of basic information about EU programs meeting pre-defined criteria. This search tool as well as Bank's EU newsletter, providing up to date information about legislation changes and support programs in place, are available on the Bank's website.

5.3.4 Achievements of subsidiaries

Pioneer Pekao TFI S.A.

As at 30th June 2008, the net assets value of mutual funds under management of Pioneer Pekao TFI S.A., a company managed by Pioneer Pekao Investment Management S.A. (in which the Bank holds a 49% share), amounted to PLN 20,278.0 million and was lower by PLN 8,439.5 million compared with the end of 2007. The decrease of assets was driven by unfavorable market conditions that resulted in significant redemptions of mutual funds and the decrease of assets valuation caused mainly by a decrease of shares prices. As at 30th June 2008, the Company had 1,175.4 thousand of opened accounts (a decrease by 7.5% in the first half of 2008).

The net assets value of mutual funds under management of Pioneer Pekao TFI S.A. is presented in the table below:

(PLN million)

	30.06.2008	31.12.2007
Net assets value of Pioneer Pekao TFI	20,278.0	28,717.5
- bond and money market funds	4,848.1	4,550.5
- equity funds	6,237.6	10,564.7
- balanced funds	9,192.3	13,602.3

In the second quarter of 2008 the company extended its offer with a Program Super Basket (so called "portfolio of funds") being a specialized investment product allowing for systematic and long term investing in Pioneer mutual funds. Thanks to differentiation of portfolio structure, the product allows for diversification of investment depending on individual needs and risk profile of the clients.

Centralny Dom Maklerski Pekao S.A. (CDM)

At the end of June 2008, CDM maintained 149.4 thousand investment accounts and its market share amounted to 14.7%. CDM also offered on-line access to investment accounts, allowing its customers to buy and sell all instruments listed on the Warsaw Stock Exchange and on the OTC market (CeTO) through the Internet. As at 30th June 2008, CDM maintained 27.7 thousand on-line accounts, 1.3 thousand more than at the end of 2007.

In the first half of 2008 the Company achieved:

a 17.8% share in the bond trading volume on the Warsaw Stock Exchange,

a 3.0% share in the stock trading volume on the Warsaw Stock Exchange,

a 4.1% share in the futures trading volume on the Warsaw Stock Exchange.

In line with Bank's strategy of concentration on retail brokerage services, being a part of the integrated services offered by Bank to retail clients, CDM on the basis of a sale agreement dated 28th January 2008 sold to UniCredit CA IB part of the enterprise conducting corporate brokerage and investment banking services.

UniCredit Bank Ltd.

As of 30th June 2008 UniCredit Bank pursues its activity through 61 branches and 107 debit cards and consumer credits sales outlets. Number of outlets was rationalised in Q2 in the framework of optimisation programme. Bank provides services for 126.5 thousand individual clients and almost 2.6 thousand corporate clients.

According to information provided by Bank Austria Creditanstalt AG (BA-CA), a member of UniCredit Group, BA-CA on 24th January 2008 completed on the acquisition of 94.2% of the share capital of Ukrsotsbank (which is the fourth largest bank in Ukraine by assets) from the group of investors represented by Interpipe Group. The structure of the Ukrainian operations belonging to the UniCredit Group is currently being assessed.

5.4 Segment reporting

Segment reporting of the Pekao Group covers following areas:

Retail banking area - full-range of banking activity related to retail clients and small and micro companies with annual turnover not exceeding PLN 10 million, and also income of companies consolidated under the full method and assigned to retail activity,

Corporate banking area - full-range of banking activity related to medium and large companies, and also income of companies consolidated under the full method and assigned to corporate activity,

Treasury and Investment activities area - Bank's involvement on inter-bank market, in debt securities and capital investments in companies, which are not a part of other segments, and also income of companies consolidated under the full method and assigned to this activity.

Information on main segments' results for the first half of 2008:

(PLN million)

	Retail activity	Corporate activity	Treasury and Investment activity	Total Group
External interest income	1,532.3	1,424.2	1,068.7	4,025.2
External interest expense	588.1	891.2	280.8	1,760.1
Net external interest income	944.2	533.0	787.9	2,265.1
Internal interest income	1,314.9	1,754.9	(3,069.8)	-
Internal interest expense	776.9	1,395.5	(2,172.4)	-
Net internal interest income	538.0	359.4	(897.4)	-
Net interest income	1,482.2	892.4	(109.5)	2,265.1
Non interest income	1,070.5	921.8	109.8	2,102.1
Total income	2,552.7	1,814.2	0.3	4,367.2

Allocated assets	32,431.9	40,776.5	37,199.1	110,407.5
Unallocated assets				11,245.5
Total assets				121,653.0

Allocated liabilities	53,120.7	36,919.5	9,888.5	99,928.7
Unallocated liabilities				21,724.3
Total liabilities				121,653.0

Information on main segments' results for the first half of 2007*:

(PLN million)

	Retail activity	Corporate activity	Treasury and Investment activity	Total Group
External interest income	593.7	758.2	703.6	2,055.5
External interest expense	175.0	519.1	147.6	841.7
Net external interest income	418.7	239.1	556.0	1,213.8
Internal interest income	632.0	560.3	(1,192.3)	0.0
Internal interest expense	267.0	525.4	(792.4)	0.0
Net internal interest income	365.0	34.9	(399.9)	0.0
Net interest income	783.7	274.0	156.1	1,213.8
Non interest income	1,059.6	220.4	55.5	1,335.5
Total income	1,843.3	494.4	211.6	2,549.3

Allocated assets	14,233.1	24,170.4	27,795.6	66,199.1
Unallocated assets				4,992.0
Total assets				71,191.1

Allocated liabilities	29,243.8	23,928.3	7,063.9	60,236.0
Unallocated liabilities				10,955.1
Total liabilities				71,191.1

* Data as published for the second quarter of 2007.

5.5 Adjustments for provisions, deferred tax provision and assets

(PLN million)

	Group		Bank Pekao S.A.
	30.06.2008	31.12.2007	30.06.2008	31.12.2007
Total provisions	357.9	379.8	353.4	375.0
of which:
provisions for off-balance sheet liabilities	170.6	186.2	170.6	186.2
provisions for liabilities to employees	129.4	123.6	127.5	121.9
other provisions	57.9	70.0	55.3	66.9
Provision for deferred tax	3.7	0.3	0.0	0.0
Deferred tax assets	513.4	419.0	440,2	349.4

5.6 Write-offs for revaluation of assets

(PLN million)

Group

Bank Pekao S.A.

	1H 2008	1H 2007*	1H 2008	1H 2007*
Total	(121.8)	(92.3)	(94.9)	(76.7)
for loan receivables	(137.3)	(100.8)	(110.3)	(84.3)
for off-balance sheet liabilities	15.1	8.5	15.1	8.5
other	0.4	0.0	0.3	(0.9)

* Data as published for the second quarter of 2007.

5.7 Information on contingent assets and liabilities

(PLN million)

	30.06.2008	31.12.2007
Contingent liabilities granted and received	53,365.2	61,325.0
Liabilities granted:	38,543.7	38,716.8
Financial	34,305.6	34,264.6
Guarantees	4,238.1	4,452.2
Liabilities received:	14,821.5	22,608.2
Financial	3,397.9	2,199.5
Guarantees	11,423.6	20,408.7
Financial derivatives	250,640.9	298,579.7
currency transactions	77,740.5	109,653.5
interest rate transactions	167,604.5	188,215.7
securities transactions	5,295.9	710.5
Other	21,553.5	17,663.0
Total off-balance sheet items	325,559.6	377,567.7

5.8 Post balance sheet events

No significant events occurred after the balance sheet date which were not reflected in the financial statements.

5.9 Seasonality or cyclical nature of the Bank's activity

The demand for the financial services offered by the Bank is stable, and so the impact of seasonal changes is immaterial. Due to the nature of the Bank's activity, it is not subject to seasonal or cyclical changes.

5.10 Issuance, redemption and repayment of debt securities

Issuance of bonds of Bank Pekao S.A.

On the basis of Resolution No. 6 of the Bank's Extraordinary General Meeting dated 25th July 2003 on the issue of registered bonds under an incentive programme, the Bank issued registered A and B series bonds with pre-emptive rights to take up the Bank's F series shares as well as registered C and D series bonds with pre-emptive rights to take up the Bank's G series shares.

All the pre-emptive rights to take up F series shares pursuant to the implementation of the right of priority ensuing from the A and B series bonds and all the pre-emptive rights to take up G series shares pursuant to the implementation of the right of priority ensuing from the C series bonds were executed.

The Bank acquired 69,028 registered series C bonds from Pekao Faktoring Sp. z o.o., for the purpose of redemption, and a total of 345,972 series C bonds from eligible persons, upon the request thereof for early redemption, pursuant to the implementation of the right of priority to take up the Bank's shares ensuing from the bonds, for the purpose of redemption thereof.

The issue price of G series share amounts to PLN 123.06.

The execution of the pre-emptive rights to take up G series shares can be exercised in respect of D series bonds from 1st January 2009 to 31st December 2012.

D series bonds can be purchased from the Trustee agent by eligible persons until 30th December 2008.

The bonds that will not be sold by the Trustee agent by 30th December 2008, will be purchased on 31st December 2008 by the Bank for the purpose of redemption at the nominal value.

Issuance of bonds of Joint Stock Commercial Bank HVB Bank Ukraine

On 24th January 2006 HVB Ukraine issued 79,000 bonds of total face value 79,000,000 UAH. The purpose of this issue was to acquire the funds for financing the development of the lending activity. In the issue HVB Ukraine offered bonds with put option, common, interest bearing, registered, with discount to the face value. For the first two years the coupon interest was fixed at 8.8% p.a. and the interest rate for the next two years is 10.35% p.a.

Structured Certificates of Deposits

Structured Certificates of Deposits are investment products for Bank's clients that are an alternative for traditional banks' deposits. The total value of Bank's liabilities relating to these products amounted to PLN 2,118.6 million at the end of June 2008 (principal value). In Bank's balance sheet there are 40 issues of Structured Certificates of Deposits in PLN, Euro and USD with the maximum maturity date set at 8th March 2011. Liabilities with the date of maturity in 2008, 2009, 2010 and 2011 account for 25.5%, 38.0%, 25.7% and 10.8% of total liabilities, respectively.

Pekao Leasing Holding S.A. (former BPH PBK Leasing S.A.) bonds

The total value of liabilities due to that bonds (principal) amounted to PLN 483.1 million at the end of June 2008 with the date of maturity up to 3 months.

BPH Bank Hipoteczny S.A. mortgage-backed securities

The total value of liabilities due to that mortgage-backed securities amounted to PLN 921.4 million at the end of June 2008 (principal value). Nominal value with the date of maturity up to 3 months account to 4.2%, with the date of maturity 1 - 3 years - 67.1% and 3 - 5 years - 32.9% of total nominal value.

5.11 Dividend paid

Pursuant to Resolution of the Ordinary General Meeting of Bank Pekao S.A. dated 23rd April 2008, PLN 9.60 per one ordinary share was appropriated for payment of a dividend in respect of 2007, i.e. 6.7% higher as compared to the dividend paid in respect of 2006 (PLN 9.00 per one share). The ex-dividend date was declared for the 15th May 2008 and the dividend was paid on 3rd June 2008. All the Bank's shares are ordinary shares.

5.12 Effects of changes in the Group's structure

As at 30th June 2008 the composition of the Capital Group has not changed compared to the information disclosed as at 31st March 2008.

5. 13 The position of the Management Board regarding the possibility of achieving previously published forecasts

The Bank has not published a forecast of financial results for 2008.

5.14 Information regarding shareholders owning at least 5% of the total number of votes at the General Meeting of Bank Pekao S.A.

The shareholders of Bank Pekao S.A. owning directly or indirectly through their subsidiaries at least 5% of the total number of voting rights at the General Meeting of Bank Pekao S.A. are as follows:

Shareholder's name	# of shares and votes at the General Meeting		Share in share capital and total number of votes at the General Meeting	# of shares and votes at the General Meeting		Share in share capital and total number of votes at the General Meeting
	30th June 2008			31st December 2007
UniCredito Italiano S.p.A.	155,433,755	59.28%		155,433,755	59.36%
Other shareholders	106,778,874	40.72%		106,432,902	40.64%
Total	262 212,629	100.00%		261,866,657	100.00%

Since the beginning of the 2008 share capital of the Bank has been increased by the total amount of PLN 345,972 as a result of issue of 345,972 series G ordinary bearer shares which have been taken up by participants of share option programme.

5.15 The Issuer's shares held by the Management and Supervisory Board Members

According to information available to the Bank as at the date of submitting this report, the members of the Bank's management and supervisory bodies held 166,125 shares of Bank Pekao S.A. The table below presents the number of shares held by the Management Board Members:

	As at the date of submitting the report		Change
	For the second quarter 2008	For the first quarter 2008	Change
Jan Krzysztof Bielecki	45,000	50,000	(5,000)
Luigi Lovaglio	98,036	98,036	0
Marian Wazynski	23,089	27,203	(4,114)
Total	166,125	175,239	(9,114)

The Bank Pekao S.A. Capital Group is running an incentive programme in the form of management stock options. The Programme covers the Management Board of the Bank, the remaining managerial staff, key employees for realisation of Bank's strategy, as well as employees of subsidiaries. The persons who meet the requirements set in the Programme will be able to acquire the Bank's shares.

As at the date of submitting this report the incentive programme for 2004 includes 38 persons for a total 302,257 shares, 109,791 of which will be able to be purchased by the management. The Members of the Supervisory Board did not participate in the management stock options programme.

The table below presents the number of management stock options held by the Management Board Members:

	As at the date of submitting the report		Change
	For the second quarter 2008	For the first quarter 2008	Change
Jan Krzysztof Bielecki	40,000	40,000	0
Luigi Lovaglio	32,678	32,678	0
Paolo Iannone	23,000	23,000	0
Christopher Kosmider	n / a*	23,000	n / a
Marian Wazynski	14,113	14,113	0
Total	109,791	132,791	x

* As of 4th June 2008 Mr. Christopher Kosmider resigned from the position of Vice President and Member of the Management Board of Bank Pekao S.A.

The Bank has also joined the UniCredit Group incentive program "Long-Term Incentive Plan 2007", based on offering the stock options and shares of UniCredito Italiano S.p.A. to the selected key managers and employees of the UniCredit Group. 61 employees of Pekao Group, including 7 members of the Management Board, are participating in this programme.

5. 16 Pending litigations

In the second quarter of 2008 the number of the legal proceedings in courts, appropriate bodies of arbitration or public administration bodies, in respect to the liabilities of the Group was 433. The total value amounted to PLN 757.0 million. The number of legal proceedings in respect to receivables was 3,374 with a total value of PLN 878.0 million. The value of legal proceedings relating to the liabilities of the Group in the second quarter of 2008 does not exceed 10% of the issuer's equity.

In the opinion of issuer any proceeding that was in progress in courts, appropriate bodies of arbitration or public administration bodies during the second quarter of 2008, as well as all the proceedings taken together did not create any threat to the financial liquidity of the Bank.

5.17 Changes in the Management Board

On 9th of May 2008, Mr Przemyslaw Gdanski, Vice President of the Bank resigned from his position.

The Supervisory Board of Bank Polska Kasa Opieki S.A. on the meeting held on 4th June 2008 appointed Mr. Andrzej Kopyrski to the position of Vice President of the Management Board for the current common term of office of the Management Board.

At the same time as of 4th June 2008 Mr. Christopher Kosmider resigned from the position of Vice President and Member of the Management Board of Bank Pekao S.A.

Composition of the Management Board

	30.06.2008		31.12.2007
1.	Jan Krzysztof Bielecki President of the Management Board, CEO	1.	Jan Krzysztof Bielecki President of the Management Board, CEO

2.	Luigi Lovaglio First Vice President of the Management Board, General Manager	2.	Luigi Lovaglio First Vice President of the Management Board, General Manager

3.	Paolo Iannone Vice President of the Management Board	3.	Przemyslaw Gdanski Vice President of the Management Board

4.	Andrzej Kopyrski Vice President of the Management Board	4.	Paolo Iannone Vice President of the Management Board

5.	Katarzyna Niezgoda Vice President of the Management Board	5.	Christopher Kosmider Vice President of the Management Board

6.	Grzegorz Piwowar Vice President of the Management Board	6.	Katarzyna Niezgoda Vice President of the Management Board

7.	Marian Wazynski Vice President of the Management Board	7.	Grzegorz Piwowar Vice President of the Management Board

		8.	Marian Wazynski Vice President of the Management Board

5.18 Assessment of the financial credibility of Bank Pekao S.A.

As at 30th June 2008, Bank Pekao S.A. had the following financial credibility ratings:

Fitch Ratings
Long-term rating (IDR)	A
Short-term rating	F1
Individual rating	B/C
Support rating	1
Outlook of IDR	Positive

Standard and Poor's
Long-term rating	A
Short-term rating	A-1
Outlook	Stable

Moody's Investors Service Ltd. (The Bank has not ordered Moody's rating)
Long-term deposit rating	A2
Short-term deposit rating	Prime-1
Financial strength	C
Outlook	Positive

5.19 Transactions of related entities

Capital increase of Xelion. Doradcy Finansowi Sp. z o.o.

The District Court for the Capital City of Warsaw, XIII Business Branch of the Domestic Registry Court registered on 6th June 2008 the increase of share capital of Xelion. Doradcy Finansowi Sp. z o.o. (Bank's affiliated company - "Xelion") by the amount of PLN 4,000,000.

On 15th May 2008, the Extraordinary General Meeting of Xelion adopted a resolution on increase of share capital of Xelion by the amount of PLN 4,000,000.

Within the frameworks of capital increase Bank took up 4,000 newly issued shares in Xelion with the par value of PLN 500 per share, totalling PLN 2,000,000 nominal value, which issue price was PLN 5,000,000 i.e. PLN 1,250 per share, and UniCredit S.p.A. took up 4,000 newly issued shares in Xelion with the par value of PLN 500 per share, totalling PLN 2,000,000 nominal value which issue price was PLN 5,000,000 i.e. PLN 1,250 per share.

Upon registration by the District Court of capital increase, the share capital of Xelion has been increased from PLN 50,050,000 to the amount of PLN 54,050,000.

Bank Pekao S.A. currently holds 54,050 shares of Xelion worth the total of PLN 27,025,000 of nominal value, comprising 50% of share capital of Xelion, carrying 50% of votes at the General Meeting of Shareholders in Xelion.

5.20 Factors which will affect the results of at least the next quarter

Despite some reduction in growth rate, Polish economy still develops at a fast rate mainly thanks to the high growth of investment but also due to growth of consumer demand.

Significant economic growth is accompanied by even faster growth of individual consumption resulting from the continued optimistic consumer expectations and improved situation on the labour market combined with the growth of salaries.

In the financial sector the further growth of corporate and retail lending accompanied with accelerated increase of household deposits is being observed. On the other hand as a result of the drop of prices in the stock markets in recent months, value of assets of mutual funds have dropped due to lower valuation of assets as well as outflow of savings from those funds and its conversion to bank deposits.

An important factor influencing the size and structure of bank's loan portfolio is increasing difference between domestic and foreign interest rates as well as further strengthening of PLN. These factors caused that demand for mortgage loans denominated in foreign currencies (mainly CHF) is increasing again. This may have a negative impact on the growth of loans denominated in PLN and at the same time may cause an increase of credit risk borne in banks offering foreign currency loans.

Already, since the fourth quarter of 2007, world prices of energy and food have been growing, which resulted in the significant acceleration of inflation. The growth of prices was also visible in the second quarter of 2008 and it is likely to last during 2008. The fast growth of inflation made the Monetary Policy Council to commence a series of interest rate raises. It is likely that Monetary Policy Council will increase base rates by 25 base points another two times before the end of the year.

It is expected that, in next quarters, economic growth will gradually slow down, however it will still remain at a high level. The symptoms of the growth of demand for corporate investment loans and for households mortgage loans are visible. The growth of household income and higher interest rates will favour the growth of savings especially bank deposits.

Despite the accelerated growth of deposit base, its growth is still lower than growth of loans. Done so far and expected further Central bank interest rate raises should contribute to the improvement of banks liquidity. Further growth of deposits should be taken into account however it may be accompanied by the growth of liabilities funding costs. These costs will be mostly compensated with probable higher interest rates for loans.

The further growth of salaries, appreciation of zloty and higher interest rates will increase costs and gradually reduce profitability of enterprises. Thus, it may be expected that corporate credit risk will grow. On the other hand fast increase in average household income should substantially decrease credit risk connected with financing this segment.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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